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[2015] ZALCJHB 23
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Maqungo v Qina NO and Others (JR730/12) [2015] ZALCJHB 23 (6 February 2015)
REPUBLIC
OF
SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case No: JR 730/12
DATE: 06 FEBRUARY 2015
Not Reportable
In the matter between:
DUNYISWA
MAQUNGO
.....................................................................
Applicant
And
LUVUYO
QINA
N.O
................................................................
First
Respondent
COMMISSION,
CONCILIATION,
MEDIATION
AND ARBITRATION
..................................
Second
Respondent
BAYPORT
FINANCIAL SERVICES
2010
Pty)
Ltd
.........................................................................
Third
Respondent
Heard:
9 July 2013
Delivered:
6 February 2015
JUDGMENT
VAN
GRAAN AJ
[1]
This is a review application by the
applicant, Dungiswa Maqungo, in terms of section 145(1) of the Labour
Relations Act, No 66 of
1995 (as amended) (“
the
LRA
”) against the arbitration
award by Commissioner Luvuyo Qina, first respondent, dated 24
February 2012.
Factual
background
:
[2]
The following facts appear from the
affidavits in the application, the record and the arbitration award:
2.1 On
1 April 2011, the third respondent employed the applicant “
on
a three (3) months limited duration contract
” in the
capacity of a training administrator.
2.2 On
1 July 2011, the applicant’s learning and development manager,
Ms D N Hoortzuk, renewed the applicant’s contract
which was to
expire on 30 September 2011.
2.3 On
2 September 2011, Ms Hoortzuk and Ms A Kgomo, the third respondent’s
human business partner, conducted an interview
with the applicant. Ms
Hoortzuk informed the applicant that she was satisfied with her
performance and that she was going to be
appointed on a permanent
basis.
2.4 The
third respondent sent the applicant, during August 2011, on a
training course where she obtained certificates in Premier
HR
Employee Management, Premier HR Performance Management and Premier HR
Job Management.
2.5 The
applicant, on the day that her contract was supposed to expire, 30
September 2011, was on approved leave.
2.6 On
3 October 2011, when the applicant reported for duty, she received a
letter from the third respondent informing her that
her employment
had been terminated.
2.7 The
applicant referred a dismissal dispute in terms of section 191(1)(a)
of the LRA to the CCMA. In paragraph 3 of the LRA Form
7.11, the
applicant characterised the nature of the dispute as an “
Unfair
dismissal
”. In paragraph 3 of Part B of the LRA Form 7.11,
the applicant stated that the reason for her dismissal was “
Unknown
”.
2.8
On 3 November 2011, the parties attempted
to resolve the dispute at a conciliation meeting. The commissioner
who completed the certificate
of outcome stated that the unresolved
dispute concerned an “
Unfair
Dismissal
” as a result of a
“
Reason Unknown
”
and that it could be referred to arbitration.
2.9 On
24 November 2011, the applicant requested the CCMA to conduct an
arbitration.
2.10 In
the enrolment notice dated 6 December 2011, the CCMA Case Management
noted that the primary issue in the arbitration is
“
191(5)(a)(iii)
– Reason for dismissal not known
”.
Characterisation
of the dispute at the arbitration
:
[3]
The arbitration hearing was conducted on 31
January 2012 before the arbitrator, first respondent.
3.1 The
applicant, at the arbitration, was represented by an attorney. At the
commencement of the arbitration, the third respondent’s
representative, an employee relations manager, Mr H.J. Horn, enquired
from the arbitrator, despite applicant referring the dispute
as a
“
dismissal for unknown reasons, (whether) the applicant can
indicate
o
n what basis (she) wishes to proceed.
..”
3.2 The
applicant’s attorney on the invitation of the arbitrator,
stated “
that the matter is going to proceed on the basis of
termination of a fixed term contract that will be in the line with
section 186(1)(b)
” of the LRA. The attorney informed the
arbitrator further that the dispute is about “
a contractual
matter where the contract expired but then we are going to rely on
the reasonable expectation, which the applicant
had in, in believing
that … was actually not going to be terminated
.”
