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[2011] ZALCJHB 130
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Caxton Ltd v Commission for Conciliation Mediation and Arbitration and Others (JR 1216/2002) [2011] ZALCJHB 130 (7 April 2011)
IN THE LABOUR
COURT OF SOUTH AFRICA
(HELD AT JOHANNESBURG)
CASE NO JR 1216/2002
Caxton limited
Applicant
and
THE COMMISSION FOR CONCILIATION, MEDIATION & ARBITRATION
1
ST
Respondent
NTSOANE, D (
N.O.
)
2
ND
Respondent
CILLIERS, J C
3
RD
Respondent
______________________________________________________________________________
JUDGMENT
LAGRANGE,
J
Introduction
This matter has been a drawn out affair. It began on 21 June 1999
with an act of resignation by Mr J Cilliers, the third respondent
in
the review application (‘the employee’). He then
referred a dispute to the CCMA in good time, claiming that he
had
been constructively dismissed. A conciliation meeting was held on
27th of July 1999, at which the parties appeared to agree
to address
the points in dispute outside the forum of the CCMA. These
discussions did not lead to a settlement. It seems the
Commissioner
was under the impression that the employee’s claim of
constructive dismissal had been withdrawn. For reasons
which look as
if they relate to the fact that the original dispute did not contain
a claim for overtime pay, it seems that the
employee was persuaded
to refer a fresh dispute referral under the same case number by the
commissioner, which he and his union
did. The overtime claim
appeared in the second referral. That referral was not made within
the 30 day period following the company’s
dismissal, but was
only made on 25 August 1999, and was late.
A further conciliation meeting was convened to deal with this
second referral on 1 September 1999. A certificate of the outcome
to
the effect that the dispute remained unresolved was issued on that
date. The first date set for the arbitration of the dispute
was 6
June 2000. In so far as it is the case that the dispute which was
referred to arbitration followed on from the ‘second
referral’, no condonation was applied for on account of the
lateness and no objection was made by the employer to the matter
proceeding to arbitration on this account. The employer never
applied to review and set aside the certificate of outcome.
There is a dispute as to what happened at the hearing. The company
(‘the company’), which is the company in the
review
application claims in effect that neither Mr Cilliers nor his
representative attended the hearing and after waiting a
while, the
arbitrator "saw fit to close the file", in the words of
the company. A further notice of set down of the
arbitration of the
same case was sent out by the CCMA on 22 August 2001. The matter was
set down for 11 September 2001 at 13h00
hours.
The day before the scheduled hearing on 11 September, the company’s
representative sent a fax to the CCMA indicating that
it intended to
raise a point
in limine
at the hearing. The company’s
objected to the matter proceeding because the CCMA had previously
arbitrated the matter on
6 June 2000 and “
a formal
award/ruling has been handed down.
" On this basis, the
company submitted that the CCMA had no jurisdiction to convene a
second arbitration hearing unless the
third respondent had
successfully rescinded or reviewed the first award. No copy of this
ruling was attached to the submissions.
In fact, no copy of the
ruling has ever been produced by the company.
On the employer’s account, a reversal of its early good
fortune in the matter then occurred. It failed to attend the
arbitration hearing scheduled on the second occasion, leading to a
default award being issued in the employee’s favour.
Although
the employer’s
in limine
objection reached the
arbitrator, he did not accept that the matter had been previously
determined by another arbitrator, for
reasons which will be
discussed below, and proceeded to hear the matter on a default
basis. He found that the employee had been
constructively dismissed
and awarded him 12 month's compensation. The company applied
unsuccessfully to rescind this award, which
was issued on 22
September 2001. It is the rescission ruling of 5 April 2002 which is
the subject matter of the review application
currently before court.
The review application was launched on 19 September 2002. On 9
February 2004, the company filed a notice in terms of rule 7A(8)
of
the Labour court rules notifying the employee that it stood by its
notice of motion. The employee filed a notice of opposition
and a
supporting affidavit by 19 February 2004. Nothing further happened
for over a year, and on 29th of April 2005 the employee
filed an
application to dismiss the review application. Some six months
later, at the end of October 2005 the company filed its
opposing
affidavit. The reason given by the company for its delay in filing
an opposing affidavit is that the dismissal application
was sent to
its previous attorneys of record, who did not advise it that the
application had been received
.
It seems also there is some
doubt it reached the former attorneys of record. It was only in late
August 2005, when it received
the notice of set down in the matter
that
it became aware of the
existence of the dismissal application. The employee did not file a
replying affidavit in this application.
