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[2010] ZALCCT 44
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Folami v Commission For Conciliation, Mediation and Arbitration and Others (C268/2009) [2010] ZALCCT 44 (12 March 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD
AT CAPE TOWN)
Case
no: C268/2009
In
the matter between:
EMMANUEL
OLUSEGUN
FOLAMI
.....................................................................................
Applicant
and
COMMISSION
FOR CONCILIATION,
MEDIATION
AND
ARBITRATION
............................................................................
First
Respondent
JOESHO
THEE
..........................................................................................................
Second
Respondent
THE
SALVATION ARMY
TERRITORIAL
HEADQUARTERS
..........................................................................
Third
Respondent
JUDGMENT
TIP
AJ:
1.
In this review application, which comes
before me on an unopposed basis, the applicant seeks to review and
have set aside a written
jurisdictional ruling (“the ruling”)
of the second respondent (“the Commissioner”) dated 5
April 2009.
The application is brought in terms of sections 145
and 158(1)(g) of the Labour Relations Act 66 of 1995 (“the
LRA”).
2.
The Commissioner made the said ruling on a
point
in limine
taken by the third respondent to the effect that the CCMA had no
jurisdiction to hear the matter because, it contended, the applicant
was not an “employee” as defined in section 213 of the
LRA and section 1 of the Basic Conditions of Employment Act
(“the
BCEA”) and that consequently no employment relationship
existed. This point was upheld by the Commissioner.
3.
The applicant’s case is that the
Commissioner committed a gross irregularity, being a fundamental
error of law, and also failed
to apply his mind to the facts which
pointed to the existence of an employment relationship and failed to
consider evidence supporting
these facts.
4.
At the stage of the hearing of this matter
and upon a perusal of the helpful heads of argument prepared by Ms
Bailly, who appeared
for the applicant, it was my
prima
facie
view that the applicant should be
successful. Closer examination of the record and further
consideration of the issues has
however yielded a different
conclusion.
The
jurisdiction test
5.
The first question concerns the nature of
the test for jurisdictional review. This was considered by the
LAC in
SA Rugby Players Association &
others v SA Rugby (Pty) Ltd & others
(2008)
29 ILJ 2218 (LAC) at paras [39] to [41]. In effect the Court’s
approach was that the jurisdiction test is not
the same as the
Sidumo
test (
Sidumo & Another v Rustenburg
Platinum Mines Ltd & others
(2007)
28 ILJ 2405 (CC)). Rather, the test in a jurisdictional review
is whether, objectively speaking, the facts would give
the CCMA
jurisdiction to entertain the dispute. The relevant passage is
in these terms:
“
The
question before the court a quo was whether on the facts of the case
a dismissal had taken place. The question was not
whether the
finding of the commissioner that there had been a dismissal of the
three players was justifiable, rational or reasonable.
The
issue was simply whether objectively speaking, the facts would give
the CCMA jurisdiction to entertain the dispute existed.
If such
facts did not exist the CCMA had no jurisdiction irrespective of its
finding to the contrary”
.
See
also
MEC, Department of Health, Eastern Cape v Odendaal &
others
(2009) 30 ILJ 2093 (LC) at 2098.
6.
These authorities suggest that the only
issue that hence needs to be determined in this case is whether the
applicant, based on
the facts and objectively speaking, is an
employee and whether the CCMA would accordingly have jurisdiction.
7.
Where the facts lend themselves to a
limited enquiry of that kind, the test thus enunciated is relatively
straightforward in its
application and the notion of ‘objective’
can be given its ordinary meaning. But, not all jurisdiction
issues
fall tidily into the ‘objective’ category.
The case before me demonstrates this. Whether or not the
applicant
in this matter falls to be classified as an employee does
not follow upon a simple objective determination. Instead, it
requires
an evaluation in an ultimately holistic fashion of a number
of elements. To my mind, that involves the exercise of a
substantial
degree of subjective assessment and the application of a
value judgment. Correspondingly, a decision about what the
facts
are that must be scrutinised through the jurisdiction lens
falls to be tested in significant measure against the criteria of
justifiability
and reasonableness.
