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[2014] ZALCJHB 103
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Smit v South African Police Service and Others (JR2208/12) [2014] ZALCJHB 103 (28 March 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
REPORTABLE
CASE NO: JR 2208/12
In
the matter between:
GERRIT
JOACHIM SMIT
Applicant
And
SOUTH
AFRICAN POLICE SERVICE
J
N MTHUKWANE
N.O.
SAFETY
& SECURITY SECTORAL BARGAINING COUNCIL
First
Respondent
Second
Respondent
Third
Respondent
Heard:
13 March 2014
Delivered:
28 March 2014
Summary:
Test for review of arbitration award where issue is arbitrator
misconceiving nature of enquiry.
JUDGMENT
NGCUKAITOBI
AJ
INTRODUCTION
[1]
Although
the founding papers contain a number of review grounds, during oral
argument it became clear that only two review grounds
were being
pursued by the applicant. The first is that the arbitrator
misconceived the nature of the enquiry before him; and the
second is
that the outcome of the arbitration award is unreasonable.
[2]
Recently,
the Supreme Court of Appeal in the judgment of
Herholdt
v Nedbank Ltd
[1]
concluded that these two grounds are manifestations of the grounds
for review covered by section 145(2)(a)(ii) of the Labour Relations
Act 66 of 1995 (the “LRA”). This section defines
one of the statutorily recognized reviewable “
defects
”
in an arbitration award to include an instance where an arbitrator
“
committed
a gross irregularity in the conduct of arbitration proceedings
”.
[3]
Thus, an
arbitrator who misconceives the nature of the enquiry before him or
her by asking the wrong question or an arbitrator delivering
an
arbitration award whose result is unreasonable, commits a reviewable
irregularity under section 145 of the LRA.
[4]
The basis
for the first review ground is that the arbitrator misunderstood the
nature of the enquiry before him. He should have
dealt with the issue
of whether the employment relationship between the applicant and the
SAPS in fact and in law terminated. He
failed to do this. On this
basis, it is stated that he asked the wrong question. The
consequence of this irregularity was
that the arbitrator embarked on
the wrong track to a predictable and unavoidable outcome, which did
not address the case presented
by the applicant before him.
Because of this, there was no proper ventilation of the real issues
which were referred by the
applicant for arbitration. This resulted
in a failure of a fair trial.
[5]
The second
ground, on the other hand, is that the outcome of the arbitration is
unreasonable when regard is had to the evidence
which was before the
arbitrator. On the evidence before him, it is submitted that
the arbitrator could not have found that
there was no agreement
between the South African Police Service (“SAPS”) and the
applicant that the applicant should
be re-employed or reinstated into
the SAPS. The conclusion that the applicant did not reach an
agreement for reinstatement
is unreasonable because it is in conflict
with the evidence which was before the arbitrator.
[6]
A related
aspect of the reasonableness argument is that it was unreasonable for
the arbitrator to conclude that the specific official
who concluded
the agreement of reinstatement with the applicant, Mr Bushy
Engelbrecht (“Engelbrecht”), had no authority
to conclude
the reinstatement agreement with the applicant.
[7]
It is
convenient that I start this judgment with the facts presented before
the arbitrator in order to evaluate the criticisms leveled
by the
applicant.
MATERIAL
FACTS
[8]
At the
heart of this dispute is a disagreement about the employment status
of the applicant. Notwithstanding this dispute,
some facts are
either common cause or were established during the arbitration
hearing. I intend setting out what I understood
to be common
cause from an examination of the record of the arbitration
proceedings and indeed the pleadings exchanged in this
review
application.
[9]
The
applicant was first employed by the SAPS on 28 January 1987.
After working for the SAPS in various capacities he was discharged
from service in 1992. The process by which he was discharged
entailed what is referred to within the SAPS as “
purchasing
one’s discharge
”.
This means that an employee pays a certain amount of money to the
SAPS in order to be permitted to resign.
The resignation is
subject to the permission of the SAPS, unlike the usual position
where a resignation is a unilateral act.
[2]
Employees who are granted a discharge would be entitled to their
pension benefits which would otherwise not be the case had
they
resigned in the normal course without the permission of their
employer to purchase their discharge.
[10]
Subsequent
to the applicant’s discharge in 1992, he re-applied for
re-employment in 2001. This application was successful.
On 3 December 2001 the applicant was re-appointed to the SAPS.
[11]
From 2001
the applicant worked to the position of Detective Sergeant.
[12]
In 2007 the
applicant wanted to take a substantial period of leave from his
duties in the SAPS, as he explains it, “
to
assist my wife with our newborn baby as she could not take the time
out due to her position and profession
”.
In this regard, he applied for one year of unpaid leave for family
responsibility reasons and also to complete his studies
in security
management. Initially, the application was approved.
However, the SAPS changed its mind and told the applicant
that there
were not enough detectives and accordingly he could not take unpaid
leave as initially agreed.
