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[2010] ZALCJHB 73
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Kwezi Group v Bond and Others (JR35/08) [2010] ZALCJHB 73 (3 February 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
IN JOHANNESBURG
CASE
NO: JR 35/08
In
the matter between:
KWEZI
GROUP
APPLICANT
and
BOND
B
1
ST
RESPONDENT
ZWANE
B
2
ND
RESPONDENT
COMMISSION
FOR CONCILIATION
MEDIATION
& ARBITRATION
3
RD
RESPONDENT
JUDGMENT
Nyathela
AJ
Introduction
[1]
This is an application for review in terms
of section 145 of the Labour Relations Act 66 of 1995 (the LRA) of an
award issued by
the second respondent on 20 November 2007 under case
number GAJB 30028-07.
[2]
In terms of the award, second respondent
found that the dismissal of the first respondent was unfair and
ordered the applicant to
pay to the first respondent three (3) months
salary in the sum of R48 000-00.
[3]
Applicant also seeks to stay the
enforcement of the award pending the finalization of the review in
terms of section 145(3) of the
LRA. It is this award which is
subject of the review proceedings.
[4]
First respondent is opposing the review
application.
The
parties
[5]
The applicant is Kwezi Group, is a juristic
person duly registered in accordance with the company laws of the
Republic of South
Africa.
[6]
The first respondent is Barbara Bond a
former employee of the applicant.
[7]
The second respondent is Buti Zwane, a
commissioner of the third respondent. The second respondent is cited
herein in his capacity
as the commissioner who presided at the
arbitration proceedings under case number GAJB 30028-07 and issued
the award.
[8]
The third respondent is the Commission for
Conciliation Mediation and Arbitration, a juristic person established
in terms of section
112 of the LRA.
The
Facts
[9]
The first respondent was employed by the
applicant as a Professional Assistant in terms of a fixed term
contract.
[10]
The fixed term contract was renewed on
several occasions as follows:
01
November 2006 to 30 April 2007 (six months)
01
May 2007 to 31 July 2007 (three months) and
01
August 2007 to 31 August 2007 (1 month).
[11]
Prior to the expiry of the first fixed term
contract, applicant met with first respondent to raise concerns
regarding her poor work
performance which included amongst others
handling of travel arrangements and scheduling of meetings which
resulted in double bookings,
having new business cards for the
applicant’s printed with a wrong e-mail address, failure to
submit travel claims to Kwezi
KV3 and failure to take applicant’s
calls after hours.
[12]
During July 2007 applicant offered to
extend first respondent’s contract by one month commencing on
01 August 2007 and ending
on 31
st
August 2007 as, according to applicant, first respondent’s
performance had not improved. According to applicant, the
purpose of the short contract was to enable first respondent to find
alternative employment.
[13]
On 16 August 2007, applicant informed first
respondent in writing that it will not be renewing her contract. The
employment contract
terminated on 31 August 2007.
[14]
First respondent referred a dispute
concerning her alleged unfair dismissal to the third respondent. The
dispute was conciliated.
The dispute which remained unresolved after
conciliation was subsequently referred to arbitration. The dispute
was arbitrated on
15 November 2006.
[15]
At the end of the arbitration proceedings,
second respondent found that the dismissal of the first respondent
was unfair and ordered
that the first respondent be paid compensation
in the sum of R48 000-00 which is an equivalent of the first
respondent’s
three months salary.
[16]
The Applicant seeks to review the order and
have it side aside.
Grounds
for review
[17]
In the founding affidavit the applicant
contends amongst others that:
(a)
The second respondent committed misconduct
in relation to his duties as a commissioner; committed gross
irregularity in the conduct
of the arbitration proceedings; exceeded
his powers; or failed to properly consider the evidence presented at
the arbitration and
to make a finding that is justifiable in relation
to the evidence before him.
