Ba-Pholaborwa Local Municipality v Council for Conciliation Mediation And Arbitration and Others (JR114/11) [2014] ZALCJHB 423 (28 August 2014)

REPUBLIC OF SOUTH AFRICA

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Case no: JR114/11

In the matter between:

BA-PHALABORWA LOCAL MUNICIPALITY

Applicant

and

COUNCIL FOR CONCILIATION MEDIATION

AND ARBITRATION

First Respondent

ADV. JS MAAKE N.O

Second Respondent

SAMWU obo LESEGO PHASHA & 2 OTHERS

Third Respondent

Heard: 19 July 2013

Delivered: 28 August 2014

MANCHU AJ

Introduction

[1] The third respondent acts on behalf of the applicant’s three former employees (“the employees”). The employees’

employment with the applicant was terminated following a dispute about whether the employees had failed to sign the renewal of their employment contracts. The second respondent found the dismissals to be procedurally and substantively unfair and awarded the employees 12 months compensation.

[2] This is a review against the award of the second respondent. The review is brought against the following facts.

The background facts

[3] The employees were all appointed on fixed term contracts, as Senior Debt Collectors.

[4] In terms of these fixed terms contracts, the employees were required to conclude performance agreements within 90 days after commencement of service or after a reasonable time as determined by the applicant’s Chief Financial Officer (“CFO”). The agreement also provided that in the event that the parties fail to agree on the contract of performance within the 90 days period or such time extended as fixed by the parties, then the employment contract will automatically terminate.

[5] On or about 16 March 2010, and in furtherance of the above mentioned fixed term contracts, the employees were given performance agreements to sign. There is a dispute between the parties about whether this was the first occasion in which these agreements were given to the employees for signature. On this question, I agree with the second respondent that this dispute is immaterial in light of the fact that it is common cause between the applicant and the third respondent that the agreements were given to the employees on 16 March 2010.

[6] After having received these contracts, the employees sought time to consult and obtain the advices of their union representatives on the contents of these agreements.

[7] The applicant’s CEO agreed and gave the employees until 19 March 2010 to consult their union.

[8] The employees alleged that they duly consulted their union representatives. The employees further alleged that because of a

previous commitment, the union representatives were not available to meet the CFO on 19 March 2010 to discuss the performance agreements

and that they hand delivered a letter on 18 March 2010 to the secretary of the CFO, in which they asked for the postponement of the meeting.

[9] The applicant disputed receiving the letter of 18 March 2010 and submitted that since the employees failed to submit their signed

agreements on 19 March 2010, as agreed, the employees’ contracts automatically terminated.

[10] The question before the second respondent was therefore whether the third respondent had in fact requested an extension and whether the employees had in fact failed to extend their employment contracts.

Were the agreements extended?

[11] In preparing his award, the second respondent summarised and considered all the evidence of the applicant’s and third

respondent’s witnesses.

[12] At paragraph 5.5 of the analysis and consideration of the evidence, the second respondent correctly identified the issues as follows:

‘… For me, the cardinal issue is the fact, which is common cause to the parties hereto, that on the 16th March 2010, the CEO had granted the Applicants an extension until the 19th of that month. The question then arises whether or not, failure by the Applicants to comply, can be attributed to fault on their part, in which event, if this be so, that it can therefore be found that the termination of the employment contracts had indeed automatically occurred and that, as such, their alleged dismissals were fair in the circumstances.’

[13] In considering this issue, the second respondent dealt with the events of 18 March 2010. On this issue, the second respondent found that the applicant’s CFO’s evidence was contradictory on the question whether she had received the union’s letter of 18 March 2010. It appears from the record that the CFO appeared to vacillate between two versions. On the one hand, her evidence was that she never received the letter of 18 March at all and on the other hand her evidence is that she did receive the letter, but not on the 18th of March.

[14] The second respondent also found that the extension by the union was predicated upon its claim that its shop stewards would be attending a Branch Shop Stewards Council meeting on the 19th and that the applicant made no suggestion that this was not true.

[15] In my view, the second respondent’s findings on the events of 18 March 2010 constitute a reasonable decision and are in fact correct. These events demonstrate that the employees did not breach the performance agreement by failing or refusing to sign the agreements as alleged by the applicant and that the third respondent took the necessary steps to secure an extension, as contemplated by the fixed term agreement.

The grounds of review

[16] The applicant’s grounds of review are all essentially directed against the finding that the employees did not intend to review their employment contracts and that their employment contracts did not automatically terminate. In this respect, the first to third ground of review, which appears in the founding affidavit, all appear to argue that the second respondent was incorrect to find that the employees refused to sign the agreements.

[17] The grounds of review that are set out in the supplementary affidavit also make a similar argument. I deal with the grounds of review that have not already been addressed by what is said above.

[18] In respect of the ground of review that the agreements had automatically terminated, the second respondent was correct in finding that the termination of the applicant’s employment contracts was done prematurely and that the contracts had not automatically terminated because of the employees failure to sign the performance agreement. The third respondent had communicated to the applicant that they could not attend on 19 March 2010 to discuss the agreements and this could not have constituted a refusal or failure to sign by the employees.

[19] Furthermore, in my view the second respondent did a correct analysis of the evidence before him. From my reading of the award and record that does not appear to be a basis to interfere with this finding.

[20] The second respondent awarded compensation of 12 months. The applicant wishes the court to interfere with this amount. I however

can see no compelling and persuasive basis to interfere with the applicant’s compensation award of 12 months. It is worth noting that from the applicant’s heads of argument it appears that the employees still had a further 16 months remaining on the fixed term employment contract. Therefore it does not appear that the compensation awarded exceeds what the employees would have earned had they not been unfairly dismissed. Furthermore, the second respondent appears to have exercised his discretion on an appropriate award after considering relevant considerations, including the fact that the working relationship of the parties had irretrievably broken down and that reinstatement was thus not possible.

[21] The review application is accordingly dismissed.

The applicant’s point in limine

[22] Lastly, the applicant’s heads of argument raises, for the first time an argument that the dismissal dispute between the parties was meant to have been referred to private arbitration.

[23] This argument is raised for the first time in the heads of argument and does not appear to have been persisted within the affidavits

filed in these proceedings. This point in limine is however contradicted by the evidence in the founding affidavit. In this respect, the applicant’s founding affidavit provides that the parties are in agreement that the matter be referred to the CCMA for arbitration.

[24] The point in limine is therefore disposed by the applicant’s evidence. Even though the employment agreement has a private arbitration clause, according to the applicant, the parties had agreed to refer the dismissal dispute to the CCMA instead of a private arbitrator.

[25] This point in limine is accordingly also dismissed.

[26] In the premises, the application is dismissed with costs.

________________________

Manchu AJ

Acting Judge of the Labour Court of South Africa

APPEARANCES:

For the Applicant: Mr Goldberg

Instructed by: Goldberg Attorneys

For the Respondents: Adv JL Basson

Instructed by: Maenetja Attorneys