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[2019] ZALCJHB 21
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Mathopo, Moshimane and Mulangaphuma t/a DM5 Inc v Commission for Conciliation, Mediation and Arbitration and Others (JR616/15) [2019] ZALCJHB 21 (5 February 2019)
In
the labour court of South Africa, JOHANNESBURG
Not Reportable
case
no: jr 616/15
In the matter between
MATHOPO, MOSHIMANE AND
MULANGAPHUMA
T/A DM5 INC
Applicants
and
COMMISSION FOR
CONCILIATION,
MEDIATION AND
ARBITRATION
First Respondent
LARRY SHEAR
N.O.
Second
Respondent
SIMANGELE
JULIA NHLAPO
Third
Respondent
Delivered:
5 February 2019
JUDGMENT
MAHOSI J
Introduction
[1]
This is an application in terms of section 158(1)(g) read with
section 145 of the
Labour Relations Act (LRA)
[1]
to set aside the jurisdictional ruling (ruling) issued by the second
respondent (the commissioner) under case number GAJB 105-15
on 12
March 2015. The applicant further seeks an order substituting the
jurisdictional ruling, with the order that the (CCMA) lacks
jurisdiction to determine the dispute between the parties. The
commissioner ordered that the matter must be referred for
arbitration.
[2]
Prior to outlining the applicant’s
claims in detail and to considering the issues to which they give
rise, it is necessary
to summarise the facts that form the relevant
background to the dispute between the parties.
Background
[3]
The third respondent (“Ms Nhlapo”) started working for
the applicant on 2 June
2014 as a Human Resources Manager. The
applicant and Ms Nhlapo concluded a contract of employment on 26 May
2014, which placed
Ms Nhlapho on probation for the first six (6)
months. On 3 December 2014, the applicant’s representatives met
together with
Ms Nhlapho to discuss her performance during the
probation period. Following the discussion, the contract between Ms
Nhlapho and
the applicant was terminated on the same date.
[4]
On the same date, being 03 December 2014, the applicant addressed a
letter to Ms Nhlapo
confirming the discussion and further confirming
that the termination was mutual. The letter did not record the
payment of one
monthly salary and leave pay due as agreed. As a
result, Ms Nhlapo did not sign the letter and instead drafted a
letter setting
out her recordal of the discussions at the earlier
meeting and specifically recorded the payment of the salary and leave
pay due.
The letter was signed by both parties.
[5]
Subsequent to the termination of employment, Ms Nhlapo referred an
unfair dismissal
dispute to the First Respondent (CCMA). The referral
was filed out of time and following a condonation application, the
late referral
was condoned by the CCMA. On the same day of the
hearing of the condonation application, a certificate of outcome was
issued and
the matter was referred to arbitration. The applicant did
not attend the conciliation nor did it oppose the condonation
application.
On the strength of the certificate of outcome, Ms
Nhlapho referred the dispute to arbitration.
Arbitration
[6]
The arbitration hearing was set down for 05 March 2015 and both
parties were duly
represented. At the commencement of the hearing,
the applicant raised a jurisdictional point that the CCMA lacked the
jurisdiction
to determine the dispute as Ms Hlapo was not dismissed
but rather the termination of employment was mutually agreed upon. It
was
common cause that the Third Respondent authored and signed the
letter on 03 December 2014. Ms Nhlapo, while not disputing that she
signed the letter, denied that there was a mutual termination this
notwithstanding the terms of the letter recording that the
termination was mutually agreed. Rather she submitted that she signed
the letter in order to secure payment for her December salary.
[7]
The arbitrator ruled that the CCMA does have jurisdiction to
determine the referral
and directed that the matter be set down for
arbitration. The arbitrator further ruled that the applicant took a
decision not to
extend the probation period and that constitutes a
dismissal. In support of this finding, the arbitrator stated that he
was fortified
by Ms Nhlapo’s failure or refusal to sign the
letter on the same date. The arbitrator further justified his ruling,
by stating
that if he were to find that the parties had mutually
terminated Ms Nhlapho’s services she would be without any
remedy. He
concluded that to an extent that the parties have not
tendered any evidence, it was his belief that justice and fairness
dictate
that he concludes that the CCMA has jurisdiction in order to
enable both parties to present evidence.
