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[2014] ZALCJHB 41
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Sithole and Others v National Bargaining Council For The Road Freight And Logistics Industry and Others (JR2604/10) [2014] ZALCJHB 41 (12 January 2014)
REPUBLIC
OF SOUTH AFRICA
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not reportable
Case no: JR 2604/10
In
the matter between:
SITHOLE
& 3
OTHERS Applicant
and
NATIONAL
BARGAINING COUNCIL FOR
THE
ROAD FREIGHT & LOGISTCIS
INDUSTRY 1
st
Respondent
SEELE
MOKWENA N.O. (THE
COMMISSIONER) 2
nd
Respondent
SIZEKA
OUTSOURCING SOLUTIONS
(SUPER
GROUP) 3
rd
Respondent
Date
of application: 16 January 2014
Date
of judgment: 12 January 2014
JUDGMENT
VENTER A J
[1]
This is an application to review and set aside an arbitration award
issued on 30 August 2010 by the second Respondent (to whom
I shall
refer as the “commissioner”).
[2]
Mr. Frahm-Arp acted on behalf of the Applicants whilst Mr. Mer acted
on behalf of the third Respondent.
FACTUAL
BACKGROUND
[3]
The third Respondent’s operations fall within the scope of the
first Respondent and they therefore render a service in
the road
freight and logistics sector. The four Applicants were employed as a
driver (the first Applicant) and crew members (the
second to fourth
Applicants).
[4]
According to the award the Applicants were employed since March 2009
and their services were terminated on 20 October 2009.
It was alleged
that the Applicants were involved in theft of company property.
[5]
The dismissal dispute was referred to the first Respondent and the
matter was ultimately arbitrated by the commissioner. The
commissioner’s findings were, in essence: that the dismissal of
the first Applicant (“Sithole”) was substantively
and
procedurally fair but the dismissal of the second to fourth
Applicants were substantively unfair. The Applicants sought
compensation
only from the commissioner and 4 month’s salary
was awarded to the second to fourth Applicants.
[6]
All four Applicants apply to have the commissioner’s award set
aside. The first Applicant’s case is, in essence,
that he was
not guilty of misconduct and that the commissioner erred in
concluding that he was guilty. The second to fourth Applicants’
case is that the amount of compensation that was awarded by the
commissioner is not just and equitable. Procedural issues
are
not raised by any party.
[7]
The arbitration proceedings were not mechanically recorded due to
some technical difficulty experienced by the commissioner.
The record
of proceedings was however filed and the commissioner’s
(comprehensive) hand written notes were typed and filed.
I was
therefore able to determine the matter and the core issues were
clearly dealt with in the handwritten notes (that were typed).
[8]
The handwritten notes are adequate and enables me to consider the
evidence that was led during the arbitration proceedings.
See
Transnet
t/a Metrorail v Hefer
(2002) 10 BLLR 1011
(LC), Liwambano
v Department of Land Affairs
(2012) 6 BLLR 571
(LC)
as well as
Bakasan v MIBCO
(2011) 2 BLLR 161
(LC)
in this regard.
POINTS
IN LIMINE
[9]
The 3
rd
respondent raises a preliminary issue that the 2
nd
to 4
th
applicants are not before court due to the fact
that no confirmatory affidavits are deposed to. Mr. Frahm-Arp
submitted the confirmatory
affidavits from the bar and the 3
rd
respondent abandoned the preliminary issue.
[10]
The 3
rd
respondent raises a further preliminary issue in
their heads of argument relating to the peremptory rule or waiver. In
broad terms
the argument is that the 3
rd
respondent was
ordered to pay compensation and duly complied with the award. The
monies were paid and accepted by the 2
nd
to 4
th
applicants and they therefore abandoned their intention to challenge
the award. The 2
nd
to 4
th
applicants
furthermore filed no confirmatory affidavits and one should infer
that they are satisfied with the payments received.
The applicants
arguments are that payment was only made after the date ordered by
the commissioner, the issue is only raised in
the 3
rd
respondent’s heads of argument and the 2
nd
to 4
th
applicants never unequivocally abandoned or waived their right to
institute any proceedings.
[11]
There is a variety of case law on the legal principle (see
National
Union of Metal Workers & Others v Fast Freeze (1992) 13 ILJ
963(LAC), Jusayo v Mudau & Others (2008) 29 ILJ 2953
(LC), PSA
obo Strydom v SA Revenue Services (2007) 28 ILJ 2037 (LC) and
Venture Otto SA v MEIBC (2005) 26 ILJ 349 (LC
)).
