Razzmatazz Trading & Investments 19 (Pty) Ltd v Kruger and Others (JR1149/16) [2023] ZALCJHB 198 (26 June 2023)

IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not reportable

Case No: JR 1149/16

In the matter between:

RAZZMATAZZ TRADING & INVESTMENTS 19 (PTY) LTD Applicant and GEORGE FREDERICK KRUGER First Respondent RAZZMATAZZ CIVILS (PTY) LTD Second Respondent SEFAKO MAFOYANE N.O. Third Respondent COMMISSION FOR CONCILIATION MEDIATION AND ARBITRATION Fourth Respondent

Considered 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 on 26 June 2023

JUDGMENT

TLHOTLHALEMAJE, J

Introduction and background:

[1] The applicant seeks an order reviewing and setting aside the rescission ruling dated 13 April 2015 issued by the third respondent (Commissioner) acting under the auspices of the fourth respondent, the Commission for Conciliation Mediation and Arbitration (CCMA). The application is opposed by the first respondent, Mr George Kruger (Kruger).

[2] This application is before the Court having commenced with a referral of an alleged unfair dismissal dispute by Kruger to the CCMA. Kruger had alleged that he was dismissed for alleged insolence and insubordination. On 13 February 2015, the dispute was declared as unresolved and was set down for arbitration on 13 February 2015. The applicant did not make an appearance at the scheduled time of 12h00. Kruger obtained a default award on 22 February 2015, in which the Commissioner found that his dismissal by the applicant was procedurally and substantively unfair. The applicant was further ordered to pay Kruger compensation in the amount of R242 000.00.

The rescission application before the Commissioner and his findings:

[3] The applicant on 18 March 2015 instituted a rescission application before the CCMA. The Commissioner had initially pointed out to the applicant that its application was filed outside of the prescribed time periods and had granted it an opportunity to seek condonation which the Commissioner granted in a ruling issued on 13 April 2016. In the same ruling the Commissioner however dismissed the rescission application.

[4] The application for rescission was supported by a founding affidavit deposed to by the applicant’s HR Manager, Ms Jacolien Parker in which she averred the following;

4.1 The applicant did not receive the notice of set down because the CCMA faxed to a faulty fax number, or which did not exist;

4.2 She had called the CCMA on or about 13 February 2015 to establish whether the applicant had any matters scheduled to be attended to, and was informed of the set-down of the present matter.

4.3 She had attended at the CCMA on the set-down date at 11:00 and as at 13:30 the matter had not been called. Having made enquiries with an official of the CCMA and despite being assured that enquiries would be made about where the matter was to be heard, the official she spoke to however failed to come back to her . Having waited until 13h30, and when the matter was still not called and further since she had also not seen Kruger, she decided to leave the CCMA’s premises, and went back to the applicant’s premises to attend to the payment of salaries of other employees.

4.4 She averred that the applicant was not in wilful default as she had attended the proceedings as scheduled, and that the matter was nonetheless not called, until she decided to leave the CCMA’s premises at 13h30.

4.5 Regarding prospects of success, she averred that Kruger was never dismissed as he was a sub-contractor with no contract of employment.

[5] Kruger filed his answering affidavit disputing Ms Parker’s contentions in the founding affidavit. He averred that he and his legal representative (who filed a confirmatory affidavit) duly attended the proceedings and he did not see Ms Parker as at 12h00. When the Commissioner ultimately called the matter at 12h30, there was still no appearance on behalf of the applicant, and the matter proceeded in its absence. Kruger repeated his assertions that he was indeed employed by the applicant, and that he was dismissed for alleged insolence and insubordination on 14 November 2014.

[6] The applicant’s replying affidavit was filed and deposed to by the Director of the applicant, Mr Richard Parker, in which he inter alia averred that;

6.1 A disciplinary enquiry took place on 7 November 2014 but that a decision was not taken to dismiss Kruger. In the same context, and despite denying that Kruger was dismissed, he further averred that Kruger was indeed an employee of the applicant, and that a termination did indeed take place on 14 November 2014. He however denied that a hearing was never held and contended that the dismissal of Kruger was procedurally fair and for a fair reason.

[7] At the hearing of the rescission application, the applicant raised an issue of non-joinder of the second respondent. This resulted in the latter being joined. In his detailed ruling, the Commissioner reiterated that the issues before him related to the condonation for the late filing of the rescission, the rescission itself and the question as to who the real employer was, which necessitated the piercing of the corporate veil in the light of the latter dispute. The last issue was necessitated by the filing of a second affidavit filed on behalf of the applicant by Mr Richard Parker, in respect of the rescission application, which the Commissioner had allowed into evidence. In his affidavit, Mr Parker had averred that Kruger was in fact employed by the second respondent and was dismissed for misconduct by the applicant.

[8] Having identified these issues, the Commissioner concluded that;

8.1 In the light of the contradictions between the averments of Mr and Ms Parker, the corporate veil ought to be lifted. In addition, based on other considerations related to his employment, and the evidence before him, Kruger was indeed employed by the applicant.

8.2 The applicant’s prospects of success were poor in the light of Kruger having been dismissed without any proper hearing and for unfair reasons.

8.3 In regards to the non-attendance of the arbitration proceedings leading to the default award, the Commissioner having had regard to the relevant authorities, and to the extent that the applicant had relied on the provisions of section 144(a) of the LRA, concluded that since Ms Parker had alleged that she had attended the hearing and left when the matter was not called, she was wilfully in default as there was no evidence that she took any reasonable steps to make the CCMA or case management officers of her presence and the failure to have her matter called. In effect, by leaving in circumstances that she did, the applicant waived its right to defend against the matter.

The grounds of review:

[9] The applicant’s main grounds in seeking a review are that the Commissioner’s ruling was grossly irregular, materially flawed, and unreasonable. This was so on the basis that the Commissioner allegedly misunderstood his functions, ought not have determined both the rescission and the condonation before him, and that he instead adopted an irregular approach in dismissing the rescission application. It was alleged that since only the aspects of the condonation application were to be determined at the time before the Commissioner, those that related to rescission were to be canvassed once condonation was granted. I will elaborate

more on these grounds during this judgment.

[10] It is common cause that the review application at some point was deemed withdrawn by virtue of the provisions of paragraph 11.2.3 of the Practice Manual. On 17 April 2019, this Court (per Mahosi J) issued an order reinstating the review application and further dismissing a separate application by Kruger to have the review application dismissed in terms of Rule 11 of the Rules of this Court.

The legal framework:

[11] The principal enquiry in such reviews is whether the decision arrived at by the commissioner falls within the bands of reasonableness.[1] In Herholdt v Nedbank Ltd and Another[2] it was held that for a defect to constitute a gross irregularity as contemplated in section 145(2)(a)(ii) of the LRA, the commissioner must have misconceived the nature of the inquiry or arrived at an unreasonable outcome. It was further held that material errors of facts and their weight and relevance, are not and in themselves sufficient for an award to be set aside, but are only of consequence if their effect culminated in the misconception of the inquiry or in an unreasonable outcome.

[12] The rescission application before the CCMA was brought in terms of section 144 of the LRA. These provisions under subsections (a) – (d) provides that a commissioner may on good cause shown, rescind an arbitration award or ruling erroneously sought or erroneously made in the absence of any party affected by the award; or in which there is an ambiguity; or where the ruling or award is granted as a result of a mistake common to the parties; or where the award or ruling is made in the absence of any party.

[13] As to what constitutes good cause is not specifically defined in the Act. It is however accepted that good cause ordinarily entails that the applicant in a rescission application must at least demonstrate; (i) an absence of wilfulness; (ii) that it has a reasonable explanation for the default; (iii) that the application for rescission is bona fide and not made with the intention to delay the ultimate outcome of the matter serving before the Court; and that (iv) it has a bona fide claim against the respondent party[3].

[14] In MM Steel Construction CC v Steel Engineering & Allied Workers Union of SA and Others[4], it was held that while the absence of one of the two essential elements would usually be fatal, they are not to be considered

mechanically and in isolation but are to be weighed together with other relevant factors in determining whether it should be fair and just to grant rescission.

[15] In Shoprite Checkers (Pty) Ltd,[5] it was held that commissioners retain the discretion, on good cause demonstrated, whether to grant the rescission of an award. It has since been held that a court is not entitled to interfere with the discretion of a commissioner merely on the basis that it disagrees with the conclusions reached unless it is evident that such a discretion was not exercised judicially, or that it was premised on the incorrect principles, or a misdirection on the facts, or that the conclusions reached could not reasonably have been made by a commissioner properly directing herself to all the relevant facts and principles[6].

Evaluation:

[16] The applicant contended that the Commissioner committed a gross irregularity in disposing the rescission application without oral argument and without providing the parties with proper notice to that effect. The provisions of Rule 31 of the Rules of the CCMA govern the procedures in relation to inter alia the applications for rescission. Rule 31(9)(a) – (c) provides that a commissioner must allocate a date of a hearing of the application once a replying affidavit has been filed or ought to have been filed; notify the parties of the enrolment date, time, and place; and the application must be heard on the motion roll.

[17] Under Rule 31(10) however, a commissioner may dispose of an application in any other manner that she/he deems appropriate, with the proviso being that the parties are notified of the approach to be adopted and further that the parties are provided with an opportunity to be heard. In Kungwini Residential Estate & Adventure Sport Centre Ltd v Mhlongo NO & Others[7] it was held that the provisions of rule 31(10) of the Rules of the CCMA do not dispense with the requirement to provide the parties with a notice for the hearing of the matter; and to interpret the rule in that manner would result in the infringement of the audi alteram partem rule.

[18] As I understood the applicant’s case, it contended that the Commissioner ought to have warned the parties that he intended determine the rescission application without the hearing of oral argument, in order not to infringe on its right to a fair trial. It was contended that this irregularity had resulted in the Commissioner misconstruing certain facts, including those in respect of the issue of the piercing of the corporate veil, leading to an irrational conclusion. Furthermore, it was contended that the

Commissioner completely misconstrued the nature of the relationship between the applicant and the second respondent and moreover, in respect of date and attendance on behalf of the applicant during the default arbitration hearing.

[19] In addressing these grounds of the review, it needs to be pointed out that at the commencement of the proceedings, the Commissioner had informed the parties that he intended to deal with the condonation application and where granted, to thereafter determine the rescission application[8]. A perusal of the transcribed record further belies the applicant’s contention that it was not provided with a hearing in respect of the rescission application. This is so since the Commissioner was at pains to explain to the parties that he intended on disposing of the condonation application first, which would in turn had provided him with the necessary jurisdiction in respect of the rescission application. Furthermore, the Commissioner had during the hearing invited the parties to make submissions in respect of any matter which included the rescission. It is further apparent that indeed the parties canvassed the facts which were relevant to the rescission application at length, in particular the issue of Kruger’s true employer. This in my view was pertinent for the purposes of establishing whether the applicant had a prima facie defence for the main claim. It is therefore without doubt that the Commissioner had the benefit of the evidence on all the documents

before him which included the parties’ pleadings, and had as already stated, considered all the parties’ submissions before him in respect of the rescission application. There would therefore have been no reason for the Commissioner to simply hear the application for condonation, adjourn the matter further and thereafter where condonation was granted, to then re-schedule the

matter for a determination of the rescission application. All the necessary pleadings were before him.

[20] Clearly the Commissioner’s approach that he could dispose of the application for rescission on the papers cannot be faulted because Rule 31(10) permitted him to do so. Having granted the applicant an opportunity to file an application for condonation, other than disposing of it in its favour, the purpose was to equally assist him in considering the main application, viz. the rescission application. Equally unassailable was the Commissioner’s approach in consideration of the provisions of section 138(1) of the LRA, the fact that the matter before him had been prolonged for a period of a year due to no fault on the part of Kruger, and the prejudice to him because of a piecemeal approach as contended for by the applicant.

Did the applicant demonstrate good cause?

(i) The default and explanation

[21] As I understood the applicant’s case before the Commissioner, the rescission was sought in reliance on the provisions of section 144(a) of the LRA. It is trite that a judgment is erroneously granted if there was an irregularity in the proceedings[9], or there existed at the time of its issue, a fact of which the Court was unaware, which would have precluded the granting of the judgment, and which would have induced the Court, if aware of it, not to grant the judgment[10]. Thus, once a court or a commissioner for that matter finds that an order or judgment was erroneously sought or granted, rescission ought ordinarily be granted without any further enquiry[11].

[22] There can be no doubt in this case that the applicant was fully aware of the set-down, as evident from Ms Parker’s contentions that she had attended at the premises of the CCMA prior to the scheduled time of the hearing. Her version of events was that having attended at the CCMA and making enquiries about where the matter was held, she had left at about 13h30 because none of the CCMA officials came back to her. Other than leaving for that reason, she further contended that she had to go back to the applicant’s premises to facilitate the payment of employees’ salaries. She had contended that the applicant was therefore not in wilful default since she was present but was however not called into the hearing.

[23] As already indicated elsewhere in the judgment, the Commissioner had concluded that the applicant was in wilful default considering the conduct of Ms Parker. The extent that reliance was placed on the provisions of section 144(a) of the LRA, I fail to appreciate the basis upon which it can be said that the default award was erroneously granted because there was an irregularity in the proceedings, or there existed at the time of its issue, a fact of which the Commissioner was unaware of, which would have precluded the granting of the award, and which would have induced the Commissioner, if aware of it, not to grant the award. This is so in that having allegedly attended the hearing, the Commissioner was correct in his conclusions that it was not sufficient for Ms Parker to simply leave because the matter had not been called as she alleged. The Commissioner was within his rights to proceed with the hearing upon having satisfied himself that there was no appearance by the applicant. There is no evidence supporting Ms Parker’s contentions that she made attempts to establish from an unnamed CCMA official, at which venue the matter was heard. Even if Ms Parker had attended, and to the extent that there was no discernible evidence that she was not familiar with the workings of the CCMA, at the very least, she ought to have done more than just simply leaving the CCMA premises. Equally preposterous was any suggestion that Kruger was equally not present at the arbitration proceedings, which in my view cynically suggests that the Commissioner’s conduct in issuing the default award was untoward as Kruger was not before him.

[24] Clearly Ms Parker’s conduct of leaving the CCMA’s premises simply to attend to her daily duties evinced wilfulness. Even if there was any merit in her version, at the very least, one would have expected the applicant to immediately on the same date, have sent correspondence to the CCMA to advise it of her version of events, and to place it on record that she had indeed attended to the matter. On the opposite side, it took the applicant more than 14 days after the default award was issued, to file a rescission wherein all the allegations of the applicant’s attendance at the hearing surfaced. This is not the conduct of a party that showed any seriousness in defending the claim against it. The Commissioner’s findings that the applicant was in wilful default was therefore reasonable under the circumstances, and the applicant’s averments regarding its prospects of success (bona fide defence) on the merits demonstrates its lack of bona fides regarding the explanation proffered by Ms Parker.

Bona fide defence to Kruger’s claim:

[25] The applicant further attacked the Commissioner’s findings on the basis that he merely disposed of the rescission based on the first leg of the enquiry without more. In the heads of argument, it was repeated that the Commissioner ignored the applicant’s prospects of success in defending against Kruger’s claim. This contention lacks merit for the following reasons;

25.1 In the arbitration award, the Commissioner observed that there were two affidavits filed in support of the rescission application. The averments made by Ms Parker and Mr Parker in these affidavits were contradictory in respect of the status of Kruger. It was averred on behalf of Kruger that even the allegation that he was an employee of the second respondent, was only raised in the affidavit in support of the condonation application. Ms Parker had averred that Kruger was in fact an independent contractor and not an employee, whilst Mr Parker had averred that Kruger was in an employee of the second respondent.

25.2 It was on the basis of Mr Parker’s affidavit that the applicant had contended before the Commissioner that the default award was erroneously granted against the incorrect employer. This had compelled to undertake a meaningless and unnecessary exercise in having to pierce the corporate veil in establishing who the correct employer was.

25.3 In that regard, the Commissioner had accepted the contention on behalf of Kruger that the applicant’s contentions were merely an attempt to avoid liability flowing from the default award. The Commissioner further drew a negative inference in the light of the different versions proffered regarding the employment status of Kruger, further concluding that these contradictions evinced a fabrication intended to avoid liability. This was more so since Ms Parker averred that she was employed by both the applicant and second respondent as a Human Resources Manager and thus should have been in a better position to attest to the employment status of Kruger. The Commissioner concluded that it had not been shown that the award was erroneously granted since the applicant’s version on the employment status of Kruger was highly suspicious and palpably false.

25.4 Clearly in the light of the glaring contradictions in the applicant’s version as to the employment status of Kruger, and whether a dismissal took place or not, the Commissioner could not ignore them in the ultimate determination of whether the applicant had a bona fide defence to Kruger’s claim. It will be recalled that there were three versions as to the employment status of Kruger. The first as per Ms Parker’s founding affidavit was that Kruger was a sub-contractor. The second version in the replying affidavit was that indeed Kruger was employed by the applicant but that his dismissal was fair. The third version, aligned to the first, was that Kruger was employed by the second respondent. These vacillations took place in circumstances where the documentary evidence presented by Kruger demonstrated that a letter of confirmation of his appointment, the charge sheet, a notice of dismissal, and copies of his payslips, all emanated from the applicant.

25.5 Against the above contradictions, vacillations, and clear attempts by the applicant to adapt and change its case as the matter progressed in the face of documentary evidence, the Commissioner was correct in raising doubts as to the applicant’s bona fides. Clearly there could not have been a basis for a finding that the applicant enjoyed any prospects of success in the light of its

disingenuous approach to this matter.

[26] In the light of the above conclusions, it follows that there is no basis upon which it can be found that the Commissioner’s ruling did not meet the threshold of reasonableness, and there is no cause for this Court to interfere with the Commissioner’s findings. This is so in that in line with the approach in Goldfields[12], the Commissioner as required of him to deal with the applications before him with the minimum of legal formalities, employed a process that gave the parties a full opportunity to have their say in respect of the issues before him. The Commissioner further properly identified what he was required to determine, understood the nature of the issues he was required to determine, dealt with the substantial merits of those issues; and arrived at a decision that another decision-maker could reasonably have arrived at based on the material served before him.

[27] I have further had regard to the requirements of law and fairness insofar as Kruger had sought a costs order. Even though it has been concluded that the applicant lacked bona fides in persisting with the rescission application let alone this review, I am of the view that each party must be burdened with its own costs.

[28] In the premises, the following order is made:

Order:

1. The application to review and set aside the rescission ruling dated 13 April 2015 under case number FSBF 5345/14 issued by the third respondent is dismissed

2. Each party is to pay its own costs in respect of this application.

Edwin Tlhotlhalemaje

Judge of the Labour Court of South Africa

REPRESENTATION:

For the Applicant: Kramer Weihmann & Joubert Attorneys, Heads of argument prepared by Adv. I. Olivier. For the First Respondent: Snyman Attorneys, Heads of argument prepared by Adv. J.P. Breytenbach.

[1] See Sidumo and Another v Rustenburg Platinum Mines Ltd and Others [2007] ZACC 22; 2008 (2) BCLR 158 (CC) at para 110.

[2] 2013 (6) SA 224 (SCA) at para 25.

[3] See Shoprite Checkers (Pty) Ltd v CCMA and Others [2007] 10 BLLR 917 (LAC) paras 28 – 36, where it was held; ‘The test for good cause in an application for rescission normally involves the consideration of at least two factors. Firstly, the explanation for the default and secondly whether the applicant has a prima facie defence. In Northern Province Local Government Association v CCMA and Others [2001] 5 BLLR 539 (LC) at 545, paragraph [16], it was stated: “An applicant for the rescission of a default judgment must show good cause and prove that he at no time denounced his defence, and that he has a serious intention of proceeding with the case. In order to show good cause an applicant must give a reasonable explanation for his default, his explanation must be made bona fide and he must show that he has a bona fide defence to the plaintiff’s claims.”’

[3] See Shoprite Checkers (Pty) Ltd v CCMA and Others [2007] 10 BLLR 917 (LAC) paras 28 – 36, where it was held;

‘The test for good cause in an application for rescission normally involves the consideration of at least two factors. Firstly, the explanation for the default and secondly whether the applicant has a prima facie defence. In Northern Province Local Government Association v CCMA and Others [2001] 5 BLLR 539 (LC) at 545, paragraph [16], it was stated:

“An applicant for the rescission of a default judgment must show good cause and prove that he at no time denounced his defence, and that he has a serious intention of proceeding with the case. In order to show good cause an applicant must give a reasonable explanation for his default, his explanation must be made bona fide and he must show that he has a bona fide defence to the plaintiff’s claims.”’

[4] (1994) 15 ILJ 1310 (LAC) at 1311J – 1312A.

[5][5] Supra.

[6] National Coalition for Gay and Lesbian Equality and Others v Minister of Home Affairs and Others [1999] ZACC 17; 2000 (1) BCLR 39 (CC) at para 11.

[7] [2006] 5 BLLR 423 (LAC) at para 13.

[8] Page 36 of the transcribed record at lines 20-25 and further.

[9] Morudi and Others v NC Housing Services and Development Co Limited and Others 2019 (2) BCLR 261 (CC) at para 27.

[10] See Cash Paymaster Services (Pty) Ltd v Mogwe and others (1999) 20 ILJ 610 (LC) at 615 A - D

[11] See Rossiter & Others v Nedbank Ltd (96/2014) ZASCA 196 (1 December 2015) at para 16; Nyingwa v Moolman NO 1993 (2) SA 508 (Tk) at 510D – G; Naidoo v Matlala NO 2012 (1) SA 143 (GNP) at 153C.).

[12] Gold Fields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v Commission for Conciliation Mediation and Arbitration and Others [2013] ZALAC 28; [2014] 1 BLLR 20 (LAC); (2014) 35 ILJ 943 (LAC) at para 20.