3.3 On
the arbitrator’s question whether the third respondent’s
representative, Mr Horn, wished to comment, the representative
stated
that “
there was at no stage made, an offer to renew the
fixed term contract
” and that no reasonable expectation was
created by the applicant’s managers that her contract would be
renewed.
3.4
After their opening remarks, the representatives discussed the
bundles of documents with the arbitrator.
3.5 The
applicant’s attorney thereafter indicated that he would like to
call his witnesses. It appears from the transcription
of the
arbitration proceedings that a brief discussion ensued between the
arbitrator, third respondent’s representative and
the attorney.
This discussion was introduced by the arbitrator with the phrase
“
Lets see if I understand it please
.” It appears
further from the transcription, of which bits were not audible for
transcription typist, that the arbitrator
attempted to establish
whether they were “
speaking about contract
...”
3.6 The
third respondent’s representative confirmed the arbitrator’s
view.
3.7 The
arbitrator, however, stated that “
(t)he applicant is saying
that in fact there was a legitimate expectation
”. As a
result, the arbitrator said, the
onus
would be on the
applicant. The applicant’s attorney, if he had a different
view, did not inform the arbitrator of such view.
The
evidence by Mr H.J. Horn at the arbitration
:
[4]
The third respondent’s
representative, Mr Horn, testified as one of the third respondent’s
witnesses :
4.1 His
evidence was,
inter alia
, that he had a discussion with the
applicant on 3 October 2010 when she informed him that she already
had “
... prior discussions with other managers in, which
they created the expectation that her contract will be a permanent
contract
”.
4.2 Mr
Horn also dealt with the third respondent’s letter dated 3
October 2010. The letter reads as follows:
‘
Bayport
Financial Services
(third
respondent)
would
like to bring to your attention that your fixed term contract expires
on the 30
th
September 2011 as per our contractual agreement. This is to
notify you that the contract will not be renewed, giving you
four
weeks notice
.’
4.3
Under cross-examination, Mr Horn admitted that he was not involved
with the applicant’s first and second contract. The
first
contract he admitted was renewed.
4.4 He
was informed that Ms D.N. Hoortzuk (learning and development manager)
and Ms A. Kgomo (human capital business partner) had
a discussion
with the applicant “
that there might be a possibility for
(the applicant) to become permanent in the company
”, but
that there was no authorisation for such discussion.
4.5 The
applicant’s attorney asked Mr Horn whether the discussion
between Ms Hoortzuk and the applicant did “
not give (the
applicant) a reasonable expectation that her contract [be renewed]
”.
It appears from the unsatisfactory transcript that he answered in the
affirmative. Mr Horn admitted under cross-examination
that he
terminated the applicant’s contract on 3 October 2010 on an
“
instruction
”. At the end of his
cross-examination, Mr Horn tried to distinguish between two scenarios
which are different from each other.
In the first scenario there are
two considerations, one:
“
whether
there was any permanent contract concluded with her and two whether
her fixed term contract was renewed.”
The second scenario
concerned the issue:
“
whether
there is legal expectation for her that something else could have
transpired, uhm that reasonable expectation could have
existed
right.”
The third respondent’s second witness
:
[5]
The third respondent’s second witness
was the third respondent’s employee relations officer, Ms L.
Mathikge.
5.1 She
testified that she was not involved in the termination of the
applicant’s employment.
5.2 There was no
cross-examination.
The
applicant’s evidence at the arbitration
:
[6]
The applicant testified after the third
respondent has closed its case:
6.1 The applicant’s
evidence was that the date of 30 September 2010 was the termination
date of her contract. However, she
received training from the third
respondent to be able to perform in a permanent position.
6.2 When she was given her
letter of dismissal she was actually expecting a permanent contract
to sign.
6.3 Although her contract
expired on 30 September 2010, she went to work on 3 October 2010,
because she was promised she was going
to become a permanent
employee.
6.4 She was sent on
training to be able to perform in the permanent position.
6.5 Her attorney asked her
to inform the arbitrator what her expectations were “
toward
the ... end of (her) contract
”. She answered that she
expected to get a permanent contract to sign because she had been
promised that.
