CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 187/20
In the matter between:
NESU MAROVEKE Applicant
and
SIPHO TALANE N.O. First Respondent
COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION Second Respondent
FERMEL (PTY) LIMITED Third Respondent
Neutral citation: Maroveke v Talane N.O. and Others [2021] ZACC 20
Coram: Mogoeng CJ, Jafta J, Khampepe J, Madlanga J, Majiedt J,
Mhlantla J, Pillay AJ, Theron J and Tshiqi J
Judgment: Mhlantla J (unanimous)
Decided on: This judgment was handed down electronically by circulation to
the parties’ representatives by email, publication on the
Constitutional Court website and release to SAFLII. The date and
time for hand-down is deemed to be 10h00 on 06 July 2021.
Summary: Appeal from Labour Appeal Court — unfair labour practice —
quantification of back pay — insufficient information before
Labour Court — material mistake
2
ORDER
On appeal from the Labour Appeal Court , Johannesburg hearing an appeal from the
Labour Court, Johannesburg:
1. Leave to appeal is granted.
2. The appeal is upheld to the extent that paragraph 3 of the order of the
Labour Court is set aside and substituted with the following:
“Fermel (Pty) L imited must pay Mr Nesu Maroveke an amount of
R146 767.20 within 15 days from the date of this order.”
3. Save as set out in paragraph 2, the appeal is dismissed.
4. Each party must pay its own costs.
JUDGMENT
MHLANTLA J (Mogoeng CJ, Khampepe J, Jafta J, Madlanga J, Majiedt J, Pillay AJ,
Theron J and Tshiqi J concurring):
Introduction
[1] This is an application for leave to appeal against an order of the Labour Appeal
Court.1 That Court refused leave to appeal against parts of the judgment and order of
the Labour Court.2 The matter turns on the issue of the appropriate back pay due to an
employee whose dismissal had been declared unfair.
1 Maroveke v Talane N.O. , unreported judgment of the Labour Appeal Court , Johannesburg, Case No JA12/20
(04 August 2020) (Labour Appeal Court II). The applicant’s appeal lies against both the Labour Appeal Court’s
refusal to grant leave to appeal against the judgment of the Labour Court as well as against parts of the judgment
and order of the Labour Court.
2 Fermel (Pty) Limited v Talane N.O. [2019] ZALCJHB 83 (Labour Court II).
MHLANTLA J
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Background facts
[2] The applicant, Mr Nesu Maroveke , was employed as an artisan and mine
technician by Fermel (Pty) Limited, the third respondent , a company that provides
technical services to min ing companies .3 He commenced his duties on
15 October 2007. On 25 June 2009, the applicant received a distress signal to attend to
a breakdown in a mine . He was with a colleague when he drove a company vehicle
underground through a tunnel and it sank in an area covered with water. The motor
vehicle could not withstand the depth of water and the applicant was unable to drive it
out. As a result, the engine failed.
[3] Later that day, the vehicle was towed to the workshop. One of the officials ,
Mr Engelbrecht, who had concluded that the applicant was responsible for the damage
to the vehicle, told him that the cost of the repairs to the engine would be approximately
R100 000. He produced a loan form for the amount and instructed the applicant to sign
it. The applicant refused and demanded that the engine be inspected. He also sought a
report setting out the extent of the damage. The applicant was informed that due to his
refusal to sign the document, he would be charged for misconduct and subjected to a
disciplinary hearing. On 6 July 2009, a disciplinary hearing was held where he was
found guilty on the basis that “he could have foreseen that there could be potential
damage to the vehicle after he drove it into the water ”. An expert report regarding the
damage to the vehicle was not presented during the hearing nor was a copy given to the
applicant. He was also not afforded an opportunity to deal with the report during his
evidence. However, the chairper son of the hearing considered it during the
determination of an appropriate sanction. On 16 July 2009, the applicant was dismissed.
[4] Two months after his dismissal, the applicant obtained employment at
Gold Fields Limited (Gold Fields).
3 The first and second respondents are Advocate Sipho Talane N.O . and the Commission of Conciliation,
Mediation and Arbitration. They did not participate in these proceedings.
