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[2015] ZALCJHB 12
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Kelly Industrial Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR1237/13) [2015] ZALCJHB 12; [2015] 6 BLLR 606 (LC); (2015) 36 ILJ 1877 (LC) (21 January 2015)
REPUBLIC
OF SOUTH AFRICA
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG)
JUDGMENT
Case
no: JR 1237/13
DATE:
21 JANUARY 2015
Reportable
In
the matter between:
KELLY
INDUSTRIAL
LTD
.............................................................
Applicant
And
COMMISSION
FOR CONCILIATION,
MEDIATION
AND ARBITRATION
..................................
First
Respondent
COMMISSIONER
ELRIDGE EDWARDS
...................
Second
Respondent
JAN
SPOGTER
..................................................................
Third
Respondent
BOOI
SPOGTER
.............................................................
Fourth
Respondent
RANDALL
NEL
..................................................................
Fifth
Respondent
NICOLAS
VAN WYK
.........................................................
Sixth
Respondent
JOHNNY
VORSTER
.....................................................
Seventh
Respondent
JACQUES
JORS
..............................................................
Eighth
Respondent
ISAK
WILBACH
..............................................................
Nineth
Respondent
RIAAN
WELBACH
...........................................................
Tenth
Respondent
WILLIAM
KOOPMAN
...............................................
Eleventh
Respondent
GERALD
SAULSE
.......................................................
Twelveth
Respondent
Heard:17
December 2014
Delivered:21
January 2015
Summary:
(Review application- termination of placement of employees of labour
broker -whether constituted a dismissal- commissioner's
finding
correct)
JUDGMENT
VENTER,
AJ
Introduction
[1]
This matter is a good example of the precarious and vulnerable
position of employees employed by labour brokers on temporary
assignments or contracts and highlights the reason why this form of
atypical employment is to be regulated and such employees are
to be
protected by the law, dispute resolution tribunals such as the first
respondent and bargaining councils and the courts.
[2]
The matter concerns an application by the applicant to review and set
aside an arbitration award of the second respondent in
his capacity
as commissioner of the first respondent. The application has been
brought in terms of section 145 of the Labour Relations
Act
[1]
("the
LRA").
Background
facts
[3]
The applicant conducts business as a temporary employment service
("TES") placing persons on a so-called temporary
basis at
various sites of its clients.
[4]
The common cause facts are that the applicant employed the third to
twelfth respondents ("the respondents") on 1 June
2012 in
terms of limited duration contracts ("the Contracts"). In
terms of the Contracts, the respondents were assigned
in the capacity
of general workers and performed these services at the Eskom
Gamma-Kappa Transmission Line for KEC International
Limited.
[5]
On 25 March 2013, the respondents were informed in writing that their
assignments at the Eskom Gamma-Kappa Transmission Line
project would
end and their last day at work would be the next day, 26 March 2013.
The applicant paid the respondents two (2) weeks'
remuneration in
lieu of notice and accrued leave and provided the respondents with
their UI-19 forms for purposes of claiming from
the Unemployment
Insurance Fund ("UIF").
[6]
On 24 April 2013, the respondents referred an alleged unfair
dismissal dispute ("the Dispute") to the first respondent
claiming that they had been unfairly dismissed by the applicant as
the project on which they had been employed had not come to
an end.
[7]
The Dispute came before the second respondent for arbitration. The
applicant placed the dismissal of the respondents in dispute
and the
respondents thus bore the onus to prove that they had been dismissed
by the applicant.
[8]
The third and eighth respondents led evidence on behalf of the
respondents. Schalk Andries Van Wyk ("Van Wyk"), an
official from an Employers' Organisation, CTL Management Forum, led
evidence on behalf of the applicant on the terms of the Contracts
concluded between the applicant and the respondents and email
correspondence between representatives of the applicant and its
client, KEC International Limited.
[9]
The respondents all concluded identical contracts and their
circumstances were all identical to those of the third and eighth
respondents who testified on their behalf.
[10]
I feel it necessary to point out at this stage that Van Wyk had no
personal knowledge of the facts giving rise to the conclusion
and
termination of the Contracts, was not involved at all in the
negotiations leading up to the conclusion of the Contracts or
the
discussions regarding the termination thereof and was not the author
or recipient of any of the emails exchanged between the
representatives of the applicant and its client regarding the reason
for the termination of the Contracts.
[11]
The fact that Van Wyk lacked any personal knowledge of the facts of
the matter was conceded by Van Wyk
[2]
and Van Wyk was aware of the risk that his evidence was hearsay and
consisted largely of legal argument.
[3]
Despite being cautioned in this regard by the first respondent, the
applicant failed to lead any further evidence by witnesses
who had
personal knowledge of the facts surrounding the conclusion and
termination of the Contracts or the email exchange between
the
applicant's representatives and its client. Nor did the applicant
address the first respondent as to the admission of the hearsay
evidence of Van Wyk in terms of section 3 of the Law of Evidence
Amendment Act
[4]
.
[12]
The second respondent, in a well-reasoned and comprehensive award,
found that the respondents had discharged the onus of proving
that
they had been dismissed and concluded that the dismissals were both
substantively and procedurally unfair for lack of a valid
reason and
fair procedure.
