THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

NOT REPORTABLE

Case no : JR1121/13

In the matter between:

SUPERCARE SERVICES GROUP (PTY) LTD Applicant

and

COMMISSIONER OLOTA NO First Respondent
COMMISSION FOR CONCILIATION, MEDIATION
AND ARBITRATION Second Responde nt
TAWUSA OBO MAUREEN RAKODI Third Respondent

Heard : 6 November 2024
Delivered : 15 January 2025
Summary : Application to review and set aside the arbitration award of the first
respondent that the applicant demoted the third respondent’s
member and thereby committed an unfair labour practice. Held
that the commissioner correctly found that there was a demotion,
and the finding that the demotion constituted an unfair labour
practice was reasonable . Application dismissed.
2



JUDGMENT


DANIELS J

Introduction

[1] This is an application brought to review and set aside the arbitration
award issued by the first respondent ( hereafter the “commissioner”) . The
commissioner found that the applicant demoted the third respondent’s
member, Ms Maureen Rakodi (“ Ms Rakodi” or “the employee” ) and
awarded her relief. When the matter was argued , the third respondent’s
representatives failed to appear. The matter proceeded in its absence.

Material facts

[2] The facts of the matter are common cause:

2.1 Ms Rakodi was employed as a cleaner and then promoted to the
position of contract team leader, where she would clean but also
supervise the other cleaners. She was deployed by the applicant to
work at the site of one of its customers, ABI Rustenburg depot (the
“customer”).

2.2 Ms Rakodi signed an employment contract with the applicant which
stated:

2.5. The employee acknowledges that –
2.5.1. the nature of the company’s business and its
contract with various customers often necessitates
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the transfer of staff from time to time with the
consequence that employees may have to execute
their duties at places and in areas different from
those at which they were initially employed. In the
circumstances, the employee specifically
acknowledges that he/she understands that he/she
may at any time be so transferred by the company
to execute his/her duties at a place different from
that at which he/she was initially employed and the
employee hereby consents to the company
effecting such transfers, provided –
2.5.1.1. two weeks’ notice and reasons are to
be given by the company to the
employee for the proposed transfer .”
(own emphasis)

2.3 On 2 October 2012, the customer emailed the applicant complaining
about the poor quality of its services. In the email, the customer
stated that the employee was “one of the worst performing people”
and it demanded that she be removed from its premises immediately.
The customer further indicated that if the service is not improved then
it would “definitely consider other options .”

2.4 To avoid the possible retrenchment of the employee, in the absence
of any consultation with the employee or her union, the applicant
decided to transfer her to the position of cleaner at Capitec.

2.5 The applicant approved the transfer on 31 October 2012, as
indicated by the applicant’s signed internal transfer form. On that
date, the applicant informed the employee that she had been
transferred to Capitec. Ms Rakodi failed to report for duty, but
subsequently signed the internal transfer form and commenced her
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duties at Capitec. In the internal transfer form, the employee
effectively reserved her rights as follows:

“Not accepting the current conditions / I want to be transferred
with the same conditions as before. I am prepared to work at
Capitec ”

2.6 The employee’s conditions of employment changed upon transfer.
Her monthly remuneration was reduced, from R2580, 68 to R1360,
32, as a result of the reduction of working hours. Her annual bonus
reduced from R2330, 06 to R1360, 32 and she no longer received
the team leader allowance. Her status was diminished because she
was no longer a team leader , and no longer performed any duties
applicable to team leaders.

Arbitration proceedings

[3] The third respondent alleged that the applicant had committed an unfair
labour practice and referred that dispute to the second respondent for
conciliation, and when that failed, arbitration.

[4] At arbitration, the applicant contended that:

4.1 It informed the employee several weeks earlier that the customer had
complained about her performance,

4.2 It held a counselling meeting with the employee after the complaint
was lodged by the customer, but there was no time to fully consult
the employee because it was an emergency situation.

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4.3 There was no demotion but only a transfer which it was entitled to
implement.

4.4 The transfer (or demotion) was lawful because it occurred after
proper notice, it gave reasons, and was based on its operational
requirements.

4.5 The transfer was necessary to avoid the possible retrenchment of the
employee.

4.6 If the transfer constituted a demotion, the employee waived her rights
to challenge the demotion because she accepted it by signing the
internal transfer form and working in the new position .

[5] The commissioner found that there was a demotion and it constituted an
unfair labour practice. The reasons why the demotion was considered
unfair are unclear , save that the absence of a proper consultation
process was considered to be of great significance .

