THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Case no: JA31/25
In the matter between:
UNIVERSAL PRODUCT NETWORK (PTY) LTD (UPN) Appellant
and
COMMISSIONER PATRICK MBATSANA N.O. First Respondent
COMMISSION FOR CONCILIATION MEDIATION AND
ARBITRATION (CCMA) Second Respondent
NATIONAL UNION OF FOOD BEVERAGE WINE
SPIRITS AND ALLIED WORKERS (NUFBWSAW) Third Respondent
SIMON RIKHOTSO AND OTHERS Fourth to Further Respondents
Heard: 12 March 2026
Delivered: 31 March 2026
Coram: DJAJE AJA; COLLIS AJA and MOSHOANA AJA
JUDGMENT
(1) Reportable No
(2) Of interest to other Judges: No
(3) Revised
____________ ______________
Signature Date
LABOUR APPEAL COURT
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MOSHOANA, AJA
Introduction
[1] This appeal concerns itself with an important legal question of whether gross
procedural unfairness can mutate into substantive unfairness. The Labour
Court reviewed and set aside an arbitration award which had found that the
dismissal of the employees was procedurally unfair but substantively fair. For
procedural unfairness, the commissioner had awarded the employees one
month salary as compensation. The Labour Court after reviewing the
arbitration award found that the dismissals were substantively unfair and
ordered the appellant, Universal Product Network (Pty) Ltd (UPN) to reinstate
and compensate the employees and the estates of the deceased employees.
[2] The appeal reached this Court with the leave of the Labour Appeal Court
(LAC) granted on 06 May 2025. The appeal is opposed by the trade union
and its members.
Background Facts
[3] UPN is the logistics arm of the national retailer, Woolworths. On 12 October
2015, National Union of Food Beverage Wine Spirits and Allied Workers
(NUFBWSAW), hereafter, the trade union, called a protected strike action in
support of wages and condition of service demand. The trade union and the
appellant agreed on picketing rules.
[4] On 19 October 2015, the appellant obtained an interdictory relief against the
trade union and its members from committing certain acts of misconduct and
from being within three hundred meters of the appellant’s premises. The
picketing endured until 27 October 2015. Some employees accepted the
wage offer and returned to work.
[5] Approximately 256 employees were charged with acts of misconduct allegedly
committed over the period 20 to 27 October 2015. The appellant alleged that
the employees in question breached company policies and procedures and
the agreed picketing rules; breached the interim court order; prevented
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vehicles from entering and leaving the appellant’s premises and causing loss
or damage to the appellant, despite repeated warnings concerning their acts
of misconduct.
[6] Over a period, twenty -three disciplinary enquiries, chaired by different
chairpersons took place. Almost all, save for three employees were found
guilty as charged. They were all dismissed on 28 December 2015. Aggrieved
by the dismissals, the trade union challenged the fairness of the dismissals at
the Commission for Conciliation, Mediation and Arbitration (CCMA).
Conciliation failed to resolve the dispute. Commissioner Patrick Mbatsana
was appointed to resolve the dispute through arbitration. Arbitration
proceedings were conducted from 20 March 2016 to 2 June 2020.
[7] On 12 June 2020, the appointed commissioner published his arbitration
award. The commissioner found that the dismissal of the employees was
substantively fair but procedurally unfair. As stated above, each of the
employees were awarded one month’s remuneration as compensation for the
procedural unfairness.
[8] Disenchanted with the arbitration award, the trade union launched a review
application in the Labour Court. As stated before, the trade union became
successful before the Labour Court hence the present appeal.
Judgment of the Labour Court
[9] The judgment of the Labour Court is tediously long. It comprised of ninety -
eight pages and 367 paragraphs. Sadly, the judgment veered off the pleaded
case by a proverbial mile. The finding by the commissioner that the dismissal
was procedurally unfair was not challenged by any party. The pleaded case of
the trade union on procedural unfairness was limited to the quantum of
compensation. The trade union pleaded thus:
’33 Despite these adverse and substantive findings, which do not list most
of the reasons for UPN’s disregard of the law and the requirements for
procedural unfairness, the Commissioner ordered UPN to pay each of
the individual applicants one month’s salary.
