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[2016] ZALCCT 22
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Max Models CC v Commission for Conciliation Mediation and Arbitration and Others (C985/2014) [2016] ZALCCT 22 (2 February 2016)
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Not
reportable
case
no: C985/2014
In
the matter between:
MAX
MODELS
CC Applicant
And
COMMISSION
FOR CONCILIATION MEDIATION AND
ARBITRATION First
Respondent
JOHN
M BROWN
N.O. Second
Respondent
STEPHANIE
PETERS Third
Respondent
Heard:
21 May 2015
Delivered:
2 February 2016
Summary:
Review application. The applicant contends the award in which an
employee’s dismissal for
poor work performance was found to be
both procedurally and substantively unfair is reviewable. Applicant
contends the commissioner
incorrectly applied the principles relating
to the employer’s “right to right a wrong” and that
no compensation
ought to have been awarded.
JUDGMENT
RALEHOKO
AJ
Introduction
[1]
The third respondent (“the employee”) referred an unfair
dismissal dispute to the CCMA after she was called to a
meeting where
she was informed that her performance was below the expected standard
and therefore she should leave the premises
immediately. The matter
could not be resolved during conciliation. Two days after the
conciliation meeting, the applicant, through
its legal
representatives addressed a letter to the employee instructing her to
report for duty as she was still under the notice
period and that she
had been re-instated. She rejected the offer of re-instatement.
[2]
In subsequent arbitration proceedings, the second respondent (the
commissioner) found the employee’s dismissal to have
been both
procedurally and substantively unfair,
inter alia
, because the
offer of re-instatement was not genuine. She was awarded 3 months
compensation.
[3]
In these review proceedings the applicant takes issue with the award
on the grounds,
inter alia
, that the commissioner misapplied
the law as regards the principle of “the right to right a
wrong”. The applicant also
takes issue with the award of 3
months compensation. The employee opposes the review application.
Background
facts
[4]
In the arbitration proceedings, the applicant did not call any
witnesses in support of its case. The employee testified on her
own
behalf.
[5]
Applicant specialises in the development and management of models and
the employee was employed as a model booker. The employee’s
main responsibility was to secure bookings for models with both
foreign and international clients.
[6]
The employee commenced employment with the applicant in January 2013.
When she joined the applicant, the employee had no experience
in
booking models. She received on the job training. It was in dispute
whether the training received was adequate.
[7]
The employee’s probation period was extended for 3 months but
this was not unusual at the applicant.
[8] The applicant
shutdown for the festive season from 21 December 2013 to 5 January
2014. Before the shutdown, the employee received
an R8000 bonus as
well as a Christmas card from the managing member of the applicant,
Lynn Maxwell (Lynn), stating “
Thank you for the wonderful
year, you have really become part of the team
.
Well done. Lots
of Love Lynn”.
[9]
The employee returned to work after the shutdown and worked without
incident. She went on annual leave from 24 June 2014 and
returned to
work on 14 July 2014.
[10]
A week after her return from leave and on 23 July 2014, Lynn
confronted the employee and accused her of
inter alia
poor
work performance, spending a lot of time in the kitchen and on the
computer attending to non-work related stuff. Of the 3
employees who
were responsible for booking models, the employee had generated R604
091.73 of the applicant’s 2013/2014 turnover
of R7 569 630.05,
which was the least amount. Lynn informed the employee that it was
not working and that she should rather leave
immediately and to
communicate her decision the following morning on whether she would
resign or go the CCMA route. The employee
left the premises soon
after that encounter with Lynn.
[11]
Later that day, the employee received an e-mail from Lynn confirming
the discussion held earlier that day that her employment
was being
terminated due to incapacity because “
l do not believe that
your performance will change and l believe 18 months has been more
than enough time to fulfil your employment
obligations
”.
She was informed that she would be paid
in lieu
of notice.
[12]
The employee referred an unfair dismissal dispute to the CCMA on 28
July 2014 and the matter was unsuccessfully conciliated
on 15 August
2014.
[13]
On 18 August 2014 the applicant’s attorneys of record addressed
a letter to the employee instructing her to report for
duty as she
was still on notice. She was also informed that she had been
re-instated.
