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[2012] ZALCJHB 103
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CTR Protection Services (Pty) Ltd v Wainwright NO and Others (JR2901/2010) [2012] ZALCJHB 103 (4 October 2012)
REPUBLIC OF SOUTH
AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case no. JR2901/2010
In the matter between:
CTR PROTECTION
SERVICES (PTY) LTD
.....................................................
Applicant
and
ALEX WAINWRIGHT N.O
...................................................................
First
Respondent
CCMA
.............................................................................................
Second
Respondent
FISHER, WAYNE
...............................................................................
Third
Respondent
LANGLEY, RUSSELL
DAREEL
.....................................................
Fourth
Respondent
Heard: 17 May 2012
Delivered: 04 October
2012
Headnote: Review –
constructive dismissal – existence of employment relationship -
jurisdictional point raised for the
first time in review application
– irregularity in not considering jurisdiction –
irregularity in evaluation of evidence
– award reviewed and set
aside.
__________________________________________________________________
JUDGMENT
__________________________________________________________________
WHITCHER, AJ
Introduction
The applicant seeks to
review and set aside the arbitration award issued on 25 September
2010 under case no KNDB7895-10 by the
First Respondent [“the
commissioner”]. The third and fourth respondent [“the
respondents”] referred a
‘constructive dismissal’
dispute to the CCMA. The commissioner found that the applicant had
constructively dismissed
the respondents on 18 June 2010;
alternatively had dismissed them before they resigned. He awarded
the respondents compensation.
The applicant relies
upon the following grounds of review:
2.1 The CCMA did not have
jurisdiction to entertain the dispute as the respondents were
independent contractors and not employees
of the applicant.
2.2 To the extent that it
may be accepted that they were indeed employees, the respondents did
not show that continued employment
would be objectively intolerable.
2.3 The commissioner
misconducted himself in making an ‘alternative’ finding
that the respondents had been unilaterally
dismissed prior to their
resignation.
2.4 The commissioner
adopted an unfair arbitration procedure.
Jurisdictional point
raised for the first time in review proceedings
The applicant contends
that the CCMA did not have jurisdiction to entertain the dispute as
the respondents were independent contractors
and not employees of
the applicant.
It is common cause that
the nature of the relationship between the parties was not raised as
an issue for adjudication at the
arbitration. This contention was
raised for the first time in the applicant’s review
application.
The respondents deny
that they were independent contractors and contend that the
applicant is estopped
1
from raising such an
issue at this stage because it did not deny the existence of an
employment relationship at arbitration. During
the arbitration
proceedings, the third respondent testified that the applicant had
“employed” him as a security driver
and the commissioner
stated that it was ‘common cause that the [respondents] were
offered employment on a fixed term contract
for the period 1 June
2010 to 12 July 2010 by the [applicant].’
The applicant admits
that it did not deny these statements, but contends, for the reasons
set out below, that this does not prevent
the issue being considered
by this court:
6.1 The issue of
jurisdiction is a question of law and where it is alleged in a review
application that the true relationship between
the parties is not one
of employee and employee, the reviewing court is enjoined to consider
whether the CCMA in fact had jurisdiction
to entertain the dispute
before it.
6.2 The commissioner
ought to have explained the concept and checked whether the CCMA had
jurisdiction over the parties at the commencement
of the proceedings.
The applicant was represented at the arbitration by a layperson, its
director, Mr Houston, who was not aware
that the CCMA did not have
the power to consider the dispute in light of the relationship
between the parties. The respondents
do not dispute this claim.
6.3 The record shows that
the commissioner read and referred to the written contract between
the parties. Had he applied his mind
to the contract and other
evidence that was led at the hearing, he would have been alerted to
the fact that the relationship was
an issue that needed to be
pertinently raised and inquired into. A proper reading of the written
contract clearly indicated that
the respondents were independent
contractors. Further, the fourth respondent testified that he had had
another “private job”.
The Law
In
Rand
Water v Bracks N.O. and Others,
2
the
reviewing court stated:
‘
In respect
of the contention ... that these jurisdictional points were not
raised during the arbitration, I am satisfied that that
does not
constitute a bar to the point been raised at this stage of the
proceedings. As it also related to the issue of jurisdiction
the fact
that it was not raised before the commissioner, did not relieve the
commissioner of the obligation to consider whether
the CCMA had
jurisdiction or not to hear the matter. In
Legal
Aid Board v John N.O
3
the
[reviewing court] held: ‘... the matter was not pertinently
raised before the arbitrator, it being an issue of jurisdiction
of
course does not preclude the applicant from raising the issue at this
stage.’
