About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Cape Town Labour Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Cape Town Labour Court, Cape Town
>>
2017
>>
[2017] ZALCCT 61
|
|
Khan v Council for Conciliation, Mediation and Arbitration (CCMA) and Others (C832/2016) [2017] ZALCCT 61 (15 November 2017)
IN
THE LABOUR COURT OF SOUTH AFRICA
(CAPE
TOWN)
CASE
NUMBER
: C832/2016
DATE
:15
NOVEMBER 2017
In
the matter between:
BLUMERUS
LODEWYK EZRA KHAN
Applicant
and
COUNCIL
FOR CONCILIATION, MEDIATION
AND
ARBITRATION
(CCMA)
1
st
Respondent
N.E.
ISAACS
N.O.
2
nd
Respondent
MMI
HOLDINGS LIMITED
3
rd
Respondent
J
U D G M E N T
STEENKAMP,
J
:
This
is an application to have a condonation ruling by the second
respondent, Commissioner N E Isaacs, a commissioner of the CCMA,
reviewed and set aside. It arises from a referral of an
automatically unfair dismissal dispute by Mr Blum Khan, the former
CEO of the third respondent, MMI Holdings Ltd. Mr Khan
submitted in his main referral that he was dismissed and that that
dismissal was automatically unfair based on his age as there was no
agreed or normal retirement age. In the course of the
dispute
MMI raised a point
in limine
that his referral was late as his employment was terminated on 30
June 2016 and he only referred a dispute to the CCMA on 25 August
2016 without an application for condonation.
Mr
Khan countered that, as far as he is concerned, he was dismissed on
25 July 2016, which is the date on which his salary was not
paid.
The commissioner that presided over the conciliation made a ruling
that he had to apply for condonation. He did
so four days
later, on 3 October 2016, and the condonation application was then
heard by Ms Isaacs.
The
commissioner accepted at first in her ruling that “the referral
together with his application for condonation” was
65 days
late. It has become apparent that that is incorrect. Although
his application for condonation may have been submitted
65 days late,
his actual referral was only some 25 or 26 days outside of the 30 day
time period provided for in s 191(1)(b)(i)
of the Labour Relations
Act.
The
applicant’s case before the arbitrator was that he was not
subject to any specific retirement age. It has indeed
become
common cause that no retirement age was specified in his contract of
employment. However, it was stated in the Bankmed
Pension Fund
Rules that the normal retirement age is 60. He had a meeting
with the deputy CEO, Mr Willem van Zyl and the
CEO of MMI Holdings,
Mr Nicolas Kruger, in July 2013. He says the normal retirement
age was not raised in that meeting and
that he was not aware of any
policy. That is denied by MMI in its answering affidavit and
the arbitrator had to consider
that allegation in the context of the
evidence as a whole before her.
The
arbitrator, in considering the extent of the delay, had to then
consider whether Khan was dismissed on 30 June 2016 or 25 July
2016.
She took into account that he received a letter on 30 May 2016
confirming his retirement from 30 June, and another
on 30 June.
I will return to that in a moment. She also took into account
that he entered into an independent contractor
agreement with MMI
with effect from 1 July 2016.
Against
that background she found that the correct date was indeed 30 June
and that that was the date from which he had to refer
the dispute.
She then applied the established principles in
Melane
v Santam Insurance Company Limited
1962
(4) SA 694
(A) and found that the reason for the delay was not a
valid or reasonable one for the following reasons:
“
The
applicant had been notified of his pending retirement prior to being
issued with a retirement letter from the Group CEO on 30
June 2016.
The applicant stated he waited to see if the respondent would pay him
on 25 July 2016 as he had attended various
board meetings. I do
not find this the conduct of a reasonable employee who had received a
letter from the group CEO advising
him of his retirement. In
addition, I believe the applicant to be a seasoned and sophisticated
employee. The applicant did
not dispute this letter in any way.
In fact, the applicant conceded that he was negotiating a three-year
employment contract,
alternatively, at his request, as an independent
contractor. I do not find this is the conduct of a permanent
employee who
believed he was still in the permanent employ of
the respondent. The applicant failed to present a reasonable
explanation
for waiting before challenging his alleged unfair
dismissal.”
