Food and Allied Workers Union obo Others v Commission for Conciliation Mediation and Arbitration and Others (JR 246/2012) [2013] ZALCJHB 221 (17 September 2013)

9

REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Not Reportable

Case no: JR 246/2012

In the matter between:

FOOD AND ALLIED WORKERS’ UNION ...............................................First Applicant

KHANYISO, X AND OTHERS ............................................................Second Applicant

and

COMMISSION FOR CONCILIATION, MEDIATION

AND ARBITRATION ...........................................................................First Respondent

SHARDLOW, J N.O .......................................................................Second Respondent

SIMBA (PTY) LTD ..............................................................................Third Respondent

Heard : 02 August 2013

Delivered : 17 September 2013

Summary : Application to review arbitration award dismissed with costs. Principles restated.

AC BASSON, J

This was an application to review and set aside the award by the second respondent (“the commissioner”) in which it was found that the third respondent (Simba (Pty) Ltd – hereinafter referred to as “Simba”) had dismissed the individual applicants for a fair reason. The procedural fairness of the dismissal was not placed in dispute.

The applicants (the Food and Allied Workers’ Union (hereinafter referred to as “FAWU”) on behalf of 58 applicants (hereinafter referred to as “the individual applicants”) sought an order reviewing and setting aside the arbitration award of the CCMA and declaring the dismissals of the individual applicants to be unfair. In the alternative, the applicants sought an order remitting the matter back to the CCMA for arbitration de novo.

Brief exposition of the relevant facts

The 58 applicants were all employed by SIMBA as Packaging Machine Technicians (hereinafter referred to as “the PMT’s”).

It is part of the duties of the PMT’s that they will undertake all duties, functions and responsibilities normally associated with the position of PMTs’. The PMT’s further undertake to carry out all duties that are commensurate with their positions and further undertake to carry out the duties delegated or assigned to them from time to time.

The respondent tendered evidence to the effect that some R 1.5 million rand were lost per annum as a result of film waste.

Contractors were used to empty the waste bins and count the wasted packets. A decision was taken by the respondent to do away with the contractors and that the PMT’s will in future account for the recording of the waste. Staff members were advised accordingly.

Management of the respondent set the date of 31 January 2011 as the date for the implementation of the new system whereby the PMT’s would count their own packaging waste. Some of the PMT’s complied with the instruction. However, it appears from the evidence that whilst some adhered to the instruction many simply decided not to adhere to the instruction. At some stage a two week extension period was granted to allow employees to try out the new system but the applicants simply continued to refuse to adhere to the instruction. The union was also involved and was advised by the respondent that disciplinary action would be taken against the employees should they persist with their insubordination. Despite the intervention of the union the applicants continued to refuse to comply with the instruction until their dismissals in September 2011.

It is clear from the evidence that the respondent had issued a clear instruction to the applicants and that for a significant period – some seven months – the respondent had sought to persuade the applicants to comply with the instruction.

At the arbitration it was contended that the applicants had the bona fide belief that the instruction amounted to a material change to their terms and conditions of employment as the PMT’s were not required to count waste prior to the issuing of this instruction.

The Commissioner submitted a comprehensive award summarizing the evidence of numerous witnesses over a period of four days. The

Commissioner held that the dismissal was substantively fair and that dismissal was an appropriate sanction.

[10] The applicants raised three grounds of review in the founding affidavit. A further ground for review was raised at a later stage. All of the grounds have in common the alleged failure of the Commissioner to take into account material evidence and that he incorrectly applied the law. In essence the applicants relied on Herholdt v Nedbank Ltd1 in advancing their argument for a review. In brief the applicants allege that the arbitration award is defective and should be set aside for the following reasons:

The applicants contended during the arbitration that the sanction of dismissal was too harsh in that the individual applicants held a bona fide belief that the instruction to count waste amounted to a change to the individual applicants’ terms and conditions of employment. The Commissioner completely misunderstood this argument and therefore failed to consider it at all.

