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[2009] ZALCJHB 31
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Nedcor Bank Ltd v Harris and Others (JR927/01) [2009] ZALCJHB 31 (14 December 2009)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
IN JOHANNESBURG
REPORTABLE
CASE
NO: JR927/01
In
the matter between:
NEDCOR
BANK LIMITED
APPLICANT
and
JAMES
GEORGE
HARRIS
1
ST
RESPONDENT
COMMISSIONER
BHEKI
KHUMALO
2
ND
RESPONDENT
COMMISSION
FOR CONCILIATION
MEDIATION
AND
ARBITRATION
3
RD
RESPONDENT
JUDGMENT
Molahlehi J
Introduction
[1]
This is an opposed application to review and set aside the
arbitration award issued by the second respondent (the commissioner)
under case umber GA115998 and dated 14
th
May 2001. In that
arbitration award the commissioner found the dismissal of the first
respondent to have been unfair and directed
that he be reinstated.
Background
facts
[2]
The first respondent resigned his employment with the applicant on
12
th
October 2000, in circumstances which he alleged
constituted a constructive dismissal. Thereafter, he referred the
dispute regarding
the alleged constructive dismissal to the second
respondent (the CCMA) in terms of the provisions of the Labour
Relations Act,
number 66 of 1995 (the LRA). Failure to resolve the
dispute at conciliation resulted in it being arbitrated upon by the
commissioner.
[3]
The resignation by first respondent concerned in general his
dissatisfaction with his immediate superior, Mrs Schroeder and
in
particular centered on the implementation of a performance
improvement program (the PIP). The essence of the case of first
respondent is that his resignation was induced by the conduct of Mrs
Schoeder in particular because of the manner in which she applied
the
PIP both before and after his transfer.
[4]
The problem between the two seems to have started with the low
performance rating which Mrs Schoeder gave to first respondent,
implying that his performance was poor. Because of this the first
respondent instituted grievance proceedings against Mrs Schoeder.
Being unhappy with the outcome the grievance process the first
respondent request a transferred to another branch of the respondent.
Soon after joining the Randburg branch his senior resigned and was
replaced by Mrs Schoeder.
[5]
According to the first respondent, immediately on resumption of
duties at Randburg, Mrs Schoeder changed the system and added
more
responsibilities to his job description. She also raised the targets
which the first respondent had to meet per month to R5
million. The
added responsibilities were according to the first respondent time
consuming and had a negative influence on him reaching
those targets.
The first respondent further complained that Mrs Schoeder placed him
on the PIP and gave him a rating of 1 (one).
[6]
The first respondent then lodged a grievance against Mrs Schoeder
which was referred to the internal Ombudsman for adjudication.
The
Ombudsman found the conduct of Mrs Schoeder to be unfair and unjust.
It seems the applicant was not satisfied with the decision
of the
Ombudsman and accordingly referred the matter to arbitration which
found that there was nothing unfair about the conduct
of Mrs
Schoeder.
[7]
The first respondent being unhappy with the outcome of the
arbitration award requested another transfer. He was transferred
to
what is referred to as the Boss team in Edgardale. On his arrival
there he found Mrs Schoeder who insisted that his immediate
supervisor should place him on the PIP program resulting in tension
developing between the two of them. It was for this reason
that the
first respondent resigned and thereafter referred a constructive
dismissal dispute to the CCMA. And as indicated the CCMA,
arbitrated
upon the dispute, found the dismissal to have been unfair and
directed that the applicant to reinstate the first respondent.
Point
in limine
[8]
The first respondent in his heads of argument raised a point
in
limine
concerning the delay on the part of the applicant in
prosecuting the review application. The applicant filed an affidavit
wherein
it sought to explain the delay. The first respondent opposed
admission of the affidavit of the applicant explaining the delay. On
24
th
April 2009, this Court ruled against the opposition
and admitted the affidavit. The first respondent was granted leave to
file
his answer to that affidavit.
[9]
The brief background to the delay is as follows: As indicated above
after resigning from his employ the first respondent referred
a
dispute to the CCMA which was ultimately arbitrated on and the award
issued on the 16
th
May 2000. The applicant challenged the
outcome of the arbitration award by launching the review application
on 9
th
July 2001.
