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Duncanmec (Pty) Ltd v William and Others (JR815/15) [2018] ZALCJHB 34 (8 February 2018)

78 Reportability
Labour Law
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Brief Summary

Labour Law — Review of arbitration award — Application for review of an arbitration award finding dismissal substantively unfair — Applicant contending that the arbitrator failed to apply his mind to the evidence and that the decision was unreasonable — Arbitrator's findings based on credibility assessments of witnesses and failure of the applicant to prove misconduct — Court finding that the arbitrator's decision was one that a reasonable decision-maker could reach based on the evidence presented.

Comprehensive Summary

Summary of Judgment


1. Introduction


This matter was a review application in the Labour Court brought in terms of section 158(1)(g) (as pleaded) and, in substance, determined with reference to the review framework in section 145 of the Labour Relations Act 66 of 1995 (“the LRA”). The applicant sought an order reviewing and setting aside an arbitration award issued by the first respondent, acting as an arbitrator under the auspices of the second respondent bargaining council.


The applicant was Duncanmec (Pty) Ltd (the employer). The first respondent was William, Itumeleng N.O (the arbitrator). The second respondent was the Metal and Engineering Industry Bargaining Council (the bargaining council under whose auspices the arbitration took place). The third respondent was the National Union of Metalworkers of South Africa (NUMSA) (the employee’s union). The fourth respondent was Matiti, Siyakudumisa (the employee).


The procedural history was that the employee was dismissed following an internal disciplinary enquiry. He referred an unfair dismissal dispute to the bargaining council, where conciliation failed and the matter proceeded to arbitration. The arbitrator issued an award finding the dismissal substantively unfair, ordering retrospective reinstatement and back pay. The employer then launched the present review application in the Labour Court. The matter was heard on 5 April 2017 and judgment was delivered on 8 February 2018.


The general subject-matter of the dispute concerned whether the employee was under the influence of alcohol at work, whether the employer proved that misconduct on the evidence presented, and whether the arbitrator’s contrary conclusion (and remedy) was reviewable on the Sidumo reasonableness standard.


2. Material Facts


The employee was employed by the applicant as a welder from 14 June 2014. On 8 May 2015, he was subjected to a process intended to determine whether he was under the influence of alcohol. The judgment records that the employee refused to take a breathalyser test or a blood test. On the same day, he was given a notice of suspension and a notice to attend a disciplinary hearing.


A disciplinary enquiry was held on 12 May 2015, and the employee was dismissed at the end of that enquiry. He thereafter referred an unfair dismissal dispute to the bargaining council.


At arbitration, it was common cause that the employer’s investigation consisted of an observation test and the (attempted) breathalyser test. The observation form completed by the employer’s safety officer recorded, among other things, that the employee smelt of alcohol, had bloodshot eyes, his speech was not normal, and that he was aggressive. The form was signed by three employer representatives to confirm its accuracy.


The material disputes, as treated by the arbitrator and later referred to in the review judgment, concerned whether the observation-based indicators reliably established intoxication. On the employee’s version, which the arbitrator accepted on key aspects, the employee’s eyes were red due to an eye injury sustained at work, and his condition regarding his eyes was not a reliable indicator of sobriety. The arbitrator also accepted the employee’s denial that he smelled of alcohol, noting corroboration by a witness (Mr Jonas) and that this was regarded as not challenged by the employer in the relevant respects.


Another material factual aspect concerned steadiness and coordination. The arbitrator attached weight to the fact that the observation form did not include an entry on the steadiness of the employee’s feet as required, that the relevant employer witness denied observing uncoordinated movement, and that the employee’s walking was described as proper by the employee’s witness, with this evidence treated as unchallenged by the employer.


A further factual aspect concerned the employee’s refusal to take the breathalyser test. The employer contended that the refusal justified an inference that he was under the influence. The employee gave an explanation for refusing, linked to the condition of his eyes and being mocked, and also testified that being taken away for such testing had occurred before and in front of other employees. The arbitrator declined to draw the inference contended for by the employer.


The arbitrator ultimately found that the employer failed to discharge the onus of proving that the dismissal was for a fair reason, and concluded that the dismissal was substantively unfair, ordering reinstatement and back pay.


