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[2011] ZALCJHB 115
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Johannesburg City Parks Ltd v Toli NO and Others (JR 2767/09) [2011] ZALCJHB 115; (2012) 33 ILJ 1456 (LC) (6 December 2011)
11
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
case
no: JR 2767/09
In the matter between:
JOHANNESBURG
CITY PARKS LTD
............................................................
Applicant
and
SMANGA
TOLI N.O
…........................................................................
First
Respondent
SOUTH
AFRICAN LOCAL GOVERNMENT
BARGAINING
COUNCIL
…...........................................................
Second
Respondent
EDWARD
SEROBA
….......................................................................
Third
Respondent
Heard
: 1 November 2011
Delivered:
06 December 2011
Summary:
Review – the decision of the arbitrator to
award compensation and retrospective reinstatement. Section 193(1)
and (2) of
the LRA.
JUDGMENT
MOLAHLEHI J
Introduction
This is an application to review and set aside the arbitration award
of the second respondent made under case number IMD 010806
dated 2
September 2009. The applicant does not however seek to review the
entire arbitration award but only that part of the
arbitration award
that reinstates the third respondent (the employee) retrospectively
including the compensation awarded to the
employee. It should be
noted in this respect that the applicant has complied with that part
of the arbitration award that required
it to reinstate the employee.
Background facts
The employee who at the time of his dismissal was employed as
horticulture was dismissed for misconduct related to refusal to
obey
lawful instruction. The alleged refusal to obey the instruction
arose from the refusal to stop using the vehicle of the
applicant
because he was given travelling allowance and a petrol card.
The employee not being happy with the dismissal referred a dispute
concerning an alleged unfair dismissal to the bargaining council
for
conciliation. Conciliation having failed the matter was referred to
arbitration. The arbitrator ordered the retrospective
reinstatement
of the employee and the relevant part of his order for the purpose
of this judgment reads as follows:
‘
(a) I
order
Johannesburg city parks to reinstate Edward Serobe retrospective to
27 November 2007, a date of his unfair dismissal, with
employment
conditions not less than those he enjoyed prior to his dismissal.
(b) Reinstatement is without
loss of benefits.
(c) I further order Johannesburg
city parks to pay and years salary to the amount of R565 340,16 (Five
hundred and sixty five thousand,
three and forty rands and sixteen
cents calculated as [26920 x 21 months]. This area salary or back pay
is payable within fourteen
days in receipt of this award.’
Grounds for review
As indicated above, the applicant does not challenge the arbitration
award in its entirety but has limited its challenge to the
retrospective reinstatement of the employee including the
compensation order by the arbitrator. In this regard, the applicant
says that the arbitrator either committed a gross irregularity,
misconduct or that he exceeded his powers in that:
‘
9.1
The arbitration proceedings were initially set down for 1 July 2008,
but it was postponed at the request of the Applicant and
the Third
Respondent as the parties were trying to settle the matter.
9.2 The arbitration was set down
again for 4 August 2008, but was postponed because the Third
Respondent did not receive the notice
of set down from the Second
Respondent.
9.3 The arbitration was again
set down for 29 October 2008, but did not proceed on this date as the
Second Respondent did not have
any Commissioner available to
arbitrate the matter and it was postponed.
9.4 The dispute was once again
set down for arbitration on 18 November 2008. On this date the matter
was postponed at the request
of the Applicant and the Third
Respondent as the parties were trying to further (sic) explore the
possibility to settle the matter.
9.5 The partiesagreed to the
postponement and that they would report back to the First Respondent
by 1 December 2008 on whether
a settlement had been reached or not.
The matter was not settled and it was set down for arbitration on 25
March 2009.
9.6 On 25 March 2009 the
Applicant requested a postponement. The Third Respondent did not
oppose the request and the matter was
set down for arbitration on 28
May 2009.
9.7 On 28 May 2009 the Third
Respondent requested the postponement in order to consult with his
family and the Applicant did not
oppose the request.
9.8 The arbitration finally
commenced on the 15 July 2009 and was finalised on 19 August 2009.,
It is apparent from the above that the arbitration hearing was
postponed on a number of occasions, in some instances by agreement
between the parties and they did so largely because they were
involved in settlement discussions. It is also apparent that on
the
other occasions the postponements were due to administration
problems on the part of the bargaining council.
The issue
In essence, the issue in this matter revolves around whether the
arbitrator in ordering retrospective reinstatement including
payment
of the back pay for the period of 21 months, exercised his powers
properly and in a fair manner.
