IN THE LABOUR COURT OF SOUTH AFRICA
(Held at Cape Town)
•Case No: C
310/98
In the matter between :
FRASERS INTERNATIONAL REMOVALS Applicant
and
THE COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION First Respondent
and
Second Respondent
Third Respondent
J U D G E M E N T
Revelas J:
[1] This is an application for the review of an
arbitration award made by the second respondent in
favour of the third respondent. The applicant
seeks an order that the second respondent’s award
reinstating the third respondent in the employ of
the applicant and ordering the applicant to pay
the third respondent compensation in the amount of
R 21 213-16 be set aside.
[2] The application is brought under section 145 of the
Labour Relations Act, No 66 of 1995 (“the Act”)and
the application is unopposed. A Mr Wagiet,
purporting to represent the third respondent, has
filed an affidavit and so has the third
respondent. However there is no notice of
opposition. There was also no appearance for the
third respondent, although he was present in
court. Mr Wagiet also stated that he abides by the
court’s decision. I consequently treat the matter
as if it were unopposed.
[3] The third respondent was employed by the applicant
during July 1993. In his letter of appointment the
relevant paragraph under the heading “Retirement”
reads as follows:
“Retirement on attaining the age of 63 is compulsory.
However an extension of your employment may be
negotiated with management, which agreement will be
confirmed in writing.”
[4] According to the applicant, the age of 63 years is
also the retirement age provided for in the
applicant’s pension fund scheme rules.
[5] The applicant alleges that the third respondent’s
date of retirement was 1 March 1998.
[6] The applicant explains that in exceptional
circumstances of mutual need, and subject to
managerial approval, some employees have been re-
employed by the applicant subsequent to having
been retired at age 63. This arrangement were it
has occurred in the past, apparently occurs only
by mutual agreement and that the applicant had no
right to insist that any employee stays on past
retirement age and nor has any employee the right
to insist that he or she remains in employment
with the applicant, after retirement age.
[7] If such exceptional circumstances exist, then a
new employment contract is entered into, after the
employee has received a pension or provident fund
benefits to which he or she has become entitled to
on retirement, and the terms and conditions of
such employment will vary in each case.
[8] It is common cause that the third respondent did
not wish to be retired at the age of 63 and
requested the applicant to retain his services
beyond this age. Consultations took place and a
dispute arose. The applicant was of the view that
there were no exceptional circumstances which
required the retention of the third respondent’s
post, whereas the third respondent believed that
his services should be retained.
[9] On 5 March the third respondent, before he was
retired, and therefore still employed by the
applicant, referred a dispute to the Bargaining
Council for the Road Freight Industry. A copy of
his referral reflects in paragraphs 3(a) and (b)
thereof that the dispute concerns an unfair labour
practice and related to Schedule 7 Item 3(1) of
the Act.
[10] Item 3(1)in Schedule 7 of the Act reads as
follows:
“any party may refer a dispute about an alleged unfair
labour practice in writing to -
(a) A Council if the parties to the dispute fall within the
registered scope of that council or
(b) The commission, if no Council has jurisdiction”
[11] The Bargaining Council for the Road Freight
Industry held a dispute meeting on 22 April 1998
which remained unresolved and on the day a
certificate was issued by the Council reflecting
that the dispute remained unresolved and that it
concerned an “unfair labour practice” dispute.
The certificate specifically refers to Item 3(1)
of Schedule 7 of the Act.
[12] On 24 April 1998 the third respondent submitted a
request to the Commission for Conciliation,
Mediation and Arbitration (“the CCMA, or “the
first respondent”) to arbitrate the following:
“unfair labour practice that led to unfair dismissal.
Inconsistency of company policy”. In the request form
(LRA FORM 7.13) requesting an arbitration, the
following decision is sought from the CCMA by the
third respondent:
“ to be afforded the same opportunity as enjoyed by other
employees. Reinstatement. To be granted the same
opportunity to work to age 65 years.”
