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[2013] ZALCJHB 345
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Transnet Ltd t/a Transnet Capital Projects v South African Transport And Allied Workers Union obo Mbatha and Others (JR2608/09) [2013] ZALCJHB 345 (14 June 2013)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not
reportable
case
No: JR 2608/09
In
the matter between:
TRANSNET
LTD T/A
TRANSNET
CAPITAL
PROJECTS Applicant
and
SOUTH
AFRICAN TRANSPORT AND
ALLIED
WORKERS UNION obo
TB
MBATHA AND 52
OTHERS First
Respondent
SIPHO
DLAMINI
N.O Second
Respondent
TRANSNET
BARGAINING
COUNCIL Third
Respondent
Heard:
30 January 2013
Delivered:
14 June 2013
Summary:
In granting compensation an arbitrator may not exceed
his or her power in terms of section 193 of the LRA
as doing so
renders his or her award reviewable. Review in terms of section 145
of the LRA: Dismissal for refusing to
sign a fixed term
contract.
JUDGMENT
LALLIE, J
[1]
This is an application to review and set
aside the arbitration award of the second respondent (the
arbitrator). It is opposed by
the first respondent.
Factual
background
[2]
The applicant employs a number of employees
on fixed term contracts, the bulk of which are linked to specific
works projects. The
duration of the contracts differs with the
longest being a year. A number of the individual first respondents
had entered into
repeated fixed term contracts with the applicant.
When they reported for duty on 12 January 2009, the fixed term
contracts they
had entered into with the applicant had expired. They
submitted the necessary documents including forms which had to be
signed
by their banks and on the 14
January 2009, they started performing
their duties. On 20 January 2009 they were issued with contracts of
employment which they
were required to read, sign and return to the
applicant the following day. They sought clarity on the probation and
pass/fail clause.
On 22 January 2009, the individual first
respondents returned the contracts unsigned. Workers who had refused
to sign their contracts
were not allowed to work. Arrangements were
made for alternative labour and the individual first respondents
disrupted operations.
Police and security guards were called in to
restore order. The individual first respondents were paid until the
end of January
2009. The applicant denied dismissing or treating the
individual first respondents unfairly.
[3]
The first respondent referred an unfair
labour practice dispute to the third respondent. The summary of the
facts of their dispute
is that workers were stopped from working
after raising certain issues on their contracts of employment. They
sought reinstatement
with full benefits. A conciliation was not held
and the dispute was arbitrated by the arbitrator who issued an
award in their
favour:
Grounds for review
[4]
The applicant’s first ground for
review is that the award suffers from misdirection and defects in
relation to the assessment
of evidence, interpretation and
application of the law. The second ground is based on the
arbitrator’s failure to conciliate
the dispute before
arbitrating it in breach of a collective agreement. A further attack
is based on the arbitrator’s finding
which disregarded that the
fixed term employment offered by the applicant was subject to the
individual first respondents signing
contracts of limited duration
running from 11 January to 10 April 2009. The applicant submitted
that without signed contracts of
employment no employment
relationship existed, alternatively, the individual first respondents
were employed from the date they
tendered their services until the
time it became apparent that the terms of the offer of the fixed term
contracts were not accepted
by the individual first respondents. The
arbitrator’s finding that the individual first respondents
report for duty on 26
August 2009 when the fixed term contracts they
were offered would have expired on 10 April 2009 was found to be
unreasonable by
the applicant.
[5]
The applicant submitted that the
arbitrator’s finding that the individual first respondents be
retrospectively reinstated
and paid the amount of money they would
have earned from the first day that they were not on duty to the last
day that they were
not working is unreasonable as it disregards
the reality that they were offered employment until 10 April 2009. It
further
does not take into cognizance the payment they received until
28 January 2009.
Evaluation
[6]
It is trite that this court’s
function in determining whether to interfere with an arbitration
award on review is provided
for in section 145 (1) and (2) of the
LRA. I will firstly consider the applicant’s submission that
the arbitrator did not
arbitrate the dispute which had been referred
and suffering from the defect of not having been conciliated.
[7]
The commissioner dealt reasonably with the
issue of the nature of the dispute before him. A reading of the
record reveals that soon
after the commencement of the arbitration
proceedings the arbitrator intimated that the dispute before him was
an unfair dismissal
dispute. The applicant neither objected nor
brought to the arbitrator’s attention the true nature of
the dispute as
it understood it. It only raised that issue in its
closing arguments. The commissioner reasonably rejected the argument
which was
raised after all the evidence had been led on the basis
that the arbitrator was dealing with an unfair dismissal dispute. The
applicant
cannot be allowed to have a change of heart at that very
late stage of the proceedings. The arbitrator proffered a reasonable
explanation
that he exercised his right in terms of the LRA and
determined the dispute. The same applies to the applicant’s
argument
that the dispute was not properly before the arbitrator as
it had not been conciliated leading to the parties not having an
opportunity
to attempt to resolve it through conciliation. If the
applicant genuinely desired to exercise its right to have the dispute
conciliated,
nothing prevented it from expressing its desire at the
commencement of the arbitration. The law is clear; resolution of
disputes
through arbitration should not be hamstrung by the failure
to schedule conciliations. The arbitration was held more than 30 days
after the dispute was referred to the third respondent. It was
therefore properly before the arbitrator. Contrary to the applicants
submission the collective agreement did not require the conciliation
of the dispute before it was arbitrated. Conciliation was
therefore
no jurisdictional fact.
