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[2014] ZALCJHB 16
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Drs Haagensen & Lurie Inc v Commission for Conciliation, Mediation and Arbitration and Others (JR2969/10) [2014] ZALCJHB 16 (7 February 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case
no: JR 2969/10
REPORTABLE
DATE:
07 FEBRUARY 2014
In
the matter between:
DRS
HAAGENSEN & LURIE
INC
...................................................................
Applicant
And
THE
COMMISSION FOR CONCILIATION
MEDIATION
AND
ARBITRATION
.......................................................
First
Respondent
COMMISSIONER
MOAHLOLI NYAMA (Cited in
his
capacity as Commissioner of the Commission
for
Conciliation and
Arbitration)
.................................................
Second
Respondent
MADELEIN
CLOETE
...........................................................................
Third
Respondent
Heard:
05 September 2013
Delivered:
07 February 2014
Summary:
Review application of two arbitration awards made- first ruling on
jurisdiction and the second on merits of the alleged
unfair
dismissal. The applicant abandoning the review of the first
arbitration award. Legal presumption- the first award remains
in
force and valid. The Commissioner in the second arbitration award
bound by the jurisdictional ruling in the first arbitration
award.
The second arbitration award fair and reasonable in finding the
dismissal of the employee to be substantively unfair.
JUDGMENT
MOLAHLEHI
J
Introduction
[1]
This is an application to review and set aside the arbitration award
made under case number GAJB 2415-10 dated 31 October 2010,
in terms
of which the dismissal of the third respondent was found to be both
procedurally and substantively unfair.
Background
facts
[2]
The applicant is involved in the medical practice. The third
respondent (the employee) was prior to the termination of her
employment employed by the applicant as a credit controller. It is
common cause that during the cause of her employment the employee
regularly took sick leave.
[3]
Mr Sher, the manager of the applicant, approached the employee
regarding her capacity to perform her duties as a result of her
health problems. An incapacity inquiry was subsequently held where
the problem arising from the health condition of the third respondent
was discussed.
[4]
The incapacity hearing was held on 15 July 2010. It transpired at
that time that the employee was due to undergo an operation
which
would have seen her away from work for two months.
[5]
During the enquiry, the employee suggested as a solution to her
health problem that she be allowed to take work home. The suggestion
was rejected by the applicant on the basis of the risk that would
pose on the confidentiality of the files she had to work on.
[6]
The third respondent further suggested that a temporary person be
employed during her sick leave. That was also rejected on
the basis
that it would take time to train such a person.
[7]
The outcome of the engagement between the parties was an agreement in
terms of which the employment contract of the employee
be terminated
on the grounds of medical boarding. Clause 2.1 of the agreement
provides:
‘
With
effect from the termination date, the employment of the employee with
the Practice is terminated by mutual agreement.’
[8]
The effective date of the termination was 29 January 2010. Clause 4
of the agreement provides:
‘
This
agreement constitutes the full and final settlement of all or any
claims, which either party may have against the other of
whatsoever
nature arising from or in conjunction with the employee’s
employment with the Company and the subsequent termination
thereof.
This
agreement constitutes the entire agreement concluded between the
parties and no variation, alteration or addition thereto shall
be of
any force or effect unless reduced to writing and signed by both
parties.’
[9]
After the termination of the employment contract, the employee
referred an alleged unfair dismissal dispute to the CCMA. At
the
conciliation hearing, the applicant raised a point in limine
regarding the jurisdiction of the CCMA to entertain the dispute.
[10]
The objection for the CCMA to entertaining the matter was dismissed
and accordingly the CCMA was found to have jurisdiction
to entertain
the matter. The matter proceeded to arbitration where at the end
thereof the termination of the employment contract
of the employee
was as indicated earlier found to have been unfair and a 10 months
compensation was for that reason made in favour
of the employee.
The
adjudication history of the matter
[11]
There are two arbitration awards in this matter. The first
arbitration award dealt with the narrow issue of the jurisdiction
of
the CCMA to entertain the dispute. The jurisdictional point as was
raised by the applicant concerned the issue of whether the
employee
was dismissed by the applicant. This matter served before
Commissioner Phala (the first Commissioner).
