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[2015] ZALCJHB 363
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Louw v South Africa Local Government Bargaining Council Benoni and Others (JR384/2010) [2015] ZALCJHB 363 (18 September 2015)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not
Reportable
Case
No: JR384/2010
In
the matter between:
DAVID
LOUW
Applicant
and
SOUTH
AFRICA LOCAL GOVERNMENT
BARGAINING
COUNCIL BENONI
First
Respondent
COMMISSIONER
MABHOKO MOTHOLE Second
Respondent
NOKENG
TSA TAEMANE MUNICIPALITY
Third
Respondent
Heard:
30 June 2015
Delivered:
18 September 2015
Summary:
Constructive dismissal – applicant facing
disciplinary enquiry resigning because of threat contained
in letter
that civil and criminal action may be taken against him if he does
not resign. If he resigns however, undertaking
given that no
such action will be taken. Distinguished from situation where
employee resigns in the face of a disciplinary
enquiry without such a
threat.
Constructive
dismissal – whether in such a situation resignation reasonable
or whether applicant should have stood his disciplinary
enquiry.
JUDGMENT
SNIDER
AJ
[1]
This is an application in terms of which the applicant seeks an order
that the arbitration
award
[1]
of the second respondent dated 4 February 2010 (“the award”)
be reviewed and set aside, alternatively that the award
be
rescinded, further alternatively that the rescission of judgment
application is referred back to the first respondent.
[2]
Neither of the parties has persisted with the rescission application
in their heads
of argument or in argument before me.
[3]
Accordingly I have adjudicated this matter on the basis that the
relief sought by
the applicant is as embodied in the first prayer
referred to above.
[4]
The point was taken by the third respondent in its papers that the
applicant was significantly
dilatory in pursuing his review and there
are allegations and argument to and fro in relation to the issue of
condonation.
The third respondent complains that the record was
only filed a year after it was made available to the applicant.
[5]
The issue of condonation is first raised in the third respondent’s
answering
affidavit
[2]
and it is clear that the applicant was, at the very best for him,
inept in pursuing his review application.
[6]
He was also dilatory. He ultimately served the transcribed
record of the arbitration
only in July 2011 apparently a year after
the record had been provided to him by the registrar of this court.
[7]
The applicant deals with his failure to apply for condonation in his
replying affidavit.
[3]
Whilst the applicant does not set out a thorough explanation for his
default, the point that he does correctly make is that
his conduct
has in no manner demonstrated a lack of interest from his side to
have the matter finalised.
[4]
[8]
Rule 7A(6) of the Labour Court rules provides that “
the
applicant must furnish the registrar and each of the other parties
with a copy of the record or portion of the record, as the
case may
be, and a copy of the reasons filed by the person or body
.”
There is no time period provided for in the sub-rule.
[9]
In terms of item 11.2 of the Practice Manual of this court, which
came into effect
on 2 April 2013, records in review applications must
be filed within 60 days of the date on which the applicant is advised
by the
registrar that the record has been received.
[10]
As set out above, the record in this matter was filed in July 2011,
long before the Practice
Manual came into effect.
[11]
This does not excuse the applicant’s conduct, and it was
certainly open to the third respondent
to bring an application to
dismiss the review application. However it did not.
[12]
The applicant does attempt to justify the delay in a somewhat
disjointed manner and also seems
to be aware of the relevant
provisions of the rules.
[13]
I am accordingly satisfied that, under the circumstances, the
applicant was not required to apply
for condonation, although he
might have been susceptible to an application to dismiss the review
arising from his dilatory conduct.
[14]
Even if I had to treat the situation as one that required
condonation, I would have had regard
to the oft cited
dictum
of Holmes JA in
Melane
v Santam Insurance Company Limited
[5]
and, on a conspectus of all the facts, given the applicant’s
strong prospects of success, as set out below, I would have
granted
condonation notwithstanding the relative paucity of his explanation.
[15]
Briefly, the background to the matter is as follows. The
applicant was employed by the
first respondent on 1 July 2001;
[6]
he worked at the Eastern Gauteng Services Council which was the third
respondent’s predecessor in title.
[16]
His position in the Eastern Gauteng structure was as a chief clerk in
the financial section.
At the time that the events dealt with
herein took place the applicant was the manager of the income section
of the third respondent’s
finance department.
[17]
Various disciplinary charges were preferred against the applicant.
Save to state that these
charges had to do with alleged
irregularities / misconduct perpetrated the applicant; it does not
serve to deal with them in any
great detail. They were not the
main subject matter at the arbitration and were neither proved by the
third respondent nor
disproved by the applicant in the arbitration.
The allegations were simply not dealt with in the arbitration with
nearly
the particularity and forensic examination that would be
necessary in order to make a determination either way. As will
appear
below however it is necessary to determine if there was a
prima facie
case for the applicant to answer in the
disciplinary proceedings.
