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[2014] ZALCCT 42
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Lippert and Another v Commission for Conciliation Mediation And Arbitration and Others (C1032/2012) [2014] ZALCCT 42 (31 July 2014)
REPUBLIC
OF SOUTH AFRICA
IN THE LABOUR COURT OF SOUTH
AFRICA, CAPE TOWN
JUDGMENT
Not Reportable
Case
no: C1032/2012
In the
matter between:
T
LIPPERT
First Applicant
F
LIPPERT
Second
Applicant
and
COMMISSION
FOR CONCILIATION
MEDIATION
AND
ARBITRATION
First
Respondent
COMMISSIONER
JP HANEKOM
NO
Second
Respondent
EZT
TRAVEL (PTY) LTD t/a GLOBAL
TRAVEL
ALLOWANCE SOUTH
AFRICA
Third
Respondent
Date
heard: 14 May 2014
Delivered:
31 July 2013
Summary:
Application to review and set aside an arbitration award
JUDGMENT
Rabkin-Naicker
J
[1]
This is an opposed application to review and set aside an award dated
1 November 2012, under case number WECT324 – 12.
[2]
The basis for the review of the arbitration award is that the second
respondent (the Commissioner) committed a gross irregularity
by
refusing to allow the applicants legal representation at the hearing.
[3]
It is also alleged by the applicants that the Commissioner in his
conduct of the proceedings, interfered during the tendering
of
evidence and actively assisted witnesses of the third respondent to
change their versions; refused the applicants the right
to recall a
crucial witness as was previously agreed to during the hearing;
failed to consider material uncontested evidence prepared
by the
applicant; refused applicants the opportunity to lead crucial
evidence at the hearing, dismissing it as being irrelevant
and
speculative; and reached a result that no reasonable Commissioner
could reach.
Background
[4]
The third respondent (the company) conducts business in the travel
industry and provides discounts to club members in respect
of
accommodation and travel related services. It also rents out
accommodation points/timeshare for members at a charge. The first
applicant started his business relationship with entities related to
the company during 2008. Second applicant was also previously
employed within the group.
[5]\
The applicants hold a 30% shareholding in the company through a trust
known as the F&T Trust. First applicant was nominated
as director
of the company during 2009 and was duly appointed and registered as
such in December 2010. A resolution by the board
of directors was
adopted on 29 July 2010 in respect of his directorship. He was
appointed as the director as a representative of
the F & T Trust.
[6]\
The company was run as a quasi-partnership. First applicant with the
assistance of his wife, second applicant, opened and managed
the
Somerset West offices of the company. According to the applicant's
financial, personnel and operational functions for this
office were
managed and administered from the Somerset West office at all
relevant times. It is their case that the relationship
between them
and the other directors started to deteriorate in mid-2011 when it
was requested by one of the directors (Swanepoel)
that second
respondent be banned from future director and shareholders meetings
while she had always attended these meetings in
the past. First
applicant as a consequence addressed a letter to Swanepoel setting
out his concerns and suggested a method to end
the parties’
business relationship as partners within the group of relevant
entities.
[7]
On 16 November 2011, two days after applicants returned from London
where they were at been attending to business on behalf
of the
company and related entities, the other directors entered the
Somerset West offices and took control of all functions at
these
offices. This action is described as a hostile takeover in
submissions on behalf of the applicant.
[8]
The applicants were then denied access to the premises of the company
or access to any documents or information and were placed
on
immediate suspension. Nine charges were leveled against them by the
other directors during December 2011. These charges included
fraud,
non-disclosure of information, gross insubordination, insolence and
refusal to obey lawful instructions. The applicants
were not present
at the disciplinary hearings and were dismissed on 22 December 2011.
