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[2013] ZALCJHB 355
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Distinctive Choice 721 CC t/a Husan Panel Beaters v The Dispute Resolution Centre (Motor Industry Bargaining Council) and Others ((2013) 34 ILJ 3184 (LC)) [2013] ZALCJHB 355; [2013] ZALCJHB 83 (14 May 2013)

REPUBLIC OF SOUTH
AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Reportable
Case no: JR 84/2012
In the matter between:
DISTINCTIVE CHOICE 721 CC
t/a
HUSAN PANEL BEATERS
.....................................................................
Applicant
and
THE DISPUTE RESOLUTION
CENTRE
(MOTOR INDUSTRY
BARGAINING COUNCIL)
........................
First
Respondent
COMMISSIONER P H DE
VILLIERS N.O
..............................
Second Respondent
VICTOR PEYPER
......................................................................
Third
Respondent
Heard: 16 January 2013
Delivered: 14 May 2013
Summary: Application
to review and set aside arbitration award in which arbitrator found
that employer had made employee’s
employment intolerable in
terms of s. 186(1)(e) of LRA – meaning to be given to s.
186(1)(e) of LRA – employee claiming
that employer made
employment intolerable by demoting him and removing ‘channels
of communication’ necessary to perform
work – other
reasonable alternatives available to employee, including attendance
of disciplinary enquiry and institution
of unfair labour practice
proceedings, if enquiry decided against him – employee not
entitled to resign in anticipation of
unfair conduct by employer –
evidence not demonstrating permanent demotion without enquiry –
intolerability implies
no other reasonable alternatives available –
not appropriate to refer matter back to the bargaining council –
declarator
granted.
____________________________________________________________
JUDGMENT
HULLEY, AJ
Introduction
The applicant seeks to
review and set aside an arbitration award issued by the second
respondent and for the remission of the
matter to the first
respondent for hearing by a commissioner other than the second
respondent. In the alternative, it asks that
this Court substitute
the award with a finding that the third respondent was not
constructively dismissed.
The factual setting
The applicant runs a
panel-beating business. As such, it has business relationships with
various entities including towing companies,
short-term brokers,
insurance companies and motor vehicle manufacturers.
Mr Herbert Carlson was
the managing member of the applicant with his wife, Mrs Rose
Carlson, being responsible for the financial
management of the
applicant. The third respondent (to whom I shall hereinafter refer
as Mr Peyper) was the workshop manager and
Mr Christo Meyer the
workshop foreman.
Mr Meyer had started out
with the applicant as a panel-beater and had demonstrated talents
which allowed him to work his way up
to foreman.
Mr Peyper testified on
the operations of the workshop and the impact such operations had on
the ultimate demise of his relationship
with the applicant. His
evidence is not entirely clear, but from what I can gather it
appears that the panel-beating operation
consisted of approximately
six ‘sections’: strip and assembly, panel-beating,
bodywork, repair works, spray paint
(which consisted of the
preparation and spray paint areas), and finally, the quality control
sections.
The panel-beating
operation was initially split into four teams, with each team
assigned a different number; a register was kept
of the work
performed by each team and it was easy, said Mr Peyper, to monitor
the performance of each team and to identify which
team was
responsible for work on a specific motor vehicle.
As the workshop manager
Mr Peyper was responsible for oversight of the entire operation with
Mr Meyer reporting to him and he,
in turn, to Mr Carlson.
Mr Peyper testified that
the operation ran fairly smoothly at that stage.
Later, however, Mr
Carlson decided to split the operations of the workshop in two, with
Mr Peyper working on one half of the workshop
and Mr Meyer on the
other.
In terms of the new
arrangement there was to be no cross-pollination of staff or tasks.
Mr Peyper testified that he expressed
reservations about this
arrangement. Notwithstanding such reservations, Mr Carlson
implemented his decision. With time the new
arrangement led to
difficulties. For instance, so Mr Peyper testified, if two or three
panel-beaters in one section were absent
on the same day,
panel-beaters from the other section – which was fully staffed
on that day – could not be transferred
to assist them.
Notwithstanding this, Mr Peyper was sometimes required to sit in on
complaints from customers relating to vehicles
which were not
repaired in his section.
In terms of the new
arrangement, Mr Peyper and Mr Meyer would report directly to Mr
Carlson.
On 3 June 2011 Mr Peyper
was summoned to the office of Mrs Carlson. She handed him a letter
which was addressed to him. The letter
read as follows:
“
Please
be informed that a consultation between yourself and top management
is scheduled for Monday 6
th
of June at 07h15 at our premises in order to discuss the following
matters:
1.
Work performance.
2.
Insurance complaint.
3.
Dealer complaints.
4.
Client complaints.
The
above matters are of great concern and need immediate intervention.”
Mr Carlson was away on
business in Mozambique at the time and was due to return towards the
end of that month.
On 6 June 2011 Mr Peyper
reported to Mrs Carlson’s office at the allotted time and Mrs
Carlson then telephoned Mr Carlson.
According to Mr Peyper, Mr
Carlson informed him that there had been complaints from customers
including an entity he identified
as Telesure. Mr Carlson stated
that he had been mulling over issues for a while and could no longer
avoid what was to follow.
Mr Peyper and Mr Meyer were to swop
positions as workshop manager and foreman; Mr Peyper would “
forfeit”
a Ford Fortuna motor vehicle which had previously been given to him;
a cell phone which Mr Peyper had used to perform his functions
would
be taken back; and Mr Peyper was to have no further contact with the
insurance companies.
According to Mr Peyper,
the complaints stemmed from the very changes which Mr Carlson had
implemented contrary to his (Mr Peyper’s)
advice.
Mr Peyper informed Mr
Carlson that they were still working through the dealer complaints
and insofar as the complaints from the
clients were concerned, the
relevant vehicles were not under his authority and therefore he
could not be held liable for complaints
relating to those vehicles.
Mr Carlson was
apparently unperturbed by Mr Peyper’s protests. He indicated
that it was unfortunate that things had reached
the point it had but
he had been considering the issue for a while but it was simply “one
of those things”
.
Mr Carlson comforted Mr Peyper that
he should not be disheartened. The telephone call concluded on this
note.
According to Mr Peyper,
Mrs Carlson then indicated to him that she would draw up the
necessary documentation and addenda and had
already scheduled a
disciplinary hearing for Thursday, 9 June 2011. She indicated,
however, that if he did not want to be subjected
to a disciplinary
enquiry given the unpleasantness thereof for Mr Peyper she was
prepared to telephone “the people”
and tell them not to
proceed. Mr Peyper stated “you have to do what you have to do”
and that if Mrs Carlson felt
the need to have a disciplinary enquiry
then it was out of his hands. He then removed the SIM card from his
mobile phone and
handed it to Mrs Carlson.
It is not clear from his
testimony, but it appears that shortly after the same meeting Mrs
Carlson indicated to Mr Peyper that
she realised the difficulty
which he had been placed in and he could, as an alternative go and
assist Mr Carlson in Mozambique.
On Friday 10 June 2011,
Mrs Carlson handed a letter to Mr Peyper which read as follows:
“
Dear
Vic Peyper
Outcome
of consultation
With
reference to the consultation held 6
th
June 2011 at the
above address, it was decided that your new job title is Workshop
Foreman with immediate effect.
No
disciplinary hearing will be needed to this regard.”
The letter had a place
for signature by both the employer and employee, but was not signed
on behalf of the employer.
Mrs Carlson attached to
this letter a handwritten slip which indicated what Mr Peyper’s
new salary and benefits would be
in light of the demotion.
Mr Peyper indicated that
he found the demotion to be “completely degrading”. From
being the workshop manager reporting
only to Mr Carlson, he had now
been relegated to the position of foreman reporting to his previous
underling, Mr Meyer.
Mr Peyper testified that
he informed Mrs Carlson that he did not agree with the contents of
the letter of 10 June 2011 and that
he required a weekend to
consider the documents and would revert to her the following Monday
(13 June 2011).
As news of Mr Peyper’s
demotion began to spread, so his embarrassment intensified. A number
of other personnel came to commiserate
with him. At one stage, he
testified, he told Mrs Carlson that he felt so “frustrated”
that he could climb into his
car and go home because he could not
work under those circumstances. Even clients, he said, expressed
shock and dismay at the
events which had led to his undoing.
On Monday, 13 June 2011
Mr Peyper handed a letter dated 10 June 2011 to Mrs Carlson.
The letter read:
“
Dear
Rose
Your
correspondence attached refers as well as the telephone conference
between yourselves and I (
sic
) on 6 June 2011 where you
indicated that a demotion in my position as Workshop Manager was
effective immediately or the possibility
of assisting Callie in
Mozambique was offered as an alternative.
This
alternative in working in Mozambique is not a suitable option for me
as I have other obligations in Nelspruit.
As
regards the signing of the outcome of consultation as well as the
addendum to work contract I find myself in a difficult position;
for
the following reasons.
On
Tuesday 7 June 2011 I affirmed (
sic
) from you whether my job
was in jeopardy to which you verbally confirmed that my job security
was in no way in danger and that
there would be no change to my
income structure. According to you only a change in my job
description would be added as an amendment
to my current contract.
As
our relationship til (
sic
) now had been based on trust, I find
this change to be very disconcerting. My loyalty and dedication to
Husons since 2005 has been
beyond reproach. I have also held the
company’s name in high regard and have always promoted its good
name. This has always
been and still is my ultimate desire and for
this reason I find it extremely difficult to accept the terms of the
documents as
presented to me.”
According to Mr Peyper,
Mrs Carlson’s response to receiving this letter was that she
knew that her decency on the matter
would come back to haunt her and
that she should have followed the disciplinary procedure.
Later on that day, at
approximately 2 p.m. or 3 p.m., Mr Peyper telephoned Mr Carlson who
indicated that he was aware that Mr
Peyper had refused to sign the
letter of 10 June 2011. Mr Peyper explained to Mr Carlson that he
did not agree with the contents
of the letter. Mr Carlson apparently
became angry and indicated that Mr Peyper should go on leave for
two-and-a-half weeks until
he (Mr Carlson) returned from Mozambique.
Mr Carlson stated that when he got back they could discuss the
matter “but he
said”, testified Mr Peyper, “he is
letting me know now that he is not changing his mind he is sticking
to his decision”
(i.e. the decision to demote Mr Peyper).
According to Mr Peyper, Mr Carlson then explained to him that:
“
If
I want to play it that way he knows that it is very easy …
just start the procedure again and this time we can just do
it the
right way. In any case he said if I wanted to get rid of you, you
know I am prepared to pay the price. I will pay the price
he says
‘you know me’.”
Mr Peyper testified that
he regarded these statements by Mr Carlson as a threat:
“
I
actually regarded it as a threat that seeing that you don’t
want to sign the documents, we can quite easily then just start
the
process again …. (inaudible) and, do it the right way. And I
read into that as seen that obviously
omdat
ek dwars
check, en
jy
jou hardegat
,
… (inaudible) just look … (inaudible) warning, second
warning third warning disciplinary hearing and you are history.”
According to Mr Peyper
he could not work under those conditions.
“
Well
the conditions that was (
sic
)
set by him I mean it was, it was a slap in the face … to a
certain extent I am also a fairly assertive person I like things
done
the right way. I understood how Callie’s mind works, I
understood how he wanted things done and with all these limitations

