Olympic Park Trading 126 (Pty) Ltd t/a SKG Properties v Skhosana and Others (JR2360/22) [2024] ZALCJHB 263 (28 June 2024)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: JR2360/22

In the matter of:

OLYMPIC PARK TRADING 126 (PTY) LTD T/A

SKG PROPERTIES

Applicant

and

SKHOSANA, ROBERT NO

First Respondent

THE CCMA

Second Respondent

DU PLESSIS, MARCEL

Third Respondent

Heard: 12 March 2024

Delivered: 28 June 2024

JUDGMENT

WHITTINGTON, AJ

[1] It is important to note that the Labour Relations Act[1] (Act) does not provide for an appeal from arbitration proceedings but only for a review under the provisions of sections 145, 158 (1) (g) and 158 (1) (h).

[2] Section 145 of the Act provides as follows:

‘(1) Any party to a dispute who alleges a defect in any arbitration proceedings under the auspices of the Commission may apply to the Labour Court for an order setting aside the arbitration award –

(2) A defect referred to in section (1), means –

(a) that the commissioner –

(i) committed misconduct in relation to the duties of the commissioner as an arbitrator;

(ii) committed a gross irregularity in the conduct of arbitration proceedings; or

(iii) exceeded the commissioner’s powers; or

(b) that an award has been improperly obtained.’

[3] Further, Section 158 (1) (g) of the Act provides as follows:

‘(1) The Labour Court may –

…

(g) subject to section 145, review the performance or purported performance of any function provided for in this Act on any grounds that are permissible in law;’

[4] It is clear from the wording of the Act that the provisions of section 158 (1) (g) are subject to the provisions of section 145.

[5] The distinction between matters on appeal and matters on review continues to be significant and courts should guard against judicial

overzealousness in setting aside decisions that do not coincide with the judge’s own opinions[2].

[6] The test stated in relation to review proceedings is: “is the decision reached by the commissioner one that a reasonable decision maker could not reach?”.[3]

[7] The key distinguishing factor between appeal and review proceedings is the fact that review proceedings are more concerned with an evaluation of procedural aspects and less concerned with delving again into the evidence presented at the hearing of the matter.

[8] In a case subsequent to the Sidumo case referred to above and more particularly the matter of Gold Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v Commission for Conciliation, Mediation & Arbitration & others[4] it was held that a review court must ascertain whether the arbitrator considered the principal issue before him/her; evaluated the facts presented at the hearing and came to a conclusion which was reasonable to justify the decisions he or she arrived at.

[9] It was held in the same judgment that 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?[5].

[10] If a commissioner does not take into account a factor that he is bound to take into account, his or her decision invariably will be unreasonable. The flaw in process alone will usually be sufficient to set aside the award on the grounds of it being a latent gross irregularity, permitting a review in terms of section 145 (1) read with section 145 (2) (a) (ii) of the LRA[6].

[11] The fact of the matter is that the reasonable decision maker yardstick crafted in Sidumo, viewed in proper context, is none other than, in the absence of a “rational objective basis” [the Carephone test] between the decision arrived at and the material placed before the decision maker[7], the decision falls to be reviewed.

[12] Where a commissioner fails to have regard to material facts, this will constitute a gross irregularity in the conduct of the arbitration

proceedings because the commissioner would have unreasonably failed to perform his or her mandate and thereby prevented the aggrieved

party from having its case fully and fairly determined. Proper consideration of all relevant and material facts and issues is indispensable to a reasonable decision and if a decision-maker fails to take account of a relevant factor which he or she is bound to consider, the resulting decision will not be reasonable in the dialectical sense. Likewise, where a commissioner does not apply his or her mind to the issues in a case the decision will not be reasonable[8].

[13] There is no requirement that the commissioner must have deprived the aggrieved party of a fair trial by misconstruing the whole nature of the enquiry. The threshold for interference is lower than that; it being sufficient that the commissioner has failed to apply his mind to certain of the material facts or issues before him, with such having potential for prejudice and the possibility that the result may have been different[9].