[8]
The applicant argued that the arbitrator
committed a gross irregularity by disregarding undisputed facts
before him. The first of
such facts is that the individual first
respondents were aware that they were offered fixed term contracts of
employment running
from 11 January to 10 April 2009 which they
refused. The duration of the fixed term contracts is not supported by
evidence. Even
the applicant could not refer to any evidence
supporting its argument. Evidence before the arbitrator was that the
individual first
respondents were employed by the applicant over a
period of years on fixed term contracts of different duration. The
applicant’s
argument that not all contracts were for the same
period of time and dependent on the nature of the works contract in
which the
applicant was engaged, is in variances with its argument
that all the parties were aware of the duration of the fixed term
contract
that the individual first respondents were offered in
January 2009.
[9]
The applicant argued that the arbitrator’s
finding that the individual first respondents were employed on
indefinite contracts
of employment, or were dismissed unfairly and
such dismissal was substantively and procedurally unfair is not
supported by the
facts before him and therefore unreasonable. This
argument is based on the arbitrator’s finding that the
individual first
respondents returned to work on 12 January 2009 to
start with the new year’s contracts. It is common cause that
the individual
first respondents were given new contracts of
employment which they refused to sign owing to dissatisfaction with
certain clauses.
They were given an ultimatum to return the signed
contracts or face termination of their services. The applicant argued
that the
refusal to sign the fixed term contracts on the terms on
which they were offered meant that the individual first respondents
were
not employed by the applicant.
[10]
The applicant further argued that the
arbitrator exceeded his powers and committed a gross irregularity in
assuming the power to
extend the life of the fixed term contracts of
employment when such contracts has already expired. The applicant did
not present
a substantial, clear and convincing argument on the
relationship between the individual first respondents and itself
between their
first day on the duty in 2009 and the date on which
their employment relationship was terminated.
[11]
It is common cause that the applicant
allowed the individual first respondents to work from 12 to 21
January 2009 without written
contracts of employment. Section 213 of
the LRA defines an employee as:
‘
any
person excluding an independent contractor who, works for another
person or for the state and who receives, or is entitle to
receive,
any remuneration’
.
The individual first respondents worked for the applicant between 12
and 21 January 2009. They were remunerated for their work
and were
therefore employees of the applicant in January 2009.
The
starting point for deciding the validity of the applicant’s
argument that the arbitrator’s finding that the individual
first respondents were dismissed by the applicant is section 186(a)
of the LRA. It provides as follows:
‘
(i)“dismissal”
means that-‘An employer has terminated a contract of employment
with or
without
notice’
.
[12]
The
decision in
Nulaw
v Barnard NO and Another
[1]
which the first respondents sought to rely on is apposite. It
illustrates clearly that an employer who has engaged in acts which
bring the contract of employment to an end in a manner recognised by
law terminates the contract of employment. It is common cause
that
the applicant, through its employees unequivocally informed the
individual first respondents who were its employees from 12
January
2009 not to return to work without signing the new contracts of
employment. The instruction terminated the employment relationship.
The arbitrator’s decision that the individual first respondents
were dismissed by the applicant is therefore reasonable.
[13]
I
now consider whether there is merit in the applicant’s argument
that the arbitrator’s finding that the dismissal of
the
individual first respondents was unfair. In
Biggs
v Rand Water
[2]
the court made it abundantly clear that it is unfair to keep
employees on fixed term contracts in order to make it easy for the
employer to dismiss such employees without complying with the
obligations imposed by the LRA in respect of permanent employees.
[14]
It is common cause that a number of the
individual first respondents have worked for the applicant for years
on consecutive fixed
term contracts. It is further common cause that
some clauses which influenced the individual first respondents not to
sign the
contracts for the period commencing in January 2009 are
related to probation and pass/fail. Their common feature is that they
threatened
job security of employees who have worked for the
applicant for years. The definition of the employee in the LRA is
instructive.
It does not distinguish between employees who have
signed a contract of employment and those whose contracts are only
verbal. It
also does not differentiate between employees employed in
terms of fixed term contracts and those whose contracts are of
unlimited
duration. Other than the inherent differences in their
contracts, employees on limited duration contracts should enjoy equal
protection
by the LRA and their rights should not be diminished
because of the regime of their contracts. Employers cannot be allowed
to use
fixed term contracts to get rid of their employees easily and
with impunity. Had the individual first respondents not been on fixed
term contracts, the applicant could not have instructed them to
accept new terms and condition of employment or face dismissal.
