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[2011] ZALCCT 56
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4 Seas Worldwide (Pty) Ltd v Commission for Conciliation Mediation and Arbitration and Others (C 939/2009) [2011] ZALCCT 56 (23 June 2011)
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Not reportable
Of
interest to other judges
Case
no: C 939/2009
In the matter between:
4
SEAS WORLDWIDE (PTY) LTD
....................................................
Applicant
and
CCMA
....................................................................................
First
respondent
STEPHEN
BHANA N.O.
..................................................
Second
respondent
LIESEL
VAN DER BURGH
..................................................
Third
respondent
Heard
:
25 May 2011
Delivered
:
23 June 2011
Summary: Review
– award not unreasonable –
application dismissed.
JUDGMENT
STEENKAMP J
Introduction
This is an application to review and set aside an award by the
second respondent (the arbitrator) in which he found the dismissal
of the third respondent, Liesel van der Burgh (the employee) to be
procedurally and substantively unfair. He ordered the applicant,
4
Seas Worldwide (Pty) Ltd, to pay her compensation equivalent to 5
months’ remuneration, as well as one month’s
is a notice
pay. He also ordered the applicant to pay the employee's costs on a
scale A of the magistrate’s court tariffs.
Both parties were
legally represented at arbitration.
Condonation
The arbitration award was delivered to the parties by telefax on 8
October 2009. The applicant delivered its review application
on 25
November 2009. The application is four days out of time. The
applicant only applied for condonation on 22 December 2009.
The parties agreed that I should deal with the merits of the review
application fully, as I would have to consider the prospects
of
success in the context of condonation in any event.
1
The applicant was represented at arbitration by Mr Richard Brown of
Herold Gie attorneys. The applicant’s business manager,
Leon
Bubenicek, informed Mr Brown by email on 16 October 2009 that the
applicant had received the award the previous day, ie
on 15 October
2009.
Subsequently, the applicant appointed Werksmans Inc to pursue the
review application. Werksmans’ Grant Marinus received
the file
from Herold Gie on 17 November and delivered the review application
on 25 November 2009. On 10. December 2009, and during
the course of
urgent interdict proceedings to stay the enforcement of the
arbitration award, the employee's attorneys informed
Mr Marinus that
the award had been delivered to both parties on 8 October 2009. The
applicant then to apply for condonation with
the assistance of Mr
Marinus.
The extent of the delay is not significant. It has not led to any
prejudice to the employee. The explanation for the delay is
sufficient for condonation to be granted. Despite the view I have
taken of the prospects of success, which I will address in
considering the merits of the review application, I decided to grant
the application for condonation.
The review application: the merits
The parties are in agreement that the test I must apply in order to
decide whether the award is open to review, is that set out
in
Sidumo and another v Rustenburg Platinum mines Ltd and others
2
,
i.e. whether the decision reached by the Commissioner is one that a
reasonable decision maker could not reach.
The issue in dispute before the Commissioner was whether the
employee was dismissed for incapacity (poor work performance) or
operational requirements; and in any event, whether the dismissal
was procedurally and substantively fair.
The applicant had employed the employee as a general manager from 1
August 2008 and dismissed her on 5 May 2009, ostensibly for
operational requirements.
It is common cause that the applicant initially embarked on a
performance management processes with the employee. It is also
common cause that it made no adverse finding on the employee’s
performance during this process. The applicant then set
a
retrenchment procedure in process on the basis that the position of
general manager was redundant.
The arbitrator came to the conclusion that the applicant had taken a
decision on the redundancy of the position prior to commencing
the
consultation process. He concluded that the decision to dismiss her
was a
fait accompli
; and that the decision to dismiss her for
operational requirements was a way to avoid the responsibility of
managing her. He
concluded that the real reason for dismissal was
the employee's alleged poor performance and not an economic
rationale. This
was neither a fair more a genuine reason. The
dismissal was therefore procedurally and substantively unfair.
In coming to this conclusion, the arbitrator took into account the
decision of the Labour Appeal Court in
SACTWU & others v
Discreto (a division of Trump & Springbok Holdings)
3
that the function of a court in scrutinising the consultation
process [in terms of section 189] is not to second-guess the
commercial or business efficacy of the employer’s ultimate
decision, but to pass judgement on whether the ultimate decision
arrived at was union and not merely a sham. He also considered the
following statement of Prof Darcy du Toit
4
:
“
The
starting point, therefore, is that an enquiry into the substantive
fairness of an operational requirements dismissal is twofold:
first,
whether it was in fact based on 'the economic, technological,
structural or similar needs of an employer' and, second, whether
that
the reason was 'fair' in the sense of being adequate, he when weighed
up against the employee's basic right to fair labour
practices, to
justify dismissal."
