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[2009] ZALCJHB 18
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National Health And Allied Workers Union (NEHAWU) v Ramodise and Others (JR1210/08) [2009] ZALCJHB 18 (18 August 2009)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
IN JOHANNESBURG
REPORTABLE
CASE
NO: JR1210/08
In
the matter between:
NATIONAL
HEALTH AND ALLIED
WORKERS
UNION (NEHAWU)
APPLICANT
and
KGAUGELO
RAMODISE
1
ST
RESPONDENT
THE
COMMISSION FOR CONCILIATION,
MEDIATION
AND ARBITRATION
2
ND
RESPONDENT
SENIOR
COMMISSIONER,
TIMOTHY
BOYCE
3
RD
RESPONDENT
JUDGMENT
Molahlehi J
Introduction
[1]
This is an application to review the ruling
of the third respondent (the commissioner) under case number GAJB
28037-07 dated 28
th
March 2008 in terms of which he found the first respondent to be an
employee of the applicant (Nehawu).
Background facts
[2]
The first respondent, Mr Ramodise was prior
to his dismissal employed by the applicant, Nehawu, as deputy
secretary and currently
is employed as chief executive officer at
Sekororo District Hospital, Limpopo Department of Health and Social
Development. Although
there seem to have been no written contract at
the time Mr Ramodise was appointed deputy secretary of Nehawu on 1
st
July 2004, he received a monthly salary in the amount of R22 429.88,
a monthly car allowance in the amount of R9 500.00, pension/provident
fund benefits, housing allowance, cell phone allowance, credit card
and petrol card. Several statutory deductions were also made
from the
salary of Mr Ramodise and these including PAYE, Unemployment
Insurance the levy for Skills Development fund etc.
[3]
Nehawu suspended Mr Ramodise during October
2006, on the grounds that he together with other staff members had
acted in a manner
that amounted to misconduct. The relevant parts of
the letter of suspension read:
“
1.
This serves as a notice to inform you that you are suspended as the
Deputy Secretary and an employee of NEHAWU
on full pay with immediate
effect until the finalisation of the disciplinary process as decided
by the Special CEC that took place
on the 19 September 2006.
2.
Your suspension is a precautionary measure by your employer, National
Education Health and
Allied Workers Union, informed by reasons to: …”
[4]
Thereafter, and following the
recommendations of an independent investigation, a disciplinary
inquiry was conducted against Mr Ramodise.
The relevant parts of the
charges brought against him are quoted in full in this judgment
because of importance of the wording
used therein particularly as
concerning the issue at hand. The relevant parts of the notice of the
disciplinary hearing reads as
follows:
“
5.
You failed to disclose that you were a
director and shareholder of Pheliso.
6.
You had the duty to disclose these facts to your employer because of
the following:
6.1
. . .
6.2
. . .
6.3
The failure to disclose your interest in Pheliso which is an alliance
company of CCS constitutes material
misconduct alternatively creates
a perception that you were partial in your dealings towards CCS and
further that you placed the
interests of CCS over those of your
employer.
6.4
Your failure to disclose constitutes gross misconduct which destroys
the relationship between your employer
and yourself …”
[5]
Under the heading “
FAILURE
TO PROMOTE YOUR EMPLOYER’S INTERRESTS OVER AND ABOVE INTERRESTS
OF CCS,
the charges read as
follows:
“
7.
You had a common law duty to promote your employer’s interest
and to avoid a conflict of interest in
your dealings with service
providers of your employer.
8.
You materially failed in your duty by promoting the interests of CCS
over and above your
employer’s interests. You did so by:
8.1
. . . to 8.5 . . .
8.6
Your aforesaid conduct destroys the relationship of trust between
yourself and your employer.”
[6]
The disciplinary proceedings were chaired
by Advocate Sibeko SC, assisted by two assessors who are employees of
Nehawu. One of the
issues that arose during the disciplinary
proceedings concerned the question as to whether Mr Ramodise was an
employee or an office
bearer. This issue arose during the
cross-examination of Mr Majola, the secretary general of Nehawu.
[7]
The chairperson of the disciplinary
enquiry, after a thorough and detailed analysis of the facts observed
as follows:
“
It
would appear that these proceedings contemplate a dispute which
involves an employer -employee relationship.”
[8]
In arriving at this conclusion the
chairperson of the disciplinary hearing relied on the letter of
suspension and the charges as
was formulated by Nehawu
.
In as far as the substance of the
charges were concerned the chairperson the disciplinary hearing found
Mr Ramodise not guilty of
misconduct. However, the two assessors who
were employees of Nehawu, to the contrary found him guilty of serious
misconduct and
concluded that he should be dismissed. This view
received support from the Central Executive Committee of Nehawu whose
view and
conclusion is recorded in a letter which reads as follows:
“
The
Central Executive Committee of Nehawu which convened and set on the
25 June 2007, took a decision in terms of section 63(5)(a)
and (b) of
the Nehawu constitution, to remove and dismiss you effective from 25
June 2007.”