were placed on me, I mean how can you perform? I was looking back to
the document that were given to me determining what sort of

production bonuses I am looking at so forth, how do you obtain those
production bonuses if the tools that you need to do the job
are taken
away from you. If the communication channels you need to effectively
do your job are taken away from you it doesn’t
make sense. It
seemed to me that this was a bit of a smokescreen to get me in a
position there I would make mistakes and it was
an easy way out
because I [am] not performing, poor work performance let’s
start procedures and away you go.”
Mr Peyper recounted an
incident to the arbitrator in which Mr Carlson had terminated the
services of other staff members without
following any procedure. (I
understand from this that Mr Peyper wished to demonstrate to the
arbitrator that Mr Carlson was true
to his word.)
On 14 June 2011 Mr
Peyper’s attorneys addressed an e-mail to the applicant in
which they set out the details of the events
which had unfolded
until that time, pointed out that the applicant’s conduct
constituted a breach of “both the labour
law and a violation
of our client’s rights” but since Mr Peyper, so they
indicated in the letter, preferred to resolve
the issues amicably
“we are instructed to request an urgent meeting with
yourselves on a without prejudice basis”.
They pointed out
that “should you not be willing to meet or to return the
Fortuna, our client will be forced to take all
such steps as he may
be advised to enforce and protect his rights.”
On the same day Mr
Peyper completed a leave form and booked off for five or six days.
On 15 June 2011, Mr
Peyper testified, he noticed that he had developed a tingling
sensation in his hand and began experiencing
dizzy spells which he
attributed to poor sleep. He decided to see a doctor as he was
concerned that his diabetic condition was
deteriorating because of
the high stress levels in the workplace. His physician, Dr van
Heerden, sent him to see a psychologist,
Mr Gerrie Strydom, and
booked him off for seven days and also referred him to a specialist
physician, Mr Alex Cruyven. Mr
Cruyven diagnosed Mr Peyper with
clinical depression.
Mr Peyper did not return
to work. He testified that his attorneys received no response to
their letter despite an acknowledgement
of receipt thereof from the
applicant and, feeling beleaguered and remediless, he tendered his
resignation on 4 July 2011.
The letter of
resignation (which was dated 2 July 2011) was delivered to the
applicant by Mr Peyper’s wife on 4 July 2011.
It read as
follows:
“
Dear
Callie
My
letter, dated 10 June 2011 as well as my lawyer’s letter dated
14 June 2011 refers. I am disappointed to note that you
have still
not contacted me or my lawyer to try and resolve the issues with me.
I see that after my latest letter suggesting we
sit down and talk,
you continue to give effect to the decision to demote me: I note on
my latest salary deposit that the amount
has reduced considerably and
this appears to be in accordance with your stated intention to demote
me. It is obvious to me that
no matter what I say you have no
intention to discuss the matter with me or to change your mind.
Your
actions have caused me considerable embarrassment amongst the staff
at the workplace and even amongst clients. Taking my cell
phone and
privileges was unnecessary and a slap in the face. I do not
understand your instruction to me that I may not speak to
clients any
more (some of whom have become my friends) even though I am supposed
to be the workshop foreman and still need to communicate
with them in
the execution of my duties.
I
have served the company with complete loyalty since I started seven
years ago. However your actions over the last few months and

