Mahlanga N.O v Rand Water (J 547/2020) [2022] ZALCJHB 329; (2023) 44 ILJ 569 (LC) (16 November 2022)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case no: J 547/2020

PHUMZILE JEAN MAHLANGA N.O. Applicant

and

RAND

WATER

Respondent

Heard: 1 November 2022

Delivered: 16 November 2022

This judgment was handed down electronically by consent of the parties’ representatives by circulation to them by email. The date for hand-down is deemed to be 16 November 2022.

JUDGMENT

PRINSLOO, J

Introduction

[1] The Applicant (SAMWU) approached this Court on behalf of its member, Mr Mhlanga, for an order to declare that the Respondent is in breach of the terms of his contract of employment by failing to pay Mr Mhlanga the remuneration due to him. The Applicant seeks an order for the Respondent to pay Mr Mhlanga his remuneration, benefits and mora interest calculated in respect of the period April 2013 until June 2017.

[2] The matter was enrolled for hearing on 1 November 2022, when Mr Gwebu, for the Applicant, indicated that Mr Mhlanga had passed away and that the Applicant is to be substituted for the executrix of Mr Mhlanga, Ms Phumzile Jean Mahlanga N.O. The Applicant was substituted accordingly.

[3] This matter has a protracted and unfortunate history of litigation.

[4] The Respondent had employed Mr Mhlanga in April 1996 as a mechanics foreman. He was dismissed on 5 December 2012 after he was charged and found guilty of misconduct. SAMWU subsequently referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA).

[5] An arbitration award was issued on 27 March 2013 and Mr Mhlanga’s dismissal was found to be substantively unfair and the Respondent had to reinstate him to the same position as at the date of his dismissal. The presiding commissioner however found that Mr Mhlanga transgressed in respect of some of the charges levelled against him and that he, therefore was not entitled to backpay. Mr Mhlanga was to return to work on 15 April 2013.

[6] The Respondent subsequently filed an application to review the arbitration award and judgment in the Respondent’s favour was issued on 4 September 2015. SAMWU filed an appeal to the Labour Appeal Court (LAC) and on 18 May 2017, the LAC upheld the appeal.

[7] Upon receiving the LAC judgment, SAMWU on behalf of Mr Mhlanga engaged the Respondent for him to go back to work, but the Respondent indicated that the position previously held by Mr Mhlanga was filled by someone else.

[8] On 28 August 2017, the Respondent offered Mr Mhlanga the position of distribution manager at the Mpumalanga division, with effect from 1 September 2017. Mr Mhlanga did not accept the offer.

[9] On 20 November 2017, the Respondent offered Mr Mhlanga the position of distribution manager at the Mpumalanga division, but on this occasion, it was offered with effect from 1 July 2017. The letter made reference to the LAC judgment of 18 May 2017. The letter clearly stated that the Respondent was re-employing Mhlanga in the position of distribution manager at the Mpumalanga division. The position previously held by Mr Mhlanga was that of mechanics foreman. Mr Mhlanga accepted the offer.

[10] During February and July 2018 Mr Mhlanga’s attorneys of record wrote letters of demand to the Respondent, demanding that a position be created and that he be reinstated with effect from 1 March 2018. The attorneys also demanded payment for loss of salary. The Respondent’s response to the demands was that Mr Mhlanga, assisted by SAMWU, accepted the position of distribution manager with effect from 1 July 2017. The Respondent stated that the date of 15 April 2013 had been overtaken by subsequent events in that Mr Mhlanga returned to work after the LAC judgment and his return date of 1 July

2017 was by agreement between the Respondent, SAMWU and Mr Mhlanga.

[11] On 13 July 2020, the Applicant filed an application for the payment of his outstanding remuneration and benefits for the period from 15 April 2013, the date of reinstatement in terms of the arbitration award until 30 June 2017.

