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[2011] ZALCCT 23
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Western Cape Department of Transport and Public Works v Fritz NO and Others (C846/08) [2011] ZALCCT 23 (26 August 2011)
REPUBLIC OF SOUTH AFRICA
Reportable
Of
interest to other judges
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
CASE
NO: C846/08
In the matter between:
THE
WESTERN CAPE DEPT OF
TRANSPORT
& PUBLIC WORKS
….................................................
Applicant
and
NAOMI
FRITZ N.O.
….............................................................
First
respondent
THE
GENERAL PUBLIC SERVICE
SECTORAL
BARGAINING COUNCIL
…..........................
Second respondent
SHIRLEY
JANE DOUGLAS
…..............................................
Third
respondent
Heard
:
11 August 2011
Delivered
:
26 August 2011
Summary: Review – unfair labour practice and constructive
dismissal.
JUDGMENT
STEENKAMP J
Introduction
Ms Shirley Jane Douglas, the third respondent, was employed by the
Western Cape Department of Transport and Public Works (the
applicant) on a fixed term contract for two years as the Head of
Branch: Community Based Public Works Programme (CBPWP). She
resigned
on 30 October 2006. She referred a constructive dismissal dispute in
terms of s 186(1)(e) of the Labour Relations Act
1
to the General Public Service Sectoral Bargaining Council (GPSSBC),
the second respondent. The arbitrator, Ms Naomi Fritz (the
first
respondent) found that the Department’s “actions and
conduct rendered continued employment intolerable”
for the
employee and that a constructive dismissal had taken place. She
ordered the Department to pay Ms Douglas compensation
equal to 14
months’ remuneration.
Ms Douglas had also referred an unfair labour practice dispute to
the GPSSBC arising from earlier alleged unfair disciplinary
action
in which she was given a final written warning. The arbitrator found
that it was an unfair labour practice and ordered
the Department to
pay Ms Douglas a further three months’ compensation.
The Department seeks to review both findings.
Background
Ms Douglas was employed on a fixed term contract for a period of two
years in January 2006. It was due to terminate on 31 December
2007.
She was employed at the level of Director and was responsible for
programme management, implementation and coordination
of the
Expanded Public Works Programme (EPWP) in the Western Cape.
On Friday 23 June 2006, Ms Douglas had to go to Pretoria to attend a
meeting for the Department. As she was due to attend another
meeting
in Gauteng on Monday 26 June 2006, she had not planned to return to
Cape Town over the weekend. The Friday meeting finished
at
lunchtime. Douglas then rented a car at her own cost in order to
drive to Magoebaskloof where she owns a smallholding. She
phoned her
secretary to tell her of her movements. On her way there, she
received a telephone call from the office manager, who
told her that
the Head of Department, Mr Thami Manyathi, wanted her to attend a
meeting in Cape Town on Saturday morning (24
June) at 0830. At this
stage she was already some 350km from Pretoria.
Douglas phoned Polokwane airport to inquire about flights to Cape
Town, but all flights were fully booked as the school holidays
had
just started. She also phoned Manyathi and explained that she was
already in Magoebaskloof; that there were no flights available
from
Polokwane; that she was available at her virtual office at her home
in Magoebaskloof to attend a conference call; and that
she had
arranged three of her staff members to be present at the meeting the
next morning. The only alternative would be to drive
back to
Johannesburg in order to try and get a flight from OR Tambo airport,
but that would entail another 3-4 hour drive; she
had been up since
04:00 that morning; and she would endanger her own safety and that
of other road users if she had to drive
straight back to
Johannesburg that night or at 02:00 the next morning. Manyathi
nevertheless insisted that she get back to Cape
Town for the
Saturday morning meeting.
On Saturday morning, Douglas phoned Manyathi again, but he refused
to take her calls. She remained in contact with her staff
members
who attended the meeting. They completed the MINMEC report –
the purpose of the meeting – and emailed it
to her. She made
corrections and emailed it back.
On 27 June 2006 Douglas received a notice to attend a disciplinary
hearing on a charge of gross insubordination because she had
not
attended the Saturday meeting. At the disciplinary hearing, she was
found guilty of gross insubordination and the chairperson
imposed a
final written warning, coupled with a month’s unpaid
suspension. On appeal the MEC, Mr Marius Fransman, removed
the
suspension and upheld a final written warning valid for six months.