[13]
In the same
year, 2007, the applicant was involved in a motorbike accident, which
resulted in a serious foot injury. A plaster
cast was put on
his foot and for a while he was unable to walk. As a result he
was bedridden and remained at home, unable
to work. During this
period of sick leave, Lieutenant Colonel Tshabalala (“Tshabalala”),
the commander of the
applicant, visited him and was given a copy of a
letter from the applicant’s doctor to confirm the fact that the
applicant
was unfit for work. Tshabalala told the applicant
that his sick leave application form would be taken care of upon the
applicant’s
return to work which assurance was accepted by the
applicant.
[14]
The
applicant’s request for sick leave appears not to have been
processed by the SAPS. The record shows that the human
resources system reflected that the applicant was on unpaid leave.
It is not clear how this occurred because the applicant’s
version at the arbitration that he was injured and his commander was
aware of the injury, remained uncontested.
[15]
Nevertheless,
it was put to the applicant in cross examination at the arbitration
that he was in fact on unpaid leave, a suggestion
he strongly refuted
with reference to the facts as narrated above. It was, however, never
put to him that he was not in fact injured
as he claimed. Nor was it
suggested that the conversation with Tshabalala did not happen. No
witness was called to explain how
it came about that the SAPS
computer system reflected the applicant as being on unpaid leave when
it was known that he was on sick
leave.
[16]
For several
months between December 2007 and May 2008 the request for sick leave
was not processed. In about May 2008 the
applicant was advised
that he could buy his discharge from the SAPS. An official from
the SAPS visited the applicant at his
house and informed him that he
had to sign a discharge form because his salary would be stopped if
he did not apply to purchase
his discharge. According to the
applicant, the form was blank at the time he signed it. He did
not know how it was
subsequently populated beyond his basic personal
details.
[17]
Indeed, the
form itself contains some peculiar features. In the section
where the applicant should indicate the date of his
discharge, that
date is “
2008/05/30
”.
However, the date of signature of the form itself is “
2008/06/18
”.
That would mean that the applicant would have been discharged before
he applied for his discharge. This is
clearly illogical.
Similarly, on the second page of the form, the “approving
officer”, RM Griessel signed on
18 June 2008. But on the
same page the applicant’s date of discharge is 30 May 2008.
This again does not make
sense because the applicant could not have
been discharged before the discharge was approved.
[18]
For his
part, in his evidence, the applicant denied paying the required
application fee in respect of the discharge and persisted
with his
version that the form was blank when he signed it and he was
effectively under duress because he believed that his salary
would be
stopped otherwise.
[19]
Together
with the request for a discharge, the applicant signed a request to
withdraw his pension benefits under the Government
Employees Pension
Fund. He indicated, in the application form, that the reason
for the withdrawal of the pension benefits
was “
voluntary
resignation
”.
[20]
An
inventory appears to have been printed out on or about 27 May 2008
indicating that the applicant handed in several work related
items
including handcuffs, bullet resistant rounds, and some handguns.
An exit form also was completed in which some items
had to be
certified, such as disciplinary action against the applicant, civil
claims and State property in the applicant’s
possession.
The section certifying that the applicant had no financial debts
against the State was not signed. The
section certifying that
the applicant had no outstanding medical certificates was signed.
This is despite the fact that the
applicant’s request for sick
leave was outstanding by the time of the application for a purchased
discharge.
[21]
After the
submission of the discharge forms together with the request for the
withdrawal of the pension, no steps appear to have
been taken by the
SAPS to finalise the termination of the applicant’s employment
and to process the payment of the pension
benefits due to the
applicant by the Government Employees Pension Fund.
[22]
In about
July 2008 the SAPS terminated the applicant’s salary. There is
no evidence on the record to indicate whether there
was any notice to
the applicant prior to the termination of his salary. The reason for
the termination of the salary appears to
have been the belief within
some officials at the SAPS that the applicant was on unpaid leave,
despite the fact that the unpaid
leave had in fact been refused by
the SAPS. No consideration seems to have been given to the fact that
the applicant was on sick
leave because of his injury.
[23]
No
communication was sent to the applicant to confirm whether or not his
requested for a purchased discharge had been processed
or approved,
in accordance with the standard process. Nor were the pension
benefits due to the applicant paid out to him.
[24]
Towards the
end of 2008 the applicant had still not heard from the SAPS
concerning the status of his discharge request. His salary,
however,
remained suspended. He had discussions with various officials of the
SAPS to query the status of his discharge request.
He was informed
that the request to be discharged had not been processed at the head
office of the SAPS because they were waiting
for a letter from the
Sandton Station, which was responsible for the processing of the
applicant’s request for a discharge
in the first instance.
[25]
This delay
resulted in the applicant changing his mind about his request for a
discharge. In the answering affidavit of the SAPS,
it is accepted
that during October 2008 the applicant had a discussion with
Lieutenant Colonel Sharpe (“Sharpe”) during
which the
applicant stated that he had decided to withdraw his application for
a discharge.
[26]
Sharpe in
turn spoke to Director Basson, who requested the applicant to put his
request in writing. Subsequent to the letter
being written, the
applicant was informed by the Provincial Office that they were
waiting for certain documents from head office
in order to process
the withdrawal of the request for discharge.