The
factual circumstances
8.
As a preliminary observation, this Court
was faced with considerable difficulty in dealing with the transcript
of the proceedings
in the CCMA, in that the applicant’s
evidence is extensively punctuated with the inscription
‘indistinct’.
This is so frequently the case that
it is more often than not impossible to grasp the content of his
evidence. The transcribers
have noted that the applicant’s
accent was the reason for this. However, there is no indication
that any effort was
made by the applicant to cure as many of those
deficiencies as possible. To the contrary, it is in my view
plain that nothing
of that sort was attempted. It is trite that
it is an applicant’s duty to ensure that a proper record is
placed before
a reviewing court. The failure to do so may even
lead to such court dismissing a review application on that ground
alone.
I am not inclined to be that drastic in this matter.
At the same time, it must be said that the obscurity for me of large
parts of the record inclines me towards accepting the Commissioner’s
recital of the evidence, he having had the advantage
of listening to
it. I should add that I am of course confined to a review of
the Commissioner’s determination in relation
to the material
ventilated at the hearing before him. That does not include new
evidence raised in the affidavits filed in
support of the present
application.
9.
With those
caveats
I turn to the basic facts and the legal
questions that arise. The third respondent is the Salvation
Army for the Western Cape.
In about November 2002, it required
the services of a bookkeeper and announced this one Sunday to its
member congregants.
The applicant was a member. He
applied and after a consequential interview process was appointed by
an official of the third
respondent as its bookkeeper.
10.
At the time of this appointment it was
agreed that the applicant would provide and perform bookkeeping
services to the third respondent
and that, in return, the applicant
would pay a discounted R300.00 per month for board and lodging at one
of the third respondent’s
hostels, as opposed to the usual rate
of R900.00 per month which was then applicable.
11.
At the time of his appointment, the
applicant was not a resident of the third respondent but thereafter,
in January 2003, he took
up accommodation at the third respondent.
12.
It was agreed between both parties that the
balance of R600.00, which the applicant was not required to pay
towards his accommodation,
would be treated as a
quid
pro quo
for his bookkeeping services.
13.
The arrangement thus concluded remained in
place for a period of six years from 2 November 2002 until 4 December
2008 when it was
summarily terminated.
14.
The argument before the Commissioner revolved around the provisions
of section 200A of the LRA (mirrored in section 83A of the
BCEA),
which present a set of seven circumstances and a presumption that if
any one or more of them is present, that person will
be deemed to be
an employee unless the contrary is proved. The relevant part of
the section reads as follows:
“
(1)
Until the contrary is proved, a person who works for, or renders
services to, any other person is presumed, regardless of the
form of
the contract, to be an employee, if any one or more of the following
factors are present:
(a)
the manner in which the person works is
subject to the control or direction of another person;
(b)
the person’s hours of work are
subject to the control or direction of another person;
(c)
in the case of a person who works for an
organisation, the person forms part of that organisation;
(d)
the person has worked for that other person
for an average of at least 40 hours per month over the last three
months;
(e)
the person is economically dependent on the
other person for whom he or she works or renders services;
(f)
the person is provided with tools of the
trade or work equipment by the other person; or
(g)
the person only works for or renders
services to one person.
”
15.
The Commissioner considered most of these
factual presumptions but not all of them. At the end of that
process he found that
not one of them applied and that the applicant
had not discharged the onus of proving that he was an employee.
It is necessary
to examine each of them in turn:
16.
Sub-paragraph (a)
:
The Commissioner was of the view that the applicant was not subject
to the control or direction of the third respondent.
It is
indeed clear that he worked on his own. Although he was
required to complete his balancing and reconciliation work
by the
seventh of every month, this does not in my view amount to control in
the sense contemplated in the section. Likewise,
the mere fact
that he had to be given access to the working area when he came to do
this work does not constitute control.
17.
