South African Social Security Agency v Monks NO and Others (D536/12) [2014] ZALCD 56 (28 October 2014)

REPUBLIC OF SOUTH AFRICA

IN THE LABOUR COURT OF SOUTH AFRICA, DURBAN

JUDGMENT

Reportable/Not reportable

Case no: D536/12

In the matter between:

SOUTH AFRICAN SOCIAL SECURITY AGENCY

Applicant

and

COMMISSIONER COLIIN MONKS NO

First Respondent

COMMISIONER FOR CONCILIATION, MEDIATION

Second Respondent

AND ARBITRATION

NONKULUNGA UNITY NKOSI

Third Respondent

HLENGIWE MKHIZE

Fourth Respondent

NUPSAW

Fifth Respondent

Heard: 22 August 2014

Delivered: 28 October 2014

Summary: Dismissal of Third and Fourth Respondent- Appeal noted- Appeal failed – Matter referred to CCMA- Settlement agreement signed by the Union representative- Consequences of settlements- Effective date of settlement- Effect of Second Referral to CCMA- Application for rescission of a settlement agreement- Section 144 discussed- One Commissioner not to rescind another Commissioner’s ruling unless an obvious error contemplated in terms of Section 144(b) occurred- Rule 25(1)(a) of CCMA discussed- Section 145 discussed

FOUCHÉ AJ

Introduction

[1] This matter was brought to this Court in accordance with Section 145 of the Labour Relation Act 66 of 1995 (“the LRA”) as a Review matter. The matter before the Court flows from an application for rescission of the settlement agreement reached between the PSA and the Applicant.

[1.1] The settlement agreement was reached under KPPM 3528/11 on 11 January 2012 between the PSA and the Applicant. On 3 February 2012, the Fifth Respondent noted the matter at the CCMA under case number KNDB 16626/11 and received a jurisdictional ruling, being that the CCMA does not have jurisdiction to entertain in this matter. The matter was taken to Commissioner Munks on 11 May 2012 under case number KNDB 16626/11 for rescission of the jurisdictional ruling of 3 February 2012.

Relief sought

[2] The relief sought in this matter on behalf of the Applicant is that the arbitration award issued by the Second Respondent, Commissioner

Monks under Case no KNDB 16626-11, on 24 October 2010, in the arbitration proceedings between the Applicant and the Third and Fourth Respondents, be reviewed and set aside in accordance with Section 145 of the Labour Relations Act. Furthermore, that the

rescission ruling be substituted with an order that the rescission application is dismissed with costs. Lastly, costs to be paid by any respondent who opposes the application.

Facts

[3] The Applicant is The South African Social Security Agency (SASSA), a juristic entity established in terms of Section 2 of the South African Social Security Agency Act 9 of 2004.

[4] The First Respondent is Commissioner Collin Monks, a duly appointed Commissioner in terms of Section117 of the Labour Relations Act (LRA). The Third Respondent is Nokulunga Unity Nkosi, a former employee of the Applicant and the Fourth Respondent is Hlengiwe

Mkhize, also a former employee of the Applicant.

[5] The Third and Fourth Respondents were both subjected to a disciplinary inquiry for suspected fraudulent conduct. After being

found guilty of these offences, the Third and Fourth Respondents were dismissed on 12 October 2009[1].

[6] The Third and Fourth Respondents unsuccessfully appealed their dismissal[2]. At all relevant times hereto, the Third and Fourth Respondents were members of the Public Service Association (“the PSA”)[3]. During the disciplinary enquiry the Fourth and the Fifth Respondents were represented by the PSA[4].

[7] The PSA on behalf of the Third and Fourth Respondents challenged their dismissal at Pietermaritzburg under case number KNPM

352811.Case number KNPM 352811[5] was set down for conciliation/arbitration on 11 January 2012. At this hearing the dispute was referred to second Respondent resulting in a written settlement. In accordance with the settlement agreement Mr Govender withdrew the dispute on the instructions of the Third and Fourth Respondents.

[8] Subsequent to this settlement, Third and Fourth Respondents joined Fifth Respondent. Fifth Respondent referred the same dispute to the Durban branch of the Second Respondent where case number KNDB 16626/11[6] was allocated. The matter was set down for conciliation/arbitration on 3 February 2012[7].

[9] On 3 February 2012, Mr Molefe represented the Third and Fourth Respondents. Commissioner Isaacs held that the Second Respondent is functus officio and that the CCMA does not have jurisdiction to entertain the dispute as it was settled under case number KNPM 3528/11[8].

