IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT BRAAMFONTEIN CASE NO J6145/00
In the matter between:
SOUTH AFRICAN BROADCASTING CORPORATION Applicant
and
COMMISSION FOR CONCILIATION
MEDIATION AND ARBITRATION First Respondent
COMMISSIONER L D E NTOMBELA, NO Second Respondent
ANTHONY JOHN TAYLOR Third Respondent
JUDGMENT
FREUND A J:
INTRODUCTION
1 In this application the applicant seeks an order inter alia:
"1 Reviewing and setting aside the ruling made by the second
respondent on 20 November 2000 (Case No GA101/965) in terms
whereof the second respondent ruled that the third respondent
was an employee and employed by the applicant as defined in
the Act;
2 Reviewing and setting aside the certificate of outcome issued by
the second respondent on 12 December 2000;
3 Substituting the ruling made by the second respondent with an
order that the third respondent was not an employee as defined
in s213 of the Act and that the CCMA therefore lacks jurisdiction
to conciliate his alleged unfair dismissal dispute."
2 The circumstances in which this application has come before this
Court are the following. On or about 23 June 2000 the third
respondent referred a dispute to the first respondent ("the
CCMA") pertaining to his alleged unfair dismissal by the
applicant. The applicant objected to the CCMA's jurisdiction to
conciliate the dispute on the basis that the third respondent was
not an "employee" as defined in s213 of the Labour Relations Act,
66 of 1995 ("the Act"). The applicant then served and filed an
affidavit with the CCMA setting out the factual basis for its
contention that the third respondent was not an employee. The
third respondent filed an opposing affidavit in which he alleged
that he was indeed an employee of the applicant and in which he
set out the facts upon which he relied in this regard. He did,
however, also submit in his affidavit that, for a proper finding to
be made on the nature of the relationship between himself and
the applicant, oral evidence would be required. The applicant
filed a replying affidavit. On 2 October 2000 (i.e. more than three
months after the referral to the CCMA) the "point in limine "
relating to the third respondent's disputed status was set down
for argument before the second respondent ("the
Commissioner"). The Commissioner made a ruling, for which he
gave detailed reasons, that the third respondent was an
employee as defined in s213 of the Act. The applicant received
this ruling on 20 November 2000. A conciliation meeting was
scheduled for 12 December 2000. It appears that this meeting
did not take place. In any event, the Commissioner on 12
December 2000 issued a "certificate of outcome" certifying that
the dispute had been referred for conciliation and remained
unresolved. The aforementioned ruling and certificate gave rise
to the present application. No arbitration hearing in respect of
the dispute has yet been held.
3 The application is not opposed by the first or second respondents
but is opposed by the third respondent.
The parties' contentions
4 Mr Halgryn, who appeared on behalf of the third respondent,
submitted that conciliators (as opposed to arbitrators) of the
CCMA should not enquire into and determine whether the party
referring the dispute is in truth an employee. He submitted that
a mere allegation by the party concerned that he or she is an
employee is sufficient to confer jurisdiction to conciliate. In the
alternative, he submitted that a finding by the conciliating
commissioner as to whether an employment relationship exists
can in law not bind the commissioner appointed to arbitrate the
dispute. He submitted that if the conciliating commissioner rules
that an employer/employee relationship exists, nothing precludes
the party found to be the employer from revisiting its
jurisdictional objection at the arbitration stage. He submitted
that, for this reason, it was premature and inappropriate for the
court to entertain the review application and that this was a
sufficient basis to dismiss the present application. In the further
alternative he submitted that the evidence showed that the third
respondent had been an "employee" of the applicant.
5 Mr Maserumule, who appeared on behalf of the applicant,
responded that, in terms of s191 of the Act, the CCMA only has
jurisdiction to conciliate a dismissal dispute if a "dismissed
employee" refers the dispute. The existence of an employment
relationship is thus a jurisdictional pre-requisite for conciliation.
A commissioner appointed to conciliate a dispute must, he
submitted, consider whether he or she has the necessary
jurisdiction and this requires him or her to determine - if this is
challenged - whether the person who referred the dispute to the
CCMA was an "employee" of the alleged employer. He pointed
out that in Tier Hoek v CCMA [1999] 1 BLLR 63 (LC) Landman J
held that it was incumbent upon the commissioner who was to
conciliate the dispute to decide whether or not the dispute
concerned an employer and employee. He further pointed out
that in Fidelity Guards Holdings (Pty) Ltd v Epstein NO and Others
[2000] 12 BLLR 1389 (LAC) at 1394-1395, the Labour Appeal
Court stated the following:
"(16) Where a dismissal dispute has been referred to the CCMA or a
council for conciliation, there are a few matters which can
possibly give rise to a jurisdictional objection by, for example, the
"employer". The one is that it can be disputed that there was an
employer-employee relationship between the parties. Another
one could be ...
(17) If the employer is aware of any one of the above possible
grounds of objection, he would have to consider what he must do
about them. He would have to consider whether he should
immediately rush off to a court of competent jurisdiction to seek
an order to the effect that the CCMA or the council has no
jurisdiction to conciliate the dispute or whether he should first
raise the objection before the commissioner appointed to
conciliate and go to court only if the ruling is against him or
whether he should raise the objection before the conciliating
commissioner and even if the ruling is against him, proceed to
participate in the conciliation process because, if the matter is
resolved at conciliation, the ruling against him will become
academic and in that way he will avoid the legal costs which
would be involved in approaching a court.
