Berry & Donaldson (PTY) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR1554/19) [2022] ZALCJHB 184 (12 July 2022)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case no: JR1554/19

In the matter between:

BERRY & DONALDSON (PTY) LTD

Applicant

And

COMMISSION FOR CONCILIATION, MEDIATION

AND ARBITRATION

First Respondent

COMMISSIONER JUSTICE SANTJE MTHOMBENI Second Respondent

TRACEY-LEE SELBY

Third Respondent

COMMISSIONER DEREK LUCKY MAHLANGU

Fourth Respondent

Heard: 07 June 2022

Delivered: 12 July 2022

This judgment was handed down electronically by circulation to the parties' legal representatives by email, publication on the Labour Court’s website and released to SAFLII. The date and time for hand-down is deemed to be 10h00 on 12 July 2022.

Summary: Review application – the commissioner failed to apply his mind to the issues which were material to the determination of the dispute.

JUDGMENT

NKUTHA-NKONTWANA, J

Introduction

[1] this is an application in terms of section 145(1) and section 145(2)(a)(ii) of the of the Labour Relation Act[1] (LRA) in terms of which the applicant seeks an order reviewing and setting aside the arbitration award (award) issued by the fourth

respondent (commissioner) under the auspices of the first respondent (CCMA) and case number GAEK4560-119, dated 07 July 2019. The

commissioner found the dismissal of the third respondent substantively and procedurally unfair and ordered compensation equivalent to six months’ salary.

[2] The award is impugned on several grounds of review but mainly that the commissioner misconstrued the nature of the enquiry and, alternatively, rendered an unreasonable award. The applicant also took issue with the fact that the second respondent was not the commissioner who presided over the arbitration proceedings and as such the award is reviewable on this ground alone. It later transpired that there was an administrative bungle in relation to the name that ultimately appeared on the award that was issued.

[3] The applicant then launched a Rule 11 application[2] to join the fourth respondent as party in this litigation. That application served before Phehane J who granted an order joining the fourth respondent and directing them to file an explanatory affidavit on what had transpired. The fourth respondent duly complied and explained that the problem was caused by the CCMA case administrators who did not update the CCMA case management system as the matter was initially allocated to the second respondent. Soon after he was apprised of the unfortunate mistake, he duly varied the award to reflect his name in terms of section 144 of the LRA.

[4] The applicant requests that I mark my displeasure at the conduct of the commissioner and CCMA with an appropriate costs order. It contends that it was seriously prejudiced by their ineptitude. I agree that there is no excuse for the remiss conduct on the part of the commissioner and CCMA. It does not make sense that the commissioner appended his signature on the award without picking up the incorrect name. Still, I am not inclined to burden commissioner and CCMA with costs as the applicant failed to notify them that it was intending to seek costs against them despite the fact that they are not opposing this application.

Factual Background

[5] The third respondent was employed by the applicant as a Senior Export Controller in the export department of its Johannesburg branch. In January 2019, the applicant initiated the retrenchment discussions with three of its employees, including the third respondent, in the export department as they had been identified as there was a possibility that they would be affected by the contemplated retrenchment. They were advised that the applicant was experiencing financial constraints due to low volumes in the export department and that cost-cutting measures and possible retrenchments were being considered.

[6] On 1 February 2019, Mr Artur Vock (Mr Vock), the general manager of the applicant’s Johannesburg branch, met with the third respondent and her colleague. He issued them with notices in terms of section 189(3) of the LRA. That was followed by further one-on-one consultations with the third respondent on 4, 6 and 12 February 2019. It was the applicant’s evidence that proposals made by the third respondent were duly considered but found not to be feasible. On 13 February 2019, she was issued with a notice of termination which came into effect on 28 February 2019.

[7] Two months after the retrenchment of the third respondent, there were positions that become vacant in the export department after two resignations, one being that of the Export Manager, Jacques Rheede. Ultimately, these positions were never filled due to financial constraints.

