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[2008] ZACC 16
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Equity Aviation Services (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (CCT 88/07) [2008] ZACC 16; [2008] 12 BLLR 1129 (CC); 2009 (1) SA 390 (CC) ; (2008) 29 ILJ 2507 (CC) ; 2009 (2) BCLR 111 (CC) (25 September 2008)
Links to summary
CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case
CCT 88/07
[2008]
ZACC 16
EQUITY AVIATION SERVICES (PTY)
LTD
Applicant
versus
COMMISSION FOR CONCILIATION, MEDIATION
AND
ARBITRATION
First Respondent
W FERREIRA
NO
Second Respondent
NELSON
MAWELELE
Third Respondent
Heard on :
6 May 2008
Decided on :
25 September 2008
JUDGMENT
NKABINDE
J:
Introduction
The
main question in this case is whether section 193(1)(a) of the
Labour Relations Act
1
(the LRA), properly interpreted, means that the back-pay payable to
employees reinstated in their employment is limited to
12 months’
wages. Section 193 provides for three remedies a court or
arbitrator may order after ruling that a dismissal
is unfair. They
are reinstatement, re-employment or compensation. A court must
order reinstatement or re-employment unless
one or more specified
circumstances exist
2
in which case compensation may be granted depending on the nature
of the dismissal. The section also vests a court or arbitrator
with a discretion to order reinstatement from any date not earlier
than the date of dismissal.
The
applicant seeks leave to appeal against the judgment of the Labour
Appeal Court as well as condonation for the delay in
lodging this
application and condonation for the late filing of the record. The
third respondent opposes the application for
leave to appeal but
does not oppose the applicant’s applications for condonation.
The third respondent seeks condonation
for the late filing of the
answering affidavit.
Parties
The
applicant, Equity Aviation Services (Pty) Ltd (Equity), is a
registered company formerly known as Apron Services (Pty) Ltd.
The
first respondent, the Commission for Conciliation, Mediation and
Arbitration (CCMA) is a statutory body established under
the LRA.
The second respondent, the Commissioner, conducted arbitration
proceedings under the auspices of the CCMA. The third
respondent,
Mr Mawelele,
3
is an erstwhile employee of Equity.
Facts
Many
of the facts in this case are common cause. They are dealt with in
considerable detail in the judgment of the Labour Appeal
Court in
Apron Services (Pty) Ltd v Commissioner for Conciliation,
Mediation and Arbitration and Others.
4
For the purpose of this judgment, it is not necessary to restate
the facts in detail. It suffices to say that Mr Mawelele
was
employed by Equity as a shift control officer. During November
2000 he was charged with misconduct
5
and, following a disciplinary enquiry, found guilty and dismissed
on 8 March 2001.
6
A dispute arose between Equity and the employee as to the fairness
of the dismissal.
Arbitration
proceedings
Aggrieved
by the dismissal, Mr Mawelele referred the dispute to the CCMA for
conciliation. Conciliation having failed, the
dispute was referred
for arbitration.
7
The Commissioner issued an arbitration award on 18 March 2002
8
stating that the dismissal was both procedurally and substantively
fair.
9
Labour
Court proceedings
On
2 May 2002 Mr Mawelele launched proceedings in the Labour Court for
the review of the award in terms of section 145(1)
10
of the LRA.
11
The relief sought was for the dispute between the parties to be
referred back to the Commissioner for rehearing, alternatively,
for
the matter to be determined by that Court. The basis for remittal
was that the record was insufficient. It was contended
on behalf
of Mr Mawelele that the finding that he had committed four acts of
misconduct was not rationally connected to the
evidence before the
Commissioner. Equity opposed the review application.
The
Labour Court, per Revelas J, decided that although the record was
unsatisfactory, it was not persuaded that the deficiency
was of a
nature that precluded it from making a finding on the rationality
of the award. The Court found that the charges
arose from the same
incident and that the offence should have been corrected with
progressive discipline. It set aside the
award and replaced it
with an order that the “[employee] is to receive a final
written warning to the effect that should
he commit a similar
transgression in the next two years he may be dismissed
immediately”. On 2 February 2005 the Labour
Court granted
Equity leave to appeal to the Labour Appeal Court and ordered that
costs be costs in the appeal.
12
Labour
Appeal Court proceedings
The
Labour Court’s decision was challenged for reviewing and
setting aside the sanction of dismissal. The Labour Appeal
Court,
per Zondo JP, with Pillay and Kruger AJJA concurring, observed that
the Labour Court did not expressly make an order
of reinstatement
after setting aside the award. However, the Labour Appeal Court
said that there was no doubt that the Labour
Court was of the view
that the Commissioner ought to have ordered Equity to reinstate Mr
Mawelele. That, the Labour Appeal
Court said, arose from the fact
that the Labour Court expressly held that the appropriate
disciplinary sanction was a final
warning on the condition imposed.
The
Labour Appeal Court also observed that the Labour Court did not
consider whether a reinstatement order which the Commissioner
ought
to have made should have operated retrospectively, and if so, the
extent of the retrospectivity. Regarding the merits
of the case,
the Labour Appeal Court found that the Labour Court was correct in
setting aside the award even though it did
not agree with the
reasons for the decision. The Labour Appeal Court expressed doubt
regarding the correctness of the condition
included in the order
setting aside the award, but said that it was not necessary to say
more about it because Mr Mawelele
had not noted a cross-appeal
against that part of the order.
13
The
Labour Appeal Court found that while an order of reinstatement may
necessarily be implied in the order of the Labour Court,
14
the retrospectivity of the reinstatement order was not to be
implied. The employee did not note a cross-appeal against the
Labour Court’s failure to make an order backdating the
reinstatement to the date of dismissal. The Court opined that
it
was therefore not open to it to consider that aspect. It concluded
that the reinstatement order that the Commissioner would
have made
should have run only from the date of the issuing of the award.
The Court therefore made the following order, which
in part reads:
“
3(c) The arbitration
award issued by the commissioner in this matter is hereby reviewed
and set aside and in its place the following
order is made:
. . . .
[Equity] is ordered to
reinstate the [employee] in its employ on terms and conditions
no less favourable to him than
the terms and conditions which
governed his employment immediately before his dismissal;
[T]he order in (ii) above
shall operate from the date of the issuing of this award.”
The
order in para
graph 3(c)(iii) above is the
subject matter of this appeal. As will become more apparent later
in this judgment, Equity’s
criticism is that the perceived
retroactive order of reinstatement constitutes an infringement of
its right to fair labour
practices and that that order is at odds
with the decision of the Labour Appeal Court in
Chemical
Workers Industrial Union and Others v Latex Surgical Products (Pty)
Ltd.
15
Petition
to the Supreme Court of Appeal
On
12 July 2007 Equity applied for leave to appeal to the Supreme
Court of Appeal against the judgment of the Labour Appeal
Court.
16
The Supreme Court of Appeal dismissed the application with costs
on 11 September 2007.
In
this Court
On
28 November 2007 Equity lodged an application for leave to appeal
against paragraph 3(c)(iii) of the order of the Labour
Appeal
Court.
17
The Chief Justice directed
18
that written argument by the parties should address: (a)
condonation and leave to appeal; (b) the merits of the appeal in
relation to the order appealed against in case condonation and
leave to appeal were granted; and (c) the appropriate remedy
should
the appeal succeed, including the question whether the matter
should be referred back to the Labour Appeal Court for
it to
determine the appropriate remedial order. Equity was directed to
file the record by no later than 21 February 2008.
The
applicant seeks condonation for the late filing of the application
for leave to appeal and of the record. The application
for leave
to appeal should have been lodged on 3 October 2007
19
but was lodged on 28 November 2007. The applicant explains that
the need to appeal to this Court became apparent when the
Supreme
Court of Appeal handed down the judgment in
Republican Press
(Pty) Ltd v CEPPWAWU and others
20
of which it became aware a few days later. Equity makes the
point that even if
Republican Press
were correctly decided,
its appeal to the Labour Appeal Court was decided before the
decision by the Supreme Court of Appeal
in that case. Thus, Equity
contends, the Labour Appeal Court was bound by its earlier decision
in
Latex.