[27]
Because of
the delays being experienced by the applicant in regard to his
withdrawal of the request for discharge, the applicant
approached
Engelbrecht, at the time an Assistant Commissioner and Cluster
Commander of Alexandra. Engelbrecht agreed that
the applicant
could withdraw his request for a discharge. Present during this
conversation was Captain Taljaardt (“Taljaardt”).
[28]
A letter
was written to the Head of Service Terminations at the SAPS Head
Office on 13 August 2009 signed by Engelbrecht specifically
recording
that the “
intended
resignation
”
of the applicant was withdrawn and the applicant was recommended for
re-enlistment to the SAPS. Engelbrecht’s
letter ended by
recording that the matter should be finalized speedily.
[29]
Some steps
were thereafter taken to process the re-enlistment of the applicant.
They included a letter written by a Senior
Superintendent Stoltz
(“Stoltz”), the Section Head: Personnel Provisioning &
Maintenance to the Divisional Commissioner
in which it is stated that
there were fifty (50) employees whose names were sent for
re-enlistment and requested a report back
with regard to such
re-enlistments. It was common cause that the applicant’s
name was included in the list of 50 employees.
[30]
Furthermore,
a printout from the central database of the SAPS which was generated
by a Colonel Goosen confirmed that the applicant’s
re-enlistment was in process.
[31]
Finally,
there is an email of 17 June 2010 written on behalf of J Rademeyer
recording that the applicant’s absence could not
longer be
regarded as leave without pay and he should be re-enlisted.
[32]
As noted,
none of this was contested at the arbitration hearing.
[33]
In its
answering affidavit to the review application, the SAPS did not place
this chronology in any dispute. In fact, in two
material
respects the version of the applicant was confirmed. First, the
SAPS admitted that the applicant was never informed
that his
discharge was finalized and accordingly the employment relationship
terminated by way of a discharge. Instead, the
SAPS argued in
the answering affidavit that since resignation is a unilateral act
the applicant could not “
withdraw
such resignation
”.
Secondly, the SAPS confirmed that Sharpe was notified by the
applicant in about October 2008 that he no longer intended
proceeding
with his request for a discharge.
[34]
On or about
3 May 2010 the Head of Employee Relations and Life Cycle Management,
Brigadier M Jamieson, wrote a letter to the Provincial
Commissioner
of Gauteng stating that the applicant’s “
application
to withdraw his discharge has not been approved”
.
This letter seems to follow documents submitted to the head office by
the provincial office. It is unclear whether
the Provincial
Commissioner, Mr P Naidoo, had in fact approved or disapproved the
request by the applicant to be reinstated.
The form which was
completed by Mr Naidoo requires an election to be made between
“recommended” and “not recommended”.
The words “
not
recommended
”
have been scratched out, but there is a scrawled handwritten
annotation made before the word “
recommended
”,
which says “
not
”,
thus creating the impression that the request for reinstatement was
in fact rejected by the Provincial Commissioner.
Although this
appears to have been a disputed issue at the arbitration hearing, the
evidence seems to have been inconclusive and
I intend making no final
findings in that regard. In any event, it is clear that the
view taken by the national office was
to reject the request for
re-enlistment. I propose approaching this case from this
factual footing.
[35]
Before I
deal with the grounds of review, I should perhaps mention that in
argument Counsel for the SAPS requested me to take into
account
certain printouts from the Persal system of the SAPS. I have
considered these printouts. They do not appear
to support the
stance of the SAPS in regard to the issue whether the discharge of
the applicant was finalized and approved in accordance
with the
relevant regulations. The printout of 5 August 2009 produced at
12h27 records that the applicant was in the process
of “
purchasing
”
his discharge. It does not state whether or not such a purchase
of a discharge was accepted, approved or communicated
to the
applicant. Similarly, the printout of the same date produced at
12h28 records a delay in the processing of the discharge
request by
the applicant because the applicant had applied for reinstatement.
The final set of printouts produced on 8 December
2009 do not take
the matter further because they too state that the applicant was
still in the process of purchasing his discharge.
Importantly
however, these printouts show that the applicant was still regarded
as being in service, although his absence was regarded
as leave
without pay.
ARBITRATION
PROCEEDINGS
[36]
The
applicant referred a dispute to the Safety & Security Sectoral
Bargaining Council on or about 1 July 2010. In the
referral
form the applicant gave the following summation of the disputed
issues:-
“
I was told that
the withdrawal of my discharge was to be processed, and I was to
return to work as soon as this was done.
When I called to
follow up, they said (Province) that they would let me know soon when
I could return as the process was basically
complete. I have
now received an email dated 17 June 2010 stating that they are only
now processing my discharge, and that
I will need to re-apply for
re-enlistment. This is contrary to what I was told and agreed
to. This process has dragged
on for two years.”
[37]
The outcome
required by the applicant was the following:-
“
Reinstatement to
previous position and retrospective pay for period that I have been
waiting for processing of withdrawal of discharge
(since February
2009)”.