Grounds
for review
[13]
The applicant's grounds of review in the founding affidavit are
simply that the second respondent committed gross misconduct
in
concluding that the respondents had been dismissed in that he ignored
the fact that the applicant is a TES and that termination
of the
placement of employees on a temporary basis does not constitute a
dismissal.
[14]
The supplementary affidavit of the applicant is deposed to by Kenneth
Bain ("Bain"), the Group Manager IR and HR
Policy
Development of the applicant. The majority of the facts and
allegations relating to the facts surrounding the conclusion
and
termination of the Contracts contained in the supplementary affidavit
were not placed into evidence before the second respondent.
[5]
[15]
The applicant submits in the supplementary affidavit that the agency
agreements and/or the assignment agreements were sui generis
employment contracts. The argument in the supplementary affidavit
goes further and states that if the assignment agreement is
considered a contact of employment its duration is defined by the
project and expiry on completion of the project could not amount
to a
dismissal. If the agency agreement is regarded as a contract of
employment it would establish a "unique employment relationship"
which would be lawful where the principle of no work no pay would
apply.
[16]
It is important to mention at this juncture that the applicant draws
a distinction between the Contracts, which it calls assignment
agreements and an agency agreement. The so called agency agreement
was not part of the record of the arbitration proceedings and
there
was no evidence that the respondents had in fact concluded any agency
agreements with the applicant. I deal with this distinction
and
argument of the applicant further below.
[17]
The applicant's grounds of review in the supplementary affidavit are
that the second respondent failed to apply his mind to
the facts
before him and his award is one which a reasonable commissioner would
not have arrived at.
The
relevant test for review
[18]
The question of whether or not the respondents were dismissed is a
jurisdictional fact. The respondents were required to discharge
the
onus of establishing, on a balance of probabilities, that they were
dismissed in order for the first respondent to have the
necessary
jurisdiction to entertain the Dispute.
[19]
The Labour Appeal Court ("the LAC") in Solid Doors (Pty)
Ltd v Commissioner Theron and Others
[6]
held that the question of whether an employee was dismissed is to be
determined objectively. The LAC held that:
‘
Having
established what the requirements are for a constructive dismissal,
it is necessary to make the observation at this stage
of the judgment
that the question whether the employee was constructively dismissed
or not is a jurisdictional fact that - even
on review - must be
established objectively. That is so because if there was no
constructive dismissal- the CCMA would not have
the jurisdiction to
arbitrate. A tribunal such as the CCMA cannot give itself
jurisdiction by wrongly finding that a state of affairs
necessary to
give it jurisdiction exists when such state of affairs does not
exist. Accordingly, the enquiry is not really whether
the
commissioner’s finding that the employee was constructively
dismissed was unjustifiable. The question in a case such
as this one
– even on review- is simply whether or not the employee was
constructively dismissed. If I find that he was constructively
dismissed, it will be necessary to consider other issues. However, if
I find that he was not constructively dismissed, that will
be the end
of the matter and the commissioner’s award will stand to be
reviewed and set aside’.
[20]
The applicable test for review of an award of a commissioner of the
CCMA where the dismissal was in dispute was set out by
the LAC in SA
Rugby Players Association and Others v SA Rugby (Pty) Ltd and
Others
[7]
as follows:
‘
The
issue that was before the commissioner was whether there had been a
dismissal or not. It is an issue that goes to the jurisdiction
of the
CCMA. The significance of establishing whether there was a dismissal
or not is to determine whether the CCMA had jurisdiction
to entertain
the dispute. It follows that if there was no dismissal, then the CCMA
had no jurisdiction to entertain the dispute
in terms of section 191
of the Act.
The
CCMA is a creature of statute and is not a court of law. As a general
rule, it cannot decide its own jurisdiction. It can only
make a
ruling for convenience. Whether it has jurisdiction or not in a
particular matter is a matter to be decided by the Labour
Court. In
Benicon Earthworks & Mining Services (Edms) Bpk v Jacobs No &
others (1994) 15 ILJ 801 (LAC) at 804 C-D, the
old Labour Appeal
Court considered the position in relation to the Industrial Court
established in terms of the predecessor to
the current Act. The Court
held that the validity of the proceedings before the Industrial Court
is not dependent upon any finding
which the Industrial Court may make
with regard to jurisdictional facts but upon their objective
existence. The Court further held
that any conclusion to which the
Industrial Court arrived on the issue has no legal significance. This
means that, in the context
of this case, the CCMA may not grant
itself jurisdiction which it does not have. Nor may it deprive itself
of jurisdiction by making
a wrong finding that it lacks jurisdiction
which it actually has. There is, however, nothing wrong with the CCMA
enquiring whether
it has jurisdiction in a particular matter provided
it is understood that it does so for purposes of convenience and not
because
its decision on such an issue is binding in law on the
parties. In Benicon’s case the Court said at 804C-D:
'In
practice, however, an Industrial Court would be short-sighted if it
made no such enquiry before embarking upon its task. Just
as it would
be foolhardy to embark upon proceedings which are bound to be
fruitless,so too would it be fainthearted to abort the
proceedings
because of a jurisdictional challenge which is clearly without
merit.'
In
my view the same approach is applicable to the CCMA.
