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[2010] ZALCJHB 69
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Mohlakoana v Commission for Conciliation Mediation And Arbitration and Another (JR284/09) [2010] ZALCJHB 69 (13 April 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD
AT JOHANNESBURG)
CASE
NO: JR 284/09
In
the matter between:
WILLIAM
MOHLAKOANA
Applicant
and
THE
COMMISSIONER, COMMISSION FOR
CONCILIATION,
MEDIATION AND
ARBITRATION
1
st
Respondent
ROBINSON
LIQUORS (PTY) LTD T/A
ULTRA
LIQUORS
2
nd
Respondent
JUDGMENT
LAGRANGE,AJ
Introduction
1.
This is a review application in which the
applicant, Mr Mohlakoana, who represented himself in these
proceedings, seeks to set aside
only the commissioner’s award
of compensation of two months’ salary following a finding by
the commissioner, that his
dismissal by the third respondent was
substantively, but not procedurally, unfair.
2.
The applicant was dismissed on 16 September
2008 and the arbitration award was issued on 25 January 2009, after
being employed for
two years.
3.
The applicant’s grounds of review
were not stated with the clarity one might expect of parties who are
represented by legal
practitioners or labour law specialists. The
applicant, who appears throughout to have prosecuted the review
without legal assistance
or expert advice, claimed that the
commissioner erred in awarding him only two months’
compensation and that it was not ‘just
and equitable’ as
he had been unfairly dismissed. Although not stated as a ground of
review as such the applicant also alleged
in his founding affidavit
that the award of two months compensation had been made “although
my date of dismissal was 16/09/2008
and the arbitration award was
issued on the 25/01/2009”.
4.
The applicant also believed that his
continued unemployment at the time of this hearing was a factor that
should be considered
but eventually conceded that the commissioner
could only have been expected to decide the issue of compensation on
what was before
him at the time of the arbitration hearing on 16
January 2009. In court, when asked to elaborate on why he felt there
was something
wrong with the award, he said the commissioner had not
applied his mind to the issue of compensation. It is apparent
from
the applicant’s perspective that he could not make sense
of the award of compensation in relation to the loss of income he
had
suffered by the time the award was issued.
5.
The third respondent, represented by Mr
Frahm-Arp, argued that the founding affidavit did not disclose a
ground of review though
it acknowledged that some allowance had to be
made for imprecise pleading in the case of a lay person in the
applicant’s
position. The third respondent nevertheless
persisted with its argument that the applicant had failed to set out
any evidence
in support of his contention that the compensation award
should be altered.
6.
In support of its argument, the employer
cited the authority of
Business
Design Software (Pty) Ltd & another v Van der Velde
[2009] 8 BLLR 746
(LAC)
, on the basis
that the LAC held that a failure to set out any of the limited
grounds upon which a court may interfere is fatal
to a claim that an
award of compensation should be altered. The court in that instance
cited a number of other cases in which the
courts have had to
consider circumstances in which a decision taken in the exercise of a
judicial discretion may be interfered
with on appeal. The test has
been characterised more than once in these terms:
“
(T)he
power to interfere on appeal with the exercise of a discretion is
limited to cases in which it is found that the trial Court
has
exercised its discretion capriciously or upon a wrong principle, or
has not brought its unbiased judgment to bear on the question,
or has
not acted for substantial reasons…”
[1]
7.
In this matter the commissioner had decided
that the applicant’s dismissal by the respondent was
substantively, but not procedurally,
unfair. The applicant, a
warehouse manager, had been dismissed for gross negligence allegedly
resulting in stock losses in
excess of R 100 000 over a period of two
months.
8.
The commissioner concluded on the basis of
the evidence before him that the standard of care to be exercised by
the applicant in
the performance of his duties was unknown and that
it was therefore meaningless to talk of gross negligence, or even
negligence,
in the circumstances. In reaching this conclusion the
commissioner was obviously influenced by what he perceived to be
inadequate
training and preparation of the applicant for the duties
he was expected to perform, compounded by a lack of clarity about
what
those duties entailed, for which the commissioner held the
respondent responsible.
