City of Tshwane Metropolitan Municipal v South African Local Government Bargaining Council and Others (JR536/20) [2023] ZALCJHB 294 (13 October 2023)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case no: JR536/20

1. REPORTABLE: YES / NO

2. OF INTEREST TO OTHER JUDGES: YES / NO

3. REVISED.

DATE: 13/10/23

In the matter between:

CITY OF TSHWANE METROPOLITAN MUNICIPAL Applicant

and

SOUTH AFRICAN LOCAL GOVERNMENT

BARGAINING COUNCIL First

Respondent

COMMISSIONER JOSEPH MPHAPHULI N.O. Second

Respondent

IMATU OBOJUSTICEMALULEK Third

Respondent

Heard: 29 June 2023

Delivered: 13 October 2023

JUDGEMENT

DAVE, AJ

[1] An arbitration hearing before the Second Respondent (Commissioner) commenced in the Applicant's absence giving rise to a default arbitration award (default award). This resulted in a rescission application brought by the Applicant to rescind the default award. The Third Respondent, IMATU, acting on behalf of its member, Justice Maluleke (Maluleke) opposed the Applicant's rescission application. The Commissioner issued his rescission ruling (ruling) on 3 February 2020, under case no: PMD121805 in terms of which he refused to rescind his default award.

[2] This is an opposed application to review and set aside the ruling.

Background

[3] Maluleke commenced employment with the Applicant in August capacity of Revenue Consultant.

[4] On or about 20 June 2017, the Applicant's Forensic Services received information implicating the alleged involvement of employees of the Applicant in the commission of fraud and corruption. A complaint had been lodged by a member of the public wherein the complainant alleged that two employees solicited an amount of R6000.00 from her under the pretext that they would write off her municipal utility account debt R33,091.31 with the proviso that an amount of R6000.00 be paid to them.

[5] Pursuant to investigations conducted by the Applicant's forensic investigators, Malueke and his colleague were implicated. They were employed in the Applicant’s Group Financial Services: Credit Control and Debt Collection Departments.

[6] In her statement to the investigator, the complainant alleged that she had paid R3000.00 in cash to Maluleke in the presence of his colleague and that she has made a further payment in the sum of R2970.00 by means of a Shoprite money market transaction. Documentary evidence contained in the forensic report showed that monies were withdrawn by Maluleke shortly after the deposit was made by the complainant.

[7] Due to the seriousness of the matter, it was recommended by the investigator that both Maluleke and his colleague be suspended and charged with allegations of misconduct as reflected in the charge sheet as follows:

'CHARGE 1

You are hereby charged with misconduct relating to corruption in that you have contravened clause 1.2.5 of the standard of conduct disciplinary procedure Collective Agreement which reads: employees should conduct themselves with honesty and integrity in that –

You allegedly on or about the 4 and 5 May 2017 received an amount totalling R5970 from Ms Mojaje in order to write off her municipality

account with number [xxxx] which was owing +- R33000.00.’

[8] In terms of the forensic report, both Maluleke and his co-accused declined to make statements or participate in the investigation.

[9] After having been served with disciplinary enquiry notifications, Maluleke's colleague entered into a plea agreement with the Applicant in terms of which he admitted guilt and, according to the Applicant, as consequence of his plea of guilt, this confirmed Malulekes involvement the misconduct. In terms of his plea agreement, Maluleke's colleague was issued with a final written warning and a 5-day suspension without pay as an alternative to dismissal. 3

[10] When the disciplinary hearing was scheduled to commence on 9 October 2018, Maluleke failed to attend. The disciplinary hearing proceeded in his absence. He was found guilty and a sanction of dismissal was held to be appropriate in the circumstances. According to Maluleke, he was unaware that the was scheduled to proceed on 9 October 2018, hence his non-appearance thereat.

[11] The Third Respondent, on behalf of Maluleke, referred an unfair dismissal dispute the First Respondent. The matter remained

unresolved and was subsequently referred to arbitration under the auspices of the First Respondent.

Events leading to the default award

[12] It is pertinent to note that there were a number of postponements[1] in respect of the arbitration hearing.

[13] When the matter was set down for arbitration on 13 September 2019, , Maluleke was represented by a representative of IMATU and the Applicant was represented by its attorney, Mr Machaka (Machaka). The arbitration did not go ahead on this day pursuant to an indulgence sought by IMATU’s Union representative on the grounds that the matter had been referred to him due to the resignation of the official who dealt with the matter from its inception and that he had been briefed in another mater on the same day. The Applicant did not oppose the request. Consequently, the arbitration was postponed and by agreement, a new date was set for the arbitration for 22 November 2019.

