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[2009] ZALCCT 12
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Elston v McEwan NO and Others (C662/07) [2009] ZALCCT 12 (9 January 2009)
IN THE LABOUR COURT OF
SOUTH AFRICA
HELD
AT CAPE TOWN
REPORTABLE
CASE NUMBER: C662/07
In the matter between:
ELSTON,
INGRID
Applicant
and
McEWAN
NO, GAIL
First
Respondent
SHELL
SA ENERGY (PTY) LTD
Second
Respondent
NATIONAL BARGAINING
COUNCIL
FOR
THE CHEMICAL INDUSTRY
Third
Respondent
JUDGEMENT
NGALWANA
AJ
Introduction
[1]
This is an application primarily for the review, setting aside and
correction of an arbitration award made by the first respondent
on 23
October 2007 under case number WCCHEM3876 and under the auspices of
the third respondent. In the alternative, the applicant
seeks
the review and setting aside of the first respondent’s award
and that the matter be remitted to the third respondent
for
de
novo
consideration.
[2]
The application comes pursuant to the provisions of section 77(2) of
the Basic Conditions of Employment Act, 75 of 1997 (“the
BCEA”)
which confers on this court the jurisdiction to review “the
performance or purported performance of any function
provided for in
this Act . . . on any grounds that are permissible in law”.
One of the functions for which the BCEA
provides is the resolution –
either by the CCMA or bargaining council and by way of arbitration –
of disputes in relation
to severance pay (section 41(9)). It is
the award of the first respondent, sitting as arbitrator under the
auspices of the
third respondent, that this court is required to
review in this case.
[3]
The parties are agreed that this court has jurisdiction to do so
pursuant to the provisions of the BCEA.
[4]
The first respondent found that during the period 1 June 1997 to 31
May 2001 the applicant was not an employee of the second
respondent
and was therefore not entitled to additional severance pay of five
years and eleven months.
[5]
The applicant now seeks to have the award substituted with a finding
that she was indeed an employee of the second respondent
as defined
in section 1 of the
BCEA from 1 June 1995
to 30 April 2007 of which the period in dispute (1
June
1997 to 30 April 2001)
forms part.
[6]
Flowing from that finding, she seeks an order requiring the second
respondent to pay her severance pay in the amount of R161 427.20
in terms of section 41(2) of the BCEA. She also seeks an order
that the second respondent bears the costs of the arbitration
proceedings.
[7]
The second respondent opposes the application, maintaining that the
applicant was not its employee during the period 1 June
1997 to 30
April 2001. It thus submits that she is not entitled to the
severance pay she seeks in relation to that period.
[8]
But what are the facts underpinning the first respondent’s
decision which the applicant seeks to have set aside?
The
Undisputed Facts
[9]
The following facts are not in dispute.
[10]
The applicant rendered services to the third respondent as a computer
trainer. She did so from 1 June 1995 until her
retrenchment on
30 April 2007.
[11]
Upon her retrenchment, the third respondent paid her severance pay
for the period 1 May 2001 to 30 April 2007 (“the third
period”)
calculated in terms of its retrenchment policy. She was not
paid severance for the period 1 June 1995 to 31
May 1997 (“the
first period”) and for the period 1 June 1997 to 30 April 2001
(“the second period”).
It appears that the first
period was not included in the calculation of severance pay (even
though the first respondent considered
that the applicant was “for
all intents and purposes” an employee during that period)
because the second period was
not considered
“
continuous
service”
for purposes of section
41(2) of the BCEA. The second period was in turn not considered
for severance pay because the third
respondent took the view that the
applicant was not its employee during that period.
[12]
During the second period the applicant rendered services to the third
respondent through a close corporation of which she was
one of three
members. During that period she submitted invoices to the third
respondent for work done; the invoices were
rendered in the name of
the close corporation of which she was a member; she received no paid
annual leave; she was not eligible
to join the third respondent’s
pension fund.
[13]
During that same period the applicant was required to render services
to the third respondent personally and not delegate to
other members
of the close corporation; she received an annual bonus; she was
required to comply with the third respondent’s
working
conditions (including, presumably, working hours); she could not
engage in activity that is in conflict with the third
respondent’s
interests; she had a job title; and all intellectual property
obtained in the course of rendering service to
the third respondent
would devolve upon the third respondent.