(18) If the dispute is not resolved at conciliation stage, he would have
to consider whether he should then rush off to a court of
competent jurisdiction at that stage to obtain an appropriate
competent jurisdiction at that stage to obtain an appropriate
order on whether or not the CCMA or the council has jurisdiction
to proceed to arbitrate the dispute. He would consider whether
he should wait and see if the employer takes the dispute to
arbitration or to the Labour Court after conciliation has failed
before he can take the costly route of approaching a court for a
ruling on jurisdiction. He may legitimately think that he should
reserve his rights and participate in the arbitration proceedings
on the basis that, if the arbitrator finds in his favour on the merits
which is likely to be a cheaper route in some cases, if not most,
he will avoid legal costs but if he rushes off to court before the
arbitration is completed, he may waste money on court
proceedings in a case where he may be likely to end up with an
award in his favour anyway.
(19) If the employer approached the court after the referral but before
even the conciliation could start and sought a ruling that the
council or the CCMA did not have jurisdiction on one or more of
the grounds of objection I referred to earlier, he might be
unsuccessful and might have to come back to participate in the
conciliation process anyway. Then, maybe, he might have to
approach the court again after the conclusion of the arbitration
proceedings if the award is against him if he believes that the
arbitrating commissioner has committed one or other reviewable
irregularities entitling him to have the award set aside. That
would be a second trip to the court. If, however, he raised
whatever objections he has before the CCMA or the council but
participated in the process up to the end of the arbitration
proceedings before rushing off to court, this may be cost
effective, more convenient and may avoid a duplication or
multiplication of court proceedings. It would also not overburden
the court.
(20) I think from the above it should be clear that whether or not a
party should approach the court about jurisdictional objections
before or after the completion of the processes before the CCMA
or the council is not a simple question. I doubt that a hard and
or the council is not a simple question. I doubt that a hard and
fast rule can be made about it. Considerations which this issue
raises are not altogether dissimilar to some of the considerations
which our courts have to deal with from time to time in different
contexts (see Nugent J in Liberty Life Association of Africa Ltd v
Niselow (1996) 17 ILJ 673 (LAC) at 676G-680J; Nicholson J in
Gordon Verhoef & Krause & Another v Azanean Workers' Union &
Others (1997) 18 ILJ 707 (LAC) and Galgut J in connection with
the in medias res rule in Zondi & Others v President Industrial
Court & Others (1991) 12 ILJ 1295 (LAC) esp at 1300C-1303A.)"
6 Mr Maserumule submitted that in the above passage the Labour
Appeal Court made clear that there was no merit in the third
respondent's point in limine that the present application is
premature. The Labour Appeal Court, he submitted, had
effectively held in this passage that it is open to an "employer"
whose objection to the jurisdiction of the CCMA to conciliate a
matter has been dismissed by a conciliating commissioner is
entitled forthwith to approach this court on review. As to the
merits of the application, Mr Maserumule argued that the
evidence which I shall refer to below showed that the third
respondent had never been an "employee" of the applicant.
Should a conciliating commissioner enquire into whether
the referring party was an "employee" of the other party?
7 I have considerable sympathy with the argument that it is not
necessary for a commissioner appointed to conciliate a dismissal
dispute to enquire into and make a finding upon the question as
to whether the referring party was indeed an employee of the
other party. To my mind the scheme provided for in s191 of the
Labour Relations Act, No 66 of 1995 ("the LRA") is for conciliation
to take place speedily and with a minimum of legal formality, to
be followed in due course, where necessary, by an arbitration at
which substantial points in dispute, including jurisdictional points,
can be determined. Section 191(1) provides that, if there is a
dispute about the fairness of a dismissal, the dismissed employee
may refer the dispute in writing within thirty days of the dismissal
to the appropriate bargaining council or to the CCMA. Section
191(4) provides that the bargaining council or the CCMA must
attempt to resolve the dispute through conciliation. Section
191(5) then provides (in the relevant part):
"If a council or a commissioner has certified that the dispute
remains unresolved, or if thirty days have expired since the
council or the commission received the referral and the dispute
remains unresolved -
(a) the council or the commission must arbitrate the dispute at the
request of the employee ...". (My emphasis.)
8 The fact that s191(5) requires arbitration of the dispute even if
the commissioner has not certified that the dispute remains
unresolved and, by necessary implication, even if no conciliation
has even been convened is, in my view, a strong pointer that the
legislature could not have intended that complex jurisdictional
disputes turning on disputed questions of fact and/or law should
be entertained by conciliating commissioners.
9 It is also significant, in my view, that s136(4) does not permit
legal representation in conciliation proceedings. By contrast,
s140(1) provides for legal representation to be permitted where
the complexity of a dispute regarding a dismissal relating to the
employee's conduct or capacity requires this. This is indicative of
an intention on the part of the legislature that complex questions
of law and fact should be resolved at the arbitration stage and
not at the conciliation stage. (I accept that in the present case
legal representation was in fact permitted by the second
respondent when determining the jurisdictional issue, but the
fact remains that no provision in the Act specifically caters for
this.)
10 Furthermore, the scheme of s191 of the LRA is clearly intended to
facilitate speedy arbitration of disputes brought by persons
claiming to be the victims of unfair dismissals. If conciliating
commissioners are required to resolve difficult questions of fact
and law, and if it is open to aggrieved parties to bring such
decisions on review prior to the commencement of arbitrations
sought by the affected complainants, it is obvious that the policy
underlying the LRA in favour of speedy arbitration will be
frustrated.
11 In this regard I concur with the views expressed by Pillemer AJ in
BHT Water Treatment v CCMA and Others [2002] 2 BLLR 173
(LC). Although the facts in that case are distinguishable from the
facts in the present case, the following comment by the learned
Judge (at paragraph 17) appears to me to be in point:
"The notion that a CCMA commissioner appointed to conciliate a
dispute must decide the merits of the dispute before he has
jurisdiction to conciliate conflicts with the scheme of dispute
resolutions set out in section 191. What is so strange is that this
type of jurisdictional challenge is not just a bizarre aberration in
the present case, it seems to be fast on the way to becoming a
practice. This was the third similar review that came before me
during the course of a week in which I sat in Cape Town. In my
view improper challenges like this frustrate the functioning of the
dispute resolution process contemplated by the Act and must
stop."
