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[2019] ZALCJHB 367
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Emfuleni Local Municipality v South African Local Government Bargaining Council and Others (JR741/16) [2019] ZALCJHB 367 (11 November 2019)

the
labour court of South Africa, johannesburg
judgmenT
Not
reportable
CASE
NO: JR741/16
In
the matter between:
EMFULENI
LOCAL MUNICIPALITY
Applicant
and
SOUTH AFRICAN LOCAL
GOVERNMENT
BARGAINING
COUNCIL
First

Respondent
M
N S DAWSON
N.O
Second
Respondent
SAMWU
OBO T I MOKOENA & OTHERS

Third Respondent
Heard:
7 November 2019
Judgment
delivered: 11 November 2019
JUDGMENT
VAN
NIEKERK J
[1]
This is an application to review and set aside an arbitration award
issued by the second
respondent (the arbitrator). The arbitrator
issued the following award:
1. The action by the
respondent by promoting only those members who are in the LUM section
and not promoting the traffic officers
was procedurally unfair, since
the LUM employees and the traffic officers were all law enforcement
officers.
2. The respondent is
hereby ordered to place the traffic officers on the same level as the
LUM employees with effect from 1 July
2012.
3. The respondent is
hereby ordered to place the traffic officers on that level on or
before 15 April 2012 and if they fail to do
so the matter should be
brought before me for the proper assessment.
4. The
respondent is hereby ordered to pay the costs occasioned by this
arbitration.
[2]
The arbitrator subsequently issued a second award in terms of which
he ordered the
applicant to pay the respondents (the employees) a sum
in excess of R 36 million in back pay. The applicant seeks also to
review
and set aside that award.
[3]
The material facts are not in dispute. The applicant is a
municipality. It comprises
various departments, clusters and
divisions. The employees who are the subject of this dispute were
employed by the applicant (and
remain in its employ) as traffic
officers in the public safety and community development cluster. The
employees are all graded
at job level 9, as law enforcement officers,
in terms of their contracts of employment and in accordance with the
occupational
structure relevant to their division.
[4]
In November 2014, the employees lodged a grievance in which they
contended that the
applicant had committed an unfair labour practice
in that they were engaged at job level 9, while law enforcement
officers in the
land use management cluster (referred to in the award
as ‘LUMs’) were appointed at job level 6, a higher grade.
LUMs
perform duties related to the use of land and building in the
applicant’s jurisdiction. The dispute was ultimately referred

to the first respondent, the bargaining council, for arbitration.
[5]
In his award, the arbitrator recorded that the issue for decision was
whether the
promotion of the LUMs to level 6 while the traffic
officers who are also law enforcement officers remain at level 9 was
fair. The
award is devoid of any analysis of the evidence and any
reasoning that serves to indicate the basis of the award. The
arbitrator
simply concluded that he was satisfied that the applicant
had failed to prove on a balance of probabilities that by promoting
the
LUMs to level 6 and leaving the traffic officers at level 9 it
acted fairly. It warrants mention that the arbitrator had ruled that

the applicant bore the onus of proving that its conduct was not
unfair. (This is the subject of a separate ground for review, which

in view of the conclusion to which I have come is not necessary for
me to consider.) The only discernible basis for the arbitrator’s