[9]
Clause 63 (5) (a) and (b) of Nehawu’s
Constitution reads as follows:
“
If,
in its opinion, the charges have been satisfactorily proven, the BEC,
REC, PEC, NEC or CEC may:
(a)
remove the shop steward or office bearer or official (as the case may
be) from office in the union;
(b)
expel the shop steward office bearer from the union, or dismiss the
official from employment by the
union;”
[10]
Following his dismissal Mr Ramodise
referred his unfair dismissal dispute to the second respondent (the
CCMA) and upon failure to
reach an agreement during conciliation the
matter was arbitrated by the commissioner.
The ruling
[11]
The commissioner in his ruling identified
that the issue he was required to determine involved the question of
whether or not Mr
Ramodise was an employee. After considering the
submissions of both parties the commissioner found Mr Ramodise to be
an employee
in terms of
section 213
of the
Labour Relations Act 65 of
1995
. He reasoned as follows:
“
5.1
It was common cause that pursuant to having been appointed as a
respondent’s Deputy Secretary, the applicant:
5.1.1
was required to perform certain functions;
5.1.2
was paid a set of salary;
5.1.3
received a car allowance together with certain other benefits.”
[12]
The commissioner further correctly
distinguished the case of Nehawu and Mr Ramodise from that of the
Church of the Province of Southern
Africa (Diocese of Cape Town) v CCMA and others
[2001] 11 BLLR 1213
(LC),
where the Court found that an
employment relationship did not exist between the parties because the
parties never intended to create
a binding agreement and therefore
there was no employment relationship between them. On the facts of
the matter before him the
commissioner found that Mr Ramodise’s
appointment was accompanied “
by a
duty to perform certain duties, and a reciprocal entitlement to be
paid for performing those duties. The parties must, accordingly,
have
intended to create a legally binding agreement.”
[13]
Nehawu contends that the commissioner
committed a serious mistake of law which resulted in it being denied
a fair hearing. It was
for this reason that it contended that the
commissioner committed gross misconduct justifying a review of that
decision. For this
reason Nehawu submitted in its founding affidavit
that the commissioner ought to have found that the relationship
between the parties
was not that of employment. It is does not
however define the nature of the relationship it had with Mr
Ramodise.
[14]
Mr Malindi for Nehawu argued that despite
everything pointing to the existence of the employment relationship
the Court should on
the evidence of Mr Majola find that there was no
employment relationship. He in this respect argued further that the
word “
employee”
was used loosely and not as envisaged in the
Labour Relations Act. He
further argued that the fact that there was no written contract
between the parties was not an omission but an understanding that
even though Mr Ramodise was paid remuneration as an employee he was
not an employee.
The applicable
legal principles
[15]
The word “
employee”
is defined in terms of section 213 of the Labour Relations Act 66 of
1995 (the Act) to mean:
“
(a)
any person, excluding an independent contractor, who works for
another person or for the State and who receives,
or is entitled to
receive, any remuneration; and
(b)
any other person who in any manner assists in carrying on or
conducting the business of an employer.”
[16]
In
Hydraulic
Engineering Repair Services v Ntshona & Others (2008) 29 ILJ 163
(LC),
this Court considered the factors
to take into account in determining the existence of an employment
relationship between the parties.
The Court held in this regard that
the fact that the provisions of the contract categorize the
relationship between the parties
to be that of an independent
contractor is not conclusive of the true nature of the relationship.
While the Court in that matter
was faced with a written contract, the
principles enunciated therein would still apply even where the
employment contract was concluded
by way of a verbal agreement or
otherwise. In this respect the Court found that the courts and other
dispute resolution bodies
have gone beyond what the parties regard as
the nature of their relationship to uncover the underlying and the
true nature of such
a relationship.
[17]
The Court in
Hydraulic
Engineering Repair
looked at the
various tests that the courts and other dispute resolution bodies
have over the years applied in determining the true
nature of the
relationship between the parties. In applying any one of the tests
the courts have acknowledged and emphasized that
the question of
whether a person is an employee of another person depends largely on
the facts of each case in the light of the
features of the
relationship between such two parties.
[18]
At an earlier stage in the development of
jurisprudence in this area the South African courts favoured the use
of the control test
in determining the nature of the relationship
between master and servant. Control and supervision was held to be
one of the
indicia
to determine whether the relationship was that of a contract of
service (employment contract) or a contract for service (independent
contract).
[19]
In
CMS Support
Services Ltd v Briggs (1998) 19 ILJ 271 (LAC),
the Court focused and emphasised upon the election made by the
employee, in the contract. This approach was criticised in the
Denel
(PTY) LTD v Geber (2005) 26 ILJ 1256
(LAC),
for disregarding the realities
of the relationship between the parties. It was held, in
Denel
’s
case that ignoring the realities of the relationship between the
parties makes it possible to avoid the scope of the protective
legislation such as the Labour Relation Act and the Basic Conditions
of Employment Act. The reality approach does not however mean
that
the contractual expression by the parties as contained in their
agreement should be ignored. Thus the court in
Ackers
(Pty) Ltd v Mandla
(2001)
22 ILJ 1813 (LAC),
held that in
determining whether a relationship exists between the parties, the
terms of the relevant contract should be scrutinized.