I believe the explanation is
not implausible and in view of the merits of the dismissal
application discussed below, the late
filing of the opposing
affidavit in the dismissal application is condoned.
The matter was set down for a hearing on the unopposed roll on 26
October 2005. On that occasion it appears to have been postponed
sine die
by agreement. The next occasion it was set down was
on 2 April 2009 but was removed from the roll. On 19 during the same
year
it was again postponed
sine die
. Once again it was set
down, this time for a hearing on 15 September 2009, but it was once
more removed from the roll. Later
it was re-enrolled for a hearing
on 27 January 2010. Once again the matter did not proceed. It was
finally heard on 15 September
2010. In short, the matter has been
ripe for hearing for over five years. There is an explanation for
some of these delays one
of them being the unavailability of the
employee’s counsel who was appearing
pro bono
. Another
cause of delay was the fact that the registrar apparently would not
set the review application down while the dismissal
application was
pending and would not set the latter application down, because a
replying affidavit had not yet been filed. Eventually
both
applications were set down to be heard on the same day, which is
what should have happened without waiting for the parties
to request
this.
The dismissal application
The employee relied on limited grounds for launching the
dismissal application. In his founding affidavit in support of this
application he claims that the company did not serve him with a
record or transcripts of the CCMA proceedings. He claimed also
that
it failed to comply with the court rules and it was delaying the
matter by not setting it down for a hearing.
The company replied that it did serve a copy of the record on the
employee and as evidence of this attached a registered postal
slip
dated 26 November 2004 addressed to him. In a later affidavit
related to the review application, the employee admitted the
possibility of having received service of the record in this manner.
He did not identify which specific rules of court the company
had
allegedly not complied with, but I presume he intended to refer to
the rules governing reviews and, in particular, the time
period for
filing a record. The company says it is blameless for the matter not
being set down because it was advised that the
review application
could not be set down until the dismissal application had been
decided and that the registrar of the court
determines the date for
this only once the pleadings have closed. It seems that the fact the
employee did not file a replying
affidavit might have caused the
registrar not to set the matter down, even though it was not
necessary to wait for a replying
affidavit to be filed, once the
time for a reply had expired.
It seems critical to me that the employee did not try to dispute
the company's allegation that it served the record on him
by
registered post. Had it been otherwise, he might have had better
grounds for asking for the dismissal of the review application.
I
also accept that the delays in setting the review application down
cannot simply be attributed to the company alone. In any
event, the
only record before the court did not include a transcript of the
proceedings.
For these reasons, I do not think that Mr Cilliers has provided
compelling grounds for dismissing the review application.
The review application
The arbitrator’s rescission ruling
The only record of what transpired at the rescission application
hearing is the ruling itself. The focus of the arbitrator’s
reasoning was on the question of whether or not there was wilful
default on the part of the company in failing to attend the
hearing.
In reaching the conclusion that it was in wilful default, the
arbitrator based his finding essentially on two subsidiary
inferences he drew from the evidence. Firstly, he concluded that the
explanation of the company’s representative that he
had been
held up because of the road accident which took 20 minutes to clear
could not explain his failure to arrive at the hearing
because if he
had driven straight from the accident to the CCMA he would have
found the hearing in still in progress. Secondly,
the arbitrator
remarked on the absence of any witnesses for the company at the
hearing and concluded that the company’s
representative could
not have had any evidence to present at the rescission hearing,
which would have been crucial to
the
success
of the application. By
implication, the arbitrator inferred that the employer had not
seriously intended to defend the claim.
The grounds of review
The company raises a number of grounds of review in its founding
affidavit, which it decided not to supplement or expand upon
when it
filed a rule 7A(8) notice. For the most part, the company’s
cause of complaint is the arbitrator’s handling
of the
evidence before him. Firstly, it complains that the arbitrator
failed to deal with all its evidence, which it claims was
plain from
his statement in his default ruling that "
besides, Mr Ross
had nothing to present to the rescission hearing as evidence.
"
Further, it claims the arbitrator did not apply his mind to the
evidence in finding that after the accident in which the company’s
representative was involved was cleared up in 20 min, the
representative did not proceed to the CCMA, whereas the company’s
representative had stated in his affidavit in support of the
rescission application that he had arrived at the CCMA offices at
approximately 13h56, but the arbitrator was not present.
In addition, the company submits that the arbitrator relied on
inadmissible evidence in coming to the conclusion that he would
still have been busy with the default application hearing if the
company’s representative had arrived when he said he did.
