Emfuleni Local Municipality v Sekhabisa N.O and Others (JR2397/06) [2008] ZALC 58 (18 April 2008)

Page 21 of 20 CASE NUMBER: JR2397/06

Page 21 of 20

CASE NUMBER: JR2397/06

IN THE LABOUR COURT OF SOUTH AFRICA

(HELD IN JOHANNESBURG)

In the matter between:

EMFULENI LOCAL MUNICIPALITY APPLICANT

and

TJ SEKHABISA N.O FIRST RESPONDENT

THE SOUTH AFRICAN LOCAL GOVERNMENT

BARGANING COUNCIL SECOND RESPONDENT

THE SOUTH AFRICAN MUNICIPAL

WORKERS UNION obo KS PETLANE THIRD RESPONDENT

JUDGMENT

AC BASSON, J

This is an application to review and set aside a decision by the First Respondent (hereinafter referred to as “the Arbitrator”) of the South African Local Government Bargaining Council (hereinafter referred to as the “SALGBC”) to refuse an application for rescission of an arbitration award granted against the Applicant in this matter in its absence.

The arbitration was held in the absence of the Applicant who claims that it was unaware that the dispute had been set down for arbitration. The First and Second Respondents do not oppose the review application. The application is opposed by the Third Respondent - the South African Municipal Workers Union (“SAMWU”) obo Mr. Petlane. I will hereinafter referred to the Third Respondent as “Petlane”.

The Applicant advanced five separate grounds for reviewing the refusal of the rescission application. The Applicant submitted that on each of these grounds the ruling of the arbitrator stands to be set aside.

Point in limine

Before turning to the merits of the review application, I first need to deal with the point in limine raised on behalf of Petlane in the Respondent’s heads of argument. At the outset it should be pointed out that this point in limine was raised for the first time in the Respondent’s heads of argument. This point was never taken either in the application for rescission or in any of the affidavits in these proceedings. The Applicant objected to this point being raised only in argument and submitted that raising this point at such a late stage seriously prejudices the Applicant. In brief it was contended on behalf of the Respondent that this Court lacks jurisdiction to review the rescission ruling because the rescission application was late.

The dispute between the parties was dealt with under the auspices of the South African Local Governing Bargaining Council. The SALGBC have rules governing the conduct of proceedings under its auspices. In terms of Rule 32(1) of the Rules of the Bargaining Council a rescission application must be brought within 10 days of the date on which the Applicant became aware of the award. The Respondent argued that, because the affidavit filed in support of the rescission application is dated 13 June 2006, the rescission application filed on 4 July 2006 was out of time. I will return to this point hereinbelow and more in particular, the relevance of the 13th of June 2006.

The dates relevant to this application are the following:

A point in limine was argued before the Bargaining Council and the Applicant participated in the adjudication of this point (17 and 18 November 2005). The parties thereafter waited for the matter to be set down for arbitration.

On Wednesday 14 June 2006 an official of SAMWU mentioned to Mr. Nkomo of the Applicant (hereinafter referred to as “Nkomo”) that a default judgment had been taken against the Applicant. On that same day Nkomo phoned the Bargaining Council and inquired about the status of the dispute. Nkomo was asked to phone a person with the name of Sipho on Monday 19 June 2006.

On 15 June 2006 Nkomo wrote a letter to the Bargaining Council to complain about the manner in which the dispute was handled by the Council.

Nkomo phoned Sipho on 19 June 2006 who informed him that he was not able to obtain the necessary information. Sipho advised Nkomo to visit the office of the Bargaining Council which he did on 23 June 2006.

On or about 19 June 2006 Sipho phoned Nkomo to inform him that he (Sipho) had made a mistake and that the matter had in fact been scheduled for 6 June 2006 and that the matter had continued in the absence of the Applicant. He further informed Nkomo that a default judgment was granted.

A copy of the arbitration award was provided on 28 June 2006.

The rescission application was filed on 4 July 2006 which is within 10 days of 19 June 2006. If, however, the date of 28 June 2006 (being the date on which the Applicant actually received the award from the Bargaining Council) is taken as the operative date, the rescission application would also have been filed timeously (see the discussion below).