[20]
The Labour Appeal Court in
State
Information Technology Agent (Pty) Ltd v Commission for Conciliation,
Mediation and Arbitration (2008) 29 ILJ 2234,
confirmed the approach it had adopted in
Denel.
Davis JA in that case, after upholding the views expressed by
Benjamin in
(2004) ILJ 25 787,
held that the decision in
Denel
is congruent with the provisions of
section 213
of the
Labour
Relations Act, and
that when determining the issue of employment
relationship the Court must work with three primary criteria. The
three criteria
are set out (at paragraph 12 ) in the judgment as
follows:
“
1.
an employer’s right to supervision and control;
2.
whether the employee forms an integral part of the organisation with
the employer;
and
3.
the extent to which the employee was economically dependent upon the
employer.”
[21]
Turning to the facts of this case, it is
clear that Nehawu has failed to show on what basis the ruling of the
commissioner should
be reviewed and set aside. In other words it has
failed to show that the relationship between it and Mr Ramodise was
anything other
than an employment relationship. It is clear from the
facts of this case that Mr Ramodise was under the control of Nehawu
as its
employee and was in this respect expected to put out 40
(fourty) hours of work a week. In addition to the basic salary which
he
dependent on for his economic survival, the other factors which
support the view that he was an employee is that Nehawu deducted
and
made contributions for the various statutory requirements from his
salary like PAYE, UIF, Provident Fund and Skills Development
Levy.
[22]
It is important to note that the
Unemployment Insurance Act 63 of 2001
defines an employee as “
any
natural person who receive remuneration or to whom remuneration
accrues in respect of services rendered … but excludes
an
independent contractor.”
Also in
respect of this Act Nehawu could not have made contribution as it did
because a “
contributor”
is amongst others defined as a natural person who is or was employed.
The
Skills Development Levies Act 9 of 1999
, imposes a duty on an
employer like Nehawu to pay skills development levy. Also of
importance in as far as this Act is concerned
is that its definition
of an “
employee”
is the same as that in the
Labour Relations Act 66 of 1995
.
[23]
Nehawu’s contention that Mr Ramodise
was not an employee is not supported by the written communication
with him. Mr Ramodise
is referred to as an employee consistently
through out starting with the letter of suspension and ending with
that of dismissal.
[24]
Reliance on the constitution by Nehawu does
not assist its case. There is nothing in the constitution that
prohibits an office bearer
from becoming an employee. In fact the
reading of clause 65 which Nehawu based its case on indicates that
the constitution envisaged
that a person could be both an office
bearer and an employee as was the case with Mr Ramodise. Clause 65
(a) provides for the removal
of a shop steward or office-bearer from
office. And clause 65(b) provides for the expulsion of a shop steward
or office bearer
from the union or
the
dismissal of an official from the employment by the union. (My
emphasis).
Conclusion
[25]
In conclusion and in summary, it is my view
that the realities of this case point towards the fact that Mr
Ramodise was an employee.
The particular facts that support this view
can be summarized as flows:
1. that even subsequent
to the disciplinary hearing, Nehawu treated Mr Ramodise as an
employee in that he was dismissed and not
voted out of his position
in terms of clause 64 of the constitution.
2. the manner
in which he worked was subject to the control and/or direction of the
Nehawu and its officials.
3. he was
part of the organization-Nehawu.
4. his hours
of work was subject to the control of Nehawu and in this regard
had to report for work on a daily
basis and was entitled to take
leave like any other employee.
5. he was
economically dependent on the salary paid to him by Nehawu.
6. he
reported for work at the Nehawu offices and was provided with, inter
alia, office space, computer equipment, stationery,
telephones and
other work equipment to enable to render his services.
[26]
In the light of the above, the application
to review the ruling of the commissioner stands to be dismissed. What
then remains for
consideration is the issue of costs which is
governed by
section 162
of the
Labour Relations Act 66 of 1995
. In
terms of this section account should be taken of both law and
fairness in the consideration of whether or not to grant costs.
In my
view the facts and circumstances of this case calls for costs to be
awarded on a punitive scale.
[27]
In the premises the following order is
made:
(i)
The application to review the ruling of the
third respondent under case number GAJB 28037-07 dated 28
th
March 2008, is dismissed.
(ii)
Mr Ramodise is the employee of the
applicant and accordingly the second respondent (CCMA) has
jurisdiction to entertain the alleged
dismissal dispute.
(iii)
The applicant is to pay costs on the scale
of own attorney and client.
_______________
Molahlehi
J
Date
of Hearing :
22
nd
April 2009
Date
of Judgment :
18
th
August 2009
Appearances
For
the Applicant :
Adv G Malindi
Instructed
by :
Thaanyane Attorneys
For the
Respondent: Mr F van Rooi
of Eversheds