[14] On 21 November 2019, Machaka became ill. On 22 November 2019, being the day of the arbitration, Machaka did not arrive. He attended at a medical practitioner on that day and was diagnosed with suffering from gastritis. His treating doctor booked him off to resume work on 23 November 2019. He was subsequently booked off until 28 November 2019. However, he did not communicate his indisposition to Maluleke's representative. Consequently, the Commissioner too was unaware of Machaka's indisposition on the day of the arbitration.

[15] After waiting for almost 3 hours, the Commissioner decided to proceed with the arbitration in the absence of the Applicant. This resulted in the default his default award, the Commissioner makes reference to the non- appearance by the Applicant despite proof of service of the notice of set down.

[16] The Commissioner found Maluleke's dismissal to be substantively and procedurally unfair and ordered the Applicant to reinstate him in the same or similar position by no later than 15 December 2019 and further that the reinstatement must be with arrears salary payment in the sum of R253,617.00.

[17] In response to the default award, the Applicant filed a rescission application which was opposed. The Commissioner issued his ruling in terms of which he refused to rescind the default award.

The rescission application

[18] In the Applicant's rescission application, the Applicant explained the reasons for not attending the arbitration and in doing so, referred to the fact that Machaka took il on 21 November 2019 and consulted a doctor on the day of the arbitration. Further, that Machaka was booked off until 23 November 2019 and on 25 November 2019 he was still indisposed due to severe dehydration and would resume work on 28 November2019. Attached to the rescission application were Machaka's medical |notes as well as a confirmatory affidavit by Machaka.

[19] Furthermore, the Applicant explained that when the matter was set down for arbitration on 13 September 2019 ,Machaka was present and ready to proceed. At the instance of Maluleke's representative, by agreement, the arbitration was postponed 2 November 2019 to accommodate the predicament that Maluleke's representative was facing.

[20] The Applicant also dealt with its prospects of success and provided a detailed account of the events leading up to Maluleke's dismissal.

Principles governing rescission

[21] Section 144 of the Labour Relations Act[2] (LRA), provides that:

'Any commissioner who has issued an arbitration award or ruling, or any other commissioner appointed by the director for that purpose, may on that commissioner's own accord or, on the application of any affected party, vary or rescind an arbitration award or ruling-

(a) erroneously sought or erroneously made in the absence of any party affected by that award;

(b) in which there is an ambiguity, or an obvious error or omission, but only to the extent of that ambiguity, error or omission;

(c) granted as a result of a mistake common to the parties proceedings; or

(d) made in the absence of any party, on good cause shown.’

[22] Section 144(d) permits an application to rescind an arbitration award made in the absence of any party "on good cause shown". The principle of good cause in this context was addressed in Shoprite Checkers Pty) Ltd v CCMA and others[3] (Shoprite).

[23] In Shoprite, the Labour Appeal Court explained that the test for good cause in an application for rescission normally involves the consideration of at least two factors, namely, the explanation for the default and secondly, whether the Applicant has a prima facie defence. The Court quoted, with approval, the views expressed in Northern Province Local Government Association CCMA and Others[4] where it was held that:

'An application for the rescission of a default judgment must show good cause a n d prove that he at no time denounced his defence, and that he has a serious intention of proceeding with the case. In order to show good cause an applicant must give a reasonable explanation for his default, his explanation must be made bona fide and he must show that he has a bone fide defence plaintiff's claims.'

[24] Shoprite further quoted with approval, the views expressed in MM Steel Construction CC v Steel Engineering & Allied Workers Union of SA and others[5] where Nugent J had this to say.

[25] The Court in Shoprite set out the following[6] in reaching its decision to return the court a quo's refusal to set aside the commissioner's decision to rescind his ruling:

‘In considering good cause, the second respondent took into account only one aspect of the test. That is to say he only considered the fact that Boysen had mis-diarised the date of the arbitration hearing. He clearly did not consider the appellant's defence to the third respondent's claim as he made no mention of it in his decision. In my view, the second respondent, failed to weigh together all the relevant factors in determining whether it was just and fair and therefore, whether good cause had been shown for the rescission of the arbitration award. It follows that the second respondent did not apply his mind to all the issues before him and if he did, he ought the circumstances of this case, to have rescinded his earlier default award.'

[26] In Northern Training Trust v Maake and others,[7] the test for rescission in terms of section144(a) of the LRA was said to be the following:

' The enquiry in an application for rescission of an arbitration award is consequently bipartite. The first leg is one which is concerned with whether or notice of set down was sent... Should evidence show that the notice set, a probability is then created that the notice sent was received. The send leg to the enquiry is one which concerns itself with the reasons proffered by the applicant who failed to attend the arbitration proceedings. Such applicant needs to prove that he or she was not wilful in defaulting, that he or she has reasonable prospects of being successful with his or her case, should the award be set aside. However, the applicant needs not necessary deal fully with the merits of the case.'