The
question before the court a quo was whether on the facts of the case
a dismissal had taken place. The question was not whether
the finding
of the commissioner that there had been a dismissal of the three
players was justifiable, rational or reasonable. The
issue was simply
whether objectively speaking, the facts which would give the CCMA
jurisdiction to entertain the dispute existed.
If such facts did not
exist the CCMA had no jurisdiction irrespective of its finding to the
contrary’
[21]
In Hickman v Tsatsimpe NO and Others
[8]
this Court held as follows:
‘
Section
145(2)(a)(ii) of the Labour Relations Act 66 of 1995 (the LRA)
provides for the review of arbitration proceedings under
the auspices
of the Commission for Conciliation, Mediation and Arbitration (the
commission/second respondent) on the grounds that
a commissioner
'committed a gross irregularity in the conduct of the arbitration
proceedings'.
The
grounds of review as set out above can easily be compacted into the
ground that the commissioner committed a gross irregularity
in the
conduct of the arbitration proceedings.
However,
the standard of review as set out in Sidumo and Another v Rustenburg
Platinum Mines Ltd and others which poses the question:
‘Is the
decision reached by the commissioner one that a reasonable decision
maker could not reach?’ is not applicable
in the context of an
enquiry into whether constructive dismissal happened or not’.
[22]
This test of review has been followed in numerous subsequent
cases
[9]
.
[23]
As the second respondent's finding is that the respondents were
dismissed, which finding is a jurisdictional fact, the Sidumo
test of
whether the finding of the second respondent was one which no
reasonable commissioner could arrive at on the evidence before
him is
not applicable.
[24]
The applicant in setting out its grounds of review in the founding
and supplementary affidavits appears to have misconstrued
the correct
test of review and has argued that the award is not an award a
reasonable commissioner would have arrived at on the
facts before
him. This test is not applicable.
[25]
The question I am required to determine is whether the second
respondent was right or wrong in concluding as he did. Put
differently
whether the second respondent correctly found, based on
the evidence before him that the respondents were dismissed. In
determining
this issue I am restricted to only consider the evidence
on record that was before the second respondent when he arrived at
his
finding that the respondents were dismissed.
[26]
In Stars Away International Airlines (Pty) Ltd t/a Stars Away
Aviation v Thee NO and Others
[10]
this Court held as follows:
‘
In
coming to the conclusion that he did – ie that the employee had
been constructively dismissed – the arbitrator was,
of course,
confined to the evidence that the employee gave. The applicant was
well aware of the date of arbitration and it was
legally represented;
why it chose to simply ignore its opportunity to be heard, boggles
the mind. Nevertheless, this court now
has to consider whether the
arbitrator correctly found, based on the evidence before him, that
the employee had been constructively
dismissed and that it was
unfair’.
[27]
In considering the question of whether or not the respondents were
dismissed I will have regard to the evidence that was before
the
second respondent. I will not consider the reasoning of the second
respondent.
[11]
The
evidence before the second respondent and the applicant's argument
[28]
The evidence of the respondents led by the third and eighth
respondents was that they were employed in terms of the Contracts
for
the duration of the Eskom Gamma-Kappa Transmission Line Project and
not for the duration of a particular assignment and had
only heard of
the term "assignment" at the arbitration proceedings.
[12]
[29]
Van Wyk's evidence consisted largely of hearsay and was in fact
nothing more than legal argument. As such Van Wyk's evidence
was of
little if of no probative value to the second respondent. Due to the
fact that the applicant failed to lead direct and relevant
evidence
by a person with personal knowledge of the facts and only relied on
unreliable hearsay evidence, the respondents' version
was
unchallenged.
[30]
The applicant's argument as presented by Van Wyk was that the
assignments for which the respondents were placed at its client
came
to an end and the assignments thus terminated in terms of clause
3.3.1 of the Contract. Van Wyk stated that the respondents'
assignments were terminated by means of a speedy but fair
process.
[13]
[31]
Van Wyk further argued that the termination by the applicant's client
of the particular portion of the project and the termination
of the
assignments in terms of clause 3.3.1 of the Contracts had no effect
on the employment relationship between the applicant
and the
respondents which employment relationship continued on the agreed
basis that the respondents would not receive any remuneration
or
benefits and there would be no expectation that they would
immediately be placed on another assignment.
[14]
[32]
At the hearing of the application, Quentin Donaldson of the
Employer's Organisation who appeared on behalf of the applicant
persisted with this line of argument.
[33]
Mr Donaldson argued that the arrangement between the applicant and
the respondents is one of an agency agreement in terms of
which the
applicant agrees to seek temporary placements for potential
candidates at their clients. Once the applicant finds a placement
the
applicant and the potential candidate conclude an assignment
agreement which assignment agreement details the specific work
the
candidate is to perform.
[34]
During argument Mr Donaldson agreed that this so called agency
agreement was not presented at the arbitration proceedings and
was
not placed before the second respondent. The reason for this, Mr
Donaldson argued, was that clause 1.5 of the Contract describes
the
agency agreement.
[35]
It is unclear whether the so called agency agreement exists
separately to the assignment agreements.
[36]
Mr Donaldson further argued that the arrangement between the
applicant and the potential candidate is essentially a lay off
agreement in terms of which the candidates who are not working are
not entitled to remuneration pending the placement of that candidate
at another client, as the applicant cannot pay the candidates while
looking for alternatives for them. Mr Donaldson argued that
this is
the applicant's business model as the applicant cannot operate if it
pays candidates who are not working.
