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[2015] ZALCJHB 297
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Director General: Department of Justice and Constitutional Development v General Public Service Sectoral Bargaining Council and Others (JR3306/11) [2015] ZALCJHB 297 (11 September 2015)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case no: JR 3306/11
In the matter between:
DIRECTOR
GENERAL: DEPARTMENT OF JUSTICE
AND
CONSTITUTIONAL
DEVELOPMENT
Applicant
and
GENERAL PUBLIC SERVICE
SECTORAL
BARGAINING
COUNCIL
First Respondent
COMMISSIONER
ZS SIBEKO
N.O.
Second Respondent
BN
MBONANI
N.O.
Third Respondent
L
MPHAHLELE
Fourth Respondent
Delivered:
11 September 2015
Review:
General principles applied to review of arbitration award, in which a
promotion
was awarded following a finding of an unfair labour
practice. Award reviewed and replaced with an order of compensation
JUDGMENT
FOURIE AJ
Introduction
[1]
The
third respondent, Mr Mbonani, was (and still is) employed by the
applicant, the Department. He had faithfully acted in the position
of
Chief Director: Strategy Monitoring and Evaluation (the position) for
several years, at the time that he applied for a permanent
appointment to the position. He was well regarded by his peers and
was suitably qualified and experienced for the position and
was duly
shortlisted.
[2]
Departmental
regulations required that a selection committee conduct interviews
with the shortlisted candidates and, thereafter,
make recommendations
to the Director General on the preferred candidates, whereupon the
Director General will make the final decision
on who to appoint by
either accepting or rejecting the recommendations.
[3]
After
the interviews, the majority of the interviewing panel was of the
view that Mr Mbonani was the preferred candidate while the
fourth
respondent, Ms Mphahele, scored in second place.
[4]
The
chairperson of the panel, Dr De Wee, advised that he intended seeking
guidance from the Director General before firmly committing
to a
recommendation and it appears that the panel then adjourned without
making a final decision.
[5]
Dr
De Wee consulted informally with the Director General, who informed
him of her preference for a female candidate, as this would
further
promote the objectives of employment equity within the department.
[6]
Dr
De Wee then canvassed the committee members by telephone, and
informed them of the Director General’s preference. This
resulted in certain members of the committee changing their minds and
the recommendation ultimately made by the majority of the
committee,
was that Ms Mpahlele be recommended for appointment to the position.
Unsurprisingly, the Director General acted on the
recommendation and
made the appointment.
[7]
Mr
Mbonani, aggrieved by what he perceived to be unfair treatment,
referred an unfair labour practice to the first respondent, the
bargaining council, who in turn appointed the second respondent (the
commissioner) to arbitrate the dispute.
[8]
After
hearing evidence, the commissioner held that the Department had
committed an unfair labour practice (on the facts summarised
above)
and ordered that Mr Mbonani be promoted into the position.
[9]
The
Department brought the current review proceedings in which it seeks
to set aside the arbitration award. Mr Mbonani opposes the
application. The Department launched review proceedings timeously,
but has caused lengthy delays in the finalisation of the record
and
pleadings, which partly explains why this matter comes before court
several years after the dispute arose. The remainder of
the delay was
caused by backlogs in the court process.
[10]
Frustrated
by the lack of progress in the matter, Mr Mbonani’s attorneys
brought two separate applications to dismiss the
review proceedings
on the grounds of delay. However, at the hearing of this matter, I
was informed by counsel for both parties
that these applications had
become settled and that I was to deal with the matter on its
substantive merits, which I propose to
do. The lengthy delays that
have occurred in this matter will be dealt with where they impact on
the appropriate relief to be granted
and on costs.
The recruitment and
selection policy
[11]
The
Department has in place a policy, titled ‘Recruitment and
Selection Policy’, that regulates appointments. In relevant
part the policy provides as follows:
11.1
Recruitment
processes aim to recruit the most suitable candidates to positions,
and to promote employment equity in the department.
11.2
The
executing authority (in this case the Director General) appoints a
selection committee to make recommendations on appointments
to vacant
posts. The primary function of the selection committee is to compile
a shortlist, interview shortlisted candidates, and
make
recommendations as to appointments to the executing authority. The
code provides that recommendations should be made on the
suitability
of a candidate, having regard to the following criteria:
11.2.1
The
qualification, training, skills, and knowledge based on the inherent
requirements of the job;
11.2.2
The
department’s human resources plan;
11.2.3
The
department’s employment equity plan.
