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[2013] ZALCJHB 38
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Satinsky 128 (Pty) Ltd t/a Just Group Africa v Dispute Resolution Centre and Others (JR 1479/2012) [2013] ZALCJHB 38 (26 February 2013)
REPUBLIC OF SOUTH
AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case no: JR 1479 / 2012
In the matter between:
SATINSKY 128 (PTY) LTD
t/a JUST GROUP AFRICA
......................................
Applicant
and
DISPUTE RESOLUTION
CENTRE
.........................................................
First
Respondent
COMMISSIONER W
FERREIRA
.......................................................
Second
Respondent
DALEEN SWANEPOEL
.........................................................................
Third
Respondent
Heard: 17 January 2013
Delivered: 26 February
2013
Summary: Bargaining
Council rescission proceedings – Review of proceedings,
decisions and awards of arbitrators – Test
for review –
Section 145 of LRA 1995 – Requires the arbitrator rationally
and reasonably consider the evidence as a
whole –
determinations of arbitrator compared with evidence on record in
rescission – arbitrator’s decision unreasonable
and
irregular – award reviewed and set aside
Bargaining Council
rescission proceedings – Requirements for the proper
consideration of rescission application – arbitrator
failing to
properly conduct rescission proceedings
Rescission
applications – principles applicable to rescission applications
– application of such principles by arbitrator
unreasonable and
irregular – award reviewed and set aside
JUDGMENT
SNYMAN, AJ
Introduction
[1] This matter concerns
an application by the applicant to review and set aside an
arbitration award (in this case a rescission
ruling) of the third
respondent in his capacity as an arbitrator of the National
Bargaining Council for the Motor Industry (DRC)
(the first
respondent). This application has been brought in terms of Section
145 as read with Section 158(1)(g) of the Labour
Relations Act
1
(“the LRA”).
[2] The matter before the
first and second respondents concerned a rescission application
brought by the applicant as a result of
a default award granted
against the applicant and in favour of the third respondent. In an
award dated 31 March 2011, the second
respondent dismissed the
applicant’s rescission application. In the founding affidavit
in the applicant’s review application,
the applicant contended
that this rescission ruling came to the attention of the applicant
for the first time on 18 June 2012,
2
and it then promptly
filed the review application on 22 June 2012. It is this rescission
ruling by the second respondent that forms
the subject matter of the
current review application brought by the applicant.
Background facts
[3] This matter has a
rather involved background. It all started when the applicant was
sent a letter by the third respondent’s
attorneys on 1 October
2010 informing the applicant that there was an award given against
the applicant and demanding compliance
with such award. This letter
also had attached the default award itself which was dated 23 August
2010. What is significant, for
reasons as will be apparent hereunder,
is that this letter was sent to telefax number 086 616 4177
which is the applicant’s
correct telefax number.
3
[4] On 8 October 2010,
the applicant filed a rescission application. The applicant stated in
its founding affidavit to the rescission,
at the time, that it never
received the set down notice in this matter. Subsequent investigation
showed that the arbitration hearing
was set down for 19 August 2010
and that the set down notice had been sent on 16 July 2010 to fax
number 086 616 4711 and
not the applicant’s actual fax
number of 086 616 4177.
4
It was further apparent
that the fax number 086 616 4711 was provided by the third
respondent in her referral documents to
the first respondent.
5
[5] On 22 October 2010,
arbitrator B J van Niekerk of the first respondent found that the
applicant had shown good cause for the
granting of rescission and
rescinded the default award dated 23 August 2010.
6
[6] The arbitration was
then again set down for 9 February 2011. The notice of set down was
dated 22 December 2010 and was once
again sent to the applicant at
telefax number 086 616 4711.
7
[7] The applicant then
again did not appear at the arbitration on 9 February 2011, and once
again, and on 17 February 2011, the
third respondent’s
attorneys sent a letter to the applicant informing it that a default
award that had been granted against
the applicant and demanded
compliance. The third respondent’s attorneys attached this
default award which was issued by arbitrator
E Maree and was dated 10
February 2011 to this letter as well. The first page of the default
award records the applicant’s
telefax number as 086 616
4711.
8
Once again, this letter
by the third respondent’s attorneys to the applicant was sent
to telefax number 086 616 4177
and not the number 086 616
4711 used by the first respondent.
9
[8] On 25 February 2011,
the applicant once again applied for rescission.
10
The applicant
specifically recorded in the rescission application that its telefax
number was not 086 616 4711 but was actually
086 616 4177.
The applicant contended that as the wrong telefax number was used, it
never received notice of the set down
of the arbitration for 9
February 2011. The applicant also in detail addressed the issue of
prospects of success.
[9] The third respondent
opposed the applicant’s rescission application and filed an
answering affidavit on 11 March 2011.
11
The third respondent
contended that the telefax number 086 616 4711 was that of the
applicant and that her attorneys used this
telefax number
successfully when communicating with the applicant and that the
applicant received documents when her attorneys
used this fax number.
The third respondent stated that these documents were the arbitration
award of August 2010, an application
for a postponement
12
and the second
arbitration award of February 2011. This of course is not correct,
because as can be seen from what is set out above,
the applicant
actually received these documents when the third respondent’s
attorneys used telefax number 086 616 4177.
The third respondent
also refers to the fact that telefax number 086 616 4711 is on
the business card used by the chairman
of the applicant. The third
respondent further stated that the applicant did not explain why
notices sent to its representatives
were not received.
[10] The applicant
further contended that in the default award dated 10 February 2011,
arbitrator Maree recorded that the set down
notice had been sent to
telefax number 086 616 4711 and that there was proper service on
the applicant as a result, and that
the third respondent’s
attorney, who was present, did not correct this.
[11] The second
respondent then gave his rescission ruling, dated 31 March 2011, in
terms of which the applicant’s rescission
application was
dismissed. This ruling was not preceded by a hearing. It is this
ruling that forms the subject matter of these
proceedings.
