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[2014] ZALCJHB 40
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AMT Services v Metal And Engineering Bargaining Council and Others (JR2682-11) [2014] ZALCJHB 40 (11 February 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not
reportable
Case
no: JR 2682-11
In
the matter between:
AMT
SERVICES
Applicant
and
METAL
AND ENGINEERING BARGAINING
COUNCIL
(MEIBC) First
Respondent
TSHEPO
MASHIGO N.O. (THE
COMMISSIONER) Second
Respondent
KHULEKANI
SITHOLE Third
Respondent
Heard:
16 January 2014
Delivered:
11 February 2014
Summary:
Review application
JUDGMENT
VENTER
A J
[1]
This is an application to review and set aside an arbitration award
issued on 14 September 2011 by the second respondent (to
whom I shall
refer as the “commissioner”). The arbitration award was
issued under auspices of the first Respondent
under case number MEGA
32466.
[2]
Ms. Charoux appeared for the Applicant whilst Ms. Hanif appeared for
the third Respondent.
FACTUAL
BACKGROUND
[3]
The third Respondent was employed by the Applicant in their
maintenance department. The third Respondent was found in
(unauthorised)
possession of company property. He was subsequently
charged for theft of brass bushes to the approximate value of R
26 000-00.
[4]
The third Respondent pleaded guilty during a disciplinary inquiry
that was conducted on 13 January 2011. Aggravating- and mitigating
factors were considered and the third Respondent was dismissed on 20
January 2011.
[5]
The third Respondent lodged an appeal against his dismissal but the
dismissal was confirmed on 28 February 2011.
[6]
The dismissal dispute was subsequently referred to the first
Respondent and the dispute was arbitrated on 1 September 2011.
[7]
No
viva voce
evidence was presented during the arbitration
proceedings and the commissioner was only called upon to determine
one issue namely
consistency. The commissioner was of opinion that
the Applicant failed to act consistently and that the dismissal was
therefore
substantively unfair. The Applicant was ordered to pay
compensation to the third Respondent in the amount of R 12 600-00
(which
was equal to three month’s salary).
[8]
It was common cause between the parties that another employee, Mr.
Zungu (“Zungu”) was also charged for theft of
company
property during the same period. He was found guilty of removing two
door handles to the value of approximately R 10-00
and was issued a
final written warning.
[9]
The Applicant filed this application in reaction to the finding that
their conduct was substantively unfair.
GROUNDS
FOR REVIEW
[13]
The Applicant’s grounds for review are broadly stated. The
Applicant contends that the commissioner’s finding is
not
reasonable and that the conclusion reached was unreasonable as the
arguments presented to him do not support such conclusion.
The
Applicant’s case is, in essence, that any reasonable
commissioner would have arrived at a different finding when faced
with the same set of facts. The Applicant’s contention is that
they had reason to differentiate in applying discipline and
that they
acted consistently.
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 and Others,
case number JA2/2012
[2013]
ZALAC 28
(4 November 2013)
("
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
and Another v Rustenburg Platinum Mines Ltd and Others
[1]
("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 the
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
case of This approach had been accepted by the Labour Appeal
Court in
the case of
Herholdt
v Nedbank Ltd
[2]
.
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 Herholdt
went on appeal, however, the Supreme Court
of Appeal did not uphold
such a generous approach. It revisited and analysed the provisions of
section 145 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 section 145 (2) (a) of the LRA. For
a
defect in the conduct of the proceedings to amount to a gross
irregularity as contemplated by section 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.’
[3]
[21]
The SCA thus made its position clear on the issue through its
judgment in the Herholdt 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]
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?’
[4]
[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
[25]
The commissioner’s findings were, in essence, that the
Applicant acted unfairly in dismissing one employee and not
dismissing
another employee after both employees were convicted of
theft of company property. The commissioner found that “theft
was
theft” and damaged the trust relationship.
[26]
The commissioner furthermore concluded that length of service and the
value of the stolen items should not have played a role
and both
employees should have been dismissed.
[27]
The facts in this matter are common cause. The Applicant pleaded
guilty to theft of brass bushes and the value is also not
in dispute.
It is also common cause that he had approximately two years service
at the time of his dismissal whereas Zungu had
a clean record for a
protracted period. The legal representatives were unable to provide
clarity on the exact duration of Zungu’s
employment but they
were
ad idem
that it was for many years.
[28]
It was therefore incumbent on me to consider the parity principle in
determining whether the commissioner acted reasonable.
[29]
Contemporaneous consistency or the so-called parity principle is a
well known principle and an important yardstick in determining
fairness of discipline at the workplace. The classic example is where
two employees are guilty of the same form of misconduct and
issued
with different sanctions.