MHLANTLA J
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Litigation history
CCMA I
[5] Aggrieved by the dismissal, the applicant lodged an unfair dismissal dispute with
the Commission for Conciliation, Mediation and Arbitration (CCMA).4 This was on
the basis that his dismissal was unfair and that it contravened the provisions of
section 185(a) of the Labour Relations Act.5 In the CCMA’s view, the failure to make
the specialist report on the damage to th e vehicle available to the applicant was
procedurally unfair and rendered the dismissal substantively unfair. The Commissioner
found that the dismissal was procedurally and substantively unfair and ordered that the
applicant be reinstated.
Labour Court I
[6] The third respond ent approached the Labour Court to review the arbitration
award.6 On 20 April 2012, t he Labour Court held that the Commissioner’s reasoning
was fundamentally flawed. 7 It relied on Sidumo,8 and h eld that no reasonable
decision-maker could arrive at the same conclusion on the available evidence. 9 It thus
set aside the arbitration award and substituted it with an order that the dismissal was
procedurally and substantively fair.10
4 The dispute was heard before Commissioner Mafa N.O. who is not a party to these proceedings.
5 66 of 1995. Section 185 of the Labour Relations Act provides:
“Right not to be unfairly dismissed or subjected to unfair labour practice
Every employee has the right not to be –
(a) unfairly dismissed; and
(b) subjected to unfair labour practice.”
6 Fermel (Pty) Limited v Mafa N.O., unreported judgment of the Labour Court, Johannesburg, Case No JR 3522/09
(20 April 2012) (Labour Court I).
7 Id at para 1.
8 Sidumo v Rustenburg Platinum Mines Ltd [2007] ZACC 22; 2008 (2) SA 24 (CC); 2008 (2) BCLR 158 (CC).
9 Labour Court I above n 6 at para 6.
10 Id at para 11.
MHLANTLA J
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Labour Appeal Court I
[7] The applicant appealed the decision of the Labour Court. On 1 July 2014, t he
Labour Appeal Court held that the record of the proceedings was in a
‘‘deplorable state’’.11 It held that the Labour Court ought not to have saddled itself with
the task of evaluating the evidence , as not all the evidence that was before the CCMA
was before it. Furthermore, there were material contradic tions in the evidence of the
witnesses. All these factors warranted a remittal to the CCMA. Therefore, the
Labour Appeal Court set aside the order of the Labour Court and the arbitration award.
It remitted the matter back to the CCMA to be heard afresh before a different
commissioner.12
CCMA II
[8] On 14 October 2014, the Commissioner held that the applicant had, under the
circumstances, acted like a reasonable driver and in keeping with company policy.
Therefore, the requisite negligence for the char ge of misconduct had not been
established.13 The Commissioner concluded that the employer had failed to prove the
misconduct, and, accordingly, the dis missal was substantively unfair. 14 The
Commissioner issued an award of reinstatement retrospective to 1 November 2013 with
back pay equivalent to 12 months’ remuneration.15
[9] Shortly thereafter, the applicant applied for a variation of the award. This was
on the basis that the back pay due was calculated on the same scale from the date of
employment to the date of the arbitration award. This was acceded to by the
11 Maroveke v Fermel (Pty) Limited, unreported judgment of the Labour Appeal Court, Johannesburg,
Case No JA7/2013 (1 July 2014) (Labour Appeal Court I) at para 21.
12 Id at para 23.
13 Maroveke v Fermel (Pty) Limited, arbitration award of the CCMA, Case No MP 4969-09 (14 October 2014)
(CCMA II) at para 35.
14 Id.
15 CCMA II above n 13 at paras 39-40.
MHLANTLA J
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Commissioner. Thus, the back pay due to the applicant increased from R135 536.28 to
R469 256.88.
Labour Court II
[10] The third respondent launched an application to review and set aside the
arbitration award.16 On 4 April 2019, the Labour Court handed down its judgment in
which it agreed with the Commissioner’s findings that the dismissal was sub stantially
unfair and that an order of reinstatement was appropriate.