The relevant test for
review
[12] In
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others,
13
Navsa AJ held that
in the light of the constitutional requirement (in s 33 (1) of the
Constitution) that everyone has the right
to administrative action
that is lawful, reasonable and procedurally fair, the reasonableness
standard should now suffuse s 145
of the LRA
.
The majority of the
Constitutional Court set the threshold test for the reasonableness of
an award or ruling as the following: ‘[i]s
the decision reached
by the commissioner one that a reasonable decision-maker could not
reach?’
14
In
CUSA
v Tao Ying Metal Industries and Others,
15
O'Regan J held: ‘[i]t
is clear…. that a commissioner is obliged to apply his or her
mind to the issues in a case. Commissioners
who do not do so are not
acting lawfully and/or reasonably and their decisions will constitute
a breach of the right to administrative
justice.’
[13] The
Labour
Appeal Court had the occasion to fully ventilate the issue again in
Herholdt
v Nedbank Ltd.
16
In this judgment, the
Court
concluded:
17
‘
Where
a commissioner fails to have regard to material facts, this will
constitute a gross irregularity in the conduct of the arbitration
proceedings because the commissioner would have unreasonably failed
to perform his or her mandate and thereby have prevented the
aggrieved party from having its case fully and fairly determined.
Proper consideration of all the relevant and material facts and
issues is indispensable to a reasonable decision and if a decision
maker fails to take account of a relevant factor which he or
she is
bound to consider, the resulting decision will not be reasonable in a
dialectical sense. Likewise, where a commissioner
does not apply his
or her mind to the issues in a case the decision will not be
reasonable.
Whether
or not an arbitration award or decision or finding of a commissioner
is reasonable must be determined objectively with due
regard to all
the evidence that was before him or her and what the issues were.
There is no requirement that the commissioner must
have deprived the
aggrieved party of a fair trial by misconceiving the whole nature of
enquiry. The threshold for interference
is lower than that; it being
sufficient that the commissioner has failed to apply his mind to
certain of the material facts or
issues before him, with such having
potential for prejudice and the possibility that the result may have
been different. This standard
recognizes that dialectical and
substantive reasonableness are intrinsically interlinked and that
latent process irregularities
carry the inherent risk of causing an
unreasonable substantive outcome.’
[14] The
Nedbank
judgment in is in any
event in line with what Labour Appeal Court had earlier said in
Fidelity
Cash Management Service v Commission for Conciliation, Mediation and
Arbitration and Others
18
when specifically
interpreting the
Sidumo
test. The Court held as
follows: ‘[t]o this end a CCMA arbitration award is required to
be reasonable because, if it is not
reasonable, it fails to meet the
constitutional requirement that an administrative action must be
reasonable and, once it is not
reasonable, it can be reviewed and set
aside.’
[15] As the Labour Appeal
Court in
Nedbank
referred
with approval to the judgment in
Southern
Sun Hotel Interests (Pty) Ltd v Commission for Conciliation,
Mediation and Arbitration and Others,
19
reference is made to the
following extract from such judgment, where it was held as follows:
‘
In
summary, s 145 requires that the outcome of CCMA arbitration
proceedings (as represented by the commissioner's decision) must
fall
within a band of reasonableness, but this does not preclude this
court from scrutinizing the process in terms of which the
decision
was made. If a commissioner fails to take material evidence into
account, or has regard to evidence that is irrelevant,
or the
commissioner commits some other misconduct or a gross irregularity
during the proceedings under review and a party is likely
to be
prejudiced as a consequence, the commissioner's decision is liable to
be set aside regardless of the result of the proceedings
or whether
on the basis of the record of the proceedings, that result is
nonetheless capable of justification.’
[16] In
Lithotech
Manufacturing Cape - A Division of Bidpaper Plus (Pty) Ltd v
Statutory Council, Printing, Newspaper and Packaging Industries
and
Others,
20
the Court held:
‘
Even
where the reasoning of the arbitrator may be criticized, this in
itself does not render the award reviewable particularly where
the
ultimate result arrived at by the arbitrator is sustainable in the
light of the record. I must, however, qualify this statement
by
pointing out that there may be cases where, although the ultimate
conclusion reached by the commissioner or arbitrator is reasonable,
the reasoning adopted by the arbitrator or commissioner is so flawed
(even if the ultimate result is reasonable), that it cannot
be
concluded that the arbitrator duly exercised his or her functions as
an arbitrator by taking due consideration of matters that
are vital
to the dispute. In such circumstances the reviewing court may well be
inclined to review and set aside the award.’
[17] In specifically
dealing with the above principles when it comes to the review of a
rescission ruling, the Court in
Martin
v Commission for Conciliation, Mediation and Arbitration and Others
21
held as follows:
‘
A
reasonable decision maker in the present circumstances would apply
the relevant test - in other words, the test referred to in
Northern
Training Trust
and affirmed by the Labour Appeal Court in
Shoprite
Checkers
.
This required her to establish that the notice of set down was sent
(which she did) and then to determine whether the applicant's
default
was wilful, and whether she had reasonable prospects of success in
her claim. A commissioner's decision cannot be said
to be reasonable
when the commissioner fails to consider all the materially relevant
factors prior to making that decision.’
[18] The applicant’s
application for the review of the rescission ruling of the second
respondent must therefore be determined
on the basis of the
principles as set out above.
The principles
relating to rescission applications
[19] As one of the
central issues in the determination of this matter is whether or not
the second respondent properly applied the
principles relating to
rescission applications, it is important to set out exactly what
these principles are. The fact is that
the failure by the second
respondent to apply all the required principles in determining a
rescission application as required by
law would constitute a
reviewable irregularity.
[20] The
basic test for
determining a rescission application is found in the judgment of
Superb
Meat Supplies CC v Maritz,
22
where it was held as
follows:
‘
The
applicant must give a reasonable explanation of his default; his
application must be made bona fide; he must show that he has
a bona
fide defence to the plaintiff's claim. This needs to be shown prima
facie only and it is not necessary to deal fully with
the merits of
the case or to prove the case. It is sufficient to set out facts
which, if established at the trial, would constitute
a good defence.
