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[2015] ZALCPE 57
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Keypak (Pty) Ltd v Potgieter NO and Others (P550/2012) [2015] ZALCPE 57 (18 September 2015)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, PORT ELIZABETH
JUDGMENT
Not
Reportable
Case
no: P 550/2012
In
the matter between
KEYPAK
(PTY) LTD
Applicant
and
POTGIETER,
T N.O (cited in his capacity as
Commissioner
of the Commission for Conciliation,
Mediation
and Arbitration)
First Respondent
THE
COMMISSION FOR CONCILIATION, MEDIATION
AND
ARBITRATION
Second Respondent
HEYNSEN,
JEROME
Third Respondent
Heard:
9 October 2014
Delivered:
18 September 2015
Summary:
Having made the finding that the third respondent had failed t meet
the performance standard set by the
applicant the commissioner
rendered his award reviewable by finding the third respondent’s
dismissal for poor work performance
substantively unfair.
JUDGMENT
LALLIE
J
[1]
This is an application to review and set aside an arbitration award
of the first respondent. It is opposed by the third respondent.
This
application was filed outside the six weeks’ period prescribed
in section 145 (1) of the Labour Relations Act 66 of
1995 (“the
LRA”) and the applicant applied for condonation of the
lateness. The condonation application is unopposed.
I have considered
it and decided to grant it because the extent of its lateness is not
excessive and the explanation proffered
by the applicant is
reasonable.
[2]
The third respondent was employed by the applicant as a qualified
fitter and turner from 7 November 2011 subject to a three
months’
probation. He did not meet the applicant’s performance standard
and the parties agreed to extend his probation
to 30 March 2012.
However, on 7 March 2012, after the third respondent had yet again
failed to identify a fault from a machine,
the applicant gave him a
week’s notice that his services would be terminated. His last
working day was 14 March 2012. Aggrieved
by his dismissal, the third
respondent referred an unfair dismissal dispute to the second
respondent who I will refer to in this
judgement is the CCMA. It was
arbitrated by the first respondent who I will refer to in this
judgement as the commissioner. The
commissioner issued an award in
which he found the third respondent’s dismissal procedurally
and substantively unfair and
ordered the applicant to pay him
compensation in the amount of R72 000.00 which is equivalent to
remuneration he would have earned
over a period of six months. In
this application, the applicant seeks an order reviewing and setting
aside the arbitration award.
[3]
Giving reasons for his decision, the commissioner noted that the
third respondent did not give evidence. He took into account
that in
the agreement extending the third respondent’s probation the
parties agreed as follows:
‘
1.
The employee shall receive any further training, guidance, support,
and instruction
as may be necessary to allow
him the opportunity to meet the required standards. 2. The employee
will be evaluated on a weekly
basis, on every Monday. 3 .Should the
employee not perform according to the standard set, the company
reserves the right to terminate
the employee’s service at the
end of the extended probation period’.
[4]
The commissioner found the third respondent’s dismissal
procedurally unfair based on the applicant’s concession
that
the applicant extended no formal invitation for the third respondent
to make representations before the decision to dismiss
him was taken.
He expressed the view that the applicant could set standards which it
could expect the third respondent to comply
with. The commissioner
had doubts about the third respondent’s ability and willingness
to comply with the standard set by
the applicant. He found no basis
to conclude that there was no substance in deciding that the third
respondent performed poorly.
[5]
The commissioner expressed the view that the third respondent could
expect the applicant to give him training which it undertook
to
provide in the contract extending his probation. He found it common
cause that the training was not provided. The commissioner
observed
that notwithstanding the third respondent’s poor performance,
he had to decide whether the applicant acted fairly
by dismissing
him. He rejected the applicant’s argument that the third
respondent did not need training on the machines he
was required to
service as it was inconsistent with the agreement to extend his
probation which provided that the third respondent
“shall
receive” further training to allow him meet the performance
standard. The commissioner found the applicant’s
failure to
comply with the terms of the agreement to extend the third
respondent’s probation inconsistent with his poor performance
and the sanction of dismissal inappropriate. He concluded that the
third respondent’s dismissal was both substantively and
procedurally unfair and ordered the applicant to pay him compensation
equivalent to remuneration he would have earned over a period
of six
months.
[6]
The applicant submitted that the award stands to be reviewed and set
aside on the grounds that it is unreasonable because having
found
that the third respondent had failed to meet the performance
standard, the commissioner had no basis to find his dismissal
substantively unfair. The commissioner unreasonably found the third
respondent’s dismissal substantively unfair because the
applicant failed to give him training as on the uncontested evidence
tendered at arbitration, the third respondent did not need
training.
He was employed as a qualified and experienced fitter and turner. The
commissioner misconstrued the agreement extending
the third
respondent’s probation in finding that it provided that the
applicant “shall receive” training. His
finding that
failure to provide the promised training rendered the dismissal
substantively unfair has no basis. A further ground
the applicant
sought to rely on was the commissioner’s failure to apply the
guidelines in item 9 of schedule 8 to the Labour
Relations Act 66 of
1995 (the LRA) in determining the fairness of the dismissal. The
applicant submitted that the commissioner
failed to apply his mind
properly and to have proper consideration of the facts and the law
and exceeded his powers when determining
the issue of relief.
[7]
Opposing the application, the third respondent denied that the award
is unreasonable. He further denied that the commissioner
misconstrued
the agreement extending his probation. He submitted that had the
applicant followed the guidelines in schedule 8 to
the LRA, he would
have completed his probation successfully. The third respondent
denied having failed to meet the performance
standard set by the
applicant. The better part of his affidavit consists of his effort to
disprove evidence tendered at the arbitration
to the effect that he
failed to meet the set performance standard.