(b)
Second respondent gave insufficient
weighting to the fact that the first respondent misconceived the
nature of the contracts, none
of the contracts provides for probation
and that the contracts had fixed periods.
(c)
The second respondent misconceived the law
on dismissal pertaining to employees on fixed term contracts. Even if
the first respondent
harboured an expectation of renewal there was no
objectively reasonable expectation of renewal as she was informed
that there would
be no further extensions, the contract was renewed
twice for reduced periods, her quality of work was poor and she was
informed
of such and no undertaking was made that her contract will
be renewed or that she would be made permanent.
(d)
Even if the first respondent had an
expectation of further employment, the expectation could not have
exceeded one month as according
to section 186(1)(b) a reasonable
expectation of renewal lies with respect to renewal on “the
same or similar terms”
(and not with respect to permanent
employment).
Applicant’s
Submissions
[18]
Applicant reiterated the grounds for review
and more particularly that the decision reached by the second
respondent is not one
which a reasonable decision maker could have
arrived at given the materials which were before him.
[19]
Applicant argued that the award shows that
second respondent did not apply his mind to the facts properly before
him and thereby
committed a gross irregularity which renders his
award reviewable.
First
Respondent’s Submissions
[20]
Second respondent’s award is one
which a reasonable decision maker could under the circumstances make.
The award is consistent
with the evidence presented during the
arbitration proceedings.
[21]
First respondent had a reasonable
expectation that her contract would be renewed on similar terms or on
terms in respect of which
she will be made a permanent employee. With
regard to the third extension, her contract should have been extended
with six months.
She however advised applicant to extend it with a
period of one month because applicant had sufficient opportunity to
decide on
what it wanted to do with her.
[22]
Applicant failed to advise her that it was
her last extension. At the time of her employment Mr Mahamba (the
Director of Kwezi Group)
verbally informed her that her contract will
be a long term or permanent. She could not have accepted employment
on a fixed term
contract.
[23]
According to the first respondent,
she stated at the arbitration hearing that she had a legitimate
expectation that her contract
will be renewed, like they had done in
the previous occasions. She had a reasonable expectation that her
contract will be renewed
on the same terms or into a permanent
employment.
Legal
position
[24]
The question as to what constitutes a
reasonable expectation for renewal of a fixed term contract of
employment as contemplated
in section 186(1)(b) of the LRA was dealt
with by the court on several occasions.
[25]
In
University
of Cape Town v Auf der Heyde (2001) 22 ILJ 2647 (LAC)
at paragraph 21 the Labour Appeal Court stated that:
“
In
order to determine whether the respondent had a reasonable
expectation, it is first necessary to determine whether he, in fact,
expected his contract to be renewed or converted into a permanent
appointment. If he did have such an expectation, the next question
is
whether, taking into account all the facts, the expectation was
reasonable.”
[26]
In SA
Rugby
(Pty) Ltd v CCMA & others (2006) 27 ILJ 1041 (LC)
paragraph 11 the Labour Court held that “
For
the employee’s expectation to be ‘reasonable; there must
be an objective basis for the creation of this expectation,
apart
from the subjective say-so or perception. (See Auf der Heyde at para
26; and Dierks v UNISA at 1246). This is an objective
enquiry: would
a reasonable employee in the circumstances prevailing at the time
have expected the contract to be renewed on the
same or similar
terms. ...”
[27]
On page 1048 para 25 the court held as
follows: “W
hat section 186(1)(b)
requires in expressed terms is a reasonable expectation on the part
of the employee that there would be a
renewal of the fixed contract
in question, i.e the said 3 month contract on the same or similar
terms, not an expectation of another
contract for a period of 1 year
and for a different purpose”.
[28]
In the SA Rugby case, the court pointed out
that for an employee to rely successfully on section 186(1) (b), the
employee must establish:
“
(a)
that he had, subjectively, an expectation that the employer would
renew the fixed-term contract in question on the
same or
similar terms; and
(b) that the expectation
was reasonable; and
(c) that the employer did
not renew it or offered to renew it on less favourable terms.”