[14]
The employee’s legal representative responded on the same day
rejecting the offer of re-instatement.
[15]
During the arbitration proceedings and in response to the allegations
of poor work performance, the employee stated that she
was aware of
corporate but not individual targets
.
She testified about how
she invoiced for more and smaller jobs than her two colleagues. She
also testified that she filed e-mails
in clients’ folders which
might have led Lynn to believe that she sent fewer e-mails. She
denied spending a lot of time in
the kitchen making toast or that she
spent a lot of time on the computer attending to non work related
stuff.
[16]
She also explained her decision to reject the offer of re-instatement
which she did not regard as genuine.
[17]
A month after her dismissal, the employee found employment as an
Operations Manager in Durbanville, far from her home, at a
substantially reduced salary than what she earned at the applicant.
[18]
She was not paid her notice pay, which was due at the end of August
2014.
The
award
[19]
Procedural fairness was not in issue, the only issue being
substantive fairness.
[20]
The commissioner started the analysis of the evidence by pointing out
that the applicant bore the onus to prove that the dismissal
was
substantively fair but that inexplicably it led no sworn evidence.
[21]
The commissioner found the employee to have been
reliable, highly
credible,
open
and
frank
. He accepted the
employee’s evidence that she had no personal targets to meet
but rather corporate targets and that Lynn
had on about 5 occasions
encouraged all bookers to increase the financial value of their model
bookings but had not singled out
the employee in that discussion.
[22]
The commissioner further found that the employee had at no point been
confronted about her performance, that in fact she was
unaware of
what she was costing the applicant and that she had not been given a
chance to explain her perceived shortcomings. The
commissioner
attached significance to the christmas card that the employee
received in December 2013 and noted that this was despite
that in the
period immediately preceding that December, she had costed the
applicant.
[23]
The
commissioner further found that the applicant’s gross flouting
of the guidelines in the Code of Good Practice dealing
with
dismissals for incapacity impacted on the substantive fairness of the
dismissal.
[1]
[24]
On relief, the commissioner considered the submissions made on behalf
of the applicant, that the employee’s refusal to
accept the
offer of re-instatement disqualified her from receiving compensation.
The commissioner stated that the issue for determination
was whether
the offer of re-instatement was genuine and reasonable and found that
it was not, for the following reasons:
24.1.
the applicant did not offer re-instatement when the matter was
conciliated as had happened in the case authority that the
applicant
was relying on.
24.2.
there was no indication that the applicant accepted that it acted
unfairly or had wronged the employee.
24.3.
there was no indication that in making the offer to re-instate, the
applicant was not looking for an opportunity to simply
follow
procedures and ultimately dismiss the employee; and
24.4.
the offer of re-instatement smacked of bad faith.
[25]
As has already been stated above, the commissioner found the
dismissal to have been both substantively and procedurally unfair
and
awarded 3 months compensation.
Grounds
for review
[26]
The applicant submits that in general the commissioner committed
material errors of law and owing to those errors, he misconstrued
the
nature of the dispute and asked the wrong question, which deprived
the parties of a fair trial.
[27]
More specifically the applicant argues that in arriving at the
conclusions that the commissioner arrived at, he acted inconsistently
and contrary to his duties and obligations by, amongst others:
27.1.
disregarding the nature and extent of the inquiry and therefore
exceeding his powers.
27.2.
ignoring evidence,
inter alia,
that the employee had been
offered intensive training, that she had been spoken to about her
failure to perform at acceptable levels,
the loss suffered by the
applicant as a consequence of the employee’s performance and
that the employee was offered and rejected
re-instatement.
27.3.
accepting and relying on irrelevant evidence and reaching conclusions
that are not rationally connected to the evidence. It
is alleged that
the commissioner focused his inquiry almost exclusively on third
respondent’s version that the employment
relationship was
strained when there was no evidence to support this.
27.4.
erroneous interpretations of the issues and material errors of law
about the legal principles applicable to unconditional
offers of
re-instatement which are rejected and the effect on relief to be
granted.
27.5.
the failure to have regard to what would have been fair to both
parties.
[28]
The award is also attacked on the general ground that it is not
reasonable. I deal with this ground first.
