Oracle Corporation South Africa (Pty) Ltd v Malgas and Others (JR 1356/18) [2020] ZALCJHB 136 (17 August 2020)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not reportable

Case No: JR 1356/18

In the matter between:

ORACLE CORPORATION SOUTH AFRICA (PTY) LTD

Applicant

and

ABDUL-HAKIM MALAGAS

First Respondent

D.A PRETORIUS N.O

Second Respondent

COMMISSION FOR CONCILIATION, MEDIATION

AND ARBITRATION

Third Respondent

Enrolled: 12 May 2020 (Determined 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 10h00 on 17 August 2020

JUDGMENT

TLHOTLHALEMAJE, J

Introduction:

[1] In this opposed application, the applicant (Oracle Corporation South Africa (Pty) Ltd) seeks an order reviewing and setting aside the arbitration award dated 13 June 2018 issued by the second respondent (Commissioner), acting under the auspices of the third respondent (CCMA). In the award, the Commissioner had found that the failure by the applicant to pay commission to the first respondent, Mr Abdul-Hakim Malagas (Malagas) constituted an unfair labour practice. The applicant was ordered to pay to Malagas, an amount equal to R856 309.62 as compensation, together with interest thereon with effect from 1 October 2016.

[2] As a consequence of the current National State of Disaster, the parties had agreed that the matter be disposed of on the papers, and had further at the invitation of the Court, filed additional written submissions.

Background:

[3] The applicant is a wholly owned subsidiary of Oracle Corporation, a multinational computer technology and software corporation, which has its headquarters in California, USA. It specialises in providing computer hardware products and services, developing and marketing software technology, cloud engineered systems, and enterprise software products. The Corporation has subsidiaries in various parts of the globe.

[4] Relevant for the purposes of this dispute is one of the subsidiaries, Oracle Netherlands BV (‘Oracle Netherlands’). In 2013, Oracle Netherlands sold Oracle Human Capital Management (HCM) cloud services to another entity, Myriad International Holdings BV (Myriad). Myriad is a subsidiary of Naspers Netherlands BV, which is registered on the Netherlands Stock exchange, and is in turn, a subsidiary of the Naspers Group.

[5] The Naspers Group is a global internet and entertainment group, which has one of its other subsidiaries, Naspers Ltd, registered on the Johannesburg Stock Exchange. Naspers Ltd also has a number of subsidiaries, and through an entity known as MIH Holdings, is a shareholder of Multichoice Support Services (Pty) Ltd, a wholly owned South African company (Multichoice).

[6] Malagas has been in the employ of the applicant since November 2012 and occupies the position of Application Sales Representative, specialising in the sale of Human Capital Management Systems. In addition to his basic salary, Malagas was entitled to participate in a commission structure in accordance with an Individual Compensation Plan. It is common cause that Multichoice was one of the entities which fell within Malagas’ defined sales territory.

[7] Central to this dispute is what is referred to as ‘Teaming Agreement Guidelines’ contained in a Revenue Allocation Policy

which is applicable to the Oracle Corporation. In terms of these Guidelines, teaming agreements are applicable throughout the Corporation, in terms of which the splitting of compensation between sales teams for concluded international transactions are regulated, particularly in circumstances where significant sales resources from one organisation, are or were used to help another organisation within the Corporation to close a transaction.

The dispute:

[8] The dispute arises from the failure of the applicant and Oracle Netherlands to enter into a teaming agreement, following the conclusion of a deal between Oracle Netherlands and Myriad in respect of Multichoice on 30 August 2016 (The MultiChoice deal). Malagas contends that the conclusions of that deal was as a result of his efforts, and that Oracle Netherlands ought to have entered into a teaming agreement with the applicant in order to ensure that fair compensation was shared amongst the two teams.

[9] The applicant’s position however in regards to Malagas’ claim is that he played no role whatsoever in the transaction between Oracle Netherlands and Myriad in respect of the Multichoice deal. It further contends that it could not compel Oracle Netherlands to enter into a teaming agreement with it or Malagas, and had thus not committed any unfair labour practice.

[10] Aggrieved, Malagas had then lodged a grievance in October 2016. An independent chairperson recommended further investigations, which had concluded that Oracle Netherlands’ refusal to conclude a teaming agreement with Malagas was not unfair. Malagas then referred an unfair labour practice dispute to the CCMA in August 2017. Arbitration proceedings held in May 2018 led to the arbitration award which is the subject matter of these review proceedings. At those proceedings, the applicant led the evidence of Mr Balazs Torbagyi, whilst Malagas testified in his own case.