The defence must have existed at the time of the judgment.
In
determining whether or not good cause has been shown, the court is
given a wide and flexible discretion in terms of rule 31(3)(b).
When
dealing with words such as 'good cause' and 'sufficient cause' the
Appellate Division has refrained from attempting an exhaustive
definition of their meaning in order not to abridge or fetter in any
way the wide discretion implied by these words. The court's
discretion must be exercised after a proper consideration of all the
relevant circumstances.’
[21]
In specifically dealing with the rescission test in arbitration
proceedings, the Court in
Shoprite
Checkers (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
23
said the following:
‘
It
seems to me that in applying s 144 of the Act a commissioner is in
the same position as a judicial officer in the civil courts
when
considering an application for rescission.
Moreover,
s 3 of the Act directs any person applying the Act to interpret its
provisions in such a way that it gives effect to the
primary objects
of the Act and for the interpretation to comply with the
Constitution.
As
there are circumstances which can be envisaged, such as in the
present case, and which fall outside the circumstances referred
to in
s 144 of the Act, in such cases both logic and common sense would
dictate that a defaulting party should, as a matter of
justice and
fairness be afforded relief. It follows, that if one was to hold that
s 144 of the Act does not allow for the rescission
of an arbitration
award in circumstances where good cause is shown and that an
applicant who seeks rescission of an arbitration
award was compelled
to bring the application within the limited circumstances allowed by
the wording of the section it could lead
to unfairness and injustice.
In my view this would be inconsistent with the spirit and the primary
object of the Act referred to
above. Furthermore, I am of the view
that to interpret s 144 of the Act so as to include 'good cause' as a
ground for rescission
is to give the Act an interpretation that is in
line with the right provided for in s 34 of the Constitution because,
if s 144
is not interpreted in that way, a party who can show good
cause for his default would be denied an opportunity to exercise his
right provided for in s 34 of the Constitution despite the fact that
he may not have been at fault for his default. That could be
a grave
injustice.
The
test for good cause in an application for rescission normally
involves the consideration of at least two factors. Firstly, the
explanation for the default and, secondly, whether the applicant has
a
prima facie
defence.’
[22] In
Northern
Training Trust v Maake and Others,
24
the Court said:
‘
The
enquiry in an application for the rescission of an arbitration award
is consequently bipartite. The first leg is one which is
concerned
with whether or not the notice of set-down was sent (for instance by
fax or registered post). Should evidence show that
the notice was
sent, a probability is then created that the notice sent was
received. The second leg to the enquiry is one which
concerns itself
with the reasons proffered by the applicant who failed to attend the
arbitration proceedings. Such applicant needs
to prove that he or she
was not wilful in defaulting, that he or she has reasonable prospects
of being successful with his or her
case, should the award be set
aside. However, the applicant needs not necessarily deal fully with
the merits of the case.
The
two requirements of fairness and expedition should be balanced. Where
there is an apparent conflict between the two, fairness
should be
given precedence lest injustices are done.’
[23] What the above
authorities clearly show is that in the case of the determination of
rescission applications in the CCMA or
in bargaining councils, as the
case may be, the arbitrator determining the same must conduct himself
or herself in the same manner
as a civil court would in making such
determination. This requires a proper determination of the issue of
whether “good cause”
exists to rescind a default award.
The determination of “good cause” requires a two tier
investigation, the first being
the consideration of the explanation
for the default and the second being a consideration of the issue of
prospects of success.
Added to the two issues is a consideration
whether the application was brought bona fide. Finally, there has to
be considerations
of fairness applied, so as to avoid any injustice
being done. All these issues must be fully considered and dealt with
in the reasons
given by the arbitrator when making the rescission
determination.
The issue of the
explanation
[24] The first question
then is what is required from an arbitrator in making a determination
of the explanation submitted for the
default as the first issue for
consideration? In this regard, and in the judgment of
Martin
v Commission for Conciliation, Mediation and Arbitration and Others,
25
the Court said:
‘
Insofar
as the application for rescission in the present instance required
the commissioner to establish that her ruling had been
erroneously
made, there are two issues that, in my view, the commissioner failed
to consider. The first is that the applicant was
herself unaware that
she was required to attend at the CCMA on 30 January...
In
my view, therefore, the ruling made on 30 January was erroneously
made. Insofar as the absence of the applicant on that date
is
concerned, there is no dispute that the notice of set down of the
arbitration hearing on that date was sent and received. I
have dealt
with the applicant's explanation, in her affidavit filed in support
of the application for rescission, for her failure
to attend. There
was patently no wilful default on her part...’
[25] The judgment in
Ndhlela
v Transnet Ltd
26
is instructive, and the
following extract from the judgment is pertinent:
‘
An
ingredient of the requirement that good cause be shown is that the
element of wilfulness must be absent. The reasons for an applicant's
absence or default must be set out because they are relevant to the
question of whether or not the default was wilful. Before an
applicant can be said to be in wilful default the following elements
must be shown:
•
knowledge
that the action is being brought against him or her;
•
a
deliberate refraining from entering an appearance or appearing,
though free to do so; and
•
a
certain mental attitude towards the consequences of default.’
I further regard the
following extract from the judgment in
Ndhlela
as quite pertinent to the
current matter, especially considering the third respondent’s
attorneys had several times in the
events preceding the arbitration
set down on 9 February 2011 actually dealt with and corresponded with
the applicant, but yet the
third respondent’s attorney who was
present on 9 February 2011 could simply not call the applicant and
find out where it
was. The Court in
Ndhlela
said:
“
Viewed
in this light, it is difficult to understand how it came about that
when the matter was called at the trial roll and then
allocated to
Revelas J for hearing, and there was no appearance by any
representative on behalf of Transnet, no effort was made
by Mr
Ndhlela's attorney to make contact with Transnet's attorney, or to
ask the presiding judge for an opportunity to stand the
matter down
to make a telephone call to Mr Mazwai or his counsel. That would have
been a simple and quick process (particularly
in the age of the
cellphone).’
