Brief Summary

Labour Law — Review of arbitration award — Application for review in terms of section 145 of the LRA — Applicant dismissed for misconduct after altercations with colleagues — Arbitrator found dismissal substantively and procedurally unfair, awarding maximum compensation but not reinstatement — Applicant contended that no grounds existed for deviation from reinstatement as primary remedy — Legal issue of whether the arbitrator misapplied section 193(2) of the LRA in denying reinstatement — Court held that the arbitrator's decision was justified based on the context of the dismissal and the potential for an unsafe employment relationship.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings were a review application brought in terms of section 145 of the Labour Relations Act 66 of 1995 (LRA) to review and set aside an arbitration award. The review was directed not at the commissioner’s finding of unfair dismissal as such, but specifically at the remedy granted in the arbitration.

The applicant was Ms Sinenhlanhla Precious Mthetwa, an employee who had been dismissed. The first respondent was the Commission for Conciliation, Mediation and Arbitration (CCMA), the second respondent was Commissioner Natasha Moni (the arbitrator who issued the award under review), and the third respondent was the Motor Industry Bargaining Council (MIBCO). Although the third respondent opposed the review application on the papers, there was no appearance on behalf of the third respondent at the hearing.

The matter arose from an arbitration conducted under the auspices of MIBCO, culminating in an award dated 27 August 2018, which found the applicant’s dismissal to be substantively and procedurally unfair. Despite that finding, the arbitrator granted the applicant maximum compensation rather than retrospective reinstatement. The review focused on whether that deviation from reinstatement was permissible under sections 193(1) and 193(2) of the LRA.

The general subject-matter of the dispute concerned the statutory preference for reinstatement as a remedy for unfair dismissal, and the circumstances in which an arbitrator may properly award compensation instead, particularly with reference to the “non-reinstatable” conditions in section 193(2)(a)–(d).

2. Material Facts

The applicant commenced employment with the third respondent on 24 March 2014, initially as a Client Service Representative, and at dismissal held the position of Returns Processor. She was dismissed on 26 July 2017.

On 5 July 2017, an altercation occurred at the workplace involving the applicant and a colleague, Ms Martina Malebana, in the manager’s kitchen. After the incident was reported, there was a further altercation when the applicant returned to the kitchen. The applicant was given permission to go home, but shortly before leaving she lodged a complaint alleging that Malebana had threatened her with a knife. On the same day, the applicant was also involved in another altercation with another employee, Ms Zandile Kwabe, arising from the applicant’s belief that Kwabe was attempting to “steal her man”.

All three employees were charged with misconduct. The applicant faced charges of assault, intimidation and harassment, bringing the company name into disrepute, and unauthorised absence. On 20 July 2017, at her disciplinary hearing chaired by Ms Mapalo Tsatsimpe, the applicant pleaded guilty to all charges.

The court treated as material background a prior disciplinary incident in June 2015 involving the applicant. In that earlier matter, she had been found guilty of making degrading insults towards a superior and was sanctioned with dismissal by the same chairperson, Tsatsimpe. The then General Secretary, Mr Tom Mkhwanazi, intervened and overturned the dismissal after considering mitigating factors relating to the applicant’s abusive upbringing. The applicant was instead granted a conditional reprieve, placed on a final written warning, demoted, and required to seek assistance for anger management, with the express warning that repetition could result in immediate dismissal. The third respondent also arranged and paid for professional assistance related to anger management, though this did not appear to resolve the issue.

Following the July 2017 incidents and disciplinary process, the chairperson issued her findings on 24 July 2017, and the applicant was summarily dismissed on 26 July 2017. By contrast, Malebana and Kwabe received final written warnings.

The applicant referred an unfair dismissal dispute on 28 July 2017. Arbitration took place over multiple dates between 13 March 2018 and 7 August 2018. The pre-arbitration minutes recorded that the applicant would seek compensation if unfairness were found, but at the commencement of arbitration she amended the relief sought to retrospective reinstatement.

