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[2015] ZALCCT 43
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Rainbow Farms (Pty) Ltd v CCMA and Others (C377/2012) [2015] ZALCCT 43 (29 May 2015)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Not reportable
Of
interest to other judges
C
ase
no: C 377/2012
In
the matter between:
RAINBOW
FARMS (PTY) LTD
Applicant
and
CCMA
First Respondent
COMMISSIONER
D I K WILSON
Second Respondent
SOLIDARITY
Third Respondent
MOGAMAT
SALIE & 4 OTHERS
Fourth and further
respondents
Heard
:
27 May 2015
Delivered
:
29 May 2015
Summary:
Review – jurisdiction – not bound by description in
referral to conciliation. LRA s 186 –
ULP relating to benefits.
Conclusion on merits not so unreasonable that no other arbitrator
could have reached same conclusion.
Application dismissed.
JUDGMENT
STEENKAMP
J
Introduction
[1]
The applicant, Rainbow Farms, applied to have an award by the second
respondent (the commissioner) reviewed and set aside. The
commissioner found that the process leading to five employees not
receiving a bonus was an unfair labour practice. He ordered the
company to pay each of them compensation equivalent to one month’s
wages.
Background
facts
[2]
The five employees (who are cited as the fourth and further
respondents, represented by their trade union, Solidarity) are
employed as halaal slaughters. Each time they slaughter a chicken,
they have to utter the words, “Bismillah Allah u Akbar”.
The company pays discretionary bonuses. In 2011 the five did not
receive bonuses as they were rated below 3 out of 5 points awarded
by
the company.
[3]
The employees referred a dispute to the CCMA. They indicated that the
dispute is about an unfair labour practice , but in summarising
the
facts of the dispute, they said:
“
[The]
employer engaged in an arbitrary discriminatory employment practice
in its selection of which employees receive annual and/or
performance
bonuses. [The employer] unfairly and unlawfully discriminated and/or
employ [
sic
] discriminatory employment practices against the
applicant employees on one or more of the prohibited listed grounds,
especially
on the grounds of nepotism, alternatively arbitrary
grounds.”
[4]
Conciliation was unsuccessful. The employees, now represented by
Solidarity, referred the dispute to arbitration. They described
the
issue in dispute as follows:
“
Respondent
[the employer] committed an unfair labour practice relating to
benefits. Respondent arbitrarily and unfairly decided
not to award
the applicants performance bonuses.”
[5]
At the arbitration, the company raised a point
in limine
that
the CCMA did not have jurisdiction. Its main argument was that the
employees had referred an unfair discrimination dispute
and, failing
conciliation, it had to be referred to the Labour Court for
adjudication. The arbitrator held that the real dispute
was about an
unfair labour practice and that the employees had abandoned any
reliance on an allegation of discrimination. He held
that the CCMA
did have jurisdiction.
[6]
The
arbitrator then dealt with the company’s argument that the
awarding of a bonus was not a ‘benefit’ and could
not be
arbitrated as an unfair labour practice dispute. He referred to
IMATU
obo Verster v Umhlatuze Municipality
[1]
and ruled that the discretionary bonus was an advantage granted at
the employer’s discretion, and thus a ‘benefit’,
referring to the following
dictum
:
“
The
more plausible interpretation is that the term ‘benefits’
was intended to refer to advantages conferred on employees
which did
not originate from contractual or statutory entitlements, but which
have been granted at the employer’s discretion.”
[7]
Turning to the merits, the arbitrator summarised the evidence of the
five employees, Messrs Mogamat Salie; Gilmee Adams; Abdoeragmaan
Frantz; Omarsharif Frantz and Yunus Johnson. He also considered the
evidence of the two witnesses called by the company, Mr Rushdie
Solomon (the team leader in charge of the slaughterers); and Mr Chris
Esterhuysen (the processing manager to whom Solomon reported).
[8]
The arbitrator considered the process envisaged by the company’s
“talent management toolkit” setting out its
performance
management system. He came to the conclusion that the process
envisaged by this document was not followed in the case
of these five
employees.
[9]
The arbitrator came to the following conclusion:
“
I’m
satisfied that the process conducted by the respondent [i.e. the
company] leading to the applicants [the employees] not
receiving a
performance bonus was seriously flawed and amounted to unfair conduct
by the employer relating to the provision of
benefits to the
employees. In other words, the respondent has committed an unfair
labour practice.
I
note that I have only dealt with the process followed by the
respondent. I am in no position to say whether the ratings given
to
the applicants were correct or not, and if incorrect, what the
correct writing should have been. I’m therefore unable
to say
whether the applicants should have received a bonus if the process
had been correctly followed.
I
am entitled to award compensation to the applicants for the
commission of the unfair labour practice, and I am of the opinion
that compensation in the sum of one month’s pay would be
appropriate.”
[10]
The arbitrator ordered the company to pay each of the employees one
month’s wages, subject to standard PAYE deductions.
Evaluation
/ Analysis
[11]
The applicant firstly takes issue with the commissioner’s
finding on jurisdiction. Alternatively, it argued that the
commissioner misconceived the nature of the enquiry; and that he
reached an unreasonable conclusion
Jurisdiction
[12]
The test to
consider whether the ruling on jurisdiction is reviewable is simply
whether the arbitrator was right or wrong.
[2]
The reasonableness test in
Sidumo
[3]
does not apply.
[13]
It is so,
as Mr
Kirby-Hirst
was at pains to stress, that the employees referred to a
“discriminatory employment practice” in their initial
referral
to conciliation. But, at that stage ready, they referred to
their dispute as an unfair labour practice dispute. And when the
dispute
remains unresolved and they referred it to arbitration –
this time with the assistance of their trade union – they made
it clear that the dispute was that of an alleged unfair labour
practice relating to the provision of benefits as envisaged by
s186(2)(a) of the LRA.
