About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Durban Labour Court, Durban
SAFLII
>>
Databases
>>
South Africa: Durban Labour Court, Durban
>>
2009
>>
[2009] ZALCD 37
|

|

Ethekwini Municipality v SA Local Government Bargaining Council and Others (D343/07) [2009] ZALCD 37 (27 February 2009)

IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT DURBAN
D343/07
Reportable
ETHEKWINI
MUNICIPALITY
APPLICANT
And
SA
LOCAL GOVERNMENT
BARGAINING
COUNCIL
FIRST

RESPONDENT
INDEPENDENT
MUNICIPAL ALLIED
TRADE
UNION [IMATU]
SECOND

RESPONDENT
COMMISSIONER
A.S DORASAMY
THIRD

RESPONDENT
THE
PERSONS WHOSE NAMES APPEAR
ON
THE SCHEDULES ANNEXED
FOURTH

AND FURTHUR RESPONDENTS
TO
THE NOTICE OF MOTION
JUDGMENT
Cele J
Introduction
[1] This application is
one brought in term of S 158 (1) (g) of the Labour Relations Act 66
of 1995, (“the Act”) to
review and set aside or correct
an arbitration award dated 14 May 2007 issued by the third respondent
as an arbitrator of the first
respondent. The arbitration award was
issued in favour of the employees grouped as the fourth respondents
duly assisted by their
union, the second respondent who all opposed
this application. The employees should be the 4
th
to
further respondents.
Background facts
[2] The applicant found
its existence through the amalgamation of three local authorities
namely, the Kingsburgh City Council, Umkomaas
Local Authority and the
Borough of Amanzimtoti.  As a consequence of such amalgamation,
the applicant had to restructure its
staff complement. Negotiations
about the restructuring took place between the applicant and
representatives of the employees resulting
in the compellation of an
agreed and negotiated document called the Staff Placement Policy and
Process.
[3] As will be shown, the
date 8 October 2003 is significant in this matter. Prior to it, the
fourth and further respondents (“employees”)
were often
utilised by the applicant as its relief staff in various libraries.
The employees sought to be placed in permanent employment
positions
within the applicant as librarians. As a consequence a dispute arose
between them and the applicant when the applicant
resisted such
placement. They referred the dispute for conciliation and
arbitration. An arbitration hearing was scheduled for 30
September
2003 before Mr. Rajah Naidoo as the appointed arbitrator.  The
dispute was however settled between the parties and
was by agreement,
made an arbitration award on the same date. The terms of agreement
were that:
“
1.The 19
applicants reflected in schedule “A” shall be permanently
employed by the Respondent, South Operational Entity,
with effect
from 8 October 2003.
2.    The
19 applicants shall be employed as part-time Library assistants on
grade TK7 of the Metro Scale. The applicants
shall work a maximum of
5 hour day, 25 hour- 6 day week. The 5 hour shall be worked
consecutively and in one shift (sic).
3.    The
applicants shall enjoy all the normal benefits of permanent
employment eg. leave, medical aid, housing
subsidy etc.
4.    The
applicants shall be notched as per qualification plus one notch for
every year of service from date of
appointment as relief worker.
5.    The
respondents shall be entitled to redeploy the applicants during areas
of need provided that this is done
fairly, equitably, reasonably and
in consultation with the unions and bargaining council resolutions on
re-deployment.
6.    The
applicants shall be granted seven days additional annual leave, which
shall be taken within the first twelve
months of employment.
7.    The
issue of Ms Pat Hayter shall be addressed separately by the
management and the unions.”
[4] The agreement of the
parties was then to be taken for submission to the next Exco meeting
of the applicant and the unions were
to be informed of the response
by 11 November 2005. If the agreement of the parties was not
authorised by Exco, the matter had
to be referred   to
arbitration by 16 November 2005. The issue of the placement of the
employees as the permanent staff
component of the applicant was
finalised. A further dispute arose between the parties pertaining to
pension, leave, and bonus benefits
of the employees prior to 8October
2003. The employees referred that dispute to conciliation and
arbitration. Three points
in lime
were raised by the applicant
during the arbitration hearing which was before Ms Shanta Reddy as
the appointed arbitrator. The first
point raised was that the
arbitration hearing of 30 September 2003 had dealt with all the
issues pertaining to pension, leave and
bonus benefits, leaving the
employees with having to review the award if they were not satisfied
by it. Ms Reddy ruled that the
settlement agreement of 30 September
2003 did not deal with the issues of retrospective pension, leave and
bonus benefits due to
the employees and that there was no waiver in
respect of those benefits by the employees.  The employees
proceeded to refer
an unfair labour dispute pertaining to those
benefits, for conciliation and arbitration. The third respondent was
appointed to
arbitrate it. He found in favour of the employees by
issuing an arbitration award in the following terms:
“
Award
1.    The
applicants have discharged the onus of proving on the balance of
probabilities that the respondent has
committed an unfair labour
practice by failing to pay the applicants their leave and annual
bonus and in Mrs Govender’s case
her pension benefit.
2.    Mrs
Peggy Cockraine is entitled to be a party to the proceedings and is
entitled to her leave and bonus benefits
from date of commencement to
date of leaving the respondent’s service, alternatively up to
November 2003.
3.    Mrs
T Judy Govender is entitled to retrospective pension fund benefit.
4.    All
applicants are entitled to leave benefits from date of commencement
up to the 8 October 2003.
5.    All
applicants are entitled to an annual bonus from date of commencement
up to the 8 October 2003. (sic)
6.    The
respondent shall pay the monies due, owing and payable in terms 4 and
5 above by no later than the 30 JUNE
2007. (sic)
7.    The
respondent is to bear the costs of the hearing from conciliation up
to and including the conclusion of
the arbitration (4 MAY 2007).
Grounds for review
[5
]
The applicant has made the following submissions as constituting
the   grounds for review and the circumstances under
which
a defect is said to have been committed:
(a) The award was
improperly obtained in that the arbitrator relied on evidence that
was tendered in two prior arbitration hearings,
which formed part of
the Applicants’ and Second Respondent’s bundles of
documents. The reliance on evidence tendered
at prior arbitration
hearings to prove the existence of any rights and or benefits, and
the commission of an unfair labour practice
against the employees,
were entirely misplaced and incorrect in law on the following
grounds:
(i)
It is trite that each case is to be judged on its own merits;
(ii)
the reliance on evidence given at a previous arbitration, to
establish the existence of
facts, not proved by the Fourth and
Further Respondents is grossly irregular as such evidence would not
be subject to the test
of cross examination;
(Iii)
the reliance on evidence submitted at a previous arbitration hearing
to prove the existence
of certain facts in a new dispute, ousts the
jurisdiction of the arbitration tribunal.
(b) The arbitrator
committed a gross irregularity, in that he failed to
apply his mind to the legislative
provisions contained in
Basic Conditions of Employment Act, the 1983 Act and the 1997 Act and
the regulation to The Natal Joint
Municipal Pension Fund in that:
(i)
Since the employees were “panel” employees, their terms