3. Legal Issues


The central legal questions before the Labour Court were whether the arbitration award was affected by a reviewable defect as contemplated in section 145(2) of the LRA, and whether the result reached by the arbitrator was one that a reasonable decision-maker could not reach on the material before him.


The dispute before the Labour Court was primarily one of the application of law to fact within the constrained review jurisdiction. It required the Court to assess whether the employer’s complaints about the arbitrator’s factual findings and evaluative choices (including credibility-related preferences and the drawing or rejection of inferences) amounted to gross irregularity, misconceiving the enquiry, or an unreasonable outcome under the Sidumo/Herholdt line of authority.


Although the employer’s grounds were framed as the arbitrator failing to apply his mind and ignoring relevant evidence, the Labour Court approached the matter as a question of whether any such alleged process irregularities were material and whether they produced an outcome that fell outside the bounds of reasonableness on the totality of the evidence.


4. Court’s Reasoning


The Court set out the review framework under section 145 of the LRA, identifying that an award may be set aside for defects such as misconduct by the arbitrator, gross irregularity in the conduct of proceedings, exceeding powers, or improper obtaining of an award. The Court emphasised that the key enquiry is not appeal-style reconsideration of correctness, but whether the decision is one that a reasonable arbitrator could reach.


In applying the constitutional and appellate guidance, the Court relied on the principles articulated in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others 2007 (28) ILJ 2405 (CC), as reiterated and refined in Herholdt v Nedbank Ltd and Congress of South African Trade Unions 2013 (6) SA 224 (SCA); 2013 (11) BLLR 1074 (SCA); 2013 (34) ILJ 2795 (SCA). The Court recorded that material factual errors or disagreements about the weight attached to evidence are not, in themselves, sufficient; their significance depends on whether they render the outcome unreasonable.


The Court further adopted the “totality of the evidence” approach described in Gold Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission for Conciliation, Mediation and Arbitration and Others [2014] 1 BLLR 20 (LAC), noting that process-related irregularities do not automatically justify interference and that a piecemeal approach to reviewing each factor in isolation is improper. The Court also referred to Head of the Department of Education v Mofokeng and Others [2015] 1 BLLR 50 (LAC) on the materiality requirement: a failure to apply the mind to a material issue is typically an irregularity, but it will justify setting aside only if it reflects a misconception of the enquiry or produces an unreasonable outcome.


Against that legal framework, the Court assessed the employer’s specific complaints. One complaint was that the arbitrator referred to his own observation that the employee’s eyes were bloodshot during arbitration, which the employer characterised as the arbitrator introducing evidence without allowing it to be tested. The Court’s overall evaluation, however, was that the arbitrator engaged with the evidence led, including the employee’s testimony about his eye condition and the context in which bloodshot eyes were raised. The Court did not accept that the employer’s complaint, as advanced, established a reviewable defect meeting the unreasonableness threshold.


Another complaint was directed at the arbitrator’s acceptance of evidence from Mr Jonas, whom the employer attacked as biased because he was a shop steward and had represented the employee at the disciplinary enquiry. The Court rejected that submission, finding no merit in the contention that this, without more, demonstrated that the arbitrator’s acceptance of the employee’s version on the smell of alcohol was reviewably unreasonable.


The Court also addressed the refusal to take the breathalyser test and the employer’s invitation to infer intoxication from the refusal. It noted the employee’s explanation for refusing the test and recorded the third respondent’s submission that the inference could not be drawn where the employer did not put to the employee that his refusal was because he was under the influence. The Court accepted that the arbitrator considered the evidence presented and concluded that the inference was not supported by the proven facts before him.


Stepping back to the overall review enquiry, the Court held that the arbitrator’s award contained a detailed exposition of the evidence and a detailed analysis, and that the arbitrator took into account the evidence led and applied his mind to the issues. The Court concluded that the employer had not established that the arbitrator committed misconduct, committed a gross irregularity, exceeded his powers, or reached an unreasonable outcome. In the Court’s assessment, there was no basis to interfere with the award.