The
right to legal representation
[9]
Rule 25 (3)(c) of the CCMA Rules provides as follows:
“
(c) If the dispute being
arbitrated is about the fairness of a dismissal and a party has
alleged that the reason for the dismissal
relates to the employee's
conduct or capacity, the parties, despite subrule (1)(b) are not
entitled to be represented by a legal
practitioner in the proceedings
unless-
(1)
the commissioner and all the other parties consent;
(2)
the commissioner concludes that it is unreasonable to expect a party
to deal with the dispute
without legal representation, after
considering-
(a)
the nature of the questions of law raised by the dispute;
(b)
the complexity of the dispute;
(c)
the public interest; and
(d)
the comparative ability of the opposing parties or their
representatives to deal with the
dispute.’
[10]
In
Commission
for Conciliation, Mediation & Arbitration & others v Law
Society of the Northern Provinces (Incorporated as the
Law Society of
the Transvaal)
[1]
the court considered this sub rule as follows:
“
The subrule indeed allows the
commissioner considerable latitude in allowing legal representation.
It may be allowed where the commissioner
and all the parties agree.
In addition, the commissioner may allow it in exercising his or her
discretion when he or she considers
that it is 'unreasonable to
expect a party to deal with the dispute without legal representation'
after consideration of the listed
factors. The listed factors are:
the nature of the questions of law raised by the dispute; the
complexity of the dispute; the public
interest; and the comparative
ability of the opposing parties or their representatives to deal with
the dispute. The subrule does
not disallow other forms of
representation. Nor does it exclude the consideration of other
relevant considerations. These factors
may well, in a given case,
include the seriousness of the individual consequences of a
dismissal, assuming that this is not already
encompassed by the
subrule, which I doubt. “
[11]
The Court made reference to the earlier case of
Hamata
& another v Chairperson, Peninsula Technikon Disciplinary
Committee & others
[2]
in which the SCA
dealt with the question of whether there is a right to legal
representation in internal disciplinary hearings
and found that no
such right exists, holding as follows:
“
This
constitutional and statutory position comes as no surprise. There has
always been a marked and understandable reluctance on
the part of
both legislators and the courts to embrace the proposition that the
right to legal representation of one's choice is
always a sine qua
non of procedurally fair administrative proceedings. However, it is
equally true that with the passage of the
years there has been
growing acceptance of the view that there will be cases in which
legal representation may be essential to
a procedurally fair
administrative proceeding. In saying this, I use the words
'administrative proceeding' in the most general
sense, i.e. to
include, inter alia, quasi-judicial proceedings. Awareness of all
this no doubt accounts for the cautious and restrained
manner in
which the framers of the Constitution and the Act have dealt with the
subject of legal representation in the context
of administrative
action. In short, there is no constitutional imperative regarding
legal representation in administrative proceedings
discernible, other
than flexibility to allow for legal representation but,
even then,
only in cases where it is truly required in order to
attain procedural fairness
.” My emphasis)
The
arbitration proceedings
[12]
The arbitration proceedings
in casu
commenced on 2 March 2012.
The company was represented by the head of the Employer's Federation
of South Africa (EFOSA) and later
during the proceedings by another
official of EFOSA. The applicant's attorney was present and applied
to the Commissioner to represent
his clients at the hearing due to
the complexity of the matter and the legal and commercial
implications and consequences of their
respective dismissals, as well
as the comparative ability of the parties – the company was
represented by the head of a national
employers’ organization
while the applicants had never taken part in such proceedings. The
Commissioner reasoned as follows
in relation to Rule 25(3) of the
CCMA rules:
“
Okay, be that as it may, as far
as comparative ability is concerned, do you know, that CCMA, you're
always going to have that problem
when you have comparative ability,
because the rules are quite clear, once you belong to an employer’s
organization, you
are entitled to bring your most experienced,
whoever you want to bring as an official, you entitled to do so, even
if the applicant,
on the other side has no experience whatsoever.
To my mind, this comparative
ability,…To continue, I was busy with the comparative ability.
So that will always be the case
that the CCMA and to my mind, clauses
must not be read in isolation and my interpretation of this issue of
comparative ability
must be read in line with the complexity of the
matter.
In other words, what I'm saying is if
the matter is complex, then comparative ability becomes an important
issue.