conclusion appears to be the premise that the applicant had failed to
produce any evidence to explain why the LUM employees had
been placed
on level 6.
[6]
The applicant contends that the award is reviewable because the
arbitrator erred in
classifying the dispute as one relating to
promotion. In short, the applicant’s primary submission is that
since no-one was
promoted (and no-one demoted), the dispute between
the parties should not have been framed in the terms that the
arbitrator chose
to frame it. The arbitrator thus misconceived the
nature of the enquiry.
[7]
The test to be applied is one that recognises and reinforces the
distinction between
a review and an appeal. This court is entitled to
intervene if and only if the arbitrator’s decision is one that
falls outside
of a band of decisions to which a reasonable
decision-maker could come on the available material. In
Head of
Department of Education v Mofokeng & others
[2015] 1 BLLR 50
(LAC)
,
the LAC said the following:
[30]
The failure by an arbitrator to apply his or her mind to issues which
are material to the determination of a case will usually
be an
irregularity. However, the Supreme Court of Appeal (“the SCA”)
in
Herholdt v Nedbank Ltd
and this court in
Goldfields
Mining South Africa (Pty) Ltd (Kloof Gold Mine) v CCMA and others
have held that before such an irregularity will result in the setting
aside of the award, it must in addition reveal a misconception
of the
true enquiry or result in an unreasonable outcome…
[32]
…Mere errors of fact or law may not be enough to vitiate the
award. Something more is required. To repeat: flaws in
the reasoning
of the arbitrator, evidenced in the failure to apply the mind,
reliance on irrelevant considerations or the ignoring
of material
factors etc. must be assessed with the purpose of establishing
whether the arbitrator has undertaken the wrong enquiry,
undertaken
the enquiry in the wrong manner or arrived at an unreasonable result.
Lapses in lawfulness, latent or patent irregularities
and instances
of dialectical unreasonableness should be of such an order
(singularly or cumulatively) as to result in a misconceived
inquiry
or a decision which no reasonable decision-maker could reach on all
the material that was before him or her.
[33]
Irregularities or errors in relation to the facts or issues,
therefore, may or may not produce
an unreasonable outcome or provide
a compelling indication that the arbitrator misconceived the inquiry.
In the final analysis,
it will depend on the materiality of the error
or irregularity and its relation to the result. Whether the
irregularity or error
is material must be assessed and determined
with reference to the distorting effect it may or may not have had
upon the arbitrator’s
conception of the inquiry, the
delimitation of the issues to be determined and the ultimate outcome.
If but for an error or irregularity
a different outcome would have
resulted, it will
ex hypothesi
be material to the
determination of the dispute. A material error of this order would
point to at least a
prima facie
unreasonable result. The
reviewing judge must then have regard to the general nature of the
decision in issue; the range of relevant
factors informing the
decision; the nature of the competing interests impacted upon by the
decision; and then ask whether a reasonable
equilibrium has been
struck in accordance with the objects of the LRA. Provided the right
question was asked and answered by the
arbitrator, a wrong answer
will not necessarily be unreasonable. By the same token, if an
irregularity or error material to the
determination of the dispute
may constitute a misconception of the nature of the enquiry so as to
lead to no fair trial of the
issues, with the result that the award
may be set aside on that ground alone. The arbitrator however must be
shown to have diverted
from the correct path in the conduct of the
arbitration and as a result failed to address the question raised for
determination.
[8]
Of some significance to the present proceedings is the referral form.
On the face
of the referral form, the dispute referred to the
bargaining council is one in which the employees are aggrieved at
their job grades
and in which they seek to have that grade revised to
level 6. The referral form makes no mention of any dispute concerning
promotion
The first inkling of any dispute about promotion is
apparent from the record. It would appear that the pre-arbitration
minute recorded
one of the issues in dispute  as whether the
conduct of the respondent in appointing and/or promoting and/or
affording benefits
to  law enforcement officers at job level 6
in the division while the applicants were kept the job level 9 is
unfair in general,
and  more specifically for reasons that are
recorded in the minute, including the absence of any rational
justification for
the differentiation, and the consequent prejudice
caused to the employees by the income differential. Specifically
placed in dispute
was also whether there should be any job evaluation
process before any upgrading of the employee to a higher job level.
The arbitrator
enquired of the applicant’s representative
whether she agreed with the understanding that in 2012, the LUMs were
promoted
to level 6. The response was that ‘It was not a
promotion as such’. The arbitrator replied ‘Well, let us
call
it a demotion then since six is before nine. But do you agree
that that happened? ‘ The applicant’s representative
again stated that it was not a promotion ‘as such’. The
arbitrator is later recorded as saying ‘Therefore I rule
that
the onus is on the department to prove to me that by not promoting
these people… or you do not seem to like the word
“promoting”,
moving them from nine, level 9/10 to level 6 is just for them and not
an unfair labour practice on them.
I will rule that the onus is on
the respondent to resume or kick off the evidence…’. The
employees’ representative,
in his opening address, made
reference to the differentiation between the LUMs and the employees,
and the unfairness on the part
of the applicant ‘by not giving
them the same’.
[9]
It would appear then that without the dispute having been articulated
by the employees
as one concerning an unfair labour practice in
regard to the employer’s conduct in relation to promotion, and
without hearing
any evidence and in the face of a clear objection by
the applicant’s representative, the arbitrator simply decided
that the
matter was one that concerned promotion, and proceeded to
hear evidence and make a decision on that basis.
[10]
Counsel for the respondents submitted that the true nature of the
dispute was one that concerned
demotion, and that the arbitrator
correctly categorised the dispute in those terms. The duties of an
arbitrator in this regard
were set out by the LAC in
Health &
Other Services Personnel Trade Union of SA on behalf of Tshambi v
Department of Health, Kwazulu-Natal
[2016] 7 BLLR 649
(LAC):
“
[16] An arbitrator
is required to determine the true dispute between the parties. To