particularly the demotion leave me with no other alternative (
sic
)
but to resign with immediate effect, which I hereby do.
All
of my rights are strictly reserved.
Yours
faithfully
Vic
Peyper”
In cross-examination, it
was put to Mr Peyper that he had at least one other option before
resigning which was to refer an unfair
labour practice to the
bargaining council having jurisdiction. It is apparent from the
transcript that Mr Peyper and the applicant’s
legal
representative were at cross-purposes on this issue. Mr Peyper was
of the view that he had referred an unfair labour practice
dispute
to the bargaining council (he understood this to be the precursor to
his dismissal dispute which was in issue at the
hearing); whereas
the applicant’s representative was clearly referring to a
separate unfair labour practice dispute relating
to his demotion.
Mr Peyper called two
further witnesses including his wife, who testified as an expert
witness. I do not consider it necessary
to traverse their evidence.
The company called three
witnesses, Mrs Carlson, Mr Carlson and Ms Melanie Tomlinson.
Ms Tomlinson was a
so-called Life Style and Business Coach. Her evidence related to
efforts on her part to coach Mr Peyper at
the request of the
applicant. Mr Carlson, so she said, had informed her that he was
experiencing difficulties with Mr Peyper
and wanted him to undergo
business management coaching in order to develop certain skills.
Mrs Carlson testified
that there had been a number of complaints which led ultimately to
her issuing the letter of 3 June 2011.
Under cross-examination she
explained that she had spoken to an assessor from Telesure who
advised her that they had received
numerous complaints regarding
vehicles repaired by the applicant and that Telesure was going to
terminate its relationship with
the applicant.
Mrs Carlson testified
that on about 6 June 2011 Mr Peyper was asked to return his mobile
telephone and the Fortuna. Mrs Carlson
stated that they wanted to
prevent Mr Peyper from interacting with clients and suppliers of the
applicant.
According to Mrs Carlson
a decision was taken between Mr Carlson and her to either demote Mr
Peyper in accordance with the letter
of 10 June 2011, subject him to
a disciplinary hearing or offer him a position in Mozambique (with a
different company owned
by Mr Carlson). An offer along these lines
was, she testified, put to Mr Peyper but he failed to revert;
ultimately, she issued
the letter of 10 June 2011 to him. The letter
was not signed, she testified, because Mr Peyper had not made a
decision to accept
the offer.
In cross-examination Mrs
Carlson appeared to be somewhat ambivalent on whether any decision
had been taken to demote Mr Peyper.
At one stage she testified that
a decision had been taken to demote him; at another stage she stated
that a decision had only
been taken to remove him from the “division
that was causing harm to the company”.
Mrs Carlson stated that
Mr Peyper’s employment with the applicant was not in jeopardy
and she informed him as much.
According to Mr Carlson,
he had been in Mozambique when he received word that a written
complaint had been received from an entity
he described as Hotline
Insurance Company. This was not the first complaint. Mr Carlson
realised he needed to take some preventative
measures, and so, it
appears, he decided to remove Mr Peyper as a public relations
exercise because he did not want to be perceived
“as a person
that is not serious”.
In his evidence in
chief, Mr Carlson testified that Hotline had indicated that they
would not like to continue in a working relationship
with Mr Peyper,
but were not prepared to lodge a formal, written complaint. Under
cross-examination Mr Carlson testified that
he acquired knowledge of
Telesure’s concerns during a conversation he apparently had
with “my guy doing my quotes”
who had, in turn,
apparently received information from an assessor to the effect that
Telesure was intending to “make changes”.
Mr Carlson
testified that he attempted to establish the truth behind this story
but the person he spoke to (who was not identified)
said that it was
the applicant’s problem and was not prepared to get involved
in the matter.
On the face of it, this
appears to be a material contradiction, but it is not absolutely
clear from the record whether the entity
referred to by Mr Carlson
in chief – which he referred to as Hot Line Insurance Company
– is the same entity referred
to by him in cross-examination –
which he referred to interchangeably as Telesure Hot Line and
Telesure. It may well be
that he was merely referring to the hotline
of different insurance companies’ hotline.
At any rate, Mr Carlson
testified that he informed Mr Peyper that he (Mr Peyper) would swap
roles with Mr Meyer and that Mr Meyer
would take over on a temporary
basis as workshop manager with Mr Peyper continuing as the foreman
although his remuneration would
remain at the same level. During
cross-examination he testified that the package would remain the
same although Mr Peyper’s
salary would be different.
On 13 June 2011 Mr
Carlson (who was still in Mozambique) had a further discussion with
Mr Peyper. They discussed the applicant’s
letter of 10 June
2011. Mr Carlson felt that the point of the letter was to avoid
having to take disciplinary action against
Mr Peyper and he informed
Mr Peyper he informed Mr Peyper that if he did not accept the terms
disciplinary action would have
to commence. Mr Peyper, he testified,
did not accept the new position.
Although Mr Carlson did
not expressly say so, on his evidence, the fact that Mr Peyper did
not accept the proposal made by the
company meant, by implication,
that disciplinary action would follow.
Mr Carlson informed Mr
Peyper to take time off and the two of them would discuss the matter
further upon his return.
Mr Carlson returned to
South Africa on about 25 June 2011. He testified that he responded
to the letter from Mr Peyper’s
attorneys and indicated via
email that he would discuss the matter only with Mr Peyper. This
email was, however, not included
in the bundle of documents handed
in at the arbitration proceedings.
The arbitration award
The second respondent
indicated in his award that:
“
Although
there is no clear cut definition of a constructive dismissal it is
clear from the case law that in order to be successful
in his claim
of constructive dismissal, the applicant must prove three things on a
balance of probability. The applicant must prove
that his working
conditions were intolerable. The test is objective and not
subjective. The applicant must show that the conduct
of the employer
judged reasonably and sensibly was such that no employee could
reasonably be expected to continue in the employment
relationship.
The applicant must prove that it was the respondent who had made his
working conditions intolerable. Lastly the applicant
must prove that
his resignation was the only reasonable option open to him.”
Later, with reference to
the facts of the case the second respondent continued as follows:
“
The
first issue is was the applicant demoted? The answer is clearly yes.
The applicant was advised that he was no longer workshop
manager and
that C Meyer was taking over from him. The applicant is told that he
is now the workshop foreman and that he must have
no contact with
dealers or insurance companies. The applicant is told [to] and does
hand in his phone and his vehicle. The letters
given to the applicant
are not in the format of an offer. Both letters merely inform the
applicant that he is now workshop foreman
and that he must assist the
workshop manager. He is told what his salary will be. His salary is
lower as a production bonus (achieving
a goal & no comebacks) is
discretionary by nature. [Mr Carlson] on his own version phones C
Meyer on 6 June 2011 and tells
him to take over as workshop manager
on a temporary basis. The applicant was thus demoted and it took
place on 6 June 2011.
Was
the demotion offered as an alternative to a disciplinary hearing? The
answer is no. [Mrs Carlson] tried to imply that the applicant
was
offered the alternatives of a disciplinary hearing or a demotion. Her
testimony was however contradicted by that of her husband
who
testified that he had told the applicant already on 6 June 2011 that
he was no longer workshop manager and had told C Meyer
that he was
taking over as workshop manager.
Were
the applicant’s working conditions intolerable? The respondent
did not follow any formal procedure prior to demoting
the applicant.
The applicant had received no counselling or warnings in the period
leading up to his demotion. The applicant’s
vehicle and
cell-phone were taken away from him. The respondent argued that the
applicant was being moved out of position temporarily.
This is
however not reflected in [two] letters given to the applicant. The
letters do not state that it will be on a temporary
basis. The
applicant after he is demoted is not given a clear job description as
to what is expected of him. He is left in a difficult
position as he
does not know what he is responsible for and what he is not
responsible for. He is merely told that he must assist
C Meyer who
used to report to him. The applicant had already been placed in a
difficult situation in March 2011 when the workshop
had been split
between him and C Meyer. The applicant had remained responsible as
workshop manager but was no longer in a position
to manage
effectively as C Meyer was in charge of the employees working under
him. It is also very questionable if as to whether
the respondent had
a valid reason to demote the applicant in such a drastic manner. [Mr
Carslon] testified that the main reason
for the demotion was Hotline
Insurance. He however acknowledged that he had not actually received
a complaint from them. He had
merely heard through his quote guy that
they were unhappy. It would seem that [Mr Carlson] made a quick
decision without thinking
as to whether his decision would be fair to
the applicant. [Mr Carlson] admitted that there may well have been a
bit of chaos in
the workplace as a result of his decision. An
employer has the right to demote an employee. The employer must
however [have] a
valid reason and follow a fair procedure. The
respondent did not do this in the matter at hand.
Was
it the actions of the respondent that had made the applicant’s
working conditions intolerable? It was the respondent who
decided to
demote the applicant without following any form of procedure and had
taken away the applicant’s cell phone and
vehicle.”
Having set out the
aforesaid background, the second respondent then concluded:
“
Was
resignation the only reasonable option open to him [?] The applicant
testified that the respondent had told him that he was
not going to
change his mind and that he would get rid of him if he wanted. The
respondent did not really challenge the applicant’s
evidence in
this regard and I have no reason not to believe him. The applicant
did through his lawyer request a meeting to try
and resolve the
matter amicably. The respondent did not respond to the letter with
any proposals but merely sent through a letter
acknowledging receipt
of the letter. In the circumstances it would have served no purpose
for the applicant to lodge a grievance.”
It appears from the
aforesaid that the second respondent was satisfied that the
applicant had rendered a continued employment
relationship
intolerable and that it had done so by demoting Mr Peyper and making
it clear to him that the decision was final.
Grounds of review
The applicant has raised
a host of review grounds. I do not intend trawling through every one
of them. It appears to my mind that
in essence the applicant’s
complaints against the award may be neatly encapsulated into four
separate compartments:
First, the arbitrator
had not analysed or not properly analysed the evidence which was
before him and had not properly explained
how he arrived at the
conclusions which he did.
Second, the evidence
did not support the conclusion reached by the arbitrator and
therefore, so he complains, no reasonable
arbitrator could have
arrived at the decision which he did.
In this regard the
applicant, in essence, contends that Mr Peyper, on his own version,
had not made out a case for constructive
dismissal. Moreover, he
contends that the arbitrator ought to have considered the evidence
which undermined Mr Peyper’s
testimony.
Third, the arbitrator
had based his conclusion on the fact that the applicant demoted Mr
Peyper when the true enquiry ought
to have been whether the
applicant had rendered continued employment intolerable.
Fourth, the arbitrator
proceeded from the finding that the applicant had made continued
employment intolerable to an award of
compensation; he failed to
consider whether the dismissal was unfair.
The applicable
standard for review
The resolution of
disputes about unfair dismissals is governed by the provisions of s.
191 of the Labour Relations Act
1
(the LRA).
In terms of s. 191(5)
(a)(ii) of the LRA the CCMA or bargaining council “must”
arbitrate a dispute “if”
the employee “has
alleged” that “the reason for the dismissal” is
inter
alios
“
that
the employer made continued employment intolerable”. The
reference to making continued employment intolerable is a
reference
to the provisions of s. 186(1) (e) of the LRA.
Section 186(1)(e) reads
as follows:
‘
186
Meaning of dismissal and unfair labour practice.
—
(1)
‘
Dismissal”
means that—
(a)
…
(e)
an
employee
terminated a contract of employment with or
without notice because the employer made continued employment
intolerable for the
employee
.’
The Labour Appeal Court
has held that the existence of “a dismissal” is a
jurisdictional fact necessary for the CCMA
or bargaining council to
determine the dispute by way of arbitration; if that jurisdictional
fact is absent the CCMA or bargaining
council is not entitled to
arbitrate the matter.
2
In
SA
Rugby Players’
an
arbitrator had found that the employees (certain rugby players) had
established that they were dismissed as contemplated in
s.186(1) (b)
of the LRA.
3
The finding of the
arbitrator in respect of one of the players was upheld on review to
the Labour Court on the basis that the
reasoning and conclusion were
‘justified’. In respect of the others the Labour Court
reviewed and set aside the arbitrator’s
decision on the basis
that his decision was not supported on an objective and rational
basis. On appeal to the Labour Appeal
Court Tlaletsi AJA held:
‘
[39]
The issue that was before the commissioner was whether there had been
a dismissal or not. It is an issue that goes to the jurisdiction
of
the CCMA. The significance of establishing whether there was a
dismissal or not is to determine whether the CCMA had jurisdiction
to
entertain the dispute. It follows that if there was no dismissal,
then the CCMA had no jurisdiction to entertain the dispute
in terms
of s 191 of the Act.
[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. In
Benicon Earthworks & Mining Services (Edms) Bpk v Jacobs NO &
others
(1994) 15
ILJ
801 (LAC) at 804C-D, the old Labour
Appeal Court considered the position in relation to the Industrial
Court established in terms
of the predecessor to the current Act. The
court held that the validity of the proceedings before the Industrial
Court is not dependent
upon any finding which the Industrial Court
may make with regard to jurisdictional facts but upon their objective
existence. The
court further held that any conclusion to which the
Industrial Court arrived on the issue has no legal significance. This
means
that, in the context of this case, 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
. In
Benicon's
case the court said at 804C-D:
'In
practice, however, an Industrial Court would be short-sighted if it
made no such enquiry before embarking upon its task. Just
as it would
be foolhardy to embark upon proceedings which are bound to be
fruitless, so too would it be fainthearted to abort the
proceedings
because of a jurisdictional challenge which is clearly without
merit.'
In
my view the same approach is applicable to the CCMA.
[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 of
the three players was justifiable, rational or reasonable. The issue
was simply whether objectively
speaking, the facts which would give
the CCMA jurisdiction to entertain the dispute existed. If such facts
did not exist the CCMA
had no jurisdiction irrespective of its
finding to the contrary.’ (My emphasis)
I will revert to the
practical application of the test and the proviso stipulated in the
emphasised passage shortly.
For present purposes, I
consider it appropriate to draw attention to the fact that s 191(5)
(a) does not require the CCMA or bargaining
council to arbitrate the
dispute if there is “a dismissal”, as stated by the
Labour Appeal Court; it requires the
tribunal to arbitrate the
dispute “if” the employee has “alleged that the
reason for dismissal” is one
or several factors, including
that the employer made continued employment intolerable. Thus, on a
strict reading of the section,
the relevant jurisdictional fact
appears to be the existence of an allegation by the employee that
the reason for his or her
dismissal is one of the listed factors,
not the existence of the dismissal.
As noted in the
SA
Rugby Players’
case
a true jurisdictional fact must objectively exist before the
relevant functionary may exercise jurisdiction over the matter.
I
have some difficulty with the notion that a finding made on a hotly
contested factual dispute may be considered to be ‘objective’

when the determination of such finding is dependent upon an
assessment of the probabilities, having regard to the credibility