The applicant’s case:

[11] According to the applicant, during 2015, the Oracle Netherlands’ sales team began negotiations with Myriad in Netherlands on the next phase of the ‘2013 Deal’. These negotiations consisted of renewing the contract in respect of the cloud services already being supplied to Myriad, and extending the provision of the cloud services by adding additional employees onto the existing cloud platform.

[12] The negotiations envisaged the deployment of the cloud service system across 27 international jurisdictions including South Africa, and in particular, through Multichoice. Contractual terms were concluded in November 2015, resulting in the closing of the deal on 30 August 2016.

[13] Notwithstanding negotiations between Oracle Netherlands and Myriad on a Multichoice deal, during March 2015, the applicant’s team through Malagas was also involved in discussions with Multichoice about another project related to the cloud based fusion system. The applicant contends that this deal was initiated completely separate from the ‘Multichoice Deal’ which is the subject matter of the dispute. Malagas had started discussions with Multichoice about the cloud based fusion system and during September 2015 and had submitted proposal documents to Multichoice regarding that system, and followed up with several engagements with a view of sealing a deal.

[14] It is not in dispute that in the course of discussions with Multichoice, Malagas had in May 2016, issued an ‘Order Document’. In the same month, a Mr Bruinders of Multichoice, with whom Malagas had been liaising, had provided an update on the discussions and advised that Multichoice had all the information and support it required, and that internal discussions were to be held to determine the next step.

[15] Bruinders on 24 May 2016 then provided an update, and stated that one of the decisions taken by Multichoice was that since Naspers already had existing agreements with Oracle Group in place, they (Multichoice), would no longer continue with contractual discussions with the applicant as far as the fusion system was concerned. It was further advised that in line with Naspers Data Privacy Agreement, Multichoice would benefit from Oracle Priority Services already in place. In the same feedback, Bruinders thanked the applicant for its responses, quotes and related information.

[16] In the light of the above feedback, the applicant contends that it was unable to conclude the proposed Multichoice deal. Notwithstanding the feedback, Malagas and his team had approached Oracle Netherlands and requested that a teaming agreement be entered into. Despite Malagas’ request prior to the deal being closed and booking, Oracle Netherlands refused to enter into any such agreement. Subsequent attempts made by Malagas’ managers to persuade Oracle Netherlands to enter into a teaming agreement also proved to be unsuccessful.

[17] According to the applicant, Oracle Netherlands refused to enter into a teaming agreement since it held the view that neither Malagas nor any other person in the applicant’s team had provided any assistance in concluding the Multichoice 2016 Deal. In the end, Malagas was not paid any commission on the conclusion of the 2016 Deal. Equally so, the applicant did not receive any revenue recognition or income from that deal.

[18] Torbagyi confirmed that Malagas had sent him an email complaining about Oracle Netherlands having ‘stolen his deal’. The issue was then investigated and escalated to the EMEA management for a review. It was concluded that neither the applicant nor Malagas had played any crucial role in the conclusion of the Multichoice deal, and that a teaming agreement could not be concluded. This was further since Oracle Netherlands had an agreement with Naspers dating back to 2013, which involved 15 other countries and a number of other subsidiaries.

[19] Torbagyi further testified that although the applicant had made a sales effort with Multichoice, that effort was however not required to conclude the deal, in view of Naspers’ intention to roll out the product in question globally. The applicant could not provide substantial evidence that it had put the right effort into the sale, and that Oracle Netherlands had negotiated the deal without the applicant’s team.

[20] Torbagyi had conceded that Malagas had worked on the Multichoice deal for over 18 months, but had disputed that the mere submission of order documents was sufficient to seal the deal. Furthermore, the individuals that Malagas had liaised with at Multichoice in South Africa did not have the authority to conclude or sign any deal. He further conceded that the Oracle Netherlands’ team had agreed to meet with the South African team to discuss the teaming agreement, but that negotiations collapsed at a point when

the South African team requested 100% of the commission.

Malagas’ case:

[21] Malagas’ case in summary was that;

21.1 During 2015, and in his role as the applicant’s Applications Sales Representative, he had initiated, and was primarily responsible for a sales process of the Product to Multichoice. This had started with his submission of a proposal document to Multichoice on 10 September 2015 on the cloud based Fusion system, with the aim of encouraging Multichoice to switch from PeopleSoft Fusion system. A second revised proposal had followed in November 2015.

