National Union of Mineworkers obo Members and Others v Arcelormittal South Africa Limited and Others (JR 802/18) [2020] ZALCJHB 167 (2 September 2020)

In the Labour Court of South Africa, JOHANNESBURG

Not Reportable

case no: JR 802/18

In the matter between:

NATIONAL UNION OF MINEWORKERS

OF SOUTH AFRICA

First Applicant

TEFO SEKGOELOA

Second Applicant

JUNIOR GUSHA

Third Applicant

and

ARCELORMITTAL SOUTH AFRICA

LIMITED

First Respondent

COMMISSIONER CLAIRE HOCK N.O

Second Respondent

METAL AND ENGINEERING INDUSTRIES

BARGAINING COUNCIL

Third Respondent

Heard: 4 June 2020

Delivered: In view of the measures implemented as a result of the Covid-19 outbreak, this judgment was handed down electronically by circulation to the parties' representatives by email. The date for hand-down is deemed to be 02 September 2020.

JUDGMENT

MAHOSI. J

Introduction

[1] This is an application brought by the first respondent, the National Union of Metal Workers of South Africa (NUMSA) in terms of section 145 of the Labour Relations Act[1] (LRA) to review and set aside the arbitration award issued by the second respondent (the arbitrator) under the auspices of the third respondent, the Metal and Engineering Industries Bargaining Council (MEIBC) under case number MEGA50511, dated 25 August 2016. In his award, the arbitrator found that the dismissal of the second and third applicants (the employees) were fair.

[2] NUMSA seeks an order declaring that the employees’ dismissal were both procedurally and substantively unfair and that they be reinstated with effect from the date of their dismissal, without loss of salary or benefits. Alternatively, that the matter be referred back to the MEIBC for a hearing de novo before an arbitrator other than the second respondent.

Background

[3] Prior to their dismissal on 30 January 2017, the employees were employed by the first respondent, Arcelormittal South Africa Ltd (AMSA). During their employment, the employees were plant shop stewards.

[4] On 6 October 2016, an incident occurred during which one of NUMSA’s members, also employed by AMSA, was injured and lost three fingers on a notcher machine while threading. AMSA began engaging with the employees in respect of the investigation of the incident, but were dissatisfied with their conduct. As a result, AMSA levelled the following charges against the employees:

‘Failure to act in the best interest of the employer in that, you, on 6 October 2016 deliberately frustrated management efforts (Mr Alton Du Plooy) to conduct a preliminary investigation which was partly underway thereby failing to assist with an incident investigation and not contributing in order to investigate what the root cause was for the serious accident taking place and therefore not assisting in putting corrective actions in place in order to create a safe work environment.

Bringing the company into disrepute and/or failing to comply with the Company’s Code of Conduct, policies and procedures in that you, on 6 October 2016, in the meeting held in the team room convened to conduct a preliminary investigation, refused to corporate with management in contravention of the AMSA Incident Investigation Procedure and the Vanderbijlpark Work Safety, Health and Environmental (SHE) Policy Statement by arguing with and preventing management from conducting the investigation in the 09H00 meeting.

Contravention of SHE legislation or Regulation or Works Instruction in that you, on 6 October 2016, in the meeting held in the team room convened to conduct a preliminary investigation, incited and influenced two identified witnesses not to issue written statements and directed other employees to walk out of the meeting held at 13H00 in contravention of section 14 of the OSH Act.”

In addition, Mr Gusha was charged with the following:

‘Rudeness, Insolence, Impoliteness or Impudence in that you, on 6 October 2016, in the meeting held in the tea room convened to conduct a preliminary investigation conducted yourself in a disrespectful manner towards Messrs Mocke and Pelser.”

Failure to act in the best interest of the employer in that, you, on 6 October 2016 after the injury incident and before the incident investigation meeting held in the tea room at Pickling Line no 4, without justification accused Mr Pierre-Marie Poisson and his team of wanting to kill black people thereby inciting racial disharmony between management and employees.’

[5] AMSA appointed Advocate Zindle Ngwenya (the chairperson) to chair the disciplinary hearing against the employees. On 11 January 2017 the chairperson handed down her finding on sanction which she entitled “Disciplinary Sanction Recommendation”.

[6] In this finding, the chairperson gave both employees a final written warning for the single charge namely failing to participate and assist in the preliminary investigation. She gave the third applicant a further final written warning for being rude and disrespectful to management.