and conditions did not form part of the regulations governing terms
and conditions of employees that fell within the former Local

Authorities, hence the former provisions of the repealed and the
Basic Conditions of Employment Act, 1997
Basic Conditions of
Employment Act would
have been applicable for the period in which the
leave and bonus pay benefits were claimed, namely from date of
commencement of
employment to 8 October 2003.
(ii)
In terms of
Section 12
(2) of the
Basic Conditions of Employment Act,
accrued
leave would have expired within four months after the
termination of any leave cycle. A leave cycle being twelve months.
The employees’
accrued leave, if any, would have therefore
lapsed automatically within a period of four months after a leave
cycle; the
Basic Conditions of Employment Act similarly
makes
provision for the lapsing of accrued leave, not taken within a leave
cycle.
(iii)
If an employee satisfies the definition of a part time employee, as
defined in the Natal Joint Municipal
Pension Fund regulations, the
employing Local Authority must consent to that employee becoming a
member of the Fund prior to admission
to membership. The admission to
membership of the Fund is also subject to the approval of the
committee. The employees put up no
evidence of such consent and or
Committee approval.
(c)    The
arbitrator committed gross irregularity:
(i)
in that he failed to take cognisance that the employees did not have

contracts of employment, which issue was common cause, with the
former South Operational Entity. The applicant’s submission

being that there was no contract evidencing any entitlement to bonus
pay, retrospective from date of commencement of employment
with the
former South Operational Entity up until 8 October 2003.
(ii)
by finding that the applicant had committed an unfair labour practice

