N F Die Casting (Pty) Limited v Metal and Engineering Bargaining Council and Others (J611/01) [2002] ZALC 38; (2002) 23 ILJ 924 (LC); [2002] 6 BLLR 560 (LC) (19 April 2002)

IN THE LABOUR COURT OF SOUTH AFRICA

HELD AT JOHANNESBURG

CASE NO: J611/01

In the matter between:

N F DIE CASTING (PTY) LIMITED Applicant

and

METAL & ENGINEERING BARGAINING COUNCIL First Respondent

J HORN N.O. Second Respondent

NUMSA Third Respondent

K BOK Fourth Respondent

COMMISSION FOR CONCILIATION,

MEDIATION AND ARBITRATION Fifth Respondent

MF KGAKA N.O. Sixth Respondent

MASHIGO T N.O. Seventh Respondent

JUDGMENT

FRANCIS J

Introduction

In this matter the applicant (‘the company’) applied

1.1 to review and set aside the certificate of outcome of conciliation issued by the first respondent dated 8 November 2000;

1.2 to review and set aside the arbitration award dated 14 May 2001 issued by the sixth respondent; and

1.3 for costs and ancillary relief.

The company also applied to review and set aside the seventh respondent’s decision refusing the company legal representation, on the grounds that the enabling section under which he acted constituted an infringement of the company’s constitutionally entrenched right to a fair hearing. However the papers were not served on the applicable Minister, and in consequence the company elected not to proceed with this aspect of its claim.

The company did not proceed with its application to review and set aside the certificate of outcome of conciliation issued by the first respondent on 8 November 2000. This is due to the fact that no application for condonation was made and because the company had admitted at the arbitration proceedings that the dispute was properly before the commissioner.

The third respondent, NUMSA withdrew its opposition to the matter after the fourth respondent (‘Bok’) had engaged the services of an attorney.

Background facts

In April 2000 Bok, at that point in time an employee of the company, was charged with dishonest business practices in that he

deliberately falsified production achievements, falsely inflated production figures and lied to his superior about the conduct of a disciplinary enquiry. Alternative charges were framed to cover related and ancillary aspects of his conduct.

At a disciplinary hearing held on 11, 17 and 19 April 2000, Bok was found guilty as charged on all counts. The evidence of Gavin Swart was of particular importance, for it established that Bok knew that Swart could manipulate the figures on the company’s computers and that Bok had on more than one occasion instructed Swart to change them so as to pretend that more output had been achieved than was truly the case.

Bok was dismissed on 5 May 2000. He appealed against the decision and, at the appeal hearing, called Swart to give evidence on his behalf. At the conclusion of the appeal hearing on 8 June 2000, his dismissal was confirmed.

On 3 July 2000 the dismissal was referred to the Metal & Engineering Bargaining Council having jurisdiction over it, the first respondent in these proceedings. In the referral, NUMSA, incorrectly stated that the employee was dismissed on 8 June 2000, where in fact he was dismissed on 5 May 2000. The 8 June 2000 was the date when the appeal against dismissal was rejected.

Two conciliation meetings were held in an effort to resolve this matter.

9.1 At the first, which occurred on 2 August 2000, the company’s industrial relations officer, Mr Eric Nyekemba, raised the point that the dismissal on which the dispute was based was 5 May 2000 and, in consequence, the dispute has been referred for conciliation out of time. The NUMSA official representing Bok replied by saying that he would investigate the matter and would revert to the conciliator by 11 August 2000, but he failed to do so and simply set the matter down for a second round of conciliation.

9.2 The second conciliation meeting was held on 8 November 2000. The previous point that was raised was not dealt with and the second respondent proceeded to consider the dispute. Finding it irresoluble, he referred it for arbitration on the basis that the dictates of the statute regarding the referral for conciliation had been satisfied.

The company did not raise the issue of the late referral when it was referred for arbitration. The arbitration commenced on 1 March 2001. On the first day of the arbitration, NUMSA objected to the fact that the company was being legally represented. The matter was argued and the arbitrator hearing the matter, the seventh respondent in these proceedings, ruled in favour of the objection. His order debarred Nkaiseng, an attorney from representing the company at the proceedings but permitted him to remain as an observer in the proceedings. Having made the ruling, he postponed the arbitration to 10 April 2001.