27
[26] With regard to the
issue of the explanation provided by the applicant in this matter,
the simple explanation of the applicant
was that the wrong telefax
number was used in sending the notice of set down to it, and thus it
did not receive the same and consequently
was unaware of the
arbitration hearing. In my view, there is little doubt from the
record of the proceedings that telefax number
086 616 4711 is
not the telefax number of the applicant. This fact must have the
consequence that any notice sent to that
telefax number would not
constitute proper service of the notice on the applicant. In my view,
the most important factor that confirms
that the telefax number
086 616 4711 is not of the applicant is that every time the
third respondent obtained a default award
and required the applicant
to comply (this happened twice), the default award and letter of
demand was sent to telefax number 086 616
4177. If the
applicant’s fax number was indeed 086 616 4711, then why
is this telefax number not used by the third respondent’s
attorneys when they were seeking enforcement of the default awards?
The same contention applies with regard the instance when the
third
respondent’s attorneys sought that the applicant agree to a
postponement, which request was once again sent to 086 616
4177.
The conduct of the third respondent, through her attorneys, leaves a
bad taste in the mouth. To make matters even worse,
and in the
answering affidavit to the rescission application of the applicant
filed by the third respondent, it is contended that
specific
documents were sent to the applicant at telefax number 086 616
4711 and received by it, when the actual documents
referred to in the
answering affidavit show that these documents were actually sent to
086 616 4177. What the evidence in
my view clearly shows is that
every time a document was sent to the applicant at 086 616 4177,
the applicant reacted and reacted
promptly. Every time a document was
sent to 086 616 4711, the applicant did not react. In my view,
this can only mean that
documents sent to telefax number 086 616
4711 were not received by the applicant. It can thus comfortably be
concluded that
any service on telefax number 082 616 4711 is not
service on the applicant and the applicant certainly did not receive
such
documents.
[27] The difficulty with
the award of the second respondent is that he does not deal with any
of the above issues. The second respondent
accepts that the telefax
number 086 616 4711 was used on 22 December 2010 to notify the
applicant of the arbitration on 9
February 2011, and then simply
records that “evidence presented by the employee”
suggested this was indeed a number
used by the employer. As I have
indicated above, the evidence did not show this. The “evidence”
presented by the employee
(the third respondent) of such number being
used was in fact completely misleading, as I have set out above. A
proper analysis
of the evidence in fact shows that the telefax number
086 616 4711 is not used by the applicant. Insofar as the second
respondent
concluded that telefax number 086 616 4711 was indeed
used by the applicant, this conclusion is unsustainable and
irregular,
and falls to be reviewed and set aside.
[28] The next issue to
consider is the issue of the issue of telefax number 086 624
5544. It appears from the documents on
record that this telefax
number belongs to the applicant’s representatives at the time,
being LWO. The second respondent
records in his award that the
applicant does not explain why documents sent to that telefax number
(082 624 5544) were not
received. The problem with this
conclusion is simply that such telefax number does not appear on the
notice of set down of 22 December
2010 as being an address for
service of the notice of set down. The only telefax number that
appears on the notice of set down
itself is 086 616 4711. Added
to this, and if regard is had to the default award of arbitrator
Maree dated 10 February 2011,
this arbitrator, in discharging her
duties of determining valid service of the set down, only refers to
the telefax number 086 616
4711 and this is the only address
also recorded in the default award. The fact is that the address on
the notice and on the default
award does not include telefax number
086 624 5544, and thus it is irrelevant. In any event, and in
bringing its rescission
application, the applicant would not know
that it would need to deal with telefax number 086 624 5544, as
this number appears
nowhere on the set down notice or default award,
so the applicant would not even know it was used. I therefore
conclude that the
second respondent’s referral to and reliance
on service at telefax number 086 624 5544 is misplaced and
irregular. In
the end, this is still not the telefax number of the
applicant.
[29] In
Mega
Burger v Commissioner Louw NO and Another,
28
the Court dealt with an
explanation that a notice of set down which was ostensibly properly
sent but was never received, as follows:
‘
The
commissioner was obliged to satisfy himself on 7 August that the
notice of set down had been served on Mega Burger. The fact
that it
was sent by registered post goes some way to showing that there was,
at least, an attempt at service. When informed that
Mega Burger said
that it had no notice of the set down, it was on the facts before
him, reasonable for him to suppose that this
was true. This is
particularly so in the light of the fact that Mega Burger had
attended the conciliation proceedings. There was
no evidence to the
contrary before him that Mega Burger did not receive the notice of
set down.’
The point that needs to
be made from what the Court said in
Mega Burger
is that all
the arbitrator that conducted the default arbitration proceedings
satisfied herself on, when the default award was
made on 10 February
2011, is that there was service on telefax number 086 616 4711.
On the facts that then came to light in
the rescission application,
it was quite reasonable to suppose that it was true that service on
that telefax number was not received
by the applicant. It should also
have been considered that when this happened before, the applicant
immediately brought rescission
proceedings, which were successful for
the very same reason. There was also no contrary evidence that the
applicant in fact did
receive the notice of set down.
[30]
In
MTN
South Africa v Van Jaarsveld and Others,
29
it was held as follows,
which in my view can equally be applied in the current matter:
‘
Rescission
applications of this nature require the presiding officer who is
responsible for deciding them to give consideration
to whether or not
in truth the party who was in default at the time of a scheduled
hearing was unaware of the hearing. If that
fact is established, the
explanation for the unawareness must be considered and if the
explanation is reasonable that provides
the basis for the rescission
of the award made by default
.’
In terms of the above, it
is my view that the explanation by the applicant in the current
matter is not only reasonable, but truthful.
The second respondent
unfortunately made no enquiry or determination into this issue.