The Commissioner found that the sanction of dismissal “fell within a band of reasonable sanctions” instead of determining

whether the sanction was, in his view, fair.

The Commissioner failed to consider the argument that two of the individual applicants should not have been dismissed because, at the disciplinary hearing, the respondent only sought final warnings in respect of these two.

The Commissioner, in considering the applicants’’ arguments’ relating to consistency, failed to properly apply

the appropriate legal principles.

Simba contended that there is no merit in any of the grounds and that the application should be dismissed.

[11] Before I turn to a brief consideration of each ground it is important to point out that the Supreme Court of Appeals in a recent judgment Herholdt v Nedbank Limited2 rejected the so-called process related unreasonableness3 test which lowered the threshold for interference with arbitration awards. In rejecting this test the SCA confirmed the review test as set out by the Constitutional Court in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others:4

“[25] In summary, the position regarding the review of CCMA awards is this: A review of a CCMA award is permissible if the defect in the proceedings falls within one of the grounds in s 145(2)(a) of the LRA. For a defect in the conduct of the proceedings to amount to a gross irregularity as contemplated by s 145(2)(a)(ii), the arbitrator must have misconceived the nature of the inquiry or arrived at an unreasonable result. A result will only be unreasonable if it is one that a reasonable arbitrator could not reach on all the material that was before the arbitrator. Material errors of fact, as well as the weight and relevance to be attached to particular facts, are not in and of themselves sufficient for an award to be set aside, but are only of any consequence if their effect is to render the outcome unreasonable.”5

[12] Against the background of this decision the award will now be considered in light of the review test as set out in Sidumo6 which states the following in respect of the test for review:

“[110] To summarize, Carephone held that s 145 of the LRA was suffused by the then constitutional standard that the outcome of an administrative decision should be justifiable in relation to the reasons given for it. The better approach is that s 145 is now suffused by the constitutional standard of reasonableness. That standard is the one explained in Bato Star : Is the decision reached by the commissioner one that a reasonable decision maker could not reach? Applying it will give effect not only to the constitutional right to fair labour practices, but also to the right to administrative action which is lawful, reasonable and procedurally fair.”

[13] I will now turn to a brief discussion of the various grounds for review. In terms of the first ground of review, the applicants contended that the dismissal was too harsh in that the individual applicants held a bona fide belief that the instruction amounted to a change in their conditions of service. At the outset it should be pointed out that it was conceded that there was no compelling evidence before the CCMA that the applicants held a bona belief. I should also point out that it is clear from the summary of the evidence that the Commissioner was in fact alive to the fact that this was the union’s case. Mr Orr, however, submitted that the Commissioner should have determined whether the applicants indeed held such a belief and that the fact that he did not do so resulted in a procedural irregularity. I do not agree: The fact that the Commissioner did not expressly state in the award that no such evidence was tendered does not render the award reviewable.7 In any event, it is not required that Commissioners render detailed or comprehensive awards. Furthermore, whether the applicants held a bona fide belief is a question of fact. None of the applicants dealt with this issue in their evidence and in the absence of any evidence the Commissioner was therefore entitled to ignore the supposed beliefs and deal with the facts that were presented at the arbitration. In so far as the applicants relied on the Herholdt v Nedbank decision to substantiate a claim of a reviewable irregularity, the SCA has now made it clear that the review test as set out in Sidumo is the test that should be applied in review applications.

[14] In terms of the second ground of review it was submitted that the Commissioner did not determine whether the dismissal was in his view appropriate and that the finding recorded in the award namely that the sanction of dismissal fell “within a band of reasonable sanctions” clearly demonstrates that the Commissioner did not apply his mind to the issue of sanction. There is no merit in this argument. What the commissioner stated in paragraph [95] of the award should not be read in isolation but should be read in the context of the whole award. More in particular, the respondent’s disciplinary rules provides for dismissal in the case of a finding of insubordination. Likewise the Code of Good Practice lists gross insubordination as a permissible ground for dismissal. Finally, it is clear from the award that the Commissioner did in fact consider the gravity of the misconduct and considered that dismissal was an appropriate sanction:

“[84] The applicants have argued that even if their refusal to count waste did constitute insubordination it was not sufficiently serious enough to warrant dismissal. I do not find this argument compelling. The respondent issued a clear instruction to the applicants and there was no requirement in law or fairness for the respondent to obtain the agreement of the applicants, and it is the concerted refusal over a significant period of time, during which the respondent sought to persuade the applicants to comply with the instruction, which makes the insubordination serious enough to justify dismissal.”

