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[2015] ZALCJHB 147
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NJR Steel Holdings (Pty) Ltd and Another v Federated Mining and Allied Industries Workers Union obo Mathabatha and Others (JR1859/13) [2015] ZALCJHB 147 (5 May 2015)
The Labour Court of
South Africa, Johannesburg
Judgment
Case no: JR1859/13
DATE: 05 MAY 2015
Not Reportable
In the matter between:
NJR STEEL HOLDINGS (PTY)
LTD
...........................................................................
First
Applicant
NJR STEEL - PRETORIA EAST
(PTY)
LTD
..........................................................
Second
Applicant
And
FEDERATED MINING AND
ALLIED INDUSTRIES WORKERS UNION
OBO BEN MATHABATHA AND 10
OTHERS
........................................................
First
Respondent
COMMISSION FOR
CONCILIATION, MEDIATION
AND
ARBITRATION
..............................................................................................
Second
Respondent
COMMISSIONER JOSEPH
TSABADI
N.O
...........................................................
Third
Respondent
Heard: 15 January 2015
Delivered: 5 May 2015
Summary: Labour Law -
dismissal - arbitration - rescission application-employees dismissed
for reasons relating to their participation
in an unprotected strike-
Commissioner issued a default award in the First Applicant's absence
recording dismissal substantively
unfair- Applicant's launched
rescission application - Commissioner refusing rescission application
- review application in
terms of Section 145 of the Labour Relations
Act - Commissioner committing a gross irregularity - Commissioner
failed to correctly
apply the test for a rescission application -
Commissioner required to establish if notice of set down was sent,
and then decide
if default was wilful and whether the Applicant had
reasonable prospects of success in its claim - reasonable
decision maker
must apply the relevant test - decision reached by the
Commissioner not one that a reasonable decision maker could reach -
rescission
ruling reviewed and set aside - rescission granted -
First Respondent directed to refer the dispute to the Labour Court
subject
to condonation for the late referral being granted
JUDGMENT
OLIVIER A J
Introduction:
[1]
This matter concerns an
application by the First and Second Applicants to review and set
aside a rescission ruling of the Third
Respondent in his capacity as
Commissioner of the CCMA, the Second Respondent. This
application has been brought in terms
of Section 145 of the Labour
Relations Act ("the LRA").
[2]
Ben Mathabatha and 10
others as listed in the default award issued by the Third Respondent
dated 12 April 2013 under case number
JAPT2673-8 (hereinafter
referred to as ("the individual respondents") were all
members of the Federated Mining and Allied
Industries Workers Union
("the First Respondent") at the time of the issuing of the
default award and the rescission
ruling dated 15 August 2013.
They were also represented by Mr. Maripa, an official of the First
Respondent at the time of
the arbitration hearing and the rescission
application hearing.
[3]
The individual
respondents were all employed by NJR Steel - Pretoria East (Pty) Ltd
("the Second Applicant") at the time
of their dismissal
during January 2008. Based on the founding affidavit and
supplementary affidavit deposed by a representative
of the First
Applicant (NJR Steel Holdings (Pty) Ltd) the individual respondents
were dismissed by the Second Applicant on/or about
28 January 2008
after they failed to heed the contents of two ultimatums to stop
their participation in an unprotected strike in
support of a demand
relating to bonus payments.
[4]
The Second Applicant is
a private company conducting business as a steel merchant and
supplier of hardware from premises in Silverton,
Pretoria. The
First Applicant is the holding company of the Second Applicant.
The First Applicant has interests in
the steel manufacturing
industry, the manufacturing of paint in the chemical industry, and
the wholesale and retail sector through
businesses such as steel
merchants and hardware suppliers. Its interest is represented
in 23 subsidiary companies, each of
which is operated and managed
separately as distinct businesses. The Second Applicant is such
a subsidiary. The First Applicant
only exercises oversight and a
supporting role in respect of its subsidiaries such as the Second
Applicant.