The
Issue
[14]
The issue that was in dispute between the parties at arbitration
before the first respondent was whether the applicant was
during the
second period an employee of the third respondent. The first
respondent found that she was not, and so was not
entitled to
severance pay including the first and second periods.
[15]
The applicant disagrees and asks this court to review that decision
and substitute its own decision for it to the effect that
she was
indeed an employee of the third respondent throughout.
Grounds
of Review
[16]
Before dealing with the merits of the case some preliminary
observations are in order. In the heads of argument submitted
on her behalf the applicant invokes the provisions of the Promotion
of Administrative Justice Act, 3 of 2000 (“
PAJA”)
for her review application. Both the
Constitutional Court (in
Sidumo and
Another v Rustenburg Platinum Mines Ltd and Others
(2007) 28 ILJ 2405 (CC) at para [104] for the reasons given at paras
[94]
et seq
)
and the Labour Appeal Court (in
Fidelity
Cash Management Service v CCMA and Others
(2008)
29 ILJ 964 (LAC) at para [92]) have held that PAJA does not apply in
the review of awards made pursuant to statutorily compulsory
arbitration processes.
[17]
Nevertheless, that is in my view not fatal to the applicant’s
case because on a proper reading of her founding affidavit
she does,
albeit in higgledy-piggledy fashion, invoke a semblance of the
grounds of review set out in section 145 of the Labour
Relations Act,
66 of 1995 (“the LRA”). In essence, as I understand
her grounds, she charges that the first respondent
committed a gross
irregularity. This is a ground of review in section
145(2)(a)(ii) of the LRA. The applicant then
elaborates by
suggesting that the first respondent misconstrued the evidence
presented to her. I disagree.
[18]
It must be borne in mind that this court is required to consider
whether the decision of the first respondent is one that a
reasonable
decision-maker could not reach (
Sidumo
at para [110]).
It
is not the reviewing court’s task to consider whether or not
the decision is correct in law. That is the function
of an
appeal court (
Minister of Justice and
Another v Bosch NO and Others
(2006) 27
ILJ
166
(LC) at paragraph [29]).
[19]
Counsel for the applicant sought to urge me that the reasonableness
test in
Sidumo
“and the test for reviews of commissioners’ findings on
unfair dismissal” cannot be relied on in this matter
because
this matter is not concerned with the unfairness of a dismissal but
rather with a finding on a jurisdictional fact.
This argument
has little to commend itself. There is nothing either in
section 145(2) of the LRA or in the
Sidumo
judgment that confines application of the review standard that each
posits only to unfair dismissal cases. The standard in
Sidumo
is in my view clearly the overarching standard of general application
to all review cases outside those falling within the purview
of PAJA.
[20]
Section 77(2) of the BCEA confers on this court the jurisdiction to
review arbitration awards made under the third respondent’s
auspices “on any grounds that are permissible in law”.
In my reading of the Constitutional Court’s decision
in
Sidumo
and that of the Labour Appeal Court in
Fidelity
Cash Management Service
, the grounds
permissible in law for purposes of section 77(2) of the BCEA do not
include those in PAJA for the reasons given by
the Constitutional
Court in
Sidumo
at para [94]-[104]. The applicable grounds are thus those in
section 145(2) of the LRA as “suffused by” the
reasonableness standard.
[21]
The Labour Appeal Court’s take on the meaning of this has been
articulated in
Fidelity Cash Management
Service
(at para [101] thus:
“
Nothing
said in
Sidumo
means that the grounds of review in s 145 of the [LRA] are
obliterated. The Constitutional Court said that they are suffused by
reasonableness.”
and
again (at para [102], 997
in principe
):
“
Sidumo
seeks to construe s 145 so as to meet the current constitutional
requirement that an administrative action must be lawful, reasonable
and procedurally fair.”
[22]
Thus, the section 145(2) review grounds have not, with the advent of
Sidumo
,
become obsolete. The BCEA provides no review grounds of its
own.
[23]
I am satisfied that the first respondent’s award is
unassailable on the grounds in section 145(2) of the LRA as “suffused
by” the
Sidumo
constitutional standard.
