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[2011] ZALCD 8
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Builders Trade Depot v Commission for Conciliation Mediation and Arbitration and Others (D 822/10) [2011] ZALCD 8; [2012] 4 BLLR 343 (LC); (2012) 33 ILJ 1154 (LC) (28 November 2011)
REPUBLIC OF SOUTH AFRICA
Reportable
Of
interest to other judges
THE LABOUR COURT OF SOUTH AFRICA, DURBAN
JUDGMENT
CASE
NO: D 822/10
In the matter between:
BUILDERS
TRADE DEPOT
…...........................................................
Applicant
and
CCMA
….................................................................................
First
respondent
Commissioner
Ian BULOSE
…........................................
Second
respondent
Commissioner
Phillip VAN ZYL
…......................................
Third
respondent
Mannie
NAIDOO
….............................................................
Fourth
respondent
Heard
:
15 November 2011
Delivered
:
28 November 2011
Summary:
Review – rescission ruling and arbitration
award – employee applying for rescission of arbitration award
where employer
party was absent. Application of LRA s 144.
Arbitration award – employee drinking on duty – extant
written warning
for same misconduct – arbitrator nevertheless
found dismissal unfair. Award unreasonable – reviewed and set
aside.
JUDGMENT
STEENKAMP J
Introduction
The applicant seeks to review a rescission ruling made by
commissioner Ian Bulose (the second respondent), as well as a
subsequent
arbitration award by commissioner Phillip van Zyl (the
third respondent). The dispute arises from the dismissal of the
employee,
Mr Mannie Naidoo (the fourth respondent) by the applicant.
It is common cause that Naidoo had been drinking whilst on duty and
that, at the time of his dismissal, there was an existing written
warning pertaining to the same offence applicable to him.
Commissioner van Zyl nonetheless found his dismissal to have been
unfair.
Somewhat peculiarly, commissioner Bulose had found in an earlier
arbitration award that the dismissal was fair. That arbitration
was
heard in the absence of the employer party, and the commissioner
nevertheless found – on the employee’s version
only –
that the dismissal was fair. Despite the fact that the employee was
present and the employer was not, the employee
applied for
rescission of the award and commissioner Bulose granted it. Naidoo
referred the dispute to arbitration afresh and
commissioner Van Zyl,
having heard the evidence of both parties, came to the conclusion
that the dismissal was unfair. He ordered
the applicant to reinstate
Naidoo with no backpay and to couple the reinstatement with a final
written warning. The applicant
now seeks to review both those
awards.
The rescission ruling
Naidoo was dismissed on 1 December 2009. He referred a dispute to
the CCMA on 23 December 2009. The matter was set down for con/arb
on
25 January 2010. The applicant objected to con/arb on 12 January
2010. Naidoo’s attorney of record wrote to the CCMA
on 13
January 2010, confirming that conciliation only would proceed on 25
January 2010. The applicant accordingly did not attend
the
proceedings on that day. Naidoo did. Despite this agreement and the
notification to the CCMA, commissioner Bulose continued
with
arbitration in the applicant’s absence and heard Naidoo’s
evidence. He found that the dismissal was fair.
The applicant‘s attorneys, having read the award, wrote to
Naidoo’s attorneys on 17 February 2010 seeking clarification
why the arbitration went ahead in its absence.
Shortly thereafter Naidoo filed a rescission application in the
CCMA. The applicant opposed it on various ground, including the
following:
Naidoo did not have
locus standi
to apply for rescission as
the arbitration was not heard in his absence.
Naidoo had dishonestly carried on with the arbitration despite an
agreement to the contrary.
The dismissal was fair and there was in any event no basis for the
application.
Commissioner Bulose handed down his ruling on rescission on 19 March
2010. He ignored the preliminary point relating to
locus standi.
He appears to have accepted that Naidoo had behaved in a
“reprehensible” manner by proceeding with the
arbitration,
contrary to the agreement between the parties, but
nevertheless found:
“
Furthermore,
while I am persuaded by the view that the conduct of the [employee]
was reprehensible, the balance of convenience based
on the
established legal principles dictate that the application should be
granted.”
Commissioner Bulose did not explain what those “established
legal principles” were. He nevertheless rescinded his
own
award and it was set down for a fresh arbitration before
commissioner Van Zyl.
Is the ruling on rescission reviewable?
