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[2019] ZALCCT 17
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Engedi Electrical CC v National Bargaining Council for the Electrical Industry and Another (C260/18) [2019] ZALCCT 17 (24 July 2019)
in
the labour court of South Africa, CAPE TOWN
Not
Reportable
case
no: C260/18
In
the matter between:
ENGEDI ELECTRICAL CC
Applicant
and
THE NATIONAL
BARGAINING COUNCIL
FOR THE ELECTRICAL
INDUSTRY
First
Respondent
M PATEL
N.O
Second
Respondent
Heard:
5 June 2019
Delivered:
24 July 2019
JUDGMENT
MAHOSI.
J
Introduction
[1]
This is an application in terms of section 145
of
the Labour Relations Act (LRA)
[1]
for
an order to review and set aside the arbitration award issued by the
second respondent (the arbitrator) under the auspices
of the
first respondent,
the
National Bargaining Council for the Electrical Industry
(the
NBCEI), dated 12 March
2018 under case number ECI078/17RTB.
[2]
The key question is whether the arbitrator’s decision is one
that a reasonable
decision-maker could not reach.
[3]
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.
Material background
facts
[4]
The applicant and the first respondent’s relationship emanates
from the Main
Collective
Agreement
[2]
(the Main
Agreement), which requires any employer
operating in the electrical industry to register with
the first
respondent within a specific period and to pay
certain levies and contributions to the first respondent
in relation to its employees.
[5]
In terms of Clause 29(f) of the Main Agreement, an employer attracts
personal liability
in the event of an employee being disqualified
from claiming benefits due to the employer failing to pay the
contributions prescribed
by the Main Agreement. The clause reads:
‘
In
the event that an employee fails to qualify for death, disability
and/or funeral benefits in terms of pension and/or provident
fund
agreements because the employer failed to pay contributions owing to
the employee’s membership, the employer shall be
liable to pay
such employee of his/her beneficiaries an amount of money equal to
the death, disability and funeral benefits that
would have been
payable to the employee under the rules of the applicable fund had
the contributions been paid by the employer.’
[6]
The genesis of this dispute arose from the applicant’s alleged
failure to make
the
necessary contributions as prescribed by the Main Agreement.
On 9
March 2017,
a claim was submitted for death benefits and funeral
expenses
following the death of the late Mr Patric Sethole. The first
respondent’s underwriters, Nestlife Assurance Corporation
Limited, repudiated the claim after establishing that the applicant’s
contributions were in arrears.
[7]
On 09 May 2017, the first respondent wrote a letter of demand to the
applicant demanding
the benefit which the family of the deceased
employee would have been entitled to had the applicant made the
contributions under
the Main Agreement, amounting to R134 937.68.
The applicant only paid the family an amount of R10 000,00
(ten
thousand rand). This resulted in the third respondent issuing
the applicant with a compliance order, however the applicant failed
to make the payment. The matter was conciliated unsuccessfully and
it was then set down for arbitration that was heard on 26
February
2016. Subsequently, the arbitrator issued the award on the 12 March
2018. It is this award that is the subject of this
application.
The Arbitration
[8]
The issue before the arbitrator was whether the applicant contravened
clause 29(f)
Part 1 of the Main Agreement. The applicant was
represented by Mr. Lan Lewis, a representative of the South African
United Commercial
And Allied Employers Organisation (SAUEO) and the
first respondent was represented by Mr. Abraham Mabello, a designated
agent.
[9]
The record evidences that prior to the arbitration hearing, the
matter was conciliated
with an attempt to resolve it. However, it
could not be resolved. Consequently,
the
parties agreed to narrow the issues down and to confine the issue
that the arbitrator had to determine to the question
whether
the contribution amount of R6 000,00 was paid by the applicant to the
first respondent on the 31August 2016.
[10]
On the one hand,
Mr.
Mabello
submitted
that after Mr Sithole’s death, his family submitted a claim
that was forwarded to the first respondent’s
Head office.
However, the claim was not approved for payment as the applicant was
in arrears. Consequently, Mr Mabello had a meeting
with the applicant
in which he indicated that the family was entitled to R20 000.00 for
the funeral costs. The applicant indicated
that he was not in a good
financial position and that he would pay R10 000,00 which he paid. It
was after the funeral that Mr.
