IN THE LABOUR COURT OF SOUTH AFRICA
SITTING IN JOHANNESBURG
JR2048/03
: 2004/10/29
Date of Judgment:
In the matter between
LIBERTY GROUP LTD Applicant
and
COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION 1st Respondent
COMMISSIONER M S RAFFEE 2nd Respondent
ITSENG EILEEN MOGOROSI 3rd Respondent
JUDGMENT DELIVERED BY
THE HONOURABLE MR JUSTICE NGCAMU
ADVOCATE P A BUIRSKI
THIRD RESPONDENT IN PERSON
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TRANSCRIBER
SNELLER RECORDINGS (PTY) LTD - DURBAN
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JUDGMENT
NGCAMU AJ
[1] This is a review application brought against the award issued by the second
respondent. The application is being opposed by the third respondent.
[2] The third respondent, Ms Mogorosi, was employed by the applicant as
Divisional Director, Brand Development. She commenced employment on 22 May
2000. On 29 October 2001 she referred a dispute of unfair constructive dismissal
to the CCMA. She alleged the dispute arose about 14 September 2001. The
conciliation could not resolve the dispute. The dispute was referred for
arbitration, presided over by the second respondent. At the end of the arbitration
the commissioner issued an award in terms of which he found that Mogorosi had
been constructively dismissed by the applicant and awarded compensation
amounting to R432 000.
[3] The review is based on several grounds, namely that:
(a) The commissioner committed a gross irregularity, or did not apply his mind
to the relevant issues, or that he made no rational connection between the
evidence before him and the conclusions he reached in finding that the third
respondent resigned.
(b) The commissioner committed a gross irregularity by failing to find that the
third respondent, if she resigned, resigned freely and voluntarily and therefore
there was no dismissal in terms of section 186(e) of the Labour Relations Act.
(c) The commissioner committed a gross irregularity, or did not apply his mind
in not making a factual finding on what caused the resignation of the applicant
which was not voluntary or what caused the employee to be constructively
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dismissed and failed to find the nexus between the perceived demotion and the
resignation.
(d) The commissioner failed to make an adverse finding against the employee
for failure to institute a grievance.
(e) The commissioner committed a gross irregularity by finding that the third
respondent had good reason to believe that she was demoted.
(f) The commissioner committed a gross irregularity by awarding compensation
in the sum of R432 000, a figure that is arbitrary.
[4] Before dealing with the merits of the review, I need to deal with the
preliminary issues raised in this matter.
Third respondent's opposing affidavit
[5] On 20 September 2004 the third respondent filed a document purporting to
be an opposing affidavit. This document was signed on 17 September 2004 and
was served upon the applicant. This document is not under oath. When this was
raised by counsel for the applicant, the third respondent's response was that
there is no document which is not under oath. The document and annexures filed
by the third respondent have a rubber stamp put on them by an official of the
bank as an ex officio commissioner of oaths. There is, however, no indication that
the affidavit was attested to. I say this because the rubber stamp appears on all
the documents filed with the affidavit. There is no reason for placing the rubber
stamp on those papers. I am satisfied that the opposing affidavit was not signed
under oath. The third respondent, who appeared in person, never submitted that
the affidavit was made under oath. I therefore reject the document as
constituting a proper affidavit before the Court.
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[6] Another unsigned and unattested affidavit appears at page 232 to page 238
of the court papers. This document is also rejected on the same basis.
Rule 11 application
[7] The third respondent filed an application to dismiss the review application.
This application was filed with the Registrar on 11 February 2004, having been
signed on the same date. The affidavit in support of this application has not been
signed before a commissioner of oaths. Accordingly, it does not constitute a
proper affidavit and it is not admitted. That disposes of the rule 11 application. I
dismissed this application after hearing the submissions made by the parties
during the hearing.