[24]
For purposes of this judgment and on the facts of this case it is not
even necessary to go as far as the Labour Appeal Court
went in
Fidelity Cash Management Service v CCMA
and Others
(2008) 29 ILJ 964 (LAC) when
it said at para [102]:
“
It
seems to me that, even if there may have been a debate under
Carephone
and
prior to
Sidumo
on whether a commissioner's decision for which he or she has given
bad reasons could be said to be justifiable if there were other
reasons based on the record before him or her which he or she did not
articulate but which could sustain the decision which he
or she made,
there can be no doubt now under
Sidumo
that the reasonableness or otherwise of a commissioner's decision
does not depend - at least not solely - upon the reasons that
the
commissioner gives for the decision. In many cases the reasons which
the commissioner gives for his decision, finding or award
will play a
role in the subsequent assessment of whether or not such decision or
finding is one that a reasonable decision maker
could or could not
reach. However, other reasons upon which the commissioner did not
rely to support his or her decision or finding
but which can render
the decision reasonable or unreasonable can be taken into account.
This would clearly be the case where the
commissioner gives reasons
A, B and C in his or her award but, when one looks at the evidence
and other material that was legitimately
before him or her, one finds
that there were reasons D, E and F upon which he did not rely but
could have relied which are enough
to sustain the decision.”
[25]
The reasons given by the first respondent are in themselves
compelling for the conclusion at which she arrived. It is
thus
not necessary to trawl the record for other “better”
reasons on which she might have relied but did not.
Clearly,
when the applicant interposed the close corporation between herself
and the third respondent for purposes of rendering
the service that
she did, she could not possibly thenceforth have been an employee
within the meaning of the BCEA. Therein,
too, lies the
distinction between her circumstances on the one hand, and those of
Ms Hendricks on the other (who, having initially
been a contract
worker and later a permanent employee, was paid severance that
covered her entire stay at the third respondent,
including that
during which she had been a contract worker). It matters not,
in my view, that the applicant effectively became
a member of the
Shell community by reason, among other things, of the working
conditions that apply to other employees being applicable
to her.
[26]
In my view, on whatever test (whether “reality” test or
“dominant impression” test) the applicant was
not an
employee on the evidence advanced before the first respondent.
[27]
The applicant also charges that the first respondent exceeded her
powers. Again, this is a ground in section 145(2)(a)(iii)
of
the LRA. But the applicant does not explain in what respects
the first respondent has “exceeded her powers”.
[28]
She says “there is no rational objective basis justifying the
connection made by the first respondent between the material
properly
available to her and the conclusion he or she eventually arrived
at”. This is really no more than a regurgitation
of the
“rationality test” as formulated by the labour courts in
numerous cases. I could find nothing irrational
about the first
respondent’s conclusion on the evidence presented to her.
Even if I disagreed with the first respondent
on certain aspects of
her decision as regards considerations of law (and I express no view
in that regard as it is not my place
to do so on review) it cannot
reasonably be said in my view that her conclusion is (as the
applicant charges) not rationally connected
to the material properly
made available to her or (on the constitutional standard ushered in
by
Sidumo
)
unreasonable.
[29]
The Labour Appeal Court is with respect correct when it says (in
Fidelity Cash Management Service
at para [100]):
“
The
test enunciated by the Constitutional Court in
Sidumo
for determining whether a decision or arbitration award of a CCMA
commissioner is reasonable is a stringent test that will ensure
that
such awards are not lightly interfered with. It will ensure that,
more than before, and in line with the objectives of the
[LRA] and
particularly the primary objective of the effective resolution of
disputes, awards of the CCMA will be final and binding
as long as it
cannot be said that such a decision or award is one that a reasonable
decision maker could not have made in the circumstances
of the case.”
[30]
On this standard, and with the primary objective of the LRA’s
effective dispute resolution scheme, I can find no basis
on which to
interfere with the first respondent’s award.
Finding
[31]
In the result, the application is dismissed with costs.
[32]
In argument, counsel for the applicant sought costs both of this
application and in the arbitration. The application
has been
unsuccessful and so the applicant cannot be awarded costs of the
arbitration. Neither party argued that the costs
of the
arbitration had, by agreement, stood over for determination in this
court, or that they would be costs in this application.
In any
event, it is in my view undesirable to award costs of arbitration in
the circumstances of this case as that may tend to
send the wrong
message to individuals who may be minded to refer disputes to their
council or the CCMA for arbitration. In
the circumstances, I
cannot make an order in relation to the arbitration.
____________________
Ngalwana
AJ
Appearances
For
the applicant:
Mr P Kantor
Instructed
by:
Craig Schneider Associates
For
the 2
nd
respondent: Mr G
Elliott
Instructed
by:
Maserumule Inc
Date
of hearing:
29
October 2008
Date
of judgment:
09 January 2009