See also SA Commercial Catering & Allied Workers Union v
Speciality Stores Ltd (1998) 19 ILJ 557 (LAC) at paragraphs 32-34
12 However, I believe that I am bound to find that a commissioner
appointed to conciliate a dispute is at least entitled (if not
obliged) to investigate whether the party claiming to be a
dismissed employee was in fact an employee of the other party.
13 In Richards Bay Iron and Titanium (Pty) Ltd t/a Richards Bay
Minerals & Another v Jones & Another (1998) 19 ILJ 627 (LC) a
party which had been cited as the alleged employer in a referral
to the CCMA approached this Court, while conciliation was
pending, for an order declaring that it was not the employer and
that the referral of the dispute to the CCMA was irregular.
Brassey AJ rejected a submission on behalf of the applicant that
the CCMA had no power to rule upon the question as to whether
the requisite employer/employee relationship existed. He found
that in the case before him the existence or otherwise of the
requisite employer/employee relationship turned on complex
questions. At 632E the learned Judge continued:
"These complex questions are best resolved by the hearing of
oral evidence and that evidence, in my view, is best heard by the
CCMA. That body was established to provide a speedy and
inexpensive solution to a variety of cases, including cases such
as this in which employees complain of unfair dismissal. It fulfils
the intention of the lawgiver better to leave these matters within
its province than to allow them to be transferred to this Court,
whose processes are most elaborate, expensive and time
consuming. Nothing before me suggests that this is one of those
"rare cases in which grave injustice might otherwise result or
where justice might not by other means be obtained" if the
matter is left to be decided by the CCMA. On the contrary:
justice will be served, not compromised, by leaving the decision
in the hands of a body in which access is ready and the
determination both swift and cheap is obtainable."
Brassey AJ ruled that the application before him was premature
and accordingly dismissed it.
14 In Tier Hoek v CCMA supra Landman J stated as follows:
"(8) When a commissioner embarks upon the process of conciliation it
is incumbent on the commissioner , as has been found in various
decisions of this court, to satisfy himself or herself that he or she
has the necessary jurisdiction with regard, inter alia , to the area
of jurisdiction, the persons concerned, the period of time involved
and the res or matter in dispute.
(9) In this particular case it was incumbent upon the commissioner
who was to conciliate the dispute to decide whether or not the
dispute concerned an employer and employee . The
commissioner, in my opinion, properly had regard to the
representations made by Mr Claassens and to the written
representations filed on behalf of Tier Hoek and came to the
conclusion that Tier Hoek, represented by Mr Van Dyk, was the
employer of Claassens. There is nothing in the affidavit which
has been filed which makes me come to the conclusion that that
ruling was defective as envisaged in section 145 of the Act. It
was certainly within the competence of the commissioner to
make that ruling and having made that ruling, it cleared the way
for the arbitration proceedings to take place." (My emphasis.)
15 Several features in relation to the Tier Hoek decision must be
noted. First, it is not entirely clear whether the learned Judge
concluded that it was essential, or merely permissible, for the
conciliating commissioner to satisfy himself or herself as to the
existence of an employer/employee relationship. The statement
in the last sentence of paragraph 9 that it "was certainly within
the competence of the commissioner to make that ruling" may
imply that this is all that the learned Judge was seeking to make
clear. Secondly, in Tier Hoek the Court noted that, after the
conciliating commissioner had ruled that there was an employer/
employee relationship and that the CCMA therefore had
jurisdiction, the arbitrating commissioner had once again
satisfied herself that she had the necessary jurisdiction. It
appears, although this is not clear, that the arbitrating
commissioner once again considered the question as to the
existence of the employer/employee relationship. The learned
Judge did not comment negatively on the right of the arbitrating
commissioner to re-enquire into this question.
16 Although Benicon Earthworks & Mining Services (Eiendoms) Bpk
v Jacobs NO and Others (1994) 15 ILJ 801 (LAC) is a case
pertaining to the Labour Relations Act, No 28 of 1956, and not to
the present Labour Relations Act, No 66 of 1995, the following
comments by Nugent J (as he then was) in that case (at
803H-804H) are, in my view, in point:
"There are cases which suggest that the Industrial Court is
required to satisfy itself that the necessary jurisdictional facts
exist before exercising its powers which are dependent thereon
(see for example Kloof Gold Mining Co Ltd v National Union of
Mineworkers & Others (1986) 7 ILJ 655 (T) at 673E-F; Tornado
Transport (Pty) Ltd at 130C-D), which might suggest that in a
case like the present the Industrial Court is called upon to
enquire into the validity of the establishment of the conciliation
board, and satisfy itself that it was validly established, before
dealing with the application before it.
If there is such a requirement, it arises only from practical
considerations. The validity of the proceedings before the
Industrial Court is not dependent upon any finding which that
court may make with regard to the jurisdictional facts, but rather
upon their objective existence. Accordingly any conclusion to
which the court may come on this issue has no legal significance.
As pointed out by Leon J in Pinetown Town Council at 179B-D:
"Where the jurisdiction of a tribunal is dependent on the
existence of a particular state of affairs, it cannot give itself
jurisdiction by incorrectly finding that the conditions for the
exercise of jurisdiction are satisfied ... [A] determination on the
jurisdictional facts is always reviewable by the courts because in
principle it is no part of the exercise of the jurisdiction but
logically prior to it."
Equally the tribunal cannot deprive itself of jurisdiction by an
incorrect finding that the jurisdictional facts do not exist.