[11] In determining the extent of retrospectivity, the Labour Court held that the
Commissioner did not make a decision that a reasonable commissioner would make as
it was known that the applicant was unemployed for only two months after his dismissal
and was thereafter gainfully employed. Relying on Toyota SA Motors ,17 the
Labour Court held that the award of 12 months’ back pay was unreasonable and not in
keeping with the established principle that reinstatement ought to neither impoverish
nor enrich the employee but restore them to the position they would have been in but
for the dismissal.18 It held that the Commissioner should have considered the fact that
the applicant was employed and fashion the reinstatement award having regard to the
period that the employee was able to tender his services . Furthermore, retrospective
reinstatement should have been limited to two months, which was the period when the
applicant was unemployed. It thus set aside the CCMA award and replaced it with an
order reinstating the applicant with effect from 14 October 2014 , being the date of the
arbitration award, with back pay equivalent to two months’ wages at R11 294.69 per
month.
16 Fermel v Talane N.O ., unreported judgment of the Labour Court , Johannesburg, Case No JR 2545/14
(4 April 2019) (Labour Court II) at para 2.
17 Toyota SA Motors (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration [2015] ZACC 40; (2016)
37 ILJ 313 (CC); 2016 (3) BCLR 374 (CC).
18 Labour Court II above n 16 at para 26.
MHLANTLA J
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Labour Appeal Court II
[12] The applicant sought leave to appeal from the Labour Appeal Court.
On 4 August 2020, the Labour Appeal Court dismissed his application for leave to
appeal against the order of the Labour Court.19
In this Court
[13] The applicant lodged an application for leave to appeal against the portion of the
Labour Court’s order where it held that the Commissioner’s award of 12 months’ back
pay was unreasonable.
[14] Upon consideration of the matter, a discrepancy was discovered in the arbitration
award, in that it recorded that the applicant earned R1 500 per month at Gold Fields.
This appeared to be substantially lower than the applicant’s salary when he was
employed by the third respondent. This discrepancy caused this Court to issue
directions calling upon the parties to make written su bmissions on whether the
Labour Court had all the facts relating to the actual earnings of the applicant. In
particular, the applicant’s earnings before his dism issal and what he earned at the new
place of employment after his dismissal.
[15] The applicant and the third respondent filed written submissions and the matter
was determined without oral argument.
Applicant’s submissions
[16] The applicant submits that this matter implicates a constitutional right, namely
the right to fair labour practices.20 The applicant further submits that this matter raises
an arguable point of law of general public importance which ought to be considered by
this Court. This is whether the subsequent securing of employment by a d ismissed
19 Labour Appeal Court II above n 1.
20 Section 23 of the Constitution.
MHLANTLA J
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employee precludes him from receiving full back pay from the time of his dismissal to
the date of a reinstatement award in his favour.
[17] The applicant submits that the Labour Court did not have all the relevant facts
before it to determine an appropriate remedy. For instance, there was no evidence about
his income at his new post and the dismissal as a supervening impossibility in the way
of tendering his services was not considered. He also submits that monies earned from
other sources in the calculation of the back pay due to the dismissed employee should
not be deducted.
[18] In response to this Court’s directions, the applicant submits that the Labour Court
had incorrect information regarding his earnings. The error was caused by the
Commissioner during the CCMA proceedings, where the applicant had testified that his
gross salary was R26 750 but the Commissioner incorrectly had regard to his net salary,
which was R11 294.69. The latter figure was varied in a subsequent ruling by the
CCMA. For some unexplained reason , however, the Labour Court did not have this
information and used the original (and incorrect) figure of R11 294.69 in its judgment.
Consequently, the Labour Court did not have the correct information on which to
determine the appropriate back pay . In addition , the applicant earned R15 000 at
Gold Fields and this was substantially less than what he earned at his previous
employer.
Third respondent’s submissions
[19] The third respondent submits that there are no prospects of success in this matter,
and, therefore, it would not be in the interests o f justice for this Court to grant leave to
appeal. It further submits that it has always intended to comply with the reinstatement
order made by the Labo ur Court but could not do so without the applicant being in
possession of a valid work permit. It tendered payment of the two months’ salary to
which the applicant was entitled, however, due to the appeal processes being underway
the applicant did not accept same.
