National Union of Metalworkers of South Africa obo Mathoba v South Ocean Electric Wires Company (Pty) Ltd and Others (JR 49/19) [2023] ZALCJHB 248 (25 August 2023)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not reportable

Case No: JR 49/19

In the matter between:

NATIONAL UNION OF METALWORKERS OF SOUTH AFRICA obo PHILEMON MATHOBA Applicant And SOUTH OCEAN ELECTRIC WIRES COMPANY (PTY) LTD First Respondent COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION Second Respondent LEBOGANG MATLAGA N.O. Third Respondent

Considered on the papers

Delivered: This judgment was handed down electronically by circulation to the parties' legal representatives by email and publication on the Labour Court’s website. The date and time for hand-down is deemed to be on 25 August 2023

JUDGMENT

TLHOTLHALEMAJE, J

Introduction:

[1] The applicant, the National Union of Metalworkers of South Africa (NUMSA) acting on behalf of its member, Mr Philemon Mathoba (Mathoba) approached this Court seeking an order reviewing and setting aside the arbitration award issued by the third respondent (Commissioner) acting under the auspices of the second respondent, the Commission for Conciliation Mediation and Arbitration (CCMA).

[2] In the award, the Commissioner dismissed Mathoba’s claim of unfair discrimination on the basis that he failed to allege the specific arbitrary ground of discrimination on which the claim was premised upon. The first respondent, South Ocean Electric Wires Company (Pty) Ltd (South Ocean) only filed a notice of intention to oppose the review application.

Background:

[3] Mathoba is employed by South Ocean in the position of a supervisor. Upon discovering that he was being remunerated at a lower rate than another supervisor, viz. Mr Rezel Jaopas (Jaopas), he lodged an internal grievance which was not resolved. He then with the assistance of NUMSA referred a dispute to the CCMA. When the matter remained unresolved, it was referred for arbitration and came before the Commissioner for

arbitration who had issued the impugned award.

The arbitration proceedings:

[4] No evidence was presented before the Commissioner after he had mero motu raised the question of the basis of the alleged unfair discrimination. What was however common cause arising from the parties’ representatives’ oral submissions was that Mathoba and Jaopas were remunerated at different rates despite performing work of equal value. South Ocean’s justification was that Jaopas possessed superior work experience, was head-hunted based on his previous working experience, and had trained Mathoba.

[5] The Commissioner had afforded the parties an opportunity to file written submissions on the issue whether Mathoba had identified the specific ground on which he based his claim of unfair discrimination. It appears that only NUMSA filed the written submissions. The Commissioner concluded in the absence of South Ocean’s submissions that the fact that the two employees were remunerated differently was not on its own sufficient to sustain a claim of discrimination. He held that there was a requirement on Mathoba to allege the arbitrary ground of discrimination on which the claim was premised. He concluded that such a ground was not identified, and that the mere allegation of discrimination on arbitrary grounds was insufficient to sustain Mathoba’s claim. This was particularly so since South Ocean was not in a position to defend a claim in which Mathoba had not identified the specific ground of discrimination. He therefore dismissed the claim.

Grounds of review and evaluation:

[6] In seeking a review, NUMSA submitted that the Commissioner committed a reviewable irregularity in failing to allow the parties to adduce evidence in respect of the allegation of differential remuneration for work of equal value. Furthermore, it was contended that the Commissioner committed an error of law in concluding that the specific arbitrary ground of discrimination was not articulated to sustain the claim.

[7] The applicant chose to seek a review of the award rather than exercise a right of appeal in terms of s 10(8) of the EEA. To this end, the enquiry is whether the ultimate conclusion reached by the commissioner falls within the band of reasonableness.[1] In Head of Department of Education v Mofokeng & Others[2] the Court held that it is not only the unreasonableness of the outcome which is the subject of scrutiny but that the inquiry further

includes a consideration of whether the commissioner misconceived the nature of the enquiry or had undertaken the enquiry in a misconceived manner. In Motor Industry Staff Association & another v Silverton Spraypainters & Panelbeaters (Pty) Ltd & others[3] it was held that in order for an error of law to amount to a reviewable irregularity, such an error must be found to have been material, in that, it must have had an effect of influencing the ultimate conclusions of the commissioner.

[8] The Commissioner had identified Mathoba’s claim as pertaining to equal pay for work of equal value. He had noted the common cause facts and the justification by South Ocean of the pay disparities as already indicated elsewhere in this judgment. As a starting point, the provisions of section 6(1) of the Employment Equity Act[4] (EEA) prohibits the discrimination of an employee in any employment policy or practice on the grounds listed therein or on any arbitrary grounds. Furthermore, in terms of section 6 (4), any other differential treatment in the terms and conditions of employment

between employees of the same employer performing work of the same value premised on the grounds listed in subsection (1) constitutes an act of unfair discrimination.