Grounds of review
[8]
The applicant submits that the Commissioner failed to properly apply
his mind and, as such, committed
gross irregularity or exceeded his
powers, in finding that Ms Nhlapo was dismissed by the applicant when
her probation period was
not extended.
[9]
Further that the commissioner ignored the fact that the decision not
to extend the
probation period was preceded by an agreement between
the parties to mutually terminate the employment relationship. The
applicant
argued that once parties agreed to terminate the employment
relationship, the issue of whether to extend the probation period did
not arise.
[10]
The applicant submitted that the commissioner failed to properly
apply his mind to the evidence before
him indicating that after the
meeting, the applicant addressed a letter to Ms Nhlapho setting the
terms of the discussion and confirming
the mutual termination and
that Ms Nhlapho authored and signed the letter.
[11]
According to the applicant, there was no evidence before the
Commissioner indicating that Ms Nhlapho
denies that her employment
was mutually terminated, if there was no mutual termination why would
a seasoned Human Resources Manager
in the third respondent’s
position not have said so. More so that she drafted and signed the
letter.
Applicable law and
analysis
[12]
The test for review applications based on jurisdictional error is
well established and has been stated
in numerous cases of this Court
and the Labour Appeal Court as the correctness test. In
SA
Rugby Players’ Association v SA Rugby (Pty) Ltd and Others; SA
Rugby (Pty) Ltd v SARPU,
[2]
the Labour Appeal Court (LAC) held as follows:
‘…
The
issue was simply whether, objectively speaking, the facts which would
give the CCMA jurisdiction to entertain the dispute existed.
If such
facts did not exist, the CCMA had no jurisdiction irrespective of its
finding to the contrary.’
[13]
The applicant has to establish that the arbitrator’s decision
was objectively wrong. In
Fidelity
Guards Holdings (Pty) Ltd v Epstein NO and Others,
[3]
the court held as follows:
‘
In
my view where the power to be exercised is statutory, the answer to
the question of what the jurisdictional fact(s) is (are)
which must
exist before such power can be exercised lies within the four corners
of the statute providing for such power. Accordingly
the provisions
of such statute require to be considered carefully to determine what
the necessary jurisdictional fact(s) is (are).
In the light of this I
consider it necessary to have regard to the provisions of the Act to
determine what the necessary jurisdictional
fact(s) is (are) which
must exist in a case such as this one before it can be arbitrated or
adjudicated in terms of the Act.’
[14]
It is trite that in a case where a dispute that was referred to the
CCMA was settled there is no jurisdiction
to arbitrate. However, in
this case, the commissioner was confronted with a jurisdictional
point, as raised by the applicant on
whether the dispute had become
settled. In order to determine this issue, the commissioner had to
consider whether the agreement
constituted a compromise of the
dispute before him. To decide this, the commissioner had to interpret
the agreement. Issues in
relation to the effect of settlement
agreements on the commissioner’s jurisdiction have been
considered by the courts. In
Cook4Life
CC v Commission for Conciliation Mediation and Arbitration and
Others,
[4]
this
Court stated as follow
:
‘
[14]
In my view, the refusal by commissioners to enter into any
consideration of the validity of an agreement confuses the concepts
of jurisdiction and power. The CCMA has jurisdiction to determine
unfair dismissal disputes and it is specifically enjoined, in
terms
of s 115 (1)(b), to arbitrate disputes referred to it after a failed
conciliation. Section 191 contemplates that the CCMA
must make a
ruling when the existence of a dismissal is placed in issue, by
determining whether or not an employee referring an
unfair dismissal
claim was dismissed within the meaning accorded to that term by
section 186 (1) of the Act. That being so, I fail
to appreciate why,
in matters such as the present, when it is contended that an
agreement is voidable on account of it having been
induced by duress,
the CCMA is not empowered to make that determination in the exercise
of its jurisdiction to determine the existence
or otherwise of a
dismissal. To require an applicant in those circumstances to refer a
contractual dispute to this court as a precondition
to arbitration on
an unfair dismissal claim would defeat the statutory purpose of
informal and expeditious dispute resolution,
and would import a
requirement that finds no reflection in the Act.’