It is against that background that the arbitrator came to the
conclusion that the evidence showed that the applicant’s
decision on the redundancy of the employee's position was a fait
accompli; that the real reason for the dismissal was not an
economic
rationale; that the reason for dismissal was neither fair nor
genuine; and that it was therefore substantively unfair.
He also
came to the conclusion that the consultation process was no more
than a sham and that the dismissal was procedurally
unfair as well.
One hardly needs authority for the proposition that the use of an
improper motive for dismissing an employee makes the process
a sham.
For example, in
Pedzinski v Andisa Securities (Pty) Ltd (formerly
SCMB Securities (Pty) Ltd))
5
this court noted:
"I
have found… further that the respondent’s reason for
dismissal based on operational requirements was spurious
and a sham.
The respondent used the applicant’s health condition as an
admission in order to rid itself of an employee who
proved herself to
be diligent and committed in the execution of her duties."
The arbitrator in this case was faced with a similar situation and,
like the court in
Pedzinski
, he found the dismissal to be
unfair. He properly considered the evidence before him and made an
award that a reasonable decision
maker could make. The award is not
reviewable.
Mr
Aggenbach
, for the applicant, submitted that there was a
bona fide commercial rationale for the dismissal. He submitted that
there was
no need for a general manager; that the position had
become redundant; and that this was the reason for dismissal.
The problem with this argument is that the employee was indeed
presented with a
fait accompli
, as the arbitrator pointed
out. On 8 April 2009 the applicant’s Mark Llewellyn told the
employee that her job “will
be made redundant”; she was
only invited to consult a week later.
It is also apparent from the evidence and the contemporaneous
correspondence that the applicant attempted to convert a failed
performance management process to be a retrenchment process that
was, as the arbitrator found, a sham.
The employee testified that there were clear attempts to "manage
her out". For example, she was pressurised to sign
performance
review forms that had not previously applied to her; her targets
were changed; and her reporting lines were changed.
On 3 April 2009
the applicant’s Leon Bubenicek presented her with a
counselling form, to which she responded in full on
7 April 2009. On
8 April 2009 the applicant’s labour consultant, one Stephen
Beukes, entered the fray and changed tack
by setting in motion an
operational requirements dismissal. On the same day – 8 April
2009 – the applicant’s
Mark Llewellyn told the employee
that Bubenicek wanted to sideline her and that she would be "bought
out of the business".
Significantly, it appears that Beukes was
under the impression that the applicant had reached an agreement
with the employee,
when this was not the case. Beukes removed the
employee from the workplace on 15 April 2009; and only thereafter
did he attempt
to set up a consultation process. At that stage, he
was under the impression that she had to be “relieved of her
duties”
and not suspended. What’s more, a letter dated
24 April 2009 inviting the employee to a consultation process was
sent under
Llewellyn's name while he was in Hawaii and unaware of
such a letter.
Mr
Aggenbach
argued that the applicant had corrected a flawed
process and that any shortcomings in the process were. As a result
of miscommunication
between the applicant's directors and its
consultant, Beukes.
6
But it is clear from the evidence that the belated attempt at
consultation was a sham. The arbitrator’s conclusion in this
regard is not so unreasonable that no other decision-maker could
have reached the same conclusion.
Conclusion
The arbitration award is a reasonable one and is consistent with the
evidence given at the arbitration. In coming to his decision
the
arbitrator properly considered his role as required by
Sidumo
and he evaluated the applicant’s actions in the light of the
relevant case law. He came to a conclusion that a reasonable
arbitrator could reach.
Both parties asked for costs to follow the result. There is no
relationship left between the parties. In law and fairness, I
agree
that costs should follow the result.
Order
The application is dismissed with costs.
_______________________
Anton Steenkamp
Judge of the Labour Court
APPEARANCES
APPLICANT: Adv M Aggenbach
Instructed by Werksmans
THIRD RESPONDENT: Adv P Kantor
Instructed by Craig Schneider
1
Melane
v Santam Insurance Co Ltd
1962 (4) SA
531 (A) 532 B-F.
2
(2007)
28
ILJ
2405
(CC) para [110].
3
[1998]
12 BLLR 1228
(LAC) at 1230
4
Darcy
du Toit, “Business restructuring and operational requirements
dismissals: Algorax and beyond” (2005) 26
ILJ
595 at pp 601 1nd 602.
5
[2007] ZALC 64
;
[2006]
2 BLLR 184
(LC) para [97].
6
He
referred in this regard to a trio of cases decided by the old
Industrial Court under the 1956 LRA’s unfair
labour
practice jurisdiction, viz
Metal
& Allied Workers Union of SA v Henred Freuehauf Trailers (Pty)
Ltd
(1988) 9
ILJ
488 (IC);
SARHWU v
Bop Air (Pty) Ltd
1994 (3) LCD 74
(IC); and
Nhlapo v Liquor Inn
[1995] 7 BLLR 101
(LC).