Ntlatha v Phakisa Freight Management Services (Pty) Ltd and Others (JR 1333/18) [2020] ZALCJHB 121 (13 August 2020)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case no: JR 1333/18

In the matter between:

LONWABO NTLAHLA

Applicant

and

PHAKISA FREIGHT MANAGEMENT

SERVICES (PTY) LTD First Respondent

J D SELLO N.O

Second Respondent

NATIONAL BARGAINING COUNCIL FOR THE

ROAD FREIGHT AND LOGISTICS INDUSTRY Third

Respondent

Enrolled: 9 July 2020

Decided on the papers

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 13 August 2020.

Summary: Review application – limited duration employment contract concluded in contravention of subsection 198B(3) of the LRA and deemed to be of indefinite duration in terms of section 198B(5) of the LRA does terminate automatically in terms of the termination clause – employer must follow the procedure contemplated in section 189 of the LRA.

JUDGMENT

NKUTHA – NKONTWANA, J

Introduction

[1] In this application, the applicant, Mr Lonwabo Ntlahla (Ntlahla), seeks an order to review and set aside the arbitration award dated 25 June 2018 under case number GAJB23732-17 issued by the second respondent, J.D Sello, (arbitrator) under the auspices of the third respondent, the National Bargaining Council for the Road Freight and Logistics Industry (NBCRFLI). This application is opposed by the first respondent, Phakisa Freight Management Services (Pty) Ltd (Phakisa).

Factual background

[2] Phakisa is a Temporary Employment Services (TES) employer responsible for the placement of temporary employees with its clients. DB Schenker is one of its the clients.

[3] Mr Ntlahla was employed by Phakisa on a limited duration contract on 2 February 2016. He was placed to work at the premises of DB Schenker on a Vermont Sales Project (Vermont Project) in the position of Operations or Distribution Assistant at a rate of R29.47 per hour. The terms of his contract were, inter alia, as follows:[1]

‘(1.2) Employment shall commence on 01/02/2016, and shall cease once the specific work is completed in terms of the duration of the project, or specific task.

(1.4) on completion of this contract, as detailed in point (1.1 and 1.2) above, the Limited Duration Contract will automatically terminate. Such termination shall not be construed as being retrenchment, but shall be completion of a contract. No hearing whatsoever is required when this contract terminates through fluctuation of time and/or completion of a task.

….

(2.8) You understand that your appointment is subject to availability of work from our client and that the company will be guided in this regard by the client’

[4] The Vermont Project came to an end in 2017and DB Schenker notified Phakisa accordingly. As a result, Mr Ntlahla’s limited duration contract came to an end and his last working day was on 31 October 2017.

[5] Mr Ntlahla challenged the termination of his employment contract by referring a dispute of unfair dismissal to the Conciliation, Mediation and Arbitration (CCMA). The matter was subsequently transferred to NBCRFLI. The arbitrator issued the impugned award wherein he found, firstly, that Mr Ntlahla was employed on a fixed term contract which expired when the first respondent’s client terminated its contract; and secondly, that Phakisa fairly terminated the services of the applicant based on its operational requirements and paid him severance pay.

Legal principles and application

[6] Mr Ntlahla’s main impugn against the award is that the arbitrator misconstrued the nature of the enquiry and consequently rendered an unreasonable outcome.[2]

[7] The issue for determination was the true reason for the termination of Mr Ntlahla’s limited duration employment contract. Phakisa contends that its contract with DB Schenker that placed Mr Ntlahla on the Vermont Project came to an end. As a result, two of Phakisa’s employees, Messrs Ntlahla and Seloane, were affected and their limited duration employment contracts terminated automatically and were accordingly paid severance pay. In essence, the case of Phakisa is that Mr Ntlahla’s limited duration contract was in line with section 198B(3) of the Labour Relations Act[3] (LRA) and its termination was not a dismissal as contemplated in terms of section 186 read with section 189 of the LRA. Mr Wessel

Cornelius van Basten (Mr Van Basten), testified that he was Phakisa’s Regional Manager at that time and he was the one who informed Messrs Ntlahla that his employment contract would terminate because Phakisa lost its contract with DB Schenker.

[8] On the other hand, Mr Ntlahla conceded that his employment contract terminated as a result of the Vermont Project ceasing. However, he was adamant that to the extent that he was not party to a contract between Phakisa and DB Schenker, he ought not to have been affected by its termination. Nonetheless, the mainstay of his impugn is that the termination of his contract ought to have been

preceded by consultation in terms of section 189 of the LRA because section 198B of the LRA was not applicable. He asserts that he was dismissed and his dismissal was both procedurally and substantively unfair.

[9] In Piet Wes Civils CC and another v Association of Mineworkers and Construction Union and Others,[4] referred to by Mr Ntlahla, the Labour Appeal Court (LAC), confronted with similar facts, stated the following:

‘[24] Turning to the employees with whom the appellants state that a written employment contract was entered into, the duration of that contract was made subject to the "supply of work contracts" by Piet Wes' clients and the supply of the "same work contracts" by Waterkloof's clients.