[7] In her finding, the chairperson found that: (a) there was no dishonesty on the part of the employees, (b) the employees were acting in their capacity as shop stewards, (c) the employees did not incite or influence the witnesses to leave the preliminary investigation, (d) the employees did not wilfully endanger the safety of others, and (e) and that there was no indication that the trust relationship was severed beyond repair.

[8] However, on 25 January 2017, AMSA sent a letter to the employees indicating that it was dissatisfied with the sanction. The only reason it gave for its dissatisfaction was that the offences were serious and that the sanction was not in line with the guidelines in the collective agreement. AMSA further stated that the chairperson had not made a finding on sanction but had merely made a recommendation. In its letter, AMSA invited the employees to make further submissions in relation to sanction. NUMSA, on behalf of the employees, advised AMSA that they stood by their earlier submissions on sanction.

[9] AMSA dismissed the employees on 30 January 2017. In their letters of dismissal the reasons for their dismissal was set out. NUMSA alleges that two of those reasons were not presented as aggravating factors at the disciplinary hearing, namely, reputational and financial risk created by the employees’ conduct.

[10] Dissatisfied with the employees’ dismissal, NUMSA referred an unfair dismissal dispute to the MEIBC. The dispute was conciliated unsuccessfully and a certificate of non-resolution was issued. NUMSA then referred the dispute for arbitration which was held on a number of days and concluded on 28 March 2018. It is this award that forms the subject matter of this application.

In arbitration

[11] The parties concluded a pre-arbitration minute, which outlined the common cause issues and the issues to be determined by the arbitrator. The issues before the arbitrator were whether the employees waived their rights to challenge procedural fairness and whether the only issue for determination was the appropriateness of the sanction. The commissioner also recorded that the employees challenged all aspects of substantive fairness.

[12] At the end of the arbitration, NUMSA argued that the substitution of the sanction by AMSA rendered the dismissal both procedurally and substantively unfair. However, in her award, the arbitrator dealt with the issue under the heading procedural fairness and made a finding that the substitution of sanction was not procedurally unfair.

[13] In the next section of her award, the arbitrator makes no reference to the substitution issue. However, she dealt with all the elements of substantive fairness and found that the employees were guilty of all the charges levelled against them.

Grounds of review

[14] Although the applicants raised multiple grounds of review, the case is confined to only two of them. The first ground is that the arbitrator committed a gross irregularity by misconceiving the nature of the enquiry before her. The basis for this contention is that the arbitrator allegedly treated the issue relating to the substitution of the sanction solely as an aspect of procedural fairness as opposed to both substantive and procedural fairness. In essence, NUMSA challenges the first respondent’s decision to overide the findings of the chairperson and to replace it with its own findings.

[15] The second ground is that the arbitrator’s finding on sanction was one that no reasonable decision maker could have reached on the evidence before her.

Legal Principles - Substitution of sanction

[16] It is trite that an employer has the right to discipline his workforce within the framework of the LRA. This the employer does by following a fair procedure, which will include a disciplinary enquiry with a chairperson, who on hearing evidence led, will come to a finding and pronounce a sanction if the employee is found guilty of the misconduct so charged.

[17] What then happens when the chairperson provides for a sanction, which in most cases is often a sanction less than dismissal, which the employer is unhappy with? Is the employer entitled to substitute the sanction with that of another sanction, even dismissal, and if so, what is the procedure that should be followed?

[18] In the matter of Branford Metrorail Services (Durban) and Others[2] the Labour Appeal Court (LAC) held that in the labour context the yardstick is fairness. Therefore fairness would dictate whether an employer could substitute a decision of the chairperson but then only in exceptional circumstances. This was echoed by the Labour Court in Samson v CCMA and Others[3] stated that:

“An employer is entitled to, when it is fair to do, in exceptional circumstances may revisit a penalty and substitute it with a more

severe sanction.”

[19] However, as in Branford supra the LAC stated that if the employer were to revisit the sanction imposed by the chairperson and was to impose a different sanction

same must be done only in circumstances where it is not ultra vires the disciplinary code and which are exceptional. There too, the LAC qualified this by stating that the employer would then have to convene a second enquiry, which would be unfair if, in the first enquiry, the merits and facts of the misconduct were manifestly dealt with.