The
record was lodged more than 11 days later than the date stipulated
in the directions issued by the Chief Justice. The explanation
for
the delay is that the original record of the Labour Appeal Court
proceedings could not be located and that Equity encountered
difficulties in finding suitable transcribers to transcribe the
record timeously. Equity explains further that it could not
instruct its attorneys on time due to certain pressures on its
business.
Regarding
the merits of the appeal, Equity relies on
Latex.
It
contends that it is not competent for a court or tribunal to order
retrospective operation of a reinstatement order in
excess of 12
months. It is argued that if that order is granted after lengthy
delays employers would be compelled to pay back-pay
for the entire
period, thereby imposing an exorbitant sanction on the employer
that is far in excess of the compensation envisaged
in terms of
section 194 of the LRA. That, it is argued, would undermine the
effect of section 194. Equity argues that the
construction of
section 193 by the Labour Appeal Court in
Latex
properly
gives effect and protection to the right to fair labour practices
enshrined in section 23(1) of the Constitution.
In support of this
it argues that orders making reinstatement fully retrospective to
the date of dismissal constitute an infringement
of the employer’s
right to fair labour practices; that a fully retrospective order
should only be granted in the most
exceptional circumstances and
that limiting back-pay to 12 or 24 months is reasonable when viewed
against the machinery of
the LRA which is designed to ensure
expeditious resolution of unfair dismissal disputes. Equity argues
therefore, that section
193 is reasonably capable of being
interpreted to mean that where reinstatement is ordered, it should
operate with retrospective
effect not beyond 12 months (in the case
of ‘ordinary’ unfair dismissals) and 24 months (in the
case of dismissals
which are held to be automatically unfair).
Adopting
the reasoning in
Latex
,
Equity argues that any order
for payment of retrospective remuneration is, in effect, an order
for compensation and thus the
limitations imposed by section 194
apply to any award of back-pay connected with a reinstatement
order. It is contended that
the remedies contemplated in section
193 are not alternative remedies, but can be ordered
simultaneously. Equity concedes
however that notionally,
reinstatement cannot be ordered simultaneously with re-employment.
Both remedies, it argues, can
be ordered with compensation. Equity
argues that the legislature has capped the amount of remuneration
or back-pay in section
194 to which an employee is entitled on
reinstatement to achieve fairness between employers and employees.
It is argued that
there is no rational basis on which to
distinguish between the limit on financial compensation imposed
where reinstatement
is ordered and in circumstances where it is
not. That, it is argued, would differentiate unfairly between
employees who elect
to, or are able to seek reinstatement, and
those who do not.
In
the alternative, Equity contends that the Labour Appeal Court
failed to exercise its discretion properly when ordering
reinstatement to operate from the date of the issuing of the award.
As to the question of appropriate relief, Equity asks that
the
matter be referred back to the Labour Appeal Court for that Court
to hear further evidence to determine the date from which
the
reinstatement order should operate.
Mr
Mawelele does not oppose the applications for condonation but does
oppose the application for leave to appeal on the basis
that the
application does not raise a constitutional matter and
alternatively, that to the extent that the application might
raise
a constitutional issue, it is not in the interests of justice for
leave to appeal to be granted. It is contended on
behalf of Mr
Mawelele that Equity’s interpretation of section 193(1)(a) –
that no court can order reinstatement
beyond 12 months – has
no merit, and that there are no prospects of success on appeal.
Issues
Apart
from the preliminary issues that arise for decision, namely whether
the applications for condonation and leave to appeal
should be
granted, the central issues that arise for consideration relate to:
(a) the proper interpretation of section 193(1)(a)
read with
section 194, more pointedly, whether these sections, correctly
interpreted, limit the payment of back-pay where a
court orders
reinstatement or re-employment to a maximum of 12 months wages as
contended for by Equity; (b) whether the Labour
Appeal Court
exercised a discretion in relation to the retrospectivity of the
order and, if so, whether it failed to exercise
its discretion
properly; and (c) whether remittal of the case to the Labour Appeal
Court will constitute appropriate relief.
Before
I make a determination on these issues, it is necessary to
delineate the relevant constitutional and statutory provisions
as
well as any relevant sources of international law.
The
Constitution, statutory framework and ILO Convention
Section
23 of the Constitution provides that “[e]veryone has the
right to fair labour practices.” Section 39(1)
of the
Constitution provides:
“
When interpreting the
Bill of Rights, a court, tribunal or forum─
(a) must promote the values
that underlie an open and democratic society based on human dignity,
equality and freedom;
(b) must consider international
law; and
(c) may consider foreign law.”
Section
3 of the LRA enjoins any person applying that Act to interpret its
provisions─
“
(a) to give effect to
its primary object;
in compliance with the
Constitution; and
in compliance with the public
international law obligations of the Republic.”
The
LRA, as evident from the long title, is intended “to give
effect to section 27 of the Constitution.”
21
The purpose of the Act is expressly stated as follows in section
1:
“
[T]o advance economic
development, social justice, labour peace and the democratisation of
the workplace by fulfilling the primary
objects of this Act, which
are─
(a) to give effect to and
regulate the fundamental rights conferred by section 27 of the
Constitution;
(b) to give effect to
obligations incurred by the Republic as a member state of the
International Labour Organisation;
(c) to provide a framework
within which employees and their trade unions, employers and
employers’ organisations
can
─
(i) collectively bargain to
determine wages, terms and conditions of employment and other
matters of mutual interest; and
(ii) formulate industrial
policy; and
(d) to promote─
(i) orderly collective
bargaining;
(ii) collective bargaining at
sectoral level;
(iii) employee participation in
decision-making in the workplace; and
(iv) the effective resolution
of labour disputes.”
Section
193 of the LRA makes provision for remedies for unfair dismissals
and “unfair labour practice”. It reads
as follows:
“
(1) If the Labour Court
or an arbitrator appointed in terms of this Act
finds that a
dismissal
is unfair, the Court or the arbitrator may─
(a) order the employer to
re-instate the employee from any date not earlier than the date of
dismissal;
(b) order the employer to
re-employ the employee, either in the work in which the employee was
employed before the dismissal or
in other reasonably suitable work
on any terms and from any date not earlier than the date of
dismissal; or
(c) order the employer to pay
compensation to the employee.
(2) The Labour Court or the
arbitrator must require the employer to re-instate or re-employ the
employee unless─
(a) the employee does not wish
to be re-instated or re-employed;
(b) the circumstances
surrounding the dismissal are such that a continued employment
relationship would be intolerable;
(c) it is not reasonably
practicable for the employer to re-instate or re-employ the
employee; or
d) the dismissal is unfair only
because the employer did not follow a fair procedure.
(3) If a dismissal is
automatically unfair or, if a dismissal based on the employer’s
operational requirements is found
to be unfair, the Labour Court in
addition may make any other order that it considers appropriate in
the circumstances.
(4) An arbitrator appointed in
terms of this Act may determine any unfair labour practice dispute
referred to the arbitrator,
on terms that the arbitrator deems
reasonable, which may include ordering reinstatement, re-employment
or compensation.”
Section
194, as its heading shows, deals with “[l]imits on
compensation.” It provides:
“
(1) The compensation
awarded to an employee whose dismissal is found to be unfair either
because the employer did not prove that
the reason for dismissal was
a fair reason relating to the employee’s conduct or capacity
or the employer’s operational
requirements or the employer did
not follow a fair procedure, or both, must be just and equitable in
all the circumstances, but
may not be more than the equivalent of 12
months’ remuneration calculated at the employee’s rate
of remuneration
on the date of dismissal.
