About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2013
>>
[2013] ZALCJHB 265
|
|
Peter v Commission for Conciliation Mediation and Arbitration and Others (JR 798/12) [2013] ZALCJHB 265 (10 July 2013)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA,
JOHANNESBURG
JUDGMENT
Reportable
CASE NO: JR798/12
In the matter between:
GALATIS PETER
.............................................................................................
Applicant
and
THE COMMISSION FOR
CONCILIATION, MEDIATION
AND ARBITRATION
...........................................................................
First
Respondent
BOYCE MICHAEL N.O.
.................................................................
Second
Respondent
VAN GELMAN, COLLEEN
................................................................
Third
Respondent
Heard:
10 July
2013
Delivered:
Summary:
___________________________________________________________________
JUDGMENT
___________________________________________________________________
MASIPA, AJ
Introduction
[1] [2] This is an
application for the review of the Second Respondent’s (the
commissioner) arbitration award under case number
GA22454-11 dated 21
February 2012. In its notice of motion, the Applicant also sought an
order for the stay of further proceedings
until finalisation of the
review application; suspension of the execution of the award of the
Second Respondent until the conclusion
of the review proceedings and
an order for costs against any party opposing the application.
[3] The award was issued
under the auspices of the Commission for Conciliation, Mediation to
Arbitration, the First Respondent in
this matter. The issue before
the Second Respondent was whether the Third Respondent was an
employee and if so, whether she was
dismissed by the Applicant and
whether the dismissal of the Third Respondent was substantively and
procedurally unfair. The Second
Respondent after considering the
evidence before him, found that the Third Respondent discharged the
onus to prove that she was
an employee; he found further that her
dismissal was substantively and procedurally unfair and ordered the
Applicant to compensate
her in the amount of R141 000.00.
[4] The Applicant
contends that the Second Respondent’s award is unreasonable and
susceptible to review. The Applicant undertook
to elaborate on his
grounds for review after considering the record but elected to file a
notice standing by his initial affidavit
on receipt of the record. In
his founding affidavit, the Applicant averred that the Second
Respondent misdirected himself and came
to conclusions which were
unjustifiable, illogical and unreasonable. The application is opposed
by the Third Respondent.
Background
[5] During the
arbitration hearing, there were only two witnesses. Both the employer
and the employee had legal representation.
The Third Respondent
testified in person and the Eugenie Richardson testified for the
Applicant. The Third Respondent’s contention
was that she was
an employee while the Applicant’s contention was that she was
an independent contractor. The onus therefore
rested with the
Applicant to prove that she was an employee.
[6] In his founding
affidavit, the Applicant averred that there could not have been any
dismissal as he was awaiting the outcome
of the suspension
proceedings which were initiated by the Third Respondent’s
Attorneys. The Applicant did not deal with the
issue of dismissal in
his heads of argument and recorded in court that the issue of the
fairness or otherwise of the dismissal
was no longer an issue to be
determined by the Court. The only issue was, therefore, whether the
decision of the Second Respondent
in finding that the Third
Respondent was an employee and not an independent contractor was that
of a reasonable decision maker.
[7] It is important, at
this stage, to mention that the Applicant deposed to the founding
affidavit in this matter. He had, however,
elected not to give
evidence at the arbitration hearing and relied on the evidence of his
advisor, Richardson.
The arbitration award
[8] The Third Respondent
testified that she is a Dental Hygienist and met the Applicant while
working for Dr Fulko. In May 2008,
he was contacted by the
Applicant’s receptionist about a position they had for a dental
hygienist and invited her to an interview.
She went to the interview
and was interviewed by the Applicant and his partner at the time Dr
Galatis. (Both Doctors are Dentists).
She was hired at the interview.
She advised that she wanted to continue working for Dr Fulko for one
day a week and was given permission
by the Applicant.