Finally, on costs, the Court considered the requirements of law and equity and concluded that the matter warranted no costs order.


5. Outcome and Relief


The Labour Court dismissed the employer’s review application and therefore refused to set aside the arbitration award.


The effect of the dismissal was that the arbitration award remained operative, including the arbitrator’s order of retrospective reinstatement and payment of back pay in the amount of R55 145.62.


The Court made no order as to costs.


Cases Cited


Sidumo and Another v Rustenburg Platinum Mines Ltd and Others 2007 (28) ILJ 2405 (CC).


Herholdt v Nedbank Ltd and Congress of South African Trade Unions 2013 (6) SA 224 (SCA); 2013 (11) BLLR 1074 (SCA); 2013 (34) ILJ 2795 (SCA).


Gold Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission for Conciliation, Mediation and Arbitration and Others [2014] 1 BLLR 20 (LAC).


Head of the Department of Education v Mofokeng and Others [2015] 1 BLLR 50 (LAC).


Legislation Cited


Labour Relations Act 66 of 1995 (as amended), including section 145 and section 158(1)(g).


Rules of Court Cited


No rules of court were cited in the judgment.


Held


The Labour Court held that the employer failed to establish any reviewable defect under section 145 of the LRA. On the totality of the material before the arbitrator, the arbitrator’s conclusion that the dismissal was substantively unfair was not a conclusion that a reasonable decision-maker could not reach. The review application was dismissed and no costs order was made.


LEGAL PRINCIPLES


A review under section 145 of the LRA requires the applicant to establish a defect of the kind contemplated in section 145(2), such as misconduct, gross irregularity, exceeding powers, or improper obtaining of the award. The review court does not determine whether the arbitrator’s decision was correct, but whether it is sustainable within the bounds of reasonableness.


The Sidumo reasonableness standard, as explained in Herholdt, requires the reviewing court to determine whether the outcome is one that a reasonable arbitrator could not reach on all the material that was before the arbitrator. Errors of fact and disagreements about the weight or relevance assigned to evidence are not, without more, sufficient grounds to set aside an award; they matter only if they render the outcome unreasonable.


As set out in Gold Fields, the review court must consider the totality of the evidence rather than dissecting the award in a piecemeal fashion. A process-related irregularity does not automatically mean the outcome is unreasonable.


As explained in Mofokeng, a failure to apply the mind to a material issue is usually an irregularity, but it will justify setting aside the award only if it shows a misconceived enquiry or results in an unreasonable outcome. Materiality is assessed by considering whether the error had a distorting effect on the arbitrator’s conception of the enquiry, the issues to be determined, and the result.

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[2018] ZALCJHB 34
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Duncanmec (Pty) Ltd v William and Others (JR815/15) [2018] ZALCJHB 34 (8 February 2018)

IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
no: JR 815/15
In
the matter between:
DUNCANMEC
(PTY)
LTD

