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[2010] ZALCJHB 25
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Sekunjalo Investments Ltd v Mehta and Others (JR1306/08) [2010] ZALCJHB 25 (21 October 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
IN JOHANNESBURG
REPORTABLE
CASE
NO:
JR 1306/08
In
the matter between:
SEKUNJALO
INVESTMENTS
LIMITED
A
pplicant
and
D
MEHTA
1
st
Respondent
N
MBELENGWA
N.O
2
nd
Respondent
COMMISSION
FOR CONCILATION,
MEDIATION
& ARBITRATION
3
rd
R
espondent
SEKUNJALO
CORPORATE
SERVICES
(PTY) LTD
4
th
R
espondent
JUDGMENT
Molahlehi
J
Introduction
[1]
The applicant in an
application before the second respondent (the commissioner) sought to
have the first respondent’s claim
of unfair dismissal dismissed
for lack of jurisdiction. The point about jurisdiction was based on
the contention that there existed
no employment relationship between
the applicant and the first respondent.
[2]
The applicant has
also applied for condonation for the late filing of its review
application. The review application was one day
late. I see no reason
why the condonation should not be granted regard being had to the
degree of lateness and the reasons proffered
by the applicant.
Background facts
[3]
The first respondent
challenged his alleged unfair dismissal on the basis that he had been
constructively dismissed by applicant.
His referral of the dispute to
the CCMA was accompanied by an application for the condonation of the
late referral of his dispute.
The applicant did not oppose the
condonation application but reserved its right to challenge the
alleged unfairness of the dismissal
at the arbitration hearing.
[4]
After granting the
condonation for the late referral of the dispute, the CCMA issued a
certificate confirming that the dispute remained
unresolved and that
it could be arbitrated upon. The first respondent then referred that
dispute to arbitration.
[5]
After the referral of
the dispute to arbitration the applicant launched an application as a
point in
limine
,
seeking the dismissal, of the first respondent’s case on the
basis that the CCMA did not have jurisdiction to arbitrate
the
matter. In terms of the
point
in limine
the applicant contended that the CCMA did not have jurisdiction
because there was no employment relationship between the applicant
and the first respondent.
[6]
The first respondent
opposed the
point
in limine
on the basis that the applicant could not challenge the jurisdiction
of the CCMA at that stage unless and until the certificate
of outcome
had been reviewed and set aside.
The
arbitration award and the grounds for review
[7]
The commissioner in
his award ruled as follows:
“
5.1
The respondent’s application to dismiss this matter does not
succeed.
5.2
Sekunjalo
Corporate Services (Pty) Ltd is joined as the co-respondent.
5.3
The
CCMA should send the notice of set down to both respondents.
5.4
I make
no order as to costs.”
[8]
The commissioner in
his award says that the reasons for the above conclusion are that:
“
4.1
It is common cause that the applicant signed a contract of employment
with Corporate Services, which
is a subsidiary of the respondent
(SIL), the holding company. The applicant was the CEO of the
healthcare and biotechnology divisions
of the group which is the
current respondent. The applicant reported to Mr Kajee, the CEO of
SIL and not the Board of Corporate
Services or any other division
within the group.
4.2
It is submitted that the applicant applied for
condonation for the late referral of the dispute and cited
SIL as the
respond. The matter was conciliated upon and nothing was done by the
respondent to object to the wrong citation of the
dispute. I am of
the view that the respondent should have objected to the wrong
citation at that time.
4.3
SIL as a holding company of subsidiary/divisions in the group has a
substantial interest in this
matter and therefore it should remain as
the respondent. Corporate Service should also be joined in this
matter as a respondent.
4.4
For the applicant to succeed in his claim of constructive dismissal,
he has to prove that indeed continued
employment was made
intolerable. However such intolerability arose when the applicant was
either employed by either SIL or Corporate
Services and the applicant
has to prove that at arbitration.”
[9]
The applicant contends that the
commissioner’s finding constitutes an irregularity which is
reviewable. The essence of the
applicant’s attack on the
commissioner’s arbitration award is based on two grounds which
are set out below.
[10]
The first ground of review is that the
commissioner committed a reviewable irregularity by holding that he
was precluded from determining
the
point
in limine
by reason of the existence of
the certificate of outcome.
[11]
The second ground of review is that the
commissioner committed a reviewable irregularity by making two
findings which are contradictory.
