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[2014] ZALCCT 66
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Bitou Municipality v South African Local Government Bargaining Council and Others (C1019/2012) [2014] ZALCCT 66 (24 October 2014)
REPUBLIC OF SOUTH
AFRICA
LABOUR COURT OF SOUTH
AFRICA, CAPE TOWN
JUDGMENT
Not
Reportable
Case
no: C1019/2012
In
the matter between:
BITOU
MUNICIPALITY
................................................................................................
Applicant
and
SOUTH
AFRICAN LOCAL MUNICIPALITY
BARGAINING
COUNCIL
...............................................................................
First
Respondent
COMMISSIONER
COEN DE KOCK N.O.
…............................................
Second
Respondent
LONWABO
MNINAWA RONALD
NGOQO
................................................
..
Third
Respondent
Heard: 12
February 2014
Delivered: 24
October 2014
Summary:
....
Errors
which lead commissioners reach unreasonable decisions render their
arbitration awards reviewable.
…...................
Review
in terms of section 145 of the Labour Relations Act – Dismissal
for misconduct.
JUDGMENT
LALLIE
J
Introduction
[1]
This is an application to review and set aside an arbitration
award of the second respondent (‘the arbitrator’)
in
which he found the third respondent’s dismissal both
substantively and procedurally unfair and ordered his reinstatement.
It is opposed by the third respondent.
Condonation
[
2 ] The founding and the replying affidavits were filed late by
8 and 4 days respectively. The applicant applied for condonation
of
the lateness. The condonations were unopposed. In both instances, the
degree of lateness is not substantial, the applicant proffered
reasonable explanation and the delay did not cause the third
respondent prejudice. I am satisfied that the applicant showed good
cause. The applications should, therefore, succeed.
[3]
The third respondent’s answering affidavit was filed
about eight months out of time. He applied for condonation.
His
application was opposed by the applicant. The explanation that the
third respondent forwarded for the delay was that there
were on-going
settlement negotiations between the applicant and himself. The
applicant denied that the attempts to settle the dispute
were
responsible for the delay as the applicant informed the third
respondent as early as February 2013 of its intention to launch
the
review application. It also reminded the third respondent’s
attorneys to file the answering affidavit. All they did was
promise
to file it. The applicant argued that the third respondent should not
be allowed to rely on his lack of funds to pay his
counsel fees owing
to unemployment as he got alternative employment which remunerated
him at the monthly rate of R 80 000.00 after
his dismissal. The
unavailability of the third respondent’s counsel because she
was on maternity leave did not constitute
reasonable explanation
according to the applicant because the period of the unavailability
is not disclosed. Counsel was also briefed
to file the answering
affidavit three months after it was due.
[4]
Part of the applicant’s attack on the third respondent’s
explanation for the delay in filing his answering
affidavit is
justified, however, the validity of some arguments in the third
respondent’s favour cannot be denied. When his
counsel who had
assisted him at the disciplinary enquiry and the arbitration hearing,
which generated a lot of documents, was unavailable,
it was not
financially viable for him to enlist the services of another as he is
funding his own litigation. The applicant contributed
to the delay in
that it did not respond within reasonable time to the third
respondent’s application for assistance with
fees for his legal
team when such application was made in terms of section 119A of the
Municipal Systems Act (MSA).
[5]
The applicant argued that it was prejudiced by the delay as it
is entitled to have the matter brought to finality. The
test for
condonation for the late filing of an answering affidavit is less
stringent than the test for condonation of the late
filing of a
founding affidavit because the respondent is not
dominus litis
.
An applicant can prevent the effects of a delay in the filing of an
answering affidavit by requesting the registrar to enrol the
matter
for hearing on the unopposed roll when the
dies
for filing the
answering affidavit have prescribed. It was, therefore, not necessary
for the applicant to suffer the eight months’
delay. The
applicant argued that this matter is not complex. It was complicated
by the third respondent and the arbitrator. This
submission is an
oblique reference to the fact that the matter was complicated when
the answering affidavit became due, as the
arbitrator had, on the
applicant’s admission, already complicated it.