Analysis

[27] In casu, the Applicant and its attorney, Machaka, were aware of the arbitration date. The Applicant's failure to attend was based on its attorney becoming ill. The Commissioner does not take issue with Machake becoming ill. He took issue with the fact that Machake did not bother communicating his indisposition, in which case, the Commissioner would have post e d the arbitration. In other words, had the Commissioner known of Machake taking and consequently being unable to attend the arbitration hearing, he would postponed it. The Commissioner says as much at paragraph 27 of his ruling:

'Had the Applicant communicated or position to be communicated to the Council, the arbitrator would have invoked the provisions of Rule 30 and at the same concluded that good cause has been shown for an adjournment.'

[28] The Commissioner correctly refers to the criteria for determining whether a rescission application should succeed or not, namely, the reasons for the Applicant's failure to attend the arbitration, the requirement to show good cause and the prospects of success at arbitration.

[29] In his ruling, Commissioner concluded that –

“Nowhere does the Applicant party give an account of any reason, if any, as to why the incapacity was not communicated to the Council on or before the scheduled day of the hearing. The Applicant's representative first consulted оn November 2019 in time to advise of his indisposition.'

[30] One can appreciate the Commissioner's dissatisfaction. I too find it somewhat comprehensible that neither Machaka nor the Applicant informed Maluleke's Union representative or the First Respondent of the fact that he was not in a position to attend the arbitration. However, to is equally puzzling as to why no attempt was made by the Commissioner or Maleluke's representative, what would have been a simple step, for instance, in the form of a phone call, to determine Machake’s (or the Applicant’s) whereabouts, more so in circumstances where:

1. The matter was due to proceed on 13 September 2019 with Machake in attendance and ready to proceed with the arbitration;

2. The Applicant accommodated the Union representative's request for a postponement due to the predicament he faced at the time;

3. The parties had agreed to the matter being set down for 22 November 2019;

4. On 22 November 2019, no one arrived from the Applicant

[31] At the very least, a simple investigation into Machake's where abouts would in all likelihood have sufficed. Whilst in no way condoning Machake's failure to communicate, one could reasonably have expected a display of some concern as to Machake's absence in circumstances where he personally agreed to the new date of own i.e. 22 November 2019 and that he was ready to proceed on the previous occasion. Instead, the Commissioner, as well as Maluleke's Union representative, waited almost 3 hours before starting the arbitration without any attempt in that time to establish Machake's or the Applicant's whereabouts had either party communicated with the other, it could have deterred the arbitration from proceeding. As referenced above, the Commissions confirms this in his ruling where says he would have postponed the arbitration had he known of Machake's indisposition.[8]

[32] In considering the reasons for the Applicant's non-attendance at the arbitration on 22 November 2019, the Commissioner concludes that:

'Proof of incapacity would meet the requirement of good cause provided such is brought to the evaluator of fact at the time of commencing the arbitration process.'

[33] I don't agree with this contention. I don't see why good cause cannot be shown by a party for non-attendance, whether for incapacity or otherwise, at some point post the event. In its recission application, the Applicant provides prima facie evidence of Machake's illness on 22 November 2019 and the founding affidavit in the rescission application is accompanied by Machake's confirmatory

affidavit whereby he confirms the doctors' notes and the facts pertaining to his non-attendance. Furthermore, Machaka was in attendance on 13 September 2019 ready to arbitrate and agreed to the new date. It cannot be said that that the Applicant disavowed itself of its intention to defend itself against Maluleke's unfair dismissal claim.

[34] The Commissioner's finding that Machaka first consultant his doctor on 21 November 2019 is incorrect. This is clear from his doctors note Machaka took ill on 21 November 2019 and he consulted his doctor on 22 November 2019. His doctor booked Him off as from 21 November 2019. The Commissioner therefore relied on the date upon which Machaka first consulted with his doctor, which to his mind, was the day before the arbitration hearing and consequently (and incorrectly) found that Machaka had time on 21 November 2019 to advise his in disposition.

[35] In essence, the Commissioner reason for refusing to rescind his award was based solely on the Applicant not communicating Machake's indisposition either before or on the day of the arbitration and that, had it done so, the matter would have been postponed. Based on this reasoning, the only failure by the Applicant was the failure to communicate Machaka's indisposition.