[9] In terms of section 11(2) of the EEA[5], where an employee alleges that the discrimination complained of is based on arbitrary grounds, the employee has the duty to prove on the balance of probabilities that the conduct complained of was irrational; amounted to discrimination; and was unfair. This means that in cases where the discrimination is alleged on arbitrary grounds, the employee has the burden of proving the existence of the discrimination and further that the discrimination was unfair.[6] Of equal importance is that it is required of a commissioner to have regard to the Code of Good Practice on Equal Pay for work of Equal Value[7], and the provisions of the Employment Equity Regulations[8], which constitutes the equal pay legal framework in terms of the EEA. Regulation 6 in particular provides guidelines in assessing whether work is in fact of equal value.

[10] Furthermore, a commissioner is obliged to distinguish between the various categories of ‘work of equal value’ established by Regulation 4. These are where the employee performed the same work of the comparator, i.e. where the work is identical or interchangeable;

where the work is substantially the same, or sufficiently similar that the employee can ‘reasonably be considered to be performing the same job’, and where the employee performed work of the same value as the work of the comparator employee engaged ‘in a different job’ if the employee’s occupation is accorded the same value in accordance with the methodology prescribed by the regulations.

[11] NUMSA’s primary complaint is that the Commissioner erroneously precluded it from leading evidence to demonstrate that the conduct of South Ocean in remunerating Mathoba differently from Jaopas was irrational and constituted an unfair discrimination. It is trite that the consequences of excluding or preventing the presentation of material evidence by a commissioner are that parties are deprived of an opportunity to fully ventilate their respective cases at arbitration, and that disputes would not be fully and fairly determined. This omission invariably results in a reviewable irregularity[9]. The same principle was set out in Goldfields[10], where it was held that in assessing whether a decision of the arbitrator falls within a band of reasonableness, it must be considered whether amongst other things, the Commissioner afforded the parties a fair opportunity to state their respective cases.

[12] It is apparent from the record of arbitration proceedings together with the arbitration award that the Commissioner had issued his award based solely on the oral submissions made by the parties when he initially raised his concerns, and further on NUMSA’s written submissions. Other than the fact that South Ocean failed to file its written submissions, there was equally no oral evidence which was adduced in order to test whether or not the conduct complained of fell afoul of section 6(1) read together with subsection (4) of the EEA.

[13] The Commissioner simply relied on Ndudula[11] and other authorities in concluding that Mathoba’s claim ought to be dismissed since he had not from those submissions, demonstrated

the basis of the alleged arbitrary ground. Clearly the enquiry ought not have ended at that point. What escaped the Commissioner’s

attention however was that the authorities he had relied on were distinguishable from the dispute before him in material respects.

[14] Other than Pioneeer Foods (Pty) Ltd v Workers Against Regression (WAR) and Others[12] which came before the Court by way of an appeal in terms of section 10(8) of the EEA, Ndudula and Ntai and Others v South African Breweries Limited[13] were matters that were adjudicated by the Court in circumstances where pleadings had been exchanged in accordance with Rule 6 of the Rules of the Court. Furthermore, the facts of Ndudula were significantly distinguishable in that the difference in pay between the complainants and the comparators in that case occurred

because of a mistake, which was subsequently corrected and the comparators’ pay was adjusted downwards. The facts were clear

in that case for the Court to have called upon the applicant to not simply allege that the differentiation was arbitrary but to also identify the ground of discrimination complained about. Effectively, the pleadings in that case did not disclose the grounds as required by section 6(4) of the EEA, more specifically since the differences were acknowledged as merely based on a bona fide error on the part of the employer.

[15] The reliance by the Commissioner on Ntai and Others v South African Breweries Limited[14] was equally misplaced in the light of the cause of action in that case. The applicants in that case had relied on the now repealed item 2(1)(a) read together with item 3(4)(a) of schedule 7 to the LRA, and at the time that the EEA was only promulgated and not yet implemented at that stage. Equally so, the applicants’ case was that the employer had committed unfair racial discrimination since the complaint was that they were paid lesser than their white comparators despite the fact that they were all employed as training officers. The Court having acknowledged that the ground of discrimination ought to be pleaded, nonetheless concluded that the similarity of the jobs (as training officers); the difference in race between the applicants and the two comparators; and the fact that the applicants were paid less than their comparators, raised a very strong inference that race could very well be a probable explanation for the difference in remuneration. Such an inference of discrimination concluded the Court, could only be drawn if consistent with all the proven facts, and that such inference was the most probable inference to be drawn[15]. In Pioneer, as at the time the matter came before the Court by way of an appeal, the evidence of the parties had been fully ventilated before the commissioner, and it was based on that evidence whether the parties had discharged their onus or not.