[15] In terms of the third and fourth grounds of review the applicant submitted that the dismissals should be reviewed and set aside on the basis of inconsistency. More in particular it was submitted that the Commissioner failed to apply the appropriate legal principles. In supporting its contention the applicants referred to SA Commercial Catering and Allied Workers Union and Others v Irvin and Johnson Ltd8 as authority for the submission that the Commissioner committed a gross irregularity in holding that although there were instances of inconsistency, the respondent did not act capriciously. According to the applicant the respondent chose to dismiss some employees and not others without showing any material distinguishing features between these groups of employees. I have considered the submissions and I am of the view that this ground of review is equally without merit. What does appear from the award is that a distinction had been made between acting PMT’s (Shabangu and Reba) and the permanent PMT’s. The acting PMT’s were demoted and sent back to their previous jobs. Their situations are therefore clearly distinguishable from the other PMT’s. As far as Thabiso Lepolo is concerned, the evidence show that he had counted from the beginning and was therefore not charged with insubordination.

[16] In respect of two employees – Kutama and Msimango – the applicant argued that they were dismissed after the respondent’s

management requested final written warnings in respect of their conduct. They were, nonetheless, dismissed. The applicant submitted

that the Commissioner did not properly apply his mind to these facts. I do not agree with this submission. Although Mr Robertson for the respondent did state at the time of the disciplinary hearings that the two employees should not be dismissed, he explained at the arbitration that had he known at the time that the two in fact only started to count (in other words adhere to the instruction) after they had received the notifications to attend the hearings, he would not have recommended that they should not be dismissed. In respect of these two employees I can therefore find no reason to interfere with the findings of the Commissioner. I should also point out that neither of these two employees gave evidence at the hearing.

[17] I am satisfied that the award is sound and that the Commissioner arrived at a decision that is reasonable. This is certainly not a decision that a reasonable Commissioner could not reach. The evidence clearly shows that the applicants failed to obey a lawful instruction over a sustained period of time. This amounted to gross insubordination which, according to the respondent, irretrievably damaged the employment relationship. The applicants’ conduct was deliberate in that they deliberately flaunted the authority of the respondent over a protracted period of time.

[18] Accordingly the application to review is dismissed. I am in agreement that costs should follow the result.

[19] In the event the following order is made:

19.1. The application to review is dismissed with costs including the costs of two counsel.

_______________________

AC BASSON J

Judge of the Labour Court

APPEARANCES

For the Applicants : Advocate C Orr

Instructed by : Cheadle Thompson & Haysom Attorneys

For the Third Respondent : Advocate GC Pretorious SC with Advocate P Belger

Instructed by :Cowan Harper Attorneys

1 [2012] 9 BLLR 857 (LAC).

2(701/2012) [2013] ZASCA 97 (5 September 2013).

3The Court summarized the process related unreasonableness test as follows: “[15] Although this should not have been the case after Sidumo, there has been a development in a different direction, aimed, as were the pre-Sidumo cases already referred to, at providing a more generous standard for review of CCMA arbitration awards. It is unnecessary to trace this development through the cases.24 It suffices to deal with its formulation in the present case, which represents its culmination.

