About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2020
>>
[2020] ZALCJHB 32
|
|
SA Metal (Pty) Ltd v Holroyd and Others (J2274/17) [2020] ZALCJHB 32 (5 February 2020)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
case
no:
J
2274/17
In
the matter between:
S
A METAL (PTY)
LTD Applicant
and
DEBBIE
LEE
HOLROYD First
Respondent
VUSUMUZI
EUGENE MOYO N. O
Second Respondent
THE
COMMISSION FOR CONCILIATION,
MEDIATION
AND ARBITRATION Third
Respondent
Heard
:
29 January 2020
Delivered
:
05 February 2020
Summary:
An opposed review application – jurisdictional power –
existence of employer – employee relationship –
suspensive
condition fulfilled or not. On the objective facts,
employer and employee relationship came into existence and was
terminated –
dismissal within the meaning of section 186 of the
LRA. The arbitrator was correct that an employer and employee
relationship came
into existence and that dismissal was effected –
jurisdictional powers existed. The remedy of reinstatement was
appropriate
– the order of backpay cannot be interfered with –
it being not compensation in terms of section 194 of the LRA –
the just and equitable requirement finds no application. Held: (1)
The application for review is dismissed ruling. Held: (2) No
order as
to costs.
JUDGMENT
MOSHOANA,
J
Introduction
[1]
This application turns on a very narrow legal point. The real
question
is whether an employer employee relationship was born or
not? The applicant contends that because the suspensive condition was
not met, an employment contract did not come into being. Accordingly,
the first respondent could not be dismissed and resultantly,
the
Commission for Conciliation, Mediation and Arbitration (CCMA) did not
have jurisdiction to entertain the dispute. The first
respondent on
the other hand contends that an employer and employee relationship
was born, and having been terminated, she was
dismissed and the
dismissal was unfair. The applicant in retort to the claim of unfair
dismissal contends that the remedy was inappropriate
and ought to be
interfered with. The application is opposed by the first respondent.
Background
facts
[2]
During or about February 2017, the
applicant required an HR Practitioner as a resource. Resultantly, an
employment agency was instructed
to source the required resource. The
agency sourced the first respondent. On 27 February 2017, Mr Michael
Jones (Mr Jones), the
Human Resources Manager, as part of information
sharing, indicated to the first respondent the details of the medical
aid and the
provident fund contributions. She was also informed that
the information shared – medical and provident fund
contributions
– is subject to her passing all her tests. She
was informed that the costs to company (CTC) would be outlined to her
on the
same day.
[3]
It became common cause that the first
respondent was invited to an interview session, wrote a skills test,
underwent medical fitness
tests and attended a handover meeting with
the previous incumbent. She was informed by Mr Jones that she is the
successful candidate.
She later received a proposed CTC salary which
she accepted. Resultantly, she tendered her resignation at her
erstwhile employer.
Subsequent thereto, on 1 March 2017, she received
a letter of appointment, which she accepted on 2 March 2017. Later in
the day,
she received a call from the representative of the
employment agency, one Morne, who advised her that she was struggling
to find
her referees, thus informed her that the offer of employment
from the applicant would be withdrawn.
[4]
On 3 March 2017, the applicant received a
letter from one Mark Aaris, Head of Human Capital of the applicant,
which, effectively
sought to withdraw the employment offered to the
first respondent. In the letter, it was suggested that the letter of
appointment
was a proposed employment contract, which was subject to
her passing all pre-employment checks. The letter concluded thus: -
‘
Subsequently
we received results regarding the pre-employment checks which don’t
meet the requirements and expectations for
the position of HR
Practitioner.
These results
unfortunately don’t allow us to continue with the employment
offer.’
[5]
Aggrieved thereby, (the withdrawal of the
offer) the first respondent referred a dispute to the CCMA alleging
unfair dismissal.
At the arbitration proceedings, the applicant
challenged the jurisdiction of the CCMA on the basis that there was
never an employer
and employee relationship between it and the first
respondent. Having listened to the evidence from both parties, the
arbitrator
concluded that there was an employer and employee
relationship and that the letter of 3 March 2017 serves as proof of
dismissal
of the first respondent. Having failed to prove the
fairness of the dismissal, the arbitrator concluded that the
dismissal was
both substantively and procedurally unfair.
Resultantly, the arbitrator reinstated the first respondent with an
order of backpay.
[6]
Aggrieved by the award, the applicant
launched the present application. As pointed out above, the
application is opposed by the
first respondent only.
Grounds
of review
[7]
The applicant raised five grounds of
review. Those may be summarised as follows: (a) being prejudiced by
not allowing legal representation
in a seemingly complex dispute; (b)
failure to allow postponement of the arbitration; (c) in concluding
that there was employer
employee relationship, the arbitrator failed
in his duties by failing to properly analyze the evidence before him
and came to an
incorrect conclusion in respect of the suspensive
conditions; (d) the relief of reinstatement was inappropriate and (e)
the award
is not one that a reasonable decision maker would arrive
at. In the supplementary affidavit, the applicant did not add further
grounds but simply amplified upon the aforementioned five grounds.