[38]
Under the
section “
Nature
of the dispute
”
the applicant characterized the dispute as “
unfair
labour practice” “relating to failure to reinstate in
terms of an agreement
”.
[39]
At the
commencement of the arbitration the parties were requested to explain
the nature of the dispute. After setting out
a brief sequence
of the events leading up to the arbitration, the applicant explained
the status of his resignation and/or request
for a discharge as
follows:-
“
What happened
thereafter is that the resignation was never finalized.
So
Superintendent Sharpe came to my house and said what do I want to
do?
I
said well it was not
finalised
,
I phoned the police and asked them what is happening. They said
they never knew that I had resigned and what is the story.
So
and I said well, I did actually resign but actually I want to cancel
it”.
[40]
The SAPS on
the other hand stated that its position would be that the applicant
never reached an agreement with it to cancel his
resignation and
return to work.
[41]
In his
evidence in chief and indeed under cross examination, the applicant’s
case was that his request to purchase his discharge
was never
processed by the SAPS and he was never informed that he had been
discharged from service as required by the applicable
procedures and
policies. Furthermore, the applicant testified that he never
received his pension payout within the period
that he was expecting.
It was in these circumstances that he elected to withdraw his
application for a discharge and to ask
for re-enlistment,
particularly bearing in mind that the SAPS was treating his absence
from work as leave without pay. The
advice given by the
officials who spoke to the applicant was that he had to apply
formally for re-enlistment which he did upon
agreement with
Engelbrecht.
[42]
The SAPS,
on the other hand, led no evidence to show that the request for
discharge of the applicant was accepted by the SAPS or
that the
applicant was ever informed that he had been discharged from
service. It gave no explanation for the delay in the
processing
of the applicant’s request for a discharge. Furthermore,
the SAPS led no evidence concerning the delay in
the payment of the
pension payout of the applicant. It will be recalled in this
respect that the testimony of the applicant
had been that the
relevant forms were apparently not transmitted to the head office of
the SAPS from the Sandton Station, which
must have contributed to the
delay in the processing of the request for a discharge by the
applicant.
[43]
The
arbitration also dealt with the issue of the agreement reached
between the applicant and Engelbrecht concerning the re-enlistment
of
the applicant to the SAPS. The applicant’s evidence was
corroborated by one witness, Taljaardt, who was present
in the
conversation with Engelbrecht. Engelbrecht did not testify at
the arbitration hearing. That meant that there
was no credible
factual contestation of the version given by the applicant, which
seems to be consistent with the documentary evidence
which was before
the arbitrator.
[44]
In his
arbitration award, the arbitrator characterized the issue to be
decided as follows:-
“
I am required to
determine whether there was an agreement between the applicant and
the respondent to reinstatement or re-employ
the applicant in
accordance with the provisions of
Section 186(2)(c)
of the
Labour
Relations Act 66 of 1995
, as amended”.
[45]
In his
analysis, the arbitrator stated that the onus of proof is on the
applicant to show on a balance of probabilities that there
was an
agreement between the respondent and him regarding the
reinstatement. He concluded that there was no such agreement.
The basis for the conclusion was twofold. First he criticized
the applicant for not producing “
any
document
”
that shows that there was an agreement to reinstate him. Second
he criticized the applicant for not calling Engelbrecht
as a witness
to support the claim of an agreement for reinstatement. On this
basis the arbitrator found that the applicant
had failed to discharge
the onus to prove the existence of the reinstatement agreement.
In addition, the arbitrator found
that even if such agreement
existed, Engelbrecht did not have any authority to bind the SAPS to
reinstate the applicant.
ANALYSIS
[46
]
The basis
for the judicial review by this court of arbitration awards of
bargaining councils and the Commission for Conciliation,
Mediation
and Arbitration (“the CCMA”) is
section 145
of the LRA.
Section 145(1)
permits any party alleging a defect in any arbitration
proceedings to apply to the Labour Court for an order setting aside
the
arbitration award containing the defect.
Section 145(2)
tabulates the grounds upon which arbitration awards may be reviewed
and set aside. It provides:-
“
(2) A defect
referred to in sub-section (1), means –
(a)
that the
Commissioner –
(I)
committed
misconduct in relation to the duties of the Commissioner as an
arbitrator;
(ii)
committed a
gross irregularity in the conduct of the arbitration proceedings;
or
(iii)
exceeded
the Commissioner’s powers; or
(b) that the award has
been improperly obtained”.
[47]
As noted
above, several grounds have been advanced by the applicant for the
setting aside of the arbitration award. It is
not necessary to
regurgitate all the review grounds. In my view, the matter must
be approached on the basis of an allegation
of the gross
irregularities committed by the arbitrator.
[48]
The most
recent authoritative statement about reviews of arbitration awards in
terms of
section 145
of the LRA is
Herholdt
v Nedbank Ltd.
That case concerned an attack principally on findings of fact made by
a CCMA Commissioner. That case is significant
at two levels.