The Respondent’s argument that the rescission application was late rests on the fact that Nkomo was advised by a union representative on 14 June 2006 that a default judgment had been taken. Nkomo, the deponent to the founding affidavit in the rescission application confirms this fact. If this is the date upon which the Applicant became “aware” of the default judgment, the rescission application would have been filed out of time. On behalf of the Applicant it was, however, submitted that the Applicant, although it was informed by the union official that a default had been granted, only became aware of the default judgment on 28 June 2006 when a copy of the said award was actually provided to the Applicant by the Bargaining Council. It was further submitted that the date of 14 June 2006 cannot be the operative date in light of what had transpired after Nkomo was informed of the default award by the union official: Immediately after Nkomo had received the information, he took steps to verify the information. Initially the Bargaining Council could not confirm to Nkomo that a default award was indeed issued. It was only on the 19th that it was confirmed that a default award was issued and it was only on 28 June 2006 that the Applicant actually received the said award. In light of these facts it cannot be said that the Applicant had been “aware” of the award on 14 June. Moreover, the Applicant only received the award on the 28th of June and filed the rescission application merely a few days thereafter. A perusal of the papers reveal the following:

On the very same day, namely the 14th of June 2006 when the Nkomo was informed that a default had been granted, Nkomo phoned a one Sipho at the Bargaining Council. Nkomo was informed that he should phone on the 19th of June 2006. On 15 June 2006, a letter was written to the administrator of the Bargaining Council in which the Bargaining

Council was advised that the Applicant was informed that the matter was set down on 14 June 2006. In this letter the Applicant complains about the fact that they have not been informed of the dates.

On Monday 19 June 2006 Phahlane phoned Sipho again and was told that he (Sipho) would revert back. When Sipho reverted back to Phahlane, he was informed that no default judgment had been issued and the matter was postponed. In a letter dated 19 June 2006, the contents of this discussion was confirmed in writing. More in particular, it is confirmed that it was the Applicant’s understanding that the arbitration hearing scheduled for 16 June 2006 did not in fact take place. It was thus the Applicant’s understanding that a new date for the arbitration hearing will be communicated to it. From this letter it is thus clear that by 19 June 2006 the Applicant was under the impression that a default judgment had not been issued. The contents of this letter is consistent with the averments made by Nkomo obo the Applicant in the rescission application. On the strength of this letter and the uncontested evidence on behalf of the Applicants it cannot therefore be concluded that the Applicants was “aware” of the ruling until at the very earliest 19 June 2006.

Later on 19 June 2006 the Applicant was, however, informed that a mistake was made and that the default award was in fact granted. On 28 June 2006 a copy of the said award was provided by the Bargaining Council. Soon thereafter the application was filed.

The rescission application was filed on 4 July 2006 within 10 working days from the date on which the applicant was informed that a default was issued. It was however, only on 28 June 2006 that a copy of the award was issued to the Applicant.

On the papers before me, I am satisfied that the Applicant at the earliest became “aware” of the default judgment on 19 June 2006 in the sense that it was informed that an award was issued. At that stage the Applicant was not even furnished with a copy of the award. If this is indeed the operative date, the rescission application was filed timeously. However, I am of the view that the operative date is the 28th of June 2006 being the date on which the Applicant received the ruling from the Bargaining Council. Only then was the Applicant placed in a position to file a rescission application. From the papers, I am therefore satisfied that it was not necessary to have applied for condonation for the late filing of the rescission application and that the rescission application was in fact filed within the required time period.

As far as the date of the founding affidavit is concerned, I am satisfied on the papers that, although the application for rescission was signed by Nkomo on 13 June 2006 this clearly is an error. Even on the Respondent’s own argument (albeit only made out in the Heads of Argument), Nkomo was informed by the union representative on 14 June 2006 that the default was awarded which is a day after the rescission application was signed. On this point alone I am satisfied that the date of 13 June 2006 (which also refers to the fact that Nkomo was informed on 14 June 2006 about the default judgment) clearly is an error. It is impossible that the Applicant could have known on 13 June 2006 that a default was granted if it was only informed of such fact the following day. On behalf of the Applicant it was submitted that the other dates also support the fact that the affidavit could not have been signed on 13 June 2006. If reference is had to the stamp of the commissioner of oaths, which is the 30th of June 2006, it would appear that it is more probable that that was the date on which the affidavit was signed. There is also nothing on the papers to gainsay the Applicant’s averment that it only received the default on 28 June 2006 which, in my view, only adds to probabilities that the affidavit was prepared and signed after the default award was indeed received by the Applicant.

In the event, I am satisfied that the rescission application was brought within the required time period. Accordingly, I will return to the merits of the review of the rescission ruling.

Rescission Ruling

The Arbitrator states that because the rescission application was merely brought on a letter dated 4 July 2006, the rescission application did not comply with Rule 31 of the Rules of the Bargaining Council and that it is as a result, defective. In terms of this letter the only grounds for rescission were the fact that the Commissioner had erred in issuing the arbitration award in favour of the Respondent (the Applicant before the Bargaining Council) and the fact that the notice of set down was addressed to Mr. Vincent Phahlane and sent to the Human Resources Department instead of being addressed to Mr. Jero Mofokeng at the legal department. The rescission application was opposed. I will return to this point hereinbelow.