[12]
The contention of the applicant during that hearing was that the CCMA
did not have jurisdiction because the employee’s
employment
contract was terminated by agreement between the parties.
[13]
In determining the issue of whether the employee was dismissed, the
first Commissioner made the following findings:
‘
3.4
The submissions of the respondent were muddled and confusing. As much
as the CCMA did not have the power to set aside the settlement
agreement, it is clear that what the document sought to achieve (the
settlement agreement) was inconsequential because the applicant
supposedly resigned.’
[14]
It was on the basis of the above that the Commissioner found that the
CCMA did have jurisdiction to arbitrate the dispute.
Once the issue
of jurisdiction was resolved on the basis that the CCMA had
jurisdiction the matter proceeded for determination
of both the
procedural and substantive fairness of the dismissal before
Commissioner, Mr Nyama (the second Commissioner).
[15]
As indicated earlier in this judgment, the second Commissioner found
the dismissal to have been unfair and ordered compensation
for that
reason in the amount equivalent to 10 months’ salary.
[16]
The applicant being unhappy with the outcome of both arbitration
awards filed the present review application. In the cause
of the
review application the issue of joining the first Commissioner arose.
It would appear that although the employee opposed
the joinder
application, she later consented thereto. The application to join the
first Commissioner in the review application
was granted. However,
despite the leave to join the first Commissioner in the proceedings,
the applicant failed or neglected to
effect the joinder.
Grounds
of review
[17]
Initially, the applicant sought to review both the first arbitration
award dealing with the jurisdictional point and the second
arbitration award dealing with the fairness of the dismissal.
[18]
As indicated earlier, the applicant abandoned the review application
of the first arbitration award after failing to effect
the joinder of
the first Commissioner. That being the case, the focus in this
judgment shall be on the review grounds raised against
the second
award.
[19]
In challenging the second arbitration award, the essence of the
applicant’s complaint is that the Commissioner committed
gross
irregularity in several respects. The applicant contends that the
Commissioner in arriving at the conclusion that the dismissal
was
unfair, failed to take into account the fact that the employee was
not dismissed but that the contract was terminated through
the
agreement. The other point raised by the applicant is that the
Commissioner made incorrect factual and legal findings in as
far as
the dismissal of the employee was concerned.
The
arbitration award
[20]
In the arbitration award, the second Commissioner noted two issues
for his determination. The first issue concerns legal representation
which does not arise in these proceedings. The second issue concerns
the substantive fairness of the dismissal.
[21]
In arriving at the conclusion that the dismissal of the employee was
unfair, the Commissioner relied on the provisions of item
11 of
schedule 8 of the Code of Good Practice the provisions of which are
discussed later in this judgment.
[22]
The Commissioner found that the employee was required to go for a hip
replacement which required her to take leave from 25
January 2010 to
07 March 2010. The period that the employee would have been absent
from work due to the ill-health was not appreciated
by the applicant
and it was for that reason that incapacity enquiry due to ill-health
was conducted.
[23]
The Commissioner criticised the approach adopted by the applicant in
conducting the incapacity enquiry. He found that the applicant
did
not conduct ill health incapacity enquiry properly and in particular,
that sufficient time was not provided for the consideration
of the
proposals made by the employee. The enquiry according to him was done
in haste and accordingly no proper consideration was
given to the
alternatives to dismissal.
[24]
It was for the above reasons that the Commissioner found that there
were no fair reasons to dismiss the employee for incapacity.
[25]
In awarding costs against the applicant the commissioner found the
applicant to have been reckless in that it proceeded to
oppose the
employee’s claim despite knowing that it did not conduct a
proper enquiry. The Commissioner also disapproved of
the failure by
the applicant to produce in evidence the report into the employee’s
incapacity.
Evaluation
[26]
It is trite that the existence of dismissal is a jurisdictional fact
which must exist before the CCMA can acquire the power
to consider a
dismissal dispute.