The company argues further that in coming to the conclusion that
it was in wilful default, the arbitrator had paid lipservice
to the
principles of fairness and had clearly disregarded all the
admissible evidence it had placed before him.
It also complains that the arbitrator did not consider the
in
limine
objection when he issued his rescission ruling.
The company’s most forceful attack on the arbitrator's
reasoning is that he failed to apply his mind to the legal
principles
governing the rescission of an award. If he had he done
so on the admissible facts before him he could only have come to the
conclusion that there was no wilful default on the part of the
company in failing to attend the hearing.
The test for rescission
Section 144 of the Labour Relations Act, 66 of
1995 (‘the LRA’) reads as follows:
“
Any commissioner who has issued an
arbitration award or ruling, or any other commissioner appointed by
the director for that purpose,
may on that commissioner's own accord
or, on the application of any affected party, vary or rescind an
arbitration award or ruling
-
erroneously
sought or made in the absence of any party affected by that award;
in
which there is an ambiguity, or an obvious error or omission, but
only to the extent of that ambiguity, error or omission;
or
granted
as a result of a mistake common to the parties to the
proceedings.
”
The
only provision of this section which might apply to the company is
subsection 144 (a). However, the Labour Appeal Court has
held that
applicants for rescission may also rescind a default award if they
can show good cause
for setting it aside:
“
Section
144 must be interpreted so as to also include good cause as a ground
for the rescission of a default arbitration award.
Accordingly, a
commissioner may rescind an arbitration award under s 144 where a
party shows good cause for its default.”
1
The LAC reiterated the requirements of good cause:
“
[35] The test for good cause in an application for
rescission normally involves the consideration of at least two
factors. Firstly,
the explanation for the default and, secondly,
whether the company has a prima facie defence. In Northern Province
Local Government
Association v CCMA & other (2001) 22 ILJ 1173
(LC);
[2001] 5 BLLR 539
(LC) at 545 para 16 it was stated:
'An company for the rescission of a default judgment must show
good cause and prove that he at no time denounced his defence, and
that he has a serious intention of proceeding with the case. In order
to show good cause an company must give a reasonable explanation
for
his default, his explanation must be made bona fide and he must show
that he has a bona fide defence to the plaintiff's claims.'
[36] In MM Steel Construction CC v Steel Engineering & Allied
Workers Union of SA & others (1994) 15 ILJ 1310 (LAC) at
1311I-1312A Nugent J had this to say:
'These two essential elements ought
nevertheless not to be assessed mechanistically and in isolation.
While the absence of one of
them would usually be fatal, where
they are present they are to be weighed together with relevant
factors in determining whether
it should be fair and just to grant
the indulgence.'”
2
In
Chetty v Law Society, Transvaal
1985 (2) SA
756
(A)
, Miller JA stated at 765A-C that:
“
The
term "sufficient cause" (or "good cause") defies
precise or comprehensive definition, for many and various
factors
require to be considered. (See Cairns' Executors v Gaarn
1912 AD 181
at 186 per Innes JA.) But it is clear that in principle and in the
long-standing practice of our Courts two essential elements
of
"sufficient cause" for rescission of a judgment by default
are:
that the party seeking relief must present a reasonable and
acceptable explanation for his default ; and
(ii) that on the merits such party has a bona fide defence
which, prima facie , carries some prospect of success.'
In
the
Shoprite
case, the LAC set aside a rescission ruling by a Commissioner who
declined to set aside a default award because i
n
considering good cause, the Commissioner only took one aspect of the
case into account and consequently failed to weigh together
all the
relevant factors in determining whether it was just and fair and
therefore with a good cause had been shown for the decision
of the
award. Had he applied his mind to all the issues before him in the
circumstances of that case he would have rescinded
the default
award.
3
Considering
the
arbitrator's ruling in this case it is difficult to escape the
conclusion that he only had regard to whether or not the company
had
given a reasonable explanation for its default. In his assessment of
the evidence, he essentially dismissed the company representative’s
explanation on the basis that if he had arrived at the CCMA when he
said he did, the hearing would still have been in progress.