Reasonableness
of the award
[29]
The test
applicable in reviews is by now well settled and both parties
referred to the relevant authorities in their heads of argument
as
well as in oral argument. The question is whether the decision
arrived at by a commissioner is one that no reasonable decision
maker
could have come to.
[2]
An award
falls to be set aside if the conclusion falls outside a range of what
is considered reasonable.
[30]
As has already been stated, the applicant conceded procedural
unfairness but sought to defend its decision to dismiss on
substantive
grounds.
[31]
The only evidence placed before the commissioner by the employee has
already been summarised above. The commissioner found
the employee to
be a reliable and credible witness who was frank during her
testimony.
[32]
The applicant elected not to lead evidence to explain its reasons for
dismissing the employee or its conduct. The commissioner
lamented the
applicant’s approach given that it bore the onus to prove that
the dismissal was for a fair reason. In argument
Mr Benade correctly
conceded that the applicant’s failure to tender evidence during
the arbitration proceedings creates difficulties.
[33]
Given the uncontroverted evidence of the employee as summarised
above, the commissioner’s finding that there was no fair
reason
to dismiss is without a doubt, one that falls within a band of what
is considered reasonable. The employee was unaware of
individual
targets and was oblivious to the fact that Maxwell had concerns about
her performance. At no point prior to 23 July
2014 was she confronted
about her performance as an individual. In fact in December 2013 she
had been given a bonus and her contribution
to the business was
acknowledged in a christmas card. In the 6 months preceding the
meeting of 23 July, the employee’s performance
had in fact
improved. There was no evidence that the employee had done anything
wrong.
[34]
There is therefore no merit to the applicant’s contention that
the award is unreasonable. I will nevertheless consider
the other
grounds of review raised.
The
“right to right a wrong”
[35]
After finding that the dismissal was substantively unfair and it
being common cause that the dismissal was procedurally unfair,
the
commissioner went on to determine whether the employee was entitled
to compensation for the unfair dismissal.
[36]
Applicant
submits that the employee was not entitled to compensation as she had
refused an unconditional offer of re-instatement.
In that regard the
applicant relies on the decisions of the Labour Appeal Court in
Kemp
t/a Centralmed v Rawlins
[3]
and that of the Supreme Court of Appeal reported as
Rawlins
v Kemp
[4]
.
These are the same case authorities that the applicant relied upon
during the arbitration proceedings and were considered by the
commissioner, as is evident from the award.
[37]
In these proceedings the applicant persists with its submission that
it should be open to an employer to remedy a procedurally
unfair
dismissal through a
bona fide
offer of re-instatement. The
applicant criticises the commissioner for (a) focusing his entire
investigation on whether the offer
to re-instate was genuine and
reasonable, (b) ignoring the concession made by the employee during
cross examination that the offer
was unconditional and (c) taking
into account the employee’s subjective views that the
employment relationship had become
intolerable.
[38]
I will now deal with each of these arguments in turn.
(a)
Whether the offer of re-instatement was genuine and reasonable
[39]
It was not in dispute that on 18 August 2014 the applicant’s
attorneys sent the employee a letter instructing her to
report for
duty because she was on notice as she had been retrospectively
re-instated. The employee rejected the offer of re-instatement.
[40]
An employer has a right to remedy an unprocedurally unfair dismissal
by offering to re-instate. In
Rawlins v Kemp t/a
Centralmed
the Supreme Court referred to this principle as
the employer’s “right to seek to right the wrong”.
[41]
The case
authorities that the applicant relied upon during the arbitration
proceedings and in these proceedings
[5]
emphasise the fact that the offer to re-instate must have been
bona
fide
and not a sham. The offer must be genuine and reasonable. It is
therefore incorrect, as submitted by Mr Benade in oral argument,
that
the offer of re-instatement itself is sufficient. It must be a
bona
fide
offer of re-instatement.
[42]
The commissioner found that the offer to re-instate was not genuine
and reasonable. The applicant criticises the commissioner
for
confining the inquiry to the genuineness of the offer and also
submits that the offer was in fact
bona fide
.
[43]
Since the genuineness of the offer to re-instate is an important part
of the investigation whether or not an employee acted
unreasonably in
rejecting an offer of re-instatement, the criticism that the
commissioner focused his entire investigation on the
genuineness of
the offer must be rejected. Once it has been established that the
offer to re-instate was not genuine, that should
be the end of the
inquiry.