Late filing of documents
[8] A rule 7A(8)(a) affidavit was sent to the third respondent by registered mail
on 2 July 2004. The unattested opposing affidavit was filed on 20 September
2004. Another document purporting to be an affidavit was filed on 7 October
2004. These documents, even if accepted as correct affidavits, were filed out of
time. There is no application for condonation that has been filed so that they
could be admitted. In the circumstances, these documents, besides not being
properly before the Court, are not proper affidavits. In the circumstances they are
not admitted as part of the proceedings. The third respondent addressed the
Court and stated that these documents were late because she focused on the
dismissal of the review.
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[9] The applicant also filed the rule 7A(8) out of time. An application for
condonation has been made. I was satisfied during the hearing with the reasons
set out for the delay. I accordingly granted the application condoning the late
filing of rule 7A(8).
Application to strike out
[10] The applicant submitted that some of the documents filed by the third
respondent cannot be part of the review application and that new matters had
been raised in the opposing affidavit. The third respondent submitted that there
are no new facts. Counsel for the applicant requested that I reserve judgment in
respect of the striking out until I have heard submissions. I accepted this.
[11] Having found that the documents filed by the third respondent are late and
no application for condonation has been filed and that the affidavits are not under
oath, there are therefore no documents filed by the third respondent to be
considered. The reason for this is that these documents are not properly before
the Court. In the circumstances I do not have to make any ruling on the
application to strike out because there is nothing to strike out.
[12] I should add that because the third respondent has filed a notice to oppose I
allowed her to address the Court. Her address to the Court focused on the
position she was appointed to and the reporting structure. She pointed out that
Mr Came, to whom she had to report, was on her level when she came to work for
the respondent but not at the time when she left. She agreed to three months'
pay to leave the company. After she had left, the bonus had not been included,
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and that is where the dispute arose. The third respondent's address raised issues
not on record.
The background of the review
[13] On 22 May 2000, the employee, Ms Mogorosi, was employed by the
applicant as Divisional Director, Brand Development. The employment contract
was concluded on 26 May 2000. The grievance procedures formed part of the
employment contract. At the time the employee reported to Mike Jackson, the
Head of the Financial Services Department.
[14] During March 2001, the relationship between the employee's superiors,
colleagues and subordinates began to deteriorate. The employees in her division
were not satisfied with her management style and reported to her superiors
without informing her. Mr Jackson contacted the employee regarding this
problem. A meeting was held with Jackson, the employee and two of her
subordinates to discuss the problem. It was felt at that stage that the complaints
were unfounded. The employee undertook to take this matter up and to resolve
the problem with the staff. An agreement was reached that contemplated her exit
should the problem not be resolved by the following month.
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[15] Mr Jackson advised the employee that the rumours of the employees not
being satisfied persisted. Mr Jackson took a decision to transfer the employee to
Mr Gavin Came, who would then manage the employee's department. The
employee was not satisfied with this and considered reporting to Mr Gavin Came
as demotion. She told Mr Jackson that it was not acceptable to her because this
was changing her job. She believed that Mr Gavin Came was her equal as he had
previously occupied her position. This incident took place on 14 September 2001.
Mr Jackson suggested she became a consultant without overall responsibility for
brand development. In her response to Mr Jackson, she sent an e-mail and stated:
"My request is to be given a chance to find the solutions to the problems with the
team. To do this I need to fully grasp the issues and implement corrective action.
Should I fail to resolve the issues as agreed, then we will discuss my exit from
Liberty. The consultant option will pass it is not my competency. While I agree to
this, it needs to be understood that the solution lies not with me only but in
conjunction with the team. I can try till I am purple in the face but if there is no
commitment from the team to resolve the issues there is nothing I can do."
[16] Mr Jackson also asked her how they could part ways as a result of her
perceived demotion. The employee suggested that a fair settlement would be
three months' pay. Mr Jackson accepted the proposal. A draft settlement
agreement was written. The employee refused to sign it because the agreement
did not include the incentive bonus. She then went back and had a discussion
with Mr Jackson. There is a dispute as to whether Jackson agreed to have the
bonus included. There is, however, no figure that was agreed for the incentive
bonus. The subsequent agreement sent to the employee again did not have the
bonus. The subsequent agreement sent to the employee again did not have the
incentive bonus. She did not sign the agreement.
