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[2018] ZALCD 16
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Samuel v Old Mutual Bank and Others (D398/11) [2018] ZALCD 16; (2019) 40 ILJ 205 (LC) (21 September 2018)
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IN
THE LABOUR COURT OF SOUTH AFRICA, DURBAN
Reportable
Case
no: D 398/11
In
the matter between:
RUMBA
SAMUEL
Applicant
and
OLD
MUTUAL
BANK
First
Respondent
COMMISSIONER
JABULANI
NGWANE
Second
Respondent
COMMISSION
FOR CONCILIATION,
MEDIATION
AND
ARBITRATION
Third
Respondent
Heard:
1 March 2018
Judgment:
21 September 2018
JUDGMENT
GUSH,
J
Introduction
[1]
This is an
application to review and set aside the arbitration award of the
second respondent dated 7 April 2011, wherein he found
that the
dismissal of the applicant was unfair but ordered compensation in an
amount equivalent to twelve months’ salary.
Background
[2]
The
applicant was employed by the first respondent in its Durban offices
on 15 October 1981. She had worked for the first respondent
for close
to 26 years holding various clerical positions. At the time of her
dismissal the applicant worked in the reception area.
[3]
The
applicant was dismissed on 23 May 2007 for alleged acts of
misconduct. The applicant dissatisfied with her dismissal referred
a
dispute to the third respondent who appointed the second respondent
to arbitrate the dispute.
[4]
Somewhat
startlingly, the arbitration commenced on 18 October 2007 and
continued for 28 days over a period of almost 4 years. The
second
respondent’s award is dated 4 April 2011.
[5]
In his
award the second respondent found “on the overall evidence
before me, the respondent has failed to prove on a balance
of
probabilities that the dismissal of the applicant was fair.”
[1]
despite so finding the second respondent declined to reinstate the
applicant and ordered that the first respondent pay the applicant
compensation in an amount equivalent to 12 months’
remuneration.
[6]
The second
respondent under the heading “
Appropriate
Remedy
”
records that the applicant “prayed for reinstatement and the
respondent opposed the reinstatement stating that it
would in the
circumstances not be
appropriate
”
[my emphasis]
[2]
. It is
appropriate to quote in full, the second respondent’s reasoning
in concluding that reinstatement was not the appropriate
remedy. He
says:
‘
6.2 S193(2) (b) [of the LRA] as
amended, provides that: “the Labour Court or the arbitrator
must require the employer to reinstate
or reemploy the employee
unless the circumstances surrounding the dismissal are such that a
continued employment relationship would
be intolerable”
6.3 The applicant herself conceded
that the employment relationship between her and her managers Prem
Naidoo and Barney Walker was
intolerable.
6.4 Paul Rist testified that there
were new systems in place which would take close to six months to
train the applicant to catch
up as she had been away from the
operations for close to four years.
6.5 Zakhona Ncalane testified that the
“war” between Prem Naidoo and the applicant would start
again and affect the
workplace if the applicant which returned to
work.
6.6 Mbali Cele testified that she
would not have the applicant in her branch as she was too difficult
to instruct.
6.7 This evidence, which paints out to
the surrounding circumstances, militates overwhelmingly against the
considerations of reinstatement
of the applicant. (sic)
6.8 Having observed the demeanour of
the witnesses and the applicant’s attitude towards Prem Naidoo
and Barney Walker,
the nature of interventions attempted by the
respondent to improve the relationship between the parties, the
longevity of the acrimonious
relationship between the parties and the
age of the applicant, I am satisfied that a reinstatement order would
not be conducive to good workplace relations
but would
probably undermine whatever measures that might have been taken to
sustain workplace harmony and might scratch open the
wounds that
might have healed by the distance between the disputants. (my
emphasis)
6.9 I therefore refused to reinstate
the applicant and now consider the alternative remedy of compensation
which I am satisfied
is the most appropriate and just in the
circumstances’.
[3]
[7]
It is
apparent from the pleadings that the applicant was born on […]
1951, and was accordingly 56 years old when she was
dismissed.
[8]
In his
award the second respondent records that it was common cause that the
usual retirement age for employees of the first respondent
is 61. The
applicant does not take issue with this this conclusion in her
founding affidavit. In her supplementary affidavit the
applicant
simply “point[s] out
[4]
that her retirement age is 65.”