21.2 Having submitted two proposals to Multichoice, the applicant with a view to consummate the sale had continued interactions with Multichoice, culminating in the submission of an order document. In this regard, Malagas had prepared the Order document and forwarded it to Multichoice on 9 May 2016 in an attempt to secure and close the deal before 31 May 2016 and before the end of the fiscal year.

21.3 On 24 May 2016, he was advised of the fact that Multichoice sought to sign a global contract through Naspers BV in Netherlands due to a benefit in the pricing structure. MultiChoice had then procured the Product from Oracle Netherlands through Myriad on 30 August 2016. Malagas contended that he was unaware of these developments or discussions taking place between Myriad and Oracle Netherlands.

21.4 He together with the Senior Sales Manager, Pillay and the applicant’s Applications leader, Khumalo, sought to approach Oracle Netherlands to conclude a teaming agreement to get their share of the commission on the deal. Despite the request prior to the closure of the deal and booking, and the approval of such an agreement by representatives of the applicant, viz, Pillay, Khehar (Vice-president of the Eastern Europe and Africa division) and Khumalo, Oracle Netherlands refused to conclude the Agreement.

21.5 Such approval was further denied by a variety of senior individuals in Oracle Corporation, including the Senior Sales Director in Netherlands, the Vice-President for HCM in Western Europe, and the Senior Vice-President, Middle East and Africa. Malagas is of the view that the dispute ought to have been escalated to a Mr Alain Blanc, the Senior Vice President for Europe, Middle East and Africa, but that this was not done.

21.6 The basis of Malagas’ claim was that as part of the deal, a similar product was simultaneously also purchased to be utilised by Naspers Netherlands in the Netherlands, and that the same ordering document he had sent to Multichoice on 9 May 2016 was used when the deal was concluded, with the only difference being that the Netherlands team concluded a deal for 12000 employees, as opposed to 11000 employees which reflected on the order document he had submitted.

21.7 Malagas’ contention was that the commission due as calculated with reference to various multiplier figures, depending on whether a salesperson reached a particular target in accordance with his/her individual compensation plan. His individual compensation plan for 1 June 2016 to 31 May 2017 indicated a target of over R5m in HCM cloud sales. If he reached the target, which he had, his commission would be 12.86% and if he sold more, that would have increased to 25%. Further increases could be attained if he sold more than R6.3m, and that he had reached those targets.

21.8 Under cross-examination, Malagas had conceded that when the matter was brought to the attention of Blanc, the latter’s response was that it be resolved through the teaming agreement before he could deal with it.

21.9 He further conceded that he had no interaction whatsoever with Oracle Netherlands prior to 24 May 2016, and took no part in the signing and closing of the deal, which Oracle Netherlands had been working on for eight months. He further conceded that at no stage was his assistance sought by Oracle Netherlands post May 2016.

21.10 Malagas further conceded that his sales efforts were independent from those of Oracle Netherlands, and that he had no knowledge whether Bruinders or any other representative of Multichoice in South Africa were authorised to conclude the deal.

The Commissioner’s award:

[22] The issues for determination before the Commissioner were;

a) Whether Malagas played any role in closing the deal;

b) Whether the applicant may compel Oracle Netherlands to enter into a teaming agreement;

c) Should it be found that Malagas played a role in closing the deal, whether the applicant committed an unfair labour practice by failing to pay him commission for his role in closing the deal?

[23] The Commissioner found that an unfair labour practice was committed based on the following;

23.1 Malagas’ evidence was clear and consistent and thus probable. Torbagyi’s version on the other hand albeit also clear and consistent, was less probable in the light of several concessions he had made under cross-examination, including that;

23.1.1 It was possible to pay commission to Malagas even without a teaming agreement for a cloud deal;

23.1.2 Malagas and the applicant had indeed made a significant efforts in that deal;

23.1.3 The applicant could still claim commission after it was paid to Oracle Netherlands;

23.1.4 If there were legal problems, a clawback mechanism could be used to benefit from the deal; and that,

23.1.5 Despite the problems with parallel work, the Netherlands team had no contact with Multichoice as a customer.

23.2 It ought to be accepted that the Multichoice deal was never concluded. However, even if the Netherlands team worked on the deal, it should also be accepted that it was ‘more likely to be true’ that the foundation laid by Malagas’ work was significant in laying the basis for the Multichoice portion of the deal.

