IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
CASE NUMBER :
J3579/98
In the matter between:
GIMINI INDENT AGENCIES CC t/a
S & A MARKETING Applicant
and
THE COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION First
Respondent
COMMISSIONER P J VAN DER MERWE Second
Respondent
LEWI EGNOS Third
Respondent
_____________________________________________________________________
___
J U D G M E N T
_____________________________________________________________________
___
KENNEDY A J:
1[] The Applicant dismissed the Third Respondent from its
employ on 5th May 1998. The Third Respondent challenged the
fairness of that dismissal in arbitration proceedings before the
Second Respondent (" the Arbitrator"), a commissioner of the
Commission for Conciliation, Mediation and Arbitration (" CCMA"). In
an award handed down by the Arbitrator on 26th October 1998, the
dismissal was found to be substantively fair, but procedurally unfair.
The latter finding was made, according to the Arbitrator's award,
"on account of lack of impartiality " on the part of the
chairperson of the disciplinary enquiry, viz Mr Rappaport, the
managing member of the Applicant close corporation. The
Arbitrator awarded the Third Respondent compensation equivalent
to " the remuneration that he would have received between
the date of his dismissal on 5 May 1998, and the date of the
arbitration on 13 October 1998, calculated on the basis of
his salary at the time of his dismissal."
2[] The Applicant challenges the validity of the Arbitrator's
award by way of review proceedings brought before this Court under
section 145(1) of the Labour Relations Act No 66 of 1995.
3[] The following background events, which emerge from
the evidence placed before the Arbitrator, are relevant. The Third
Respondent was employed by the Applicant on the 1st April 1997 as
an accountant/ bookkeeper. The relationship between the Third
Respondent and the Applicant, and particularly its managing
member, Mr Rappaport, soon became problematic. He was accused
of poor performance, for which he was counselled during the latter
half of 1997. He was not awarded a year end performance bonus at
the end of 1997. He felt resentful about this, as well as various
other grievances. These included the alleged failure by
management to honour an undertaking to provide him with an
assistant. He also felt aggrieved about being relocated to an office
which allegedly was not properly ventilated; about the alleged
failure to repair a printer; about the failure to provide a debtor's
clerk with a computer which led to the clerk using the Third
Respondent's computer, which affected the Third Respondent's
ability to perform his work; and about the timing of leave. These
disputes led to conflict particularly with Mr Rappaport who, the Third
Respondent alleged, had an adverse " mindset" towards him and
conducted a "relentless campaign against (him) in an attempt
to force (him) out. " Mr Rappaport testified before the Arbitrator
(according to his award) to the effect that the Third Respondent
"refused to accept that he was performing poorly, and
reacted by attempting to justify his poor performance and
carrying out personal attacks against the managing
member. This continued for a four month period until the
company felt it had no alternative but to advise the [Third
Respondent] that he was relieved of his position as
bookkeeper, and that as from 1 April 1998, his position
would be that of 'debtor's clerk'". The Third Respondent
challenged this effective demotion by referring a dispute to the
CCMA for conciliation. Prior to the conciliation, the Applicant
acknowledged that it had not complied with the requirements of the
Labour Relations Act, and restored the Third Respondent to his
previous position as bookkeeper.
4[] The Third Respondent was then required to attend a
"performance meeting " on 20th April 1998. His poor
performance was discussed at length. He was again informed that
he had been reinstated into his previous position as bookkeeper.
However, on 22nd April 1998, the Third Respondent wrote a letter to
the Applicant stating that he did not believe that he had been
reinstated. He indicated that he refused to return to his previous
position. The Applicant responded by notifying the Third
Respondent that he was required to attend a disciplinary hearing on
a charge of refusing to obey a lawful and reasonable instruction to
return to his previous position. The disciplinary hearing held on 28th
April 1998 was chaired by Mr Rappaport. The Third Respondent was
found guilty of the charge. He was issued with a final written
warning and instructed again to return to his position as
bookkeeper. He refused to comply with this instruction. He was
accordingly notified that he was required to attend a further
disciplinary hearing on 4 May 1998. That enquiry was chaired by Mr
Rappaport.