Evaluation
Legal
representation
[8]
Two tests come into play in this matter. The first
is the correctness test and the other is the reasonableness test.
With regard
to the legal representation issue, the gripe of the
applicant is that the arbitrator having allowed legal representation
for the
first respondent, ought to have offered the applicant an
opportunity to find one for itself. There is no merit in this ground.
Having not offered an opportunity to find a legal representative is
not a defect that renders the award reviewable. In any event,
the
transcript reveals the following:
‘
COMMISSIONER
:
No, obviously you have to decide what you believe would be
appropriate for the respondent. I need to understand
what you are
asking me, because obviously I cannot give legal advice.
I can
give you legal information, the approach
.
MS AARIS
:
Okay, I do not think we will finish today.
If there is a need for
legal representation for the company, we can bring it next time.
COMMISSIONER
:
You want to bring to bring a legal representative?
MS AARIS:
If we need to
. We can
proceed right now
. We have one
and half hour left. So most likely we will not finish this matter.’
[9]
It is patently clear that the applicant
representative “
pinned her colours
to the mast
” with regard to the
issue of legal representation. Upon being asked if the applicant
wishes to bring one, she categorically
stated that “
if
we need to
”. Clearly, it can
never be said that the arbitrator failed in his duties, which failure
taints the award. Accordingly, this
ground must fail.
Postponement
[10]
At the CCMA, postponement is not there for the
taking. Arbitrators cannot postpone arbitrations unless valid grounds
to do so are
presented to them. The transcript reveals that the
representative of the applicant simply expressed her desire to leave
at 11h30.
The commissioner, pertinently asked her the following:
‘
COMMISSIONER
:
So you do want to apply for postponement.
MS AARIS:
No, let us just go ahead.
COMMISSIONER
…
Your flight bookings, I mean, those are your personal issues. I
cannot entertain any of that,
but what I can tell you is that
there is a possibility of asking for postponement which is not
automatic
, but if that is something that you want to consider we
can deal with that.
MS AARIS
:
Then I am going to ask you to postponement due to that.
…
MS AARIS
:
We can proceed
. I have to hand over to my colleague if need
be.’
[11]
It is absolutely clear that having been advised
that the applicant could ask for postponement, its representative
sought to apply
for postponement but after the issue of costs was
raised she decided to proceed with a rider that she would hand over
to a colleague
if need be. Accordingly, this ground is bound to fail
too.
Was
there an employment relationship?
[12]
With regard to the existence of an employer and
employee relationship, I must state that for an employer and employee
relationship
to exist a written contract of employment is not a
requirement. On the objective facts, an employment relationship
commenced when
the first respondent was offered the CTC which she
accepted. This is after the first respondent was interviewed and
attended the
medical test. The letter of employment that followed on
1 March 2017 was not one to create an employer and employee
relationship
but was a recordal of the terms of the already created
employer and employee relationship. The letter itself records thus: -
“
The terms
of agreement of your employment contract with the company are set out
below.”
[13]
The contentious issue, which I shall revert to
later in this judgment is a term of the contract as opposed to a
condition as argued
by the applicant. As a term, it was recorded that
“
Your appointment will be
subjected to you passing all the pre-employment checks
”.
This is not a condition but a term, known as a modal clause. Thus the
arbitrator was right when he concluded that on the
objective facts,
an employer and employee relationship came into being.
Was
the modal clause a suspensive condition?
[14]
I
now deal with the applicant’s argument that the term outlined
above is a suspensive condition and since the first respondent
failed
to pass the reference checks, the agreement did not come into
existence. He placed heavy reliance on the judgment of the
Labour
Appeal Court in
Nogcantsi
v Mnquma Local Municipality and others
[1]
,
in particular where Coppin AJA, writing for the majority stated the
law as follows:
‘
[36]
A conditional contract of employment is a commercial reality. The LRA
is not against such contracts.
The appellant, seemingly, agrees that
that is so, but confines the acceptability of such contracts to those
where the condition
is suspensive, rather than resolutive, as in this
case. The main argument being that with a suspensive condition there
is no employment
contract pending the fulfilment of the suspensive
condition. But in the case of a resolutive condition, a contract
exists, but
comes to an end upon fulfilment of the resolutive
condition and the contract is regarded as if it never existed.’
[15]
Unfortunately,
this case is not of assistance to the applicant. The condition
therein was different as in that contract a term couched
in the
following terms was inserted: “
Clause
1.1 the appointment was subject to a vetting and screening process
which should it reveal negative outcomes
the
contract would be automatically terminated.”