[15]
In determining whether the CCMA had jurisdiction, the commissioner
had to establish whether the employment
relationship was mutually
terminated. In so doing, he had to interpret the settlement
agreement. In
CTP
Ltd T/A Caxton Newspapers Division v Mphaphuli NO and Others,
[5]
this Court restated the principles
relating
to the interpretation of statutes and other documents as mentioned i
n
Bothma-Batho
Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk.
[6]
In the latter judgment, it was stated as follows:
‘
[10]
In
Natal
Joint Municipal Pension Fund v Endumeni Municipality
the current state of
our law in regard to the interpretation of documents was summarised
as follows:
“
Over
the last century there have been significant developments in the law
relating to the interpretation of documents, both in this
country and
in others that follow similar rules to our own. It is unnecessary to
add unduly to the burden of annotations by trawling
through the case
law on the construction of documents in order to trace those
developments. The relevant authorities are collected
and summarised
in
Bastian Financial Services (Pty) Ltd
v General Hendrik Schoeman Primary School
.
The present state of the law can be expressed as follows:
Interpretation is the process of attributing meaning to the words
used
in a document, be it legislation, some other statutory
instrument, or contract, having regard to the context provided by
reading
the particular provision or provisions in the light of the
document as a whole and the circumstances attendant upon its coming
into existence. Whatever the nature of the document, consideration
must be given to the language used in the light of the ordinary
rules
of grammar and syntax; the context in which the provision appears;
the apparent purpose to which it is directed and the material
known
to those responsible for its production. Where more than one meaning
is possible each possibility must be weighed in the
light of all
these factors. The process is objective, not subjective. A sensible
meaning is to be preferred to one that leads to
insensible or
unbusiness-like results or undermines the apparent purpose of the
document. Judges must be alert to, and guard against,
the temptation
to substitute what they regard as reasonable, sensible or
business-like for the words actually used. To do so in
regard to a
statute or statutory instrument is to cross the divide between
interpretation and legislation; in a contractual context
it is to
make a contract for the parties other than the one they in fact made.
The 'inevitable point of departure is the language
of the provision
itself
1
,
read in context and having regard to the purpose of the provision and
the background to the preparation and production of the
document.”
[11]
That statement reflected developments in regard to contractual
interpretation in
Masstores
(Pty) Ltd v Murray & Roberts Construction (Pty) Ltd; KPMG
Chartered Accountants (SA) v Securefin Ltd & another
and
Ekurhuleni
Municipality v Germiston Municipal Retirement Fund
.
I return to it and to
those cases only because we had cited to us the well- known and much
cited summary of the earlier approach
to the interpretation of
contracts by Joubert JA in
Coopers
& Lybrand & others v Bryant
,
that:
‘
The
correct approach to the application of the 'golden rule' of
interpretation after having ascertained the literal meaning of the
word or phrase in question is, broadly speaking, to have regard:
(1)
to the context in which the word or phrase is used with its
interrelation to the contract as a whole, including the nature and
purpose of the contract ... ;
(2)
to the background circumstances which explain the genesis and purpose
of the contract, i.e. to matters probably present to the
minds of the
parties when they contracted. . ;
(3)
to apply extrinsic evidence regarding the surrounding circumstances
when the language of the document is on the face of it ambiguous,
by
considering previous negotiations and correspondence between the
parties, subsequent conduct of the parties showing the sense
in which
they acted on the document, save direct evidence of their own
intentions.’
[12]
That summary is no longer consistent with the approach to
interpretation now adopted by South African courts in relation to
contracts or other documents, such as statutory instruments or
patents. Whilst the starting point remains the words of the document,
which are the only relevant medium through which the parties have
expressed their contractual intentions, the process of interpretation
does not stop at a perceived literal meaning of those words, but
considers them in the light of all relevant and admissible context,
including the circumstances in which the document came into being.
The former distinction between permissible background and surrounding
circumstances, never very clear, has fallen away. Interpretation is
no longer a process that occurs in stages but is ‘essentially
one unitary exercise. Accordingly it is no longer helpful to refer to
the earlier approach.’
[16]
The commissioner’s finding that the CCMA had
the jurisdiction to arbitrate the dispute was premised on the
conclusion that
the applicant took a decision not to extend the
employee’s probation period. In coming to the aforesaid
conclusion, he interpreted
the settlement agreement and rejected the
applicant’s reliance on the part of the agreement where it was
stated that “this
termination has been agreed based on the
following terms…” Instead, he took the view that the
phrase should be read
in the context of the whole letter. The letter
in question records as follows:
‘
03
December 2014
6 Months’
Probation: HR Manager
The firm has taken a
decision not to offer Simangele Nhlapho the abovementioned position
after the probation period. This decision
was taken on Wednesday, 03
December 2014
This is the first formal
and final probation the firm has conducted with Simangele Nhlapho.