11.3
The
code requires that the selection committee retain minutes of
interviews and scoring sheets in respect of candidates, in order
to
justify its decisions.
11.4
The
selection committee is then required to make recommendations as to
the order of preference for appointment of candidates, so
that if the
first preferred candidate refuses the appointment, the next candidate
in line can be appointed without the need to
repeat the process.
11.5
The
code states that appointments are only to be regarded as final once
the executing authority approves the recommendation of the
selection
committee, and a signed offer letter is prepared.
11.6
The
code provides further that “Where the Selection Committee makes
recommendations that will not enhance representivity,
and the
candidature included previously disadvantaged persons, the submission
with reasons as for such deviation will be forwarded
to the executing
authority or delegated official for approval/disapproval.”
11.7
Appointments
are required to take place in accordance with the Public Service
Regulations of 2001.
Non-compliance with
the code
[12]
Self-evidently,
the code does not provide for the executing authority (i.e. the
person making the final decision as to whether to
approve the
recommendation of the selection panel) to comment on or seek to
influence the outcome of the panel’s deliberations
or
recommendations. This is hardly surprising – the entire purpose
of the selection panel is rendered irrelevant by the interference
of
the final decision maker in its deliberations – the executing
authority may as well conduct the interviews and make appointments
directly, without considering the panels’ recommendations.
[13]
An
internal investigation concluded that there were serious
irregularities in the selection process, primarily that the Director
General interfered with the deliberations of the selection committee,
and in doing so caused it to reach a different result.
Unfair labour
practice?
[14]
The
arbitrator held that the conduct described above resulted in an
unfair labour practice (relating to promotion) being committed
against Mr Mbonani. It is difficult to fault the reasonableness of
this conclusion, given the facts as summarised above.
[15]
Without
doubt, the process that led to the appointment of Ms Mpahlele was
procedurally unfair vis-à-vis Mr Mbonani. Given
the broad
scope of the definition of unfair labour practices, particularly in
light of the decision of the Labour Appeal Court
in
Apollo
Tyres SA (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
,
[1]
this finding is imminently reasonable.
[16]
In
my view, the arbitrator’s finding of an unfair labour practice
is correct and is certainly not subject to review.
The relief granted at
arbitration
[17]
The
arbitrator held that were it not for the interference of the Director
General in the selection committee process, the committee
would most
probably have recommended Mr Mbonani to be appointed in the position
and the Director General would probably have ultimately
appointed him
to the position. I agree with the first proposition but not with the
second. The Director General had the final say
and could have simply
rejected the recommendation of the selection committee, for instance
on grounds that it did not properly
give effect to the employment
equity requirements in the department.
[18]
This
reasoning seems to have been the basis for the relief granted,
namely, that Mr Mbonani was to be promoted into the position
with
effect from the date of Ms Mpahlele’s appointment. Is the
relief granted reviewable?
[19]
The
Labour Appeal Court (per Murphy AJA) recently restated the review
test, in
Head
of the Department of Education v Mofokeng and Others
,
[2]
(“
Mofokeng
”),
as follows:
‘
[30]
The failure by an arbitrator to apply his or her mind to issues which
are material to the determination
of a case will usually be an
irregularity. However, the Supreme Court of Appeal (“the SCA”)
in
Herholdt
v Nedbank Ltd
(Footnote omitted) and this court in
Goldfields
Mining South Africa
(
Pty
)
Ltd
(
Kloof
Gold Mine
)
v
CCMA and Others
(Footnote omitted) have held that before such an irregularity will
result in the setting aside of the award, it must in addition
reveal
a misconception of the true enquiry or result in an unreasonable
outcome. (Footnote omitted)
[31]
The determination of whether a decision is unreasonable in its result
is an exercise inherently
dependant on variable considerations and
circumstantial factors. A finding of unreasonableness usually implies
that some other
ground is present, either latently or comprising
manifest unlawfulness. Accordingly,
the process of judicial review
on grounds of unreasonableness often entails examination of
inter-related questions of rationality,
lawfulness and
proportionality, pertaining to the purpose, basis, reasoning or
effect of the decision
, corresponding to the scrutiny envisioned
in the distinctive review grounds developed casuistically at common
law, now codified
and mostly specified in section 6 of the Promotion
of Administrative Justice Act (“PAJA”) (Footnote
omitted); such
as failing to apply the mind,
taking into account
irrelevant considerations, ignoring relevant considerations
,
acting for an ulterior purpose, in bad faith, arbitrarily or
capriciously etc.