The first is that it clarified, for the first time, the relationship
between the test of “
reasonableness
”
laid down by the Constitutional Court in
Sidumo
& Another v Platinum Mines Ltd. & Others
[3]
and the grounds of review codified by
section 145(2)
of the LRA. In
this regard in
Herholdt
it was stated that reviews could be brought on the unreasonableness
ground set out in the
Sedumo
decision and the specific grounds in
Section 145(2)
of the LRA.
The grounds in
Section 145(2)
“
had
not been extinguished by the Constitutional Court but were to be
‘suffused’ with the constitutional standard of
reasonableness
”.
[4]
[49]
What this
means, the SCA explained, was that the concept of a gross
irregularity in the conduct of arbitration proceedings is not
confined to a situation where an arbitrator misconceives the nature
of the enquiry, but extends to those instances where the result
is
unreasonable.
[50]
The second
reason why
Herholdt
is significant concerns the endorsement of the approach which
“
borrows
”
the substantive content of the grounds of review in
section 145(2)(a)
of the LRA from the “
corresponding
provisions
”
of the
Arbitration Act 42 of 1965
. In this regard the following
statement appears from the judgment of the SCA in
Herholdt
:-
“
The height of the
bar set by the provisions of
Section 145(2)(a)
of the LRA is apparent
from considering the approach to reviews of arbitral awards under the
corresponding provisions of the
Arbitration Act 42 of 1965
. The
general principle is that a ‘gross irregularity’ concerns
the conduct of the proceedings rather than the
merits of the
decision. A qualification to that principle is that a ‘gross
irregularity’ is committed where decision
makers misconceive
the whole nature of the enquiry and as a result misconceives their
mandate or duties in conducting the enquiry.
Where the
arbitrator’s mandate is conferred by statute, then, subject to
any limitations imposed by the statute, he exercises
exclusive
jurisdiction over questions of fact and law”.
[5]
[51]
In sum, the
approach of the SCA to gross irregularities is that they can provide
a basis for judicial review in a number of scenarios,
two of which
have been jurisprudentially sketched out. First, where there is
evidence of the misconception of the whole nature
of the enquiry by
the arbitrator and secondly where the result of the award is
unreasonable. I do not understand the
Herholdt
judgment as being conclusive of the instances where an arbitrator can
be said to have committed a gross irregularity.
[52]
Some
questions, however, remain. For instance, to be reviewable,
should the misconception of the nature of the enquiry result
in a
denial of a fair trial? Is it possible for an arbitrator to
misconceive the nature of the enquiry but nevertheless arrive
at a
reasonable result? I believe these questions are not yet settled and
our quest for answers must continue. Nevertheless,
I intend
confining the scope of this judgment to only two grounds of review,
which I believe have been established on the papers.
(i)
Misconceiving
the nature of the enquiry
[53]
In
Herholdt
,
the SCA did not expatiate the meaning of “misconceiving the
nature of the enquiry” as a ground of review under
Section
145(2)
of the LRA. But it hinted that the meaning could be
derived from cases which have interpreted that phrase in the context
of the
Arbitration Act, which
provides for private arbitrations. In
any event, the substantive content of the review ground based on
misconceiving the nature
of the enquiry appears relatively well
settled and indeed based on a long judicial history.
[54]
The
judgment of
Ellis
v Morgan; Ellis v Dessai
[6]
dealt with a review by a Superior Court of a decision by a Magistrate
and explained the term ”
gross
irregularity in the proceedings
”
as follows: -
“
An irregularity in
the proceedings does not mean an incorrect judgment; it refers
not to the result, but to the method of
a trial, such as, for
example, some highhanded or mistaken action which has prevented the
aggrieved party from having his case
fully and fairly determined.”
[7]
[55]
Another
early decision which also dealt with a review against a decision of
the Magistrate was Goldfields Investment Ltd. &
Another v City
Council of Johannesburg & Another.
[8]
In that case Schreiner J, writing a concurring judgment, expanded
upon the dictum in
Ellis
v Morgan
.
He stated that:-
“
It is not merely
highhanded or arbitrary conduct which is described as a gross
irregularity. Conduct which is perfectly well
intentioned and
bona fide, although mistaken, may also come under the description of
a gross irregularity. The pertinent
question, in each case, is
whether such conduct prevented a fair trial of the issues. If
it did prevent a fair trial of the
issues then it is a gross
irregularity. Gross irregularities could be patent or latent.
Latent irregularities would
ordinarily be apparent from the reasons
provided in support of the decision.”
[9]
[56]
The
formulation of
Ellis
v Morgan and Johannesburg Consolidated Investments
has been applied in a long list of labour cases, both under the
Labour Relations Act 28 of 1956 (“the old Act”) and
the
current LRA. The judgment of
Paper
Printing Wood & Allied Workers Union v Pienaar LO &
Others
[10]
confirmed
the authority of the previous Labour Appeal Court to judicially
review decisions taken by the erstwhile Industrial Court.
The
grounds upon which that could be done included the notion of
misconception of the whole nature of the enquiry. Decisions
of
the Labour Appeal Court subsequent to the passing of the current LRA
also confirm this. They include the decision of
Toyota
SA Motors (Pty) Ltd. v Radebe & Others.