[12] The application is opposed and the Respondent disputed that the Applicant is entitled to relief. The Respondent raised a number of points, but in view of the finding made, it is not necessary to deal with all the points so raised. The Respondent’s case in the main is that after the LAC judgment was handed down, the position of mechanics foreman was filled by someone else and as a result, the Respondent successfully negotiated an alternative with Mr Mhlanga when he accepted the position of distribution manager with effect from 1 July 2017. As a result, Mr Mhlanga effectively abandoned and waived the order of reinstatement and upon accepting the alternative offer, the contractual relationship in terms of which the Respondent had employed Mr Mhlanga as a mechanics foreman was never restored.

Analysis

[13] The crisp question in casu is whether Mr Mhlanga’s contract of employment was restored pursuant to an arbitration award ordering his reinstatement. If the employment contract was restored, the Applicant would be entitled to outstanding remuneration from 15 April 2013 until 30 June 2017 and if not, there is no claim against the Respondent. The Respondent raised a point of prescription, which would only become relevant if the Applicant is indeed able to show an entitlement to outstanding remuneration.

[14] Considering the facts of this matter, there is no merit in the application and it has to fail. I say so for the reasons set out infra.

Reinstatement

[15] In Kubeka and others v Ni-Da Transport (Pty) Ltd[1] (Kubeka), the LAC considered a claim for arrear wages or backpay, consequent upon an order for reinstatement. The LAC held that the key issue to be decided was whether the employees’ claim for backpay depended on the restoration of the contracts of employment and when the contracts of employment were restored, if at all. The same question arises in casu.

[16] The LAC restated the reasoning of the Constitutional Court in National Union of Metalworkers of SA on behalf of Fohlisa and others v Hendor Mining Supplies (A Division of Marschalk Beleggings (Pty) Ltd)[2] (Hendor) about the governing principle that the contracts of employment of unfairly dismissed employees are terminated by dismissal and revive only when they tender their services pursuant to a reinstatement order and the tender is accepted by the employer. The reinstatement

order does not in and of itself reinstate the contract of employment, it is rather directing the employees to tender their services and for the employer to accept those services. In Hendor, it was confirmed that if an employee presents her or himself for work, but the employer refuses to accept him or her back, the remedy is not contractual, but it is to bring the employer before the court for contempt of court.

[17] As was confirmed in Kubeka, there is a crucial difference between an order for reinstatement and actual reinstatement pursuant to the right to reinstatement which the reinstatement order grants to an employee. An employee who is the beneficiary of a reinstatement order can elect not to enforce it. If the employee does not enforce the order (by tendering services and seeking committal for contempt if the offer is declined) the employment contract is not restored and the relationship does not resume. There can be no legal basis for any contractual claim for arrear wages until such time as the contract is restored by the agreement of the employer to accept the tender of the employees in respect of future services. Rights to backpay flowing from the reinstatement order can only arise once the contract is restored. Prior to the employer agreeing to restore the contract pursuant to an order to do so, there is no contract in existence and thus no juridical basis for a claim for arrear wages.

[18] In Kubeka the LAC held that:

‘The decision of the Constitutional Court in Hendor therefore leaves little doubt that a reinstatement order does not restore the contract of employment and reinstate the unfairly dismissed employees. Rather, it is a court order directing the employees to tender their services and the employer to accept that tender. If the employee fails to tender his or her services or the employer refuses to accept the tender, there is no restoration of the employment contract. If the employer fails to accept the tender of services in accordance with the terms of the order, the employee’s remedy is to bring contempt proceedings to compel the employer to accept the tender of services and thereby to implement the court order.’[3]

[19] The LAC further held that[4]:

‘A requirement that backpay is only due and payable on reinstatement is in keeping with the remedial scheme and purpose of s 193 of the LRA. As Mr Watt-Pringle SC, counsel for the respondents, correctly submitted, if an employee in receipt of a reinstatement order could on the strength of the order alone claim contractual payment for the retrospective part of the order without actually seeking reinstatement (tendering prospective services), it would convert a reinstatement remedy (which requires a tender of services) into a compensation award (which does not), in excess of the statutory limitation on compensation awards. Such an outcome would be inconsistent with the purpose of ss 193 and 194 of the LRA. An unfairly dismissed employee must elect his or her preferred remedy

and, if granted reinstatement must tender his or her services within a reasonable time of the order becoming enforceable. If reinstatement

has become impracticable through the effluxion of time, for instance where the employee has found alternative employment, he or she should seek to amend his or her prayer for relief to one seeking compensation.’