The court must nonetheless still consider
whether, apart from the flawed reasons of or any irregularity by the
arbitrator, the result
could be reasonably reached in light of the
issues and the evidence
. (Footnote omitted) Moreover, judges of
the Labour Court should keep in mind that it is not only the
reasonableness of the outcome
which is subject to scrutiny. As the
SCA held in
Herholdt
, the arbitrator must not misconceive the
inquiry or undertake the inquiry in a misconceived manner. There must
be a fair trial
of the issues. (Footnote omitted)
[32]
However, sight may not be lost of the intention of the legislature to
restrict the scope of review
when it enacted section 145 of the LRA,
confining review to “defects” as defined in section
145(2) being misconduct,
gross irregularity, exceeding powers and
improperly obtaining the award. Review is not permissible on the same
grounds that apply
under PAJA.
Mere errors of fact or law may not
be enough to vitiate the award. Something more is required.
To
repeat: flaws in the reasoning of the arbitrator, evidenced in the
failure to apply the mind, reliance on irrelevant considerations
or
the ignoring of material factors etc must be assessed with the
purpose of establishing whether the arbitrator has undertaken
the
wrong enquiry, undertaken the enquiry in the wrong manner or arrived
at an unreasonable result. (Footnote omitted) Lapses in
lawfulness,
latent or patent irregularities and instances of dialectical
unreasonableness should be of such an order (singularly
or
cumulatively) as to result in a misconceived inquiry or a decision
which no reasonable decision-maker could reach on all the
material
that was before him or her.
[33]
Irregularities or errors in relation to the facts or issues,
therefore, may or may not produce an unreasonable outcome or provide
a compelling indication that the arbitrator misconceived the inquiry.
(Footnote omitted) In the final analysis, it will depend
on the
materiality of the error or irregularity and its relation to the
result
. Whether the irregularity or error is material must be
assessed and determined with reference to the distorting effect it
may or
may not have had upon the arbitrator’s conception of the
inquiry, the delimitation of the issues to be determined and the
ultimate outcome
. If but for an error or irregularity a different
outcome would have resulted, it will
ex hypothesi
be
material to the determination of the dispute. A material error of
this order would point to at least a
prima facie
unreasonable result. The reviewing judge must then have
regard to the general nature of the decision in issue; the range of
relevant
factors informing the decision; the nature of the competing
interests impacted upon by the decision; and then ask whether a
reasonable
equilibrium has been struck in accordance with the objects
of the LRA
. (Footnote omitted) Provided the right question was
asked and answered by the arbitrator, a wrong answer will not
necessarily be
unreasonable. By the same token, an irregularity or
error material to the determination of the dispute may constitute a
misconception
of the nature of the enquiry so as to lead to no fair
trial of the issues, with the result that the award may be set aside
on that
ground alone. The arbitrator however must be shown to have
diverted from the correct path in the conduct of the arbitration and
as a result failed to address the question raised for determination.’
(Footnote omitted) (Underlining added)
[20]
That
a summary of the current state of the review test is so lengthy, is
an indication of the complexity inherent in the review
of arbitration
awards under the LRA. I have emphasised the portions of the test that
in my view are most relevant to this application.
[21]
It
seems to me that the award is
prima
facie
unreasonable, in relation to the relief granted, in that the
arbitrator based it on a factually incorrect assumption (that were
it
not for the unfairness, Mr Mbonani would ultimately have been
appointed to the position) and failed to take into account material
factors, for example:
21.1
The
arbitration proceedings took place several months after the
appointment and the award was issued more than a year after the
impugned appointment.
21.2
The
successful candidate would have been firmly entrenched in the
position by the time the award was issued, and to order that Mr
Mbonani replace her in this position, would cause severe disruption
to the functioning of the department.