Although the Commissioner found that the rescission application (which is, according to him the one dated 4 July 2006) was defective, he nonetheless proceeded to evaluate the merits of the application. In essence he concluded that, because the Applicant had attended the Bargaining Council at least on two previous occasions following notices that were sent to the same number, the Applicant was accordingly properly notified. The Commissioner accordingly rejected the explanation for not attending the arbitration process on 6 June 2006. The Commissioner also held that it would be unreasonable to refuse the rescission application because the Applicant did not address the issue of the prospects of success in the main application and what prejudice it would suffer if the application was not granted. The application for rescission was accordingly refused.

Background facts

On 23 May 2005 Petlane was summoned to a disciplinary hearing to face two charges both of which relate to the misappropriation of council property. On 22 June 2005 Petlane was found guilty on the alternative charges of unlawfully borrowing council property without permission and was dismissed. Petlane chose not to appeal the decision but opted instead to refer the matter to the Bargaining Council. During the conciliation process the Applicant was represented by Mr. Vincent Phahlane (hereinafter referred to as “Phahlane”) who is the Assistant Manger: Labour Relations responsible for, inter alia, overseeing all matters relating to disciplinary matters.

On 17 November 2005 the matter was set down for arbitration. At the arbitration Nkomo (the deponent to the founding affidavit in the present application) replaced Phahlane (who initially represented the Applicant). The reason why Nkomo had replaced Phahlane was because he (Nkomo) had prosecuted Petlane during the disciplinary hearing. At the hearing Nkomo furnished the Bargaining Council with his own contact numbers. It is important to note that these contact numbers differed from those of Phalane. Nkomo specifically requested the Bargaining Council to henceforth direct all correspondence relating to this matter to him. It is common cause that the Bargaining Council did not forward the notice of set down in respect of the proceedings of 6 June 2006 to Nkomo notwithstanding the fact that Nkomo had furnished the Bargaining Council with his contact details. Nkomo accordingly did not receive a copy of the notice of set down for the arbitration. It was only on 14 June 2006 (as already pointed out) that he was informed by the union official, who represented Petlane at the arbitration that the arbitration hearing had been held in the absence of the Applicant and that the Bargaining Council had issued a default arbitration award against the Applicant.

Rescission application dated 3 July 2006

On 3 July 2006 the Applicant filed a rescission application with the Bargaining Council. The Rescission application was served on Petlane on the same date. The Applicant attached the rescission application to the founding affidavit together with proof that it was indeed served on the Bargaining Council. The rescission application was brought on notice to all persons and complied with the Rules of the Bargaining Council (Rule 31). The rescission application sets out in detail the reasons for non-attendance and, more in particular, that Nkomo had expressly requested the Bargaining Council to foreward all notices to him and not to Phahlane. The rescission application also sets out the facts on which the Applicant will rely in defending the main case. Petlane opposed the rescission application by filing an answer to the rescission application albeit only in letter format. This letter is dated 3 July 2006. The answer filed by Petlane is not under oath and therefore clearly not in compliance with the Rules of the Bargaining Council (Rule 31(5)). What should also be noted is the fact that the letter of Petlane specifically refers to the rescission application and acknowledges that he had received the rescission application on 3 July 2006. On 4 July 2005 the Applicant filed a reply to the answer (albeit also in letter format and likewise not in compliance with the applicable Rules).

Notwithstanding the fact that the Applicant did file a proper rescission application which complied with the Rules, the Commissioner dismissed the application firstly because the letter dated 4 July 2006 – which the Commissioner regarded as the rescission application - did not comply with the rules (because it was in letter format); secondly because the notice of set down was faxed to the same number used on two previous occasions; and thirdly because the issue of prospects of success and prejudice were not addressed in the letter dated 4 July 2006.

Review

The following facts are before this Court:

A formal application for rescission was brought on Notice of Motion and accompanied by a founding affidavit deposed to by Nkomo. This rescission application was properly served on the Bargaining Council on 3 July 2006. On the very same day the rescission application was also served on Petlane.

A letter from Petlane dated 3 July 2006 which refers to the rescission application dated 3 July 2006. Although this letter does not comply with the Rules it purports to oppose the rescission application.

A letter from the legal manager of the Applicant – Mr. Mofokeng – dated 4 July 2006 to which a letter to the Bargaining Council of even date is attached. This letter sets out the reasons for not attending the proceedings and reiterates the fact that the notice of set down was not received by the Applicant.