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[17] On 28 September 2001 the employee left the company before the
agreement was signed. In her e-mail to Jackson dated 27 September 2001 she
stated that she was not resigning nor terminating, but leaving in view of what she
deemed to be a demotion as a result of the alteration of reporting structures,
which translated into constructive dismissal. After the applicant had left, she filed
a dispute with the CCMA.
The review application
[18] The resignation of the employee only gives rise to a cause of action if the
employer makes the continued employment intolerable. Section 186(e) of the
Labour Relations Act defines dismissal as meaning:
"An employee terminated a contract of employment with or without notice
because the employer made continued employment intolerable for the employee."
[19] The onus is on the employee to establish that there was a constructive
dismissal. (See Jooste v Transnet Ltd trading as SA Airways (1995) 16 ILJ 629
(LAC) at 638A-639B.) The action of the employer must be such that, if judged
reasonably and sensibly, the employee cannot be expected to put up with it. (See
Pretoria Society for the Care of the Retarded v Loots (1997) 6 BLLR 671 (LAC).)
The conduct of both parties should be looked at as a whole in order to come to the
conclusion that the employee could not put up with the employer's actions. The
test on whether there was constructive dismissal is objective. ( SmithKline
Beecham (Pty) Ltd v CCMA and Others (2000) 21 ILJ 988 (LC).)
[20] There are three requirements for constructive dismissal to be established,
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namely:
(a) The employee must have terminated the contract of employment.
(b) The reason for the termination of the contract of employment must be that
continued employment has become intolerable for the employee.
(c) It must be the employee's employer who had made continued employment
intolerable.
All these requirements must be present. If one is absent, that is the end of the
matter. (Solid Doors (Pty) Ltd v CCMA and Others , case No CA4/03, paragraph 28,
an unreported judgment.)
[21] In the present case I am not satisfied that the first requirement has been
met. When the employee had discussions with Mike Jackson, to whom she was
reporting, she told Jackson to give her a chance to resolve the issues with her staff
and that if she failed she would come and say she had failed. She would then
resign. Her evidence appears at page 455 of the papers, lines 13 to 15, where she
stated:
"That was just (unclear) of the discussion at the time but it wasn't I am going to
resign or I am threatened to resign or anything like that."
When the employee was asked if she resigned, she responded that she did not
resign and did not write a letter of resignation. The employee denied terminating
the employment relationship. She denied having cancelled the contract of
employment. When she was asked who cancelled the contract, she responded by
saying that:
"I would say we both cancelled it."
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[22] The first requirement for constructive dismissal is that the employee must
have resigned. The commissioner found that the employee did not resign
voluntarily. To come to such conclusion, the commissioner must have first found
that the employee did resign. In the light of the denial by the employee that she
resigned, there can be no finding that the resignation was not voluntary. The
commissioner found the involuntariness in the resignation on the findings that
Mr Mike Jackson explained to the employee that, as the rumour persisted, he did
not want the employee to manage her division any longer.
[23] The commissioner misdirected himself on this and misconstrued the
evidence of the employee. The evidence given by the employee at page 13 of the
transcript is that:
"When I voiced my discontent about what was happening and my unbearableness
of the situation basically was when he said to me 'Look, I don't want to manage
your division any more and you are now going to report to Mr Gavin Came'."
The above is repeated at page 91 of the transcript where the employee stated
that Mr Mike Jackson said:
"The rumours are persisting and I don't want to manage your division any more,
you know, and I want you to become a consultant, a black market consultant."
It is factually incorrect that Mr Mike Jackson said he did not want the employee to
manage her division.
[24] The employee wrote a letter confirming her last day at work to be
28 September 2001. She wanted a response by 2 October 2001. In her evidence
she stated that she wrote the letter so that, if she simply left, it would not be
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construed as absconding. At page 450 of the papers, lines 22 to 25, she testified
that:
"I wrote this just to make sure that when I don't come to work the following day it
is understood that it is based on that verbal agreement that I had with them,
which is why I am saying if you don't respond you know then I will probably come
in and continue working."