[20] The issue the Courts grapple with is delegated authority. An employer, when appointing a chairperson, delegates the authority to discipline that employee to that chairperson. Therefore, for all intents and purposes the chairperson is the employer and his/her decision is that of the employer. Therefore, for the employer to then, when unhappy, substitute the decision would be functus officio, as the authority to discipline has already been accomplished, which is akin to res judicata. The employee was charged, he/she answered to the case and a finding was made. It could not be seen to be fair to then subject them to the wills and fancies of the employer which would then circumvent the provisions of the LRA which is to allow for a fair procedure when disciplining one’s workforce.

[21] This issue came to the fore in the matter of SARS v CCMA and Others (Kruger)[4] where the chairperson imposed a sanction of a final written warning for the racial slur of the use of the “K” word in the workplace. Aggrieved thereby SARS substituted the sanction with that of dismissal. The employee referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) wherein it was found that his dismissal was unfair as there was a collective agreement in place stating that the decision of the chairperson was final. This decision was upheld up to the Labour Appeal Court, where after the Constitutional Court only dealt with the issue of re-instatement which was eventually overturned and compensation awarded.

[22] In SARS v CCMA (Kruger) the LAC held that:

“The established law about an employer being disallowed from interfering in the outcome of a disciplinary enquiry where the chair has the power to make a final decision, which is the crucial issue in this appeal, has, at its aim, the protection of workers from arbitrary interference with discipline in a fair system of labour relations. This principle is worthy of protection.”

[23] Therefore, the chairperson is clothed with the persona of the employer and their decision is therefore final and binding on the employer. The employer cannot arbitrarily substitute the sanction for one of its own.

[24] More recently in the matter of SAMWU obo Mahlangu v SALGBC and Others[5] the Labour Court, in dealing with issue where a collective agreement regulated the relationship between the parties which clear stated that the findings of the chairperson was final, and where the chairperson termed his findings as a recommendation found that:

“Under circumstances in which the employer unilaterally assumed the power to determine the sanction to be imposed whereas it was bound by an agreed peremptory code assigning such power to an appointed chairperson, and where it did not give effect to the sanction

recommended by the only person entitled to decided on it, the employer’s dismissal of Mahlangu was in flagrant breach of the provisions of the code … its action had the effect of the sanction being decided by someone other than the only person

authorised by the code to do so.”[6]

[25] The Court further distinguished the applicable principles from that in Samson v CCMA supra in that matter there was no collective agreement in place.

[26] In opposing this application, the respondent referred the Court to Moodley v Department of National Treasury[7]. In this matter Labour Appeal Court, in analysing the Kruger matter stated that while, in light of a collective agreement, the dismissal of Mr Kruger was unfair as he was not granted a hearing before the dismissal, the arbitrator was still enjoined to make an enquiry under section 193 of the LRA when granting relief as to whether re-instatement is practical or not. Therefore, this matter is in keeping with the principles of SARS v Kruger (both LAC and Constitutional Court)

[27] The respondent further referred the Court to James v Eskom SOC Ltd[8]. In this matter the employees were dismissed after the decision of the appeal tribunal was substituted by the General Manager. They referred the matter to the CCMA, where, after the matter was arbitrated, the commissioner found that since there was a collective agreement in place which precluded the substitution of the sanction as the appeal tribunals’ decision was final, the dismissal of the employees was thus unfair. However, on an inquiry in section 193 as enjoined to do, the commissioner found that re-instatement was impractical and therefore awarded them compensation. This was upheld by the Labour Appeal Court.

[28] Therefore, this decision confirms the principle laid in SARS v Kruger that if there is a collective agreement in place the sanction cannot be substituted. If it is, then the dismissal is unfair, and the arbitrator should enquire into section 193 of the LRA to see if re-instatement is practical or not.

[29] Furthermore, the respondent referred the Court to Ekhurhuleni Metropolitan Municipality v SAMWU[9]. However, this matter dealt with a summary dismissal for misconduct without the holding of a disciplinary enquiry. It is not apposite to the issues discussed herein.

[30] In light of the case law, if there is no collective agreement or disciplinary code in place, an employer may substitute the sanction of a disciplinary chairperson if it is fair to do so and with engaging the employee, either in another disciplinary enquiry or to have the employee make submissions.