[9] Her evidence was that
it was agreed that she worked for the Applicant four days a week some
months Saturday and/or Sunday. She
was paid 50% commission of
whatever she brought in. She was not given a contract of employment
and performed work at the Applicant’s
premises. She received a
payslip monthly and had an employee number. The Applicant deducted
SITE tax, PAYE and UIF from her monthly
salary. She was not doing the
accounting or taking money. Her salary was worked out by Dina who did
salaries for all staff.
[10] She did not pay rent
and used equipments supplied by the Third Respondent which were used
by the previous hygienist. She had
to order the products she used
through Lynn and the order had to be approved by the Applicant who
paid for them and for everything
she needed. Payment of patients was
made to the Applicant’s receptionist. She was ordered when to
take leave i.e. in accordance
with the Applicant’s closing
periods. She was stopped from using her preferred method of tooth
whitening and had to follow
the one preferred by the Applicant. The
Applicant’s friends and associates did not pay for the services
she performed on
them.
[11] When the
receptionist refused to do the call outs, she had to recall patients
because the Applicant told her to do it for both
of them. At least
two performance review meetings were conducted. Her usage of the
telephone was restricted by the Applicant.
[12] Richardson’s
evidence testified that she provides Human Resources advice to the
Applicant since 2008. He met the Third
Respondent for the first time
in May 2008. She drafted the contract between the Applicant and Third
Respondent. The Applicant signed
the contract on 15 August 2008, it
was however not signed by the Third Respondent.The contract was
prepared on 29 July 2008 and
the Third Respondent was hesitant to
sign as she valued her flexibility. The Applicant was working for
another dentist at the time.
[13] The contract stated
that she was a contractor and would not qualify for leave pay or sick
leave and she had to give timeous
notice of her absence. She was to
be paid 50% commission and was not entitled to bonuses. She was not
in a position to explain
why SITE, PAYE and UIF were deducted from
her income. She confirmed that there were performance reviews.
[14] In the award, Second
Respondent extensively analysed the issue whether the Third
Respondent was an employee. The Second Respondent
considered the
definition of employee in terms of section 213 of the LRA. He found
that in terms of section 213(a), for the Applicant
to be classified
as an employee, three factors must be shown being that the Third
Respondent worked for the Applicant, she received
or was entitled to
receive remuneration from the Applicant and was not an independent
contractor.
[15] The second
Respondent considered the provisions of Section 200A of the LRA and
correctly found that the presumptions did not
apply to the Third
Respondent as she earned above the Minister’s determination in
terms of Section 6(3) of the Basic Conditions
of Employment Act which
was R149 739.00.
[16] He found that he
could not place much reliance on the unsigned contract produced by
the Applicant as it could not be said to
be reflecting the meeting of
the minds of the two parties.
[17] The Second
Respondent also took into account the provisions of item three of the
Code of Good Practice on who is an employee.
He found that in terms
of the code, any person interpreting or applying one of the following
Acts must take this Code into account
for the purpose of determining
whether a particular person is an employee. The Second Respondent had
regard to the dominant impression
test and took into account six
factors set out by the Appellate Division to distinguish a contract
of employment from a contract
of service.
[18] The Second
Respondent analysed the evidence before him in respect of the
agreement between the Applicant and Third Respondent
as follows:
18.1. That she was
obliged to submit to the control and supervision of the Respondent in
terms of regulations governing the relationship
between an Oral
Hygienist and Registered Dentist and was not permitted to practice
for her own account without such control and
supervision;
18.2. She was not paid a
fixed salary but an agreed amount based on fees raised by her, less
certain deductions, including PAYE,
SITE, UIF and VAT;
18.3. She was provided
with a monthly payslip;
18.4. She was provided
with an IRP5 certificate by the Respondent;
18.5. She did not share
in the fees generated by the Applicant;
18.6. She made no direct
contribution towards rent, utility bills and consumables;
18.7. She did not
purchase her own consumables but required the consent of the
Applicant to purchase any consumables which she required
for her
practice;
18.8. She made no direct
contribution towards salaries of the Applicant’s employees but
utilised their services;
18.9. She was not
authorised to utilise the Applicant’s telephone system unless
it was for the purpose of generating fees
for the practice;
18.10. She was obliged to
telephone clients of the practice to generate business for both the
Applicant and herself;
18.11. She did not
partake in the administration of the Applicant’s practice save
for the calculation of amounts due to her;
18.12. She was not
granted any paid leave or sick leave;
18.13. She was not
allowed to take leave without the Respondent’s consent (on her
version) and without consultation (on the
Applicant’s version);
and
18.14. She was obliged to
submit to the Applicant’s wishes in respect of time, date and
venue of meetings called by the Applicant.