[44]
The applicant’s submission that the offer to re-instate was
bona fide
was considered and rejected by the commissioner,
with reasons. That finding is unassailable and there is no basis for
interfering
with it.
[45]
That the employee conceded that the offer was unconditional is not
decisive because she also testified that she was concerned
that the
offer to re-instate was made to afford the employer an opportunity to
dismiss her after following procedure. The applicant
could have
rebutted that version if it had a different motive in offering to
re-instate the employee. It chose not to do so. In
any event
Lynn made it clear to the employee on 23 July 2014 that if she chose
to come back, the applicant would go through the
process of issuing
warnings. That statement was never retracted.
[46]
Making an
offer of re-instatement solely for purposes of subjecting an employee
to an inquiry to remedy procedural flaws arose in
Setcom
(Pty) Ltd v Dos Santos and Others
[6]
.
There
the court found that the offer to re-instate was not made to restore
the status
quo
before the dismissal but was contrived to portray the employers’
actions as an upliftment of a suspension in order to allow
it to
pursue a disciplinary hearing. The court found that the offer to
re-instate was not genuine. I align myself with the views
of the
court that where an employer makes an offer to re-instate for other
reasons other than to restore the status
quo
before dismissal, the employer’s motives become a relevant
factor in deciding whether the employee was justified in rejecting
the offer of re-instatement
[47]
Although there appears to be merit in the submission by Mr Kantor
that the letter from the applicant’s attorneys did
not
constitute an offer but rather an authoritarian instruction, l have
approached the matter from the same basis that the commissioner
approached it, which is that the offer was made but it was found not
to be genuine. In any event the commissioner’s finding
that an
offer was made is not the subject of a counter review by the
employee.
(b)
Breakdown of the employment relationship
[48]
The applicant submitted that there was no evidence of a breakdown of
the employment relationship and that the employee merely
expressed
her subjective views.
[49]
The applicant also relies on a statement by the employee that the
relationship with the employer was fine. If one has regard
to the
employee’s entire evidence, it becomes clear that she was
referring to the period prior to 23 July 2014. Everything
changed on
23 July 2014.
[50]
As regards the breakdown in the trust relationship, the employee
testified that;
50.1. “
This
issue of trust l think it is quite clear that l am not – she
does not want me there that it is not an option that l come
back to
work out my notice period
” and;
50.2. “
I did not
believe that this was a sincere re-instatement of my employment. The
e-mail from Lynn made it quite clear that there was
no room for me
there
” and;
50.3. “
I have
been terminated it is very clear in this e-mail on page 11 that it
is- that there is no return
” and also;
50.4. “
First of
all l would have to go back into an office with colleagues that know
that l have been fired. Secondly, l would not trust
that l am back
there to work there for good. I could not because l would feel l am
just back in there so that she can follow procedure
properly. That
means just prolonging agony…”
[51]
The applicant could have rebutted that evidence but chose not do so.
In oral argument it was submitted that the applicant chose
not to
rebut that evidence because it regarded the employee’s evidence
on this issue as insufficient. That is the risk that
the applicant
took and it cannot now criticise the commissioner for the findings he
made based on the uncontroverted evidence of
the employee.
[52]
Since the employee was of the view that she was no longer wanted at
work and in circumstances where Lynn did not disavow her
previous
stance that it was not working, the trust relationship had already
broken down.
[53]
The applicant’s further submission that the relationship could
have been mended after a short period of time was not
placed before
the commissioner and l need not entertain it in these proceedings.
(c)
Whether the commissioner should have granted compensation
[54]
Mr Benade
for the applicant submitted that the commissioner misconstrued the
meaning and import of the discretion afforded to him
in terms of
section 193(1)
(c) of the
Labour Relations Act No 66 of 1995
[7]
and that on a proper evaluation of the facts and circumstances, his
decision was judicially incorrect.
[55]
As l understood the applicant’s argument, it was that the
commissioner ought to have exercised his discretion against
granting
the employee compensation because she rejected an unconditional offer
of re-instatement.