and reliability of several witnesses.
Nevertheless, I am bound
by the judgment in
SA
Rugby Players
and
intend to apply it.
The same principles have
been applied in a different setting in
Minister
of Public Works v Haffejee NO
:
4
‘
Where
a tribunal is a creature of statute with no inherent powers (such as
a compensation court), it cannot by its own ruling or
decision confer
a jurisdiction upon itself which it does not in law possess. While
de
facto
,
and if only to decide whether or not to exercise its adjudicatory
function, it might be obliged to consider the question itself
if its
jurisdiction was challenged in proceedings before it,I ts decision on
that score would in no sense be one which has any
status
de
jure
and it would be amenable to challenge in a court of law even in the
absence of any statutorily provided remedy by way of appeal
or
review. If it decided that it had jurisdiction and it was wrong, its
hearing of the case would amount to an act which was
ultra
vires
and of no force or effect. A party who contests the jurisdiction of
such a tribunal in the sense that the tribunal's very right
to exist
is disputed, should not be obliged to seek a ruling on jurisdiction
from it when it has no jurisdiction
de
jure
to determine the question, and when its
de
facto
decision thereanent would bind no one
de
jure
and would immediately be vulnerable to being nullified by the
decision of a court of law.’
The following
observations can be gleaned from these judgments:
A tribunal which is a
creature of statute cannot confer upon itself powers which have not
been conferred upon it by the empowering
statute.
Where such tribunal’s
entitlement to exercise a power is dependent upon the pre-existence
of a certain fact or state of
affairs (a so-called ‘jurisdictional
fact’) which fact or state of affairs the tribunal is not
empowered to determine,
the existence of such fact or state of
affairs must objectively exist in order for the tribunal to
exercise such power which
has been conferred upon it.
Practically, a tribunal
may consider whether the fact or state of affairs is in existence
before it may exercise its own powers.
But where the tribunal
does so, it does so purely as a matter of convenience; any finding
which the tribunal makes regarding
such fact or state of affairs is
binding upon no one: neither the parties nor a court subsequently
called upon to determine
the matter, and it accordingly has no
legal effect.
A party disputing the
tribunal’s jurisdiction to entertain the issue is not obliged
to seek a ruling from such tribunal.
Where, however, a
decision is made by such tribunal, it may immediately be challenged
in a court of law.
But it seems to me that
where the principle arises in a setting such as present, it is more
easily stated than applied. These
judgments do not expressly state
what is to become of the evidence led and the proceedings held
before the tribunal in order
to prove the existence of the
jurisdictional fact. Are the parties bound by those proceedings or
are they at liberty to lead
evidence afresh including evidence not
led before the tribunal? If the parties are to proceed on the record
of evidence gathered
before the tribunal, what is the Court to make
of the findings of fact and credibility made by the tribunal? Is it
bound by those
findings in the same way that an appeal court (rather
than a review court) is bound?
5
After all, the tribunal
was much better placed to observe the witnesses and to make
credibility and factual findings.
6
If the Court is not bound by the findings of fact and credibility
made by the tribunal, how is it to determine disputes on such
facts
which arise on the record? Is it to adopt a hybrid approach where
the issue regarding the dismissal (the jurisdictional
issue) is to
be referred to oral evidence with, depending upon its finding on
whether there was a dismissal, the balance to be
determined upon the
record?
The implication of the
above-quoted
dicta
in the
SA Rugby Players
and
Haffajee
judgments is that the parties are bound by nothing
done by or before the tribunal which concerned the jurisdictional
fact and
that if the finding made by the tribunal on that
jurisdictional fact is challenged, evidence may be led afresh before
the Labour
Court or High Court, as the case may be, and a finding
made afresh by that Court.
These issues were not
dealt with in express terms in any judgment I have come across.
There are, however,
dicta
in some cases which
appear to support the views expressed above and
dicta
in other cases which
appear to conflict with them.
In
Sanlam
Life Insurance Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
7
the Labour Appeal Court
held that where the applicant disputed that there was an
employer-employee relationship (and therefore
that the CCMA had
jurisdiction) the Labour Court was called upon ‘to decide
de
novo
’
whether
an employer-employee relationship existed.
8
On the other hand, in
Phera v
Education Labour Relations Council and Others,
9
Tlaletsi AJA also faced
with the question of whether an employer-employee relationship
existed held that the question which the
Labour Court had to
consider when reviewing an arbitrator’s award on the question
of jurisdiction, was ‘whether the
material that was placed
before the commissioner’ established that the CCMA or
bargaining council, as the case may be,
had jurisdiction to
entertain the dispute.
10
In general, the approach
adopted by the Courts appears to have been to determine the
jurisdictional fact on the record which served
before the arbitrator
without being bound by any of the findings made by the arbitrator in
respect of that jurisdictional fact.
This is the approach I will
adopt for the purpose of this case, having proper regard to the
applicable principles relating to
the resolution of factual
disputes,
11
but I do not think that
the issues which I have raised above have been authoritatively
resolved.
What is meant by
“constructive dismissal”?
In general the phrase
‘constructive’ is to be contrasted with ‘actual’
and connotes that a transaction
or operation has not really taken
place but something which can be regarded as its equivalent has.
12
Our law introduces
similar fictions in a variety of settings: the doctrine of
constructive notice, constructive knowledge,
13
constructive desertion,
14
constructive delivery
and constructive breaking and entering
15
are all examples of such
situations. What is common in each instance is the fact that the
applicable law requires the existence
of one fact (such as notice,
knowledge, desertion, delivery, etc.), but accepts something
different as constituting the equivalent
of the first fact.
Whilst the term
‘constructive dismissal’ is routinely used to describe a
dismissal under s 186(1) (e) of the LRA,
that term does not appear
in the statute itself.
The proper meaning to be
given to s. 186(1) (e) of the LRA, must, in my view, commence with a
consideration of the words used
in that section. I have quoted that
section in full above and need not repeat it here.
In
Natal
Joint Municipal Pension Fund v Endumeni Municipality
16
Wallis JA dealt with the
concept of interpretation of documents (whether they be statutes,
contracts, wills or otherwise). He
explained that –
‘
The
present state of the law can be expressed as follows: Interpretation
is the process of attributing meaning to the words used
in a
document, be it legislation, some other statutory instrument, or
contract, having regard to the context provided by reading
the
particular provision or provisions in the light of the document as a
whole and the circumstances attendant upon its coming
into existence.
Whatever the nature of the document, consideration must be given to
the language used in the light of the ordinary
rules of grammar and
syntax; the context in which the provision appears; the apparent
purpose to which it is directed and the material
known to those
responsible for its production. Where more than one meaning is
possible each possibility must be weighed in the
light of all these
factors. The process is objective, not subjective. A sensible meaning
is to be preferred to one that leads to
insensible or unbusinesslike
results or undermines the apparent purpose of the document. Judges
must be alert to, and guard against,
the temptation to substitute
what they regard as reasonable, sensible or businesslike for the
words actually used. To do so in
regard to a statute or statutory
instrument is to cross the divide between interpretation and
legislation; in a contractual context
it is to make a contract for
the parties other than the one they in fact made. The 'inevitable
point of departure is the language
of the provision itself', read in
context and having regard to the purpose of the provision and the
background to the preparation
and production of the document.
…
It
clearly adopts as the proper approach to the interpretation of
documents the second of the two possible approaches mentioned
by
Schreiner JA in
Jaga
v Dönges NO and Another; Bhana v Dönges NO and Another
namely
that from the outset one considers the context and the language
together, with neither predominating over the other. This
is the
approach that courts in South Africa should now follow…’
17
Thus, the proper
approach to interpretation is to consider:
The language used in
the document.
The context in which
the provision appears (in the rest of the document).
The purpose to which
the provision was directed.
The background to the
preparation and production of the document.
Whilst none of the
factors is to have predominance over the other, the ‘inevitable
point of departure’ is the language
of the provision.
The provisions of the
LRA (like all other statutes enacted to give effect to
constitutional rights) must be interpreted in a ‘purposive’

manner so as to give effect to the purpose of the legislation and
the values enshrined in the Constitution. However, as Sachs
J
observed in
South
African Police Service v Public Servants Association
:
18
‘
Interpreting
statutes within the context of the Constitution will not require the
distortion of language so as to extract meaning
beyond that which the
words can reasonably bear. It does, however, require that the
language used be interpreted as far as possible,
and without undue
strain, so as to favour compliance with the Constitution. This in
turn will often necessitate close attention
to the socio-economic and
institutional context in which a provision under examination
functions. In addition it will be important
to pay attention to the
specific factual context that triggers the problem requiring
solution.’
Thus, in giving effect
to the purpose of the provision a court is not at liberty to adopt a
meaning divorced from the actual language
of the statute.
19
Provided the meaning of
the words used is clear, that is the meaning to be ascribed to a
word or phrase used in a statute and
a court is not at liberty under
the guise of ‘purposive interpretation’ to stray from
that meaning.
20
It appears from the
language of s. 186(1)(e) of the LRA that for there to be a dismissal
under its provisions, the following facts
have to be present:
21
The employee must have
terminated the contract of employment.
The termination may
have been with or without notice.
The reason for the
employee terminating the contract of employment must have been the
conduct of the employer.
Such conduct must have
made continued employment intolerable for the employee.
The
Collins
English Dictionary
defines
“intolerable” as “[m]ore than can be tolerated or
endured; insufferable.” It is, in short, something
which is
simply too great to bear. This is borne out by the various synonyms
ascribed to the word in
Roget’s
Thesaurus
:
22
‘
insufferable,
impossible, from hell, insupportable, unendurable, unbearable; past
bearing, past enduring, not to be borne, not to
be endured, not to be
put up with; extreme, beyond the limits of tolerance, more than flesh
and blood can stand …’
Whilst the phrase
‘constructive dismissal’ may be a convenient short-hand
phrase to describe s186 (1) (e) dismissals,
it seems to me that it
would be more useful to use the terminology actually employed by the
Legislature.
23
So much, then, for the
language.
I turn now to consider
the context. Section 186(1)(e) of the LRA forms part of a section
dealing with dismissals and part of a
chapter dealing with the right
not to be unfairly dismissed or subjected to unfair labour
practices. Moreover, s. 3 of the LRA
enjoins a person applying the
LRA to interpret its provisions so as to give effect to its primary
objects and in compliance with
the Constitution and the public
international obligations of the Republic. The primary objects of
the LRA are set out in s. 1
and include the regulation and giving
effect to the rights entrenched in s. 23 of the Constitution.
24
Thus, in its context, s.
186(1) (e) must reflect the fundamental right of every person to
fair labour practices enshrined in s.
23 of the Constitution.
Fairness, in the context of unfair dismissals, must be considered
from the perspective of both employer
and employee.
I turn now to consider
the purpose of s. 186(1) (e) of the LRA and the background to its
application. I should observe that the
purpose of the section is to
be gleaned from the historical context in which constructive
dismissal came to form part of our
law under the previous Labour
Relations Act
25
and it is this context
which informed the Legislature’s adoption of s. 186(1)(e).
Therefore, in the context of s. 186(1)
(e) the enquiry into the
purpose and background converge and should be considered
simultaneously.
The phrase ‘constructive
dismissal’ is one which was imported into South African law
from the United Kingdom.
To consider its
evolution from UK law into our own the analysis must begin with the
position in the United Kingdom.
The position in the
United Kingdom
A useful starting point
is the case of
Western
Excavating (ECC) Ltd v. Sharp
26
in which the Court of
Appeal had to consider whether an employee was constructively
dismissed under the then Trade Union and Labour
Relations Act 1974.
It appears from the
opinion of Lord Denning MR in that case that in terms of the
relevant provision (paragraph 5(2) (c) of Schedule
1 to the Act) an
employer would be taken to have dismissed an employee “if, but
only if” the employee terminated
the contract of employment
with or without notice “in circumstances such that he is
entitled to terminate it without notice
by reason of the employer’s
conduct”.
Lord Denning MR noted
that there were two schools of thought on the proper interpretation
to be given to paragraph 5(2)(c), the
one school applying what the
learned Judge referred to as ‘the contract test’ and the
other school applying what
he referred to as ‘the
unreasonableness test’.
The learned Master of
the Rolls summarised ‘the contract test’ thus:
‘
On
the one hand, it is said that the words of Sch 1, para 5(2)(c), to
the 1974 Act express a legal concept which is already well
settled in
the books on contract under the rubric ‘Discharge by breach’.
If the employer is guilty of conduct which
is a significant breach
going to the root of the contract of employment, or which shows that
the employer no longer intends to
be bound by one or more of the
essential terms of the contract, then the employee is entitled to
treat himself as discharged from
any further performance. If he does
so, then he terminates the contract by reason of the employer’s
conduct. He is constructively
dismissed. The employee is entitled in
those circumstances to leave at the instant without giving any notice
at all or, alternatively,
he may give notice and say he is leaving at
the end of the notice. But the conduct must in either case be
sufficiently serious
to entitle him to leave at once. Moreover, he
must make up his mind soon after the conduct of which he complains;
for, if he continues
for any length of time without leaving, he will
lose his right to treat himself as discharged. He will be regarded as
having elected
to affirm the contract.’
27
The ‘unreasonableness
test’, the learned Master of the Rolls summarised as follows:
‘
On
the other hand, it is said that the words of Sch 1, para 5(2)(c) do
not express any settled legal concept. They introduce a new
concept
into contracts of employment. It is that the employer must act
reasonably in his treatment of his employees. If he conducts
himself
or his affairs so unreasonably that the employee cannot fairly be
expected to put up with it any longer, the employee is
justified in
leaving. He can go, with or without giving notice, and claim
compensation for unfair dismissal.
It
would seem that this new concept of ‘unreasonable conduct’
is very similar to the concept of ‘unfairness’
as
described in Sch 1, para 6(8), which says:
“…
the
determination of the question whether the dismissal was fair or
unfair, having regard to the reason shown by the employer, shall