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34 I respectfully submit that the Commissioner’s award is not
commensurate with his findings and that no reasonable commissioner
could have made such an award in this context.’
(Own emphasis)
[10] Conspicuously absent from the pleaded case, is a case that the procedural
unfairness is so gross that it mutated to substantive unfairness. The
substantive unfairness challenge was confined to the contention that the
employees were not guilty as charged and that the sanction of dismissal was
inappropriate.
[11] It is trite that a court is not entitled to decide an unpleaded case
1. The bulk of
the Labour Court’s reasoning was confined to the grossness of procedural
unfairness that rendered the dismissal to be substantively unfair. This was,
with due respect an unnecessary excursion given the pleaded case. On
procedural unfairness, the gripe of the trade union was the compensation
awarded. On that challenge, the Labour Court, with considerable regret and
utmost respect, reached the following convoluted and contradictory
conclusion:
‘[324] Roskam argued that in coming to an award of one month
compensation under the circumstances, the commissioner exercised
his discretion capriciously and his decision is accordingly not rational
and therefore not reasonable. I agree.
[325] I, however, do not intend to interfere with the award of one month’s
compensation.
[326] I intend, for reasons discussed above and below, to review and set
aside the commissioner’s finding that the dismissals were procedurally
unfair and substitute the finding with a finding that due to gross
procedural defects in the hearing process followed by UPN, the
1 See Vodacom (Pty) Ltd v Makate and Another [2025] BLLR 1105 (CC) at para 99; Director of
Hospital Services v Mistry 1979 (1) SA 626 (A) at 635H-636B; Minister of Safety and Security v
Slabbert [2010] 2 All SA 474 (SCA) para 11; and De Nysschen v Government Employees’ Pension
Fund and others [2024] 4 BLLR 349 (SCA) para 16-18.
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outcome of the proceedings were vitiated rendering the dismissals
substantively unfair.
(Own emphasis)
[12] In a review application, a court may only interfere if the arbitration award falls
outside the bands of reasonableness. The finding that the dismissals were
procedurally unfair was not attacked. As to why the Labour Court chose to
review and set aside that unimpeached finding, this Court is at a complete
loss. The Labour Court correctly did not interfere with the award of one month.
That should have been the end of the matter for the trade union given the
parameters of its impugn of the arbitration award. When it comes to
compensation, a commissioner obtains guidance from section 194(1) of the
Labour Relations Act
2 (LRA). The compensation must be just and equitable in
all the circumstances and may not be more than the equivalent of 12 month’s
remuneration.
[13] In other words, a just and equitable compensation is anything between 0 to 12
months’ remuneration
3. An exercise of discretion is involved when it comes to
the number of months to be awarded. An award for compensation is an
equivalent of a solatium 4. Indeed, the one month’s compensation award was
not interferable.
[14] The Labour Court erred in reviewing and setting aside a finding of procedural
unfairness, in the circumstances where no one challenged that finding. The
appellant had not launched a counter -review. The trade union could not
impugn a favourable finding. The finding of substantive unfairness by the
Labour Court is not aligned to the attack by the trade union. The attack was
two-fold; namely (a) the employees are not guilty as charged; and (b) the
sanction of dismissal was inappropriate. As indicated above, nowhere did the
trade union raise a challenge that the procedural unfairness is so gross that
the commissioner should have considered it to constitute substantive
2 Act 66 of 1995, as amended.
2 Act 66 of 1995, as amended.
3 See Johnson & Johnson (Pty) Ltd v Chemical Workers Industrial Union (1999) 20 ILJ 89 (LAC).
4 See ARB Electrical Wholesalers (Pty) Ltd v Hibbert (20150 36 ILJ 2989 para 24.
LABOUR APPEAL COURT
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unfairness. This challenge was germinated by the Labour Court mero motu
(on its own). A Court is entitled to on its own raise a legal issue foreshadowed
in the papers and give parties an opportunity to address it5. A party who seeks
to review an arbitral award is bound by the grounds contained in the review
application6.
