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[2018] ZALCJHB 18
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Telkom South Africa Limited and Another v Nowosenetz NO and Others (JR2423/15) [2018] ZALCJHB 18 (25 January 2018)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
no: JR2423/15
In
the matter between
:
TELKOM
SOUTH AFRICA
LIMITED
First Applicant
GARTH
STRACHAN
Second applicant
and
COMMISSIONER
LAURENCE NOWOSENETZ
N.O.
First
Respondent
TSHEPISO
DARRYL MOLEFE
Second
Respondent
JOSIAH
ZIMPI
MAPHANGA
Third Respondent
COMMISSION
FOR CONCILIATION,
MEDIATION
AND ARBITRATION
Fourth
Respondent
Heard:
14
November 2017
Delivered:
25 January 2018
Summary:
Review application – unfair labour practice – the
commissioner pegged his findings
on an irrelevant issue.
JUDGMENT
NKUTHA-
NKONTWANA. J
Introduction
[1]
This is a
unique case pertaining to unfair labour practice in terms of section
186(2)(a) of the Labour Relations Act (the LRA).
[1]
The second and third respondents (Messrs Molefe and Maphanga)
successfully challenged the appointment of the first applicant (Mr
Strachan) by the first applicant (Telkom) at the arbitration hearing
under the auspices of the Commission for Conciliation, Mediation
and
Arbitration (the CCMA). The first respondent (the commissioner)
issued the award dated 17 November 2015 under case number 14736-11
wherein he found as follows:
1.1.
Telkom had committed an unfair labour practice
against Messrs Molefe and Maphanga by promoting the first applicant
(Mr Strachan)
to the position of Executive Enterprise Risk
Management.
1.2.
Telkom was directed to set aside the appointment
of Mr Strachan within 30 days from the date it received the award and
re-open the
procedure for the filling of the position of Executive
Enterprise Risk Management within 60 days from the date it received
that
award.
1.3.
Ordering Telkom to pay compensation to Messrs
Molefe and Maphanga equivalent to six months’ remuneration
respectively within
14 days from the date it received the award.
[2]
In these proceedings, Telkom seeks an order
reviewing and setting aside the award and to substitute it with one
dismissing the unfair
labour practice claim, alternatively remitting
the matter back to the CCMA for a hearing
de
novo
before a different commissioner.
[3]
The application is opposed by both Messrs Molefe
and Maphanga.
Pertinent
facts
[4]
The facts in this matter are to a large extent
common cause. The post of the Executive Enterprise Risk Management
(the position)
was created in July 2010. The requirements for the
position were a four-year degree with a minimum experience of eight
years in
the enterprise risk management field, of which three years
must be in a management capacity. The post was to be advertised
internally
and externally.
[5]
The post was advertised internally on 22 July
2010. Amongst the shortlisted and interviewed candidates were Messrs
Molefe, Maphanga
and Strachan. They were all interviewed on 26 August
2010 but no appointment was made. Mr Mvelase, the person who had
requested
the establishment of the position, was not satisfied with
the candidates who, in his view, were too theoretical. Mr Maphanga
was
the best candidate, scoring 39 points; Mr Strachan was the second
best, scoring 38.5 points; and Mr Molefe scored 30 points.
[6]
On 25 August 2010, Telkom and KPMG concluded a
consultancy agreement (KPMG agreement). Telkom was duly represented
by Mr Mvelase
who accordingly signed the KPMG agreement and with Mr
Strachan signing as a witness. In terms of clause 27 thereof, ‘both
parties agreed not to make any offer of employment or employ any
member of the party’s employees during the duration of the
agreement’.
[7]
On 3 September 2010, Mr Strachan resigned from
Telkom to join KPMG. Mr Mvelase testified that he waived the terms of
clause 27 of
the KPMG agreement. Mr Strachan testified that he did
not seek any consent to take up employment with KPMG because he had
been
informed that clause 27 of KPMG agreement had been waived by
both parties.
[8]
On 16 September 2010, the position was advertised
externally with a closing date of 30 September 2010. Mr Strachan
decided otherwise
and wanted to return back to Telkom. He enquired
from Mr Mvelase whether it would be possible that he be reconsidered
for the position
since he had withdrawn his internal application and
he was late for submitting an external application. A permission had
to be
sought from the HR department in terms of the Telkom Staffing
Policy. Mr Mvelase testified that the approval was sought and
granted.