Sub-paragraph (b)
:
The Commissioner correctly found on the evidence that the applicant
was free to work as and when he elected to do so.
18.
Sub-paragraph (c)
:
There is nothing to suggest that the applicant was part of the
organisational structure of the Salvation Army. Apart
from the
fact that he had a monthly deadline, he was not part of any reporting
arrangement, whether up or down. The question
may be posed
thus: did the applicant occupy a post or render a service?
Plainly the latter. That conclusion is consistent
with what the
LAC described as ‘the reality test’ in
Denel
(Pty) Ltd v Gerber
(2005) 26 ILJ 1256
(LAC) at paras [96] to [98]:
“
[96]
I have already referred to some of the English cases which have
adopted the same approach on this issue as the approach adopted
in
Callanan and Briggs. However, there are also cases which support the
same approach that I have adopted in the present matter.
In
particular I am in full agreement with the approach adopted in Young
& Woods and think that that is the correct approach.
That case
has been discussed sufficiently above and requires no further
discussion. Indeed, the same approach was adopted in the
case of
Catamaran which has also been discussed above. In my judgment that
approach, which for convenience, I call the reality
approach, takes
account of all relevant factors as well as the public interest and
ensures that parties have no licence to take
themselves out of the
scope of such important legislation as the Act and the
Basic
Conditions of Employment Act 1997
.
“
[97]
In McKenzie's case, referred to above, this court began to move in
the right direction when it held that the realities of the
relationship should be considered as opposed to the approach adopted
in Briggs which was to the effect that whether or not a person
was an
employee of another was effectively determined by the election made
by the parties at the relevant time. The approach adopted
by this
court in McKenzie is in line with the approach I have adopted in this
matter.
[98]
In Niselow v Liberty Life Association of Africa Ltd (1998) 19 ILJ 752
(SCA) it was said at 753H: I
'An
independent contractor undertakes the performance of certain
specified work or the production of a certain result. An employee
at
common law, on the other hand, undertakes to render personal services
to an employer. In the former case it is the product of
or the result
of the labour which is the object of contract and in the latter case
the labour as such is the object (see Smit v
Workmen's Compensation
Commissioner
1979 (1) SA 51
(A) at 61B). Put differently, an employee
is a person who makes over his or her capacity to produce to another,
an independent
contractor, by contrast, is a person whose commitment
is to the production of a given result by his or her labour (per
Brassey
''The Nature of Employment" (1990) 11 ILJ 889 at 899).'
“
The
latter passage is particularly significant in the context of this
case which is clearly concerned with the production of a given
result
and decidedly not the making over of the capacity to produce.
The applicant had a set monthly task and quite how he
delivered the
result was up to him. He received no cash remuneration and none
of the other usual incidents of employment.
19.
Sub-paragraph (d)
:
Conflicting evidence was placed before the Commissioner.
Captain Golding testified for the third respondent that she
was the
assistant administrator. She had done the work that the
applicant performed and stated that it would not take more
than three
hours per month. The applicant disputed this, contending that
it took over fifty hours every month. The
Commissioner was
unimpressed with his evidence and viewed it as an attempt by the
applicant to get across the forty hour criterion
in the section.
I am not satisfied that I should interfere with his conclusion.
As I have already observed, the Commissioner
had the advantage of
hearing the evidence and seeing the witnesses, whereas I do not have
so much as a clear record. I should
add that there is no
inherent probability that the applicant would have spent fifty hours
or more every month on this work.
His was not a particularly
elaborate task. He captured financial transaction data on a
computer and generated a monthly balanced
and reconciled cash book.
It would require a very substantial transaction volume to warrant the
length of time claimed by
him.
20.
Sub-paragraph (e)
:
Captain Golding expressed the view that the applicant was not
economically dependent on the Salvation Army because he received
no
cash payment. That in itself is of course not a conclusive
answer. Accommodation at a reduced rate amounts to payment
in
kind. But that, too, does not decide the question. In
this context, an important fact is that the applicant was
employed as
a safety observer with Dorbyl on the Cape Town docks. That was
his sole source of cash revenue and it was a position
that was at
least major time, if not full time. Moreover, as stated in item
18 of the Code: “
economic
dependence will generally be present if the applicant depends upon
the person for whom they work for the supply of work
”.