Applicant
and
WILLIAM,
ITUMELENG
N.O

First Respondent
THE
METAL AND ENGINEERING INDUSTRY
BARGAINING
COUNCIIL

Second Respondent
NATIONAL
UNION OF METAL WORKERS OF
SOUTH
AFRICA

Third Respondent
MATITI,
SIYAKUDUMISA

Fourth Respondent
Heard:
5 April 2017
Delivered:
8 February 2018
JUDGMENT
MAHOSI.
AJ
Introduction
[1]
This is an application in terms of section 158(1)(g) and/or section
158(1)(g) of the Labour Relations Act (LRA)
[1]
for an order
reviewing and setting aside an arbitration award issued by the first
respondent (arbitrator) acting under the auspices
of the third
respondent second respondent (Bargaining Council), on 9 March 2015
under case reference number MEGA 43423 in terms
of which the
arbitrator found that the dismissal of fourth respondent (the
employee) was substantively unfair.
[2]
The key question is whether the arbitrator’s decision is one
which a reasonable decision maker could not reach.
Background
[3]
The applicant employed the employee as a welder from 14 June 2014.
On  8 May 2015, the employee was subjected to a test
to
determine whether he was under the influence of alcohol. The employee
refused to take a breathalyser or blood test. On the same
day, he was
issued with a notice of suspension and a notice to attend a
disciplinary hearing. A disciplinary enquiry was held on
12 May 2015
and at the end of it, the employee was dismissed. As a result, the
employee referred a dispute of unfair dismissal
to the Bargaining
Council.
[4]
The dispute was conciliated unsuccessfully before it could proceed to
arbitration. The arbitration was held on 6 November 2015
and 9 March
2015. At the end of the arbitration, the arbitrator found that the
dismissal of the employee was substantively unfair.
The arbitrator
ordered the applicant to retrospectively reinstate the employee to a
position he occupied prior to his dismissal.
The arbitrator further
ordered the applicant to pay the employee back pay, amounting to R55
145.62. Dissatisfied with the arbitrator’s
award, the applicant
lodged this application.
Arbitration award
[5]
The arbitrator identified the substantive issue between the parties
as whether the observation made by the applicant’s
witnesses
conclusively proves that the employee was under the influence of
alcohol at the workplace.
[6]
The applicant relied on the testimony of four witnesses, namely Mr
Sejake who chaired the disciplinary enquiry; Mr Mazibuko
who is also
employed by the applicant as the Human Resource Manager; Mr Mthethwa
who is the applicant’s safety officer and
Mr Aswegen who was
the employee’s supervisor. The employee relied on his own
testimony and that of Mr Jonas who is the applicant’s
health
and safety officer and a shop steward.
[7]
It was common cause that the investigation on whether the employee
was under the influence of alcohol consisted of an observation
test
and the breathalyser test. Mr Mthethwa noted in the observation form
that the employee smelt of alcohol, his eyes were bloodshot,
his
speech was not normal and he was aggressive. Mr Mazibuko, Mr Mthethwa
and Mr Aswegen signed the said observation form to confirm
its
accuracy.
[8]
In his analysis, the arbitrator rejected the
testimony of the applicant’s witnesses that the employee had
bloodshot eyes on
the day in question. Instead he accepted the
employee’s version that he had sustained an eye injury at work
which was reported
to the applicant. The arbitrator found that the
condition of employee’s eyes could not be taken into the
equation in determining
his state of sobriety on the basis that his
eyes were even bloodshot during the arbitration although he was
sober.
[9]
On the question of whether the employee smelt of alcohol, the
arbitrator accepted the employee’s version that he did not

smell of alcohol. The basis of the arbitrator’s acceptance of
the employee’s version was that it was corroborated by
Mr Jonas
and was unchallenged by the applicant.
[10]
The arbitrator took into consideration the fact that Mr Mthethwa did
not make an entry on the observation form on the steadiness
of the
employee’s feet as required and further that he denied
observing uncoordinated movement on the part of the employee.
This
was corroborated by Mr Jones who testified that the employee walked
properly on the day in question which evidence was not
challenged by
the applicant. It was on this basis that the arbitrator rejected the
applicant’s version that the employee
was unsteady on his feet.
[11]
The applicant’s submission that the employee’s refusal to
submit to the breathalyser test justifies an inference
that he was
under the influence of alcohol was rejected by the arbitrator, as not
being consistent with the proven facts. The arbitrator
found that the
applicant failed to discharge its onus to prove that the employee’s
dismissal is for a fair reason. It was
for this reason that the
applicant challenged the arbitration award.
Grounds of Review
[12]
In essence, the applicant’s submission is that there was
evidence on which a reasonable arbitrator could find that the

employee was guilty of the misconduct for which he was dismissed.
[13]
The applicant further submits that the arbitrator failed to apply his
mind to the relevant evidence and consequently made an
award which no
reasonable arbitrator could make.
Applicable
law and analysis
[14]
Arbitration awards are reviewable in terms of section 145 of the LRA,
which provides that any party to a dispute who alleges
a defect in
any arbitration proceedings under the auspices of the Commission may
apply to the Labour Court for an order setting
aside the arbitration
award. Section 145(2) defines a defect as the commissioner’s
misconduct in relation to the duties of
the commissioner as an
arbitrator, gross irregularities in the conduct of the arbitration
proceedings, exceeding the commissioner's
powers or improperly
obtaining an award.
[15]
The test for review which has been authoritatively stated by the
Constitutional Court in
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
[2]
was reiterated in
Herholdt
v Nedbank Ltd and Congress of South African Trade Unions
[3]
as follows:
‘
In
summary, the position regarding the review of CCMA awards is this: A
review of a CCMA award is permissible if the defect in the