6.6 Under
cross-examination, she said that she had not been promised a renewal
of her contract, but she was promised a permanent
position. She
testified that the discussion which she had with Ms Hoortzuk and Ms
Kgomo and the training which she had received,
created an expectation
that her contract would be renewed on a permanent basis.
6.7 The applicant stated
under cross-examination that when she was asked whether she was
interested in a permanent contract she
said yes.
The
applicant’s witness: Ms D.N. Hoortzuk
:
[7]
Ms Hoortzuk was the learning and
development manager of the third respondent :
7.1 She
testified in chief that she had renewed the applicant’s
contract which ended on 30 June 2011.
7.2 She
(and her colleague) had the authority to convert the applicant’s
position “
from a contract position to a permanent position
”.
7.3 Ms
Hoortzuk sent the applicant on a course so that she could work
effectively.
7.4 She
told the applicant that her contract was not going to be terminated.
7.5 On
3 October 2010, the applicant received a termination letter, instead
of an appointment letter.
7.6
Under cross-examination, she said that she informed the third
respondent’s HR official that she was taking the applicant
on
permanently. She and the HR official confirmed that to the applicant
during a meeting with her. The HR official was requested
to prepare
the necessary documentation to turn the applicant into a permanent
employee.
7.7
When she was re-examined Ms Hoortzuk testified that she and the HR
official congratulated the applicant at the aforementioned
meeting
with her permanent status.
The
applicant’s witness: Ms A. Kgomo
:
[8]
Ms Kgomo was employed by the third
respondent as a human capital business partner.
8.1 The applicant’s
fixed term contract with the third respondent was renewed once
before, she testified.
8.2 She and Ms Hoortzuk
informed the applicant that she would become permanent, but the
applicant, on 3 October 2010, received a
letter terminating her
permanent contract.
8.3 Ms
Kgomo under cross-examination conceded that the applicant was not
appointed as a permanent employee – there was only
a discussion
to appoint her permanently. The appointment was not confirmed by
completing the relevant forms. She also testified
that there was no
contract.
Third
respondent’s argument before the arbitrator
:
[9] The essence of Mr Horn
‘s argument was that the applicant’s case that she had an
expectation to be permanently employed
is not covered by section
186(1)(b) of the LRA.
Applicant’s
argument before the arbitrator
:
[10]
The applicant’s attorney initially
argued that she had to prove whether there was a reasonable
expectation that her contract
was still going to continue with the
third respondent. The transcription of the argument of the
applicant’s attorney is not
complete due to the certain parts
not being audible. It seems that the applicant’s attorney also
argued that the applicant
had been treated or dismissed “
unfairly
and unjustly
” wherefore he
claimed compensation on her behalf.
The arbitrator’s award
:
[11]
The arbitrator’s award is structured
in the format usually used by CCMA arbitrators :
11.1
He first described the issues to be decided
as follows :
‘
4.
Whether or not the applicant was dismissed by the (third respondent);
and if so;
5. Whether
such a dismissal as contemplated in sec 186(1)(b) of the Labour
Relations Act 66 of 1995 (the Act) as amended
.’
11.2
He then provided a survey of the evidence
on behalf of the parties.
11.3
Under the heading “
Analysis
of Evidence and Argument
” the
arbitrator, with reference to sec 192(1) of the LRA, explained that
the applicant “
bears the onus of
proving the existence of a dismissal
”.
11.4
The arbitrator, aware of the fact that the
applicant had referred an unfair dismissal of which the reason for
dismissal was unknown
to the CCMA, stated that her attorney during
the arbitration proceedings argued that the dismissal had occurred in
terms of sec
186(1)(b) of the LRA. According to the arbitrator
“
(t)hese are clearly two different
disputes”.
11.5
He found that the applicant’s version
that she would be appointed permanently when her fixed term contract
had expired (on
30 September 2011), is not covered by sec 186(1)(b)
of the LRA.
11.6
He, however, found that Ms Hoortzuk had the
authority to appoint the applicant to a permanent position, that Ms
Hoortzuk, on 2 September
2011, offered a permanent position to her
and that the applicant had accepted the position.