[19] Based on the above,
the Second Respondent found that the evidence before him illustrated
the actual agreement and the dominant
impression created to be that
the Third Respondent was an employee and not an independent
contractor. He found that it was never
the intention of the parties
to put in place a commercial arrangement but that the true nature of
their relationship was an agreement
of employment.
[20] The Second
Respondent found that the Third Respondent had discharged the onus to
prove that she was an employee.
The review and the
legal framework
[21]
In terms of the issues
raised by the parties in court,
I
had to review the Second Respondent’s decision that the Third
Respondent was an employee. This issue limits the review to
whether
the First Respondent had jurisdiction to determine the matter before
the Second Respondent. The test applicable in the
present matter is
that formulated in
SA
Rugby Players Association and Others v SA Rugby (Pty) Ltd and Others
1
where Tlaletsi AJA, as he
then was, mentioned that:
‘
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.’
[22]
This approach was followed in
Workforce
Group (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration
2
where the court stated
the following:
‘
The
question is not whether the commissioner's finding was reasonable but
whether on the facts the applicant was an employee. The
basis of this
approach is that a ruling on jurisdiction made by the CCMA is made
for convenience - the CCMA is a creature of statute
and cannot decide
its own jurisdiction. Whether the CCMA has jurisdiction is a matter
for this court to decide. In other words,
the issue before the court
is whether, objectively speaking, there existed facts which would
give the CCMA the jurisdiction to
entertain the dispute i.e. that
established that the third respondent (Malkin) was an employee as
defined by s 213 of the LRA.’
[23]
In
ASARA
Wine Estate and Hotel (Pty) Ltd v Van Rooyen and Others,
3
where Steenkamp J found
that the test to be followed in jurisdictional matters was that set
out in the
SA
Player’s Association
decision.
The issue was whether the Second Respondent correctly found that the
Third Respondent was an employee in terms of Section
213.
[24] Section 145 provides
as follows:
'145
Review of arbitration awards
(1)
Any party to a dispute who alleges a defect in any arbitration
proceedings under the auspices of the Commission for Conciliation,
Mediation and Arbitration may apply to the Labour Court for an order
setting aside the arbitration award...’
[25]
In
Carephone
(Pty) Ltd v Marcus NO and Others,
4
the court held that the
only section that can be invoked by a party seeking the review of an
arbitration award made in proceedings
under the auspices of the
Commission for Conciliation, Mediation and Arbitration (the CCMA) is
section 145.
[26]
In
Mtshali
v Commission for Conciliation, Mediation and Arbitration and Others
5
the court stated that:
‘
Even
if it were open to [a] court of review to consider evidence not
placed before a commissioner, it would have to be accompanied
by a
satisfactory explanation as to why the evidence was not tendered in
the first place. It is conceivable that a court of review
may have
the power to receive fresh evidence by reason of its inherent powers
and equitable jurisdiction. Were this possible, it
would at least
have to satisfy the long-established requirements for receiving
evidence on appeal’.
[27]
In
National
Union of Mineworkers and Another v Samancor Ltd (Tubatse Ferrochrome)
and Others
,
6
Nugent JA stated that it
is trite that an appeal does not lie against the award of an
arbitrator. Even if the reviewing court believes
the award to be
wrong, there are limited grounds upon which it is entitled to
interfere.