1
The duty to establish the existence of a dismissal in terms of
section 192
of the
Labour Relations Act 66 of 1995
, rests with the
employee. Once the employee has established the existence of a
dismissal then the employer has the duty to show
that the dismissal
was for a fair reason.
[27]
In the present matter, the CCMA had jurisdiction to entertain the
dispute as formulated by the employee which was raised by
the
applicant at the commencement of the first arbitration hearing before
the first Commissioner.
[28]
The transcript of the proceedings before the first Commissioner
reveals very clearly that the issue of whether the employee
was
dismissed was fully ventilated by the parties. The case of the
applicant at that stage was that, the CCMA did not have jurisdiction
to entertain the dispute because the employment relationship was
terminated by consensus between the parties. In this respect,
the
applicant presented evidence of mutual termination of the contract by
settlement and made extensive submissions as to why the
CCMA lacked
jurisdiction.
[29]
It is apparent from the reading of the record that the employee did
not dispute having signed the agreement terminating the
employment
relationship. It was however argued on behalf of the employee that
the settlement agreement was “nothing other
than the employer
disguising a letter of dismissal.”
[30]
After listening to the submissions made on behalf of both parties,
the Commissioner adjourned the hearing to consider the matter
and
thereafter issued his decision as to the point in limine raised by
the applicant.
[31]
The essence of the ruling was that the applicant dismissed the
employee and therefore the CCMA had jurisdiction to entertain
the
dispute.
[32]
I have indicated earlier that the applicant had subsequent to failing
to effect the joinder of the first commissioner abandoned
the review
of the first arbitration award.
[33]
The case of the applicant in the present instance seems to be that
the second Commissioner should have considered the jurisdictional
issue of dismissal before proceeding to entertain the question of the
fairness or otherwise of the dismissal.
[34]
The general principle of our law is tha an arbitration award once
issued is final and binding until rescinded or set aside
on review.
This principle is enunciated in Taung Local Municipality v Mofokeng,
2
as follows:
‘
12.
It has been pointed out in Oudekraal supra that whilst an unlawful
act is void in law it is however in fact valid and derives
its
validity and the force of law from its factual basis. Thus the
enquiry generally is not whether the decision has its basis
in law
but rather whether such a decision exists in fact. The next enquiry
once it has been established that the decision is unlawful
but exists
in fact would be to determine whether it has been set aside on
review. In general this question arises in the determination
of
whether or not the decision is enforceable or whenever there is an
attempt at coercing such unlawful administrative act.”
[35]
It is apparent that the second Commissioner approached the matter on
the basis that he was bound by the findings made in the
first
arbitration award and in this regard had the following to say:
‘
6.
The applicant referred her dispute to the CCMA on 22 January 2010.
The conciliation remained unresolved. The initial arbitration
scheduled for the 26th April 2010 was postponed. The second
arbitration was scheduled on 5 July 2010 and the respondent raised
the preliminary jurisdictional point. A ruling was issued on 16 July
2010.’
[36]
In light of the above, the second Commissioner was duty bound to
proceed to determine whether the dismissal was for a fair
reason, the
jurisdictional point regarding the issue of dismissal having been
resolved in favour of the employee. In this respect,
the second
Commissioner identified the key issue for determination as being
whether the dismissal of the applicant was both procedurally
and
substantively unfair.
[37]
I turn to deal with the review of the second arbitration award. The
enquiry to conduct in this respect is to determine whether
the
decision reached by the second Commissioner is one that a reasonable
decision-maker could not reach.
3
[38]
It is trite that an employer is entitled to terminate the employment
contract of an employee on the grounds of incapacity due
to
ill-health, on condition that it is substantively and procedurally
fair.
[39]
The enquiry to conduct in determining the fairness of the dismissal
for incapacity due to ill-health is set out in item 11
of the Code of
Good Practice: Dismissal which provides:
•
Whether
or not the employee is capable of performing the work; and if the
employee is not capable,
•
The
extent to which the employee is able to perform the work,
•
The
extent to which the employee’s work circumstances might be
adapted to accommodate disability or where this is not possible,
the
extent to which the employee’s duties might be adapted
•
The
availability of any suitable alternative work.’
