Electropops 97 (Pty) Ltd t/a Manhour Management Services v Commission for Conciliation, Mediation and Arbitration and Others (JR46/2014) [2016] ZALCJHB 281 (14 June 2016)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGEMENT

Not Reportable

Case No: JR46/2014

In the matter between:

ELECTROPOPS 97 (PTY) LTD T/A MANHOUR Applicant

MANAGEMENT SERVICES

and

THE COMMISSION FOR CONCILIATION

MEDIATION AND ARBITRATION First Respondent

MOHALE CALVIN LEBEA N.O Second Respondent

JEREMIA MOHLALA & 18 OTHERS Third Respondent

Heard: 28 May 2015

Delivered: 14 June 2016

Summary: Labour- Review of an arbitration award. The procedure adopted by the commissioner so defective that parties were denied a fair hearing. Matter remitted back to the CCMA for a fresh hearing.

JUDGMENT

RALEHOKO AJ

Introduction

[1] This is an unopposed application for review in which the applicant seeks an order reviewing and setting aside an award in which the commissioner found the dismissal of 19 employees (third and further respondents) to have been substantively and procedurally

unfair. The commissioner awarded each employee 12 months compensation.

[2] The applicant prays for an order reviewing and setting aside the award and substituting it with an order that the dismissals were fair, alternatively reducing the compensation awarded and in the further alternative, remitting the matter to the CCMA for a fresh hearing before a different commissioner. Another order sought which appears to have become academic for present purposes is an order staying the enforcement of the award pending the determination of this application.

Background facts

[3] The facts summarised herein can be gleaned from the transcript of the proceedings but the manner in which such facts were placed

before the commissioner is in my view questionable. I return to this issue later in this judgment.

[4]The applicant is a temporary employment service as defined in the Labour Relations Act No 66 of 1995 (the LRA). It renders services

to its clients, ranging from payroll outsourcing to providing labour.

[5] On 1 May 2013, a business called Roots Butchery Jane Furse Crossing opened its doors (hereinafter referred to as Roots Butchery). The applicant provided Roots Butchery with employees which included third to further respondents. The employees commenced with training on 25 April 2013 and thereafter signed fixed term contracts of employment which did not stipulate a termination date.

[6] In letters dated 3 May 2013, the employees were informed that their employment would terminate on 20 May 2013 because the business

was not doing well.

[7] The employees challenged their dismissal at the CCMA, which resulted in the award referred to in paragraph 1 above.

The arbitration proceedings

[8] Although the referral for conciliation was in respect of 27 employees, on the set down date for arbitration only 19 employees

attended. The commissioner dismissed the case for the employees who were not in attendance.

[9] The remaining employees appointed two employees amongst themselves to speak on their behalf. The applicant was represented by

Davel, an employee of the applicant.

[10]At the commencement of the proceedings, the commissioner set out the issues in dispute, as communicated to him off the record, as follows:

10.1 there was a dispute whether the employees were given short notice of termination of their employment, with the employees contending that they were given 3 days’ notice of termination and the applicant contending it was 7 days’ notice.

10.2 whether the applicant had inserted termination dates into the fixed term contracts signed by the employees subsequent to signature

of the contracts.

10.3 whether the applicant undertook to re-employ the employees but had in fact employed other employees in the place of the dismissed employees.

[11] After getting confirmation from the parties that the above were the issues, the commissioner stated as follows:

COMMISSIONER:...Now in my view looking at the, the fact on this matter l do not think that l would need to listen to evidence in view of the issues which are not in dispute. Because there are certain issues which l would need that you should just present arguments to me, which can resolve this matter. I would need that you should then present your arguments to me on the issue of notice. Right, but more importantly l would need that you should present arguments on the issue of whether the termination was proper. In the light of the fact that the employer who bears the onus of proof is not sure as to whether the dates of termination was included in the contract and you say the date was not included. I think that issue can be resolved by arguments. Okay do we all understand, l'm going to give you the opportunity to, present your arguments as to why l should find in favour of you the employer and also I'll give you a change (sic) as to why l should find in favour of the employees...

[12] The commissioner invited the employer representative to address him on why he should find in favour of the employer, more specifically on whether this was a dismissal and why the employer believed that the dismissal was fair.

[13] The employer representative’s submission was to the effect that the employees signed the fixed term contracts.

[14] In response, Jeremia Mohlala, one of the employee representatives stated that he had requested a copy of the contract but it was not furnished to him. He further stated that the employer sent a copy to the Department of Labour only after he approached that

department for assistance. He also submitted that he had specifically queried the fact that the contract did not have an end date and he was advised to leave the end date blank.