when the employees failed to establish in the first instance, the
existence of such benefits and/or rights, neither had the employees

proved or established the commission of an unfair labour practice
committed by the applicant against them.
(iii)
by ordering that the applicant pay the employees costs from the date
of conciliation
up to and including the conclusion of the
arbitration. In terms of Section 138 (10) of the Act, read with rule
39 of the CCMA rules,
costs should only be awarded against the
applicant in the event that it was found to have acted in a frivolous
and vexatious manner,
by proceeding with or defending the dispute in
the arbitration proceedings or in its conduct during the arbitration
proceedings.
(d)   The
arbitrator committed a mistake in law:
(i)
by relying on a document, being a computation of accrued leave pay,

when the use of this document was objected to by the applicant’s
representative and the author of the document was not called
to prove
the contents thereof.
(ii)
in that he misapplied the provisions of the decision taken in
University of the North v Nobrega and another (1999) 20 ILJ 2117
(C)
by extending the application of the admission of documents
that were not objected to, namely the arbitration awards of Ms Pat
Hayter
and Mrs Urquhart, to include the admission of evidence that
was tendered at these arbitration hearings.
[6] In response, the
respondents denied the circumstances outlined by the applicant to
constitute reviewable grounds. They disputed
that the third
respondent relied on evidence tendered in the previous arbitration
hearings. To the extent that he may have relied
on submissions made
or on the findings of such arbitration hearings, they say he was
entitled to do so. Their contention is that
it is evident from the
award that the third respondent applied his mind to the provisions of
the
Basic Conditions of Employment Act. According
to them the third
respondent took cognisance of the fact that they did not have
contracts of employment but that he determined
such a consideration
to have been irrelevant to the issues before him and that by so doing
the third respondent committed no error.
The arbitration
hearing
[7] None of the parties
led any
viva voce
evidence at the arbitration hearing. They
relied on the documents which they produced. One such document
produced was intended
to show the total average hours worked by the
employees and the leave benefit they said was due to them.  The
applicant objected
to the admission of that document in the absence
of its author and on the basis that it did not purport to be a
correct reflection
of the number of leave days due to the employees.
The third respondent
mero moto
called a witness for
classification purposes. She was the Human Resources Manager of the
applicant, Ms Minette Van Zyl. The third
respondent put some
questions to the employees but he pointed out that he would not swear
them as witnesses. There was an attempt
made to call a Mr Suresh
Rambally to explain the document contested by the applicant, as its
author, but he was reportedly unavailable.
[8] In his address, Mr
Perumal, who appeared for the employees made numerous references to
how issues of other employees were resolved.
He referred to
arbitration awards which preceded the arbitration hearing in this
matter and argued that the employees were similarly
entitled to
benefits. Ms K James appearing for the applicant submitted that the
terms and conditions of employment applicable to
the employees were
those stipulated in the Basic Conditions of Employment Act of 1983
which made no provision in respect of bonus
benefits. She said that
the bonus benefits were a discretionary matter not covered by
legislation and that the employees had no
entitlement to it. In
respect of retrospective leave accumulation, she said that the Basic
Conditions of Employment Act made no
agreement for employees to
accumulate leave and as such they were not entitled to leave
benefits. In respect of Mrs Pat Hayter,
she said that the arbitration
did not grant her the pension fund benefit. Mr Rambally never came to
testify at the arbitration
hearing. The contents of the contested
document remained in dispute. The third respondent recorded that he
would have to draw inferences
in regard to the evidence pertaining to
that document.
Submissions
by the parties
Applicant’s
submissions
[
9]
Mr Nxasane appeared for the applicant. He highlighted the grounds for
review and facts submitted to support them. He said that
the
employees bore an onus to prove the unfair labour practice they
alleged the applicant to have committed. He said that the employees

