REPORTABLE
IN THE LABOUR COURT OF SOUTH AFRICA
DURBAN AND COAST LOCAL DIVISION
CASE NO.D409/99
In the matter between:
SHOPRITE CHECKERS (PTY) LIMITED APPLICANT
and
A RAMDAW (in his capacity as Commissioner
for the CCMA) FIRST RESPONDENT
MAVIS ZIQUBU SECOND RESPONDENT
SOUTH AFRICAN COMMERCIAL CATERING AND
ALLIED WORKERS UNION THIRD RESPONDENT
J U D G M E N T
WALLIS A.J.
On the 9th June 1998 Cynthia Lourens, an employee of the Applicant, presented six items which she wished
to purchase to the Second Respondent, Ms Mavis Ziqubu, a parttime cashier employed at the Applicant's
Newcastle store. One of these items was an electrical extension cord priced at R20,00. Ms Ziqubu rang it
up on her till, which was manually operated, at R2,00. The other items were correctly rung up and Ms
Lourens paid the resulting total of R31,79.
When Ms Lourens left work that afternoon she presented her parcel for inspection by the Applicant's
security guard. As it happens the guard in question was new and meticulous in the performance of his
duties which apparently is not always the case. He examined the goods, checked their prices against the till
slip and discovered the discrepancy. This he drew to the attention of the appropriate senior members of
staff.
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The result of this was that the Applicant convened a disciplinary enquiry into the conduct of Ms Ziqubu.
The charge put to her was expressed as follows:
"Gross misconduct in that on the 9/6/98 you operated till no. 28 and rang up R2,00 for an extension cord
costing R20,00 which resulted in the company having a loss of R18,00."
Ms Ziqubu was found guilty on this charge and dismissed.
That dismissal was challenged in arbitration proceedings before a commissioner appointed for that purpose
by the CCMA. The arbitration was held on the 2nd March 1999 and an award was handed down on the
12th March 1999. It was in favour of Ms Ziqubu and ordered her reinstatement. In these proceedings the
employer seeks to review and set aside that award.
The approach of the commissioner to the case emerges from that portion of the award in which he analyses
the evidence and arguments of the parties. This reads as follows:
"ANALYSIS OF EVIDENCE AND ARGUEMENTS (sic)
The employer had to show on a balance of probabilities that the employee acted fraudulently and in cohorts
(sic) with Cynthia Lourens to defraud the company of R1800. I am not satisfied that the employer party
discharged this burden of proof sufficiently and I have found the dismissal to be substantively unfair for the
following reasons:
There was no clear evidence to indicate that Cynthia Lourens and the employee planned that Cynthia would
make her purchases at the employees till and that the employee will under till her purchases. It was
coincidental that Cynthia used the employees till as the employer party did not dispute that Cynthia was in
another queue when the supervisor announced that staff could use the employees till after 16:00.
Why a purchase of R3100 and an undertilling of R1800. Why not a trolley load of groceries if there was
a plan to defraud the employer.
R200 instead of R2000 can be a honest mistake. The employee omitted to punch one 0.
R200 instead of R2000 can be a honest mistake. The employee omitted to punch one 0.
The employee was distracted and could have acted carelessly in not checking whether she punched the right
buttons before finalizing the payment.
The employer partys tills do not have modern scanners, bar codes or computer checks. This explains the
large stock losses.
The employer party is not consistent in the application of its disciplinary code and has given final warnings
for similar offences.
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The employer party appear to be too quick to charge an employee. The employee, Monica who was treated
harshly received a final warning for undertilling R1000 when the till was defective. Secondly charging
Cynthia Lourens and dismissing her even after finding that there was no conclusive proof of any collusion
or admission thereof also appears to be harsh.
The employee has a clean disciplinary record with 45 years service. She is still working part time earning
R14616 per week. She is married and the bread winner of her family of 3 children.
She was negligent and this does not suggest intent to defraud. Discipline has to be progressive with
dismissal being the last resort.
A proper enquiry was held and the employee kept to her version from the outset that she had made a
mistake and was sorry for the same."
Although at the outset of this passage the commissioner suggests that there was an obligation on the
employer to prove that Ms Ziqubu's conduct was fraudulent only five of the nine points made by him relate
to this question. The other four deal with the appropriateness of the disciplinary sanction. This he found to
be inappropriate in the light of the employer's past treatment of similar offences. It appears therefore that the
commissioner's approach was not restricted to making a choice between fraud and negligence and having
found only the latter to reinstate Ms. Ziqubu. A fair reading of the award is that he rejected the employer's
contention that the undertilling was deliberate; accepted that negligent undertilling was nonetheless
misconduct within the terms of the charge which Ms Ziqubu had faced at the disciplinary enquiry, but
regarded dismissal as an excessive sanction for that misconduct.
This understanding of the approach by the arbitrator is important because one of the submissions advanced
before me by Mrs. Annandale on behalf of the Applicant was that the commissioner had overlooked that the
misconduct with which Ms Ziqubu had been charged was not in its terms dependant on fraud being proven
against her. This was so despite the Applicant having contended that the circumstances indicated that she
had perpetrated a fraud. Accordingly, so the submission went, the commissioner had failed to address his
mind to the fact that even on the version of Ms Ziqubu she had committed misconduct of a serious nature
warranting her dismissal in the light of the importance which the Applicant attaches to compliance with
proper and careful procedures in the operation of tills.
On my reading of the award I do not think that this submission can be sustained. So to hold would
inevitably mean that the commissioner had seriously misdirected himself in addressing the first issue,
namely whether the undertilling was deliberate or negligent, by having regard to the factors mentioned in
points 6 to 9 of his award when those factors are clearly irrelevant to that question. Bearing in mind that
commissioners are only required to give brief reasons for their awards (s138(7)(a) of the Labour Relations
Act 66 of 1995 the LRA) one must I think adopt a benevolent rather than a strict approach to the
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construction of those reasons. It is inappropriate to stigmatise a commissioner for having misdirected
himself or herself or failing to address an issue when a fair construction of the award suggests otherwise as
in the present case.
I turn then to consider the commissioner's approach to the question whether the undertilling was deliberate
and therefore fraudulent or negligent. This is the first issue as it was never suggested that in the event of the
undertilling being fraudulent any sanction other than dismissal would have been appropriate.
On this aspect of the case the commissioner had the benefit of the evidence of Ms Ramlakan the cash office
supervisor. She has eighteen years of experience and testified to the procedures to be followed by a cashier.
Although the transcript of her evidence is riddled with breaks in the recording the following emerges from
it. A cashier must first identify the department from which the article comes and then the price of the
article. She then rings up the price and must check on the till screen that she has done so correctly. Then a
process called registering takes place in which a code is entered which identifies the department from which
the item comes. The cashier is expected to make a rough mental tally of the total value of all items rung up
and to check this against the total reflected on the till. When no packer is available the cashier packs the
goods once her operation of the till is finished.
The first point made by the commissioner was that according to Ms Ziqubu, Cynthia Lourens was not
initially in the queue to use her till but was redirected there by a supervisor. From this he reasoned that
there could not have been collusion between the two of them. There are two problems with this approach.
Firstly, it accepts without reservation the evidence of Ms Ziqubu in this regard even though the first time
she mentioned this was at the arbitration and then only in response to questions posed by the commissioner.
The record on this aspect is replete with omissions so that it is impossible to tell whether those questions
were leading questions although this is possible. Leaving that aside, however, an explanation produced at
this late stage should always be scrutinised with care. That is particularly the case where the new evidence
is by its very nature incapable of being tested at an arbitration taking place six months after the event
occurred. There needed to be a consideration of the general probabilities in regard to Ms Ziqubu's testimony
as a whole but there is no indication that the commissioner did this.
The other problem with this reasoning is that it only eliminates the possibility of one form of collusion and
not all possibilities as seems to have been the view of the commissioner. The form which is eliminated is a
plan worked out in advance that Ms Lourens would produce the extension cord at the till operated by Ms
Ziqubu who would then ring up a lower price for this item. However, other possibilities for collusion
remain. The evidence of Mr. Acker was that shrinkage at this store in 1998 caused losses amounting to
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R753 000,00 of which the largest percentage was "inhouse", that is, theft in various forms by members of
staff. The possibility of ongoing collusion between staff members to take, in the words of the landlord's
song from Les Miserables, "here a little slice, there a little cut" should not have been overlooked. A quick
exchange of words between Cynthia Lourens and Ms Ziqubu at the till was also a possibility which could
readily have gone unobserved by a supervisor late on a busy afternoon. Depending on the fertility of one's
imagination other possibilities consistent with collusion can be conceived.
This is not to say that the approach of the commissioner was necessarily wrong. The possibility he fastened
upon was clearly one which existed in the overall situation. It is manifest however that he regarded it as the
only possibility and one to which he attached particular importance in the determination of the case. It is
the first item he mentions in his reasons and if one peruses the record of the hearing it appears that not only
did he initially extract this information from Ms Ziqubu but at the end of her crossexamination he returned
to the topic and explored it in greater detail. It seems to have made a great impression upon him.