So, that to me itself is not a reason
to grant legal representation today. The important issue here from me
today is the complexity
of this matter.…”
[13]
The above reasoning is fundamentally flawed. First, it is premised on
the belief that because the CCMA rules allow for employer
representatives from employers’ organizations, there is
‘always’ going to be a comparative ability problem. The
Commissioner then moves from the premise that ‘this will always
be the case at the CCMA” (presumably because he believes
employer representatives always have more ability than those of
employees’) to state that it is only where a matter is complex
that comparative ability becomes an important issue. The fact that a
matter may be complex to an unrepresented person yet straightforward
to a person well versed in arbitration proceedings does not occur to
the Commissioner.
[14]
The Commissioner then proceeded to consider whether the matter was
‘complex’ in his view. Some of his thoughts
on this are
set out below:
“
Now, Mr. Jacobs addressed me on
the issues and it was clear from his argument, that the applicants
are not actually familiar with
the charges and then they haven't seen
the charges and the documentation that was required and that itself
makes the matter complex.
Mr. Uittenbogaard was adamant that
this matter is not complex. It is straightforward. The charges
against the applicant number one
and two, their case is basically
focusing on charges 12 and 5, the fraud the breach of trust and the
other charges interrelate.
Some of the charges were withdrawn.
So as far as applicant one and two is
concerned
[3]
,
that its clear to me that it relates to fraud in the case of
pay-slips and whether or not there was misconduct in that regard
and
whether there was a bank account open, a private bank account opened
to defraud the company or the respondent.
So for me, that, there's nothing in my
experience, there's nothing complex about that.
Mr Uittenbogaard said that 90% of this
case is based on documentation. So it's – for me it's
straightforward, whether or not
the applicant 1 and 2 is guilty of
falsifying documentation of opening a false employee records in order
to create extra…
There is nothing complex about that…..
To my mind this is not a matter where
directors have defrauded the company of millions where perhaps
fictitious financial statements
and so forth. Something for example
that make would make this a very complex matter.
It's simple. This case revolves around
pay-slips, false pay-slips, false employees, fraud. As simple as that
and whether or not
they were guilty of misconduct. So, I'm not
convinced that this is a complex matter and the whole purpose of rule
25 was for the
CCMA to deal with these kind of disputes at
arbitration level as easily as fairly as possible without complex
legal formalities
and that is the reason why and whereas I'm not
allowed. It is not because I am difficult…
So my decision today is, I'm not going
to allow legal representation. This is a straightforward matter and
lastly you know the fact
that you have 12 or 15 or 20 witnesses does
not make the matter complex. In my experience sometimes you have six
files and afterwards,
you realize it wasn't such a complicated
matter.”
Evaluation
[15]
In considering whether legal representation should be allowed, the
Commissioner did not discernibly apply his mind to
the issue of
procedural fairness when parties have different abilities to conduct
the leading of evidence; he misconceived the
issue of comparative
ability of the parties on the premise that an employer's
representative will always be more skilled and omitted
to understand
that the complexity of a matter is relative to the comparative
ability of a party; and laboured under the misconception
that
because much of the evidence was contained in documentation this
would somehow make the hearing more simple. He further did
not give
sufficient weight to the fact that the applicants were without any
experience in cross-examination of witnesses, whereas
the employer's
representative was extremely experienced in running such proceedings.
A reading of the award itself reveals that
the matter was indeed of a
complex nature with a large amount of evidence presented.
[16]
The failure to allow the applicants representation led to a situation
in which there was not a fair trial of the issues. This
was
compounded by the Commissioner’s conduct of the proceedings.
There are various examples of the Commissioner’s interference
in the cross examination of the company's witnesses. For example the
following transcribed part of the record:
"
Mr. Lippert:
Ja all
right. Okay, if you look at the invoice, can you confirm that around
about 21 October 2009 you rented a week at Charka’s
Rock for
Mr. Wilson?
Ms.
Simons:
yes.
Mr. Lippert:
okay. Is the price
on the invoice correct R2500.00?
Ms. Simons
: Correct
Mr. Lippert
: Are any other
details on this invoice incorrect?
Ms. Simons
: how do you mean
other details – this is an invoice.