[10]
For a period of close to two years after filing the review the
applicant did nothing to progress that application. The first
time
that some action was taken by the applicant was on 1
st
April 2003, when the applicant filed the record of the arbitration
proceedings. Two days or so after filing the record of the
arbitration proceedings the applicant filed a notice in terms of Rule
7A (8) (b) of the Rules of the Court indicating that it stands
by the
notice of motion. In response the first respondent filed his
answering affidavit which as indicted earlier was three days
late, on
the 7
th
May 2003. It may also be worth mentioning that the
applicant never filed a replying affidavit.
[11]
A year after the filing of the answering affidavit, nothing having
happened, the Registrar of the Labour Court issued a directive
on 3
rd
June 2004 which recorded that the review was unopposed and calling
upon applicant to file heads of argument within 5 days. The
directive
was sent only to the applicant. The applicant did not respond to this
directive.
[12]
Again, almost a year later and on 29
th
July 2005 the
Registrar issued the second directive which now recorded the matter
as opposed and called upon both parties to file
their heads of
arguments. There was no response to that directive from both parties.
[13]
A further directive was issued almost a year later on 12
th
July 2006, by the Registrar which also solicited no response from any
of the parties. The same was repeated on 9
th
February 2008
by the Registrar calling upon both parties to deliver their heads of
argument within 7 days. The applicant filed
its head of argument on
5
th
May 2008 and the first respondent his on 27
th
June 2008.
[14]
The matter was then set down on notice to both parties for the 12
th
July 2006. On that day the matter was postponed
sine die
apparently at the instance of the applicant. The matter came
before this Court on the 24
th
April 2009. The matter was
on that date postponed further to afford the first respondent an
opportunity to answer to the applicant’s
affidavit explaining
the delay in the prosecution of its review application.
The
applicable legal principles
[15]
It is now well established that an applicant who delays in the
prosecution of his or her review application could be bared
from
proceeding any further with the application unless a satisfactory
explanation is tendered for the delay. The approach to be
adopted
when dealing with the issue of unreasonable delay was discussed in
Solidarity & Others v ESKOM Holdings Ltd (2008) 29 ILJ 1450
(LAC
). In that case the LAC quoted with approval what was said in
Associated Institutions Pension Fund & others v Van Zyl &
others
2005 (2) SA 302
(SCA),
where the Court in dealing with the
issue of unreasonable delay in initiating proceedings had the
following to say:
“
[46] It is a
longstanding rule that courts have the power, as part of their
inherent jurisdiction to regulate their own proceedings,
to refuse a
review application if the aggrieved party had been guilty of
unreasonable delay in initiating the proceedings. The
effect is that,
in a sense, delay would 'validate' the invalid administrative action
(See eg Oudekraal Estates (Pty) Ltd v City
of Cape Town & others
2004 (6) SA 222
(SCA) ([2004]
3 All SA 1)
at para [27]). The raison
d'étre of the rule is said to be twofold. First, the failure
to bring a review within a reasonable
time may cause prejudice to the
respondent. Secondly, there is a public interest element in the
finality of administrative decisions
and the exercise of
administrative functions (See eg Wolgroeiers Afslaers (Edms) Bpk
v Munisipaliteit van Kaapstad
1978 (1) SA 13
(A) at 41).
[47] The
scope and content of the rule has been the subject of investigation
in two decisions of this Court. They are
the Wolgroeiers case and
Setsokosane Busdiens (Edms) Bpk v Voorsitter, Nasionale
Vervoerkommissie, en ‘n ander
1986 (2) SA 57
(A). As appears
from these two cases and the numerous decisions in which they have
been followed, application of the rule requires
consideration of two
questions:
(a)
Was there an unreasonable delay?
(b)
If so, should the delay in all the circumstances be condoned? (See
Wolgroeiers at 39C - D.)
[48] The
reasonableness or unreasonableness of a delay is entire dependent on
the facts and circumstances of any particular
case (See eg
Setsokosane at 86G). The investigation into the reasonableness of the
delay has nothing to do with the Court's discretion.