Ms Douglas then referred an unfair labour practice dispute
to the
GPSSBC in terms of s 186(2)(b) of the LRA.
The next significant occurrence was on 5 and 6 October 2006 when the
Department held a strategic planning session in Gordon’s
Bay.
Members of the senior management service, including Douglas,
attended the session. Manyathi presented a new “macro
structure” for the Department. The structure made no mention
of Douglas’s position.
On 16 October 2006, Manyathi told Douglas that an “interim
structure” would be implemented in terms of the new macro
structure; and that her position as head of branch of the CBPWP
would be split into two, comprising the “implementation”
and “strategic” functions. Douglas would henceforth
concentrate on the strategic function only and a Ms L Ramncwana
would take over the implementation function. The meeting lasted
between 15 and 30 minutes.
On the same day, Manyathi called a briefing session with senior
managers in the Department. He presented the “interim
arrangement” – envisaged to be in force for about a year
– in terms of which part of Douglas’s functions
would be
removed to enable her to focus on strategic functions. She would
remain on Director level and continue to receive the
same salary and
benefits though. The “interim structure” was confirmed
in a departmental communiqué to all
staff the next day, 17
October.
Douglas wrote to Manyathi on 17 October. She objected to what she
perceived to be a unilateral change to her terms and conditions
of
employment. She requested a clear outline of what her new position
would entail and the proposed terms and conditions of a
new contract
of employment. She said that she was confident that “...we can
resolve this in a manner that is agreeable
to both parties without a
formal dispute process”. Manyathi did not respond.
On 19 October 2006, Douglas wrote to Manyathi again, requesting an
urgent response by Friday 20 October 2006. She received no
such
response.
Douglas then obtained legal advice. On 20 October 2006 her attorney,
Mr Wayne Field of Bernadt Vukic Potash & Getz, wrote
to
Manyathi. He set out the sequence of events and repeated the
averment that her terms and conditions of employment had been
changed unilaterally. He requested a response by 25 October 2006 but
received none.
On 26 October Field wrote to Manyathi again, asking when he could
expect a response. Manyathi still didn’t respond, but
on the
same day – 26 October – the Acting Head of Department,
Mr Darryl Jacobs, wrote to Douglas directly. He stated:
“
The
Employer does not wish to engage you on your interpretation of what
transpired at the various meetings you refer to, although
this should
not be construed as acceptance that your interpretation is correct.
Please note that par 1.2.1 of your contract clearly
states that you
shall serve the employer in the CBPWP Branch at such place as may
from time to time be directed by the Employer.
Your
high level, specialised focus as consulted and communicated with you
is not outside the duties as listed in par 5.2 of your
contract.
While the responsibilities are reduced, this is to allow you to focus
your efforts at a strategic level to break the
poverty cycle
afflicting too many in or community.”
Jacobs sent a copy of the letter to Field the next day, 27 October
2006.
On 30 October 2006, Douglas tendered her resignation in writing to
Manyathi. She stated that she regarded herself “as having
been
left with no option than to resign” for a number of reasons,
primarily because she considered her terms and conditions
of
employment to have been changed unilaterally. She also referred to
the unfair labour practice arising from the final written
warning
imposed on her for gross insubordination.
Douglas then referred a dispute to the GPSSBC alleging constructive
dismissal. This dispute was consolidated with the unfair
labour
practice dispute and the two were heard together.
The arbitration award
The arbitrator first dealt with the unfair labour practice claim.
She had regard to the test for insubordination formulated in
CCAWUSA
& another v Wooltru Ltd t/a Woolworths (Randburg)
2
,
ie: “When the employee refuses to obey a lawful and reasonable
command or request and the refusal is wilful and serious
(wilful
disobedience), or when the employee’s conduct poses a
deliberate (wilful) and serious challenge to the employer’s
authority.”