The next point made by the commissioner by way of the rhetorical questions : "Why a purchase of R3100
and an undertilling of R1800? Why not a trolley load of groceries if there was a plan to defraud the
employer?" is simply absurd. The obvious answer is that fraud relating to a trolley load of groceries would
probably be observed by a supervisor at the till and would certainly be detected by any security guard,
however indolent, other than a dishonest one. The possibility of evading detection by way of repeated small
frauds is much higher than in the case of the theft of a trolley load of groceries.
As to the third and fourth points noone disputed the possibility of a mistake being made in punching
numbers on the till. The question though was whether this was a mistake. Here the commissioner does not
appear to have weighed the probabilities and given appropriate consideration to the evidence of Ms
Ramlakan. For example it was not simply a case of Ms Ziqubu omitting to punch one of three zeros as the
commissioner apparently thought because, as her representative mentioned in argument, the till has a double
zero which would be used to ring up cents. It is therefore the nought in twenty rand which was omitted. The
ordinary sequence of numbers which should have been pressed would have been two, zero, double zero.
To omit the zero in those circumstances is odd and it would be even odder if, as is commonplace, this till
had required her to press a further key for the intervening decimal.
The commissioner attributed the error to Ms Ziqubu being distracted. His summary of the evidence on this
point is as follows:
"She was distracted by a customer who was rude and rowdy. This customer complained of losing some of
her belongings in the store and at that time she was tilling Cynthia Lourens' items."
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It appears that the commissioner accepted this evidence as truthful and that it formed the basis for his
finding that the employee was distracted. There are, however, problems with it which are not addressed in
the award. It is true that at the arbitration Ms Ziqubu said that when she was dealing with Cynthia Lourens
another customer came and complained about a parcel that was lost. She said this customer started an
argument. That is all that she volunteered and even then it went further than she had gone at the disciplinary
hearing. The rudeness and rowdiness is a product solely of the intervention by the commissioner in the
form of blatantly leading questions. Thus it was he who asked :"Was this woman shouting at you?" and
elicited an affirmative answer. Later he took it further in a preamble to one question where the record reads:
"Listen now. You..................(inaudible)........the woman was screaming there. She must have distracted
you and so forth, right. You punched in R2,00".
However one reads this passage it is unsatisfactory. If one supplements the omission by inserting the word
"said" it is an inaccurate reflection of the prior evidence because all that Ms Ziqubu had done was to agree
with the proposition put by the commissioner himself. If one inserts "were dealing with Cynthia and" the
statement is simply a figment of the commissioner's imagination, which is then reflected in the award as
representing the evidence.
Commissioners conducting arbitrations must be very careful to refrain from asking leading questions, that
is, questions which unfairly suggest the answer to the witness. Evidence procured by these means on
controversial matters is virtually worthless. If this information had been elicited by means of the question:
"How was this customer behaving?" or "What did this customer do when she approached you?" it would
have been helpful as a fair indication of Ms Ziqubu's evidence. That is so with any evidence obtained by
asking questions in accordance with the classic form, that is, questions commencing with who, when,
where, what, why and how. As it is this evidence is more indicative of a predisposition by the
commissioner in favour of Ms Ziqubu than of anything else. Its weakness and lack of value is compounded
by the commissioner's failure to enquire from the employer's representative whether any such incident had
in fact been observed by or reported to one of its supervisors on the day in question.
What is also problematic about the commissioner's approach to Ms Ziqubu being distracted is that it is
difficult to reconcile with the general probabilities. She rang up six items for Cynthia Lourens. The
extension cord was the first of these. Although the price was incorrectly entered it was correctly registered
as a nonfood item. There was no suggestion that Ms Ziqubu misread the price and in any event a price of
R2,00 for an extension cord should immediately have rung a warning bell in her mind as being far too low
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for such an item. The other five items were all correctly entered and correctly registered. That suggests that
any distraction was of such short duration that it started and finished with the extension cord. That is a
highly improbably scenario.
One possible explanation although not tendered in evidence might have been that the distraction occurred
whilst the price of the extension cord was being rung up and that Ms Ziqubu broke off to deal with the
customer before returning to her task of ringing up the other items. However, that would not assist her in
making a case of carelessness. It would merely compound the case that she was grossly derelict in
performing her duties by leaving unanswered the question of why, once the distraction was past, she did not
check back on the only item she had rung up before it occurred in order to make sure that she had done it
correctly.
That brings me to the biggest problem in this regard which is what happened or more accurately did not
happen when Ms Ziqubu pressed the key on the till in order to ring up the total amount of R31,79. This
was R18,00 short a considerable amount in a bill of just under R50,00. What is more, apart from the
extension cord which was R20,00, two other items had been priced at R10,00 each. Those three alone
amounted to R40,00. How in those circumstances could Ms Ziqubu ever have thought that she had
performed her task correctly when R31,79 appeared on the screen? I note that she does not suggest that she
has any difficulty in performing the simple task of mental arithmetic involved in keeping a running total of
items as she is required to do.
In considering that question it would have been appropriate for the commissioner to consider Ms Ziqubu's
version of events as put to the disciplinary enquiry. There she is recorded as saying the following:
"The mistake is that I rang R2,00 instead of R18,00. It was not my aim by then I agree that I did a mistake
and there was a long queue and I had a customer that came to ask for her parcel and I had no packer. It was
not my aim to underring the item by me. Maybe I was confused so I did it."
and a little later the following exchange passed between her and her representative:
"Representative: By the time you rang the items for Cynthia were you concentrating?
Ms Ziqubu: I would say I was but because that customer came she confused me."
When being questioned by Mr. Acker the following exchange occurred:
"Neil Acker (NA): When you are ringing up an article how do you check the price.
Mavis Ziqubu (MZ): When you ring you check on the till screen.
NA: So you have just stated that you were confused by a customer.
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MZ: It was then these people came that I lost my concentration.
NA: If you think you've (rung the) wrong price up you should call the till controller.
MZ: Yes its true I never noticed I rung the wrong price.
NA: So you did not check.
MZ: No.
NA: Isn't that your responsibility as a cashier.
MZ: I told myself this is one of the staff member we are helping each other.
NA: How were you helping each other.
MZ: I told myself Cynthia will check. If the price is wrong we send the packers for the price to check if it
is wrong or right. So Cynthia will check if the price is correct or not."
If this exchange is taken at face value it conveys at the very least a grave dereliction of duty on the part of
Ms Ziqubu. To my mind it is a feeble excuse proffered to explain what is otherwise inexplicable namely
how Ms Ziqubu could have proceeded with the transaction when the till reflected a total of R31,79 which
cannot have accorded with her own rough tally of the total price of the six items. That there were so few
items and that half of them represented just on 80% of the total makes the prospect of genuine error far less
likely than in the case of say a basket of fifteen or so similarly priced items.
The explanation that Ms Ziqubu was relying upon Cynthia Lourens to check the prices of the items does
not stand up to scrutiny. This was not a case where there was a doubt about a price so that it would be
necessary to send a packer to the shelves in order to check the price. It is common cause that the extension
cord was correctly priced at R20,00. What had happened was that Ms Ziqubu rang up R2,00. How then
was Cynthia Lourens to check? One's only comment in this regard is that the simple arithmetic which Ms
Ziqubu was supposed to have done must just as easily have been done by Cynthia Lourens who should have
realised that the total reflected was considerably less than the total of the prices of the six items she had
bought. Her failure to do anything in that regard does not exonerate Ms Ziqubu but rather increases the
possibility that there was collusion between them.
A final factor which should have been borne in mind by the commissioner was the fact that Ms Ziqubu was
not a novice or an inexperienced cashier. She had been working as such, admittedly on a parttime basis,
for some four years. That experience was also a pointer to the improbability of an error occurring of the
type in question. Overall the probabilities were strongly against a finding that this was a mistake
occasioned by Ms. Ziqubu being distracted.
The last reason given by the commissioner for reaching his conclusion does not bear scrutiny. It was no
concern of his whether the Applicant's equipment was the most up to date possible or whether its checks on
the activities of cashiers were adequate. The suggestion that the absence of the most up to date equipment
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was the cause of the stock losses is ludicrous. The most charitable interpretation to be put upon this
statement is that what he intended to say was that the system in use was one which permitted errors which
would not occur in a more up to date system. I would have thought that the conclusion to be drawn from
this was that it required greater care and attention to detail on the part of cashiers not less.
Taking all these matters together do they justify a conclusion that the award of the commissioner is
reviewable? It must be remembered that the onus lay on the Applicant to prove both the reason for the
dismissal and that this reason was fair (s192(2) of the LRA). From this point of view at least the
commissioner's approach was correct.
If I had been assessing the evidence placed before the commissioner as a finder of fact at first instance I
think that I would have concluded that the Applicant discharged the onus of proving that the undertilling
was deliberate. My starting point would be the fact and nature of the undertilling. The evidence of
extensive shrinkage in the store attributable to staff members and the fact that the beneficiary in this case
was a coemployee would suffice in my view to call for some explanation. Where as here the explanation is
shot through with improbability that could provide the basis for rejecting the explanation of innocence
leaving only the alternative of guilt.