In practice, however, a court would be shortsighted if it made no
such enquiry before embarking upon its task. Just as it would be
foolhardy to embark upon proceedings which are bound to be
fruitless, so too would it be fainthearted to abort the proceedings
because of a jurisdictional challenge which is clearly without
merit. Between these extremes, will be cases in which the court
is called upon to exercise its judgment as to whether to proceed
(at the risk to the parties that the proceedings may prove to be
invalid), or to decline to do so until an authoritative ruling has
been obtained from a competent court. The court's position in
this regard is no different to that of an arbitrator whose
jurisdiction is placed in issue (see Mustill & Boyd Commercial
Arbitration (2 ed) at 574-5).
The powers of the Industrial Court do not extend to ruling upon
its own jurisdiction. At best, it can make an assessment of
whether a court reviewing its proceedings is likely to set them
aside. Where the existence or otherwise of the jurisdictional fact
is readily ascertainable, this prediction can usually be made with
some confidence. However where the jurisdictional fact is
dependent upon the validity of the exercise of statutory powers,
any enquiry would most often be futile. The enquiry may raise
difficult issues, and in any event, as I have already indicated, any
difficult issues, and in any event, as I have already indicated, any
conclusion to which the Industrial Court may come will in any
event not be decisive.
In terms of the Act, this court is entitled to review proceedings of
the Industrial Court for want of jurisdiction. In order to succeed,
it is for the applicant to show objectively that the jurisdictional
facts necessary for the exercise of its powers are absent." (My
emphasis.)
17 I respectfully concur with the views set out in the above passage
and I believe that they apply equally to jurisdictional rulings
made by CCMA commissioners in terms of the present Act. (See
Flexware (Pty) Ltd v Commission for Conciliation, Mediation and
Arbitration & Others (1998) 19 ILJ 1149 (LC) at 1153H-1155A.)
The obligation on the part of a CCMA commissioner or arbitrator
to enquire into his or her jurisdiction, if it exists, arises only from
the practical considerations referred to in the above passage.
Application premature?
18 The next question to be considered is whether it is open to this
Court, if it considers this to be appropriate, to dismiss the present
application on the basis that it has been brought prematurely.
19 Benicon Earthworks supra makes it clear, in my view, that a
finding by a conciliating commissioner cannot bind a
commissioner subsequently appointed to arbitrate the same
dispute on the question as to whether the requisite
employer/employee relationship exists. The conciliating
commissioner's finding on this issue constitutes nothing more
than his or her opinion and binds no-one, including the arbitrating
commissioner. I respectfully concur with the views expressed by
Oosthuizen AJ in Etschmaier v Commission for Conciliation,
Mediation and Arbitration & Others (1999) 20 ILJ 144 (LC) at
paragraphs 40-44; see also my comments above regarding Tier
Hoek; and see Von Baxtrom & Others v Independent Electoral
Commission (2000) 21 ILJ 434 (CCMA), where the arbitrating
commissioner redetermined the question as to the existence of
an employment relationship, notwithstanding an earlier ruling on
this question by the conciliating commissioner.
20 In my view the fact that it is open to the arbitrating commissioner
to reconsider the same question has significant implications. In
particular, the facts disclosed to the arbitrating commissioner
may well go beyond, or cast a different light on, those disclosed
to the conciliating commissioner. Such facts may justify a
different conclusion on a jurisdictional question, such as the
existence or otherwise of the requisite employer/employee
relationship, than the conclusion properly reached on the
evidence before the conciliating commissioner.
21 In my view this consideration points against the advisability of
this Court giving a final ruling on a jurisdictional question where
the facts are not entirely clear and where the possibility exists
that the facts which may emerge during the course of the
arbitration may justify a different conclusion than a conclusion
based purely on the facts disclosed during the conciliation
proceedings. A ruling by this Court that the complainant was an
employee of the other party to the dispute and that the CCMA
therefore has jurisdiction may well bind the parties and the
CCMA. It would clearly be undesirable for such a ruling to be
given in circumstances where the possibility exists that a
subsequent hearing may disclose that the facts as understood by
the Court are incorrect or incomplete. It is therefore my view
that, in an appropriate case, it is open to this Court to decline to
make a ruling on a jurisdictional issue where it is possible that a
later hearing before the CCMA may disclose facts not before this
Court. On the other hand, if it is clear on the common cause
facts that the CCMA could not have jurisdiction, I can see no
reason why this Court should not declare this to be the case even
before the arbitration has been held.
22 In my view several previous decisions by this Court point towards
the advisability of allowing the CCMA to ventilate all the relevant
factual disputes before entertaining a review going to the
question of the CCMA's jurisdiction. As referred to above, in the
Richards Bay Minerals case supra this Court dismissed the
application on the basis that it had been prematurely brought.
Although the conciliating commissioner in that case had not - as
in the present case - made a ruling before the matter came
before the Court on whether the requisite employer/employee
relationship existed, the reasoning of the Court in dismissing the
application appears to me nevertheless to be apposite in the
present case. As appears from the passage from that judgment
quoted in paragraph 13 above, the Court stressed that the
factual questions should be resolved by the CCMA hearing the
relevant oral evidence.
23 Avroy Shlain Cosmetics (Pty) Ltd v Kok & Another (1998) 19 ILJ
336 (LC) was another case in which a party alleged to be an
employer approached this Court for an order declaring that it was
not in fact the employer of the other party. By the time that the
application was brought, a conciliation meeting had been held by
the CCMA, notwithstanding an argument by the alleged employer
that the other party had not been its employee, and an
arbitration was pending. Material disputes of fact arose from the
affidavits before this Court and the question to be determined
was whether this Court should refer those disputes for the
hearing of oral evidence. Jali AJ declined to do so and dismissed
the application. He made clear that in his view the CCMA
arbitrator should be given an opportunity to consider whether the
requisite employee/employer relationship existed. I respectfully
concur with the following sentiments expressed by the learned
Judge (at 349E-350A):
"Furthermore, if considerations of convenience are to be taken
into account, the Act is clear that its purpose is 'to promote the
effective resolution of labour disputes' (s1(d)(iv)) and also to
promote simple procedures for the resolution of labour disputes
through conciliation, mediation and arbitration. Accordingly, in
this regard the CCMA was established. This was meant to be an
affordable process in terms of which individuals could resolve
their disputes without being involved in lengthy and costly legal
procedures. In my view convenience also calls for the matter to
be resolved through the forum which has been set by the Act
which will be affordable to all the parties concerned.
