Rhema Ministries v SCMAWU obo Masangwana and Others (JR777/2013) [2016] ZALCJHB 413 (8 October 2016)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case no: JR777/2013

In the matter between:

RHEMA MINISTRIES

Applicant

and

SCMAWU obo FAITH MASANGWANA

First Respondent

K WABILE N.O.

Second Respondent

THE COMMISSION FOR CONCILIATION MEDIATION

AND ARBITRATION

Third Respondent

Heard: 15 December 2015

Delivered: 28 October 2016

JUDGMENT

BEKKER AJ

Introduction

[1] This is an application for review brought in terms of Section 145 of the Labour Relations Act, No 66 of 1995 (LRA), wherein the Applicant seeks to review and set aside an arbitration award made by the Second Respondent (“the Arbitrator”) under the auspices of the Commission for Conciliation Mediation and Arbitration (“the CCMA”).

[2] The review application is opposed. The First Respondent (Ms Faith Masangwana) was awarded 28 months’ remuneration as back-pay

(totalling R288 484.00) as well as reinstatement as a result of what was found to be a procedurally and substantively unfair dismissal. It is this award that the Applicant is seeking to review.

Background

[3] The employee was employed by the Applicant on 1 December 2007 and at the time of her dismissal (due to the Applicant’s operational requirements), she was employed as an administrator/secretary.

[4] After the employee’s dismissal she referred a dispute to the CCMA alleging a procedurally and substantively unfair dismissal. An arbitration award was issued by an arbitrator of the CCMA on 26 May 2011. This arbitration award formed the basis of a review application to this Court since the Applicant believed that the award reinstating the employee was reviewable.

[5] The first arbitration award under case number GAJB29776/10 was subsequently reviewed and set aside and was remitted to the CCMA for an arbitration de novo before an arbitrator other than Mr S Ramushowana.

[6] The arbitration award that forms the basis of the current application again held that the employee should be reinstated. It is thus the second time that this court is pronouncing on this set of facts.

Grounds for review

[7] The Applicant relies on the following grounds of review:

7.1 That the arbitrator committed misconduct in relation to his duties as a commissioner of the CCMA, alternatively committed a gross irregularity in the conduct and outcome of the arbitration process and award;

7.2 That the arbitrator exceeded his powers and failed to apply his mind to the relevant issues in accordance with the provisions of the LRA;

7.3 That the arbitrator committed a material error of law in that there was no rational connection between the evidence, facts and documentation before the arbitrator and the findings made rendering the award unreasonable, also to the extent that no other reasonable decision- maker could have reached such a decision, to wit that the employee’s dismissal was procedurally and substantively unfair.

[8] The Applicant specifically took issue with the award of the arbitrator reinstating the employee retrospectively to the date of her dismissal (and for a period of some 2½ years). The Applicant avers that the position that the employee occupied was made redundant and remained redundant.

[9] Much was made of the allegation by the Applicant that the employee refused to accept the alternative position of a junior secretary at a monthly salary of R3 800.00 (which position was ostensibly offered to the employee on 10 May 2010 and during the operational requirements consultation process).

[10] When the review application was argued, counsel for both parties indicated that the only issue in dispute pertaining to substantive fairness of the dismissal was whether the alternative position of junior secretary was available and, if available, whether the employee indeed declined the position offered to her.

[11] This may naturally also have a bearing on the procedural fairness of the employee’s termination of employment due to the Applicant’s operational requirements.

[12] It further crystallised to be common cause between the parties that there was a substantive rationale behind the employee’s

dismissal, i.e. that her position became redundant due to the Applicant’s operational requirements at the time.

[13] With regards to the procedural fairness of the employee’s dismissal, the argument was centred on whether the Applicant has made a final decision to retrench the employee before the operational requirements consultation process was finalised.

[14] The Applicant alleges that a final decision was made on 16 July 2010 to retrench the employee, whereas the employee argues that the minutes of the consultation cession held on 16 July 2010 made it plain that further consultation was necessary with the employee and that it was procedurally unfair to make a final decision on her retrenchment midway through the process.

[15] The relevant portion of the minute of the consultation session held on 16 July 2010 reads as follows:

‘The position of receptionist has been turned down by Faith because it comes with a reduced salary of R3 500.00 per month, and this is not suitable for her.

In terms of the Labour Relations Act, the provisions of the Act stipulate that a salary package is given to affected employees, should redundancy be unavoidable. One week’s salary for every year completed in service is the guideline, and therefore the Ministry would look at this and based on the final decision, that redundancy is unavoidable, the position made will be redundant permanently. During the next meeting Faith will be advised of the final decision.’