It is unnecessary however for me to express a final view on this question for the simple reason that I am not
the finder of fact of first instance. Nor is this a court of appeal which can revisit and override the findings of
fact of a lower tribunal if it is satisfied that they are wrong, having borne in mind the advantages which that
tribunal has had of hearing the witnesses in person ( R v Dhlumayo 1948 (2) SA 678 (AD)). As a court of
review my functions are more limited. Whatever the proper approach to reviews under section 145 of the
LRA a matter to which I will revert I would have to be satisfied at the least that the conclusion of
deliberate wrongdoing was either the only possible conclusion or so overwhelmingly probable that the
failure to reach it indicated the presence of reviewable irregularity. That is not, however, in my view
possible on the facts of this case. I think that a perfectly reasonable and proper fact finding exercise could
arrive at the conclusion that the undertilling was deliberate. I cannot, however, exclude the reasonable
possibility that a similarly impeccable fact finding exercise would find that what occurred here was grossly
negligent and a flagrant disregard of the prescribed procedures to be followed by a cashier, but not take the
further step of holding that there was deliberate fraud.
The consequence of that conclusion is to move the enquiry forward to the stage of the penalty imposed by
the Applicant for Ms Ziqubu's accepted misconduct. As I said earlier the approach of the commissioner
involved an acceptance that even if the undertilling was occasioned by negligence on the part of Ms Ziqubu
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it was nonetheless misconduct. No other basis exists for his having examined the question of the
appropriateness of the sanction of dismissal imposed by the Applicant upon Ms Ziqubu. I turn then to
consider his approach on sanction.
It is clear that the commissioner's view of Ms Ziqubu's misconduct was that she was guilty of nothing more
than carelessness, which he described as "a mistake" for which she was sorry. That flowed from his
analysis of the facts which I have considered in some detail above. It follows from what I have said in that
regard that in my view there was no justification for this conclusion. The proper approach on the facts was
that Ms Ziqubu had been guilty of very serious misconduct and the consideration of the question of sanction
should have followed from that.
That initially erroneous approach was compounded by further errors. Neither the charge of inconsistency
nor that of being unduly hasty to charge employees with misconduct was justified. The two cases
mentioned in evidence were in no way comparable to this one. Here the undertilling flowed either from
fraud or, at the very least, from a flagrant disregard of the standard procedures to be followed by cashiers.
The first case mentioned, involving a cashier referred to only as Monica, was one of undertilling which
might have been occasioned by a defect in the till. That is a possible mitigating feature wholly absent from
the present case. The second case involved a cashier called Adelaide who rang up the marked price on a
packet without noticing that it contained not one but two pies whereas the marked price was for one pie
only. That case is wholly different from this one.
Nor is there any justification for the finding that the Applicant is too quick off the mark in charging
employees with this type of misconduct. In the light of the level of stock losses referred to in the evidence
of Mr. Acker it is perfectly proper and appropriate for the Applicant to require strict adherence to the
procedures which it lays down for cashiers in the performance of their duties. The reason is simply that if
there is such compliance one avenue for shrinkage to take place is cut off. The employer would be equally
entitled for the same reason to insist on strict compliance by its security personnel with the procedures for
checking staff parcels.
The commissioner not only does not refer to these matters but seems to deprecate them. Indeed his one
finding concerning the absence of modern scanners, bar codes and computer checks appears to be directed
at placing the blame for shrinkage at the door of the employer. All this is contrary to the clearly stated
jurisprudence of the Labour Appeal Court that it is for employers to determine what standards of conduct
are to be observed by their employees in the light of the needs of their own particular business. In the
absence of irrationality it is not for commissioners or courts to nullify or disregard those standards or to
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supplant them with others ( Scaw Metals v Vermeulen (1993) 14 ILJ 672 (LAC) at 675A B; Computicket v
Marcus NO & others (1999) 20 ILJ 342 (LC) at 347 A D; County Fair Foods (Pty) Ltd v Commission for
Conciliation, Mediation & Arbitration and others (1999) 20 ILJ 1701 (LAC) para 11, p1707 and para 45,
p1716).
Lastly on this aspect of the case the commissioner said that Ms Ziqubu had a clean disciplinary record and
he referred to the concept of progressive discipline in which dismissal is regarded as the last resort. The
problem is that far from having a clean disciplinary record Ms Ziqubu had been disciplined on five previous
occasions in the previous two years and three months for failures to comply with prescribed procedures for
the operation of her till. It is clear from a passage in the transcript of the arbitration proceedings that the
commissioner held the view that Ms Ziqubu had a clean disciplinary record solely because the final
warnings previously given to her had lapsed after four months but that is clearly incorrect. The fact that a
person no longer has a final warning hanging over their head no more extinguishes prior misconduct than
the lapsing of a suspended prison sentence extinguishes the conviction from a person's criminal record.
Once the seriousness of the misconduct is appreciated and the sanction is viewed from a correct perspective
the conclusion is I think inevitable that the commissioner's decision that dismissal was an excessive sanction
was wrong. In turn the decision that the dismissal of Ms Ziqubu was unfair is also wrong. Does that mean
that the arbitration award is capable of being corrected on review? That brings me to the powers of this
court in review proceedings.
Mrs Annandale for the Applicant and Mr. Mazwi for Ms Ziqubu were at one that the application is one in
terms of section 145 of the LRA. Their initial approach to a review under that section was that laid down
by the Labour Appeal Court in Carephone (Pty) Limited v Marcus N.O. and others (1998) 19 ILJ 1425
(LAC). In that case it was said in paragraph 37 under the general heading of the "standard of review" that:
"Many formulations have been suggested for this kind of substantive rationality required of administrative
decision makers such as "reasonableness", "rationality", "proportionality", and the like........... Without
denying that the application of these formulations in particular cases may be instructive, I see no need to
stray from the concept of justifiability itself. To rename it will not make matters any easier. It seems to me
that one will never be able to formulate a more specific test other than, in one way or another, asking the
question : 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? In time only judicial precedent will be able to give more specific content to the
broad concept of justifiability in the context of the review provisions in the LRA."
Later in the judgment at paragraph 53 the following was said:
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"Accordingly, the only bases for review are (1) that the facts amount to misconduct or gross irregularity or
impropriety under s145(2)(a)(i)(ii) and s145(2)(b) of the LRA, or (2) that his actions are not justifiable in
terms of the reasons given for them and that he has accordingly exceeded his constitutionally constrained
powers under s145(2)(a)(iii) of the Act."
A reading of the subsequent decisions of this court in reviews under section 145 shows that the formulation
of whether there is a rational objective basis justifying the connection made by the commissioner between
the material properly available to him or her and the conclusion he or she eventually arrived at has
effectively become the basis for reviews under this section. See, for example, the statement by Marcus AJ
in Nel v Ndaba (1999) 20 ILJ 2666 (LC), para 10, p 2699 I J.
Sitting as a judge of first instance I am of course bound by decisions of the Labour Appeal Court and
ordinarily I would simply have proceeded to deal with this case on that basis. However, in a recent and as
yet unreported decision of the Labour Appeal Court, Toyota South Africa Motors (Pty) Limited v Radebe
and others , Nicholson JA, in paragraph 33 of his judgment (which was concurred in by the other two
members of the court) said the following concerning this standard of review:
"I intend dealing briefly with the last mentioned ground, namely the justifiability of the award, as I have
certain misgivings about whether it constitutes an independent ground upon which an award can be
attacked. As such it is not part of section 145, which restricts an applicant to misconduct, corruption, gross
irregularity and the excess of powers. I am not sure that Froneman DJP was importing the last mentioned
ground into section 145 and I believe the mention of it in the passage above was in any event an obiter
dictum. I have two difficulties with importing this ground into the Act. The first relates to the difference
between appeals and reviews and the second relates to the constitutional implications of section 145."
In paragraph 40 Nicholson JA said:
"The reference by Froneman DJP to the constitutional provisions must be seen in the context of the specific
grounds for review in section 145. My misgivings relate, therefore, to the notion that the grounds set out in
that section are not the only avenues open to a party to challenge an award. It was not suggested in this case
that the grounds set out in section 145 were unconstitutional and they are fully operative until declared
unconstitutional. If there was such a constitutional challenge the court would have to evaluate whether the
creation of the CCMA and the other machinery of the Act provides sufficient justification for the limitation
of the rights of administrative justice provided in the constitution. Although, as I have mentioned, it is not
necessary for the purposes of this judgment to decide the issue, I have grave doubts that the concept of an
award being justifiable as to the reasons given is an independent ground of review."
I drew the attention of Mrs. Annandale and Mr. Mazwi to the judgment in Radebe and also to the judgment
of the Constitutional Court in Fedsure Life Assurance Ltd and others v Greater Johannesburg Transitional
Metropolitan Council and others 1999 (1) SA 374 (CC) and invited their submissions as to their effect on
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my task in deciding this case. Both of them addressed me on the topic with Mr Mazwi, in a colourful
phrase, proclaiming that "We are in love with the misgivings of Nicholson JA". (The matrimonial image
extended to his supplementary heads of argument where he said that "The Second and Third Respondents
happily "tie a knot" with the misgivings expressed by the learned Nicholson JA in the Toyota decision at
paragraph 40".) More pertinently Mr. Mazwi contended that in the light of what was said in Radebe I
should regard myself as being limited to the strict grounds of review set out in section 145 and should not
regard justifiability of the award as referred to in Carephone as being a proper ground of review. In an
impressive argument of higher standard than many delivered to me by legal practitioners in the course of my
acting appointment he bluntly contended that these proceedings were nothing more than an appeal in the
guise of a review. Accepting some of Mrs. Annandale's criticisms of the award and seeking to explain and
deflect others he submitted that the record amply demonstrated that the commissioner had addressed his
mind to the right questions, namely whether there was misconduct and if so its nature and the appropriate
sanction which should flow therefrom. That being so if he had erred even if there were a number of errors
of a serious nature he was nonetheless not guilty of misconduct, gross irregularity or excess of his powers
and accordingly his award must stand. Whilst I might disagree strongly with the commissioner's
conclusions therefor there was so, Mr. Mazwi contended, nothing I could do about it.