21.3
The
position in question is a senior, strategic role, and this amplifies
the disruption factor significantly.
21.4
There
is no indication that Ms Mpahlele was not competent for the position.
On the contrary, she seems to have been well qualified,
with suitable
experience.
21.5
While
the conduct of Dr De Wee and the Director General was ill-considered,
and rendered the selection process unfair, there was
no evidence to
indicate that it was motivated by ulterior motives, or that it was
calculated to undermine the functioning of the
selection committee.
Rather, it seems that the decision of Dr De Wee to seek guidance from
the Director General before concluding
the work of the selection
committee, was done in good faith and probably to avoid a formal
rejection by the Director General. He
would have been conscious at
the time that the Director General was anxious to appoint a female
candidate, if a suitable candidate
were available, to promote gender
diversity in the department.
21.6
While
the conduct was unfair towards Mr Mbonani, it probably had no impact
on the ultimate decision not to appoint him, given the
Director
General’s strong views on the need to appoint a female to the
position, and the fact that the Director General had
the discretion
to reject the candidate proposed by the selection committee.
[22]
The
failure to consider these material and relevant factors had such a
distorting effect on the relief granted that, in my view,
the
arbitrator failed to apply his mind to the inquiry as to equitable
relief to be granted. He simply defaulted to the most drastic
relief
allowed in terms of the LRA, with no consideration as to the effect
on the employer (or the incumbent) or any of the factors
listed in
the paragraph above. In doing so, he deprived the parties of a fair
trial in relation to appropriate relief and failed
to strike a
balance between their respective interests and the broader interests
of fairness and equity.
[23]
It
follows that the award stands to be reviewed and set aside on this
aspect, as the arbitrator failed to properly consider the
question of
what appropriate relief for the unfair labour practice would be.
Appropriate relief
[24]
Both
parties agreed that given the delays in this matter, it would not be
fair to either party to refer the matter back to arbitration.
I
agree. I will therefore deal with the appropriate relief to be
granted for the unfair labour practice.
[25]
In
City
of Tshwane Metropolitan Council v South African Local Government
Bargaining Council and Others
,
[3]
the Labour Court (per Lagrange J), dealing with a similar review
application, grappled with the difficult issue of when it would
be
appropriate for an arbitrator to order promotion, particularly where
substantial delays occurred between the unfair labour practice
and
the arbitration award. The learned Judge reasoned as follows:
‘
The
arbitrator imposed a decision to appoint the third respondent
retrospectively regardless of the position having been filled
[26]
If this criticism was always fatal to awards in promotion disputes,
it would render the remedy of instatement in a post non-existent.
However, in the context of the timing of the award relative to the
lodging of the grievance, I believe the applicant does have
a point.
Nearly three years had elapsed between the lodging of the grievance
by De Villiers and the issuing of the award. During
this time Sivhada
had occupied the post. While I accept the validity of the
arbitrator’s reasoning that the interests of
service delivery
played a part in his decision to appoint De Villiers to the post
notwithstanding Sivhada’s incumbency, it
does not seem he paid
any regard to the length of time Sivhada had already held the
position by the time the arbitration was finalised.
This was a
relevant factor which he ought to have considered, and in this
respect his decision to appoint De Villiers retrospectively
was
flawed.
[27]
Accordingly, his determination of an appropriate remedy must be set
aside. The respondents point out that the fairness of Mr
Ehrich’s
assessment was not challenged in the arbitration by the applicant.
Given that Sivhada did not have the necessary
experience which the
applicant conceded was a prerequisite for appointment and since the
other panellists’ impartiality in
respect of Sivhada was held
to be suspicious on the arbitrator’s findings, Ehrich’s
assessment ought to have prevailed.
In that case, De Villiers would
have been the highest rated candidate and would have been appointed.
Because of the lapse of time
between the grievance and the award,
this is no longer appropriate. Consequently, in my view, the most
appropriate alternative
relief would be a form of protective
promotion which at least will have the effect of ensuring De Villiers
was not financially
disadvantaged by being passed over for
promotion.’
[26]
I agree
with the sentiment expressed by the learned Judge, that there needs
to be a careful assessment of the disruptive effect
to an
organisation that is necessarily caused by imposing a promotion and
dislodging the successful incumbent from the position.
