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[2015] ZALCJHB 74
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Sosti Construction Projects (Pty) Limited v Commission for Conciliation Mediation And Arbitration and Others (JR 1616/13) [2015] ZALCJHB 74 (3 March 2015)
REPUBLIC OF SOUTH
AFRICA
IN THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case Number: JR 1616/13
DATE: 03 MARCH 2015
Not Reportable
In the matter between:
SOSTI CONSTRUCTION PROJECTS (PTY)
LIMITED
.............................................
APPLICANT
And
COMMISSION FOR CONCILIATION,
MEDIATION AND
ARBITRATION
...............................................................
FIRST
RESPONDENT
COMMISIONER P
MBATSANA
...............................................................
SECOND
RESPONDENT
JACQUES PLAISIER AND 3
OTHERS
.......................
THIRD AND
FURTHER RESPONDENTS
Heard: 19 December 2014
Delivered: 03 March 2015
JUDGMENT
MALAN AJ
Introduction
1. This is an application in terms of
section 145 of the Labour Relations Act in which the Applicant seeks
to have the arbitration
award made by the Second Respondent on 22
July 2013 under case number EATW 4643/13 (“the arbitration
award”) reviewed
and set aside.
2. In terms of the arbitration award
the Second Respondent held that the Third and Further Respondents
were dismissed by the Applicant
and that their dismissal was both
substantively and procedurally unfair.
3. The Applicant was ordered to pay
compensation to each of the Third and Further Respondents equivalent
to 4 (four) month’s
salary. No order was made in relation to
costs.
Summary of background facts
4. It appears from the papers that the
deponent to the Founding Affidavit, who is also the founder and owner
of the Applicant, Mr
Soli Nkuna (“Mr Nkuna”), and the
Third Respondent, Mr Jacques Plaisier (“Mr Plaisier”)
commenced a business
relationship some time in 2008.
5. Mr Plaisier at the time was at the
time employed by Nokia Siemens Network and to the extent that the
Applicant also performed
work for Nokia Siemens Network there was a
conflict of interest which necessitated the adoption of the rather
dubious position
that Mr Plaisier was considered a “sleeping
partner” in the Applicant.
6. For purposes of the review
application the Third Respondent is Mr Jacques Plaisier but the
“Further Respondents”
are not individually identified.
Based on the content of the arbitration award it is apparent that the
“Further Respondents”
(and therefore effectively the
Fourth, Fifth and Sixth Respondents respectively) are Cornelius
Plaisier, Cecilia Plaisier and Corne
Plaisier.
7. It is apparent that the Third and
Further Respondents are all related and are described as one family.
8. It is furthermore apparent from the
record of the evidence lead at the arbitration proceedings (“the
record”) that
it is uncontentious that the Third and Further
Respondents all for a period of time performed work for and received
payments from
the Applicant.
9. It furthermore appears that the
relationship between the Applicant and the Third and Further
Respondents terminated on some basis
in March of 2013.
The Arbitration proceedings
10. It is apparent from the record that
the Third and Further Respondents all gave direct oral evidence at
the arbitration proceedings.
11. The Applicant was represented at
the arbitration proceedings by Mr Saintjay Manyasha (“Mr
Manyasha”) who identified
himself in the record as the HR
Manager for the company.
12. Mr Manyasha gave evidence in the
arbitration proceedings but conceded under cross examination that he
had joined the Applicant
only in April 2013. It follows logically
that Mr Manyasha did not have direct knowledge of the functioning of
the Applicant prior
to that point and any versions that he put to
witnesses or that he testified to in relation to events at the
Applicant prior to
his appointment must be considered hearsay
evidence. Notably Mr Nkuna did not give evidence in the arbitration
proceedings.
13. The Third and Further Respondents
all gave evidence to the effect that they each had a specific job
description and reporting
lines and earned monthly remuneration for
working for the Applicant.
14. The thrust of the Applicant’s
case at arbitration, as it appears now to be in the review
proceedings, is that the Third
and Further Respondents were not
employed by the Applicant but were in effect beneficiaries of a
different type of legal relationship.
The basis of this contention
appears to be that the initial relationship between Mr Nkuna and the
Third Respondent was not an employment
relationship and that the
Fourth to Further Respondents in some instances acted in ways which
suggested a degree of independence.
It is also claimed in the
founding affidavit that a settlement agreement was entered into when
the Third Respondent left the Applicant’s
service but no
evidence in this regard was placed before the First Respondent.
15. The manner of termination of the
relationship between the Third and Further Respondents and the
Applicant was described in the
arbitration proceedings as having
essentially constituted a termination of payments to the Third and
Further Respondents combined
by a refusal by Mr Nkuna to further
contact or liaise with them at all. Although reference was made to
this issue in argument before
this Court, with the apparent intent of
persuading the Court that Mr Nkuna’s actions may not in terms
have constituted a
dismissal, the issue only attains relevance in the
event that the Court finds that the arbitrator had correctly held
that the Third
and Further Respondents were employed by the
Applicant.