[36] Regarding the bipartite test referred to in the authorities above, whilst the Commissioner recognises the criteria to be applied, he in effect ignored the second leg of the enquiry, namely prospects of success. The Commissioner concluded that prospects, if not accompanied by a reasonable explanation for a r e to attend may not come to the rescue of the defaulting party and that there would be no point in addressing the merits in a case where there is no legally justifiable explanation for failure to attend. This reasoning is clearly wrong. The Commissioner ought to have applied his mind to and considered the Applicant's prospects of success which was pertinently addressed by the Applicant in its rescission application.

[37] In this regard, in Production Institute of Southern Africa (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others[9], the Court held that:

'The discretion that a commissioner exercises in considering a rescission application is very wide and is the same as that of judicial officers in civil cases...[10] However, in exercising the power to either grant or refuse the rescission application, the commissioner has to make sure that in doings or she applies his or her mind to the factors relevant to such determination Failure to consider or apply one's mind to any of the release by the commissioner in his or her consideration of the rescission application could make such a decision unreasonable or defective of the LA. As stated in Martin's case, the Labour Appeal Court upheld the appeal largely because the commissioner in that case had taken account only one aspect of the applicable test.

[38] The facts of this matter clearly demonstrate that the Applicant has a bona fide defence to the claim of unfair dismissal, that it had not denounced its defence and had the serious intention of proceeding with the arbitration. In addition, Machake's explanation of his absence is reasonable and bona fide. His indisposition was not disputed by the Commissioner. The Applicant's rescission application also demonstrates that there is a reasonable prospect that it may succeed at arbitration. The question around whether Maleluke was properly notified of the date of his disciplinary hearing is something best determine the arbitration.

The review test

[39] In so far as the reasonableness test is concerned, the review test is well established by now. In the seminal case of Sidumo and Another v Rustenburg Platinum Mines Ltd and others[11], the Court held that:

[40] As earlier alluded to, the fact that Machake's failure to attend the arbitration was based solely on him taking ill, with evidence of same, is sufficient in my view to show good cause. Had his indisposition been made known the Commissioner at the time of the arbitration hearing, the arbitration would according to the Commissioner, have been postponed. I have already exhibited my criticism of Machake and the Applicant's failure to communicate his indisposition and whilst the Commissioner's frustration is evident in his ruling, there is nothing to suggest that Machake acted mala fide. Frustration as a consequence of a party's conduct is not a reason to refuse rescission, bearing in mind the facts set out above. The Commissioner ought to have separated his personal frustration from the objective facts placed before him in the Applicant's rescission application, considered the Applicant's defence to Maluleke's claim and ought to have rescinded his default award. By not doing so based on the analysis above, renders the ruling reviewable in that the decision reached by the Commissioner is not one that a reasonable decision maker could reach. In the result there is a basis for this Court to interfere with the ruling on review.

Conclusion

[41] In its notice of motion, the Applicant, inter alia, prays that the matter be remitted to the First Respondent for arbitration

proceedings de novo, yet does not pray for the default award to be rescinded. This point was raised by the Third Respondent. In order for the matter to be remitted to the First Respondent for an arbitration de novo, it goes without saying that the default award must be rescinded.

[42] In the premises, I make the following order:

1. The ruling of the First Respondent issued under case number PMD121805 dated 3 February 2020 is reviewed and set aside.

2. The default arbitration award issued under case number PMD121805 dated 27 November 2019 is hereby rescinded.

3. The matter is remitted back to the First Respondent, proceedings on notice to the parties to start de nova before another Commissioner.

4. There is no order as to costs.

L Dave

Acting Judge of the Labour Court of South Africa

Appearances:

For the Applicant: Mr

Sebako of Leepile Attorneys Inc

For the Third Respondent: Mr de Beer of IMATU

[1] Paragraph 2.7 of the Third Respondent's Answering Affidavit, second sentence where the Third Respondent states: "After some few postponements for arbitration, the dispute was rescheduled to proceed on 13 September 2019".

[2] Act 66 of 1995, as amended.

[3] [2007] ZALAC ;7 [2007] 10 BLLR 917 (LAC).

[4] [2001] ZALC 15; [2001] 5 BLLR 539 (LC) at para 16. 5 (1994) 15 ILJ 1310 (LAC) at 13111 - 132A.

[5] (1994) 15 ILJ 1310 (LAC) at 1311I – 132A.

[6] Shoprite supra at para 37.

[7] Shoprite supra at para 37. 7(2006) 27 ILJ 828 (LC) at para 28.

[8] Paragraph 27 of the ruling

[9] [2011] ZALCJHB 1; (2011) 32 ILJ 1712 (LC) at para 9.

[10] See Martin v Commission of Conciliation, Mediation and Arbitration and others (2008) 29 ILJ 2254 (LC).

[11] [2007] ZACC 22; [2007] 12 BLLR 1097 (CC) at para 110.