11.7
As the applicant “
did
not challenge the termination of the permanent employment, but chose
to base her dispute on sec 186(1)(b) of the Act
”,
he was unable to determine the fairness of her termination of
permanent employment.
11.8
He finally determined that there was no
dismissal in terms of sec 186(1)(b) of the LRA.
The
applicant’s case in her founding affidavit before the Labour
Court
:
[12]
The applicant stated in her founding
affidavit that, on the basis of her explanation in her affidavit, the
arbitrator’s award
was defective as contemplated in sec 145 of
the LRA and that he had committed a gross irregularity in the conduct
of the arbitration
proceedings. In the preceding paragraphs the
applicant described the arbitration proceedings conducted by the
arbitrator
as follows :
‘
13.
The First Respondent then stated
:
“
The
question is now whether the dismissal of the Applicant was in terms
of section 186(1)(b) of the Act
.”
14.
The
First Respondent thus found that the Applicant had been dismissed.
15.
In
terms of section 192(2) of the Act, it having been found that she had
been dismissed, the onus was on the Third Respondent to
establish
whether or not the dismissal was fair or not and if it failed to
discharge this onus the First Respondent was obliged
to find that it
was unfair and to order either reinstatement of the applicant or for
the Third Respondent to pay compensation to
the Applicant for unfair
dismissal in an amount that was just and equitable in all the
circumstances but limited to 12 months of
the remuneration to which
the applicant was entitled when she was dismissed.
(The third respondent in
paragraph 13 of answering affidavit admitted the correctness of
the contents of paragraph 15.)
16. Instead of deciding
whether or not the Third Respondent had discharged this onus the
First Respondent dealt with the question
of whether the dismissal of
the Applicant was in terms of section 186(1)(b) of the Act and found
that it was not the case.
He found that her permanent
employment was terminated but that the Applicant, instead of
challenging this, chose to base her dispute
on section 186(1)(b) of
the Act so he found he was unable to determine fairness or otherwise
of the termination of the permanent
employment.
17. Section 186(1)(b) of the
falls under the “Meaning of dismissal” under the Act.
One of the meanings of dismissal
is found in section 186(1)(b) :
“
an
employee reasonably expected the employer to renew a fixed term
contract of employment on the same or similar terms but the employer
offered to renew it on less favourable terms, or did not renew it.”
18. The First Respondent
found that this did not apply to what happened to the Applicant
because she relied on a promise of permanent
employment rather than a
renewal of her fixed term contract.
19. The rational conclusion
for him to have drawn from his interpretation of this section of the
Act as read with the cases he referred
to was that the Applicant had
failed to prove that she had been dismissed.
20. On the contrary he found
from the evidence that the applicant had been dismissed because she
had been permanently employed and
that this contract had been
terminated.
21. The
AWARD is thus contradictory and is inconsistent with the first
respondent’s finding on the evidence placed before
him.
’
The
third respondent’s stance in its answering affidavit
:
[13]
The third respondent in its answering
affidavit adopted the arbitrator’s approach :
13.1
The arbitrator was tasked with making a
ruling as to whether the applicant had a reasonable expectation that
her fixed term contract
would be renewed. Section 186(1)(b) of the
LRA provides that an alleged unfair dismissal has taken place where
an employee reasonably
expected the employer to renew a fixed term
contract of employment on the same or similar terms, but the employer
offered to renew
it on less favourable terms, or not at all.
13.2
As the applicant chose to challenge the
termination of her employment in terms of section 186(1)(b) of the
LRA and not the termination
of the permanent position offered to her,
the arbitrator correctly dismissed her claim.
13.3
I have noted, however, that the third
respondent’s deponent in his answering affidavit did not
challenge the commissioner’s
finding that the applicant had
been dismissed by the third respondent.
13.4
The third respondent also conceded to the
applicant’s criticism raised in paragraph 15 of her founding
affidavit (
supra
).
The
applicant’s replying affidavit
:
[14]
The applicant in her replying affidavit
disputed the contentions and submissions of the third respondent for
the following reasons:
14.1
The mandate of the commissioner was to
determine the unfair dismissal dispute which the applicant had
referred to the CCMA and upon
conciliation failing and the said
certificate being issued, that the applicant requested, in terms of
section 191 of the LRA, to
be resolved through arbitration.
14.2
Having heard the evidence, the commissioner
determined that the applicant had been permanently appointed by the
third respondent
and that such appointment was terminated by the
third respondent.
14.3
The commissioner was required in terms of
the LRA to determine whether the third respondent had discharged the
onus
on it
to prove that the applicant’s dismissal was both procedurally
and substantively fair.
14.4
Instead of making such determination the
commissioner regarded himself bound by the manner in which the
applicant’s attorney
characterised the dismissal as being a
dismissal in terms of section 186(1)(b) of the LRA.
14.5
The applicant submitted that the first
respondent was not bound by the manner in which the applicant’s
attorney characterised
the dismissal but had the power, in terms of
the LRA, to determine the nature of the dismissal himself.
14.6
Having made the determination that the
applicant had been permanently appointed and that such employment had
been terminated by
the third respondent, the commissioner
misconducted himself in relation to his duties as an arbitrator in
terms of the LRA and
committed a gross irregularity in the conduct of
the arbitration proceedings by finding that he was unable to
determine fairness
or otherwise of the termination of the permanent
employment on the basis that the applicant had not argued this case
before him.
14.7
The applicant persisted in her contention
that there was no rational objective basis justifying the connection
made by the first
respondent between the evidence before him; the
conclusion he eventually reached; and the reasons given for it.
14.8
The first respondent reached a conclusion,
applicant submitted, that is so unreasonable that no reasonable
decision-maker could
reach such in the circumstances of this case.
14.9
Under these circumstances, the applicant
persisted in her contention that the commissioner’s award
should be reviewed and
set aside.
Applicant’s
main submissions during argument before the Labour Court
:
[15]
15.1 Applicant’s representative, Mr
Myhill, submitted (with reference to paragraph 15 of the applicant’s
founding affidavit
– admitted in the third respondent’s
answering affidavit) that the arbitrator, having found on the
evidence that she
had been dismissed, was required by section 192 of
the LRA to determine whether the third respondent had discharged the
onus
of
proving that the dismissal was procedurally and substantively unfair,
and if not, whether she should have been reinstated or
compensated.
15.2
Mr Myhill, during argument, further submitted that the commissioner
had a duty to determine the nature of the dispute. He referred
me to
Coin Security Group (Pty) Ltd v Adams
and Others.
[1]
He also referred me to
Wardlaw v Supreme
Mouldings (Pty) Ltd
[2]
followed in
Chizunza v MTN Ltd and
Others
[3]
.
The
third respondent’s submissions before the Labour Court
:
[16]
The third respondent after dealing with the
factual background and the authorities on the test which should be
adopted in review
applications (
Sidumo
and Another & Congress of South Africa Trade Unions v Rustenburg
Platinum Mines Ltd and Others;
[4]
Fidelity Cash Management Services v CCMA and Others;
[5]
Phalaborwa Mining Co Ltd v Cheetham and Others;
[6]
Bestel v Astral Operations Ltd and Others;
[7]
Herholdt v Nedbank Ltd.
[8]
)
submitted that it has now been settled that an expectation of
permanent employment on expiry of a fixed term contract is not
covered by section 186(1)(b) of the LRA. (
University
of Pretoria v CCMA and Others.
[9]
)
[17]
It was submitted further on behalf of the
third respondent that the arbitrator’s award that the
applicant’s dismissal
was not in terms of section 186(1)(b) of
the LRA and that he needs not to have determined the fairness of the
applicant’s
termination of employment, “
is
one which a reasonable decision would have arrived at
”
considering the evidence presented.
[18]
The correctness of the
Coin
Security Group, Wardlaw and Chizunza
judgments on which the applicant relied on for her argument that it
is the duty of a commissioner to determine the nature of a
dispute
was not challenged by Mr Citi, the third respondent’s attorney.