I
therefore conclude that the arbitrator’s finding that the
individual first respondents were unfairly dismissed is reasonable
as
no fair reason exist for their dismissal which was not preceded by a
fair procedure.
[15]
The applicant submitted that the award the
arbitrator granted is unreasonable. The award provides as follows:
‘
Accordingly,
I make the following determination:
(1)
“
The respondent is ordered to
reinstate all the 53 Applicant Employees retrospectively. The
Applicants should report for duty on
the 26
th
August 2009.
(2)
The Applicants shall be so employed by the
Respondent as if they were on the original contract/agreement with
the respondent. All
the time frames as contemplated in the original
agreement shall be recognized by both parties. This means that the
Respondent shall
be entitled to terminate or renew the contracts as
and when the time and/or even as contemplated by the agreement
arrives.
(3)
The Respondent is further ordered to pay
all the 53 Applicant Employees the amount of money they would have
earned from the first
day that there were not working to the last day
that the were not working.
(4)
I am required to quantify the back-pay as
contemplated by Paragraph 3, but the details of what each Applicant
Employee earned was
not provided to me during the proceedings. The
parties are ordered, therefore, to provide this information within
fourteen (14)
days from the date of receipt of this award, after
which quantification will be made in this regard.
(5)
I make no order as to costs”.
[16]
The applicant’s argument is based on
its submission that the arbitrator committed a gross irregularity by
extending the life
of fixed term contracts which had expired.
[17]
Section 193 (a) of the LRA requires an
arbitrator who has found a dismissal unfair to order the employer to
reinstate the employee
from the date not earlier than the date of
dismissal. The arbitrator reinstated the individual first respondents
from the date
of their dismissal. His decision is not unreasonable
because the applicant elected to pay the individual first respondents
remuneration
from 12 to the end of January 2009. The period they were
paid for exceeded the 22 January which was their last day of duty. It
cannot later reprobate and require the first respondents to earn that
money. The arbitrator’s decision is consistent with
the
applicant’s decision. He could not in his award take away the
money from the individual first respondents. The applicant’s
submission that the arbitrator failed to apply his mind in reaching
this finding has no merit.
[18]
In
paragraph 2 of the award the arbitrator orders the applicant to
further employ the individual first respondents on fixed term
contracts with similar terms and conditions as the original
contracts/agreements. This paragraph and the reinstatement order are
mutually exclusive because reinstatement means putting a dismissed
employee back in the job that employee held prior to dismissal
on the
same terms and conditions. In this regard see
Equity
Aviation Services (Pty) Ltd v CCMA and Other
[3]
.
By
reinstating the individual first respondents the arbitrator put them
in the position of being employees who had reported for
duty and
worked for few days after the expiry of their fixed term contracts,
waiting to enter into new fixed term contracts as
they had done in
the past.
[19]
The arbitrator did not apply his mind when
drafting paragraph 2 of his award. He refers to the ‘original
contract/agreement’,
it is common cause that the individual
first respondents and the applicant had entered into a number of
fixed term contracts of
varying duration. There was a duty on the
arbitrator to state unequivocally the contract/agreement he is
referring to in paragraph
2 of his award and to give reasons for
basing his findings on it. The power of an arbitration award is in
its implementation. The
award forms an important part of the
arbitrator’s finding. It also gives direction to the parties as
it tells them what needs
to be done, by when and by which party
subsequent to an unfair dismissal finding. The arbitration award
falls short as it is not
drafted in clear language. An arbitration
award which lacks clarity because of the manner in which it has been
drafted cannot be
implemented and is unreasonable.
[20]
The applicant sought a costs order against
the first respondent. In terms of section 162 (1) a costs order may
be made according
to the requirements of law and fairness. Although I
have made an order in the applicant’s favour, the award
has been
couched in unclear terms which gave the respondent reason to
oppose this application. The respondent therefore did not act
unreasonably
in opposing this application. In the circumstances
granting a costs order will not be appropriate.
[21]
In the premises the following order is
made:
21.1 The arbitration
award issued by the second respondent under case number TOKISO/T9/028
is reviewed and set aside.
[22]
The matter is remitted to the third
respondent to be arbitrated
de novo
by
an arbitrator other than the second respondent.
_______________________
Lallie, J
Judge
of the Labour Court of South Africa
Appearances:
For the Applicant:
Advocate Van As
Instructed by:
Bowman Gilfillan Attorneys
For the first
Respondent:
Advocate TA Boda
Instructed
by:
Cheadle Thompson & Haysom Inc
[1]
[2001] 9 BLLR 1002 (LAC).
[2]
[2003] 24 ILJ 1957 (LC).
[3]
[2008]
12 BLLR 1129
(CC)