[37]
This argument by Donaldson in effect means that the employment
relationship of candidates such as the respondents whose assignments
are terminated in terms of clauses 3.3.1, 3.3.2 or 3.3.3 of the
Contracts is not terminated, but continues to exist in some form
or
another or is suspended pending the placement by the applicant of the
candidates at another client on another project and in
terms of
another assignment agreement. Furthermore, during this period of so
called suspended employment where the candidates are
not working and
while the applicant is attempting to find alternative placements for
the candidates, the candidates are not entitled
to remuneration and
benefits and should not expect that another assignment will be
entered into.
[38]
Mr Donaldson made the astonishing submissions that if the respondents
were not happy with this arrangement they could have
cancelled the
agency agreement if they did not want to linger without remuneration
and benefits while the applicant attempts to
find alternative
placements. Mr Donaldson argued that the respondents were not forced
to agree to this arrangement and in fact
benefited from this business
model of the applicant as if such business model did not exist, the
respondents would not have been
employed.
[39]
Mr Donaldson's argument was that clauses 1.4 and 1.5 of the Contract
survives the termination of the Contract as when the applicant
finds
alternative placements another assignment agreement is entered into.
The argument was further that the project and the assignment
are one
and the same thing.
[40]
As an alternative argument to the one of the relationship being one
of agency or lay off, Mr Donaldson argued that there was
no dismissal
as the Contracts simply automatically terminated on the completion of
the assignment for which the Contracts were
concluded, the duration
of which was determined by the client.
[41]
The problem I have with this argument was that this was not the
applicant's case at the arbitration. Van Wyk's argument was
clear and
that was that the termination of the portion of the project by the
client, KEC International Limited, had no effect on
the employment
relationship and the respondents continue to be employees of the
applicant unless they resign or leave the services
of the applicant.
[42]
On the issue of Van Wyk's evidence being hearsay evidence Mr
Donaldson argued that Van Wyk's evidence, although hearsay, was
largely evidence on the terms of the Contracts and the email exchange
between representatives of the applicant and KEC International
Limited and as the validity of the emails and Contracts was not
challenged this evidence should be accepted. Mr Donaldson conceded
that the admission of Van Wyk's hearsay evidence in terms of section
3 of the Law of Evidence Amendment Act by the second respondent,
was
not dealt with at the arbitration, however, he argued that the best
evidence rule applied in that the applicant could not call
the Key
Accounts Manager to the arbitration and would not call the Managing
Director to give evidence at the arbitration proceedings.
[43]
Mr Donaldson's argument misses the point. While the validity of the
Contracts may not have been challenged by the respondents,
the terms
and/or the interpretation thereof were. The respondents' case was
that they were employed in terms of the Contracts for
the duration of
the project and not only for the duration of an assignment. The
applicant's version was very different being that
the respondents
were employed in terms of so called "agency or lay off"
agreements and that they were then assigned in
terms of assignment
agreements to provide services to its client for as long as its
client needed their services.
[44]
The problem with Mr Donaldson's argument is that the terms of the
Contracts were in dispute and the applicant failed to lead
any
relevant direct evidence from a witness with personal knowledge of
the negotiations and discussions surrounding the conclusion
and
termination of the Contracts. It was not enough for the applicant to
simply rely on the written Contracts and Van Wyk's hearsay
evidence
to refute the evidence of the third and eighth respondents.
[45]
Hearsay evidence is generally excluded as it is unreliable because
the person who has personal knowledge of the facts does
not himself
tell the court or tribunal what he observed. The truth and accuracy
of the allegations of the witness giving the hearsay
evidence cannot
be tested.
[46]
The unreliability of Van Wyk's evidence was glaringly obvious when he
was being cross-examined by one of the respondents on
whether the
applicant had stopped working in the area. Van Wyk's answer was that
the applicant had stopped working in the area
however, when pressed
by one of the respondents whose son was working for the applicant in
the area, Van Wyk was unable to give
a direct answer.
[15]
[47]
Mr Donaldson's argument that the best evidence rule should apply is
misplaced. As I understand his argument, he wants this
Court to admit
Van Wyk's hearsay evidence on the basis that it was the best evidence
available as the applicant could not call
the Key Accounts Manager
and would not call the Managing Director.
[48]
This is simply not good enough. There was no evidence before the
second respondent that the applicant could not call the person
with
personal knowledge of the facts surrounding the conclusion and
termination of the Contracts to give evidence and that such
person
whose testimony would be direct, relevant and the best evidence was
not available to testify.
[49]
Hearsay is no longer regulated by the best evidence rule. Hearsay is
regulated by the Law of Evidence Amendment Act which the
applicant
failed to deal with at all in the arbitration proceedings.
[50]
In light of what I have set out above I will place no weight on Van
Wyk's evidence as it was tendered to prove material facts
and there
was no direct relevant evidence before the second respondent to
support it.
[51]
The applicant attempts to remedy its failure to lead direct relevant
evidence at the arbitration proceedings by leading this
evidence in
its supplementary affidavit in this application. This attempt by the
applicant was too late. The applicant took the
risk of only leading
the evidence of Van Wyk at the arbitration proceedings and must now
live with its decision not to call the
Key Accounts Manager or
Managing Director or any other person with direct personal knowledge
of the facts leading up to the conclusion
and subsequent termination
of the Contracts which could have rebutted the version of the
respondents.
