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[2009] ZALCJHB 89
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Comtech Networking Solutions CC v Director General of Department of Labour NO and Another (J2614/08) [2009] ZALCJHB 89 (28 August 2009)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
J2614/08
Reportable
In
the matter between:
COMTECH
NETWORKING SOLUTIONS CC
APPLICANT
and
DIRECTOR
GENERAL OF DEPARTMENT
OF
LABOUR
N.O
FIRST RESPONDENT
VENECIA
L SCHOEMAN
SECOND RESPONDENT
JUDGMENT
Pillay
D, J
Introduction
This is an appeal in
terms of section 72 (1) of the Basic Conditions of Employment Act 75
of 1997 (BCEA). On 24 October 2008 the
first respondent, the
Director General of the Department of Labour, issued a compliance
order ordering the applicant employer
to pay R47 049,41 to the
second respondent employee for alleged unpaid salary and commission.
On 27 October 2008 the
employer objected to the compliance order. On 9 December 2008 the
Department of Labour modified its compliance
order and its reasons
for it in terms of section 71 (3) (a) and (b) of the BCEA.
Both respondents oppose
the appeal jointly.
The
Nature of the Appeal
The employer invited the
court to determine whether an appeal in terms of section 72 of the
BCEA is on the record or a rehearing.
Mr Malan for the employer
submitted that the Department of Labour’s record was
inadequate. If the court intended to determine
the matter finally
the employer wanted a rehearing. In support of its submissions, Mr
Malan referred to acclaimed academic authorities
and several cases
all of which predate the Labour Relations Act 66 of 1995 (LRA).
The BCEA does not
prescribe the powers of the Labour Court specifically for an appeal.
In the circumstances, the court takes its
cue from the purpose of
the LRA itself, namely to resolve labour disputes effectively. The
circumstances of each case determines
whether the appeal is most
effectively resolved if it is determined on the record or reheard by
the court or the Department of
Labour. Given that this appeal is
against an administrative decision, it is permissible for the court
to refer the dispute back
to the administrative organ responsible
for the decision. (JR De Ville
Judicial Review of Administrative
Action in South Africa
at 387)
Grounds
of Appeal
The employer submits
that Department of Labour is biased in favour of the employee in
that it acts jointly with the employee in
opposing the appeal and in
the manner in which its officials considered the employer’s
objection. It denied the employer
a fair opportunity to respond to
the employee’s claim. It disregarded the employer’s
evidence that all three claims
of the employee were unfounded.
The employer submitted
that the Department of Labour erred firstly in finding that it owed
the employee salary and commission
for June 2008. On 22 June 2008
the employee took an advance of R5 000 on her salary for June. She
earned no commission for June
2008. After deducting her salary of R3
000 and taxes from the R5 000, the employee owed the employer R2
434. The employee had
consented to the loan being offset
automatically against her salary at the end of June or when she left
her employment.
The employee’s
response to this claim was to deny that she signed any
acknowledgment of debt. The signature on the acknowledgment
of debt
looked like hers but was not hers.
The Department of
Labour’s response to this claim was that the employee did not
ask for an advance on her salary.
The court notes that the
employee does not deny receiving an advance. She did not tender its
return, assuming in her favour that
the employer advanced her an
unsolicited loan, as unlikely as that might be. The employee is not
entitled to her salary for June
2008 until she refunds the loan to
the employer. She failed to tender the refund. Consequently, she
owes the employer the difference
between her salary and the loan.
The employer supported
its defence with documentation. In the absence of any response to
the documentation from the employee,
the Department of Labour should
have accepted the employer’s version. The Department of Labour
erred in rejecting the employer’s
defence to the claim for her
June salary.
The employer submitted
secondly that the Department of Labour erred in finding that the
employer owed the employee salary and
commission for September and
October 2007. The background to this claim is that in her complaint
on 7 July 2008, the employee
under oath claimed wages for June 1 to
June 26 2008 plus commission amounting to R13 585,89. This is the
amount the Department
of Labour advised the employer on 27 August
2008 was owing to the employee.
However, on 24 October
2008, the Department of Labour issued a compliance order calling on
the employer to pay R47 207,59. This
amount included purported
claims for April and May salary 2008 (R6 000) plus “commission
for the sales she made before
the notice period” amounting to
R38 576,62.