5[] There is no material dispute over what occurred during
the very brief enquiry on 4 May 1999. The Arbitrator recorded in his
award that:
"The [Third Respondent] and the managing member
[Mr Rappaport] were in agreement that this is what
happened:
- the persons present were Mr Rappaport the
managing member, Mr G Berman, executive sales manager,
and the [Third Respondent] himself.
- The managing member asked the [Third
Respondent] only one single question, namely `Are you going
to return to your position as bookkeeper?'
- The [Third Respondent] replied that he would
call him at 2:00.
- After having said that, the [Third Respondent]
got up and walked out of the hearing without any further
ado, leaving the managing member and Mr Berman behind.
- Nothing else was said.
- The [Third Respondent] phoned at 2:00 and
told the managing member that he was not coming back."
6[] The Arbitrator made the following comments in his
award in relation to the issue of procedural fairness:
"1. The [Third Respondent] by his own
admission did not challenge the impartiality of
the disciplinary hearing on the day that he
attended it. He just walked out. In doing so, he
could not be advised of his right of appeal against
the findings of the hearing. He also, as a result of
his own actions, forewent the opportunity to put
his case, and he did not insist on being furnished
with the minutes of the hearing.
2. He was advised timeously enough of
the enquiry to prepare himself, and to call a witness or
witnesses, which he failed to do.
3. Item 4 of Schedule 8 of the LR Act
stipulates that the `employer should conduct an
investigation to determine the grounds for dismissal. This
does not need to be a formal enquiry.' The size of the
company, coupled with the fact that the [Third Respondent]
was counselled on a number of occasions and the fact that
there was an exchange of letters over a period of months
between the [Third Respondent] and the managing member
culminating in a final written warning, did nonetheless
warrant a more formal enquiry. The employment
relationship between the [Third Respondent] and the company
had deteriorated to such an extent that it had become
intolerable, and that the impasse had to be broken. The
[Third Respondent's] final act of defiance by walking out of the
hearing without any warning or question, and thereafter
confirming [sic] his answer to one question which he was
asked, was just the final straw in the total breakdown of the
relationship. As an employee, the [Third Respondent] has to
accept the major portion of the blame.
4. Despite the foregoing, the [Third
Respondent's] assertion that the hearing was not impartial,
carries a great deal of weight. Mr Rappaport, the managing
member who was in charge of the final disciplinary enquiry
on 4 May 1998, could not possibly have acted sufficiently
impartial [sic]. He was too deeply and too personally
involved in the `feud' between the [Third Respondent] and the
company. He had been the subject of personal ridicule and
insulting remarks in letters addressed to him by the [Third
Respondent].
5. Despite the size of the company, and a
less formal disciplinary hearing, attempts should have been
made to ensure impartiality in the interest of a fair hearing
under the chairmanship of a more independent and impartial
chairman.
6. ..."
7[] The Applicant contends that the Arbitrator's findings on
procedural fairness, and his award of compensation, are not
justifiable in terms of the test identified by Froneman D J P in
Carephone (Pty) Limited v Marcus N.O and Others (1998) 19
ILJ 1425 (LAC) at 1435 E; [1998] 11 BLLR 1093 (LAC) at 1103
B - C para [37]. The test was posed in the following terms:
"Is there a rational objective basis justifying the
connection made by the administrative decision-
maker between the material properly available to
him and the conclusion he or she eventually
arrived at?"
There are a number of useful formulations of how this
test is to be understood and applied. Thus, Pretorius A J
in Shoprite Checkers (Pty) Limited v CCMA and
Others (1998) 19 ILJ 892 (LC) at 900 D - G, paras
[28] to [30], referred to the requirement that the
decision " must be capable of objective
substantiation". The decision is reviewable " where
the conclusions reached ... are not capable of
reasonable justification when regard is had to the
factual premises on which they are based."
Tip A J in Director General : Department of Labour v
Claassen and Others [1998] 6 BLLR 591 (LC) at
596 F referred to factors which " go to the very
process of the reasoning and the connection or
absence thereof between the premises and the
outcome."
