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[2016] ZALCJHB 73
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Mchuba v Passenger Rail Agency of South Africa (J392/14) [2016] ZALCJHB 73; [2016] 6 BLLR 612 (LC); (2016) 37 (ILJ) 1923 (LC) (2 March 2016)
REPUBLIC
OF SOUTH AFRICA
IN THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case no: J 392/14
In
the matter between
KHULULEKILE LAWRENCE
MCHUBA
Applicant
and
PASSENGER RAIL AGENCY
OF SOUTH AFRICA
Respondent
Heard:
16 June 2015
Delivered:
4 February 2016
Summary:
When an employer and employee have agreed that a pre-dismissal
arbitration be held into allegations
of misconduct against the
employee as envisaged in
section 188A
of the
Labour Relations Act 66
of 1995
, the employer may not withdraw unilaterally from the
agreement.
JUDGMENT
LALLIE,
J
[1] The applicant
approaches this Court for an order in the following terms:
‘
1.
Declaring that the termination of the contract of employment of the
Applicant by the
Respondent constituted a breach of its contractual
obligation to address allegations of misconduct against the Applicant
by way
of a pre-dismissal arbitration in terms of
section 188A
of
the
Labour Relations Act 66 of 1995
;
2.
Ordering that the termination of the contract of employment of the
Applicant
by the Respondent is set aside.
3.
Ordering that the Applicant is to be reinstated in his employment
with the Respondent
with retrospective effect from December 2013
without loss of remuneration or benefits.
4.
Ordering that in the event that the Respondent elects to pursue an
enquiry into
the alleged misconduct by the Applicant, it is directed
to do so by way of a pre-dismissal arbitration as contemplated in
section 188A
of the
Labour Relations Act 66 of 1995
”.
[2] The application is
opposed by the respondent. The facts of this matter are that the
applicant was employed by the respondent’s
predecessor, the
South African Rail Commuter Corporation Ltd (“SARCC”) as
the Head: Procurement & Tender Administration
on 29 April 2005.
In January 2011, the applicant’s contract of employment was
transferred to the respondent on the same terms
and conditions. The
respondent’s disciplinary code and procedure was incorporated
into the applicant’s contract of
employment. The following
clauses of the disciplinary code are relevant to the application at
hand:
‘
5.3.1
Where the contract of employment does not clearly state, for the
purpose of disciplining employees for allegations
of misconduct or
incapacity SARCC and Employee/Representative a recognised Trade Union
for which the alleged offender is a fully
paid-up member will be
entitled, to decide whether or not to hold any internal disciplinary
enquiry, or to proceed instead via
the pre-dismissal arbitration
procedures contemplated in
Section 188A
of the
Labour Relations Act.
5.3.2 In
the event
that SARCC elects to proceed via the pre-dismissal arbitration
procedure in the circumstances outlined above SARCC will
bear the
cost of an arbitrator from Tokiso Dispute settlement Services or any
other Labour Dispute Settlement Services appointed
by SARCC. The
arbitration would be final and binding on both the employee and
SARCC.’
[3] On 16 March 2011, the
applicant was suspended from duty pending investigation into
allegations of misconduct against him. On
1 July 2013, the respondent
issued the applicant with a notice to attend a pre-dismissal
arbitration hearing on 10 July 2013. In
the notice, the respondent
informed the applicant
inter alia
, that it had elected to
refer the matter to a pre-dismissal arbitration hearing in terms
clause 5.3 of its disciplinary code. After
correspondence was
exchanged between the legal representatives of the parties and Mr
Masango (“Masango”) of Tokiso
Dispute Settlement Services
(“Tokiso”), the pre-dismissal arbitration was scheduled
for 28 October 2013. At the commencement
of the pre-dismissal
arbitration, the applicant’s legal representative objected to
the pre-dismissal arbitration being held
under the auspices of Tokiso
as it was not an accredited agency and therefore lacked the necessary
jurisdiction. Mr Williams (“Williams”),
the Tokiso
arbitrator who conducted the pre-dismissal arbitration issued the
following ruling in response to the objection:
‘
I hereby
order that:
3.1
The parties must verify with the CCMA if Tokiso is accredited;
3.2
In the event that the CCMA confirms that accreditation in writing,
the following must be
done:
3.2.1 The request
for a disciplinary arbitration in terms of
section 188A
must be in
the prescribed form;
3.2.2 The employee
may consent to the
section 188A
pre-dismissal arbitration in writing;
3.2.3 The employer
must pay the prescribed fee; and
3.3
In the event CCMA informs the parties in writing that Tokiso is not
accredited, the employer
must approach the CCMA or any accredited
agency to conduct the
section 188A
process”.