[31] However, where there is a collective agreement in place, the parties are bound by such. Therefore, the employer will not be allowed to substitute the findings of the chairperson and if, done, the decision is unfair. The Court in SARS v CCMA (Kruger) found that it was not only procedural in nature but substantive and therefore re-instatement was the primary relief. It was the

Constitutional Court in SARS v CCMA (Kruger)[10] that found that although the dismissal was unfair, the conduct that led to the dismissal was of such a nature that re-instatement was not reasonably practicable and therefore compensation was awarded.

Evaluation

[32] In this matter, it is not in dispute that the Disciplinary Code (the Code) is in a form of a collective agreement and therefore binding between the parties. Clause 9.1.1.21 of the Code provides that the Chairperson of the disciplinary hearing must decide on an appropriate sanction. Clause 9.5 provides that:

‘The date of the dismissal will be the date of the sanction of dismissal handed down by the disciplinary hearing Chairperson.’

[33] The Code is silent on the issue of substitution of sanction by AMSA. Instead, clause 10.1.8 provides that the chairperson must make a finding on whether the alleged offender committed the misconduct and, if so, the appropriate sanction. Clause 11 provides that both the employee and AMSA have a right of appeal.

[34] It is apparent from the reading of the Code that there is an express provision that permits AMSA to vary or rescind the sanction of the disciplinary hearing, but this right only rests on an appeal chairperson. There is no express provision permitting AMSA to ‘unilaterally review’ the decision of the chairperson.

[35] It is my view that the most reasonable inference to be drawn is that the parties, when they negotiated the disciplinary procedure, did not intend to grant AMSA the power to review or appeal its own disciplinary decision, except through an appeal process. To conclude otherwise would be to surmise that either party could unilaterally change the effect of the agreement. My view is that AMSA had not negotiated or reserved for itself the right to vary, rescind or substitute a disciplinary hearing. It must, in this regard, be appreciated that the deviation from a collective agreement is not encouraged or countenanced. This agreement is binding on the parties and must be respected and complied with by AMSA.

[36] In her findings termed “Disciplinary Sanction Recommendation”, the chairperson of the disciplinary hearing imposed a sanction of a final warning. To an extent that the Code makes no provision for the substitution of sanction by AMSA, the substitution of the sanction by AMSA was in violation of the Code and therefore invalid. It follows therefore that the term used by the chairperson to describe her finding is of no consequence.

[37] Had the arbitrator considered whether the substitution impacted on the substantive fairness of the dismissal, she would have found that the dismissal was substantively unfair. As such, in dealing with this matter solely as procedural whereas it related to both substantive and procedural fairness, she misconceived the nature of the enquiry before her which amounted to gross irregularity. Therefore, her award stands to be reviewed and set aside on this basis alone.

Costs

[38] With regard to costs, I am of the view that this is a case where the interests of justice and fairness will be best served by making no order as to costs.

[39] Accordingly, the following order is made:

Order

1. The arbitration award issued by the second respondent under the auspices of the third

respondent, the Metal and Engineering Industries Bargaining Council (MEIBC) under case number MEGA50511 dated 25 August 2016 is reviewed, set aside and substituted with the following order:

‘(a) The dismissal of the second and third applicants is substantively unfair.

(b) The first respondent is ordered to reinstate the second and third applicants in its employ on the terms and conditions no less favourable to them than those that governed the employment relationship prior to their dismissal, subject to the final warnings imposed by the chairperson of the disciplinary hearing.’

2. There is no order as to costs.

__________________

D. Mahosi

Judge of the Labour Court of South Africa

Appearances:

For the Applicant: Advocate Chris Orr SC

Instructed by:

Cheadle Thompson & Hayson Incorporated Attorneys

For the Respondent: Advocate F Boda SC

Instructed by

Cliffe Dekker Hofmeyr Incorporated Attorneys

[1] Act 66 of 1995, as amended.

[2] [2004] 3 BLLR 199 (LAC).

[3] (2010) 31 ILJ 170 (LC).

[4] (2016) 37 ILJ 655 (LAC).

[5] [2011] 9 BLLR 920 (LC).

[6] Ibid at para 32

[7] [2017] 4 BLLR 337 (LAC).

[8] [2017] 10 BLLR 979 (LAC).

[9] [2018] 3 BLLR 246 (LAC).

[10] [2017] 1 BLLR 8 (CC).