[6]
A number of judgments that the applicant sought to rely on for
the dismissal of this application deal with condonation
for the late
filing of applications by applicants who are
dominus
litis
whose period for filing their applications is governed by the Labour
Relations Act 66 of 1995 (‘the LRA’) and not the
Rules.
In
Mabaso
v Law Society, Northern Provinces and Another
,
[1]
the Constitutional Court dealt with condonation as follows:
‘
[20] ...It
is trite law that a court considering whether or not to grant
condonation exercises a discretion. (Footnote omitted)
The discretion
must, of course, be exercised judicially on a consideration of all
the facts and ‘in essence it is a matter
of fairness to both
sides.
’
[7]
The standard for considering an application for condonation is
the interests of justice. Relevant factors in determining
whether it
is in the interests of justice that condonation be granted include
but are not limited to the nature of the relief sought,
the extent of
the delay, its cause, its effect in the administration of justice and
to other litigants and reasonableness of the
explanation.
[2]
[8]
The delay is excessive. Its explanation cannot be said to be
reasonable. The third respondent has reasonable prospects
of success
in that he could be successful, if the allegations he seeks to rely
on are proved. In opposing the review application,
the third
respondent seeks to assert his rights in terms of an arbitration
award which had been granted in his favour. Other litigants
will not
be prejudiced in the event of this application being granted as there
is no danger of memories of witness having faded
as all the evidence
the applicant needs to present its case is already before court. The
applicant has already filled the vacancy
left by the third
respondent’s dismissal. The applicant is the local government
and the third respondent was its senior official.
It is in the
interest of both parties that this application be granted for both
parties to be heard and the review application
properly ventilated.
When all the facts of this application are considered, the interests
of justice require that the application
be granted.
Factual background
[9]
The third respondent was employed by the applicant as its
municipal manager. Arising from the manner in which he performed
his
duties, the applicant preferred seven charges of misconduct against
him. A disciplinary enquiry was instituted and it found
him guilty of
the following charges:
‘
Charge 1
During the process of purchasing
certain land on behalf of the Municipality the Employee had
“transgressed section 61(1)(a)
and 61(1)(c) of the Local
Government Municipal Financial Management Act 56 of 2003 in that:
He misrepresented to the seller’s
conveyance[r]s that the Municipality had obtained the funds to pay
the agreed price; and
[He] did not refer to the conditions
attached to the funds thus giving the false impression that the
suspensive condition contained
in the Deed of Sale had been met.
Charge 3
That he transgressed section 32 of the
Act, read with the definition of “unauthorised expenditure”,
in that he “authorised
expenditure of money appropriated for a
specific purpose other than for that purpose alternatively that [he]
authorised spending
of an allocation referred to in paragraphs ‘B’,
‘C’ and ‘D’ of the definition of allocation
of allocation in the same Act other than in accordance with the
conditions of that allocation.
Charge 6
That he transgressed section 66
(before amendment) of the Local Government Municipal System Act 32 of
2000, placing on a Municipal
Manager the duty to approve a staff
establishment, in that he “grossly derelicted” that duty
as he had “since
1 March 2008 till end June 2011 failed to
approve this establishment, causing [a] lack of approved
organisational structure within
the municipality.
Charge 7
That he transgressed section 2(a), (b)
and (d) of Schedule 2 of the said Act in that he instructed his
attorney “to address
a letter to the Executive Mayor, the
Speaker and the representative of the Western Cape Provincial
Government dated 13 July 2011,
purporting to be doing so on behalf of
the members of staff of the Municipal Council”.’
Dismissal
was found to be the appropriate sanction.
[10]
The third respondent challenged the fairness of his dismissal at
the first respondent. When the dispute was scheduled
for arbitration,
the applicant and the third respondent agreed that the transcript of
the disciplinary proceedings would form part
of the arbitration
proceedings. The bundles of documents which were presented at the
disciplinary enquiry would serve the same
purpose at the arbitration.
They further agreed that the arbitrator would retain the right to
call for further evidence. The third
respondent’s case was
based only on the charges that he had been found guilty of. Both
parties submitted closing arguments.
The arbitrator based his award
on the above-mentioned documents.