That is not the position here. The Code further states: “
an
important indicator that a person is genuinely self-employed is that
he or she retains the capacity to contract with others to
work or
provide services.
” That the
applicant retained such capacity is clear. See further the
approach endorsed by the LAC in
State
Information Technology Agency (Pty) Ltd v Commission for
Conciliation, Mediation & Arbitration & others
(2008) 29 ILJ 2234 (LAC) at para [11]. It is plainly a common
cause fact that the benefit of a rent reduction was in no way
related
to the number of hours spent by the applicant in the preparation of
his monthly product.
21.
Sub-paragraph (f)
:
The applicant did his work on the Salvation Army’s computer and
used its stationery. On the face of it, that
would bring him
within the range of this presumption. The Commissioner did not
directly deal with this aspect, but I am in
any event not persuaded
that this is sufficient to disturb his conclusion that the applicant
was not an employee. The remaining
factors are a good deal more
compelling in respect of that conclusion. For instance, of
greater weight than the mere fact
that the third respondent’s
computer was used is the fact that it was thus used to produce a
given result and not in the
making over of the capacity to produce.
22.
Sub-paragraph (g)
:
As outlined above, the applicant does not fall into this category.
The reverse is true, in that his principal employment
lies with a
person other than the third respondent.
23.
It is hence my view that the Commissioner’s
conclusion that section 200A of the LRA did not serve to bring the
applicant within
the compass of “employee” is neither
subjectively nor objectively reviewable. At the same time,
regard must be
had to the statutory definition of “employee”,
insofar as section 200A deals with a presumptive and not a conclusive
framework. The definitions in both the LRA and the BCEA are as
follows:
“
(a)
any person, excluding an independent contractor, who works for
another person or for the State and who receives, or is entitled
to
receive, any remuneration; and
(b)
any other person who in any manner assists in carrying on or
conducting the business of an employer.”
24.
Also common to these statutes is the definition of remuneration:
“
any
payment in money or in kind, or both in money and in kind, made or
owing to any person in return for that person working for
another
person, including the State, ….”
25.
These provisions may be read together. Although their import is
broader than the content of section 200A of the LRA, that
content and
its interpretation informs the manner in which the definition
provisions should be understood and applied.
26.
In the present case it is so that the applicant did not have a
contract of employment. That fact, as such, does not exclude
him and, by the same token, the adjudication of who is an employee is
not dependent upon common law principles. See for instance:
Discovery Health Ltd v
Commission for Conciliation, Mediation & Arbitration & Others
2008 (29) ILJ
1480 (LC) at paragraph [42]:
“
To
summarise: The protection against unfair labour practices established
by s 23(1) of the Constitution is not dependent on a contract
of
employment. Protection extends potentially to other contracts,
relationships and arrangements in terms of which a person
performs
work or provides personal services to another. The line between
performing work “akin to employment”
and the provision of
services as part of a business is a matter regulated by the
definition of "employee" in section
213 of the LRA”
.
27.
This passage does not however advance the
case of the applicant in this matter, since there is an analytical
loop which ultimately
returns to the question examined in this
judgment as to whether or not he is to be treated as an employee or
whether the Commissioner’s
decision that he is not should
stand. It is my conclusion that it should.
28.
Given that the third respondent did not
engage in this litigation, the issue of costs does not arise.
Order
29.
I accordingly make the following order:
1
The application is dismissed.
2
There is no order as to costs.
_______________________________________
K
S TIP
ACTING
JUDGE OF THE LABOUR COURT
DATE
OF HEARING: 29 January 2010
DATE
OF JUDGMENT; 12 March 2010
FOR
APPLICANT: Adv C Bailly
Instructed
by Van Tonders Attorneys