[16] The employee interprets the contents of the consultation session of 16 July 2010 to mean that no final decision was taken as on 16 July 2010 to retrench her, but that a final decision was still to be made and that the employee would then have been advised of what that final decision was at a subsequent meeting.

[17] On 23 July 2010, however, the employee was informed by written notice that she may opt to apply for a voluntary retrenchment package, in writing, by 7 August 2010.

[18] The employee did not apply for a voluntary retrenchment package and was retrenched in writing on 10 August 2010. In that written notice, it was recorded that the employee was informed on 23 July 2010 that her position is redundant and that “she is being retrenched”.

[19] The letter of 23 July 2010 (inviting applications for voluntary separation packages) makes no mention of the fact that the employee was being retrenched at that time.

Analysis and the award

[20] In terms of Section 138(1) of the LRA, it is the duty of an arbitrator to determine the substantive merits of the dispute before

him or her and must then provide brief reasons in support of his or her award.

[21] If it crystallises from the evidence presented that there are disputes of fact pertaining to the versions of the employer and

employee, an arbitration award must contain an explanation filled with reasons as to how the arbitrator has resolved those disputes.

[22] Should an arbitrator exercise his or her powers in good faith and in a rational and reasonable manner, there is limited scope for a review court to interfere with the award. In MEC for Environmental Affairs and Development Planning v Clairison’s CC,[1] the Supreme Court of Appeal held as follows:

‘18. It bears repeating that a review is not concerned with the correctness of the decision made by a functionary, but with whether he performed the function with which he was entrusted. When the law entrusts a functionary with a discretion it means just that: the law gives recognition to the evaluation made by the functionary to whom the discretion is entrusted, and it is not open to a court to second-guess his evaluation. The role of a court is no more than to ensure that the decision maker has performed the function with which he was entrusted…

22. The law remains, as we see it, that when a functionary is entrusted with a discretion, the weight to be attached to particular factors, or how far a particular factor affects the eventual determination of the issue, is a matter for the functionary to decide, and as he acts in good faith (and reasonably and rationally) a court of law cannot interfere.’

[23] In the current matter, the arbitrator appears to have disregarded the common cause fact that there was a substantive reason for the employee’s dismissal, i.e. that her position became redundant as a result of the Applicant’s operational requirements. That being the case, was it reasonable for the arbitrator to award the employee the primary remedy of reinstatement in accordance with Section 194 of the LRA? The answer must surely be in the negative. The award that the arbitrator came to pertaining to substantive

fairness may be premised on a material mistake of fact as enunciated by the Supreme Court of Appeal in Dumani v Nair and Another (Dumani).[2] For a material mistake of fact to form a ground of review, such ground must be confined to a fact that is established in the sense that it is uncontentious and objectively verifiable.[3]

[24] Although the Supreme Court of Appeal in Dumani made the comments in the context of a review under the Promotion of Administrative Justice Act,[4] it applies equally to the review of awards under the provisions of the LRA.

[25] The correct approach to adopt in reviews of arbitration awards under the LRA was set out in Herholdt v Nedbank Limited (Congress of South African Trade Unions as amicus curiae),[5] wherein the following approach was endorsed:

‘For a defect in the conduct of the proceedings to amount to a gross irregularity as contemplated in section 145(2)(a)(ii), the arbitrator

must have misconceived the nature of the enquiry or arrived at an unreasonable result. A result will only be unreasonable if it is one that a reasonable arbitrator could not reach on all the material that was before the arbitrator. Material errors of fact, as well as the weight and relevance to be attached to particular facts, are not in and of themselves sufficient for an

award to be set aside, but are only of any consequence if their effect is to render the outcome unreasonable.’

[26] The employee remained adamant that the position of junior secretary was never offered to her by the Applicant, thus explaining why she has never accepted it. The arbitrator speculated in the arbitration award as follows:

‘In my view, despite her rather noble assertion that a reduction in remuneration from R10 303.00 per month to R3 500.00 per month was of no consequence in the service of God, or something to that effect, I find that it is probable that the Applicant rejected the offer when it was first mooted to her in December 2009 because the reduction in remuneration was immense and it is logical to conclude that it would most probably have had a significant impact on the Applicant’s standard of living. It seems to me that the Respondent rather ignorantly or mischievously as the case may be, imported a rejection which was clearly made outside the consultation process, into that process. … I have no hesitation coming to the conclusion that the Applicant’s version that she at no stage during the consultation process rejected the offer of the junior secretary position as averred by Mr Komape is a most probable version and must be accepted.’