The arbitrator took into account that Douglas attempted to get a
flight. She arranged for staff members to be present; she set
up and
created a "virtual office" by availing herself
telephonically and electronically; and it was physically impossible
for her to get back to Cape Town in time to attend the meeting. The
arbitrator found that it was unreasonable to expect her to
execute
the instruction under those circumstances. She found that Douglas's
actions could not be regarded as insubordinate and
that she
displayed no wilful disobedience.
On the aspect of a constructive dismissal, the arbitrator considered
four points:
Douglas testified that the MEC has said that he wanted her "out".
However, Manyathi denied that. He did say that
the MEC expressed a
sense of frustration as he did not believe that Douglas bought into
the "Learnership 1000" program.
The arbitrator expressed
the view that the MEC doubted Douglas's commitment to the
programme.
There was not sufficient guidance and support for Douglas.
The disciplinary hearing, leading to a final written warning, was
unfair.
The Department had changed Douglas’s terms and conditions of
employment. She received no response to her letters and
her
concerns were not addressed.
The arbitrator found that Douglas terminated the contract because
she found continued employment intolerable "...in that
she did
not know where the next blow was going to come from". The
arbitrator also found that there was no proper consultation
with
Douglas with regard to the restructuring and the impact on her post.
With regard to the argument that Douglas should have lodged a formal
grievance, the arbitrator considered that Douglas was on
medication
for anxiety, and that she could not have been expected to lodge a
grievance “that exposed herself to further
continued
intolerable conditions".
The arbitrator found that there was a constructive dismissal and
ordered the Department to compensate Douglas in an amount equivalent
to the balance of her fixed term contract, i.e. 14 months’
salary.
The test on review
In considering whether the arbitrator's finding on the unfair labour
practice is reviewable, I need to apply the test as set
out in
Sidumo v Rustenburg Platinum Mines Ltd
3
,
i.e. whether the conclusion reached by the arbitrator was so
unreasonable that no other reasonable arbitrator could have come
to
the same conclusion.
With regard to the finding on constructive dismissal, though, the
test is more nuanced. The parties were
ad idem
that the
Commissioner exceeded her powers by awarding compensation equivalent
to 14 months’ remuneration. Ms Douglas submitted
that this
part of the award should be substituted with a compensation award
equivalent to 12 months’ remuneration.
The first question to consider in a constructive dismissal dispute,
though, is whether there was a dismissal at all. This is
a
jurisdictional question.
I had occasion to consider this question in
Asara Wine Estate &
Hotel (Pty) Ltd v JC van Rooyen & others
4
,
a matter that was argued a day before this one. In that case, I
considered the
dictum
of the Labour Appeal Court in
SA
Rugby Players Association & others v SA Rugby (Pty) Ltd &
others.
5
Although the court in that case had to consider s 186(1)(b) of the
LRA
6
,
it dealt with it as a species of constructive dismissal and held as
follows:
7
“
The
issue that was before the Commissioner was whether there had been a
dismissal or not. It is an issue that goes to the jurisdiction
of the
CCMA. The significance of establishing whether there was a dismissal
or not is to determine whether the CCMA had jurisdiction
to entertain
the dispute. It follows that if there was no dismissal, then the CCMA
had no jurisdiction to entertain a dispute in
terms of section 191 of
the Act.
“
The
CCMA is a creature of statute and is not a court of law. As a general
rule, it cannot decide its own jurisdiction. It can only
make a
ruling for convenience. Whether it has jurisdiction or not in a
particular matter is a matter to be decided by the Labour
Court.…
“
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 they had been a dismissal of three players
was justifiable, rational or reasonable. The issue
was simply whether
objectively speaking, the facts which would give the CCMA
jurisdiction to entertain the dispute existed. If
such facts did not
exist, the CCMA had no jurisdiction, irrespective of its findings to
the contrary."
Section 192 of the LRA provides that:
"(1)
In any proceedings concerning any dismissal, the employee must
establish the existence of the dismissal.
(2)
If the existence of the dismissal is established, the employer must
prove that the dismissal is fair."
In most unfair dismissal cases, the existence of the dismissal is
common cause and the enquiry at arbitration – or on review
by
the Labour Court – is whether the dismissal was fair; and
whether the finding of the arbitrator in this regard was reasonable.