Having
found that the employee had not shown good reason for the late
referral of his dispute, the arbitrator then referred to the
well-known case of the Labour Appeal Court in
Moila
v Shai N.O.
2007 (28)
ILJ
1028 (LAC) where that Court confirmed the principle that, “where
no explanation has been given for the delay or an explanation
has
been given but such explanation amounts to no explanation at all, it
is not necessary to consider the prospects of success.”
In
those circumstances she exercised her discretion to refuse
condonation. It is that ruling that the employee seeks to
review
on three grounds.
He
says in his founding affidavit that, firstly, the arbitrator
“committed gross irregularities during the hearing by refusing
to have regard to facts pertinent to my prospects of success and
issues of public interest in coming to her decision”.
Secondly,
he avers that there is no rational objective basis justifying the
connection she made between the evidential material
before her and
the conclusion she eventually arrived at. He states his belief
that the award is not reasonable and that no
reasonable decision
maker could have reached same conclusion.
Thirdly,
he says that, having regard to the facts and the applicable legal
principles, the arbitrator’s finding was “incorrect”
and should be set aside.
Mr
Leslie,
who appeared for MMI together with Mr
Ackerman
,
submitted that the test to be applied in reviewing a condonation
ruling has to take into account that it is an interference with
a
discretion and that, therefore, the test of correctness is not the
one that should be used. He noted that a party seeking
to
review and even appeal the exercise of a discretion must show that
the decision maker “acted capriciously, or upon a wrong
principle, or in a biased manner, or for unsubstantial reasons, or
committed a misdirection or an irregularity, or failed to exercise
its discretion or exercised its discretion improperly or unfairly”,
referring in this regard to
Masuku v Score Supermarket (Pty) Ltd
2013 (34)
ILJ
147 (LC) at paragraph 10, although that was in
the context of an appeal.
He
also referred to
Coates Brothers Limited
v Shanker [
2003] 12 BLLR 1189
(LAC)
where the Labour Appeal Court held that errors by the court
a
quo
in the context of an appeal, both
in relation to the explanation for delay and prospects of success,
were not sufficient to interfere
with the exercise of a discretion.
The appellant had to show further that the court
a
quo
did not exercise its discretion at
all or exercised it improperly or unreasonably.
I
agree with him that the applicable legal principles were correctly
summarised by this Court in
Seardel
Group Trading t/a Romatex Home Textiles v Petersen
[2011] 2 BLLR 211
(LC) par 13 as follows:
“
When
a commissioner is endowed with a discretion this court will be very
slow to interfere with the exercise of that discretion.
The
commissioner’s exercise of discretion will be upset on review
if the applicant shows,
inter alia,
that the commissioner committed a misdirection or irregularity, or
that he or she acted capriciously or on wrong principle, or
in bad
faith, or unfairly, or that in exercising the discretion the
commissioner reached a decision that a reasonable decision
maker
could not reach.”
That
overlaps fairly neatly with the grounds of review raised by Ms
De
Wet
for the employee, namely that the
commissioner either committed a misdirection or that she acted
unfairly, or that in exercising
the discretion she reached a decision
that a reasonable decision maker could not reach.
It
is of course trite that the onus is on an applicant to persuade a
decision maker to grant him the indulgence to allow condonation.
The
principles are also trite. They were set out in
Melane
v Santam Insurance Company Limited
1962
(4) SA 694
(A) at 663 e-f and those are indeed the principles that
the commissioner applied, together with the one that I have already
cited,
set out in
Moila v Shai
.
It
is against that background that this Court must decide whether she
exercised her discretion unfairly, or whether she committed
a
misdirection, or that she acted capriciously or on a wrong principle,
or in bad faith, or ultimately, that another reasonable
decision
maker could not reach the conclusion that she did.
Further,
the test is a stringent one, as was highlighted in the case cited by
Mr
Leslie
, which is
Thebe Ya Bophelo Healthcare
Administrators (Pty) Ltd v National Bargaining Council for Road
Freight Industry
2009 (3) SA 187
(W) 201 D-E, cited by this Court
in
Department of Health (Western Cape) v Denosa on behalf of
Cloete
(2016) 37
ILJ
2398 (LC) at paragraph 29, which is:
“
As
the famous saying goes, ’
Quot
homines, tot sententiae
’.