[27] What the arbitrator appears to say is that, despite the direct evidence adduced by the Applicant (supported by documentary evidence in the arbitration process), the employee rejected the position of junior secretary outright and that the employee’s version on this subject should be accepted since the only time she allegedly rejected the position of junior secretary was in December 2009 and thus prior to the consultation process starting during January 2010. That speculative conclusion is untenable if regard is had to the evidence. The employee (in her evidence before the arbitrator) answered a question pertaining to whether the position of junior secretary was offered to her as follows:

‘Yes, the offer was made to me.’

[28] The evidence as captured in the transcribed record further reveals that mention was made by the Applicant of the junior secretary

position in December 2009 already, but at that stage (according to the employee’s evidence) the Applicant was still to “introduce the position” by way of advertising it. It is thus clear that the employee (on her own version) did not decline the position of junior secretary in December 2009 and there was thus no reason for the arbitrator to speculate on this aspect as he did in his award. The fact remains that the position of junior secretary was indeed offered by the Applicant to the employee during the course of the operational requirements consultation process that spanned the bulk of 2010.

[29] The question as to whether the position of junior secretary was a reasonable alternative did not arise in the arbitration process. The parties were ad idem that it was a reasonable alternative, although the position of junior secretary may have represented a substantive reduction in income.

[30] The following two factors stand as being established at the arbitration process:

1. That the position of junior secretary was indeed offered to the employee and she declined to accept it;

2. That there was a substantively sound reason for the termination of the employee’s services due to the Applicant’s operational

requirements.

[31] This in itself renders the award of a substantively unfair dismissal (coupled with the primary remedy of reinstatement) unreasonable and therefore reviewable. The result achieved by the arbitrator is based on these material errors of fact and renders the outcome (as far as it relates to the award of substantive unfairness and reinstatement) unreasonable.[6]

[32] An arbitrator is not at liberty to reinstate an employee where it is obvious that there was a substantively sound reason for termination of employment.[7]

[33] With regards to procedural fairness, the commissioner found that the employee’s version (that she was dismissed before the consultation cessions were completed) renders the dismissal procedurally unfair. If one has regard to the arbitration record and the evidence presented (coupled with the documentary evidence), this decision by the arbitrator can not be faulted. He has weighed the respective versions of the parties and came to a reasonable conclusion in this regard.

[34] The documentation authored by the Applicant indeed painted a picture where, at the very least, there was an indication of a further consultation meeting after the one of 16 July 2010. That consultation meeting never materialised and the employee was informed on 10 August 2010 that she was dismissed.

[35] It deserves mention that counsel for the employee acknowledged during argument that the arbitrator may have exceeded his powers in ordering reinstatement where it was common cause that the employee’s position was redundant and that there was a substantive reason for the termination of her employment. Counsel for the employee submitted that a competent award may have been either re-employment or compensation.

[36] Both parties also requested me at the onset of the court process that, should the award be reviewed, that the award be substituted

with an appropriate order and that the matter should not be remitted to the CCMA for a hearing de novo due to the protracted history of the case.

[37] I am privy to a full record of the arbitration process and see no reason why the award cannot be substituted with an appropriate order in the circumstances.

[38] Counsel for both parties also submitted that this is not a matter where costs should follow the result and that each party should be ordered to pay its own costs. I agree. The employee possessed an award in her favour and there was certainly no malice in her opposing the review sought by her erstwhile employer. The parties were both partly successful in the matter.

[39] Due to the employee’s length of service and the procedural errors committed by the Applicant, I deem an award of four months’ compensation for procedural unfairness to be just and equitable.

Order

[40] In all the circumstances, I make an order in the following terms:

1. The award by the arbitrator is reviewed and set aside insofar as it relates to the finding of substantive unfairness. The dismissal of the employee was substantively fair.

2. The award by the arbitrator pertaining to the procedural unfairness of the employee’s dismissal is upheld. It is confirmed that the dismissal of the employee was procedurally unfair.

3. The Applicant is ordered to pay the employee four months’ remuneration calculated at a rate of R10 303.00 per month (totalling

R41 212.00) as a result of her procedurally unfair dismissal within 30 days of the date of this order.

4. There is no order as to costs.

______________

Bekker AJ

Acting Judge of the Labour Court of South Africa

APPEARANCES:

FOR THE APPLICANT:

Mr P Kirstein

Instructed by Henk Wissing Attorneys

FOR THE FIRST RESPONDENT: Mr RK Mashego of Mashego Attorneys

[1] 2013 (6) SA 235 (SCA) at 240 H–241 A.

[2] 2013 (2) SA 274 (SCA).

[3] At 285 D–E.

[4] Act No 3 of 2000.

[5] (2013) 34 ILJ 2795 (SCA) at 2806 B – C.

[6] Sidumo and Another v Rustenburg Platinum Mines Ltd and Others 2008 (2) SA 24 (CC).

[7] Section 194 of the LRA 66 of 1995.