[4] Tokiso was accredited
to conduct conciliation and arbitration (including pre-dismissal
arbitrations) for the period 01 December
2013 to 30 November 2014 in
Government Gazette number 36963 of 23 October 2013. At the time the
parties appeared before Williams,
Tokiso was not an accredited agency
and therefore lacked jurisdiction to conduct the pre-dismissal
arbitration as envisaged in
section 188A of the Labour Relations Act
66 of 1995 (the section 188A arbitration). On 4 December 2013, the
applicant received
a letter from the respondent in which he was
informed that the respondent had exercised its discretion to conduct
a disciplinary
hearing against him through written representations.
He was afforded an opportunity to make his full written
representation in
answer to the same allegations of misconduct which
appeared in his pre-dismissal arbitration notice. He was invited to
give written
reasons by 11 December 2013, why disciplinary action
should not be taken against him for the acts of misconduct referred
to in
the invitation. The applicant refused to be subjected to a
disciplinary enquiry but insisted that the pre-dismissal arbitration
be pursued under the auspices of the CCMA or any accredited agency.
On 18 December 2013, the applicant received a letter from the
respondent dated 13 December 2013, informing him that his employment
contract with the respondent was being terminated with immediate
effect.
[5] The applicant
submitted that the respondent breached the contract of employment by
changing its decision to conduct a pre-dismissal
arbitration into the
allegations of misconduct against him and decided to follow a
disciplinary process based on representation
and terminated the
contract of employment pursuant to such process. The respondent
denied having breached the contract of employment.
It submitted that
the applicant sought incompetent prayers for which there is no basis
either in contract or statute. It further
denied deviating from its
employee relations policy and submitted that it had no contractual
obligation to pursue a pre-dismissal
arbitration. In terms of its
policy, formal disciplinary proceedings do not have to be invoked
whenever a standard of conduct is
breached. The respondent expressed
the view that the applicant’s real dispute is the procedural
unfairness of his dismissal
which he should have challenged at the
CCMA not the Labour Court which lacks jurisdiction to adjudicate the
matter.
[6]
The respondent’s argument that this Court lacks jurisdiction to
adjudicate this matter is untenable. It is not supported
by the
decision in
Gcaba
v Minister of Safety & Security (Gcaba )
[1]
the respondent sought to rely on. In
Gcaba
(
supra
),
it was held that the court’s jurisdiction is determined by the
applicant’s pleadings. The applicant’s pleaded
case is
based on the beach of his contract of employment.
Section 77(3)
of
the
Basic Conditions of Employment Act 75 of 1997
, grants the Labour
Court jurisdiction over any matter concerning a contract of
employment. It is common cause that the right the
applicant seeks to
asset which is the determination of allegations of misconduct against
him by means of a pre-dismissal arbitration
is based on his contract
of employment. The respondent conceded that it initially chose the
option of dealing with the allegations
of misconduct against the
applicant by means of a pre-dismissal arbitration. This Court
therefore has the necessary jurisdiction
to adjudicate the matter at
hand.
[7] The respondent
admitted having initially elected to conduct the
section 188A
arbitration. It further submitted that instead of cooperating with
the process, the applicant requested unnecessary and irrelevant
documents, which he knew, were not in the respondent’s
possession. The respondent considered the decision to pursue the
pre-dismissal arbitration in light of the applicant’s attitude.
The respondent also submitted that its election to conduct
the
enquiry in an informal basis is provided for in clause 1.3 of its
disciplinary code. The respondent lastly submitted that it
was well
with its rights to conduct the disciplinary enquiry by way of written
representations.