proceedings falls in one of the grounds in s 145(2)(a) of the LRA.
For a defect in the conduct of the proceedings to amount to
gross
irregularity as contemplated by s 145(2)(a)(ii), the arbitrator must
have misconceived the nature of the enquiry or arrived
at an
unreasonable result. A result will only be unreasonable if it is one
that a reasonable arbitrator could not reach on all
the material that
was before the arbitrator. Material errors of fact, as well as the
weight and relevance to be attached to particular
fact, are not in
and of themselves sufficient for an award to be set aside, but are
only of any consequence if their effect is
to render the outcome
unreasonable.’
[4]
[16]
In
Gold
Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission
for Conciliation Mediation and Arbitration and Others
[5]
the
Labour Appeal Court (LAC) stated as follows:
‘
[17]
The fact that an arbitrator committed a process-related irregularity
is not in itself a sufficient ground for interference
by the
reviewing court.
The
fact that an arbitrator commits a process-related irregularity
does
not
mean that the decision reached is necessarily one that a reasonable
commissioner in the place of the arbitrator could not reach.
[18]
In a review conducted under s145(2)(a)(c) (ii) of the LRA, the review
court is not required to take into
account every factor individually,
consider how the arbitrator treated and dealt with each of those
factors and then determine
whether a failure by the arbitrator to
deal with one or some of the factors amounts to process-related
irregularity sufficient
to set aside the award. This piecemeal
approach of dealing with the arbitrator’s award is improper as
the review court must
necessarily consider the totality of the
evidence and then decide whether the decision made by the arbitrator
is one that a reasonable
decision-maker could make.’
[17]
In
Head
of the Department of Education v Mofokeng and Others
[6]
the
LAC confirmed
Herholdt
and
Mofokeng
and
held as follows:
‘
The
failure by an arbitrator to apply his or her mind to issues which are
material to the determination of a case will usually be
an
irregularity. However, the Supreme Court of Appeal (“the SCA”)
in
Herholdt
v Nedbank Ltd
and
this court in
Goldfields
Mining South Africa (Pty) Ltd (Kloof Gold Mine) v CCMA and
others
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 an unreasonable outcome.
[18]
The LAC further held as follows:
‘
Irregularities
or errors in relation to the facts or issues, therefore, may or may
not produce an unreasonable outcome or provide
a compelling
indication that the arbitrator misconceived the inquiry.
In
the final analysis, it will depend on the materiality of the error or
irregularity and its relation to the result. Whether the
irregularity
or error is material must be assessed and determined with reference
to the distorting effect it may or may not have
had upon the
arbitrator’s conception of the inquiry, the delimitation of the
issues to be determined and the ultimate outcome.
If but for an error
or irregularity a different outcome would have resulted, it will
ex
hypothesi
be
material to the determination of the dispute. A material error of
this order would point to at least a
prima
facie
unreasonable
result. The reviewing judge must then have regard to the general
nature of the decision in issue; the range of
relevant factors
informing the decision; the nature of the competing interests
impacted upon by the decision; and then ask whether
a reasonable
equilibrium has been struck in accordance with the objects of the
LRA.
Provided
the right question was asked and answered by the arbitrator, a wrong
answer will not necessarily be unreasonable. By the
same token, an
irregularity or error material to the determination of the dispute
may constitute a misconception of the nature
of the enquiry so as to
lead to no fair trial of the issues, with the result that the award
may be set aside on that ground alone.
The arbitrator however must be
shown to have diverted from the correct path in the conduct of the
arbitration and as a result failed
to address the question raised for
determination.
’
[7]
[Footnotes omitted]
[19]
The question is whether the arbitrator evaluated the facts presented
before him and arrived at a conclusion that is reasonable.
The
reading of the record shows that the employee testified that he has a
problem with his eyes and that they are red and painful.
[8]
Under cross-examination, the employee testified that evidence to
prove that he went to the doctor after the accident was with the