A higher court may have to exercise its discretion in deciding
whether a matter which is before a lower court could be referred
to it either for an appeal or review or any other relief. In
exercising the aforesaid discretion, there are a number of
considerations which are usually exercised to avoid illegalities in
inferior courts. However, these discretionary powers are
sparingly exercised by the superior court unless there are
circumstances which might lead to a grave injustice, then the
superior court tends to intervene. See Richards Bay Iron &
Titanium Ltd t/a Richards Bay Minerals & Another v Jones &
Another per Brassey AJ together with the cases referred to
therein.
The first respondent has argued that it has been brought to this
court and has been subjected to an expensive process when
there was a free process which was convenient and cost effective
for the first respondent. In the circumstances, I am inclined to
take the abovementioned concerns into consideration in
exercising my discretion in considering whether to retain this
exercising my discretion in considering whether to retain this
matter within the confines of the Labour Court for adjudication."
I should mention that, as regards the case before me, Mr Halgryn,
for the applicant, made very similar points to those made by the
learned Judge in the above passage. In particular, he stressed
the affordability of CCMA proceedings and the third respondent's
desire that an oral hearing before the CCMA should enquire into
all the relevant facts.
24 I do not agree with Mr Maserumule's submission that the decision
by the Labour Appeal Court in the Fidelity Guards matter makes
it clear that it is not open to this Court to uphold the respondents'
point in limine that the present application is premature. In my
view the facts of the present case are distinguishable from those
in the Fidelity Guards case and the legal issue with which I am
dealing at present was not before the Labour Appeal Court in the
Fidelity Guards case.
25 The factual background to the Fidelity Guards case appears from
the decision of Pillemer AJ in the Court a quo (reported as Fidelity
Guards Holdings (Pty) Ltd v Epstein and Others [2000] 3 BLLR
271 (LC)). Pillemer AJ made clear that that case was an instance
of what he called a "pernicious practice" that appeared to be
developing where:
"... an employer whose employee has lodged a claim with the
Commission out of the thirty-day period (often, as in the present
case, the employee believing that the date of dismissal is the
date the appeal is refused), elects not to raise any complaint ,
anticipating that at the conciliation hearing no question of
condonation will arise. The employer fails to conciliate on the
merits of the dispute, allows a certificate that the dispute
remains unresolved to be issued without demur and engages in
the arbitration that follows again without raising any question
about the time when the dispute was referred . Then, if
unsuccessful in the arbitration, the employer approaches the
Labour Court relying upon the trump card presented to him by
the Checkers case, contending that the arbitrator had no
jurisdiction in the first place." (My emphasis.)
26 PillemerAJ stated:
1
"Obviously this practice, which is unconscionable and borders on
fraud, frustrates the purpose of the Act."
27 Pillemer AJ dissented from earlier cases in which it has been held
that the arbitrator's jurisdiction is dependent upon a timeous
referral and held that the relevant jurisdictional fact, as far as the
arbitrator was concerned, was the s135(5) certificate. He stated
(at paragraphs 9 - 12):
"(9) As I read the section the Commissioner is enjoined by the Act to
arbitrate the dispute at the request of the employee if a
commissioner certified that the dispute remains unresolved. It is
that certification which constitutes the necessary jurisdictional
fact. It confers jurisdiction. The Commissioner who issued the
certificate performs an administrative act which has important
consequences. Once he or she has so acted, then, to my mind,
unless the administrative act is reviewed and the certificate set
aside, the Commissioner is obliged to proceed with the
arbitration. The section could not make this clearer. It uses the
imperative form "must" to describe the duty to arbitrate the
dispute.
...
(11) The certificate has a whole range of consequences under various
sections of the Act. If its validity is to be challenged that
challenge must itself be timeous i.e. within a reasonable time,
which, given the nature of the process and the consequences of
the issue of the certificate of non-resolution, will inevitably be a
short period and take place before further steps occur relying
upon its issue. This is particularly so if the further steps take
place with full participation and without objection.
(12) If the administrative act of certification is invalid, even then it
must be challenged timeously because, if not, public policy as
expressed in the maxim omnia praesumuntur rite esse acta ,
requires that after a reasonable time has passed for it to be
challenged, it should be given all the effects in law of a valid
decision (cf O'Reilly v Mackman [1983] 2 AC 237, 238 and
Harnmaker v Minister of Interior 1965 (1) SA 372 (C) at 381)."
28 Pillemer AJ therefore ruled that the Commissioner had jurisdiction
to arbitrate the dispute and dismissed the review application.
29 I pause to point out that the case before Pillemer AJ had nothing
to do with whether the jurisdictional requirement of the requisite
employer/employee relationship existed. The jurisdictional
question arose from the lateness of the referral of a dismissal
dispute to the CCMA. I also wish to point out that it is implicit in
Pillemer AJ's judgment that the power to condone such a late
referral vests in the conciliating commissioner and not in the
arbitrating commissioner. In my view, this is distinguishable from
the situation where the existence of an employer/employee
relationship is disputed at the arbitration stage. As I have stated
above, in my view nothing precludes the arbitrating
commissioner from considering such a contention on its merits.