It is an
investigation into the facts of the matter in order to determine
whether, in all the circumstances of that case, the delay
was
reasonable. Though this question does imply a value judgment it is
not to be equated with the judicial discretion involved
in the next
question, if it arises, namely, whether a delay which has been found
to be unreasonable, should be condoned (see Setsokosane
at 86E.”
[16]
In
Ivor Michael Karan t/a Karan Beef Feedlot v John William
Randal
unreported case number JS347/06,
the Court
held that from a policy perspective there are two principle reasons
why the Court should have the power to dismiss a
claim at the
instance of an aggrieved party where the other has been guilty of
unreasonable delay. The first reason concerns the
prejudice that the
aggrieved party may suffer as a result of the delay and the second is
about the importance and the need to reach
finality within a
reasonable time in the administration of justice. See
Radebe v
Government of the Republic of South Africa
1995 (3) SA 787
(N) and
Sishuba v National Commissioner of the South Africa Police Service
(2007) 28 ILJ 2073 (LC).
[17]
It is trite that the Court has the power to grant an indulgence for
the defaulting party once good cause is shown for the unreasonable
delay. The authorities indicate that in assessing whether to grant
the indulgence the Court will take into account the prejudice
that
the other party may have suffered as a result of the delay in the
prosecution of the claim. See
Bezuidenhout v Johnston NO &
others (2006) 27 ILJ 2337 (LC).
[18]
It is clear from the above that the applicant has a duty to ensure
that a claim is processed without unreasonable delays to
avoid
prejudice on the other party. However, as Van Niekerk J observed in
Karan Beef Feedlot
supra at paragraph [9] of that judgment:
“
[9]
This is not to say that a respondent party is entitled to lie in
wait, intending to ambush the applicant once a
period of delay
becomes sufficiently protracted to justify the filing of an
application to dismiss. In the Bezuidenhout judgment,
Nel AJ observed
that the respondent party also bears a responsibility to ensure that
disputes are resolved expeditiously, inter
alia by ensuring that the
applicant party complies with the time periods applicable to it, for
example, by compelling compliance. In
Sishuba, Molahlehi AJ
noted that the Rules as they related to the filing of process in
review applications did not preclude a dilatory
party or
representative from being placed on terms, nor was a degree of
self-help prohibited:
“
Whilst there is
indeed a practice well-known in this Court that a matter will be set
down only once the Applicant has filed the
Heads of Argument, there
is no rule governing this practice. There is, however, in my
view, no reason why an Employee faced
with a delay on the part of the
Applicant cannot file Heads of Argument prior to that of the
Employer, and thereby activate the
process of the Registrar setting
the matter down. I also see no reason why the Employee did not,
in the circumstances of
this case, place the Employer on terms and
called upon him to file his Heads of Argument before bringing this
application.”
[10] It
seems to me that the approach adopted both in the Bezuidenhout and
Sishuba cases requires that a respondent
party confronted by an
unreasonable delay on the part of an applicant ought at least to
place the offending party on terms, or
to seek the intervention of
the Registrar or file an application to compel (when these steps are
appropriate), prior to filing
an application to dismiss.”
[19]
In the present instance there is no doubt that the applicant has been
dilatory in the prosecution of its review application.
The facts also
reveal that the first respondent also contributed to the delay which
suggests that he was not keen in having the
matter finalized as soon
as was possible. Whilst the explanation tendered by the applicant is
not satisfactory there are however
good prospects of success on the
merits of the review. It is for this reason and the fact that the
first respondent contributed
to the delay, failed take any step to
compel the applicant to take further steps in the further prosecution
of the review, that
this Court declines to intervene in favour of the
first respondent.
Grounds
for review
[20]
The applicant contended that the decision reached by arbitrator is
one which “
no reasonable arbitrator could have come to.”
The applicant contended in this regard that the commissioner in
considering whether the employee was constructively dismissed or
not,
accepted evidence outside of the ambit of the agreed issue. According
to the applicant because of the agreement reached in
the
pre-arbitration minutes it did not adduce evidence to rebut the
employee’s allegations that:
(a) he
was dissatisfied about his performance ratings,
(b)
dissatisfaction with the applicant's Human Resources personnel,
(c) he
had a grievance with his manager,
(d) he had
referred his complaint to the applicant's ombudsman, and
(e) the
referral by the referral of the dispute to the CCMA regarding the
application of the PIP program.