[16] In this case however, the approach of the Commissioner in not affording Mathoba an opportunity of leading oral evidence to discharge his onus as required under section 11(2) of the EEA was not only irregular but also constituted a material error of law. It is not clear on what basis in the absence of either written submissions or oral evidence by South Ocean that the Commissioner could have made an assessment of whether the onus was discharged by either party or not, of whether the factors in Regulation 7 were taken account of. These provide that if there is a difference in the terms and conditions of employment, including remuneration, it is not unfair discrimination if the difference is fair and rational, based on a variety of factors either singularly or a combination thereof[16].

[17] Unlike in this Court where parties are required to file pleadings, the Commissioner in this case did not have the benefit thereof. The requirement for evidence to have been led in such cases is also premised on the principles set out in CUSA v Tao Ying Metal Industries and others[17] to the effect that it is required of a commissioner to deal with the substantial merits of the dispute by taking into consideration all the relevant facts of the case and the evidence presented during the arbitration proceedings. In the light of the manner and conduct of the Commissioner in disposing off the claim, he had undertaken the enquiry in a misconceived manner, and also committed a material error of law that amounted to a reviewable irregularity. Clearly the outcome reached could not possibly have fallen within the bounds of reasonableness. It follows that the review application ought to succeed.

[18] To the extent that one cannot speak of a proper record or evidence before the Court in the light of the flawed approach adopted by the Commissioner, it follows that the Commissioner’s award ought to be reviewed and set aside, and for the matter to be remitted to the CCMA. The matter was effectively not opposed and there is therefore no basis for any award of costs to be made.

[19] Accordingly, the following order is made:

Order:

1. The arbitration award under case number GAEK 8985-18 dated 23 November 2018 which was issued by the third respondent is reviewed and set aside.

2. The dispute is remitted to the second respondent for a hearing de novo before a commissioner other than the third respondent.

There is no order as to costs.

Edwin Tlhotlhalemaje

Judge of the Labour Court of South Africa

REPRESENTATION:

For the Applicant:

S. Mabaso Incorporated Attorneys

For the First Respondent:

De Villiers & Du Plessis Attorneys

[1] See Sidumo & Another v Rustenburg Platinum Mines Ltd & Others (2007) 28 ILJ 2405 (CC).

[2] (2015) 36 ILJ 2802 (LAC) at para 31.

[3] (2013) 34 ILJ 1440 (LAC) at para 42; see also Eskom Holdings Ltd v Fipaza and others [2013] 4 BLLR 327 (LAC) at para 62.

[4] Act 55 of 1998, as amended.

[5] The full text of section 11 reads; ‘Burden of proof. - (1) If unfair discrimination is alleged on a ground listed in section 6 (1), the employer against whom the allegation is made must prove, on a balance of probabilities, that such discrimination- (a) did not take place as alleged; or (b) is rational and not unfair, or is otherwise justifiable. (2) If unfair discrimination is alleged on an arbitrary ground, the complainant must prove, on a balance of probabilities, that- (a) the conduct complained of is not rational; (b) the conduct complained of amounts to discrimination; and (c) the discrimination is unfair’

[5] The full text of section 11 reads;

‘Burden of proof. - (1) If unfair discrimination is alleged on a ground listed in section 6 (1), the employer against whom the allegation is made must prove, on a balance of probabilities, that such discrimination-

(a) did not take place as alleged; or

(b) is rational and not unfair, or is otherwise justifiable.

(2) If unfair discrimination is alleged on an arbitrary ground, the complainant must prove, on a balance of probabilities, that-

(a) the conduct complained of is not rational;

(b) the conduct complained of amounts to discrimination; and

(c) the discrimination is unfair’

[6] See Ndudula and others v Metrorail – Prasa (Western Cape) [2017] 7 BLLR 706 (LC) at para 21.

[7] GN 448 in GG 38837 of 1 June 2015

[8] Employment Equity Regulations of 2014 and a Code of Good Practice on Equal Pay for work of Equal Value.

[9] Legal Aid Board v John NO and Another [1998] 4 BLLR 400 (LC) at para 20 – 21.