[40]
The factors to take into account in determining the fairness or
otherwise of a dismissal for incapacity due to ill-health is
set out
in item 10 of the Code of Good Practice in the following terms:
•
An
employer investigates the extent of the incapacity if the employee is
temporarily unable to work.
•
If
the employee is likely to be absent for a time that is unreasonably
long, the employer should investigate all the possible alternatives
short of dismissal. When alternatives are considered, relevant
factors might include the nature of the job, the period of absence,
the seriousness of the illness and the possibility of securing a
temporary replacement for the ill employee.
•
In
the process of the investigation the employee should be allowed the
opportunity to state a case in respondent and to be assisted
by a
trade union representative or fellow employee.
•
The
degree of incapacity is relevant to the fairness of any dismissal.’
[41]
The issue which the Commissioner had to determine was set out in the
pre-arbitration minutes and as indicated earlier entailed
having to
determine the procedural and substantive fairness of the dismissal.
[42]
It is common cause that the applicant convened an incapacity hearing
regarding the ill-health of the employee. It is also common
cause
that the employee made two proposals as to how to address her
incapacity which was rejected by the applicant. The applicant
made no
proposal as to the alternative to dismissal.
[43]
In his analysis after summarising in detail the evidence of the
parties, the second Commissioner applied the facts of this
case to
the principles set out in schedule 8 of the Code of Good Practice,
items 10 and 11. In arriving at the conclusion that
the dismissal of
the employee was unfair, the second Commissioner took into account
the period it took the applicant to conduct
the investigation and the
fact that the applicant failed to provide its investigation report.
He further found that there was no
evidence that the hip replacement
which the employee had to undergo would incapacitate her from
performing work as a credit controller.
In my view, the applicant did
not submit sufficient facts that would support the proposition that
the dismissal of the applicant
was substantively fair.
[44]
In light of the above discussion, I am of the view that the second
Commissioner cannot be faulted for the approach he adopted.
The
conclusion he reached is reasonable and there is no basis for
accusing him for gross irregularity.
[45]
In light of the above, I am of the view that the applicant’s
application stands to fail.
[46]
The employee has prayed for a punitive cost order. As indicated above
initially this matter involved the review of the two
arbitration
awards. It is common cause that the applicant had failed to join the
first Commissioner and accordingly a joinder application
had to be
made. The employee abandoned the initial opposition to application
for joinder in order to expedite the prosecution of
the review.
[47]
As indicated above after obtaining an order permitting joinder, the
applicant failed to effect the joinder. The applicant then
abandoned
the review of the first arbitration award. It has to be noted that
the applicant abandoned the application after a protracted
period of
instituting and prosecuting the joinder application.
[48]
The other aspect of the conduct of the applicant which the employee
complains about concerns the delay in the prosecution of
the review
application and in particular the delay in filing the
Rule 7A(8)
notice.
[49]
Having regard to the manner in which the applicant conducted the
review application, I am in agreement with the applicant that
the
appropriate order should be costs on a punitive scale.
Order
[50]
In the circumstances, the following order is made:
1.
The review application is dismissed.
2.
The applicant is to pay the third respondent costs on attorney and
own client scale.
Molahlehi
J
Judge
of the Labour Court of South Africa
APPEARANCES:
FOR
THE APPLICANT: Adv JM Bezuidenhout
Instructed
by: Clifford Levin Attorneys
FOR
THE RESPONDENT: Adv J.W Lamprecht
Instructed
by: Spector Attorneys
1
See
Bombadier
Transportation (Pty) Ltd v Mtiya and Others
(2010) 31 ILJ 2065 (LC) at para 13.
2
(2011)
12 BLLR 1243
(LC).
3
See
Sidumo
and Another V Rustenburg Platinum Mines Ltd and Others
(2007)
28 ILJ 2405 (CC)
and
Phalaborwa Mining Company Ltd V Cheetham and Others
(2008) 29 ILJ 306 (LAC).