[8] The third respondent referred an unfair dismissal dispute to the CCMA, alleging that her dismissal had been both procedurally and substantively unfair. The commissioner found that there was no evidence that the applicant made no attempts to avoid the third respondent’s retrenchment as envisaged in the LRA; and failed to provide her with evidence regarding its financial situation and why she was affected. The commissioner concluded that the dismissal of the third respondent had been premeditated.

Review test

[9] The review test is comprehensively spelt out in Sidumo and another v Rustenburg Platinum Mines and others[3] and subsequently expounded in various dicta of both the Supreme Court of Appeal (SCA) and the Labour Appeal Court (LAC).[4] Pertinently, in Palluci Home Depot (Pty) Ltd v Herskowitz and Others,[5] LAC underscored the fact that:

‘[15] …the Labour Court’s approach to the review of the Commissioner's award transcends the mere identification of process related errors to reveal the Commissioner’s basic failure to apply his mind to considerations that were material to the outcome of the dispute, resulting in a misconceived hearing or a decision which no reasonable decision-maker could reach on all the evidence that was before him or her.

[16] Significantly, as was held by the SCA in Herholdt and endorsed recently by this Court in Head of the Department of Education v Jonas Mohale Mofokeng and Others, “for a defect in the conduct of the proceedings to amount to a gross irregularity as contemplated by s 145(2)(a)(ii) of the LRA, the arbitrator must have misconceived the nature of the enquiry or arrived at an unreasonable result”. Thus, as recognised in Mofokeng, it is not only the unreasonableness of the outcome of an arbitrator's award which is subject to scrutiny, the arbitrator “must not misconceive the inquiry or undertake the inquiry in a misconceived manner”, as this would not lead to a fair trial of the issues. In further approval of Herholdt, this Court in Mofokeng stated that:

“Mere errors of fact or law may not be enough to vitiate the award. Something more is required. To repeat: flaws in the reasoning of the arbitrator, evidence in the failure to apply the mind, reliance on irrelevant considerations or the ignoring of material factors, etc. must be assessed with the purpose of establishing whether the arbitrator has undertaken the wrong inquiry, undertaken the inquiry in the wrong manner or arrived at an unreasonable result. Lapses in lawfulness, latent or patent irregularities and instances of dialectical unreasonableness should be of such an order (singularly or cumulatively) as to result in a misconceived inquiry or a decision which no reasonable decision-maker could reach on all the material that was before him or her”.’ (Emphasis added)

Evaluation

[10] In SA Commercial Catering and Allied Workers Union and others v Woolworths (Pty) Limited,[6] the Constitutional Court endorsed the principles set out in SA Clothing and Textile Workers Union and others v Discreto - A Division of Trump and Springbok Holdings[7] (Discreto). In Discreto, the LAC held as follows:

‘…For the employee fairness is found in the requirement of consultation prior to a final decision on retrenchment. This requirement is essentially a formal or procedural one, but, as is the case in most requirements of this nature, it has a substantive purpose. That purpose is to ensure that the ultimate decision on retrenchment is properly and genuinely justifiable by operational requirements or, put another way, by a commercial or business rationale. The function of a court in scrutinizing the consultation process is not to second-guess the commercial or business efficacy of the employer’s ultimate decision (an issue on which it is, generally, not qualified to pronounce upon), but to pass judgment on whether the ultimate decision arrived at was genuine and not merely a sham (the kind of issue which courts are called upon to do in different settings, every day). The manner in which the court adjudges the latter issue is to enquire whether the legal requirements for a proper consultation process has been followed and, if so, whether the ultimate decision arrived at by the employer is operationally and commercially justifiable on rational grounds, having regard to what emerged from the consultation process.’ (Emphasis added)

[11] In the present case, the applicant led the uncontroverted evidence to prove that the third respondent’s retrenchment was operationally justifiable on rational grounds. The reason for embarking on the retrenchment process was because it was experiencing low volumes in the export department. In fact, despite the third respondent’s assertion that she had not been favoured with the reasons for the retrenchment or information to show that the applicant was not financially viable, she conceded during her cross-examination that she did handle a part of the profit sheets and was aware that her department was only one affected at that time. As a result, she did try to improve the numbers. Regrettably, this evidence eloped the commissioner’s attention.