[12]
For reasons referred to later, I do not deem it necessary to deal
with the issue raised by the 3
rd
respondent at this stage.
GROUNDS
FOR REVIEW
[13]
The applicants’ grounds for review are broadly stated. The
applicants contend that the commissioner committed gross
irregularities in the performance of his duties, that there is no
rational connection between the evidence and his award, and that
the
commissioner erred in inferring that the 1
st
applicant was
guilty of misconduct whereas the evidence presented to him do not
support such conclusion. When the application was
argued, the grounds
for review were brought within the ambit of the
Sidumo
test,
the primary arguments being that the commissioner erred in law in
finding that a possible involvement in theft is a competent
charge to
theft, the commissioner failed to appreciate the nature and extent of
the evidence that was led before him in inferring
that the 1
st
applicant was guilty of misconduct and that he made an award that was
contrary to that evidence. It is also argued that the amount
of
compensation ordered to the 2
nd
to 4
th
applicants is not just and equitable.
THE
APPLICABLE LEGAL PRINCIPLES
[14]
The approach our courts are required to adopt in reviewing awards and
rulings of arbitrators was revisited in the recent Labour
Appeal
Court decision of
Goldfields Mining South Africa (Pty) Limited
(Kloof Gold Mine) v CCMA, case number JA2/2012
("Goldfields").
[15]
This issue has been the subject of debate over a number of years. At
the heart of the debate was the question of to what extent
the Labour
Court should be able to overturn awards and rulings. It was the
intention of the legislature that the powers of the
court in this
regard should be limited. This is the reason why the Labour Relations
Act, 66 of 1995 ("LRA") does not
make provision for an
appeal against arbitration awards or rulings. It simply makes
provision for the review of such awards on
limited grounds (e.g.
where the arbitrator commits misconduct in relation to his/her duties
or there is a gross irregularity in
the arbitration). But, experience
over the last few years has shown that the concept of a review has
been widely or narrowly interpreted
by different courts – hence
the debate. The approach our courts should adopt was finally decided,
or so we thought, in the
widely-popularised case of
Sidumo &
Another v Rustenburg Platinum Mines Ltd & Others
[2007] 12 BLLR
1907
(CC) ("Sidumo").
[16]
In essence, Sidumo required a review court to ask the following
question: Is the decision one that a reasonable decision maker
could
not reach on the evidential material available. Thus the focus was
largely on the outcome of the decision, as opposed to
the manner in
which the arbitrator arrived at the outcome. This approach
presupposes that arbitration awards based on defective
reasoning by
an arbitrator will still pass the muster required in reviews,
provided that the result is one that a reasonable arbitrator
could
have reached. This is generally known as an 'outcome-based
approach'.
[17]
However, in various decisions, the Labour Court did not limit itself
to this relatively narrow test for review. It developed
the concept
of the "process related review", which it treated as
existing in addition to Sidumo's 'outcome-based approach'.
This
approach accepted that, even if the outcome of the award was
one that a reasonable arbitrator could have reached, an
award could
still be overturned if the process through which the award was
arrived at was found materially wanting – for
example if the
arbitrator ignored material relevant facts or misconstrued material
evidence in coming to his/her decision.
[18]
This approach had been accepted by the Labour Appeal Court in the
recent case of
Herholdt v Nedbank Ltd
[2012] 9 BLLR 857
(LAC).
In this case the LAC adopted a generous approach to the scope of the
test for reviews. The LAC indicated that the ground of review
of
gross irregularity in terms of s145 (2)(a)(ii) of the LRA included
"latent irregularities" and "dialectical
unreasonableness" as the basis for the review of an award. This
required the reviewing court to consider the reasoning of the
arbitrator. The LAC stated that a 'latent irregularity' occurs where
an arbitrator fails to take into account material facts or
takes into
account immaterial facts, whereas 'dialectical unreasonableness' is
unreasonableness stemming from the process of reasoning
of the
arbitrator. In this regard, the LAC held that the reviewing court
must consider whether the arbitrator's decision is supported
by
arguments and considerations that are valid, albeit, not necessarily
conclusive. In order for an arbitrator's decision to be
reasonable in
a dialectical sense, he/she is required to properly consider all the
relevant and material facts indispensable to
a reasonable decision.