In the matter before me, there is no automatic termination
contemplated. In fact this case is more about automatic termination,
which is not a dismissal in terms of the Labour Relations Act
[2]
(LRA) and not about suspensive and/or resolutive conditions
[3]
.
[16]
Returning
to the contentious issue, the clause in question is not a suspensive
condition. Where the party conferring a benefit intends
the contract
to be operative at once, but requires the party benefitting to give
something, or to do or not do something in consideration
of the
benefit bestowed, then we are dealing with a
modus
or modal clause.
[4]
In
Benoni
Town Council v Minister of Agricultural Credit and Land Tenure
[5]
,
Acting Justice Page stated that it is best to treat a
modus
as a term of the contract, from breach of which the ordinary
consequences of breach of contract follow. I fully agree.
[17]
In
casu
,
failure to pass the pre-employment checks amounts to a breach. A
party faced with a breach has an election to seek specific
performance
or cancel and sue for damages. In an employment context
cancellation of an employment contract is nothing but a dismissal.
Thus
the conclusion I reach is that the findings of the arbitrator
are correct and cannot be disturbed.
[18]
With regard to the question whether the first
respondent was dismissed, the arbitrator was spot on when he
concluded that the letter
of 3 March 2017 is proof of dismissal. The
author of the letter was ostensibly at pains to hide the purpose of
the letter. He used
the phrase ‘
not
being allowed to continue with employment offer’
.
This phrase does not make meaningful sense. If it looks like a duck,
swims like a duck, and quacks like a duck, then it probably
is a
duck. The letter is nothing but a dismissal letter. Section 186 (a)
defines dismissal to mean that an employer has terminated
employment
with or without notice. On this score, the applicant must fail.
Relief
[19]
Turning
to the issue of the relief. Reinstatement is a primary remedy unless
an employee does not wish to be reinstated. In
Equity
Aviation Services (Pty) Ltd
[6]
,
the Constitutional Court made it clear that the question whether the
award of reinstatement should be retrospective is a question
to be
answered by the arbitrator. The arbitrator in this matter made
reinstatement retrospective. A retrospective reinstatement
comes with
it the so-called back pay. In other words, the first respondent is
treated as if she was never dismissed. Effectively
backpay is nothing
but arrear wages. The first respondent has tendered services and the
applicant refused to accept the services.
Accordingly, she was
entitled to be paid her salary. Having not being paid her salary, she
was entitled to her backpay as ordered
by the arbitrator.
[20]
A
contention that the backpay ought to be just and equitable cannot be
correct. As a point of departure, backpay is not compensation
within
the contemplation of the LRA. Section 194 of the LRA only applies to
compensation, which was viewed as a
solatium
in a number of judgments of the Labour Appeal Court.
[7]
Therefore, the concept of just and equitable does not apply to
backpay. Accordingly, this Court, in my view, is not sceptered
to
interfere with the issue of backpay on the basis that same is not
just and equitable. Thus, this ground must fail.
[21]
With regard to the reasonableness of the
award, the test is whether the award is one that a reasonable
commissioner may arrive at.
An unsubstantiated assertion was made
that the reasoning in the award is totality divested from the
evidence presented and the
true nature of the dispute. There is no
merit in this assertion. The evidence revealed that the first
respondent was dismissed.
The applicant bore the onus to prove that
the dismissal was fair. Instead, the applicant chose to lead the
evidence of the employment
agency and failed to justify the
dismissal. Where an employer fails to justify a dismissal on any of
the three recognised grounds,
then the dismissal is unfair.
Accordingly, the award of the arbitrator falls within the bounds of
reasonableness and this Court
is not empowered to interfere with it.
This ground must fail too.
[22]
In the results the following order is made:
Order
1.
The
application for review is dismissed.
2.
There is no order as to costs.
_______________________
G. N. Moshoana
Judge
of the Labour Court of South Africa
Appearances:
For
the Applicant:
Advocate I Posthumus
Instructed
by:
Whalley & Van Der Lith Inc, Johannesburg.
For
the First Respondent: Ms N N Zulu of Ismail & Dhaya
Attorneys, Johannesburg.
[1]
(2017) 38 ILJ 595 (LAC).
[2]
No. 66 of 1995, as amended.
[3]
See: Id fn 1 at para 42: “…
The
termination was not triggered by an act of which the aim and object
… was to end the employment relationship…”
[4]
See: RH Christie GB Bradfield
Christie’s:
The law of contract in South Africa
6
th
Edition (Lexis Nexis, Cape Town, 2011) at p. 139.
[5]
[5]
1978 (1) SA 978
(T) at 991C.
[6]
[2015] 2 BLLR 174 (CC).
[7]
See:
Arb
Electrical Wholesalers (Pty) Ltd v Hibbert
(2015)
36 ILJ 2989 (LAC) and
SA
Airways (Pty) Ltd v Jansen van Vuuren and Another
(2014)
35 ILJ 2274 (LAC).