(2) . . . .
(3) The compensation awarded to
an employee whose dismissal is automatically unfair must be just and
equitable in all the circumstances,
but not more than the equivalent
of 24 months’ remuneration calculated at the employee’s
rate of remuneration on
the date of dismissal.
(4) The compensation awarded to
an employee in respect of an unfair labour practice must be just and
equitable in all the circumstances,
but not more than the equivalent
of 12 months remuneration.”
This
Court has acknowledged in
South African National Defence Union v
Minister of Defence and Another
22
that in interpreting section 23 of the Constitution an
important source of international law will be the conventions and
recommendations
of the International Labour Organisation (ILO).
23
An important source of international law for the purpose of this
case is ILO Convention 158 of 1982.
24
Article 4 of Convention 158 lays the foundation for South African
legislation regarding unfair dismissal based on misconduct,
incapacity and operational requirements. That Article safeguards
the security of employment by ensuring that employers do
not
dismiss employees at will. It provides that─
“
[t]he
employment of a worker shall not be terminated unless there is a
valid reason for such termination connected with the capacity
or
conduct of the worker or based on the operational requirements of
the undertaking, establishment or service.”
Section
188 of the LRA
25
endorses Article 4 by ensuring that employers do not terminate
contracts of employment at will,
26
that is to say, without giving fair reasons for the terminations of
employment contracts. It is against this background that
section
193 of the LRA must be understood and interpreted.
I
now turn to the issues for decision.
Should
condonation be granted?
The
application for leave to appeal to this Court should have been
lodged on 3 October 2007.
27
It was lodged on 28 November 2007, a delay of approximately 48
days. The need to appeal to this Court, Equity submits, became
apparent after the Supreme Court of Appeal delivered its judgment
in
Republican Press
. Generally, condonation will be granted
if it is in the interests of justice to do so.
28
Essentially, the applicant’s explanation for the delay is
not convincing but in the light of the fact that the application
is
not opposed and that the application for leave to appeal is before
this Court, it is in the interests of justice for this
Court to
consider it.
Should
leave to appeal be granted?
In
considering whether leave to appeal should be granted, it is
necessary to determine whether the matter raises a constitutional
issue and whether it is in the interests of justice for this Court
to hear the merits of the case. This Court “may decide
only
constitutional matters, and issues connected with decisions on
constitutional matters”.
29
Section 167(7) of the Constitution provides that “[a]
constitutional matter includes any issue involving the
interpretation,
protection or enforcement of the Constitution.”
In
National Education and Health and Allied Workers Union
(NEHAWU) v UCT
30
this Court held that matters that concern the interpretation of
legislation enacted to give effect to the Bill of Rights do
raise
constitutional issues.
31
The
constitutional issue raised in this case relates to the
interpretation of section 193(1)(a) which gives content to the
right to fair labour practices that is underpinned by section 23(1)
of our Constitution. Even though no order of retrospectivity
was
made by the Court below, the issue of the statutory limit, if any
on the amount of back-pay that an employer may be required
to pay
when it has been ordered to reinstate or re-employ a worker is an
important issue in labour law and one that extends
beyond the
interests of the parties directly involved in the case.
32
Also, the need for legal certainty regarding the interpretation of
section 193(1)(a) given the difference of opinions in the
decisions
of the Labour Appeal Court and the Supreme Court of Appeal
33
is also a consideration to be taken into account. Prospects of
success on appeal are an important consideration though not
a
determinative criterion.
34
I am of the view that leave to appeal should be granted.
Next,
I consider the proper interpretation of section 193(1)(a) of the
LRA.
Proper
interpretation of section 193(1)(a)
Section
193(1)(a) provides that a court or arbitrator may grant one of the
three remedies
35
to an employee who has been dismissed unfairly. A court or
arbitrator must order the employer to reinstate or re-employ the
employee unless one or more of the circumstances specified in
section 193(2)(a)-(d) exist,
36
in which case compensation may be ordered depending on the nature
of the dismissal. Reinstatement or re-employment may be
ordered
from any date not earlier than the date of the dismissal.
Ordinarily, the primary rule in interpreting legislation is to
determine the meaning of the words used in the relevant statute
according to their natural, ordinary or primary meaning and also in
the light of their context, including the subject matter
of the
statute and its apparent scope and purpose.
37
The provisions of the LRA must be purposively construed to give
effect to the right protected by section 23(1) of the Constitution
38
that is enjoyed by both employers and employees.
39
This
Court, in
Investigating Directorate: Serious Economic Offences
and Others v Hyundai Motor Distributors (Pty) Ltd: In re Hyundai
Motor
Distributors (Pty) Ltd and Others v Smit NO and Others,
40
sets out the duty imposed by section 39(2) of the Constitution
upon our courts – to interpret legislation so far as its
language will allow so as to promote the spirit, purport and
objects of the Bill of Rights. The Court said:
“
On the one hand, it is
the duty of a judicial officer to interpret legislation in
conformity with the Constitution so far as this
is reasonably
possible. On the other hand, the legislature is under a duty to
pass legislation that is reasonably clear and
precise, enabling
citizens and officials to understand what is expected of them. A
balance will often have to be struck as to
how this tension is to be
resolved when considering the constitutionality of legislation.
There will be occasion when a judicial
officer will find that the
legislation, though open to a meaning which would be
unconstitutional, is reasonably capable of being
read ‘in
conformity with the Constitution’. Such an interpretation
should not, however, be unduly strained.”
41
The
ordinary meaning of the word “reinstate” is to put the
employee back into the same job or position he or she
occupied
before the dismissal, on the same terms and conditions.
42
Reinstatement is the primary statutory remedy in unfair dismissal
disputes. It is aimed at placing an employee in the position
he or
she would have been but for the unfair dismissal. It safeguards
workers’ employment by restoring the employment
contract.
Differently put, if employees are reinstated they resume employment
on the same terms and conditions that prevailed
at the time of
their dismissal. As the language of section 193(1)(a) indicates,
the extent of retrospectivity is dependent
upon the exercise of a
discretion by the court or arbitrator. The only limitation in this
regard is that the reinstatement
cannot be fixed at a date earlier
than the actual date of the dismissal. The court or arbitrator may
thus decide the date
from which the reinstatement will run, but may
not order reinstatement from a date earlier than the date of
dismissal.
43
The ordinary meaning of the word “reinstate” means
that the reinstatement will not run a date from after the
arbitration award. Ordinarily then, if a Commissioner of the CCMA
order the reinstatement of an employee that reinstatement
will
operate from the date of the award of the CCMA, unless the
Commissioner decides to render the reinstatement retrospective.
The fact that the dismissed employee has been without income during
the period since his or her dismissal must, among other
things, be
taken into account in the exercise of the discretion, given that
the employee’s having been without income
for that period was
a direct result of the employer’s conduct in dismissing him
or her unfairly.
44
It
should be emphasised that the issue in this case relates to the
question of reinstatement for the period between the date
of the
arbitration award and the Labour Appeal Court order. It does not
relate to the period between the date of dismissal
and the date of
the arbitration award.
The
construction of section 193(1)(a) contended for by Equity is
problematic. It circumscribes the role of a court or arbitrator
in
circumstances where a reinstatement order or award is considered
appropriate. That construction is not consistent with
the ordinary
meaning of the words in section 193(1)(a). As correctly stated by
counsel on behalf of Mr Mawelele, the Labour
Appeal Court, as other
appeal courts, decides appeals on the evidence placed before the
court of first instance and may substitute
the decision of the
latter court. The construction contended for by Equity implies
that the appeal court cannot, even in appropriate
circumstances
substitute the order of the court of first instance with an order
of reinstatement or re-employment that will
operate from the date
of the award by the Commissioner, where more than 12 months have
lapsed since the date of the dismissal
by the time the Appeal Court
determines the matter. Similarly, it would mean that a
Commissioner who hears a dismissal dispute
more than 12 months
after the date of dismissal would not be able to order
reinstatement on the basis that back-pay to the
date of the
dismissal would be paid. Moreover, there is nothing in the
language of section 193(1)(a) or its context that supports
that
construction.