Opinions, even among reasonable men and women, may differ and, at
times, quite markedly. If the test in a challenge
to an
administrative action is whether the decision was one that no
reasonable decision maker could reach, it will in practice
be very
difficult to succeed.”
That
is of course even more so where it involves the exercise of a
discretion.
That
brings me, then, to the evidence that was led before the arbitrator
and the factors that she took into account. Ms
De Wet
complained that the arbitrator did not take into account all the
facts that were placed before her. The award is a short
one,
and of course it does not set out every single fact that appears in
the affidavits that served before her. However, those
affidavits are
before Court and the Court is in a position to consider whether the
commissioner exercised her discretion fairly
and reasonably. I
have briefly set out the history of the matter, but the pertinent
point in that history reaches its climax
on 30 May 2016 when -- it is
beyond dispute -- one Winnie Flandorp, an employee in the Human
Resources Department of MMI, sent
an email directly to Mr Khan. It is
common cause that he accepted and received that email. The
subject line of the email
is: “
Retirement June 2016 –
B KHAN
.” It indicates various attachments. Ms Flandorp then
says:
“
Good
morning Mr Khan.
Attached are the following documents:
1. Retirement letter for your
attention.
2. UI 2.8 form (ask the bank to
complete, then hand in to Department of Labour).
3. UI 2.11 form (for Department of
Labour).
4.
Retirement Claim Form. (Please complete and return to me).
UI-19
to follow.
Do
not hesitate to contact me should you require any assistance.”
The
fact that Mr Khan did not contact her, given his version before the
arbitrator, beggars belief. The attached letter could
not be
clearer. It starts off by saying, “Dear Mr Khan”,
and then in bold capital letters:
RETIREMENT CONFIRMATION
.
The very next line reads: “We hereby confirm your retirement
effective 30 June 2016.”
It
then spells out in no uncertain terms: “In terms of your
retirement, the following benefits will become payable.”
It
then sets out his fund benefits, employer benefits, a gift of more
than R274 000.00, and his accumulated leave estimated
at
R787 023.34. Of course, as Mr
Leslie
pointed out, if any doubt could conceivably have remained, a high
ranking employee such as the former CEO would be under no
misapprehension
that his employment was being terminated when his
accumulated leave is being paid out. That is apart from the
clear wording
of the letter confirming his retirement effective 30
June 2016.
Khan
did not query that at all, did not bother to respond to it, and in
his affidavit he blithely says he “did not take much
note of
it”. That is inexplicable. As if the body of the
email and covering letter is not clear enough, it attaches
the
unemployment insurance form, UI2.11 that had already been filled in.
It sets out that the claim for benefits in terms
of the Unemployment
Insurance Act that was being processed for Mr Blum Khan. It gives his
identity number. And it says that the
reason for termination was
retirement. It also attaches the relevant form UI19 where, again, the
reason for retirement is given
as code 3 which is “retired”.
Yet Mr Khan did nothing and carried on attending board meetings.
When
the date of his actual retirement arrived on 30 June 2016 he was no
longer dealing with a lowly employee whom he thought he
could simply
ignore. Instead, he received a letter from no less than the
group CEO, Mr Nicolas Kruger, that stated the following:
“
Dear
Blum
THANK
YOU
We
refer to the letter dated 30 May 2016
confirming
your normal retirement effective 30 June 2016 and your subsequent
withdrawal of retirement benefits dated 13 June 2016
.
[1]
I would like to take this opportunity
to thank you for the significant contribution you have made to MMI
(and Metropolitan prior
to the merger)
during your tenure.
…
As
discussed with you. we would like to engage you on a potential
consulting role on projects in MMI.”
Again,
this letter from the group CEO could not be any clearer. It
confirms Mr Khan’s retirement effective 30 June,
it refers to
his tenure that had now clearly come to an end, it refers to the fact
that he could perhaps in the future play a consulting
role as opposed
to a role as an employee, and it could leave no doubt in his mind
that he had now been retired. Inexplicably
he did not respond
or object to that letter either.
Furthermore,
as Mr
Leslie
pointed out, it was left to MMI to bring these documents to the
attention of the arbitrator. In his founding affidavit that
served before the arbitrator he simply referred to the email from Ms
Flandorp without attaching those documents. He says
that he did
not take much note of it and then says that he received further
documents from her on 28 June 2016 to which he again
paid no
attention, without disclosing that in fact those were attached to the
email of 30 May 2016.