On 10 April 2001, the arbitration was assigned to the sixth respondent, who presided over the matter to finality. Immediately after the commencement of the arbitration NUMSA objected to Nkaiseng’s presence in the room on the basis that he was keeping notes at the proceedings and was acting thus more as an adviser than a mere observer. The sixth respondent ruled that Nkaiseng must leave the room. His reason was that he ‘was taking notes, assisting the respondent’s team and having discussions with this team’. Nkaiseng left the room and thereafter Robert Smook (‘Smook’) represented the company. After giving his ruling, the sixth respondent asked the parties if the matter was properly before him. Smook stated that the matter was properly before him. Having established this point the arbitrator commenced the hearing of evidence. The company’s

first witness was led in cross-examination for the balance of the day and over the next day (11 April 2001), after which the matter was again postponed to 23, 24 and 25 April 2001 for hearing.

Shortly before the hearing on 23 April 2001, Smook consulted with Nkaiseng once more and for the first time told him of the late referral. This communication was too late to draw up a formal application that would have dealt with the point, and in consequence Smook resolved to raise the point orally at the commencement of the proceedings on 23 April 2001. When the point was raised at the hearing of 23 April 2001, the arbitrator asked why the matter had not been dealt with at the outset of the proceedings. Smook reminded him that he was unversed in law and had, despite strenuous representations of the company, been deprived of legal representation. After lengthy submissions from both sides, the arbitrator rejected the application to enrol the issue for hearing on the basis that Smook had ‘misdirected himself as to the provisions of the Act and the rules framed thereunder’.

In his reasons in support of this conclusion, the arbitrator pointed out that Smook had initio litis admitted that the referral was timeously made. The company, he noted, was now seeking to withdraw that admission and made an application for that purpose. In his view, such an application had, however, to satisfy the requirements of CCMA Rule 19, which sets out the procedure by which applications in respect of preliminary matters ‘such as applications for condonation and jurisdictional disputes’ should be brought. What the rule contemplates is the bringing of a formal application as it specifically states that a ‘party bringing an issue involving jurisdiction must do so on notice to the other party which notice must obviously be in writing and signed by the party making it.’

Smook when apprised of this rule, applied for a postponement in order to launch such an application, but such a postponement could not be dealt with informally but had to be dealt with in terms of Rule 17 of the CCMA rules. In consequence, the arbitrator felt obliged to reject the application.

After giving the ruling, the arbitrator continued with the hearing of evidence. At the commencement of the proceedings on 25 April 2001, Smook placed it on record that the company had two important witnesses who had previously been on standby at the hearing, but were currently busy with a customer audit and month-end dispatches. He expressed the belief that this should cause no problem because he had expected the witnesses he was calling to take the full day. The arbitrator remained non-committal. When, later in the day, it became clear that the witnesses who were available to give evidence on the company’s behalf might in fact finish early, a debate ensued on what should happen Smook explained that he would be requesting a postponement and invited the arbitrator to give his consent to it then and there, but the arbitrator declined to do this. After the evidence of his last witness had been heard and completed, Smook made a formal application for a postponement of the hearing. One of the witnesses’ Smook wished to call was the managing director, and the other was Mr Swart. Swart’s evidence was important because he could testify directly to Bok’s complicity in the fraudulent manipulation of the company’s figures. The arbitrator then reminded him of Rule 17 to which he had previously referred, which provides for the circumstances in which it is competent to grant a postponement. Smook pointed out that the witnesses were material but the arbitrator remained unmoved, and the application for postponement was dismissed. In consequence, Smook was obliged to close his case. Bok testified. The arbitrator in his award ordered that Bok be reinstated.

The grounds of review

The applicant has abandoned the complaint based on the refusal to allow legal representation. The first ground of review is based on the sixth respondent’s refusal to entertain and consider the issue of the late referral on its merits. The applicant contended that his refusal was ‘the consequence of a cascading set of rulings made against the company based on a technical and wholly misconceived approach to the rules’. They comprised -

16.1.1 his rejection of the informal application to withdraw the company’s concession that the matter was properly before the commissioner;

16.1.2 his rejection of the company’s informal request for a postponement in order to bring a formal application for withdrawal of the concession;

16.1.3 and finally his rejection of what was in effect an informal request for an adjournment in order to bring a formal application for postponement so as to set in train the proceedings referred to above.