It is certainly unusual for a party who was present at the
arbitration proceedings, rather than the absent party, to apply for
the rescission of a subsequent award. But is it prohibited? Put
another way, did commissioner Bulose exceed his powers by
considering
the application?
Rescission of CCMA awards are governed by s144 of the LRA. That
section reads as follows:
“
144. Variation
and rescission of arbitration awards and rulings
.—
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—
(a) erroneously sought or
erroneously made in the absence of any party affected by that award;
(b) in which there is an
ambiguity, or an obvious error or omission, but only to the extent of
that ambiguity, error or omission;
or
(c) granted as a result of a
mistake common to the parties to the proceedings.”
Naidoo submitted in his application for rescission before the CCMA
that the award had been “erroneously granted”.
In so
doing, he appears to have relied on s 144(a). However, he failed to
take into account the second clause in that subsection
– ie
that the award must have been erroneously made “in the absence
of any party affected by that award”.
The first aspect that becomes clear from a reading of the section is
that “any affected party” may apply for an award
to be
rescinded – ie not only the absent party. In terms of
subsection (a), though, only an award erroneously made “in
the
absence of any party affected by that award” may be rescinded.
In this case, the employer was affected by the award
made in its
absence. So was the employee – because the commissioner had
ruled his dismissal to have been fair – but
it was not made in
his absence. Although he was clearly an “affected party”
alluded to in the main clause of s 144,
therefore, Naidoo could not
have been the affected party in whose absence the award was made, as
contemplated in subsection (a).
It appears to me from a reading of s
144(a) that an employee who was present during arbitration
proceedings, and who is affected
by the award, cannot apply for the
rescission of the award in terms of that subsection.
But the inquiry does not end there. I also have to consider the
provisions of subsections (b) and (c).
Section 144(b) is not applicable to this case. Neither party has
alleged that there was an ambiguity or an obvious error or omission
in the award.
That leaves subsection (c). Was the award made “as a result of
a mistake common to the parties to the proceedings”?
The parties – or at least their legal representatives –
were
ad idem
that the dispute should be conciliated only on
25 January 2010. The commissioner mistakenly proceeded with
arbitration. If there
was a mistake, it was made by the
commissioner. It was not a mistake common to the parties. Naidoo
participated in the process;
the employer did not. That is akin to
the situation in
Department of Health v Naidoo & another
1
where the court held that variation in terms of s 144 was
impermissible where a mistake was that of the arbitrator, and not
one common to the parties.
It is tempting to accept that the arbitration award was erroneously
granted in the mistaken belief that the matter was to be
dealt with
as a con/arb. In terms of s 191(5A)(c) of the LRA, the commissioner
must continue with arbitration immediately after
conciliation in a
dispute “in respect of which no party has objected to the
matter being dealt with in terms of this subsection.”
In the
current case, not only did the applicant object, the parties reached
agreement that arbitration would not proceed on the
day of
conciliation. As the learned authors state in
Labour Law through
the Cases
2
:
“
If a
party objects to the process, the CCMA is precluded from invoking
section 191(5A).”
However, the award was not erroneously made in the absence of the
party affected by the award, ie Naidoo, as contemplated by
s 144(a).
Nor was the mistake common to the parties, as contemplated by
subsection (c).
Further guidance may be sought in the interpretation of rule 42 of
the Uniform Rules of the High Court. Apart from a slight effort
to
make the language plainer, section 144 is the same as that rule.
The clause “mistake common to the parties” in rule
42(1)(c) was interpreted in
Tshivashe Royal Council v Tshivashe
3
to occur “where both parties are of one mind and share the
same mistake”. That is not what happened in this case;
Naidoo
snatched at a bargain by carrying on with arbitration in the absence
of the employer party, when both parties had been
ad idem
that the matter would only be conciliated. It is only when the award
was issued some time later and it was not in his favour
that he
sought to have it rescinded.
The question who an “affected party” is who has
locus
standi
to apply for rescission in terms of that rule and the
common law was considered in
United Watch & Diamond Co (Pty)
Ltd v Disa Hotels Ltd.
4
Corbett J
5
stated:
“
In my
opinion, an applicant for an order setting aside or varying a
judgment or order of Court must show, in order to establish
locus
standi
,
that he has an interest in the subject-matter of the judgment or
order sufficiently direct and substantial to have entitled him
to
intervene in the original application upon which the judgment was
given or order granted.”