The length of
time that has passed between the promotion and the arbitration will
always be an important factor in this regard,
as the more entrenched
the incumbent is, the more disruptive the relief of promotion will
be.
[27]
It is no
easy feat to balance the competing interests of employer, successful
incumbent and victim of an unfair labour practice,
and to reach a
conclusion that is fair to all parties and that gives effect to the
LRA. In the present matter, Mr Mbonani acted
with some urgency in
referring the dispute to arbitration. The delays in having the matter
heard and in issuing the award, seem
to be systemic in nature.
Similarly, Mr Mbonani has gone to some effort to advance the hearing
of this review application, while
the department has been culpably
lax in its prosecution thereof.
[28]
It is,
therefore, through no fault of Mr Mbonani that the matter has been so
badly delayed and it seems unfair to him that the relief
granted is
so heavily influenced by the issue of delay. However, fairness
requires a careful balancing act between competing interests
and, in
my view, on balance the interests of justice and fairness require
that the incumbent (who by now will have occupied the
position for
almost five years) not be disturbed – the disruption to the
department and to Ms Mpahlele would simply be too
great and the wrong
that was done to Mr Mbonani, was largely procedural in nature; in
that it was not decisive of the ultimate
outcome of the appointment.
[29]
Aside from
the question of delay, a further factor that militates strongly
against imposing a promotion on an employer is that an
arbitrator or
court is not well placed to determine which candidate is most
suitable for an employer’s operational needs
– the
employer is self-evidently in a far better position to do so. The
remedy of ordering a promotion, while within an arbitrator’s
statutory powers, should in my view be exercised sparingly and with
caution and only on the clearest facts.
[30]
In my view,
it would be more appropriate in the circumstances of this matter to
order compensation rather than compensation in the
form of a
‘protected promotion’ and that compensation should be
calculated based on the present value of the remuneration
attached to
the position for the following reasons. Firstly, given that the
unfair labour practice occurred some five years ago,
an order that
compensation should be calculated in lockstep with the past five
years’ differences in remuneration (to both
positions) would be
difficult to calculate and enforce and is likely to lead to further
disputes. Second, to calculate compensation
based on remuneration
levels in 2010 unfairly penalises Mr Mbonani and does not take into
account the time value of money and the
effects of inflation. These
are best catered for by pegging the compensation order to current pay
levels. Thirdly, given that I
now don an arbitrator’s hat to
determine the question of redress for unfair labour practice afresh,
it seems more appropriate
to do so in the present. This also
eliminates the need for cumbersome interest calculations on backdated
compensation awards.
Costs
[31]
I am
inclined to exercise my discretion in favour of awarding costs to Mr
Mbonani. He was poorly treated in the selection process,
he acted
speedily to vindicate his rights and he has been active in ensuring
that this review application was prosecuted by the
department, who on
the other hand was extremely lax in doing so, and is fortunate that
the matter was not dismissed out of hand
for its failure to prosecute
it timeously.
Order
[32]
For the
reasons set out above, the following order is made:
1.
The
arbitration award issued by the second respondent on 21 November 2011
is reviewed and set aside only to the extent of the relief
awarded by
the arbitrator under the heading ‘Award’, at the last
page of the award.
2.
This
portion of the award is substituted with the following:
“
The employer is
ordered to compensate the employee for the unfair labour practice
perpetrated by the manner in which it reached
the decision not to
promote him to the position of Chief Director: Strategy Monitoring
and Evaluation, by paying compensation equivalent
to six months’
remuneration, calculated with reference to the current remuneration
attached to the position of Chief Director:
Strategy Monitoring and
Evaluation.”
3.
The payment
of compensation must be made by 30 September 2015.
4.
The
applicant is ordered to pay the third respondent’s costs in the
review application.
________________
GA Fourie
Acting Judge of the
Labour Court
Appearances:
For
the Applicant:
Advocate
DT Skosana SC and Advocate M Gwala
Instructed
by:
The State Attorney
For
the Respondent :
Advocate DM Matlou
Instructed
by:
Sikitha, Daniels & Associates
[1]
(2013)
34
ILJ
1120 (LAC)
.
[2]
[2015] 1 BLLR 50
(LAC) at paras 30 -
33.
[3]
[2011] 12 BLLR 1176
(LC) at paras 26
and 27.