Mrs. Annandale (whose argument was equally of a high standard) on the other hand relied strongly on the
Carephone judgment. In her submission the cumulative effect of the errors in the commissioner's award
was such that the award could not be said to be justifiable on the material before the commissioner. That is
fairly and squarely to base the review on Carephone. Neither in her original heads of argument nor in her
oral submissions did she contend that it was appropriate for me to construe misconduct, gross irregularity or
excess of jurisdiction from the contents of the award. In supplementary heads of argument delivered at my
invitation after the hearing she submitted that Carephone remains authoritative and is unaffected both by
Radebe and by Fedsure. She did however make a brief submission in regard to gross irregularity which can
be dealt with later.
In the face of these conflicting submissions it seems to me necessary to consider again the question of the
powers of review which this court enjoys in regard to arbitration awards made by commissioners and the
current status of the judgment in Carephone. My starting point is section 145 of the LRA which governs
such reviews.
The relevant portions of section 145 read as follows:
13
"Review of arbitration awards
(1) Any party to a dispute who alleges a defect in any arbitration proceedings under the auspices of the
Commission may apply to the Labour Court for an order setting aside the arbitration award
(a) within six weeks of the date that the award was served on the Applicant, unless the alleged defect involves
corruption; or
(b) if the alleged defect involves corruption, within six weeks of the date that the Applicant discovers the
corruption.
(2) A defect referred to in subsection (1), means:
(a) that the commissioner:
(i) committed misconduct in relation to the duties of the commissioner as an arbitrator;
(ii) committed a gross irregularity in the conduct of the arbitration proceedings; or
(iii) exceeded the commissioner's powers; or
(b) that an award has been improperly obtained."
On the face of the language used in the section therefore it appears that an arbitration award can be set aside
in four circumstances namely:
(a) if there was misconduct on the part of the commissioner;
(b) if the commissioner perpetrated a gross irregularity in the conduct of the arbitration proceedings;
(c) if the commissioner acted outside his or her powers; or
(d) if the award was improperly obtained.
Noone familiar with the law of arbitration could overlook the correspondence between this section and
section 33 of the Arbitration Act 42 of 1965 which reads as follows:
"Setting aside of award.
(1) Where
(a) any member of an arbitration tribunal has misconducted himself in relation to his duties as arbitrator or
umpire; or
(b) an arbitration tribunal has committed any gross irregularity in the conduct of the arbitration proceedings or
has exceeded its powers; or
14
(c) an award has been improperly obtained,
the court may, on the application of any party to the reference after due notice to the other party or parties,
make an order setting the award aside.
(2) An application pursuant to this section shall be made within six weeks after the publication of the award to
the parties: Provided that when the setting aside of the award is requested on the ground of corruption, such
application shall be made within six weeks after the discovery of the corruption and in any case not later
than three years after the date on which the award was so published."
The correspondence between this and section 145 has been noted on several occasions by this court. ( Abdull
& Another v Cloete N.O. and others (1998) 19 ILJ 799 (LC) para. 13, p803; Standard Bank of SA Limited v
Commission for Conciliation, Mediation & Arbitration and others (1998) 19 ILJ 903 (LC), para. 5, p907;
Carephone, supra, para. 25, p1432).
There is ample authority in cases dealing with arbitration under the Arbitration Act and its predecessors as
to how these provisions are to be interpreted. The position in regard to misconduct is summarised as
follows in Lawsa, Vol.1 (First Reissue), para. 445 :
"445. Misconduct by arbitrator
The word misconduct must be construed in its ordinary sense of wrongful or improper conduct on the part
of the person whose behaviour is in question. A bona fide mistake of law or fact cannot be construed as
misconduct; but if the mistake is so gross or obvious that it could not have been made without some degree
of misconduct the award may be set aside, not on the ground of mistake but on the ground of misconduct,
the mistake merely amounting to evidence of the misconduct. If there is an explanation for the error other
than misconduct or corruption, a court would not be entitled to set aside the award in question. There is no
assumption that an arbitrator knows and applies the principles of our law. Accordingly if an arbitrator
misdirects himself on the law, that in itself is no reason for setting aside the award; the parties are bound by
his finding even if he errs on the facts or the law.
An arbitrator is appointed not as the agent of the party who nominated him, but as a judge who should act
impartially and should have no personal interest in the proceedings. He must dispense justice equally and
impartially between the parties. Impartiality is achieved inter alia by granting both parties an equal
opportunity to be heard. Where an arbitrator hears one party and refuses to hear the other, the court will
interfere and set aside the award. Likewise, where the arbitrator fails to hear evidence of either party, the
award will not be upheld unless the failure can be justified on the ground that the parties agreed that
evidence should not be led."
It is accordingly not misconduct for the arbitrator to be wrong in either fact or law. ( Dickenson & Brown v
Fisher's Executors 1915 AD 166 at 174175; Amalgamated Clothing & Textile Workers Union v Veldspun
Limited 1994 (1) SA 162 (AD) at 168I169C). It is not even misconduct for there to be no evidence
apparent from the record that supports the award. Such an absence of evidence is merely a factor from
15
which the inference may permissibly be drawn that the arbitrator could only have reached the decision in
question as a result of misconduct. ( McKenzie NO v Basha 1951 (3) SA 783 (N) at 786BD;
Hyperchemicals International (Pty) Limited v Maybaker Agrichem International (Pty) Limited 1992 (1) SA
89 (W)).
Gross irregularity in the conduct of the arbitration ordinarily relates to procedural irregularities. ( Lawsa,
supra, para. 447; Bester v Easigas (Pty) Limited and another 1993 (1) SA 30 (C) at 42J43B). Instances of
that are a failure to give notice of the hearing or conducting a material part of the arbitration in the absence
of a party not in default or refusing to one party an opportunity to call evidence extended to the other party
or excluding crossexamination of a witness on a material point. The irregularity is gross when it results in
the aggrieved party not having his case fully and fairly determined. ( Ellis v Morgan : Ellis v Desai 1909 TS
576 at 581).
An act in excess of the arbitrator's jurisdiction is liable to be set aside. That encompasses both going outside
the terms of the reference insofar as the matter in dispute is concerned and acting beyond the powers
conferred upon the arbitrator under and in terms of the reference. ( Lawsa, supra, para 448). The same
principle applies in relation to arbitration awards by commissioners. Thus, for example, in a case where the
only dispute between the parties was whether the employee had committed misconduct, it being common
cause that in that event dismissal was an appropriate sanction, the arbitrator went beyond her powers in
considering the question of sanction. ( Reunert Industries (Pty) Limited t/a Reutech Defence Industries v
Naicker and another (1997) 18 ILJ 1393 (LC)).
It is true that in certain circumstances the question of an arbitrator exceeding his or her powers may arise in
relation to procedural matters. Thus, for example, if the terms of the reference were to record that the
arbitrator was obliged to follow the procedures and rules of evidence applicable in the High Court it would
be beyond the arbitrator's powers to conduct the arbitration in an inquisitorial manner although this could
also be dealt with as misconduct (c/f Halsbury, Vol. 2 (Fourth Ed, Reissue) para. 694). It is also beyond
the powers of the arbitrator to act contrary to public policy. ( Halsbury, supra , para 694; Amalgamated
Clothing & Textile Workers' Union v Veldspun Limited, supra, 174G). Apart from this, it is unusual for
procedural matters to arise under the heading of excess of powers on the part of the arbitrator. It is certainly
novel to suggest, as the judgment in Carephone suggests in paragraph 53 thereof, that justifiability of the
award on the merits of the material placed before the arbitrator can properly fall within the ambit of an
excess of the arbitrator's powers. To adopt that approach is effectively to say that the only jurisdiction
which the arbitrator has is to decide the case correctly and that is not only contrary to authority but would
have the effect of transforming a review into an appeal.
16
Reverting to the general principles governing reviewability of awards the last situation is the case where an
award has improperly obtained. There is no authority in our courts on what this means presumably because
no case has arisen where a substantial contention was advanced that an award should be set aside on this
ground. In my view if one looks at the structure of section 33(1) of the Arbitration Act it is clear that this
head of review covers matters which relate primarily, if not entirely, to conduct on the part of the successful
party to the arbitration which would justify the setting aside of the award. Thus an award procured through
fraud or the subornation of perjury could be set aside on this ground. (c/f Makings v Makings 1958 (1) SA
338 (AD)).
