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[2012] ZALCD 10
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South African Transport and Allied Workers Union and Others v MSC Depots (Pty) Ltd and Others (D 449/2011) [2012] ZALCD 10; (2013) 34 ILJ 706 (LC) (16 July 2012)
REPUBLIC OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
case
no: D 449/2011
In the matter between:
SOUTH
AFRICAN TRANSPORT AND
ALLIED
WORKERS UNION
….....................................................
FIRST
APPLICANT
ME
BULENI
…..........................................................................
SECOND
APPLICANT
DD
JALI
…....................................................................................
THIRD
APPLICANT
and
MSC
DEPOTS (PTY) LTD
…....................................................
FIRST
RESPONDENT
COMMISSION
FOR CONCILIATION,
MEDIATION
AND ARBITRATION
…..................................
SECOND
RESPONDENT
BD NAYAGER NO
…...............................................................
THIRD
RESPONDENT
Date of application:
10 July 2012
Date of judgment: 16
July 2012
Summary: Application
to set aside dismissals effected after internal disciplinary hearing
in circumstances where the parties had
agreed to submit allegations
of misconduct to arbitration in terms of s 188A. Award that employees
not guilty of misconduct subsequently
reviewed and set aside; CCMA
ordered to convene fresh hearing before another commissioner.
Employer thereafter convened internal
disciplinary hearing, after
which employees dismissed.
Held that court’s
order in review application directing CCMA to convene fresh
arbitration hearing had affirmed agreement between
the parties. By
agreeing to refer allegations of misconduct to arbitration in terms
of s 188A, an employer abandons any rights
conferred by internal
processes and policies and allegations of misconduct are accelerated
to arbitration hearing that is ordinarily
an element of
post-dismissal phase of dispute resolution process. In the present
instance, the commissioner’s inept award
had frustrated
statutory purpose of expeditious determination of allegations of
misconduct. Court granted order setting aside dismissals
as a breach
of agreement to refer allegations of misconduct to arbitration. CCMA
ordered to convene expedited hearing before senior
commissioner.
JUDGMENT
___________________________________________________________________
VAN
NIEKERK J
Introduction
[1] This is an urgent
application for a declaratory order in the following terms:
(a) that the dismissal of
the second and third applicants is in breach of an agreement
concluded between the applicants and the
first respondent in terms of
which the first respondent undertook not to dismiss the second and
third applicants without there
being a pre-dismissal arbitration as
contemplated by section 188 A of the Labour Relations Act; and
(b) that the dismissal of
the second and third applicants is a contravention of the order
granted by this court on 22 May 2012 under
case number 449/11.
[2] The applicants
initially sought an interim order to the above effect. However, at
the hearing of the application, Mr Maeso,
who represented the
respondent and Adv. Crampton, who represented the applicants, agreed
that all of the legal and factual issues
relevant to the application
had been canvassed, and that the application be treated as an
application for a final order.
Factual background
[3] The relevant material
facts are the following. The second and third applicants were
employed by the first respondent. Both of
them were shop stewards.
During July 2010, the second and third applicants addressed a letter
to the Department of Labour making
certain allegations regarding
health and safety standards at the first respondent's premises.
[4] An inspection was
duly conducted by the Department of Labour. The investigation
revealed that the allegations were wholly unfounded.
The second and
third applicants were then suspended and charged with misconduct. The
first respondent and the first applicant (the
union) agreed that the
second respondent in these proceedings (the CCMA) be requested in
terms of section 188A of the LRA to appoint
an arbitrator to conduct
what is referred to as a pre-dismissal arbitration. The third
respondent in these proceedings (the arbitrator)
was appointed to
conduct the arbitration. On 27 April 2011 the arbitrator issued an
award in terms of which he found the second
and third applicants not
guilty of the charges brought against them. He ordered that they be
reinstated.
[5] The first respondent
applied to review and set aside the arbitration award. On 22 May
2012, Gush J made the following order:
'The applicant’s application to
review and set aside the award of the fourth respondent is granted;
The first respondent is ordered to
appoint a Commissioner other than the fourth respondent to conduct a
pre-dismissal arbitration
in accordance with the provisions of
section 188 of the Labour Relations Act and the agreement between the
parties; and the first,
second and fourth respondent is ordered to
pay the applicants costs the one to pay the others to be absolved. ‘
[6] It is common cause
that the terms of the order contained typographical errors,
inter
alia
to the extent that the CCMA was the fifth respondent in the
application for review, and not the first respondent as indicated. To
the extent necessary, the parties agreed that the order should be
varied to reflect that the CCMA is ordered to appoint a commissioner
other than commissioner Nayager to conduct a pre-dismissal
arbitration, and it is so ordered.