Evaluation
In ordering retrospective reinstatement and compensation, the
arbitrator exercised powers provided for under subsections (1)
and
(2) of section 193 of the Labour Relations Act
1
(the LRA). In light of this it is necessary to quote the provisions
of both subsections. Section 193 (1) reads:
‘
193.
Remedies for unfair dismissal . . .
(1) If the Labour Court or an
arbitrator appointed in terms of this Act finds that a dismissal is
unfair, the Court or the arbitrator
may-
(a) order the employer to
reinstate the employee from any date not earlier than the date of
dismissal;
(b) order the employer to
re-employ the employee, either in the work in which the employee was
employed before the dismissal or
in other reasonably suitable work on
any terms and from any date not earlier than the date of dismissal;
or
(c) order the employer to pay
compensation to the employee.’
Section 193 (2) reads:
‘
(2)
The Labour Court or the arbitrator must require the employer to
reinstate or re-employ the employee unless-
(a) the employee does not wish
to be reinstated or re-employed;
(b) the circumstances
surrounding the dismissal are such that a continued employment
relationship would be intolerable;
(c) it is not reasonably
practicable for the employer to reinstate or re-employ the employee;
or
(d) the dismissal is unfair only
because the employer did not follow a fair procedure.
In terms of section 185(a) of the LRA, an employee has a right not
to be unfairly dismissed. The remedies for any unfair dismissal
are
provided for in terms of sections 193 and 194 of the LRA.
Section 194 of the LRA provides:
‘
(1)
The compensation awarded to an employee whose dismissal is found to
be unfair either because the employer did not prove that
the reason
for dismissal was a fair reason relating to the employee’s
conduct or capacity or the employer’s operational
requirements
or the employer did not follow a fair procedure, or both, must be
just and equitable in all the circumstances, but
may not be more than
the equivalent of 12 months’ remuneration calculated at the
employee’s rate of remuneration on
the date of the dismissal.’
It is now settled that an arbitrator or the Labour Court has a
discretion whether to grant compensation where the dismissal of
an
employee is found to be unfair. In
Equity
Aviation
Services (Pty) Ltd v
Commission for Conciliation, Mediation and Arbitration and Others,
2
the Constitutional Court held that:
‘
It
is trite law that the power to grant a remedy in section 193 is by
its nature discretionary and that the discretion must be exercised
judicially by a court that enjoys that unfettered discretion.’
In interpreting the provisions section 193 of
the LRA, the Constitutional Court in
Equity Aviation Services
held that:
‘
The
ordinary meaning of the word “reinstate” is to put the
employee back into the same job or position he or she occupied
before
the dismissal, on the same terms and conditions. Reinstatement is the
primary statutory remedy in unfair dismissal disputes.
It is aimed at
placing an employee in the position he or she would have been but for
the unfair dismissal. It safeguards workers’
employment by
restoring the employment contract. Differently put, if employees are
reinstated they resume employment on the same
terms and conditions
that prevailed at the time of their dismissal. As the language of
section 193(1)(a) indicates, the extent
of retrospectivity is
dependent upon the exercise of a discretion by the court or
arbitrator. The only limitation in this regard
is that the
reinstatement cannot be fixed at a date earlier than the actual date
of the dismissal.’
3
[Footnote
omitted]
Towards the end of the same paragraph (36) the
Court further said:
‘
The
fact that the dismissed employee has been without income during the
period since his or her dismissal must, among other things,
be taken
into account in the exercise of the discretion, given that the
employee’s having been without income for that period
was a
direct result of the employer’s conduct in dismissing him or
her unfairly.’ [Footnote omitted]
In considering whether compensation should be awarded, the
arbitrator or the Labour Court has to balance the dictates of
fairness
to both parties. The approach to be adopted in this regard
is to look at the reason for the dismissal and whether such a
dismissal
was done in a fair manner. The nature of the misconduct
and the extent of the procedural defect and the implication to both
parties
if compensation is to be granted are some of the factors
that may influence the granting or refusal of compensation.