[9]
Mr Strachan was accordingly part of the
candidates, external and internal, that had been interviewed between
November 2010 and 11
January 2011. Mr Strachan was found to be the
best candidate, scoring 59.5; the second best was Mr Leon Govender
(Mr Govender),
an external candidate, scoring 54; Mr Maphanga came
third, scoring 45.5; and Mr Molefe was the lowest, scoring 39.5.
Arbitration
Proceedings
[10]
The case of Messrs Molefe and Maphanga was two
pronged. Firstly, they challenged the fairness of the process that
led to the appointment
of Mr Strachan. They argued that the open and
competitive process was a smokescreen used to hide Mr Mvelase’s
predetermined
motive to appoint Mr Strachan. Secondly, they
challenged Mr Strachan’s candidacy and argued that he was not
eligible for
appointment in terms of the KPMG agreement.
[11]
In relation to the first challenge, the
commissioner found as follows:
11.1.
Nothing turned on the external advertisement of
the position. Even though Mr Strachan had achieved the second highest
score in the
internal advertisement, Mr Mvelase could have exercised
his discretion at that stage and appointed him but he did not because
he
found the candidates to be theoretical in their approach.
11.2.
No adverse inference could be drawn from the
replacement of Mr Naidoo by Mr Moola as a panellist during the second
interviews.
11.3.
It was not unusual that the questionnaire that
was used during the interviews was based on the strategy document
that had been prepared
by Mr Strachan who was a Senior Manager for
the Enterprise Risk Management. The advantage he enjoined
consequently was not undue
or unfair.
11.4.
The delay in finalising the process and notifying
unsuccessful candidates was not unfair.
11.5.
The lowering of the requirements was within the
discretion of management and hence not irregular.
[12]
The commissioner, however, was of the view that
the process was seriously derailed by Mr Strachan’s
resignation, recruitment
by KPMG, late submission of his application
for the position as an external candidate and his re-employment by
Telkom. He stated
that:
‘
The purview of this dispute
necessarily requires scrutinizing the rationality of the selectin of
Mr Strachan and the scope of the
enquiry of rationality is not
limited to his score but to all the objective factors having bearing
on his suitability for appointment.
Such factors legitimately include
his business integrity and adherence to Telkom’s business
ethics and legal compliance.
In short the equity is whether the
appointment of Mr Strachan complied with sound corporate
governance.’
[2]
[13]
Having
undertaken the above enquiry, the commissioner concluded that ‘there
was serious irregularity in the appointment of
Mr Strachan solely on
the KPMG issue’ and that had the issue been dealt with in a
‘lawful, ethical and transparent
way’ the outcome of the
award would have been different.
[3]
Grounds
of review
[14]
The main ground of review is that the
commissioner failed to discharge his duties as an arbitrator.
[15]
In addition, Telkom argued that the commissioner
misconceived the nature of the inquiry and rendered an award that is
grossly unreasonable.
Review
test
[16]
In
Gold
Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission
for Conciliation Mediation and Arbitration and Others,
[4]
the
Labour Appeal Court (the LAC) as per Waglay JP contextualised the
review test as postulated in
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
[5]
and stated that:
‘
[
14
]
Sidumo
does not
postulate a test that requires a simple evaluation of the evidence
presented to the arbitrator and based on that evaluation,
a
determination of the reasonableness of the decision arrived at by the
arbitrator.
The court in
Sidumo
was at pains to
state that arbitration awards made under the Labour Relations Act
(LRA) continue to be determined in terms of s145 of the LRA but
that the constitutional standard of reasonableness is “suffused”
in the application of s145 of the LRA. This implies that an
application for review sought on the grounds of misconduct, gross
irregularity in the conduct of the arbitration proceedings, and/or
excess of powers
will not lead automatically to a setting
aside of the award if any of the above grounds are found to be
present. In other words,
in a case such as the present, where a gross
irregularity in the proceedings is alleged, the enquiry is not
confined to whether
the arbitrator misconceived the nature of the
proceedings, but extends to whether the result was unreasonable, or
put another way,
whether the decision that the arbitrator arrived at
is one that falls in a band of decisions to which a reasonable
decision-maker
could come on the available material.’