Legal principles

Grounds of review

[6] It is trite that the grounds of review must be pertinently set out in the
applicant’s founding and supplementary affidavits.1 These grounds may
not be extended in the replying affidavit or in heads of argument. In brief,
the grounds of review pertinent to this judgment are as follows:


1 Communication Workers Union and others v SA Post Office Ltd and others (2013) 34 ILJ 626
at paras 35 and 39
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6.1 The applicant allege s that, contra the finding of the commissioner, it
was not common cause that the employee was demoted. In para. 7.2
of its founding affidavit the applicant states that it “ at all times
contended that this was a transfer specifically agreed to and
envisaged by the individual third respondent’s contract of
employment which resulted in a lesser position .” In reply, the third
respondent, in para 15 of its answering affidavit, states: “ At the same
time the Employer ultimately conceded during that (sic) the
arbitration that the drop in salary that Ms Rakodi received was a
demotion .” The applicant filed no replying affidavit .

6.2 It allege s that the commissioner failed to apply h er mind to the
evidence that the employee signed an employment contract in which
she consented to any transfer provided that two-weeks’ notice was
given together with reasons for the transfer.

6.3 It allege s that t he commissioner failed to apply h er mind to the fact
that the employee had signalled her consent to the transfer by
moving to the new position and performing her duties in her new
post. ‘

6.4 It allege s that the ruling that the employee must be reinstated into her
previous position is unreasonable , and, in fact, impossible.

Review applications in general

[7] The arbitration process and the resulting arbitration award both constitute
administrative action. Accordingly, section 33(1) of the Constitution
requires that the process and the outcome must be lawful, reasonable,
and procedurally fair. It was in this context that the Constitutional Court
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fashioned the appropriate review test2 in relation to CCMA arbitration
awards in the following terms: is the arbitration award one which no
reasonable commissioner could reach on the material before him or her ?
The test has come to be known as the “ Sidumo test” or the
“reasonableness test .”

[8] Subsequently , in CUSA v Tao Ying Metal Industries and Others3 (“Tao
Ying”) the Court held at para 76:

“76] It is by now axiomatic that a commissioner is required to
apply his or her mind to the issues properly before him or her.
Failure to do so may result in the ensuing award being reviewed
and set aside. Recently, in Sidumo, the matter was put thus:
“Parties to the CCMA arbitrations have a right to
have their cases fully and fairly determined. Fairness
in the conduct of the proceedings requires a
commissioner to apply his or her mind to the issues
that are material to the determination of the dispute.
One of the duties of a commissioner in conducting
an arbitration is to determine the material facts and
then to apply the provisions of the LRA to those facts
in answering the question whether the dismissal was
for a fair reason. In my judgment, where a
commissioner fails to apply his or her mind to a
matter which is material to the determination of the
fairness of the sanction, it can hardly be said that
there was a fair trial of issues .” (Own emphasis)


[9] Thus , following Tao Ying , it is clear that the decision maker must apply
his or her mind to all the issues that are material to a fair determination of
the dispute. The failure of the commissioner to apply his or her mind to
the material issues denies the parties a fair trial and, invariably, the
outcome will be unreasonable .

[10] In Herholdt v Nedbank Ltd (COSATU as Amicus Curiae)4 the court
clarified that the Sidumo test did not extinguish the procedural grounds

2 Sidumo and another v Rustenburg Platinum Mines Ltd and others (2007) 28 ILJ 2405 (CC)
3 (2008) 29 ILJ 2461 (CC) (18 September 2008)
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for reviews contemplated in section 145(2) (a) of the LRA. However, the
procedural defects alleged must indicate that the arbitrator misconceived
the nature of the enquiry, or arrived at an unreasonable result.

[11] In Bestel v Astral Operations Ltd & others5 the court considered the
narrow scope of review and accepted that an arbitrator’s finding would be
unreasonable if it is unsupported by any evidence, based on speculation,
disconnected from the evidence, supported only by evidence that is
insufficiently to justify the decision , or if it was made in ignorance of
evidence that was uncontradicted. The Court held that:
‘… the ultimate principle upon which a review is based is justification
for the decision as opposed to it being considered to be correct by
the reviewing court; that is whatever this Court might consider to be a
better decision is irrelevant to review proceedings as opposed to an
appeal . Thus, great care must be taken to ensure that this distinction,
however difficult it is to always maintain, is respected .’ (Own
emphasis)

[12] In Goldfields Mining SA (Pty) Ltd v CCMA and others6 the court held that
the concept of reasonableness embraces a wide range of outcomes,
many of which may be reasonable. The outcome should not be
evaluated on a piecemeal basis, but on the totality of the evidence.