Of course these categories are not watertight compartments and the same matters may fall into more than
one category. Thus the acceptance of a bribe is misconduct by the arbitrator whilst the giving of the bribe
means that the award was irregularly obtained. Equally some procedural matters may amount to both
misconduct on the part of the arbitrator and gross irregularity in the conduct of the arbitration.
I have set this out in some detail because it can I think be seen from this broad and general exposition of the
effect of section 33(1) of the Arbitration Act that the conduct which under that Act warrants the setting
aside of an arbitration award is as much conduct which should justify the setting aside of an arbitration
award made by a commissioner acting in terms of the LRA. The provisions of the Arbitration Act and the
finality which its limited power of review provides in respect of awards have been applied and approved in
relation to arbitrations in the field of labour relations. ( Amalgamated Clothing and Textile Workers Union
v Veldspun Limited, supra; Bester v Easigas(Pty) Ltd and another, supra. )
v Veldspun Limited, supra; Bester v Easigas(Pty) Ltd and another, supra. )
Against the background set out above one would have thought that the obvious reason for the legislature
adopting the language of section 33 of the Arbitration Act and section 145 of the LRA was to provide for a
similarly circumscribed power of review on the part of this court to interfere with arbitration awards handed
down under the auspices of the CCMA. That view of things would have been reinforced by section 143(1)
of the LRA which provides that such awards are final and binding. This provision corresponds with the
provisions of section 28 of the Arbitration Act. It would also have accorded with the well established canon
of statutory interpretation that where the legislature deliberately includes language in a statute which in the
same or a similar context has been subject to clear judicial interpretation it intends to include such language
on the basis that it bears the interpretation already given to it by the courts. ( S v R J Southey (Pty) Ltd &
another 1979 (1) SA 858 (T) at 860 E H ).
Initially in cases decided in this court it was accepted that the review powers conferred by section 145 were
17
to be given the same meaning as the corresponding powers of review conferred upon the High Court in
terms of section 33 of the Arbitration Act. ( Moloi v Euijen NO & another (1997) 18 ILJ 1372 (LC) ; Abdull
and Another v Cloete N.O. and others, supra; Standard Bank of SA Limited v Commission for Conciliation,
Mediation & Arbitration and others, supra. Only Landman J in Reunert Industries (Pty) Ltd t/a Reutech
Defence Industries v Naicker and another, supra, appears to have suggested that this might not be so.) It
was recognised that the test for review under this section was a strict and relatively narrow test, probably
narrower than the scope of common law review. ( Kynoch Feeds (Pty) Limited v Commission for
Conciliation, Mediation & Arbitration and others (1998) 19 ILJ 836 (LC) para. 30, p844). It was also
accepted that there were sound policy reasons for adopting that approach. ( Kynoch Feeds (Pty) Limited v
Commission for Conciliation, Mediation & Arbitration and others, supra, para. 40, pp846847; Shoprite
Checkers (Pty) Limited v Commission for Conciliation, Mediation & Arbitration and others (1998) 19 ILJ
892 (LC) para. 27.9, p899). Where members of this court felt unhappy with such a narrow standard of
review their approach was not to depart from a correspondence in meaning between section 33(1) of the
Arbitration Act and section 145(2) of the LRA, but to accept that arbitration awards by commissioners could
be reviewed not only under section 145 but also under section 158(1)(g) of the LRA. That approach was
adopted in each of the judgments in Abdull and another v Cloete N.O., Kynoch Feeds, Shoprite Checkers v
CCMA and Standard Bank v CCMA to which I have already referred.
This understanding of the scope and effect of section 145 accorded with the intention of those who drafted
the LRA. When the Bill was initially published for comment it was accompanied by a lengthy explanatory
memorandum which is to be found in (1995) 16 ILJ 278336. In that memorandum it was explained that
the existing system of dispute resolution, particularly as it related to cases of unfair dismissal, was complex,
inefficient, protracted and expensive. The high level of legalism which characterised the system was noted
with approbation. The dispute resolution provisions contained in the Bill are directed at resolving these
problems.
It is helpful to quote two passages from the memorandum (at 318). They described the system proposed
under the Bill in the following terms:
"A major change introduced by the draft Bill concerns adjudicative structures. In the absence of private
agreements, a system of compulsory arbitration is introduced for the determination of disputes concerning
dismissal for misconduct and incapacity. By providing for the determination of dismissal disputes by final
and binding arbitration, the draft Bill adopts a simple, quick, cheap and nonlegalistic approach to the
adjudication of unfair dismissal."
A little later the memorandum states:
18
"In order for this alternative process to be credible and legitimate and to achieve the purposes of the
legislation, it must be cheap, accessible, quick and informal. These are the characteristics of arbitration,
whose benefits over court adjudication have been shown in a number of international studies.
The absence of an appeal from the arbitrator's award speeds up the process and frees it from the
legalism that accompanies appeal proceedings. It is tempting to provide for appeals because dismissal
is a very serious matter, particularly given the lack of prospects of alternative employment in the
present economic climate. However, this temptation must be resisted as appeals lead to records,
lengthy proceedings, lawyers, legalism, inordinate delays and high costs. Appeals have a negative
impact on reinstatement as a remedy, they undermine the basic purpose of the legislation and they
make the system too expensive for individuals and small business."
When the revised Bill was submitted to Parliament the explanatory memorandum which accompanied it
repeated these statements concerning appeals in slightly abbreviated form. Thompson and Benjamin, South
African Labour Law, Vol. 1, AA2172.
To interpolate a comment at this stage it is apparent when one has regard not only to the borrowing of
language from the Arbitration Act but also to the expressed intention of those responsible for the drafting of
the statute that the aim was to ensure as far as possible that arbitration awards made by commissioners
under the LRA would exhibit a high degree of finality and would only be interfered with in very limited
circumstances. Not only was it made perfectly clear that there should be no appeal from decisions by
commissioners but it was also the manifest intention that the scope for review of such decisions would be
narrower than that attendant upon even a review under the common law, the scope for which has been
broadened in the past fifteen years or so by judgments such as those in Johannesburg Stock Exchange and
another v Witwatersrand Nigel Limited and another 1988 (3) SA 132 (AD) at 152AE; Jacobs en 'n ander
v Waks en andere 1992 (1) SA 521 (AD) and Hira and another v Booysen and another 1992 (4) SA 69
(AD). The intention appears to have been that of the three types of review identified by Innes CJ in his
much quoted judgment in Johannesburg Consolidated Investment Co. v Johannesburg Town Council 1903
TS 111 it was a review of the first type that was intended, not a common law review, which is a review of
the second type. I understand that also to be the approach of Nicholson JA in Radebe because in upholding
the review in that case the learned Judge of Appeal relied upon the test for gross irregularity laid down by
Schreiner J (as he then was) in Goldfields Investment Limited and another v City Council of Johannesburg
and another 1938 TPD 551 which was, as Corbett CJ pointed out in Hira and Another v Booysen and
another, supra, p87A, a case dealing with the first and narrowest species of review and not a common law
review.
19
It is unclear whether and to what extent any of this was drawn to the attention of the Labour Appeal Court in
Carephone. It represents, however, an understanding of section 145 of the LRA which appears to have been
firmly rejected by the Court. Having held that the only basis for reviewing a commissioner's arbitration
award under the LRA was to be found in section 145 there is then a significant departure from the accepted
interpretation of the section based on its correspondence with the provisions of the Arbitration Act and the
material referred to above. The Labour Appeal Court viewed such a correspondence with disfavour and
said as much in paragraph 25 of its judgment in the following terms:
"What has bedevilled the interpretation of s145 and has led to the conclusion that it provides for a narrow
and unconstitutional basis of review, is the reliance placed on decisions interpreting a corresponding section
in the Arbitration Act 42 of 1965 (c/f Amalgamated Clothing & Textile Workers Union v Veldspun Limited
1994 (1) SA 162 (A); (1993) 14 ILJ 1431 (A)). The meaning accorded to this section by the courts cannot
be taken over without qualification. That Act's operation in respect of arbitration under the auspices of the
commission is expressly excluded in the LRA (s146); it applies to private, consensual arbitration (in
contrast to the compulsory arbitration under the LRA); and its provisions were assessed and interpreted in a
different constitutional context. In any event, even under the provisions of the Arbitration Act an award
could be reviewed and set aside if the arbitrator exceeded his or her powers by making a determination
outside the terms of this submission ( Veldspun at 169C). These considerations augment the canon of
interpretation that the legislature, by including an existing formulation in a statute, is presumed to intend to
give it the meaning previously accorded by the courts".
give it the meaning previously accorded by the courts".
With the utmost respect it is unclear what is meant by this passage. If the settled meaning accorded by
authority in the highest court cannot be taken over without qualification those qualifications need to be spelt
out. Unfortunately this is not done in the judgment in Carephone. Nor do the factors mentioned cast any
light on the issue. The simple and obvious reason why the Arbitration Act is excluded in respect of
arbitrations under the auspices of the CCMA is that this court is given jurisdiction in respect of such matters
to the exclusion of the High Court. It does not mean that the jurisdiction conferred on this court in identical
language to that conferred on the High Court by the Arbitration Act is in any way different or intended to be
exercised any differently. As I have pointed out all of the background material available to the court
pointed in the other direction.
