IN THE LABOUR COURT OF SOUTH AFRICA
CASE NO: JR57/01
In the matter between:
First Applicant
Second Applicant
and
First Respondent
Second Respondent
THE COMMISSION FOR CONCILIATION,
Third Respondent
JUDGMENT
FRANCIS J
Introduction
1. This is an application to review and set aside an arbitration award made by the
second respondent (“the commissioner”) on 23 November 2000, acting under the
auspices of the third respondent, the Commission for Conciliation, Mediation and
Arbitration (“the CCMA”) under case number GA80874.
2. This was after the commissioner had found that the second applicant was not
constructively dismissed.
1. 3. The first respondent is opposing the review application.
The second applicant’s version
4. The second applicant was employed by the first respondent as a Duty Controller.
On 26 October 1999 the second applicant’s manager, a Mr Coetzee, informed her
that a Mr Untemachier (“the CEO”) of the first respondent wished to meet with
them the following day, as he wanted her to resign.
5. The meeting took place on 27 October 1999 with the CEO at around 14h00. The
CEO spoke to her harshly indicating that he had received several complaints about
her from the clients of the first respondent. The CEO told her that he had received
her verbal resignation from Coetzee already. The second applicant told him that
she did not wish to resign. The CEO presented her with a letter of agreement of
termination. The termination agreement made provision for payment of a salary
for a further sixweek. However, the second applicant had to leave the premises
immediately. The CEO began forcing her to sign the letter. The second applicant
insisted that she first wanted to consult with her husband. After much haggling
and forcing on the part of the CEO he agreed to grant the second applicant until
16h30 to come back with an answer.
6. The second applicant then consulted with her union representative who advised
her to accept the offer should the first respondent agree to pay her until the end of
her fixed term contract which was 1 February 2000. The second applicant
returned to the CEO’s office at 16h30 where she presented her proposal of
payment on termination. The CEO acted arrogantly and refused her counter offer.
He told her that she should take the money he was offering or else he would
ensure that her life at the first respondent would be unbearable to the point that she
would have to resign sooner then at the end of her contract.
7. The second applicant was pregnant at that stage and felt pressurised. Her union
representative, in the context of her pregnant condition, then advised her that she
should sign the agreement of termination. She then went back to the CEO at
18h00 and signed the agreement of termination.
8. The second applicant testified that up to the meeting of 27 October 1999 her
employment with the first respondent was very pleasant. The relationship with
her supervisors and other staff was normal. On her previous interaction with the
CEO, he had behaved normally. She could therefore not understand his behaviour
on the day in question.
9. The second applicant testified that she had no intention to resign prior to or on the
day of the termination. The pressure exerted by the CEO on that day forced her to
resign. He had placed her in such an intolerable situation that she had no option
but to resign. She signed the agreement out of her own accord because she feared
the threats made by the CEO. Had she wanted to resign, she would have done so
in the normal procedure. The CEO had told her not to approach human resources
in this matter.
1. 10. The second applicant considers her dismissal to be unfair as its effects are that
of a constructive dismissal and is seeking compensation.
11. The second applicant’s version was corroborated by Coetzee in material respects.
He said that whilst the second applicant was away on sick leave, approximately a
month before the meeting in question, she had indicated to him that she was going
to come in and resign. He had disclosed this to the management meeting at the
time. Since then, the CEO constantly asked him for her resignation. The CEO
indicated to him that in Switzerland it was normal for a person to resign by stating
it verbally. He told the CEO that in South Africa it was different.
The respondent’s version
12. The CEO testified that he met with the second applicant and Coetzee on 27
October 1999. He raised the issue of her performance due to having received
personal complaints from clients. He tackled the issue with her at the meeting.
The clients were extremely important to the company’s business. The complaints
were treated with seriousness. He said that the names of the clients were not
disclosed to avoid personal grudges.
13. The CEO testified that Coetzee had told him that the second applicant had
verbally resigned about a month before the meeting. As he was not sure to
whether this was sufficient he wanted the second applicant to sign a written
termination agreement. He had prepared the letter to confirm the resignation
already given. He was persuading her to sign for the same reason. As the second
applicant’s position was critical, he needed to finalise her resignation immediately.
He believed that since the second applicant had decided to resign she had mentally
not been involved with the business. This was of major concern to him as the
position was critical.