[21]
It was also for the same reason that the applicant confined its
evidence to the implementation and purpose of the PIP program
to
support the contention that the PIP program was a legitimate and
designed to monitor the performance of an employee in circumstances
where it was of the view that an employee's performance was
unsatisfactory.
[22]
The applicant further attacked the award on the basis that the
commissioner failed to appreciate the nature of the dispute
he was
required to apply his mind to. This attack is based on the contention
that the applicant’s version of events remained
undisputed and
therefore there was no basis for accepted the employee’s
version that the applicant sought to use the PIP
program
notwithstanding the fact that the employee had been transferred to
another department within the applicant's bank. The
inquiry into
employee's dissatisfaction with the applicant's human resources
personnel, his grievance with his manager, the referral
of his
complaint to the applicant's ombudsman and the referral of the
dispute to the CCMA regarding the implementation of the PIP
program
were according to the applicant entirely irrelevant to the enquiry
before the commissioner.
[23]
The other ground upon which the applicant relies on in its attack of
the award is that the commissioner committed a gross misconduct
in
the arbitration proceedings in finding that the employee's version or
evidence remains undisputed. The version of the employee
was
according to the applicant irrelevant to the enquiry as to whether or
not the implementation of the PIP program constituted
grounds for the
employee to contend that he was constructively dismissed. The
applicant did not dispute having implemented the
PIP but argued that
its implementation was not evidence that it had the intention to make
the employee's continued employment intolerable.
[24]
It was argued for the applicant that the award to reinstate the
employee who had resigned his employment is not justifiable
and
neither were the provisions of Section 194(2) applicable as the
applicant was precluded from implementing a fair procedure
due to the
fact that the applicant resigned.
The
principles governing constructive dismissal
[25]
The duty to establish the existence of a dismissal in terms section
192 (1) of the Labour Relations Act 66 of 1995 (LRA), rests
with the
employee. The employee has to establishes the existence of the
dismissal by showing that he or she terminated the employment
relationship because the employer had in terms of section 186(1) (e)
of the LRA made continued employment intolerable. Thus the
onus to
show that the dismissal was constructive because the employer had
made the continued working relationship intolerable rests
with the
employee. See
Sappi Craft (Pty) Ltd t/a Tugela Mills v Majaka NO &
others (1998) 19 ILJ 1240 (LC) and Secunda Supermarket CC t/a Secunda
Spar
& others v Dreyer NO & others (1998) 19 ILJ 1584 (LC);
[1998] 10 BLLR 1062
(LC).
To succeed in the claim that he or she
was constructively dismissed the employee has to show that
objectively assessed the conditions
at the work place were so
intolerable that he or she had no other option but to terminate the
employment relationship
.
[26]
The test for determining whether or not an employee was
constructively dismissed was set out in
Pretoria Society for the
Care of the Retarded v Loots (1997) 18 ILJ 981 (LAC),
at
paragraph [37] as follows:
“
[37] The
enquiry [is] whether the appellant, without reasonable and proper
cause, conducted itself in a manner calculated or likely
to destroy
or seriously damage the relationship of confidence and trust between
the employer and employee. It is not necessary
to show that the
employer intended any repudiation of a contract: the court's function
is to look at the employer's conduct as
a whole and determine whether
. . . its effect, judged reasonable and sensibly is such that the
employee cannot be expected to
put up with it.”
[27]
It is clear from the above that the objective assessment of the
employer’s conduct that may have made the continued employment
intolerable has to be assessed in its totality and not piece meal. In
this respect the Supreme Court of Appeal in the case of
Murray v
Minister of Defense (2008) 29 ILJ 1369 (SCA)
, held that in
assessing whether the conduct of the employer made the relationship
with the employee intolerable, the Court should
not fragment
employee’s complaints, in other words consider them one by one
in isolation and conclude that each was neither
pivotal to employee’s
resignation nor rendered his position intolerable. The Court held
that the conduct of the employer
must be considered as a whole
including its cumulative impact on whether its effect judged
reasonably and sensibly, was such that
the employee could not be
expected to put up with it. The intolerable conditions which the
employee complained about must have
been of employer's making.