[13] On 7 May 1998 the applicant was notified by the
CCMA that the matter had been set down for
arbitration on 8 June 1998. On 11 May 1998, the
applicant’s attorneys of record sent a letter to
the CCMA, averring that what was conciliated
between the parties was not an unfair dismissal,
but an alleged unfair labour practice, and that
the third respondent was seeking an unconciliated
dispute to be arbitrated by the CCMA. The letter
further states:
“with reference to the referrals for conciliation and
arbitration, it appears as if Mr Obaray is in fact disputing
our clients retirement age of 63 years. This clearly does
not fall within the disputes referred to in Schedule 7 Item
3(4)(b) read with Item 2 (1)(b) to (d).
Given that the dispute does not involve an alleged unfair
dismissal and Mr Obaray on his own version ceased to be an
employee by virtue of his retirement on 4 March 1998, he can
no longer claim to be an employee within the definition of
an ‘employee’ contained in the Act.
Accordingly, is not a party falling within the jurisdiction
of the Labour Relations Act, and the CCMA similarly has no
jurisdiction to arbitrate this dispute (in so far as it may
have otherwise had the power to do so-refer Item 1 above).”
[14] This is still the applicant’s case and one of the
grounds upon which the applicant seeks to review
this matter.
[15] On 27 May 1998, a Ms Warwick of the CCMA wrote to
the applicant’s attorneys, advising them that she
was unable to locate the referral for arbitration
on the CCMA’s computer system and that it may
therefore not necessarily have been referred to
the CCMA as yet. She was consequently unable to
confirm whether or not the CCMA had jurisdiction
to arbitrate the matter. She however assured the
respondent’s attorney’s of record that once the
referral is found, she would forward the letter of
the applicant’s attorney’s to the allocated
commissioner.
[16] On 8 June 1998 an employee of the applicant’s
human resources department received a telephone
call from the second respondent at about 10h00 and
the second respondent informed her that the
applicant was an hour late for the arbitration.
The second respondent was referred to the
correspondence that had passed between the
applicant’s attorneys of record and the CCMA.
[17] The second respondent apparently did nor have this
correspondence in his file but promised Mrs
Coleman that revert to her fifteen minutes later
which he did. The second respondent was then
referred to the applicant’s human resources
director, Mr W Jungschlager as he was the official
at the applicant responsible for the matter.
[18] Mr Jungschlager requested the second respondent to
postpone the matter. He pointed out to the second
respondent that in the light of the letter sent by
the applicant’s attorney to the CCMA and the
CCMA’s response thereto, he did not expect the
matter to proceed on that day. He also pointed out
to the second respondent that he was the only
official who was able to deal with the matter on
behalf of the applicant, and that he was ill in
bed and unable to be present at the CCMA. He
reiterated that the applicant had every intention
of opposing the matter and had a bona fide
defence.
[19] The second respondent adopted the attitude that
the notice of set down had been served on the
applicant and for that reason the matter would
proceed and no postponement would be granted. The
following day, the applicant’s attorney’s of
record forwarded a letter to Ms Warwick of the
CCMA referring to the previous correspondence and
setting out what had transpired between himself
and the second respondent.
[20] Mr Jungschlager, pointed out in his affidavit,
that contrary to what is contained in this letter
he did in fact receive notification of the
arbitration proceedings, but felt that in light of
the previous correspondence, the notice of set
down had been superceded and that the matter would
not proceed until further correspondence between
his attorneys and the CCMA had been concluded. Mr
Jungschlager explained that because Mr Field, his
attorney, had not seen the notice of set down, Mr
Field merely assumed, incorrectly though, that no
such notice had been sent to Mr Jungschlager.
[21] Ms Warwick of the CCMA did not respond to the
letter written by the applicant’s attorney, but
the second respondent did. He stated the following
in his letter:
“Your client was properly and duly served on 7 May 1998. My
discussion with your client had nothing to do with service.
Your client was raising a jurisdictional issue as a reason
for not attending and I advise your client that the issue
should have been raised as an in limine point at
arbitration. The arbitration proceeded in his absence and he
will be receiving a copy of the award in due course.”