[11]
In that case the LAC specifically asked the question whether the
arbitrator had misconceived the nature of the enquiry in
regard to
the imposition of a fair sanction. It found that in assessing
the question of the first sanction the Commissioner
had misconceived
the nature of the enquiry and ultimately went on to apply that test
to the facts of the case.
[12]
[57]
More
recently, the question of misconception of the enquiry has been
considered by the Supreme Court of Appeal in
Telcordia
Technologies Inc. v Telkom SA Ltd.
[13]
Although that case dealt with arbitration under the
Arbitration
Act, its
treatment of the law on the circumstances where the ground
of review is that an arbitrator misconceived the enquiry is
instructive.
It clarified that although the standard was
developed in a statutory setting, it applies to private arbitration
as well.
The essential question pertains to whether an
arbitrator misunderstood or asked the wrong questions to the extent
that the real
issue was not tried. Where the answer is yes, a
gross irregularity is established and the award reviewable.
Many patent
irregularities have that effect. The existence of a gross
irregularity will depend upon the examination of the reasons given by
the arbitrator.
[58]
From
these judgments, it is apparent that the ground of review based on
misconception of the enquiry is to be distinguished from
an instance
where an arbitrator acts outside his statutory powers. Misconceiving
the enquiry recognises that the arbitrator is
acting within his or
her jurisdiction. But even when acting within scope an arbitrator
must direct his or her attention to the
real issue which is required
to be decided either in terms of the relevant statute or in terms of
the referral to arbitration or
indeed an issue which is raised in the
evidence before the arbitrator. The failure to address the main
issue presented for
arbitration is an irregularity. But there is a
further leg to the enquiry. The LRA sets the review bar high. It
requires an irregularity
to be “
gross”
in
order to constitute a reviewable defect. The defect will be regarded
as gross if the real issue has not been tried as a result
of the
irregularity committed by the arbitrator. Unlike the review ground
based on unreasonableness of the result, this ground
is ultimately
concerned with the methods – or the process – of the
arbitration.
[59]
It is now
apposite to examine the award against the above legal standard. The
primary issue which the applicant presented for determination
by the
arbitrator was the issue of his resignation. In particular, the
applicant denied that he had resigned or that the
employment
relationship had come to an end. The basis upon which he said
this is apparent from his evidence in the arbitration
hearing.
He claimed that the pre-conditions for his discharge were not met and
on that basis he was entitled to be reinstated
to the SAPS. The
issue of the agreement subsequently concluded with Engelbrecht was
also important. But it is clear from
the record that it was a
secondary concern.
[60]
In order to
appreciate the position taken by the applicant, it is necessary to
examine the statutory scale of relevance to the SAPS.
The
appointment and discharge of members of the SAPS is governed by
statute.
Section 28
of the
South African Police Service Act 68
of 1995
gives the powers to appoint members of the SAPS to the
National Commissioner.
[61]
Section 35
of the SAPS Act permits the National Commissioner to discharge
members of the SAPS on account of redundancy, interest
of service or
appointment to public office. Section 35(b) allows the National
Commissioner to discharge a member “
if,
for reasons other than the unfitness or incapacity of such member,
his or her discharge will promote efficiency or economy in
the
service, or will otherwise be in the interest of the service
”.
[62]
From the
above, it is apparent that a discharge is an official act performed
by the National Commissioner or anyone with delegated
authority.
The SAPS Act must be read together with the regulations for the South
African Police Service passed under on 14
February 1964 which have
undergone several amendments and most recently under Notice R.254 in
Government Gazette 33068 on 1 April
2010.
[63]
Regulation
15 deals with “resignations, dismissal and discharges”
from the SAPS. The relevant part of the Regulation
provides:-
“
(1)
Subject to the provisions of the [Government Employees Pension Law,
1996] … a member may
be discharged or dismissed from the
service
…
(e) on account of
voluntary resignation, if he is a member below the rank of
commissioned officer who has served for a continuous
period of at
least three years and has given at least three calendar months’
notice, in writing to the Commissioner for his
intention to resign:
provided that, subject to the provisions of Regulation 11(1)(b)(iv) a
member, other than a commissioned
officer, who has not served for a
continuous period of at least three years shall not be entitled to
resign from the service by
giving notice in writing: provided
further that, subject to the provisions of sub-regulation (3) and
with due regard to the
provisions of sub-regulation (2), any member,
other than a commissioned officer, may, after written notice of at
least thirty days
or such shorter period as the Commissioner may
determine with the approval of the Commissioner, purchase his
discharge for the
following amounts:-
R500,00 during the first
year of service;
R300,00 during the second
year of service;
R200,00 during the third
year or any subsequent year of service
…
(6) A certificate
of discharge or a certificate of service on the prescribed form shall
on discharge be handed over to every
member who has served for a
continuous period of at least two years. Such certificate shall
be signed by the Commissioner
or commissioned officer authorized
thereof by him. A member whose services are terminated before
two years have expired and
who desires a certificate of discharge
shall apply therefore.”