The end of contract is based on cultural
fit as per the meeting with
Vele Malungaphuma and Lerato Mathopo
The contract of Simangele
Nhlapho is terminated with immediate effect; this termination has
been agreed based on the following terms:
Leave balance of 6.75
December salary to be
paid on my account on 19 December 2014.’
[17]
The commissioner’s interpretation of the abovementioned
agreement is in line with the test
laid out in
Bothma-Batho.
In interpreting the agreement, he
considered both the context and the language of the agreement. The
applicant relied on the perceived
literal meaning of the words “this
termination has been agreed based on the following terms”. The
commissioner did
not stop at the said words, he considered them
in
the light of all relevant and admissible context, including the
circumstances in which the document came into being
.
The subject matter of the letter was Nhlapho’s six months’
probation. It further records that the meeting the applicant
had with
Ms Nhlapho constituted a first and final probation period. It was in
this meeting that the applicant took the decision
not to offer
Nhlapho the HR Manager position after the probation period which
decision was “based on cultural fit.”
[18]
Ms Nhlapho relied on section 158(1B) of the LRA and Clause 11.2.5 of
the Labour Court Practice Manual
of the Labour Court in submitting
that there would be no basis for the ruling to be reviewed before the
issue in dispute has been
finalised. Her contention was that it would
result in a grave miscarriage of justice if this Court was to delve
into the merits
of the dispute without having allowed the CCMA to
deal with the same as a forum of first instance and without having
the benefit
of evidence led by the parties on the matter. Section
158(1B) of the LRA provide thus:
‘
The
Labour Court may not review any decision or ruling made during
conciliation or arbitration proceedings conducted under the auspices
of the Commission or any bargaining council in terms of the
provisions of this Act before the issue in dispute has been finally
determined by the Commission or the bargaining council, as the case
may be, except if the Labour Court is of the opinion that it
is just
and equitable to review the decision or ruling made before the issue
in dispute has been finally determined.’
[19]
Clause 11.2.5 of the Labour Court Practice Manual provides that
applications under sections 145 and
158(1) (g) of the LRA should not
ordinarily be brought in respect of proceedings that are incomplete.
Therefore, the issue is whether
it is just and equitable for this
Court to review the decision or ruling made by the commissioner
during the arbitration proceedings
before the issue in dispute has
been finally determined. This Court has a discretion on whether to
proceed with the review on the
merits.
[20]
From the reading of the ruling, it is apparent that the commissioner,
having considered the language
and the context of the agreement,
concluded that justice and fairness dictate that the merits and
demerits of the unfair dismissal
dispute be ventilated in evidence to
be led in the arbitration. The applicant has not made out a case for
this Court to permit
its application on a piecemeal basis. As such, I
am of the view that the commissioner correctly found, in his first
ruling, that
the CCMA has jurisdiction to arbitrate the matter.
[21]
With regard to costs, I am of the opinion that the requirements of
law and fairness dictate that
there should be no order as to costs.
[22]
In the circumstances, I make the following order:
1.
The application to review and set aside the
jurisdictional
ruling issued by the second respondent under case number GAJB 105-15
on 12 March 2015
is dismissed.
2.
There is no order as to costs.
__________________
D Mahosi
Judge
of the Labour Court of South Africa
APPEARANCES:
FOR THE
APPLICANTS:
Advocate Van As
Instructed by
Mathopo Attorneys
FOR THE RESPONDENT
Advocate
D.Z Kela
Instructed
by Ndumiso Voyi Inc
[1]
Act 66 of 1996, as amended.
[2]
[2008] ZALAC 3
;
[2008]
9 BLLR 845
(LAC) at para 41.
[3]
[2000]
12 BLLR 1389
(LAC) at para 7.
[4]
(2013)
34 ILJ 2018 (LC).
[5]
(2015)
36 ILJ 1042 (LC).
[6]
[2014]
1 All SA 517
(SCA);
2014 (2) SA 494(SCA)
.