In the arbitration, the commissioner made credibility findings including an adverse credibility finding against Malebana, and recorded that substantial portions of the applicant’s evidence were not contested. The commissioner considered the applicant’s upbringing and found it contributed to her being easily provoked. The commissioner concluded that provocation diminished the applicant’s capacity to act and consequently diminished the seriousness of the rule-breaking, and held that the applicant was guilty of a lesser offence described as “disgraceful conduct towards a fellow employee”, warranting a final written warning rather than dismissal. The commissioner also regarded the differential treatment of the applicant compared to Malebana and Kwabe (who received warnings) as significant, particularly where their warnings were said to be part of a “plea bargain” mechanism not provided for in the disciplinary code and not offered to the applicant. Procedurally, the commissioner found the disciplinary code required that the applicant be afforded an opportunity to state her case and defend herself on both the allegations and the determination of the charges, and concluded she was not afforded that opportunity.

The commissioner therefore found the dismissal both substantively and procedurally unfair, but awarded maximum compensation under section 194(1) rather than reinstatement, stating that the applicant’s tenure would be “unsafe and insecure” if retrospectively reinstated and observing that the respondent had not addressed whether the trust relationship was broken.

3. Legal Issues

The central legal question was whether the arbitrator, having found the dismissal unfair, committed a reviewable irregularity or misconduct under section 145 of the LRA by not ordering reinstatement, despite reinstatement being the legislatively preferred remedy under section 193(2), unless one of the statutory exceptions applies.

The dispute primarily concerned the application of law to fact and the rationality/reasonableness of the arbitrator’s remedial discretion. It required assessing whether, on the material before the arbitrator (and in light of the award’s stated reasons), the decision to refuse reinstatement could be sustained within the framework of section 193(1)–(2), including the “non-reinstatable conditions” such as intolerability or impracticability, and the extent to which a commissioner may rely on evaluative observations about the parties and workplace dynamics.

A subsidiary issue concerned the role of value judgment in deciding remedy, particularly where the arbitrator relied on her observations that reinstatement would produce an unsafe and insecure tenure, and whether such a conclusion required more explicit factual grounding in the award.

4. Court’s Reasoning

The court approached the matter by restating the remedial framework in section 193(1) and 193(2) of the LRA, emphasising that reinstatement and re-employment are primary statutory remedies and that the decision-maker must reinstate or re-employ unless one of the listed exceptions is present. The court relied in particular on the Labour Appeal Court’s exposition in South African Municipal Workers’ Union and Another v Ethekwini Municipality and Others [2019] 1 BLLR 46 (LAC), which characterises section 193(2) as peremptory and recognises that the enquiry into the “non-reinstatable conditions” involves fairness to both sides and requires the arbitrator to take into account relevant factors, entailing both factual finding and value judgment.

Applying those principles, the court noted that the arbitrator’s award did not fully elaborate the factual basis for the conclusion that the applicant’s tenure would be unsafe and insecure if reinstated. The judgment records that, in the absence of fuller reasoning by the arbitrator (and without meaningful elaboration in the third respondent’s answering papers), the court was left with limited insight into what precisely underpinned the commissioner’s concern. The court further observed that the award did not clearly indicate whether reinstatement was considered inappropriate because it was potentially futile or because the situation made reinstatement infeasible.

However, the court did not treat the lack of elaboration as decisive. It considered that the LAC authorities recognise that the arbitrator must take account of relevant factors and that the remedy decision involves discretion, partly a value judgment. The court also accepted that an arbitrator enjoys an evidentiary and contextual advantage because the arbitrator directly observes the interactions of the parties and witnesses during proceedings, whereas the reviewing court is confined to the record.

The court then weighed factors apparent from the record and from the arbitrator’s conclusions. On the one hand, it acknowledged that several considerations appeared to support reinstatement, including that the applicant sought reinstatement as primary relief, that the dismissal had been found substantively unfair with an inconsistency element when compared with the treatment of Malebana and Kwabe, and that there was limited articulated evidence in the award of a severed trust relationship.