In
Legal
Aid Board
(supra),
the court set aside the decision because the commissioner had not
considered the issue of jurisdiction
meromotu.
The Constitutional Court
in
Commercial
Workers Union of SA v Tao Ying Metal Industries and Others
4
indirectly confirms the
procedural rule. It held that:
‘
[68] …
Where a point of law is apparent on the papers, but the common
approach of the parties proceeds on a wrong perception
of what the
law is, a court is not only entitled, but is in fact also obliged,
meromotu,
to raise the point of law and require the parties to deal therewith.
Otherwise the result would be a decision premised on an incorrect
application of the law. That would infringe the principle of
legality....
[132] … In the context of
labour disputes, it is important to recall that parties are often not
legally represented in proceedings
before the CCMA ... It might well
be that a material irregularity could thus be overlooked by the
parties themselves.’
The Labour Appeal Court
in
S.A.
Rugby Players Association and Others v S.A. Rugby (Pty) Ltd and
Others
5
held:
‘
[40] 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 CCMA may not grant itself jurisdiction which it does not have.
Nor may it deprive itself of jurisdiction by
making a wrong finding
that it lacks jurisdiction which it actually has. There is, however,
nothing wrong with the CCMA enquiring
whether it has jurisdiction in
a particular matter provided it is understood that it does so for
purposes of convenience and not
because its decision on such an issue
is binding in law on the parties… [The CCMA] would be
short-sighted if it made no
such enquiry before embarking upon its
task.
[41] 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 there had been a dismissal....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 fact did not exist the CCMA had no jurisdiction
irrespective of it findings to the contrary.’
The Labour Appeal Court
in
Sanlam
Life Insurance Ltd v CCMA and Others
6
respectively
adopted the same approach in stating:
‘
[17] It was,
therefore, incumbent upon the Labour Court to deal with the issue
whether or not there had been an employment relationship
between the
appellant and the third respondent and, therefore, whether the CCMA
had the requisite jurisdiction to deal with the
dispute. The issue of
jurisdiction is dependent on the answer to this question ... The
Labour Court is called upon to decide
de
novo
whether
there was an employer-employee relationship between the parties...’
The case law set out
above confirms that questions of jurisdiction may be cognisable even
if raised for the first time on review.
This is more so where the
parties were unrepresented laymen unfamiliar with the intricacies of
labour law.
It is thus an exception
to the rule that applicants for review are confined to issues raised
during the arbitration in circumstances
where the parties or the
arbitrator proceeded on an incorrect interpretation of the law, in
particular the law relating to the
powers of jurisdiction of the
arbitrator. Where that is the case, a party is free to raise the
legal
point
on
review. Indeed, the reviewing court is bound to apply the law even
if the point was not raised by the parties.
The CCMA’s
jurisdiction over a subject matter and parties is conferred by the
law. It cannot be acquired through waiver
or enlarged by the
omission of the parties or conferred by the acquiescence of the
CCMA.
I accordingly find that
the applicant is entitled to raise the issue of jurisdiction at the
stage of review.
As set out in
SA
Rugby, Tao Ying, Rand Water
and
Legal
Aid Board (supra)
,
commissioners have a duty to confirm that the CCMA has the
jurisdiction over the parties and the dispute, irrespective of
whether this is raised by the parties. This is especially so where
the parties are unrepresented laymen, as was the case in this
arbitration.
7
I agree with the
applicant that a perusal of the record in this case indicates that
the commissioner read and referred to the
written contract between
the parties during the course of the leading of evidence. A perusal
of the contract further indicates
that if he had properly applied
his mind to this document and other evidence, he would have realised
that the contract contained
numerous features which, on the face of
it, indicated that the relationship between the parties may not be
one of employer and
employee, despite the third respondent
testifying that he was “employed” by the applicant.
Given the equivocal nature
of the evidence on this point, it was
incumbent on the commissioner to inquire further into this matter.
This is not to suggest
that a written contract is the sole determining evidence in a
dispute concerning whether an employment
relationship existed. It is
established law that the CCMA and Labour Court must consider
all
the factors and are
entitled to look behind the contract to ascertain the real
relationship between the parties, i.e. the ‘realities’
of the relationship. However, the terms of a written contract still
constitute highly relevant and the ‘best’ evidence
in
the inquiry.
The applicant submitted
that this court may finally determine the jurisdictional question. I
disagree. The terms of the written
contract are compelling but I
have concerns about the third respondent’s testimony that
Houston offered to “employ
him” and the commissioner’s
statement at the commencement of the proceedings that “it was
common cause that
the [respondents] were offered employment on a
fixed term contract for the period 1 June 2010 to 12 July 2010 by
the [applicant].”