In the case of an alleged constructive dismissal in terms of section
186 (1)(e), though, the prior question is whether there
was a
dismissal. The onus is on the employee to prove that her resignation
amounted to a dismissal. In order to decide whether
there was a
dismissal, the commissioner has to investigate the full merits of
the case. Only then can the commissioner decide
if there was a
dismissal as defined. If so, the commissioner must still decide
whether it was fair. If not, though, the CCMA
did not have
jurisdiction in the first place, even though the Commissioner can
only make that finding
ex post facto
.
As I pointed out in
Asara
, I am bound by the authority in
SA
Rugby
.
8
This court also applied the dictum in
SA Rugby
in the
subsequent case – heard post
Sidumo
-- of
Member of
the Executive Council, Department of Health, Eastern Cape v Odendaal
& others.
9
In that case, dealing with a constructive dismissal, Basson J
explicitly held that the question of whether a dismissal had taken
place goes to jurisdiction and that the review test as laid down in
Sidumo
does not find application in reviewing a
jurisdictional ruling.
The test I have to apply in dealing with the review of the
constructive dismissal aspect of the award, therefore, is not
whether
the conclusion reached by the Commissioner was so
unreasonable that no commissioner could have come to the same
conclusion, as
set out in
Sidumo
, but whether the
Commissioner correctly found that Ms Douglas had been dismissed.
Unfair labour practice
The arbitrator's finding on the on the unfair labour practice claim
cannot be said to have been unreasonable. Ms Douglas did
not display
any wilful disobedience. It was physically impossible for her to
attend a Saturday morning meeting in Cape Town at
short notice. She
did everything possible to make herself available and to assist the
Department. Manyathi’s insistence
that she physically attended
the meeting in these circumstances was unreasonable. I agree with
the arbitrator that there was
no wilful disobedience of the
instruction. Having made respondent, the award of compensation equal
to 3 months’ salary
on this aspect was not so unreasonable
that no reasonable arbitrator could have ordered the same
compensation. This leg of the
review application must fail.
Constructive dismissal
As I have mentioned, the parties are at idem that the Commissioner
exceeded her powers by awarding 14 months' compensation on
constructive dismissal claim. However, this only becomes relevant if
the Commissioner correctly found that there was a dismissal.
Section 186(1)(e) of the LRA defines a constructive dismissal. The
section states that:
“
Dismissal
means that –
(e) an employee terminated a
contract of employment with or without notice because the employer
made continued employment intolerable
for the employee”.
The test for determining whether or not an employee was
constructively dismissed was set out in
Pretoria Society for the
Care of the Retarded v Loots
10
.
Although that case was decided under the 1956 LRA, the
principles remain the same. In
Loots,
the court held that --
“
the
enquiry [is] whether the [employer], without reasonable and proper
cause, conducted itself in a manner calculated or likely
to destroy
or seriously damage the relationship of confidence and trust between
the employer and employee. It is not necessary
to show that the
employer intended any repudiation of a contract: the court’s
function is to look at the employer’s
conduct as a whole and
determine whether…its effect, judged reasonably and sensibly
is such that the employee cannot be
expected to put up with it”.
The court held
11
further that when an employee resigns or terminates the contract of
employment as a result of constructive dismissal, such employee
is
in fact indicating that the situation has become so unbearable that
the employee cannot fulfil his/her duties. The employee
is in effect
saying that he or she would have carried on working indefinitely had
the unbearable situation not been created.
He does so on the basis
that he does not believe that the employer will ever reform or
abandon the pattern of creating an unbearable
work environment. If
he is wrong in this assumption and the employer proves that his/her
fears were unfounded, then he has not
been constructively dismissed
and his/her conduct proves that he has in fact resigned.
The Constitutional Court recently remarked in
Strategic Liquor
Services v Mvumbi NO & others
12
that the test for constructive dismissal does not require that the
employee have no choice but to resign, but only that the employer
should have made continued employment intolerable.
In
Eagleton & Others v You Asked Services (Pty) Ltd
13
this Court considered the three requirements that an employee must
prove in order to claim constructive dismissal. These requirements
are that:
the employee terminated the contract of employment;
continued employment had become intolerable for the
employee; and
the employer must have made continued employment
intolerable.