It is patently clear from the papers that the Commissioner only relied on the letter dated 4 July 2006 and that he did not have regard to the rescission application that was properly filed. It is not clear from the papers why the Commissioner did not have regard to the rescission application. Although the papers were served on the Bargaining Council and the Commissioner, no response was received from the Commissioner. It is also clear that the Commissioner erroneously regarded the letter from the Respondent dated 4 July 2006 as the rescission application.

Although the Applicant raised five grounds upon which this ruling falls to be reviewed, I am satisfied that the review should succeed on the first ground only. The Commissioner clearly failed to consider the rescission application that was properly filed and served on all interested parties. On the basis of this error alone, the decision stands to be reviewed and set aside. As a result of this error the Commissioner arrived at a decision no reasonable decision maker could have arrived at. Furthermore, the Commissioner ought to have been alerted to the fact that there was a formal rescission application which he was obliged to consider and ought to have made the necessary enquiries to locate the application. The letter of Petlane expressly refers to the rescission application received by him on 3 July 2006. If the Commissioner had read this letter and had properly applied his mind, he would have realized that a proper rescission application was filed. In failing to properly exercise his duties in terms of the LRA, the Commissioner committed a reviewable error and arrived at a decision to which a reasonable decision maker would not have arrived at.

In the event, the rescission application is reviewed and set aside.

Substitution of the ruling

This Court has a discretion to substitute an award or a ruling made by a Commissioner: (1) Where the end result is in any event a foregone conclusion and it would merely be a waste of time to order that tribunal or functionary to reconsider the matter; (2) Where a further delay would cause unjustifiable prejudice to the applicant; (3) Where the functionary or tribunal has exhibited bias or incompetence to such a degree that it would be unfair to require the applicant to submit to the same jurisdiction again; or (4) Where the court is in as good a position as the administrative body to make the decision itself (Seetedco Plastics (Pty) Ltd v National Union of Metalworkers of SS & Others (2000) 5 LLD 718 (LC)).

I am of the view that it would be fair and in the interest of the parties to substitute the Ruling and that this Court is in as good position as a Commissioner to make a decision.

I am satisfied that the Applicant in the rescission application has made out a case for the rescission of the default award. In coming to this conclusion, I had regard to the decision in Northern Training Trust v Maake & Others (2006) 27 ILJ 828 (LC) where the Court set out the test to be applied in rescission applications:

“[26] Section 144(a) of the Act gives the commissioner the power to rescind an arbitration award erroneously made in the absence of any party affected by that award.

[27] In Northern Province Local Government Association v CCMA & others (2001) 22 ILJ 1173 (LC); [2001] 5 BCCR 539 (LC) Sutherland AJ had this to say:

'[46] It seems to me that the commissioner in considering whether or not a notification of an arbitration hearing has indeed been received by the respondent, it is necessary to consider all the facts bearing on that question. Axiomatically, in deciding whether or not a fax transmission was received, proof that the fax was indeed sent creates a probability in favour of receipt, but does not logically constitute conclusive evidence of such receipt.'

[28] The enquiry in an application for the rescission of an arbitration award is consequently bipartite. The first leg is one which is concerned with whether or not the notice of set down was sent (for instance by fax or registered post). Should evidence show that the notice was sent, a probability is then created that the notice sent was received. The second 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.

[29] The two requirements of fairness and expedition should be balanced. Where there is an apparent conflict between the two, fairness should be given precedence lest injustices are done. See Foschini Group (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & others (2002) 23 ILJ 1597 (LC); Halcyon Hotel (Pty) Ltd t/a Baraza v CCMA & others [2001] 8 BLLR 911 (LC). “

I am satisfied that the Applicant gave an acceptable and reasonable explanation for the default and that it was not willful in not attending the arbitration. I am also satisfied that the Applicant has reasonable prospects of being successful with its defense in the main case. I have decided to award costs against the Respondent. In coming to this decision I have taken account of the fact that it must have been patently clear to the Respondent that the Commissioner did not have regard to the rescission application that was properly filed by the Applicant.

Order

In the event the following order is made:

The rescission ruling by the First Respondent under case number GPD080519 is reviewed and set aside.

The matter is remitted back to the Second Respondent for arbitration de novo before another arbitrator.

The Third Respondent is ordered to pay the Applicant’s costs.

………………………………….

Date of proceedings: 27 September 2007

Date of judgment: 18 April 2008

For the Applicant: Adv A Dodson

Instructed by: Bowman Gilfillen Inc

For the Respondent: Adv O Mooki

Instructed by: Cheadle Thompson & Haysom Inc