[25] The above excerpt from the evidence brings me to the second requirement
of constructive dismissal. That is that the reason for the termination of the
contract of employment must be that continued employment has become
intolerable for the employee. Without going further, clearly the employee was
willing to come back and work for she says if there was no response she would
come back and continue working. That is not consistent with the behaviour of a
person who finds continued employment intolerable. This demonstrates that the
situation was not intolerable but the employee wanted to exit the company. If the
employee intended to exit the company there can be no constructive dismissal.
[26] A further indication that she wanted to exit is that she negotiated the
package which was agreed. This package amounted to three months' pay. Her
evidence was that the dispute arose when the company refused to include the
bonus in the package. I must indicate also that at the time when the package of
three months was discussed with Mr Mike Jackson, there was no suggestion by the
employee that the bonus should be included. The question of the bonus only
arose at the time when she was presented with an agreement to sign. It's then
that she thought that the bonus had to be included.
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[27] However, the willingness of the employee to return if the employer did not
confirm the date on which she had to leave, in my view, destroys the employee's
case. Accordingly, she failed to satisfy the second requirement.
[28] The third requirement is that it must be the employer who made continued
employment intolerable. To decide on this requirement, the Court has to look at
the entire matter and, in particular, the behaviour of the parties. The
commissioner found that eleven staff members were transferred without
consultation with the employee. Mr du Toit was unable to comment on the
transfer as he was not aware of it. He also found that staff members requested
meetings with human resources without following the grievance procedures. The
finding that this was the cause of resignation is not rational for the reason that
Mr du Toit testified that the company had an open-door policy. The staff members
did not lodge any grievance but sought to meet human resources for a discussion
on their dissatisfaction. The employee was advised about this.
[29] The commissioner further cited the proposal of climate survey when two had
been held within a year. However, the employee consented to this climate
survey. In any event, the insistence by Mr Jackson on the climate survey cannot
be a situation that may cause continued employment intolerable. If such a survey
was intended to correct the situation it cannot be the cause of the breakdown in
the employment relationship unless the employee suggests that her superior,
Mr Jackson, was not entitled to get the feeling of the employees.
[30] I need to add that the climate survey was suggested as a result of the
persistent rumours about the dissatisfaction of the staff in the employee's division.
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There is no evidence that the rumours were unfounded. It is not disputed that
Mr Jackson met with the staff or employees in the employee's absence. In the
light of the undisputed evidence of an open-door policy of the company, I find that
it would be unreasonable for Mr Jackson to refuse to speak to the employees.
[31] The employee's testimony suggests that Mr Jackson and human resources
should have refused to speak to the employees. There is no merit in that
suggestion. Such a refusal would not only be against the company policy of open-
door but would not be in the interests of the company. It is also not disputed by
the employer that Mr Jackson offered the employee a job as a consultant as a
result of the rumours. It is not the employee's case that this caused the
termination of employment. Her case is that it was his instruction to report to
Gavin Came that she did not accept and felt she could not remain in the company.
[32] The commissioner made a finding that:
"There is sufficient evidence to uphold what the applicant contends to be having
to resign in circumstances where such resignation was not voluntary. There was
no single point mentioned by this witness that could rebut the contention made by
the applicant concerning the involuntariness of her resignation. The applicant
consulted with human resources at every turn and the latter was fully aware of the
extent of the applicant's frustration and being unabled. I therefore find that the
resignation of the applicant was not voluntary."
[33] The commissioner failed to consider that the test for constructive dismissal
is not subjective but objective. He failed to consider objectively if the employer
had made continued employment intolerable.
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[34] The consultation with the human resources by the employee related to the
rumours and the fact that Mr Jackson consulted the employees of her division in
her absence. There is, however, no evidence that Mr Jackson went out to source
the rumours or that such rumours were created by the employer. In fact, the
rumours seem to have come from the employees in the department of Mogorosi,
the employee. If there was any wrongdoing by Mr Jackson or the human
resources, the employee was aware of the grievance procedures. She could have
followed these procedures to resolve the problem. The employee conceded that
she could not know what the outcome would have been had she followed the
internal procedures.
[35] The commissioner further found support for the resignation on demotion.