14. The CEO denied that he had threatened the second applicant or had spoken to her
in an arrogant and forceful manner. When she came back with a counter offer at
the 16h30 meeting, he told her that the contract would then continue as normal till
1 February 2000. He was surprised when she came back at 18h00 to sign the
agreement, as he was under the assumption that the matter was finalised. He
denied having threatened her not to take the matter to human resources.
15. The CEO testified that beside the day in question, he had met the second applicant
only once before. He had taken up the complaints against her with Coetzee.
However, Coetzee had failed to do anything about it. He had told Coetzee the day
before the meeting that he wished to meet with her to finalise her verbal
resignation.
16. The CEO testified that the meeting was centred into confirming her verbal
resignation. The resignation, albeit verbal was a “done deal.” He had prepared the
letter to confirm the resignation. As she had no resignation letter prepared he had
prepared one and wished it to be done in the form of an agreement. Also he did
not ask her whether she wished to resign since he considered it to be a done deal.
When she rejected his offer, he agreed that the contract would continue. Her
failure to sign the agreement and then return with a counter offer showed that she
was comfortable with the idea of resignation. He said that he did not contact
human resources in this instance, since he was sure that she had resigned and that
all that was needed to be done was to confirm it in writing. Since a month had
passed since her oral resignation, he wanted to expedite the process. Payments are
usually made to staff resigning, to ensure that there is no delay in replacing staff.
The sum of money is usually negotiated. He became involved due to Coetzee,
who is now an exemployee of the first respondent failing to take action. Coetzee
was confronted with this and it is part of the reason that he is no longer with the
first respondent.
The referral
17. The second applicant thereafter referred an alleged unfair dispute under section
186(e) of the Labour Relations Act 66 of 1995 (“the Act”) to the CCMA. The
dispute could not be resolved at conciliation and the matter was referred for
arbitration. The arbitration proceedings were conducted on 16 October and 9
November 2000. The commissioner was required to determine whether the
dismissal amounted to a constructive dismissal and if so to make an appropriate
award.
18. The second applicant’s claim was dismissed. The commissioner found that the
second applicant had failed to prove that the first respondent’s actions amounted
to a constructive dismissal in that the first respondent did not cause such an
intolerable situation leaving the second applicant with any option but to resign.
19. It is against this finding that the second applicant has brought her review
application.
The commissioner’s award
20. The commissioner found that for a constructive dismissal to exist the employer
must have created a situation so intolerable that the employee had no option but to
resign. The employer’s actions must be viewed as a whole and then it must be
determined whether the effect of the employer’s actions, judged reasonably and
sensible, creates a situation that the employee cannot be expected to put up with it.
21. The commissioner found that it was clear from the evidence that the aim of the
CEO on that day was to get the second applicant to sign the agreement of
termination. The CEO at no stage denied that he was pressurising the second
applicant to sign the resignation agreement. He argued that he was justified to do
so since she had already resigned orally. The CEO could not corroborate this
point. The commissioner also found that it was undisputed that he had the
termination agreement prepared before he met with her. He found that the CEO
acting on behalf of the employer was forcing the second applicant to resign.
22. The commissioner found however that this was not sufficient to find the first
respondent guilty of constructive dismissal. He dismissed the second applicant’s
claim on the basis that she had failed to prove that the first respondent’s actions
caused such an intolerable situation that she had no option but to resign.
The grounds of review
23. The applicants contend that the award is not legally justifiable and is reviewable in
terms of section 145 of the Act.
The legal position
24. Under the Act, constructive dismissal is governed by section 186(e). Section
186(e) makes provision for a situation where an employee terminated a contract of
employment with or without notice because the employer made continued
employment intolerable for the employee.
25. The leading case that deals with constructive dismissal is that of Jooste vs
Transnet t/a South African Airways [1995] 5 BLLR 1 (LAC). In Pretoria Society
for the Care of the Retarded vs Loots 1997 (18) ILJ 981 (LAC) the test was
formulated at 985 A C as follows:
1. “The enquiry is whether the appellant without reasonable and proper
cause, conducted itself in a manner calculated or likely to destroy or seriously
damage the relationship of confidence and trust between the employer and the
employee. It is not necessary to show that the employer intended any repudiation
of the contract: the court’s function is to look at the employer’s conduct as a
whole and determine whether ... its effect, judged reasonably and sensibly is such
that the employee cannot be expected to put up with it.”
and at 984 E F:
“When an employee resigns or terminates the contract as a result of constructive
dismissal such employee is in fact indicating that the situation has become
unbearable that the employee cannot fulfil what is the employee’s most important
function, namely to work. The employee is in effect saying that he or she would
have carried on working indefinitely had the unbearable situation not been
created. She does so on the basis that she does not believe that the employer will
ever reform or abandon the pattern of creating unbearable work environment. If
she is wrong in this assumption and the employer proves that her fears were
unfounded then she has not been constructively dismissed and her conduct proves
that she has in fact resigned.”