[5]
The individual
respondents filed a dismissal dispute relating to their dismissals on
28 January 2008, such referral was 17 days
late and they then brought
a condonation application. Such condonation application came before
Commissioner A P Venter on 3 April
2008 under case number GAPT
2673-08. Commissioner Venter condoned the late referral but
clearly stated that the issue of
jurisdiction to adjudicate the
dispute needs to be first determined. Venter clearly
anticipated that this court may have
jurisdiction to determine the
dispute based on the fact that the reason for the dismissal related
to strike action as was recorded
in the LRA Form 7.11. In terms
of Section 191(5)(b)(iii) this court has jurisdiction to determine a
dispute if the reason
for the dismissal is an employee's
participation in a strike that does not comply with the provisions of
Chapter IV of the LRA.
[6]
In the referral form
the individual respondents cited the First Applicant as the
Respondent employer party despite the fact that
they were employed by
the Second Applicant.
[7]
The First Applicant
then applied to this court to review the ruling by Commissioner
Venter under case number JR908-08. In
the interim the dismissal
dispute also came before Commissioner Nowdsenetz on 5 June 2008.
Commissioner Nowdsenetz postponed
the adjudication of the dispute on
the basis that the review application was still pending and may
affect the jurisdiction of the
Second Respondent to hear the
dispute. The case was postponed pending the decision of this
court.
[8]
This court under case
number JR908-08 later refused the Applicants' review application and
the matter was again at the request of
the individual respondents and
the First Respondent set down for an arbitration hearing before
Commissioner Joseph Tsabadi, the
Third Respondent, on 4 April 2013.
In the request for arbitration the First Applicant was again cited as
the relevant respondent
party. Mr. Maripa of the First Respondent
represented the individual respondents at this arbitration hearing.
However in
the 1 February 2013 request to enrol the matter for
arbitration the First Applicant requested the Second Respondent to
enrol the
matter but on the condition that "…
.only
if you have jurisdiction to hear this matter or issue the certificate
directing the matter to Labour Court -"
[1]
.
This clearly
indicated that the First Respondent and its representative knew that
based on the reason for the dismissals this court
may have
jurisdiction to adjudicate the dispute.
[9]
The First Applicant
failed to attend the arbitration hearing before the Third Respondent.
The Third Respondent proceeded to hear
the matter in the absence of
the Applicants and ruled that the First Applicant did get notice of
the hearing by fax and that Mr.
Maripa had also hand delivered a
notice to the Second Applicant. As such he proceeded to hear the
matter as a default hearing and
issued an award.
[10]
At this hearing one of
the individual respondents, Ben Mathabatha testified that they were
dismissed on 25 January 2008 for reasons
unknown to them and without
having had a hearing. In the award the Third Respondent however
recorded that Mathabatha stated
that the Applicant's manager had
alleged that they had been on a strike. The Third Respondent
then on 12 April 2013 recorded
in a default award that the dismissal
was substantively unfair as there was no plausible reason for the
dismissal and also procedurally
unfair. He re-instated the
individual respondents listed in the award with back pay equivalent
to 5 years' salary.
The default award was made against the
First Applicant, NJR Steel Holdings (Pty) Ltd, and not the Second
Applicant.
[11]
On 8 May 2013 the First
and Second Applicants launched a rescission application in respect of
the aforesaid default award.
In a detailed affidavit by
Penelope Chanee, the HR Manager of the First Applicant, all the
relevant grounds for the rescission
of the default award were
recorded. In such affidavit Chanee set out in detail the
relevant background of the dispute. She
also fully explained the
reason for the First Applicant's failure to attend. The notice
of set down was issued in the name
of the First Applicant but no
proof existed whether it was ever served on the First Applicant.
A notice was indeed hand delivered
by Maripa to the offices of the
Second Applicant. Again no fax transmission sheet could be
found proving that it had been
sent to the Second Applicant by the
Second Respondent.
[12]
The Second Applicant
had at the time appointed a new manager who was not aware of the
facts of the dismissals which occurred in
2008. He assumed the
case related to the First Applicant as stated in the notice and
forwarded the request to the First Applicant
by email. Chanee
on receipt of the email decided to wait for a formal notification
from the Second Respondent. No such
formal notification was
ever received and accordingly the First Applicant failed to attend
the arbitration hearing. The First
and Second Applicants
separately found out about the default award and on 8 May 2013
launched their rescission application.