30 Pillemer AJ's judgment was upheld on appeal in the judgment
quoted in paragraph 5 above. At paragraph 12 of the judgment
of the Labour Appeal Court, Zondo JP held as follows:
"In my view the language employed by the legislature in s191 is
such that, where a dispute about the fairness of a dismissal has
been referred to the CCMA or a council for conciliation, and the
council or commissioner has issued a certificate in terms of
s191(5) stating that such dispute remains unresolved or where a
period of 30 days has lapsed since the council or the CCMA
received the referral for conciliation and the dispute remains
unresolved, the council or the CCMA, as the case may be, has
jurisdiction to arbitrate the dispute. That the dispute may have
been referred to the CCMA or council for conciliation outside the
statutory period of 30 days and no application for condonation
was made or one was made but no decision on it was made does
not affect the jurisdiction to arbitrate as long as the certificate of
outcome has not been set aside. It is the setting aside of the
certificate of outcome that would render the CCMA or the council
to be without jurisdiction to arbitrate." (My emphasis.)
31 It was against the background of the above finding that Zondo JP
made the comments in paragraphs 16 - 20 of his judgment
quoted in paragraph 5 above and which were relied upon by Mr
Maserumule in argument.
32 It should be noted that in the Fidelity Guards matter the
fundamental question was whether it was open to an employer
who had not objected to a late referral of a dismissal dispute to
the CCMA at the conciliation stage to rely on such late referral as
a basis for challenging the jurisdiction of the arbitrator. Both the
Court a quo and the Labour Appeal Court held that it was not. In
essence this was because a timeous referral to the CCMA was not
one of the jurisdictional facts necessary in order for the
arbitrator, as opposed to the conciliator, to have jurisdiction. The
only relevant jurisdictional fact insofar as the arbitrator was
concerned, was the existence of the s135(5) certificate. The
Court a quo and the Labour Appeal Court both made clear that,
unless and until the s135(5) certificate was set aside on review,
the arbitrator had jurisdiction. Apart from the fact that I am
bound by the Labour Appeal Court's decision in this regard, I
respectfully concur with the above views.
33 However, in my view, the above considerations have no bearing
on the question as to whether an arbitrator is entitled to enquire
into the existence or otherwise of a wholly different jurisdictional
fact, namely whether the requisite employer/employee
relationship existed, if the conciliating commissioner has issued a
certificate in terms of s135(5). For the reasons that I have set
out above, I believe that the arbitrator does have this power and I
do not believe that anything stated by the Labour Appeal Court in
the Fidelity Guards matter requires me to reach a different
conclusion.
34 I would also point out that, although in the Fidelity Guards matter
the Labour Appeal Court posed various questions pertaining to
the appropriate time for an employer to bring a review
application pertaining to jurisdictional questions, it refrained from
answering these questions in any situation other than the
situation which had arisen in that case. As I have made clear
above, the jurisdictional issue in that case pertained to the
question of a late referral of the dispute to the CCMA. I think that
it is significant that, at paragraph 20 of his judgment, Zondo JP
specifically stated that he doubted that hard and fast rule could
be made about whether or not a party should approach the court
about jurisdictional questions before or after the completion of
the processes before the CCMA.
35 My conclusion is, therefore, that where a party brings a review
application before this Court after the conciliation phase and
before the arbitration phase, it is open to this Court, in
appropriate circumstances, to dismiss the application on the
basis that it has been prematurely brought. Whether a review
application should be dismissed on such a basis depends inter
alia on whether there is any realistic possibility that the facts
which may be disclosed during the arbitration phase may affect
the outcome of the review.
The merits
36 It is against this background that I turn to consider whether the
applicant has established that, on the common cause facts, the
third respondent was not its employee.
37 In the founding affidavit before this Court the applicant has
annexed the affidavits that were placed before the
Commissioner. The founding affidavit then refers to various facts
in the affidavits and annexures that were before the
Commissioner which it alleges were common cause or could not
be disputed by the third respondent. Mr Maserumule, who
appeared in this application on behalf of the applicant, submitted
that on these facts it was apparent that the third respondent was
not an employee of the applicant.
38 In his answering affidavit the third respondent did not deal
pertinently with the facts pertaining to his status as an employee
but he did state the following:
"I also deny all the allegations made in the applicant's founding
affidavit insofar as same may be inconsistent with what I have
stated in the affidavits filed in the conciliation."
39 Having regard to the contents of the third respondent's affidavit
filed at the conciliation stage, the above statement in the third
respondent's answering affidavit has, in my view, given rise to
material disputes of fact in the present application. Mr
Maserumule informed the court that the applicant had elected
not to apply to refer the dispute to oral evidence but this, of
course, does not necessarily bind this Court.
40 I also think it relevant to record that, in his affidavit before the
CCMA, the third respondent, after dealing in some detail with why
he contended that he was an employee, stated the following:
"I am advised that for conciliation purposes it is not necessary to
file this affidavit. Nevertheless, it is done in response to the point
in limine and issues raised in the affidavit of Mr Mannie Alho. I
submit with respect that for a proper finding to be able to be
made on the nature of the relationship between the respondent
and myself, oral evidence will need to be led subject to cross-
examination. In that regard, I intend to subpoena certain
members of the respondent's corporation in order that a proper
investigation and arbitration ruling may be made ..."
41 I was informed from the Bar that this was not pursued when the
matter came before the Commissioner.
42 The facts which the applicant alleged in its founding affidavit
were common cause or could not be disputed by the third
respondent were the following:
1 "15.1 the third respondent is a chartered accountant and had not
previously been employed by the applicant;
15.2 the third respondent had been seconded to the applicant by
KPMG Chartered Accountants, ("KPMG"), the applicant's external
auditors, from at least January 1999 until August 1999;
15.3 From January to August 1999, KPMG invoiced the applicant for
services rendered by the third respondent to the applicant on a
monthly basis. The applicant paid KPMG a fixed amount of
R 42 000, to which VAT of R 5 800.00 was added, bringing the
total to R 47 800.00 per month;
15.4 From February to August 1999, the applicant:
15.4.1 was not aware of the nature of the relationship between the third
respondent and KPMG, whether as a consultant or employee of
KPMG;
15.4.2 did not conclude any contract of employment with the third
respondent;
15.4.3 did not pay the third respondent any salary or benefits for his
services; and
15.4.4 never received a complaint from the third respondent regarding
the non-payment of salary to him or the non-provision of
employment benefits.