The award
[11]
In his reasons for his decision, the arbitrator dealt with the
issue of procedural fairness of the third respondent’s
dismissal first. He found that the chairperson was biased in that
after the applicant and the third respondent had closed their
respective cases and after the applicant had submitted its closing
arguments, the chairperson, on his own accord, called a witness,
Mr
Tshangana (Tshangana) to testify. In its heads of argument, the
applicant conceded that the applicant’s evidence regarding
invoking clause 1.5 of the Memorandum of Agreement (‘the MOA’)
went uncontested as Tshangana had not been called to
testify. The
chairperson’s decision to call Tshangana was preceded by an
exchange of correspondence between the applicant’s
representative and the chairperson only. The arbitrator found that by
his conduct, the chairperson’s irregularly assisted
the
applicant and found such assistance and the third respondent’s
exclusion from the correspondence leading to calling Tshangana
as a
witness, including the time at which he was called prejudiced the
third respondent and rendered his dismissal procedurally
unfair.
[12]
When considering the substantive fairness of the dismissal, the
arbitrator dealt with each charge the third respondent
was found
guilty of. The first charge is based on a letter the third respondent
wrote on 1 April 2011. The events preceding the
writing of the letter
are that the third respondent was authorised by the applicant to
finalise the negotiations for the purchase
of the property known as
the remainder of portion 2 and 20 of Hillview with Wavelengths. A
deed of sale was entered into on 28
January 2011 and the price of the
property was stated as R28 000 000.00 (exclusive of VAT or transfer
duty). The relevant parts
of the deed of sale for purposes of the
arbitration were deemed by the arbitrator to be clause 4.1 and 4.2.
Clause 4.1 contained
a suspensive condition which provides that the
whole agreement was subject to the applicant (the purchaser) securing
the purchase
price from the provincial administration of the Western
Cape within a reasonable period from the date of signature of the
agreement.
Clause 4.2 required the applicant to notify the seller’s
conveyancers in writing upon securing the purchase price. On 7 March
2011, the Provincial Government of the Western Cape via its
Department of Human Settlements (‘the Department’) and
the applicant entered into a memorandum of agreement (MOA) regarding
the acquisition of Land Parcel Farm Hillview NO 437 Portion
2 and 20
by the applicant. Clause 1.5 of the MOA provides that the funds
allocated were subject to the Department finalising an
independent
valuation of the property to determine the final purchase price. In
the event of the applicant receiving an amount
in surplus of the
Department’s valuation, surplus funds had to be paid back to
the Department immediately on the Department’s
written request.
The MOA also provided that the Department would effect payment of the
sum of R29, 350, 000.00 (Twenty Nine Million
and Three Hundred and
Fifty Thousand Rand) in one payment within thirty days of the date of
signature of the MOA by both parties
subject to certain conditions.
Between the 30 and 31 March 2011 the Department deposited the money
in the applicant’s bank
account when a valuation of the
property at the amount of R2.1 million had already been done and
forwarded to the Department. Just
before the letter of 1 April 2011
was written, the seller’s attorneys forwarded a letter to the
third respondent enquiring
as to when the purchase price could be
expected.
[13]
The essence of the letter of 1 April 2011 was that the third
respondent advised the seller’s attorneys that the
respondent
had received the required funds from the Province for the
finalisation of the contract to purchase the land. He explained
that
the funds enabled him to sign all the relevant documentation with the
attorneys so that transfer could take place. The arbitrator
found
that the false representation which formed the basis of the first
charge was based more on the third respondent’s failure
to make
reference to clause 1.5 of the MOA thus falsely representing to the
seller that all the suspensive conditions had been
complied with and
that the money was available for the sale to be proceeded with. The
arbitrator rejected the applicant’s
version that the third
respondent had made any misrepresentation because when the letter was
written the Department had already
deposited the money and the
seller’s attorneys had made enquiries about the payment. When
the Department made the deposit,
it had already received the second
valuation which was substantially less than the initial one. The
arbitrator could find no evidence
indicating that the third
respondent had been made aware of that fact when he wrote the latter
of 1 April 2011. He further found
that the applicant held a genuine
and reasonable belief that clause 1.5 of the MOA would not be
invoked. The arbitrator found that
in finding the third respondent
guilty of the first charge, the chairperson brought in issues which
the applicant was never charged
for, which did not form the basis
upon which the initiator relied in presenting the applicant’s
case. The applicant found
it problematic that the chairperson asked
himself what the third respondent’s motive was for paying R28
million for the property
and concluded that he did not act with
fidelity, honesty and integrity in respect of the R 28 million
instead of concentrating
on charge 1. The arbitrator also noted that
the chairperson prevented the third respondent’s representative
on a number of
occasions from dealing with the issue of the third
respondent’s motive in persuading the council to pay R28
million for the
property. He concluded that he was biased in favour
of the applicant at the third respondent’s expense.