[14] Although the Labour Court (LC) has often held that the test for interference in the case of a gross irregularity is no more than the potential for prejudice, this is the first time that the Labour Appeal Court (LAC) has held so expressly.

[15] Interestingly in the Herholdt matter it was held[10] that whilst:

‘it is correct that the commissioner gave these facts and issues some thought and consideration, it cannot be said that she applied her mind to them properly... The commissioner’s finding to the contrary is wholly unsustainable, and more than a plausible

intimation that she failed to apply her mind properly to the material facts and the relevant issues.’

[16] The overall legal position emerging from Gaga, Afrox Healthcare and Herholdt can be summarised as follows:

16.1 CCMA awards can be reviewed on the grounds listed in section 145 of the LRA and, in addition, on the ground of unreasonableness[11].

16.2 There are two broad types of reviews – result-based reviews (which attack the result) and process-related reviews (which attack the process followed by a commissioner in arriving at the result).

16.3 There are similarly two types of unreasonableness – substantive unreasonableness (which is aimed at the result) and dialectical unreasonableness (which is aimed at the process).

16.4 The test for substantive unreasonableness is the Sidumo test, which must be applied as per Fidelity Cash Management Service v CCMA & others[12]. To succeed, an applicant must establish that – on all the material that served before the commissioner – the result of the award is unreasonable (i.e. that it falls outside of a range of reasonable outcomes). On this test, the award may be wrong, but nevertheless not unreasonable. However, as held in Herholdt, wrong decisions are rarely reasonable.

16.5 Where a commissioner fails to apply his mind to materially relevant facts or considerations, this constitutes dialectical unreasonableness – this because a consideration of all materially relevant facts is fundamental to a reasonable decision.

16.6 Dialectical and substantive unreasonableness are interlinked in that a dialectical (i.e. process) failure on the part of a commissioner will often lead to a substantively unreasonable result. (This being what occurred in Gaga, Afrox Healthcare and Herholdt.)

16.7 Where a commissioner fails to apply his mind to materially relevant facts or considerations, this also constitutes a (latent) gross irregularity in terms of section 145 of the LRA – this because such a failure results in the losing party being deprived of a fair hearing.

16.8 A gross irregularity of this nature equates to an act of dialectical unreasonableness.

16.9 The threshold for interference on review in the case of a gross irregularity / dialectical unreasonableness is the potential for prejudice. This can be tested by asking this question: if the commissioner had applied his mind to the facts / considerations which he ignored, may (not would) he have come to a different conclusion? If the answer is in the affirmative, then the award falls to be set aside.

16.10 Provided this test for prejudice is met, an award falls to be set aside on the grounds of a gross irregularity / dialectical unreasonableness without it having to be established that the result of the award was substantively unreasonable. Seen thus, an award can be set aside on process-related grounds without the Sidumo test (being the test for substantive unreasonableness) being met.

[17] Item 7 of the guidelines in cases of dismissal for misconduct provides that a person who is determining whether a dismissal for misconduct is unfair should consider –

17.1 Whether or not the employee contravened a rule or standard regulating conduct in, or of relevance to, the workplace: and

17.2 If a rule of standard was contravened, whether or not –

17.3 The rule was a valid or reasonable rule or standard;

17.4 The employee was aware, or could reasonably be expected to have been aware, of the rule or standard;

17.5 The rule or standard has been consistently applied by the employer; and

17.6 Dismissal was an appropriate sanction for the contravention of the rule or standard.

[18] It should be emphasised that item 7 of the Code does not require an employer to set out every rule in detail and it is sufficient if the employee could reasonably have been aware of the rule and the consequence of non-compliance[13].

