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[2019] ZALCJHB 213
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Osho Steel (Pty) Ltd v Ngobeni NO and Others (JR2768/2017) [2019] ZALCJHB 213; (2020) 41 ILJ 476 (LC) (27 August 2019)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Of interest to other
Judges
Case No: JR 2768/2017
In the matter between:
OSHO STEEL (PTY)
LTD
Applicant
And
EVA NGOBENI
N.O
First
Respondent
THE COMMISSION FOR
CONCILIATION, MEDIATION
AND
ARBITRATION
Second Respondent
MAHOMAD RAFIQ
QUERESHI
Third Respondent
Heard: 22 August 2019
Delivered:
27 August 2019
JUDGMENT
TLHOTLHALEMAJE,
J
Introduction:
[1]
The
First Respondent (Commissioner), issued an award on 26 October 2017
in terms of which it was found that the resignation
of the Third
Respondent (Quereshi) from the employ of the Applicant amounted to a
constructive dismissal within the meaning of
section 186 (1)(e) of
the Labour Relations Act (LRA)
[1]
.
The Applicant was ordered to pay to Quereshi, compensation in the
amount of R150 000.00 which equated to five months’
salary.
[2] The
Applicant seeks an order reviewing and setting aside the above
arbitration
award. Quereshi opposed the application, and further
raised preliminary points, which he contended were dispositive of the
review
application if upheld.
Non-compliance
with Rule 7A(5), 7A(6) and 7A(8) of the Rules of this Court:
[3] Rule
7A of the Rules of this Court provides as follows;
“
7A
Reviews
:
(1)
A party desiring to review a decision or proceedings of a body or
person performing a reviewable
function justiciable by the court must
deliver a notice of motion to the person or body and to all other
affected parties.
(2)
The notice of motion must-
(a)
call upon the person or body to show cause why the decision or
proceedings should not be
reviewed and corrected or set aside;
(b)
call upon the person or body to dispatch, within 10 days after
receipt of the notice of
motion, to the registrar, the record of the
proceedings sought to be corrected or set aside, together with such
reasons as are
required by law or desirable to provide, and to notify
the applicant that this has been done; and
(c)
be supported by an affidavit setting out the factual and legal
grounds upon which the applicant
relies to have the decision or
proceedings corrected or set aside.
(3)
The person or body upon whom a notice of motion in terms of subrule
(2) is served must timeously
comply with the direction in the notice
of motion.
(4)
If the person or body fails to comply with the direction or fails to
apply for an extension
of time to do so, any interested party may
apply, on notice, for an order compelling compliance with the
direction.
(5)
The registrar must make available to the applicant the record which
is received on such
terms as the registrar thinks appropriate to
ensure its safety. The applicant must make copies of such portions of
the record as
may be necessary for the purposes of the review and
certify each copy as true and correct.
(6)
The applicant must furnish the registrar and each of the other
parties with a copy of the
record or portion of the record, as the
case may be, and a copy of the reasons filed by the person or body.
(7)
The costs of transcription of the record, copying and delivery of the
record and reasons,
if any, must be paid by the applicant and then
become costs in the cause.
(8)
The applicant must within 10 days after the registrar has made the
record available either-
(a)
by delivery of a notice and accompanying affidavit, amend, add to or
vary the terms of the
notice of motion and supplement the supporting
affidavit; or
(b)
deliver a notice that the applicant stands by its notice of
motion.
(9)
Any person wishing to oppose the granting of the order prayed in the
notice of motion must, within 10 days
after receipt of the notice of
amendment or notice that the applicant stands by its notice of
motion, deliver an affidavit in answer
to the allegations made by the
applicant.
(10) The applicant may
file a replying affidavit within 5 days after receipt of an answering
affidavit.”
[4]
In
this case, after the arbitration award was issued, the Applicant
served its Notice of Motion together with the founding affidavit
on
Quereshi on 12 December 2017, and delivered same on
19 December 2017. On the same date, the Applicant filed
and
delivered its Rule 7A(6) Notice (as well as the transcribed record of
arbitration proceedings).