9.
Following his conclusion that the dismissal
was substantively unfair, the commissioner then simply ordered the
second respondent
to pay the applicant compensation equivalent to two
months’ remuneration, declaring it ‘just and equitable’.
10.
Other than invoking the phrase ‘just
and equitable’, no reasons are provided by the commissioner why
he ordered this
particular form of relief given the options available
to him under section 193(1) of the Labour Relations Act, 66 of 1995
(‘the
LRA’). The applicant, who contends that the award
of compensation was not just and equitable in the circumstances, was
evidently
mystified why the commissioner awarded two months’
compensation having found the dismissal substantively unfair,
particularly
given the fact that already more than four months had
elapsed between the date of his dismissal and the date of the
arbitration
award being issued.
11.
In
Amalgamated
Pharmaceuticals Ltd v Grobler NO & others
(2004) 25 ILJ 523 (LC)
at 525, the
Labour Court held that:
'The
failure or omission by the commissioner to provide reasons for her
award does not per se render the award irrational and therefore
reviewable on the grounds of gross irregularity.'
12.
It
is true that there are cases like
Grobler
’s
case above, in which the Labour Court has upheld the decision of
arbitrators who have not sought to explain the reasons
for the award
of compensation they have made. However, in those instances it was at
least obvious from the reasoning of the arbitrator
in the rest of the
award why such a remedy was granted.
[2]
13.
It is true that the applicant had some
difficulty articulating his ground of review, but he was clearly
struggling to understand
the basis of the relief awarded and
therefore believed the arbitrator had failed to apply his mind
properly to the question of
the appropriate compensation.
14.
In this instance, it the commissioner has
not provided the slightest clue to the reasoning behind his decision
to award two months’
remuneration as just and equitable
compensation for a substantively unfair dismissal. Whilst the
commissioner has a discretion
in determining the remedy he granted,
there is no evidence he exercised it judicially. The mere fact
that the commissioner
concluded that the compensation he had
determined was ‘just and equitable’ adds nothing of
substance to his reasoning.
15.
Even though an arbitrator has a discretion
and a degree of latitude on what to award in the way of compensation,
it would be anomalous
if the duty imposed on an arbitrator in terms
of section 138(7)(a) of the LRA to provide brief reasons with an
award did not include
providing brief reasons for any remedy granted.
For the employee and employer parties to any arbitration proceedings
the most important
components of any award are the arbitrator’s
findings on the merits of dispute itself and any consequential relief
granted.
There is no reason why an arbitrator’s justification
for an award should be confined to the findings on the merits of the
dispute only.
16.
Unless the justification for the relief can
be readily discerned in the findings on the merits, as in the cases
mentioned above,
an arbitrator ought to provide brief reasons for the
relief granted. In this case, the rationale for an award of two
month’s
remuneration cannot be determined from the
commissioner’s findings on procedural and substantive
unfairness.
17.
Accordingly, I am satisfied that there is
no evidence that the commissioner exercised a proper judicial
discretion in arriving at
the order he made and, in the absence of an
obvious rationale in his other findings for the relief granted, the
commissioner’s
failure to provide reasons for the relief, in
this instance, also amounts to misconduct in the performance of his
duties as an
arbitrator under section 145(2)(a) of the LRA.
18.
I am also of the view that without evidence
of considerations which informed the arbitrator in the exercise of
his discretion, it
cannot simply be assumed that he exercised his
discretion in a rational manner based on what was ‘fair and
equitable in all
the circumstances’, whatever latitude may be
allowed an arbitrator in the exercise of that discretion. There
is no
evidentiary basis for concluding that any reasonable arbitrator
could award the relief granted, even if it was competent relief
in
terms of the powers of the arbitrator under section 194(1) of the
LRA.
19.
Before reaching a decision in this case, I
referred the parties to the recent unpublished judgment of the LAC in
the matter of
Boxer Superstores (Pty)
Ltd v Nokothula Grace Zuma and others
(DA 6/207)
dated 9 May 2008 and asked
for any additional submissions they might wish to make in the light
of that decision.