[18]
The focus of the arbitration was whether the applicant was
constructively dismissed pursuant
to a letter from the third
respondent’s attorney referred to below.
[19]
On 15 April 2008 the applicant was given a notice of suspension
pending investigations into “serious
allegations.”
[7]
On 2 October 2008, more than 5 months later, the applicant was given
a charge sheet.
[8]
The date of the proposed disciplinary enquiry was 13 October 2008.
On 11 November 2008, the disciplinary hearing apparently
having being
postponed, the third respondent’s attorneys, in response to a
letter from the applicant’s attorneys proposing
a two to three
month settlement of the matter, addressed a letter to the applicant’s
attorneys
[9]
(“the response letter”) which included the following
paragraph, numbered four –
“
Our
client’s further instructions are that in the event of your
client not tendering his resignation aforesaid the disciplinary
enquiry will go ahead in full force. Then, and in that event
our client considers to proceed to institute criminal proceedings
against your client and / or bringing civil action to recover
whatever financial losses your client has caused our client or both
action. Accordingly and against the set out above client
therefore rejects your client’s offer.”
[20]
The “resignation aforesaid” referred to in the above
paragraph is mentioned in paragraph
three of the response letter
which states –
“
Our
client is prepared to accept your client’s resignation form
employment without any financial settlement.”
[21]
The crisp question for decision before me is whether paragraph four
of the response letter created
a situation which could legitimately
be relied on by the applicant in alleging his constructive dismissal
by the third respondent.
[22]
There are no other pertinent circumstances which emerge from the
record which are relevant for
this determination.
[23]
The test to be applied in determining whether or not there was a
constructive dismissal is an
objective one, that is to say whether or
not the commissioner was correct in coming to the conclusion he
did.
[10]
[24]
Section 186(1)(e) of the Labour Relations
[11]
(“the LRA”) provides that –
“
(1)
‘Dismissal’ means that . . .
(e)
An employee terminated a contract of
employment with or without notice because the employer made continued
employment intolerable
for the employee. . .”
[25]
It is not contentious between the parties in this particular matter
that the employee brought
the contract to an end. That
particular requirement of section 186(1)(e) of the LRA is accordingly
fulfilled.
[26]
In order to answer the question set out in paragraph 21 above, it
must be determined whether
-
26.1.
the reason for the employee’s action
was that the employer had rendered the prospect of continued
employment “intolerable”;
and, allied to this;
26.2.
the employee had no reasonable alternative
other than terminating the contract.
[27]
In the event that I find that these two statements correctly reflect
the facts in this matter,
it will then be necessary to consider what
order is appropriate in the circumstances.
[28]
In
Pretoria
Society for the Care of the Retarded v Loots
[12]
the following passage appears setting out the test for a constructive
dismissal -
“
When
an employee resigns or terminates the contract as a result of a
constructive dismissal such employee is in fact indicating
that the
situation has become so unbearable that the employee cannot fulfil
what is the employee's most important function, namely
to work. The
employee is in effect saying that he or she would have carried on
working indefinitely had the unbearable situation
not been created.
She does so on the basis that she does not believe that the employer
will ever reform or abandon the pattern
of creating an unbearable
work environment. If she is wrong in this assumption and the
employer proves that her fears were
unfounded then she has not been
constructively dismissed and her conduct proves that she has in fact
resigned.”
[29]
The question must also be asked as to whether the employee had any
reasonable option other than
to resign or to abandon the
contract.
[13]
[30]
There must be a causal nexus between the acts of the employer of
which the employee complains
and the decision to resign.
Grogan
[14]
gives the example of an employee resigning after filing grievances
and it is then proved that his primary motive was to obtain
a better
job, the claim based on constructive dismissal will fail. Such
claims will also fail if the employee’s primary
motive is to
make money out of the employer.
[31]
It must be shown that the employee had no reasonable option in the
circumstances other than to
terminate the contract. See
SmithKline
Beecham (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration & Others
[15]
[32]
Counsel also referred me to the decision of Steenkamp J in
Asara
Wine Estate and Hotel (Pty) Ltd v Van Rooyen & Others
.
[16]
[33]
Steenkamp J observed that where a reasonable alternative to
resignation exists, there can be
no constructive dismissal. He
referred to
SmithKline
Beecham
(
supra
)
[17]
wherein it was held that if the employee is too impatient to wait the
outcome of the employer’s attempts to find a solution
to the
perceived intolerable solution, and resigns, then constructive
dismissal is almost always out of the question.
[34]
It is submitted on behalf of the third respondent that the applicant
was at large, under the
circumstances, to stand his disciplinary
enquiry and establish his innocence, thereby doing away with the
sting of the threat that
was made against him as set out above.