23.3 It could not be accepted that the applicant’s team’s efforts to pursue a local deal were counter-productive or that Malagas’ efforts only related to his own separate draft deal which Multichoice had abandoned on the basis that he was responsible for the sale of the Fusion product to Multichoice users, which formed a major part of the deal, and that it was more likely that a portion of the Netherlands’ deal applied to Multichoice, which was based on Malagas’ draft deal with Multichoice. In the end however, part of the Netherlands final deal was simply a ‘tweaked version’ of Malagas’ deal.

23.4 Since Malagas’ rationale for the quantification of his compensation claim was not placed in dispute, and further since it was not disputed that there was concurrent work by the Netherlands’ team over a long period on the renewal of the 2013 agreement, there should have been a split in the allocation of the commission. This meant that Malagas’ claim ought to be halved, and be payable together with interest.

23.5 In regards to the question whether the applicant could compel Oracle Netherlands to enter into a teaming agreement, the Commissioner held that despite such agreements being voluntary and could not be enforced by the CCMA, no point was served by having such agreements if they could be ignored by the Netherlands team.

23.6 The commission claimed by Malagas was therefore payable as it was a benefit within the meaning of section 186(2)(a) of the LRA, even if subject to the discretion of the employer. In this case however, the applicant did not exercise that discretion fairly.

23.7 As to whether there was an unfair labour practice in failing to pay Malagas the commission for his role in the deal, the Commissioner accepted that the applicant treated Malagas inconsistently when regard was had to equitable sharing arrangements that were made subsequent to other deals previously concluded, as was the case with the MTN deal.

The grounds of review:

[24] The applicant contends that the Commissioner’s award is reviewable on the grounds that she committed a gross irregularity by coming to a finding that was not supported by the evidence before her, and thus reached a conclusion that falls outside the bounds of reasonableness.

[25] It was further submitted that the Commissioner failed to apply her mind to the evidence; and/or misconstrued the evidence; committed an irregularity and/or committed misconduct and/or error of law, which caused her to misconceive the nature of the enquiry, resulting in a decision that a reasonable decision maker could not have reached.

The legal framework and evaluation:

[26] The question of whether Malagas was entitled to the commission ought to be determined within the context of the circumstances that entitled him to such a commission. To the extent that the issue before the Commissioner was whether an unfair labour practice was committed by the applicant within the meaning of section 186(2)(a) of the LRA, and once it is accepted that the commission in question amounted to a ‘benefit’ as contemplated by the unfair labour practice jurisdiction under the LRA, the question that arose is the source of that entitlement or benefit[1].

[27] An employee’s entitlement to a benefit for the purposes of an unfair labour practice dispute arise either from the employer’s

contractual obligations towards that employee, or from existing policies or practices, which are subject to the employer’s discretion. Accordingly, the onus is on that employee to show that he or she has a right or entitlement sourced in contract, statute, practice or policy to such benefit[2]. Furthermore, to the extent that any conditions may be attached to that entitlement as encapsulated in contract, practice or policy, it is for the employee to demonstrate that those conditions or terms were met.

[28] In this case, the source of Malagas’ entitlement to the commission is his contract of employment[3], which stipulated that he would be eligible to participate in any incentive scheme which Oracle may in its sole discretion, decide to operate related to his job. The contract also provides that Malagas would be eligible to participate in an Individual Compensation Plan set out in a separate document. What is relevant for the purposes of this case is the Individualised Compensation Plan effective from 1 June 2016, read together with the Revenue Allocation Policy and the Teaming Agreement Guidelines.

[29] The test on review is fairly settled flowing from Sidumo[4]. The enquiry is whether the decision reached by the commissioner is one that a reasonable decision-maker could not reach. As further

reiterated in Duncanmec (Pty) Ltd v Gaylard NO and Others,[5] the correct test is whether the award itself meets the requirement of reasonableness, and that an award would meet this requirement if there are reasons supporting it.

[30] To the extent that the applicant complains of several irregularities committed by the Commissioner, it was held in in Gold Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine[6]), that;

‘…an application for review sought on the grounds of misconduct, gross irregularity in the conduct of the arbitration proceedings, and/or excess of powers will not lead automatically to a setting aside of the award if any of the above grounds are found to be present. In other words, in a case such as the present, where a gross irregularity in the proceedings is alleged, the enquiry is not confined to whether the arbitrator misconceived the nature of the proceedings, but extends to whether the result was unreasonable, or put another way, whether the decision that the arbitrator arrived at is one that falls in a band of decisions to which a reasonable

decision-maker could come on the available material.’

And,

‘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?’