[14]
In respect of charge 3, the arbitrator noted that money
deposited by the province was put in a separate account by the
Chief
Financial Officer, Mr Lotte (Lotte) who, owing to the applicant’s
poor financial position utilised it to pay the applicant’s
debts. He concluded that the money was used for a purpose other than
the one it was deposited for, that is, purchasing the property.
Evidence did not show that the third respondent was implicated. He
stated that Lotte should have been disciplined for the misconduct
instead of the third respondent. The arbitrator’s finding was
that the third respondent should have been acquitted of the
third
charge. He, however, added that if his finding is wrong, the charge
did not justify the sanction of dismissal.
[15]
With regard to charge six, the arbitrator found that the
applicant should not have added it to the charges that it preferred
against the third respondent as evidence revealed that work had been
done on the staff establishment. The work had been submitted
to the
SALGBC and that the grading of the SALGBC was not accepted by the
applicant. After considering the evidence and submissions
in respect
of charge six, the arbitrator noted that substantial correspondence
between the applicant and the SALGBL indicated that
the third
respondent had worked on staff establishment. As the issue of staff
establishment had never been raised before, the arbitrator
was of the
view that charge six was included in an attempt to find as much
wrong-doing as possible against the applicant. The arbitrator
expressed the view that the delay in putting this charge to the third
respondent indicated that it was not serious enough to warrant
dismissal. He considered performance related process to have been the
best action to have been taken against the third respondent.
[16]
The arbitrator found that the third respondent was found guilty
of charge 7 incorrectly because he was requested/mandated
by the
applicant’s senior personnel to instruct an attorney to address
a letter to the applicant and the provincial representatives
who were
at the applicant’s premises and address their concerns. The
applicant was but one of the officials who were unhappy
with the
interference by provincial representatives. He could not be said,
based on the contents of the letter part of which was
offensive, to
have transgressed the MSA.
Grounds for review
[17]
The applicant submitted that the arbitrator committed misconduct
in relation to his duties as an arbitrator, gross irregularity
in the
conduct of the arbitration proceedings and exceeded his powers. The
award was further attacked on the basis that the arbitrator
disregarded essential evidence which included a complete break-down
in the employment relationship, the third respondent’s
untruthfulness when giving evidence and that the third respondent was
guilty of insubordination. The applicant submitted that the
arbitrator’s legalistic approach on the issue of procedural
fairness rendered his award reviewable. The applicant also sought
to
rely on the arbitrator’s failure to find the third applicant
guilty of the acts of misconduct which led to his dismissal.
The
relief awarded to the third respondent was, according to the
applicant in breach of section 193 (2) of the Labour Relations
Act 66
of 1995 (‘the LRA’) in that the arbitrator ordered the
third respondent’s reinstatement in the face of
evidence that
the employment relationship had broken down. The amount the
arbitrator arwarded was inequitable and he ordered mutually
exclusive
remedies.
[18]
The arbitrator rejected the third respondent’s submission
that Mr Gilomee (Gilomee) who was appointed as an investigator
was
not independent as envisaged in clause 5(3)(a) of the disciplinary
regulations for senior managers. He found no substance in
the
explanation proffered by the third respondent that the talks that
Gilomee had with the Provincial Government for appointment
as an
advisor for various municipalities compromised his independence.
