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[2018] ZALCJHB 373
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SABC v CCMA and Others (JR 232/17) [2018] ZALCJHB 373; (2019) 40 ILJ 603 (LC) (9 November 2018)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not
reportable
Of interest to other
judges
case no: JR 232/17
In
the matter between:
SABC
Applicant
and
CCMA
First
respondent
DANIEL
DU PLESSIS N.O.
Second
respondent
MATHOMA
AND 13 OTHERS
Third
to sixteenth respondents
Heard
:
11 October 2018
Delivered
:
9 November 2018
Summary:
Review of rescission ruling and of refusal to postpone. LRA ss 144
and 145.
JUDGMENT
STEENKAMP
J
Introduction
[1]
The third to sixteenth respondents were employees of the applicant,
the South African Broadcasting Corporation SOC Ltd (SABC).
[2]
They were dismissed after disciplinary proceedings conducted by an
independent dispute resolution agency, Tokiso. It was found
that they
had defrauded the SABC’s medical aid scheme by acting in
collusion with medical services providers. These 14 employees
were
part of a group of 113 employees who had been dismissed for the same
dishonest misconduct.
[3]
The employees, mostly
represented by different attorneys, referred unfair dismissal
disputes to the CCMA
[1]
(the
first respondent). The disputes of these individual employees (who
were not represented by trade unions) were consolidated.
The disputes
were set down for arbitration. On the third day of the arbitration,
the SABC’s attorney, Mr Puke Maserumule,
became unavailable in
the unfortunate circumstances detailed further on. The SABC applied
for a postponement. The commissioner,
Daniel du Plessis (the second
respondent), refused. Having heard only the evidence of the
employees, he found that their dismissals
were unfair. The SABC
applied for rescission. The Commissioner refused. The SABC now seeks
to review the rescission ruling; the
refusal to postpone; the
arbitration award; and the commissioner’s earlier refusal to
recuse himself. It also asks the Court
to stay the enforcement of the
arbitration award and to waive the security provided for in s 145(8)
of the LRA.
[2]
Background facts
[4]
As previously mentioned, the employees are part of a group
of about 113 who were dismissed by the SABC
for
defrauding its medical aid scheme in collusion with some
medical services providers. They belonged to a closed
medical
aid scheme, the SABC Medical Aid Scheme, which is administered by
Medscheme. The SABC contributes 60% and the employees
40% of the
monthly contributions.
[5]
The SABC received a report that there was a syndicate operating
amongst its employees which recruited employees, members of
the
medical scheme, to submit fraudulent medical aid claims and to share
the proceeds with service providers and the syndicate
leaders.
[6]
The SABC forensics department investigated the allegations. It found
that approximately 200 employees had defrauded the medical
scheme of
hundreds of thousands of Rands. Employees would submit claims from
service providers (mainly a dentist, doctors, a psychologist,
a
homeopath and two pharmacies) for medical services or medication not
actually provided. When they received a refund, they would
share the
proceeds with the service providers.
[7]
The SABC instituted disciplinary proceedings against 134 employees.
Given the large number, it was not reasonably practicable
conduct
individual disciplinary hearings. The SABC engaged an external
service provider, Tokiso, to conduct the disciplinary proceedings.
Tokiso appointed 10 chairpersons to do so. Each employee received a
disciplinary charge sheet together with documentary evidence
to
support the misconduct allegations. They were given the opportunity
to respond in writing. All of the documentation was handed
to the
chairpersons. At the end of the process, the chairpersons found that
113 had committed misconduct and 11 did not. The employees
were given
the opportunity to submit written mitigating factors. The SABC then
considered the findings by Tokiso; the mitigating
and aggravating
factors; and dismissed those employees had committed misconduct gross
dishonesty.
[8]
One of the trade unions
whose members were dismissed, BEMAWU, brought an urgent application
to this court to stop the process. In
an
ex
tempore
judgment
on 14 January 2016 this Court dismissed the application and expressed
the view – albeit
obiter
–
that the process
adopted for this ABC was fair under the circumstances.
[3]
It noted with reference to the governing clause in the SABC
disciplinary code:
[4]
“
Against
the background of that clause it seems to me that the process
envisaged by the SABC does ensure that discipline will be
exercised
fairly in accordance with the rules of natural justice, albeit not in
the way that the SABC normally conducts its disciplinary
procedures.
In these circumstances, where the Corporation has to deal with
similar allegations of misconduct against more
than 100 employees, it
would be unworkable to adopt a process where each employee must be
heard individually, call witnesses and
present evidence. The
rules of natural justice, and especially the principle of
audi
alteram partem
,
will be satisfied, albeit in an attenuated manner in the process that
the Corporation has decided to adopt.”