Counsel for COSATU made submissions under the two heads of ‘latent irregularity’ and ‘dialectical unreasonableness’ and it is convenient to adopt that nomenclature. [16] A latent irregularity, sometimes referred to as process related unreasonableness, is one arising from the failure by the arbitrator to take into account a material fact in determining the arbitration. It includes the converse situation of taking into account a materially irrelevant fact. If that occurs, it is said to be a latent irregularity justifying the setting aside of the award. The LAC expressed it thus: ‘Where a commissioner fails to have regard to material facts, this will constitute a gross irregularity in the conduct of the arbitration

proceedings because the commissioner would have unreasonably failed to perform his or her mandate and thereby have prevented the aggrieved party from having its case fully and fairly determined.’ The LAC went on to endorse the following passage in the judgment of van Niekerk J in Southern Sun Hotel Interests (Pty) Ltd v CCMA and others: ‘If a commissioner fails to take material evidence into account, or has regard to evidence that is irrelevant, or the commissioner commits some other misconduct or a gross irregularity during the proceedings under review and a party is likely to be prejudiced as a consequence, the commissioner’s decision is liable to be set aside regardless of the result of the proceedings or whether on the basis of the record of the proceedings, that result is nonetheless capable of justification.’ [17] Two points flow from this approach. The first is that the threshold for interference with the award is lower than in terms of the judgment in Sidumo. The second is that it is immaterial whether the result reached by the arbitrator is one that could reasonably be reached on the material before the arbitrator. The mere possibility of prejudice will suffice to warrant interference"

3The Court summarized the process related unreasonableness test as follows:

“[15] Although this should not have been the case after Sidumo, there has been a development in a different direction, aimed, as were the pre-Sidumo cases already referred to, at providing a more generous standard for review of CCMA arbitration awards. It is unnecessary to trace this development through the cases.24 It suffices to deal with its formulation in the present case, which represents its culmination.

Counsel for COSATU

made submissions under the two heads of ‘latent irregularity’ and ‘dialectical unreasonableness’ and it is convenient to adopt that nomenclature.

[16] A latent irregularity, sometimes referred to as process related unreasonableness, is one arising from the failure by the arbitrator to take into account a material fact in determining the arbitration. It includes the converse situation of taking into account a materially irrelevant fact. If that occurs, it is said to be a latent irregularity justifying the setting aside of the award. The LAC expressed it thus:

‘Where a commissioner fails to have regard to material facts, this will constitute a gross irregularity in the conduct of the arbitration

proceedings because the commissioner would have unreasonably failed to perform his or her mandate and thereby have prevented the aggrieved party from having its case fully and fairly determined.’

The LAC went on to endorse the following passage in the judgment of van Niekerk J in Southern Sun Hotel Interests (Pty) Ltd v CCMA and others:

‘If a commissioner fails to take material evidence into account, or has regard to evidence that is irrelevant, or the commissioner commits some other misconduct or a gross irregularity during the proceedings under review and a party is likely to be prejudiced as a consequence, the commissioner’s decision is liable to be set aside regardless of the result of the proceedings or whether on the basis of the record of the proceedings, that result is nonetheless capable of justification.’

[17] Two points flow from this approach. The first is that the threshold for interference with the award is lower than in terms of the judgment in Sidumo. The second is that it is immaterial whether the result reached by the arbitrator is one that could reasonably be reached on the material before the arbitrator. The mere possibility of prejudice will suffice to warrant interference"

4(2007) 28 ILJ 2405 (CC).

5Herdholdt (SCA decision) at para 25.

6Sidumo (supra) at para 110.

