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[2019] ZALCJHB 203
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Bytes Managed Solutions (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR2212/16) [2019] ZALCJHB 203 (19 August 2019)
THE
LABOUR COURT OF SOUTH AFRICA, HELD AT JOHANNESBURG
Not
reportable
case no: JR 2212/16
In
the matter between:
BYTES
MANAGED SOLUTIONS (PTY) LTD
First
Applicant
and
THE
COMMISSION FOR CONCILIATION, MEDIATION & ARBITRATION
First
Respondent
MBONGENI
MOTSOENENG (
N.O.
)
Second
Respondent
JEFFREY
MAPHAKELA
Third
Respondent
Heard
:
14 August 2019
Delivered
:
19 August 2019
Summary:
(Review – arbitrator failing to allow postponement for
applicant to arrange legal representation
– arbitrator failing
to consider if appropriate cost award would have remedied prejudice
to employee – (
obiter
) arbitrator permitting advocate to
appear without anything to suggest counsel had been briefed by an
attorney also irregular)
JUDGMENT
LAGRANGE
J
Background
[1]
[2]
This is a review application of an arbitration award in which the
arbitrator found that
the third respondent’s retrenchment was
both procedurally and substantively unfair. The applicant company
retrenched the
third respondent who was a storeman
[3]
The arbitrator’s reasoning in finding the retrenchment
procedurally unfair was that:
3.1
The first consultation meeting with the employee was not proceeded by
any notice along the lines
expected in section 189 [3] of the LRA and
in fact no forewarning of what the meeting was about was given to
him.
3.2
The retrenchment was a fait accompli because the employer had already
decided before the meeting
on 8 June 2016 that he would be dismissed.
Any suggestion that it was only a provisional decision was belied by
the fact that the
employee was not advised to come up with
alternative proposals.
3.3
No genuine offers of alternative positions were made.
3.4
The employer knew as far back as January 2016 that it would have to
shed staff but nonetheless
renewed the employees contract for another
12 months in April 2016 only to spring the news of the retrenchment
on him in June.
3.5
The fact that the employees contract contained a clause which
envisaged the possibility of retrenchment
taking place before the
contract had run its full term could not shield the applicant from
liability in terms of the contract of
employment.
[4]
In relation to the substantive unfairness, the arbitrator was
persuaded that the retrenchment
was substantively unfair on the basis
that:
4.1
There was evidence that during the consultation one of the employer
representatives argued that
he should not be dismissed and even
though it was the employee who testified to this, the arbitrator did
not regard it as hearsay
because it was a statement made in his
presence.
4.2
In any event, the arbitrator found that the employer had no right to
retrenchment employee on
a fixed term contract especially when it
renewed the contract in circumstances where it must’ve known
that it had sufficient
resources to employ him for another 12 months.
Grounds of review:
[5]
While admitting that the failure to provide the third respondent with
a notice in terms
of section 189 [3] of the Labour Relations Act, 66
of 1995 (‘the LRA’) deprived him of an informed
perspective and
necessary information available to him prior to the
meeting so that he could give it his consideration beforehand, the
applicant
argues that no prejudice was suffered by him as a result
because it dealt with all aspects in section 189 [3] during the
course
of the consultation meeting on 8 June. Further, it claims it
then gave him the opportunity to consider his position and if he
deemed
it necessary to request further consultations. The applicant
submits this would have provided him with the time to consider his
position take advice and make representations which he failed to do.
Accordingly, the applicant takes the arbitrator to task for
criticizing the respondent for not apprising the employee of the
retrenchment consultation beforehand and then expecting him to
engage
meaningfully in consultation, whereas the applicant contends the
first meeting was merely informative and it was never expected
that
the employee would have to respond in that meeting. This version that
the first meeting was merely informative, is entirely
at odds with
the applicant’s version in the arbitration proceedings where it
maintained that the first meeting was very much
a consultation
meeting in keeping with the LRA’s intention that there should
be a meaningful consultation process.
[6]
Secondly, the applicant argues that the arbitrator’s finding
that the retrenchment
was a
fait accompli
, the applicant
entailed misconstruing Engelbrecht’s testimony, which was
simply to the effect that a decision was taken that
it would be
necessary to dispense with two of the three store controller
positions, but that did not mean that dismissal would
necessarily
follow.
[7]
Thirdly, the applicant contends that the arbitrator’s finding
that at no stage was
the employee invited to provide alternatives and
that he was simply asked to show an interest in a position that was
also open
to other employees, is illogical. The applicant’s
reasoning is that where the employee expressed no interest in the
possible
alternatives mentioned by the applicant there was no point
in pursuing the discussion of alternatives.