[5]
In
a response dated 15 January 2018, Quereshi’s
attorneys of record addressed correspondence to the Applicant’s
erstwhile attorneys of record (L Botha Attorneys), advising and
requesting compliance with Rule 7A(6) and 7A(8) of the Rules of
this
Court and that upon compliance, an answering affidavit would be
filed.
[6] L
Botha Attorneys’ response
via
email was that there was
compliance with the Rules, further contending that since a notice of
opposition was noted, the answering
affidavit was out of time as the
dies
expired on 28 December 2017.
[7] Quereshi’s
attorneys of record’s response on 18 January 2018
was
to reiterate that the service of Rule 7A(6) and the transcript was
not in compliance with the Rules. In this regard, it was
pointed out
that the Second Respondent, the Commission for Conciliation Mediation
and Arbitration (CCMA) still had to serve and
file the record, and
for the Applicant to comply with Rule 7A(5). It was further pointed
out that such a notice had still not been
received. The Applicant was
reminded that it had failed to serve and file the record consisting
of the bundle as would have been
provided by the CCMA; that it had
not furnished security in accordance with section 145(8) of the LRA,
and further that the review
application was defective as the CCMA had
still not filed a record. It does not appear that there was a
response to this correspondence.
[8] In
his answering affidavit filed and served on 22 January 2018,
Quereshi again raised the above preliminary points. The CCMA
delivered its notice of compliance in terms of Rule 7A(3) on
2 February 2018.
It is not clear from the pleadings as to
whether and when the Rule 7A(5) was issued. In a replying affidavit
served and filed on
5 February 2018, the Applicant’s
contentions were that Rule 7A(8)(b) of the Rules was complied
with as the
Notice of Motion and the transcribed record were filed
and served on Quereshi on 12 December 2017. The Applicant
instead
contended that the answering affidavit was filed out of time
without an application for condonation. It regarded the preliminary
points as ‘
little more than a poorly constructed attempt to
excuse the substantial delay in filing the answering affidavit’.
Again, the Applicant was steadfast, contending that the
transcribed record was properly filed and served, and that there was
therefore
compliance with the Rules of this Court.
[9] In
a further answering affidavit filed and served on 2 February 2018,
Quereshi
inter alia
reiterated that the review application in
the light of non-compliance with the provisions of Rule 7A was
irregular and defective.
[10] L
Botha Attorneys withdrew from the matter on 20 February 2018.
The Applicant’s
new attorneys of record (Higgs Attorneys) came
on board on 14 March 2018. On the same date, the Notice in
terms of Rule
22B was filed and served. This was followed by written
heads of argument on 30 April 2018, and a request for a
hearing
date on 3 May 2018. Nowhere in the written heads of
argument are the preliminary points raised by Quereshi dealt with.
[11] At
these proceedings, Ms Jajbhay on behalf of Quereshi persisted with
the preliminary points,
contending that the review application was
not properly before the Court and ought to be dismissed. Ms Jajbhay
had further submitted
that as a result of these irregularities and
defects, the Applicant was advised to withdraw the application and to
relaunch it
with an application for condonation, but that it
persisted with the application. She further contended that even if it
were to
be accepted that a transcribed record was filed, the Court
would not be in a position to make a determination in respect of the
review application, in the light of the defective nature of that
record.
[12] Ms
Bensch for the Applicant however submitted that there was a proper
record before the
Court, and further that Quereshi had not raised any
disputes in that regard in the pleadings. She confirmed that the
record was
transcribed from recordings made during the arbitration
proceedings by the Applicant, and was properly transcribed and served
on
Quereshi.
[13]
The
starting point is a consideration of the objectives behind the Rules
of this Court. It cannot be doubted that these Rules are
premised on
t
he
right to have any dispute that can be resolved by the application of
law decided in a fair public hearing before a Court as set
out in
section 34 of the Constitution of the Republic.
[2]
The Rules of this Court emanate from the provisions of section 159 of
the LRA, which makes provision for the establishment of the
Rules
Board for this Court. The Rules Board in turn is tasked with making
rules to regulate the conduct of proceedings in this
Court, including
the process by which proceedings are brought before the Court, the
form and content of that process.