[13] In Head of the Department of Education v Mofokeng and others7 the
court again confirmed that where an arbitrator fail s to apply his or her
mind to the material issues, this will usually indicate that the outcome is
unreasonable or that the arbitrator misconceived the nature of the
enquiry. However, when a mistake of fact or law occurs, what matters is
its materiality - whether the error had a distorting effect on the outcome.



4 (2013) 34 ILJ 2795 (SCA)
5 [2011] 2 BLLR 129 (LAC) at para 18
6 (2014) 35 ILJ 943 (LAC) at para 14
7 [2015] 1 BLLR 50 (LAC)
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Analysis of the grounds of review

[14] It is necessary to consider the grounds of review in the context of our law
on demotions and unfair labour practices. In Nxele v Chief Deputy
Commissioner, Corporate Services, Department of Correctional Services
& others , the court, per Zondo JP (as he was then stated):8

“[88] I agree with counsel for the appellant that the mere fact that the
appellant's rank and remuneration were not going to change does not
mean that the transfer to Pollsmoor could not or did not constitute a
demotion. I agree, too, that the status, prestige, and responsibilities of
the position are relevant to the determination of whether or not a transfer
in a particular case constitutes a demotion…

[89] The appellant also did not consent to such demotion. In terms of the
common law a demotion without the employee's consent is unlawful. In
terms of the Labour Relations Act the demotion of an employee without
his consent would be unfair …”

[15] In Builders Warehouse v Benade9 at para 14 the appeal court stated: “ The
court a quo is correct that a dispute about an alleged unfair labour practice
extends to “unfair conduct relating to demotion”. The fact that the parties
have agreed that the aggrieved employee accepts demotion is not a
complete defence because the ambit of this unfair labour practice is wider
than this. The implementation of an agreement to accept demotion, may
constitute an unfair labour practice .” Relying on this authority, this court
held that consent itself did not imply waiver of the right to challenge the

8 (2008) 29 ILJ 2708 (LAC)
9 (P/A 1/14) [2015] ZALAC 77 (5 May 2015)
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fairness of the demotion.10 Accordingly, it is settled that consent on its own
does not establish that the demotion was fair.

[16] It is well established that consultation , or negotiation, is required before a
decision to demote an individual can be fairly taken. In Solidarity v
Perishable Products Export Control Board & others11 the court considered
the CCMA matter between TOWU on behalf of Malan and Commuter
Handling Services (Pty) Ltd12 and stated:

“41] If a demotion is the sanction for misconduct, it was found that it
should be preceded by a disciplinary hearing and the misconduct
procedures which are normally applicable. If it is an alternative sanction
to dismissal it stands to reason that the procedural standards for a
hearing prior to dismissal should also be complied with where the
outcome is demotion. ..” (own emphasis)

[17] The applicant contends that the transfer did not constitute a demotion ,
and the second respondent therefore had no jurisdiction to hear the
dispute . The difficulty, for the applicant, is that the transfer easily meets
the criteria for demotion. In brief, d emotion contemplates the loss of
benefits (remuneration) or status. Here, t he employee was transferred to
a position of lower status, and her remuneration was decreased. Both of
these facts were common cause. At arbitration, the applicant conceded
that her remuneration was reduced, and in this application the applicant
referred to the employee’s new position (after transfer) as a “lesser
position .” In the circumstances, t here can be no question that the
employee was demoted, and the commissioner correctly assumed
jurisdiction.


10 Solidarity on behalf of Taliep v Perishable Products Export Control Board & others (2022) 43
ILJ 2592 (LC) at paras 38, 43 and 44
11 Citation in fn. 10 above
12 [2006] 3 BALR 327 (CCMA)
11

[18] It must be noted that, at arbitration, the commissioner suggested to the
applicant’s representative that it was common cause that the employee
was demoted.13 The commissioner asked whether it was common cause
that the employee’s remuneration was reduced, and that her position
changed. The representative conceded that her remuneration had been
reduced and her position had also been changed though “her duties
didn’t change that much .” The commissioner understood that the
applicant had conceded that the employee had been demoted. It is hard
to understand how the applicant could ever have disputed that the
employee was demoted given that her status was diminished , her
remuneration reduced, and her duties changed.