depend on whether the employer can satisfy the tribunal that in the
circumstances (having regard to equity and the substantial
merits of
the case) he acted reasonably in treating it as a sufficient reason
for dismissing the employee.”
Those
who adopt the “unreasonableness test” for dismissal say
quite frankly that it is the same as the ‘unreasonableness’

test for fairness. That was the view taken by Megaw LJ in
Turner v
London Transport Executive
([1977] ICR 952 at 964). He said:
‘
So
far as (c) is concerned … the wording of this sub-paragraph is
not a wording which involves, or implies, the same concept
as the
common law concept of fundamental breach of a contract resulting in
its unilateral repudiation and acceptance of that unilateral

repudiation by the innocent party. The employer’s “conduct”
here is employer’s conduct to be adjudged by
the industrial
tribunal by the criteria which they regard as right and fair in
respect of a case in which the issue is whether
or not there has been
“unfair” dismissal. ’
28
Ultimately, Lord Denning
MR and the remainder of the court accepted that the contract test
was to be preferred. The reasoning
of the learned law Lord is an
exercise in statutory interpretation and need not be considered
here. However, in arriving at his
conclusion he made an observation
which is pertinent:
‘
Paragraph
5(2)(
c
)
deals with the cases where the employee himself terminates the
contract by saying: “
I
can’t stand it any longer
.
I want my cards.’
29
(Emphasis
added)
The emphasised words
reflect the notion of intolerability which was to find its way into
the language of s. 186(1) (e) of our
LRA.
This then settled the
issue in English law, but in arriving at its conclusion, the Court
recognised that it was a matter of statutory
interpretation and
regard had to be had to the specific statute in question.
Subsequently, in the
case of
Woods
v. W M Car Services (Peterborough) Ltd
30
the Employment Appeal
Tribunal held:
‘
In
our view it is clearly established that there is implied in a
contract of employment a term that the employers will not, without

reasonable and proper cause, conduct themselves in a manner
calculated or likely to destroy or seriously damage the relationship

of confidence and trust between employer and employee:
Courthaulds
Northern Textiles Ltd v Andrew
[1979] IRLR 84.
To constitute a breach of this implied term, it is
not necessary to show that the employer intended any repudiation of
the contract:
The Tribunal’s function is to look at the
employer’s conduct as a whole and determine whether it is such
that its effect,
judged reasonably and sensibly, is such that the
employee cannot be expected to put up with it: see
BAC
Ltd v. Austin
[1978] IRLR 332
and
Post
Office v. Roberts
[1980] IRLR 347.
The conduct of the parties has to be looked at as a
whole and its cumulative impact assessed:
Post
Office v Roberts
(supra) paragraph 50.
We
regard this implied term as one of great importance in good
industrial relations. Quite apart from the inherent desirability
of
requiring both employer and employee to behave in the way required by
such a term, there is a more technical reason for its
importance. The
statutory right of an employee who ceases to be employed to complain
that he has been unfairly dismissed is wholly
dependent on his
showing that he has been “dismissed”. In the ordinary
case, where an employer in fact dismisses the
employee … this
normally presents no difficulty. The difficulty arises in cases of
constructive dismissal falling within
s. 55(2)(c) where the employee
has resigned due to the behaviour of the employer. As is well known,
there used to be conflicting
decisions as to whether, in order to
constitute constructive dismissal, the conduct of the employer had to
amount to a repudiation
of the contract at common law or whether it
was sufficient if the employer’s conduct was, in lay terms, so
unreasonable that
an employee could not be expected to put up with
it. In
Western Excavating (ECC) v Sharp
(supra) this conflict
was resolved in favour of the view that the conduct of the employer
had to amount to a repudiation of the
contract at common law.
Accordingly, in cases of constructive dismissal, an employee has no
remedy even if his employer has behaved
unfairly, unless it can be
shown that the employer’s conduct amounts to a fundamental
breach of the contract.’
That decision was taken
on appeal, but the appeal failed.
31
The position in South
Africa under the Labour Relations Act, 1956
Under the 1956 LRA the
Industrial Court considered unfair dismissals in the scope of its
unfair labour practice jurisdiction.
An unfair labour
practice was defined under that Act as:
‘
any
act or omission, other than a strike or lock-out, which has or may
have the effect that –
(i)
any employee or class of employees is or may be unfairly affected or
that his or their employment opportunities or work security
is or may
be prejudiced or jeopardized thereby’.
An “employee”,
in turn, was defined as –
‘
any
person who is employed by or working for any employer and receiving
or entitled to receive any remuneration, and, subject to
subsection
(3), any other person whomsoever who in any manner assists in the
carrying on or conducting of the business of an employer’
The establishment of
conciliation boards and the invocation of the Industrial Court’s
jurisdiction could, except in certain
limited circumstances, only be
initiated by employers (or employer organisations) and employees (or
trade unions).
Thus, on a narrow
interpretation of the 1956 LRA, an employee who had been dismissed
ceased, upon his or her dismissal, to be
an employee as defined in
the Act and would not be entitled to relief under the Act. There
were, however, other provisions in
the Act which made it clear that
it was to be extended to dismissed employees as well and, therefore,
that a strict interpretation
was not warranted.
32
The courts thus had little difficulty in finding that a person who
had been dismissed by his or her employer (and was accordingly,
no
longer an “employee” as contemplated at common law) was
nevertheless an employee for purposes of the unfair labour
practice
jurisdiction of the Industrial Court.
33
In
National
Automobile and Allied Workers Union (now known as National Union of
Metalworkers of SA) v Borg-Warner SA (Pty) Ltd
Van
den Heever JA held:
‘
The
relationship envisaged by the Act between “employer” and
“employee” is therefore clearly not one that
terminates
as it would at common law. Cases accepting that the provisions of the
Act do not relate solely to the enforcement of
legal (common-law)
rights, are legion. Cf
Marievale
Consolidated Mines Ltd v President of the Industrial Court and others
1986
(2) SA 485
(T) at 498I-499H; (1986) 7
ILJ
152
(T); and
Consolidated
Frame Cotton Corporation Ltd v President of the Industrial Court and
others
1986
(3) SA 786
(A); (1986) 7
ILJ
489
(A). The fact that the definition is framed in the present tense (by
the use of the phrase “is employed”) cannot
alter the
fact that other sections of the Act already referred to make it clear
that ex-employees are also included within its
terms.
…
It
is therefore sufficient that the legislature clearly had in mind that
once a particular employment relationship is established,
the parties
to it remain “employee” and “employer” as
defined, beyond the point of time at which the relationship
would
have terminated under the common law. Where it includes also former
employees seeking re-employment or reinstatement, it
has placed no
limitation suggesting when - or why - a former employee no longer
falls within the definition. What is clear, is
that when both parties
so agree, or when equity permits, the relationship does come to an
end.’
34
But those cases in which
an employee resigned posed added difficulties. This was so because
at common law, a resignation was a
unilateral act which brought
about a termination of the employment contract, and required no
agreement from the employer.
35
Thus, an employee who
resigned would, ordinarily, not be entitled to activate the court’s
jurisdiction.
In
Jooste
v Transnet Ltd t/a SA Airways,
36
the old Labour Appeal
Court (per Myburg J, as he then was), with reference to the
Borg-Warner
case,
supra
,
noted:
‘
The
case of an applicant who was actually dismissed by the employer
raises no difficulty in regard to jurisdiction. What is much
more
problematic is the case of an applicant who resigned his employment.
It seems to me that if he did so with the intention to
terminate the
employment relationship he cannot be an “employee” within
the meaning ascribed to the word by the LRA,
as interpreted in the
Borg-Warner
case,
and the Industrial Court will not have jurisdiction to determine any
dispute between the applicant and his former employer.
A
fortiori
,
if the applicant resigns in terms of an agreement with his employer
that they will go their separate ways, he ceases to be an
employee in
terms of the LRA and cannot seek redress from the Industrial Court.
An agreement to end the employment relationship
is common. It is
often accompanied by a resignation by the employee. A resignation
which is part of an agreement to terminate the
employment
relationship puts an end to the status of the former employee as an
“employee” in terms of the LRA.’
37
Against this backdrop,
the Labour Appeal Court examined the concept of constructive
dismissal in our law. Myburg J noted that
it was not a concept that
appeared in the 1956 LRA or any other South African statute and did
not form part of our common law.
What was however known to our
common law, said the learned Judge, was the concept of repudiation.
38
The learned Judge then
examined the history of constructive dismissal in the United
Kingdom:
‘
In
the United Kingdom, in terms of s 55(2)(c) of the Employment
Protection (Consolidation) Act of 1978, an employee is treated as

dismissed by his employer if the employee terminates the contract,
with or without notice, in circumstances such that he is entitled
to
terminate it without notice by reason of the employer's conduct.
Anderman
The
Law of Unfair Dismissal
(2
ed) at 63-4 states that para (c) was introduced –
'to
avoid the possibility that employers might attempt to circumvent the
statutory protection by pressurising an employee to resign.
It is
being interpreted, however, to limit the kind of pressure by the
employer that entitles an employee to resign solely to conduct
which
is contractually repudiatory....Whilst the resignation itself may be
with or without notice, the circumstances must be such
as to justify
a resignation without notice. By its terms, therefore, it presupposes
contractually repudiatory conduct by the employer
since at common law
only a wrongful repudiation entitles an employee to resign without
notice'.’
39
Myburg J held that the
1956 LRA had ‘no equivalent provision to s 55(2)(c) of the
Employment Protection Consolidation Act’,
but had conferred ‘a
wide discretion on the Industrial Court in terms of s 46(9)(c) to
determine a dispute concerning an
alleged unfair labour practice’.
40
The learned Judge held
that in a case based upon constructive dismissal the following
factual enquiries had to be conducted:
First, the employee had
to establish that he did not intend to terminate the employment
relationship.
41
Secondly, whether ‘the
employer did constructively dismiss him’.
42
The first enquiry,
strictly speaking, had nothing to do with constructive dismissal,
but was concerned with the jurisdiction of
the old Industrial Court
to determine the matter because, as noted above, if the employee
intended to resign, he ceased to be
an employee and the Industrial
Court had no jurisdiction to determine the dispute.
43
Referring to the
decision of the Employment Appeal Tribunal in
Woods
v W M Car Services
,
supra
,
Myburg J held that, subject to the fact that it was necessary find
an implied term of the type set out therein, the approach
which
commended itself to him was that referred to above,
viz
.
that an employee was entitled to expect that his employer would not,
without reasonable and proper cause conduct itself in a
manner
calculated or likely to destroy or seriously damage the relationship
of confidence and trust; whether judged reasonably
and sensibly the
conduct of the employer was such that an employee could not be
expected to put up with it.
44
This then gave content
to the concept of ‘constructive dismissal’ in our law
under the 1956 LRA.
In
Pretoria
Society for the Care of the Retarded v. Loots
,
supra
,
the Labour Appeal Court (now sitting, since the advent of the 1995
LRA, as a full bench) had cause to reconsider the concept
of
constructive dismissal. Nicholson JA (Myburg JP and Froneman DJP
concurring), endorsing, subject to certain limitations, the