The rescission application hearing:
[13]
It is important to note
that during the arbitration hearing the number of individual
respondents increased from 10 to 11.
Of the 11 only 8 were
originally cited as applicants in the initial LRA Form 7.11.
Two employees were never a part of the
original referral at all. In
the rescission application, proper grounds were also set out showing
the Applicants prospects
of success.
[14]
On 12 April 2013 and
after the Third Respondent had heard both the First Respondent and
the Applicant's representative, he refused
to rescind the award and
gave the following reasons:
"
The
Respondent
(the First Applicant)
was in wilful default.
The fax that the CCMA sent to the Respondent advising it of a set
down for this matter was indeed duly
received. Secondly the
trade union official hand delivered the notice of set down and handed
it to a manager of the Respondent.
The Respondent elected not
to attend the arbitration proceedings"
.
[15]
After receiving the
aforesaid rescission ruling the First and Second Applicant launched
the current review application.
The grounds of review of the First and Second
Applicants
[16]
The Third Respondent in
the manner in which he conducted both the arbitration proceedings and
the rescission application hearing
acted in a manner which was
reviewable. This conduct was irregular and he arrived at a decision
in the rescission application that
a reasonable arbitrator could not
have reached in the circumstances. In its affidavits the Applicants
were able to show that no
fax transmission slip showing that the
Second Respondent had indeed faxed the notice of set down to the
First Applicant existed.
Accordingly the first ground for
review is that the Third Respondent erred in finding that the Second
Respondent faxed a copy of
the notice of set down to the First
Applicant.
[17]
Even were it to be that
such a fax transmission report existed, the First Applicant's
representative stated under oath in the rescission
application that
the First Applicant did not receive the notice of set down allegedly
faxed. As such, the Third Respondent
erred in not having had
regard to the representatives of the First Applicant statements under
oath. The hand delivery of
the notification by Mr. Maripa to a
manager of the Second Applicant was not proof of delivery or service
on the First Applicant.
In the premises the Third Respondent
ought to have found that no conclusive proof existed that the First
Applicant received a copy
of the notice of set down.
[18]
Further grounds of
review relied upon by the Applicants relate to the fact that the
Third Respondent committed a reviewable irregularity
by failing to
consider whether the First Applicant had reasonable prospects of
success in opposing the relief sought by the individual
respondents
in the arbitration. So for instance did the Third Respondent
fail to consider that the First Applicant would
have succeeded in
establishing that an employment relationship never existed between it
and the individual respondents and accordingly
the Second Respondent
does not have jurisdiction to adjudicate the alleged dispute.
[19]
The individual
respondents were dismissed by the Second Applicant and not the First
Applicant with whom it did not have an employment
relationship.
Proper evidence was placed before the Third Respondent in relation to
the employment relationship between the
individual respondents and
the Second Applicant. The Second Applicant also dismissed the
individual respondents based on
their failure to comply with
ultimatums to return to work pursuant to their participation in an
unprotected strike action in support
of a demand to be paid bonuses.
The ultimatums were clearly issued by the Second Applicant and not
the First Applicant.
[20]
The First Applicant
also indicated in its rescission application that it had good
prospects of demonstrating that the Second Respondent
does not have
jurisdiction over the dispute as it concerned dismissals resulting
from participation in unprotected strike action.
Only this
court has jurisdiction over disputes concerning dismissals resulting
from strike action. As such, the Third Respondent
failed to
determine the true reasons for the dismissals and he should have
concluded that the Second Respondent does not have jurisdiction
to
adjudicate the dismissal dispute.
The relevant legal principles and the test for review
[21]
In
Shoprite
Checkers (Pty) Ltd vs CCMA and others (2007) 28 ILJ 2246 LAC,
the Labour Appeal Court held that good cause should be read into
Section 144 of the LRA when considering rescission applications.
The rescission in that case confirmed
Northern
Training Trust vs Maake and others (2006) 27 828 LC,
where the test for rescission in Section 144(a) of the LRA was said
to be the following:
"The enquiry in an application for rescission
on an arbitration award is consequently bipartite. The first leg is
one which
is concerned with whether or not the notice of set down was
sent……. a probability is then created that the notice
sent was received. The second leg to the enquiry is one which
concerns itself with the reasons proffered by the Applicant
who
failed to attend the arbitration proceedings. Such Applicant
needs to prove that he or she was not wilful in defaulting,
that he
or she has reasonable prospects of being successful with his or her
case should the award be set aside. However the
Applicant need
not deal with the merits of the case".
