Mda v CCMA and Another (J1500/99) [2000] ZALC 114 (10 October 2000)

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Brief Summary

Labour Law — Dismissal — Review of arbitration award — Applicant dismissed for unauthorized use of funds — Arbitration found dismissal substantively fair but procedurally unfair — Award limited compensation based on conciliation offer — Court finding arbitrator erred by referring to confidential conciliation discussions and misinterpreting Section 194(1) of the Labour Relations Act — Award reviewed and set aside, directing payment of gross remuneration for the period of dismissal.

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J1500/99 JUDGMENT
Sneller Verbatim/CT CASE NO. J1500/99
IN THE LABOUR COURT OF SOUTH AFRICA
BRAAMFONTEIN
2000­10­10
In the matter between:
A MDA Applicant
and
CCMA 1st Respondent
2nd Respondent
L­MAP 3rd Respondent
                                                             
J U D G M E N T   
                                                             
NGCAMU J :  
1. In this matter the applicant was employed by the third respondent up  
until the date of dismissal on 26 June 1998.   The charge that resulted  
in   the   dismissal   of   the   applicant   was   the   unauthorised   use   of   funds.  
The dispute was referred to the first respondent for conciliation.  The  
conciliation   proceedings   were   conducted   on   11   September   1998.     During  
the   conciliation   an   offer   was   made   by   the   third   respondent   to   make  
payment to the applicant of an amount equal to applicant's remuneration  
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from the date of dismissal to the date of the conciliation.   The offer  
was refused by the applicant and the dispute went to arbitration.  
2.   The   second   respondent   conducted   the   arbitration   proceedings   on   16  
February   1999.     The   award   was   handed   down   on   30   March   1999.     The  
arbitrator   found   that   the   dismissal   was   substantively   fair,   but   was  
procedurally   unfair.     The   arbitrator   made   an   award   that   applicant   be  
compensated   by   payment   of   the   nett   amount   payable   by   the   third  
respondent from the date of dismissal to the date of the conciliation.  
The arbitrator held that the applicant had caused a delay by refusing to  
accept the offer during the conciliation.  
3. The applicant now seeks to review and set aside the decision of the  
second respondent in that ­
(a) the arbitrator based his award on the information converred during the  
conciliation   process,   whereas   the   proceedings   at   the   conciliation  
process are confidential and any offer is made without prejudice;
 (b) the arbitrator misinterpreted and/or wrongly applied the provisions of  
Section 184(1) of the Labour Relations Act.  
4.   The   third   respondent   is   opposing   the   review   on   the   basis   that   the  
second respondent was correct in his award.  
The following questions arise as a result of this review.
(a) whether the reward is reviewable; and 
(b) whether   the   arbitrator   is   entitled   to,   in   making   a   reward   for  
compensation, to refer to the offer made during the conciliation;
(c) if the  proviso in Section 194(1) is applicable;
(d) whether compensation should be the nett or gross value of the earnings.

5. The questions set out above arise because it has been submitted that  
the grounds for the review raised by the applicant are a matter of law  
and therefore this court has no jurisdiction to review the award.  
6. In  Pep Stores (Pty) Ltd) vs Laka NO and Others  1998 9 BLLR 952 LC at  
960 MLAMBO J said the following:
"I want to suggest that in addition to procedural defects, Section 145  
gives   the   Labour   Court   the   power   to   enquire   whether   the   award   in  
question is appropriate within the meaning of Section 138(9).  The pre­
occupation   of   the   court   in   reviewing   awards   on   this   basis   would   be  
whether there has been a failure of justice.   In time the labour court  
will have to establish when has justice failed.   For purposes of this  
judgment   I   want   to   suggest   that   an   award   would   be   found   to   be  
inappropriate if it is shown that: (1) the commissioner ignored direct  
evidence placed before him, (2) the commissioner relied on evidence not  
placed   before   him,   (3)   the   commissioner   committed   a   serious   error   of  
law.     Where   it   is   shown   that   one   or   more   or   a   combination   of   these  
factors is present, this court will review an award of the commission."
7. I fully agree with the sentiments expressed by MLAMBO J.   The court  
cannot ignore serious omissions or commissions on the basis that those  
defects do  not relate  to misconduct  or gross  irregularity.    The court  
has a duty to see to it that justice has been done.
8.   The question is whether the second respondent's award stands to be  
reviewed.  The argument presented on behalf of the applicant is that the  
second   respondent   referred   to   confiden tial   discussions   during   the  
conciliation and made an error in the interpretation of Section 194(1).  
In my view the award can be reviewed if it results in the miscarriage of  
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justice. I therefore come to the conclusion that this court has juris ­
diction to review the third respondent's award.
9. It was submitted by Mr Malan on behalf of the third respondent that  
the present review is based on the interpre tation of Section 194(1).  I  
reject this submission for the reasons stated herein.
10. The next question to be answered is whether the third respondent is  
entitled to refer to the offer made during conciliation.  Mr Tucker for  
the   applicant   submitted   that   it   is   irregular   for   the   commissioner   to  
refer   to   the   conciliation   proceedings.     Mr   Malan   did   not   make   any  
submission regarding this point.  When the commissioner made the award,  
he   referred   to   the   offer   made   during   the   conciliations   and   that  
influenced   him   in   making   the   award   and   in   making   the   compensation   in  
terms of the provisions of Section 184(1).
  