7See Hickman v Tsatsimpe NO and others (2012) 33 ILJ 1179 (LC) where the Court held as follows: “[55] Similarly, I was urged to find that the commissioner's failure to deal with the dispute of fact whether the applicant's performance was poor or not constitutes a gross irregularity entitling the applicant to have the award reviewed and set aside.” See also Refilwe Muriel Mogale v A & D Spitz (Pty) Ltd (case no JA 36/2011 dated 22 August 2013): “[17] On the other hand, courts should be mindful of the fact that arbitration awards should not be equated to judgments of courts of law and that arbitration awards like judgments are not meant to be perfect. The fact that a particular issue was not mentioned in the award does not necessarily mean that it was not considered. The facts of the case, including the nature of the evidence, the importance of the issue and whether the issue was canvassed in the evidence will assist in determining whether the issue was considered. The fact that a particular conclusion could not have been reached without considering the issue not mentioned is also relevant. In Rex v Dhlumayo and Another, Davis, AJA said the following: ‘… Indeed, even in a written judgment it is often impossible, without going into the facts at undue length, to refer to all the considerations that arise. Moreover, even the most careful Judge may forget, not to consider, but to mention some of them. In other words, it does not necessarily follow that, because no mention is made of certain points in the judgment – more especially, of course, if that judgment be an oral and extempore one – they have not been taken into account by the trial Judge in arriving at his decision. No Judgment can ever be perfect and all-embracing It would be most unsafe invariably to conclude that everything that is not mentioned has been overlooked.’ In County Fair Foods (Pty) Ltd v CCMA and others [1999] 11 BLLR 1117 (LAC). the Labour Appeal Court also confirmed that an award must be brief and that a failure to deal with every issue does not imply that the commissioner did not apply his mind to the evidence: “[39] I agree with Conradie JA that the commissioner should not be held not to have applied his mind to a particular facet of the matter merely because it is not explicitly dealt with in the award. Nor do I quarrel with the proposition that awards are expected to be brief. Section 138(7)(a) of the LRA says so. Though desirable it may be, it is not expected of commissioners to write well researched and scholarly awards. Awards must be brief and the proceedings before commissioners must be dealt with expeditiously. See section 138(1) read with section 138(7)(a). However, failure to deal with an important facet may, depending on the circumstances of the case, provide evidence that the commissioner did not apply his or her mind to that particular facet.”

7See Hickman v Tsatsimpe NO and others (2012) 33 ILJ 1179 (LC) where the Court held as follows: “[55] Similarly, I was urged to find that the commissioner's failure to deal with the dispute of fact whether the applicant's performance was poor or not constitutes a gross irregularity entitling the applicant to have the award reviewed and set aside.” See also Refilwe Muriel Mogale v A & D Spitz (Pty) Ltd (case no JA 36/2011 dated 22 August 2013): “[17] On the other hand, courts should be mindful of the fact that arbitration awards should not be equated to judgments of courts of law and that arbitration awards like judgments are not meant to be perfect. The fact that a particular issue was not mentioned in the award does not necessarily mean that it was not considered. The facts of the case, including the nature of the evidence, the importance of the issue and whether the issue was canvassed in the evidence will assist in determining whether the issue was considered. The fact that a particular conclusion could not have been reached without considering the issue not mentioned is also relevant. In Rex v Dhlumayo and Another, Davis, AJA said the following:

‘… Indeed, even in a written judgment it is often impossible, without going into the facts at undue length, to refer to all the considerations that arise. Moreover, even the most careful Judge may forget, not to consider, but to mention some of them. In other words, it does not necessarily follow that, because no mention is made of certain points in the judgment – more especially, of course, if that judgment be an oral and extempore one – they have not been taken into account by the trial Judge in arriving at his decision. No Judgment can ever be perfect and all-embracing It would be most unsafe invariably to conclude that everything that is not mentioned has been overlooked.’

In County Fair Foods (Pty) Ltd v CCMA and others [1999] 11 BLLR 1117 (LAC). the Labour Appeal Court also confirmed that an award must be brief and that a failure to deal with every issue does not imply that the commissioner did not apply his mind to the evidence: “[39] I agree with Conradie JA that the commissioner should not be held not to have applied his mind to a particular facet of the matter merely because it is not explicitly dealt with in the award. Nor do I quarrel with the proposition that awards are expected to be brief. Section 138(7)(a) of the LRA says so. Though desirable it may be, it is not expected of commissioners to write well researched and scholarly awards. Awards must be brief and the proceedings before commissioners must be dealt with expeditiously. See section 138(1) read with section 138(7)(a). However, failure to deal with an important facet may, depending on the circumstances of the case, provide evidence that the commissioner did not apply his or her mind to that particular facet.”

8(1999) 20 ILJ 2302 (LAC).