The
context, on the contrary, supports the view that the ordinary
meaning of section 193(1)(a) does not offend the right to
fair
labour practices. Fairness ought to be assessed objectively on the
facts of each case
45
bearing in mind that the core value of the LRA is security of
employment. In this regard, it is important to bear in mind
that
where a court or Commissioner has decided that reinstatement is the
appropriate remedy, it will also have to be decided
that the worker
has been unfairly dismissed. The worker will thus have been
deprived of wages, unfairly, as a result of the
conduct of the
employer. The importance of security of employment was affirmed by
this Court in
NEHAWU
:
46
“
Security of employment
is a core value of the LRA and is dealt with in chap[ter] VIII. The
chapter is headed ‘Unfair Dismissals’.
The opening
section, section 185, provides that ‘[e]very employee has the
right not to be unfairly dismissed’.
This right is essential
to the constitutional right to fair labour practices . . . . [I]t
seeks to ensure the continuation of
the relationship between the
worker and the employer on terms that are fair to both. Section 185
is ‘a foundation upon
which the ensuing sections are
erected’”.
47
Equity
contends that any order for payment of retrospective remuneration
is in effect an order for compensation and that the
limitations
imposed by section 194 should apply to any award of back-pay.
Conflicting decisions have been made by the Labour
Appeal Court on
the question whether reinstated employees may be awarded back-pay
in excess of the equivalent of 12 months’
wages (or 24 months
in certain circumstances) as specified 194. In
Kroukam
48
the majority, per Willis JA and Davis AJA, held that the
limits set out in section 194 do not apply.
49
In
Latex
50
a differently constituted court, per Zondo JP, Mogoeng JA and
Jafta AJA, unanimously suggested that it is not competent to make
a
reinstatement order that requires an employer to pay back-pay in an
amount in excess of 12 months wages thus implying that
the limits
set out in section 194 apply. The rulings on this point in both
judgments are obiter as the employees in neither
case were awarded
back-pay in excess of the statutory limits in respect of
compensation. The Supreme Court of Appeal has clarified
the
position in
Republican Press.
It held that the back-pay to
which the dismissed employee ordinarily becomes entitled when an
order for reinstatement is made
cannot be equated with
compensation, thus allowing for the limitation contained in section
194 not to be applied in relation
to back-pay.
51
Given the clear language used in section 193(1)(a) and the
coherent legislative structure for the resolution of dismissal
disputes in the LRA, the interpretation in
Republican Press,
in which the Supreme Court of Appeal endorsed the majority view in
Kroukam,
is, in my view, correct.
Equity
argues that the remedies of reinstatement and re-employment are not
alternative remedies to be understood as alternatives
to
compensation. They can be ordered simultaneously with it. Equity
maintains that in order to achieve fairness between employers
and
employees in circumstances of unfair dismissals the legislature
deemed it fit to “cap” the amount of remuneration,
or
back-pay to which the unfairly dismissed employee is entitled on
reinstatement.
52
The language used in section 193 is not amenable to this
construction. While it was permissible under section 46(9) of the
repealed Labour Relations Act 28 of 1956
53
for a court to order reinstatement and compensation in the same
case if deemed reasonable and fair to the parties,
54
that is a far cry from the current statutory framework,
particularly the provisions of section 193 read with those of
section
194 of the LRA. If the provisions were to be interpreted
to bring about that result, that reading would not only be unduly
strained but would also distort the text. Grogan
55
succinctly makes the point with which I agree:
“
Although the employer
must pay a reinstated employee a sum of money if the reinstatement
order is made retrospective, that sum
is not compensation as
contemplated in subsection (1)(c) . . . . While ‘back pay’
is obviously a form of compensation
for the loss of earning during
the period of unemployment after the dismissal, it is generally
regarded as distinct from compensation.
Consistent with this view,
the LRA deals with reinstatement and compensation in different
sections, and suggests that reinstatement
and compensation are
alternative remedies. It seems clear that an employee who is
awarded full retrospective reinstatement cannot
be awarded
compensation
in addition
to back pay. This would be
inconsistent with the use of the disjunctive ‘or’ in
section 193(1).”
56
It
follows that the sum of money paid to an unfairly dismissed
employee subsequent to an order of reinstatement with retrospective
effect is not compensation as contemplated in section 193(1)(c) or
section 194. The remedies in section 193(1)(a) are thus
in the
alternative and mutually exclusive.
57
Equity
contends further that there is no rational basis for distinguishing
between the limit of financial compensation where
retrospective
reinstatement is ordered and where it is not. I disagree. A
distinction must be drawn between the remedies
of reinstatement and
compensation provided for in section 193(1)(a) and (c),
respectively, so as to understand the scope of
the “limits on
compensation” under section 194.
58
It might well be that the limits on compensation seek to curtail
the employer’s financial risk when confronted with
an unfair
dismissal claim. In the case of re-employment or reinstatement,
the statute provides two mechanisms for the management
of such
concerns. First, section 193(2)(c) provides that the remedies of
reinstatement or re-employment need not be ordered
if the court or
Commissioner is satisfied that it would not be “reasonably
practicable” for the employer to reinstate
or re-employ the
employees.
59
Secondly, that statute provides that a court or Commissioner has a
discretion to determine the extent of retrospectivity of
the order
of reinstatement or re-employment. In exercising the discretion a
court or an arbitrator may address, among other
things, the period
between the dismissal and the trial as well as the fact that the
dismissed employee was without income during
the period of
dismissal, ensuring however, that an employer is not unjustly
financially burdened if retrospective reinstatement
is ordered or
awarded.
60
It
is evident from the clear language in which section 193(1)(a) is
couched as well as the statutory context, that the back-pay
to
which an unfairly dismissed employee becomes entitled when
retrospective reinstatement is ordered is not limited to the
maximum periods of compensation provided in respect of compensation
as contemplated in section 194. The legislative structure
for the
resolution of unfair dismissal disputes is clear and coherently
crafted. The LRA allows for any of the three remedies
set out in
section 193(1) to be granted to an unfairly dismissed employee.
Reinstatement or re-employment remains the legislatively
preferred
remedies so as to restore the employee to the employment
relationship. They safeguard the employee’s security
of
employment. Either of the two remedies may be granted except in
the specified circumstances set out in section 193(2) in
which case
compensation in terms of section 193(1)(c) may be ordered, the
amount of which depends on the nature of the dismissal.
61
Subsection
193(1)(c) read with section 194 relates to compensation only. The
capping in section 194 has no bearing on retrospective
reinstatement. It is only when reinstatement or re-employment is
not ordered that compensation in terms of section 194 may
be
ordered to a maximum equivalent to 12 or 24 months’
remuneration depending on the nature of the dismissal. It follows
that it is competent to make a reinstatement order that requires an
employer to pay back-pay for more than 12 months.
For
these reasons, the construction of section 193(1)(a) contended for
by Equity must fail.
Exercise
of discretion
Equity’s
alternative contention concerns the perceived exercise of
discretion by the Labour Appeal Court. It argues that
if the
construction contended for does not find favour with this Court,
the appeal should nevertheless succeed on the basis
that that Court
erred in not exercising the discretion vested upon it as to the
date from which the reinstatement order should
have taken effect.
Equity contends that the reinstatement took effect on the date the
order of the Labour Court was made not
least because there had been
no request for retrospective reinstatement. It is contended
further that the Labour Appeal Court
did not properly consider
“certain relevant factors”.