[31] In this case, it can be accepted that the applicant does not complain about the process followed by the Commissioner, nor did I understand its case to be that it was not afforded an opportunity to state its case. It can further be accepted that the Commissioner in the light of the pre-arbitration minutes properly identified the dispute she was required to arbitrate. The principal issue to be determined as captured by the Commissioner was whether the applicant had committed an unfair labour practice by failing to remunerate Malagas for his role in the deal concluded on 30 August 2016 between Oracle Netherlands BV and Myriad. The question however remains whether the Commissioner understood the nature of the dispute she was required to arbitrate, dealt with the substantial merits of that dispute, and arrived at a decision that another decision-maker could reasonably have arrived at based on the evidence that was placed before her.

[32] For the Commissioner to make a finding that the applicant committed an unfair labour practice, and given the nature of the deal that was concluded, it had to be found that any remuneration was due not only in terms of any role that Malagas may have played in the deal in question, but also in accordance the Revenue Allocation Policy read together with the Teaming Agreement Guidelines.

[33] In regards to whether Malagas played a role in the deal, the applicant takes issue with numerous finding made by the Commissioner, including that Malagas had laid a foundation for the Multichoice portion of the 2016 deal, and that it was the better pricing for the larger scale deal that led Multichoice to leave it to Naspers to conclude the deal with Oracle Netherlands. The applicant contends that that there was no evidence placed before the Commissioner for such a finding to be made. In this regard, it was submitted that for the Commissioner to come to such a conclusion, there must have been evidence placed before her demonstrating that as a result of Malagas’ efforts, Multichoice had influenced Myriad to enter into the 2016 deal, or that at the time, Myriad had not already decided to buy the HCM products for the South African region, as a result of its own negotiations with Oracle Netherlands.

[34] The evidence presented however according to the applicant was that Malagas did not contribute to the 2016 Deal; did not influence Myriad in any way regarding the closure of that deal; had no interactions with Myriad, and that the Oracle teams in both South Africa and Netherlands had no contact with each other prior to May 2016.

[35] The applicant had conceded that Malagas had started working on a deal with Multichoice in March 2015. Thereafter, he had held various formal and informal meetings with Bruinders of Multichoice about switching from Peoplesoft to Fusion systems. Subsequent thereto, proposals were sent to Bruinders, which were followed with demonstrations. The deal was worth an amount of €2.4m in benefits and revenue for Oracle Netherlands.

[36] It was submitted on behalf of Malagas that it was not correct that no evidence was placed before the Commissioner for her findings in that he was entitled to the commission on the Multichoice deal, having worked on it for 18 months since the beginning of 2015, and further since Multichoice was a major customer in his territory. It was further submitted that on 18 May 2016 and having received the final revised Order document, Multichoice had thanked him for the teams’ efforts in providing the necessary information, support and pricing discount that was required up until that date. Thus even if ultimately Multichoice chose to procure the product from or through Oracle Nederland as part of global contracting through the parent company (Naspers, in Netherlands), the deal was initiated when its details were shared by the applicant with Oracle Netherlands at the latter’s request. However, prior to then, Oracle Netherlands had no prior knowledge of the deal or its details, and before 25 May 2016 when the applicant was advised that the deal would be concluded via Oracle Netherlands, the latter had no contact with Multichoice. To this end, it was further submitted that other than the slight

increase in the quantity of users and an adjustment in pricing, the Orders were identical.

[37] In addressing the question whether Malagas had played a role in the deal for the purposes of an entitlement to the commission, the Commissioner took into account Torbagyi’s concessions that the applicant played a significant role in the deal, and concluded that it was more likely to be true that the foundation laid by Malagas’ work was significant in laying the basis for the Multichoice deal’. This conclusion however, flawed as it may be, ought not to have ended the debate at that point.

[38] It was common cause that Bruinders had advised the applicant on 18 May 2016 that Multichoice had all the information and support it required. On 24 May 2016 Bruinders thanked the applicant and Malagas for the team’s responses, quotes and related information. The issue as correctly pointed out on behalf of the applicant is whether those efforts, ultimately influenced the deal between Oracle Netherlands and Myriad. Any conclusion in this regard must take into account the common cause facts that Malagas had at no stage until May 2016, no interaction whatsoever with Oracle Netherlands about the Multichoice deal; that at no stage was his assistance sought by Oracle Netherlands; and that parallel discussions between Oracle Netherlands and Myriad had been ongoing over a period of eight months in pursuance of the global contract, which culminated in the Multichoice deal.