In Cash Paymaster Services (Pty) Limited v Mogwe
and Others (1999) 20 ILJ 610 (LC) at 616 A Seady A
J referred to the need for the outcome to be " rationally
justifiable".
Cheadle A J in Coetzee v Lebea N.O and Another
(1999) 20 ILJ 129 (LC) at 133 F - G stated that " the
best demonstration of applying one's mind is
whether the outcome can be sustained by the
facts found and the law applied. The emphasis is
on the range of reasonable outcomes and not on
the correct one"
In Kynoch Feeds (Pty) Limited v CCMA and Others
[1998] 4 BLLR 384 (LC) at 393 J to 394 B , Revelas J
stated that "It has also been held that where a
decision-maker takes a decision unsupported by
any evidence or by evidence which is insufficient
to reasonably justify the decision arrived at, or
where the decision-maker ignores uncontradicted
evidence which he was obliged to reflect on, the
decision arrived at would be set aside."
In Morningside Farm v Van Staden N.O and
Another [1998] 5 BLLR 488 (LC) at 490 H Revelas J
set aside a decision of a CCMA arbitrator on the basis
that " there was a glaring inconsistency between
the facts found by the first respondent and the
final conclusion arrived at by him."
Tip A J in Standard Bank of SA Limited v CCMA and
Others [1998] 6 BLLR 622 (LC) at 627 J to 628 A
indicated that relief by way of review would be available
"where a commissioner sitting as arbitrator has
misconstrued oral or documentary evidence, or
has ignored or misapplied relevant legal principle,
to an extent that is inappropriate or
unreasonable, then such commissioner has failed
in the task assigned under the Act."
8[] The Applicant has raised three grounds on which it
contends the Arbitrator's decision should be reviewed and set aside.
The first of these was summarised in Mr Hardie's heads of argument
as follows:
"The Second Respondent held that the Third
Respondent forewent his right to a disciplinary
hearing by walking out of it on 4 May 1999. Once
this was found, there could be no procedural
unfairness in the form of insufficient impartiality
on the part of the chairperson, because no
disciplinary hearing took place."
9[] During argument, Mr Hardie submitted in essence the
following. The right of an employee facing disciplinary charges to
have them heard and decided by an impartial chairperson is one of
the aspects of the right to a fair procedure. The Arbitrator in the
present matter found that the effect of the Third Respondent
walking out of the enquiry was to forego the right to a fair hearing.
It was in effect a waiver of the right to a fair opportunity to be heard.
Mr Hardie referred in this regard to the article of Edwin Cameron
"The Right to a Hearing Before Dismissal - Problems and
Puzzles" (1988) 9 ILJ 147 at 176 to 178 in which it was stated
that:
"... An employee can by his or her conduct
abandon or waive the right to a pre-dismissal
hearing. Waiver in law occurs when a person with
full knowledge of a legal right abandons it. In the
employment context it would be unrealistic to
apply the full requisites of the legal doctrine of
waiver before an employee's conduct could be
said to exempt an employer from the hearing
requirement. All that should be required is that
the employee should indulge in conduct which
establishes that the employer can no longer
reasonably or fairly be expected to furnish an
opportunity for a pre-dismissal hearing."
10[] Mr Hardie submitted that once the Arbitrator found that
the employer was not obliged to hold a fair hearing, it was not
justifiably reasonable for the Arbitrator to examine whether the
requirements of procedural fairness had been met and in particular
to find that the Applicant had acted unfairly by having the enquiry
chaired by a person who was not impartial. Mr Hardie submitted
further that once the Third Respondent waived the one component
of a fair hearing, namely the opportunity to present his case, he
waived the other components of fair procedure, which would include
the right to have the matter decided by an impartial chairperson.