[5]
The retirement age is only placed in dispute in the applicant’s
replying affidavit. I am not satisfied that there is sufficient
evidence in the record of the arbitration or the applicant’s
pleadings to gainsay the conclusion of the second respondent
that it
was common cause that the retirement age was 61. Accordingly, for the
purposes of this judgment I am satisfied that the
normal retirement
age is 61.
The
Award
[9]
It is
important to take into account that this matter eventually was argued
before this Court in 2018 some 11 years after the dismissal.
The
matter has been plagued by inordinate delays.
[10]
It is
barely conceivable that an arbitration should be allowed to take
place over a period of almost 4 years. These delays were
in no small
measure due to the respondent leading the evidence of 8 witnesses and
the applicant 17 witnesses including herself.
[11]
The delays
in the matter being concluded extended to the applicant’s
application to review the award. The referral of the
award to this
Court was made timeously. The review application was filed on 16 May
2011 but thereafter the extensive delay by the
applicant in
filing the record led to the applicant’s review application
being archived.
[12]
The
applicant only applied to this Court for the file to be retrieved
some 4 years later, in 2015, which application was unsuccessful.
The
applicant then appealed against the refusal of this decision, which
appeal was heard on 25 August 2016. On 25 January 2017,
the
Labour Appeal Court upheld the appeal and granted the applicant leave
to proceed with the review application. The parties
then agreed as to
the procedure and time limits for the filing of the requisite
pleadings and the matter was enrolled to be heard
in March 2018.
The
Grounds of Review
[13]
The essence
of the review is simple. The applicant is dissatisfied with the
decision of the second respondent not to grant her reinstatement
but
on the strength of his interpretation of the provisions of section
193(2) of the Labour Relations Act
[6]
(LRA), to order compensation. The first respondent in turn opposed
the applicant’s review and argued that the decision of
the
second respondent was reasonable and “is not tainted by any
reviewable defect.”
[7]
[14]
The first
respondent in addition argued that the relief sought by the applicant
namely reinstatement, was not competent on the basis
that by time the
review application was heard, the applicant had past the retirement
age. The essence of the first respondent’s
argument was that as
the applicant had passed the retirement age, she was in effect
seeking compensation. The effect of reinstatement
was that the
applicant would receive compensation in excess of the statutory limit
on compensation provided for in the LRA, viz.
12 months salary.
[15]
The
difficulty with the respondent’s argument is simply this:
15.1
At the time
of her dismissal, the applicant had not reached retirement age, nor
had the applicant reached retirement age at the
time the arbitration
was concluded.
15.2
The issue
therefore relating to whether or not the applicant was entitled to
reinstatement was alive at the time the award was handed
down. If the
second respondent had ordered reinstatement, the applicant could have
recommenced her employment.
15.3
This Court
is asked to review the second respondent’s award and in
particular the second respondent’s decision not to
order
reinstatement. If the second respondent’s decision not to award
reinstatement is reviewable it needs to be substituted
with the
correct decision.
15.4
If at the
time the decision of the second respondent is reviewed and set aside
and substituted with reinstatement, the applicant
has passed the
normal retirement age, it should not and I believe does render the
effect of the reinstatement order incompetent.
15.5
To find
that such an order in such circumstances is incompetent would simply
serve to prejudice the rights of employees who are
dismissed shortly
before their retirement or in circumstances where a review
application is delayed beyond the employees retirement
age. This is
not an outcome contemplated by the LRA and most certainly such an
outcome would be unfair.
15.5
It is an
inherent risk faced by employers in labour litigation where a final
decision is deferred whilst the litigation is ongoing.
It is for this
reason that the act specifically provides for an exception to the
obligation of the court to reinstate unless the
provisions of section
193(2) are met.
15.6
When a
dismissal is found to be unfair the only circumstances in terms of
which the court or an arbitrator may order compensation
as opposed to
reinstatement are those set out in section 193(2).
[16]
The issue
to be decided in this matter therefore is whether the second
respondent’s decision to order compensation as opposed
to
reinstatement is reviewable. In this matter the relevant two issues
that the second respondent had to consider were whether
the
circumstances surrounding the dismissal were such that “a
continued employment relationship would be intolerable”
and /or
whether is was not “reasonably practicable” for the first
respondent to reinstate or reemploy the applicant.
[17]
In
assessing the second respondent’s decision not to reinstate but
award compensation it is necessary to have regard to the
second
respondent’s reasons.