[4]
[14]
The
arbitrator quite correctly referred to the decision of the Labour
Appeal Court in
NUMSA
v Driveline Technologies (Pty) Ltd
[5]
to say
the parties are not bound by the manner in which the conciliated
Commissioner characterised the dispute on the certificate
of outcome.
He also followed the authority of this court in
Bombardier
[6]
that a certificate of outcome has no bearing on jurisdiction. That
conclusion cannot be faulted.
‘
Benefit’
[15]
The
arbitrator’s ruling that the discretionary ‘bonus could
be included under the term ‘benefit’ in s 186(2)(a)
is
also not open to review. The approach in
Umhlatuze
Municipality
,
to which he referred, has now been endorsed by the LAC in
Apollo
Tyres:
[7]
“
I
also agree, with qualification, with the Labour Court’s
conclusion that there are at least two instances of employer conduct
relating to the provision of benefits that may be subjected to
scrutiny by the CCMA under its unfair labour practice jurisdiction.
The first is where the employer fails to comply with a contractual
obligation that it has towards an employee. The second is where
the
employer exercises a discretion that it enjoys under the contractual
terms of the scheme conferring the benefit.”
…
“
In
my judgment ‘benefit’ in s 186(2)(a) of the Act means
existing advantages or privileges to which an employee is entitled
as
a right or granted in terms of a policy or practice subject to the
employer’s discretion.”
[16]
On this aspect, too, the arbitrator correctly found that the CCMA had
jurisdiction to arbitrate the unfair labour practice
dispute.
Merits
[17]
The sole ground of review raised on the merits is that:
“
The
arbitrator has overlooked the evidence of Esterhuysen who testified
that he effectively confirms consistency and objectivity
of the
process and had been satisfied that the answers under the “How”
section had been consistently dealt with. Furthermore
that everyone
in the company was subject to the appraisal system which incorporated
a subjective element by the individual supervisors
which is a
discretionary part of the process which, by its very nature, cannot
be challenged most certainly at the forum chosen
by the [employees]”,
i.e. the CCMA.
[18]
In his oral submissions, Mr
Kirby-Hirst
elaborated on this
ground by arguing that the employees had complained about the result,
not the process; yet the arbitrator’s
finding was based on the
process.
[19]
There are two answers to this submission. Firstly, as Mr
Van der
Hoven
pointed out, the unfair process led to an unfair result. As
the company’s witness, Solomon, conceded: “With more
insight
and closer working with the slaughterers, I believe there
would be a better outcome”. And secondly, the arbitrator did
consider
Esterhuysen’s evidence. He noted that Esterhuysen had
agreed that the ratings in the “how” section of the
appraisal
was subjective. Esterhuysen stated that the elements rated
were measurable, but he did not explain how this was to be done. The
arbitrator found this subjective process to be unfair. Whether this
Court agrees or not, is neither here nor there. It is not a
conclusion that is so unreasonable that no other arbitrator could
have come to the same conclusion.
[20]
In short,
the arbitrator considered the principal issue concerning an unfair
labour practice relating to benefits before him; he
evaluated the
evidence; and he came to a conclusion that was reasonable.
[8]
Having found that the employer had committed an unfair labour
practice, he decided to award each of the employees compensation
equivalent to one month’s wages. That was within his discretion
and is not so unreasonable that no other arbitrator could
have made
the same award. The award is not open to review, as opposed to
appeal.
Conclusion
[21]
The arbitrator correctly found that the CCMA had jurisdiction to hear
the unfair labour practice dispute. Having heard and
evaluated the
evidence, he came to the conclusion that the employer had committed
an unfair labour practice. He ordered the employer
to pay the
employees in an amount that fell within his powers. The award is not
so unreasonable that no other arbitrator could
have made it.
[22]
With regard to costs, I take into account that the employees are
still employed by the company; and that they were ably represented
by
their trade union, thus obviating the need for legal fees. In law and
fairness, a costs order is not appropriate.
Order
The
application for review is dismissed.
_______________________
Steenkamp
J
APPEARANCES
APPLICANT:
G
Kirby-Hirst of MacGregor Erasmus (attorney).
THIRD
RESPONDENT:
H
van der Hoven of Solidarity
(trade union official).
[1]
[2011]
9 BLLR 882
(LC) para 30.
[2]
SARPA v
SA Rugby (Pty) Ltd
[2008]
29 BLLR 845
(LAC) paras 39-41;
South
African Post Office v CCMA
[2011]
11 BLLR 1183 (LC).
[3]
Sidumo
v Rustenburg Platinum Mines Ltd
(2007)
28
ILJ
2405 (CC).
[4]
Labour
Relations Act 66 of 1995
.
[5]
[2000]
1 BLLR 20 (LAC).
[6]
Bombardier
Transportation (Pty) Ltd v Mtiya N.O.
[2010]
8 BLLR 840
(LC). See also
Mickelet
v Tray International (Pty) Ltd
(2012)
33 ILJ 661 (LC) para 19 and
BMW
SA (Pty) Ltd v NUMSA
(2012)
33 ILJ 140 (LAC) para [5].
[7]
Apollo
Tyres South Africa (Pty) Ltd v CCMA
[2013]
5 BLLR 434
(LAC); (2013) 34
ILJ
1120 (LAC) para [46].
[8]
Cf
Gold
Fields Mining SA (Pty) Ltd (Kloof Gold Mines) v CCMA
[2007] ZALC 66
;
[2014]
1 BLLR 20
(LAC);
Herholdt
v Nedbank Ltd
(2013)
34
ILJ
2795 (SCA).