Lewis, on behalf of the applicant,
disputed non-payment of the contribution and provided proof that it
was paid into the first
respondent’s Nedbank account. Mr
Mabello submitted that such payment was not received, as the first
respondent did not hold
any account with Nedbank and argued that it
was surprising that the first respondent had always used the first
respondent’s
correct account details.
[11]
On the other hand,
Mr Lewis
submitted the first respondent’s bank account was not known to
the applicant. He further submitted the applicant’s
payment
history drawn from its internet bank and a letter from the bank
confirming that the amount of R6 000,00 was paid on 31
August 2016
and that it was paid to the first respondent’s bank account. Mr
Lewis argued that in the absence of the first
respondent’s bank
statement, it could not be verified whether the amount paid was
received or not. He confirmed that the
applicant received a letter
from the first respondent in terms of which it was advised that the
Nedbank account did not belong
to the first respondent. However, he
argued that the said letter was of no consequence as it was only sent
to the applicant after
31 august 2016.
[12]
In his award, the arbitrator made a finding that the applicant was
aware that the first respondent
had no bank account with Nedbank and
further that, by failing to ascertain that the payment was made into
the first respondent’s
correct bank account, the respondent
breached the Main Agreement.
It
is this award that is the subject of this application.
The Grounds for Review
[13]
The applicant’s contention is that
the
arbitrator acted unreasonably by not allowing the parties to testify
under oath and to test evidence through cross-examination.
It was
further contended that the arbitrator failed to consider the
documentation presented as proof of compliance with the Main
Agreement and as well as the applicant’s arguments that the
applicant was loaded by the first respondent’s designated
agent
as a beneficiary on the system upon registration.
[14]
In opposing the application, the first respondent’s contention
is that there is no evidence
that the applicant was denied an
opportunity to cross-examine the third respondent’s
agent. However, in the alternative,
the third respondent seems to
suggest that cross-examination would not in any way advance the
applicant’s case. It is further
contended that the record does
not support the applicant’s contention that the arbitrator
refused to accept the documentary
proof.
Applicable legal
principles and analysis
[15]
Section 145 of the LRA provides that any
party to a dispute who alleges a defect in any arbitration
proceedings under the auspices
of the Commission may apply to the
Labour Court for an order setting aside the arbitration award.
Section 145(2) of the LRA defines
a defect as the commissioner’s
misconduct in relation to the duties of the arbitrator as an
arbitrator, gross irregularities
in the conduct of the arbitration
proceedings, exceeding the commissioner's powers or improperly
obtaining an award.
[16]
The
principle, as laid out in
Sidumo
and Another v Rustenburg Platinum Mines Ltd
and Others
[3]
,
is whether the decision reached by the arbitrator is one that a
reasonable decision maker could have reached. Therefore, the test
on
review is not whether the arbitrator came to a correct decision that
the court sitting in the same position as the arbitrator
would have
reached, but whether the arbitrator arrived at a reasonable decision
based on the material before him or her.
[17]
The applicant challenged the process adopted by the arbitrator in
conducting the arbitration. In opposing,
the first respondent relied
on the provisions of section 138(1) of the LRA to submit that the
arbitrator has a broad discretion
to choose the manner in which
she/he may conduct the proceedings.
Section 138 of
the LRA provides for the manner in which arbitrations may be
conducted and it reads:
‘
(1)
The commissioner may conduct the
arbitration in a manner that the commissioner considers appropriate
in order to determine the dispute
fairly and quickly, but must deal
with the substantial merits of the dispute with the minimum of legal
formalities.
(2)
Subject to the discretion of the commissioner as to the appropriate
form of the proceedings,
a party to the dispute may give evidence,
call witnesses, question the witnesses of any other party, and
address concluding arguments
to the commissioner.
…
(6)
The commissioner must take into account any code of good practice
that has been issued by
NEDLAC or guidelines published by the
Commission in accordance with the provisions of this Act that is
relevant to a matter
being
considered in the arbitration proceedings.