[18]
The first
issue concerns the second respondent’s conclusions regarding
the charges of alleged misconduct levelled at the applicant
by the
first respondent and the evidence the first respondent adduced in
support thereof at the arbitration and the second respondent’s
conclusion regarding the fairness of the applicant’s dismissal.
[19]
In this
regard the second respondent’s reasons for deciding that the
dismissal was unfair are clearly set out in his analysis
of the
evidence and arguments: He says the following:
‘
1
.
There was substantial evidence before
me that the charges against the applicant were preferred immediately
after the applicant had
lodged “another grievance against Prem
Naidoo;
Further the numerous charges –
nine 9 charges and there alternatives- show that these allegations
happened in the atmosphere
of chronis and serious acrimony between
[the applicant] Prem Naidoo and Barney Walker.
2.
The chairperson of the
disciplinary hearing made a finding of guilty on only four charges.
3.
He [the chairperson of the
disciplinary hearing] failed to come to this hearing to substantiate
his findings and his decision to
dismiss the applicant.
4.
S192(2) LRA 66/95, as amended,
places the onus to prove the fairness of the dismissal on the
employer. The employer has failed to
discharge this onus.
5.
Prem Naidoo who was the “main
item” from day one of this arbitration up to the conclusion of
the evidence, attended
the arbitration proceedings religiously and
she heard all accusations that were levelled against her by some of
the applicant’s
witnesses and by the applicant herself but she
decided not to “bat an eyelid”. She sat so quietly like a
statue.
6.
No reasons were advancedfor her
reluctance to offer her testimony or to defend herself from the
“vicious character assassination”
by the applicant who
testified that Prem and Pam Fixen consumed alcohol in the office
during office hours, that she demanded birthday
gifts from her
subordinates and that she took bribes and backhand from employees.
7.
…
8.
It is therefore my finding
that:
a.
The respondent’s failure
to tender evidence on the appropriateness of the sanction of
dismissal imposed on an employee with
twenty-six years of service;
b.
Even before his imposition of
the sanction, the chairperson failed to testify how he “waded”
through nine charges and
the alternatives and made findings of guilty
on only four charges;
c.
It is
probable
that Prem’s failure
to testify would confirm the applicant’s perception that
the
charges were “trumped up
”
by Prem in order to get rid of her since they had a bad relationship;
…’
[8]
(my emphasis)
d.
On the overall evidence before
me the respondent has failed to prove on a balance of probabilities
that the dismissal of the applicant
based on the four charges she was
found guilty on was fair.
[20]
The first
respondent has not applied to review the conclusions of the second
respondent as set out above.
[21]
Having
established that the dismissal was unfair and probably based on
“trumped up charges” the second respondent declined
to
order reinstatement but awarded compensation.
[22]
The second
respondent’s decision not to order reinstatement appears to be
based on three considerations: the first relates
to the applicant’s
evidence that her relationship with Naidoo and Walker was
intolerable; the second relates to the first
respondent’s
evidence that the applicant would require training to catch up as she
had been away from the operations for
close to four years and the
third is that “a reinstatement order would not be conducive to
good
workplace relations
but would probably undermine whatever measures that might have been
taken to sustain workplace harmony and might scratch open the
wounds
that might have healed by the distance between the disputants.”
[9]
[23]
I now turn
to deal with each of the reasons herein below:
19.1
Re-employment
with the first respondent cannot be equated with re-employment with
“Naidoo and Walker”. This is particularly
so in the light
of the second respondent’s conclusion that it was probable that
Naidoo had trumped up the charges against
the applicant in order that
she be dismissed. There was no credible evidence led to suggest that
the first respondent would not
be able to have placed the applicant
elsewhere within the organization.
19.2 It is pertinent to
emphasize that the second respondent concluded that the second
respondent had, despite the availability
of witnesses, failed to
prove that the applicant was guilty of misconduct, particularly that
the second respondent concluded that
it was probable that the charges
were “trumped up”. That being so it is unreasonable to
conclude that the “circumstances
surrounding the dismissal are
such that a continued employment relationship would be intolerable”.
If that were so
an employer could in order to ensure that an
employee is not reinstated itself create the” circumstances
surrounding the
dismissal” to justify a decision not to
reinstate. In this matter the applicant specifically sought
reinstatement. The prejudice
to the applicant if she if not
reinstated is substantial particular in the light of her length of
service and proximity to retirement.