Were
the respondents dismissed?
[52]
I intend to deal with both arguments of the applicant in support of
its submissions that the respondents' employment was not
terminated.
I will do so despite the fact that the one argument was not before
the second respondent and I am required to determine
the question of
whether there was a dismissal de novo.
[53]
The question to be determined is whether the second respondent
correctly found on the evidence before him that the respondents
were
dismissed.
[54]
Section 186 of the LRA defines a dismissal. Section 186(1)(a) states
that:
‘
Dismissal
means that -
(a)
an employer has terminated employment with
or without notice’.
[55]
The reliable, relevant and undisputed evidence that was before the
second respondent was the unchallenged version of the respondents,
the Contracts and the common cause facts.
[56]
I have already set out the common cause facts and the respondents'
version above and will not repeat same here.
[57]
As the exact terms of the Contracts were in dispute, that is whether
the respondents were employed for the duration of the
project or were
merely assigned to perform specific tasks on the project, I will deal
with the relevant terms of the Contracts
in some detail.
[58]
The Contract is on the applicant's letterhead and is headed "Written
Particulars of Employment". The Contract sets
out the terms and
conditions of the offer of employment.
[59]
Clause 1 of the Contract provides as follows:
‘
1.
THE
NATURE OF THE CONTRACT
1.1
It is agreed, understood and accepted by
you that Kelly Industrial is in the business of providing assignees
to clients who require
the provision of certain skills on a limited
term assignment basis ("the assignment").
1.2
You also agree and understand that your
services are to be provided by Kelly Industrial to the client for a
period/s decided upon
by the client.
1.3
You guarantee that you are competent to
carry out the duties and responsibilities of the assignment to the
satisfaction of the client
and Kelly Industrial.
1.4
You accept that upon termination of the
assignment, as provided for in terms of clause 3.3 below and as
provided for in terms of
clause 3 below, you will not be entitled to
remuneration or benefits until another assignment is commenced.
1.5
Kelly Industrial will, upon termination of
the assignment, seek an alternative suitable assignment for you with
another of Kelly
Industrial's clients, upon mutually agreed terms and
conditions in terms of another limited duration assignment. You agree
that
despite Kelly Industrial's undertaking to seek an alternative
assignment for you, you have received no undertaking nor has any
expectation been created that any other assignment will be entered
into with another of Kelly Industrial's clients, upon the same
or
similar terms and conditions, or otherwise.
1.6
A probation period of four (4) months is
applicable during which time Kelly Industrial in conjunction with the
Client will ascertain
your suitability and competence for the
position’.
[60]
Clause 3 of the Contract provides that:
‘
3.
COMMENCEMENT, DURATION AND TERMINATION
OF EMPLOYMENT
3.1
As it is difficult for the client to determine the duration of the
Project with any certainty, your assignement with the client
will
commence effective I JUNE 2012 and continue until the Project is
completed, unless terminated earlier in terms of clause 3.3
below.
3.2
You will be assigned in the capacity of General Worker (Job Title) or
in such other capacity of a comparable status as Kelly
Industrial may
require, having regard to the needs and requirements of the
assignment, the client and your ability and capacity
to fulfil such
requirements, You will perform these services on the ESKOM
GAMMA-KAPPA TRANSMISSION LINE FOR KEC International in
Laingsburg in
the Western Cape or at such other place as the client or Kelly
Industrial may from time to time determine.
3.3
You will be assigned solely for the purpose of rendering services in
the above capacity for the duration of your assignment.
This
assignment will terminate subject to the notice periods in clause 4,
upon Kelly Industrial advising you that:
3.3.1
the Project for which the assignee has been assigned has been
completed; or
3.3.2
the services of the assignee no longer being required due to early
termination of the client's Project; or
3.3.3
the client has terminated its contract with Kelly Industrial; or
3.3.4
you have been dismissed for reasons of misconduct or incapacity
following a disciplinary hearing
3.4
Kelly Industrial will advise you in writing upon the occurrence of
any of the events referred to in clause 3.3 above.
3.5
It is specifically recorded that there is no expectation that your
assignment will be renewed or extended after completion of
the
Project referred to in clause 3.1 above’.
[61]
The Contract in my view contemplates a distinction between the
"assignment" which is defined as the assignment of
"assignees to clients who require the provision of certain
skills on a limited term assignment basis" and the project,
which is not defined in the Contract. Clause 3.1 clearly
distinguishes between an assignment and a project. In terms of clause
3.1 the assignment will ‘continue until the Project is
completed’.
[62]
The Contract is not clear at all as to what the project is. As the
term "project" is not clearly defined in the Contract
it is
necessary to consider the words in the Contract to determine what the
project was. In my view clause 3.2 of the Contract
defines the term
"project" as the Eskom Gamma-Kappa Transmission Line. From
a reading of this clause it is understandable
that the respondents
thought they were employed by the applicant for the duration of the
project, clause 3.1 clearly states this
much. The words Eskom
Gamma-Kappa Transmission Line are in caps and bold which in my view
reinforces the interpretation that this
was the project.
