IN THE LABOUR COURT OF SOUTH AFRICA
SITTING IN JOHANNESBURG
CASE NO
JR2048/03
Date of Hearing:
2004/10/29
Date
of Judgment: 2005/01/20
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
FOR THE APPLICANT: ADVOCATE P A
BUIRSKI
FOR THE RESPONDENTS: THIRD RESPONDENT IN
PERSON
TRANSCRIBER
SNELLER RECORDINGS (PTY) LTD - DURBAN
JR2048/03- NB/CD - 3 - JUDGMENT
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.
JR2048/03- NB/CD - 4 - JUDGMENT
(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 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.
JR2048/03- NB/CD - 5 - JUDGMENT
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.
[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
JR2048/03- NB/CD - 6 - JUDGMENT
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.
[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
JR2048/03- NB/CD - 7 - JUDGMENT
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, 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.
JR2048/03- NB/CD - 8 - JUDGMENT
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.
[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
JR2048/03- NB/CD - 9 - JUDGMENT
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,
JR2048/03- NB/CD - 10 - JUDGMENT
no figure that was agreed for the incentive bonus. The
subsequent agreement sent to the employee again did not have
the incentive bonus. She did not sign the agreement.
[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
JR2048/03- NB/CD - 11 - JUDGMENT
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, 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
JR2048/03- NB/CD - 12 - JUDGMENT
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."
[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.
JR2048/03- NB/CD - 13 - JUDGMENT
[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 construed as absconding. At page
450 of the papers, lines 22 to 25, she testified that:
JR2048/03- NB/CD - 14 - JUDGMENT
"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
JR2048/03- NB/CD - 15 - JUDGMENT
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.
[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
JR2048/03- NB/CD - 16 - JUDGMENT
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. 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
JR2048/03- NB/CD - 17 - JUDGMENT
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
JR2048/03- NB/CD - 18 - JUDGMENT
dismissal is not subjective but objective. He failed to consider
objectively if the employer had made continued employment
intolerable.
[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
JR2048/03- NB/CD - 19 - JUDGMENT
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 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
JR2048/03- NB/CD - 20 - JUDGMENT
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.
[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.
JR2048/03- NB/CD - 21 - JUDGMENT
[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
JR2048/03- NB/CD - 22 - JUDGMENT
the company on payment of salary equal to three months plus
bonus. If the bonus was paid the matter would have 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."
JR2048/03- NB/CD - 23 - JUDGMENT
(b) There is no order as to costs.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
__________
Ngcamu AJ