MHLANTLA J
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[20] In response to our directions, the third respondent submits that the Labour Court
had the record and transcript of the review proceedings when it determined the back
pay due to the applicant. It also submits that: (a) the gross salary of the applicant on the
date of termination of his services was R24 730.64 per month ; (b) the applicant wa s,
after his dismissal, without employment for two months; (c) in September 2019, he
secured employment at Gold Fields in a similar position to that which he had held at its
business; (d) his salary at Gold Fields was R15 000 per month, although, it is not clear
on the evidence whether this is the gross or net pay; in this regard, the relevant parts of
the transcript of the evidence of Mr Kobus Kotze who testified that the applicant was
paid R15 000 per month, was attached to the written submissions; and (e) th e third
respondent reiterated that it had tendered payment of the two months’ back pay on the
correct remuneration level of the applicant.
Issues
[21] The following issues must be determined:
(a) Does this matter engage this Court’s jurisdiction?
(b) Is it in the interests of justice to grant leave to appeal?
(c) If it is, what is the appropriate back pay due to the applicant?
Jurisdiction
[22] This application involves a constitutional matter as it implicates the right to fair
labour practices as enshrined in the Constitution. Therefore, this Court’s jurisdiction is
engaged.
Leave to appeal
[23] The next question is whether it is in the interests of justice that leave to appeal
be granted. In NEHAWU, it was held that this determination requires the consideration
of several factors, one of which is the matter’s prospects of success. 21 In this regard,
21 National Education Health and Alli ed Workers Union v University of Cape Town [2002] ZACC 27; 2003 (3)
SA 1 (CC); 2003 (2) BCLR 154 (CC) (NEHAWU) at para 25.
MHLANTLA J
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the main consideration is whether there are reasonable prospects that this Court will
materially reverse or alter the decision of the Labour Court.
[24] Further, an appeal court is enjoined to interfere with a discretionary decision of
the court whose order is appealed against, where it reached a decision which in the result
could not have been reasonably made by a court that had properly directed itself towards
all the relevant facts and principles. 22 In this matter , the applicant does not enjoy
reasonable prospects of success in respect of the claim relating to his retrospective
reinstatement for the reasons set out below.
Merits
[25] I am satisfied that the Labour Court was correct when it held that the award of
12 months’ back pay was unreasonable and not in keeping with the established principle
that reinstatement ought to neither impoverish nor enrich the empl oyee beyond the
extent to which he would have been but for the dismissal. 23 Furthermore, the
Commissioner should have considered the fact that the applicant was employed and
formulated the reinstatement award by having regard to the period that the employee
was without employment.
[26] The Labour Court did not misdirect itself in the exercise of its discretion to
reduce the period of retrospective reinstatement to accord with the time spent without
employment. It must be borne in mind that reinstatement is intended to restore the
employee’s position to that which she would be in but for the dismissal. In this instance,
the applicant could not be restored to that position because he obtained employment
shortly after his dismissal. He was unemployed for two months; therefore, the
reinstatement order should have been for that period only. The Labour Court was thus
22 National Coalition for Gay and Lesbian Equality v Minister of Home Affairs [1999] ZACC 17; 2000 (2) SA 1
CC; 2000 (1) BCLR 39 at para 11.
23 Mediterranean Textile Mills (Pty) Ltd v SA C lothing & Textile Workers Union [2011] ZALAC 23; (2012) 33
ILJ 160 (LAC) at paras 26 -7. See also Grogan Dismissal 2 ed (Juta & Co (Pty) Limited, Cape Town 2014) at
615.
MHLANTLA J
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correct in reducing the period for which reinstatement was due. It follows that there are
no prospects of success on this issue.
Remedy
[27] However, the applicant’s claim for appropriate back pay stands on a different
footing and there are reasonable prospects that this Court will materially alter the
decision of the Labour Court. The compensation to the wronged party is intended to
“offset” th e financial loss suffered as a result of a wrongful act. What must be
determined is the extent of the loss, while considering the nature of the unfair dismissal.