These disputes will have to be resolved
though a ‘live’ evidentiary hearing.
For the reasons set out
above, the award falls to be reviewed, set aside and remitted to the
CCMA for adjudication on the jurisdictional
point. The commissioner
committed a gross irregularity in the conduct of the proceedings in
failing to raise and consider the
issue of jurisdiction.
Constructive dismissal
The applicant contended
that, to the extent that it may be accepted that they were indeed
employees of the applicant, the third
and fourth respondent did not
show that continued employment would be objectively intolerable.
The test on review in
constructive dismissal disputes
The review test is not
whether the decision reached by the commissioner is one that a
reasonable decision-maker could not reach,
but whether, objectively,
there was a constructive dismissal.
8
Test for constructive
dismissal
The onus borne by an
employee in claiming a constructive dismissal requires him or her,
on a balance of probabilities, to prove
inter alia
the
following elements:
22.1 That he or she
terminated the contract of employment (this is common cause); and
22.2 That continued
employment had become intolerable due to circumstances of the
employer’s making and that it was because
of those
circumstances that the employee terminated the contract of
employment.
9
In order to show his or
her continued employment was intolerable, the employee must allege
and prove facts that show that this
was
objectively
the
case.
10
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 an employee and
employer. It is not necessary to
show that the employer intended any
repudiation of the 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.
11
When an employee
terminates a contract of employment as a result of constructive
dismissal, such employee is 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.
The employee terminates the contract
on the basis that he or she
does not believe that the employer will reform or abandon the
pattern of creating an unbearable work
environment. If the employee
is wrong in this assumption and the employer proves that his or her
fears were unfounded then the
employee has not been constructively
dismissed and his conduct proves that he had in fact resigned.
12
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.
However, even if the employer is responsible, it may not be to
blame. There are certain
actions an employer may fairly and
reasonably undertake that makes 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’.
13
The employee need not
establish that he or she had no choice whatsoever but to resign.
However, where a reasonable alternative
to resignation exists, it
cannot be said that the employer has made continued employment
intolerable for the employee. The emphasis
is on whether a
reasonable alternative existed.
14
In summary therefore,
the respondents must show not only that the conduct of the applicant
created an intolerable situation at
the time of the resignation, but
also that the future relationship was threatened to such a degree
that it could be regarded
as being objectively intolerable. Where an
employee does not give the employer a chance to rectify the
relationship “going
forward”, it cannot easily be
concluded that the resignation amounted to a constructive dismissal.
Furthermore, the respondents
must demonstrate that the reason for
the resignation was linked to the objectively intolerable conduct of
the applicant.
The evidence on record
relating to intolerability
It was common cause that
the applicant secured a contract with the European Sports Production
Network [“ESPN”] to
transport their personnel around
during the 2010 World Cup in Johannesburg and in this regard
approached the respondents who
lived in Durban.
The third respondent
testified that Houston “offered to employ” him as a
security driver at R1 250 per day without
deductions from 1
June to 12 July 2010. He would be required to work about 12 hours
per day and, where this was exceeded, Houston
would “put in
claims for some form of overtime from the client”. Although
the third respondent was told to get a
security officer board
number, Houston told him that he would not be employed as a “body
guard” or “VIP protection
personnel” since the
applicant had a “specific stand-by team” to perform such
services if required. The applicant
would, and did, provide the
respondents with hired vehicles to perform their jobs. Houston
further agreed that the third respondent
could use the hired vehicle
to drive to and from his lodgings, which were about 50km out of
Johannesburg, because he would not
have his private vehicle in
Johannesburg.
The respondents reported
for duty on 1 June but only commenced their duties on 3 June. In the
meantime, they used the fourth respondent’s
vehicle to become
familiar with the routes.
During the night of 17
June, Houston’s son told them that they would be redeployed
from 18 June 2010 to provide security
services on satellite vehicles
operated by the applicant’s clients and that they must hand in
the hired vehicles. On 18
June, they went to applicant’s
premises and requested a meeting with Houston.
The third respondent
testified that he told Houston that he was ‘not happy that
[he] would be employed as a security guard
instead of a driver and
that it would obviously become intolerable for me to continue
because I did not have transport to and
from my residence and if I
had to use public transport it would be too costly...and therefore I
was
prepared to continue if I was employed as a driver.
Houston
said he was not prepared to do that. I then told [him] that I was
leaving.”