15.5 From September 1999, KPMG stopped invoicing the
applicant for services rendered by the third respondent. Instead,
third respondent invoiced the applicant for his services through
Elsa Taylor & Associates CC, a close corporation of which his wife,
also a chartered accountant, was the sole member;
15.6 the close corporation charged the applicant a fee for
"professional services rendered", for the same amount as KPMG
had previously done, inclusive of VAT. The applicant paid the
close corporation on the basis of each invoice;
15.7 until the termination of his contract in April 2000, the
applicant did not pay a salary to the third respondent nor did it
provide him with any employment benefits such as medical aid,
pension fund or car allowance;
15.8 even after May 1999, when the third respondent claims he
became applicant's employee, he was never paid a salary as
KPMG, and later Elsa Taylor & Associates, invoiced the applicant
for his services and were duly paid; and
15.9 there is no evidence of a complaint or grievance by the
third respondent regarding the absence of a fixed term contract,
until after the termination of his contract in April 2000."
43 In his answering affidavit before the CCMA the applicant stated
the following:
"3 I was employed as a general manager: finance in January 1999.
The intention was initially that I be employed on a fixed term
contract, the basis of which was to resolve certain problems
relating to stock levels and financial systems within the television
division.
4 In May 1999 the nature of the relationship changed in that it was
deemed necessary by the respondent to send me to the
television market in Los Angeles to oversee the purchase of
foreign material.
5 Prior to my departure I was interviewed by Mr Neil Harvey and Mr
Mannie Alho (the deponent to the respondent's affidavit in
support of its point in limine ) and a verbal agreement was
concluded whereby I would become an employee for a fixed
period. This fixed period would expire in December 2000.
Harvey required me to commit to the respondent in order that it
could benefit from sending me to Los Angeles so that I could train
a successor. I agreed.
6 Because I was in partnership with my wife in an accounting and
business consulting practice, it was agreed that I could invoice
the respondent on a month-by-month basis, as an interim
measure only until I was entered on the QPAC system as an
measure only until I was entered on the QPAC system as an
employee. It is this practice of monthly invoicing which the
respondent relies upon to argue that I was not an employee but
was an independent contractor.
7 I am advised that the method of payment and of deducting tax is
merely one of many factors to be taken into account when
determining whether an employment relationship exists. Be that
as it may, it was the intention of the parties to conclude a written
employment contract. The fact that the contract was never put
in writing was due to no fault of my own but due to the
lackadaisical approach of the respondent.
8 This topic is addressed more comprehensively in my letter dated
3 June 2000 which is annexed hereto marked "AT1" and should
be incorporated herein as if every allegation is specifically made
in this affidavit. ..." (My emphasis.)
44 In annexure "AT1" the third respondent stated inter alia as
follows:
"Whilst it is correct that there is no written agreement between
the SABC and myself this was not due to any fault on my part.
Indeed, the internal memo addressed to Mrs Khuzwayo herself
prior to her meteoric promotion from HR to Chief Executive from
Molefe Mokgatle, the then - Chief Executive of TV, instructs her to
conclude a written contract between myself and the SABC
commencing October 1999 and terminating 30 September 2000."
45 The "internal memo" referred to above is part of the papers
before this Court. In it Molefe Mokgatle, then the Chief Executive
- TV of the applicant advises Cecelia Khuzwayo as follows:
"I have since discussed finalised ( sic) the above individual to be
contracted for 1st October 1999 - which is for to 30 September
2000 (12 months).
We also agreed that we appoint an understudy by January 2000
to understudy him.
Could you please assist with the preparation of a contract
appointment letter." (My emphasis.)
46 The words emphasised above do not make it clear whether the
contemplated contract was to be an employment contract or
some other form of contract. However, in his affidavit before the
CCMA, the third respondent referred to a further letter dated 5
April 2000 addressed by Molefe Mokgatle to Dr Vincent Maphai,
chairman of the applicant's board. In that letter Mr Mokgatle
states the following (inter alia):
"A letter (attached) was sent to Ms Khuzwayo on the 25th
September 1999 to issue an employment contract to Mr Taylor .
Six months later nothing has happened ..." (My emphasis.)
47 The words that I have emphasised above show quite clearly that
the contract contemplated in the "internal memo" from Mr
Mokgatle to Ms Khuzwayo must have been an employment
contract and not some other form of contract.
48 In the same letter of 5 April 2000 Mr Mokgatle implied that the
third respondent's rights in terms of the Labour Relations Act had
been infringed inasmuch as he had "personally agreed with Mr
Taylor [i.e. the third respondent] on a twelve-month contract". In
the third respondent's affidavit before the CCMA he commented
as follows:
"Since the Labour Relations Act only applies to employers and
employees it is clear that I was regarded as an employee.
Mokgatle's confirmatory affidavit is annexure AT6 hereto."
49 In his aforementioned confirmatory affidavit Mr Mokgatle
confirms the contents of the third respondent's affidavit insofar
as they relate to him and then goes on to state:
1
"... in particular I confirm that the SABC at all times subsequent
to May 2000 regarded the applicant as an employee."
(It seems to me that the reference to May 2000 was probably an
error and that the reference was intended to be to May 1999.)
50 Mr Mokgatle was a senior executive of the applicant. His
evidence that he had given instructions for an employment
contract to be issued to the third respondent, together with his
evidence that the SABC regarded the applicant as an employee,
points towards a conclusion that, by the time that the third
respondent's services were terminated by the applicant, the third
respondent may indeed have become an employee of the
applicant.
