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[2014] ZALCCT 29
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Chafeker v CCMA and Others (C568/12) [2014] ZALCCT 29; (2015) 36 ILJ 451 (LC) (29 May 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
REPORTABLE
OF
INTEREST TO OTHER JUDGES
CASE
NO: C 568/12
In
the matter between:
NAZIR CHAFEKER
Applicant
And
CCMA
First Respondent
D I K WILSON N.O.
Second Respondent
R & v BEARINGS
SUPPLIES CC
Third Respondent
Heard
:
6 May 2014
Delivered
:
29 May 2014
Summary:
Dismissal void – employment contract upheld.
JUDGMENT
STEENKAMP
J
Introduction
[1]
The applicant, Nazir Chafeker, was
dismissed by the third respondent, R & V Bearings cc. He seeks a
declaratory order that the
dismissal is void.
The nature of the
application
[2]
The applicant initially sought an order
that an arbitration award by the second respondent, Commissioner
D.I.K. Wilson, be reviewed
and set aside. The Commissioner had found
that Chafeker’s dismissal was substantially fair but
procedurally unfair. He ordered
the cc to pay him compensation
equivalent to two months’ remuneration. Subsequently the
applicant launched an application
to amend his notice of motion. In
the amended application, he seeks a declaratory order that his
dismissal was null and void; and
ancillary relief in the form of an
order that the cc must be held to the contract of employment,
[3]
At the hearing of this matter on 6 May 2014
I dismissed the cc’s application for condonation for the late
filing of its supplementary
answering affidavit with costs. I gave
reasons for that order
ex tempore
and
will not repeat them here.
The application to amend
[4]
In September 2013 the applicant brought an
application to amend his notice of motion. That application was heard
at the same time
as the review application. It is not opposed. In
terms of the amended notice, the application for review would be as
an alternative
to the following relief he seeks:
“
1.
Declaring the purported dismissal of the applicant on 22 August 2011
to be null and void and of no force and effect.
2. Directing the third
respondent to comply with the applicant’s employment contract
by:
2.1
paying to him the total amount [of] salary he would have earned in
the period from the date
of his purported dismissal in 22 August 2011
to the date of this order;
2.2
permitting him to take up his former position as manager of the third
respondent with all rights
and privileges attached thereto;
2.3
continuing to pay his salary as before his purported dismissal.”
[5]
The applicant could have brought the
application for a declaratory order as a separate application; but
that would have led to an
unnecessary duplication of costs. Most of
the material relevant to the amended application was already before
the Court in the
review application.
[6]
The applicant delivered a short affidavit
in support of the application for amendment, setting out why he seeks
the amendment and
setting out the circumstances of a meeting where
the decision was taken to dismiss him. He delivered it almost eight
months before
the hearing. The cc had ample time to deliver an
answering affidavit but it did not.
[7]
There is no prejudice to the cc in granting
the amendment. It is so granted.
Background facts
[8]
At the time of Chafeker’s dismissal
in August 2011, the cc had four members. Apart from being an
employee, Chafeker was also
a member of the cc. They held membership
in the following percentages:
8.1
Nazir Chafeker 40%
8.2
Godfrey Willie 40%
8.3
Fuaad Willie
10%
8.4
Faried Willie
10%.
[9]
Chafeker, an attorney, was appointed as a
manager of the cc’s business by Godfrey Willie in 2008, when
Godfrey was the sole
member of the cc. Fuaad and Faried Willie are
Godfrey’s sons.
[10]
Chafeker called a meeting of the cc for 22
August 2011. On the agenda were discussions of a number of business
trips, dates for
other meetings, and “Willie’s offer for
Chafeker’s compensation”. There was no mention of
disciplinary
steps to be taken against Chafeker – who had
called the meeting – or his possible dismissal or removal as
member.
[11]
Apart from the three Willies and Chafeker,
a family friend, Logan Thavarajoo, attended the meeting. Logan is not
a member of the
cc. Chafeker’s employment was terminated at the
meeting.
Evaluation / Analysis
[12]
I
shall first deal with the application for a declaratory order. This
Court has jurisdiction to do so in terms of s 77(3) of the
Basic
Conditions of Employment Act
[1]
and s 158(1)(a)(iii) and (iv) of the Labour Relations Act.