62
Moreover, Equity argues that there is, on the recorded evidence,
no reason why Mr Mawelele should benefit from the 19 months
delay
in prosecuting the review. It contends also that the order of
retrospectivity is unduly harsh to its business, particularly
because Equity has not received the benefit of services from Mr
Mawelele.
It
is trite law that the power to grant a remedy in section 193 is by
its nature discretionary and that the discretion must
be exercised
judicially by a court that enjoys that unfettered discretion. It
must be stressed, however, that the focus of
the appeal before the
Labour Appeal Court was on the decision of the Labour Court to
review the award and not on the “discretionary
remedy”
as there had been no appeal on that basis. The Labour Appeal Court
was required to determine whether the decision
of the Labour Court
in reviewing the award was correct. The appeal was thus limited to
the evidence on which the decision
of the Labour Court was
granted.
63
The
Labour Court made an order replacing the award of the
Commissioner’s. The Labour Court’s decision thus
operated
automatically from the date of the Commissioner’s
award. In determining whether the Labour Court correctly reviewed
the award, the Labour Appeal Court interpreted the order of the
Labour Court and rightly found that the order reinstating Mr
Mawelele was correct. The Labour Appeal Court then assumed,
correctly in my view, that it could not consider the question
whether the reinstatement order should be made effective to a date
later than the award as the issue of the discretion in respect
of
the retrospectivity of the reinstatement had not been raised,
either in the notice of appeal or, seemingly, in argument
before
that Court. The Labour Appeal Court concluded that properly
interpreted the order of the Labour Court meant that reinstatement
should operate from the date of the award. It then made an order
reflecting that position
64
as it was not open to it to deal with the extent of the
retrospectivity of the reinstatement.
The
criticism by Equity that the Labour Appeal Court should have made
the reinstatement order to run from the date of the order
of the
Labour Court is without merit. Equity had not raised the issue in
its notice of appeal nor, seemingly, in argument
before the Labour
Appeal Court. The Labour Appeal Court could not mero motu consider
the alleged “certain relevant factors”
extraneous of
the record despite the fact that the discretionary powers vested in
it in terms of sections 145
65
and 174
66
are wide. That Court decides appeals on the evidence placed before
the Labour Court and may substitute the decision of the
Labour
Court. It is not suggested on the applicant’s papers, nor
was it suggested in argument, that the Labour Appeal
Court was
asked to deal with the discretionary remedy and that any of the
said “relevant factors” were placed before
that Court.
On this point there can be no criticism of the Labour Appeal Court
for not having dealt with the said factors
nor can its judgment be
criticised in light of the evidence before it.
As
to the criticism that Mr Mawelele will benefit unjustly from the
delay of 19 months in prosecuting the review, it is common
cause
that the delay was caused by the unavailability of the record of
the proceedings before the CCMA. The tapes seemingly
went missing.
The delay was therefore not due to any deliberate, wilful or
flagrant disregard for the express provisions and
underlying
purpose of the LRA. In the circumstances it would be unfair to lay
the blame for the delay on Mr Mawelele.
I
should add in this regard that it is a matter of great concern that
the system of expedited adjudication of unfair dismissal
disputes
which the LRA sought to establish often operates far from
expeditiously. The case at hand is a good example of how
labour
disputes are taking far too long to reach finality. The adverse
effects of these delays impose burdens both on employers
and on
workers, as this case again illustrates.
Equity
argues that the order of perceived retrospectivity is unduly harsh
on its business, not least as it (Equity) has not
benefitted from
Mr Mawelele’s services in the interim period. Equity seems
to lose sight of the fact that a remedy of
reinstatement is always
granted to an employee wishing to offer his or her services to his
or her employer. There is no evidence
that Equity offered the
employee a job and no contention to that effect has been made.
Moreover, it is not suggested that
there is any evidence which is
relevant that ought to have been, but was not included in the
record.
The
principle of the right of election is a fundamental one in our law.
Equity made an election not to ask Mr Mawelele to render
his
services, nor did they offer him alternative employment. When
exercising an election, the law does not allow a party to
blow hot
and cold. A right of election, once exercised, is irrevocable
particularly when the
volte face
is prejudicial or is unfair
to another.
67
As long as an employee makes himself or herself available to
perform his or her contractual obligation in terms of the contract
of employment, he or she is entitled to payment despite the fact
that the employer did not use his or her services.
68
Mr Mawelele cannot, in the circumstances, be prejudiced by reason
of the manner in which Equity exercised its election.
Relief
Equity
contends that the appropriate relief is for the matter to be
remitted to the Labour Appeal Court to enable the parties
to
furnish that Court with evidence relevant to the issue of
retrospectivity. In the alternative, Equity urges this Court
to
declare that Mr Mawelele’s reinstatement should operate from
the date of the order of the Labour Court.
This
Court has stressed the need for effective remedies.
69
In the circumstances of this case, there is no room for remittal.
The Labour Appeal Court interpreted the order of the Labour
Court
and did not exercise a discretion. Even on the assumption that it
did, an ex post facto attempt to introduce new evidence
on appeal
in this manner to justify a remittal cannot be allowed. The LRA’s
objective to resolve unfair dismissal disputes
expeditiously will
be frustrated if remittal is granted especially where no
exceptional circumstances for that relief are shown
to exist. On
the contrary, it will afford Equity a second bite at the cherry.
That will be unfair to Mr Mawelele and, needless
to say, this Court
cannot sanction that result. There is no legal or factual basis
for granting the declaration sought. In
the view I take of the
matter, it would be inappropriate to remit the case to the Labour
Appeal Court or declare that Mr Mawelele’s
reinstatement
should operate from the date of the order of the Labour Court.
For
all these reasons, I conclude that the appeal must fail.
Costs
As
to the matter of costs, counsel on behalf of Equity contended that
Mr Mawelele should pay his own costs. In effect, this
argument
suggests that a successful litigant will be burdened with the costs
occasioned by an unsuccessful review application
and appeal. The
argument has no merit. Mr Mawelele has had to suffer at the
instance of Equity. He waited for almost six
years for the
dismissal dispute to be finalised. Although he was reinstated on 1
July 2007, he has not received payment for
the period during which
he was unemployed. In my view, considerations of the interests of
justice and fairness dictate that
Equity should pay Mr Mawelele’s
costs on the appeal to this Court.
In
the result, the appeal should be dismissed with costs including the
costs occasioned by the employment of two counsel.
Order
The
following order is made:
The applications for condonation for late filing of the
application for leave to appeal and of the record are granted.
The application for condonation for the late filing of the
opposing papers by the third respondent is granted.
The application for leave to appeal is granted.
The appeal is dismissed with costs including the costs
occasioned by the employment of two counsel.
Kroon
AJ, Madala J, Mokgoro J, O’Regan J, Skweyiya J concur in the
judgment of Nkabinde J.
YACOOB J:
I
have read the judgment of Nkabinde J and agree that the applicant
should fail. Nkabinde J rightly holds that all the applications
for condonation should be granted. It is apparent that this is a
constitutional matter because the case concerns an application
and
interpretation of the Labour Relations Act.
1
I conclude however that the prospects of success are so bad that
it is not in the interests of justice for leave to appeal
to be
granted.
It
will be convenient first to summarise the differences between the
approach adopted by Nkabinde J and the approach in this
judgment.
Nkabinde J holds that section 193 of the Labour Relations Act
2
does permit a court to order retrospective reinstatement for a
period of more than 12 months consequent upon a finding that
the
dismissal was unfair. That conclusion pre-supposes that an order
of retrospective reinstatement was made by any of the
courts below
in this case. In my view, on a proper construction, the
reinstatement ordered in this case was never retrospective.
In the
circumstances the question whether and the extent to which
retrospective reinstatement is permitted by the Labour Relations
Act does not arise. I motivate this conclusion below.