My difficulty in the current case is that Naidoo was present when
the arbitration was heard. Even though he clearly had an interest
in
the award and was affected by it, he was not the party in default
and therefore falls outside the scope of s 144(a).
It is so that not only judgments (or awards) granted by default can
be rescinded. The common law position was summarised by Trengove
AJA
after a lengthy discussion of the authorities in Roman-Dutch law in
De Wet and others v Western Bank Ltd:
6
“
The
Courts of Holland ... appear to have had a relatively wide discretion
in regard to the rescission of default judgments, and
a distinction
seems to have been drawn between the rescission of default judgments,
which had been granted without going into the
merits of the dispute
between the parties, and the rescission of final and definitive
judgments, whether by default or not, after
evidence had been adduced
on the merits of the dispute.”
But the application in this case was brought in terms of section 144
of the LRA. As discussed above, the application did not
fall
properly within any of the three circumscribed circumstances
envisaged by that section.
In summary, it appears to me that commissioner Bulose exceeded his
powers when he granted the employee’s application for
rescission. His decision to rescind his own award is not open to
review must be reviewed and set aside and his original award
must
stand.
But even if I am wrong, I would have reviewed and set aside the
subsequent award of commissioner Van Zyl.
Review of the second arbitration award
It is common cause that Naidoo was under a current written warning
for driving a forklift whilst under the influence of alcohol.
It is
also common cause that he is a relief forklift driver, but he was
not fulfilling those duties on 26 November 2009, the
day in question
concerning the current inquiry. As a salesman, he was dealing with
members of the public.
The applicant’s branch manager, Mr Graham Axon, visited the
store on the day and spoke to Naidoo. Axon testified at arbitration
that he could smell alcohol on Naidoo’s breath, that the was
unsteady on his feet and slurred his speech, and that his
eyes were
bloodshot.
When Axon initially confronted him, Naidoo denied that he had been
drinking. He then agreed to do a breathalyzer test. The test
showed
that his blood/alcohol level was over the legal limit to drive a
vehicle. Naidoo then said that he had drunk a “Long
Tom”
(ie 450 ml) beer during his lunch break on an empty stomach. He
signed a statement confirming it.
At the arbitration, Mr
Van Vollenhoven
, who appeared for
Naidoo in those proceedings as well as this review, initially argued
that Naidoo was an alcoholic and should
be treated as such. However,
Naidoo strenuously denied that he had a drinking problem.
Commissioner Van Zyl pointed out in his award that Naidoo had
changed his version a few times during his testimony. He also
accepted that there was an existing written warning against Naidoo
for similar misconduct, ie driving a forklift under the influence
of
alcohol. He nevertheless found that Naidoo was not under the
influence of alcohol “to such an extent that he could not
perform his duties properly”; that his dishonesty was not
sufficiently serious to warrant dismissal; and that the dismissal
was substantively unfair. He ordered the applicant to reinstate
Naidoo from the date of the award, coupled with a final written
warning for six months.
Commissioner Van Zyl’s award is in sharp contrast to that of
Commissioner Bulose, who found on Naidoo’s own evidence
that
his dismissal was fair.
Commissioner van Zyl accepted that Naidoo already had a written
warning for similar misconduct against him that was still valid.
Yet
he saw fit to reinstate Naidoo, coupled with a further written
warning. This finding cannot be reconciled with the consent
of
progressive discipline and is itself so unreasonable that no
reasonable arbitrator could have come to the same conclusion.
Furthermore, the Commissioner sought to impose "a greater duty"
on the applicant to find out what was causing the employee’s
drinking, despite the fact that the employee was adamant that he was
not an alcoholic; that the Commissioner accepted this; and
that the
employee had a written warning for similar misconduct against him.
I recently had occasion to consider similar issues in
Transnet
Freight Rail v Transnet Bargaining Council & others.
7
Some of the principles that were extensively discussed and that case
are apposite to this one and I will attempt to summarise
them.
Section 10 (3) of the Code of Good Practice: Dismissal specifically
includes alcoholism as a form of incapacity and suggests
that
counselling and rehabilitation may be appropriate measures to be
undertaken by a company in assisting such employees. The
requirement
to assist such employees by providing them with treatment has been
widely accepted. However, when an employee who
is not an alcoholic
and does not claim to be one, reports for duty under the influence
of alcohol, he is guilty of misconduct.