It is true that arbitration under the auspices of the CCMA is generally, although not exclusively (see s141 of
the LRA), compulsory. However, the review powers vested in this court are the same in either event. I am
not aware of any authority that suggests that this justifies a departure from the well established meaning of
the language in which powers of review of arbitration awards have over the years been conferred on our
courts. It is not as if compulsory arbitration is in any way a novelty. It is a long established feature of
legislation dealing with expropriations and valuations for rating purposes. In the field of labour relations it
has long been provided for in respect of public service employees in the predecessors to the LRA, where it
20
was the quid pro quo for the exclusion of the right to strike. It must also be borne in mind that if the parties
do not wish to arbitrate before a commissioner of the CCMA they are free to agree upon alternative dispute
resolution procedures and thereby to avoid that fate. If they do so their arbitrations will be subject to the
provisions of the Arbitration Act and the awards made therein will be subject to review under section 33(1)
of that Act. Such awards will then be reviewed by this court in terms of section 157(3) of the LRA. This is
a point to which I will revert.
The argument arising from the lack of voluntariness in regard to arbitrations before the CCMA is referred to
by Pretorius AJ in the Shoprite Checkers case, supra, p899 where he said:
"27.9 There are arguably sound policy reasons within the context of the LRA and labour relations in general for
imposing the narrow review test contained in s145 on parties who are subject to arbitration awards of the
CCMA. Similar policy reasons are set out in the decision of the Appellate Division of the Supreme Court
in Amalgamated Clothing & Textile Workers Union v Veldspun Limited......
27.10 On the other hand, there are in my view equally important policy considerations for demanding of
commissioners of the CCMA when they conduct arbitrations that they comply with the more stringent
standards implicit in s33 of the Constitution. Not only the interests of justice, but also sound labour
relations may well be better served by arbitration decisions which comply with the standards implicit in s33
of the Constitution than by arbitration decisions which do not necessarily comply with those standards, but
serve to end labour relation disputes more speedily. Further, it must be borne in mind that the reasoning in
the Veldspun case applies to circumstances where parties have voluntarily submitted their dispute to
arbitration. This is not the case where the arbitration provisions of the LRA are concerned."
To similar effect is a passage from the judgment of Tip AJ in the Standard Bank case, supra, para. 6, p907
which reads as follows:
".......... there is an important point of distinction in that arbitrations conducted under the Arbitration Act are
entered into voluntarily, as was the submission to arbitration in Veldspun's case, whereas those conducted in
the CCMA have a strong element of compulsion. Clearly, there is a stronger policy consideration in the
context of private arbitration in limiting the grounds upon which an award may be taken further, than there
is in a situation where a respondent party is obliged through statute to participate in arbitration proceedings,
as is the case under the Act."
This point is perhaps strengthened when one reads judgments such as that of the Appellate Division in
Dickenson & Brown v Fisher's Executors, supra, where one finds that a substantial factor in holding that
the power to set aside an award of an arbitrator is a limited power is said to be the fact that the parties have
voluntarily entered upon the arbitration process and selected their own judge to resolve their disputes. In
those circumstances, so it is said, it is appropriate that they should be bound by that person's decision. All
21
of this I accept. However, it leaves untouched the fact that the LRA contains a deliberate legislative choice
in favour of arbitration as the means to settle a large range of disputes in the field of labour relations. That
arbitration may be consensual but, if there is no consensus, it is imposed upon the parties. In so imposing it
the legislature has chosen to do so by prescribing that the award of a commissioner shall be final and
conferring power upon this court in terms substantially identical to those conferred upon the High Court to
set aside consensual arbitration awards under the Arbitration Act. I can find little room in those
circumstances for arriving at a broader interpretation of the language of section 145 solely on the ground
that the arbitral process is compulsory rather than voluntary.
As to the last factor mentioned in paragraph 25 of the Carephone judgment I venture with respect to suggest
that it adds nothing to the matter. It is true that under the Arbitration Act an award can be reviewed and set
aside if the arbitrator exceeds his or her powers by making an award outside the terms of the submission.
That is expressly provided for in section 33(1)(b) of the Arbitration Act, and the power in question
corresponds precisely with the power to review and set aside a commissioner's arbitration award in terms of
section 145(2)(a)(iii) of the LRA. Wherein therefore lies the difference between the provisions of the
Arbitration Act and those of the LRA?
Having rejected what may be described as a "traditional" interpretation for section 145(2) the Labour
Appeal Court in Carephone sought for an interpretation which is consistent with the Constitution, more
specifically the administrative justice provisions of the Constitution. Indeed that appears to have been its
principal concern that the "narrow" basis for review in section 145 might be unconstitutional. The basis for
this concern is however unclear. Earlier in its judgment the court had pointed out that the establishment of
the CCMA as an independent and impartial tribunal or forum to determine certain classes of labour dispute
satisfied the constitutional requirements of section 34 of the Constitution. The obligation of fairness in the
conduct of arbitration under the auspices of the CCMA is not restricted or abrogated by section 145 and the
powers of review given to this court provides ample scope for judicial regulation of any departures from that
constitutional standard under the heading of misconduct of the arbitrator and gross irregularity in the
conduct of the arbitration. As pointed out above where procedural injustice has led to someone not having
a fair hearing before the arbitrator the award will be reviewed and set aside. Where then does the perceived
constitutional problem lie?
As I read Carephone and particularly paragraphs 11 to 22 thereof the court's concern was the following. It
held that the CCMA constituted an organ of state for the purposes of the Constitution so that its actions
would have to comply with the requirement of fair administrative action laid down in section 33 of the Bill
of Rights read with item 23(2) of Schedule 6 to the Constitution. (A similar view was expressed in Kynoch
22
Feeds, supra, paras. 45 and 46, pp847848). Returning then to the Carephone judgment the court rejected a
submission that an arbitration under the auspices of the CCMA was a proceeding of a judicial nature and
therefore did not amount to administrative action for the purpose of those provisions. Finally it held that the
categorisation of different functions of the State administration into judicial, quasi judicial and
administrative was not part of our administrative law and said:
"It would be ironic indeed if they are reintroduced at this stage of the development of our law to limit the
scope of judicial review of administrative action".
On that basis the Labour Appeal Court held (para. 20) that:
"The constitutional imperatives for compulsory arbitration under the LRA are thus that the process must be
fair and equitable; that the arbitrator must be impartial and unbiased; that the proceedings must be lawful
and procedurally fair; that the reasons for the award must be given publicly and in writing; that the award
must be justifiable in terms of those reasons; and that it must be consistent with the fundamental right to fair
labour practices."
Building on this foundation the Labour Appeal Court held (in paragraph 30) that the effect of the
administrative justice provisions of the Bill of Rights was to broaden the scope of judicial review of
administrative action. By reference to the constitutional requirement that administrative action must be
justifiable in relation to the reasons given for it the court said (para. 31) that:
"This provision introduces a requirement of rationality in the merit or outcome of the administrative
decision. This goes beyond mere procedural impropriety as a ground for review, or irrationality only as
evidence of procedural impropriety."
evidence of procedural impropriety."
That, so the court held, provided the basis for an extended scope of review which it formulated in the terms
set out above. That extended scope does not, however, arise from an interpretation of section 145 but
appears to be independent of it and additional to it.
With respect I share not only the misgivings of Nicholson JA in regard to the result of this line of reasoning
but I am unable to accept that the reasoning itself is correct. If as Nicholson JA suggested it is an obiter
dictum I am free to reject it and would do so. However that seems to me rather too cavalier an approach to
take when the contents of that judgment and the passages I have quoted have never been treated as obiter
dicta by any member of this court. Far from it. In preparing this judgment I have referred to every decision
of this court reported in the Industrial Law Journal and the Butterworths Labour Law Reports since the
Carephone judgment became available involving the review of an arbitration award arising out of a CCMA
23
arbitration. In virtually every one the court has referred to one or other of the leading passages from
Carephone, both of which are quoted above, and in some at least there is reference only to the broader
ground of review enunciated in that judgment (c/f Nel v Ndaba, supra ).
The problem with justifiability as a ground for review and the suggestion that an award must be rationally
connected to the material before the arbitrator is that it blurs the distinction between review and appeal. If
the commissioner's award is based upon erroneous findings of fact and erroneous processes of reasoning it
is difficult to see on what basis it can then be regarded as justifiable in relation to the material before the
commissioner. Once that is the approach, however, there appears to be no significant distinction between a
review on the grounds of justifiability and an appeal. This has occasioned confusion and considerable
endeavours on the part of this court and the Labour Appeal Court to emphasise that notwithstanding the
Carephone judgment there remains a distinction between a review and an appeal ( Coetzee v Lebea N.O. and
another (1999) 20 ILJ 129 (LC); Computicket v Marcus N.O. and others, supra at 346; County Fair Foods
(Pty) Limited v Commission for Conciliation, Mediation & Arbitration and others (1999) 20 ILJ 1701
(LAC). There is a useful summary of the endeavours to maintain this distinction in the judgment of
Kennedy AJ in Jimini Indent Agencies CC t/aS & A Marketing v Commission for Conciliation, Mediation &
Arbitration and others (1999) 20 ILJ 2872 (LC) para. 7, pp28762877.