principles laid down in
Jooste’s
case, held:
‘
When
an employee resigns or terminates the contract as a result of
constructive dismissal such employee is in fact indicating that
the
situation
has
become so unbearable
that
the employee cannot fulfil what is the employee's most important
function, namely to work. The employee is in effect saying
that he or
she would have carried on working indefinitely had the unbearable
situation not been created. She does so on the basis
that she does
not believe that the employer will ever reform or abandon the pattern
of creating an unbearable work environment.
If she is wrong in this
assumption and the employer proves that her fears were unfounded then
she has not been constructively dismissed
and her conduct proves that
she has in fact resigned.
Where
she proves the creation of the unbearable work environment she is
entitled to say that by doing so the employer is repudiating
the
contract and she has a choice either to stand by the contract or
accept the repudiation and the contract comes to an end;
Venter
v Livni
1950
(1) SA 524
(T) at 528. In that circumstance, if it constitutes an
unfair labour practice, the employee is entitled to sue for
compensation
in terms of s 46(9)(c) of the Act.
In
the latter instance she is demanding, therefore, that compensation be
paid because it is the employer's unlawful act that has
precipitated
the refusal to work and the acceptance of the employer's repudiation.
The two envisaged steps are not always easily
separable as the
enquiry into whether the employee intended to terminate the
employment by accepting the repudiation will often
involve an enquiry
into whether such resignation was voluntary or not. The two stages
are not necessarily water tight compartments.’
45
(Emphasis
added)
The “two stages”
referred to by Nicholson JA were those contemplated in the
Jooste
case referred to above.
Thus, it was in the
context of the old Industrial Court’s unfair labour practice
jurisdiction that the English law of constructive
dismissal passed
into South African labour law.
Constructive dismissal
under the
Labour Relations Act, 1995
When the 1995 LRA came
into effect the Labour Court naturally turned to the law on
constructive dismissal under the 1956 LRA for
guidance in respect of
s. 186(1)(e)
of the
1995 LRA.
46
In one of the first
cases brought to the Labour Court on the subject Landman J (as he
then was) held that the scheme of the 1995
LRA on the subject of
constructive dismissal ‘was to continue and to utilize the
concept of constructive dismissal’
as set out in the pre-1995
LRA cases. The learned Judge nevertheless recognised that the
principles set out in those cases were
‘not adopted
holus
bolus
for
the new Act is a codification of the old law and with codification
has come certain refinements’.
47
Under the 1956 LRA, it
will be recalled, constructive dismissal was intertwined with the
doctrine of repudiation. In
Albany
Bakeries Ltd v Van Wyk
and
Others
48
the Labour Appeal Court,
giving vent to the language of s 186(1)(e), severed the cords of
repudiation. Pillay AJA, rendering the
judgment of the unanimous
Court pointed out that:
‘
[23]
Since the advent of the [1995] Act the prime and only consideration
is whether the employer made continued employment intolerable
for the
employee.
[24]
If the demotion is a repudiation which would entitle the employee to
cancel the contract, but does not amount to making life
intolerable,
it is insufficient; if it is sufficient to make life intolerable, it
is relevant.’
With respect, this must
be correct.
The Courts have held
that employment must objectively have been rendered intolerable in
the sense that no reasonable employee
could be expected to put up
with the conduct of the employer.
49
At the same time the
employee must himself or herself have found such conduct
intolerable.
In
Mafomane
v Rustenburg Platinum Mines Ltd,
50
Trengove AJ pointed out
that:
‘
[49]
The requirement that the employee prove that his or her continued
employment had become “intolerable”, has the
following
implications:
49.1
The test is an objective one. It means that the employee must prove
at least two things. The first is that the circumstances
had become
so unbearable that the employee could no longer reasonably be
expected to endure them. The second is that there was
no reasonable
alternative to escape those unbearable circumstances, than to resign.
49.2
When the latter issue is considered, it must be borne in mind that
the termination of an employment relationship is usually
only
appropriate as a remedy of last resort. An employee who resigns to
escape an oppressive working environment despite the fact
that there
are other avenues of escape open to him or her, will usually find it
hard to characterise the resignation as a constructive
dismissal. The
ultimate test, however, remains whether it was reasonable to resign
in order to escape the intolerable working environment.
That is
always a question of fact that depends on the circumstances of every
case.
49.3
I have thus far spoken of circumstances that render continued
employment “intolerable” in the sense that the employee

can no longer “reasonably” be required to endure them, as
if there is a single objective standard by which those matters
can be
judged. But that is often not the case. The question whether
continued employment has become “intolerable” or
whether
the employee can no longer “reasonably” be required to
endure it, are based on value judgments which sometimes
vitally
depend on the perspective from which they are made. A case where a
black employee suffers race discrimination by a white
employer is a
good example. The assessment whether the race discrimination is so
severe as to be intolerable, will often depend
on the background and
the perspective of the individual making it. What may seem
inconsequential from the perspective of someone
who has never
suffered the humility and denigration of race discrimination, may be
regarded far more seriously and indeed intolerable
from the
perspective of a lifelong victim of race discrimination and the
humility and denigration that it entailed. From whose
perspective
then, should one judge whether the race discrimination was such that
the employee could not reasonably have been expected
to endure it? It
seems to me that the judgment must be made from the perspective of a
reasonable person in the shoes of the employee.
Section 186(1) (e)
firstly says that continued employment must have been made
intolerable “for the employee”. It suggests
that the
assessment whether continued employment has become intolerable must
be made from the employee’s perspective. The
purpose of the
section is secondly to give effect to the right of every employee in
terms of section 185(b) of the LRA and ultimately
in terms of section
23(1) of the Constitution, not to be subjected to unfair labour
practices. This right requires that the question
whether continued
employment has been rendered intolerable, be judged from the
perspective of the employee. It would be unfair
to deny the remedies
of dismissal to employees who resign because their continued
employment became intolerable from their perspective.
49.4
The conclusion that the question whether the employee’s
continued employment has become intolerable in that he or she
cannot
“reasonably” be required to endure it, must be made from
the perspective of a reasonable person in the shoes
of the employee,
obviously does not mean that the employee’s own views must
prevail. The test remains an objective one. The
idiosyncrasies of the
particular employee are not the benchmark. The assessment must be
made from the perspective of a reasonable
person in the shoes of the
employee, that is, from the perspective of a reasonable person with
the same background, life experience
and position.’
However, in
Strategic
Liquor Services v Mvumbi NO,
51
the Constitutional Court held:
‘
[3]
Section 185(a)
of the
Labour Relations Act confers
'the right not to
be unfairly dismissed'.
Section 186(e)
defines 'dismissal' as
including a situation where 'an employee terminated a contract of
employment with or without notice because
the employer made continued
employment intolerable for the employee'. This definition gives
statutory embodiment to the jurisprudence
of constructive dismissal
that preceded it.
The
CCMA concluded that Mr Redgard had been constructively dismissed. In
its application to this court, the employer contends that
the CCMA -
and the Labour Courts in refusing to review its determination -
misconceived the jurisdictional prerequisites for constructive

dismissal, since on Mr Redgard's own version he had a choice whether
to resign or be subjected to poor performance procedures.
It asks
this court to step in.
[4]
There are two reasons why the invitation cannot be accepted. The
first is that the employer's submission overlooks Mr Redgard's

uncontested evidence to the effect that his work situation had become
intolerable and that the alternative to resignation was a
sham since
the employer would find a reason to dismiss him anyhow. This means
there was no 'choice'. The second is that it misconceives
the test
for constructive dismissal, which does not require that the employee
have no choice but to resign, but only that the employer
should have
made continued employment intolerable.’ (Footnotes omitted)
It seems to me that this
latter statement must be understood to exclude a ‘reasonable’
choice.
52
If it was intended to
mean that an employee was not required to demonstrate that he or she
had no ‘reasonable’ alternatives
to resignation it would
be in conflict with the language of the section. Quite apart from
all the authorities on the question,
the ordinary meaning of the
word “intolerable” connotes the absence of a
(reasonable) choice. I emphasise the meaning
of the phrase
intolerable and its various synonyms as set out above. If an
employee has reasonable alternatives, it implies that
the conduct of
the employer is not unbearable or not beyond the limits of
tolerance.
Thus, in
Albany
Bakeries
,
supra
,
Pillay AJA, with reference to the judgment of Conradie JA in
Old
Mutual Group Schemes v Dreyer and Another
53
held:
‘
[28]
Conradie JA referred to the
Loots
case where mention was also made of a belief of the employee that the
employer would never reform or abandon the pattern of creating
an
unbearable work environment. How will an employee ever prove that if
he has not adopted other suitable remedies available to
him? It is,
firstly, also desirable that any solution falling short of
resignation be attempted as it preserves the working relationship,