[12] In addition, the third respondent testified that she had offered alternatives to her retrenchment which had not been considered. It is, therefore, mind-boggling that she would offer alternatives for cost savings when she was not aware of the rationale for her retrenchment.

[13] On the issue of consultation, it was the applicant’s evidence that there were about three consultation meetings before the retrenchment of the third respondent. Pertinently, according to Mr Vock, the applicant’s General Manager, on 1 February 2019, he had a meeting with the third respondent and one of her colleagues and

issued them with the section 189(3) notices and explained the contents thereof. Consistent with this evidence, the third respondent

testified that she was aware that her chances of escaping retrenchment were very slim as she was the last to be employed in her

department and the applicant applied the LIFO principle as a selection criterion.

[14] The third respondent conceded under cross-examination that there were at least two further consultation meetings with Mr Vock before she was issued with the retrenchment letter on 13 February 2019. Nothing much turns of the fact that the third respondent did not receive a response in writing on her proposed alternative suggestions for

retrenchment. Mr Vock testified that the suggestion that was proposed by the third respondent had been discussed with her prior to her sending the email to the senior management on 13 February 2019.

[15] It is absolutely clear that the commissioner’s finding that the dismissal of the applicant was procedurally and substantively unfair is at odds with the uncontroverted evidence of the applicant that was

before him.

[16] The applicant also impugns the conduct of the commissioner to accept and consider the third respondent’s evidence that was based on a version that was not put to Mr Vock, the applicant’s witness. The said evidence pertains to the third respondent’s allegation that the reason for her dismissal was the fact that she had lodged a grievance about being accused of having an affair with one of the directors. She asserted that, instead of attending to her grievance,

the applicant retrenched her.

[17] In President of the Republic of South Africa and others v South African Rugby Football Union and others,[8] the Constitutional Court held that:

‘[61] The institution of cross-examination not only constitutes a right, it also imposes certain obligations. As a general rule it is essential, when it is intended to suggest that a witness is not speaking the truth on a particular point, to direct the witness's attention to the fact by questions put in cross-examination showing that the imputation is intended to be made and to afford the witness an opportunity, while still in the witness-box, of giving any explanation open to the witness and of defending his or her character. If a point in dispute is left unchallenged in cross-examination, the party calling the witness is entitled to assume that the unchallenged

witness's testimony is accepted as correct…

[62] The rule in Browne v Dunn is not merely one of professional practice but “is essential to fair play and fair dealing with witnesses”…

[63] The precise nature of the imputation should be made clear to the witness so that it can be met and destroyed, particularly where the imputation relies upon inferences to be drawn from other evidence in the proceedings. It should be made clear not only that the evidence is to be challenged but also how it is to be challenged. This is so because the witness must be given an opportunity to deny the challenge, to call corroborative evidence, to qualify the evidence given by the witness or others and to explain contradictions on which reliance is to be placed.’ (Emphasis added)

[18] While in National Union of Mineworkers and another v Rustenburg Platinum Mine (Mogalakwena Section) and others,[9] the LAC referred with approval to the decision in ABSA Brothers (Pty) Ltd v Moshoana NO and Others[10] where the following was said about the failure to cross-examine on an important point:

‘It is an essential part of the administration of justice that a cross-examiner must put as much of his case to a witness as concerns that witness (see Van Tonder v Kilian NO en ‘n ander 1992 (1) SA 67 (T) at 721). He has not only a right to cross-examination but, indeed, also a responsibility to cross-examine a witness if it is intended to argue later that the evidence of the witness should be rejected. The witness’s attention must first be drawn to a particular point on the basis of which it is intended to suggest that he is not speaking the truth and thereafter be afforded an opportunity of providing an explanation (see Zwart and Mansell v Snobberie (Cape) (Pty) Ltd 1984 (1) PH F19 (A)). A failure to cross-examine may, in general, imply an acceptance of the witness’s testimony. In this regard Pretorius has the following to say in ‘Cross-examination in South African Law’ Butterworths 1997 at149-150:

“… it is unjust and unfair not to challenge a witness’s account if offered the opportunity, then later argue – when it is no longer possible for the witness to defend himself or offer an explanation – that his evidence should not be accepted.