[63]
The applicant itself appears to have regarded the Eskom Gamma-Kappa
Transmission Line as the project as it calls it a project
in the
Notices of End of Assignment given to the respondents on 25 March
2013. It states as follows ‘We wish to advise that
your
assignment at the Eskom Gamma-Kappa Transmission line project will be
ending in terms of clause 3.3.1 of your Written Particulars
of
Employment’.
[16]
[64]
Mr Donaldson conceded at the hearing of the matter that clause 3.2
creates the impression that the respondents were employed
on the
Eskom Gamma-Kappa Transmission Line project.
[65]
The Contract does not stipulate that the respondents were employed
for the duration of only a portion of a particular phase
of the
Project, the so called "assignment" the applicant has
contended for and further does not provide that the respondents'
assignment would only be the mixing of concrete in the Merweville
area, another contention of the applicant. In terms of the Contracts
the respondents were employed to provide their services as general
workers on the project. This is in my view the plain and literal
meaning of the words in clause 3.2 of the Contracts. Clause 3.3.1 of
the Contract does not refer to an assignment but a project.
[66]
It is thus my view that the respondents were employed in terms of the
Contracts on a limited duration basis which employment
would
automatically terminate on completion of the project as envisaged in
clause 3.3.1 and not so called "assignments".
The Contract
or "assignment agreement" as the applicant calls it was
without doubt an employment contract and could only
be terminated in
terms of clause 3.3 thereof.
[67]
The applicant failed to place any evidence before the second
respondent that the project was completed and that the Contracts
terminated automatically in terms of clause 3.3.1 as a result. Mr
Donaldson in fact conceded that at the time of the arbitration
proceedings the project had not been completed. Accordingly, I am of
the view that the Contracts did not automatically terminate
on 31
March 2013 in terms of clause 3.3.1 and that by giving the
respondents notice of termination of the Contracts on 25 March
2013,
the applicant terminated the Contracts with notice and this was a
dismissal as defined in section 186(1)(a) of the LRA.
The
applicant's agency agreement argument
[68]
This brings me to the applicant's argument and business model that
upon termination of the assignment by the applicant the
"agency
agreement" comes into operation in terms of which the applicant
undertakes to find alternative assignments and
that pending these
attempts by the applicant the respondents will not receive
remuneration and benefits and should not expect that
the applicant
will enter into any other assignment with them.
[69]
As this was the applicant's sole argument before the second
respondent at the arbitration proceedings I feel that it is necessary
for me to deal with it even though I have held that the respondents
were dismissed.
[70]
This was the crux of the applicant's case at the arbitration
proceedings.
[71]
This so called "agency agreement" contained at clauses 1.4
and 1.5 of the Contracts in effect places the respondents
at the
mercy of the applicant and not only offends the principle of security
of employment but also goes against the very notion
and definition of
an employment relationship where an employer provides work to an
employee who renders their services to the employer
and is entitled
to remuneration. The applicant's answer to this is that if the
respondents did not want to linger at home with
no pay while the
applicant attempts to find alternative placements for them they could
have resigned or cancelled the Contracts.
[72]
It is this very mischief the amendments to the LRA seeks to address,
the abusive practices associated with labour brokers.
If the
applicant's business model is to be condoned and accepted, it would
go against the very values of providing employees with
security of
permanent employment and would perpetuate the abuse of employees by
labour brokers.
[73]
The applicant's case was that the respondents were not dismissed and
remained employed pending the applicant finding alternative
placements. However, the applicant led absolutely no evidence of the
steps and attempts it made to find the respondents alternative
work.
The applicant appears to have expected the respondents to sit at home
indefinitely at the back and call of the applicant,
waiting for the
applicant to find alternative placements for them, not receiving any
remuneration and further not to expect that
the applicant would in
fact enter into another assignment agreement with them.
[74]
In National Union of Metalworkers of South Africa and others v
Abancedisi Labour Services
[17]
the employer, a TES, attempted to convince the Supreme Court of
Appeal ("the SCA") that the employees who were excluded
from the client's premises and told to go home without pay were not
dismissed but were suspended indefinitely.
[75]
In this case, the employees refused to sign a code of conduct and
were excluded from the client's premises. The employees were
not
allowed back to work at the client and were not paid as they did not
work. The limited duration contracts envisaged the continuation
of
the employment relationship after the conclusion of the assignment at
the client and the employer thus argued that they were
not dismissed.
[76]
The SCA did not accept this argument by the employer and held as
follows:
‘
A
refusal to allow an employee to do the work he was engaged to do may
constitute a wrongful repudiation and a fundamental breach
of the
employment contract which vests the employee with an election to
stand by the contract or to terminate it. Here, Abancedisi
did not
just leave the employees to languish in idleness after their
exclusion from Kitsanker. It also did not pay them any wages.
Thereafter, nothing even slightly resembling the characteristics of
an employment relationship remained between the parties beyond
the
illusory retention of the employees on Abancedisi’s payroll
upon which Mr van der Mescht harped. Whether or not Abancedisi
intended to repudiate the employment contract, the effect of its
conduct constituted a material breach of the employment contract
that
entitled the employees to cancel it. To that end, the employees took
a step that is sanctioned by the law and referred a dispute
to the
bargaining council.