[35]
What distinguishes the current matter from
Asara
(
supra
)
is the threat contained in the response letter. A determination
of the effect that the threat, objectively viewed, would
have had on
the applicant is the core aspect of this matter.
[36]
There is a further passage in
Asara
(
supra
)
which is valuable to the current analysis
[18]
“
The
commissioner proceeded to find that van Rooyen was not guilty of
misconduct. This illustrates that the commissioner misconceived
the nature of the enquiry before him. Van Rooyen had resigned
before a disciplinary enquiry could be held. In the arbitration
proceedings, it was not incumbent on the applicant to prove its case
on misconduct. In line with the authorities cited above,
it was
sufficient to illustrate prima facie that there was a case for van
Rooyen to answer, and accordingly that is was reasonable
to take
disciplinary action against him.”
[37]
The third respondent’s representatives made significant efforts
at the arbitration to show
that indeed there was a case for the
applicant to answer and I am satisfied that, on a
prima facie
basis, this was achieved. However the case was certainly not
proven and the distinguishing feature remains the threat.
[38]
The following was stated by the Constitutional Court in
Strategic
Liquor Services v Mvumbi & Others –
There
are two reasons why the invitation cannot be accepted. The first is
that the employer's submission overlooks Mr Redgard's
uncontested
evidence to the effect that his work situation had become intolerable
and that the alternative to resignation was a
sham since the employer
would find a reason to dismiss him anyhow. This means there was
no 'choice'. The second is that
it
misconceives the test for constructive dismissal, which does not
require that the employee have no choice but to resign, but
only that
the employer should have made continued employment intolerable
.
[19]
(My emphasis)
[39]
The submissions on behalf of the third respondent are that the
applicant perceives the response
letter as a threat upon which he
could claim to have been constructively dismissed as he believed that
he would be found guilty
either way. It was submitted that this
was a palpable misreading of the said letter, was contrived and fell
to be rejected.
[40]
It was further submitted that the applicant
lead no evidence to support his claim of constructive
dismissal and
that the applicant had the alternative, of standing his disciplinary
enquiry and thereby clearing his name, as set
out above.
[41]
I am unconvinced that the applicant’s evidence was as sparse as
submitted on behalf of
the third respondent.
[42]
It is true that the applicant does refer to a fear that he would be
found guilty regardless,
arising from the threat indicated in the
response letter.
[20]
However this is by no means the only evidence he gave in relation to
the threat contained in the response letter.
[43]
He also states that he was “
feeling
that I would rather resign because I felt it was rather unnecessarily
and there was no reason to get involved in a civil
case
.”
[21]
He further states that he “
was
not prepared to continue working for the respondent due to the
threats that were made in the (
response
)
letter
”.
[22]
[44]
Clearly the applicant took the remarks in the response letter as a
threat and, at least on his
version, resigned as a result
thereof
[23]
although he does also link the threat in the response letter to his
allegation that there was already effectively a guilty
finding.
[24]
[45]
It matters not that the applicant may be able to clear his name by
standing his disciplinary
enquiry. This begs the question as to
whether it is a reasonable alternative for the applicant.
[46]
The following passage from the decision in Asara (
supra
) is
relevant –
Where
a reasonable alternative to resignation exists, there can be no
constructive dismissal. Accordingly, where the employee
has the
option of facing a disciplinary hearing, but resigns, there can be no
talk of constructive dismissal. This appears
to me to be a
correct statement of the law, unchanged by the dictum in Strategic
Liquor Services.
[25]
[47]
I find the threat contained in the response letter troubling.
The third respondent manifests
its intention, by way of the threat of
civil litigations and criminal action against the third respondent,
to coerce the applicant
into resigning without compensation.
Whether or not the third respondent would be sufficiently mischievous
as to follow through
on the threat regardless of the merits of the
suit or complaint contemplated, is not a question I have to decide.
[48]
The mere reporting of the applicant to the South African Police
Services and / or the institution
of civil proceedings would, in
themselves, have an extremely deleterious impact on the applicant.
[49]
Guilt, innocence, criminal and civil liability are often not entirely
straightforward to establish,
as anyone in the legal profession will
attest. It is quite understandable that an individual would not
want to become immersed
in these potentially murky waters.
[50]
The meaning of what the third respondent says is clear; if the
applicant were to resign, all
of these potential problems would be
instantly removed. The fact that the threat uses the word
“considers” is
neither here nor there. The
intention is manifest.
[51]
It is highly undesirable in the context of an employment relationship
that the third respondent
should offer to excuse the applicant from
reporting him criminally and suing him civilly in return for his
resignation without
recompense.
[52]
The question then becomes whether the applicant, as a reasonable man,
would have regarded the
threat and the indication that it gave of the
potential danger he would be placing himself in if he were not to
heed it, as being
sufficiently serious to justify his resignation.
