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 26
|

|

Strautmann v Silver Meadows Trading 99 (Pty) Ltd t/a Mug And Bean Suncoast and Others (D412/07) [2009] ZALCD 26 (9 June 2009)

IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT DURBAN
CASE
NO: D412/07
In
the matter between:
INGO
STRAUTMANN

Applicant
and
SILVER
MEADOWS TRADING 99 (PTY) LTD
t/a
MUGG AND BEAN SUNCOAST

First
respondent
COMMISSIONER
B PILLEMER

Second
respondent
COMMISSION
FOR CONCILIATION

Third
respondent
MEDIATION
AND ARBITRATION
REASONS
FOR JUDGMENT
VAN
NIEKERK J
[1]
On 5 June 2009, I made the following order:
1.
The second respondent's ruling dated 3 June 2007 is reviewed and set
aside.
2.
The matter is remitted back to the CCMA for an arbitration hearing
de
novo
before a different commissioner.
3.
The first respondent is to pay the costs of this application.
These
are my reasons.
[2]
The applicant sought in terms of s 158 of the Labour Relations Act to
review and set aside a ruling made by the second respondent
on 3 June
2007, when she held that the CCMA had no jurisdiction to arbitrate
the applicant’s dismissal dispute.
[3]
The applicant was employed by Kishara CC t/a Mugg and Bean Suncoast
as a general manager. He was also a member of the close
corporation
that employed him. After a disagreement between the members of the
close corporation, in June 2006, the business of
Mugg and Bean
Suncoast was sold as a going concern to the first respondent. The
first respondent contends that prior to the sale
of the business, the
applicant had agreed to withdraw from the business and that it was a
condition of the sale that the applicant
would not in future be
involved in the business. The applicant avers that he was dismissed
in circumstances where no reason for
his dismissal was given, and
contends that his dismissal was not in any way related to the
transfer of the business. On 5 October
2006, the applicant referred a
dispute to the CCMA in which he alleged that he had been
constructively dismissed by the first respondent
on 14 September
2006, because the first respondent had declined to “offer (him)
employment as before”.  At some
point in the proceedings,
the applicant appreciated that in the absence of a resignation, there
was no constructive dismissal,
and it is not disputed that the matter
proceeded on the basis that the applicant was dismissed at the
initiative of the first respondent.
[4]
The dispute was set down for con-arb on 1 November 2006. Commissioner
JD Vedan was appointed as the presiding commissioner.
The first
respondent did not attend the proceedings. On the same day,
commissioner Vedan issued a certificate of outcome by completing
Form
7.12.
[5]
The certificate records that the matter was referred to conciliation
on 5 October 2009 and that, as at 1 November 2009, the
dispute
between the applicant and the first respondent remained unresolved.
The commissioner ticked the box provided to indicate
the nature of
the dispute that reads “unfair dismissal” and added, in
handwriting, “section 197 transfer of company
as a going
concern”. The commissioner also recorded, in handwriting, that
the matter related to “automatically unfair
dismissal in terms
of section 187(1) (g) of LRA.”  Finally, in that part of
the certificate that records the recourse
available to a referring
party if the dispute remains unresolved, the commissioner indicated,
by marking the relevant box printed
on the form, that the dispute
could be referred to the Labour Court.
[6]
The applicant had expected the commissioner to proceed with the
arbitration hearing. After consulting his attorney, the applicant

took the view that his dismissal had not been effected for a reason
that is automatically unfair, and the matter was set down for

arbitration on 27 May 2007 before the second respondent. At the
hearing, the first respondent raised a number of points
in limine
.
These included the absence of any employment relationship between the
applicant and the first respondent, a contention that the
applicant
had not been dismissed and a submission to the effect that the
applicant had been dismissed for a reason related to a
transfer in
terms of s 197 and that the dispute ought therefore to be adjudicated
by this court. After hearing argument presented
by the parties’
legal representatives, the second respondent issued what is termed a
“ruling on jurisdiction”.
In her ruling, the second
respondent said the following:
“
Con/arb
is a process in terms of which the conciliation and arbitration
elements are effectively joined in the sense that immediately