[31]
The Court in
MTN
also
dealt with the very issue of communication by telefax in litigation
proceedings, which is problematic, and held as follows,
30
which
once again in my view can equally be applied in this instance:
‘
It
is plain from anyone who attends the hearings of the Labour Court,
that the enormous growth in the number of applications for
rescission
in circumstances where the respondent party claims that albeit on the
face of it a telefax transmission was sent, it
was not received or
did not reach the person responsible for giving it attention, leads
to the conclusion that the provisions of
the Act in this regard
require reconsideration. In my view, it is appropriate that the
statute be reappraised in this regard and
that the Rules Board for
the Labour Courts gives its attention to this matter of procedure.’
[32] Reference is also
made to
Northern
Province Local Government Association v Commission for Conciliation,
Mediation and Arbitration and Others
31
where it was held as
follows:
‘
It
seems to me that a commissioner in considering whether or not a
notification of an arbitration hearing has indeed been received
by a
respondent, it is necessary to consider all the facts bearing on that
question. Axiomatically, in deciding whether or not
a fax
transmission was received, proof that the fax was indeed sent creates
a probability in favour of receipt, but does not logically
constitute
conclusive evidence of such receipt. A party to proceedings who
claims that it did not receive a telefaxed notification,
must be put
in a position where it can consider the grounds upon which it is
contended that a notice was furnished to it, and thereupon
give an
explanation as to whether or not it was received, could have been
received, and any other germane circumstance, which has
a bearing on
the explanation tendered that the party was ignorant that the matter
had been set down. Naturally, commissioners must
be on their guard
against abuse of the process by parties who, having been properly
notified but having neglected to participate
in the proceedings,
subsequently wail once an adverse arbitration award is served on
them. Nevertheless, the prudent need to guard
against those
circumstances should not disturb a fairminded enquiry into whether or
not as a fact the notice did not come to the
attention of the party.’
In my view, the second
respondent did not conduct a fair minded enquiry in the current
matter. Especially as to the issue of telefax
number 086 624
5544, the applicant was never put into a position where it could
provide an explanation for this, but yet it
formed a central part of
the second respondent’s reasoning against the applicant. There
is also no evidence of abuse of process
by the applicant –
after all its previous rescission was successful which it would not
have been if it was abuse of process.
The explanation that the
applicant was unaware of the hearing date was in the end reasonable
and acceptable.
[33]
It is accordingly my view that in
the
end, there was a proper and in essence undisputed explanation as to
why the applicant did not attend the arbitration, being
that it in
fact never received the set down notice and was unaware of the
arbitration hearing on 9 February 2011. Reference is
accordingly made
to
Electrocomp
(Pty) Ltd v Novak
32
where the Court held as
follows:
‘
The
principle laid down in
Federale
Stene
and a line of preceding cases including
Topol
and
Others
v L S Group Management Services (Pty) Ltd
1988 (1) SA 639
(W), establishes that where a party to an application
was genuinely unaware of the date of set down, the granting of
judgment by
default would be erroneous and it is not necessary for
the party concerned to have shown or proved good cause.’
[34] A
final appropriate reference is to the judgment in
Inzuzu
It Consulting (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others,
33
where it was held as
follows:
‘
It
is quite clear that the commissioner, if he had read and considered
the application for rescission, could not have failed to
notice that
(a) the address to which the notice of set down for the con/arb
proceedings had been sent, was incorrect; (b) the aforesaid
error was
perpetuated when the notice of set down for the rescission
application was sent to the same incorrect address; and (c)
when the
applicant launched the rescission application, it appointed a
particular service address, but that the notice of set down
in
respect of the rescission application had not been sent to such
address.
The
conclusion is accordingly inescapable that the commissioner either
failed to read the application for rescission, or failed
to give any
consideration thereto, prior to making the ruling. Such conduct on
the part of the commissioner clearly constitutes
a gross dereliction
of duty.’
[35]
The
logical conclusion in this matter is simply why would an applicant,
who had taken so much effort to have his matter actually
heard by the
first respondent and actually applying for and obtaining rescission
in the first instance, then simply ignore and
abandon the very last
and most important part of the process, being the ultimate
arbitration hearing date in February 2011. This
makes no sense.
Fairness
dictates that the applicant must be given an opportunity to present
its case in the circumstances of this matter, and reference
is made to
Foschini
Group (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
34
where it was held as
follows:
‘
Where
a party at all times intended to defend proceedings and its default
is not wilful, then though the party may formally have
received
notice of the proceedings, the granting of an award in that party's
absence may constitute an error sufficient to justify
the rescission
of the application. Even if no satisfactory explanation is given for
the party's default, other factors, such as
the strength of the
defaulting party's case, should be taken into consideration.
The
two requirements of fairness and expedition should be balanced. Where
there is an apparent conflict between the two, fairness
should be
given precedence lest injustices are done. To establish that there is
a reasonable probability of success on the merits,
it suffices if an
applicant shows a prima facie case in the sense of setting out
averments which, if established at the proceedings,
would entitle
that party to the relief asked for. An applicant need not necessarily
deal fully with the merits of the case.’
[36] I conclude that the
applicant has thus, in the rescission application before the second
respondent, provided a bona fide and
acceptable explanation for not
attending at the arbitration on 9 February 2011. I further conclude
that the explanation submitted
by the applicant was truthful and on
the probabilities it must be accepted that the applicant did not
receive the notice of set
down for 9 February 2011. The fact is that
an incorrect address was used by the first respondent in serving the
set down notice.
In the end, it therefore cannot be said that the
applicant was in willful default, and I indeed accept that this was
not the case.
Finally, fairness in this instance dictates that the
applicant be afforded the opportunity to present its case on the
merits of
the matter in the first respondent. It is therefore my view
that the award of the second respondent in this respect cannot be
sustained,
and falls to be reviewed and set aside.
The issue of prospects
of success
[37] The second issue to
consider in rescission applications is that of prospects of success.