The
LAC made a related finding that this action; ie the employees’
referral, was made ‘too soon’ and was ‘premature’.
With respect, I do not agree. Section 191(1)(b) of LRA expressly
requires this to be done in writing within 30 days of the date
of the
dismissal. Evidently, the employees did not blindly rush to the
bargaining council. They were dismissed between 6 and 9
July and
approached the bargaining council on 23 July 2001, two weeks already
into the four week period envisaged by the legislature.
This was
after their union representative, Mr Tshoga, had communicated with Mr
van der Mescht and ascertained Abancedisi’s
position. The LAC’s
view that their situation was akin to an ‘indefinite
suspension’, with which I disagree as
it is not supported by
the evidence, and the courses the LAC considered should have been
followed by the employees are, with respect,
irrelevant.
In
deciding whether there was an unfair dismissal justifying the order
sought by the employees, reference must first be had to s
186(1)(a)
of the Act in terms of which the term dismissal means that "an
employer has terminated a contract of employment
with or without
notice": ie the employer has engaged in an act which brings the
contract of employment to an end in a manner
recognised as valid by
the law. Section 192(2) of the Act places an onus on an employer,
where the existence of a dismissal is
established, to prove that it
is fair. In terms of s 188(1), a dismissal that is not automatically
unfair as the present one, is
unfair if the employer fails to prove
that the reason for dismissal is a fair reason; that it is related to
the employee’s
conduct or capacity; or that it is based on the
employers’ operational requirements; and that it was effected
in accordance
with a fair procedure. Abancedisi, which, in addition
to the conduct set out above, did not even bother to start
retrenchment procedures
(and this attitude in my view is consistent
with an attitude that the employees were already dismissed) neither
advanced a defence
in its pleadings nor adduced any evidence at the
trial to justify the dismissals. It dismally failed to discharge its
onus.
It
is not necessary in this matter to pronounce on the other interesting
debates that it potentially raises, such as whether an
employment
contract that contains an automatic termination clause as the present
one conflicts with the employees’ right
not to be unfairly
dismissed under the Act and the Constitution and offends public
policy. Suffice it to reiterate that it
is well for labour
brokers to bear in mind that the intention of the Act – which
governs labour relations with the object,
inter alia, to give effect
to the employee rights contained in s 23 of the Constitution –
is that employment may only be
terminated upon the employee’s
misconduct, incapacity or operational requirements and these reasons
must meet the requirements
of substantive and procedural fairness set
out in the Act’.
[18]
[77]
In casu, the applicant informed the respondents on 25 March 2013 that
the client no longer required their services and their
last day at
work would be 26 March 2013. The respondents were paid 2 weeks'
notice, accrued leave and given their UI 19 forms.
On 25 March 2013,
the respondents were given written Notice of the End of Assignment.
[78]
The written notice provides as follows:
‘
We
wish to advise that your assignment at the Eskom Gamma-Kappa
Transmission line project will be ending in terms of clause 3.3.1
of
your Written Particulars of Employment. The client has advised that
your part in the project has come to an end and it will
be phasing
out the remaining parts of the project. Your last day of work on the
assignment will be 26 March 2013 and you will be
paid two weeks'
notice and any leave pay owing up to 09 April 2013.
However,
please note that this does not constitute a termination of the agency
agreement between you and Kelly Industrial and in
terms of clause
1.5. we would like to seek another suitable temporary assignment for
you if you are available’.
[79]
On 18 April 2013, Paxsal Payroll Outsourcing (Pty) Ltd, on behalf of
the applicant informed the Department of Labour that the
respondents
worked for the applicant from 1 May 2012 to 31 March 2013. This
letter was curiously not included in the paginated
record of
proceedings but formed part of the record filed by the first
respondent with this Court in terms of the Notice of Filing
in
Compliance with Rule 7A(2)(b) and 7A(3).
[80]
On 24 April 2013, and just before the expiry of the 30 day period in
terms of section 191(1)(a) of the LRA to refer a dispute
to the first
respondent, the respondents referred the Dispute alleging the unfair
dismissal.
[81]
At the arbitration of the Dispute on 20 May 2013, the applicant did
not lead any evidence of attempts it made or steps taken
to find the
respondents alternative placements. The applicant further failed to
lead any evidence that it was not able to find
such alternatives and
that as a result has or would start a process to terminate the
employment of the respondents for operational
reasons. One would have
expected the applicant to lead this evidence in light of its argument
that the respondents were still employed.
[82]
The fact that the applicant had not attempted to find alternative
placements for the respondents subsequent to the termination
of their
Contracts or had not, in light of no alternatives being found,
commenced a process to terminate the respondents' employment
on the
grounds of its operational requirements coupled with the fact that
the respondents were paid notice, accrued leave, given
UI19 forms and
on 18 April 2013 the applicant informed the Department of Labour that
the respondents had worked up to 31 March
2013, all indicate in my
view that the respondents' employment was terminated by the applicant
and the respondents were dismissed.
The fact that the applicant had
not looked for alternative placements, had not commenced a process to
terminate the respondents'
employment due to its operational reasons
and the representation to the Department of Labour 18 days after the
respondents were
notified of termination of the assignments, all
support the conclusion that the applicant itself considered that the
respondents
were no longer employed as at 31 March 2013.