that end, it is necessary to establish the
relevant facts and
construe the category of dispute correctly. An arbitrator must make
an objective finding about what is the dispute
to be determined. This
court in
Wardlaw
… addressed directly the question of
whether the employee's characterisation of a dispute should enjoy
deference and rejected
that approach. Distinguishing the formalistic
school of thought from the substantive school of thought, this court
held that the
latter should prevail. As a result, in
Wardlaw
,
an arbitrator was held to have incorrectly assumed jurisdiction over
a dispute that was about an automatically unfair dismissal,
a
category of dispute reserved for adjudication by the Labour Court.
The Constitutional Court disposed of this issue in
Commercial
Workers Union of SA v Tao Ying Industries & others
:
'A commissioner must, as
the LRA requires, "deal with the substantial merits of the
dispute". This can only be done by
ascertaining the real dispute
between the parties. In deciding what the real dispute between the
parties is, a commissioner is
not necessarily bound by what the legal
representatives say the dispute is. The labels that parties attach to
a dispute cannot
change its underlying nature. A commissioner is
required to take all the facts into consideration including the
description of
the nature of the dispute, the outcome requested by
the union and the evidence presented during the arbitration. What
must be borne
in mind is that there is no provision for pleadings in
the arbitration process which helps to define disputes in civil
litigation.
Indeed, the material that a commissioner will have prior
to a hearing will consist of standard forms which record the nature
of
the dispute and the desired outcome. The informal nature of the
arbitration process permits a commissioner to determine what the
real
dispute between the parties is on a consideration of all the facts.
The dispute between the parties may only emerge once all
the evidence
is in.'
That approach has been
reaffirmed by this court in National Union of Metalworkers of SA on
behalf of
Sinuko v Powertech Transformers (DPM) & others
(2014) 35
ILJ
954 (LAC) at paras 16-21 per Coppin JA.”
[11]
But it does not follow that an arbitrator is free to determine the
nature of the dispute without
proper recourse to the relevant
documentation (including the referral form) and the evidence. Any
determination of the nature of
the dispute (and thus jurisdiction)
must necessarily be the subject of reflection and a rational
decision-making process. Section
186 (2) (a) of the LRA defines an
unfair labour practice as an act or omission that arises between an
employer and employee involving
unfair conduct by the employer
relating to promotion. In the present instance, the arbitrator
concluded, at the stage of the opening
address by the municipality’s
representative, that the dispute was one that concerned an unfair
labour practice in relation
to promotion. This conclusion amounts to
no more than an assumption on his part, without regard to any
evidence. Even if the arbitrator
had been inclined to postpone his
conclusion until all the evidence was in, he would have had regard to
the fact that no-one was
promoted, at least not in the sense that
this court had defined that term. In
Mashegoane v University of
the North
[2007] ZALC 53
;
[1998] 1 BLLR 73
(LC), a dispute that concerned the
refusal by the senate of the university to appoint a lecturer to the
position of dean of the
faculty, where the court considered that the
appointment to the post of dean would be one that would considerably
elevate the employee’s
status and encompass a greater degree of
responsibility. On this basis, the court held that the dispute
properly concerned a promotion.
In the present instance, the
employees do not seek appointment to another post, and certainly not
one that confers greater responsibility
or status.  They seek to
remain in the same jobs, with the same responsibilities, but to be
graded at a higher level, with
the financial rewards that grading at
a higher level will bring. In
Polokwane Local Municipality v
SALGBC & others
[2008] ZALC 29
;
[2008] 8 BLLR 783
(LC), Molahlehi J regarded
a dispute where an employee sought to have her post upgraded as a
dispute of interest. In the absence
of any right to be appointed to
the higher position or to have the post upgraded, the dispute was not
arbitrable (at paragraph
26).
[12]
In the present instance, there is no evidence that the adjustment of
the employees’ job
grades to grade 6 would result in any
greater responsibility, authority or status. Indeed, the employee’s
case is that they
are entitled to be engaged in job grade 6 because
they perform the same work as those of their colleagues in that
grade, and that
they enjoy the same status as law enforcement
officers. There is thus no dispute about promotion.
[13]
The evidence overwhelmingly suggests that the true dispute between
the parties is one that relates
to job grading; specifically, a
contention by the employees that their posts should be graded at a
higher level. The employees
have established no right, whether by way
of collective agreement, regulatory measure and the like, to have
their jobs graded at
level 6. The employees’ dispute is thus
not arbitrable under the unfair labour practice definition - see
Polokwane Local Municipality
(
supra
)). The employees
may have a claim under the Employment Equity Act on the basis of
equal pay for the same or similar work, or work
of equal value. But
that is not the claim that they referred to arbitration.
Alternatively, the applicants may have the election
to press their
demand by resorting to the exercise of the right to strike. But this
is not a matter that I need decide.
[14]
In summary, the arbitrator committed a reviewable irregularity by
assuming that the dispute before
him was one of an unfair labour
practice relating to promotion. He misconceived the nature of the
enquiry and his award is reviewable
on that basis.
[15]
In the light of the conclusion to which I have come, it is not
necessary for me to consider the
applicant’s further grounds
for review.
[16]
In so far as costs are concerned, the court has a broad discretion in
terms of s 162 to make
orders for costs according to the requirements
of the law and fairness. Both parties submitted that costs ought
properly to follow
the result I see no reason to disagree with that
submission and there is no evidence before me to indicate otherwise.
I make the following
order:
1.
The arbitration awards issued by the second
respondent on 15 March 2016 and 10 August 2016 under case number GPD
061501 are reviewed
and set aside.
2.
The award issued on 15 March 2016 is
substituted by the following:
‘
The
referral is dismissed’.
3.
The South African Municipal Workers
Union is to pay the costs of the application.
André van Niekerk
Judge
REPRESENTATION
For
the applicant: Adv. J Nalane, instructed by KNT Attorneys
For the respondent: Adv.
F Baloyi, instructed by Maenatja Attorneys