The second ground of review arises out of the arbitrator’s refusal to grant the company the postponement it sought in order to enable it to call the remaining witnesses.

The third ground of review is based on the approach that the arbitrator took to the company’s failure to call the two witnesses in question, and in particular to its failure to call Swart.

First ground of review

At the outset of the hearing on 23 April 2001, the date when the arbitration was resumed, Smook stated that he wished to draw the attention of the arbitrator to the fact that a ‘certificate of outcome of the case was granted invalidly, as condonation for the lateness of the application was not granted by the Bargaining Council.’ He invited the arbitrator to make a ruling as to whether or not the certificate was in fact valid and pointed out that, if it was not, ‘these proceedings will be a waste of time as the company will take this case on review if it is continued on that basis’.

Developing his argument, Smook submitted that in terms of rule 9 of the CCMA rules, he was entitled to bring the application whenever the deficiency of jurisdiction came to his notice and the commissioner was obliged ‘at any stage during the arbitration

proceedings’ to deal with the issue of jurisdiction. The arbitrator pressed Smook on why he had conceded at the outset of the proceedings that the matter was properly before the CCMA for arbitration and why, in particular, the application based on the invalidity of the referral had not been made earlier. In the course of the argument, the arbitrator referred to rule 17 of the CCMA rules, which deals with postponements.

The arbitrator asked Smook whether he was seeking a postponement in order to obtain the time to raise the point in a proper form and he replied that if this was what was required, it is what he wanted. The arbitrator then put it to him that the company had no basis for seeking a postponement, since there was no compliance with the procedures contemplated by rule 17. What he had in mind was the need for a formal application to be brought in writing if a postponement is sought, a process contemplated by rule 17.2. This emerges from the content of his decision on the point, where he states that -

“Rule 9(2) makes provision for raising jurisdictional issues at any stage of the proceedings and enjoins the commissioner to require the party referring a dispute to prove that the commissioner has jurisdiction to resolve it [sic]. This rule must be a [sic] read pari passu with Rules 17 and 19 which deal with postponements in preliminary matters such as jurisdiction of the commission. Rule 19 specifically states that a party bringing an issue involving jurisdiction must do so on notice to the other party which notice must obviously be in writing and signed by the party making it. When referred to this rule Mr Smook then applied for a postponement and was referred to Rule 17 which prescribed the procedure to be followed in applications for postponement. The point in limine in application for postponement were dismissed.’

It is appropriate to quote rules 9, 17 and 19 of the CCMA rules.

9. Jurisdiction to arbitrate

9.1 The commissioner appointed to arbitrate the dispute may only arbitrate the dispute if the Commission has jurisdiction to arbitrate the dispute.

9.2 If at any stage during the arbitration proceedings it becomes apparent that there is a jurisdictional issue which has not been determined, the commissioner must require the referring party to prove that the Commission has the necessary jurisdiction to resolve the dispute.

17. Postponements

17.1 Postponements will be granted without the need for the parties to appear if both of the following conditions are met:

(a) All the parties to the dispute agree in writing to the postponement; and

(b) the request for the postponement is received by the Commission more than 10 days prior to the scheduled date of the arbitration.

17.2 A formal application in writing for the postponement must be made if -

(i) The parties cannot agree whether or not to an arbitration should be postponed; or

(ii) the request for a postponement is made within 10 days of the scheduled date of arbitration.

The application must be served before the scheduled date for the arbitration. The Commission must decide whether to grant the request for a postponement on the written document presented or whether to convene a formal hearing.

19. Applications/Motion proceedings in respect of preliminary matters such as applications for condonation, jurisdictional disputes, variation and rescission applications and other interlocutory applications

19.1 An application must be brought on notice to all persons who have an interest in the application.

19.2 The party bringing the application must sign the notice of application. The application must be delivered and must contain the following:

(c) .............

(a) (d) ............

(e) .............

(f) ............

(g) a notice that if it intends opposing the matter, the party must deliver an answering affidavit within five days after the application has been served, failing which the matter may be heard in the party’s absence; and

(a) .......................