[10] Gold Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission for Conciliation Mediation and Arbitration and Others [2013] ZALAC 28; [2014] 1 BLLR 20 (LAC); (2014) 35 ILJ 943 (LAC) at para 20 where it was held; ‘Failing to consider a gross irregularity in the above context would mean that an award is open to be set aside where an arbitrator (i) fails to mention a material fact in his award; or (ii) fails to deal in his/her award in some way with an issue which has some material bearing on the issue in dispute; and/or (iii) commits an error in respect of the evaluation or considerations of facts presented at the arbitration. The questions to ask are these: (i) In terms of his or her duty to deal with the matter with the minimum of legal formalities, did the process that the arbitrator employed give the parties a full opportunity to have their say in respect of the dispute? (ii) Did the arbitrator identify the dispute he was required to arbitrate(this may in certain cases only become clear after both parties have led their evidence)? (iii) Did the arbitrator understand the nature of the dispute he or she was required to arbitrate?(iv) Did he or she deal with the substantial merits of the dispute? and (v) Is the arbitrator’s decision one that another decision-maker could reasonably have arrived at based on the evidence?’

[10] Gold Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission for Conciliation Mediation and Arbitration and Others [2013] ZALAC 28; [2014] 1 BLLR 20 (LAC); (2014) 35 ILJ 943 (LAC) at para 20 where it was held;

‘Failing to consider a gross irregularity in the above context would mean that an award is open to be set aside where an arbitrator (i) fails to mention a material fact in his award; or (ii) fails to deal in his/her award in some way with an issue which has some material bearing on the issue in dispute; and/or (iii) commits an error in respect of the evaluation or considerations of facts presented at the arbitration. The questions to ask are these: (i) In terms of his or her duty to deal with the matter with the minimum of legal formalities, did the process that the arbitrator employed give the parties a full opportunity to have their say in respect of the dispute? (ii) Did the arbitrator identify the dispute he was required to arbitrate(this may in certain cases only become clear after both parties have led their evidence)? (iii) Did the arbitrator understand the nature of the dispute he or she was required to arbitrate?(iv) Did he or she deal with the substantial merits of the dispute? and (v) Is the arbitrator’s decision one that another decision-maker could reasonably have arrived at based on the evidence?’

[11] Ibid.

[12] [2016] ZALCCT 14; [2016] 9 BLLR 942 (LC); (2016) 37 ILJ 2872 (LC).

[13] [2000] ZALC 134 (16 November 2000).

[14] Ibid.

[15] At para 20 and 22

[16] Such as the individuals’ seniority or length of service, qualifications, ability, competence or potential above the minimum

acceptable levels required for the performance of the job; performance, quantity or quality of work, provided that employees

are equally subject to the employer’s performance evaluation system, that the performance evaluation system is consistently

applied; the existence of a shortage of relevant skill, or the market value in a particular job classification; and any other

relevant factor that is not unfairly discriminatory in terms of Section 6(1) of the Act. See also Sun International Limited v SACCAWU obo Ramerafe and Others (JR1501/17) [2019] ZALCJHB 31; [2019] 7 BLLR 733 (LC); (2019) 40 ILJ 1873 (LC), where it was held; ‘[10] The award lacks coherence, and comprises a series of often random observations More particularly, to the extent that the arbitrator considered that it was for the employee to establish and prove on a balance of probability that the applicant’s conduct was not rational and amounted to unfair discrimination, this overlooks the provisions of s 11 of the EEA. That section makes clear that if unfair discrimination is alleged on a specified ground listed in s 6 (1) (which it was in the present instance), the employer against whom the allegation is made must prove, on a balance of probabilities, that the discrimination did not take place or that any discrimination was rational and not unfair, or is otherwise justifiable. The applicant was thus obliged to discharge the onus to prove the absence of any discrimination and to justify any discrimination found to exist…’

[16] Such as the individuals’ seniority or length of service, qualifications, ability, competence or potential above the minimum

acceptable levels required for the performance of the job; performance, quantity or quality of work, provided that employees

are equally subject to the employer’s performance evaluation system, that the performance evaluation system is consistently

applied; the existence of a shortage of relevant skill, or the market value in a particular job classification; and any other

relevant factor that is not unfairly discriminatory in terms of Section 6(1) of the Act.

See also Sun International Limited v SACCAWU obo Ramerafe and Others (JR1501/17) [2019] ZALCJHB 31; [2019] 7 BLLR 733 (LC); (2019) 40 ILJ 1873 (LC), where it was held;

‘[10] The award lacks coherence, and comprises a series of often random observations More particularly, to the extent that the arbitrator considered that it was for the employee to establish and prove on a balance of probability that the applicant’s conduct was not rational and amounted to unfair discrimination, this overlooks the provisions of s 11 of the EEA. That section makes clear that if unfair discrimination is alleged on a specified ground listed in s 6 (1) (which it was in the present instance), the employer against whom the allegation is made must prove, on a balance of probabilities, that the discrimination did not take place or that any discrimination was rational and not unfair, or is otherwise justifiable. The applicant was thus obliged to discharge the onus to prove the absence of any discrimination and to justify any discrimination found to exist…’

[17] [2008] ZACC 15; 2009 (1) BCLR 1 (CC) at para 66.