[14]
The
rules of any Court are put in place
for multiple purposes,
chief amongst which is to prescribe the procedure, the time limits,
and the forms to be used in the Court;
to promote access to the court
and to ensure the right to have disputes resolved and determined
expeditiously and with minimum
costs; to enable the business of the
Court to be carried out in an orderly, uniform and consistent manner;
and to set guidelines
on the standards of conduct expected of those
who practise in the Court.
[15]
Rule 7A of the Rules of this Court in regards to the service and
filing of the record in
review proceedings is supplemented by the
Practice Manual of this Court, and under its clause 11.2 it is
provided that;
“
11.2.1
Once the registrar has notified an applicant in terms of Rule 7A (5)
that a record has been received and may
be uplifted, the applicant
must collect the record within seven days.”
[16]
As
it was correctly pointed out by Prinsloo J in
Sol
Plaatjie Local Municipality v South African Local Government
Bargaining Council and Others
[3]
,
the purpose of the Practice Manual is to promote uniformity and
consistency in practice and procedure, to set guidelines on standards
of conduct expected of those who practise and litigate in the Labour
Court, and to further promote the statutory imperative of
expeditious
dispute resolution. This is line with the objectives of the Court
rules as already alluded to.
[17] In
line with the provisions of the Rule 7A and the Practice Manual, it
follows that any
reference to the record, can only be a record
obtained by means of the provisions contemplated in 7A(2)(b) of the
Rules, and furnished
to the applicant party by the Registrar as
contemplated in Rule 7A(5), and which must in turn be transcribed and
copies thereof
be furnished to the Registrar and each of the other
parties as contemplated under Rule 7A(6). This process of securing
and delivering
a transcript, is clearly meant to preserve the
integrity of the record of proceedings, and to avoid instances of
disputes about
the authenticity of that record.
[18] In
this case, clearly the provisions of Rule 7A were not followed, and
it is not correct
as argued on behalf of the Applicant, that the
issue of non-compliance with the Rules was not raised in the
answering affidavit.
It is unheard of in review proceedings for an
applicant party to file its review application, the transcribed
record, and Rule
7A(8) Notice at the same time. As it was readily
conceded by Ms Bensch, the transcribed record was from the
Applicant’s own
recording of the arbitration proceedings. As it
were, Ms Jajbhay had immediately pointed out the problems identified
by the transcribers
with the recording. There can be no doubt
therefore that this blatant breach of the Rules of this Court cannot
be countenanced,
as it goes against the grain of the very purpose of
the Rules. Applicant parties cannot set their own rules in regards to
review
proceedings. Any record of proceedings other than that
provided by the CCMA or Bargaining Councils as further obtained
through
Rule 7A(5) cannot be regarded as an official and legitimate
record for the purposes of compliance with Rule 7A(6).
[19]
Obviously
private recordings of arbitration proceedings may come in handy where
the CCMA or Bargaining Council is not in a position
to provide a
record for whatever reason. Even then, the acceptance of such a
record for the purposes of review proceedings would
be subject to
reconstruction under the auspices of the CCMA
[4]
.
In the end however, it would lead to an untenable position for the
Court and the parties to a dispute, where unofficial transcribed
records are simply filed and served, when there are clear rules
governing that process.
[20] The
Applicant was warned from the time that it served and delivered its
review application
in the manner that it did, that the whole process
was flawed and defective. The most logical step to have taken under
the circumstances
would to have been to withdraw the transcribed
record and the Rule 7A(8) Notice. This was however not to be so, and
it is my view
that it should suffer the consequences of its
intransigence.
Non-compliance
with the provisions of section 145(8) of the LRA
[21] In
the light of the conclusions reached in regards to non-compliance
with Rule 7A of the
Rules of this Court, the review application ought
to be dismissed on account of it being defective. However, for the
sake of completeness,
I will proceed to deal with the second
preliminary point upon which Ms Jajbhay had argued the review
application also ought to
be dismissed.