[15] Thereafter the following exchange took place:

COMMISSIONER: Yes and then you are contending that well because there was no date l can find in your favour, that’s my understanding. Is this crux of the arguments because this is not time to give evidence, it’s time to present the arguments...

JEREMIA MANTSOANE MOHLALA: Okay.

COMMISSIONER: Okay are you going to say something different from what he has already said? But you should be addressing the issues which l have already identified here...

WITNESS: We are surprised that the employer said he’s not sure or the date was not there, but the person who, who who gave us the, who issued us with the contract is the gentleman next to the employer.

COMMISSIONER: Okay in that event l will not finalise this matter, l will call the gentleman to come and tell me what happened. He was there when the contract was signed and he, you say that he knows so he should, he should testify and tell me, if, what exactly happened (inaudible). Sir you confirm that you were present.

[16] The witness in question is Meshack Majolo and the commissioner posed questions to him on whether or not there was a termination date on the fixed term contract when it was presented to the employees for signature.

[17]After the exchange, the commissioner invited Mohlala to pose questions to Majolo. Mohlala stated that he was confused by the

employer’s version because at the Department of Labour the employer indicated that the termination date was on the contracts.

[18] Then the commissioner stated as follows:

COMMISSIONER: Looking at the evidence which has been given by the employer, the witness of the employer who was present at that time of signing. You don’t differ on this issue, there was no date all right. Now all l have to decide is what implications does that have on the issues of the termination altogether. The dates was inserted at some stage thereafter from what you are saying, so don’t differ from that so there will be no purpose in trying to deal with the (inaudible) on this aspect. All right okay we have come to the end, l will write the awards l will send it to the parties.

The award

[19] The commissioner identified the issues for determination as two-fold: (a) whether there was a dismissal and (b) if there was a dismissal, whether that dismissal was fair.

[20] The commissioner recorded that the employees did not testify because there were no material disputes of facts and recorded the

evidence of Majolo as set out above. He then made the following findings:

20.1 there was no dispute that the employer terminated the employment of the employees but there was a dispute as to whether the

termination constituted a dismissal, with the employer contending that there was no dismissal because fixed term contracts ran their course. However, the contracts did not specify a termination date and the employees contended that they were in fact employed for an indefinite duration and not on fixed term contracts.

20.2 the employer did not lead evidence on procedural and substantive fairness. The dismissals were accordingly substantively and procedurally unfair.

20.3 as regards relief, the employees were not seeking re-instatement. The compensation to be granted was to be “as close as possible put them in the situation in which an employed person should be” and that the LRA allowed a maximum of 12 months. Although 12 months compensation would disadvantage the employees (because they are not employed), 12 months compensation was in this case just and equitable.

Grounds for review

[21] In the founding affidavit filed in support of the review application, the applicant sets out some background facts about how

the applicant provided employees to Roots Butchery, the contracts signed by these employees and how the duration was determined. A perusal of the transcript of the arbitration proceedings reveals that most of this background information was not placed before the commissioner on record.

[22] The applicant contends that the award is reviewable for the following reasons:

22.1 the 12 months compensation granted is unreasonable because the employees signed fixed term contracts and were employed for a

month.

22.2 the commissioner’s finding that there was a dismissal is also unreasonable taking into account that the employees were

informed that they were signing fixed term contracts.

22.3 the finding on the fairness of the dismissal and the relief is unreasonable taking into account the evidence before the commissioner.

22.4 the commissioner failed to give reasons for rejecting the version of the employer and for accepting the version of the employees.

[23] In the Heads of Argument, the following further submissions are made:

23.1 the dismissal was at the very least substantively sound and the commissioner deprived the applicant of an opportunity to lead

evidence on the issue.

23.2 the commissioner found that evidence was not necessary but then found that the employer failed to lead evidence on the fairness

of the dismissal.

23.3 the fact that the fixed term contracts did not have a termination date did not have the effect that the contracts became open-ended and of a permanent nature because the employees were informed that their employment was of a temporary nature.

23.4 the commissioner committed an irregularity by concentrating solely on the end date of the contracts instead of investigating the substantive reason for the termination of the employee’s employment.

23.5 an award of 12 months compensation to each of the 19 employees who had 25 days service is unreasonable. The commissioner applied the wrong test in determining the amount of compensation to grant.

23.6 the commissioner failed to appreciate that the employees’ complaint was that they had been given short notice, not that there was no fair reason to terminate their employment. This factor was relevant in determining the compensation to grant.