[8]
Fourthly, the arbitrator misconstrued the evidence in concluding that
the applicant knew
as far back as January that retrenchments were
envisaged whereas the evidence showed that it did not envisage at
that point that
there would be no work for the storemen or even when
it renewed the employee’s contract in April 2016.
[9]
Fifthly, the applicant maintains the arbitrator erred in law in
believing that it was unlawful
to terminate a fixed term contract in
circumstances where the parties had expressly provided for the
possibility of early termination
through retrenchment.
[10]
Lastly, in awarding the employee 10 months’ remuneration as
compensation the arbitrator made a grossly
inappropriate award
bearing in mind the circumstances and the fact that the award of
compensation exceeded the outstanding portion
of the applicants fixed
contract and was more than the employee was asking for.
[11]
In the applicant’s supplicant supplementary affidavit, it
focused on the conduct of the arbitration.
The additional points of
review raised were that:
11.1 In the
applicant’s evidence at the arbitration extensive evidence was
given of the alternative position at
the CIW warehouse and that an
alternative position for a stores person would be available in Cape
Town and at that stage no meaningful
engagement was expected of him.
11.2 The
applicant further attempted to bolster its explanation that the
decision to retrench the employee was not a
fait accompli
and
the employee was only told in the meeting of 8 June 2016 that his
contract would end at the end of June because he had declined
the two
other positions that were available. The only issue with the
applicant concedes was predetermined was that there was not
enough
work for three individuals in the store function, but alternatives
were available and were canvassed.
11.3 The
finding that no alternatives were canvassed with the employee was
entirely unreasonable in the light of testimony
that there were
positions open and the employee was invited to express an interest in
the position. Further, the applicant indicated
to the employee that
it was willing to consider alternatives he might wish canvass with
them. The arbitrator also misconstrued
the employer’s
obligation namely that he believed the employer was obliged to
actually offer a position to an employee.
11.4 In
concluding that the consultation process was inadequate, the
arbitrator ignored the fact that the employee himself
refused to
entertain further proposals and indicated that any communications
would be undertaken through legal representatives,
which undermined
any process of effective and meaningful consultation.
[12]
If it was necessary to consider the substantive merits of the
arbitration award, I would be inclined to agree
that the arbitrator
appeared to have misdirected himself in equating the compensation due
to the employee as being necessarily
equivalent to the unexpired
portion of his fixed term contract, which in any event he appears to
have slightly overestimated. I
would be less inclined to accept that
the arbitrator was grossly unreasonable in concluding that the
retrenchment was procedurally
unfair.
[13]
Be that as it may the applicant belatedly raised an important
procedural irregularity which cannot be brushed
aside. The applicant
contends that the arbitrator should not have allowed the arbitration
proceedings to proceed when it withdrew
its jurisdictional objection
at the hearing convened for the purpose of considering the
jurisdictional point it had previously
wished to raise. In proceeding
with the arbitration, it argues the arbitrator deprived the applicant
of the opportunity to properly
consult with witnesses for the
purposes of leading evidence and without giving the applicant an
opportunity to use legal representation.
The arbitrator unreasonably
rejected the applicant’s application for a postponement. It was
not unreasonable in my view of
the arbitrator to have expected the
applicant in those parties to have been ready to proceed as there
would have been absolutely
no reason for postponement in the matter
and the applicant or to have foreseen the possibility that the matter
might then proceed
in the absence of anything else in delaying its
commencement. However, the arbitrator’s conduct in proceeding
when the applicant
had pertinently raised the issue of wanting legal
representation was more cavalier.
[14]
Rule 25(1)(b) and (c) of the CCMA Rules state:
“
(b)
Subject
to paragraph
(c)
, in any arbitration proceedings a party
to the
dispute
may appear in person or be
represented only by-
(i) a
legal
practitioner
; or
(ii) an
individual entitled to represent the party at conciliation
proceedings in terms of sub-rule (1)
(a)
.
(c) If the dispute
being arbitrated is referred in terms of section 69(5), 73 or 73A of
the BCEA or is about the fairness of a dismissal
and a party has
alleged that the reason for the dismissal relates to the employee's
conduct or capacity, a party is not entitled
to be represented by a
legal practitioner or a candidate attorney in the proceedings unless-
(i) the
commissioner and all the other parties consent;
(ii) the
commissioner concludes that it is unreasonable to expect a party to
deal with the dispute without legal representation,
after
considering-
(a)
the nature of the questions of law raised by the dispute;
(b) the
complexity of the dispute;
(c) the
public interest; and
(d) the
comparative ability of the opposing parties or their representatives
to deal with the dispute.”
