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[2014] ZALCJHB 30
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Mohale v Hlatswayo NO and Others (JR2083/12) [2014] ZALCJHB 30 (18 February 2014)
REPUBLIC OF SOUTH
AFRICA
LABOUR COURT OF SOUTH
AFRICA, JOHANNESBURG
JUDGMENT
Not reportable
Case No JR2083/12
In
the matter between:
SOLLY
MOHALE
…........................................................................................
Applicant
and
HLATSWAYO,
T
N.O.
.........................................................................
First
Respondent
COMMISSION
FOR CONCILIATION,
….....................................
Second
Respondent
MEDIATION
AND ARBITRATION
CASHPAY MASTER
SERVICES NORTHERN
...............................
Third
Respondent
(PTY)
LIMITED
Heard:
15 January 2014
Delivered:
18 February 2014
Summary: Review of
jurisdictional ruling - section 158 (1)(g) of the LRA, 1995 - delay
in filing of review application condoned
- reasons for delay
satisfactory – Commissioner committed gross irregularity in
finding that CCMA had no jurisdiction to
interpret settlement
agreements - ruling set aside.
JUDGMENT
CHAVOOS
AJ
Introduction
[1]
This is an application for review in terms of section 145 of the
Labour Relations Act, 66 of 1995, as amended (the “LRA”)
and/or section 158(1)(g) of the LRA to review and set aside a
jurisdictional ruling of the first respondent under the auspices
of
the second respondent. In terms of the ruling, the first respondent
found that the second respondent did not have jurisdiction
to
arbitrate the applicant’s unfair dismissal dispute on the basis
that the issue in dispute was about a term of the settlement
agreement in which case the labour court and the high court had
concurrent jurisdiction in terms of section 77(3) of the Basic
Conditions of Employment Act to preside over the dispute.
Background
[2]
A dispute arose between the applicant and the third respondent which
culminated in a settlement agreement being concluded on
21 November
2008.
[3]
In terms of the settlement agreement, any relationship, contractual
or otherwise, that existed between the applicant and the
third
respondent terminated on 21 November 2008 by mutual agreement.
[4]
The agreement was in full and final settlement of the “settlement
claims” defined as any claim of whatsoever nature,
the
applicant may have against the third respondent including any claims
which may have resulted from the termination of the relationships
contemplated in the settlement agreement.
[5]
Subsequent to the conclusion of the settlement agreement, the parties
entered into a further contractual relationship. Sometime
thereafter,
a new dispute arose and the applicant referred an alleged unfair
dismissal dispute to the CCMA for arbitration.
[6]
At the commencement of the arbitration, the third respondent raised
two points in
limine
. The first was that the settlement
agreement concluded on 21 November 2008 also settled the new dispute.
The second was that the
applicant was not an employee of the
respondent but an independent contractor. The parties agreed that the
commissioner was only
required to give a ruling in respect of the
first objection in limine before it arbitrated the dispute.
[7]
On 18 June 2010, the commissioner handed down his jurisdictional
ruling, the salient portion of which is as follows:
‘
The
applicant concluded a settlement agreement with the respondent during
2008 for a particular course of action which was between
the parties
and the settlement agreement was in full and final settlement between
the parties;
It was apparent that the
parties had further engaged one another which resulted in another
course of action;
The crucial issue is
whether or not a settlement agreement that was concluded between the
parties during 2008 did, or did not, cover
the possible future claims
or legal liability that the applicant may have against the
respondent;
The cases cited by both
parties are incongruent to one another in that they all indicate that
if the issue in dispute is about the
term of the agreement then the
labour court and the high court have concurrent jurisdiction in terms
of section 77(3) of the BCEA;
Given the evidence before
me, I conclude that the CCMA has no jurisdiction to deal with the
matte'r.
[8]
It is apparent from the commissioner’s reasoning that he
declined jurisdiction on the basis that the high court or labour
court had jurisdiction to resolve a dispute about the interpretation
of a settlement agreement;
[9]
The applicant then referred the matter by way of a statement of case
to this Court which matter was heard by Acting Judge Dodson
on 10
July 2012, with judgment being delivered on 8 August 2012.
