City of Matlosana Local Municipality v South African Local Government Bargaining Council and Others (JR 993/12) [2013] ZALCJHB 204 (26 July 2013)

REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Not reportable

Case No: JR 993/12

In the matter between:

CITY OF MATLOSANA LOCAL MUNICIPALITY .....................................................Applicant

and

SOUTH AFRICAN LOCAL GOVERNMENT

BARGAINING COUNCIL (SALGABC) ........................................................First Respondent

T. L. MABUSELA N.O. ............................................................................Second Respondent

T. MKHONTWANA & 9 OTHERS ...............................................................Third Respondent

Heard: 25 JULY 2013

Delivered: 26 JULY 2013

Summary: (Review – dismissal – contracts linked to political office bearers – type of dismissal not determined – poor record and insufficient evidence to canvass issues properly – remitted for hearing de novo)

Lagrange J

[1] This is an application to review and set aside an award by the second respondent an arbitrator appointed by the first respondent.

The award concerned 10 applicants employed by the City of Matlosana Local Municipality.

[2] There was a question raised by the applicant about whether or not all the individual applicants are opposing the review application. It was common cause that Mr Ntepang has settled his dismissal dispute with the applicant and is no longer a party to these proceedings. In so far as the other individual respondents are concerned, in view of the outcome of this application, it does not matter whether they had all opposed it or not.

[3] The applicants were all engaged on fixed term contracts which expired when the term of office of the political office bearer in whose office they worked ended, or a period of five years had expired. In June 2011 they were all issued with letters reminding

them of the expiry of their contracts and that they must vacate the offices they occupied by the 30th of the month. Three of the

applicants were employed in the office of the Chief Whip, and the remainder in the office of the Mayor. The Chief Whip served a full term until municipal elections were held in May 2011.

[4] In the case of the applicants working in the office of the executive Mayor, the incumbent Mayor at the time of their appointment, Mr Duduvo, vacated office in February 2010, but they remained in their posts and served his successor, Mr Mogale, until the elections of May 2011. They all continued to work in their previous positions until they were notified of their dismissals in June that year. The case of Mr Ntepang, who worked in the Mayor's office, was slightly different as he was seconded to work on a temporary basis as a project coordinator in the office of economic growth from 3 June 2011. There was some dispute over when he received the notice of the expiry of his contract, but the arbitrator accepted that it was only on 30 June 2011 that he did, unlike the others who appear to have received the notices on 2 June 2011.

[5] After considering the evidence and case law, the arbitrator concluded:

"I cannot find anything that suggests that there was no implied employment relationship between the applicants and the respondent. With regard to the case of Mr Ntepane, it is clear from the fact that the employer indeed intended to second him [to] another position but later decided otherwise.”

[6] The arbitrator then found that the employer's conduct towards the applicants was unfair and ordered that they be "reemployed on the same terms of employment or be placed in other positions on the same levels as the ones they used to occupy or as parties may agree." The arbitrator further awarded each applicant, compensation of five months' salary.

[7] The arbitrator’s reasoning appears to rest on the following subsidiary findings and principles:

7.1. The applicants all remained in service even after the May or Chief Whip to whose office they were attached had vacated office.

7.2. The employer was aware of their continued presence at work.

7.3. The applicants continued to work for the entire period of office of the second Mayor and it was only shortly after the appointment of a third Mayor that their services were terminated.

7.4. The relationship between the two parties continued despite the expiry of the applicants’ contracts of employment, even though their contract stated that the duration of the relationship would be until the Mayor vacated office.

7.5. In respect of the three applicants who were employed in the office of the single Whip the contract stated "Your contract is linked to the term of the office of the Council single whip." This did not refer to a particular council, or the current council, and it was possible to interpret this to mean that the appointment would be in that office for as long as the Council existed.

7.6. In view of the fact that their services continued beyond the duration of the contract of employment it was therefore "not

incorrect to conclude that their expectations were raised by the conduct of the respondent."

7.7. There was authority to the effect that the terms of the contract are not decisive and a reasonable expectation of renewal can exist even where a written contract expressly stipulates that the employee acknowledges there is no expectation of renewal.

7.8. The Labour Court has also held that the failure of an employer to notify employees about the expiry of the contract in advance can give an impression that there was an intention to give the employee a permanent position.

Grounds of review

[8] The municipality has raised a number of grounds of review which may be summarised as follows:

8.1. It claims that the referral of the dispute was only made on 17 July 2011, a period of six weeks after 2 June 2011, and accordingly

the bargaining Council lacked jurisdiction in the absence of condonation application being granted for the late referral of the

dispute. This point was not persisted with in argument.

8.2. Since only three applicants testified there was no evidence before the arbitrator of the expectations of the other seven respondents, and the arbitrator committed a gross irregularity or misconducted himself in drawing conclusions about their expectations.