[30]
The parity principle should however be applied with caution and is
merely a general principle of fairness and should not be
applied
rigidly. The courts have made some important rulings such as the
matter of
Rustenburg
Platinum Mines
(Rustenburg
Section)
v
CCMA and Others
,
[5]
where the court noted that the applicant had not challenged the
commissioner’s finding that the onus rested on the employer
to
prove that its conduct was consistent. The law requires employees who
have committed similar misconduct to be treated consistently.
Consistency is an element of fairness in disciplinary matters.
However, there must be sound reasons for treating employees guilty
of
the same offence differently. The evidence indicated that of the two
employees with whom the Respondent (employer) compared
his situation,
one had received a bottle of perfume without declaring it, as
required by the company policy. She had received a
final written
warning. The other employee had also received a gift which he did not
declare, and had also been given a final written
warning. No evidence
had been led concerning the circumstances of the second employee. It
appeared from the record of the arbitration
proceedings that the
Applicant had not sought to justify the different sanctions handed
down to the three employees. Unlike the
respondent employee, one of
the other employees had been found guilty of a second charge, yet had
received only a final warning.
There was no evidence before the
commissioner to support the Applicant’s arguments that various
factors were taken into account
when it applied its conflict of
interest policy. In review applications, the court cannot go beyond
the evidence placed before
the commissioner. The Applicant had
accordingly failed to prove that the commissioner’s finding of
inconsistency was unjustifiable.
[31]
In
SRV
Mills Services v CCMA and Others
,
[6]
the court held that an employee need not prove
male
fides
on the side of the employer in order to prove inconsistency. In
SACCAWU
and Others v Irvin and Johnson
,
[7]
it was however held, by the Labour Appeal Court, that consistency is
not a true “principle” in its own right but merely
a
factor in determining fairness. An employer only needs to be
“reasonably” consistent.
[32]
The Labour Appeal Court has also found that an employer may be
justified in differentiating between employees who have committed
similar offences on the basis of personal circumstances, merits or
the misconduct in itself.
[8]
[33]
The Applicant did not treat the two employees alike and their
argument is that the length of service and value of the theft
should
be considered.
[34]
It is trite that long service is a relevant factor to be considered
when discipline is applied.
[35]
Long service and the value of a stolen item were at the heart of the
matter of
Shoprite
Checkers (Pty) Ltd v CCMA and Others
,
[9]
where an employee consumed food belonging to the employer. The
Supreme Court of Appeal held,
inter
alia
,
that the length of service and relatively low value of the item
should be of paramount importance.
[36]
There are two distinct reasons why the Applicant did not dismiss both
employees and the reasons are common cause. In my view
these reasons
are valid and the commissioner ought to have considered them
properly. To merely state that theft is theft and that
the trust
relationship has become intolerable would not suffice. The third
Respondent was guilty of stealing brass bushes that
form part of the
Applicant’s daily operations and income. The value is R
26 000-00. Zungu stole two door handles to
the value of R 10-00
and the evidence clearly suggests that the door handles were of very
little financial value or of operational
significance to the
applicant.
[37]
The Applicant provided a reasonable explanation to the commissioner
as to why they differentiated in the issuing of different
sanctions.
I am satisfied that their reasons are sound in law and the
commissioner should have considered these factors.
[38]
The arguments that were placed in front of the commissioner does not
support his conclusion and I am not satisfied that the
commissioner
correctly interpreted the available arguments and/or legal position.
The award therefore stands to be set aside.
[39]
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 I
should order that costs be paid by the third Respondent. He opposed
the application but was not frivolous or vexatious.
[40]
For these reasons, I make the following order:
(a)
The arbitration award dated 14 September
2011, issued under MEIBC case number MEGA 32466, is hereby set aside
and replaced by an
order that the dismissal of the third respondent
was substantively fair.
(b)
Each party to pay its own costs.
APPEARANCES:
FOR
APPLICANT: Ms. Charoux from Stanley Moldt Attorneys.
FOR
THIRD RESPONDENT: Ms. Hanif from Mitti Attorneys.
Pieter
Venter AJ
Acting
Judge of the Labour Court
[1]
2007]
12 BLLR 1907
(CC).
[2]
[2012]
9 BLLR 857 (LAC).
[3]
2013
(6) SA 224
(SCA) at para 25.
[4]
Ibid
at para 20
[5]
[2006]
11 BLLR 1104 (LC).
[6]
[2004]
2 BLLR 184 (LC).
[7]
[1999]
8 BLLR 741 (LAC).
[8]
See
Early
Bird Farms v Mlambo
[1997] 5 BLLR 541
(LAC) in this regard.
[9]
[2009]
7 BLLR 619
(SCA).