[28]
Advocate Lennox correctly submitted that there is no right of appeal
to a Commissioner’s award and that it is merely
a review. It is
only in exceptional circumstances that this court sitting as a court
of review can hear new evidence which was
not placed before the
arbitrator. The Applicants has not set out any reasons why it sought
to introduce new evidence in its founding
affidavit. There is,
therefore,
no case made out to
suggest the existence of any exceptional circumstance for the
admission and/or consideration of such evidence.
I will therefore not
take the evidence into account.
[29] The Applicant
initially set out the grounds for the review as being that it was
bizarre that the Second Respondent came to
the conclusion that the
dominant impression created was that the Third Respondent was his
employee. The Applicant submitted that
the dominant impression
indicated exactly the opposite. He submitted that the fact that the
Second Respondent came to this illogical
conclusion was reinforced by
the fact that he, somewhat inexplicably found that the evidence of
Richardson was nothing but a clear
litany of lies.
[30] The evidence of
Richardson related mainly to whether the Third Respondent was
dismissed or not. As a result, the Applicant
did not pursue its
challenge to the Second Respondent’s award in so far as it
related to a finding that Richardson’s
evidence was a litany of
lies. I will therefore not deal with this aspect in the judgment.
[31]
The fundamental issue
which the Second Respondent had to determine was whether the Second
Respondent was an employee as set out
in Section 213 of the LRA. This
was a discussed in the
Workforce
Group
matter
where Van Niekerk J applied the principles set out in
State
Information Technology Agency (Pty) Ltd v Commission for
Conciliation, Mediation and Arbitration and Others
7
and Denel (Pty) Ltd v
Gerber,
8
where the LAC set out the
primary criteria for determining an employment relationship as
relating to:
1. the employer’s
right of supervision and control;
2. whether the employee
forms an integral part of the organisation with the employer; and
3. the extent to which
the employee was economically dependent upon the employee.
[32]
He submitted that it H
Paul Benjamin in ‘An Accident of History
:
who is (and who should be) an employee under South African Labour
Law’’
9
wrote the following:
‘
The
presumption of employment indicates that there are three primary
criteria for indicating the presence of an employment relationship
-
the employer's right of supervision and control; the employee forming
an integrated part of the organization of the employer;
and the
employee's economic dependence upon the employer.’
[33] Advocate Hutchinson
submitted that the Third Respondent applied her own trade. It was a
legislative requirement that she be
supervised by a Dentist. It did
not follow from this that she was an employee. Throughout her period
with the Applicant, she sought
to promote herself as a specialist.
She testified that Oral Hygienists should be independent and have
their own practice numbers
and that supervision was not necessary. In
her evidence, she did not explain how she was supervised the actual
carrying out of
her duties.
[34] He submitted further
that the issue of PAYE deductions had no bearing as it was deductible
even with independent contractors.
He submitted that the deduction of
UIF did not determine the nature of the relationship. However, he
conceded that the deduction
of PAYE, UIF and SITE tax meant that the
Third Respondent was short changed if she was not an employee. He
disputed that there
was fraud perpetuated against the South African
Revenue services.
[35] The Third Respondent
could practice elsewhere and in her evidence kept referring to her
practice. He argued that the recalls
done by the Third Respondent
were towards growing her own practice. He compared the relationship
between the parties to that of
the CCMA and its Part-Time
Commissioners and submitted that it was all about the money.
According to him, CCMA Commissioners followed
the money and would go
to Bargaining Councils as they paid better than CCMA. He argued that
the organisation test could not apply
with the Third Respondent and
that it was dependant on where she was sitting on any particular day.
[36] Advocate Lennox
submitted that the Applicant interfered with the Third Respondent’s
fee analysis. In addition to the
tax deductions, she was issued with
an IRP5 certificate and issued with payslips which had an employee
number. She had two performance
appraisals. He argued that the fact
that Oral Hygienists were aspiring to be independent did not suggest
they were independent
contractors. He made an example of a law
practice where associates are expected to grow the practice that did
not mean they were
not employees.