The
reinstatement order we are concerned with in this case was made in
favour of the third respondent, Mr Mawelele. The applicant
dismissed Mr Mawelele for misconduct
3
on 8 March 2001. Conciliation failed and the arbitration was
conducted by the second respondent in the Commission for
Conciliation,
Mediation and Arbitration (the CCMA). The second
respondent issued an award against Mr Mawelele on 18 March 2002,
finding
that the dismissal was neither procedurally nor
substantively unfair. Mr Mawelele took the matter on review to the
Labour
Court. On 18 October 2004 that Court upheld the review,
found that Mr Mawelele had been unfairly dismissed and set aside
the
award of the Commissioner. The Court ordered that Mr Mawelele
should receive a final written warning saying that “should
he
commit a similar transgression in the next two years he may be
dismissed immediately.”
4
The Labour Court did not however order reinstatement in so many
words.
On
15 June 2007 the Labour Appeal Court
5
dismissed the appeal by the applicant, made no order as to costs
and made the following additional order:
“
3.(c) The arbitration
award issued by the commissioner in this matter is hereby reviewed
and set aside and in its place the following
order is made:
(i) The applicant’s
dismissal was substantively unfair.
(ii) The respondent is ordered
to reinstate the applicant in its employ on terms and conditions no
less favourable to him than
the terms and conditions which governed
his employment immediately before his dismissal;
the order in (ii) above shall
operate from the date of the issuing of this award . . .”.
6
Section
193(1)(a) of the Labour Relations Act allows for the retrospective
reinstatement of any person who has been unfairly
dismissed
provided that the date of reinstatement does not precede the date
of dismissal.
7
The retrospectivity provision needs some elaboration. The
decision whether the reinstatement is to be retrospective is that
of the CCMA commissioner or the judge of the Labour Court who
adjudicates on the dispute as a matter of first instance. That
decision is the result of the conclusion by the CCMA commissioner
or the Labour Court judge that the dismissal was unfair,
that
reinstatement is the appropriate remedy, and that some degree of
retrospectivity is appropriate. The adjudicator concerned
must
decide whether the order of reinstatement will run from the date of
the decision to reinstate or from an earlier date
that does not
precede the date of dismissal.
An
order of retrospectivity in relation to reinstatement can be said
to properly have been made only if retrospectivity is ordered
before the date on which a reinstatement order would have been made
by the CCMA commissioner or the Labour Court judge acting
correctly. A court seized with an appeal from a decision of
another court, or with a review of the decision of a CCMA
commissioner,
is not an adjudication tribunal of first instance.
It follows that if a court of appeal or review finds that the CCMA
commissioner
or the court of first instance should have ordered
reinstatement, any order of reinstatement that operates from the
date on
which the correct order ought in the first place to have
been made is not retrospective in the true sense. An order of
reinstatement
is retrospective only if it covers any of the period
from the date on which the dismissal occurred until the date of the
award
of the CCMA commissioner or a judgment and order of a Labour
Court of first instance. Section 193(1) in terms refers to “the
Labour Court or an arbitrator”. This is a reference to the
Labour Court adjudicating the dispute as a court of first
instance
and includes a CCMA commissioner who arbitrates the dispute.
The
effect of the Labour Appeal Court order in this case is that the
reinstatement dated back to the date of the order of the
CCMA
Commissioner which was made on 18 March 2002. It did not cover any
of the period from the date of the dismissal, 8 March
2001, until
the date on which the incorrect award of the CCMA Commissioner was
made. It was therefore not retrospective.
Indeed
the Labour Appeal Court was alive to this:
8
“
In the order that the
Court a quo made it did not, after setting aside the arbitration
award, expressly replace it with an order
of reinstatement. It only
ordered that the third respondent be given a final written warning
on the condition to which I have
referred above. However, there can
be no doubt that the Court a quo was of the view that the
commissioner ought to have ordered
the appellant to reinstate the
third respondent. This flows from the fact that the Court a quo
expressly stated that the correct
sanction for the third
respondent’s misconduct was a final written warning and that
this had to be on condition that, if
he was found guilty of a
similar act of misconduct within twelve months, the third respondent
could be dismissed immediately.
What the Court a quo did not
deal with in its judgment is whether or not the order of
reinstatement that the commissioner ought
to have made should have
been one operating retrospectively and, if so, up to what date
retrospectively. While it may be argued
that an order of
reinstatement is necessarily implied in the order that the Court a
quo made, it cannot be said that the reinstatement
was ordered to be
retrospective is also implied in the order of the Court a quo.
Since the third respondent did not note a cross-appeal
against the
Court a quo’s failure to make such implied order of
reinstatement retrospective, I do not think that it is
open to this
Court to consider that issue. The retrospectivity that I am
referring to does not relate to the period between
the date of the
issuing of the arbitration award and the date of the order of the
Court a quo or indeed the date of this order.
It relates to the
period between the date of dismissal and the date of issuing of the
award.
In the light of this the
reinstatement order that is implied in the order of the Court a quo
as the reinstatement order that the
commissioner should have made
would have run from the date of the issuing of the arbitration
award. I shall make an order that
reflects this. That means that
the third respondent would have lost out on remuneration covering
the period from the date of
the dismissal to the date of the
delivery of the award.”
Reliance
by the applicant on the case of
Latex
9
was misplaced. That case, like the case of
Republican
Press
,
10
was different from this one in that it was concerned with what I
may call retrospectivity in the true sense: retrospectivity
that
extended to a date before that upon which the Labour Court of first
instance made its order. The Labour Appeal Court
ordered
reinstatement from a date that preceded the date of the order of
the Labour Court. That Court, having concluded that
the Labour
Court ought to have made an order of reinstatement, made the order
retrospective to a date six months before the
date upon which the
Labour Court order should have been made.
11
It was precisely because the Labour Court of first instance in
Republican Press
had made an order of reinstatement that
effectively preceded the date of its order by some six years that
the interpretation
of the retrospectivity element of section 193
became relevant.
12
By parity of reasoning, that interpretation is not relevant here.
The
applicant’s submission that any retrospective order of
reinstatement was made is therefore wrong. In these circumstances
it is unnecessary to decide whether the law places any limitation
on the period for which reinstatement might be retrospective.
The
applicant’s case has no prospects of success. I would
dismiss the application for leave to appeal.
Langa
CJ and Van der Westhuizen J concur in the judgment of Yacoob J.
Counsel for the Applicant Advocate A Oosthuizen SC and Advocate S
Cowen instructed by Hofmeyr Herbstein & Gihwala Inc,
Johannesburg.
Counsel
for the Third Respondent Advocate JG Van der Riet SC and Advocate H
Barnes instructed by Cheadle Thompson & Haysom
Inc,
Johannesburg.
1
Act 66 of 1995.
2
See section 193(2) which provides that these remedies need not be
adopted if the employee does not wish to be reinstated or
re-employed; or the circumstances are such that continued employment
would be intolerable; or it is not reasonably practical for
the
employer to reinstate or re-employ the employee; or the dismissal
was unfair because of the procedure followed. The full
text of the
sub-section is set out at [24] below.
3
I refer to him as “Mr Mawelele” and
“the employee” interchangeably.
4
JA18/05,
15 June 2007, unreported.
5
The misconduct related to events that took place
on 15 November 2000. Following certain incidents on that date Mr
Mawelele was
summoned to a disciplinary hearing to answer four
charges, namely, (1) leaving the work place without permission on 15
November
2000 and before the end of the shift; (2) failing to
perform according to the required standard by failing to provide
buses for
flights SA 482 and SA 1734; (3) leaving a subordinate in
charge with responsibilities that he could not carry out; and (4)
bringing
the company’s name into disrepute by failing to meet
service standards.
6
Mr Mawelele
lodged an unsuccessful internal
appeal against the decision of the chairperson of the disciplinary
enquiry.