Houston then asked him
to complete the day’s assignment but he refused. The
transcript is not clear at this point. It appears
that the third
respondent wanted certain payments before he agreed to complete the
day’s work. In any event, Houston response
to this was:
“F...off you will not get a cent”. The third and fourth
respondent then left.
The fourth respondent
did not testify because according to him his version was the same as
that of the third respondent.
Houston testified that
the fourth respondent did most of the talking at the meeting on 18
June. He basically told Houston that
the third and fourth respondent
“had not signed up to be (security) guards ... were leaving
and wanted [their] money”.
Houston told them that since they
had contracted to be “security drivers” they had in fact
“signed up”
to be security guards. They disagreed and
asked to be paid off. Houston swore because they refused to complete
that day’s
job and he had no replacements. At no stage, during
the meeting, did the respondents raise, or attempt to engage him on,
the
issue of private or alternative transport before resigning.
Houston then put a
number of questions to the third respondent. Key questions included
the following:
‘
Q: What were
you doing when you were driving the vehicles around?
A: I was ensuring that they get there
safely.
Q: Is that not safeguarding?
A: It is ensuring the safety....it is
not specifically guarding.
Q: The only specific reason is that
you did not have transport?
A: The reason was I did not want to be
a security guard either.
Q: Did you ask me how long the
re-deployment would last?
A: No.
Q: Did I tell you?
A: You said maybe one day I do not
know. You could not tell us how long.
Q: How did you leave after the
meeting?’
The third respondent
explained that he had arranged for his mother-in-law to take off work
to collect him.
Houston put the
following question to the fourth respondent:
‘
Q: Have you
at any time asked for remuneration for using your private vehicle?
A: No.‘
The fourth respondent
then conceded that the real reason for his resignation was that he
had not wanted to “be a security
guard.” He intimated
that he had referred the dispute primarily to get the money owed to
him for the work he had done and
the expenses he had incurred
because Houston had ignored all their invoices.
After Houston questioned
the respondents, the commissioner allowed the third respondent to
give further testimony. He testified
that he would not have accepted
the job without the use of a company vehicle. Houston was not
invited to respond to, or question
the third respondent on this
statement.
Analysis of evidence
In my view, the evidence
led at the arbitration did not demonstrate that continued employment
would be intolerable for the respondents.
This is so for the reasons
set out below.
It was common cause that
the applicant did not change the respondents’ hours or
remuneration.
Houston’s swearing
came after the respondents had resigned so this issue cannot feature
in this inquiry.
I accept that the
redeployment arrangement placed the third respondent in a difficult
position in respect of transport. Houston
could easily have treated
his complaint as a request for alternative transport and tendered
suggestions. He did not do this.
However, this unhelpful
and questionable conduct by Houston is not sufficient to prove
constructive dismissal. The third respondent
made no effort to press
the issue of alternative transport with Houston before resigning. In
fact he made it known that he was
only prepared to continue working
if he continued working a security driver and this is what Houston
refused to do. At the time
of the resignation the third respondent
did not know how long the redeployment would last and had in fact
not worked in the redeployed
position. He resigned on the basis that
it would “become” intolerable.
The fourth respondent
had his own private vehicle. There was thus no basis to suggest that
continued employment would become intolerable
for him on the basis
that he was unable to travel between work and his lodgings. This is
especially the case in light of the
fact that he admitted that he
had not at any time asked for remuneration for using his private
vehicle.
It is evident that the
main reason for the resignations was because the respondents did not
want to work as security “guards”.
Houston’s version
that the respondents came to the meeting and asked to paid-off
because they did not sign up to be security
guards was not rebutted.
This does not appear to be the fault of the respondents because it
is clear from the record that the
commissioner directed the flow of
the questioning and the evidence. In any event the commissioner gave
the third respondent an
opportunity to testify again after Houston
testified.
The fourth respondent
conceded that his real reason for resigning was because he had not
wanted to work as a security guard.
In respect of the third
respondent, even if the issue of transport had been a relevant
gripe, it became irrelevant because, on
his own evidence, he would
have resigned anyway because he did not want to work as a security
guard
.
There was no merit to
the respondents’ complaint about working as security guards.
They were contracted to provide security
services and conceded this
when questioned by Houston. Considering that the duties of a
security driver involved effectively
being a security
guard
as
well,there was no reasonable basis to their objection that their
change of assignment was such that the employment relationship
would
become intolerable.
Accordingly, the
respondents could not objectively establish that this change to
their work practice would make continued employment
intolerable.
Here, again, the point
can be made that at the time they resigned the respondents had not
in fact worked in the redeployed positions.
They resigned on the
basis that it would “become” intolerable.