The impact of the judgment has extended to the situation mentioned above of a review of an arbitration
award made in a labour matter but conducted in terms of the Arbitration Act. Such reviews come before
this court in terms of section 33(1) of the Arbitration Act by virtue of the provisions of section 157(3) of the
LRA. In at least one instance ( Transnet Ltd v Hospersa & another ( 1999) 20 ILJ 1293 (LC) 1297 D I ) this
court has extended the approach in Carephone to the review of an arbitration held in terms of the
Arbitration Act. ( sed contra Eskom v Hiemstra (1999) 20 ILJ 2367 (LC) at para 17, p1267). The extent of
the dilemma is apparent. It would be absurd for this court to review the arbitration awards of CCMA
commissioners on less stringent grounds than those of private arbitrators whose appointment may have been
designed to circumvent arbitration before a commissioner. On the other hand it results in this court giving
a different interpretation to section 33(1) of the Arbitration Act to that which has been laid down by the
High Court and the Supreme Court of Appeal and which is applied by those courts. Such inconsistency is
undesirable if not intolerable.
The further and no doubt unintended effect of the Carephone judgment has been in some measure to
sideline the grounds of review which are expressly provided for in section 145 of the LRA and to introduce
a constitutional basis for review which is nowhere to be found in the LRA. That cannot be correct. Apart
from anything else it does not flow from a proper process of constitutional reasoning. That process should
24
start with the interpretation of the statutory provision in question, in this case, section 145 of the LRA. If
there is doubt as to its meaning which is not the case as that is established by clear and long standing
authority then the court is enjoined to select that interpretation which accords with constitutional values
(see s36 of the Constitution and s3 of the LRA). Having determined the proper interpretation of the section
the next question is whether the provision is in breach of any of the rights embodied in the Bill of Rights or
any other provision of the Constitution. I note that other than the reference in paragraph 25 of the
Carephone judgment to "a narrow and unconstitutional basis of review" it has never otherwise been
suggested that section 145 is unconstitutional and until that occurs and the section is declared
unconstitutional then as Nicholson JA pointed out in para. 40 of his judgment in Radebe it remains fully
operational. I note that Mpati J in Patcor Quarries CC v Issroff and another 1998 (4) SA 1069 (SECLD)
expressed the view that there is nothing unconstitutional in section 28 of the Arbitration Act. It would seem
to follow a fortiori that there is nothing constitutionally wrong with section 33 thereof and the position is
the same in respect of the corresponding provisions of the LRA.
Even if section 145 infringes some right conferred by the Constitution because it does not afford an
aggrieved party before a CCMA commissioner a full right of appeal against an arbitration award that is by
no means the end of any constitutional enquiry. (I should not be understood as saying that the absence of a
full right of appeal may constitute an infringement of any constitutionally protected right or that I share the
view that : "In a perfect society with unlimited resources full rights of appeal should be allowed from every
administrative decision". There seem to be overwhelming reasons of equity, proper administration, finality
and the like which suggest that many administrative decisions should be final and only subject to challenge
on fairly narrow review grounds. In my experience it is primarily lawyers many of whom stand to benefit
from it who are convinced for the need for appeals and they are viewed with the more jaundiced eye by
others in the community. The point is made in more amusing fashion in A.P. Herbert's "Why the House of
Lords?", Misleading Cases From the Common Law, p255. In any event this approach begs the question of
whether an arbitration under the auspices of the CCMA is an administrative decision).
The next stage of any constitutional enquiry is the question of whether any infringement of a
constitutionally protected right is justified in terms of the limitation clause in section 36 of the Constitution.
That as Nicholson JA points out requires an evaluation of whether the creation of the CCMA and the other
machinery of the Act in the light of its stated purpose, which is itself a constitutional purpose (see section 23
of the Constitution), is such as to justify any limitation of rights embodied in section 145. None of that was
considered by the court in Carephone and at the time Carephone was decided (28th August 1988) this court
had no jurisdiction to consider such matters as the amendment to section 157(2) brought about by section 14
of Act 127 of 1998 had not yet come into effect.
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My task and that of other judges sitting in the Labour Court would have been made simpler (and this
judgment a good deal shorter) had the court in Radebe simply overruled Carephone, but after expressing his
reservations concerning it Nicholson JA added that "It is not necessary for the purposes of this judgment to
decide the issue". Where does that leave the matter as far as other cases in this court are concerned which
raise that issue? As I have indicated I am reluctant to treat Carephone as obiter as hitherto it has not been
so treated by this court. Am I obliged to follow it?
In this regard I am confronted with a further difficulty. As I mentioned in paragraph 67 the court in
Carephone rejected the primary contention, which would have been decisive of the case, that an arbitration
before a CCMA arbitrator does not involve the performance of administrative functions but rather functions
of a judicial or quasi judicial nature and accordingly the constitutional provisions governing fair
administrative action are inapplicable thereto. The question which has now arisen is whether that
fundamental starting point is consistent with the jurisprudence of the Constitutional Court.
Shortly after the judgment in Carephone was delivered the Constitutional Court was called upon to consider
the meaning of the expression "administrative action" in section 24 of the Interim Constitution, which
expression was carried forward in the corresponding provisions of the final and present Constitution. That
consideration occurred in Fedsure, supra .
The Fedsure case dealt with the decisions of a local authority to approve a budget and fix rates and levies by
way of resolution and those decisions were challenged as administrative action not sanctioned by the
Constitution. Accordingly the Constitutional Court was obliged to consider what was administrative action
for the purposes of the Constitution. It did so in paragraphs 21 to 46 of the joint judgment of Chaskalson P,
Goldstone J and O'Regan J, which was endorsed by all the members of the court.
What is significant in the first instance is that the court considered the judgments in the Appellate Division
(as it was then called) in which that court moved away from and finally rejected for the purposes of
administrative law and the application of the principles of natural justice the English categories of
administrative, quasi judicial and judicial actions. ( Pretoria North Town Council v A One Electric Ice
Cream Factory (Pty) Limited 1953 (3) SA 1 (A) at 11AC; South African Roads Board v Johannesburg City
Council 1991 (4) SA 1 (A); Du Preez and another v Truth and Reconciliation Commission 1997 (3) SA 204
(A) at 231AB). It is pointed out in paragraph 25 of the judgment that in the development of our
administrative law as reflected in these cases:
"The distinction between legislative and administrative or quasi judicial acts of such authorities was then
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not always of importance. What was more important was the nature of the power being exercised and
whether it was of a character which required the public authority to adhere to the requirements of natural
justice."
It was on the basis that this distinction had ceased to be relevant that the Labour Appeal Court in Carephone
in paragraph 17 of its judgment rejected the argument that the work of a CCMA commissioner sitting as an
arbitrator is judicial and not administrative action. However, as the Constitutional Court pointed out in
Fedsure that was the position under the former constitutional dispensation. Under our present Constitution
the need for some such classification is dealt with as follows in paragraph 26 of the judgment namely that:
"Whilst it might not have served any useful purpose under the previous legal order to ask whether or not the
action of a public authority was "administrative", it is a question which must now be asked in order to give
effect to s24 of the Interim Constitution and s33 of the 1996 Constitution".
In other words the Constitutional Court accepted the need to distinguish between instances where the
actions of organs of state constitute administrative action and those where they do not in order to give effect
to the express language of the Constitution. This is precisely what it did in the Fedsure case in considering
that the actions of a local authority in fixing a rate, levying a contribution and determining to pay a subsidy
out of public funds were not administrative actions although undertaken by an organ of state in the exercise
of its statutory powers. It is also the approach it adopted in Pharmaceutical Manufacturers' Association of
South Africa ( association incorporated in terms of section 21) and another: In re the ex parte application
of The President of the Republic of South Africa and seven others CCT 31/99, unreported.
of The President of the Republic of South Africa and seven others CCT 31/99, unreported.
Whilst the judgment of the Constitutional Court in Fedsure does not necessarily resuscitate the old
distinctions in their entirety it makes two things clear. Firstly, not every action by an organ of state under
statutory powers constitutes administrative action for the purposes of the Constitution. Secondly, it is
necessary in every case to consider whether the particular action by the particular organ of state is of its
nature administrative action for constitutional purposes. The Labour Appeal Court did neither of these
things in Carephone and arrived at its decision that a CCMA commissioner conducting an arbitration is
subject to the administrative justice requirements of the Constitution on the simple basis that because the
CCMA is an organ of state not vested with any judicial functions in terms of the Constitution its actions are
administrative action for constitutional purposes. That approach is irreconcilable with the decision of the
Constitutional Court in Fedsure. As the Constitutional Court is the highest court in all constitutional
matters (s167(3)(a) of the Constitution) its judgment on a constitutional issue must be followed. In my view
therefore and with the utmost respect this part of the judgment in Carephone cannot any longer be treated as
good law. It is in manifest conflict with the proper approach to what constitutes administrative action as
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laid down by the Constitutional Court.