The basis of the Review application
16. Insofar as the primary criticism of
the arbitrator’s award in this instance is in effect that he
misconstrued his own
jurisdiction to hear the matter by concluding
that the Third and Further Respondents were employees of the
Applicant the review
test in relation to a rational decision maker as
formulated by the Supreme Court of Appeal in the matter of Herhold v
Nedbank Limited
(congress of SA Trade Unions as amicus curiae) (2013)
ILJ 2795 (SCA) and the Labour Appeal Court in the subsequent judgment
in
the matter of Gold Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v
CCMA and Others (2014) 35 ILJ 943 (LAC) does not apply in the
circumstances in relation to this main ground of review.
17. Given that the Second Respondent is
not entitled to expand his own jurisdiction to any extent the first
question before the
Court is crisply whether he had correctly held,
based on the evidence before him, that the Third and Further
Respondents were employees
and that he in the circumstances had
jurisdiction to entertain their claim.
18. If the Second Respondent was
correct in holding that, based on the evidence before him, the Third
and Further Respondents were
employees of the Applicant the further
question that then logically arises is whether a dismissal occurred.
19. There is nothing before the Court
on the papers that suggests that, in the event that the Commissioner
is correct in his assessment
that an employment relationship exists
and that a dismissal occurred his findings in relation to the issue
of the fairness of such
dismissal is open to challenge. It appears to
be factually uncontentious that no pre dismissal procedure was
followed and no case
has been put forward to suggest that a fair
reason for such dismissal existed.
The definition of an employment
relationship
20. The Labour Relations Act in the
definitions contained in section 213 defines an employee as follows:
“'employee' means-
(a) any person, excluding an
independent contractor, who works for another person or for the State
and who receives, or is entitled
to receive, any remuneration; and
(b) any other person who in any manner
assists in carrying on or conducting the business of an employer,
and 'employed' and 'employment' have
meanings corresponding to that of 'employee';”
21. The aspect of the definition
provided in this regard that has over time provided an ongoing source
of debate, and which may
have relevance to this matter, is the
distinction to be drawn between independent contracting and
employment. The distinction arises
from the common law distinction
between the locatio conduction operis (a contract to perform work)
and the location conduction
operarum (a contract of employment) and
may at first blush appear deceptively simple. In basic terms the
former type of agreement
is a contract to provide specified work
whilst the latter places the productive potential of an individual at
the beck and call
of an employer. In practice it is however often
much harder to draw hard and fast distinctions and, in situations
where characteristics
of both type of relationship are present in a
single relationship the “dominant impression” approach is
probably the
most practical approach to follow to arrive at a
conclusion regarding the true nature of the relationship. The
dominant impression
approach requires consideration of a range of
characteristics of the relationship under scrutiny to determine if
the “dominant
impression” is that of employment or
independent contracting.
22. Various characteristics that are
typical of the contracting or employment relationship have been
identified by our courts over
time and have been absorbed into the
presumptions which are now found at section 83A of the Basic
Conditions of Employment Act
and section 200A of the Labour Relations
Act. By a somewhat peculiar application of legislative logic the
presumptions do not apply
to employees who earn above the earnings
threshold established in terms of section 6(3) of the Basic
Conditions of Employment Act.
The presumptions none the less
represent a useful summary of the characteristics which our courts
have generally accorded to employment
relationships. For purposes of
employing the “dominant impression” approach the
presumptions, whether directly applicable
to the specific
relationship under scrutiny or not, therefore represent an extremely
useful point of reference.
23. Section 83A (1) and (2) of the
Basic Conditions of Employment reads as follows:
“83A Presumption as to who is
employee
(1) A person who works for, or renders
services to, any other person is presumed, until the contrary is
proved, to be an employee,
regardless of the form of the contract, if
any one or more of the following factors is present:
(a) The manner in which the person
works is subject to the control or direction of another person;
(b) the person's hours of work are
subject to the control or direction of another person;
(c) in the case of a person who works
for an organisation, the person is a part of that organisation;
(d) the person has worked for that
other person for an average of at least 40 hours per month over the
last three months;
(e) the person is economically
dependent on the other person for whom that person works or renders
services;
(f) the person is provided with tools
of trade or work equipment by the other person; or
(g) the person only works for or
renders services to one person.
(2) Subsection (1) does not apply to
any person who earns in excess of the amount determined by the
Minister in terms of section
6 (3).”
The meaning of dismissal
24. Dismissal at common law constitutes
a unilateral act by which an employer terminates an employment
relationship.
25. The Labour Relations Act in section
213 thereof defines dismissal in section 186 as follows:
“186 Meaning of dismissal and
unfair labour practice
(1) 'Dismissal' means that-
(a) an employer has terminated
employment with or without notice;
[Para. (a) substituted by s. 30 (a) of
Act 6 of 2014.]