[56]
The submission ignores the fact that the commissioner found that the
offer to re-instate was not genuine and not reasonable.
An employee
is justified in rejecting such an offer and when that happens, that
employee should not be denied compensation.
[57]
The commissioner correctly distinguished the facts in
Rawlins v
Kemp
where the court refused to award compensation. The offer
to re-instate Dr Rawlins was made in good faith (which was not in
dispute),
the offer was made repeatedly and there was no evidence of
a breach of the trust relationship. In contrast, in the matter before
the commissioner, the offer to re-instate was not genuine and the
commissioner found that it in fact smacked of bad faith, that
the
applicant did not apologise for its actions and that it also did not
disavow its stance to issue warnings and ultimately dismiss
the
employee.
[58]
The authorities relied upon by the applicant to argue that the
employee should have been denied compensation all confirm that
an
employee may be denied compensation where they unjustifiably rejected
a genuine and reasonable offer of re-instatement. Where
the offer of
re-instatement is not
bona fide
, as the commissioner found was
the case in this matter, there is no reason why an employee who
rejects such an offer should be
denied compensation.
[59]
The
Johnson
& Johnson (Pty) Ltd v CWIU
[8]
decision which the applicant seeks to rely on does not assist it. In
that matter, only procedural fairness was in issue. In the
present
matter, the dismissal was found to have been both procedurally and
substantively unfair.
[60]
I must also point out that the
Johnson & Johnson
decision predates the 2002 amendments to the LRA. The current
section
194(1)
provides that the compensation to be granted to an employee
whose dismissal is found to be unfair, either substantively or
procedurally,
must be ‘just and equitable in all the
circumstances’ to both the employer and the employee, subject
only to the maximum
limits set out in the section.
[61]
In my view 3 months compensation for a substantively and procedurally
unfair dismissal was just and equitable. Other relevant
considerations were that although the employee had found
another job a month after leaving the applicant, she now earned
considerably less than she earned whilst working for the applicant
and the fact that the applicant did not pay the employee her
notice
pay in August 2014 salary as promised.
[62]
The commissioner’s award of compensation must stand.
[63]
I find that the commissioner correctly applied the legal principles
as regards the “right to right a wrong” and
whether or
not to grant compensation. l also find that the award is not one that
no reasonable decision maker could reach. The
review must fail.
Costs
[64]
Both parties submitted that costs must follow the result. Taking into
account the requirements of law and fairness, this is
an appropriate
approach to take in the matter.
Order
[65]
In the premises l make the following order.
65.1. The review
application is dismissed.
65.2. The applicant is
ordered to pay the third respondent’s costs, including the
costs of counsel.
_______________________
TC
Ralehoko
Acting
Judge of the Labour Court
Appearances
For
the Applicant:
Advocate E Benade
Instructed
by:
Carelse Khan Attorneys
For
the Third Respondent: Advocate Peter Kantor
Instructed
by
Dorrington Jessop Attorneys
[1]
The Code requires an employer to consider whether the employee
failed to meet a performance standard and if so, whether the
employee was aware or could reasonably be expected to have been
aware of the standard, whether the employee was given a fair
opportunity to meet the required standard and lastly whether
dismissal was an appropriate sanction for not meeting the required
standard.
[2]
Sidumo
& Ano v Rustenberg Platinum Mines Limited & Others
2008
(2) SA 24
(CC) at para 110.
[3]
(2009)
30 ILJ 2677 (LAC).
[4]
(2010)
31 ILJ 2325 (SCA).
[5]
Van
Niekerk v Cheque Guarantee Services
(2001)
22 ILJ 728 (LC),
Johnson
& Johnson (Pty) Ltd v Chemical Workers Industrial Union
(199) 20 ILJ 89 (LAC),
Basson
v Cecil Nurse (Pty) Ltd
(2001) 22 ILJ 673 (LC).
[6]
(2011)
32 ILJ 1434 (LC) at para 36.
[7]
The
section provides as follows:
(1)
If the Labour Court or an
arbitrator appointed in terms of this Act finds that a dismissal is
unfair, the Court or the arbitrator
may-
(c) order the
employer to pay compensation to the employee.
[8]
[1998]
12 BLLR 1209
(LAC)