The applicant submitted
that it is also evident that the respondents had already decided to
resign before their meeting with Houston
because, when Houston asked
the third respondent how he had left the applicant’s premises
after the meeting, the third
respondent said he had arranged for his
mother-in-law to collect him. I did not place much weight on this
because it was not
made clear when the third respondent had made the
arrangement – before or after the meeting.
The commissioner’s
findings that the applicant unilaterally dismissed the respondent’s
prior to their resignation
This finding was based
on the fact that Houston told the respondents to F....off. A perusal
of the record indicates that there
was no factual basis for this
finding. When Houston did this, the respondents had already
resigned. The finding of the commissioner
is therefore reviewed and
set aside.
Conclusion
In light of my findings
on constructive dismissal, an order that the case be remitted to the
CCMA in respect of the jurisdiction
issue will be academic. In light
of my findings on the issue of jurisdiction and constructive
dismissal, there is no need to
deal with the procedural grounds of
review which does not impact upon the outcome of the review.
Costs
A consideration in
respect of costs is that, although it is open to a party to raise a
jurisdictional point subsequent to arbitration
proceedings even
though it did not raise such point at the outset, it nevertheless is
so that, had the applicant been vigilant
about its rights and raised
the point at the arbitration it may well have had the result that
the matter would have been then
finalised.
Order
In view of the reasoning
above:
The first respondent’s
award is reviewed and set aside.
The first respondent’s
finding that the third and fourth respondents were constructively
dismissed is substituted with an
order that the applicant did not
constructively dismiss the third and fourth respondents.
There is no order as to
costs.
_____________
Whitcher, AJ
Acting Judge of the
Labour Court
Appearances:
For the Applicant:
Advocate RJA Moultrie
Instructed by: David
Botha & Associates
For
the Third and Fourth Respondent: CarelCrafford of Crafford Attorneys
1
Estoppel
is a rule of evidence or a rule of law that prevents a person from
denying the truth of a statement he has made or from
denying the
existence of facts that he has alleged to exist. The denial must
have been acted upon (probably to his disadvantage)
by the person
who wishes to take advantage of the estoppels or his position must
have been altered as a result. Estoppel by conduct
arises when the
party stopped has made a statement or has led the other party to
believe in a certain fact. Estoppel by record
prevents a person from
reopening essential elements of a claim or defence that have been
adjudicated upon by a court of competent
jurisdiction between the
same parties.
2
(2007)
28 ILJ 2310 (LC) at para44.
3
(1998)
19 ILJ 851 (LC).
4
(2008)
29 ILJ 2461 (CC).
5
(2008)
29 ILJ 2218 (LAC) at para40 and 41 relying on
Benicon Earthworks
and Mining Services (Edms) Bpk v Jacobs NO andOthers
(1994) 15
ILJ 801 (LAC) at 804C-D.
6
(2009)
30 ILJ 2903 (LAC) at para17.
7
This
duty is reiterated in the ‘CCMA guidelines on how to conduct
arbitration’, effective from January 2012. According
to the
guideline, statutory arbitrators have a duty to confirm that the
CCMA or relevant bargaining council has jurisdiction
to hear the
dispute, irrespective of whether this issue is raised by the parties
and to raise any preliminary concerns that the
arbitrator may have
as a result of reading the referral form or other documents before
them.
8
Asara
Wine Estate and Hotel (Pty) Ltd v Van Rooyenand Others
(2011)
ZALCCT 21 which relied upon the LAC’s reasoning on
jurisdiction in
SA Rugby Players Association and Others
(2008)
29 ILJ 2218 (LAC).
9
See
sections 186(1)(e) and 192; See also
Mafomane v Rustenburg
Platinum Mines Ltd
[2003] 10 BLLR 999
(LC) per Trengrove AJ at
para 48.
10
Smithkline
Beecham (Pty) Ltd v CCMA and Others
(2000) 21
ILJ
988
(LC) at para 38;
Mafomane v Rustenburg Platinum Mines Ltd
(supra)
at para 49.See also
Van Greunen v Johannesburg Fresh Produce
Market (Pty) Ltd
[2010] 7 BLLR 785
(LC);
Asara Wine Estate
(supra).
11
Asara
Wine Estate
(supra);
Pretoria Society for the Care of the
Retarded v Loots
(1997) 18 ILJ 981 (LAC).
12
Pretoria
Society for the Care of the Retarded v Loots
(supra).
13
Murray
v Minister of Defence
(2008) 29 ILJ 1369 (SCA) at para 12 and
13.
14
Asara
Wine Estate
(supra).