This consideration must be dealt with
on an equal footing as the
explanation for the absence. The difficulty that often arises in
rescission proceedings in the CCMA
and the bargaining councils is
that this consideration is either completely ignored by arbitrators
dealing with the rescission
application or is simply given cursory
reference or consideration.
35
Such conduct would
clearly amount to a failure to properly apply the requisite
principles in rescission applications, and would
constitute a
reviewable irregularity. As was said in
MM
Steel Construction CC v Steel Engineering and Allied Workers Union of
SA and Others:
36
‘
An
applicant who does not tender an acceptable explanation for his
default, and demonstrate that he has a defence which is bona
fide and
has a prospect of succeeding, will generally not meet that test and
his application will be bound to fail (
Chetty
v Law Society, Transvaal
1985 (2) SA 756
(A)). Those two essential elements ought nevertheless
not to be assessed mechanistically and in isolation. While the
absence of
one of them will usually be fatal, where they are present
they are to be weighed together with other relevant factors in
determining
whether it would be fair and just to grant the
indulgence.’
The current matter is a
case in point, as the second respondent clearly considered only the
issue of the explanation in isolation,
and actually did not determine
prospects of success.
[38] In considering the
issue of prospects of success, it is not necessary to make a final
conclusion on the merits of the case.
It is equally not necessary to
determine if the case offer is true or not. The merits simply need
not be fully ventilated. The
proper enquiry is whether the case of
the rescission applicant, if ultimately found to be true and
accepted, would constitute a
proper case which could lead to such
party succeeding in the merits of the matter. As the Court said in
Superb
Meat Supplies:
37
‘
[t]
he
applicant... must show that he has a
bona
fide
defence
to the plaintiff's claim. This needs to be shown
prima
facie
only
and it is not necessary to deal fully with the merits of the case or
to prove the case. It is sufficient to set out facts which,
if
established at the trial, would constitute a good defence.’
38
[39] The finding by the
second respondent on the issue of prospects of success is, as
paraphrasing from his award, the following:
‘[i]t seems that
the employer does have some prospect of success in the matter. It is
clear that extensive oral evidence
would be required on the specific
issue of whether the employee was dismissed fairly and whether a
proper procedure was followed
in the matter.’ With respect to
the second respondent, this conclusion in the second respondent’s
own award as it stands
meets the requirements of prospects of success
as contemplated by law for the purposes of granting rescission. The
point is simply
that if true, the employer (the applicant) would have
a proper case. The final determination of the merits of the case
would then
deal with the issue whether the applicant’s case is
true or not. This requires the case to be heard on the merits and
thus,
insofar as it concerns the issue of prospects of success in a
rescission application, for rescission to be granted. It is clear
to
me that the second respondent did comprehend the true nature of the
test of prospects of success, and did not appreciate what
he was
required to determine. This is a material failure, and a reviewable
irregularity.
[40] The facts of the
current matter also confirm that the second respondent simply did not
properly consider the issue of prospects
of success as required by
law, and only paid the requirements, as stated above, a “cursory
reference”. It appears from
the case advanced by the applicant
in the founding affidavit in the rescission application that the very
issue of the dismissal
of the third respondent is in dispute. The
applicant contended that the third respondent was dissatisfied with
what she considered
to be unacceptable conduct on the part of her
CEO, there was an altercation between the third respondent and the
CEO, and the third
respondent then verbally told the CEO that she was
resigning with immediate effect. When asked to put this resignation
in writing,
she refused and left. In her answering affidavit in the
rescission application, the third respondent also refers to an
altercation
with her CEO. The third respondent however contends that
pursuant to this altercation, she was told in no certain terms by her
CEO to leave, with some swear words added. The third respondent
contended she never resigned and left because she was told to do
so.
What is clear from these two versions is that the issue of dismissal
is not common cause. This means that the onus would be
on the third
respondent in the arbitration proceedings to prove she was dismissed.
The second respondent does not even deal with
this issue, or make any
reference to it. In my view, the fact that dismissal is in issue and
having regard to the above two cases
of the parties, there can be no
doubt that the second respondent should have concluded that proper
prospects of success had been
shown by the applicant for rescission
to be granted.
[41] I accordingly
conclude that the applicant had indeed satisfied the second
requirement in rescission applications of illustrating
prospects of
success. The second respondent committed a gross and reviewable
irregularity in not so concluding.
Further requirements
and issues
[42] As I have already
dealt with above, fairness in this matter dictates that the
rescission application of the applicant should
have been granted,
especially considering, at the very least, the doubt about the
telefax number and the issue that dismissal is
in dispute.
[43] A further issue to
consider is whether the applicant’s rescission application was
bona fide. The third respondent certainly
does not make out a case in
the answering affidavit to the contrary. It appears from the award of
the second respondent that he
appreciated the need to deal with this
issue, as the second respondent concludes that the evidence suggests
a “pattern”
on the part of the applicant of not attending
DRC processes. The second respondent makes this determination because
of the fact
that the applicant also did not attend the first
arbitration hearing. I have several difficulties with this conclusion
of the second
respondent. The first is that the evidence does not
show a “pattern” of conduct as suggested by the second
respondent,
on the part of the applicant. What the evidence in a
nutshell does show, if considered properly and as a whole, is that
whenever
documents were sent to the right telefax number, the
applicant immediately acted, and when not, no response or action was
forthcoming
from the applicant. This can only lead to the reasonable
conclusion that the applicant did not attend at the arbitrations
because
it did not receive the notice, and thus its conduct is bona
fide, and the application for rescission had to be bona fide. The
only
“pattern” shown in the evidence is the persistent
sending of the notices of set down to the wrong address.
[44] The reliance by the
second respondent on the fact that the applicant did not attend the
previous (first) arbitration proceedings
is misplaced. What the
second respondent seems to ignore is that the applicant did not
attend the first arbitration for the same
reason for not attending
the second arbitration, and in the case of the first arbitration,
rescission was in fact granted by the
DRC itself. The point is that
if the applicant was successful in seeking rescission of the default
arbitration award the first
time around, then surely the bringing of
the second application for rescission on the same basis has to be
bona fide.