The distinction between
incapacity and misconduct is a direct result of the fact that it is
now accepted in scientific and medical
circles that alcoholism is a
disease and that it should be treated as such.
In this regard Grogan states the following in
Workplace Law
8
:
“
Employees
may be dismissed if they consume alcohol or narcotic drugs to the
point that they are rendered unfit to perform their
duties. There
may, however, be a thin dividing line between cases in which alcohol
or drug abuse may properly be treated as misconduct,
and those in
which it should be treated as a form of incapacity. The Code of Good
Practice: Dismissal specifically singles out
alcoholism or drug abuse
as a form of incapacity that may require counselling and
rehabilitation [Item 10(3)]...
It is clear, however, that in
certain contexts being intoxicated on duty can be treated as a
disciplinary offence...”
The category of misconduct for reporting for duty under the
influence of alcohol has not been extinguished by the incapacity
classification for employees with alcoholism. An obligation to
assist an employee who does not suffer from such incapacity does
not
rest on the shoulders of an employer. Such an employee is
responsible for their actions and can, and should, be held
accountable
for any misconduct they commit.
Once a commissioner finds that an employee is not an alcoholic
he/she is required to consider whether a finding of guilt is fair
and whether the sanction applied by the employer is reasonable and
justified in the circumstances. In order to do this the commissioner
is required to continue to apply the law relating to misconduct and
not that relating to incapacity.
Grogan
9
,
in discussing the case of
Tanker Services (Pty) Ltd v Magudulela
10
in which it was found that an employee who was under the influence
of alcohol committed an offence justifying dismissal, notes
the
following:
“
...[I]n
Tanker Services (Pty) Ltd v Magudulela the employee was dismissed for
being under the influence of alcohol while driving
a 32-ton
articulated vehicle belonging to the employer. The court held that an
employee is 'under the influence of alcohol' if
he is unable to
perform the tasks entrusted to him with the skill expected of a sober
person. The evidence required to prove that
a person has infringed a
rule relating to consumption of alcohol or drugs depends on the
offence with which the employee is charged.
If employees are charged
with being 'under the influence', evidence must be led to prove that
their faculties were impaired to
the extent that they were incapable
of working properly. This may be done by administering blood or
breathalyser tests...
In the current case, based on his own observations and the
breathalyser test, Axon formed the view that Naidoo was unable to
perform his duties. Even though he was not called upon to drive a
forklift on the day, Naidoo had to interact with members of
the
public. That would have led to embarrassment for the company.
With regard to sanction, Section 3 of Schedule 8 of The Code of Good
Practice: Dismissal places an expectation on employers to
use
corrective and progressive discipline in dealing with the misconduct
of employees.
In
Sidumo & another v Rustenburg Platinum Mines Ltd &
others
11
the Constitutional Court held that in assessing whether an
employer's decision to dismiss is fair:
“
A
commissioner will take into account the totality of circumstances. He
or she will necessarily take into account the importance
of the rule
that had been breached. The commissioner must of course consider the
reason the employer imposed the sanction of dismissal,
as he or she
must take into account the basis of the employee's challenge to the
dismissal. There are other factors that will require
consideration.
For example, the harm caused by the employee's conduct, whether
additional training and instruction may result in
the employee not
repeating the misconduct, the effect of dismissal on the employee and
his or her long-service record. This is
not an exhaustive list.”
In cases involving misconduct for reporting for duty under the
influence of alcohol a commissioner should, in determining the
fairness of dismissal, consider and weigh against each other (based
on the above), among other things:
That the employee knew of the rule and was aware that breaching it
could result in dismissal;
That the employee wilfully committed the misconduct;
The nature and responsibilities of the employee’s job
function;
The basis for the employee’s challenge to dismissal;
The importance of the rule breached;
The principles and necessary application of progressive discipline
and the importance of consistency;
The employee’s disciplinary record, including the presence or
lack of any relevant valid warnings of final written warnings
that
may be in effect;
The harm (or potential to bring harm) as a result of the
misconduct.