[10]
In a pre-trial minute, the parties agreed that:
10.1
the narrow question to be determined by the
court is whether or not a settlement agreement concluded between the
applicant and the
respondent on 21 November 2008 settles any further
claims and/or liability that arose between the applicant and the
respondent
after 21 November 2008;
10.2
if the court answered the aforesaid
question in the negative, then the matter must be referred back to
the CCMA for determination
of two issues. Firstly, whether an
employment relationship existed between the parties. Secondly, if the
first question is answered
in the affirmative, whether the applicant
had been unfairly dismissed by the Respondent.
[11]
Mr Hutchinson who was the counsel for the third respondent, at the
trial before Dodson AJ argued that both parties had erroneously
overlooked the fact that this court had no jurisdiction to entertain
the dispute because it was not for the court to determine
academic
issues and that the ruling of the commissioner should rather have
been taken on review to have it set aside, if the applicant
wished to
take issue with it.
[12]
The change in approach was for the first time recorded in the third
Respondent’s heads of argument.
[13]
For reasons set out in his judgment, Dodson AJ agreed that this court
did not have the jurisdiction to determine the issues
purportedly
presented to it by agreement in the parties’ pre-trial minutes
and accordingly dismissed the referral. He also
agreed that this
matter ought to have been referred to this court for a review. He
also articulated in his judgment the reasons
for him disagreeing that
the commissioner had no jurisdiction to interpret the settlement
agreement and drew a distinction between
the cases referred to by the
third respondent from the matter at hand in coming to his conclusion.
Evaluation
[14]
I am in agreement with Dodson AJ that the cases as referred to by the
third respondent are distinguishable from the matter
at hand. In my
view, the defence that was raised by the third respondent at the CCMA
before the commissioner in response to the
applicant’s alleged
unfair dismissal claim was that the alleged unfair dismissal dispute
could not be adjudicated by the
CCMA on the basis that a settlement
agreement had been concluded between the parties which settled all
current and future disputes
is simply a plea of compromise and
collateral to the real nature of the dispute referred to by the
applicant, namely an alleged
unfair dismissal dispute. The
interpretation of the settlement agreement was part of what the
commissioner was required to determine
in adjudicating the alleged
unfair dismissal dispute and he had the requisite power to interpret
and hear evidence on the defence
raised by the third respondent as
part of the adjudication of the alleged unfair dismissal claim.
[15]
Ironically, Mr Hutchinson in his heads of argument before Dodson AJ,
records the following as to the commissioner’s findings:
“
The
commissioner’s findings are set out above in paragraph 1
above. It is apparent from the commissioner’s findings
that he committed a gross irregularity in the conduct of the
proceedings by failing to determine the issue that was argued before
him. In fact, he side-stepped the issue and made an
incomprehensible reference to the labour court having jurisdiction
over
disputes concerning the terms and conditions of an agreement as
contemplated in section 77(3) of the BCEA.
What
the commissioner should have determined is whether there was any
connection between the settlement agreement and a subsequent
contract
of employment that was allegedly entered into between the parties and
allegedly resulted in the dismissal of the applicant.
If the
commissioner found that the settlement agreement, covered a
subsequent dismissal the CCMA would not have jurisdiction to
entertain the matter. If however, he determined that a
subsequent event culminating in the dismissal of the applicant was
not covered by the settlement agreement, then he had jurisdiction to
deal with the matter.”
[16]
This is precisely what the commissioner ought to have done in
adjudicating the dispute at the CCMA instead of side-stepping
the
issue.
[17]
It is not necessary for me to provide substantive reasons motivating
why the CCMA does indeed have jurisdiction to deal with
unfair
dismissal disputes in light of the concessions made by Mr
Hutchinson. The reasons are in any event well articulated
in
the judgment of Dodson AJ in respect of which I am in agreement.
If the CCMA has the power to decide on whether a settlement
agreement
is enforceable in appropriate circumstances, it may determine the
issue in dispute for this reason as well.
[18]
The Commissioner’s findings are grossly irregular and falls to
be reviewed and set aside.