Test for review
[19]
In
Fidelity
Cash Management Service v CCMA and Others
,
[3]
the sets [
sic
]
for review are expressed in the following words:
‘
The test
enunciated by the Constitutional Court in
Sidumo
for determining whether a decision or arbitration award of a CCMA
Commissioner is reasonable is a stringent test that will ensure
that
such awards are not lightly interfered with. It will ensure that,
more than before, and in line with the objectives of the
Act and
particularly the primary objective of the effective resolution of
disputes, awards of the CCMA will be final and binding
as long as it
cannot be said that such a decision or award is one that a reasonable
decision-maker could not have made in the circumstance
of the case.’
The
court further held that reasonableness must be determined objectively
‘with due regard to all the evidence that was before
the
Commissioner and what the issues before the commissioner were. The
same sentiment was echoed in
Gold
Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v CCMA and Others,
[4]
where it was held that the reviewing court must consider the totality
of the evidence and then decide whether the decision made
by the
arbitrator is reasonable.
[20]
It was submitted on behalf of the applicant that the arbitrator
incorrectly adopted the criminal procedure approach in
terms of which
the third respondent’s ‘guilt’ needed to be proven
failing which acquittal in the form of reinstatement
should follow.
The applicant sought to rely,
inter
alia
,
on
Avril
Elizabeth Home for the Mentally Handicapped v CCMA and Others.
[5]
It was further argued that the approach adopted by the arbitrator led
him to unreasonably overlook the issue of the breakdown of
the
employment relationship. Section 193(2) enjoined him to consider it
as he could not take a correct decision on the relief due
to the
third respondent without considering whether reinstatement was
appropriate. The chairperson dealt with the issue of the
breakdown of
the employment relationship and made a finding that the employment
relationship between the applicant and the third
respondent had
broken-down as a result of the acts of misconduct which led to his
dismissal. He gave reasons for his finding. The
arbitrator was
required, so went the argument, to give reason for overturning the
chairperson’s decision on the issue.
[21]
The third respondent defended the arbitrator’s failure to
deal with question of the breakdown of the trust relationship
by
submitting that it was hearsay evidence. The relationship between the
third respondent and the Mayor was not necessarily one
between the
third respondent and the employer. The powers of the Mayor in terms
of the MSA, did not extend to the assessment on
behalf of the Council
of the trust relationship between the Council and a municipal
manager. The Mayor’s perceptions of the
third respondent’s
integrity and trustworthiness did not meet the threshold contemplated
in section 193(2) of the LRA.
[22]
The applicant argued that the arbitrator’s failure to deal
with the mutually exclusive versions before him and the
third
respondent’s is untruthfulness constituted sufficient grounds
to have the award reviewed and set aside.
[23]
The essence of the applicant’s argument on the
unreasonableness of the decision that the third respondent was
procedurally
unfair was that the chairperson acted within his powers
in terms of the collective agreement which governed the disciplinary
enquiry
when he called Tshangana as a witness. In addition, the third
respondent had alleged that the applicant’s failure to call
Tshangana was to his detriment as he had knowledge of evidence which
would exonerate him from charge 1. Tshangana was eventually
called by
agreement between the applicant and the third respondent.
[24]
The applicant argued that the decision that the third
respondent’s dismissal was unfair was contradictory,
unreasonable
and wrong. It was based on the arbitrator’s error
of disregarding admissible evidence and admitting inadmissible
evidence.
[25]
The applicant gave elaborate reasons for a punitive costs order
against the third respondent. Section 138 of the LRA requires
arbitrators to determine disputes fairly and quickly but to deal with
the substantial merits of the dispute with the minimum of
legal
formalities. The duty is expressed as follows in
Gold Fields
(supra) at paragraph 16:
“
In
short: A review court must ascertain whether the arbitrator
considered the principal issue before him/her; evaluated the facts
presented at the hearing and came to a conclusion which was
reasonable to justify the decisions he or she arrived at.”
[26]
When the evidence before the arbitrator is considered in its
totality, it reveals that he failed to deal with the substantial
merits of the dispute before him. With regard to the first charge the
arbitrator found that the third respondent held a genuine
and
reasonable belief that clause 1.5 of the MOA would not be invoked. He
also mentioned that the fact that the seller had been
given a copy of
the MOA was undisputed. The arbitrator gave no reasons for his
finding on clause 1.5 of the MOA. The witness who
testified on
whether clause 1.5 of the MOA would not be invoked was Tshangana. The
arbitrator criticised the chairperson for calling
Tshangana as a
witness and decided to treat his evidence with caution. In making his
finding, he did not deal with Tshangana’s
evidence at all.