A further consideration ought to be the implications of being
lenient in the application of an important rule and the message
such
leniency sends to other employees regarding the infringement of such
a rule. The need to deter other employees from committing
the same
misconduct is a response to risk management and is as legitimate a
reason for dismissal as a breakdown in trust. In
this regard
Conradie JA in
De Beers Consolidated Mines Ltd v Commission for
Conciliation, Mediation & Arbitration & others
12
stated the following:
“
A
dismissal is not an expression of moral outrage; much less is it an
act of vengeance. It is, or should be, a sensible operational
response to risk management in the particular enterprise. That is why
supermarket shelf packers who steal small items are routinely
dismissed. Their dismissal has little to do with society's moral
opprobrium of a minor theft; it has everything to do with the
operational requirements of the employer's enterprise.”
The Labour Appeal Court considered the relevance, application and
purpose of final written warnings in
National Union of
Mineworkers & Another v Amcoal Colliery t/a Arnot Colliery &
Another
13
.
That case involved an instance of collective misconduct. The
employees who were party to the misconduct had varying levels of
discipline on their file. Those already on final written warnings
were dismissed. The other employees received a lesser sanction
which
was subsequently reduced by one level in terms of the company’s
progressive disciplinary structure (e.g. an employee
with a clean
record was initially given a serious written warning with was later
reduced to a warning). Those who had been dismissed
did not have
their sanctions reduced and the court found that this was fair. In
this regard the court was of the opinion that
an argument that the
sanction of dismissal should have also been reduced failed to
consider the fact that the other employees
had disciplinary records
that allowed for a lesser sanction than that initially imposed.
Their records did not constrain the
employer to impose a particular
punishment and nothing else. The employees already on a final
written warning however left the
employer with little choice but to
dismiss them. If their dismissal had been reduced it would have been
to a final written warning
and there would have been no progression
of discipline at all. The Labour Appeal Court was of the opinion
that failure to impose
the sanction of dismissal would mean that
they were not punished for that offence and that further, the
employee's offence was
a fairly serious one and did not justify the
extension of any final warning.
The implication of this finding, as discussed by Grogan
14
is that:
“
...[A]n
employee’s disciplinary record may be taken into account when
considering whether the employee should be dismissed
for a particular
offence. This follows from the requirement that dismissal should be
‘progressive’. An employee on
a final warning for the
same offence will normally be regarded as irredeemable, and dismissal
will be justified if the employee
commits a similar offence during
the currency of the warning.”
Commissioner van Zyl failed to take these principles into account in
coming to the conclusion that he did. His conclusion was
so
unreasonable that no reasonable arbitrator could have come to the
same conclusion.
Conclusion
Both arbitration awards must be reviewed and set aside. Given the
full exposition of the facts as recorded in the arbitration
proceedings, it would serve no purpose to remit the dispute to
arbitration for a third time. The second award, as well as the
ruling on rescission, must simply be reviewed and set aside. That
means that the first arbitration award of commissioner Bulose
stands
and that Naidoo’s dismissal was fair.
In fairness, Naidoo should not be held liable for the applicant’s
costs in circumstances where the second award was in
his favour,
even though commissioner Bulose may have been accurate when he
described Naidoo’s behaviour in the first process
as
“reprehensible”.
Ruling
The rescission ruling of commissioner Bulose dated 19 March 2010 and
the arbitration award of commissioner Van Zyl dated 29 July
2010 are
reviewed and set aside. The arbitration award of commissioner Bulose
finding that the dismissal of the fourth respondent,
Naidoo, was
fair, remains valid.
There is no order as to costs.
_______________________
A J Steenkamp
Judge
APPEARANCES
APPLICANT: Bruce MacGregor of MacGregor Erasmus, Durban.
FOURTH RESPONDENT: Shaun van Vollenhoven
Instructed by N Bramdeo Attorneys, Durban.
1
[2004]
9 BLLR 890
(LC).
2
Du
Toit et al,
Labour Law through the
Cases
(LexisNexis, Issue
17) LRA
8-98(2).
3
1992
(4) SA 852 (A) 863 A-B.
4
1972
(4) SA 409
(C).
5
(as
he then was) at 415A.
6
1979
(2) SA 1031
(A) at 1041 C-E.
7
[2011]
6 BLLR 594
(LC).
8
pp
226 and 266
9
Workplace
Law
p 224.
10
[1997]
12 BLLR 1552
(LAC).
11
[2007]
12 BLLR 1097
(CC) para
[72].
12
(2000)
21
ILJ
1051 (LAC) pa
ra [22].
13
(2000)
5 LLD 226 (LAC).
14
Dismissal
pp 100-101