had to prove the existence of benefits which were not granted to them
by the applicant such that it could be said that an unfair
labour
practice was committed by the applicant. He pointed out that the
claims which the employees were saying they were entitled
to were to
be retrospective from the dates on which employees joined the South
Operational Entity, which dates were not established.
In essence, the
claims for the benefits preceded the date of deemed permanent
employment, being 8 October 2003. He submitted that
no
viva voca
evidence was led to establish the existence of such benefits and the
commission of an unfair labour practice by the applicant.
[10] He criticised the
third respondent for having relied on the:
Ø arbitration
award of commissioner Odayan in  respect of Ms Pat Hayter dated
3 March,
Ø arbitration
award of commissioner Mathe in respect of Ms M. Urquhart and others
dated 22 September 2004, and
Ø the letter dated
23 December 2002 from the Natal Joint Pension Fund to Ms M. Goba in
respect of Mrs W. Pather.
[11] He submitted that
the third respondent ought not to have accepted the document
recording the computation as an accurate record
of what leave pay
would have been due to the employees while he ignored the objection
to the document. He said that a gross irregularity
was committed by
the third respondent who accepted the document without its contents
being proved. He said that the third respondent
extracted evidence
that was tendered by the witnesses that testified at previous
arbitration hearings and was therefore influenced
by outside
evidence, when the existence of such facts was not proved before him.
He said that the employees failed to put up contracts
of employments
to establish the existence of bonus benefits or pension benefits. He
said that the claim for leave benefits dating
back from the date of
commencement of employment, up till the date of deemed permanent
employment would have become prescribed
by virtue of the provisions
of the Basic Conditions of Employment Act of 1983 and Act 75 of 1997.
Further leave benefit was not
leave benefit as defined in S186 (2) of
the Act, as it is a right derived from the Basic Conditions of
Employment Act. He argued
that the applicant’s pursuance of
this matter was neither frivolous nor vexatious and therefore did not
warrant an adverse
costs order and that such order was an error in
law.
[12] In response to a
submission made on behalf of the employees, he denied that the
applicant had sought to improve its own condition
by virtue of its
wrong doing. He pointed out that, that submission had never been
pleaded, nor was it canvassed in the heads of
argument tendered on
behalf of the employees. In that regard, he said that it was never
contended by the employees nor was it a
finding by the third
respondent that, during that period, 1990 up to and including 8
October 2003 any of the employees sought annual
leave. Nor was it
alleged that the applicant declined to grant the annual leave to
them. The third respondent was required,
ex post facto
to
determine whether the employees were entitled to leave benefits from
the date of commencement of employment up to 8 October
2003.
Employee’s
submissions
[13] Mr Winchester
appeared for the employees. He submitted that the third respondent
acted properly and that his arbitration award
was not based on any
error in law, or any other irregularity. He pointed out that the
applicant was legally represented at the
arbitration hearing and such
representative did not object to the document now complained of,
being admitted into evidence. He
said that, apart from the obliged
reference, the applicant did not properly challenge the authenticity
o the document which purported
to be a computation of average
hours worked by the employees. He said that the applicant did not
object to the document
being tendered into evidence. He submitted
that the applicant did not challenge the evidence of Ms Govender,
Cockraine, Kay or
Brady, nor was the applicant’s version put to
them.
[14] He said that Mr
Perumal’s opening address, at the arbitration hearing,
constituted facts which the applicant had agreed
to, even though it
is not confirmed by the transcript. He contended that the applicant
did not challenge the transcribed record.
He said that the document
which was being challenged had been put up by the very party that
sought to challenge it, the applicant.
He said that the document had
been produced and relied upon in the arbitration hearing before
commissioner Mathe. He submitted
that the parties had agreed on an
informal type of an arbitration hearing where there would be no
evidence tendered. He said that
the third respondent was entitled to
use prior arbitration awards for precedent.
[15] According to him,
the employees were not asking for anything more than they were
entitled to. They wanted to participate with
their contributions as
did Ms Pather. In respect of the leave benefit, he said that the
rationale of the applicant was very strange.
It said that the
employees were not entitled to leave benefits. If they were entitled,
they forfeited the leave. He submitted that
no one could improve
one’s position by wrong doing. As such, an employee could not
forfeit a leave which she was denied the
exercise thereof in the
first place. He referred to
Wimbledon
Lodge (Pty) Ltd v
Gore N.O and others
2003 (4) SA 315
(SCA).
[16] In respect of the
bonus, he said that payment for it was in terms of the rules. He said
that the issue was pertaining to entitlement.