19.3
The effect of the
second respondent refusing reinstatement and awarding compensation,
given his findings, is to punish the applicant
for having been
unfairly dismissed for alleged misconduct (“probably trumped
up”) that the first respondent was not
prepared to prove;
19.4
Evidence
that the applicant would require training given her lengthy absence
from work does not support the contention that it is
not reasonably
practicable for the applicant to have been reinstated or that a
continued employment relationship would be intolerable.
In fact, by
giving evidence that the applicant would have required training
suggests that it was indeed reasonably practicable
for her to be
reinstated.
19.5
The second
respondent did not conclude that a continued relationship is
“intolerable” but found that reinstatement would
“not
be conducive to good workplace relations” and accordingly
awards compensation. It is not possible to equate the
two. By doing
so the second respondent in justifying his decision not to reinstate
commits a reviewable irregularity and misconduct.
[24]
In
Xstrata
South Africa (Pty) Ltd (Lydenburg Alloy Works) v National Union of
Mineworkers obo Masha and Others
[10]
the Labour Appeal Court referred to the decision in
Mediterranean
Textile Mills
(
Pty
)
Ltd v
SACTWU and others
and
held:
‘…
reinstatement is the
primary remedy under the LRA and involves placing an employee back in
employment as if the dismissal had never
occurred. If the exceptions
to the remedy of reinstatement do not apply, the Labour Court and
arbitrators only have a discretion
with regard to the extent to which
reinstatement should be made retrospective.’
[11]
[25]
As far as
the delay in the finalisation of a matter is concerned the court
held:
‘…
it
is not rational to use the lapse of time between Masha’s
dismissal and the arbitration to deny her the primary remedy of
reinstatement. If that was a relevant factor, an employer could avoid
reinstatement by merely delaying the completion of the arbitration.’
[26]
I am
acutely aware of the inordinate delay between the referral of the
dispute to arbitration and the finalization of that arbitration.
It
was available to the first respondent to argue that as a result
thereof, should reinstatement be ordered that reinstatement
should be
from a later date and not the date of dismissal. This was not argued.
[27]
The Labour
Appeal Court
in
the
Xstrata
[12]
matter then considered
what reasonably practicable meant:
‘
The object of section 193(2)(c)
of the LRA is to exceptionally permit the employer relief when it is
not practically feasible to
reinstate; for instance, where the
employee’s job no longer exists, or the employer is facing
liquidation, relocation or
the like. The term “not reasonably
practicable” in section 193(2)(c) does not equate with
“practical”,
as the arbitrator assumed. It refers to the
concept of feasibility. Something is not feasible if it is beyond
possibility.’
[28]
I am
satisfied that the second respondent’s analysis, understanding
and application of the provisions of section 193(2) of
the LRA and
the consequential decision not to reinstate but to award compensation
constitutes a defect in the award as provided
for in section 145 of
the LRA. As such the award of compensation falls to be reviewed and
set aside.
[29]
There is no
reason in law or in fairness why in this matter costs should not
follow the result.
[30]
In the
circumstances and for the reasons set out above I make the following
order:
Order
1.
The second
respondents award in so far as he refused to reinstate the applicant
is reviewed and set aside;
2.
The first
respondent’s dismissal of the applicant was substantively
unfair;
3.
The first
respondent is ordered to reinstate the applicant on the same terms
and conditions as prevailed at the time of her dismissal;
4.
As the
applicant has reached retirement age the reinstatement is for the
period 23 May 2007 to 31 August 2012 the date upon which
she would
have retired had she not been dismissed;
5.
The first
respondent is ordered to pay the applicants costs.
D H
Gush
Judge of the Labour Court
of South Africa
Appearances:
For the Applicant:
Advocate C Todd
Instructed by: Bowman
Gilfillan Attorneys
For the respondent:
Advocate T Seery
Instructed by: Jay Reddy
Attorneys
[1]
Pleadings page 23 award at para 5.10.
[2]
Pleadings page 23 award at para 6.1.
[3]
Pleadings page 23 of the award at
para 6.
[4]
Pleadings page 17 award at para
3.5.2.
[5]
Pleadings page 30 at para 24.
[6]
Act 66 of 1995 as
amended.
[7]
Pleadings page 44 at para 26.
[8]
Pleadings page 22 of the award at
para 5.
[9]
Pleadings page 23 of the award at
para 6.8.
[10]
[2017] 4 BLLR 384 (LAC).
[11]
Page 337 at para 8.
[12]
Id n. 11 at para
11.