26. It is trite that arbitration awards issued by the CCMA may be reviewed on any of
the grounds set out in section 145 of the Act more especially where the
commissioner has committed a gross irregularity in the conduct of the arbitration
proceedings. The decision of the arbitrator can also be set aside if it was not
rationally related to the purpose for which the power was given from an objective
view or if it was not justifiable as to the reasons given. Such a conclusion must be
justifiable as to the reasons given in the sense that the material reasons given must
lead logically to his order.
27. The following was said in Carephone (Pty) Ltd v Marcus NO & Others (1998) 19
ILJ 1425 (LAC) at paragraphs 32 34:
1. “In determining whether administrative action is justifiable in terms of the
reasons given for it, value judgments will have to be made which will, almost
inevitably, involve the consideration of the ‘merits’ of the matter in some way or
another. As long as the judge determining this issue is aware that he or she
enters the merits not in order to substitute his or her own opinion on the
correctness thereof, but to determine whether the outcome is rationally justifiable,
the process will be in order.”
28. A commissioner must have applied his mind seriously to the issues at hand and
reasoned his way to the conclusion. Such conclusion must be justifiable as to the
reasons given in the sense that the material reasons given must be lead logically to
his order. In this regard see Milady’s (A Division of Mr Price Group Ltd) v
Naidoo & others (2002) 23 ILJ 1234 (LAC).
Analysis of the facts and arguments raised
29. The second applicant bears the onus to prove that she terminated her contract of
employment with or without notice because the first respondent made continued
employment intolerable for her. The onus must be discharged on a balance of
probabilities by leading credible evidence.
30. The second applicant testified at the hearing of the matter about the circumstances
of her resignation. She was supported by her manager, Coetzee. Prior to the
meeting that took place, there was no problem with the second applicant’s
performance and she had a good relationship with everybody. The parties met on
27 October 1999 at approximately14h00. The second applicant testified that after
she had sat down, the CEO told her that he wanted them to be open with each
other. He told her that when she started working for them he had great
expectations from her but because of her big mouth, he had received many
complaints from various airlines about her attitude, her performance and her dress
code. The second applicant told him that due to being pregnant she did not wear
a uniform. The CEO refused to give her more information about the alleged
complaints that he had received regarding her behaviour. The CEO wanted her to
sign a written resignation but she insisted that she needed to consult with her
husband and legal advisor. The CEO challenged her by asking her if she could not
take any decision by herself.
31. The second applicant was given until 16h30 to make up her mind. She consulted
with her union official who advised her that because she was on a fixed term
contract which was going to expire on 1 February 2000 she should inform the
CEO that if she was paid for the unexpired portion of the fixed term contract she
would resign. She went back to the CEO who asked her if she had decided. She
told him that she wanted to be paid out for the duration of her contract and then
she would resign. He laughed at her and told her that she was a joke. He asked
her if she thought that he was stupid to lose a lot of money. He told her that he
would contact his lawyers and she hers and that it would be a lengthy process. He
then told her that he was going to be hard on her, he would make her life hell for
her and that he would be watching her every day and would get reports on her
every hour. He would check on her doctor. He knew that she would not work for
a full contract till January 2000 because of her health.
32. The second applicant testified that she left to call her union representative. She
was angry and hurt. She was advised that as she was angry, upset and pregnant,
and because of the fear that any emotional stress would cause damage to her
pregnancy that she should resign. She did so. The second applicant during cross
examination said when she was presented with her letter of resignation by the
CEO, she understood what was in the letter. She signed it but not because she
agreed or whatever but that she wanted out. She was threatened and she was told
what would happen if she did but not resign. She was not prepared to put herself
or her baby at risk and to be humiliated more and even to look at the CEO again.
33. When the CEO testified, although he denied that he was being arrogant, he did not
deny that he had uttered the words that the second applicant said he did. He was
asked this on two occasions and he said that he did not have any comments. He
avoided saying that the second applicant has fabricated the allegations that he had
threatened her in the manner she had testified to.
34. The commissioner found that the aim of the CEO on that day was to get the
second applicant to sign the agreement of termination. The CEO at no stage
denied that he was pressuring the second applicant to sign the resignation
agreement. The commissioner found that the CEO could not corroborate the fact
that the second applicant had tendered her resignation orally on an earlier
occasion. He did not dispute that he had prepared the termination agreement.