[7] After the order was
granted, on or about 30 May 2012, the second and third applicants
were given notice to attend a disciplinary
enquiry to be held on 5
June 2012. It is clear from the terms of this notice that the first
respondent intended to conduct an internal
disciplinary enquiry in
respect of the charges set out in the notice. These charges relate to
the same misconduct that was the
subject of the pre-dismissal
arbitration hearing before the arbitrator.
[8] On 5 June 2012, a
union official addressed a letter to the first respondent contending
that the first and second respondent
were bound, by the terms of the
court order, to conduct a pre-dismissal arbitration in accordance
with section 188A of the LRA.
The first respondent nonetheless
conducted a disciplinary enquiry, chaired by a member of its
management. The second and third
applicants did not participate in
the hearing and in their absence, they were found guilty of the
misconduct alleged.
[9] The second and third
applicants were advised by way of letters dated 18 June 2012 that
they had been dismissed with immediate
effect.
The applicable legal
principles
[10] Section 188A reads
inter alia
as follows:
An employer may, with the consent of
the employee, request a council, an accredited agency or the
Commission to conduct an arbitration
into allegations about the
conduct or capacity of that employee.
The request must be made in the
prescribed form.
The council, accredited agency or the
commission must appoint an arbitrator on receipt of –
payment by the employer of the
prescribed fee; and
the employees written consent to the
enquiry…
(6) Section 138, read with the changes
required by the context, applies to any arbitration in terms of this
section…
(8) The provisions of sections 143 to
146 apply to any award made by an arbitrator in terms of this
section.
(9) An arbitrator conducting an
arbitration in terms of this section must, in the light of the
evidence presented and by reference
to the criteria of fairness in
the Act, direct what action, if any, should be taken against the
employee.
[11] Section 188A
(despite its unfortunate title which on the face of it, assumes the
outcome of the arbitration hearing) has as
its purpose a means of
expediting dispute resolution by avoiding duplication between
internal and external hearings. In effect,
in terms of a a tripartite
agreement between the employee, the employer and the CCMA, an
arbitrator steps into the shoes of the
employer and assumes the right
normally considered a sacrosanct element of the managerial
prerogative - the right to exercise discipline,
including the right
to dismiss. The benefit for all is the elimination of the duplication
that inevitably occurs when court-like
in-house hearings are
inevitably followed by an arbitration hearing conducted on a
de
novo
basis.
Analysis
[12] The first issue to
be determined is that of agency. The respondent contends that any
urgency is self-created. This contention
is made against the factual
background where as early as 28 May 2012 the first respondent first
indicated to the union that it
was withdrawing its agreement to
proceed with a pre-dismissal arbitration and asserted that the
process would be conducted internally.
There was no response to this
intimation. On 30 May 2012 the first respondent contacted the union
to assist it in having disciplinary
charges in respect of the second
and third applicants. No response was received from the union. Copies
of the charges were handed
to the second and third applicants and 31
May 2012. As I noted above, the applicants did not attend the
disciplinary hearing that
took place on 5 June 2012. At that stage,
there was no challenge to the enquiry. On 7 June 2012, the union was
invited to make
further representations prior to any final decision
being made in regard to the disciplinary sanction. No response was
received.
The communication was repeated through the parties legal
representatives, and it was only on 23 June 2012 that the second and
third
applicants were dismissed. The present application was
transmitted to the first respondent by e-mail on 5 July 2012.
[13] While the union may
be criticised for its failure to respond to the correspondence
addressed to it during early June 2012,
and in particular, to the
clear notice of the first respondent's intention to conduct an
internal disciplinary hearing, as advocate
Crampton submitted, it is
the dismissal of the second and third applicants that triggered the
present application since it is the
dismissals that are contended to
constitute the breach of the agreement concluded in terms of s 188A
of the LRA, and the process
contemplated by the court order granted
on 22 May 2012. Given that the papers in the present application were
filed within 10 days
or so of receipt of the notice of dismissal, in
my view, the applicants acted sufficiently promptly to assert their
rights. Further,
it seems to me that it is the interests of all
concerned that this matter be resolved without further delay. I am
satisfied that
the application ought to be dealt with on an urgent
basis.
[14] The central issue in
these proceedings is whether the first respondent was bound, both by
the parties’ agreement to invoke
s 188A and the court order of
22 May, to have the allegations of misconduct against the second
third applicants determined only
by way of an arbitration hearing.
The applicants submit that the first respondent was not entitled
unilaterally to revoke its agreement
to that process, and that even
if the first respondent had been entitled to terminate the agreement,
there is no case made out
on the papers of any lawful termination,
either summarily or on reasonable notice. The first respondent’s
case is that after
the arbitrator’s award was set aside, it was
not bound by its initial agreement to have the allegations of
misconduct against
the second and third applicants tested by way of
an arbitration hearing.