[9]
After the dismissal, the
113 dismissed employees – either through their trade unions,
individually, or with the assistance
of attorneys – referred
unfair dismissal disputes to the CCMA. The SABC intended to call only
one witness, being the investigator.
It applied to have their
individual referrals consolidated. Commissioner Dlamini ruled that
those employees who were represented
by trade unions would have their
disputes heard separately. The individual respondents in this case,
who were either represented
by attorneys or representative source, at
their disputes consolidated under a single case number.
[5]
The arbitration
proceedings and the refusal to postpone
[10]
The arbitration hearing for these employees was set down for the week
of Monday 21 to Friday, 25 November 2016. The SABC was
represented,
as it has been throughout, by a senior attorney, Mr Puke Maserumule.
The employees were represented by a number of
different legal
representatives.
[11]
It is not disputed that Mr Maserumule was fully prepared for the
arbitration and to lead the sole witness for the SABC, Mr
Michael
Malete, a forensic auditor, who had investigated the fraudulent
claims and on the basis of whose report the disciplinary
hearings
were conducted and the employees were eventually dismissed.
[12]
On the first day of the arbitration Mr Maserumule was accompanied by
the SABC’s employee relations consultant, Mr Sello
Xama, and
two candidate attorneys. The first day was mostly taken up by
preliminary issues regarding the admissibility of evidence
and the
way in which the hearing would be conducted.
[13]
At the conclusion of the
first day’s proceedings Mr Maserumule informed the Commissioner
and the employees and their legal
representatives that his wife had
been diagnosed with cancer and that she was scheduled to undergo
chemotherapy treatment the next
day, Tuesday, 22 November 2016
[6]
.
He asked to be excused until 11:00 the next day for him to accompany
her. Mr
Lennox
–
who represented
Mr Mashigo at the arbitration and does so in these proceedings –
mentioned that, to his knowledge, it was
unlikely that the
chemotherapy would be concluded by 11:00 and suggested that the
arbitration be adjourned until Wednesday 23 November
2016. All
present, including the commissioner, agreed.
[14]
Things did not work out as planned, given these unfortunate
circumstances. During the afternoon on 22 November Mr Maserumule
contacted Mr Xama and told him that, due to unexpected developments
in his wife’s treatment, he would be unavailable for
the rest
of the week. It transpired that the chemotherapy would take much
longer than he had anticipated and that his wife would
require his
assistance afterwards. He told Xama that he would send his associate,
Mr Nkosinathi Mbuyisa, to apply for a postponement
the next day. On
the same afternoon of Tuesday 22 November Maserumule sent a letter to
all the attorneys representing the individual
employees and informed
them of the situation.
[15]
On the morning of Wednesday 23 November Mr Mbuyisa did apply for a
postponement. He explained that, although he had applied
for the
initial joinder, he had not been involved in preparation for the
arbitration, including leading and cross-examining witnesses.
He
explained that Mr Maserumule, who had prepared to present and argue
the SABC’s case, was unable to attend the next two
days due to
sudden and unforeseen circumstances relating to his wife’s
terminal cancer.
[16]
Some, but not all, of the individual employees’ legal
representatives opposed the application for postponement. The
arbitrator refused the postponement. He reasoned that the arbitration
had been set down for five days and that “Mr Maserumule
must
have been aware prior to Monday already about the procedures his wife
had to undergo”. He was of the opinion that “there
is no
reason why counsel could not have been instructed or another
colleague”. He went further:
“
The
matter is going nowhere and it seems that it might well be tactical.
I do not say it is in fact so, but one has the suspicion
especially
was not present on Monday, hence the matter was postponed at 3 PM
already and today the witness is not in attendance
again.
…
I
am not satisfied that enough was done on the side of the SABC to
ensure or try to get someone to lead the case today does seem
that by
Monday on their site must be known that there is a strong possibility
of Mr Maserumule not being available for the rest
of the week.
Contingency plans should have been made. There is simply no adequate
explanation of alternative arrangements for legal
representation
made.”
[17]
The arbitrator stood the matter down until 12:30 “for the
witness who is currently not here to get to the CCMA premises
and for
instructions to be given.” He concluded: “The matter will
proceed on a default basis should the witness not
attend.”
[18]
The arbitration then proceeded on the basis – without the
SABC’s witness presenting evidence – while Messrs
Mbuyisa
and Xama remained in the hearing room. They did not participate in
the proceedings.
[19]
Each of the individual employees presented evidence under oath. They
all denied any involvement in the fraudulent scheme. Based
on that
evidence, the arbitrator made an award on 5 December 2016 in which he
found their dismissals to have been substantively
and procedurally
unfair. He ordered the SABC to reinstate them retrospectively, with
back pay amounting to R 2 896 409,
84.