[45] A further concern I
have in this matter is the absence of a rescission hearing before the
second respondent made his ruling.
Whilst I accept that the DRC Rules
dictate that the first respondent can determine applications in the
manner its deems appropriate,
and it thus can be argued a rescission
hearing is not required,
39
my concern remains that
in certain instances, it is simply not appropriate to just deal with
rescission applications on the documents
filed. There seems to be a
blanket approach by the CCMA and the bargaining councils to determine
all rescission applications just
on the documents filed, which
approach in my view cannot be correct. In certain instances, fairness
and the requirements of the
principle of
audi
alteram partem
dictates
that a hearing to determine the issue of rescission must be convened,
no matter what the Rules of the CCMA or bargaining
council may
provide as to conducting proceedings in a manner deemed appropriate.
Reference is made to the judgment of
Kungwini
Residential Estate and Adventure Sport Centre Ltd v Mhlongo NO and
Others
40
where the Court dealt
with a condonation application in the CCMA. It is my view that the
following ratio in this judgment can equally
be applied to the
consideration of rescission applications:
41
‘
Another
point is that in terms of rule 31(9)(a), the commission must allocate
a date for the hearing of an application, including
an application
for condonation, and in terms of rule 31(9)(b) the commission must
notify the parties of the date, time and place
of the hearing of the
application. Rule 31(10) provides that: “Despite this rule, the
Commission or a commissioner may determine
an application in any
manner it deems fit.”
However,
I do not think that this provision can possibly be relied upon to
dispense with the giving of notice to the parties, or
at least to the
applicant if the respondent is in default, of the commissioner's
intention to hear a matter. For a commissioner
to hear and determine
an application for condonation without notice to the parties would be
to ignore the audi alteram partem rule.
There is no indication in the
papers that any such notice was given to either the third respondent,
who had applied for condonation,
or the appellant. Although it may be
argued that it was not necessary to give notice to the appellant,
since, although it was a
party as contemplated by rule 31, it had not
given notice of intention to oppose the application (leaving aside
annexure A), the
same cannot be said about notice to the third
respondent. Had notice of the intention to hear the condonation
application been
given to the third respondent's legal
representative, Hawyes, he would surely have had an obligation to
call annexure A to the
attention of the CCMA or at least to advise
the appellant's attorneys of the set down of the application. Had
that occurred it
is unlikely that the condonation ruling would have
been made in the absence of both parties and the huge wastage of time
and effort
which has occurred in this matter would have been
avoided.’
[46] In
National
Director of Public Prosecutions and Another v Mohamed NO and Others,
42
the following was held:
‘
It
is well established that, as a matter of statutory construction, the
audi
rule should be enforced unless it is clear that the Legislature has
expressly or by necessary implication enacted that it should
not
apply or that there are exceptional circumstances which would justify
a court not giving effect to it. (footnote omitted)’
In my view, there is no
express or necessary implied exclusion of the
audi alteram partem
principle where it comes to the determination of rescission
applications in terms of either the CCMA or bargaining council Rules.
As such, this principle must still find application.
[47] Of course, there can
be no hard and fast rules as to when such a hearing should be
convened. This must be determined on a case
by case basis, by the
arbitrator to whom the determination of the rescission application is
allocated. In my view, the following
can however serve as guidelines
when the decision should rather be made to convene a hearing to
determine the rescission application:
47.1. The determination
of a rescission application only on the papers should principally be
reserved for instances where the rescission
application is unopposed;
47.2. Where the
rescission application is opposed, a rescission hearing should be
convened. This situation will leave parties with
the view that
justice is not only done, but is actually seen to be done in their
presence. There may be instances however where
even an opposed
rescission would not necessitate a hearing. An example would be where
it is clear from the documents filed that
the default arbitration
award was indeed erroneously made, as in such a case, it is not even
necessary to determine the issue of
willful default and prospects of
success. Another example would be where the explanation for the
default is not contested, and
only the issue of prospects of success
is contested, because of the manner in which the issue of prospects
of success must be determined;
47.3. There have been
several instances where arbitrators have determined unopposed
rescission applications unfavourably, based
on the arbitrator’s
own views gathered from external sources (such as the case file) or
from the arbitrator’s own contradiction
of statements made the
applicant’s founding affidavit in the rescission, or where the
arbitrator adopts his own negative
views about the rescission
applicant’s bona fides. In these kind of instances it is
imperative that the rescission applicant
be confronted in a
rescission hearing with these issues by the arbitrator, so the
applicant for rescission can address the arbitrator
on the same.
[48] In the current
matter, it is my view that this is certainly an opposed rescission
that deserved a rescission hearing. Added
to this, the second
respondent in this instance certainly formed his own views about the
applicant’s bona fides, and in my
view the second respondent
should have afforded the applicant the opportunity to address him on
this in a hearing. It is my conclusion
that the failure to convene a
rescission hearing in this instance constitutes a failure of
audi
alteram partem
and
is a reviewable irregularity.
[49] A final issue to
consider in favour of the applicant is the fact that the applicant
immediately when it received both default
awards in this matter acted
promptly and immediately in seeking and applying for rescission. In
this respect, it is apposite to
refer to the following extract from
the judgment in
Theron
NO v United Democratic Front and Others,
43
where it was held as
follows:
‘
In
my view the Court will normally exercise that discretion in favour of
an applicant where... he was, through no fault of his own,
not
afforded an opportunity to oppose the order granted against him, and
when, on ascertaining that an order has been granted in
his absence,
he takes expeditious steps to have the position rectified.’
Conclusion
[50] Based on all of the
above, it is my view that the rescission award of the second
respondent constitutes a gross and reviewable
irregularity and cannot
be allowed to stand. I conclude that the applicant had in fact
provided an acceptable explanation for its
default and had shown the
requisite prospects of success. I also accept that the applicant’s
conduct was bona fide. Finally,
it is in the interest of justice and
fairness that the applicant be given an opportunity to present its
case on the merits of this
matter.