(7)
Within 14 days of the conclusion of the arbitration proceedings -
(a)
the commissioner must issue an arbitration award with brief reasons,
signed by that commissioner.’
[18]
In
Satani
v Department of Education, Western Cape and Others
[4]
,
the
Labour Appeal Court (LAC) stated that:
‘
[13] Section
138 of the Act empowers the commissioners of the Commission for
Conciliation, Mediation and Arbitration (CCMA),
including the
Bargaining Council to conduct arbitrations under the LRA in a manner
they consider appropriate in order to determine
the dispute fairly
and quickly. They are however, enjoined to deal with the substantial
merits of the dispute with the minimum
of legal formalities. The
commissioners are given the discretion to decide the appropriate form
of the proceedings and the rights
conferred upon a party in terms of
s138(2) are subject to the overriding discretion conferred on the
commissioners.’
[19]
The rights confered upon a party to an arbitration includes giving
evidence, calling witnesses,
questioning witnesses and addressing
concluding arguments.
[5]
The
CCMA Guidelines on Misconduct Arbitrations deal with how the
arbitratior should,
inter
alia
,
conduct arbitration proceedings and evaluate evidence for the
purpose of making an award.
[6]
Clause 15 reads:
‘
The parties are
entitled to exercise these rights irrespective of the form of
proceedings. However, the manner in which they
exercise those rights
will depend on how the arbitrator decides in terms of section 138(1)
to conduct the arbitration.’
[20]
In the instant case,
the parties
agreed on the issue the arbitrator had to determine and the manner in
which the arbitration would be conducted. The
record shows that
at
the commencement of the arbitration, the arbitrator laid down the
form in which he was going to conduct the proceedings as follows:
‘
ARBITRATOR:
…The applicant as well as the respondent will make submissions
or oral submissions to myself as to whether
in actual fact this
amount of R6 000,00 was paid to the Electrical Industry and whether
it had been received by the electrical
industry. The indication is
then had this amount been received by the Electrical Industry within
60-day period the employer would
not be liable for the funeral and
death benefits of the employee and had it not been received within
the 60-day grace period they
would then have been liable for the
death and the funeral benefits. Now I’m going to then give Mr
Mabello the opportunity
to make submissions to me in that regard and
Mr Lewis will obviously oppose the submissions and Mr Mabello will
have the right
of reply and within 14 days thereafter an award would
be issue. Just to also indicates the employee or the applicant in
this matter
had indicated that they have no documentation, the
documentation is whatever is presented in the case file, is this
correct Mr
Mabello?
MR
MABELLO:
Yes
ARBITRATOR:
And from the employer’s side Mr Lewis has indicated
that he’s
got four pages is that correct Mr Lewis?
MR
LEWIS: That’s correct Commissioner, I
just want to add something maybe before Mr Mabello go on
record…
(intervention)
ARBITRATOR:
So if we can just confirm gentlemen that the issue then narrowed
in
our discussions off the record is that in actual fact whether
R6000,00 was paid to Council and was received by council which
would
in actual fact take out or either indicate the liability of the
employer, is that correct Mr Mabello?
MR
MABELLO:
Yes
ARBITRATOR:
Mr. Lewis?
MR
LEWIS:
Yes, that’s correct.
ARBITRATOR:
Okay good. Yes you wanted to say something Mr Lewis?
MR
LEWIS: No that’s the confirmation.
ARBITRATOR:
Okay good, that is then confirmed. Good Mr Mabello from your
side you
will then indicate to me why do you state that the employer is liable
for the funeral and death benefit of the employee
and let’s
just state for the record purposes the employee’s name is Mr P
Sithole, you can proceed.’
[7]
[21]
It is apparent that the parties agreed to address the arbitrator on
one issue, namely whether the contribution
amounting to R6000.00 was
paid to and received by
the first respondent.
At
no point did Mr Lewis object to the procedure adopted by the
arbitrator in running the arbitration, attempt to inform the
arbitrator
that he intended to call witnesses or that he wanted to
cross-examine Mr. Leballo or any other witness. To attack the
arbitrator
on the ground that he failed to
allow
the parties to testify under oath and to test evidence through
cross-examination
in the circumstances is meritless.