The relevant test for review
[22]
The proper review test
to be used comes from the Judgment in
Sidumo
and another vs Rustenburg Platinum Mines Limited and others.
[2]
where Navsa JA held that in
light of a constitutional requirement (in Section 33(1) of the
Constitution of the Republic of South
Africa, 1996 ("the
Constitution")), everyone has the right to administrative action
that is lawful, reasonable and procedurally
fair and that "the
reasonableness standard should now suffuse Section 145 of the LRA".
The majority of the Constitutional
Court set the threshold test for
reasonableness of an award or ruling as the following:
"
Is the decision reached by the Commissioner
one that a reasonable decision maker could not reach".
[23]
An arbitration award
can be reviewed on the grounds listed in Section 145 of the LRA i.e.
if there is a defect in the award. Defect
means that the
Commissioner:
23.1.
Committed a misconduct
in relation to the duties of the Commissioner;
23.2.
Committed a gross
irregularity in the conduct of the arbitration proceedings;
23.3.
Exceeded the
Commissioner's powers; or
23.4.
The award was
improperly obtained.
[24]
The main objective of a
review is for the Labour Court to determine whether a Commissioner
had perpetrated some irregularity that
has denied the other party a
fair hearing. This may be determined from the manner in which
the hearing was conducted, from
the manner in which the Commissioner
approached the evidence or from the conclusion the Commissioner drew
from the evidence.
[25]
Generally slight
procedural irregularities or minor errors of reasoning do not
constitute grounds for review if they did not materially
prejudice a
party. Where however a procedural misdirection or an error of
reasoning denies a party a fair hearing, the Court
is entitled to
intervene.
[26]
The starting point in
determining the power of the Labour Court to intervene is as stated
above in the case of
Sidumo
.
According to the Constitutional Court the main objective of review is
to determine whether the Commissioner has perpetrated some
irregularity that has denied either party a fair hearing. A review of
a Commissioner's decision is not an appeal. The test in the
Sidumo
matter reduces the significance of an arbitrator's
reasons because the reviewing Court applying the test examines the
result. There
is a low threshold of interference set by
Sidumo
.
[27]
In
one
of the most recent cases i.e
Herholdt vs
Nedbank Limited
[3]
the Supreme Court of Appeal held that the test is as follows:
"A
review of CCMA awards is permissible if a defect within the
proceedings fall within one of the grounds in Section 145(2)(a)
of
the LRA. For a defect in the conduct of the proceedings to amount to
a gross irregularity as contemplated by Section 145(2)(a)(ii)
the
arbitrator must have misconceived the nature of the inquiry or
arrived at an unreasonable result. The result will only be
unreasonable if it is one that a reasonable arbitrator could not
reach on all the material that was before the arbitrator. Material
errors of fact, as well as the weight and the relevance to be
attached to particular facts, are not in and of themselves sufficient
for an award to be set aside, but are only of consequence if the
effect is to render the outcome unreasonable."
[28]
Where a Commissioner
evaluated all the facts presented at the hearing and came to a
conclusion the question is whether that conclusion
is reasonable
based on the evidence before him. It needs to be considered whether
the Commissioner decision falls within a band
in which reasonable
Commissioners might reasonably agree.
[29]
In
Martin
vs Commission for Conciliation, Mediation and Arbitration and
others
[4]
Van Niekerk AJ (as he then was)
stated:
"A reasonable decision maker in the present
circumstances would apply the relevant test - in other words the test
referred
to in North Training Trust and affirmed by the Labour Appeal
Court in Shoprite Checkers. This required her to establish that
a notice of set down was sent (which she did) and then to decide
whether the Applicant's default was wilful, and whether she had
reasonable prospects of success in her claim. A Commissioner's
decision cannot be said to be reasonable when the Commissioner
fails
to consider all the materially relevant factors prior to making that
decision…..".