[51] With the rescission
award of the second respondent being reviewed and set aside, what
must next be done? I am of the view that
it would be inappropriate to
remit the rescission application itself back to the first respondent
for consideration. This Court
has the power and discretion to
determine the rescission application,
44
and in my view, I have
sufficient information and evidence before me to do so. Reference is
made to
Cementation
Mining v Commission for Conciliation, Mediation and Arbitration and
Others’,
45
where it was held as
follows:
‘
The
LAC and this court have held that they should correct a decision
rather than refer it back to the CCMA for a hearing de novo
in the
following circumstances: (i) where the end result is a foregone
conclusion and it would merely be a waste of time to order
the CCMA
to reconsider the matter; (ii) where a further delay would cause
unjustified prejudice to the parties; (iii) where the
CCMA has
exhibited such bias or incompetence that it would be unfair to
require the applicant to submit to the same jurisdiction
again; or
(iv) where the court is in as good a position as the CCMA to make the
decision itself. In this matter, the factors listed
under (i), (ii)
and (iv) are present. In these circumstances, it is appropriate to
grant a substituted order in terms of which
the applicant's
rescission application is granted.’
Based on these principles
and the evidence in this matter, I intend to substitute the
rescission award of the second respondent
with a determination that
the applicant’s application for rescission is granted.
[52] This then only
leaves the issue of costs. The third respondent only belatedly sought
to engage the applicant in the matter,
and in the end did not even
oppose the matter. Considering this, and the fact that a hearing on
the merits between the parties,
and in the first respondent, is still
to come, I do not believe a costs order is appropriate. In the
interests of fairness in this
instance, I intend to make no order as
to costs, save for the order I have already made on 8 January 2013
where the third respondent
was ordered to pay the wasted costs
occasioned by the postponement on that day.
Order
[53] In the premises, I
make the following order:
53.1. The rescission
ruling of the second respondent under case number MIPT 9610 dated 31
March 2011 is reviewed and set aside.
53.2. The rescission
ruling of the second respondent under case number MIPT 9610 dated 31
March 2011 is substituted with a ruling
that the applicant’s
application for the rescission of the default arbitration award of
arbitrator E Maree dated 10 February
2011 is granted and such award
is rescinded.
53.3. The second
respondent is directed to set the arbitration proceedings down for
hearing on the merits thereof.
53.4. There is no order
as to costs, save for the order pertaining to wasted costs against
the third respondent granted on 8 January
2013.
____________________
Snyman, AJ
Acting Judge of the
Labour Court
APPEARANCES:
For the Applicant: M
Duvenhage of Duvenhage Attorneys
For the Third Respondent:
Advocate H Groenwald
Instructed by: Clarinda
Kugel Attorneys
1
66
of 1995.
2
Record
of pleadings
page 8 para 5.3.
3
Record
of pleadings
page 45.
4
Record
of documents page 156 and 158.
5
Record
of documents page 167 and 179.
6
Record
of documents page 126
7
Record
of documents page 214 – 215
8
Record
of pleadings page 53 – 58
9
Record
of pleadings page 52
10
Record
of documents page 39 – 48
11
Record
of documents page 57 – 65.
12
Record
of documents page 73.
13
(2007)
28 ILJ 2405 (CC).
14
Id
at para 110.
15
(2008)
29 ILJ 2461 (CC)
at
para 134.
16
(2012)
33 ILJ 1789 (LAC)
17
At
para 36 and para 39.
18
(2008)
29 ILJ 964 (LAC) at para 92.
19
(2010)
31 ILJ 452 (LC) at para 17.
20
(2010)
31 ILJ 1425 (LC) at para 18.
21
(2008)
29 ILJ 2254 (LC) at para 25.
22
(2004)
25 ILJ 96 (LAC) at paras 21 and 22.
23
2007)
28 ILJ 2246 (LAC) at para 29 – 30; 33; 35.
24
(2006)
27 ILJ 828 (LC)
at
paras 28 and 29.
25
Above
n 21 at para 19 and 20.
26
(2004)
25 ILJ 565 (LC) at para 30.
27
Id
at para 32.
28
(2000)
21 ILJ 1375 (LC)
1377
H - J
.
29
(2002)
23 ILJ 1597 (LC) at para 4.
30
Id
at para 13.
31
(2001)
22 ILJ 1173 (LC) at para 46.
32
(2001)
22 ILJ 2015 (LC) at para 12.
33
[2010]
12 BLLR 1288
(LC)
at 1293.
34
(2002)
23 ILJ 1048 (LC) at paras 20 and 21.
35
See
for example
Martin v Commission for Conciliation, Mediation and
Arbitration and Others
(
supra
);
Wimpy Game Centre v
Commission for Conciliation, Mediation and Arbitration
(2008) 29
ILJ 775 (LC) at para 7.
36
(1994)
15 ILJ 1310 (LAC) at 1311I – 1312A
37
Above
n 22 at 21
38
See
also
Foschini Group (Pty) Ltd v Commission for
Conciliation, Mediation and Arbitration and Others
above n 34;
Northern Training Trust v Maake and Others
above n 24.
39
See
Rule 32(9) of the DRC Rules. This rule is identical to the
provisions of Rule 31(10) of the CCMA Rules.
40
(2006)
27 ILJ 953 (LAC) at para 13.
41
CCMA
Rule 31(1) specifically provides that the Rule 31 process also
applies to rescission applications.
42
2003
(4) SA 1
(CC) at para 37.
43
1984
(2) 532 (C) at 536G.
44
See
Cash Paymaster Services (Pty) Ltd v Mogwe and Others
(1999)
20 ILJ 610 (LC);
Martin v Commission for Conciliation, Mediation
and Arbitration and Others
(
supra
) at para 28 and 29.
45
(2010)
31 ILJ 1167 (LC) at para 12.