About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Cape Town Labour Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Cape Town Labour Court, Cape Town
>>
2014
>>
[2014] ZALCCT 9
|
|
Sanlam Life Insurance v Commission for Conciliation Meditation And Arbitration and Others (C417/2013) [2014] ZALCCT 9 (3 April 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
CASE
NO C 417/2013
NOT
REPORTABLE
In
the matter between:
SANLAM
LIFE
INSURANCE APPLICANT
and
THE
COMMISSION FOR CONCILIATION
MEDIATION
AND
ARBITRATION 1
ST
RESPONDENT
COMMISSIONER
J
PIENAAAR 2
ND
RESPONDENT
BASIL
WAYNE
FORBES 3
RD
RESPONDENT
Application
heard: 20 March 2014
Judgment
delivered: 3 April 2014
JUDGMENT
VAN
NIEKERK J
Introduction
[1]
This is an application to review and set an arbitration award made by
the second respondent, to whom I shall refer as ‘the
commissioner’. In his award, the commissioner held that the
applicant had committed an unfair labour practice in the form
of
unfair conduct in relation to the third respondent’s demotion,
and awarded the third respondent (Forbes) compensation
of R 673 920,
a sum equivalent to six months’ remuneration.
Factual
background
[2]
The material facts are recorded in the commissioner’s award and
I do not intend to repeat them here. It is sufficient
for present
purposes to record that applicant employed Forbes in September 2010
as Head: Market Intelligence. On 1 April 2012,
Forbes was promoted to
Head: Group Intelligence, a post graded at a level reserved for the
applicant’s most senior management.
The applicant contends that
the latter post was made redundant in late 2012.
[3]
It is not disputed that Forbes’s employment was terminated in
December 2012 on account of the applicant’s operational
requirements, and Forbes was denied a severance package by the
applicant on the basis that he refused to accept what it considered
to be an offer of reasonable alternative employment.
[4]
The applicant contends that as an alternative to retrenchment, Forbes
was offered the (lower) post of Head: Group Corporate
Affairs, and
that Forbes refused the offer. The applicant thus denied the
existence of any demotion. Forbes contends that he was
appointed to
the post of Head: Group Corporate Affairs in terms of a letter
addressed to him by the applicant’s chief executive
officer
(Van Zyl) on 7 November 2012 and thus demoted without prior
consultation and without his consent.
The
commissioner’s award
[5]
As I have indicated, the commissioner made a factual finding to the
effect that Forbes had been demoted, and went on to find
that his
demotion was unfair. The commissioner’s reasoning is reflected
in the following paragraphs of his award:
‘
[47]
The Applicant’s job grade was reduced from 99 to 15, and he was
no longer to report to Dr Van
Zyl, the Group Chief Executive Officer
but to Ms Ramiah. His functions and responsibilities, and rank, at
Head: Corporate Affairs
were not comparable with his functions and
responsibilities, and rank, at Head: Group Intelligence.
[48]
Ms Ramiah was at first adamant that the post of Head: Corporate
Affairs did not constitute a
demotion, but conceded under cross
examination that it did. The evidence that the post had great
potential does not take the matter
further. Ms Malan was not prepared
to concede the obvious, emphasising that the post Head: Corporate
Intelligence compared reasonably
with the applicant’s post as
Head: Group Intelligence.
[49]
The applicant proved that his appointment as Head: Group Corporate
Affairs meant that his responsibilities
and status, had been reduced,
and that he was demoted.’
[6]
The commissioner went on to find that the first respondent’s
demotion was unfair, principally because the applicant had
not
negotiated with the first respondent before his appointment as head:
corporate affairs, and that the first respondent never
consented to
the appointment.
The
grounds for review
[7]
The applicant’s primary attack on the commissioner’s
award is directed at his finding regarding the existence of
a
demotion. The applicant contends that the evidence does not disclose
the fact of a demotion and that the award stands to be reviewed
and
set aside on this basis. In this regard, the applicant contends that
the court is required to determine the correctness of
the
commissioner’s finding that Forbes was in fact demoted. It does
so on the basis of the Labour Appeal Court’s decision
in
SA
Rugby Players Association (SARPA) & others v SA Rugby (Pty) Ltd &
others
[2008] ZALAC 3
;
[2008] 9 BLLR 845
(LAC), where the court held, in a case
where the existence of a dismissal was at issue, that the test to be
applied is whether,
objectively speaking, there were facts that
served to give the commissioner jurisdiction to entertain the
dispute. In other words,
the applicable test is one of correctness;
the commissioner’s decision is not subject to a reasonableness
review. The applicant
submits that the commissioner’s decision
that Forbes had been demoted is without any objective basis and that
it should be
reviewed and set aside on that ground.