[8] The applicant’s
case is based on the breach of his contract of employment by the
respondent. Clause 5.3 of the respondent’s
disciplinary code,
which forms part of the applicant’s contract of employment,
provides that for purposes of disciplining
employees for allegations
of misconduct, the respondent may hold either a disciplinary enquiry
or a
section 188A
arbitration. In the event of the respondent
electing to proceed
via
the dismissal arbitration procedure,
it will bear the costs of an arbitrator from Tokiso or any other
labour dispute settlement
services appointed by the respondent. It is
common cause that the respondent initially elected to proceed
via
the pre-dismissal arbitration procedure. The applicant submitted that
in circumstances where the respondent had elected to deal
with the
allegations of misconduct against him by way of a pre-dismissal
arbitration in terms of
section 188A
of the LRA, that would be the
route that would be followed to address the allegations of
misconduct. In this case, he submitted
that parties would be bound to
utilise such a process and to adhere to the its outcome. The
respondent denied that it had a contractual
obligation to pursue the
section 188A
pre-dismissal arbitration.
[9] The following portion
of
section 188A
of the LRA is apposite:
‘
(1)
An employer may, with the consent of the employee request a
council
,
an accredited agency or the Commission to conduct an arbitration into
allegations about the conduct or capacity of that employee.
(2)
The request must be in the prescribed form.
(3)
The
council
, accredited agency or the Commission must appoint
an arbitrator on receipt of-
(a)
payment by the employer of the prescribed fee; and
(b)
the employee’s written consent to the inquiry.
(4) (a)
An employee may only consent to a pre-dismissal
arbitration after the
employee has been advised of the allegation referred to in subsection
(1) and in respect of a specific arbitration.
(b)
Despite subparagraph (a), an employee earning more than the amount
determined by the Minister in terms of
section 6
(3) of the
Basic
Conditions of Employment Act
>, may consent to the holding of a
pre-dismissal arbitration in a contract of employment”.
[10] The applicant
submitted that he consented and agreed to the process taking the form
of a pre-dismissal arbitration in terms
of
section 188A
of the LRA in
his contract of employment which incorporates the respondent’s
disciplinary code, and by participating in the
process that ensued
pursuant to the notice to attend the pre-dismissal arbitration. The
respondent argued that the applicant did
not consent to the
pre-arbitration dismissal in his contract of employment. The
disciplinary code provides that the respondent
will deal with
misconduct either by holding a disciplinary enquiry or a
pre-dismissal arbitration. When the respondent took a decision
that a
pre-dismissal arbitration would be held into the allegations of
misconduct against the applicant, it had to comply with
the
provisions of
section 188A
of the LRA. In terms of
section 188A
(1)
of the LRA, the respondent needed the applicant’s consent when
requesting Tokiso to conduct the pre-dismissal arbitration.
At the
time the respondent requested Tokiso to conduct the pre-dismissal
arbitration, the applicant had not given his consent.
The
disciplinary code provides that the pre-dismissal arbitration was one
of the options open to the respondent in dealing with
misconduct.
Nowhere, in the disciplinary code or the contract of employment did
the applicant consent to the pre-dismissal arbitration.
He could only
consent to it after the respondent had informed him of its election.
[11] The applicant
submitted that he also consented to the pre-dismissal arbitration by
participating in the process that ensued
pursuant to the notice to
attend the pre-dismissal arbitration. Correspondence was exchanged
between the legal representatives
of the parties and Mr Masango
(Masango) of Tokiso to arrange a date for the pre-dismissal
arbitration. The applicant and the respondent
attended the
pre-dismissal arbitration. The pre-dismissal arbitration commenced.
An objection was raised on behalf of the respondent
to the effect
that Tokiso was not an accredited agency and therefore lacked
jurisdiction to conduct the pre-dismissal arbitration.
The arbitrator
appointed by Tokiso made a ruling that the parties should verify with
the CCMA whether Tokiso was accredited. If
it was, he required that
the request for the pre-dismissal arbitration be in the prescribed
form; the applicant could consent to
the pre-dismissal arbitration in
writing and the respondent was required to pay the prescribed fee. If
Tokiso was not accredited,
he directed the respondent to approach the
CCMA or any accredited agency to conduct the pre-dismissal
arbitration.