Condonation
[19]
The Third Respondent sought to contest the review application on the
basis that the condonation for the late service and filing
of the
review application should not be granted as a result of the delay in
bringing the review application. It was not contended
that the
Applicant had no prospects of success in reviewing and setting aside
the decision of the Commissioner. In fact it
would have been
absurd for Mr Hutchinson to argue this given his argument before
Dobson AJ during trial.
[20]
Insofar as the issue of delay is concerned, Mr Hutchinson contended
that the Applicant was legally represented at the CCMA
and that his
attorneys ought to have known that the Commissioner’s ruling
should have been taken on review as opposed to
filing a statement of
case and seeking the wrong remedy. In the circumstances he
contended that as a consequence of such
negligence on the part of the
Applicants’ attorneys, the condonation sought by the Applicant
insofar as the delay in bringing
the review application is concerned
should not be condoned.
[21]
He also contended that the third respondent would suffer substantial
prejudice if condonation were to be granted without any
real
substantiation in respect thereof.
[22]
Mr Orton for the Applicant argued that the advice given by the
Applicant’s attorneys at the time of the jurisdiction
ruling
being issued was far from negligent and bona fide. It was not
wrong at the time as the CCMA had at such stage adopted
the view in
respect of many similar cases that it did not have jurisdiction to
deal with the matter and that such an issue ought
to be adjudicated
by the Labour Court. The judgment of Molahlehi J, which was an
orbiter ruling on the issue was also taken
into account and it was
not until Dobson AJ pronounced on the issue that certainty was
created.
[23]
He further contended that it was the third respondent who had been
mala fide throughout the litigation in that it had first
raised a
jurisdictional objection to the CCMA hearing the matter which was a
very frivolous argument. It then agreed with
the Applicant that
the Labour Court had jurisdiction to adjudicate the dispute in terms
of section 77(3) of the BCEA. In
fact, both parties had agreed
on the narrow question to be determined before Dobson AJ in terms of
a pre-trial minute before the
third respondent belatedly in its heads
of argument before trial argued that the matter ought to be heard on
review in the Labour.
[24]
Moreover, he contended that the third respondent’s attorneys
had taken eight months to agree on a pre-trial date which
protracted
this matter unnecessarily and that it was the third respondent who
was responsible for a large portion of the delay.
[25]
The incorrect procedure followed by the applicant which resulted in
the matter coming before Dodson AJ were errors on the part
of both
parties. If the third Respondent knew from the outset that the
Commissioner had jurisdiction to hear the matter and/or
his ruling
should have been reviewed then it has been mala fide. The third
respondent in fact in the pre-arbitration agreement
agreed to the
issues that were to be argued before Dodson AJ and in the
circumstances it can hardly contend that the Applicant
was negligent
for following the incorrect procedure. It is clear that the
review application was pursued by the applicant
within 20 days of
Dodson AJ’s judgment being delivered and the only delay in
bringing the review application was as a result
of the incorrect
legal procedure being followed. I do not find that the
attorneys for the Applicant were negligent in the
handling of this
matter and find that the Applicant has provided a more than
satisfactory explanation for the delay.
[26]
The prejudice that the Applicant will suffer should he not be given
an opportunity to have the merits of the dispute heard
is immense.
He is entitled to have a fair hearing on the merits before the CCMA
which has thus far been denied to him.
[27]
Insofar as the issue of costs is concerned, the third respondent was
alive to the fact that the first respondent had committed
a gross
irregularity in the proceedings which was in as much set out in the
third respondent’s heads of argument before Dodson
AJ.
The argument that condonation should not be granted based on an
unsatisfactory explanation for the delay is without any
merit.
I see no reason why costs should not follow the result in this
matter.
[28]
In the premise, I make the following order:
28.1
The ruling issued by the first respondent,
under the auspices of the second respondent, under case number
GAJB43451-09 dated 18
June 2010, in the arbitration proceedings
between the applicant and the third respondent, is reviewed and set
aside;
28.2
The dispute is remitted back to the CCMA
for arbitration;
28.3
The third respondent is ordered to pay the
costs of this application.
Chavoos AJ
Acting Judge of the
Labour Court of South Africa
Appearances:
For the Applicant: T J C
ORTON (Snyman’s Attorneys)
For the Third Respondent:
Advocate W Hutchinson instructed by Fluxmans