166336IN THE LABOUR COURT OF SOUTH AFRICA
(HELD AT CAPE TOWN)
CASE NO: C39/99
In the matter between:
CAPWEST MOULDINGS & COMPONENTS CC Applicant
And
JOHN ELY First
Respond
ent
GERARD ROSSOUW Second
Respond
ent
ISMAIL DAUDS Third
Respond
ent
COMMISSION FOR CONCILIATION, MEDIATION &
ARBITRATION
Fourth
Respond
ent
JUDGMENT
STELZNER AJ
1. This matter came before me by way of an application for review
of the decision of the third respondent, under the provisions of
section 145 of the Labour Relations Act, No 66 of 1995 (“the
Act”).
2. First and second respondents both left their employment with
applicant during January 1998. They thereafter claimed that the
termination of their employment amounted to a constructive
dismissal and jointly declared a dispute with the applicant before
the Commission for Conciliation, Mediation and Arbitration (“the
CCMA”) on 12 March 1998. The dispute was not resolved at
conciliation and proceeded to arbitration before the third
respondent over a protracted period of time between May and
November 1998. Third respondent gave his award on 14
December 1998 and awarded both first and second respondent
compensation equivalent to 5 months’ remuneration.
3. The present review proceedings were initiated by the applicant
on 29 January 1999. Subsequent thereto, the applicant and first
respondent settled their dispute. Second respondent has not
filed any opposing papers and abides the decision of this court on
review. Both third and fourth respondent have also indicated
their intention to abide the decision of this court.
4. It was submitted by the applicant that the evidence before third
respondent did not reasonably justify his finding that there was a
constructive dismissal of second respondent and, further, that
there was no evidence whatsoever to substantiate the quantum
of the compensation awarded by the third respondent. It was
also alleged that the approach to the issue of quantum adopted
by the third respondent was fatally flawed.
5. The approach to be followed by this court in determining the
matter is that set out in the decision of the Labour Appeal Court
in Carephone (Pty) Ltd v Marcus NO & others (1998) 19 ILJ 1425
(LAC) in particular at pages 1434-1435.
6. Where no opposing papers have been filed there can be no
question of any factual dispute arising on the papers. The review
therefore has to be decided on applicant’s papers and the record
of proceedings before the third respondent, which together form
the record before me.
7. In dealing with the evidence before him it is clear that the third
respondent was obliged to consider which of two conflicting
versions he would prefer, namely the version put forward by the
second respondent himself or that put forward by one Meyer,
who was in essence the owner of the applicant business. It was
submitted on behalf of the applicant that when finding that there
was conduct on the part of Meyer which objectively justified
second respondent’s decision to cease employment, third
respondent had to be satisfied that second respondent’s version
was to be preferred over Meyer’s and had to provide cogent
reasons in his award for favouring such evidence. (See the
Carephone decision at p1440, Standard Bank of SA Ltd v CCMA
& others 1998 (19) ILJ 903 (LC) at 910 para 24 albeit where the
court was considering a review in terms of s 158(1)(g) of the Act
and Federated Timbers (Pty) Ltd v Lallie NO & others (1999) 20
ILJ 348 (LC) at 352 para 24 which quotes the reasoning in the
Standard Bank case with approval).
8. Other than glossing over the facts with a remark that “ die
totaliteit van die getuienis laat my met geen twyfel dat Mnr
Meyer wel op sy werkers gevloek en 'n skrik bewind onder hulle
gevoer het nie …” the arbitrator made no finding that there was
any reason to prefer the evidence of second respondent over that
of Meyer. In addition, he made no credibility finding against
Meyer which would suggest a finding in favour of second
respondent. Indeed, on one crucial aspect at least, the third
respondent disbelieved second respondent’s evidence regarding
the remuneration package offered to him by Meyer. Having
accepted that second respondent’s evidence on this score was
grossly overstated, it was submitted that it was difficult to
understand how the third respondent could ever have regarded
second respondent as a reliable witness on other aspects of the
case, certainly without giving cogent reasons for doing so. On
the face of it Meyer’s evidence was reasonable and no less
probable than that of second respondent. In the face of this and
the rejection of second respondent’s evidence on the
remuneration package issue it is apparent that third respondent
misconstrued the evidence before him to an extent that is
inappropriate and unreasonable, as contemplated by the dicta in
the Standard Bank and Federated Timbers cases referred to
above.