which is clearly what both parties presumably desire. Secondly, from
the very concept of intolerability one must conclude that
it does not
exist if there is a practical or legal solution to the allegedly
oppressive conduct. Finally, it might well smack of
opportunism for
an employee to leave when he alleges that life is intolerable but
there is a perfectly legitimate avenue open to
alleviate his distress
and solve his problem.
[29]
….
[30]
In addition, even if an employee was dissatisfied with the manner in
which he was dealt with in terms of the grievance procedure,
he could
have made use of the machinery of the Act. Schedule 7 item 2(1) (b)
of the Act provides that an employer is guilty of
an unfair labour
practice if it commits any form of unfair conduct relating to the
provision of benefits to an employee. A person
alleging an unfair
labour practice relating to demotion may refer the matter to a
council or if no council has jurisdiction to
the CCMA for
conciliation and arbitration. The first respondent did not make use
of any of these procedures.’
If an employee finds
herself confronted by conduct which she considers intolerable, but
the employee can avoid such (intolerable)
conduct by taking some
course of action which is reasonably within her power, other than
resignation, then the employee should
follow such other course of
action. To hold that the employee is entitled in such circumstances
to resign and claim constructive
dismissal would, in my view,
undermine the right to fair labour practices enshrined in s. 23 of
the Constitution which requires
that fairness be viewed from the
perspective of both employer and employee.
Constructive dismissal
in different contexts
In the recent case of
Murray v Minister of Defence
,
supra
, the Court had to
consider the scope of constructive dismissal. Although that case
arose after the 1995 LRA had already come
into effect, the LRA was
not applicable because it involved the SA National Defence Force
whose members were excluded from the
provisions of the 1995 LRA. It
was, however, common cause that the matter had to be considered in
light of the constitutional
rights to fair labour practices (s. 23
of the Constitution) and to human dignity.
Cameron JA held:
‘
However,
it is in my view best to understand the impact of these rights [the
Constitutional rights to fair labour practices and
human dignity] on
this case through the constitutional development of the common-law
contract of employment. This contract has
always imposed mutual
obligations of confidence and trust between employer and employee.
Developed as it must be to promote the
spirit, purport and objects of
the Bill of Rights, the common law of employment must be held to
impose on all employers a duty
of fair dealing at all times with
their employees - even those the LRA does not cover.’
54
The Court in
Murray v
Minister of Defence
endorsed the test adopted by Myburg J in
Jooste’s
case from the English law, Cameron JA making
two important observations:
First, the intolerable
work situation must be one which is of the employer’s making
or over which the employer has control.
55
Secondly, the employer
must be culpably responsible for the intolerable situation. In
other words, the employer must have lacked
‘reasonable and
proper cause’.
56
That then demonstrates
the historical background to the adoption of s. 186(1) (e) of the
LRA.
Having regard to the
aforesaid, it appears that the purpose of s. 186(1) (e) was to
ensure that the right of an employee not to
be unfairly dismissed (a
right entrenched in the LRA and s. 23 of the Constitution) was not
rendered nugatory because the employer,
instead of itself dismissing
the employee, made employment intolerable to the point where the
employee could no longer bear it
and therefore resigned.
These various factors
must be reflected in the meaning to be attributed to s. 186(1) (e)
of the LRA.
Was Mr Peyper’s
employment rendered intolerable by the applicant?
In my opinion it makes
no difference to the outcome which of the conflicting versions is to
be preferred. On Mr Peyper’s
own evidence it seems to me that
his employment had not become intolerable.
Mr Peyper explained that
Mr Carlson had confronted him on 13 June about his refusal to sign
the letter of 10 June 2011. That letter,
it will be recalled,
purported to demote Mr Peyper without holding any enquiry. Mr
Carlson chastised Mr Peyper for refusing to
sign the letter and
stated that he would simply go through the proper procedure and “we
can just do it the right way”.
If Mr Peyper had any reason to
doubt that “it” (the demotion) would be done properly,
he proffered none. His testimony
that Mr Carlson had terminated the
services of other staff without following any procedure, apart from
being legally irrelevant,
57
appears to have been
proffered to prove that Mr Carlson was true to his word and would
carry out his threat. However, the threat
in this case was that he
would follow the proper procedure.
In my view, Mr Peyper
should have accepted Mr Carlson’s undertaking to follow the
proper procedure. He could have raised
his defence to the
accusations before the chairperson of that enquiry and then awaited
the outcome. Mrs Carlson had informed
Mr Peyper that the enquiry
would be conducted by “the people”. It is not clear who
those people were, but it was
clear that it was someone other than
Mr or Mrs Carlson.
Moreover, Mr Peyper
testified that Mr Carlson informed him that he would discuss the
matter further with Mr Peyper upon his return
from Mozambique. This
meeting never took place. It is not clear why Mr Carlson did not
call for the meeting immediately upon
his return. In any event,
shortly after Mr Carlson returned Mr Peyper resigned. That meeting
might have been the precursor to
doing Mr Carlson doing it “the
right way”. Mr Carlson in his testimony implied as much.
Mr Peyper testified that
“it seemed to me” that he would be forced into a
position where he, left without the tools
necessary to achieve the
production bonuses, would be unable to perform. He testified that if
the “communication channels”
were taken away he would be
forced make mistakes and this would lead ultimately to him being
charged with poor work performance
and dismissed.
I assume that the
“communication channels” he refers to were the channels
for communicating with the clients, insurance
companies, and so
forth. The company had, it will be recalled, removed his mobile
telephone and instructed him not to have communications
with the
clients.
It thus seems to me that
the aforesaid scenario painted by Mr Peyper relates to his
perception of the working conditions in the
new position of workshop
foreman after the demotion became effective.
With respect, I fail to
see how this could amount to constructive dismissal.
In the first place, it
was not clear from the evidence that these channels of communication
were necessary for Mr Peyper to discharge
his functions as workshop
foreman.
Secondly, the scenario
painted by Mr Peyper was highly speculative. At best, for him, he
was seeking to draw an inference from
the fact that the ‘tools
of his trade’ had been removed, to demonstrate that it was
impossible to achieve certain
production criteria and, then, to draw
an inference from the fact that he had been given tasks which could
not be achieved to
demonstrate that the new post was a charade, a
“smokescreen” to get rid of him. On the evidence
tendered, it is difficult
to make these connections. Quite apart
from the fact that the evidence does not demonstrate that these
“tools” were
necessary in the new position, an attempt
to demonstrate that it was impossible to achieve certain production
levels would have
to be carefully explained with sufficient
supporting evidence. This was not done in the present case.
Thus, on Mr Peyper’s
scenario, he could have avoided being disciplined and ultimately
dismissed by not making any mistakes.
If he was hamstrung by
measures introduced by the employer he could, when charged with poor
work performance, raise this (the
fact that he had been hamstrung)
at the enquiry.
It seems to me that an
employee who anticipates that he or she will be subjected to unfair
treatment at some stage in the (possibly
distant) future must wait
for such treatment to materialise before resigning. Even if such
unfair treatment were to arise in
the future, it would still have to
be assessed at that stage whether the employee was entitled to
resign and claim intolerability.
I turn now to consider
the true reason for Mr Peyper’s resignation. If one pays close
attention to Mr Peyper’s testimony
it is apparent that he
found the unfolding events degrading.
58
He repeated this on
several occasions during his testimony. First some of the employees
working under him refused to take instructions
from him and then
client’s commiserated with him about the demotion. When
approached by the personnel manager (a person
named Colleen) who
sympathised with him, he told her “you have got a job to do,
lets just carry on with it, lets do what
we have to do”.
Indeed, Mr Peyper
testified that he told Mrs Carlson that he was so frustrated by the
humiliation he was experiencing he could
simply leave. If one
considers Mr Peyper’s letter of resignation, the humiliation
he was experiencing was the prime reason
advanced for resigning. The
question, thus, is whether Mr Peyper was justified in resigning. In
my opinion, he was not.
An employee relying upon
s 186(1) (e) of the LRA must demonstrate that employment had been
made intolerable by the employer. This
means that Mr Peyper had to
demonstrate that no reasonable employee could be expected to put up
with the situation which confronted
him and that such situation was
of the applicant’s making or within its control and that it
was culpably responsible.
Intolerability is a high
threshold, even if one accepts that there is no need to demonstrate
that the employee had reasonable
alternatives.
That junior staff
refused to take instructions from Mr Peyper does not appear to be
attributable to the applicant. In any event,
if Mr Peyper was
entitled to give them instructions and they refused, he should have
taken measures to have them disciplined.
I do not question the
embarrassment experienced by Mr Peyper. Objectively, however, the
situation had lasted for a short period
of time
59
and the situation had
not been fully resolved. Mr Carlson had not yet met with Mr Peyper
and, importantly, had not yet managed
himself to convey anything to
staff and clients. Thus, much of Mr Peyper’s embarrassment was
at that stage based upon his
perception of views held by others who
had or may have had very little insight into what was unfolding.
Furthermore, whilst I
accept, on the evidence led, that Mr Carlson was incorrect in
attributing the problems which the company
was experiencing to Mr
Peyper, I do not think that this was a mere subterfuge on the part
of Mr Carlson. Whilst Mr Peyper did
suggest that the new job was a
“smokescreen” to ultimately get rid of him, this was
based upon his refusal to accept
the terms offered by Mr Carlson
(and was in any event far-fetched). There was no suggestion by Mr
Peyper that Mr Carlson had
a general desire to get rid of him and
there was no evidence of Mr Carlson’s motive for doing so.
60
After all, it appeared
that Mr Peyper and Mr Carlson had a close relationship, even a
friendship.
Even if Mr Carlson was
wrong in attributing the woes of the company to Mr Peyper, he was
entitled to subject Mr Peyper to a performance
or disciplinary
enquiry as long as he had a genuine belief that it was warranted.
There had been complaints from insurance companies
about the
applicant’s repair work done to motor vehicles. Whether Mr
Peyper could be held responsible for these complaints
had ultimately
to be determined at an enquiry. On the face of it, Mr Carlson was
entitled to hold such enquiry even if the enquiry
would ultimately
come to the conclusion that Mr Peyper was not responsible for the
problem.
I should mention that
there were a number of alternatives (to resignation) reasonably
available to Mr Peyper. First, he could