following the failed conciliation the matter proceeds to arbitration.
This matter was set down for Con/Arb before Commissioner
Vedan. It
proceeded with the Respondent in default. Conciliation was obviously
impossible to achieve and the matter would have
proceeded to
arbitration there and then save that Commissioner Vedan,
wearing
his cap as arbitrator, found that CCMA did not have jurisdiction to
arbitrate
(my
emphasis).
The Applicant anticipated
receiving a default award and was surprised when instead he received
a certificate of outcome indicating
that the CCMA did not have
jurisdiction to arbitrate the dismissal because it was an
automatically unfair dismissal.
The
CCMA is accordingly functus officio.
It
has ruled that it does not have jurisdiction
(my
emphasis).
Ruling
I
rule that the matter cannot proceed at the CCMA as an arbitration
and, if the Applicant so elects, it maybe (sic) referred to
the
Labour Court.”
[7]
The second respondent’s ruling was made on the basis only of
the submissions made by the parties’ representatives
on the
points
in limine
raised by the first respondent.
[8]
In these proceedings, the applicant contends that to the extent that
the second respondent relied on the content of the certificate
as the
basis for the jurisdictional ruling, she committed a reviewable
irregularity in the form of a material error of law. If
this is what
the second respondent did, her ruling would stand to be reviewed and
set aside. A certificate of outcome requires
only that the
commissioner states that, as at a particular date, the dispute
referred to the CCMA remains unresolved. I am aware
that Form 7.12
provides for a classification of the dispute and an indication as to
what further rights of recourse might be open
to an applicant should
the dispute remain unresolved. But any classification that is made or
indication that is given as to which
forum or courses of action might
be open to an applicant wishing to pursue a dispute has no legal
significance other than to certify
that on a particular date a
particular dispute referred to the CCMA for conciliation remained
unresolved. Any other views expressed
by a commissioner, even if cast
in directory language, amount to little more than gratuitous
advice.
[1]
In
National
Union of Metal Workers of SA & others v Driveline Technologies
(Pty) Ltd & another
(2000) 21
ILJ
142 (LAC), Zondo AJP (as he then was) held:
“
A
commissioner who conciliates a dispute is not called upon to
adjudicate or arbitrate such dispute. He might take one or another

view on certain aspects of the dispute but, for his purposes, whether
the dismissal is due to operational requirements or to misconduct
or
incapacity, does not affect his jurisdiction. It is also not, for
example, the conciliating commissioner to whom the Act gives
the
power to refer a dismissal dispute to the Labour Court. That right is
given to the dismissed employee. (See s191 (5) (b)).
If the employee,
and not the conciliating commissioner, has the right to refer the
dispute to the Labour Court, why then should
the employee be bound by
the commissioner’s description of the dispute?”
I
am aware that the
Driveline
case
concerned a retrenchment dispute referred to this court in which the
referring party sought to “upgrade” to a dispute

concerning an automatically unfair dismissal. In that sense, no
matter what the nature of the dispute, it was always going to be

adjudicated by this court. The present dispute, of course, concerns a
dismissal dispute that the applicant contends is arbitrable
but which
the commissioner obviously regarded as justiciable. But I don’t
think that this distinction affects the principle.
The principle is
that a referring party is not bound by a commissioner’s
classification of a dispute or any directive as
to its destiny. If
this were not so and if some legal significance were to be attached
to a commissioner’s categorisation
of a dispute in a
certificate of outcome, then by electing the forum in which the
dispute is to be determined, the commissioner
denies the referring
party the freedom to pursue her rights as she deems fit. Certificates
of outcome are issued at the conclusion
of the conciliation phase
more often perhaps than not in circumstances where no evidence would
have been led as to the nature of
the dispute. The conciliating
commissioner is not always well placed to make judgments, based as
they would be only on the say-so
of one or both parties during
conciliation, as to what the true nature of the dispute might be.
Even less, for the reasons stated
above, should those judgments be
binding on a referring party.
[9]
It follows that when a commissioner completes Form 7.12 and
categorises the dispute referred to the CCMA by ticking one of the