This
crucial finding depends on the arbitrator’s own estimate of
how long the rescission hearing took. It is noteworthy
in this
regard that the arbitrator simply says that it "
could
have
" lasted 45 minutes, which is
an unambiguous indication he was not certain of the duration of the
hearing. If one has regard
to the evidence of Mr Cilliers at the
default hearing as recorded by the arbitrator, it is difficult to
believe that it would
not have been completed in under 20 minutes,
if not much less. The company representative testified that he
arrived at the CCMA
at 13h56, which was nearly an hour after the
hearing was scheduled. It is not implausible in the circumstances
that the hearing
might have been concluded a few minutes before he
arrived. While the arbitrator was obviously entitled to take into
account his
own recollection of the length of the hearing, it was
unreasonable of him to simply
prefer what he knew to be mere
speculation against the more precise affirmation by the company
representative.
Another
thing which the arbitrator took account of was that no witnesses
appeared for the company. The company however believe
that the
arbitrator would be compelled to uphold its
in
limine
objection. Moreover, the
in
limine
objection was filed the day
before the hearing was due to take place, which was clearly
indicative of the company’s intention
to oppose the
arbitration proceedings. It is difficult to understand how the
arbitrator could have concluded that the company
had not
demonstrated a serious intention of defending the matter. Having
regard to the evidence before him, was the arbitrator’s
finding that the company was in wilful default reasonable? I do not
think that on the evidence before him he could have reached
the
conclusion he did without entirely ignoring the implication of the
in limine
objection in so far as it related to the company’s intention
to defend the matter.
Moreover,
it seems apparent that the arbitrator determined the rescission
application on one consideration only, without having
regard to
issues such as whether the company had a
bona
fide
defence to Mr Cilliers’
claim. It is true, as the employee points out, that in its
application for rescission, the company
gives the briefest account
of its defence. Essentially that defence boils down to the fact that
it contends that the employee
resigned of his and free will. In
support of that contention the company attached what appears to have
been the employee’s
written resignation on 21 June 1999. That
simply read:
"To whom it may concern
I, J C Cilliers hereby hand in my resignation
as from Monday, 21 June 1999.
Yours faithfully
J C Cilliers"
Nothing
on the face of that letter suggests that the employee felt he had no
other alternative but to tender his resignation,
nor does it even
hint at a reason therefore. In the recission application, the
company also pointed out that the employee bore
the onus of proving
that he was dismissed.
I
agree that the statement of the company’s defence on the
merits is terse. Nonetheless, the statement of defence does not
have
to go into great detail:
“
'It
is sufficient if [the company for rescission of judgment] makes out a
prima facie defence in the sense of setting out averments
which, if
established at the trial, would entitle him to the relief asked for.
He need not deal fully with the merits of the case
and produce
evidence that the probabilities are actually in his favour.”
4
If
one considers Cilliers' version of events as recorded by the
arbitrator in the default award, it appears he was replaced by
someone else who took over his functions and he was re-assigned to
night-shift work. When he complained, he was told peremptorily
that
he could leave, which prompted his resignation. If this was a
condonation application, in which the prospects of the company’s
success had to be weighed, it is doubtful that the company would
succeed, but the test in a rescission application is merely
to
evaluate if the company’s stated defence is one that might
succeed if it can be proven.
Given
the circumstances, I'm satisfied that the company had a genuine
intention of defending the matter, even if its ultimate
prospects of
success as a matter of probability do not appear particularly
strong. The company’s stated defence, if proven,
is one that
could succeed and the obstacles that face an employee who claims
constructive dismissal could still prove to be ones
that the
employee is unable to overcome in a hearing where both parties lead
evidence and test each other's evidence.
Accordingly, the application to review the rescission ruling must
succeed and the original default arbitration award in the
company’s
favour on 22 September 2001 must consequently be set aside.
The
in limine
objection
Strictly speaking it is not necessary to consider any other ground
of review but I would also like to address the objection
relating to
the arbitrator’s alleged handling of the
in limine
objection in determining his rescission ruling before moving on
to deal with the status of his finding on that issue in the original
default application.
It must be said that, contrary to the company’s submissions,
the arbitrator clearly did have regard to the point
in limine
raised by the company in its letter sent to the CCMA the day before
the rescission application hearing. However, it is unclear
what his
final conclusion was about the relevance of this issue to the
rescission application. After mentioning the
in limine
point,
he stated: "
It's not clear whether the letter sought to stay
the proceedings.
"
However, it is important to place this apparently indecisive
treatment of the
in limine
issue against the backdrop of the
prior default hearing in which the arbitrator had already considered
the merits of the company’s
in limine
point in some
detail. At the default hearing he had asked the employee’s
union representative to respond to the employer’s
claim that
on 6 June 2000 the matter had been previously arbitrated and
concluded. According to the arbitrator, the representative
said he
had attended the arbitration hearing on that day and the
respondent’s representative was also present. He said
further
that he had advised the commissioner that the employee was ill in
hospital and wouldn't be able to attend the arbitration.