[64]
The case
presented before the arbitrator was that the applicant had “
bought
his discharge
”
in terms of Regulation 15 of the SAPS Regulations. The
applicable part of the Regulations makes it clear that the
purchase
of a discharge is subject to the “
approval
of the Commissioner
”.
In addition, it is clear that a certificate of discharge is to be
given to every member “
on
discharge
”
by the Commissioner. Throughout his evidence, the applicant
denied that he had been discharged within the contemplation
of the
Regulation.
[65]
The
arbitration award does not even record the dispute pertaining to the
discharge of the applicant, despite the fact that it was
a pertinent
issue raised before him. It also did not examine or answer this
question at all. It focused on the application for
reenlistment or
reinstatement, which logically flows from the question whether the
employment relationship terminated in the first
instance. The
implications of the arbitrator’s approach are profound.
Had the arbitrator appreciated the true nature
of the enquiry before
him, namely whether the applicant had in fact been discharged as
required by Regulation 15, he clearly would
have taken a different
path pertaining to the nature of the evidence to be led and the
burden of proof on the disputed items.
But he did not do this.
His failure to enquire into the question of the discharge of the
applicant has prevented a fair trial
of the issues that were before
him. That he had been told by the parties to enquire into the
existence of an agreement to
reinstate the applicant could not
possibly divest him of his primary duty once the evidence was
presented and the applicant’s
true case laid bare before him.
[66]
It must be
remembered that the applicant had attended the arbitration hearing
with his wife who was described by the arbitrator
as a person with
“
legal
knowledge
”.
The applicant’s wife was subsequently excluded from the hearing
because the rules of the third respondent would
not allow her to
represent the applicant. Although this is not per se a failing on the
part of the arbitrator, the fact that the
applicant was not
represented is a factor which should have been taken into account by
the arbitrator in relation to the understanding
of the true nature of
the enquiry. It is also clear from the written submissions of the
applicant that the issue of the failure
to approve the purchase of
the discharge of the applicant remained an essential feature of his
case, although much time was devoted
to the issue of the agreement
with Engelbrecht.
[67]
I conclude
therefore that the arbitrator committed a gross irregularity in that
he misconceived the nature of the enquiry, resulting
in the failure
to resolve the most pertinent aspect of the applicant’s case.
This is sufficient to warrant an interference
with the arbitration
award. Nevertheless I proceed to ask the question of the
reasonableness of the result.
(ii)
Reasonableness
of the outcome
[68]
I do not
believe that the result of the award is reasonable. I think the
conclusion I have reached that the arbitrator misconceived
the whole
nature of the enquiry disposes of the need to conduct a separate
reasonableness enquiry. It seems that only in rare instances
can it
be said that an award predicated upon the wrong enquiry has
nevertheless produced a reasonable outcome.
[69]
For the
above reasons I would have been disinclined to entertain the issue of
the reasonableness of the outcome. However, since
in oral argument
both parties spent considerable time on the issue of the
reasonableness of the result, I must address it.
[70]
There are
two reasons given by the arbitrator for his award. The first is
that the applicant failed to produce a written document
evidencing
the agreement to reinstate him. The second is that the
applicant failed to call Engelbrecht to corroborate his
version.
These reasons cannot be supported by an objective assessment of the
facts which were before the arbitrator.
In the first place the
applicant produced at least three documents which support his claim
that an agreement was indeed concluded
with Engelbrecht. The
first is the letter of 13 August 2009 written by Engelbrecht, wherein
Engelbrecht unequivocally recommends
the re-enlistment of the
applicant. The second was a letter from Senior Superintendent
Stoltz to the Divisional Commissioner
in which the applicant’s
name was among 50 names submitted for re-enlistment. The third
was an email dated 17 June
2010 in which it was recorded that the
applicant’s absence from work could no longer be regarded as
absence without leave.
Accordingly the statement by the
arbitrator that no documentary evidence was produced by the applicant
in support of the claim
of an agreement for reinstatement, has no
factual foundation.
[71]
In relation
to the second reason, namely that Engelbrecht was not called, the
arbitrator completely overlooked the fact that Taljaardt,
who was
present when the conversation with Engelbrecht occurred, was in fact
called. At that point the evidentiary burden
should have
shifted to the SAPS. To require the applicant to call
Engelbrecht where the version of the applicant was essentially
uncontested is equivalent to asking the applicant to prove his case
beyond any reasonable doubt, something which has no foundation
in
arbitration proceedings. It is clear therefore that the
conclusion reached by the arbitrator in relation to the existence
of
the agreement was so unreasonable that no reasonable arbitrator could
have arrived at it given the facts which were before him.
[72]
The
arbitrator also decided that Engelbrecht had no authority to bind the
SAPS, even if he concluded the reinstatement agreement
with the
applicant. There is no clear foundation for this statement.