[15] It seems to me from
the wording of s 188A that once an employer and an employee consent
to refer the determination of allegations
of misconduct or incapacity
to an arbitration hearing in terms of s 188A, and once the CCMA
accedes to the request, the employer
effectively agrees to bypass the
application of its internal disciplinary procedures and to accelerate
the disciplinary process
to the stage of the arbitration hearing
ordinarily applicable in a post-dismissal phase. That being so, and
since the consent of
the affected employee and the CCMA is necessary
to achieve that result, it is not open to the employer to abandon the
process on
a unilateral basis.
[16] In the present
instance, I need not decide whether any agreement reached in terms of
s 188A is capable of termination at common
law, nor is it necessary
for me to decide whether such an agreement constitutes a collective
agreement capable of termination on
reasonable notice as contemplated
by s 23(4) of the Act. As I have indicated, that is not the case that
the first respondent has
made. But in so far as the first respondent
submits that its consent may be withdrawn unilaterally at any stage
in the process,
that contention flies in the face of the system of
compulsory arbitration that is established by Part C of chapter VII
of the Act,
the material parts of which are specifically made
applicable to an arbitration hearing in terms of section 188A.
[17] Secondly, in so far
as the first respondent submits that there was an ‘initial
dispute’ referred to an arbitration
hearing and that the
process was completed by the setting aside of the arbitration award,
that submission has no merit. It is not
for the first respondent to
agree or not to agree to a second round of arbitration. The
arbitration hearing contemplated by the
order granted on 22 May is
not a discrete process – it is an integral element of the same
process initiated by the parties’
agreement to submit the
allegations of misconduct against the second and third applicants to
arbitration. As I have indicated above,
the charges of misconduct
relate to the same events that were the subject of the hearing before
the arbitrator. The only intervening
factor is the setting aside of
the award, and an order directing the CCMA to convene a fresh hearing
before a different commissioner.
I fail to appreciate the basis on
which these developments afford the first respondent a right to
abandon the agreement to submit
the allegations of misconduct against
the second and third applicants to arbitration, and to revert to an
internal disciplinary
hearing.
[18] In the absence of
any right by the first respondent unilaterally to withdraw from an
agreement to refer the allegations of
misconduct against the second
and third applicants to an arbitration hearing, the applicants are
entitled to the relief they seek.
Their rights are affirmed by the
terms of the order of this court granted on 22 May 2012. In these
circumstances, the dismissals
of the second and third applicant stand
to be set aside, and the first respondent ordered to comply with its
obligations in terms
of the agreement concluded in terms of s 188A.
[19] This leaves the
matter of the arbitration hearing into the allegations of misconduct
made against the second and third applicants.
Section 188A holds the
promise of the expeditious resolution of disputes about employee
conduct and the swift imposition of a fair
sanction for any proven
misconduct. Regrettably, in this instance, the CCMA has failed the
parties, and frustrated the statutory
purpose that underlies the
section. The ineptitude with which the pre-dismissal arbitration was
conducted resulted in a successful
review, and an order that the
matter be remitted to the CCMA for re-hearing. The parties have been
prejudiced, the respondent more
so since it has had in the interim to
carry the cost of the applicants’ wages. But that is a risk
that an employer must run
when it decides to place the function of
workplace discipline in the hands of an unknown third party.
Ordinarily that risk may
be worth running. I have referred to the
significant cost savings to be had by avoiding the duplication
occasioned by elaborate
in-house disciplinary enquiries and an
inevitable arbitration hearing at which the same allegations are
tested in a
de novo
hearing. But the integrity of the system
depends on the expertise of the arbitrator, and that is where the
first respondent’s
initial confidence in the system was
betrayed. It is the interest of all parties that this matter be
resolved without further delay.
I intend therefore to make an order
to the effect that the arbitration hearing be conducted before a
senior commissioner on an
expedited basis.
[20] Finally, in relation
to costs, both parties’ representatives submitted that costs
ought appropriately to follow the result.
I accordingly make the
following order:
The first respondent’s
dismissal of second and third applicants:
is in breach of an
agreement concluded between first respondent and applicants in terms
of which it was agreed that the first
respondent would not dismiss
the said applicants for the misconduct in question without
conducting a pre-dismissal arbitration
as contemplated in
section
188A
of the
Labour Relations Act, No. 66 of 1995
; and
is in contravention of
the order granted by the Court in its judgment delivered on 22 May
2012 in case no. D 449/11.
The dismissals are set
aside.
In the event that the
first respondent elects to pursue an enquiry into the alleged
misconduct by the second and third respondent,
it is directed to
conduct a pre-dismissal arbitration as contemplated in
section 188A.
The National Director of
the second respondent or a person delegated by her is directed,
after consulting with the parties’
representatives, to appoint
a senior commissioner to conduct the pre-dismissal arbitration on an
expedited basis.
The first respondent is
ordered to pay the costs of this application
.
A van Niekerk
Judge
APPEARANCES
APPLICANTS: Adv D
Crampton, instructed by PKX Attorneys
FIRST RESPONDENT: Mr M
Maeso, Shepstone and Wylie Attorneys