[20]
The SABC applied for rescission of the award based on it been having
granted by default, as the arbitrator had indicated in
his earlier
ruling. He refused and handed down his rescission ruling on 1
February 2017. He did not accept that the arbitration
took place “in
the absence of any party”, given that Xama and Mbuyisa remained
in attendance after the arbitrator had
refused to postpone the
arbitration proceedings. And obviously the SABC did not present a
case why the dismissals were for a fair
reason; and although good
cause may have been shown that a fair procedure was in fact followed,
“the applicant was not absent
the application in terms of
section 144(d) cannot be successful" [
sic
].
This review and the
relief sought
[21]
The SABC seeks to have both the rescission ruling and the
postponement ruling reviewed and set aside. On either basis, the
effect would be that the arbitration award of 2 December 2016 would
be set aside or rescinded and another arbitrator would have
to
consider the dispute on the merits, having heard all the parties.
Evaluation / Analysis
[22]
I shall consider each of the rulings chronologically.
Refusal to postpone the
arbitration
[23]
When refusing to postpone
the proceedings, the arbitrator quite correctly referred to
Carephone
[7]
:
“
In
a court of law the granting of an application for postponement is not
a matter of right. It is an indulgence granted by
the court to
a litigant in the exercise of a judicial discretion. What is
normally required is a reasonable explanation for
the need to
postpone and the capability of an appropriate costs order to nullify
the opposing party’s prejudice or potential
prejudice.
Interference on appeal in a matter involving the lower court’s
exercise of a discretion will follow only
if it is concluded that the
discretion was not judicially exercised (
Madnitsky
v Rosenberg
1949 (2) SA 392
(A) at 398-399).
There
are at least three reasons why the approach to applications for
postponements in arbitration proceedings under the auspices
of the
Commission under the LRA is not necessarily on a par with that in
courts of law. The first is that arbitration proceedings
must
be structured to deal with a dispute fairly and quickly (s 138(1)).
Secondly, it must be done with ‘the minimum
of legal
formalities’ (s 138(1)). And thirdly, the possibility of
making costs orders to counter prejudice in good
faith postponement
applications is severely restricted (s 138(10)).”
[24]
Applying
Carephone
, the arbitrator found that the SABC could
have made alternative arrangements when Mr Maserumule became
unavailable. But the facts
in this case are quite different from
those in
Carephone.
In that case, the partner in a large law
firm who had been assigned to the matter became unavailable a full
five days before the
arbitration was due to start. There was no
explanation of any steps taken to get another practitioner to take
over during that
time. In this case, Mr Maserumule was taken by
surprise. What he initially thought would be an interruption for a
couple of hours
on one day turned out to be a process over two full
days. He could not have foreseen it. And his junior colleague was not
in a
position to proceed. There was nothing at all before the
commissioner to suggest that Mr Maserumule’s unforeseen
unavailabity
was “tactical” or anything less than
bona
fide
.
[25]
Mr Mbuyisa, the junior attorney, was not prepared to deal with the
arbitration itself; nor could he prepare adequately at such
short
notice. He would have had to do so overnight in a matter where, as
here, the 15 employees were represented by some seven
or eight sets
of counsel and attorneys and the documentary evidence comprised 14
bundles of documents. Xama also explained that
he was not in a
position to simply take over from his attorney.
[26]
In my view, the arbitrator’s refusal to postpone the
arbitration in the unique circumstances of this case was irrational
and unreasonable. That decision should be reviewed and set aside.
[27]
The necessary consequence of that decision is that the dispute should
be remitted for a full hearing on the merits. I
shall
nevertheless deal with the review of the rescission ruling as well,
given that it raises an interesting – and, as far
as the Court
and all the counsel that appeared before it are aware – novel
question relating to s 144.
The rescission ruling
[28]
The arbitrator refused to rescind the 2 December 2016 award on 1
February 2017. He did so on two grounds: Firstly, that it
was not a
default award “made in the absence of any party”; and
secondly, given that he had refused the postponement
on 23 November
2016, he could not revisit that decision by way of the rescission
application.
[29]
Section 144 of the LRA provides that:
“
Any
commissioner who has issued an arbitration award or ruling, or any
other commissioner appointed by the director for the purpose,
may on
that commissioner’s own accord or, on the application of any
affected party, vary or resend an arbitration ruling
–
…
(d)
made in the absence of any party, on good cause shown.”
[30]
Did the Commissioner in this case make the award “in the
absence of any party”?
[31]
It is common cause that, having been unsuccessful in their
application for a postponement, the SABC’s attorneys took
no
further part in the proceedings. Neither did the SABC present in
evidence. But Mr Mbuyisa (Mr Maserumule’s colleague)
and Mr
Xama (the SABC’s employment relations manager) remained in the
hearing room. It is in those circumstances that the
Commissioner’s
warned the parties that “the matter will proceed on a default
basis should the witness not attend.”