[19]
This was a far wider interpretation than the traditional approach to
the concept of gross irregularity which was largely limited
to the
situation where the arbitrator misconceives the whole nature of the
enquiry, and as a result the arbitrator misconceives
his/her mandate
or duties in conducting the enquiry. The LAC's judgment in Heroldt
went on appeal, however, and the Supreme Court
of Appeal did not
uphold such a generous approach. It revisited and analysed the
provisions of s145 of the LRA, and stated that
the legislature was
deliberate in rejecting the option of an appeal of awards. It
deliberately chose review, on narrow grounds,
so as to serve as a
deterrent to parties seeking to challenge awards. This supported the
purpose of the CCMA as a dispute resolution
forum that is to provide
for an inexpensive and expeditious dispute resolution process.
[20]
The SCA summarised the position as follows:
"A review ...is
permissible if the defect in the proceedings falls within one of the
grounds in s145 (2) (a) of the LRA. For
a defect in the conduct of
the proceedings to amount to a gross irregularity as contemplated by
s 145(2) (a) (ii) ...the arbitrator
must have misconceived the nature
of the inquiry or arrived at an unreasonable result. A result will
only be unreasonable if it
is one that a reasonable arbitrator could
not reach on all the material that was before the arbitrator.
Material errors of fact,
are not in and of themselves sufficient for
an award to be set aside, but are only of any consequence if their
effect is to render
the outcome unreasonable."
[21]
The SCA thus made its position clear on the issue through its
judgment in the Heroldt matter. However, since the coming
into
force of the Constitutional Seventeenth Amendment Act, 2012 the SCA
no longer has the jurisdiction to hear appeals from the
LAC and the
LAC is now the final body of appeal (except for Constitutional
issues) when interpreting the LRA.
[22]
There was therefore some anticipation to see if the LAC would follow
the SCA decision in Heroldt when it next confronted the
review test
issue. The Goldfields decision, handed down on 4 November 2013, was
the first LAC decision to consider the test for
review after the
SCA's Heroldt decision. In its judgment, the LAC recognises that the
process-related grounds of review provided
for in section 145(2)(a)
still pertain but finds that, once the procedural defect is
established, the reviewing court must go a
step further and satisfy
itself that the defect resulted in the award being one that a
reasonable arbitrator could not have reached.
In the words of the
LAC, "What is required is first to consider the gross
irregularity that the arbitrator is said to have
committed and then
to apply the reasonableness test established by Sidumo. The gross
irregularity is not a self-standing ground
insulated or independent
of the Sidumo test. That being the case it serves no purpose for the
reviewing court to consider and analyse
every issue raised at the
arbitration and regard failure by the arbitrator to consider all or
some of the issues albeit material
as rendering the award liable to
be set aside on the grounds of process-related review."
[23]
The LAC in Goldfields reaffirmed the purpose of an arbitrator, as set
out in section 138 of the LRA, to deal with the substantial
merits of
the dispute between parties with the minimum of legal formalities and
to do so expeditiously and fairly. The relevant
enquiries to
make in review applications, said the LAC are the following:
"(i) In terms of his
or her duty to deal with the matter with the minimum of legal
formalities, did the process that the arbitrator
employed give the
parties a full opportunity to have their say in respect of the
dispute? (ii) Did the arbitrator identify the
dispute he was required
to arbitrate...? (iii) Did the arbitrator understand the nature of
the dispute he or she was required to
arbitrate? (iv) Did he or she
deal with the substantial merits of the dispute? And (v) Is the
arbitrator's decision one that another
decision – maker could
reasonably have arrived at based on the evidence?"
[24]
Thus, where an arbitrator commits misconduct in relation to his/her
duties or there is a gross process-related irregularity
in the
arbitration, this is not - in and of itself - a sufficient ground to
warrant interference by our courts on review. The irregularity
must
be of such a nature that it renders the decision reached unreasonable
in the circumstances. So practically what does all of
this mean?
It is no longer good enough for employers or employees wishing to
review an award based on one of the procedural
defects provided for
in section 145(2)(a), to only establish the existence of the defect,
i.e. misconduct by an arbitrator in relation
to his/her duties, a
gross irregularity committed by the arbitrator in the conduct of the
arbitration proceedings or the arbitrator
exceeding his powers.
It is now also necessary to show that the defect caused the ultimate
result of the award to be unreasonable.
Thus, the two stage test
adopted by the LAC in such instances is:
a. Was there a section
145(2)(a) defect ?; and
b.