Analysis

[24] In my view this matter can be disposed of based on the manner in which the commissioner conducted the arbitration proceedings.

[25] Section 138(1) of the LRA requires arbitrators to conduct arbitrations in a manner that the commissioner considers appropriate

in order to determine the dispute fairly and quickly. In Oakfields Thoroughbred & Leisure Industries Ltd v McGahey [2001] 10 BLLR 1147 (LC) the court stated as follows:

[25] While an arbitrator has a discretion under section 138 of the LRA as to how the proceedings should be run , there should still be a semblance of procedural order reminiscent of a trial and , in particular , regard should be had to the issue of onus prescribed by section 192 of the LRA . (Naraindath v CCMA and others (2000)21 ILJ 1151 (LC)).

[26] In my view, the commissioner in this matter failed to conduct the proceedings in a fair manner, failed to conduct the proceedings in a manner which can be regarded as procedural and in fact disregarded the issues of onus. These irregularities had the consequence that the parties were denied a fair trial.

[27] Firstly, he summarised the issues in dispute based on off the record discussions he had with the parties prior to the commencement of the arbitration proceedings. It is not at all apparent from the record why the pre-arbitration conference was conducted off the record. The pre-arbitration conference should have at least been conducted on the record so that one could verify whether the commissioner’s summary of the issues was in fact correct.

[28] Thereafter the commissioner prescribed to the parties how the proceedings would be conducted. He dictated to the parties that

evidence was not necessary and that argument would suffice, despite that there were a number of disputes of facts before him. For

instance, evidence was required on whether the employees had in fact been dismissed and instead of inviting third and further respondents

to lead evidence or address him why they were contending that they were dismissed, the commissioner invited the applicant’s

representative to make submissions to him on this issue as if the burden of proof was on the applicant.

[29] Evidence was also required on why the applicant had terminated the employment of the employees and the procedure that had been followed in terminating the employment. Again, no such evidence was led because the commissioner unilaterally decided that no such

evidence was required.

[30] The issues that the commissioner invited the parties to address him on were in fact not addressed, patently due to the inexperience of the parties. Despite that the questions posed had not been answered, the commissioner continued with the proceedings without guiding the parties. It ought to have been clear to the commissioner that the parties required a “helping hand”.

[31] In my view, it was also irregular that during argument, the commissioner mero motu called for the evidence by Majolo, after he had specifically informed the parties that evidence was unnecessary. The commissioner himself proceeded to conduct the examination in chief of Majolo, even though the applicant was represented in those proceedings. After the examination in chief, the employees were given commissioner invited the third and further respondents to pose questions to Majolo. The applicant’s representative was not given such an opportunity.

[32] When the commissioner announced that it is the end of the proceedings, one is left in shock that the commissioner considers the proceedings concluded when they have not even begun.

[33] While a commissioner has the powers to determine how arbitration proceedings should be conducted, in my view this does not give a commissioner the licence to dictate to the parties in the manner that the commissioner did. A commissioner cannot unilaterally

decide that evidence is not required and during submissions, call for evidence. Further, a commissioner cannot simply decide on which issues he wishes to hear argument thereby taking away from the parties the right to have a dispute properly ventilated. In my view, the commissioner went beyond the bounds of what the LRA allows him to do and conducted the proceedings in such a manner that both parties were in fact denied an opportunity to be heard.

[34] Having informed the parties that evidence was not necessary, it is then difficult to comprehend how the commissioner found that

the applicant failed to lead evidence on the fairness of the dismissal and order the applicant to pay the maximum compensation

allowed in terms of the LRA. For this reason alone, the award falls to be set aside.

[35] In light of the conclusion that l have come to, l find it unnecessary to deal with the other grounds of review raised by the

applicant and the other irregularities and will set aside the award.

[36] As both parties were denied an opportunity to be heard, the matter ought to be remitted to the CCMA for a hearing de novo before a different commissioner.

[37] I accordingly make the following order:

37.1 The award in case number LP3525-13 dated 26 November 2013 issued by Commissioner Mohale Calvin Lebea under the auspices of the CCMA is hereby reviewed and set aside.

37.2 The matter is remitted back to the CCMA for a hearing de novo before a Commissioner other than Commissioner Calvin Lebea.

37.3 There is no order as to costs.

TC Ralehoko

Acting Judge of the Labour Court

Appearances

For the Applicant: Advocate M Meyer

Instructed by: Nothnagel Attorneys