[8]
In relation to the merits of the commissioner’s finding on the
fairness of the demotion, should it be found that the third
respondent was indeed demoted, the applicant submits that the test to
be applied is that enunciated by the Constitutional Court
in
Sidumo
v Rustenburg Platinum Mines Ltd
[2007] 12 BLLR 1097
(CC) recently
affirmed by the Supreme Court of Appeal in
Herholdt v Nedbank
(701/2012, 5 September 2013). In the latter judgment the court
summarised the position as follows:
‘
[25]
In summary, the position regarding the review of CCMA awards is this:
A review of a CCMA award is permissible
if the defect in the
proceedings falls within one of the grounds in s 145 (2) (a) of the
LRA. For a defect in the conduct of the
proceedings to amount to a
gross irregularity as contemplated by s 145 (2)(a)(ii), the
arbitrator must have misconceived the nature
of the inquiry or
arrived at an unreasonable result. A result will 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, as
well as the weight and relevance to be
attached to particular facts,
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.’
[9]
In so far as the grounds for review relate to the reasonableness of
the commissioner’s award, In
Goldfields Mining South Africa
(Pty) Ltd v
CCMA
(JA 2/2012, 4 November 2013) the Labour
Appeal Court confirmed that the applicable test does not admit what
has been referred to
as a “process-related review”, at
least in the sense that it is no longer open to a reviewing court to
set aside an
arbitration award only on account of a process- related
irregularity on the part of the arbitrator. This has the consequence
that
the failure by an arbitrator to mention a material fact in the
award, or to deal with any issue that has a bearing on the issue
in
dispute, or any error in regard to the evaluation of the facts
presented at the arbitration hearing, is of no consequence. Provided
that the arbitrator gave the parties a full opportunity to state
their respective cases at the hearing, identified the issue that
he
or she was required to arbitrate, understood the nature of the
dispute and dealt with its substantive merits, the function of
the
reviewing court is limited to a determination whether the
arbitrator’s decision is one that could not be reached by a
reasonable decision-maker on the available material.
[10]
The court set out the test in these terms:
‘
[20]
The questions to ask are these: (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 (this may in certain cases only become clear after both
parties
have led their evidence)? (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?
[21]
Where the arbitrator fails to have regard to the material facts it is
likely that he or she will
fail to arrive at a reasonable decision.
Where the arbitrator fails to follow proper process he or she may
produce an unreasonable
outcome (see
Minister
of Health and Another v New Clicks South Africa (Pty) Ltd and Others
2006 (2) SA 311
(CC)). But again, this
is considered on the totality of the evidence not on a fragmented,
piecemeal analysis. As soon as it is
done in a piecemeal fashion, the
evaluation of the decision arrived at by the arbitrator assumes the
form of an appeal. A fragmented
analysis rather than a broad-based
evaluation of the totality of the evidence defeats review
as a
process. It follows that the argument that the
failure to have regard to material facts
may potentially
result in a wrong decision has no place in review applications.
Failure to have regard to material facts must
actually
defeat the constitutional imperative that the award must be rational
and reasonable - there is no room for conjecture and
guesswork.
Analysis
[11]
I deal first with the applicant’s contention regarding the
existence of a demotion as a jurisdictional prerequisite.
In
SA
Rugby
, the Labour Appeal Court held that the issue of whether or
not there had been a dismissal is an issue that goes to the
jurisdiction
of the CCMA (see paragraph 39 of the judgment). That
case concerned a refusal by an employer to renew a fixed term
contract. The
same principle has been applied by this court in
Asara
Wine Estate & Hotel (Pty) Ltd v Van Rooyen & others
(2012) 33
ILJ
363 (LC) in relation to a claim of constructive
dismissal and again by the LAC in
De MiIlander v MEC Dept of
Finance Eastern Cape & others
(2013) 34
ILJ
1427
(LAC), also in relation to a refusal to renew a fixed term contract.
In the latter case, the court observed (at paragraph
26) that in
SA
Rugby
, the court had observed that there was a statutory onus on
an employee claiming unfair dismissal to establish the existence of a
dismissal, and that the test to be applied to determine whether the
employee had discharged that onus is objective. On that basis,
it
would seem, the court held that the question whether there had been a
dismissal as defined by s 186 (1) involved a determination
of the
jurisdictional facts. On review, the court accordingly applied a test
of objective justifiability, and not reasonableness.
[12]
In my view, unfair labour practice disputes stand to be resolved on a
different basis. There is no statutory onus that obliges
a claimant
to establish the existence of an unfair labour practice. It is
incumbent on an employee claiming to have been
the victim of an
unfair labour practice to establish both that the employer committed
the unfair labour practice alleged, and that
the employer’s
conduct was unfair. In a case such as the present, it is employer’s
conduct (whether by way of act or
omission) in relation to a
demotion that can legitimately form the basis of an unfair labour
practice claim, it is not a
demotion
per se
that gives rise to
a cause of action. In these circumstances, it does not seem to me
that the existence or otherwise of a demotion
ought to be the subject
of a discreet enquiry in the form of an objective determination of
facts that would give the CCMA jurisdiction.
Simply put, it is
incumbent on the employee to establish an act or omission by his or
her employer that involves unfair conduct
relating to a demotion. The
commissioner must make a determination on that basis, and the
resulting award is subject to review
in terms of the reasonableness
threshold established by
Sidumo
.
[13]
In the present instance, the referral document (Form 7.11) completed
by the third respondent states the following:
‘
I was instructed
on 8 November 2012 to accept a lower level post which had neither
definition nor any substantial functions and
responsibilities. Should
I decline to accept I would have no option other than to resign and
walk away with absolutely nothing.