applicant.
[9]
The applicant took issue with the arbitrator’s submission that
according to his observation the employee’s eyes were
bloodshot
during the arbitration, even though he was sober. In this regard, the
applicant submitted that, in effect, the arbitrator
introduced
evidence to corroborate the employee’s version without giving
the applicant an opportunity to test it.
[20]
The applicant further took issue with the arbitrator’s
acceptance of the employee’s version, which was corroborated
by
Mr Jonas, that he did not smell alcohol. The issue raised was that Mr
Jonas’ evidence was tainted with bias as he was
a shop steward
and represented the employee at the disciplinary enquiry. I find no
merit to this submission.
[21]
On the question whether the employee’s refusal to take
thebreathalyser test justifies an inference that he was under
the
influence of alcohol, the third respondent submitted that the
employee testified on the reasons he refused to be subjected
to the
breathalyser test. The employee testified that he asked the shop
steward to explain that the reason he did not want to take
the
breathalyser test was that his eyes were painful and red and as a
result people were mocking him.
[10]
He further testified that it was not for the first time he was taken
from other employees in order to subject him to the breathalyser
test
and that this was done in the presence of other employees.
[11]
[22]
The third respondent’s submission was further that an inference
that the employee refused to take the breathalyser test
because he
was under the influence of alcohol could not be drawn as the
applicant did not put that version to the employee. The
arbitrator
considered the evidence before him before coming to the conclusion
that such an inference  was not supported by
the facts before
him.
[23] It is my view that none of the
grounds of review raised by the applicant muster the applicable test
of unreasonableness. In
this case, the arbitrator’s award is
not only clear but it contains the detailed exposition of the
evidence presented before
him during the arbitration, followed by an
equally detailed analysis of the evidence and argument.
[24]
It is abundantly clear from the applicant’s founding affidavit
and its supplementary affidavit that the applicant has
not
established any basis upon which the Court could find that the first
respondent’s award was reviewable. The applicant
failed to
discharge the onus of establishing that the arbitrator either
committed misconduct in relation to his duties as a commissioner
, a
gross irregularity in the conduct of the arbitration proceedings, or
exceeded his powers.
[25] It is apparent from the reading
of the award that the arbitrator took into consideration all the
evidence that was led before
him, and applied his mind to the issues
before him. In my view, the arbitrator dealt exhaustively with the
evidence before him,
and considered all relevant factors before
coming to the conclusion that the employee’s dismissal was
substantively unfair.
[26] Considering the depth of his
treatment with the evidence, it cannot be said that the arbitrator
failed to apply his mind to
the issues before him or even that he
reached an illogical and unjustifiable conclusion or reached an
unreasonable conclusion.
There is, therefor, no reason for this Court
to interfere with the arbitrator’s award.
[27]
With regard to costs, taking into account the requirements of law and
equity, I believe this is a matter in which there should
be no order
as to costs.
[28] In the premise, I make the
following order:
Order
1.
The applicant’s review application is
dismissed.
2.
There is no order as to costs.
_____________
D.
Mahosi
Acting
Judge of the Labour Court (then)
Appearances
For
the Applicant:    Mr RUBEN J.C. Orton of Snyman
Attorneys
For
the Respondent: Mr. Express Mtshali, NUMSA official.
[1]
Act 66 of
1995 as amended.
[2]
2007 (28) ILJ 2405 (CC) para 25.
[3]
2013 (6) SA 224
(SCA);
2013 (11) BLLR 1074
(SCA); 2013 (34) ILJ 2795
(SCA).
[4]
At para 25.
[5]
[2007] ZALC 66
;
[2014]
1 BLLR 20
(LAC) at para 17 and 18.
[6]
[2015]
1 BLLR 50
(LAC) at para 30.
[7]
At para 33.
[8]
Index to
record page 83, line 1-2
[9]
Index to
record page 92, line 23
[10]
Index to
record page 83 line 9-13.
[11]
Index to
record page 83, line 21-24.

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