On the other hand, the court emphasised countervailing considerations which supported the arbitrator’s decision not to reinstate. These included that the applicant was already on a final written warning flowing from the earlier 2015 incident, that the employer had already attempted progressive and supportive interventions (including paid professional assistance for anger management), and that those measures did not appear effective in changing the applicant’s behaviour. The court treated those features as relevant to whether reinstatement would meaningfully secure ongoing employment in practice.

In addition, the court considered the arbitrator’s stated concern about an “unsafe and insecure” tenure as an evaluative conclusion that could be linked to the workplace context and the applicant’s disciplinary history. The third respondent did not deny the arbitrator’s observation. The court reasoned that reinstatement is intended to safeguard security of employment, but where the arbitrator formed a view that reinstatement would not achieve that function in the circumstances observed, it could justify deviation from reinstatement.

Drawing these strands together, the court concluded that the arbitrator’s decision to award compensation rather than reinstatement reflected a value judgment that was not “far-fetched” and was not one that a reasonable decision-maker could not reach. On that basis, the court held that the remedy outcome did not justify interference on review.

5. Outcome and Relief

The Labour Court dismissed the review application. The arbitration award therefore remained in place, including the award of maximum compensation under section 194(1) of the LRA and the refusal to order reinstatement.

No order as to costs was made.

Cases Cited

Hoffman v South African Airways 2000 (11) BCLR 1211 (CC)

South African Municipal Workers’ Union and Another v Ethekwini Municipality and Others [2019] 1 BLLR 46 (LAC)

Mediterranean Textile Mills (Pty) Ltd v South African Clothing and Textile Workers Union and Others [2012] 2 BLLR 142 (LAC)

DHL Supply Chain (Pty) Ltd and Others v National Bargaining Council for the Road Freight Industry and Others [2014] 9 BLLR 860 (LAC); (2014) 35 ILJ 2379 (LAC)

Equity Aviation Services (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others [2008] 29 ILJ 2507 (CC); [2008] 12 BLLR 1129 (CC)

Legislation Cited

Labour Relations Act 66 of 1995, including sections 145, 193(1), 193(2), and 194(1)

Rules of Court Cited

Labour Court Rule 7A(8)(b)

Held

The court held that, although reinstatement is the primary remedy for unfair dismissal under section 193(2) of the LRA, an arbitrator’s remedial choice involves a discretionary evaluative component. On the facts and circumstances reflected in the award and record, including the applicant’s existing final written warning and the ineffectiveness of prior corrective interventions, the arbitrator’s conclusion that reinstatement would render the applicant’s tenure “unsafe and insecure” was treated as a permissible value judgment. The refusal to order reinstatement and the award of maximum compensation accordingly did not warrant interference on review, and the review application was dismissed with no costs order.

LEGAL PRINCIPLES

Reinstatement and re-employment are the legislatively preferred remedies for unfair dismissal under section 193(1), and the decision-maker must order reinstatement or re-employment under section 193(2) unless one of the statutory exceptions applies.

The enquiry into whether a “non-reinstatable condition” exists, including intolerability under section 193(2)(b) or lack of reasonable practicability under section 193(2)(c), requires the arbitrator to consider all relevant circumstances, and involves a discretionary decision that is part factual determination and part value judgment, informed by fairness to both employer and employee.

In determining remedy, an arbitrator is obliged to take into account relevant factors bearing on the feasibility and appropriateness of reinstatement, including matters such as the employee’s disciplinary history, the nature and extent of misconduct as ultimately found, the workplace context, and whether corrective measures (including progressive discipline or assistance measures) have been attempted and have been effective.

On review, where an arbitrator’s remedial decision reflects a rational evaluative conclusion grounded in the circumstances, a reviewing court will not interfere merely because fuller reasons could have been provided, provided the outcome remains within the bounds of reasonableness contemplated by the applicable review standard.

Mthetwa v Commission for Conciliation, Mediation and Arbitration and Others (JR1806/18) [2019] ZALCJHB 311 (14 November 2019)