If so, can the defect be said to be such that resulted in the
decision reached being unreasonable (in the sense that it was one
that a reasonable arbitrator could not have reached)?
THE
COMMISSIONER’S AWARD REGARDING THE MATTER OF THE 1
ST
APPLICANT
[25]
The crux of the 1
st
applicant’s argument is that he
committed no wrongdoing and that the commissioner erred in arriving
at another decision.
In his award, the commissioner summarises the
evidence of each witness in some detail. I have studied the averments
made by the
1
st
applicant and the answers thereto. It is
also clear from the handwritten notes of the commissioner and his
subsequent award that
the only incriminated evidence against the 1
st
applicant is that or Mrs. Roux. She gave clear and precise
evidence on the duties of the 1
st
applicant as well as the
procedures followed when trucks are loaded and the like. She
explained that 4 extra pellets were loaded
on the 1
st
applicant’s truck and that a manual gate pass was issued to him
instead of the usual electronic gate pass. I do not intend
dealing
with her entire evidence but I am satisfied that the commissioner
correctly considered the totality of her evidence and
that he
correctly arrived at a conclusion that the 1
st
applicant
was guilty of serious misconduct albeit on a balance of probability.
[26]
Mr. Frahm-Arp argued that the only incriminating evidence against the
1
st
applicant only surfaced during re-examination. I have
considered this argument but in my view her evidence should be
considered
in totality. The commissioner clearly did so and analysed
the evidence and presented sound reasons for accepting her evidence.
[27]
The commissioner’s conclusion is supported by evidence and he
came to the correct finding. In my view, the commissioner
applied his
mind to the facts before him and came to a conclusion that falls
within a band of decisions to which reasonable decision
makers could
come on the available evidence
[28]
In short: the commissioner’s conclusion that the 3
rd
respondent’s version that the theft would not have occurred
without the 1
st
applicant’s involvement is a
decision that is not unreasonable, given the material before him.
THE
COMMISSIONER’S AWARD REGARDING THE MATTER OF THE 2
nd
TO 4
th
APPLICANTS
[29]
The 2
nd
to 4
th
applicants were awarded 4 months
compensation and it is common cause that reinstatement was not sought
during the arbitration proceedings.
[30]
Their case is simply that the amount awarded is not just and
equitable as they were deprived of their livelihoods despite the
fact
that they committed no wrongdoing. It is also the 2
nd
to
4
th
applicant’s case that the commissioner
considered that they had short service at the time of the dismissal
where in fact
this is factually not correct (they had 5 years’
service). The commissioner furthermore failed to consider that the
2
nd
to 4
th
applicants were unemployed at the
time of the arbitration proceedings and find themselves in a dreadful
position by no fault of
their own.
[31]
Section 193 of the LRA grants a commissioner a discretion in awarding
compensation and there is simply no fixed yardstick in
determining
the exact amount that should be allocated. The CCMA guidelines on
misconduct arbitrations (Government Gazette number
34573 dated 2
September 2011) provides that commissioners ought to consider certain
factors in determining an amount that is just
and equitable. These
factors are listed in paragraphs 133.1 to 133.15 and it is abundantly
clear that the commissioner considered
only some of these factors
(but not each and every factor).
[32]
It would easy to criticize the commissioner for awarding 4 months
compensation and not a higher amount. The test for review
is however
dealt with above and in my view the decision to award 4 months
compensation is not unreasonable or of such nature that
it
necessitates interference from this court. The commissioner was faced
with the relevant facts and explained why he granted 4
months
compensation.
[33]
The decision to grant 4 months compensation is not unreasonable
albeit that the commissioner did not apply each and every listed
factor to be considered.
THE
PEREMPTORY RULE OR WAIVER
[34]
The 3
rd
respondent raises this as a preliminary issue in
their heads of argument and arguments from the bar (see paragraphs 10
to 12
supra
).
[35]
I do not deem it necessary to consider this aspect as the award
should not be set aside. It is therefore simply not necessary
to
consider the 3
rd
respondent’s arguments as the
application is dismissed.
[36]
Finally, in relation to costs, and in the exercise of the discretion
conferred on me by section 162 of the LRA, there is no
reason why
costs should not follow the result.
For
these reasons, I make the following order:
1.
The application is dismissed, with costs.
Pieter
Venter
Acting
Judge of the Labour Court
Appearances
For
the Applicant:
Ludwig Frahm-Arp (Bell Dewar
Inc.)
For
the Respondent:
Darryn Mer (Fluxmans Incorporated)