Chubb Security SA (Pty) t/a Chubb Electronics Security v CCMA and Others (JR58/05) [2010] ZALCJHB 74 (15 January 2010)

85 Reportability

Labour Law

Brief Summary

Labour Law — Review of arbitration award — Procedural and substantive fairness — Applicant sought to review an arbitration award that found the dismissal of the fourth respondent, a former employee, to be unfair and ordered reinstatement with back pay. The applicant contended that the CCMA lacked jurisdiction due to the nature of the dismissal being automatically unfair under section 187(1) of the LRA. The court found that the commissioner failed to address a critical point in limine regarding jurisdiction and proceeded to arbitrate the matter, constituting a gross irregularity. The award was reviewed and set aside, with a finding that the CCMA had no jurisdiction to arbitrate the dispute.

Comprehensive Summary

Summary of Judgment

1. Introduction

This matter concerned a review application brought in the Labour Court in terms of section 145 of the Labour Relations Act 66 of 1995 (the LRA). The applicant sought to review and set aside an arbitration award issued under the auspices of the CCMA, and also sought a stay of enforcement of the award pending finalisation of the review in terms of section 145(3).

The applicant was Chubb Security SA (Pty) Ltd t/a Chubb Electronic Security, the employer. The first respondent was the Commission for Conciliation, Mediation and Arbitration (CCMA), and the second respondent was the CCMA commissioner, Mr N Mbelengwa, who issued the arbitration award. The third respondent was the trade union SATAWU, and the fourth respondent was Mr Hlayisane Shadrack Motaung, the dismissed employee.

The procedural history was that Mr Motaung was dismissed after an internal disciplinary process. He referred an unfair dismissal dispute to the CCMA, conciliation failed, and arbitration proceeded. The commissioner found the dismissal procedurally and substantively unfair and ordered reinstatement with back pay. The employer then approached the Labour Court to set that award aside.

The general subject-matter of the dispute was the lawfulness of the CCMA’s jurisdiction to arbitrate the dismissal dispute once it emerged in evidence that the employee alleged dismissal for union-related activities, which would render the dispute one of automatically unfair dismissal reserved for adjudication by the Labour Court rather than arbitration by the CCMA.

2. Material Facts

Mr Motaung was employed by the applicant as a Reaction Officer. On 22 May 2003, he met with his Area Manager, Mr Willie Naude, who informed him that his monthly performance bonus would be reduced due to late-coming. The employer’s version was that Mr Motaung reacted by swearing and shouting and then leaving the office.

After leaving the office, Mr Motaung encountered another manager, Mr Philip Robertson, in the corridor. The employer alleged that Mr Motaung forcefully pushed Mr Robertson with his shoulder, and then pushed him again when they encountered each other a second time. It was further alleged that Mr Motaung threatened that he was prepared to beat Mr Robertson up outside the building. These factual allegations formed the basis of the disciplinary action.

Disciplinary proceedings were instituted and Mr Motaung faced charges framed as insubordination/disrespect/insolence towards superiors, intimidation/threat of violence, and rude, abusive, insolent behaviour/language. A disciplinary hearing commenced on 29 May 2003, where Mr Motaung indicated he was a shop steward and that his union should be notified, leading to a postponement to 5 June 2003.

On 5 June 2003, he pleaded not guilty and requested a postponement on the basis that the charges were unclear. Evidence was led to clarify the allegations, and the matter was postponed to 11 June 2003 to permit preparation. On 11 June 2003, Mr Motaung requested a postponement due to stress but did not then have a medical certificate. The chairperson refused the postponement, and Mr Motaung and his representative walked out. The hearing proceeded in their absence. Mr Motaung later obtained a medical certificate booking him off duty from 9 to 11 June 2003.

He was found guilty on the charges and dismissed. He referred a dispute to the CCMA on 7 July 2003; conciliation on 19 August 2003 was unsuccessful; arbitration took place on 22 November 2004; and an award issued on 13 December 2004 found the dismissal procedurally and substantively unfair and ordered reinstatement with back pay.

A further material procedural fact in the review proceedings was that the answering affidavit opposing review was deposed to by a union official who lacked personal knowledge of what occurred in arbitration and whose version was not confirmed by Mr Motaung. The Labour Court rejected that answering affidavit on that basis.

In relation to the core jurisdictional issue, it was common cause before the Labour Court that, during arbitration, Mr Motaung alleged that he was dismissed for participating in union activities. It was also not in dispute that the employer raised a point in limine at arbitration contending that the CCMA lacked jurisdiction if an automatically unfair dismissal was being alleged, but the commissioner proceeded without ruling on that point at the hearing.