19.3 The application must be supported by an affidavit. The affidavit must clearly and concisely set out:

(a) .................

(b) ................

(c) ...............

(d) ................

19.4 (a) Any party opposing the application may deliver a notice of opposition and an answering affidavit.

(b) A notice of opposition and an answering affidavit must be delivered within five days from the day on which the application is served on the party opposing the application.

19.5 (a) ...............

(b) ...............

19.6 Subject to the discretion of a commissioner, a written statement may be substituted for the affidavits referred to in rule 19.2 to 19.5.

19.7 (a) The Commission must allocate a date for the hearing of the application once a replying affidavit is delivered, or once the time limit for delivering a replying affidavit has lapsed whichever occurs first.

(b) The Commission must notify the parties of the date, time and place of the hearing of the application.

19.8 Notwithstanding rule 19.7, the Commission may determine an application in any manner it deems fit.

19.9 Any ruling made by a commissioner in terms of these Rules which has the effect of a final order will be regarded as an arbitration award.”

I am of the view that the application for postponement was not properly entertained on its merits because the arbitrator took the view that, having regard to the provisions of rule 17 and 19, it was not properly before him. The construction placed on these rules by the arbitrator was erroneous in law, since the rules are plainly designed for cases in which an application for postponement is made in the ordinary course. Where the application is made from the Bar, it is plain that these two rules, and in particular rule 17, cannot apply.

The arbitrator’s belief that the rules have the effect of precluding any application from the Bar had the result that he failed to consider the application for a postponement on its merits, and in consequence, improperly rejected it. The approach that the arbitrator took was such that he shut his mind to the submissions that would have been made to him on the merits, and as a result, failed to properly apply his mind to the matter. In consequence, he rejected an application that should have been entertained by him and considered on its merits, thereby committed a reviewable irregularity.

The standpoint adopted by the arbitrator was based on a reading of the CCMA rules that was, in the circumstances, vitiated by error of law so drastic as to constitute a material irregularity in the circumstances. The arbitrator by misconstruing the rules in the way he did, took a blinkered approach to the provisions of the rules and thus failed to apply his mind to the merits of the application.

If he had not committed this irregularity, he would have considered the application on its merits and decided it accordingly. It would have been open for him to decide that the application for postponement should be granted and then to decide, once the application for withdrawal of the concession and for a declaration that the referral was out of time and thus null and void had been made, to consider that on its merits and potentially to decide in favour of the applicant. This irregularity prevented a fair trial of the issues and a failure of justice.

The second ground of review

On 25 April 2001, Smook made a formal application for the matter to stand adjourned to the following day in order to call two important witnesses who, he had earlier explained, would not be available that afternoon. In dealing with this application, the arbitrator referred once more to rule 17 of the CCMA rules and, despite submissions by Smook that the witnesses were material, refused the application for a postponement.

The erroneous approach that the arbitrator took to his powers on applications for postponement made from the Bar vitiated his

consideration of the application for a postponement to call further witnesses. By taking the attitude that the application for postponement had to be formally mounted, he closed his mind to the merits of the application and, in consequence, failed to consider and properly apply his mind to the points being raised in favour of it. The result was that the company was unable to call the two witnesses in question, and was obliged to close its case.

If the arbitrator had engaged with the issue on the merits, he would have discovered that there was a good explanation for the absence of the two witnesses, that little prejudice would be caused by the postponement, and that the witnesses were sufficiently important to justify the application for a postponement ensuring that they were so called. In taking the approach that he did, therefore, the arbitrator failed properly to apply his mind to the application for a postponement and created a situation in which the witnesses could not be called to give their evidence. By the approach that he took, the arbitrator thereby committed a reviewable irregularity that had the result that he was forced to consider the merits of the dismissal dispute on evidence that was partial and incomplete.

Once again, the standpoint adopted by the arbitrator was based on a reading of the rules that was vitiated by error of law so material to justify the review and setting aside of the refusal to grant the postponement. The arbitrator took the view that the postponement could only be granted if formal application for it was mounted by the applicant. As a result, he failed to enter into the merits of the application and, in consequence, failed to apply his mind to them.