In
Chabeli v Commission for Conciliation, Mediation and
Arbitration & others
14
the court held that in order to prove a constructive dismissal, the
employee has to show that the employer had made the continued
employment relationship intolerable and that, objectively assessed,
the conditions at the workplace has become so intolerable
that he
had no option but to terminate the employment relationship.
15
As I recently stated in
Value Logistics (Pty) Ltd v Basson &
others
16
,
I doubt that this strict test survives the formulation by the
Constitutional Court in
Strategic Liquor Services (supra).
The test remains, though, that the conduct of the employer must be
judged objectively.
17
I also have regard to the recent
dictum
of the Labour Appeal
Court in
Jordaan v CCMA
18
,
where the court cited with approval its earlier decision in
Old
Mutual Group Schemes v Dreyer
19
where Conradie JA said:
“
Buitendien
sou so ‘n werknemer wat uit die bloute bedank dit gewoonlik
moeilik vind om ‘n hof te oortuig dat hy werklik
konstruktief
ontslaan is. Die bewyslas rus op die werknemer... Die bewyslas is nie
‘n ligte een nie... Dit is nie vir ‘n
werknemer maklik om
aan te toon dat ‘n werkgewer die voorsetting van sy diens
onuithoudbaar gemaak het nie. Hy kan hom nie
maar net op frustrasies
en irritasies verlaat en hom bekla oor reëls wat vir alle
werknemers geld, maar hom nie aanstaan nie.
Net soos ontslag is ‘n
gedwonge bedanking ‘n allerlaaste opsie. Dit is ‘n uitweg
wat ‘n werknemer nie mag
volg terwyl daar nog ander uitweë
is nie.”
And Davis JA continued:
“
This
dictum represents a salutary caution that constructive dismissal is
not for the asking. With an employment relationship, considerable
levels of irritation, frustration and tension inevitably occur over a
long period. None of these problems suffice to justify constructive
dismissal. An employee, such as appellant, must provide evidence to
justify that the relationship has indeed become so intolerable
that
no reasonable option, save for termination is available to her.”
In
Murray v Minister of Defence
20
-- cited with approval by the Constitutional Court in
Strategic
Liquor Services
-- the Supreme Court of Appeal emphasised that
--
“
the
mere fact that an employee resigns because work has become
intolerable does not by itself make for constructive dismissal. For
one thing, the employer may not have control over what makes
conditions intolerable. So the critical circumstance must have been
of the employer’s making. But even if the employer is
responsible, it may not be to blame. There are many things an
employer
may fairly and reasonable do that make an employee’s
position intolerable. More is needed: the employer must be culpably
responsible in some way for the intolerable conditions: the conduct
must have lacked ‘reasonable and proper cause’.”
In the present case, Ms Douglas may well have felt that her
employment had become intolerable. Some crucial responsibilities
had
been taken away from her without proper consultation. She was, as
she explained in her very able oral argument, a passionate
civil
servant who wished to fulfil the duties assigned to her during her
fixed term period of employment over two years.
I agree that there was not sufficient consultation with Ms Douglas
before her position was restructured. On the other hand, though,
she
was a senior employee at director level. Both the level of
employment and her salary remained unchanged. This was not a case
where, as in
Riverview Manor (Pty) Ltd v CCMA & others
21
,
the employer unilaterally reduced the employee’s salary. I
do not consider her diminished responsibilities to equate to a
demotion. Even if it were, she had another option open to her, i.e.
to refer another unfair labour practice claim to the Bargaining
Council. She had already availed herself of this remedy before, and
it was known to her.
Nor do I agree that the change in her responsibilities amounted to a
repudiation of her contract of employment. In terms of clause
1.2.1
of her contract of employment:
"The
employee shall serve the employer in the Community Based Public Works
Programme branch at such place as may from time
to time be directed
by the employer or any other officer duly authorised thereto in this
respect; "
and
in terms of clause 1.2.3:
"The
employee may be required perform other duties or to work at other
places that may reasonably be required by the employer."
As a senior employee, some flexibility was required of the employee.