[39] In the absence of evidence indicating how Malagas’ efforts were utilised in closing the Multichoice deal between Oracle Netherlands

and Myriad, the conclusion by the Commissioner therefore that it was ‘more than likely to be true’ that Malagas had laid the foundation leading to the conclusion of the deal, is clearly not the applicable test when assessing such evidence in the face of disputed facts[7].

[40] The test or standard of proof remains that of a balance of probabilities, and the question that should be answered ultimately is whether the probabilities favoured a conclusion that Malagas played a role in the deal. This exercise is part of the functions of the Commissioner as confirmed in Edcon Ltd v Pillemer NO & others[8] which is to weigh all the relevant factors and circumstances of each case in order to come up with a reasonable decision.

[41] The mere fact that Malagas’ evidence was clear and consistent as found by the Commissioner did not necessarily make that evidence probable, nor did concessions made under cross-examination by Torbagyi necessarily imply that his testimony should be rejected as being less probable. The Commissioner’s conclusions were essentially based on inter alia, the Order document and the numbers therein in making a finding that Malagas had played a role in the deal. The significance placed by the Commissioner on the order document is however meaningless, in that a submission of an order document does not imply that a deal is sealed, nor does it imply that the order document had any bearing on the ultimate deal.

[42] The fact that the negotiations between Multichoice in South Africa and the applicant were abandoned due to considerations such as better pricing as stated by Bruinders in his email of 24 May 2016, or the fact that Naspers was pursuing a global contract is equally neither here nor there, as in the end, those negotiations, in the absence of any evidence to indicate what bearing they had, did not in themselves end up with a deal.

[43] Undue significance was also placed by the Commissioner on the concessions that Malagas had worked on the Multichoice deal over a protracted period. It might have been so, and it is not uncommon in the commercial world for significant efforts and resources to be put into negotiations in pursuance of a deal, which efforts ultimately come to nought. Thus, rewards cannot be due when those efforts produced no tangible results in the end.

[44] The Commissioner’s conclusions that the Multichoice deal was a ‘tweaked version’ of the applicant’s proposals are equally not supported by evidence , and Torbagyi’s concessions that the Multichoice portion of the deal attracted the greater commission due to the applicable multiplier, cannot in my view be a basis to conclude that compensation was due in the further absence of a teaming agreement.

[45] The fact that the negotiations between the South African team and Multichoice in South Africa collapsed when Naspers opted for a global contract with Myriad ought to have been the end of the matter, as Malagas’ efforts did not bear any fruit. Thus, in the absence of evidence to point to the influence of Malagas’ or the applicant’s efforts being utilised to seal the deal, which evidence was not placed before the Commissioner, it follows that her conclusions that Malagas played a role in the deal are indeed not supported by any evidence, and are at best speculative. Thus, reliance by the Commissioner on unsupported evidence, speculation, and/or evidence insufficiently reasonable to justify a conclusion rendered her award reviewable[9].

[46] Once it was concluded that Malagas played no role in the ultimate deal, that ought to have been the end of the matter. The Commissioner nonetheless proceeded to find that commission was payable albeit subject to the discretion of the applicant, and that the applicant did not exercise its discretion fairly. This finding is equally

without a basis in the absence of conclusions that Malagas played a role or the in the absence of the teaming agreement. The applicant

cannot be accused of having applied its discretion unfairly, or acted arbitrarily, capriciously or inconsistently in not paying commission, in circumstances where the basis for such payment was not demonstrated. The concessions by Torbagyi that a post-booking teaming agreement could be reached or that there were claw-back arrangements are issues relevant only in circumstances where such an agreement was entered into, and where it could be demonstrated that the applicant benefitted from the deal. It is common cause that the applicant like Malagas derived no benefit from the Multichoice deal.

[47] Even if for some reason the commission was due, the issue remains what it was that was expected of the applicant to do, in circumstances where Oracle Netherlands refused to enter into a teaming agreement. The conclusions of the Commissioner in regards to whether the applicant could compel Oracle Netherlands to enter into a teaming agreement are equally not sustainable, and as correctly pointed out on its behalf, the Commissioner exceeded her powers in this regard.

[48] It is common cause that those agreement are entered into on a voluntary basis between different teams under the Oracle Group. The principles underlying these agreements as captured in the Guidelines, which also provide a dispute resolution of some sort where an agreement cannot be entered into. That process took its course and it was found that an agreement under the circumstances was not warranted. The applicant through its representatives as conceded, made all attempts to secure such an agreement to no avail, and as Malagas had conceded, the matter was referred to Blanc, who for reasons that are not clear reverted the matter back to negotiations over the teaming agreement.