[17]
In
Head
of the Department of Education v Mofokeng
,
[6]
the LAC found as
follows:
‘
[30]
The failure by an arbitrator to apply his or her mind to issue which
are material to the determination
of a case will usually be an
irregularity. However, the [SCA] in
Herholdt
…
and this court in
Gold Fields
… have held that before
such an irregularity will result in the setting aside of the award,
it must in addition reveal a
misconception of the true enquiry or
result in the setting aside of the award. It must in addition reveal
a misconception of the
true enquiry or result in an unreasonable
outcome…
[31] …
Moreover, judges of the Labour Court should keep in mind that it is
not only the reasonableness
of the outcome which is subject to
scrutiny. As the SCA held in
Herholdt
, the arbitrator
must not misconceive the inquiry or undertake the inquiry in a
misconceived manner. There must be a fair
trial of the issues.’
[18]
Concisely,
as
deftly put by
Ngcobo
J, as he then was, in
Sidumo
:
[7]
‘
[268] Where a
commissioner fails to have regard to material facts, the arbitration
proceedings cannot in principle be
said to be fair because the
commissioner fails to perform his or her mandate. In so doing …
the commissioner’s action
prevents the aggrieved party from
having its case fully and fairly determined. This constitutes a gross
irregularity … And
the ensuing award falls to be set aside not
because the result is wrong but because the commissioner has
committed a gross irregularity….’
Analysis
and findings
[19]
It is now a
well-established verity that correct approach arbitrators should
adopt when dealing with promotion disputes in terms
of
section186(2)(a) was set out in
Ndlovu
v Commission for Conciliation, Mediation and Arbitration and
Others,
[8]
where
it was state that:
‘
[11] In my
view, the questions which the commissioner asked in the first
paragraph of that quotation were wholly
justifiable questions in
relation to a dispute over a matter of promotion. It can never
suffice in relation to any such question
for the complainant to say
that he or she is qualified by experience, ability and technical
qualifications such as university degrees
and the like, for the post.
That is merely the first hurdle. Obviously a person who is not so
qualified cannot complain if they
are not appointed.
[12] The next
hurdle is of equal if not greater importance. It is to show that the
decision to appoint
someone else to the post in preference to the
complainant was unfair. That will almost invariably involve comparing
the qualities
of the two candidates. Provided the decision by the
employer to appoint one in preference to the other is rational it
seems to
me that no question of unfairness can arise.’
[20]
The correct
approach when dealing with the issue of onus in promotion disputes is
the one in
Department
of Justice v Commission for Conciliation, Mediation and Arbitration
and Others
,
[9]
where the LAC stated that:
‘
[73] …
An employee who complains that the employer's decision or conduct in
not appointing him constitutes
an unfair labour practice must first
establish the existence of such decision or conduct. If that decision
or conduct is not established,
that is the end of the matter. If that
decision or conduct is proved, the enquiry into whether the conduct
was unfair can then
follow. This is not one of those cases such as
disputes relating to unfair discrimination and disputes relating to
freedom of association
where if the employee proves the conduct
complained of, the legislation then requires the employer to prove
that such conduct was
fair or lawful and, if he cannot prove that,
unfairness is established. In cases where that is intended to be the
case, legislation
has said so clearly. In respect of item 2(1)(b)
matters, the Act does not say so because it was not
intended
to be so.’
[21]
In essence,
Messrs Melefe and Maphanga had an onus to not only to prove that they
are qualified for the position and that, ‘but
for’ the
appointment of Mr Strachan, they would have been appointed; but also
the prejudice they had suffered.
[10]
[22]
It will be recalled that the commissioner clearly
endorsed the recruitment process and found no irregularity in
relation to the
re-advertisement of the position and the shortlisting
of the candidates other than Mr Strachan. Put differently, according
to the
commissioner, the process would have been fair if it was not
for the candidacy and appointment of Mr Strachan. It must also be
highlighted that Mr Strachan met all the inherent requirements of the
position. He was only found to be unsuitable not because he
was not
the best candidate, as found by the interviewing panel, but
because his appointment is
unlawful, as found by the commissioner.
