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[2011] ZALCJHB 157
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Mafikeng Local Municipality v South African Local Government Bargaining Council and Others (JR 668/10) [2011] ZALCJHB 157 (8 July 2011)
IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
Not Reportable
Caseno: JR 668/10
In the matter between:
MAFIKENG LOCAL MUNICIPALITY
............................................................
Applicant
and
SOUTH AFRICAN LOCAL GOVERNMENT
BARGAINING COUNCIL
......................................................................
First
Respondent
M MOSALA N.O
(in her capacity as Arbitrator)
...............................................................
Second
Respondent
T KGOSIMORE
.....................................................................................
Third
Respondent
K W MOGORISI
..................................................................................
Fourth
Respondent
Date of hearing: 7 July 2011
Date of Judgment: 8 July 2011
J U D G M E N T
FOURIE AJ
The third and fourth respondents (the claimants) applied for
employment with the applicant (the municipality). They were duly
interviewed. The interviewing panel recommended their appointment,
and the Human Resources department drew up draft letters of
appointment, to be placed before the Municipal Manager for approval.
The appointment of the claimants was at all times subject to and
conditional upon approval being granted by the Municipal Manager,
who had not sat in on the interviews. The process of approval by the
Municipal Manager before an appointment is made is required
by law
(see section 55(1) (e) of the Local Government: Municipal Systems
Act.
1
This is standard practice within the municipality and was known to
the personnel that interviewed the claimants. It was also
communicated to the claimants themselves.
The Municipal Manager never approved the appointments, but due to an
administration error, the claimants were informed that they
should
report for duty. The claimants were not presented with any offers of
employment, and no details pertaining to their appointment
(salary
etc) were agreed upon. They duly reported for duty on 1 September
2009. Two days later after reporting for duty, the
Municipal Manager
learnt of their apparent appointment for the first time and
immediately saw to it that the claimants were informed
that they had
not been appointed. The claimants were asked to leave the premises
on the same day.
The claimants referred a dispute of an alleged unfair labour
practice to the first respondent Bargaining Council, who duly
appointed the second respondent (the arbitrator) to arbitrate the
dispute. The referral form describes the nature of the unfair
labour
practice as the failure by the municipality to provide them with
appointment letters confirming their employment, and
a failure to
pay their salaries.
The municipality denied that the claimants were ever employed, as
their appointment was conditional upon approval by the Municipal
Manager, which he never granted.
In the arbitration award, the arbitrator held that the municipality
dismissed the claimants unfairly, and ordered that they be
reinstated with full backpay. The municipality seeks to review and
set aside the award. The review application is unopposed.
The primary grounds of review are that the arbitrator misconceived
the nature of the dispute before him, and that the result
is grossly
unreasonable.
The arbitrator’s reasoning can be summarised as follows:
The claimant’s employment was subject to approval by the
Municipal Manager;
The Municipal Manager never approved their appointment;
As a result, no contract of employment came into existence in
respect of either claimant;
The claimants do not seek to enforce any alleged contract of
employment with the municipality, but merely seek to have the
municipality’s conduct declared an unfair labour practice;
The claimants were informed (albeit incorrectly) that they were to
be appointed, and reported for duty at the municipality
for 2 days
before being told to leave.
The municipality drew up contracts of employment ‘with a
clear intention of appointing the [claimants]’
This amounts to an unfair dismissal, and not an unfair labour
practice as alleged by the claimants.
The claimants were unfairly dismissed, and should be reinstated
with backpay, which is to be calculated on the figures contained
in
the unsigned appointment letters.
In my view the arbitrator completely misconceived the nature of the
enquiry before him. He failed to apply his mind to a crucial
jurisdictional fact – was there an employment relationship
between the parties? In the absence of an employment relationship,
no unfair labour practice or dismissal could occur. By definition,
both require the existence of an employment relationship as
a
jurisdictional prerequisite. This seems to have escaped the
arbitrator entirely.
For present purposes, the only possible definition of ‘dismissal’
which could apply, is section 186(1) (a) of the
Labour Relations
Act
2
,
which defines ‘dismissal’ as “an employer has
terminated a contract of employment with or without notice”.
The issue of whether a dismissal occurred is a jurisdictional fact.
A finding of a ‘dismissal’ as defined in section
186(1)
of the LRA is a prerequisite for the dispute-resolution mechanism
provisions (section 191of the LRA) and subsequent powers
of
arbitrators (sections136, 138 and142 of the LRA) to take effect. If
the question of a dismissal is placed in dispute, the
employee bears
the onus to prove it (section 192(1) of the LRA).
The CCMA has no power to determine its own jurisdiction. Obviously
an assessment and provisional finding will normally be made
by an
arbitrator (who, having assumed jurisdiction, will normally proceed
to arbitrate on the merits), but this is always subject
to final
determination by the Labour Court
3
.
Accordingly, in determining the issue of whether a dismissal
occurred, a court sitting on review is not limited to an assessment
of whether the arbitrator’s decision was reasonable (in the
Sidumo
sense), but will consider the issue
de novo
4
.
On an objective assessment of the facts, no contracts of employment
came into existence, as the suspensive condition (approval
by the
Municipal Manager) was not fulfilled. The fact that draft letters of
appointment were prepared, and the unfortunate error
that was made
by inviting the claimants to report for duty, did not serve to
fulfil the suspensive condition.
As no consensus was ever reached regarding the employment of the
claimants by the municipality, the claimants do not have a claim
in
law against the municipality based on either unfair labour practice
or unfair dismissal.
Furthermore, the award is reviewable as the conclusion reached (and
reasoning process followed) is not one that a reasonable
arbitrator
could have reached.