In
Dr D.C. Kemp t/a Centralmed v Rawlins,
4
after dealing with the discretion which the arbitrator has in terms
of section 193(1)(c) of the LRA, the Court held that in assessing
whether to order reinstatement the following factors which are not
exhaustive are to be taken onto account:
‘
(a)
the nature of the reason for dismissal; where the reason for the
dismissal is one that renders the dismissal automatically unfair
such
as race, colour, union membership, that reason would count more in
favour of compensation being awarded than would be the
case with a
reason for dismissal that does not render the dismissal automatically
unfair; accordingly, it would be more difficult
to interfere with the
decision to award compensation in such case than otherwise would be
the case;
(b) whether the unfairness of
the dismissal is on substantive or procedural grounds or both
substantive and procedural grounds;
obviously it counts more in
favour of awarding compensation as against not awarding compensation
at all that the dismissal is both
substantively and procedurally
unfair than is the case if it is only substantively unfair, or, even
lesser, if it is only procedurally
unfair;
(c) in so far as the dismissal
is procedurally unfair, the nature and extent of the deviation from
the procedural requirements;
the minor the employer’s deviation
from what was procedurally required, the greater the chances are that
the court or arbitrator
may justifiably refuse to award compensation;
obviously, the more serious the employer's deviation from what was
procedurally required,
the stronger the case is for the awarding of
compensation;
(d) in so far as the reason for
dismissal is misconduct, whether or not the employee was guilty or
innocent of the misconduct; if
he was guilty, whether such misconduct
was in the circumstances of the case not sufficient to constitute a
fair reason for the
dismissal;
(e) the consequences to the
parties if compensation is awarded and the consequences to the
parties if compensation is not awarded;
(f) the need for the courts,
generally speaking, to provide a remedy where a wrong has been
committed against a party to litigation
but also the need to
acknowledge that there are cases where no remedy should be provided
despite a wrong having been committed
even though these should not be
frequent;
(g) in so far as the employee
may have done something wrong which gave rise to his dismissal but
which has been found not to have
been sufficient to warrant
dismissal, the impact of such conduct of the employee upon the
employer or its operations or business;
and
(h) any conduct by either party
that promotes or undermines any of the objects of the Act, for
example, effective resolution of
disputes.’
5
In arriving at the conclusion that the employee in
Dr Kemp
was not entitled to compensation the Court took into account that:
‘
(a) a
genuine and reasonable offer of reinstatement was made to her which
she did not accept;
(b) had the respondent accepted
the appellant’s offer of reinstatement:
(i) she would not have suffered
any financial loss which she may have suffered as a result of her
dismissal;
(ii) the dispute between the
parties would have been resolved without the appellant having to
incur the legal costs that he must
be taken to have incurred in
defending the unfair dismissal claim and the costs relating to this
appeal;
(iii) the respondent would not
have incurred the legal costs that she must be taken to have incurred
through this litigation both
in the Labour Court and in this Court;
(c) for some time after the
appellant had made the offer of reinstatement to the respondent, the
respondent did not even bother
to respond to the appellant –
and that is conduct which is unacceptable, particularly when one of
the parties is trying to
have the dispute resolved. Such conduct
undermines one of the primary objects of the Act which is the
effective (which includes
expeditious) resolution of disputes: it is
better that disputes be resolved through conciliation than through
litigation or arbitration
or industrial action.’
In
Equity
Aviation Services,
the
Constitutional Court in dealing with the contention that the
employee should not be allowed to benefit from the 19 months
delay
in the prosecution of the review held that:
‘
As
to the criticism that Mr Mawelele will benefit unjustly from the
delay of 19 months in prosecuting the review, it is common cause
that
the delay was caused by the unavailability of the record of the
proceedings before the CCMA. The tapes seemingly went missing.
The
delay was therefore not due to any deliberate, wilful or flagrant
disregard for the express provisions and underlying purpose
of the
LRA. In the circumstances it would be unfair to lay the blame for the
delay on Mr Mawelele.’
6
The arbitrator in the present instance in ordering the reinstatement
and compensation of the employee reasoned as follows:
‘
Looking
at the reason for James to oppose the applicant’s reinstatement
... one cannot find any one justifiable enough for
his version to
hold. The applicant paid his rates. James agreed that bad
relationship between the applicant and him was personally
irrelevant.
The applicant’s qualifications limit him to the respondent
only, a fact supporting reinstatement. Mike Griffiths
did not testify
to any irretrievable broken relationship as the applicant’s
immediate superior so the version was James remained
irrelevant.
Nothing of what the respondent
presented in evidence showed that the applicant’s conduct
before dismissal warranted or justified
to reinstate. Circumstances
surrounding the di
smissal
negated
the respondent’s opposition to reinstatement.’