[12] In response to the
above consent by conduct pleaded by the applicant, the respondent
admitted having initially elected to hold
a pre-dismissal
arbitration. In addition, it pleaded that instead of cooperating with
the process, the applicant requested unnecessary
and irrelevant
documents, which he knew, were not in possession of the respondent.
In light of his attitude, the respondent reconsidered
its decision to
pursue the pre-dismissal arbitration and elected to conduct the
enquiry on an informal basis as provided for in
clause 1.3 of its
disciplinary code. The real reason the respondent reconsidered its
decision to pursue the pre-dismissal arbitration
was the applicant’s
attitude of not cooperating with the process but demanding
unnecessary, irrelevant and unavailable documents.
By implication,
had the applicant co-operated with the process and adopted an
attitude acceptable to the respondent, the respondent
would not have
reconsider its decision to pursue the pre-dismissal arbitration.
[13]
Both parties sought to rely on
SA
Transport & Allied Workers Union and Others v MSC Depots (Pty)
Ltd and Others
[2]
(
MSC
).
The respondent argued that the applicant’s reliance on the MSC
judgment is misplaced as there was no agreement between
the parties
and Tokiso to have the pre-dismissal arbitration held. Interpreting
section 188A
of the LRA, the court, in the
MSC
judgment, made the following observation: “In effect, in terms
of a tripartite agreement between the employee, the employer
and the
CCMA, the arbitrator steps into the shoes of the employer and assumes
the right considered a sacrosanct element of the
managerial
prerogative-the right to exercise discipline, including the right to
dismiss. The benefit for all is the elimination
of the duplication
that inevitably occurs when court-like in-house hearings inevitably
followed by an arbitration hearing conducted
on a
de
novo
basis”.
[3]
The respondent
argued that the applicant became aware that there was no contract as
contemplated in
section 188A
in the absence of his written consent
and that Tokiso was not accredited agency at the time that the
purported contract was concluded.
In an attempt to cure the fatal
defect, the applicant advised the respondent in a letter dated 12
March 2014 that Tokiso became
an accredited agency on 1 December 2013
and that he did consent to the pre-dismissal arbitration.
Notwithstanding the attempt,
the defect was not cure as it was fatal.
It further argued that in the absence of the tripartite agreement,
there was no obligation
on the respondent to be party to the
pre-dismissal arbitration.
[14] The applicant argued
that he consented to the pre-dismissal arbitration and there was
therefore an agreement that the process
be utilised. The
pre-dismissal arbitration was initialled by agreement between the
parties and Tokiso was seized with the matter.
The respondent could
not unilaterally decide to abandon the pre-dismissal arbitration and
require the applicant to submit written
submissions with regard to
the allegations of misconduct against him and take a decision to
dismiss him. He sought to rely on the
following dictum of MSC
(
supra)
:
‘
[15]
It seems to me from the wording of
s 188A
that once an employer and
an employee consent to refer the determination of allegations of
misconduct or incapacity to an arbitration
hearing in terms of
s
188A
, and once the CCMA accedes to the request, the employer
effectively agrees to bypass the application of its internal
disciplinary
procedures and to accelerate the disciplinary process to
the stage of the arbitration hearing ordinarily applicable in a
post-dismissal
phase. That being so, and since the consent of the
affected employee and the CCMA is necessary to achieve that result it
is not
open to the employer to abandon the process on a unilateral
basis’.
[15] The MSC decision is
based on different facts but its interpretation of
section 188A
is
correct. The respondent approached Tokiso for a pre-dismissal
arbitration to be held into allegations of misconduct against
the
applicant in terms of its disciplinary code, which was incorporated
into the applicant’s contract of employment.
Section 188A
should be given a purposive interpretation. It requires the
employee’s consent to the pre-dismissal arbitration to be in
writing. The purpose of requiring an employee’s written consent
is to ensure that an employee participate in the pre-dismissal
arbitration knowingly as the process may prejudice the employee. An
employee who consents to the pre-dismissal arbitration forfeits
the
right to have the allegations of misconduct against him or her
determined in terms of the employer’s disciplinary code.