9. Furthermore, there was no evidence before the third respondent
to the effect that second respondent indicated that he was
offended or aggrieved by the behaviour of Meyer or that he
raised his dissatisfaction with Meyer in order that the matter
might be addressed. Indeed, on the evidence, it appeared that
second respondent’s decision to abandon his job was ultimately
prompted by Meyer’s refusal to pay him an advance on his
commission on the strength of an order allegedly secured by him.
Second respondent did not rely on the alleged non-payment of
salary as the basis for his alleged constructive dismissal but
rather relied on the allegation that Meyer’s conduct, language
and attitude towards him and fellow employees had created an
intolerable situation.
10. I was pointed to numerous other incorrect findings on the
evidence made by the third respondent by Mr Gamble, who
appeared on behalf of the applicant. It appears from the record
that the third respondent, indeed, made a number of incorrect
findings on the evidence before him but it is not necessary for
the purposes of this award for me traverse the detail thereof.
11. As indicated above the first main ground of review was that
the evidence before the third respondent did not reasonably
justify his finding that second respondent had been
constructively dismissed.
12. This court has endorsed the so-called two stage approach to
dealing with a dispute involving an alleged constructive
dismissal. The approach, with specific regard to the scheme of
the 1995 Labour Relations Act, is set out in detail by Landman J in
Sappi Kraft (Pty) Ltd t/a Tugela Mill v Majake NO & others (1998)
19 ILJ 1240 (LC) and in particular at 1250C-F
“In my opinion, having regard to the scheme of the new Act, the
two-stage approach is to be followed.
First of all an employee who resigns or leaves her place of
employment (or may be said to have deserted) must prove that
this was not the case and that the employer dismissed her by
making the continued employment intolerable. The onus on this
leg is upon the employee. If this is established then the second
stage is arrived at. The second stage concerns an evaluation of
whether or not the dismissal was unfair. This is certainly true of
substance but clearly the provisions relating to procedure are not
relevant.
The two stages that I have set out above are however not
independent stages. They are two stages in the same journey
and the facts which are relevant in regard to the first stage may
also be relevant in regard to the second stage. Moreover there
may well be cases where the facts relating to the first stage are
determinative of the outcome of the second stage. Whether or
not this is so is however a matter of fact and no general principle
can or should be laid down."
13. In the Sappi Kraft case, further, the court found that the
enquiry into the second stage commences when dismissal has
been proved. At that stage the onus switches to the employer to
show that the dismissal was fair for reasons related to the
employee’s conduct or capacity. On the facts of the Sappi Kraft
case the court found no indication in the award that the
commissioner had properly considered the relevant facts in
regard to the second stage. The court was convinced that the
commissioner did not apply his mind past the mere fact that
constructive dismissal has been proven, in the sense of a
jurisdictional fact, that being a dismissal. It found that that
aspect was conclusive as far as the commissioner was
concerned, whereas it ought not to have been. He ought to have
gone on to consider all the facts to determine whether or not the
dismissal was unfair. His failure to do so rendered the award
reviewable.
14. That is exactly what appears to have happened in the case
before me. There is no indication whatsoever that the third
respondent applied his mind to the second stage. He simply
concluded on the evidence before him that second respondent
had discharged the onus of showing a constructive dismissal in
the sense that it was the conduct of Meyer which had caused him
to terminate his employment with applicant.
15. In addition, and in any event, it appears doubtful that the
evidence before third respondent was sufficient to justify the
conclusion which he reached even at the first stage.
16. In the circumstances I am satisfied that on this leg the third
respondent’s award ought to be reviewed and set aside.