[83]
Mr Donaldson at the hearing of the matter argued that the fact that
the applicant did not look for alternative placements for
the
respondents is not an indication of a dismissal as if the applicant
had found alternative placements for the respondents in
one year's
time it would ratify the "agency agreement". This is an
absurd argument and I will not consider it further.
[84]
The Applicant in my view opportunistically attempted to avoid the
consequences of dismissing the respondents unfairly by placing
the
dismissal in dispute at the arbitration proceedings and arguing that,
despite the termination of the Contracts, the employment
relationship
continued to exist. How could this possibly be the case where the
applicant had not made any attempt at finding alternative
placements
and/or had not commenced a retrenchment process? What did the
applicant expect the respondents to do? Remain employed,
without work
and without remuneration and not receive any severance pay in
circumstances where no alternative placements could
be found. This
business model is in my view an attempt by the applicant to not only
avoid the consequences of unfair dismissals
but to also avoid having
to retrench employees it cannot place at other clients.
[85]
Contrary to Mr Donaldson's argument, this business model only
benefits the applicant as employees like the respondents are
left to
linger at home not working and not earning an income, who are to
remain available to the applicant and who are eventually
forced into
the position where they have to seek alternative employment with
another employer to earn a living. I assume that should
an employee
take up employment with another employer during the period of so
called "suspended" or sui generis employment
in terms of
the agency agreement, the applicant would opportunistically argue
that such employee resigned, deserted or repudiated
his employment
contract with the applicant which continues to exist indefinitely
pending the placement of the employee at another
client. This is in
my view an abuse and deliberate attempt to avoid not only its
obligations as an employer but also the consequences
of unfair
dismissal of employees or termination on the grounds of its
operational requirements.
[86]
The evidence of the respondents as to the events of 25 March 2013 was
that just before 17h00 they were called in one by one
and told to
sign a letter that they are no longer working. They were told that
they would get 2 weeks' notice and 10 minutes later
received the
forms needed for UIF purposes.
[19]
They were told that they do not have to report for duty on 26 March
2013.
[20]
[87]
If these facts do not amount to abusive practices and do not support
the conclusion that the respondents were dismissed, I
do not know
what facts would. The dismissals were certainly speedy but not fair.
It is these abusive practices which are to be
eradicated in the
workplace and employment sphere.
Conclusion
[88]
Having regard to what I have set out above, the second respondent's
finding that the respondents were dismissed was correct
and is to be
upheld.
[89]
Accordingly, the following order is made:
89.1
The review application is dismissed.
89.2
There is no order as to costs.
Venter
AJ
Acting
Judge of the Labour Court
APPEARANCES
For
the Applicant: Mr Q Donaldson from CTL Management Forum
[1]
Act No. 66 of 1995.
[2]
Pages 168 - 169 of the record.
[3]
Pages 179 - 180 of the record.
[4]
Act 45 of 1988.
[5]
Paragraphs 6, 7, 8, 9, 10, 11, 25, 28 and 31 of the supplementary
affidavit contained at pages 131 - 144 of the pleadings.
[6]
(
2004)
25
ILJ
2337 (LAC) at paras 29.
[7]
(2008) 29
ILJ
2218 (LAC) at paras 39 - 41.
[8]
(2012)
33
ILJ
1179 (LC)
at paras 4 - 6.
[9]
See
Asara
Wine Estate & Hotel (Pty) Ltd v Van Rooyen & others
(2012) 33
ILJ
363 (LC),
Workforce
Group (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration & others (
2012)
33
ILJ
738 (LC),
Trio
Glass t/a The Glass Group v Molapo NO & others
(2013) 34
ILJ
2662 (LC),
Gubevu
Security Group (Pty) Ltd v Ruggiero NO & others
(2012) 33
ILJ
1171 (LC) and Zeuna - Stärker Bop (Pty) Ltd v National Union of
Metalworkers of SA (1999) 20
ILJ
108
(LAC).
[10]
(2013) 34
ILJ
1272
(LC) at para 22.
[11]
See also
Twoline
Trading 413 (Pty) Ltd t/a Skosana Contract Labour v Abram Mongatane
and others (
2014)
JOL 31668
(LC) where Snyman AJ held at paragraph 34 as follows: ‘As
stated above, the issue as to whether the first respondent was
dismissed or not is an issue of jurisdiction and, therefore the onus
was on the first respondent to prove that he had been dismissed,
as
the issue of dismissal was placed in dispute by the applicant. I
shall have regard to the entire record of evidence, as it
stands,
including the documentary evidence and determine the issue of the
existence of a dismissal de novo. I shall, accordingly,
not consider
the reasoning of the second respondent in his award, which I
actually consider to be entirely inadequate and unacceptable
and
shall only refer to the same where it is in the interest of a
complete and proper determination of this matter. I shall decide
the
issue of the dismissal of the first respondent for myself’.
[12]
Pages 126, 128, 130, 132, 148, 149, 157 and 158 of the record.
[13]
Pages 172-173 of the record.
[14]
Page 173 of the record.
[15]
Page 186 of the record.
[16]
Page 20 of the record.
[17]
(2013) 12 BLLR 1185
(SCA).
[18]
At paras 15 - 18.
[19]
Pages 126 and 158 of the record.
[20]
Page 129 of the record.