11[] In my view these submissions are unpersuasive. The
premise on which Mr Hardie's argument is based, namely that the
Arbitrator found that the Third Respondent " forewent his right to
a [fair] disciplinary hearing by walking out of it", is an incorrect
characterisation of what was in fact found by the Arbitrator. As
appears from his award, he found that by walking out of the enquiry
the Third Respondent " forewent the opportunity to put his
case" [my emphasis]. In other words, the Third Respondent waived
the right to be present at the enquiry, to cross-examine the
employer's witnesses, and to present his own evidence and
argument both in relation to the merits and, if found guilty, the
appropriate penalty. The Arbitrator did not go on to find that the
waiver of this component of the right to a fair hearing amounted to a
waiver of the other components of a fair hearing, which would
include the right to have the matter heard and decided by an
impartial chairperson. Nor was this in my view a logical
consequence of the Arbitrator's finding, as Mr Hardie contended. On
the contrary, in my view it cannot be that if an employee decides to
walk out of a disciplinary enquiry, that can give the employer free
rein to have the matter decided by a person who may, for example,
be biased or mala fide. It is in my opinion clear from the award of
the Arbitrator that all he had in mind, when referring to the
consequences of the Third Respondent walking out of the enquiry,
was the waiver of his right to the opportunity to present his case and
not the waiver of his right to have the matter decided by an
impartial decision-maker.
12[] Applying the test for review referred to above, it cannot
in my view be said that there is no reasonable objective basis to
justify the connection made by the Arbitrator between the material
properly available to him and the conclusion which he eventually
arrived at. The evidence presented before the Arbitrator showed a
history of events characterised by serious antagonism between the
Third Respondent on the one hand and Mr Rappaport on the other.
As sub-mitted by Mr van As , who appeared for the Third
Respondent, they were the two protagonists in the saga which had
been charac-terised by on-going personal conflict. The Third
Respondent had numerous grievances directed specifically at Mr
Rappaport. The Third Respondent was accused of failing to comply
with Mr Rappaport's various instructions. The Third Respondent had
directed criticism and abuse at Mr Rappaport personally. The
charge of which the Third Respondent was found guilty and for
which he was dismissed was disobedience of Mr Rappaport's
instruction and gross insubordination towards Mr Rappaport. It was
Mr Rappaport who had chaired the previous disciplinary enquiry and
who had given the final instruction for the Third Respondent to
return to his position which he had disobeyed.
13[] In these circumstances there is in my view at least a
rational connection between that factual material before the
Arbitrator and his conclusion that Mr Rappaport was so personally
involved to the extent that he could reasonably be perceived as not
being sufficiently impartial to chair the disciplinary enquiry.
Accordingly the Applicant's attempt to review the Arbitrator's award
on this ground must fail.
14[] This conclusion also disposes of the second argument
raised by Mr Hardie, namely that there " was no evidence,
alternatively insufficient evidence before the Second
Respondent to justify the conclusion that the Applicant's Mr
Rappaport had acted impartially [sic] at that disciplinary
hearing on 4 May 1998; alternatively there was insufficient
evidence to make the inference that the Applicant's Mr
Rappaport was insufficiently impartial to conduct a fair
hearing as chairman on 4 May 1998 ". Mr Hardie submitted
further that the Arbitrator made a positive finding that he was
actually biased (and not merely that there was a reasonable basis
for suspicion of bias) and that there was no evidence to justify this.
In my view this seeks to read too much into the award. When
properly analysed, it simply seeks to convey that Mr Rappaport was,
in view of his personal involvement in the earlier events, clearly
inappropriate and not sufficiently detached to chair the enquiry. Mr
Rappaport was essentially the main complainant and therefore in
effect would have been a judge in his own cause. That is an
automatic disqualification:
See the judgment of Lord Browne-Wilkinson in R v
Evans and Others, ex parte Pinochet Ugarte; R v
Bartle and Others, ex parte Pinochet Ugarte
(Amnesty International and Others intervening)
(No 2) (1999) 6 BHRC 1 (HL)1 at 10 d - 11 d
For the reasons set out above, I am of the opinion that
there was an adequate factual basis to justify the
Arbitrator's conclusions in that regard.