Calculation of the
amount could be left out as with leave benefits. He said that the
applicant had not demonstrated that the third
respondent’s
order directing it to pay the costs of the arbitration was grossly
irregular, in circumstances where the third
respondent based such
findings on facts placed before him. He argued that the applicant was
effectively seeking to appeal the costs
order, which in the instance
case was inappropriate.
Analyses
[17] The dispute referred
by the employees to conciliation and thereafter to arbitration was
that the applicant committed an unfair
labour practice by not
recognising and honoring their benefits for leave and bonus pay. In
respect of the tenth respondent it was
said that the applicant
declined her entitlement to pension benefits in terms of the Natal
Joint Municipal Pension Fund. All of
the claims are retrospective
from the dates on which they joined the South Operational Entity.
[18] Section 186 (2) (a)
has relevance to these proceeds and it reads:
“
(2)
“Unfair labour practice” means any unfair act or omission
that arises between an employer and
an
employee
involving-
(a) unfair conduct by the
employer relating to the     promotion, demotion,
probation (excluding
disputes
about dismissals for a reason
relating to probation) or training of an
employee
or relating
to the provision of benefits of an
employee.
”
[19] It was therefore
part of the enquiry which the third respondent was to determine if
each source of the claim amounted to a
benefit as envisaged in S186
(2) (a). It must always be borne in mind that a difference needs to
be drawn between “benefits”
and “remuneration”
– See in this respect (1)
Schoeman & another v Samsung
Electronics (Pty) Ltd
[1997] 10 BLLR 1364
(LC),
(2)
Gaylad v
Telkom South Africa (Pty) Ltd 1[998]
9 BLLR 942
(LC)
Revelas J
held in the Gaylad case that payment for accumulated leave formed
part of remuneration and was therefore not a benefit.
The third
respondent omitted this investigative task in the execution of his
duties.
[20] The applicant has
correctly pointed out that the onus to prove the commission of an
unfair labour practice rested on the employees.
The transcript record
of the arbitration proceedings shows that only one person testified
at the hearing, Ms Van Zyl who was called
by the third respondent
mero moto.
The rest of the other people who were asked
questions were not really testifying as the third respondent
deliberately decided not
to swear them in. None of the employees
therefore testified during the arbitration hearing. It is difficult
to categorise the utterances
of those who were asked questions as
such did not constitute evidence.
[21] It is my view that
there has not been a full and fair trial of the issues in this
arbitration hearing. Parties agreed to holding
“an informal”
arbitration hearing. If it was their intention not to lead evidence,
one would have expected that they
would first produce a
pre-arbitration minute. The minute would identify facts which they
had agreed to, facts that were in dispute
and the issue which the
third respondent was called upon to determine. It seems that there
are facts which parties agreed to but
the same were not incorporated
into the record. I have therefore been unable to determine these
facts. The parties could also have
agreed on the status of the
documents which they wanted to hand in. That would obviate any of
them who might have sought to distance
themselves from their
documents. As such, I have been unable to find that evidence which
the employees tendered to prove that the
applicant committed an
unfair labour practice. The transcript record suggests that the onus
of proof was infact placed on the applicant,
where it never belonged
in the first place.
[22] When the third
respondent gave out a helping hand by calling Ms Van Zyl and by
putting questions to some of the employees,
he must have realised the
predicament in which the parties placed him by resorting to an
informal hearing. When he could not find
joy in handling the
contested document, he recorded that he would draw an inference. It
is not clear how an inference could be
drawn in the absence of proven
facts from which it could reasonably be drawn. The award is silent
about the drawing of an inference.
A conclusion is irresistible then,
that an inference adverse to the applicant was drawn. In that event
the award suffers from a
latent defect of serious magnitude.
[23] I have been
persuaded by the submissions made on behalf of the applicant that, in
the circumstances of this matter, it was
grossly irregular of the
third respondent to import evidence from the prior arbitration
hearings into the arbitration hearing before
him. The third
respondent did not have as much benefit as did the other
commissioners or arbitrators who were steeped into the
trial of
issues brought to them.
[24] I am also not
persuaded that the applicant ought to have been ordered to pay costs
of the arbitration hearing in the instant
matter.
[25] In the
circumstances, the following order will issue:
1.   The
arbitration award dated 14 May 2007, issued by the third respondent
in this matter, is reviewed and set aside.
2.   This
matter is remitted to the first respondent for a
denovo
arbitration hearing before an arbitrator other than the third
respondent.
3.   No costs
order is made.
_____________
Cele
J
27/02/09
Appearances
For
the applicant: Joseph Nxusani
Instructed
by: Kathy James
For
the Respondent: Allyn Winchester SC
Instructed
by: Futcher Attorneys