boxes provided, the commissioner does not make a jurisdictional
ruling. Nor does the ticking of any of the boxes marked “CCMA

arbitration”, “Labour Court” “None” or
“Strike/Lockout” amount to a ruling on which of
those
courses of action must be pursued by a referring party. Consistent
with the principle established in the
Driveline
case, it is not for commissioners, by means of certificates of
outcome or otherwise, to dictate to litigants either how they should

frame the disputes that they might wish to pursue or which forum they
are obliged to approach to have those disputes determined.
Litigants
must stand and fall by the claims that they bring to arbitration.
They run the risk that during the arbitration proceedings,
a
commissioner might decide, in terms of Rule 22 of the CCMA Rules,
that a referring party should be required to prove that the

commission has jurisdiction to arbitrate the dispute. (This assumes,
of course, that the issue giving rise to the jurisdictional
point has
not previously been the subject of a ruling by a commissioner, either
at the commencement of the conciliation phase or
at any time
thereafter.) If a referring party ought reasonably to have foreseen
that the reason for the disputed dismissal or a
reason that
contributed significantly to it was such that the dispute ought to
have been referred to this court, there is no reason
why an order for
costs should not be made in terms of Rule 39(1) of the CCMA Rules in
respect of a jurisdictional ruling made against
that party. If a
referring party refers to arbitration a dismissal dispute in respect
of which the CCMA, on the face of it, has
jurisdiction but it
transpires during the proceedings, for example, that the dismissal
was effected for a reason that is automatically
unfair, the
arbitration proceedings might be stayed and the applicant advised to
initiate proceedings in this court. Alternatively,
the parties might
agree to consent to the CCMA’s jurisdiction and the
continuation of the arbitration proceedings.
[2]
[10]
Ms Nel, who appeared in these proceedings for the first respondent,
did not seek to rely on the certificate of outcome issued
by
commissioner Vedan as constituting a prior jurisdictional ruling
per
se
. She submitted that the certificate
of outcome aside, the second respondent reasonably concluded on the
material before her that
commissioner Vedan, as arbitrator, had made
a jurisdictional ruling and that the CCMA was therefore
functus
officio
. In the absence of a proper
disclosure by the applicant of all of the factual circumstances,
especially those relating to the con/arb
process and any engagement
between the applicant and commissioner Vedan, Ms Nel submitted that
this application ought to fail.
[11]
As I noted above, the first respondent raised a number of points
in
limine
, all of which were argued before the second respondent.
The first was that the applicant was not an employee of the first
respondent,
the second that he was never dismissed by the second
respondent and the third that if the applicant was dismissed, the
reason for
dismissal (a breach of s 197) ought to be adjudicated by
this court, that the applicant ought to have applied to this court to
review and set aside the certificate of outcome. No evidence was led
before the commissioner. The first respondent’s representative

made a statement from the bar, in which he
inter alia
outlined
the circumstances of a disagreement amongst the members of the close
corporation that was the seller of the business,
the applicant’s
ceasing to work for the business prior to the sale, the sale of the
business itself, and the condition of
the sale to the effect that the
applicant was not to be part of the business under the ownership of
the first respondent. The applicant’s
representative, at the
outset of his address, objected to the fact that jurisdictional
points were being raised without the leading
of evidence. He
contended that the nature of the points raised by the first
respondent’s representative were such that their
merits could
be determined only after hearing evidence. That notwithstanding, the
applicant’s representative continued in
the same fashion as the
first respondent’s representative, i.e. to make submissions
from the bar, the effect of which was
to create a significant dispute
of fact. In relation to the certificate of outcome, the applicant’s
representative said the
following:
“
The
third point, which I didn’t address you on earlier, is that the
matter has been conciliated, alleged breach of 197 etc,
etc. We, we
really don’t know what the Commissioner was doing on, on the
occasion that it came before this hearing, before
the CCMA on the
previous occasion. In fact the applicant would say that he went away
on the basis that an award was supposed to
have been granted. But he
subsequently found that there was nothing, that there was certificate
and also shockingly the certificate
talks about the Labour Court. Now
the submission, with respect, is that one doesn’t have to
review that certificate. You,
you as the arbitrator, with respect,
have an obligation to determine what the true nature of the dispute
is in this matter and
you’re not bound by the certificate as it
stands in terms of its content, in terms of its content or the
classification of
the dispute.”
[12]
With due respect to the second respondent, there was no factual basis
on which to find, as she did, that commissioner Vedan
had made a
finding that the CCMA did not have jurisdiction to arbitrate. First,
to the extent that she relied on the certificate
of outcome as a
jurisdictional ruling, for the reasons recorded above, the
certificate does not constitute a ruling, and to have
regarded it as
such is a gross irregularity, leading to a conclusion to which no
reasonable decision maker could come. Secondly,
there was no evidence
before her to establish the existence of a jurisdictional ruling made
by commissioner Vedan.
[13]
Ms Nel’s further submission that the applicant’s
contention that he expected a default award to be issued necessarily