Was
the appointment of Strachan unlawful?
[23]
Telkom argued that Mr Strachan’s departure
to join KPMG was irrelevant to the question that arose regarding his
subsequent
appointment and the commissioner misdirected himself in
finding that it was proof that he lacked integrity, a quality crucial
to
cooperate governance. The KPMG agreement did not, per se,
prohibit Mr Strachan from taking up employment with KPMG, so it
was
further argued.
[24]
Since the
KPMG agreement did not create any rights to the third parties and,
correspondingly, obligations to the third parties,
the commissioner
misdirected himself in his finding that the alleged breach thereof
offended the right of Messrs Melefe and Maphanga
to fair labour
practice. It is only the parties to the KPMG agreement who can
enforce its terms in the event of a breach. In this
instance, both
Telkom and KPMG had no qualms with Mr Strachan’s movement
between the two companies. In fact, it was Mr Mvelase’s
evidence that he had waived the application of clause 27 of the KPMG
agreement. The commissioner rejected this evidence on wrong
legal
basis. Even if there was no expressed waiver, it could be inferred
from the conduct of Telkom and KPMG as they did nothing
to enforce
the terms of the KPMG agreement. The correct test for waiver or
inferred waiver is well articulated in
Atlantic
Beach Home Owners Association NPC v City of Cape Town and
Another,
[11]
the court referred with approval to
Road
Accident Fund v Mothupi,
[12]
where
the test for inferred waiver is stated as follows:
‘
[15]
Waiver is first and foremost a matter of intention. Whether it is the
waiver of a right or a
remedy, a privilege or power, an interest or
benefit, and whether in unilateral or bilateral form, the starting
point invariably
is the will of the party said to have waived it…
“It is a well-established principle of our law that a statutory
provision
enacted for the special benefit of any individual or body
may be waived by that individual or body, provided that no public
interests
are involved. It makes no difference that the provision is
couched in peremptory term…”
[16] The test
to determine intention to waive has been said to be objective…That
means, first, that
intention to waive, like intention generally, is
adjudged by its outward manifestations…; secondly, that mental
reservations,
not communicated, are of no legal consequence…;
and thirdly, that the outward manifestations of intention are
adjudged from
the perspective of the other party concerned, that is
to say, from the perspective of the latter’s notional alter
ego, the
reasonable person standing in his shoes.
[17] …
[18] The outward
manifestations can consist of words; of some other form of conduct
from which the intention to waive
is inferred; or even of inaction or
silence where a duty to act or speak exists…[19]
Because no-one is
presumed to waive his rights…the onus is on
the party alleging it and, two, clear proof is required of an
intention to do
so. The conduct from which waiver is inferred, so it
has frequently been stated, must be unequivocal, that is to say,
consistent
with no other hypothesis.’
[25]
Frankly, the evidence on record does not disclose
any wrongdoing by Mr Strachan. Even if his appointment was, however,
unlawful,
it would be absurd to hold him responsible for it. Mr
Strachan was not a party to the KPMG agreement and could not have
been bound
by it solely because he had witnessed its conclusion. The
KPMG agreement was not in any way a restraint of trade against Mr
Strachan.
[26]
Another
issue that the commissioner failed to deal with is the causal
connection between the unfairness complained of and the prejudice
allegedly suffered. Telkom correctly argued that Messrs Molefe and
Maphanga failed to demonstrate that there was a causal connection
between the unfairness complained of and the prejudice allegedly
suffered. In
International
Management (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others,
[13]
the
Court stated that:
‘
[9]
It is important to note that in these type of cases, it is also
incumbent on an applicant
to show a causal connection between the
unfairness complained of and the prejudice suffered. Consequently, it
is not sufficient
just to show that there was a breach of protocol or
procedures in the recruitment process. It is necessary also for
the complainant
to show that the breach of the procedure unfairly
prejudiced him. Accordingly, the question is whether but for the
alleged failure
to consider internal candidates first, Mogoro would
have been appointed.’
[27]
During the oral submissions, the counsel for
Messrs Molefe and Maphanga was constrained to concede that ‘but
for’ the
alleged illegal appointment of Mr Strachan it is Mr
Govender that would have been appointed as he was the second best
candidate.