11.   It   is   well   known   that   conciliation   proceedings   are   private   and  
confidential and conducted on a without prejudice basis and no party can  
refer   to   the   statements   made   during   the   concilia tion   and   subsequent  
proceedings.     For   this   reason   Section   135(4)   prescribes   who   should  
attend the  conciliation.    At the  conciliation the  parties do  not have  
the   benefit   of   legal   advice.     In   the   circumstances   I   hold   that   the  
commissioner committed irregularity when he referred to the offer made  
during   the   conciliation   for   purposes   of   reaching   settlement.     Section  
194(1) provides as follows:
"If   a   dismissal   is   unfair   only   because   the   employer   did   not   follow   a  
fair procedure, compensation must be equal to the remuneration that the  
employee would have been paid between the date of dismissal and the last  
day of the hearing of the arbitration or adjudication, as the

case may  be, calculated  at the  employer's rate  of remuneration  on the  
date of dismissal.  Compensation may, however, not be awarded in respect  
of any unreasonable period of delay that was caused by the employee in  
initiating or prosecuting a claim"
12. In the present case it was accepted that the dispute was referred in  
time and there was no delay on the part of the applicant.  In terms of  
Section 194(1) once the commissioner has decided to award compensation,  
he   has   to   follow   the   procedure   provided   for   in   this   section.     The  
employee is, however, not entitled to compensation for a certain period  
if there  was unreasonable  delay by  him in  initiating or  prosecuting a  
claim.   The delays that the commissioner referred to was caused by the  
applicant not accepting a reasonable offer made at the conciliation.  I  
have   stated   that   the   conciliation   proceedings   were   private   and  
confidential and no party can refer to such proceedings.   The date of  
arbitration is not fixed by the applicant, but by the first respondent,  
and   any   delay   in   the   arbitration   proceedings   in   this   case   cannot   be  
attributed   to   the   applicant.     However,   on   procedural   unfair ness,   the  
employer can only avoid paying compensation by reinstating the employee.  
The proviso in section 194(1) is accordingly not applicable.
13. The award has to be reviewed on this ground.   The commissioner, in  
deciding   to   award   limited   compensation,   misinterpreted   the   purpose   of  
the conciliation.  In so doing he made use of "without prejudice" offer.  
When the commissioner calculated the award, he limited the compensation  
to   the   nett   remuneration   for   the   period   between   16   June   1998   and   11  
September   1998.     Applicant   was   denied   compensation   for   the   period  
between 11 September 1998 to 16 February 1999.  He then came to a figure

between 11 September 1998 to 16 February 1999.  He then came to a figure  
of   R23   229,10.     The   word   remuneration   is   not   found   in   the   Act,   but  
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counsel   for   the   parties   correctly   accepted   that   it   refers   to   all   the  
benefits the employee receives.  
14.   It   is   not   clear   how   the   commissioner   arrived   at   the   figure   of  
R23  229,10   as   nett   income.     The   total   remuneration   of   the   applicant  
according   to   the   payslip   dated   May   1998   is   R18   128,46   made   up   as  
follows.  Basic salary: R11   085; housing allowance R334; travel less 40%  
tax R4   900,08; annuity R1   423,13; group life R86,26.  Gross pay amounts  
to   R18   128,46.     The   total   deductions   amounted   to   R9   291,64,   leaving   a  
nett salary of R8   832,52.  
15.   The   third   respondent   in   his   affidavit   stated   that   the   applicant  
earned a nett salary of R7   743,03 per month.   And if you multiply this  
figure by three months, you get R23   239,09.   This figure is less than  
the   nett   remuneration   as   contained   in   the   payslip   if   you   multiply  
R8  836,82 by three.  
16.   Whatever   the   position,   the   commissioner   is   not   entitled   to   award  
only the nett remuneration.   The monthly remuneration of the applicant  
at   the   time   of   the   dismissal   is   R18   128,46.     I   have   stated   that   the  
commissioner committed an irregularity which nullifies this award when  
he referred to the without prejudice discussion.  I  have said that the  
calculation of the compensation is based on the gross remuneration and  
not the nett.   The applicant is entitled to the full compensation. In  
terms of Section 194(1) of the Labour Relations Act.  
17. The order therefore is as follows:  The arbitration award is hereby  
reviewed and set aside.   The court determines the dispute in terms of  
Section   145(4)(a)   in   the   following   terms.     The   third   respondent   is

directed to pay the applicant gross remuneration for the period 26 June  
1998   to   16   February   1999   subject   to   the   tax   directives   by   the   South  
African   Receiver   of   Revenue   less   the   amount   already   paid   to   the  
applicant.  The third respondent to pay costs of this application.
­­­o0o­­­
APPEARING ON BEHALF OF APPLICANT :  Mr R J Tucker
APPEARING ON BEHALF OF RESPONDENT :  Mr G F Malan
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