35. The commissioner however then went to hold despite these findings that the
second applicant was not constructively dismissed. He found that although at the
first meeting the CEO was forcing her to sign the agreement, the pressure was
alleviated by the fact that he gave her until 16h30 to come back to him. He found
that she probably resigned because of her union’s advice and that she probably
had other reasonable options including the lodging of the grievance against the
CEO.
36. I am of the view that in coming to his decision, the commissioner ignored the
issues pertaining to performance and pregnancy of the second applicant as he said
that they were not directly linked to the issue in dispute. The commissioner
ignored the fact that the CEO had made unsubstantiated allegations against the
second applicant regarding her performance which was not supported by the
manager and her motivation for resigning namely that she feared that if she were
to stay and that the CEO was to carry out his threats of regularly checking on her
including her doctors and making her life hell, it would affect her pregnancy.
37. The commissioner’s decision more particularly to ignore these factors and the
circumstances is not rationally justifiable. The fact of the matter is that the CEO
threatened the second applicant. He demeaned her by calling her a joke, accused
her unjustifiably of poor performance and made no bones about the fact that if she
did not resign he would make her life hell. The CEO did not challenge that he
said this and indeed no evidence was led that his threat was not serious. The
second applicant was in the circumstances justified in believing that the threats of
the CEO were serious. This was the only reasonable inference in the
circumstances to draw.
38. The second applicant had no alternative but to resign having regard to the
unequivocal threats of the CEO. No evidence was led about a possible grievance
procedure that could have been lodged by the second applicant against the CEO
and nor was evidence led by the CEO that his threats were not serious. It was
clear from the evidence that was led that the CEO wanted the second applicant
out.
39. The second applicant had given clear evidence that she was forced to sign the
letter as is evident from the commissioner’s own findings and of abuse, rudeness
and conduct of an overbearing nature. The CEO’s conduct was unjustified and
improper. He told the second applicant in unequivocal terms what he would do is
she did not resign. She was faced with a stark choice: either resign or stay in
employment and face the threats of her CEO. In her situation and the fact that she
previously had been recommended by her doctor to take light duties for fear of a
miscarriage, she had no other reasonable option but to resign. Any reasonable
person would have resigned in the face of the threats of the CEO and the CEO’s
conduct could not justify it.
40. The CEO’s conduct demonstrates that the first respondent had embarked on a
cause of action calculated to render the employment relationship intolerable. If
one examines the CEO’s conduct as a whole, it cannot be said that it was conduct
which the second applicant could be expected to tolerate.
41. The commissioner’s award is therefore irrational. The commissioner ignored
material evidence, namely of the second applicant’s pregnancy and furthermore
ignored the direct evidence of the second applicant which was unchallenged that
the threats of the CEO were serious. The commissioner had also ignored the
objective state of affairs. Had he applied his mind to the objective unfairness of
the first respondent’s conduct, he would have found that the second applicant had
no alternative but to resign.
42. The commissioner’s finding that there was no constructive dismissal is not
rationally justifiable in relation to the reasons given for it. His award was so
flawed that I am left with no alternative but to conclude that there was no fair trial
of the issues. The award must be reviewed and set aside.
43. Section 145(3)(a) empowers this Court when it sets aside an award to ‘determine
the dispute in the manner it considers appropriate’. This is an appropriate case to
deal with the matter on review as all the facts are before me.
44. It is common cause that second applicant, if it is found that she was constructively
dismissed, would be entitled to six weeks compensation which is for the balance
of her fixed term contract. I agree.
45. There is no reason why costs should not follow the result.
46. In the circumstances I make the following order:
1. The commissioner’s arbitration award dated 23 November 2000 made under case
number GA 80874 is reviewed and set aside and substituted with the following:
“The second applicant was constructively dismissed.
The second applicant is awarded 6 weeks compensation”.
2. The first respondent to pay the costs of the application.
FRANCIS J
JUDGE OF THE LABOUR COURT OF SOUTH AFRICA
FOR THE APPLICANTS : F A BODA INSTRUCTED BY GEO ISSEROW & T L
FRIEDMAN INC
FOR THE FIRST RESPONDENT : W HUTCHINSON INSTRUCTED BY FLUXMANS INC
DATE OF HEARING : 13 NOVEMBER 2002
DATE OF JUDGMENT : 12 DECEMBER 2002