[25] A contract duration linked to the supply of work contracts by clients cannot be construed to equate to the occurrence of a "specified event", "the completion of a specified task or project" or "a fixed date", as contemplated by section 198B(1). This is so in that a "specified event", "the completion of a specified task or project" or a "fixed date" does not constitute a possibility that future contracts may not be supplied in future by an employer's clients. This remains a possibility and nothing more than that. It is by no means a specified event which in future will arise, nor is it related to the completion of a task or project or a fixed date, but is an operational risk which may occur, one under which the business operates.

[26] The purpose of section 198B is to provide security of employment, except in circumstances where a fixed term or limited duration contract is clearly justified. The Labour Court was correct in finding that to place a construction of the words "specified event" on the cancellation of the Exxaro contract went beyond the intention of the legislature. From a plain reading of the contract that was concluded between the appellants and certain of the employees, no limited duration or fixed term can be read into what was is clearly, from its terms, an unlimited duration employment contract entered into between the parties.

[27] Since all of the employment contracts entered into were of an indefinite duration, as contemplated by section 198B(5), such contracts could not be terminated on notice by the appellants without adherence to the fair dismissal procedures set out in the LRA…’

[10] Turning to the present case, similarly, the duration of Mr Ntlahla’s appointment was subject to ‘availability of work’ from Phakisa’s client in terms of clause 2.8. of the employment contract. Even though clauses 1.1 and 1.2 refer to specific project or task, the said project or task is not specifically mentioned, a fact conceded by Mr Van Basten. Also, there was no evidence led as to why Mr Ntlahla’s employment contract was for a limited duration other than the fact that Phakisa is a TES.

[11] It stands to reason, therefore, that Mr Ntlahla’s limited duration employment contract had been concluded in contravention of subsection 198B(3) of LRA and as such deemed to be of an indefinite duration in terms of section 198B(5) of the LRA. Accordingly, Phakisa had to follow the procedure contemplated in section 189 of the LRA and by failing to do so, the dismissal of Mr Ntlahla was procedurally unfair.

[12] In the circumstances, the arbitrator misdirected himself by finding that Mr Ntlahla was employed on a limited duration contract which expired when DB Schenker terminated Phakisa’s contract. By the same token, he found that Phakisa fairly terminated the services of Mr Ntlahla on the basis of its operational requirements and paid him severance pay. These findings are obviously irreconcilable and cannot stand.

Conclusion

[13] The Commissioner clearly misconceived the nature of the enquiry and, consequently, arrived at a decision which no reasonable decision-maker could reach on all the material that was before him. As such, the award is vitiated by this irregularity.

[14] In the interest of justice, I deem it expedient not to remit this matter back to the NBCRFLI. The issues are crisp and were properly ventilated during the arbitration proceedings and the adequacy of the record of those proceedings is not placed in issue. I am, accordingly, in a position to determine the matter to its finality.

[15] In the light of the findings that I have arrived at above, it is clear that the dismissal of Mr Ntlahla was procedurally unfair. I am, however, satisfied that there was a justifiable operational reason that was brought about by the termination of the Phakisa and DB Schenker contract. In fact, the evidence of Mr Van Basten in this regard was not challenged.

[16] It follows that the applicant is entitled to a compensatory relief that is ‘just and equitable’.[5] I have considered all the circumstances in this matter and, particularly, the fact that Phakisa did not even attempt to engage Mr Ntlahla prior to the termination of his employment contract. Thus, in my view, compensation equivalent to four months’ salary (R5 746.65 x 4 = R22 986.60) is just and equitable.

Costs

[17] It is settled that costs do not follow the result in this Court. However, in the present case, Mr Ntlahla is an individual litigant who had to incur legal costs in order to vindicate his procedural right. It is, therefore, in accordance with the principles of fairness and equity that Phakisa pays his costs.

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

Order

1. The arbitration award issued under case number GAJB23732-17, dated 25 June 2018, is reviewed and set aside and substituted with the following order:

1.1 The dismissal of the applicant, Mr Lonwabo Ntlahla, is substantively fair but procedurally unfair.

1.2 The first respondent, Phakisa Freight Management Services (Pty) Ltd, is ordered to pay the applicant, Mr Lonwabo Ntlahla, compensation equivalent to four months’ salary which is R22 986.60.

2. The respondent, Phakisa Freight Management Services (Pty) Ltd, is ordered to pay the applicant’s, Mr Lonwabo Ntlahla, costs.

__________________

P Nkutha-Nkontwana

Judge of the Labour Court of South Africa

[1] See: Record of proceedings, pages 38 and 39.

[2] See: Sidumo and Another v Rustenburg Platinum Mines Ltd and Others (2007) 28 ILJ 2405 (CC); see also: Head of Department of Education v Mofokeng and Others (2015) 36 ILJ 2802 (LAC) at para 32 to 33; Palluci Home Depot (Pty) Ltd v Herskowitz and Others [2015] 5 BLLR 484 (LAC); (2015) 36 ILJ 1511 (LAC) at paras 15 to 16.

[3] Act 66 of 1995 as amended.

[4] [2018] 12 BLLR 1164 (LAC).

[5] Section 194(1) of the LRA.