[28]
In
Murray
supra the SCA was dealing with constructive
dismissal of the SA Navy employee which is not covered by the
provisions section 186(1)
(e) of the LRA but by the common law
contract of employment. In applying the concept of constructive
dismissal as adopted from
the English law and subsequently codified
by the LRA, the SCA found that the concept was applicable to the
common law contract
of employment and in this regard found that the
employer had the duty of fair dealing with an employee.
[29]
The employee in
Murray
supra had in the proceedings before the
High Court contended that he had been constructively dismissed
following a series of incidents
which occurred from September 1993 to
June 1997, this ultimately led to his resignation. The incidents
which the employee complained
about included his arrest and the
holding of a court martial which was discontinued because there was
no
prima facie
evidence against him. The other complaints were
about; his promotion to the rank of commander being withheld and
being removed
from his position of commander of the military police
unit, Simon's Town, and posted as a supernumary at the naval staff
college,
Muizenberg, the downgrading of his post at the military
police unit etc. The High Court, weighed each individual complaint of
the
employee and held that none of them rendered the appellant’s
position intolerable or caused him to resign. The decision of
the
High Court was overturned on appeal by the SCA which found that the
cumulative incidents of the conduct of the employer created
intolerable conditions for the employee. In arriving at that
conclusion the SCA reasoned at paragraph 13 that:
“
[13] It
deserves emphasis that the mere fact that an employee resigns because
work has become intolerable does not by itself make
for constructive
dismissal. For one thing, the employer may not have control over what
makes conditions intolerable. So the critical
circumstance must have
been of the employer's making. But even if the employer is
responsible, it may not be to blame. There are
many things an
employer may fairly and reasonably do that may make an employee's
position intolerable. More is needed: the employer
must be culpably
responsible in some way for the intolerable conditions: the conduct
must (in the formulation the courts have adopted)
have lacked
'reasonable and proper cause. Culpability does not mean that the
employer must have wanted or intended to get rid of
the employee,
though in many instances of constructive dismissal that is the case.”
[30]
The other aspect to consider in determining the existence of
constructive dismissal is whether or not the employee had no option
but to resign in order, as Grogan in his Workplace Law (4 ed) at 105,
puts it, “
to protect his or her interests.''
In
Foschini
Group v Commission for Conciliation , Mediation &
Arbitration & Others (2008) 29 ILJ 1515 (LC),
NeL
AJ, as he then was, quoted with approval what was said in
Aldendorf
v Outspan International Ltd (1997) 18 ILJ 810 (CCMA),
where the
commissioner had the following to say:
“
[W]here
employees could reasonably have lodged a grievance regarding the
cause of the unhappiness, and failed to do so before resigning,
they
may be hard put to persuade the court or arbitrator that they had no
option but to resign.”
[31]
In addition to determining whether the conduct of the employer has
made the continued employment relationship intolerable,
the
commissioner or arbitrator has to determine whether such a dismissal
was unfair.
Smithline Beecham (Pty) Ltd v Commission for
Conciliation, Mediation & Arbitration & others (2000) 21 ILJ
988 (LC).
[32]
Pillay AJA, in
Albany Bakeries v Van Wyk & others (2005) 26
ILJ 2142
(LAC) in the middle of paragraph [28] observed as
follows:
“
. . . It
is, firstly, also desirable that any solution falling short of
resignation be attempted as it preserves the working
relationship,
which is clearly what both parties presumably desired. Secondly, from
the very concept of intolerability one must
conclude that it does not
exist if there is a practical or legal solution to the allegedly
oppressive conduct. Finally, it might
well smack of opportunism for
an employee to leave when he alleges that life is intolerable but
there is a perfectly legitimate
avenue open to alleviate his distress
and solve his problem.”
Evaluation
of the arbitration award
[33]
In arriving at the conclusion that the dismissal of the first
respondent was unfair the commissioner reasoned that it was senseless
to apply the PIP generated from another section on the employee after
he was transferred to another section. The commissioner further
found
with regard to the implementation of the PIP programme that “
the
respondent acted unreasonably and unfair in that it sought to apply
the programme arbitrarily.”
[34]
In considering the facts which were before him the commissioner found
that:
“
On the
probabilities therefore I accept that the applicant’s version
that the respondent sought to use the (PIP) from the
Vehicle
Retention Unit on him while at Boss section.