[19] In Sidumo v Rustenberg Platinum Mines[14] it was held that consideration ought to be given to the reasonableness of the employer’s rule and the appropriateness of dismissal as a sanction for the contravention of the rule. It has further been held that, even where misconduct does not fall within

the expressed provisions of a disciplinary code, it may still be of such a nature that the employer may be entitled to discipline the employee. This approach was endorsed by the LAC in County Fair Foods (Pty) Ltd v the CCMA & others.[15]

[20] The third respondent was accused of the following:

‘Dishonesty: In that you made a false statement on Tuesday the 16th of November 2021. Your manager, Muhammed Varachia, contacted you at 08h35 in the morning to confirm whether you were at work you

responded that you were at work before 08h00 and went to the mall when in fact you only arrived at anchor at 08h33 and only came into the office at 08h44.

Failure to Notify: Non-compliance with the company disciplinary code in that on Tuesday the 16th of November 2021 you failed to notify your manager, Muhammed Varachia that you would be late for work.

Gross Insubordination: In that on Thursday the 25th of November 2021 at 15h48 you were seen conversing with Julia Rubkina in front of the Santa Maria boardroom. This despite being instructed on Wednesday the 17th of November 2021 by your manager, Mohammed Varachia and the HR manager, Hernus de Lange, not to communicate with Julia due to her

suspension.’

[21] In the award handed down by the first respondent, the following statement appears at paragraph 41:

‘I propose to dispose of the second and third charges first. As far as Charge two is concerned I find it frivolous. Even the respondent

itself did not pursue it with any conviction. It was formulated merely to stack up the charges against the applicant. It is not

inculpatory to the applicant.’

[22] The extent to which the second charge is dealt with is quoted above.

[23] It would appear that the first respondent has not applied his mind at all to the issues which ought to have been considered in terms of the Code of Good Practice as set out above.

[24] Even if one were to assume in favour of the first respondent that the statement that the charge was “frivolous” goes to whether or not dismissal was an appropriate sanction this finding is premised on the finding that the charge was levelled against the third respondent for the purpose of stacking the charges up against the third respondent.

[25] This finding is wholly unsupported by any of the evidence presented at the hearing. To be perfectly clear there appears to be no debate that regarding the third respondent’s working hours or that, in the event that he was late, that he ought to have alerted his manager. There is further no suggestion by the third respondent that the rules regarding his working hours or the requirement of alerting his manager in the event that he arrived late were unreasonable. There is indeed a debate as to whether the third respondent was in fact at work when he was contacted by his manager but the award does not deal with this dispute at all.

[26] In the context of the entire award, it may be argued that the finding that the applicant sought to “stack up the charges against” the first respondent may be a conclusion which flows from the wider findings that Mr De Lange of the applicant was motivated by “malice” and “paranoia”.

[27] I shall deal with these wider findings in more detail below however, leaving aside for a minute whether the findings against Mr De Lange were justified, the reasoning applied is unsustainable.

[28] The commissioner deals with the first charge again in his award from paragraph 52. At paragraph 53, the following statement appears:

‘Mr. de Lange in his unmitigated malice towards the applicant was very eager to turn a molehill into a mountain. For me the exchanges

between the applicant and his superior were innocuous this should be seen in its proper context. The applicant and Mr. Varachia had their own working arrangement that was not in conflict with the overall goals and objectives of the respondent Mr. de Lange was a mere interloper in the whole saga full stop that he was the human you resources manager did not entitle him to micromanage other employees and other operational spheres of the organisation. His main duties have to do with policies procedures and human resources systems of the company as well as the relevant laws relating to the workplace the line functions are not his domain.’

[29] The extract above is remarkable for several reasons. Firstly, it would appear that the first respondent is of the view that the “working arrangement” between Mr Varachia trumps the provisions of the applicant’s employment contract. Secondly, it appears that the allegations relating to any such “working arrangement” are denied by the applicant.

[30] Further, it appears to me that there is nothing in the evidence tendered by any of the witnesses to support any conclusions of “unmitigated malice” or mala fides of any kind. I note that the applicant did testify in response to several leading questions that he was of the opinion that Mr de Lange had personal reasons for doing so. When further pressed to explain why he thought this was so he stated that “everything just feels personal” and that his “friendship with Yulia is the root of everything”.