He had
requested a postponement for this reason, which the granted. Apart
from hearing the contrary version of the employee,
the arbitrator
also noted the fact that no award had been produced by the employer,
and he checked the CCMA case management system.
He recorded that the
system showed that the case had not been closed, which was at odds
with a claim that it had already been
determined.
The arbitrator concluded that the CCMA would not have set the
matter down for arbitration if it was closed. He dismissed the
in
limine
objection as having no basis.
Nothing suggests that when the rescission hearing took place, the
company advanced any further points in support of its argument
for
rescission based on the
in limine
point. Consequently, there
was no reason for the arbitrator to reconsider the merits of that
objection. Nevertheless at the default
hearing, he did at least
consider the possibility that it might have been the employer’s
intention to raise the
in limine
objection as a reason to
postpone the rescission hearing, but he evidently discounted this
because the employer’s letter
did not make that clear.
Before proceeding further, it is necessary to deal with the
in
limine
point on which the company placed so much reliance.
Essentially it claimed that the matter had already been determined
in the
previous arbitration held in June. However, to date it has
been unable to produce a copy of any award or ruling dismissing the
employee’s claim. When the
in limine
point was dealt
with in the absence of the company at the default arbitration
hearing, the employee’s union representative,
who claimed to
have been present on the first occasion, said that he requested a
postponement of the arbitration on account of
the company being ill
and in hospital, which request was granted.
The company was obviously aware of this contrary version when it
filed its rescission application, but does not attempt to
deal with
it at all. It also does not appear to have been canvassed at the
rescission application hearing, where one might have
expected the
company to try and bolster its claim that the matter could not be
set down again for arbitration. The arbitrator
investigated the
status of the matter at the time of the default hearing and found
that the matter had not been closed.
The company also subsequently investigated the record of the
matter’s progress at the CCMA, but could not come up with
clearer evidence that the matter had been finalised on 6 June 2000.
All that investigation revealed was that four dates for the
matter
had been set down, one for conciliation and three for arbitration.
Although the company contends that this is consistent
with its claim
that the matter was arbitrated on 6 June 2000, it is equally
consistent with the matter being postponed once and
set down on two
further occasions, namely the default hearing in September and the
subsequent rescission hearing. In the light
of all these factors,
the arbitrator’s finding on the
in limine
objection
given what was before him at the default hearing was not
unreasonable.
However, because the default award should have been rescinded, his
ruling on this question in that hearing also cannot stand
and it is
possible that on a full re-hearing evidence might be canvassed which
could lead to a different conclusion.
Remedy
The absurdity of this matter is that after 10 years, the parties
have still not participated in a hearing in which their respective
versions of the merits of the unfair dismissal claim have been
properly canvassed in evidence. Ordinarily, where there has been
a
delay of this nature, the court would be loathe to refer it back to
the CCMA for a hearing. However, the evidence of events
leading to
the employee’s resignation is simply insufficiently detailed
to permit a fair evaluation of the merits of the
matter on what is
available.
With great reluctance therefore, I am referring it back for a
fresh hearing on the in limine ruling, and, if necessary, the
merits. I am mindful of the fact that either or both parties may be
prejudiced by their inability to obtain the testimony of
certain
witnesses after such a long time and that witnesses’ memories
of events might be vague. There is no reason to believe
that the
parties might not be equally prejudiced in this respect, but to
decide a constructive dismissal dispute on the sketchy
and patchy
evidence available would be even worse in my view.
Order
Accordingly, the following order is made:
(a) The second respondent’s rescission ruling 05 April 2002 is
reviewed and set aside and so too is the second respondent’s
default award on 22 September 2001.
(b) The first respondent is directed to set the matter down for a
hearing before another commissioner other than the second respondent,
to determine both the in limine objection based on the alleged prior
ruling/award of 6 June 2001, and if necessary, the merits
of the
third respondent’s unfair dismissal claim.
(c) No order is made as to costs.
1
Shoprite
Checkers (Pty) Ltd v Commission for Conciliation, Mediation &
Arbitration & others
(2007) 28 ILJ 2246 (LAC)
2
Shoprite
at
2257
3
Shoprite
,
par [37]
4
Grant
v Plumbers (Pty) Ltd
1949
(2)
SA 470
(O)
at 476-7
15