[20] Prior to the actual reinstatement of an employee, no contract of employment exists and thus also no contractual obligation, as the only obligation at that point is to reinstate. An employee is not entitled to the payment of remuneration in terms of a contract of employment that is yet to be resuscitated. An order to reinstate does not restore the contract of employment and reinstate an employee, it merely orders an employer to do so.

[21] It is clear from the aforesaid authorities that arrear wages or backpay are only due and payable on reinstatement.

[22] What exactly does ‘reinstatement’ mean when it comes to an award of reinstatement by an arbitrator? Section 193(1) of the Labour Relations Act[5] (LRA) provides that: “If the Labour Court or an arbitrator appointed in terms of this Act finds that a dismissal is unfair, the Court or the arbitrator may – (a) order the employer to re-instate the employee from any date not earlier than the date of dismissal…” The LRA does not dictate the terms applicable to reinstatement, and leaves it up to the judge or arbitrator, with the only proviso being that it cannot operate earlier than the actual date on which the employee was dismissed.

[23] In Equity Aviation Services (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others[6] (Equity Aviation), the Constitutional Court specifically dealt with the meaning of ‘reinstatement’ awarded in terms of section 193 of the LRA and held that:[7]

‘The ordinary meaning of the word 'reinstate' is to put the employee back into the same job or position he or she occupied before the dismissal, on the same terms and conditions... It is aimed at placing an employee in the position he or she would have been but for the unfair dismissal. It safeguards workers' employment by restoring the employment contract. Differently put, if employees are reinstated they resume employment on the same terms and conditions that prevailed at the time of their dismissal. As the language of s 193(1)(a) indicates, the extent of retrospectivity is dependent upon the exercise of a discretion by the court or arbitrator. The only limitation in this regard is that the reinstatement cannot be fixed at a date earlier than the actual date of the dismissal. The court or arbitrator may thus decide the date from which the reinstatement will run, but may not order reinstatement from a date earlier than the date of dismissal. The ordinary meaning of the word 'reinstate' means that the reinstatement will not run from a date after the arbitration award. Ordinarily then, if a commissioner of the CCMA orders the reinstatement of an employee that reinstatement will operate from the date of the award of the CCMA, unless the commissioner decides to render the reinstatement retrospective.’ [Footnotes omitted]

[24] The ratio in Equity Aviation is clear. Reinstatement means the restoration of the status quo ante. It is as if the employee was never dismissed. Where reinstatement is awarded, an employer will be in compliance with such an award if the employer, on (or as from) the date of the award having been made, takes the employee back into its service on the same terms and conditions of employment of the employee as it existed at the time of the dismissal of the employee. Also, and as a necessary consequence, the original starting date of employment of the employee will remain the same and applicable, if such reinstatement is awarded.

[25] In short, reinstatement means taking the employee back on the same terms and conditions of employment as if the dismissal of the employee never occurred, which would apply as from the date of award of reinstatement and with the continuity of employment intact.

[26] In Nel v Oudtshoorn Municipality and another,[8] the Supreme Court of Appeal referred with approval to the following:

‘… In Jackson v Fisher's Foils Ltd [1944] 1 All ER 421 Humpreys J quoted with approval the following dictum in Dixon (William) Ltd v Patterson 1943 SC (J) 78 as to the meaning of 'reinstatement':

“The natural and primary meaning of "to reinstate" as applied to a man who has been dismissed (ex hypothesi without justification) is to replace him in the position from which he was dismissed, and so to restore the status quo ante the dismissal.”’