…It would create an untenable situation if each witness had to be recalled later to respond to claim emerging from the opponent’s case which the witness might be able to elucidate. In the interest of finality and convenience of witnesses, it is clear that all matters must, as far as possible, be dealt with at a single opportunity. There can thus be no doubt that there is a clear responsibility on a cross-examiner to cross-examine if a witness’s account is rejected.’’’ (Emphasis added)

[19] The third respondent’s contention that the omission to put her version to Mr Vock is inconsequential is, in my view, untenable. It is apparent from the above authorities that the commissioner ought to

have rejected the impugned evidence. Yet, not only did he admit this evidence, he also based upon it his decision that the third

respondent’s dismissal was premeditated. By acting the way he did, the commissioner misconstrued the nature of the enquiry and deprived the parties of a fair hearing.

Conclusion

[20] In all the circumstances, the commissioner failed to apply his mind to the issues which, as shown above, were material to the determination of the dispute. I am satisfied that the award cannot stand as it is not sustainable on the facts of this case.

Remedy

[21] It is well accepted that in the interest of justice, the Court would seldom remit this matter back to the CCMA because of the consequential delays. Equally in this matter, I am not inclined to remit it back to the CCMA as I am in a position to deal with the matter to its finality in the interest of justice.

[22] After a careful perusal of the record and in the light of the findings I have arrived at above, I am convinced that the dismissal of the third respondent is procedurally and substantively fair.

Costs

[23] In accordance with the requirements of the law and fairness, each party must carry its own costs.

[24] In the result, I make the following order.

Order:

1. The arbitration award dated 7 July 2019 issued under case number GAEK4560-19 is reviewed and set aside and substituted with the following order:

1.1 The dismissal of the third respondent is procedurally and substantively fair.

1.2 The unfair dismissal claim is accordingly dismissed.

2. There is no order as to costs.

P Nkutha-Nkontwana

Judge of the Labour Court of South Africa

Appearances:

For the Applicant: Advocate M Edwards

Instructed by: Teresa Erasmus Attorneys C/O Haffeegee Roskam

Savage Attorneys

For the Respondents: Advocate D. C Du Plessis

Instructed by:

Marias Parsons Attorneys C/O Oosthuizen Du Toit Berg &

Boon

[1] Act 66 of 1995, as amended.

[2] Rule 11 of GN 1665 of 14 October 1996: Rules for the conduct of proceedings in the Labour Court.

[3] (2007) 28 ILJ 2405 (CC) at paras 78 - 79.

[4] See: Head of the Department of Education v Mofokeng [2015] 1 BLLR 50 (LAC); Gold Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v Commission for Conciliation, Mediation and Arbitration and others [2007] ZALC 66; [2014] 1 BLLR 20 (LAC); Herholdt v Nedbank Ltd (Congress of South African Trade Unions as amicus curia) [2013] 11 BLLR 1074 (SCA).

[5] (2015) 36 ILJ 1511 (LAC) at paras 15 - 16.

[6] (2019) 40 ILJ 87 (CC) at para 25.

[7] [1998] 12 BLLR 1228 (LAC) at para 8; see also BMD Knitting Mills (Pty) Ltd v SACTWU [2001] 7 BLLR 705 (LAC) at para 19; CWIU and Others v Algrorax (Pty) Ltd [2003] 11 BLLR 1081 (LAC) at paras 69 – 70.

[8] 2000 (1) SA 1 (CC) paras 61-63.

[9] [2015] 1 BLLR 77 (LAC) at para 35.

[10] [2005] 10 BLLR 939 (LAC) at para 39.