More
fundamentally,
in
this case the arbitrator identified the dispute, i.e. whether the
R6000,00 contribution was paid into the first respondent’s
account as required
in terms
of the Main Agreement
,
and both parties addressed him to this effect.
[22]
In this regard, I find the quote from
Head
of the Department of Education v
Mofokeng and Others
[8]
apposite:
‘
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, 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.
’
[Footnotes omitted]
[23]
In
Naraindath
v Commission for Conciliation, Mediation and Arbitration and
Others
[9]
the Labour Court said the following regarding what is required of the
arbitrator in conducting arbitration proceedings
:
‘
[27]
In my view it is perfectly clear in these circumstances
that a complaint that a commissioner has conducted proceedings
in a
way which differs from the way in which the same dispute would be
dealt with before a court of law cannot as such succeed.
It is only
where the person seeking to challenge the commissioner's award can
point to specific unfairness arising from that action
by the
commissioner that a proper ground for review is established. A
failure to conduct arbitration proceedings in a fair manner,
where
that has the effect that one of the parties does not receive a fair
hearing of their case, will almost inevitably mean either
that the
commissioner has committed misconduct in relation to his or her
duties as an arbitrator or that the commissioner has committed
a
gross irregularity in
the
conduct
of the arbitration proceedings. (See sections 145(2)(a)(i) and (ii)
of the LRA ; McKenzie, The Law of building and Engineering
Contracts
and Arbitration, 5th Ed. pp l88-189).’
[24]
It is apparent from the reading of the award and the record that the
arbitrator assessed the submissions
made and the documentary evidence
placed before him and preferred the first respondent’s version.
The applicant could not
sway the arbitrator to favour its version on
the probabilities. It is not for this Court to interfere with the
arbitrator’s
reasoning for choosing one version over another
when there were conflicting versions unless the decision is so
implausible as to
render it unreasonable.
[25]
It is my view that the arbitrator was reasonable in his assessment of
the evidence before him and reached
a conclusion that any reasonable
decision maker could have reached on the probabilities of the
versions placed before him. It follows
that the applicant has not
established any basis upon which the Court could find that the
arbitrator’s award was reviewable.
As such, the applicant
failed to discharge the onus of establishing that the arbitrator
committed misconduct in relation to his
duties, a gross irregularity
in the conduct of the arbitration proceedings, or exceeded his
powers.
It cannot be
said that he
reached a decision that
a reasonable decision-maker could not reach. There is, therefore, no
reason for this Court to interfere
with the arbitrator’s award.
Costs
[26]
In
terms of section 162 of the LRA, the Court has a wide discretion in
awarding costs. The Constitutional Court has recently reiterated
in
Zungu v
Premier of the Province of Kwa-Zulu Natal and Others
[10]
,
that costs orders should be made in accordance with the requirements
of law and fairness. In this matter,
the
requirements of law and fairness dictate that there should be no
order as to costs.
[27]
In the circumstances, I make the following order.
Order
1.
The application to review
and set aside the arbitration award issued by the second
respondent
under the auspices of the first respondent dated 12 March 2018 under
case number ECI078/17RTB is dismissed.
2.
There is no order as to costs.
__________________
D. Mahosi
Judge
of the Labour Court of South Africa
Appearances:
For
the applicant:
Advocate Venter
Instructed
by:
Andrie Hetcher Attorneys
For
the third respondent: Advocate M. Mgxashe
Instructed
by:
Elton De Bruin Attorneys
[1]
Act
66 of 1995 as amended.
[2]
Government Gazette of 24 March 2017
[3]
[2007]
12 BLLR 1097 (CC).
[4]
[2016] ZALAC 38
; (2016) 37 ILJ 2298 (LAC)
.
[5]
S
ection
138(2) of the LRA, as amended.
[6]
Clause 2 of CCMA Guidelines on Misconduct Arbitrations
[7]
Index to record,
Page
15, line 11 to 25
[8]
[2015] 1 BLLR 50
(LAC) at para
33.
[9]
(2000) 6 BLLR 716 (LC).
[10]
(2018)
39 ILJ 523 (CC);
[2018] 4 BLLR 323
(CC).