The above
instruction/offer was in writing and handed to me on 7
th
of November 2012 with the heading “Your Appointment”. The
letter contains unilateral changes of terms and conditions
of my
contract and contradicted the specific terms and conditions referred
to in the letter dated 1 April 2012.
[14]
The applicant’s account of the meeting between him and Van Zyl
on 6 November is instructive. He says the following:
‘
MR FORBES: Dr van
Zyl basically said this is what he can offer, he advised me that
these items will no longer be in the portfolio
and that I said to him
I need to understand what the full portfolio vision is and what needs
to help in order to make up my mind
and the decision was that I have
to go speak to Yegs Ramiah to understand what the role will entail so
that I can make up my mind.’
Not
only did the applicant clearly view what Van Zyl conveyed to him as
nothing more than an offer, it is apparent from the third
respondent’s evidence that he accepted that the correspondence
of 7 November was presented to him in that form. His evidence
was
that he fully appreciated that following the meeting with Van Zyl he
was being considered for the alternative position and
that he
understood that the conditions of the offer remained to be finalised.
His evidence further discloses that on 12 November
he remained in a
position to accept or decline the offer and to question the available
alternatives should he elect not to accept
the offer. The third
respondent clearly accepted that he had been presented with an offer
in writing, which he elected ultimately
not to accept. Of some
significance is the fact that Forbes presented the applicant with a
counter proposal. On 14 December 2012
the third respondent’s
attorneys addressed a letter to the applicant in which it was clearly
stated that the third respondent
would accept the role of Head:
Corporate Affairs provided that his terms and conditions of
employment remained unchanged. In cross
examination, the third
respondent cited the applicant’s refusal to accept his counter
proposal as the point at which his
demotion took place. The third
respondent’s position is perhaps best summed up by his response
to the question put by the
commissioner:
‘
MR FORBES
:
I was asked to accept a demotion, and when I declined to accept the
demotion I was dismissed.’
[15]
On the third respondent’s own version therefore, he did not
regard, as the commissioner found, the letter addressed to
him by Van
Zyl on 7 November to constitute a demotion. The commissioner’s
reasoning in relation to the existence of a demotion
appears to have
been driven by the content of the letter addressed to the third
respondent by Van Zyl, and in particular, that
the position of
Head: Corporate Affairs was a position with lower status and less
favourable conditions of employment than
that then occupied by the
third respondent. What the commissioner appears to have lost sight of
is the fact that the letter constituted
no more than an offer, open
for acceptance or rejection. The first paragraph of that letter reads
as follows:
‘
YOUR
APPOINTMENT
I have pleasure in
confirming our agreement and your appointment as Head: group
corporate affairs, job grade 15, from 01 January
2013. In terms of
this appointment your conditions of employment will change as
follows….
[16]
The appointment of the third respondent to the position of Head:
Group Corporate Affairs was therefore clearly predicated on
the
existence of an agreement between him and Van Zyl. The third
respondent, on his own version, denied the existence of any such
agreement; in fact, he rejected the offer and made a counter
proposal. It would follow therefore, on the third respondent’s
version, that the letter from Van Zyl could not, as the commissioner
found, have constituted an appointment to the position of
head: group
corporate affairs. In these circumstances, I fail to appreciate the
basis on which any reasonable decision-maker would
conclude that the
letter presented to the third respondent was a
fait accompli
,
at least in the sense that it represented a final decision to demote
him regardless of his consent.
[17]
In short: it is clear to me, from a conspectus of all of the
evidence, that the third respondent was never in fact demoted
prior
to the termination of his employment for reasons related to the
applicant is operational requirements. The letter of 7 November,
on
the third respondent’s own version and on the face of the
letter itself, was no more than an offer, one that the third
respondent rejected, and which led ultimately to the applicant’s
decision to retrench him. Whether that dismissal was substantively
and procedurally fair is the subject of separate proceedings.
[18]
In view of the conclusion to which I have come on the first leg of
the applicant’s attack on the commissioner’s
award, it is
not necessary for me to consider the applicant’s submissions in
relation to the reasonableness of the commissioner’s
conclusions regarding the fairness of the demotion that he found to
exist.
[19]
Finally, in relation to costs, the court has a broad discretion in
terms of s 162 of the LRA to make orders for costs according
to the
requirements of law and fairness. The court is traditionally
reluctant to make orders for costs against individuals who
pursue
their grievances in a bona fide manner, or to close the doors of the
court to individual litigants by erecting a barrier
to entry in the
form of the potential of an adverse order for costs. I propose
therefore to make no order as to costs.
I
make the following order:
1. The
arbitration award issued by the second respondent under case number
WECT 91-13 on 1 May 2013 is reviewed
and set aside.
2. The
award is substituted by the following:
“
The applicant’s
claim is dismissed.”
ANDRE
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
REPRESENTATION
For
the applicant: Mr G Marinus, Werksmans Inc.
For
the third respondent: Adv Nortje, with him Adv Zaytoen Cornelissen
instructed by Henry van Niekerk Attorneys