have attended the
disciplinary enquiry and raised all his complaints at that hearing.
Secondly, if a final decision had been
taken on his demotion, he was
entitled to refer an unfair labour practice dispute to the
bargaining council in terms of s. 186(2)(a)
of the LRA.
Having determined this
matter on Mr Peyper’s version it is strictly speaking
unnecessary for me to consider the factual
disputes. There is,
however, one issue which was interrogated in some detail in argument
before me and which, out of fairness
to the parties, I should
examine. This is whether the demotion of Mr Peyper was final.
In my view the
surrounding evidence and common cause facts are inconsistent with a
final decision having been taken to demote
Mr Peyper. I say this for
the following reasons:
Mr Peyper testified
that immediately after the telephonic meeting on 6 June Mrs Carlson
informed him she would draw up the necessary
documentation and
addenda and had already scheduled a disciplinary hearing for
Thursday, 9 June 2011, but that such hearing
was avoidable.
This was consistent
with both Mr and Mrs Carlson’s evidence that if Mr Peyper was
not prepared to accept the demotion,
the company would have to
subject him to a disciplinary enquiry (which might ultimately have
resulted in the demotion).
The letter handed to Mr
Peyper on 10 June was not signed on behalf of the applicant.
Moreover, it contained a space for Mr Peyper
to sign and confirm
his agreement with the arrangement. Mrs Carlson testified that this
was because no final decision had been
taken on the demotion and
the letter was given to Mr Peyper for him to accept.
Mr Peyper also
testified that when he handed his own letter dated 10 June to Mrs
Carlson (on 13 June 2011) she remarked that
she knew she would
regret not having followed the disciplinary route (which she had
initially scheduled for 9 June 2011). This
is consistent with Mrs
Carlson’s evidence that she had presented Mr Peyper with
three options, but he had failed to respond
to the options in time
for her to proceed with the enquiry.
Finally, when Mr Peyper
and Mrs Carlson met on 10 June 2011 (during which she provided him
with the letter of the same date),
Mr Pepyer, on his own version,
stated that he did not agree with the contents of the letter.
I have quoted the
letter in full above. It indicates that it was decided at the
meeting of 6 June that Mr Peyper’s new
job title would be
Workshop Foreman “with immediate effect” and that no
disciplinary hearing was necessary.
The letter is, on the
face of it, open to the interpretation that management had decided
to demote Mr Peyper and that this decision
was final and therefore
no disciplinary action would be necessary. But if this is what was
decided at the meeting of 6 June,
Mr Peyper, would have relied on
the letter as proof of his assertion; he would not have stated, as
he did, that he disagreed
with it.
It is clear that a
discussion did take place on 6 June regarding the demotion of Mr
Peyper and his removal from the position.
Consistent with this Mr
Peyper was asked to return his mobile telephone, the Fortuna and
certain other items associated with
his position as workshop manager
and was asked not to have any communications with clients. These
facts are, however, equally
consistent with the applicant’s
case that Mr Peyper was to be temporarily removed from the position
until a hearing had
been conducted.
Mr Peyper testified that
Mr Carlson told him that he would not budge from his decision to
demote him. This implied that the decision
was final. Counsel for Mr
Peyper submitted that because Mr Peyper’s testimony in this
respect was never challenged, it
should be accepted. I agree with
that submission on the facts of the present case. However, I do not
think this statement made
by Mr Carlson can be understood in the
sense suggested on behalf of Mr Peyper.
Clearly, Mr Carlson
considered that unless Mr Peyper accepted the terms of the letter of
6 June 2011, he would have to be subjected
to a disciplinary
enquiry. Mr Peyper himself testified that this is what Mr Carlson
had stated and it was apparent from Mr Carlson’s
evidence that
this is what he had in mind.
Moreover, on My Peyper’s
own version Mrs Carlson informed him that an enquiry had already
been scheduled for 9 June 2011.
Mr Carlson could not
have taken a final decision whilst at the same time intending to
hold an enquiry. It seems to me that what
Mr Carlson had conveyed to
Mr Peyper was that he (Mr Carlson) had resolved that Mr Peyper was
to be demoted and would not be
persuaded by any representations
which Mr Peyper wished to make to him. However, if after such
discussion Mr Carlson could not
be persuaded, then Mr Peyper would
either have to accept Mr Carlson’s decision and the demotion
or be subjected to an enquiry
which would be conducted by somebody
else. It could not mean that the demotion was final without any
enquiry.
In the heads of argument
filed on behalf of Mr Peyper reference is made to a further factor
to support the conclusion that the
demotion was permanent. With
reference to a passage in the record, it was argued that Mr Peyper
confirmed that he had telephoned
Mr Carlson and complained that his
salary had been reduced to which Mr Carlson responded “Yes,
(I) reduced it”.
61
It is not clear to me
that Mr Peyper’s evidence should be understood in the manner
suggested in the heads of argument filed
on his behalf. The relevant
passage in the transcript reads as follows:
‘
MR
PEYPER
:
[Mr Carlson] turned around and I actually phoned him at one stage and
I’ve said to him I see that my salary has been reduced
[and] he
said to me yes he reduced it and he said to me he’s got to
start somewhere along the line to try and recover some
of the
workshop losses the problems that is in the workshop.’
Thus, the reason
advanced by Mr Carlson to Mr Peyper for making the deductions had
nothing to do with the demotion; it had to
do with the losses
suffered by the business.
62
In the circumstances, I
am satisfied that no final decision to demote Mr Peyper had been
taken.
Relief
I have set out the
nature of the relief sought by the applicant. It seeks an order that
the matter be referred back to the first
respondent to be determined
by a different arbitrator, alternatively that this Court substitute
the decision of the second respondent
with a finding that the third
respondent was not constructively dismissed.
Since the determination
of the jurisdictional issue is this Court’s to make, it would
be inappropriate for me to refer the
matter back to the bargaining
council.
The appropriate order is
the one I intend making. It is this:
The award of the second
respondent dated 6 December 2011 is hereby reviewed and set aside.
It is declared that the
applicant did not make the third respondent’s employment
intolerable and, therefore, did not dismiss
the third respondent
within the meaning of s. 186(1) (e) of the LRA.
The third respondent is
ordered to pay the costs of this application.
_______________
Hulley, AJ
Acting Judge of the
Labour Court
Appearances:
For the Applicant: H.
Gerber
Instructed by: Nothnagel
Attorneys
For Third Respondent: F.
Van der Merwe
Instructed by: Duke
Attorneys
1
Act
66 of 1995
2
SA
Rugby Players Association and Others v SA Rugby (Pty) Ltd and
Others; SA Rugby (Pty) Ltd v SA Rugby Players Association
(2008)
29
ILJ
2218 (LAC);
Member of the Executive Council,
Department of Health, Eastern Cape v Odendaal and Others
(2009)
30
ILJ
2093 (LC), at 2098C – 2099D
3
In
terms of s. 186(1)(b) of the LRA a dismissal means that ‘an
employee reasonably expected the employer to renew a fixed
term
contract of employment on the same or similar terms but the employer
offered to renew it on less favourable terms, or did
not renew it’.
4
[1996] ZASCA 17
;
1996
(3) SA 745
(A) at 751F – H
5
R
v Dhlumayo and
Another
1948 (2) SA 677
(A) at 705 –
706
6
supra
,
at 705
7
(2009)
30
ILJ
2903 (LAC).
8
At
2909C
9
(2012)
33
ILJ
2839 (LAC).
10
At
2844F
11
Stellenbosch
Farmers' Winery Group Ltd and Another v Martell et Cie and Others
2003 (1) SA 11
(SCA).
12
Jowitt’s
Dictionary of English Law
(3
rd
ed.) at 522. See
Murray v. Minister of Defence
2009 (3) SA 130
(SCA) at 136A –
D
13
Bonitas
Medical Aid Fund v Volkskas Bank Ltd
and Another
1992 (2)
SA 42
(W)
14
Froneman
v Froneman
1972 (4) SA 197
(T).
15
S
.
v Cupido
1975 (1) SA 537
(C).
16
2012
(4) SA 593
(SCA)
17
At
603F – 604E
18
2007
(3) SA 521
(CC), at
529B – C
19
S
v Zuma and Others
[1995] ZACC 1
;
1995 (2) SA 642
(CC), at paras 17-18
20
Michelin
Tyre Co (SA) (Pty) Ltd v Janse van Rensburg
and Others
2002 (5) SA 239
(SCA), at 242B/C
21
Solid
Doors (Pty) Ltd v Commissioner Theron & Others
(2004) 25
ILJ
2337 (LAC) at para. 28
22
Roget’s
Thesaurus of English Words and Phrases
23
“
[I]t
is difficult to see why it is convenient to say that X is Y as long
as one remembers that it is not Y but X, particularly
when one knows
that the consequences of X may be materially different to the
consequences of Y”, (Prof. D T Zeffertt, ‘Words,
Words,
Words …’,
Essays
in Honour of Ellison Kahn
(Juta,
1989), p. 363.)
24
Aviation
Union of South Africa and Another v South African Airways (Pty) Ltd
and Others
2012 (1) SA 321
(CC), at 330D – 331A
25
Labour
Relations Act, 28 of 1956, as amended
26
[1977] EWCA Civ 2
;
[1978]
1 All ER 713
(CA)
27
Western
Excavating v Sharp
,
supra
, at 717C – E.
28
Western
Excavating v Sharp
,
supra
, at 717f – 718a
29
Western
Excavating v Sharp
,
supra
, at 718f
30
[1981]
IRLR 347
(EAT) at 350.
31
Woods
v W M Car Services (Peterborough) Ltd
[1982] IRLR 415
(CA)
32
Brassey,
Cameron, Cheadle and Olivier,
The New Labour Law
(Juta,
1987), pp. 21 – 5
33
National
Automobile and Allied Workers Union (now known as National Union of
Metalworkers of SA) v Borg-Warner SA (Pty) Ltd
(1994) 15 ILJ 509
(A), at 518B – D; Brassey
et al
,
New Labour Law
,
op cit
, pp. 27 – 8
34
At
paras 518B – G
35
Rustenburg
Town Council v. Minister of Labour and Others
1942 TPD 220
;
Potgietersrust Hospital Board v Simons
1943 TPD 269.
36
(1995)
16
ILJ
629 (LAC). See too Brassey
et al
,
op cit
,
pp. 30 – 1
37
At
637H – 638A
38
At
636E – H
39
At
636H – 637A
40
At
637D-E
41
At
638A – C.
42
At
638D – E.
43
Pretoria
Society for the Care of the Retarded v. Loots
(1997) 18
ILJ
981 (LAC), at 984B – C
44
Jooste
v. Transnet Ltd
,
supra
, 638H – 639A
45
At
984D – G
46
Sappi
Craft (Pty) Ltd t/a Tugela Mills v Majaka NO and Others
(1998)
19
ILJ
1240 (LC);
Secunda Supermarket CC t/a Secunda Spar
and Another v Dreyer NO and Others
(1998) 19
ILJ
1584
(LC)
47
Sappi
Craft v Majaka
,
supra
, at 1249B – D
48
(2005)
26
ILJ
2142 (LAC), at 2148I – J
49
Lubbe
v. Absa Bank Bpk.
[1998] 12 BLLR 1224
(LAC), at para. 8;
SmithKline Beecham
(Pty) Ltd v Commission for Conciliation, Mediation and Arbitration
and Others
(2000) 21
ILJ
988 (LC),
Albany Bakeries
,
supra
,
at 2149D – 2150H
50
[2003]
10 BLLR 999
(LC)
51
2010
(2) SA 92
(CC)
52
In
SA Police Service v Safety and Security
Sectoral Bargaining Council and Others
(2012)
33 ILJ 453 (LC), at 461A – C Steenkamp J did not find it
necessary to draw this distinction.
53
(1999)
20
ILJ
2030 (LAC)
54
At
135A – B;
cf
SA Maritime Safety Authority v McKenzie
2010 (3) SA 601
(SCA), at 627F
55
At
138C
56
At
138D
57
Delew
v. Town Council of Springs
1945 TPD
128
58
There
is the possibility that Mr Peyper was influenced by his
deteriorating health, but no expert evidence was led in this respect

and I am unable to make a finding upon this. In any event, Mr Peyper
did not expressly indicate that he was influenced by this
factor.
59
The
initial meeting with
Mr Peyper took place on 6
June 2011 and by 14 June 2011 he had gone on leave. He never
returned to the workplace.
60
There
was a feint suggestion that Mr Carlson may have been aggrieved by
the relationship between Mr Peyper and Mr Carlson’s
father,
but this appears to be far-fetched and was not persisted in.
61
Third
respondent’s heads of argument at 14, para 14.4.2
62
An
employer is, of course, not entitled to make deductions contrary to
s. 34
of the
Basic Conditions of Employment Act, 75 of 1997
. This
issue was not raised.