implied that the merits of the dispute had been canvassed by
commissioner Vedan prior to his jurisdictional ruling, is equally

unpersuasive. The applicant’s subjective expectation may well
have been that he would obtain a default award. But it does
not
necessarily follow from the fact that he was denied an award that the
merits of his claim were formally addressed as an element
of any
arbitration proceedings directed at establishing jurisdiction.
Commissioner Vedan might just as easily have formed the view,
after
informal discussion with the applicant, that the real nature of his
claim concerned a dismissal related to the transfer of
a business,
completed the certificate of outcome on that basis, and simply
declined to proceed further.
[14]
Although, as Ms Nel contended, the applicant might be criticised for
failing to lay a proper factual matrix as to precisely
what
transpired before commissioner Vedan, it should be recalled that in
the proceedings under review, the primary argument presented
by the
applicant’s representative was that evidence should be heard in
relation to the points
in limine
being argued, and that for reasons unknown, the second respondent
made a ruling based only on the respective representatives’

submissions. The material properly before a commissioner on which the
commissioner can base a decision is ordinarily limited to
evidence
under oath (whether this be introduced
viva
voce
or by affidavit) or evidence
introduced by agreement between the parties (see
DB
Thermal (Pty) Ltd v CCMA & others
[2000]
10 BLLR 1163
(LC)). The fact that there was no proper evidentiary
basis established before the second respondent on which to make a
ruling in
relation to the points
in
limine
was not a function of the
applicant’s failure to adduce sufficient evidence so much as
the second respondent’s failure
to require that evidence be
led.
[15]
In short, to the extent that the second respondent considered the
certificate of outcome issued at the conclusion of the conciliation

phase to constitute a jurisdictional ruling, this is a reviewable
irregularity. To the extent that the second respondent’s
ruling
is based not on the certificate of outcome but on the submissions
made by the parties’ respective legal representatives,
there
was no evidence before her and therefore no proper basis for her to
make the factual finding that commissioner Vedan had
made a
jurisdictional ruling. The second respondent’s ruling that the
CCMA was
functus officio
therefore stands to be reviewed and set aside.
[16]
For these reasons, I made the order reflected in paragraph 1.
ANDRE
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
Date
of argument: 4 June 2009
Date
of judgment: 9 June 2009
Appearances:
For
the Applicant: Adv L Naidoo
Instructed
by: Jay Reddy Attorneys
For
the Respondent: Adv C Nel
Instructed
by: Deneys Reitz
[1]
The governing body of the CCMA should give consideration to an
amendment to the form of the certificate, if only to make it clear

that the commissioner’s categorisation of a dispute and the
avenues or institutions through which the commissioner indicates

that further recourse should be sought, are not binding on referring
parties.
[2]
Section
158(2) envisages the converse situation - it provides that where
after referral of a dispute to this court the matter
ought to have
been referred to arbitration, proceedings can be stayed to allow for
the referral of the dispute to arbitration,
alternatively, with the
parties’ consent, this court can sit as an arbitrator.