[2]
[13]
This leg of the applicant’s argument
does not rest on the fairness of his dismissal. He argues, instead,
that it was unlawful
and thus invalid and of no force and effect.
[14]
This
Court issued a declaratory order to that effect in
NEHAWU
v University of Transkei.
[3]
Landman
J explained the circumstances as follows:
“
At
the outset of the hearing it was agreed that the application would be
argued in two stages as the first stage might dispose of
the matter.
The first stage relates to the validity of the dismissal or, more
accurately, whether in law there has been a dismissal.
The second
relates to the fairness of such a dismissal, if there has been one.
The jurisdiction of this
court to consider a question whether employees have been dismissed by
their employer arises from the
Labour Relations Act of 1995
,
especially by virtue of the provisions of
s1
89 which confers
jurisdiction on this court to adjudicate on dismissals for
operational requirements. The power to grant a declaratory
order
stems from
s158(1)(a)(iv)
of the Act. Where a dispute about a
dismissal for operational requirements can be decided at an early
stage then it is clearly
within the objects of the Act and in the
interests of all concerned for the court to pursue this avenue. “
[15]
That
decision was quoted with approval by the LAC in
Revan
Civils v NUM
[4]
where the prior question was if the employees had been validly –
as opposed to fairly -- dismissed in terms of
s 189A
of the LRA.
Relying on
De
Beers Group Services (Pty) Ltd v NUM
[5]
the Court held:
[6]
“
Unless
there has been a valid dismissal the court may not consider or grant
any relief on the basis that the dismissal was unfair.”
[16]
This
Court considered the validity of the dismissal of an employee who was
also a director of a company in
Nibo
(Edms) Bpk v Cupido
[7]
.
The Court held that the employee’s dismissal was invalid and
noted:
[8]
“
Dit
volg uit die reg soos neergelê ... dat NIBO se submissie dat
Cupido, waar hy hom bekla oor die regsgeldigheid al dan nie
van sy
ontslag, hom tot die KVBA moet wend ingevolge die onbillike ontslag
prosedures van die WAV, nie relevant is t.o.v. die
regsgeldigheid
in teenstelling met die
billikheid
van sy ontslag nie.”
[17]
The question whether the Commissioner in
this case had the jurisdiction to decide on the fairness of
Chafeker’s dismissal
depends on the prior question whether his
dismissal was valid in law.
[18]
At
the time of this judgment, the provisions of the Close Corporations
Act
[9]
still apply, despite the
enactment of the new Companies Act.
[10]
Section 48 of the CC Act deals with meetings of members:
“
48.
Meetings of members
(1) Any member of a
corporation may by notice to every other member
and every other person
entitled to attend a meeting of members, call a
meeting of members for
any purpose disclosed in the notice.
(2)
Unless an association agreement provides otherwise --
(a) a notice referred to
in subsection (1) shall, as regards the date,
time and venue of the
meeting, fix a reasonable date and time,
and a venue which is
reasonably suitable for all persons
entitled to attend the
particular meeting;
(b) three-fourths of the
members present in person at the meeting,
shall constitute a
quorum; and
(c) only members present
in person at the meeting may vote at
that meeting.”
And s 46 deals with
voting:
“
(c)
differences between members as to matters connected with a
corporation's business
shall be decided by majority vote at a
meeting of members of the
corporation;
(d) at any meeting of
members of a corporation each member
shall have the number of
votes that corresponds with the
percentage of his
interest in the corporation;”.
[19]
The effect of these provisions is that,
where there is a dispute about the management of a business of a
close corporation, any
decision about it must be put to the vote of
members in a properly constituted meeting.
[20]
The full transcript of the meeting of 22
August 2011 served before the Court. It is clear that no vote was
taken or called for.
The notice to terminate his employment was
conveyed to Chafeker in the following manner by Logan:
“
So
the last thing that the family wants and if you do not have a letter
of appointment the last undertaking the family has made
is that the
offer [of employment] that was made to you, that of administrator,
was on a temporary basis.
[Chafeker]: Is that so?
[Logan]: Yes. They have
now requested that we terminate it.
[Chafeker]: You can’t
just terminate it.
[Logan]: Ja. Yes.
[Chafeker]: I’m not
going way here.
[Logan]: Yes. They’ve
already changed the banking code so you won’t have access to
that.
[Chafeker]: Are you
willing to do that, Mr Willie?