[15] As it shall be demonstrated below, the issue raised by the Labour Court is not
strictly a legal point. The issue required to be pleaded and evidence in its
support would have been required to be led. The Labour Court erred in
germinating an unpleaded case and not allowing the parties to lead evidence
for and against that case. Certainly, this is at variance with the functions of a
reviewing court
7.
[16] Returning to the substantive unfairness issue, the commissioner reached the
following unassailable finding:
‘[492] All the represented applicants in these proceedings were positively
identified. All the videos are captured within the vicinity of the
respondent which is not in compliance of the picketing rules or the
court order. It is irrelevant whether they were blocking roads and
trucks or whether they are respondents to the court interdict. They
violated the picketing rules and are all guilty thereof. The respondent
had a valid reason to dismiss the applicants.’
(Own emphasis)
[17] In its judgment, the Labour Court acknowledged that the evidence
demonstrated that the trucks were blocked and such constituted a serious
misconduct. Despite a laborious referencing of the decisions of the
Constitutional Court and the LAC, nowhere does the Labour Court expressly
conclude that the employees were not guilty as charged and that their
5 See CUSA v Tao Ying Metal Industries and Others (2008) 29 ILJ 2461 (CC) at para 66.
6 CUSA at para 66.
7 See Makuleni v Standard Bank of South Africa Ltd and others (2023) 44 ILJ 1005 (LAC) at para 13 –
‘To meet the review test, the result of the award has to be so egregious that, as the test requires, no
reasonable person could reach such result…’
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dismissal sanction was inappropriate. Instead, the Labour Court furnished a
barrage of reasons why in its view the award is not that of a reasonable
commissioner. All those reasons demonstrate appeal grounds as opposed to
review grounds. For instance, where the commissioner found that the
employees were positively identified, the Labour Court finds that the finding is
disconnected with the evidence before him. A court of review is not entitled to
substitute reasonable findings of an arbitrator, who listened to the evidence
and observed the witnesses. It is not about what a court of review would have
done with such evidence, but whether the conclusion is one a reasonable
decision maker would reach.
[18] The crux of the Labour Court’s finding on substantive fairness is that set out in
paragraph 326, quoted above, of its judgment. That finding has nothing to do
with whether the employees were guilty or not guilty of the misconduct that led
to their dismissal, nor does the learned judge find that dismissal as a sanction
was inappropriate. I now turn to consider the legal questioned raised and
decided by the Labour Court on its own.
Does a grossly procedurally unfair dismissal morph into a substantively unfair
dismissal?
[19] On this question the Labour Court was heavily influenced by the decision of
the Labour Court in CVO School VIVO v Christoffel Daniel Pretorius and
others
8. That decision reached a conclusion that as a matter of general
principle, gross procedural failures in the conduct of proceedings could in
itself serve to vitiate the outcome of the proceedings, no matter what the
merits of the matter may be. The Labour Court in CVO School had relied on
the decision of Yichiho Plastics (Pty) Ltd v Muller
9 and Satani v Department of
Education, Western Cape and others10.
8 (JR1006/15; JR1004/15) [2017] ZALCJHB 412 (6 April 2017).
9 (1994) 15 ILJ 593 (LAC).
10 (2016) 37 ILJ 2298 (LAC).
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[20] In terms of the old Labour Relations Act 11 of 1956, the bifurcation between
substantive and procedural unfairness was unknown. The old LRA only knew
an unfair labour practice which was any act or omission other than a strike or
lock-out which may have an effect that any employee or class of employees is
or may be unfairly affected or that his or their employment opportunities or
work security is or may be prejudiced or jeopardised thereby. As such, a
dismissal could under the old LRA be declared to be an unfair labour practice.