3. Legal Issues

The central legal question was whether the CCMA commissioner committed a reviewable irregularity by proceeding to arbitrate and determine the dispute despite evidence that the employee alleged dismissal for union activities, which would characterise the dispute as an automatically unfair dismissal.

Closely connected to that was whether, in those circumstances, the CCMA had jurisdiction to arbitrate the dispute under the LRA, or whether the dispute had to be referred to the Labour Court for adjudication in terms of the statutory scheme.

The dispute before the Labour Court was primarily one of law (statutory jurisdiction and the correct forum under the LRA), and the application of that legal framework to the facts that emerged during arbitration. It also concerned the review standard in section 145, particularly whether the commissioner’s conduct amounted to a gross irregularity and whether he exceeded his powers.

4. Court’s Reasoning

The Labour Court first addressed a preliminary issue concerning the adequacy of the opposing papers. It noted that the deponent to the answering affidavit was a union official who only became employed by the union after the conclusion of the arbitration hearing, and therefore did not have personal knowledge of the relevant arbitration events. It was further common cause that Mr Motaung, who would have had direct knowledge, did not confirm the contents of the affidavit. On that basis, the court rejected the answering affidavit and regarded it as unnecessary to deal with condonation for the late filing of the replying affidavit, because the replying affidavit could not be considered in the absence of a proper answer.

Turning to the merits of review, the court treated as central the commissioner’s failure to address the point in limine concerning the CCMA’s jurisdiction. The record showed that a jurisdictional challenge was raised when it became apparent from the employee’s evidence that he alleged dismissal for union activities, yet the commissioner proceeded with the arbitration without a ruling at that stage. Although the award later stated that the employee’s suspicion that he was dismissed for union activities did not preclude the CCMA’s jurisdiction, the court held that this reflected an erroneous understanding of the statutory position.

The court applied the LRA’s classification of dismissals for union activity. It reasoned that, in terms of section 187 read with section 5, a dismissal for participating in union activities constitutes an automatically unfair dismissal. The court then applied section 191(5)(b), which it understood as requiring that disputes about automatically unfair dismissals be referred to the Labour Court for adjudication, not to the CCMA for arbitration. On that legal footing, the court concluded that the CCMA lacked jurisdiction to arbitrate the dispute once it emerged that the employee relied on union activity as the reason for dismissal.

The Labour Court characterised the commissioner’s failure to decide the point in limine in these circumstances as a gross irregularity rendering the award reviewable. It further held that the commissioner, because of the incorrect view that the CCMA retained jurisdiction, exceeded his powers by arbitrating a dispute that the LRA allocates to the Labour Court.

The court accordingly set aside the award, not on the merits of procedural or substantive fairness of the dismissal, but because the dispute (as alleged by the employee) fell outside the CCMA’s arbitral jurisdiction and into the Labour Court’s adjudicative jurisdiction.

5. Outcome and Relief

The Labour Court reviewed and set aside the arbitration award dated 13 December 2004 issued under case number GA 23309-03.

The court substituted the award with an order that the CCMA had no jurisdiction to arbitrate the dispute.

No order as to costs was made.

Cases Cited

No external case authorities were cited in the judgment.

Legislation Cited

Labour Relations Act 66 of 1995: section 145; section 145(3); section 187; section 5; section 191(1); section 191(5)(b).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Labour Court held that where, during CCMA arbitration, an employee alleges dismissal for participation in union activities, the dispute is one of automatically unfair dismissal as contemplated by the LRA. Such disputes must be referred for adjudication to the Labour Court and fall outside the CCMA’s jurisdiction to arbitrate. The commissioner’s failure to rule on the jurisdictional point in limine, and his continuation to arbitrate the dispute, constituted a gross irregularity and an instance of exceeding arbitral powers, warranting the review and setting aside of the award and its substitution with an order of no jurisdiction.

LEGAL PRINCIPLES

The judgment applied the principle that a dismissal for union participation or union activities is characterised by the LRA as an automatically unfair dismissal, with the consequence that the statutory dispute-resolution path differs from ordinary unfair dismissal disputes.

It further applied the jurisdictional allocation in the LRA that disputes concerning automatically unfair dismissal must be referred to the Labour Court for adjudication, and that the CCMA therefore lacks jurisdiction to arbitrate such disputes.

The judgment also applied the review principle that a commissioner’s failure to determine a properly raised jurisdictional point in limine, coupled with proceeding to decide a dispute outside the CCMA’s statutory powers, may constitute a gross irregularity and an excess of powers justifying review under section 145.