51 As against this I understand the force of the contention advanced
on behalf of the applicant that the manner in which the third
respondent was remunerated, right up to the time that the
relationship was terminated, indicates that he never became an
employee of the applicant.
52 It was submitted on behalf of the applicant that the present case
is on all fours with the facts in CMS Support Services (Pty) Ltd v
Briggs [1997] 5 BLLR 533 (LAC). In that case the respondent
requested the appellant to enter into a contract with a close
corporation, of which she was the sole member, in terms of which
the close corporation would procure that her services were
provided to the appellant. The Labour Appeal Court overturned a
decision by the Industrial Court that the respondent was an
employee of the appellant. Central to the Labour Appeal Court's
conclusion in this regard was the following paragraph in the
judgment of Myburgh JP (at 538G-I):
"Having weighed up the advantages and disadvantages, the
respondent made an election. She elected not to become an
employee. Instead she elected to enjoy the advantages that a
contract between the appellant and MCS would give and to forfeit
the advantages of being an employee. What followed the
respondent's election was a consultancy contract, a contract
concluded between the appellant and MCS, a juristic person
distinct from its member, the respondent. At no time did the
respondent concede that the consultancy contract was a sham.
On the contrary, and at all times, including in the witness box,
she insisted that it was a valid and binding contract. She could
hardly contend alternative ( sic), of course, or she would be liable
to pay the income tax on the basis that she was an employee,
and having misrepresented the true position to the Receiver of
Revenue, she would be liable for penalties."
53 The court went on to find (at 540B):
"There was no contract concluded between the appellant and the
respondent in her personal capacity. The contract which was
concluded was the consultancy contract and that was an
agreement between the appellant and MCS."
54 In my view the CMS Support Services case is distinguishable. In
the present case, at least on the third respondent's version
supported by the evidence of Mr Mokgatle, a verbal agreement
existed in terms of which the third respondent was to become an
employee of the applicant for a fixed period. It was the intention
of the parties that this was to be confirmed in a written
employment contract. It is true that the arrangements in terms of
which the applicant continued to be invoiced for the third
respondent's services points prima facie against the existence of
this employment contract but, for the purposes of the present
application, I must accept the third respondent's evidence that it
had been agreed that he could invoice the respondent on a
month by month basis as an interim measure only until he was
entered on the QPack system as an employee. If this is indeed
correct, the method of payment does not necessarily point
conclusively against the existence of an employer/employee
relationship. Indeed, on the third respondent's version, I believe
that it would be open to me to hold that, notwithstanding the
manner in which he was paid, he was an employee of the
applicant.
55 Mr Maserumule pointed out that, although VAT had been
charged to the applicant on the services rendered by the third
respondent, the payments made had not been regarded (at least
by the applicant) as salary and income tax had accordingly not
been paid thereon. This is undoubtedly an aspect of concern. If
the third respondent's version that he became an employee of
the applicant with effect from May 1999 is correct, income tax
should of course have been deducted from his salary and paid to
the South African Revenue Services. Prima facie the third
respondent's version (taken together with facts put up by the
applicant which he has not denied) suggests that there may have
been a failure to comply with the provisions of the Income Tax
Act. On the other hand, on the applicant's version, this Act does
not appear to have been infringed.
56 In my opinion, notwithstanding the applicant's election not to
refer the dispute before me to oral evidence, it is not appropriate
for me to reach any conclusion in the present application as to
whether or not the third respondent was an employee of the
applicant. If I were to rule, on the basis of the incomplete factual
information before me, that the third respondent was an
employee of the applicant, this could well bind the parties and
the commissioner appointed to arbitrate the dispute. In the
event that such a ruling rests on an incorrect factual foundation
this would, in my view, be highly undesirable.
57 This leaves me with two choices: to refer the present application
to oral evidence, or to dismiss the application, leaving it to the
arbitrating commissioner to hear the evidence on the disputed
issues. In the exercise of the discretion which I believe that I
have not to entertain the present review application at this time,
I believe that the latter option is the more appropriate. The third
respondent has at all times been willing to ventilate the relevant
factual disputes in the contemplated arbitration proceedings.
The advantages to him of the CCMA as the applicable forum are
obvious. The process should be cheaper, quicker and less formal
than in this Court. In my view this is also the process most
consistent with the purpose of the Act of promoting effective
resolution of labour disputes (see s1(d)(iv) of the Act). Except
where jurisdictional disputes can be resolved by the application
of legal principles to undisputed facts, I believe that this Court
should discourage review applications of the present type prior to
the conclusion of the arbitration proceedings for which the Act
makes provision. I therefore propose to uphold the third
respondent's point in limine that the present application is
premature and to dismiss the application.
58 It follows that the third respondent will be entitled to refer the
dispute concerning his alleged dismissal by the applicant for
arbitration by the first respondent. If it should be found by the
arbitrating commissioner that the third respondent was indeed an
employee of the applicant and that the South African Revenue
Services was misled in this respect, it is my view that it would be
appropriate for the arbitrating commissioner to make his or her
views in this regard known to the relevant authorities.
59 Inasmuch as the third respondent is the substantially successful
party in this application, I see no reason why the applicant should
not be ordered to pay his costs. Although it is by no means
inconceivable that the applicant may ultimately establish that the
third respondent was not its employee, I do not think that this is
a sufficient reason not to require it to pay the costs occasioned
by the present unsuccessful application.
60 In the circumstances the application is dismissed, with costs.
A J FREUND
ACTING JUDGE OF THE LABOUR
COURT
DATE OF HEARING : 23 May 2002
DATE OF JUDGMENT :
FOR THE APPLICANT : Mr P Maserumule of Maserumule Inc
FOR THE RESPONDENTS : Adv Leon Halgryn (Instructed by Joubert Attorneys)
2002.117