Accordingly, the Yichiho decision was decided under the old LRA. With regard
to Satani, the LAC was concerned with the procedural irregularities in the
arbitration proceedings. In particular the Court in Satani said:
‘[37] In my view, the award must be reviewed and set aside because the
scope, nature and effect of the arbitrator’s interventions and
dominance were such that she failed to afford the parties a fair
hearing. Her conduct gave rise to a reasonable apprehension of bias.’
(Own emphasis)
[21] The legal statement coined in CVO Schools that gross procedural unfairness
may vitiate the outcome of the proceedings is correct as far as it refers to a
gross irregularity in an arbitration hearing to a point that the parties to an
arbitration process are not afforded a fair hearing. There is a clear and
necessary distinction to be drawn between procedural fair ness and gross
irregularity in the proceedings. A gross irregularity is a severe, fundament al
failure to follow proper procedures or legal principles in a decision- making
process. Such an irregularity is capable of denying an affected party a fair
hearing12. The statement in CVO Schools is not authority for the proposition
that the gross procedural unfairness renders the dismissal substantively
unfair. To the extent that the Labour Court reached such a conclusion, it erred
and its decision on that is liable to be set aside on appeal.
and its decision on that is liable to be set aside on appeal.
[22] Section 188(1)(a)(i) of the current LRA is clear that a dismissal is unfair if the
employer fails to prove that the reason for the dismissal is a fair reason –
11 Act 28 of 1956.
12 See Ellis v Morgan; Ellis v Desai 1909 TS 576.
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related to the employee’s conduct. This is in line with article 4 of the
International Labour Organisation’s (ILO) Termination of Employment
Convention No 158 of 1982 (Convention). Section 188(1)(b) specifically
provides that a dismissal is also unfair if that dismissal was not effected in
accordance with a fair procedure. Also, this is in line with article 7 of the
Convention. Therefore, under the current regime a dismissal without a fair
reason is one that is substantively unfair and one without a fair procedure is
one that is procedural ly unfair13. No matter how gross the procedural defect
is, procedural unfairness cannot morph into being substantive unfairness.
Were that to be the case, a dismissal for theft for instance, effected without
any hearing must by reason of a complete lack of a hearing become a
substantively unfair dismissal , even in the circumstances where an employer
would have had a fair reason – misconduct of theft – to have dismissed an
employee. This is unsustainable and inconsistent with the LRA as well as the
Convention.
[23] It is completely illogical and uncoordinated with section 188 of the current LRA
to accommodate a situation where, depending on the grossness of the
procedural unfairness , a dismissal with a valid reason would become
substantively unfair. Arbitration proceedings are a hearing de novo. Proper
reading of the Labour Court judgment demonstrates that the alleged gross
procedural unfairness, is related to what happened at the internal hearings.
Such is of no moment given the fact that an arbitration process is a hearing de
novo.
[24] I pause to remark that in an instance where a dismissal related to operational
requirements is involved, issues of procedural unfairness may be inex tricably
intertwined with substantive unfairness to a point that a dismissal may be
found to be substantively unfair14. However, such does not extinguish the
found to be substantively unfair14. However, such does not extinguish the
bifurcation between substance and procedure as known in the current LRA. In
a dismissal related to operational requirements , procedural fairness is
13 See item 4(1) of Schedule 8 of the LRA.
14 See Woolworths (Pty) Ltd v SACCAWU and others (2018) 39 ILJ 222 (LAC) at para 22.
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governed by section 189 of the LRA . Egregious departure from a section 189
process shall never turn a dismissal supported by economic ; technological;
structural or similar needs to be substantively unfair , unless if a dismissal is
not a measure of last resort15.