[19] The applicant’s many contentions and submissions in its founding
affidavit boil down to the same issue . The applicant contends that
transfer was lawful (because the employer had a right to transfer the
employee in terms of the employment contract) and, accordingly, the
transfer (or demotion) was fair , prior consultation not being required
under the contract . The employee consented to the transfer and it was
therefore fair, alternatively she waived her right to challenge the
demotion . These contentions are, in my considered view, as explained
below, without merit:

19.1 Firstly, while it is correct that the employment contract deals with
transfers , it is unclear whether clause 2.5 of the contract also cover s
transfers which are also demotion s. In our common law, demotion is
unlawful in the absence of consent. Where the employment contract
intends to deprive an employee of common law rights, one would
have expected the parties to do so clearly . There is no indication in
the employment contract which requires that clause 2.5 must be
interpreted to include demotions , thereby extinguishing the
employee’s common law rights to withhold her consent to a transfer
which amounts to a demotion .

13 Record Vol. 2; Transcript p132 line 5 – p133 line 5
12


19.2 Secondly, it appears from the arbitration record that reasons for the
transfer were not provided to the employee, as required by the
employment contract.14 It seems that the employee was not given
two weeks’ prior notice of her transfer either. In any event, t he
applicant confuses lawfulness with fairness. Even if the transfer or
demotion was lawful, this does not necessarily make it fair.

19.3 Thirdly, the authorities indicate that consent to demotion, by itself, is
not a complete defence to the unfair labour practice claim. I see no
reason to depart from these authorities .

19.4 Fourthly, on the facts of this matter, there was no unqualified consent
to the demotion. The employee specifically reserved her rights to
challenge the demotion .

[20] It is common cause that the employee was not consulted, and was
informed that she had been transferred on the same day it was affected .
The following of a fair process prior to demotion is not a n insignifican t
issue . Prior c onsultation is fundamental to the fairness of the demotion.
The applicant’s submissions that consultation was not required because
it was entitled to act unilaterally cannot be sustained. This confuses
lawfulness with fairness. The argument that consultation was impossible
because it was an emergency also cannot be sustained. The evidence
demonstrated no reason why consultation could not have been held
between the time of the complaint and the time when the applicant
approved the transfer – from 2nd to 31st October. In my view, on this
basis alone, the absence of consultation, the demotion constituted an
unfair labour practice.


14 Record Vol. 2; Transcript p126 line 25 – p127 line 7
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[21] The applicant sought to justify the demotion by stressing that it was an
alternative to retrenchment. However, this only gets the applicant so far.
Retrenchment is not a fait accompli just because the employer cannot
see any alternative and must be preceded by a proper joint, consensus -
seeking, consultation process to seek to find inter alia alternatives to
retrenchment. The applicant could have treated the employee’s
reservation of rights as a rejection of the transfer, and taken steps to
address its operational requirements .

[22] The commissioner reinstated the employee. The applicant argues that
this was improper and requires it to perform an impossibility. I disagree.
The applicant presented no evidence that the contract with the customer
would automatically terminate if the employee were to be reinstated. In
the circumstances, compliance with the award is not an impossibility.
Section 193(4) of the L abour Relations Act 66 of 1995 confers a wide
discretion upon the commissioner to grant relief, as he or she deems
reasonable, to victims of unfair labour practices. I see no reason to
interfere with such discretion.

[23] The reasoning of the commissioner is of little moment. The task of the
court, on review, is to assess all the evidence and determine whether the
outcome was reasonable. In my view, the arbitration award is reasonable
in relation to all the evidence before the commissioner.

Costs

[24] The third respondent’s representatives failed to appear at court . This
conduct is unbecoming and I am inclined to punish such conduct with a
cost order . During the course of this matter, the third respondent has
been represented by three different firms. The applicant’s practice note
identifies third respondent’s current representatives as a firm which had
represented the third respondent during 2016, but had been substituted
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by another firm in 2018. In the circumstances , given the confusion as to
the identity of the third respondent’s current representatives, it would not
be proper to order them to pay the applicant’s costs.

Conclusion

[25] In the circumstances, for the reasons set out above, I make the following
order:
25.1 The application is dismissed,
25.2 There is no order as to costs.

Reynaud Daniels
Judge of the Labour Court of South Africa



Appearances :

For the Applicant :
Snyman Attorneys (Ms T Moyo)



For the Third Respondent :
No appearance