The
employee’s advantage when allegations of dismissal are dealt
with in terms of the disciplinary code is that the employer
may not
challenge the chairperson’s decision in favour of the employee
while it may challenge the decision of the arbitrator
who conducts
the pre-dismissal arbitration. The conduct of the parties and Tokiso
confirms their agreement to the pre-dismissal
arbitration. The
respondent approached Tokiso to have the process held and the legal
representatives of both parties and Masango,
of Tokiso arranged a
date for the pre-dismissal arbitration. Both parties appeared on the
date before an arbitrator acting under
the auspices of Tokiso. Both
parties were ready to proceed with the pre-dismissal arbitration but
the respondent raised the issue
of Tokiso’s accreditation
because without the accreditation any decision reached by Tokiso
would be a nullity owing to lack
of jurisdiction. The respondent did
not raise the issue of the absence of the applicant’s written
consent. In the circumstances,
the applicant consented to the
pre-dismissal arbitration albeit by conduct. A tripartite agreement
between the parties and Tokiso
for the pre-dismissal arbitration to
be held existed.
[16] The respondent may
not rely on Tokiso’s non-accreditation as its disciplinary code
allowed it to approach any other labour
dispute settlement services.
On 28 October 2013, Tokiso issued the ruling that the parties head to
verify whether Tokiso was accredited
and there was a duty on the
respondent to comply with the ruling promptly. The respondent’s
disciplinary code provides that
the respondent may appoint Tokiso or
any other labour dispute settlement services. When Tokiso’s
jurisdiction was challenged,
there was a duty on the respondent to
appoint an alternative body to conduct the
section 188A
arbitration.
In addition, the respondent disclosed the real reason for abandoning
the pre-dismissal arbitration. It had nothing
to do with the absence
of the applicant’s written consent in to the pre-dismissal
arbitration. The respondent raises the
defence of the applicant’s
lack of written consent as an opportunistic attempt to justify its
unacceptable conduct. The reality
is that it was punishing the
applicant for requesting documents he needed to prepare his defence
because it was of the view that
they were irrelevant and unnecessary.
By referring the matter to pre-dismissal arbitration, the respondent
lost the right to take
decisions on the relevance of documents the
applicant requested as it had handed it over to Tokiso. When the
tripartite agreement
was reached, the respondent had no residual
power to take any step against the applicant including dismissing him
in terms of its
disciplinary code. The respondent had no right to
abandon the pre-dismissal arbitration unilaterally. By withdrawing
from the pre-dismissal
arbitration agreement having elected to deal
with the allegations of misconduct against the applicant by means of
a pre-dismissal
arbitration, the applicant acted in breach of the
applicant’s contract of employment. The applicant is therefore
entitled
to the relief he is seeking.
[17] I could find no
reason in both law and fairness for costs not to follow the result.
[18] In the premises, the
following order is made:
18.1
The termination of the applicant’s contract of employment by
the respondent constituted a breach of
the respondent’s
contractual obligation to address allegations of misconduct against
the applicant by way of a pre-dismissal
arbitration in terms of
section 188A
of the
Labour Relations Act 66 of 1995
.
18.2
The termination of the applicant’s contract of employment by
the respondent is set aside.
18.3
The applicant is reinstated in his employment with the respondent
with retrospective effect from December
2013, without loss of
remuneration and benefits.
18.4 In
the event that the respondent elects to pursue an enquiry into the
alleged misconduct by the applicant,
it is directed to conduct a
pre-dismissal arbitration as contemplated in
section 188A
of the
Labour Relations Act 66 of 1995.
18.5
The respondent is ordered to pay the costs of this application.
________________
Lallie J
Judge
of the Labour Court of South Africa
APPEARANCES
:
For the Applicant:
Advocate Mosam
Instructed by
Mchunu Attorneys
For the Respondent:
Advocate Seegals
Instructed
by
Makhubela
Attorneys
[1]
[2009] 12 BLLR
1145 (CC).
[2]
(2013) 34 ILJ 706
(LC).
[3]
At para 11.