[49] It was submitted on behalf of Malagas that; ‘This was a classic example of the big guys choosing to abandon the little guy in the interest of self-preservation and in circumstances where they will not be financially compensated, rather than the fallout of taking on the internal politics of a multinational company’. These emotive retorts however lose sight of the basic legal premise that an unfair labour practice can only take place in the context of employer/employee relationship.

[50] If Oracle Netherlands had for unfair reasons refused to enter into an agreement, and ignored the teaming agreement guidelines, there was a further stumbling block, which is that even though the applicant and Oracle Netherlands fall under the Oracle Corporation, they are in their own right, separate juristic entities. The dispute over teaming agreements is a matter between Malagas and Oracle Netherlands, and unless there was a legal basis demonstrated upon which the applicant was compelled to enforce the teaming agreement, I fail to appreciate what it was that it was expected to do under the circumstances.

[51] If the ‘little guy’ referred to on behalf of Malagas continued to be aggrieved as a result of not getting a share of the Multichoice deal, nothing prevented him from taking on the other ‘big guys’, which is both Oracle Netherlands or the Oracle Group. An unfair labour practice claim however against the applicant was bound to be unsustainable in that to hold it liable for the actions or inactions of its sister company, which is a separate juristic entity, and without a joinder, would not

make any legal sense. This is even moreso in circumstances where it is common cause that the applicant had supported and approved the teaming agreement. The Commissioner’s conclusions therefore that the CCMA could enforce such agreements on the basis that Oracle Netherlands could not simply ignore them, are unsustainable, as the CCMA had no powers to enforce such agreements.

[52] I therefore agree with the submissions made on behalf of the applicant that a finding of unfair labour practice on the part of the applicant cannot be one that a reasonable commissioner could have come to in the light of the material that was served before her. In the absence of evidence to demonstrate what value his contributions had added to the Multichoice deal, or further in the absence of teaming agreement, Malagas failed to discharge the onus placed on him to demonstrate that the applicant had committed an unfair labour practice by not paying him commission. Clearly the Commissioner exceeded her powers, committed material errors of law, and gross irregularities, necessitating that her award be set aside. On the whole, the award and the conclusions reached therein falls

outside the bounds of reasonableness.

[53] Further in the light of the conclusions reached, and also taking into account the extensive material placed before the Court, the written submissions, and the fact that this matter has been ongoing for four years, no purpose would be served by reverting it back to the CCMA to be determined de novo. Accordingly, the Court is in a position to substitute the award of the Commissioner.

[54] I have further taken into account the requirements of law and fairness in regards to an order of costs. There is an ongoing relationship between the parties, albeit strained by this dispute and costs associated with it. Be that as it may, I am of the view that the facts of this case do not warrant an award of costs.

[55] Accordingly, the following order is made;

Order:

1. The arbitration award issued by the Second Respondent under case number GAJB18716-17 dated 13 June 2018 is reviewed, set aside and substituted with an order that;

‘The failure by Oracle Corporation South Africa (Pty) Ltd to pay commission to Mr Hakim Malagas did not constitute an unfair labour

practice.’

2. There is no order as to costs.

___________________

Edwin Tlhotlhalemaje

Judge of the Labour Court of South Africa

REPRESENTATION:

For the Applicant: Written heads of argument prepared by Mr. P Rogers with Mr. D Jenkins, instructed by Edward Nathan Sonnenberg Incorporated

Supplementary written submissions prepared by Mr. Fritz Malan of Edward Nathan Sonnenberg Incorporated

For the First Respondent: Solomon Holmes Attorneys

[1] See Apollo Tyres SA (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others [2013] 5 BLLR 434 (LAC); (2013) 34 ILJ 1120 (LAC) at para 50, where it was held; ‘…In my view, the better approach would be to interpret the term “benefit” to include a right or entitlement to which the employee is entitled (ex contractu or ex lege including rights judicially created) as well as an advantage or privilege which has been offered or granted to an employee in terms of a policy or practice subject to the employer’s discretion. In my judgment “benefit” in s 186(2)(a) of the Act means existing advantages or privileges to which an employee is entitled as a right or granted in terms of a policy or practice subject to the employer’s discretion…’

[1] See Apollo Tyres SA (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others [2013] 5 BLLR 434 (LAC); (2013) 34 ILJ 1120 (LAC) at para 50, where it was held;