[22] The
relevant provisions of section 145 of the LRA are;
(7)
The
institution of review proceedings does not suspend the operation of
an arbitration award, unless the applicant furnishes security
to the
satisfaction of the Court in accordance with subsection (8)
(8) Unless
the Labour Court directs otherwise, the security furnished as
contemplated in subsection
(7) must—
(a)
in
the case of an order of reinstatement or re-employment, be equivalent
to 24 months‘ remuneration; or
(b)
in
the case of an order of compensation, be equivalent to the amount of
compensation awarded.
[23]
The
above provisions received the attention of the Labour Appeal Court in
City of
Johannesburg v SAMWU obo Monareng and Another
[5]
,
where Kathree-Setiloane AJA stated the following;
“
[7] The
Labour Court has a discretionary power under section 145(3) of the
LRA to stay the enforcement
of an arbitration award pending its
decision in the review application. It may stay the enforcement of an
arbitration award pending
finalisation of a review application
against the award with or without conditions. It may in terms of
section 145(8) of the LRA
dispense with the requirement of furnishing
security. Properly construed, section 145(3) read with section 145(7)
and (8) should
be interpreted to mean that where an applicant in a
review application furnishes security to the Labour Court in
accordance with
section 145(8) of the LRA, the operation of the
arbitration award is automatically suspended pending its decision in
the review
application. In other words, the employer need not make an
application in terms of section 145(3) of the LRA to stay the
enforcement
of the arbitration award pending the finalisation of the
review application.
[8]
However, should the employer wish to be absolved from providing
security or to provide
security in an amount less than the threshold
in subsections (8) (a) and (b), then it is required to make an
application to the
Labour Court, in terms of section 145(3), for the
stay of the enforcement of the arbitration award pending its decision
in the
review application. The employer must make out a proper case
for the stay as well as for the provision of security in accordance
with section 145(8) to be dispensed with or reduced.
[9]
The words “unless the Labour Court directs otherwise” in
section 145(8)
of the LRA must be construed broadly to mean that the
Labour Court is afforded a discretion to either: (a) exempt the
employer
from paying security on the stay of the enforcement of an
arbitration award pending its decision on review or (b) reduce the
quantum
of security to be furnished by the employer to an amount
below the threshold in sections 145(8)(a) and (b) of the LRA.
[10]
Although section 145(8) of the LRA makes specific reference to “the
applicant”, it
effectively applies to only employers. It makes
no provision for an employee who brings a review application to
furnish security.
The purpose of sections 145(7) and (8) is
essentially to dissuade employers from bringing frivolous review
applications with no
prospects of success and ensure that they are
timeously and expeditiously prosecuted” (Citations omitted)
[24] A
reading of these provisions and as further explained by
Kathree-Setiloane AJA indicates
that in the absence of an application
in terms of section 145(3) of the LRA, in terms of which t
he
employer is required to make out a proper case for the stay as well
as for the provision of security in accordance with section
145(8) to
be dispensed with or reduced,
t
he mere
institution of review proceedings does not on its own suspend the
operation of an arbitration award. Effectively, contrary
to Ms
Bensh’s contentions, there is an obligation on a reviewing
party to furnish security, unless this Court directs otherwise
under
the provisions of section 145 (8) of the LRA. Properly read, it can
be implied from these provisions that in the absence
of an
application to stay and/or the furnishing of security, employees with
favourable awards can, despite the review application,
still seek to
enforce and execute the award.
[25]
It is further my view that the practice of filing
a Notice of Motion encompassing prayers to review and set aside an
award, a stay
of execution, and exemption from furnishing security,
is clearly at odds with the purpose of section 145(7) of the LRA.
This specifically
so since review applications are placed on the
ordinary roll and heard long after a favourable award was obtained.
This practice
in effect results in a stay of execution and
exemption from furnishing security being obtained by default, and
this is clearly
a circumvention of section 145(7) of the LRA.