[32]
In his rescission ruling, the Commissioner found that the word
“absence” means “not present” or “not
in attendance” or “being away”. He had regard to
the online Cambridge dictionary which defines absence as “the
fact of not being where you are usually expected to be”. He
found that the SABC was not absent from the proceedings and therefore
s 144(d) did not apply.
[33]
In my view, that is to formalistic and interpretation of the
subsection. I would go further and say that it is so far removed
from
the intention of the legislature that it is unreasonable and thus
reviewable.
[34]
In my view, it cannot be said that a party to litigation or
arbitration is truly “present” in the sense of
meaningfully
participating in the proceedings when both the attorney
and the client had actively withdrawn from further participation in
the
proceedings. The fact that they were physically present in the
room does not, in my opinion, preclude a finding that the proceedings
took place “in the absence” of that party.
[35]
The finding of the arbitrator to the contrary seems to me to be so
formalistic that it is irrational. The ruling on rescission
should be
reviewed and set aside as well.
[36]
The logical upshot of that finding is that the arbitration award of 2
December 2016 should be rescinded. It would serve no
purpose to refer
the decision on rescission back to another commissioner. The full
facts are before this Court.
Enforcement and security
[37]
The SABC has asked for execution of the arbitration award to be
stayed pending the resolution of this review application; and
for the
security provided for in s 145(8) to be waived. Given the outcome of
this application, those issues have become moot.
Conclusion
[38]
The postponement ruling should be reviewed and set aside. So should
the ruling on rescission. On either basis, the result is
that the
award of 2 December 2016 must either be set aside or rescinded. The
dispute must be remitted to the CCMA for a proper
hearing on the
merits, giving all parties the opportunity to give evidence and to be
cross examined. That hearing should be held
on an expedited basis,
given the number of employees involved and the delays to date.
[39]
In law and fairness, a costs award is not appropriate. The result of
this ruling is that the dispute is not finalised; and
although the
SABC has been successful, it would not be fair to hold the individual
employees liable for costs.
Order
[40]
I therefore make the following order:
40.1
The ruling of the second respondent, Commisioner Daniel du Plessis,
issued on 1 February 2017 in which he refused to rescind
his award
issued on 2 December 2016 is reviewed and set aside, and the award is
rescinded.
40.2
The ruling of the second respondent on 23 November 2016 when he
refused to postpone the arbitration hearing is reviewed and
set
aside.
40.3
The dispute is remitted to the CCMA (the first respondent) for a
fresh arbitration on the merits before a commissioner other
than the
second respondent. The CCMA is directed to set the matter down for
hearing on an expedited basis.
40.4
No order as to costs.
Steenkamp
J
APPEARANCES
APPLICANT
(SABC):
M J van As
Instructed
by Masreumule Inc.
THIRD AND FOURTH
RESPONDENTS:
(Mathoma
& Mugeri)
E Furstenburg
Instructed
by J F van Zyl.
FIFTH RESPONDENT:
(Nyathi)
SIXTH RESPONDENT:
(Mtsweni)
Thabang Mathibe
(attorney).
L
Botha attorneys.
EIGHTH RESPONDENT:
(Mashigo)
NINTH RESPONDENT:
(Mkhabela)
TENTH AND ELEVENTH
RESPONDENTS:
(Senna and Mhlanga)
THIRTEENTH RESPONDENT:
(Letsipa)
FOURTEENTH RESPONDENT:
(Mavumengwana)
FIFTEENTH RESPONDENT:
(Mothloki)
M A Lennox
Instructed by Douglin
Shapiro Dermantinis.
J S C Nkosi
Instructed by Choshane
attorneys.
S Gaju
Instructed by
Sudeshnee Naidoo attorneys.
B Khoza (attorney).
Mabaso attorneys.
Narain
attorneys.
[1]
Commission
for Conciliation, Mediation and Arbitration.
[2]
Labour
Relations Act 66 of 1995
.
[3]
BEMAWU
and Others v SABC and Others
(J2239/2015)
[2016] ZALCJHB 74.
[4]
Par
[13]. (Ironically, in that case, Mr
Van
As
–
who
now appears for the SABC – appeared against it for the trade
union. In both cases, Mr Maserumule was the attorney for
the SABC).
[5]
In
these proceedings, the employees were represented by a total of
seven different counsel or attorneys.
[6]
It
must unfortunately be noted that Mr Maserumule’s wife passed
away as a result of the cancer earlier this year.
[7]
Carephone
(Pty) Ltd v Marcus N.O.
(1998)
19
ILJ
1425
(LAC) pars [54] – [55].