What then is the proper answer to the question raised in Carephone whether the conduct of an arbitrator and
the making of an arbitration award by a CCMA commissioner under the LRA is administrative action for
the purposes of the Constitution? I am mindful of the fact that a commissioner of the CCMA, even when
sitting as an arbitrator, cannot claim to be a court and cannot claim to be vested with any judicial authority
in terms of the Constitution, but then no arbitrator ever makes such a claim. The CCMA as a body and
commissioners as part of the body have much in common with the old Industrial Court which was
characterised as an administrative tribunal having wideranging powers of investigation. ( SA Technical
Officials' Association v President of Industrial Court 1985 (1) SA 597 (AD); Paper, Printing Wood and
Allied Workers' Union v Pienaar N.O. 1993 (4) SA 621 (AD) at 634DE). That is the general position but
here we are concerned with a commissioner functioning as an arbitral tribunal not one acting as an
investigator.
I think that it is unprofitable and probably constitutionally irrelevant to seek to categorise the activities of
the CCMA generally as being either administrative or not administrative and then to proceed from there.
The Constitution speaks of administrative action and the enquiry in my view is whether the particular action
under consideration is administrative action for constitutional purposes. That raises the possibility that
some actions by the CCMA are administrative and some not. That does not seem to me to matter. It is
perfectly clear from the Fedsure judgment that some actions by a local authority will be administrative
actions and others not.
On this basis the proper question is whether the conduct of an arbitration concerning an alleged unfair
dismissal by an arbitrator appointed in terms of the LRA by the CCMA is administrative action. I cannot
think that it is. Other than the element of compulsion in most, but not all cases, such an arbitration is no
different from any other arbitration. It is well known that it was seen at the time the Act was drafted as an
extension of the already thriving field of private arbitration developed largely under the auspices of the
Independent Mediation Service of South Africa (IMSSA) and in recognition agreements concluded between
trade unions and employers. The LRA did not do away with private arbitrations but sought to impose the
same system upon cases where no private agreement was in place. It was an alternative to a courtbased
system of adjudication of disputes
Arbitration has never so far as I am aware been regarded as a matter of administrative action. In Lawsa,
supra, para. 406 it is said that:
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"An arbitration is the reference of a dispute between parties for a final determination in a quasi judicial
manner, by a person or persons other than a court of competent jurisdiction."
Similarly in Halsbury (Fourth Ed. ReIssue) Vol. 2, para. 601 it is said that:
"Arbitration is the process by which a dispute or difference between two or more parties as to their mutual
legal rights and liabilities is referred to and determined judicially and with binding effect by the application
of law by one or more persons (the arbitral tribunal) instead of by a court of law. The decision of the
arbitral tribunal is usually called an award. The reference to arbitration may arise from the agreement of the
parties (private arbitration ) or from statute." (The reference to a statute is important as it shows that
arbitration does not change its character because it is compulsory.)
Other than the fact that the CCMA is an organ of state acting in terms of statutory authority and exercising
statutory powers, neither of which is decisive as the Constitutional Court has made clear, I can find no
reason to characterise the work of a commissioner of the CCMA presiding over an arbitration in terms of
section 136, 138, 139 or 141 of the LRA as being administrative action. In my view it clearly is not
administrative action. The fact that the commissioner is not performing judicial functions under the
Constitution and does not form part of the judicial arm of the State or come within the judicial process
(Carephone, para. 18) is neither here nor there. The question is whether the conduct of such an arbitration
is administrative action and the answer is that it is not.
My conclusion therefore is that the misgivings of Nicholson JA in Radebe were amply justified both on the
grounds he expressed and the broader grounds set out in this judgement and that the view in Carephone that
an arbitration award by a CCMA arbitrator can be reviewed on the grounds that it is not justifiable in terms
of the reasons given for it is incorrect. As I have endeavoured to indicate that view rests upon an approach
to the expression "administrative action" in the Constitution which has been rejected by the Constitutional
Court and cannot therefore be regarded as authoritative. Accordingly even if the decision in Carephone is
not obiter I am not obliged to follow it. That being so it seems to me that the only grounds of review
available to the Applicant in this case are those contained in section 145 of the LRA. I proceed to consider
the application on this basis.
The only ground for contending that this award falls to be reviewed and set aside in terms of section 145 of
the LRA is that the commissioner committed a gross irregularity in the conduct of the proceedings. The
claimed irregularity is said to lie broadly in a wholly incorrect approach by the commissioner to his task as a
result of which he did not apply his mind properly to the issues before him. Thus so the argument runs the
Applicant was deprived of a fair hearing.
In support of these propositions I was referred to the following passage from the judgment of Schreiner J in
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Goldfields Investment Limited and another v City Council of Johannesburg and another, supra, 560:
"It seems to me that gross irregularities fall broadly into two classes, those that take place openly, as part of
the conduct of the trial they might be called patent irregularities and those that take place inside the mind
of the judicial officer, which are only ascertainable from the reasons given by him and which might be
called latent..........Neither in the case of latent nor in the case of patent irregularities need there be any
intentional arbitrariness of conduct or any conscious denial of justice.........The crucial question is whether it
prevented a fair trial of the issue. If it did prevent a fair trial of the issues then it will amount to a gross
irregularity. In matters relating to the merits the magistrate may err by taking a wrong one of several
possible views or he may err by mistaking or misunderstanding the point in issue. In the latter case it may
be said that he is in a sense failing to address his mind to the true point to be decided and therefore failing to
afford the parties a fair trial. But that is not necessarily the case. Where the point relates only to the merits
of the case, it will be straining the language to describe it as a gross irregularity or a denial of a fair trial.
One would say that the magistrate has decided the case fairly but has gone wrong on the law. But if the
mistake leads to the court's not merely missing or misunderstanding a point of law on the merits, but to its
misconceiving the whole nature of the enquiry, or of its duties in connection therewith, then it is in
accordance with the ordinary use of the language to say that the losing party has not had a fair trial."
This passage which, as I have pointed out above, dealt with the first and narrowest grounds of review, was
quoted with approval by the Labour Appeal Court in Radebe, supra, para . 41.
quoted with approval by the Labour Appeal Court in Radebe, supra, para . 41.
The line which distinguishes erroneous but nonreviewable findings of fact or law from errors of the same
type which constitute gross irregularity is not easy to draw or, in many cases, to discern. That much
emerges from a consideration of the various decisions analysed in the judgment of Corbett CJ in Hira v
Booysen, supra, a case dealing with common law review. In Radebe's case the irregularity lay in the
commissioner's approach which was either that a clean disciplinary record and long service always
precluded dismissal as an appropriate sanction for misconduct or that the existence of some other lesser
sanction, for example suspension or demotion, excluded the appropriateness of dismissal. (The
commissioner's reasons did not make it clear which of these was the approach which he had adopted). This
approach was so deficient in law, logic and sound labour relations practice that it was said to be
"indefensible on any legitimate ground" (per Zondo AJP, para. 26). There was "a yawning chasm between
the sanction which the court would have imposed and that which the commissioner imposed" (per
Nicholson JA, para. 53). This constituted a gross irregularity.
I am unable to detect an error of similar proportions in this case. Fundamentally the commissioner's award
flowed from one error and one error only namely his finding that the undertilling by Ms Ziqubu arose from
a single moment of carelessness on her part when she was under pressure. That was a factual conclusion
arrived at on a weighing up of all the evidence and a consideration of the proper question raised by the case
namely, whether Ms Ziqubu was guilty of misconduct and if so the nature of that misconduct. I disagree
with the commissioner's conclusion. If the test were whether it is justifiable on all the material before the
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commissioner I would hold, in the light of the deficiencies in the commissioner's process of reasoning, that
it is not. That is not, however, the test which I believe I am obliged to apply.
In my view in the absence of an obviously erroneous approach by the commissioner to the questions which
he had to answer I could only set his award aside if I came to the conclusion that no reasonable
commissioner could in the proper exercise of his functions have made that award. To adopt the test
approved by Zondo AJP in Radebe it would be necessary for me to say that the unreasonableness of his
decision is of such a degree as to be indefensible on any legitimate ground. After anxious thought I do not
think that I can properly say that about this award. I am particularly mindful of the fact that the
commissioner had the benefit of observing Ms Ziqubu as a witness and clearly regarded her as a credible
witness. I doubt that assessment but lacking the advantages which he had I cannot say that such conclusion
is beyond the borders of reasonableness. The patent errors in some of the commissioner's reasoning such as
his rhetorical question about the theft of a trolley load of groceries or his reference to the absence of bar
codes and scanners are in my judgment merely supplementary to his central factual finding and intended to
support it. If they are stripped away that conclusion nonetheless remains undisturbed. Similarly on his
factual finding that this was a careless mistake even a proper regard to Ms Ziqubu's prior misconduct would
not I think have led to him sustaining the sanction of dismissal. Nor on that factual basis would I have done
so.
In the result the commissioner's errors did not amount to a gross irregularity in the conduct of the
proceedings. There are accordingly no grounds for me to interfere with his award in terms of section 145 of
the LRA.
The application is dismissed.
M.J.D. WALLIS ACTING JUDGE
DATE OF HEARING : 29 February 2000
5th April 2000
COUNSEL FOR APPLICANT: MS A ANNANDALE
ATTORNEYS FOR APPLICANT: DENEYS REITZ
FOR SECOND RESPONDENT: MR V MAZWI, an official of the THIRD RESPONDENT
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