It is true that the overall power of appointments
rests with the
National Commissioner. But the power may be delegated. On
the evidence which was before the arbitrator
it was not clear if such
power had in fact been delegated. In any event, in my view the
main problem with this finding is
that if in fact it was true that an
agreement was reached with Engelbrecht as testified by the applicant,
it would be unfair on
the part of the SAPS to seek to resile from
such agreement. The case brought by the applicant was one
founded on unfair labour
practice. In this respect, the
arbitrator did not consider whether in the event an agreement was in
fact reached with Engelbrecht,
it would nevertheless be unfair to
permit the SAPS to resile from such agreement. Certainly the
question as to the authority
of Engelbrecht would not be decisive in
relation to the fairness enquiry. Given that there was no
fairness enquiry conducted
by the arbitrator at all, in my view it
cannot be said that the result is reasonable.
[73]
I conclude
therefore that the arbitration award fails on both grounds. The
arbitrator misconceived the whole nature of the
enquiry and delivered
an award with a result that is not reasonable on the material which
was before him.
RELIEF
[74]
During oral
argument I debated with both counsel whether to remit the matter back
to the third respondent for a hearing before a
different arbitrator
or whether to substitute the award. The relief sought in the
notice of motion is a remittal. Counsel
for the SAPS submitted that
it would be unfair for this Court to decide the matter, on the issue,
which in reality only became
clear during oral argument. He submitted
that the SAPS could well have produced the relevant evidence to prove
that the requirements
of Regulation 15 were fulfilled, if the
arbitrator had directed himself to the correct enquiry. I agree with
these submissions
and wish to place additional considerations which I
decided not to substitute the award.
[75]
My first
finding is that the arbitrator misconceived the whole nature of the
enquiry and did not enquire into the question whether
the employment
relationship between the parties in fact terminated. The record
before me does not provide a clear account
to enable a just
conclusion on whether the applicant was ever discharged within the
contemplation of Regulation 15. It seems
that additional
evidence will have to be canvassed before any final determinations
are made to that question.
[76
]
I
appreciate of course that the applicant has been out of employment
for a substantial period of time. I also take into account
that
this is not the first time this matter is being debated before this
court, having been remitted on the first occasion by Van
Niekerk J.
My primary difficulty is that it is not possible on the present
record to answer the question whether the provisions
of Regulation 15
were fulfilled. It seems that this is an issue that must be
addressed at arbitration with new evidence being
led and new parties
being permitted the opportunity to produce any documents to
substantiate their respective cases.
[77]
Similarly,
in relation to my second reason for the finding, the problem is that
the arbitrator did not direct his mind to the question
of the
fairness of the decision to the extent that an agreement was reached
with Engelbrecht. If such agreement was reached
as it seems to
have been, on the probabilities, it seems to me unfair to permit the
SAPS to renege from it on the account of the
alleged lack of
authority on the part of Engelbrecht. But these are questions which
must be dealt with by the bargaining council.
[78]
For these
reasons, I intend remitting the matter for fresh arbitration
proceedings before a Commissioner other than the second respondent.
ORDER
[79]
In
the circumstances the following order is issued:-
1.
The arbitration award dated 14 August 2012
issued by the second respondent acting as arbitrator of the third
respondent is hereby
reviewed and set aside.
2.
The dispute between the applicant and the
first respondent is remitted back to the third respondent for a
hearing before a Commissioner
other than the second respondent.
3.
The
first respondent shall pay the applicant’s costs.
___________________
TEMBEKA NGCUKAITOBI
Acting Judge if the
Labour Court of South Africa
APPEARANCES:
For the
Applicant:
Adv M Jennings
Instructed
by:
Deal Attorneys (Pro-Bono)
For the
Respondent: Adv
SB Nhlapo
Instructed
by:
State Attorney, Johannesburg
[1]
2013 (6) SA 224 (SCA).
[2]
See
for instance the judgment of Van Niekerk J confirming the unilateral
nature of the act of resignation:
Mafika
v South African Broadcasting Corporation
2010 (5) BLLR 542
(LC). The qualification, however, is that the act
of resignation must be unequivocally conveyed to the employer in
order to be
valid. In this regard see:
African
National Congress v The Municipal Manager, George Local Municipality
2010
(3) BLLR 221
(SCA). Nicola Smit, an academic at the University of
Johannesburg has written a thought provoking article on the nature
of the
act of resignation published under the title “Resignation
– An act that is not as straightforward as it seems?”
2011
TSAR
100.
[3]
2008 (2) SA 24 (CC)
[4]
Herholdt
at
para 14
[5]
Herholdt
v Nedbank
at para 10.
[6]
1909 TS 576.
[7]
Ellis v
Morgan; Ellis v Dessai
at 581.
[8]
1938 TPD 551.
[9]
Goldfields
Investment Ltd. & Another v City Council of Johannesburg &
Another
at 560.
[10]
1993 (4) SA 621 (A).
[11]
2000 (21) ILJ 340 (LAC).
[12]
See too
Stocks
Civil Engineering (Pty) Ltd. v RIP N.O. & Another
[2002] ZA LAC
3
(1 February 2002)
and
Branford
v Metrorail Services (Durban) (Case No. DA/2002).
[13]
[2006] ZASCA 112
;
2007 (5) BCLR 503
(SCA).