17. The second leg of applicant’s case rested on the approach
taken by the third respondent to the issue of compensation to be
awarded. Having found the dismissal of second respondent to be
unfair the third respondent was bound to award compensation in
accordance with the provisions of section 194 of the Act. In
terms of section 194(1) read with section 194(2), the minimum
amount of compensation payable was the remuneration which
second respondent would have been paid from 1 February 1998
(being the date of the constructive dismissal) to 5 November
1998 (being the last day of the arbitration hearing), that is, just
over 9 months’ remuneration. The maximum amount payable
was 12 months’ remuneration. Third respondent does not find
any unreasonable period of delay caused by the employee in
initiating or prosecuting a claim (as envisaged by the provisions
of section 194(1)). Indeed, having mentioned that one of the
postponements was occasioned at the request of the employer
party, third respondent simply states that given that the matter
took so long to finalise and because in his view the employer
party should not be penalised in this regard, he deems an
appropriate compensation award to be the equivalent of five
months’ remuneration.
18. Furthermore, third respondent awards compensation to
second respondent on the basis that he was remunerated at a
rate of R6 000-00 per month when the evidence before him did
not justify such a finding. Indeed, the finding in this regard
accorded with neither the version of Meyer, on behalf of the
applicant, nor with the version put up by second respondent.
Second respondent’s evidence was that the parties had agreed
upon a monthly salary package of R20 000-00 made up of
R15 000-00 cash plus R5 000-00 fringe benefits, which evidence
was rejected by third respondent. Meyer testified that he and
second respondent agreed upon a monthly salary of R6 000-00
only up to and including December 1997, due to the fact that the
factory was not yet in production at that stage. From 1 January
1998 the basis for remuneration would be strictly commission
with a salary of R6 000-00 per month to be paid only provided
that sales of R18 000-00 had been achieved. Thereafter there
would be an additional 10% on nett profit above sales of
R18 000-00. The evidence was, furthermore, that there were no
sales during January 1998 and that second respondent was,
accordingly, entitled to no remuneration for that month. What he
might have earned in months thereafter had he remained
employed is, in the circumstances, purely speculative.
19. It has been settled by the Labour Appeal Court in the matter
of Johnson & Johnson (Pty) Ltd v Chemical Workers Industrial
Union (1999) 20 ILJ 89 (LAC) that the only discretion under
section 194(1) in regard to an award of compensation for
procedural unfairness is not to award any compensation
whatsoever. In the absence of exercising a discretion not to
award any compensation then the formula set out in section
194(1) must be applied. Section 194(2) gives the arbitrator a
discretion in awarding compensation for substantive unfairness
but states that the award must not be less than the amount
specified in s 194(1), in this case 9 months’ remuneration. Not
only does third respondent misconstrue his powers in applying
the provisions of section 194 but he also determines the monthly
rate of remuneration on a basis unsupported by the evidence
before him. Accordingly, I am satisfied that on the second leg as
well the applicant has made out a case for review.
20. As in the Sappi Kraft case referred to above this appears to be
the kind of case where it is appropriate to refer the matter back
to the CCMA for arbitration ab initio before a commissioner other
than the third respondent, where both stages of the two-stage
approach to constructive dismissal can be applied and in order
that, if relevant, the provisions of s 194 of the Act can be
properly applied and can be applied in relation to the properly
established facts.
21. There was no opposition from any of the respondents in
regard to these proceedings and, accordingly, this is the sort of
case where it would be appropriate for me to exercise my
discretion against making any award of costs.
22. In the circumstances I make the following order:
22.1 The award made by the third respondent in the arbitration
held under the auspices of the Commission for Conciliation,
Mediation & Arbitration under case number WE9899 is reviewed
and set aside.
22.2 The matter is referred back to the CCMA to conduct the
arbitration ab initio before a commissioner other than the third
respondent.
22.3 There is no order as to costs.
S STELZNER
Acting Judge of the Labour Court of South Africa
DATE OF HEARING: 20 August 1999
DATE OF JUDGMENT: 27 August 1999
APPEARANCE FOR
APPLICANT:
Mr P Gamble
INSTRUCTED BY: Cliffe Dekker Fuller Moore
Inc.
APPEARANCE FOR
RESPONDENTS:
No appearance.