The Court concluded:[9]

‘From the provisions of the LRA and the cases I have cited it is clear that by reinstating a dismissed employee the employer does not purport to conclude a fresh contract of employment. The employer merely restores the position to what it was before the dismissal...’

[27] The LAC followed the same approach in Mediterranean Textile Mills (Pty) Ltd v SA Clothing and Textile Workers Union and others[10] where the Court said:

‘The term 'reinstatement' within the context of s 193(1)(a) of the LRA entails placing a dismissed employee back to his or her former position in employment as if he or she was never dismissed in the first place. This is the essence of retrospective reinstatement envisaged in s 193(1)(a) which, according to a recent Constitutional Court decision, Equity Aviation Services Ltd v Commission for Conciliation, Mediation & Arbitration & others, is –

“the primary statutory remedy in unfair dismissal disputes (in that) [i]t is aimed at placing an employee in the position he or she would have been but for the unfair dismissal.”’

[28] In Myers v National Commissioner of the SA Police Service and Another,[11] the Court held:

‘The Constitutional Court in Equity Aviation interpreted the word 'reinstate' to mean that the employee must be put back into the same job or position that he or she occupied before the dismissal, on the same terms and conditions. Reinstatement is aimed at placing the employee in the position he or she would have been, but for the unfair dismissal.’

[29] The obvious question in casu is whether Mr Mhlanga was indeed reinstated, as reinstatement is a fact that must be established to succeed with his claim for the payment of outstanding remuneration s from 15 April 2013 until 30 June 2017.

[30] The Applicant has to show that he indeed tendered his services on 15 April 2013, in accordance with the arbitration award in terms of which he was reinstated and ordered to return to work on 15 April 2013.

[31] In the Applicant’s founding affidavit it is stated that “I was at all material times ready and willing to render my services to the Respondent and fulfil my duties as Mechanics Foreman. However, I was prevented and prohibited from rendering such services by the Respondent who later offered me a new position with a new date of re-employment”.

[32] In the Respondent’s answering affidavit, the aforesaid averment is responded to as follows: “Save to admit that the Respondent offered Applicant a new position with a new date of employment, both of which offers Applicant freely and voluntarily accepted, the contents of this paragraph are denied. While it is denied that the Applicant, either after the arbitration award and / or after the LAC judgment ever tendered his services or reported for duty as Mechanics Foreman, it is noted that this allegation is not even made by Applicant. Applicant instead contents (sic) himself with merely alleging that he ‘was at all times ready and willing to render my services to the Respondent.’ This is not good enough. The Applicant as a fact, never tendered his services or reported for duty as Mechanics Foreman. In law, whereas it is so that the employer subjected to a reinstatement order must accept the employee back to work, the employee as a fact must first present himself for duties. As noted, this never happened”.

[33] The Applicant filed a replying affidavit wherein the Respondent’s aforesaid averments were ‘noted’ and he confirmed that he was informed that the position he previously occupied, was no longer available and he was offered a new position, which he accepted.

[34] Applying the Plascon-Evans rule,[12] I accept that it is evident from the facts that Mr Mhlanga did not tender his services in accordance with the order for reinstatement

and that the Respondent never reinstated him in accordance with the order for reinstatement. The authorities are clear: an employee must tender his or her services, failing which he or she cannot claim arrear wages and if an employer refuses to reinstate the employee, the contract of employment does not revive. If the contract is not revived through an act of reinstatement, there exists no claim for backpay if the employee did not tender his or her services in accordance with an arbitration award or an order of Court.

[35] In casu, it is common cause that Mr Mhlanga was instead offered a different position, with effect from a different date and that the offer was one of re-employment.