15[] The third argument advanced by Mr Hardie was to the
effect that there was overwhelming evidence before the Arbitrator
showing that there had been a complete breakdown of the
relationship between the parties, that the Third Respondent was to
blame for this, that he had throughout been insubordinate to
management and particularly to Mr Rappaport and he had not raised
any objection to Mr Rappaport on the basis of impartiality prior to
the CCMA arbitration proceedings. Mr Hardie submitted further that
"any person sitting in Mr Rappaport's shoes would only have
come to the same finding that he did, and therefore that
that suspicion is without foundation." These submissions are in
my view unpersuasive. It is at least questionable whether one can
make the assumption that dismissal was inevitable. As has
frequently been remarked in our case law, it is dangerous to make
such an assumption. See for example Administrator Transvaal v
Zenzile 1991 (1) SA 21 (A) at 37 C - F . The Applicant's
argument seems to amount to a " no difference " argument. It
ignores the need to recognise that whatever the merits of the
charge against an accused employee may be, and however probable
or inevitable dismissal may be, it is important that value be attached
to the fairness of the process which leads to the result. Even if it
transpires that the result does not favour the employee, it must at
least be the product of a process which can objectively be regarded
as fair. One component of this is that the person who chairs the
disciplinary enquiry must not be a person who has an interest in the
outcome or in respect of whom there is reasonable ground for
suspicion of partiality or bias. In my view there was at least a
rational basis for the Arbitrator in the present case to conclude that
it was unfair and inappropriate for the enquiry to have been chaired
by Mr Rappaport.
16[] The final argument advanced on behalf of the Applicant
was summarised in the following terms in Mr Hardie's heads of
argument:
"Having found that the Third Respondent's
dismissal was unfair for reason of the
chairperson's insufficient impartiality, the Second
Respondent in making his award, never
considered whether he should, in the exercise of
his discretion, award no compensation to the
Third Respondent."
17[] Mr Hardie correctly pointed out that the Arbitrator had
such a discretion, either to award compensation on the basis
provided for in section 194(1) of the Labour Relations Act, or to
award no compensation at all. In this regard he referred to the
judgment of Froneman D J P in Johnson and Johnson (Pty)
Limited v Chemical Workers Industrial Union (1999) 20 ILJ 89
(LAC) at 99 I - 100 A, para [40] . Mr Hardie referred to the fact
that the award does not make any express reference to such a
discretion or to the Arbitrator being aware of it or as to how he
exercised it. He submitted further that in view of the factual
circumstances of the case, and in particular the serious misconduct
of the Third Respondent, had the discretion been exercised
judicially, it would have been inevitable that it would have been
exercised against awarding any compensation to the Third
Respondent. Such an award of compensation would, Mr Hardie
argued, unjustifiably " have been rewarding the Third
Respondent for his unreasonable and flagrant defiance of
his employer on an on-going basis"
18[] For the reasons I have given above, this reasoning is in
my view not convincing. There was at least a rational basis for the
Arbitrator to conclude not only that there was unfairness in the
procedure followed, but also that compensation was justified. Such
compensation would not, as Mr Hardie contended, reward the Third
Respondent for his unacceptable conduct, but would be a solatium
for the loss of his right to fair procedure and a punitive measure to
penalise the employer for denying him that right.
Johnson & Johnson (supra) at 100 A - B para [41]
19[] At best for the Applicant, the award is silent as to
whether or not the Arbitrator was alive to the fact that he had a
discretion whether or not to award compensation. It is significant to
note that this line of attack, namely that the Arbitrator did not
consider or did not properly consider whether to exercise his
discretion against awarding compensation, was not raised at all in
the Applicant's founding affidavit. Accordingly this attack must
likewise fail.
20[] In the result:
(a) The application is dismissed.
(b) The Applicant is ordered to pay the Third
Respondent's costs of the application.
PAUL KENNEDY
ACTING JUDGE OF THE
LABOUR COURT
20 AUGUST 1999
Date of hearing : 6th August 1999
Date of judgment: 20th August 1999
Applicant represented by: Attorney S B Hardie
Applicant's Attorneys: Edward Nathan & Friedland Inc,
Johannesburg
No appearance for First and Second Respondents
Third Respondent represented by: Advocate M J van As
Third Respondent's attorneys: Sampson Okes Higgins Inc,
Johannesburg.