[15]
When the applicant withdrew the jurisdictional point, its
representative, Ms D Morris (‘Morris’)
asked for a
postponement owing to its witnesses being unavailable and because she
was unable to consult an attorney before the
arbitration. She claimed
to have only discovered a week before the arbitration that she was
entitled to be represented by a lawyer
because the dismissal was for
operational reasons and was travelling around the country on work
related commitments during the
previous week. The employee was
represented by an advocate and she also asked if there was any
distinction between an advocate
and attorney. The arbitrator
explained the difference and mentioned
inter alia
that
advocates were “litigation specialists”. He also
incorrectly intimated that an advocate who belonged to the
independent
bar was entitled to “get clients from the street”.
Morris expressed concern she would be more disadvantaged facing an
advocate and that “the playing fields are not equal.”
[16]
If the employee had an attorney who had briefed the advocate, there
was no record of anyone from the attorney’s
office being
present, nor was there any evidence that the advocate had been
briefed by an attorney. From the arbitrator’s
remarks about the
position of advocates at the independent bar he clearly did not feel
it was necessary, despite the absence of
any other indications that
the advocate had been briefed, to confirm if that was the case. In
fact, his remarks strongly suggest
that he believed Adv Maphekela was
not a member of a bar society and that there was no need to enquire
if he was on brief because
of the arbitrator’s mistaken
conception of the right of independent advocates to appear after
receiving instructions from
the client. It is noteworthy that Adv.
Maphekela said nothing to confirm his status or to confirm if he was
on brief.
[17]
The arbitrator decided to dismiss the application for postponement as
‘frivolous’ on the basis
that on the previous occasion
the applicant had not been ready to proceed because a key witness was
not available and the hearing
was adjourned for the purpose of
allowing the parties to try and settle the dispute or for the
applicant to pursue the jurisdictional
point if there was no
settlement. The arbitrator found that the applicant had 21 days to
prepare of the hearing and did not act
with reasonable dispatch to
protect its rights. However, he had no basis before him of
knowing that Morris had known at that
early stage that the applicant
was entitled to legal representation. The only evidence before him
was Morris’s statement
that she only learnt a week ago and that
she was criss-crossing the country for the rest of the week making it
difficult to consult
an attorney beforehand. In any event, the
arbitrator ought to have been sure that the applicant was aware of
its rights in that
regard and not simply assumed that to be the case.
It ought to have been manifestly evident that the issue of legal
representation
for the applicant had only come to light as an issue
in the week before the postponed hearing and that the circumstances
had made
it difficult for Morris to arrange a consultation. Had the
arbitrator pointed the issue of legal representation out to the
applicant
when the arbitration first convened when the employee was
already represented by Adv. Maphakela the situation might be
different.
[18]
Adv. Maphela rightly complained that the issue of a postponement and
legal representation could have been
raised with the employee in the
week before the date of the postponed hearing and Morris ought to
have considered the possibility
of a continuance if the applicant did
not proceed with the jurisdictional point. However, that
inconvenience could have been cured
with an appropriate cost award
which the arbitrator did not even consider in his forthright
dismissal of the application for postponement.
[19]
In the circumstances, though it cannot be said with any certainty
that the outcome of the arbitration would
have been different, it can
be said that the applicant was denied a fair hearing in the sense
that it was unreasonably refused
a postponement to obtain legal
representation which it was entitled to. I am satisfied that
this gross irregularity warrants
setting aside the award, despite my
doubts about whether the applicant’s case can be improved.
[20]
Initially I was under the impression this issue had been raised only
in the week preceding the review application
hearing, but it was set
out in the supplementary affidavit. I fully understand why the
employee would have been inclined
to oppose the review in light of
the award in his favour and some manifest shortcomings in the
applicant’s case on the record.
In the circumstances it is not
appropriate to make a cost award.
Order
[1]
The arbitration award issued under CCMA case number GAJB 13753-16
dated 10 October 2016
is reviewed and set aside and the dismissal
dispute is remitted to the first respondent to be set down for a
hearing before a commissioner
other than the second respondent.
[2]
No order is made as to costs.
_______________________
Lagrange
J
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
W
Hutchinson instructed by Fluxmans Inc.
RESPONDENT:
A
Goldberg of Goldberg Attorneys