The third ground of review

In his award, the arbitrator dealt with the failure to call the witnesses, and in particular the material witness Swart, as follows -

“It is important to note that a material witness Mr G Swart was not called to testify about the instruction he received from the applicant. Mr Swart was also alleged to have advised the second witness, M F Naude, how to manipulate computer figures.

The applicant stated that Mr Swart did in fact attend the hearing on two occasions. Mr Smook himself added that he intended to call this witness but failed to do so because the witness could not leave the respondent’s business unattended and attend this hearing and remain in attendance until called to give evidence. There are no sufficient reasons why this witness had not been called. The witnesses [sic] was available and one is bound to infer that the failure to call him was the result of apprehension on the part of the respondent that he would under Oath, give true but adverse evidence exonerating the applicant bearing in mind that when the applicant appealed against the findings of the disciplinary hearing, this witnesses [sic] testified in his favour.’

In reasoning in this manner, the commissioner committed two errors of fact and logic that are fundamental to the conclusion that he arrived at. The first one is an obvious one. It is that, unless he rejected the company’s explanation for not calling Swart, he could not conclude that Smook entertained the apprehension that Swart would give evidence adverse to the company, still less could he conclude that this inference was an inevitable one. Secondly he could not infer from the fact that Swart was called on behalf of Bok to give evidence at the disciplinary hearing that his evidence was in fact in Bok’s favour. The most that he could infer was that Bok thought, at the time, that the evidence would promote his case. In fact, when Swart was called at the hearing, his evidence was adverse to Bok and, in consequence, Bok saw no reason to invoke his testimony at the CCMA hearing.

In approaching the evidence in the manner in which he did, the arbitrator arrived at a conclusion concerning the nature of Swart’s evidence that was completely at odds with the facts. The adverse inference he drew constituted an important link in the chain of reasoning that enabled the arbitrator to find against the company on the merits of the unfair dismissal case and thus make the award he made reviewable. The approach adopted by the arbitrator was so irregular that the decision on the merits of the unfair dismissal case cannot stand.

The arbitrator recorded in his award the explanation the company gave for the failure to call these witnesses and seemingly accepted the explanation for their evidence tendered by Smook, for he made no effort to take issue with them. After accepting them, however, he then drew an inference adverse to the company’s case arising out of the failure to call Swart, holding that the company failed to call him because it believed that he would give evidence adverse to its case. In coming to this conclusion, he referred to the fact that Bok had called Swart to testify at the appeal hearing, and concluded from that that the evidence of Swart was actually in Bok’s favour. No such inference is justified in the circumstances, and in fact Swart, when he gave evidence at the appeal hearing, did not in fact testify in Bok’s favour - quite the reverse.

Mr Brassey, who appeared for the applicant, urged me to permit the applicant to withdraw the concession that it made during the arbitration proceedings which were that the matter was properly before the Commission. I am not prepared to do so. This is a matter which will have to be dealt with before the Commission.

The award stands to be reviewed and set aside.

Both parties sought costs against each other. I see no reason why in law and fairness costs should not follow the results. Mr Brassey submitted that the matter was of such a nature that it warranted the employment of two counsel. I do not agree. The issues are not complex issues. They are the standard issues that this Court is faced with on a regular basis. The applicant had initially raised the issue of legal representation which in my view would have warranted the employment of two counsel. However, the applicant abandoned that issue. This is not a matter which warrants the employment of senior counsel in this matter.

In the circumstances it is ordered that -

(1) The award dated 14 May 2001under case number 122941 is reviewed and set aside;

(2) The dispute is referred to the fifth respondent to be heard de novo by a commissioner other than sixth and seventh respondents;

(3) The fourth respondent is directed to pay the applicant’s cost which costs do not include the employment of senior counsel in this matter.

FRANCIS J

JUDGE OF THE LABOUR COURT OF SOUTH AFRICA

FOR THE APPLICANT : MSM BRASSEY SC WITH AP J DU PLESSIS INSTRUCTED BY HLATSHWAYO DU PLESSIS VAN DER MERWE ATTORNEYS

FOR THE FOURTH RESPONDENT: ATTORNEY D L KROWITZ

DATE OF HEARING : 28 MARCH 2002

DATE OF JUDGMENT : 19 APRIL 2002