Therefore the
applicant perceived the risk as real if he were to continue with
employment
(My underlying). Also the applicant’s
version that the manager prohibited him from pursuing the dispute
through the CCMA
while under his section was not refuted. This added
to his reason for resignation. I therefore find that that the
applicant was
constructively dismissed within the definition of the
Act referred to above.”
[35]
In my view the arbitration award of the commissioner stands to be
reviewed because it does not meet the reasonableness standard
set out
in in
Sidumo and Another v Rustenburg Platinum Mines Ltd and
Others (2007) 28 ILJ 2405 (CC)
. The arbitration award further
stands to be reviewed because the commissioner committed a gross
irregularity in that he exceeded
the powers given to him by the
parties in their pre-arbitration minute and thereby misconceived the
nature of the dispute before
him.
[36]
The arbitration award is firstly unreasonable because the
commissioner in a fundamental way misconceived the test to apply
when
considering the issue of constructive dismissal. The commissioner
failed to determine whether the conditions at the workplace,
at the
time of the resignation of the first respondent, were so intolerable
that he had no option but to resign. The commissioner
in assessing
the reason for the resignation did not do so in the context of
evaluating the conditions that prevailed at the workplace
at the time
the applicant submitted his resignation but rather applied what may
be referred to as the “
perception of real risk to the
continued employment.”
This is not the test for determining
constructive dismissal.
[37]
Secondly, the commissioner exceeded his powers and thus committed a
gross irregularity in that he failed to confine himself
to the terms
of the pre-arbitration agreement concluded by the parties. In
preparation for the arbitration proceedings and with
the view to
expediting the proceedings the parties convened a pre-arbitration
meeting and recorded their agreement in a pre-arbitration
minute. The
relevant part of the minutes of the pre-arbitration meeting reads as
follows:
“
Whether the
Performance Improvement Programme instituted by the Customer
Retention unit made continued employment intolerable and
constituted
constructive dismissal.”
[38]
The powers of the commissioner were thus confined to determining
whether the implementation of the PIP programme, specifically
on the
work of the first respondent created conditions so intolerable that
he had no option but to resign. The commissioner failed
to appreciate
the nature of the dispute he was required to apply his mind to. Had
he appreciated the nature of the dispute before
him he ought, in
particular, to have considered the reason for resignation which was
not based on the intolerable working conditions
but on the poor
performance rating and the implementation of the PIP. In this respect
the first paragraph of the letter of resignation
of the first
respondent was critical in the assessment of whether or not the
reason for the resignation was because of the intolerable
working
conditions or something else. The letter reads as follows:
“
Resignation J.
G Harris Employee nb010799
I hereby confirm my
resignation is due to the fact that I want to pursue the matter
regarding my unfair Performance rating and PIP
which were put in
place by ABF Retention Unit, Branch no 9443.”
[39]
It is clear from the above that the first respondent resigned because
he wanted to challenge the performance rating he had
received and not
because the conditions at the workplace were unbearable.
[40]
In the light of the above the arbitration award of the commissioner
as indicated earlier stands to be reviewed and set aside
and be
substituted with the appropriate award. I however do not belief that
it would be appropriate to allow the costs to follow
the results.
[41]
In the premises the following order is made:
(i)
The point
in limine,
seeking to have the review application
dismissed because of the delay in its prosecution is dismissed.
(ii)
The arbitration award issued by second respondent is reviewed and set
aside.
(iii)
The arbitration award of the second respondent is substituted with
the following award:
“
1. The
applicant has failed to show that the reason for his resignation was
due to the implementation of the PIP making the continued
employment
relationship intolerable.
2.
The
applicant was not dismissed but resigned.
3.
The
CCMA lacks jurisdiction to entertain this dispute.”
_______________
Molahlehi
J
Date
of Hearing :
12
th
August 2009
Date
of Judgment :
14
th
December 2009
Appearances
For
the Applicant :
Adv
Peter Buiski
Instructed
by :
Cliffe Dekker Hofmeyr
Inc
For
the Respondent: Adv G
Fourie
Instructed
by :
Howes Incorporated Attorneys