The
arbitrator quite properly took into account those letters and had to
weigh that up on affidavit against Mr Khan’s bland
statement --
without having attached the documents -- that in his mind he had not
retired, simply because there was no retirement
policy in his
contract of employment; and against the backdrop of the facts that he
sets out, for example, that he had attended
a meeting where it was
not discussed and that he had continued to act as a director.
Ms
De Wet
quite correctly pointed to the relevant test to be used
in cases like that, being the well-known test in
Plascon-Evans
Paints Limited v Van Riebeeck Paints (Pty) Ltd
1984 (3) SA 63
(A)
at 65C, reiterated in the case that she referred to, namely
National
Scrap Metal Cape Town (Pty) Ltd v Murray and Roberts Limited
2012
(5) SA 300
(SCA) at paragraph 21 where the SCA said:
“
As
the High Court was called on to decide the matter without the benefit
of oral evidence, it had to accept the facts alleged by
the
appellants (as respondents below) unless they were so far-fetched or
clearly untenable that the Court is justified in rejecting
them
merely on the papers. An attempt to evaluate the competing
versions of either side is thus both inadvisable and unnecessary
as
the issue is not which version is the more probable but whether that
of the appellants is so far-fetched and improbable that
it can be
rejected without evidence.”
In
this case the arbitrator had to decide on the evidence on affidavit
before her which version to accept where there was this dispute
of
fact. I do not think it was at all unreasonable for her to
accept that the version of MMI was not so far-fetched and improbable
that it could be rejected without evidence. In fact, given the
contemporaneous documentation, and especially the letters
directly
addressed to Mr Khan to which he did not bother to respond, clearly
support the version of MMI.
It
is so that the arbitrator did not set out in detail every other
factor that Mr Khan relies on, but as I have said this is an
informal
procedure before the CCMA on paper where the arbitrator only has to
give brief reasons. She did note that Khan stated
that he
waited to see if MMI would pay him on 25 July as he had attended
various board meetings. She also considered the
fact that he
was negotiating a three year contract. She also noted that he
did not dispute the fact that the three year contract
as an
independent contractor was negotiated at his own election. It
is against that background that she found that his explanation
was
not reasonable, given that his employment clearly ended on 30 June
2016.
Having
come to that conclusion she then properly applied the authority of
the Labour Appeal Court in
Moila v Shai
N.O.
and concluded that it was not
necessary to consider the prospects of success. That is not a
conclusion that was capricious
or arbitrary. In fact, it was entirely
reasonable; and I would go so far as to say that it was the correct
one. And even if she
were to have taken the prospects of success into
account, I am of the view -- and this is
obiter
-- that his prospects of success would in any event have been poor,
given the clear evidence that he had retired and had raised
no
objection thereto on 30 May or on 30 June. It is likely that, had the
matter gone to arbitration, it would have been difficult
for him to
show that he did not at least tacitly consent to his retirement.
In
short, the ruling and the discretion exercised by the arbitrator is
not open to review. That leaves the question of costs.
Both parties asked for costs to follow the result. I see no
reason in law or fairness to interfere with that request.
There
is no longer any employment relationship between the parties and the
applicant is a person of some means. And this
is not a lowly
unemployed employee who would be severely prejudiced by paying the
respondents’ costs.
The
one remaining questions is whether it warranted the costs of two
counsel. On balance, even though the matter is not unduly
complex, I accept that it is at least voluminous and complex enough;
and, as Mr
Leslie
pointed out, it involved significant amounts of money -- for example,
the pay-out on which the SARS directive was based was more
than R5
million. I accept that the employment of two counsel was not
unreasonable.
THE
APPLICATION IS DISMISSED WITH COSTS, INCLUDING THE COST OF TWO
COUNSEL WHERE SO EMPLOYED.
___________________________
STEENKAMP,
J
APPEARANCES
APPLICANT:
Alma de
Wet
Instructed
by:
Gillian &
Veldhuizen Inc.
THIRD
RESPONDENT: Graham Leslie
(with him Lourens Ackermann)
Instructed
by:
Louis
van Zyl.
[1]
My
underlining.