[30]
Applying the aforesaid
dicta it is clear that the Third Respondent failed to consider or
apply his mind to the relevant factors
in the rescission
application.
[31]
It should have been
clear to the Third Respondent as was recorded by the two
Commissioners who have previously dealt with the matter
(Venter and
Nowdsenetz) that the matter related to a dismissal for participation
in an unprotected strike and that the CCMA therefore
did not have
jurisdiction. It must have been clear to him that this was an
issue that he needed to consider and rule on.
[32]
In exercising his power
to either grant or refuse the rescission application the Third
Respondent had to make sure that in doing
so he applied his mind
properly to all the relevant factors. He clearly did not apply
his mind to the relevant issue as to
whether the First Applicant was
duly served with a notice of set down. It is clear from the
evidence that this was not the
case. As such there was no basis
for him to find that the First Applicant had indeed received a fax
transmission relating
to the set down.
[33]
Furthermore, the Third
Respondent erred and committed a gross irregularity by failing to
consider whether the First Applicant had
reasonable prospects of
success in opposing the relief sought by the individual respondents
at the arbitration.
[34]
It must have been clear
from all the relevant evidence and documentation in his possession
that an employment relationship had never
existed between the First
Applicant and the individual respondents. The default award was
therefore clearly awarded incorrectly
against the First Applicant.
The Third Respondent also clearly failed to consider in relation to
the prospects of success
that the Second Respondent does not have
jurisdiction over the dispute as it concerns dismissals resulting
from participation in
an unprotected strike. Only this court
has jurisdiction over such disputes.
First Respondent's notice dated 12 March 2013
[35]
It is important also
for this court to take note of the fact that the First Respondent on
11 March 2014 served a notice on the Second
Respondent in which it
indicated that it would like to "withdraw" the default
award and any application to enforce the
award under case number
GAPT2673-08.
[36]
In the notification to
the Second Respondent the First Respondent clearly indicated that it
was of the view that the CCMA had no
jurisdiction to arbitrate the
matter as the individual respondents were accused of embarking on
unprotected strike action.
The notification also indicated that
the First Respondent was aware that the individual respondents were
employed by the Second
Applicant and not the First Applicant in
respect of whom the award had been made.
[37]
The aforesaid notice to
the Second Respondent was also filed with the Registrar of this court
on 12 March 2014 and formed part of
the consideration of the matter.
As such the First Respondent had abandoned any reliance on the
default award on such grounds
which are in support of the application
made by the First and Second Applicant.
[38]
However it needs to be
recorded that in the review application, the representatives of the
First Applicant made a number of serious
allegations of fraud and
other misconduct against the First Respondent's representative, Mr.
Maripa as well as the individual respondents.
These aspects
need to be further investigated at the hearing of the matter before
this court should this matter proceed to be adjudicated.
Conclusion
[39]
In the circumstances I
conclude that the Third Respondent acted in a grossly irregular
manner and that the Applicants were deprived
of a fair hearing in the
rescission application and that the Applicants were therefore able to
prove that relevant grounds of review
existed in terms of Section 145
of the LRA which makes the rescission ruling of the Third Respondent
one that a reasonable Commissioner
could not have reached.
[40]
As such the rescission
ruling stands to be set aside.
In
the premises I make the following order:
I.
The rescission ruling
issued by the Third Respondent on 15 August 2013 under the auspices
of the Second Respondent case reference
GAPT2673-08 is reviewed and
set aside.
II.
The rescission ruling
of the Third Respondent is substituted with an order:
i.
That the First and
Second Applicant's application for rescission is granted; and
ii.
Directing the First
Respondent to refer the individual respondents' dismissal dispute to
this court for adjudication subject to
the Labour Court first
granting condonation for the late referral of the dispute.
III.
Cost to be cost in the
cause when this matter is heard by this court.
OLIVIER AJ
Acting Judge of the Labour
Court of South Africa
APPEARANCES
For the
Applicant: Advocate Landman
Instructed
by: O'Donovan Attorney
For
the Respondents: No appearance
[1]
Refer page 189 of the record
[2]
(2007) 281ILJ 2405 (CC)
[3]
(2013) 34 ILJ 2795 SCA
[4]
(2008) 28 ILJ 2254 LC at paragraph
25