(b) an employee employed in terms of
a fixed-term contract of employment reasonably expected the employer-
(i) 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; or
(ii) to retain the employee in
employment on an indefinite basis but otherwise on the same or
similar terms as the fixed-term
contract, but the employer offered to
retain the employee on less favourable terms, or did not offer to
retain the employee;
[Para. (b) substituted by s. 30 (a) of
Act 6 of 2014.]
(c) an employer refused to allow an
employee to resume work after she-
(i) took maternity leave in terms of
any law, collective agreement or her contract of employment; or
(ii) ......
[Sub-para. (ii) deleted by s. 95 (4) of
Act 75 of 1997.]
(d) an employer who dismissed a
number of employees for the same or similar reasons has offered to
re-employ one or more of them
but has refused to re-employ another;
or
(e) an employee terminated employment
with or without notice because the employer made continued employment
intolerable for the
employee; or
[Para. (e) substituted by s. 30 (b) of
Act 6 of 2014.]
(f) an employee terminated employment
with or without notice because the new employer, after a transfer in
terms of section 197
or section 197A, provided the employee with
conditions or circumstances at work that are substantially less
favourable to the employee
than those provided by the old employer.
[Para. (f) added by s. 41 (b) of Act 12
of 2002 and substituted by s. 30 (b) of Act 6 of 2014.]”
Analysis and conclusion
26. On an overall conspectus of the
evidence as reflected by the record it appears that the only direct
evidence in relation to
the manner in which the relationship between
the Applicant and the Third to Further Respondents operated and ended
was the evidence
of the Third and Further Respondents. It appears
from the record of this evidence that the Third and Further
Respondents did in
fact perform work for the Applicant over a period
of time on an unbroken basis. It furthermore appears from their
evidence that
they held particular positions that related to specific
job content and that they generally all received monthly payments for
rendering
their services. Their evidence was further to the effect
that they had specific reporting lines within the Applicant’s
organisation.
27. The cross examination of the Third
and Further Respondents was of little consequence and failed to
challenge material parts
of their evidence. To the extent that the
Applicant put up only the hearsay evidence from an HR Manager who was
employed after
the relationship between the Applicant and Third and
Further Respondents had terminated, the Second Respondent could not
prefer
a contrary version over the evidence of the Third and Further
Respondents.
28. Although the relationship between
the owner and founder of the Applicant and the Third Respondent may
not have commenced as
an employment relationship it is apparent from
the record of the Third Respondent’s evidence at the
arbitration that the
relationship had evolved over time and that he
had become involved in the operating of the Applicant’s
business in a more
direct manner. The involvement of the other family
members of the Third Respondent in the business of the Applicant
followed and
their evidence illustrates what appears to have been
employment relationships.
29. It is in the nature of review
proceedings that the merits of the Commissioner’s decision can
only be assessed based on
the actual evidence that was before him at
the time of the arbitration hearing.
30. The overall effect of the Third and
Further Respondents’ evidence was that they were working for
the Applicant, received
remuneration from the Applicant for the
services that they rendered on a monthly basis, that they held
specific positions and that
they reported to specific individuals in
the Applicant’s organisation. The fact that the relationship
between the Third Respondent
and the Applicant may originally been an
investor or “silent partner” relationship does not
displace the largely uncontroverted
evidence which indicates that at
the time that the relationship between the Applicant and the Third
and Further Respondents terminated
their relationships with the
Applicant had the hallmarks of an employment type relationship.
31. The Second Respondent’s
finding to the effect that the Third and Further Respondents were
employees of the Applicant therefore
cannot be faulted.
32. There was also direct evidence
before the Second Respondent from the Third and Further Respondents
that their services with
the Applicant terminated on the basis that
the Applicant at a point refused to pay them further and the Mr Nkuna
thereafter refused
to liaise, contact or have anything further to do
with them. It has to be stated that this conduct on the part of the
Mr Nkuna
is difficult to interpret as anything but an expression of a
decision by Mr Nkuna to terminate the relationship with the Third to
Further respondents. Mr Nkuna clearly did not intend for the
relationship to proceed as before and must have known that his
actions
effectively terminated the relationship. Mr Nkuna’s
actions can, in circumstances where the Third to Further Respondents
were to be considered employees of the Applicant, only be interpreted
as a dismissal of the Third to Further Respondents.
33. The finding that a dismissal had in
fact occurred and that the Applicant had failed to prove that such
dismissal was for a fair
reason or effected in accordance with a fair
procedure was similarly correct on the face thereof.
34. In the circumstances the following
order is made:
34.1. The application is dismissed.
34.2. There is no order as to costs.
Malan AJ
Acting Judge of the Labour Court of
South Africa
APPEARANCES
For the Applicant: Adv. B S Tshauke
Instructed by: Lingerfelder &
Baloyi Inc
For the Respondent: