Primeinvest 1069 t/a Foresters Arms v N.M and Others (C05/2023) [2024] ZALCCT 28 (12 July 2024)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE LABOUR COURT OF SOUTH AFRICA

(HELD AT CAPE TOWN)

Not reportable

Case No: C05/2023

In the matter between:

PRIMEINVEST 1069 T/A FORESTERS ARMS

Applicant

and

N[...] M[...]

First Respondent

CARLTON JOHNSON N.O.

Second Respondent

THE COMMISSION FOR CONCILIATION, MEDIATION

AND ARBITRATION

Third Respondent

Heard: 27 June 2024

Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email, publication on the Labour Court website and release to SAFLII. The date for handing down judgment is deemed to be 12 July 2024.

Summary: Review of a rescission ruling by the Commissioner. Ruling reviewed and set aside. Commissioner only dealt with why the employer failed to attend arbitration. Did not consider whether employer had a bona fide defence to the employee’s claim. This failure by the Commissioner to consider the merits of the employer’s case amounted to a reviewable irregularity.

JUDGMENT

ACKERMANN AJ

REASONS FOR ORDER

[1] This is an unopposed review application. I granted relief in terms of a draft order at the hearing of this application on 27 June 2024. My reasons follow.

[2] The order reviewed and set aside the decision of the second respondent (‘the Commissioner’) not to rescind (‘the rescission ruling’) the default judgment (‘the default award’) he had given in favour of the third respondent (‘the employee’), and substituted the decision by a finding that rescission should have been granted.

[3] The recission ruling was dated 24 November 2022 under case number WECT 16329-20. The default award in favour of the employee, was granted on 7 September 2022, in the absence of the employer. The Commissioner awarded 5 months’ remuneration for an unfair dismissal.

How the default award came about

[4] During November 2019, the employee’s poor work performance was addressed. It appeared that the employee was experiencing personal problems due to her son’s drug addiction.

[5] It is common cause that she was given two options, one of which was to take unpaid leave for two months, from 2 December 2019 to 2 February 2020, in order to address her unfortunate domestic situation, and she elected this option.

[6] It is the employer’s version that she did not return to work on 3 February 2020, or any time thereafter and was repeatedly called but did not answer her phone. When the employer finally got hold of her and asked her when she would be resuming her duties, the employee answered that she was on anti-depressants and said she could not return to work.

[7] The employee referred an unfair dismissal dispute to the CCMA on 21 October 2020, citing retrenchment as the reason for her dismissal.

[8] Because her referral was late, and the referral form was missing a page, the employee was instructed to re-refer the matter and to make application for condonation, which she did, but only in December 2021. Condonation was granted in August 2022 (the time effluxion between December 2021 and August 2022 is not explained, but nothing turns on this).

[9] On 4 August 2022, the employee set the matter down for con/arb, to be heard on 25 August 2022.

[10] However, on 17 August 2022 the employer informed the employee by email that the employer would like to reschedule the arbitration as the chef involved in the matter was on leave and could not testify. She would only be back mid-September 2022.

[11] The employer’s version is that it made more than 30 attempts by way of phone calls to the employee without being able to reach her.

[12] The employer did not attend the con/arb proceedings and relied on the email sent as a request for a postponement. The Commissioner accepted that this email was a request for a postponement but took issue with the non-attendance of the employer. I will say more about this in due course.

[13] As mentioned, arbitration proceeded in the absence of the employer and the Commissioner delivered a default award in favour of the employee on 9 September 2022, awarding the employee 5 months’ compensation on the basis that her dismissal was procedurally and substantively unfair.

[14] On 15 September 2022 the employer made an application for recission of the award. The reasons underpinning the recission application can be briefly summarised as follows:

14.1. The employer was not in wilful default, as it had requested a postponement by email;

14.2. Its main witness was not available to testify;

14.3. The employee had not been dismissed but had absconded; thus there was no dismissal and the CCMA lacked jurisdiction;

14.4. The employee had elected to take unpaid leave from December 2019 to February 2020 but never returned to her employment, and proof of this was attached to the rescission application;

14.5. The employee had applied for UIF benefits on 7 January 2020;

14.6. The employee had made numerous unsuccessful attempts to contact the employee, but when finally reached, the employee said she was unable to return to work.

[15] The rescission application was unopposed.

[16] On 24 November 2022, the Commissioner delivered his rescission ruling declining to rescind the default award.

[17] The rescission ruling was premised squarely and only on the failure of the employer to appear at arbitration. The Commissioner was of the view that the employer had elected not to attend the hearing in the absence of a postponement being granted and viewed this conduct as ‘reckless and negligent’. The Commissioner found that where no postponement had been granted, a party who fails to attend at arbitration proceedings does so at its own peril.

[18] Critically, the Commissioner did not deal at all with the merits of the rescission application.

Evaluation

[19] In Martin v Commission for Conciliation, Mediation & Arbitration & Others,[1] Van Niekerk J examined the principles relating to rescission. Referring with approval to the case of Northern Training Trust v Maake & others,[2] the Court noted that the enquiry rests on two legs.

[20] First, did the other party know of the arbitration proceedings?

[21] Second, if the party failed to attend, what were the reasons for this non-attendance?

[22] Such a party needs to prove that they were not in wilful default, and that they had reasonable prospects of success in the main dispute.[3] In considering the correct interpretation of section 144(a) of the LRA that gives Commissioners the power to rescind an award made erroneously in the absence of any party, Van Niekerk J referred to the LAC judgment of Shoprite Checkers (Pty) Ltd v CCMA & Others[4] that dealt with the Court’s discretionary powers and the weighing up of interests:

[23] The court concluded, quoting from the LAC’s judgment:

“ 'Furthermore, I am of the view that to interpret s 144 of the Act so as to include "good cause" as a ground for rescission id [sic] to give the Act an interpretation that is in line with the right provided for s 34 of the Constitution because, if s 144 is not interpreted in that way, a party who can show good cause for his default would be denied an opportunity to exercise his right provided for in s 34 of the Constitution despite the fact that he may not have been at fault for his default. That could be a grave injustice.'

[17] The Labour Appeal Court continued to consider the merits of the case, and upheld the appeal largely on account of the fact that the commissioner in that case had taken account only of one aspect of the applicable test, and had therefore failed to weigh together all the relevant factors in determining whether it was just and fair, and, therefore, whether good cause had been shown for the rescission of the arbitration award.”

[24] The Commissioner went no further than finding the applicant’s assumption of a postponement to be negligent. As counsel for the applicant pointed out in argument, the applicant was a lay person, and at the time had not yet retained the services of an attorney. The non-attendance could therefore not be described as wilful. I agree.

[25] One of the factors to be taken into account in determining whether there was good cause to rescind, and thus whether the decision of the Commissioner is reviewable on grounds of unreasonableness, is whether the defaulting party had reasonable prospects of success in its claim.[5] A Commissioner that fails to apply his or her mind to the applicant’s prospects of success in the main claim, fails to take into account relevant factors, and the rescission ruling is reviewable on the grounds of unreasonableness.[6]

[26] Counsel for the applicant referred me to the unreported judgment of Melomed Hospital Holdings (Pty) Ltd v Denosa obo Leonard Fourie and Others Case no C589/2020 (20 June 2023), where this Court, per Leslie AJ, held that the failure of a commissioner to assess or make any determination on the applicant’s prospects of success is a material misdirection. Good cause includes whether there is a bona fide defence to the claim.[7]

[27] In showing good cause the applicant does not have to prove its case on a balance of probabilities. All that is required is that the applicant show that it has a bona fide defence to the claim in the sense of setting out averments which if established at trial, would entitle it to succeed.[8]

[28] This has direct application in the present matter where the Commissioner simply focused on the reasons why the employer did not attend at arbitration. There is nothing in the rescission ruling that indicates or suggests that the Commissioner even considered prospects of success the employer may have had in the unfair dismissal dispute.

[29] This, despite having detailed documentation before him as part of the rescission application - documentation which should have been considered because it established a bona fide defence.

[30] The employer for example stated that there was no dismissal because the employee never returned from her medical leave and only approached the CCMA on 26 October 2020, despite a letter from her saying that she had elected to accept the offer of unpaid leave, and that she would return to work on 2 February 2020.

[31] This material served before the Commissioner. Also, part of the rescission application (contained in various addendums to the application) was a statement by the employer that the employee had confirmed telephonically that she would not be returning to work as she was depressed and on medication. This places in dispute the employee’s version that she reported for work on 2 February 2020.

[32] Further, the Commissioner did not consider the letter of the employee (also put up as part of the rescission application) saying she had elected the option given to her by her employer of taking unpaid leave, and would return to work on 2 February 2020.

[33] All of this establishes at least a bona fide defence, and there was a duty on the Commissioner to consider these facts. His failure to do so amounted to a reviewable irregularity.

[34] Based on the authorities and the facts set out above, the rescission ruling cannot stand.

[35] There is little point in referring the matter back to the CCMA for a ruling by another Commissioner. All of the relevant evidence is available to this Court, and substitution is in the circumstances an appropriate remedy:

Order:

1. The Second Respondent’s rescission ruling dated 24 November 2022 (“Ruling”) under the Third Respondent’s case reference number WECT 16329-20 is reviewed and set aside.

2. The Ruling is substituted with the following order:

“The arbitration award issued by the Second Respondent on 7 September 2022 under case number WECT 16329-20 is rescinded.”

3. The third respondent is directed to enrol the unfair dismissal dispute under case number WECT 16329-20 for arbitration.

4. No order as to costs.

Lourens Ackermann

Acting Judge of the Labour Court of South Africa

Appearances:

Applicant’s counsel: Adv U Mahilall Instructed by: Cluver Markotter Inc.

[1] (2008) 29 ILJ 2254 (LC)

[2] (2006) 27 ILJ 828 (LC)

[3] At para [12]

[4] (2007) 28 ILJ 2246 (LAC)

[5] Martin supra at para [25]

[6] Paras [27] and [28]

[7] Melomed Para [20]

[8] Para [26]