[36] There is a material difference between reinstatement and re-employment. In Mashaba v Citibank NA SA Branch and others,[13] the Court defined re-employment as follows:

‘[25] Re-employment does not require the restoration of the status quo ante as if a dismissal has not happened. Re-employment is relief that in effect affords the employer greater flexibility where it comes to taking the employee back to work. Examples of where re-employment, as opposed to reinstatement, would be competent are:

25.1 Where there had been operational changes to the employee’s position in the interim, or a change in conditions of employment, which do not go so far as to render taking the employee back into employment impracticable, but which make a complete restoration of the status quo ante as required by reinstatement impossible, re-employment would be appropriate. In simple terms, the employee is returned to work in an alternative position. The court or the arbitrator however still retains the discretion to decide the retrospectivity of such an award of re-employment, so it does not follow that all re-employment awards necessarily mean that it must be new employment with no retrospectivity.

25.2 Also, re-employment, as opposed to reinstatement, can have conditions and/or terms attached to taking the employee back to work, not contemplated by the employee’s original employment and/or employment terms. For example, it may be ordered that an employee is re-employed on a different medical aid…

25.3 Re-employment would also occur where it is decided to regard the previous employment relationship as terminated and the replacement thereof with new employment which may or may not be on different terms…’

[37] In Tshongweni v Ekurhuleni Metropolitan Municipality,[14] the LAC defined re-employment as:

‘…Re-employment implies termination of a previously existing employment relationship and the creation of a new employment relationship, possibly on different terms both as to period and the content of the obligations undertaken.’

Conclusion

[38] In casu, the reinstatement order per se did not reinstate Mr Mhlanga, it ordered the Respondent to do so. It obliged and required Mr Mhlanga to present himself for resumption of duties, which he never did, and it obliged the Respondent to accept his tender for services, which tender was never made. As a result, reinstatement never took place, no contract of employment existed and there was no contractual obligation to remunerate Mr Mhlanga.

[39] If the contract is not revived through an act of reinstatement, there exists no claim for backpay if the employee did not tender his or her services in accordance with an arbitration award or an order of court.

[40] Mr Mhlanga cannot be entitled to the payment of remuneration in terms of an employment contract that was never resuscitated.

[41] To make matters worse, Mr Mhlanga accepted an offer for re-employment in a different position, which completely extinguished his claim for outstanding remuneration in terms of a contract that was never revived and which he abandoned when he accepted an offer for employment on different terms.

Costs

[42] The last issue to be decided is the issue of costs.

[43] In so far as costs are concerned, this Court has a broad discretion in terms of section 162 of the LRA to make orders for costs according to the requirements of the law and fairness.

[44] Mr Gwebu for the Applicant submitted that there should be no order as to costs as this application is pursued by Mr Mhlanga’s widow, who has nothing and will not be able to pay the costs. Mr Buirski on the other hand submitted that this is a contractual matter and that the normal rule that cost should follow the result must apply.

[45] Having considered the facts of this matter and the history of litigation, I am of the view that the interests of justice will be

best served by making no order as to costs.

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

Order

1. Applicant is to be substituted for the executrix of Mr Mhlanga, Ms Phumzile Jean Mahlanga N.O;

2. The application is dismissed;

3. There is no order as to cost.

Connie Prinsloo

Judge of the Labour Court of South Africa

Appearances:

For the Applicant: Mr J Gwebu from Madlela Gwebu Mashamba Inc Attorneys

For the Respondent: Advocate P Buirski

Instructed by:

Salijee Govender Van der Merwe Inc Attorneys

[1] (2021) 42 ILJ 499 (LAC).

[2] (2017) 38 ILJ 1560 (CC).

[3] Kubeka supra at para 35.

[4] Id at para 38.

[5] Act 66 of 1995, as amended.

[6] (2008) 29 ILJ 2507 (CC).

[7] Id at para 36.

[8] (2013) 34 ILJ 1737 (SCA) at para 8.

[9] Id at para 10.

[10] (2012) 33 ILJ 160 (LAC) at para 26.

[11] (2014) 35 ILJ 1340 (LC) at para 14.

[12] [1984] ZASCA 51; 1984 (3) SA 623 (A).

[13] (2019) 40 ILJ 2762 (LC) at para 25.

[14] (2012) 33 ILJ 2847 (LAC) at para 37.