[26]
The purpose of section 145(7) of the LRA is to
ensure that a security is furnished immediately upon an application
for a review,
unless the Court directs otherwise. It is my view that
a reviewing party seeking to be exempted from payment of security
needs
to bring a proper application in that regard, and for the Court
to make a determination before it can be said that the review
application
is properly before the Court and ripe for a hearing. This
is so in that these are ordinarily issues of jurisdiction under the
provisions
of section 145 of the LRA.
[27]
The manner with which this application was brought before the Court
illustrates the concerns
and need for an approach as advocated above.
Since October 2017 to date, Quereshi was unable to enforce his
favourable award, pending
the determination of this review
application. The Applicant on the other hand has by default, been
exempted from furnishing security
in terms of section 145(7) of the
LRA. The prejudice to Quereshi is clearly evident, more particularly
when the facts and grounds
upon which an exemption was sought in this
case are analysed.
[28] The
Applicant seeks an exemption on the basis that it is a part of a
group of approximately
30 companies forming the OSHO Group of
Companies involved primarily in the mining industry. It contended
that it was certainly
able to settle its liabilities in terms of the
arbitration award should the review application fail. It nonetheless
contended that
there would be a strong likelihood of irreparable
prejudice and harm to it should Quereshi be paid the amount awarded
in the award,
in that he would not be able to repay it should the
review application succeed. The Applicant further submitted that
should it
be forced to place the money in a trust, it would be denied
access to those funds, thus having a negative effect on its business.
[29] The
Applicant’s arguments clearly lack merit. The amount payable as
security is not
ordinarily paid to the employee pending the
determination of the review application. In the absence of clear
guidelines as to how
this security ought to be furnished, this Court
has accepted security deposited in a trust account of legal
representatives or
the Sheriff of this Court, or even held in trust
and guaranteed by banks.
[30]
The
contention that payment of security would prevent access to such
funds and therefore negatively impact on the Applicant’s
business is clearly self-serving. Good cause in the context of
motivating a departure from the security provisions prescribed in
section 145(7) and (8) would involve a proper explanation why this
request should be entertained, with particular emphasis on any
material prejudice the applicant may suffer if it is not granted this
relief.
[6]
[31] On
its own version, the Applicant is capable of making the payment. It
however seeks an
exemption because the only prejudice it would suffer
is lack of access to those funds. This is but one aspect of the
alleged material
prejudice, which in my view cannot be sustainable in
circumstances where it is not clear how the business of a group of 30
companies
cannot survive with a shortfall of R150 000.00 which
will be held in trust. It is further not clear from these grounds as
to how the payment would have a staggering impact upon its ability to
continue with its business. Nothing is said about the Applicant’s
financial stability, its assets and income base, to demonstrate its
ability to satisfy the arbitration award in the event of not
succeeding with the review application. A mere say-so that the
Applicant is capable of satisfying the arbitration award is not
enough.
[32]
In
the replying affidavit, the Applicant had changed tune on the issue
of security, contending that it was ‘
currently
in the process of obtaining a bank guarantee for the purpose of
providing security to the value of the arbitration award’
[7]
.
That undertaking was made on 5 February 2018 when the
replying affidavit was delivered. As at the hearing of this
application,
the security had not been furnished. This in my view
raises questions about the Applicant’s
bona
fides
when initially seeking exemption. It is demonstrative of the fact
that any allegations of prejudice to it should it furnish security
was mere red-herring. The Applicant was clearly in a position to
furnish security, but did not do so for reasons best known to
it.
[33] To
exempt large employers who are able to furnish security, but who for
reasons best known
to themselves refuse to do so, would circumvent
and render redundant, the objectives of the provisions of section
145(7) of the
LRA. These provisions are meant to ensure that this
Court is not burdened with review applications that have no merit,
and is to
prevent employers from pursuing review proceedings at their
own pace for the simple reason that they can, irrespective of the
merits.
In the end, the Applicant has not placed compelling reasons
before the Court or shown good cause why it should be exempted from
furnishing security. At the opposite end, it had undertaken to
furnish such security but had still failed to do so some one year
and
six months later.
Conclusions:
[34] In
the light of the above conclusions, and those reached in regards to
non-compliance with
Rule 7A of the Rules of this Court, it is my view
that the review application ought to be dismissed.