[8]
For this Court to review and set aside an arbitration award, it must
constitute a decision which a reasonable decision maker
could not
reach. In this regard see
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
[1]
.
In
Herholdt
v Nedbank Ltd and Others
[2]
it was held that when an arbitrator conducts the enquiry into the
fairness of a dismissal in the wrong manner, his or her arbitration
award becomes reviewable. Guidelines for the determination of the
fairness of the dismissal of employees while serving probation
are
contained in item 8 of schedule 8 to the LRA. They provide that the
purpose of probation is to give the employer an opportunity
to
evaluate the employee’s performance before confirming his or
her appointment. They further provide that an employee may
be
dismissed for poor work performance during or at the end of the
probation after a fair procedure has been followed. The importance
of
distinguishing between the substantive and procedural fairness of the
dismissal of an employee on probation is implicit
in item 8
which provides a procedure to be followed when dismissing an employee
on probation for poor work performance. Item 8(1)
(j) of schedule 8
to the LRA provides for the substantive fairness of those employees
as follows:
‘
Any person
making a decision about the fairness of a dismissal of an employee
for poor work performance during or on expiry of the
probationary
period ought to accept reasons for the dismissal that may be less
compelling than would be the case in dismissals
effected after the
completion of the probationary period.’
[9]
For an arbitrator to reach the conclusion that dismissal for poor
work performance before the completion of the probationary
period is
substantively fair, the arbitrator needs to be satisfied that
employee failed to meet the performance standard set by
the employer.
The only evidence before the commissioner which he correctly accepted
was to the effect that the third respondent
failed to meet the set
performance standard. He made a finding that the respondent’s
work performance was poor. The finding
is inconsistent with his
conclusion that the third respondent’s dismissal was
substantively unfair. A decision that is disconnected
with evidence
before an arbitrator renders an award unreasonable. See
Herholdt
(supra
).
[10]
The applicant conceded having failed to follow a fair procedure when
dismissing the third respondent by not affording him an
opportunity
to make representations before taking the decision to dismiss him.
The applicant and the third respondent entered into
an agreement to
extend the probation period. Clause 2 of the agreement provides as
follows:
‘
Therefore,
it is recorded and agreed that the probation period of the Employee
will be extended for a further until 30 March 2012
for the purpose of
evaluating the Employee’s ability to fulfil the necessary
functions of his work. This extended period
will be subject to the
following conditions:
1.
The
Employee shall receive any further training, guidance, support, and
instruction as may be necessary to allow him the opportunity
to meet
the required standards.
2.
The
Employee will be evaluated on a weekly basis, on every Monday.
3.
Should
the employee not perform according to the standards set, the company
reserves the right to terminate the employee’s
services at the
end of the extended probation period’.
[11]
The commissioner rejected the applicant’s argument that the
third respondent did not need training as it was inconsistent
with
the agreement to extend his probation. He expressed the view that
they would not have agreed that he “shall receive”
further training to allow him improve and meet the required standards
if the third respondent did not need training on the machines
he was
to service. Although the commissioner did not cite the provisions of
the contract extending the probation
verbatim
, his conclusion
that it promised the third respondent training which he needed
judging by the quality of his performance, cannot
be faulted.
However, the question that needs to be answered is whether the
applicant’s failure to provide training affected
the
substantive or procedural fairness of the dismissal. Failure to
provide training in the context of the agreement extending
the
probation period affected the procedural fairness of the third
respondent’s dismissal. The evidence before the commissioner
was that the third respondent’s poor work performance was
unabated. The commissioner even expressed his doubts about the
third
respondent’s ability and willingness to comply with the set
standard. He overlooked provisions of item 8 (1) (j) of
schedule 8 to
the LRA in taking the decision on the fairness of the third
respondent’s dismissal for poor work performance
that he ought
to have accepted reasons less compelling than would have been the
case had the dismissal been effected after the
completion of the
probationary period. The commissioner’s decision that the
sanction of dismissal was inappropriate and the
third respondent’s
dismissal substantively unfair is unreasonable as it is not based on
the evidence before him.
[12]
As the third respondent’s dismissal was only procedurally
unfair the amount of compensation granted by the commissioner
is
discordant with the unfairness of the dismissal. The third respondent
worked for the applicant for about four months. His poor
work
performance manifested itself almost immediately after his
appointment. Compensation equivalent to remuneration the third
respondent would have earned over a period of two months is just and
equitable in all the circumstances of this matter.
[13]
In the premises, the following order is made:
13.1 Condonation of
the late filing of the review application is granted.
13.2 The
arbitration award issued by the first respondent under case number
ECPE 1210 – 12 and dated 26 September 2012
is reviewed and set
aside and substituted with the following:
13.3 The third
respondent’s dismissal was substantively fair but procedurally
unfair.
13.4
The applicant is ordered to pay the third respondent compensation in
the amount of R26 000.00 which is equivalent to
remuneration he would
have earned over a period of two months.
____________________________________
Lallie J
Judge of the Labour Court
of South Africa
APPEARENCES
For the Applicant:
Mr Snyman of Snyman Attorneys
For the Third
Respondent: Advocate Thys
Instructed
by Rushmere Noach Inc
[1]
[2007] 12 BLLR 1097 (CC)
[2]
[2013] 11 BLLR 1074
(SCA)