It was contended in this respect
that on the one hand the commissioner found that the applicant being
a subsidiary of the fourth
respondent had a substantial interest in
the matter and should for that reason remain as a party to the
proceedings. And on the
other hand the commissioner says that the
decision as to who the employer of the first respondent was should be
determined at the
arbitration hearing. The applicant further
contended that in failing to determine who the employer of the first
respondent was,
the commissioner exceeded his powers.
Evaluation
[12]
The case of the applicant is that the
commissioner refused to entertain its dispute on the basis of the
authority of
Fidelity Guards Holdings
(Pty) Ltd v Epstein NO & Others
[2000] 12 BLLR 1389
(LAC).
The essence of that judgment is that
by issuing a certificate of outcome, the conciliating commissioner
condoned the late referral of the dispute. The certificate once
issued, in the context of condoning the late referral of the dispute
to the CCMA, becomes a bar to the employer raising the jurisdictional
point concerning the late referral of that dispute unless the
certificate was set aside.
[13]
In
Bombardier
Transportation (Proprietary) Limited Lungile Mtyiya NO and others
case
number JR 644/09,
soon
to be reported, the court observed the two different approaches that
have been adopted by the Labour Court in dealing with
the
consequences of the certificate of outcome in relation to the issue
of jurisdiction.
[14]
The first approach is
that which is found in
EOH
Abantu (Pty) Ltd v CCMA &Another (2008) 29 ILJ 2588(LC),
where the court taking its direction from
Fidelity
Guards Holdings (supra)
held that
once a certificate of outcome has been issue without the
jurisdictional facts been satisfied, the arbitrating commissioner
is
obliged to arbitrate the matter despite the fact that the
conciliating commissioner may have been wrong in as far as
jurisdiction
is concerned. In other words the arbitrating
commissioner cannot dismiss the matter on the bases of lack of
jurisdiction in the
face of the certificate of outcome. In terms of
this approach the only time that jurisdiction in the face of the
certificate of
outcome can be raised is if that certificate has been
set aside irrespective of whether or not the conciliating
commissioner was
wrong. See
Bombadier
(supra)
at paragraph [6]. In other
words in terms of this approach a party is bared from raising any
jurisdictional point as long as there
is a certificate of outcome.
[15]
The other approach is
found in the view that the bar to raising a jurisdictional point is
limited only to where the conciliating
commissioner in issuing the
certificate had discretion to exercise over any jurisdictional point
that may have been in existence,
like granting condonation as was the
case in
Fidelity
Guards.
Thus in my view the approach adopted in
Fidelity
Guards
applies
in instance involving what I would refer to as procedural
jurisdictional points. It however, has to born in mind that as
a
general rule the CCMA can not give itself jurisdiction by means of a
certificate of outcome of the dispute.
[16]
In dealing with the
status of a certificate of outcome Van Niekerk J in
Bombadier
(
supra)
had
the following to say:
“
[14]
In other words, a certificate of outcome is no more than a document
issued by a commissioner stating that
on a particular day, a dispute
referred to the CCMA for conciliation remained unresolved. It does
not confer jurisdiction on the
CCMA to do anything that the CCMA is
not empowered to do, nor does it preclude the CCMA from exercising
any of its statutory powers.
In short a certificate of outcome has
nothing to do with jurisdiction. If a party wishes to challenge the
CCMA jurisdiction to
deal with an unfair dismissal dispute, it may do
so, whether or not the certificate of outcome has been issued.
Jurisdiction is
not granted or afforded to it by a CCMA commissioner
issuing a certificate of outcome. Jurisdiction either exists as the
fact or
it does not.”
[17]
This court aligned
itself with the above approach in the unreported judgment of
Road
Accident Fund v South African Transport and Allied Workers Union &
Others unreported case number:
JS
750/10
.
In the present
instance the issue that arose in
Fidelity
Guards
concerning jurisdiction because of the late referral of the dispute
does not arise. The condonation for the late referral which
was
granted was never opposed by the applicant neither does the applicant
seek to raise that as an issue in the present instance.
The issue
raised by the applicant concerns the substantive issue of whether or
not there existed an employment relationship between
it and the first
respondent. Thus the jurisdictional point raised in this matter is
different to the one which was raised in
Fidelity
Guards (supra).
[18]
In my view, as will
appear in more details below, the commissioner in the present
instance did not dismiss the point raised by the
applicant on the
basis of decision in
Fidelity
Guards
as contended by the applicant. All what the commissioner did was to
postpone the issue and directed that it be determined at arbitration
hearing.