[Godfrey Willie]: I’m
willing to do that. To terminate your employment here because the
staff is fed up with you...”
[21]
No vote was taken. It appears from the
transcript that Faried may have been sympathetic to Chafeker; had a
vote been called for,
and had Faried voted against Chafeker’s
dismissal, the resultant deadlock would have had to be referred to a
referee.
[22]
The cc has not taken a valid decision to
terminate Chafeker’s employment. It follows that his dismissal
is invalid.
[23]
It
also follows that the commissioner did not have jurisdiction to
decide on the fairness of Chafeker’s dismissal. His dismissal
was void
ab
initio
;
the commissioner or the CCMA could not clothe itself with
jurisdiction to decide whether it was fair.
[11]
[24]
At the meeting of 22 August 2011 Chafeker
made it clear that he would “like to stay on at R&V”.
It is clear that
he meant to continue tendering his services. The
effect of his dismissal being void
ab
initio
and his continued tender is that
his employment contract remains of full force and effect. He is
therefore entitled to his accrued
salary.
[25]
Ms
Golden
argued that this application is premature because there is a pending
dispute between the parties before the Western Cape High Court
disputing the validity of the cc’s association agreement. But
on the evidence before me, Chafeker was validly appointed as
a member
of the cc by Godfrey Willie. He held a 40% member’s interest.
He called the meeting of the cc on 22 August 2011.
None of the other
members contested his authority to do so or his member’s
interest. Neither did they contest the validity
of the association
agreement which all four of them signed. Clause 4 of that agreement
reads as follows:
“
A
member of the corporation may by notice to other members and every
person entitled to attend a meeting of the members , call a
meeting
of members for any purpose disclosed in the notice.”
[26]
The question of voting is not dealt with in
the association agreement. Therefore, the provisions of s 46 of the
CC Act, quoted above,
prevail. No vote was taken to validly dismiss
Chafeker.
Conclusion
[27]
Chafeker’s dismissal was invalid and
thus void
ab initio
.
The CCMA had no jurisdiction to deal with its unfairness. The award
must be reviewed and set aside. Chafeker is entitled to the
declaratory order and the consequential relief that he seeks.
[28]
Both parties asked that costs should follow
the result. I see no reason in law or fairness to interfere with that
request.
Order
[29]
I therefore make the following order:
29.1
The arbitration award of the second
respondent under case number WECT 13554/11, dated 30 May 2012, is
reviewed and set aside.
29.2
It is declared that the purported dismissal
of the applicant on 22 August 2011 is invalid and of no force and
effect.
29.3
The third respondent is ordered to comply
with the applicant’s employment contract by:
29.3.1
paying his salary from 22 August 2011 to
today;
29.3.2
permitting him to take up his former
position as manager of the third respondent, with all rights and
privileges attached thereto,
from 1 June 2014;
29.3.3
continuing to pay his salary.
29.4
The third respondent is ordered to pay the
applicant’s costs, including the costs of counsel.
_______________________
Steenkamp J
APPEARANCES
APPLICANT:
N
F Rautenbach
Instructed
by Chafeker & Shabodien Inc.
THIRD
RESPONDENT:
T
J Golden
Instructed
by André
Bester attorneys.
[1]
Act 75 of 1997 (BCEA).
[2]
Act 66 of 1995 (LRA).
[3]
[1999] 3 BLLR 244
(LC) paras [5] – [6] and [19].
[4]
(2012) 33
ILJ
1846
(LAC).
[5]
(2011) 32
ILJ
1293 (LAC).
[6]
Revan
Civils (supra)
para
[7].
[7]
C 954/12 [2013] ZALCCT 54 (11 Feb 2013).
[8]
NIBO
(supra)
para
[12].
[9]
Act 69 of 1984 (CCA).
[10]
Act 71 of 2008, that was promulgated on 1 May 2011.
[11]
Cf
Benicon
Earthworks and Mining Services (Pty) Ltd v Jacobs NO & ors
(1994) 15
ILJ
801 (LAC) 803-4;
SARPA
v SA Rugby (Pty) Ltd & ors
[2008] ZALAC 3
;
[2008]
9 BLLR 845
(LAC) 856 E-G;
Santam
Insurance Ltd v CCMA & ors
(2009) 30
ILJ
2903 (LAC) 2908.