Although he was required to give brief reasons for his decision, he
was required to deal with Tshangana’s
evidence which provided
relevant information on whether clause 1.5 of the MOA would be
invoked or not and shed light on the substantial
merits of the
charge. The arbitrator’s omission to deal with the mutually
exclusive versions before him c forms part of his
failure to deal
with the substantial merits of the dispute. So does his failure to
deal with the appropriateness of reinstatement
in the face of the
chairperson’s decision that a continued employment relationship
would be intolerable.
[27]
After evaluating evidence in connection with charge three, the
arbitrator had to make a finding whether the third respondent
had
contravened section 32 of the Municipal Finance Management Act 56 of
2003 (the MFMA). The arbitrator accepted that as the accounting
officer the third respondent was ultimately responsible for the use
of funds. Having made that observation, he finds that the third
respondent was wrongly found guilty of the charge and that he ought
to have been acquitted. He is not sure of his finding and add
that if
it is wrong it most definitely not dismissable. He adopted the same
attitude when dealing with charge six. An arbitrator
is decision
maker, he needed to clearly determine whether the third respondent
had contravened section 32 of the MFMA and section
66 of the MSA and
based on his sense of fairness decide whether the applicant acted
fairly by dismissing him for the contravention.
His failure to
exercise the authority to make decisions rendered his findings
unreasonable.
[28]
The arbitrator’s finding that the third respondent’s
arbitration was procedurally unfair is not supported
by the evidence
before him. It is taken in total disregard of the contents of the
record he was required to consider which reflects
that the parties
had agreed that Tshangana be called as a witness. The decision that
by calling him to testify, the chairperson
assisted the applicant
unfairly flies in the face of the agreement.
[29]
The arbitrator made serious errors that constituted gross
irregularities which led him to reach an unreasonable decision.
His
decision to reinstate the third respondent with effect from 11
November 2012 and order that he paid in terms of the reinstatement
order from the date of his dismissal, the 6 February 2012 to 1
November 2012 is a manifestation of the unreasonableness of his
award.
[30]
I have considered the submissions on behalf of both parties on
the question of costs. The third respondent opposed this
application
armed with an award in his favour in an attempt to assert his rights
in terms of the award. Costs orders should not
be used to deter
employees from opposing review applications in their favour. The
third respondent did not act unreasonably in
opposing this
application and all the delays and inadequacies do not justify a
costs order against him. Similarly, the applicant’s
inadequacies do not justify a costs order in favour of the third
respondent.
[31]
In the premises, the following order is made:
1.
......
Condonation
of the late filing of the review application is granted.
2.
......
Condonation
of the late filing of the answering affidavit is granted.
3.
......
Condonation
of the late filing of the replying affidavit is granted.
4.
.....
The
arbitration award issued by the Second Respondent under case number
WCP031205 and dated 22 October 2012 is reviewed and set
aside.
5.
......
The
matter is remitted to the First Respondent to be arbitrated
de
novo
by an arbitrator other than the Second Respondent.
6.
......
No
order is made as to costs.
_____________
Lallie J
Judge
of the Labour Court of South Africa
Appearance
For
the Applicant:
...................
Mr
Conradie
of Conradie Attorneys
For
the Third Respondent:
Advocate
Ferreira
Instructed
by:
.........................
Mills
Attorneys
[1]
[2004] ZACC 8
;
2005 (2) SA 117
(CC) at para 20.
[2]
See
Van
Wyk Unitas Hospital and Another
[2007] ZACC 24
;
2008
(4) BCLR 442
(CC) at para 22.
[3]
[2008] 3 BLLR 197
(LAC) at para 100.
[4]
[2007] ZALC 66
;
[2014] 1 BLLR 20
(LAC) at para 18.
[5]
[2006] 9 BLLR 833
(LC) at 838–839.