‘…In my view, the better approach would be to interpret the term “benefit” to include a right or entitlement to which the employee is entitled (ex contractu or ex lege including rights judicially created) as well as an advantage or privilege which has been offered or granted to an employee in terms of a policy or practice subject to the employer’s discretion. In my judgment “benefit” in s 186(2)(a) of the Act means existing advantages or privileges to which an employee is entitled as a right or granted in terms of a policy or practice subject to the employer’s discretion…’

[2] Ibid at para 51

[3] Pages 125 – 130 of Amended Record Bundle

[4] Sidumo and Another v Rustenburg Platinum Mines Ltd and Others 2007) 28 ILJ 2405 (CC) at para 110

[5] (2018) 39 ILJ 2633 (CC) at para 43. See also Herholdt v Nedbank Ltd and Another (2013) 34 ILJ 2795 (SCA) at para 25

[6] (JA 2/2012) [2013] ZALAC 28; [2014] 1 BLLR 20 (LAC); (2014) 35 ILJ 943 (LAC) at paras 14 and 20

[7] Stellenbosch Farmers’ Winery Group Ltd and Another v Martell & Kie SA and Others 2003 (1) SA 11 (SCA) at para 14I–15E, where it was held that; 'To come to a conclusion on the disputed issues a court makes findings on (a) the credibility of the various factual witnesses; (b) their reliability; and (c) the probabilities. As to (a), the court's finding on the credibility of a particular witness will depend on its impression about the veracity of the witness. That in turn will depend on a variety of subsidiary factors, not necessarily in order of importance, such as (i) the witness' candour and demeanour in the witness-box, (ii) his bias, latent and blatant, (iii) internal contradictions in his evidence, (iv) external contradictions with what was pleaded or put on his behalf, or with established fact or with his own extracurial statements or actions, (v) the probability or improbability of particular aspects of his version, (vi) the calibre and cogency of his performance compared to that of other witnesses testifying about

the same incident or events. As to (b), a witness' reliability will depend, apart from the factors mentioned under (a) (ii), (iv) and (v) above, on (i) the opportunities he had to experience or observe the event in question and (ii) the quality, integrity and independence of his recall thereof. As to (c), this necessitates an analysis and evaluation of the probabilities and improbabilities of each party's version on each of the disputed issues. In the light of its assessment of (a), (b) and (c) the court will then, as a final step, determine whether the party burdened with the onus of proof has succeeded in discharging it. The hard case, which will doubtless be the rare one, occurs when the court's credibility findings compel it in one direction and evaluation of the general probabilities in another. The more convincing the former, the less convincing will be latter. But when all factors are equipoised probabilities prevail.’

[7] Stellenbosch Farmers’ Winery Group Ltd and Another v Martell & Kie SA and Others 2003 (1) SA 11 (SCA) at para 14I–15E, where it was held that;

'To come to a conclusion on the disputed issues a court makes findings on (a) the credibility of the various factual witnesses; (b) their reliability; and (c) the probabilities. As to (a), the court's finding on the credibility of a particular witness will depend on its impression about the veracity of the witness. That in turn will depend on a variety of subsidiary factors, not necessarily in order of importance, such as (i) the witness' candour and demeanour in the witness-box, (ii) his bias, latent and blatant, (iii) internal contradictions in his evidence, (iv) external contradictions with what was pleaded or put on his behalf, or with established fact or with his own extracurial statements or actions, (v) the probability or improbability of particular aspects of his version, (vi) the calibre and cogency of his performance compared to that of other witnesses testifying about

the same incident or events. As to (b), a witness' reliability will depend, apart from the factors mentioned under (a) (ii), (iv) and (v) above, on (i) the opportunities he had to experience or observe the event in question and (ii) the quality, integrity and independence of his recall thereof. As to (c), this necessitates an analysis and evaluation of the probabilities and improbabilities of each party's version on each of the disputed issues. In the light of its assessment of (a), (b) and (c) the court will then, as a final step, determine whether the party burdened with the onus of proof has succeeded in discharging it. The hard case, which will doubtless be the rare one, occurs when the court's credibility findings compel it in one direction and evaluation of the general probabilities in another. The more convincing the former, the less convincing will be latter. But when all factors are equipoised probabilities prevail.’

[8] (2008) 29 ILJ 614 (LAC) para 21.

[9] See Bestel v Astral Operations Ltd and Others [2011] 2 BLLR 129 (LAC) at paras 13 - 15