7
S
ection 191(1)(a) of the LRA provides:
“
If there is a dispute about
the fairness of a dismissal, or a dispute about an unfair labour
practice, the dismissed employee
or the employee alleging the unfair
labour practice may refer the dispute in writing to─
(i) a council, if the parties to the dispute fall
within the registered scope of that council; or
(ii) the
Commission, if no council has jurisdiction.”
8
C
ase number GA130566.
9
The Commissioner reasoned that a written warning
would have been the appropriate sanction when regard is had to the
charges in
isolation, but concluded that the situation was different
when the charges were considered cumulatively.
10
Section 145(1) of the LRA provides:
“
Any party to a dispute who
alleges a defect in any arbitration proceedings under the auspices
of the Commission may apply to the
Labour Court for an order setting
aside the arbitration award─
(a) within six weeks of the date
that the award was served on the applicant, unless the alleged
defect involves the commission
of an offence referred to in Part 1
to 4, or section 17, 20, or 21 (in so far as it relates to the
aforementioned offences) of
Chapter 2 of the
Prevention and
Combating of Corrupt Activities Act, 2004
; or
(b) if the alleged defect involves an offence referred
to in paragraph (a), within six weeks of the date that the applicant
discovers
such offence.”
11
The six weeks within which the award should have
been reviewed in terms of
section 145(1)
expired on 29 April 2002.
The review application was thus late by three days.
12
In the order granting leave to appeal to the Labour Appeal Court Mr
Mawelele is
erroneously cited as the applicant
instead of Equity.
13
Above n 4 at para 51.
14
Equity conceded during oral argument that the
Labour Court order should be understood to embrace reinstatement.
15
[2006] 2 BLLR 142
(LAC);
(2006) 27
ILJ
292 (LAC).
16
Equity was concerned with the appropriateness of the sanction. The
essence of its petition was therefore that both the Labour
Court and
the Labour Appeal Court erred in usurping the discretion of the
employer by imposing a sanction that they thought would
be fair
despite the contentions of the employer. Equity contended that the
proper test for review was the one set out in
Rustenburg Platinum
Mines
Ltd v CCMA
and Others
2007 (1) SA 576
(SCA);
(2006) 271
ILJ
2076 (SCA) at paras 40-3. Equity argued that the Labour Appeal
Court strayed from the test set out by the Supreme Court of Appeal
in that case. Equity was also of the view that in the light of the
conflicting decisions in
Rustenburg
Platinum Mines
and
Engen
Petroleum Ltd v CCMA and Others
[2007]
8 BLLR 707
(LAC); (2007) 28
ILJ
1507 (LAC) confusion was caused amongst the general public.
17
Above n 4 at para 54.
18
The directions were issued on 21 January 2008.
19
In other words, 15
days from 11 September 2007
when the Supreme Court of Appeal dismissed Equity’s
application for leave to appeal.
20
2008 (1) SA 404
(SCA);
[2007] 11 BLLR 1001
(SCA).
21
Although the long title and se
ction 1 of the LRA
refer to
section 27
of the interim Constitution, the relevant
corresponding provision in the 1996 Constitution is section 23 and
they should be read
as if they refer to section 23 of the 1996
Constitution.
22
[1999] ZACC 7
;
1999 (4) SA 469
(CC);
1999 (6)
BCLR 615
(CC) at para 25.
23
In
NUMSA and Others
v Bader Bop (Pty) Ltd & Another
[2002] ZACC 30
;
2003 (3) SA 513
(CC);
2003 (2) BCLR 182
(CC);
[2003]
2 BLLR 103
(CC); (2003) 24
ILJ
305 at para 26, this Court stated that South Africa’s
international obligations are important to the interpretation of
the
LRA.
24
Convention 158 of 1982 is titled ‘Termination
of Employment at the Initiative of the Employer.’ This
Convention superceded
Recommendation 119 of 1963 of the ILO upon
which the Industrial Court relied in formulating its guidelines
regarding unfair dismissal.
25
Section 188 of the LRA provides:
“
(1) A dismissal that is not
automatically unfair, is unfair if the employer fails to prove─
(a) that the reason for dismissal is
a fair reason─
(i) related to the employee’s
conduct or capacity; or
(ii) based on the employer’s
operational requirements; and
(b)
that
the dismissal was effected in accordance with a fair procedure.
(2) Any person considering whether
or not the reason for dismissal is a fair reason or 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 this Act.”
26
Under the common law a contract of employment
could be terminated without any reason being furnished as long as
the proper notice
was given where notice was required. In such
circumstances a summary dismissal would be unlawful only for want of
notice. The
employee’s damages may then be restricted to his
loss of earnings in the notice period. See in this regard
Key Delta v Marriner
[1998] 6 BLLR 647
(E) at 652G wherein Erasmus J commented obiter on this point.
27
In other words, 15
days from the date of the
dismissal of the application for leave to appeal by the Supreme
Court of Appeal, required by Constitutional
Court Rule 19(2).
28
Brummer v Gorfil Brothers Investments (Pty) Ltd
&
Others
[2000] ZACC 3
;
2000 (2) SA 837
(CC);
2000 (5) BCLR 465
(CC) at para 3.
29
See section 167(3)(b) of the Constitution.
30
[2002] ZACC 27
;
2003 (3) SA 1
(CC);
2003 (2) BCLR 154
(CC) at paras
15-6.
31
See also
Bader Bop
above n 23 at para 15.
32
Republican Press
above
n 20
at
para 16 and
Bader Bop
above
n 23 at para 16.
33
Kroukam v SA Airlink (Pty) Ltd
(2005)
26
ILJ
2153 (LAC);
[2005] 12 BLLR 1172
(LAC),
Latex
above n 15 and
Republican Press
above
n 20.
34
Minister of Health and Others v Treatment
Action Campaign and Others (No 1)
[2002] ZACC 16
;
2002 (5) SA 703
(CC) at para 10.
35
The employer may be ordered to reinstate or
re-employ the employee, or the employer may be ordered to pay
compensation to the
employee.
36
The circumstances exist where the employee does not wish to be
reinstated or re-employed, where the circumstances surrounding
the
dismissal are such that a continued employment relationship would be
intolerable, where it is not reasonably practicable
for the employer
to reinstate or re-employ the employee, or where the dismissal is
unfair only because the employer did not follow
a fair procedure.
N
one of these circumstances apply in the present
case.
37
Republican Press
above n 20 at para 19; See also
Jaga
v Dönges NO and Another; Bhana v Dönges NO and Another
1950 (4) SA 653
(A) at 662;
[1950] 4
All SA 414
(A) at 421.
38
NEHAWU
above n
30 at para 41. See also
Johnson &
Johnson (Pty) Ltd v Chemical Workers Industrial Mechanisms Union
(1999) 20 ILJ 89 LAC;
[1998] 12 BLLR 1209
(LAC); (1999) 4 LLD 7
(LAC) at paras 22-3; and
Consolidated
Frame Cotton Corporation Ltd v President of Industrial Court and
Others Ltd; Consolidated Woolwashing and Processing
Mills v
President of Industrial Court and Others
1986 (3) SA 786
(A) at 798E-F
39
In
NEHAWU
above
n 30 at para 40 this Court said:
“
[T]he
focus
of section 23(1) is, broadly speaking, the relationship
between the worker and the employer and the continuation of that
relationship
on terms that are fair to both. In giving content to
that right, it is important to bear in mind the tension between the
interests
of the workers and the interests of the employers which is
inherent in labour relations. Care must therefore be taken to
accommodate,
where possible, these interests so as to arrive at the
balance required by the concept of fair labour practices. It is in
this
context that the LRA must be construed.”
40
[2000] ZACC 12
;
2001 (1) SA 545
(CC);
2000 (10)
BCLR 1079
(CC);
2000 (2) SACR 349
(CC).
41
Id at para 24.
42
Consolidated Frame
above n 38 at 798B-D.