On 9 December 2008,
pursuant to the employer’s objection, the Department of Labour
modified the compliance order in terms
of section 71 (3) (a) of the
BCEA and its reasons to claim salary of R6 000 for September and
October 2007, not April and May
2008.
The employee alleged
that when she terminated her employment in June 2007 the employeer
did not pay her salary for September and
October 2007.
The Department of Labour
submitted that the salary for 2007 was included in the amount of R47
207,59 claimed in the compliance
order.
The Court finds that the
documentary evidence supports the employer. The Department of
Labour’s record contains no evidence
of either the employee
lodging a complaint for the 2007 salary or of an inspector calling
on the employer for an undertaking
in respect of that claim. The
Department of Labour had not put the claim for 2007 salaries to the
employer prior to 8 December
2008 when it modified its compliance
order. As a result it had not given the employer an opportunity to
respond to it before
issuing the order.
Furthermore, the
Department of Labour did not have the power to make any findings on
the claims for 2007 salary because section
70 (d) of the BCEA bars a
labour inspector from issuing a compliance award if the amount is
payable for longer than 12 months
before the date when the complaint
was made to an inspector or, if no complaint was made, the date when
the inspector first endeavoured
to secure a written undertaking from
the employer in terms of section 68.
When the Department of
Labour called for payment for the first time about 4 December 2008,
the claim was more than 12 months old.
Therefore, Department of
Labour erred in issuing an order for payment of the 2007 claims.
The employer submitted
thirdly that the Department of Labour erred in finding that it owed
the employee commission:
(a)
without first giving the employer particulars of this claim and
calling on it to respond before issuing the compliance
order,
(b)
without acceding to the employer’s request for particulars,
(c)
when the employee had expressly waived her rights in terms of section
30 of the BCEA in the Commission Agreement, and
(d)
on the basis that the forfeiture clause could be treated as if it did
not exist.
The Department of
Labour and the employee, on its advice, claimed that the forfeiture
of commission clause in the Commission Agreement
conflicted with
section 4 and 5 of the BCEA read with clause 6(3) of the Sectoral
Determination No 9: Wholesale and Retail Sector,
a copy of which was
not placed before the court.
The forfeiture clause
stated:
“
Management
reserves the right to decide the amount of commission applicable in
case of orders received between the period of resignation
and
departure from the company. In the event of termination dismissal,
any outstanding commission will be forfeited.”
The court finds
that without full evidence and argument, the Department of Labour
could not determine the validity of this clause.
It omitted to give
the employer an opportunity to make representations before it issued
its compliance order. Furthermore, there
is no evidence that the
employee represented that the forfeiture clause was invalid. The
Department of Labour therefore erred
in ordering the employer to pay
commission.
Without adequate
evidence and argument on the record, the court is not in a position
to determine finally whether any commission
is payable to the
employee. Consequently, the employee is given leave to refer this
aspect of the claim to the Department of
Labour within 10 days of
receipt of this judgment, if she so chooses. In that event, the
Department of Labour must assign inspectors
other than those
previously involved in this case to administer and determine it.
Costs
The inspector(s) who
pursued the employee’s case were over-exuberant and biased in
favour of the employee. Inspectors perform
an administrative
function. Their administrative actions have to meet the requirements
of fairness. One of the requirements of
fairness or just
administrative action is that the decision maker should be unbiased
and impartial. In this case the inspector(s)
believed in good faith
that they were acting within their mandate to protect employee
rights. The Department of Labour should
therefore not be burdened
with an order for costs.
Order
1.
The appeal is upheld on all grounds.
2.
The court gives leave to the employee to refer only her dispute
concerning unpaid commissions to the Department
of Labour to be
administered and determined by inspectors other than those previously
involved in the dispute.
3.
The employee’s claims for salary for June 2008 and September
and October 2007 are dismissed.
4.
The employee is ordered to pay the costs of the appeal.
___________
Pillay D, J
Date of Judgment: 28
August 2009
Appearances
For the Applicant: Adv
ZM Malan instructed by AC Schmidt Inc
For the Respondent:
Labour Official SB Manpeule