[22] Mr Jungschlager denies that he refused to attend
the hearing on the grounds that the CCMA had no
jurisdiction to arbitrate the matter. He argues
that what he had requested, was a postponement so
that at the very least, the applicant might be
afforded the right to be heard on the issue of
jurisdiction, which still remained unresolved.
[23] The arbitration proceeded in the absence of the
applicant. In his award the second respondent
found that there was an unwritten company policy
providing for retrenchment at age 65 and
furthermore that it had been agreed to, between
the applicant and the third respondent that the
third respondent would only retire at the age of
65.
[24] The second respondent further found that the
applicant, in breach of its own policy, and of the
agreement between itself and the third respondent,
forced the third respondent to retire at the age
of 63.
[25] The second respondent concluded that this conduct
on the part of the applicant constituted “a
dismissal without a fair reason, or a dismissal
for a reason unknown (my emphasis) to the
employee.”
[26] At the arbitration hearing, the third respondent
was represented by a Mr Wagiet, who is apparently
an official of the Islamic Unity Convention.
According to the applicant, the Islamic Unity
Convention is not a trade union and it appears
that the second respondent accepted, without
considering the provisions of section 138(4) of
the Act, that the third respondent was entitled to
be represented by Mr Wagiet of the Islamic Unity
Convention.
[27] The applicant argued that Mr Jungschlager had a
good and sufficient reason for not been able to
attend the arbitration hearing and that the matter
should have been postponed at least to hear the
applicant on the question of jurisdiction. The
second respondent does not make mention of the
fact that the applicant requested a postponement
on certain grounds and that the application was
refused for certain reasons. No reasons were given
for the refusal of the request for a postponement.
[28] In the decision of CAREPHONE (PTY)LTD V MARCUS NO
& OTHERS [1998] 11 BLLR 1093 (LAC) the trite
principle that a postponement is an indulgence,
and not a right was upheld. The second respondent
stated that he refused the postponement because it
was the applicant’s decision not to attend the
arbitration and the fact that Mr Jungschlager was
ill was “coincidental”. Factually, this seems the
correct observation. Mr Jungschlager was not
absent because he was ill, but because he believed
the correspondence pertaining to jurisdiction,
justified is absence. His belief was illfounded.
Jurisdictional issues relating to arbitration
cannot e conducted by correspondence or over the
telephone.
[29] Even if the applicant wished to object to the
jurisdiction of the second respondent, this should
have been raised at the arbitration proceedings.
Commissioners enjoy a wide discretion with regard
to the granting postponements. The Labour Court
will not, and should not interfere with this
discretion, unless there are compelling reasons to
do so. Accordingly, I cannot find that the refusal
to postpone the matter amounted to an irregularity
or to the second respondent exceeding his powers.
[30] The applicant further seeks to review the award on
the following grounds:
1. That the CCMA had no jurisdiction to treat the
matter as an unfair dismissal case; and
2. That the third respondent was not dismissed,
since attaining the ordinary retirement age does
not constitute dismissal in terms of the Act;
3. That there is no evidence whatsoever of the
commission of residual unfair labour practice as
defined in item 2 of Schedule 7 of the Act;
4. That to the extent that the third respondent
viewed being granted leave at a time after
his stipulated retirement date, and viewed
being sent on a computer course as indicative
of an intention on the part of the applicant
to retain his services after age 63, which was
found by the second respondent, this was a mistake
which could be more satisfactorily explained
in evidence.
[31] It was further argued that, should I find that the
second respondent had jurisdiction to arbitrate an
unfair dismissal case, and that the request for
postponement was correctly refused then, the
finding of the second respondent was irregularly
made and not justified by the reasons given for
it, on the following grounds:
[32] The third respondent did not allege and nor did
the second respondent find that the reason for
dismissal related to the third respondent’s
“conduct or capacity”. In this regard I was
referred to section 191(5)(a) of the Act. The
point was made that, notwithstanding the aforesaid
provisions, a finding of unfair dismissal was made
by the second respondent. The applicant submitted
that unless there is evidence of circumstances
provided for in section 191 (5)(a)(i)-(iii) of the
Act, no finding of an unfair dismissal case may be
made and submitted further that the jurisdictional
facts referred to in the above sections, were not
present during the arbitration proceedings.