[25] Such an unlegislated formulation of gross procedural unfairness morphing into
substantive unfairness will also make section 193(2)(d) 16 of the current LRA
incongruent. On the Labour Court’s reasoning, the subsection must be read to
be excluding gross procedural unfairness. Accordingly, this Court disagrees
with the approach adopted by the Labour Court to convert a “gross procedural
unfairness” into a substantive unfairness. That is not only at odds with the
current LRA but it is simply untenable. Even if there was such a legal basis for
substantive unfairness, the trade union should have clearly and unequivocally
presented such a case at arbitration, it being a hearing de novo. It was
improper for the Labour Court to make the appellant to content with a new
case of substantive unfairness other than the one determined by the
arbitrating commissioner. As required by section 192(2) of the LRA, the onus
lies on an employer to prove that the dismissal is fair . Section 188 effectively
directs an employer as to what to prove in order to attain fairness.
[26] Firstly, an employer must prove a fair reason. Secondly , prove that the
dismissal was effected in accordance with a fair procedure. It bears emphasis
that section 188(2) specifically provides that any person considering whether
or not the dismissal was effected in accordance with a fair procedure must
take into account any relevant code of good practice issued in terms of the
LRA. This simply means that the commissioner was to be guided by the code
of good practice and nothing more. Expressly and conspicuously absent in the
code is the degree of procedural unfairness.
code is the degree of procedural unfairness.
15 See Atlantis Diesel Engines (Pty) Ltd v NUMSA (1994) 15 ILJ 1247 (A).
16 (2) The Labour Court or the arbitrator must require the employer to re-instate or re-employ the
employee unless – (d) the dismissal is unfair only because the employer did not follow a fair
procedure.
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[27] As correctly held in Avril Elizabeth Home for the Mentally Handicapped v
CCMA and others17, what is required is not a formal enquiry. What is required
is an investigation into any alleged misconduct by the employer, an
opportunity by any employee against whom any allegations of misconduct are
made, to respond after a reasonable period with the assistance of a
representative, a decision by the employer and notice of that decision. Unlike
in a gross irregularity situation, as expounded above, there is no room for the
possibility of gross procedural unfairness in the scheme of the current LRA.
Analysis
[28] There was no legal basis for the Labour Court to have interfered with the
arbitration award. Sadly, the judgment of the Labour Court extensively
considered decisions under the old LRA when the bifurcation between
substance and procedure was absent in determining the fairness of a
dismissal. The lengthy judgment of the Labour Court is unfortunately
contradictory in many respects. It was a futile exercise for the Labour Court to
consider a barrage of authorities that dealt with procedural unfairness, in the
circumstances where, the finding of the commissioner on procedural
unfairness remained unchallenged.
[29] The commissioner considered the principal issue and afforded the parties an
opportunity to address him on the principal issue
18. He thereafter reached a
justifiable and reasonable decision. Therefore, the Labour Court erred in
reviewing and setting aside the commissioner’s award. Since the arbitration
award is unimpeachable, the Labour Court was not empowered to invoke
section 145(4) of the LRA powers. Its substitution of the arbitration award is a
brutum fulmen – void on its face.
[30] Most importantly, the Labour Court erred in deciding a case that is not
foreshadowed in the pleadings – gross procedural unfairness equating
17 (2006) 27 ILJ 1644 (LC).
17 (2006) 27 ILJ 1644 (LC).
18 See Gold Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine v CCMA and others (2014) 25 ILJ
943 (LAC) at paras 14 -16.
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substantive unfairness and one which was not ventilated at arbitration.
Accordingly, the order of the Labour Court must be set aside.
Conclusion
[31] Because of all the above reasons, the order set out below is made.
Order
1. The appeal is upheld.
2. The order of the Labour Court is set aside and replaced with an order :
Dismissing the review application with no order as to costs.
3. In respect of this appeal, this Court awards no order as to costs.
_______________________
G N Moshoana
Acting Judge of the Labour Appeal Court of South Africa
Djaje AJA and Collis AJA concurring.
APPEARANCES:
For the Appellant : Mr C Watt-Pringle SC
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Instructed by: Macgregor Erasmus Attorneys
Inc, Johannesburg.
For the Respondent : Mr A Roskam
Instructed by: Haffegee Roskam Savage
Attorneys, Johannesburg.