He, however, during his argument, pointed out that
the applicant’s
case enunciated in her heads of argument relating to the
commissioner’s duty to determine the nature
of the dispute, was
not specifically included in her founding affidavit as a ground for
review. He referred me to
CUSA v Tao
Ying Metal.
[10]
Applicant’s
response in its replying affidavit
[19]
Mr Myhill, in reply, submitted that his
argument based on the
Wardlaw’s
principle is a supplementary argument,
which finds support in paragraph 15 of the applicant’s
affidavit.
Conclusion:
[20]
The commissioner, first respondent, in his
award rejected the third respondent’s version that Ms Hoortzuk
“
had no authority to appoint the
applicant to a permanent position”
.
[21]
The commissioner in his analysis of the
evidence before him noted that a permanent position was offered to
the applicant “
which she has
accepted during the meeting which was held on 2
nd
September 2011
”. The
commissioner, noting the aforementioned evidence, then found that the
evidence “
means that the Applicant
was permanently employed by the Respondent (
third
respondent
)”
and
that the “
permanent employment was
going to kick in … on 30 September 2011
”.
[22]
This finding by the first respondent, the
conclusion of the employment contract, which has not been challenged
by the third respondent
on review, would reasonably evoke the
question whether the applicant had been dismissed. The commissioner
had in fact found that
there was a dismissal, but that the
“
Applicant’s dismissal was
not in terms of section 186(a)(b)
”.
[23]
Reasonableness would require, the
commissioner having found that the applicant had been dismissed, a
further investigation by the
commissioner, whether the applicant’s
dismissal was fair as contemplated in section 192(2) of the LRA.
[24]
It is clear from the opening address and
the final argument of the applicant’s attorney that the
attorney clearly lacked an
understanding of what case he had to
present before the commissioner. The evidence by the applicant and Ms
Hoortzuk was that a
contract had been concluded.
[25]
Under these circumstances, the decision of
the first respondent not to determine whether the dismissal was fair
or not, was unreasonable.
[26]
The first respondent’s finding that
he was unable to determine the fairness or not of the applicant’s
termination and
that she was not dismissed in terms of section
186(1)(b) of the LRA is reviewed and set aside.
Costs:
[27]
The usual rule in respect of costs is that
the successful party is entitled to costs. In this instance, it is
appropriate to deviate
from this rule. Had the applicant’s
attorney presented the applicant’s case in a coherent manner,
the commissioner’s
unreasonable decision might have been
avoided.
Order:
[28]
In
the event, it is ordered as follows :
28.1
The award of the first respondent that he
was unable to determine fairness or otherwise of the termination of
the applicant’s
permanent employment (including paragraph 23 of
his award) is hereby set aside.
28.2
The remaining portion of the dispute
(whether the termination of the applicant’s employment was fair
or not) and, if it was
unfair, the appropriate relief, is remitted
back to the first respondent (and in the event of the first
respondent no longer being
employed by the second respondent, to a
commissioner appointed by the second respondent).
28.3
No order as to costs is made in respect of
this application.
Van Graan AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES
:
For the Applicant: Adv E Myhill
Instructed
by: Goba Attorneys
For
the Third Respondent: D Cithi of Tabacks Inc
[1]
(2000) 21 ILJ 924 (LAC) at 930.
[2]
(2007) 28 ILJ 1042 (LAC) at 1046-1053.
[3]
[2008] ZALC 73
;
(2008) 10 BLLR 940
(LC) at para 13.
[4]
(2007) 33 ILJ 1789 (LAC); 2008 (2) SA 24 (CC).
[5]
(2008) 29 ILJ 964 (LAC).
[6]
(2008) 29 ILJ 306 (LAC).
[7]
(2011) 2 BLLR 129
(LAC).
[8]
(2012) 33 ILJ 1789 (LAC);
(2012) 9 BLLR 857
(LAC)
at para 33.
[9]
[2012] 2 BLLR 164
(LAC) at para 18 and para 21.
The LAC judgment on which the third respondent relied is
distinguishable on the facts from this
matter. In this matter
a contract of employment of a permanent nature was offered to the
applicant which she accepted,
unlike the employee in the LAC
judgment.
[10]
(2009) 1 BLLR (CC) at para 64.