Underlying this is the intent to restore the applicant to the position he would have been
in but for the wrongful act by the employer. That restoration must not assume a punitive
character. This view is properly enunciated in Davids as follows:24
“The compensation which must be made to the wronged party is a payment to offset
the financial loss which has resulted from a wrongful act. The primary enquiry for a
court is to determine the extent of that loss, taking into account the nature of the unfair
dismissal and hence the scope of the wrongful act on the part of the employer. This
court has been careful to ensure that the purpose of the compensation is to make good
the employee’s loss and not to punish the employer.”25
[28] In restoring the applicant to his previous position, this Court ought to consider
both the amount he would have earn ed but for his dismissal and what he earned while
working at Gold Fields. As far as this is concerned, the Labour Court did not set out
the facts it considered about the earnings of the applicant. It merely issued an order in
the following terms:
“The [applicant] is to be reinstated with effect from the date of the Arbitration Award,
being 14 October 2014. The [applicant] is en titled to be reinstated from
14 August 2014. For the avoidance of doubt, the employer shall pay the employee
24 Davids v Boland Rugby (Pty) Ltd [2011] ZALCCT 69 at para 14. There the Labour Court agreed wi th the
enunciation of the principle on reinstatement as set out in Le Monde Luggage CC t/a Pakwells Petje v Dunn N.O.
[2007] ZALAC 9; (2007) 28 ILJ 2238 (LAC) at para 30.
25 Davids id.
MHLANTLA J
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back pay equivalent to 2 mon ths’ wages (R11 294.69 x 2 = R22 589.38) on or before
30 April 2019.”26
[29] In this Court, the parties have clarified the applicant’s earnings in their written
submissions. The third respondent has admitted that the Labour Court had incorrect
figures and that the applicant’s actual salary was R24 730.60 per month. It has also
tendered payment of the two months’ back pay at R24 730.60 per month. We also know
now that the applicant earned R15 000 per month at Gold Fields. It is clear that the
applicant mitigated his loss by obtaining employment within a short period after his
dismissal.
[30] The Labour Court misdirected itself in two respects. Firstly, in its quantification
of the actual back pay. The Labour Court did not have the ruling of the CCMA where
its order was varied. Therefore, it relied on incorrect facts. Secondly, it did not have
the details of the applicant’s salary at Gold Fields. Thus, the Labour Court arrived at a
decision that could not have been reasonably made by a court that had directed itself to
all relevant facts and principles. Accordingly, this Court is enjoined to intervene.
[31] A determination whether an employee has been put in a better position than she
would have been in had she remained employed requires an enquiry into what that
employee earned at the new place of employment. In this matter, that information was
not before the Labour Court and it did not conduct the enquiry. The applicant’s actual
salary was R24 730.60 per month. The Labour Court relied on incorrect figures when
it made its determination for the two months’ back pay. This mistake must be rectified.
[32] The Labour Court also committed a material error in that it did not consider the
difference in earnings. In this regard, the applicant’s salary at Gold Fields was
substantially less than his previous salary. Whilst employed by the thir d respondent,
the applicant earned R24 730.60 per month . At Gold Fields he earned R15 000 per
26 Labour Court II above n 16 at para 43.
MHLANTLA J
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month. The difference between the salaries is R9730.60 per month. This would mean
that the total difference in earnings for the period of 10 months is R97 306. In my view,
the applicant’s diligence and good fortune in finding employment should not prejudice
him from receiving what is due to him. Had the Labour Court conducted this exercise,
it would have concluded that the applicant earned substantially less at Gold Fields. The
difference between the two salaries is a substantial amount that cannot be ignored.
[33] The Lab our Court should have taken the difference into account when
determining the back pay. Therefore, the applicant ought to be compensated for thi s
difference in the remaining 10 months for which back pay is permissible. In my view,
this would not have a punitive effect, but instead, serve to restore the applicant to the
position he would have been in but for the dismissal.
[34] In the resul t, the applicant is entitled to payment of R49 461.20, which is two
months’ back pay , and R97 306, being the total difference between what he earned
whilst in the third respondent’s employ and his earnings at Gold Fields for the period
of 10 months. This means that paragraph 3 of the order of the Labour Court must be
set aside and replaced with an order that the third respondent should pay the applicant
an amount of R146 767.20.
Order
[35] The following order is made:
1. Leave to appeal is granted.
2. The appeal is upheld to the extent that p aragraph 3 of the order of the
Labour Court is set aside and substituted with the following:
“Fermel (Pty) L imited must pay Mr Nesu Maroveke an amount of
R146 767.20 within 15 days from the date of this order.”
3. Save as set out in paragraph 2, the appeal is dismissed.
4. Each party must pay its own costs.
For the Applicant:
For the Third Respondent:
Ndumiso Voyi Incorporated
Weavind and Weavind Incorporated