The restructuring was not arbitrary or irrational and would
impact
on her for an interim period only – at most for a year. It is
so that this would comprise a major part of her fixed
term period of
employment. She was clearly frustrated because of the fact that her
responsibilities had been diminished. However,
there was no real
prejudice to her. The test for constructive dismissal remains an
objective one. Objectively speaking, the actions
of the employer
were not sufficiently serious to make continued employment
intolerable. The Department explained the rationale
for the interim
restructure. It did not sufficiently consult with Ms Douglas, but it
cannot be said to have been culpably responsible
for her
resignation.
The failure of the Department, and specifically Mr Manyathi, to
respond to Ms Douglas's conciliatory attempts to resolve the
matter
by way of correspondence or a meeting, is deplorable. Nevertheless,
she did have further options open to her before deciding
to resign.
She could have followed the formal grievance procedure, of which she
was aware. She could also have referred an unfair
labour practice
dispute to the Bargaining Council. Her decision to resign was
premature.
Conclusion
I find that Ms Douglas’s resignation did not amount to a
constructive dismissal. The contrary finding of the arbitrator
in
this regard must be reviewed and set aside.
Costs
Both parties have been partly successful. In law and fairness, there
should be no order as to costs.
Order
The application to review the arbitrator's award concerning an
unfair labour practice and the award of compensation equal to
three
months' remuneration is dismissed.
The arbitration award concerning the finding of constructive
dismissal is reviewed and set aside.
There is no order as to costs.
_______________________
A J Steenkamp
Judge
APPEARANCES
APPLICANT: MC Solomon
Instructed by the State Attorney.
SECOND RESPONDENT: In person.
1
Act
66 of 1995 (“the LRA”).
2
(1989)
10
ILJ
311
(IC) 314 I.
3
(2007)
28
ILJ
2405
(CC).
4
Case
no C272/2010 (unreported, Labour Court, Cape Town, 24 August 2011).
5
(2008)
29
ILJ
2218
(LAC).
6
Section
186(1)(b) provides that dismissal means that – “an
employee reasonably expected the employer to renew a fixed-term
contract of employment on the same or similar terms but the employer
offered to renew it on less favourable terms, or did not
renew it.”
7
At
paras [39] – [41].
8
Supra
.
9
(2009)
30
ILJ
2093
(LC) para [6].
10
(1997)
18
ILJ
981 (LAC) at page 985. See also
Woods v WM Car
Services (Peterborough)
(1981) ILR 347 at 350.
11
(1997)
18
ILJ
981 (LAC) at page 984.
12
(2009)
30
ILJ
1526
(CC);
[2009] 9 BLLR 847
(CC) at para [4]
13
(2009)
30 ILJ 320 (LC) at para 22.
14
(2010)
31 ILJ 1343 (LC).
15
(2010)
31 ILJ 1343 (LC) at para 17. See also
Sappi
Kraft (Pty) Ltd t/a Tugela Mill v Majake NO & others
(1998)
19 ILJ 1240 (LC) and
Secunda
Supermarket CC t/a Secunda Spar & another v Dreyer NO &
others
(1998) 19 ILJ 1584 (LC);
[1998]
10 BLLR 1062
(LC).
16
Case
no C1025/09 (Labour Court, Cape Town, 26 May 2011).
17
Smithkline
Beecham (Pty) Ltd v CCMA
(2000) 21 ILJ
988 (LC) 997B;
Kruger v CCMA &
Another
[2002] 11 BLLR 1081
(LC)
1085D;
Lubbe v ABSA Bank Bpk
[1998]
12 BLLR 1224
(LAC) para 8;
Mafomane v
Rustenburg Platinum Mines Ltd
[2003]
10 BLLR 999
(LC) para 49.1.
18
[2010]
12 BLLR 1235 (LAC) 1239 B-E.
19
(1999)
20
ILJ
2030
(LAC) 2036.
20
(2008)
29 ILJ 1369 (SCA) at para 13. The position of the SCA was confirmed
in the case of
Daymon Worldwide SA Inc
v Commission for Conciliation, Mediation and Arbitration &
others
(2009) 30 ILJ 575 (LC) at paras
27 and 40.
21
[2004]
2 BLLR 177
(LC).