The employee felt subjectively that reporting to Gavin Came was unacceptable as
she was on the same level as Mr Came. On the other hand, the employee agreed
that Mr Came was the Managing Director, reporting to Mr Anderson, the Chief
Executive Officer. Mr Came previously headed the employee's department. The
employee further accepted that Mr Came was on level one, while she was on level
two as a Divisional Director. Mr du Toit testified that there is no Divisional Director
on level one but that Divisional Directors are on level two. This was never
disputed. Mr Jackson and Mr Came were both on level one, reporting to
Mr Anderson. Accordingly, reporting to Mr Came cannot be a demotion.
[36] The evidence of Mr du Toit, which has not been rebutted, is that there was
no change in the employee's salary. There was no change in the job level, being
level two. The employee did the same job. The reporting structure also did not
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change. The change was in respect of the person to whom the employee had to
report. Prior to the change and after the change there was one person between
the employee and Mr Anderson.
[37] The commissioner relied on the salary schedule to find that the employee
was on the same level as Mr Came. Clearly, the Managing Director cannot be on
the same level as a Divisional Director. The Divisional Director reports to the
Managing Director. The document that the commissioner relied upon was
produced during the cross-examination of Mr du Toit. This document had not
been discovered by the employee. The employee never gave evidence on this
document when she gave evidence-in-chief. Furthermore, the authenticity of this
document was contested but it was never proved by the employee.
[38] The commissioner committed an irregularity in relying on this document to
find that there was a demotion, for the reasons that follow. The demotion was not
the cause of the alleged resignation or the termination of the employment. The
package schedule was not produced during the evidence-in-chief. The employee
failed to give evidence as to when the demotion occurred. The evidence relating
to the demotion was only raised during cross-examination when the employee's
case had been closed. The employer was not given an opportunity to cross-
examine the employee on this document. It was accordingly irregular for the
commissioner to rely on this document in finding that the employee's position was
changed from level one to level two in the absence of evidence of the person who
prepared the document and in the absence of cross-examination of the employee.
The commissioner accordingly failed to apply his mind to the evidence before him.
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[39] In my view, the findings of demotion cannot be sustained on the evidence, in
that the status of the employee was never altered. She did the same job. She
conceded that Mr Came was the Managing Director on level one and she was on
level two.
[40] I find that the employee failed to establish the third requirement of
constructive dismissal as well. On the evidence presented by the employee there
is no rational basis for finding that the employee resigned, in the face of the denial
by the employee that she resigned or that she terminated the contract of
employment. If the employee did, in fact, resign in my view it was not as a result
of the actions of the employer. The employees in her department seem to have
had a problem with her. As a result of this, they sought to consult with
Mr Jackson and the human resources. The rumours of dissatisfaction were not
created by the employer, as I have indicated.
[41] The commissioner did not apply his mind in assessing the evidence and
make a factual finding on the cause of the alleged constructive dismissal. The
perceived demotion was unfounded in the light of the available evidence. The
award cannot be sustained for reasons I have set out.
[42] Another important issue that needs to be considered relates to the amount
of compensation. The employee was earning a total of R57 350 per month. The
commissioner awarded the employee compensation amounting to R432 000. The
commissioner failed to explain how this figure is made up. One has to take into
account that the employee was willing to leave the company on payment of salary
equal to three months plus bonus. If the bonus was paid the matter would have
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been settled, it would not have come to court. There was no reliable figure for the
bonus before the arbitrator. There is no rational objective basis for the award as
the commissioner has failed to motivate it.
[43] In the result, I find that the award is arbitrary and the award therefore
cannot be sustained.
[44] I have indicated that the employee failed to establish the three requirements
for the constructive dismissal action. There is therefore no point in referring the
matter back to the CCMA.
[45] I have already ruled that the respondent's papers were not properly before
Court. I have accordingly decided not to make any order as to the costs.
[46] The following order is made:
(a) The award is reviewed and set aside and substituted with the order that:
"The applicant has failed to establish the dismissal and the application is
dismissed."
(b) There is no order as to costs.
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__________
Ngcamu AJ
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