[37] As regards the issue
of being part of the organisation, he submitted that the bookings and
payments by patients were done with
the Applicant’s
receptionist. She was issued payslips and was issued payslips
together with other employees. She closed when
the business closed
for December holidays. She had to seek permission to take leave. She
obtained permission to work elsewhere
as she was working four days a
week with the Applicant.
[38] On a consideration
of the criteria set out in the
SA Rugby
matter, the following
is apparent on the issue of the employer’s right of supervision
and control:
1. It is a legal
requirement that Oral Hygienists be supervised by Dentists;
2. The Third Respondent
could not apply her own skills in whitening/bleaching teeth as the
Applicant instructed her not to do so;
3. She could not take
leave when she pleased and had to seek permission from the Applicant;
4. She was instructed not
to use the phone except for work related purposes;
5. She paid no rent;
6. The purchase of her
supplies/consumables was done and approved by the Applicant;
7. She performed her
services on the Applicant’s friends with no payment;
8. She was obliged to
submit to the Applicant’s wishes in respect of time, date and
venue for the meeting
9. She was obliged to
phone clients of the practice to generate business for the Applicant
and herself.
[39] In view of the
above, it is unclear why Advocate Hutchinson argued that she did not
testify as to why she alleged she was supervised
when there was clear
evidence in this regard.
[40] On the issue of
whether the employee formed an integral part of the organisation with
the employer, her evidence was as follows:
1. She received a payslip
with an employee number;
2. PAYE, UIF and SITE tax
were deducted from her salary and she was issued with an IRP5
certificate;
3. She was not allowed to
take leave without the Applicant’s consent and without
consultation.
4. She did not pay rent
or directly contribute towards her supplies/consumables;
5. She made no
contributions towards salaries of the Applicant’s employees but
utilised their services.
6. She did not work on
the December holidays when the practice was closed.
[41] It cannot be said
that because she worked for another dentist for one day, then she did
not form part of the Applicant’s
organisation since her
evidence that this was after obtaining consent from the Applicant was
unchallenged. Further, as Advocate
Lennox argued, there is no law
prohibiting an employee to be employed by more than one employer.
[42] The last point
relates to the extent to which the employee was economically
dependent upon the employer. The evidence of the
Third Respondent was
that:
1. She was paid 50%
commission from the work she performed. She worked four days for the
Applicant;
2. The Applicant was
responsible for purchasing her supplies/consumables;
3. She did not directly
contribute towards rent;
4. She did not directly
contribute towards salaries of the Applicant’s employees but
utilised their services.
[43] I find that the
Second Respondent, in analysing the evidence before him, found that
the Third Respondent was subject to the
supervision and control of
the Applicant, formed part of the organisation and was economically
dependent on the Applicant. On a
consideration of all facts which
were before the Second Respondent, it is clear that the real
relationship which was between the
Applicant and the Third Respondent
was an employment relationship. The Second Respondent’s award
should therefore stand.
[44] As regards the issue
of costs, the Applicant asked that any of the Respondent’s
opposing the review application be ordered
to pay the costs. I am of
the view that, having found against the Applicant, costs should
follow the result.
[45] In the premises, I
make the following order:
1. The Applicant’s
review application is dismissed;
2. The Applicant is to
pay the Third Respondent’s costs.
____________
Masipa, AJ
Acting Judge of the
Labour Court
Appearances:
For the Applicant:
Advocate W Hutchinson
Instructed by: Fluxmans
Inc
For the Third Respondent:
Advocate M A Lennox
Instructed by: Mahons
Attorneys
1
(2008)
29 ILJ 2218 (LAC) at para 41.
2
(2012)
33 ILJ 738 (LC) at para 2.
3
(2012)
33 ILJ 363 (LC) at para 22.
4
(1998)
19 ILJ 1425 (LAC).
5
(1999)
20 ILJ 2400 (LC) at para 23.
6
(2011)
32 ILJ 1618 (SCA) at para 5.
7
(2008)
29 ILJ 2234 (LAC) at para 12.
8
(2005)
26 ILJ 1256 (LAC).
9
(2004)
25 ILJ 787 at (804.