20.
The second respondent was of the view that
it was irrelevant because in that case the question before the court
was why the commissioner
had awarded compensation rather than
reinstatement after finding that the employer had failed to prove
that the dismissal of the
employee was substantively fair. In
Boxer Supestores
,
the court
a quo
concluded
that in the absence of reasons why the employee was reinstated, it
was appropriate for the court to simply substitute
the award of
compensation with an award of reinstatement. The LAC agreed that the
award was irrational but disagreed with the solution
adopted by the
Labour Court.
21.
It is true in this instance the court is
not confronting the issue of an award in which the arbitrator does
not explain the reasons
for awarding a certain amount of
compensation, rather than another form of remedy such as
reinstatement, to an employee whose dismissal
was found to be
substantially unfair. Here the issue is whether the
commissioner’s failure to provide reasons for an
award of
compensation on the low end of the scale of compensation for a
substantively unfair dismissal, renders his award reviewable
and the
focus is on whether he exercised his discretion judiciously, not
whether he applied his mind to the provisions of section
193.
22.
However, despite the different
considerations which apply to the decision to grant relief in the two
cases, the common defect in
the two awards under consideration is the
absence of manifest reasons for the relief granted.
23.
In
Boxer
Superstores
the arbitrator had found
the employer had failed to discharge the onus of proving that the
dismissal was substantively unfair and
had awarded compensation
equivalent to three months’ remuneration. At paragraph [11] of
the LAC decision the court expressed
the failure of the arbitrator
and what he ought to have done thus:
“
[11] The third
respondent’s award was manifestly irrational and to that extent
the judgment of Pillay J is correct. It is
irrational because the
third respondent gave no reasons for awarding compensation after
having found that the appellant had failed
to discharge the onus in
relation to substantive dismissal. What third respondent should have
done was to have said in effect:
I have examined the evidence. It
appears to me that, given the grave nature of the charges levelled
against first respondent that
is of dishonesty, it is clear that the
relationship between the two parties is at the level where they
cannot longer work together.
Reinstatement would therefore be
inappropriate, reemployment would be inappropriate because of the
conclusions reached by the appellant
as set out in my award.
Accordingly in terms of the powers that, I have under Section 193(2),
I make a small award of compensation.”
24.
In the circumstances, it seems appropriate
to adopt an approach similar to that of the LAC in
Boxer
Superstores
and remit the matter
to the third respondent to reconsider his decision on an appropriate
award of compensation, after setting
out his reasons for his
original order of compensation and after hearing any evidence
the parties may lead which is relevant
to the determination of an
appropriate award of compensation.
Order
Accordingly,
the following order is made:
a.
The second respondent’s award of
compensation of two months’ remuneration is reviewed and set
aside.
b.
The second respondent must record his
reasons for the remedy he granted on 25 January 2009.
c.
After hearing such evidence that the
parties are in a position to lead concerning an appropriate award of
compensation which is
just and equitable, the second respondent must
reconsider his decision on the appropriate amount of compensation.
ROBERT
LAGRANGE
ACTING
JUDGE OF THE LABOUR COURT
Date
of hearing : 9 February 2010
Date
of judgment: 13 April 2010
Appearances:
For
the applicant: Mr J Moyo of
Moyo
Attorneys Inc.
For
the respondent: Adv G F Malan
Instructed
by Leppan Beech Inc.
[1]
See e,g,
Ex
parte Neethling and Others
1951
(4) SA 331
(A)
at
335D-F or
Shepstone
& Wylie and others v Geyser NO
1998 (3) SA 1036
(SCA)
at
1044I-1045A.
[2]
See e.g.
Bezuidenhout
v Johnstone NO & others
(2006)
27 ILJ 2337 (LC)
at
2349-2351, paras [55] – [65] and
Rowmoor
Investment (Pty) Ltd v Wilson & Others
(2008) 29 ILJ 2275 (LC)
at 2283 paras [43] – [46].