[29]
In
Vorster v
Rednave Enterprises CC t/a Cash Conservators Queenswood (2008)10 BLLR
1111 (LC)
at page 1121 paragraph 19
Basson J held that “
Although the
fact that a contract has been renewed a few times may weigh in favour
of a conclusion that a reasonable employee could
have expected a
further renewal, this fact will not necessarily result in such a
conclusion.”
[30]
Grogan J in Workplace Law (8ed)
at
110 – 111 stated the following regarding the test for
reasonable expectation:
“
The
notion of reasonable expectation clearly suggests an objective test:
the employee must prove the existence of facts which will
lead a
reasonable person to anticipate renewal. The facts that found a
reasonable expectation will clearly differ from case to
case but will
most commonly take the form of some prior promise or past practice –
e.g. where the employer has habitually
renewed the contract. That a
fixed long term contract has been renewed a number of times it is not
itself indicative of the existence
of a reasonable expectation of
renewal; whether there was a reasonable expectation of renewal must
be determined from the perspective
of both the employer and the
employee. The conduct of employer in dealing with the relationship,
what the employer said to the
employee at the time of the contract
was concluded or thereafter, and the motive for terminating the
relationship have been cited
as factors to be considered”.
Did
the respondent fail to consider evidence properly before him and thus
committed a gross irregularity in finding that the first
respondent
had a reasonable expectation that her contract will be renewed.
[31]
It is clear from the case law referred to
above that an objective test is used to determine the reasonableness
of an employee’s
expectation that her contract will be renewed.
The test is whether a reasonable person in the position of the
employee would have
expected her contract to be renewed in the
circumstances of the particular case. To satisfy the test the
employee cannot merely
rely on the fact that the contract was renewed
previously but he must prove sufficient fact, objectively speaking
would justify
the expectation of renewal.
[32]
In this matter it is common cause that
applicant and first respondent had concluded an initial fixed-term
contract for six (6) months.
It is further common cause that at the
end of the six (6) months period applicant renewed the contract for a
lesser period, i.e.
three (3) months. It is not disputed that
applicant started complaining about respondent’s poor
performance and this probably
explains the reduction in the period of
the contract. Applicant’s explanation that he discussed first
respondent’s
poor performance with her in July 2007 is probable
and acceptable as it is the most reasonable explanation for offering
respondent
a shorter contract being one (1) month.
[33]
In the circumstances a reasonable employee
in the position on the first respondent could not have, in the light
of the complaints
about her poor performance and the continued
reduction of the period of the fixed term contracts, have reasonably
expected that
the contract would have been renewed for a longer
period or be granted permanent appointment.
[34]
The above common cause facts were before
the second respondent when he arrived at the decision that first
respondent had a reasonable
expectation that her contract would be
renewed.
[35]
In my view the second respondent did not
apply his mind properly to the facts before him and thus committed a
gross irregularity
in arriving at his award.
[36]
I therefore conclude that the decision
reached by the second respondent in the circumstances is not one
which a reasonable decision
maker could have reached given the
materials before him.
Order
[37]
In the premise I make the following order:
37.1 The arbitration
award issued by the second respondent on 20 November 2007 under case
number GAJB 300028-07 is reviewed and
set aside.
37.2 The award is
substituted by the following order:
37.2.1 The termination of
first respondent’s employment on 31 August 2007 does not
constitute a dismissal as contemplated
in section 186(1)(b) of the
LRA. 37.3 First respondent is ordered to pay the costs.
_______________
Nyathela
AJ
Date
of Hearing :
18 June 2009
Date
of Judgment :
03 February 2010
Appearances
For
the Applicant :
Dawn Wenton
For
the Respondent: Adv. V.P
Ngutjane
Instructed
by :
Mogaswa Attorneys