[53]
In my view the answer to this question is yes, a reasonable man,
guilty or not, would not want
to face these prospects.
Accordingly the applicant has established that he was constructively
dismissed.
[54]
Having found that the first respondent was constructively dismissed
and that accordingly, objectively,
the commissioner was wrong in his
award, I am of the view that I should now determine the matter in
terms of section 145(4) of
the LRA.
[55]
It is correct that there were disciplinary proceedings pending in
respect of serious charges
and an assessment of the transcript
suggests at least
prima facie
, there was a case for the
applicant to answer.
[56]
I cannot however find that the applicant was opportunistic in
resigning pursuant to the threat
contained in the response letter.
He had ample opportunity to resign prior to receipt of the letter.
[57]
It is also the case that the response letter, as submitted by counsel
for the third respondent,
was sent in the context of a settlement
negotiation.
[58]
The fact that the third respondent was always at large to proceed
civilly against the applicant
or make a criminal complaint is
irrelevant. It was the undertaking to relieve him of that
possibility if he resigned that
constituted the threat and the
element of coercion.
[59]
In light of what is set out above I am of the view that relief should
be afforded to the applicant.
[60]
This is not a situation where reinstatement would be appropriate and
the applicant did not seek
to be reinstated.
[61]
The applicant seeks compensation and the third respondent seeks the
dismissal of the application
alternatively the referral of the
dispute back to the first respondent for a hearing
de novo
before another commissioner.
[62]
In my view this court is in as good a position as a commissioner
would be to determine the matter
and all the relevant material is
available.
[63]
There are no degrees of comparison for the word “intolerable”
as used in section
186(1)(e). There is though, certainly, a
broad scope of conduct on the part of an employer, more and less
egregious, that
can cause a constructive dismissal. In this case it
was a single incident, not a pattern that led to the dismissal.
It is
also the case that the letter was sent in the context of
settlement negotiations and that there was at least a
prima facie
case against the applicant in the disciplinary proceedings.
[64]
Accordingly I believe that the appropriate outcome in this matter is
that the applicant
be compensated and that such compensation should
be in an amount equal to three months of the applicant’s
remuneration as
at the date of his dismissal.
[65]
In relation to the question of costs, I am of the view that costs
should follow the
cause. The third respondent was the author of
its own demise and has caused the applicant, an individual, to incur
costs
in this matter.
[66]
Accordingly I make the following order:
66.1.
The arbitration award issued by the second
respondent dated 7 February 2010 is reviewed and set aside.
66.2.
The third respondent is to compensate the
applicant in a sum equal to three months remuneration as at the date
of his dismissal.
66.3.
The third respondent is to pay the
applicant’s costs.
___________________________
SNIDER, A J
Acting
Judge of the Labour Court
Appearances
For
the Applicant: Advocate H J Snyman instructed by Geyser
Attorneys
For
the Third Respondent: Advocate T Machaba instructed by Ntanga
Attorneys
[1]
Page 71 of
the record bundle
[2]
Index
bundle page 42
[3]
Page 74
paragraph [3.1] ff
[4]
Page 76
paragraph [3.13]
[5]
1962 (4) SA
531
(A) at 532 c-f
[6]
Transcript,
record bundle page 4 line 13
[7]
Indexed
bundle page 49
[8]
Indexed
bundle pages 51 to 56
[9]
Indexed
bundle pages 57 and 58
[10]
Conti Print
CC v Commission for Conciliation, Mediation and Arbitration and
Others unreported decision of the LAC under case number
JA53/2014;
SAPA & Others v S A Rugby & Others 2008 (20) 29 ILJ 2218
(LAC) and Solid Doors (Pty) Ltd v Commissioner Theron
& Others
(2004) 252337 (LAC) at para [29]
[11]
Act 66 of
1995, as amended
[12]
1997 (18)
ILJ 981 (LAC) p984 D-G
[13]
Albany
Balers Limited v Van Wyk & Others (2005) 26 ILJ 2142 (LAC)
paragraphs [28]; [29] and
[30]
on page 2150
[14]
Dismissal,
Jutastat, 2013 reprint page 58
[15]
SmithKline
Beecham (2000) 21 ILJ 988 (LC)
[16]
(2012) 33
ILJ 363 (LC)
[17]
At p997 D -
E and p998
[18]
Asara
(
supra
)
paragraph [47] page 374
[19]
2010(2) SA
92 (CC); (2009) 30 ILJ 1526 CC at paragraph [4]
[20]
Transcript
page 17 lines 14-16
[21]
Transcript
page 17 lines 20-22
[22]
Transcript
page 18 lines 4-11
[23]
Transcript
page 42 lines 24-25
[24]
Transcript
page 50 lines 6-10
[25]
Asara
(supra) p371 para [31]