In a recent paper
5
,
Anton Myburgh SC summarizes the review test to be applied as
prescribed in
Sidumo
, and as interpreted by the Labour Appeal
Court and Supreme Court of Appeal (most recently in
Samancor
6
)
as follows:
“
the
Sidumo
test is a
result-based test, which test the reasonableness of the result /
outcome of the award;
in order to assail an award on
the basis of the
Sidumo
test, the applicant must thus assail
not only the commissioner’s reasons, but also the result of
the award;
the reasonableness of the
result of the award stands to be determined on all the material that
was before the commissioner (with
the result that the award can be
sustained for reasons not considered by the commissioner);
the focus is on whether the
result of the award falls within a range of reasonable outcomes, as
opposed to whether it was correct
(this so as to maintain the
distinction between a review and an appeal); and
seen in the context of the
above, the fact that a commissioner (as occurred in
Samancor
)
commits an error in the process of his reasoning will not result in
the
Sidumo
test being met, unless the result of the award is
incapable of justification on all the material before the
commissioner.”
Van Niekerk J held as follows in
Southern Sun Hotel
Interests(Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
7
:
“
In
summary, s 145 requires that the outcome of CCMA arbitration
proceedings (as represented by the commissioner's decision) must
fall
within a band of reasonableness, but this does not preclude this
court from scrutinizing the process in terms of which the
decision
was made. If a commissioner fails to take material evidence into
account, or has regard to evidence that is irrelevant,
or the
commissioner commits some other misconduct or a gross irregularity
during the proceedings under review and a party is likely
to be
prejudiced as a consequence, the commissioner's decision is liable to
be set aside regardless of the result of the proceedings
or whether
on the basis of the record of the proceedings, that result is
nonetheless capable of justification.”
In
Lithotech
Manufacturing Cape, A division of Bidpaper Plus (Pty) Ltd v
Statutory Council Printing, Newspaper and Packaging Industries
and
Others
,
8
,
Basson J held
:
“
...
there may be cases where, although the ultimate conclusion reached by
the commissioner... is reasonable, the reasoning adopted
by [him] is
so flawed (even if the ultimate result is reasonable), that it cannot
be concluded that [he] duly exercised his...
functions as an
arbitrator by taking due consideration of matters that are vital to
the dispute. In such circumstances, the reviewing
court may well be
inclined to review and set aside the award.”
It is plain that no claim for an alleged unfair labour practice was
established by the claimants. In fact, the complaints raised
by them
do not amount to an ‘unfair labour practice’ as defined
in section 186(2) (a) of the LRA. But even if a valid
unfair labour
practice complaint was raised, this does not entitle the arbitrator
to conclude in his award that the real dispute
is that of alleged
unfair dismissal, and then to make a finding to that effect. At the
very least (and leaving aside the problem
that this was not the
dispute referred to conciliation), this issue should have been
properly canvassed with the parties during
the arbitration, and an
opportunity should have been provided to present evidence. The
arbitrator’s failure to do so amounts
to a gross irregularity
in the conduct of the proceedings. His subsequent award of
reinstatement with backpay to positions and
at salaries that the
parties had never agreed upon, is further indication of the complete
failure by the arbitrator to apply
his mind to the matter.
In light of my finding on jurisdictional facts, it is not necessary
to elaborate further on other grounds of review. It can safely
be
stated that the reasoning and conclusion in the arbitration award
are so incompetent as to be reviewable on both a process
and result
based approach.
In the result, the review application succeeds.
I now turn to consider whether to refer the rescission application
back to the Bargaining Council for hearing afresh, or to substitute
the award. In
Southern Sun Hotel Interests
9
,
van Niekerk J explained the correct approach to this issue as
follows:
“
The
LAC and this court have held that they should correct a decision
rather than refer it back to the CCMA for a hearing de novo
in the
following circumstances: (i) where the end result is a foregone
conclusion and it would merely be a waste of time to order
the CCMA
to reconsider the matter; (ii) where a further delay would cause
unjustified prejudice to the parties; (iii) where the
CCMA has
exhibited such bias or incompetence that it would be unfair to
require the applicant to submit to the same jurisdiction
again; or
(iv) where the court is in as good a position as the CCMA to make the
decision itself.”
In this matter, all of the above factors are present. I made the
following order:
The arbitration award under CCMA Case no NWD 110906 dated 10 March
2010 is reviewed and set aside.
The award is replaced with an award in the following terms:
“
The
applicants’ claims are dismissed.”
No order as to costs.
__________________
Greg Fourie AJ
Acting Judge of the Labour Court
Appearances:
For the applicant: Ms TS Sethosa, Maserumule Inc Attorneys
For the respondents: No appearance for any respondents (unopposed)
1
32
of 2000.
2
66
of 1995.
3
SA
Rugby Players Association and Others v SA Rugby (Pty) Ltd and
Others; SA Rugby (Pty) Ltd v SA Rugby Players Union & another
(2008)
29 ILJ 2218 (LAC),
S
anlam
Life Insurance Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
(2009)
30 ILJ 2903 (LAC).
4
Chabeli
v CCMA and Others
(2010) 31 ILJ 1343 (LC).
5
Reviewing
the Review Test: Recent Judgments and Developments (not yet
published).
6
National
Union of Mineworkers v Samancor Ltd
(625/10)
[2011]
ZASCA 74
(25 May 2011).
7
Southern
Sun Hotel Interests (
(2010) 31 ILJ 452 (LC) at para 17.
8
Lithotech
Manufacturing
[2010] 6 BLLR 652
(LC) at para 18.
9
Southern
Sun Hotel Interests (Pty) Ltd v CCMA and Others
(2010) 31 ILJ
452 (LC) at para 33.