Mr. Lippert:
is (indistinct)
correct… Intervention.
Commissioner
: where is the
original of this invoice, Mr. Lippert, where is the original of this
invoice?
Mr. Lippert
: it must be at the
office. They keep things like that at the office.
Commissioner
: where did you get
yours from?
Ms. Simons
: I don't understand.
Commissioner:
The reason why I
am asking is you are asking this witness is the rest of the writing
on the invoice correct. Yes.
Commissioner
: so you know
yourself computer technology, you can copy and paste and change an
invoice as you like. So now in all fairness to
this witness, if she
has to answer that, then I want to see the original one unless she
agrees to the rest of the invoice; what
do you say? Do you say the
rest of this info on this invoice is a correct? I am allowing the
witness time to look at the invoice.
Ms. Simon's
: well if you look
at the invoice, my details, my address details on the top never
appeared on it, but that is my personal home
address, and when I did
the invoice I wouldn't put my home address on them, because I was
working in the main road Somerset West
officers so how come my
address is on the top you, my home address? And it says, resort
services. So this was never on top."
[15]
The applicants have contrasted this assistance given to the witness
for the company to the way that the Commissioner dealt
with the
applicants themselves. For example, the Commissioner having
interrupted the cross-examination of Ms. Simons by Mr. Lippert,
interrogated Mr. Lippert himself about the company that was paying
Ms. Simon's her salary as follows:
"Commissioner: now whose
company’s that?
Mr. Lippert: that company was set up
at that point to cater for the Travelcorr because – Desi
[4]
can explain it better than me, because (indistinct).
Commissioner
: Now Sir, don't
confuse me.
Ms Simons
: no, I don't…
( intervention)
Commissioner:
Don't confuse me
with the facts. You can't be a trier of law once you're not a trier
of facts, but I will assure you, at the end
of the day I will know
all the facts of this case. Don't confuse me at this stage. All I'm
asking you is in all fairness to the
witness, you're putting
questions the witness as to who employed her and who was her
employer. Now I am asking you for the sake
of clarity, who is this
company FGL TravelCorr?
Lippert
: FTO TravelCorr at the
time… (Intervention)
Commissioner
: We are busy with
cross examination so I think it is important to know who this company
is. Are you saying that travel –
FDL TravelCorr paid her
salary? Who paid her salary if Global Travel did not pay her salary?
Who employed her?
Mr Lippert
: FTL
Commissioner
: Travel Corp paid
her salary
Mr Lippert
: Ja.”
[14]
I note that that the company's answering affidavit did not deal with
any of the allegations/facts set out in the applicants’
supplementary affidavit. The issue of an allegation by the company
that the review application was one day out of time was not
pursued
and I heard this application on the merits.
[15]
Given the reasons for my order, I prefer not to comment on the merits
of the dispute as I trust these will be properly dealt
with in due
course at a new arbitration hearing. Over and above the grounds for
review I have highlighted i.e. the failure to provide
a fair trial of
the issues, the Commissioner’s misconstruction of the enquiry
required in terms of rule 25 of the CCMA rules,
and his misconduct in
arbitrating the process, I note that the Award itself, more
especially in its recording of the evidence given,
lacks both clarity
and insight. I see no reason why costs should not follow the result
in this matter. In all the circumstances,
I make the following order:
Order
1. The arbitration
Award under case number WECT324 – 12 is reviewed and set aside.
2. The dispute is
referred back to First Respondent for hearing anew before a
Commissioner other than Second Respondent.
3. The parties may
have legal representation at the de novo arbitration proceedings.
4. Third respondent
to pay the costs
________________
H.Rabkin-Naicker
Judge
of the Labour Court of South Africa
Appearances:
Applicants:
Adv. A de Wet instructed by Joose
Heswick Attorneys
First
Respondent: Adv. Paul Tredoux instructed by Quinton
J Williams & Associates
[1]
(2013) 34 ILJ
2779 (SCA)
[2]
(2002) 23 ILJ 1531 (SCA)
[3]
The
applicants in casu
[4]
i.e. Ms
Simons