Notably, none of the applicants employed in the office of the chief whip testified.

8.3. The evidence of those who testified was not consistent on the question of whether or not they believed they had been permanently employed from the start, or permanently employed once the second mayor took office, or that their initial fixed contracts had been renewed. Accordingly, there was insufficient evidence for the arbitrator to conclude either that they believed they were permanently employed or that their fixed term contracts had been renewed.

8.4. The award was vague in crucial respects. In particular, the arbitrator failed to make a finding whether the respondents were dismissed in terms of section 186 (1)(a) or (b) of the LRA, which he was obliged to do before moving on to the next stage of determining the fairness of the dismissal.

8.5. The arbitrator exceeded his powers in awarding compensation and re-employment.

8.6. The arbitrator misconducted himself by failing to give reasons for the amount of compensation awarded.

8.7. In ordering the re-employment of the applicants, the arbitrator failed to apply his mind to section 193 (2) (c) of the LRA.

8.8. The arbitrator cited no authority for his conclusions of law, though he purported to rely on Labour Court judgments.

8.9. In issuing a variation of the award after the application for review had been filed, in which the arbitrator quantified the amounts to be paid to each of the individual employees, the arbitrator improperly entertained further evidence of the applicants’ earnings without notifying the employer.

Evaluation

I agree that arbitrator appears to have decided the applicants were dismissed in the sense of not having their fixed term contracts

renewed, but he then appears to grant a remedy of reinstatement on an indefinite basis, suggesting they were permanently employed which is at odds with a dismissal arising under s 186(1) (b), but in keeping with a conclusion that the applicants were permanently

employed. Mr Ngako, for the respondents, argued that the only reasonable inference to draw was that the arbitrator’s

thinking was along the lines of the decision in Owen...

It must be said that the approach of the arbitrator is confusing. This confusion stems from failing to identify clearly whether he was dealing with a dismissal in terms of s 186(1)(b) or an ordinary unfair dismissal of a permanent employee on notice. This is a material defect in the award, since his characterisation of the dismissal would amongst other things determine the type of relief he could have awarded. Moreover, if indeed he decided that the dismissal was a result of the notice issued to the respondents,

there is no analysis in his award of why he found it substantively unfair. The respondents argue that they were dismissed on notice in terms of s 186(1)(a) and that s 186(1)(b) was not applicable. They further contend that the applicant failed to prove the substantive and procedural fairness of the dismissal. That may be so, but the arbitrator clearly based his decision on fairness on his evaluation, however flawed, of the respondents’ expectations and not by assessing the substantive or procedural fairness of their dismissals. This confusion was a consequence of him misdirecting his enquiry by failing to reach a definite conclusion on what type of dismissal he was dealing with. By misdirecting his enquiry he did not conduct himself as he should have by first determining what kind of dismissal, if any, he was dealing with and then considering the question of fairness.

It is also difficult to understand how the arbitrator could have drawn conclusions about the expectations of all the respondents on the basis of the evidence of three of them, which was not even consistent. The arbitrator’s finding on reasonable

expectations cannot reasonably be justified on the evidence.

The arbitrator awarded compensation in addition to re-employment. The compensation was clearly not simply a quantification of

retrospective salary due to him, which was linked to a date of re-employment. As such, he exceeded his powers under s 193(1) of the LRA, and this award of relief cannot stand. Clearly, he also, should have notified the applicant of his intention to vary the award before he did so, so that it might make representations on the matter if it wished to. His failure to do so amounted to misconduct in relation to his duties as a commissioner.

In view of the analysis above, I am satisfied that the arbitrator’s award must be set aside.

The evidence set out in the reconstructed record was relatively perfunctory and did not explore the main issues in sufficient detail in my view. Accordingly, this is not a case in which I believe the court can simply substitute its own decision. For this reason, it is not necessary for the court to consider whether the principles enunciated in SA Post Office Ltd v Mampeule (2010) 31 ILJ 2051 (LAC) or in the earlier case of Chillibush Communications (Pty) Ltd v Johnston NO & others(2010) 31 ILJ 1358 (LC) relied on by Mr Ngako.

Order

In the circumstances, the arbitration award of the second respondent dated 23 March 2012 and issued under case number NWD 071109 is reviewed and set aside.

The matter is remitted back to the first respondent, which must set it down for a hearing de novo before another arbitrator.

The parties must conclude a pre-arbitration minute, 10 days before the hearing of the matter.

No order is made as to costs.

_______________________

R LAGRANGE, J

Judge of the Labour Court of South Africa

APPEARANCES

APPLICANT: R Venter instructed by Setshedi Makgale & Matlapeng Attorneys

FOURTH RESPONDENT: X Ngako of Ruth Edmonds Attorneys