[31] Not only do these opinions not support a finding that Mr de Lange was motivated by “unmitigated malice” but it is clear that the propositions posed by the third respondent’s representative to the applicant in this regard were never put to Mr de Lange.

[32] This leaves only the third charge.

[33] The First respondent in his award has correctly, in my view, noted that, in order for insubordination to be characterized as gross it must be serious, persistent and deliberate[16].

[34] As such, it appears to me that the first respondent correctly identified the issue which he was required to arbitrate on this aspect.

[35] It would further appear that the first respondent has determined that the conduct of the employee in speaking to Ms Yulia Rubinka on the day of her disciplinary hearing when he had expressly been asked not to do so was not sufficiently serious, persistent and deliberate enough to warrant a sanction of dismissal.

[36] It would appear from paragraph 20 of the award that the first respondent has reached a conclusion that the third respondent did indeed fail to comply with an instruction given to him by Mr Varachia.

[37] The first respondent goes on to state that, in his view, the instruction was unreasonable. The reason that the instruction was unreasonable (in the view of the first respondent) is that the instruction was motivated by “malice and paranoia”. It is unclear whether the “malice and paranoia” alleged is attributable to Mr Varachia or Mr de Lange or indeed both.

[38] In any event such findings against Mr Varachia and/or Mr de Lange and/or both are not supported by any evidence presented at the hearing. As the first respondent’s reasoning that the disregard of this instruction did not warrant dismissal was premised on these conclusions, unsupported by any evidence, the award cannot be said to be reasonable.

[39] Accordingly, I make the following order.

Order

1. The arbitration award issued by the first respondent under GATW 15560 – 21, dated 6 September 2022, are hereby reviewed and set aside.

2. The matter is remitted back to the Second Respondent for determination of the dispute de novo before a commissioner other than the First Respondent.

3. There is no order as to costs.

D Whittington

Acting Judge of the Labour Court of South Africa

Appearances

For the Applicant: Thandi Moyo of Snyman Attorneys

Instructed:

For the Respondent:

[1] Act 66 of 1995, as amended.

[2] Sidumo and Another v Rustenburg Platinum Mines Ltd and Others (Sidumo) 2008 (2) SA 24 CC; [2007] ZACC 22 at para 108-109.

[3] Sidumo and Another v Rustenburg Platinum Mines Ltd and Others 2008 (2) SA 24 CC; [2007] ZACC 22 at para 110.

[4] (2014) 35 ILJ 943 (LAC).

[5]The Sidumo test.

[6] Gaga v Anglo Platinum Ltd & others (Gaga) (2012) 33 ILJ 329 (LAC); [2012] 3 BLLR 285 (LAC).

[7] Afrox Healthcare Ltd v Commission for Conciliation, Mediation & Arbitration & others (Afrox Healthcare) (2012) 33 ILJ 1381 (LAC); [2012] 7 BLLR 649 (LAC).

[8] Herholdt v Nedbank Ltd (2012) 23 ILJ 1789 (LAC); [2012] 9 BLLR 857 (LAC) at para 36.

[9] Herholdt supra at para 39.

[10] Supra at para 45.

[11] While this is apparent from the trilogy of judgments, it was expressly stated in National Union of Mineworkers & another v Samancor Ltd (Tubatse Ferrochrome) & others (2011) 32 ILJ 1618 (SCA); [2011] 11 BLLR 1041 (SCA) at para 5.

[12] (2008) 29 ILJ 964 (LAC); [2008]

[13] Motswenyane v Rockface Promotions [1997] 2 BLLR 217 CCMA at para 223.

[14] [2007] 12 BLLR 1097 (CC) at 1151.

[15] [1999] 11 BLLR 1117 (LAC); (1999) 20 ILJ 1701 (LAC).

[16] Armitage Shanks SA (Pty) Ltd v Mnisi (1995) 16 ILJ 61 (LAC); [1994] 8 BLLR 4 (LAC) and see the Code of Good Practice – Dismissal Schedule 8 to the Labour Relations Act.