[33] When the third respondent made a request to
conciliate the dispute about an unfair labour
practice regarding the alleged application of the
company policy relating to the retirements, he was
still in the employ of the applicant.
[34] The retirement was to take effect at the end of
March 1998. It is therefore understandable that he
described the dispute as an “unfair labour
practice” in his referral form.
[35] On 22 April 1998, when the conciliation meeting
was held, the respondent had already been retired.
In my view it would be artificial to argue that
the dispute which had been conciliated was solely
an unfair labour practice dispute and therefore
the third respondent was precluded from referring
an unfair dismissal dispute to arbitration.
[36] The third respondent’s case was now that he was
retired and he wished to be afforded the same
opportunity, as enjoyed by other employees to
continue to work until he became 65 years old.
Essentially, the same dispute which was
conciliated was also arbitrated, and that was the
dispute which arose as a result of the retirement
of the third respondent.
[37] The difficulty which presents itself in a case
such as the one before me is the question as to
how to frame the dispute when referring it.
According to item 2(1)(d) of Schedule 7 of the
Act, an unfair labour practice means any unfair
act or omission that arises between an employer
and an employee involving the “failure or refusal
of an employer to reinstate or re-employ a former
employee,” which would seem to cover the facts of
the matter in question. In terms of item 3(4)(b),
if such a dispute remains unresolved, then the
employee may request that the dispute be resolved
through arbitration.
[38] Section 186 of the Act on the other hand, presents
a further problem in that it describes dismissal
as follows:
“(a) an employer has terminated a contract of
employment with or without notice;
(b) an employee reasonably expected the employer to renew a
fixed term of contract of employment on the same or similar
terms but the employer offered to renew it on less
favourable terms, or did not renew it; (my emphasis)
(c) an employer refused to allow an employee to resume
work after she-
(i) took maternity leave in terms of any law,
collective agreement or her contract of
employment; or
(ii) was absent from work up to four weeks before the
expected date and up to eight weeks before the
actual date, of the birth of her child;
(d) an employer who dismissed a number of employees
for the same or similar reasons has offered to re-
employ one or more of them but has refused to re-
employ another; or
(e) an employee terminated a contract of employment
with or without because the employer made
continued employment intolerable for the employee”
[39] The third respondent’s case being that there was a
policy in existence that compelled the applicant
to retain his services beyond the retirement age
of 63, suggests that he could have also referred
his dispute in terms of section 186(b) of the Act,
in which case a retirement such as the one in
question could be a dismissal as envisaged in this
section.
[40] Further, section 187 (1)(f) of the Act provides
that a dismissal is automatically unfair if the
reason for the dismissal is :
“(f) that the employer unfairly discriminated against the
employee, directly or indirectly, on any arbitrary
ground, including, but not limited to race, gender, sex,
ethnic or social origin, colour, sexual orientation, age,
disability, religion, conscience, belief, political opinion,
culture, marital status family responsibility.”
[41] In terms of section 191 (5) (b) an employee may
refer an automatically unfair dispute only to the
Labour Court for adjudication, and not to the CCMA
for arbitration.
[42] Counsel for the applicant referred me a Judgement
of Landman J in the matter of SCHMAHMANN V CONCEPT
COMMUNICATIONS NATAL (PTY) LTD [1997] 8 BLLR 1092
(LC). In this matter Landman J held that an
employee is not dismissed if that person is
retired by his or her employer on attaining the
agreed or normal age of retirement(at 1097).