43
Section 193(1)(a) of the LRA. See in this regard
National Union of Metalworkers of SA &
Others v Fibre Flair CC t/a Kango Canopies
(2000)
21
ILJ
1079 (LAC) at 1080H–1081A;
[2000] 6 BLLR 631
(LAC) at 633B-E.
44
Latex
above n 15
at paras 107-8.
45
CWIU and Others v Algorax (Pty) Ltd
(2003) 24
ILJ
1917 (LAC);
[2003] 11 BLLR 1081
(LAC) at para 69.
46
Above n 30.
47
Id at para 42. See also Article 4 of the ILO Convention referred to
at [26]
above.
48
Above n 33 at para 55.
49
In the m
inority judgment Zondo JP (in
Kroukam)
expresses a view that is only obiter on the relationship between
sections 193 and 194 because it was not necessary to decide
the
issue (mentioned at para 126) whether “section 193 should be
construed to mean that an order of reinstatement can operate
retrospectively to the date of dismissal or up to 24 months or 12
months backwards, as the case may be, whichever is the earlier.”
50
Above n 15 at paras 114-6.
51
Republican Press
above n 20 at para 19.
52
The argument was premised seemingly on the obiter remarks in the
minority judgment in
Kroukam
above
n 33 at paras 123-4, that:
“
It can be argued that back-pay which an unfairly
dismissed employee gets paid when an order has been made for his
reinstatement
with retrospective effect constitutes in effect
compensation for unfair dismissal in the same way as compensation
provided for
under section 194 of the Act constitutes compensation
for unfair dismissal to an unfairly dismissed employee who is
awarded compensation
under section 194 of the Act. If that is so,
thus would run the argument, a reinstatement order the retrospective
operation
of which goes beyond 24 months or 12 months, as the case
may be, would amount to an award of compensation for unfair
dismissal
which exceeds the relevant maximum prescribed by section
194. The argument would be that such a retrospective operation of
an
order of reinstatement would undermine the capping of
compensation prescribed by section 194 of the Act.
It
would further seem that the construction that the only limitation on
the extent of the retrospective operation of an order
of
reinstatement is the date of dismissal ignores the purpose of s 194.
The purpose of s 194 is to limit the financial risks
that an
employer has when involved in an unfair dismissal claim.”
53
The predecessor to the LRA.
54
Chevron Engineering (Pty) Ltd v Nkambule &
Others
2004 (3) SA 495
(SCA);
[2004] 3
BLLR 214
(SCA) at para 30. See also the
remarks in
Kroukam
(majority judgment) above n 33 at paras 43-4.
55
Grogan
Dismissal, Discrimination and Unfair Labour Practices
(2007) 2ed (Juta & Co Ltd, Cape Town 2007).
56
Id at 583-4.
57
This view finds support in
Republican Press
above
n 20 at para 17.
58
Section 194 is referred to in full at [25]
above.
59
In this regard, see the reasoning of the Supreme Court of Appeal in
Republican Press
, cited above n 20 at para 22.
60
This view finds support in the minority decision in
Kroukam
above
n 33. In considering whether reinstatement should operate with
retrospective effect to the date of dismissal or to any
date, or
whether it should be retrospective at all, Zondo JP said (at para
131) that he would have ordered the reinstatement
to operate with
retrospective effect to the appellant’s date of dismissal.
But, in the exercise of his judicial discretion
regarding the
appellant in that matter, he would take only two matters into
account – first, that Mr Kroukam worked for
Intensive Air for
five months and earned R18 000 per month (R90 000 in total) which
amount, he opined, had to be deducted from
whatever back-pay or
compensation the court would order. Second, the appellant’s
conduct in failing to accept a job offer
made to him which would
have paid him (at para 132) either the same or an even a better
salary than the employer used to pay
him. Zondo JP stated that the
“decision not to take such job broke the causal connection
between [Mr Kroukam’s]
financial loss and the respondent’s
conduct in dismissing him as it did” (at para 133).
61
Republican Press
above n
20
at para 17.
62
These factors, Equity contends, include:
a) the
need to ensure that an
employer is not financially burdened to an extent which is
excessively harsh or unjust if reinstatement
is ordered
retrospectively;
b) the consequences of any retrospective reinstatement
to the employer and its business operations;
c) the question whether the employee did or could have
obtained employment after dismissal;
d) the question whether an employee has been
re-employed by the employer and if so on what conditions;
e) the fact that the legislature anticipated and
intended unfair dismissal disputes to be resolved expeditiously and,
accordingly
that reinstatement orders would not normally require a
lengthy period of retrospectivity;
f) the conduct of the parties giving rise to the
dismissal;
g) the conduct of the parties in litigation; and
h) the extent of any delay in finalising the dispute,
the reason for the delays and, in particular, whether the delays are
the
fault of any party.
63
This view is consistent with the remarks by the
minority judgment in
Kroukam
above n 33
at
para 113 that generally, on appeal, the Labour Appeal Court makes
such a decision as it thinks the Labour Court should have
made on
the evidence before it at the time it made its decision.
64
This meant that Mr Mawelele would have lost out
on the remuneration covering the period from the date of his
dismissal to the
date of the award because, importantly, he did not
note a cross-appeal against the Labour Court’s failure to make
the implied
order of reinstatement retrospective.
65
Above n
10.
66
Section 174 of the LRA deals with the powers of
the Labour Appeal Court on the hearing of appeals. It reads:
“
The Labour Appeal Court has the power─
(a) on the hearing of an appeal to receive further
evidence, either orally or by deposition before a person appointed
by the Labour
Appeal Court, or to remit the case to the Labour Court
for further hearing, with such instruction as regards the taking of
further
evidence or otherwise as the Labour Appeal Court considers
necessary; and
(b) to confirm, amend or set aside the judgment or
order that is the subject of the appeal and to give any judgment or
make any
order that the circumstances may require.”
67
Chamber of Mines v NUM
1987 (1) SA 668
(AD) at 681D-G.
68
See in general
Johannesburg Municipality v O’
Sullivan
1923 AD 201.
69
National Coalition for Gay and Lesbian Equality and Others v
Minister of Home Affairs and Others
[1999] ZACC 17
;
2000 (2) SA
1
(CC);
2000 (1) BCLR 39
(CC) at paras 65, 81-2.
1
Act 66 of 1995.
2
Discussed later in this judgment.
3
The details of the misconduct are not relevant
for the purposes of this judgment.
4
Mawelele v Commission for Conciliation Mediation and Arbitration
and Others
(JR 622/03)
[2004] ZALC 77
(18 October 2004) at para
16.
5
Apron Services (Pty) Ltd v Commission for Conciliation, Mediation
and Arbitration and Others
(JA18/05)
[2007] ZALAC 14
;
[2007]
ZALC 14
(15 June 2007).
6
Paragraph 3(c)(i)-(iii) of the Labour Appeal
Court order.
7
Section 193(1) provides:
“
(1) If the Labour Court or an arbitrator
appointed in terms of this Act finds that a dismissal is unfair, the
Court or the arbitrator
may—
(a) order the employer to re-instate the employee from
any date not earlier than the date of dismissal;
(b) order the employer to re-employ the employee,
either in the work in which the employee was employed before the
dismissal or
in other reasonably suitable work on any terms and from
any date not earlier than the date of dismissal; or
(c) order the employer to pay compensation to the
employee.”
8
Above n 5 at paras 50-2.
9
Chemical Workers Industrial Union &
others v Latex Surgical Products (Pty) Ltd
[2006] 2 BLLR 142
(LAC); (2006) 27
ILJ
292 (LAC).
10
Republican Press (Pty) Ltd v CEPPWAWU and
others
2008 (1) SA 404
(SCA);
[2007]
11 BLLR 1001
(SCA).
11
Above n 9 at para 123.
12
Above n 10 at para 22.