The scoring of each candidate was not in dispute and the
commissioner had, in any event, endorsed the re-advertisement of the
position
and inclusion of extremal candidates.
[28]
Also, this case presents a peculiar situation
where two candidates sought promotion in relation to a single vacant
position with
success and were awarded a compensation equivalent six
months’ remuneration respectively, notwithstanding the fact
that both
did not qualify for appointment. The commissioner clearly
misdirected himself as the second best candidate was Mr Govender. If
this approach were to stand, it would mean that all unsuccessful
candidates would qualify for compensation even if they are not
promotable solely because the appointed candidate is ineligible. This
is untenable. Nonetheless, there is no need to delve much
on this
issue in the light of the findings I have made above.
[29]
In short, I agree with Telkom that the KPMG
agreement was irrelevant in the enquiry of the alleged unfair labour
practice. The commissioner
clearly misconstrued that nature of the
enquiry and, consequently, the decision that he arrived at is
definitely not one that falls
within a cluster of reasonable
decisions.
Conclusion
[30]
In all the circumstances, the commissioner
committed an irregularity and the award stands to be set aside.
[31]
In the interest of justice and in line with the
tenets of this Court one is hesitant to remit this matter back to the
CCMA. Having
had the benefit of reading the record, pleadings and
hearing oral submissions; I am in a position to decide the matter to
finality.
For all the reasons alluded to above, I am persuaded
that Messrs Molefe and Maphanga failed to prove that, by appointing
Mr Strachan,
Telkom deprived them promotion and accordingly committed
an unfair labour practice against them.
Costs
[32]
In my view, it is equitable not to award costs
against
Messrs Molefe and Maphanga, who are
individual litigants.
[33]
In the premises, I make the following order:
Order
1.
The arbitration award under case number
GATW14736-11 is reviewed and set aside and replaced
with the following order:
‘
1.1
The applicants failed to prove that the first respondent committed an
unfair labour practice in appointing the second
respondent to the
position of Executive Enterprise Risk Management.
1.2 The unfair
labour practice dispute is dismissed.
1.3 There is no
order as to costs of arbitration proceedings.’
2.
There is no order as to costs of suit.
__________________
P
Nkutha-Nkontwana
Judge
of the Labour Court of South Africa
Appearances:
For
the applicants:
Advocate GI Hulley, SC and Advocate T Manchu
Instructed
by:
Mamabolo Phajane Inc.
For
the second respondent:
Mr R Makoele from De Beer Makoele Inc
For
the third respondent:
Advocate
PH Kirsten
Instructed
by:
Gideon Van Der Berg Inc.
[1]
Act 66 of 1995 as amended.
[2]
Award page 38 paras 45 and 46.
[3]
Award page 37 para 42.
[4]
[2013] ZALAC 28
;
[2014] 1 BLLR 20
(LAC); (2014) 35 ILJ 943 (LAC) at
para 14.
[5]
(2007) 28 ILJ 2405 (CC).
[6]
[2015] 1 BLLR 50
(LAC); Subsequent to
Herholdt
v Nedbank Ltd (Congress of South African Trade Unions as amicus
curia)
[2013] 11 BLLR 1074
(SCA) and
Gold Fields
Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission for
Conciliation, Mediation and Arbitration and others
[2014]
1 BLLR 20 (LAC).
[7]
Supra
n
5 at para 268, see also
First
National Bank – A division of First Bank Ltd v Language and
others
(2013) 34 ILJ 3103
(LAC) at para 17.
[8]
2000) 21 ILJ 1653 (LC) at 1655-6.
[9]
(2004) 25 ILJ 248 (LAC) at para 73.
[10]
Ndlovu
v Commission for Conciliation, Mediation and Arbitration and Others,
supra; unreported
judgment
in
Sun International
Management (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration and Others
(Case No. JR939/2014) 18 November 2016 at para 9.;
[11]
[2016] ZAWCHC 149
;
[2017] 1 All SA 99
(WCC) at para 62.
[12]
[1]
2000 (4) SA 30
(SCA); 2000 [3] All SA 181 (A) at paras 15 to 19.
[13]
Unreported judgment of this Court under Case No. JR939/2014)
delivered on 18 November 2016 at para 9.