[19]
Although the commissioner in his finding at
paragraph 4.3 of his arbitration award quoted above says, Corporate
Service should be
joined in this matter, I do not belief that on the
proper reading of his reasoning the word “
joined
”
in that paragraph is used in the technical sense of joinder. It is
clear from the reading of the first part of that paragraph
that the
commissioner recognized that the applicant is already cited as a
party and should remain as such. All what the commissioner
does in
that reasoning is to emphasize, the already existing state of affairs
in the matter.
[20]
Even if the above analysis was found
to be incorrect, that would not advance the case of the applicant. At
best if it was to be
found that the contention of the applicant had
some merit, then the conclusion would be that the commissioner
committed a mistake.
Such a mistake would not, in my view, be
material enough to be said to have denied the applicant a fair
hearing. The mistake would
not be material because all what would
have happened is that the commissioner’s finding would have
simply confirmed an already
existing state of affairs. The applicant
as stated above had already been cited as a party in the proceedings.
[21]
I now turn to deal with the issue of the
finding by the commissioner at paragraph 4.2 of the arbitration award
that the applicant
should have objected to its citation at the
conciliation stage. I do not agree with the contention of the
applicant that the commissioner
based his finding on the decision in
Fidelity Guards.
[22]
The statement by the commissioner that the
issue of citation of the applicant should have been raised at the
conciliation proceedings
is of no consequence, because it does not
dispose of the issue of jurisdiction.
[23]
In my view the commissioner has not
determined the jurisdictional issue concerning the existence of the
employment relationship
between the applicant and the first
respondent. At paragraph 5.3 of the arbitration award, the
commissioner concludes that the
CCMA should send a notice of set down
to the respondents. And more importantly at paragraph 4.4 of the
arbitration award the commissioner
says that for the first respondent
to succeed in his claim of constructive dismissal he has to show that
the “intolerability”
arose when the applicant was
employed by either SIL or Corporate Services and the applicant has to
prove that at the arbitration
proceedings.
[24]
It is clear from the above that the
commissioner did not determine or close the determination of the
jurisdictional issue. In essence,
all what the commissioner has done
was to postpone the determination of the issue to the arbitration
hearing. He arrived at this
conclusion after determining the matter
on the papers before him. Whilst I note the explanation of the
applicant that they had
indicated their wish to present oral argument
before the commissioner, I do not belief that the approach adopted by
the commissioner
prejudiced them in any manner because the right to
pursue its claim still stands. The commissioner adopted a practical
approach
in dealing with the application which was before him. The
approach adopted by the commissioner is particularly correct if
regard
is had to the fact that the applicant had approached the CCMA
on the basis of motion proceedings. There seems to be no doubt that
on the papers before the commissioner there was a dispute of fact
which can at best be resolved at the arbitration hearing where
each
party will have an opportunity to present oral evidence which will
assist in resolving the question of whether or not the
applicant was
an employee of the first respondent. It is therefore my view that the
approach adopted by the commissioner was the
most sensible and
reasonable in the circumstances. The commissioner in the approach he
adopted, avoided a piece meal; approach
to the matter. In this regard
it needs to be emphasized that it is apparent that the issue of the
existence or otherwise of the
employment relationship between the
applicant and the first respondent would have to be determined by way
of viva voce evidence.
[25]
In my view and in the light of the above
analysis, I do not belief that the commissioner’s award is
unreasonable to warrant
a review. For the purposes of clarity I read
the commissioner’s award to be saying the following:
1.
The applicant’s application to
dismiss the first respondent’s case is dismissed.
2.
The CCMA should set down the arbitration
hearing by notifying both parties.
3.
The issue of the employment relationship
between the applicant and the first respondent will be determined at
the arbitration hearing.
[26]
In the light of the above discussion, I am
of the view that the applicant’s application to have the
commissioner’s award
reviewed and set aside stand to fail.
There is no reason in both law and fairness why the applicant should
not be required to pay
the costs of the first respondent.
[27]
In the premises the applicant’s case
is dismissed with costs.
_____________________
Molahlehi J
Date of Hearing
: 23
April 2010
Date of Judgment
: 21
October 2010
Representative
For the applicant
: Adv A
Oosthuizen
Instructed
by
:
Cliff
Dekker Hofmeyr Inc
For the respondent
: Mr
Malan
Instructed
by
:
Edward
Nathan Sonnenberg