[35] In
regards to the issue of costs, it has already been stated that as
early as when the defective
review application was launched,
Quereshi’s attorneys of record had repeatedly advised the
Applicant’s erstwhile attorneys
to comply with the rules of
this Court. The latter’s stance throughout was that there was
compliance when there was none.
The new set of attorneys upon taking
over the matter did not even deem it necessary to reflect on whether
the pleadings were in
order, and had simply proceeded from where the
erstwhile attorneys left. A simple withdrawal of the review
application, or of the
Rule 7A(8) Notice as Ms Jajbhay had suggested,
and the re-launching of the review application which is in compliance
with the rules
of this Court should have been seriously considered.
This however was not the case, and I fail to appreciate why upon a
consideration
of the requirements of law and fairness, the Applicant
should not be burdened with the costs of this application.
[36] Accordingly,
the following order is made;
Order:
1. The
preliminary points raised by the Third Respondent are upheld.
2. The
Applicant’s application to review and set aside the arbitration
award issued on 26 October 2017
under case number
GATW12973-17 by the First Respondent is dismissed with costs.
___________________
Edwin
Tlhotlhalemaje
Judge
of the Labour Court of South Africa
APPEARANCES:
For
the Applicant:
Ms
C. Bensch of Higgs Attorneys
For
the Third Respondent: Ms
N Jajbhay of Yusuf
Nagdee Attorneys
[1]
Act
66 of 1995 (as amended)
[2]
The Constitution of the Republic of South Africa, 1996 (Act 108 of
1996)
[3]
Unreported
Case No: PR 192/15, 13 June 2017 at para 19
[4]
See Clause 11.2.4 of the Practice Manual which provides:
“
If
the record of the proceedings under review has been lost, or if the
recording of the proceedings is of such poor quality to
the extent
that the tapes are inaudible, the applicant may approach the Judge
President for a direction on the further conduct
of the review
application. The Judge President will allocate the file to a judge
for a direction, which may include the remission
of the matter to
the person or body whose award or ruling is under review, or where
practicable, a direction to the effect that
the relevant parts of
the record be reconstructed.”
[5]
(JA120/2017)
[2019] ZALAC 54
; (2019) 40 ILJ 1753 (LAC)
[6]
City of
Johannesburg v SAMWU obo Monareng and Another
supra,
where
it was held that;
“
[18]
In
Rustenburg Local Municipality
,
the Labour Court held as follows in relation to what good cause
entails:
‘
Good
cause in the context of motivating a departure from the security
provisions prescribed in s145(7) and (8) would involve a
proper
explanation why this request should be entertained, with particular
emphasis on any material prejudice the applicant may
suffer if it is
not granted this relief. I will illustrate the point by way of an
example. A small manufacturing business with
20 employees dismisses
10 employees for group misconduct. A CCMA commissioner then
reinstates all these employees. The required
security would be 24
months’ salary for each of these ten employees, which would
then wipe out the entire operating cash
flow of the undertaking for
several months. This is the kind of prejudice I am referring to.
Simply described, the explanation
cannot be that it will be hard to
set security, but the explanation must be that it would be unduly
onerous and harmful to be
required to set the prescribed security.’
[19]
Material prejudice to the employer is but one factor that the Labour
Court
must give consideration to – it is by no means decisive.
In exercising its discretion, the Labour Court must have regard
to
the particular circumstances of the case as well as considerations
of equity and fairness to both the employer and the employee.
A
factor that the Labour Court must take into consideration is whether
the employer is in possession of sufficient or adequate
assets to
meet an order of the review court upholding the arbitration award;
the principal concern being that the dismissed employee
should not
be left unprotected if the Labour Court decides the review
application in his or her favour.
[20]
The
onus
is on the employer seeking an exemption
from furnishing security under section 145(8) of the LRA to
establish that it has
assets of a sufficient value to meet its
obligations should the arbitration award be upheld by the Labour
Court on review…”
[7]
At
paragraph 25 of the Replying Affidavit