[43] In this matter Landman J also held at 1096 that,
“when an employer and employee agree specifically or by
implication (retirement on normal retirement age)in advance
that the fluctuation of time is to operate as a guillotine
which severs their employment relationship then it cannot be
said that when this ate arrives that there has been a
dismissal by the employer although the relationship and the
contractual obligations are terminated. Barker and
Holtzhauzen South African Labour Glossary Juta 1996 defined
dismissal as ‘the termination of the employment of an
employee by an employer’. The LRA does not depart from this
common conception of a dismissal.”
[44] In my view, the aforesaid observations made by
Landman J in the SCHMAHMANN case, do not assist
with the difficult question, in a retirement
dispute such as this, as to how the dispute should
have been framed or defined by the third
respondent. The applicant in the SCHMAHMANN case
did not challenge her retirement when she was
notified of her retirement. She only felt
aggrieved about her retirement after she had
accepted it. In the matter before me the third
respondent challenged the fairness of the
retirement, prior to it coming into operation.
[45] The second respondent found that the third
respondent was dismissed for a reason “not known”
to the third respondent, which jurisdictional fact
would then confer the necessary jurisdiction onto
the CCMA to arbitrate the matter.
[46] The second respondent also filed an affidavit
wherein he specifically states that he found that
the employee as dismissed for an unknown reason.
[47] Quite clearly, on what was conciliated and on the
facts presented before the second respondent, this
could have not been a basis for assuming
jurisdiction. This was not the reason advanced by
the third respondent in any of his referral forms
(for conciliation or arbitration, respectively),
to be the reason for his dismissal. It was either
an automatically unfair dismissal based on
discrimination on grounds of age, or an unfair
labour practice as envisaged by schedule 7, item
2(1)(d).
[48] Whichever way one views the matter, the second
respondent should have set out clearly on which
facts he assumed jurisdiction.
[49] In the CAREPHONE judgement the following specific
test regarding review was formulated in paragraph
37 of that judgement :
“ Is there a rational objective basis justifying the
connection made by the administrative decision maker between
material properly available to him or her and the conclusion
he or she eventually arrived at ?”
[50] The second respondent had no material available to
him which could justify the conclusion that the
third respondent was dismissed for a reason
unknown to him. All the facts suggest that the
dispute related to a retirement issue and the
second respondent should have, in that context
advanced a proper basis for assuming jurisdiction
and fixed his terms of reference in relation
thereto. This he did not do. In my view he
exceeded his powers by assuming jurisdiction
without a justifiable and rational reason. This
renders his award reviewable.
[51] There is, in addition to the aforesaid, another
important aspect of the arbitration proceedings
which needs to be considered in this application
for review, and that is the question of the third
respondent’s representative.
[52] Section 138(4) of the Act provides that, in any
arbitration proceedings, a party to the dispute
may appear in person, or be represented “only (my
emphasis) by a legal practitioner, a co-employee
or by a member, office bearer or official of that
party’s trade union (my emphasis) or employer’s
organisation and, if the party is a juristic
person, by a director of that employee.”
[53] According to Mr Wagiet’s affidavit which he filed
at court he is a “male consultant” employed by the
Islamic Unity Convention, which is not a trade
union. He is not a co-employee, nor a member, or
office bearer or official of a trade union. He is
also not a legal practitioner. Consequently he is
not entitled to represent any employee at any of
the proceedings conducted under the auspices of
the CCMA.
[54] The second respondent, in my view, committed a
fatal irregularity by permitting Mr Wagiet to act
on behalf of the third respondent. In permitting a
consultant to represent an employee, when such a
consultant was clearly precluded from the Act from
representing an employee, the second respondent
also exceeded his powers.
[55] It is ordered :
That the arbitration award in this matter is set
aside and remitted to the Commission for
Conciliation, Mediation and Arbitration.
---------------
E REVELAS
For the applicant:
ADVOCATE C.S KAHANOVITZ instructed by
BERNARDT VUDIC POTASH & GETZ
For the third respondent:
No appearance
Date of Judgement: 22 February 1999
This Judgement is also available on the Internet
at the following Website:
http//www.law.wits.ac.za/labourcrt