7
In my view, based on the facts and the circumstances of this case,
the arbitrator cannot be faulted for exercising his discretion
in
the manner he did. The arbitrator in arriving at the decision that
the employee should be reinstated took into account the
fact that
the relationship between the parties had not broken down and that
there was no basis for refusing reinstatement. The
arbitrator
rejected the basis upon which the applicant sought to support its
contention that the relationship with the employee
had irretrievably
broken down. The main witness of the applicant submitted that the
relationship with the employee had irretrievably
broken down for the
following reasons:
‘
1. The
applicant lied to a disciplinary hearing that he took the car for the
service at the garage and the hearing chairperson’s
telephone
to that garage proved that he lied in that he did not take the car in
that Friday but only on Monday.
2. The applicant defied two
eviction orders by the respondent to vacate the employer’s
house he was allocated while still
employed.
3. The applicant also failed to
pay rent for the employer’s house for a very long period.
4. The applicant further failed
to pay services for the house the employer allocated him.
5. Even after getting employment
with one of the respondent’s contractors after his dismissal,
the applicant failed to pay
municipal services and rental for the
employer’s house.’
The arbitrator rejected the version of the applicant and found that
its witness was not credible and reliable. The arbitrator
found that
the cautionary letter which the applicant claimed it had issued
against the employee was never issued and that it
may have come into
existence when the applicant was preparing for this matter. The
arbitrator found that there was documentary
proof that the employee
had paid for the municipal rates contrary to the version of the
applicant’s witness.
As concerning the order for compensation, the applicant argued that
the arbitrator ought not to have made such an order as the
employee
was to blame for the delay in finalising the arbitration
proceedings. It is apparent that the arbitrator was alive to
the
fact that there was a delay in finalising the proceedings. In this
regard, the arbitrator sets out the details relating to
how this
matter progressed prior to his involvement in it and thereafter. At
the beginning of the arbitration award, the arbitrator
sets out the
instances where this matter had to be postponed and reasons thereof.
At one stage or the other either of the parties
requested a
postponement for various reasons. It would appear that none of the
application for the postponement were opposed
by either party. In
two instances, the delay was occasioned by failure of the bargaining
council to ensure that the employee
was properly served the notice
of attendance and secondly due the unavailability of the arbitrator.
It is important also in considering the issue of reinstatement and
compensation that regard should be had to both the pre-arbitration
minutes and what the deponent to the founding affidavit says at
paragraphs 8.10. In the pre-arbitration minutes, the parties
recorded the relief sought as amongst others entailing:
‘
8.1
Retrospective reinstatement with full back pay; alternatively
8.2 Compensation equal to 12
month’s salary ...
8. Payment of the applicant’s
outstanding leave pay
’
In other words, the common understanding between the parties was
that if the arbitrator was to find that the dismissal of the
employee was procedurally and substantively unfair the remedy
available was retrospective reinstatement with full back pay. The
conclusion reached by the arbitrator is thus in line with what the
parties envisaged in their pre-arbitration minutes. In this
context,
it makes sense why the applicant never, as it was conceded on its
behalf during the argument, these issues are raised
for the first
time in this hearing and not during the arbitration hearing.
In my view, based on the above facts, it cannot be said that the
arbitrator did not appreciate the issues of reinstatement and
granting compensation in circumstances where there had been a delay
in finalising the matter. It would also seem to me that the
arbitrator in exercising his discretion in favour of awarding
compensation was influenced by the nature of the charges which
led
to the dismissal of the employee.
Accordingly, the applicant’s application stands to fail. I see
no reason why the costs should in the circumstances not
follow the
results.
In the premises, the applicant’s application is dismissed with
costs.
________________
Molahlehi J
Judge of the Labour Court of South Africa
REPRESENTATION:
FOR THE APPLICANT: Adv H M Viljoen instructed by Helena Strijdom
Attorneys
FOR THE RESPONDENT: R Kuhn of Rudolf Kuhn Attorneys
1
66
of 1995 as amended in 2002.
2
[2008]
12 BLLR 1129
(CC) at para 48. See also
Johnson &
Johnson v
CIWIU
(1998) 2
1209 (LAC).
3
Equity
Aviation
at para 36
4
(2009)
11 BLLR 1027
(LAC).
5
Dr
D.C. Kemp t/a Centralmed
at para 20.
6
Equity
Aviation Services
at para 51.
7
Paras
49 and 50 of the arbitration award.