[10] The Third and Fourth Respondents applied for a rescission of the ruling under case number KNDB 16626/11. The First Respondent heard the matter and held on 3 February 2012 that case number KNDB 16626/11 is rescinded[9].

[11] The Third and Fourth Respondents alleged they were absent during the settlement negotiations and did not authorise the settlement[10].

Rescission of the judgment

[12] On 3 February 2012, the Applicant represented the Third and Fourth Respondents at the CCMA offices in Durban, whilst Mr Molefe of the union of the Fifth Respondent was also present. Commissioner Monks presided over the application for rescission of the ruling of Commissioner Isaacs. Commissioner Monks rescinded the ruling of Commissioner Isaacs[11].

[13] Respondents submitted they were not present when Mr Govender on behalf of the PSA concluded the settlement agreement and did not sign the agreement. As the PSA held the Third and Fourth Respondents power of attorney, the absence of the Third and Fourth Respondents does not invalidate the settlement agreement under KNPM3528/11[12].

[14] The matter before Commissioner Monks was res judicata and could not be entertained as a settlement was entered under case number KNPM 3528/11. The Second Respondent was functus officio as the CCMA had no jurisdiction to entertain the same dispute as it was already settled under case number KNPM 3528/11 between the parties[13].

[15] In Nel v Potgieter[14] it was held that even when the parties entered into a settlement agreement in full and final settlement of the dispute, whether or not the agreement was made an order of the Court, the defence of res judicata applies to the matter.

[16] The Third and Fourth Respondents could not ignore the consequences of the settlement agreement under case number KNPM 3528/11. No proceedings under another case number could be instituted in this matter[15]. Whilst the settlement agreement remains of force and effect, the Third and Fourth Respondents were not entitled to proceed in any other forum or the same forum, to consolidate or arbitrate their dismissals.[16]

[17] Section 144 of the LRA reads as follows:-

‘144. Variation and rescission of arbitration awards and rulings.

Any commissioner who has issued an arbitration award or ruling, or any other commissioner appointed by the director for that purpose, may on that commissioner's own accord or, on the application of any affected party, vary or rescind an arbitration award or ruling -

(a) erroneously sought or erroneously made in the absence of any party affected by that award;

(b) in which there is an ambiguity, or an obvious error or omission, but only to the extent of that ambiguity, error or omission; or

(c) granted as a result of a mistake common to the parties to the proceedings.’

[18] In Day and Night Investigators CC v Ngoasheng and Others[17], the Court dealt with the scenario where the judgement was erroneously sought or made. The word error means that the judgment did not reflect the intention of the judicial officer or in the absence of the party concerned. As a representative appeared on behalf of the Third and Fourth Respondents, Section 144(a) does not apply.

[19] In McIntire v Uli Heydt Butchery and Another[18] it was held that one Commissioner is not empowered to rescind the ruling of another Commissioner if an “obvious error” as contemplated in Section 144(b) did not occur. In Annexure “A” to the papers Commissioner Munks[19] recorded the following under case number KNDB 116626/11:-

‘1. The late rescission is condoned.

2. the ruling was made in the absence of the applicants and their representative allegedly had no authority

3. applicants have made out a prima facie case with some prospects of success.

The ruling dated 3-02-2012 is set aside.’

[20] Section 144(c) applies to mistakes common to the parties to the proceedings. The Third and Fourth Respondents were at all times aware of the dispute. Section 144(c) accordingly does not apply to the present dispute.

[21] Commissioner Isaacs made a ruling on 3 February 2012 in case number KNDB 16626/11 that[20]:

‘The CCMA does not have jurisdiction as the dispute referred has been settled. The matter was referred to the PMB CCMA office and settled under case no KNPM 3528-11.’

Submissions of the parties

[22] The Applicant submitted in Court that this Court must determine if the ruling of Commissioner Isaacs as reflected in Annexure “B”, was correct. Three questions were posed, firstly, if the dispute under KNPM 3528/11 was indeed settled, secondly, could Commissioner Isaacs have entertained the same dispute as under KNDB 16626/11, and thirdly, if the third and the Fourth Respondent’s submissions that the PSA had no mandate or authority to refer the matter for conciliation/arbitration and to attend the hearing or settle KNPM 3528/11[21].

[23] In the Answering Affidavit the Third and Fourth Respondents submitted that they were not present when the settlement was reached and did not sign the settlement agreement. They furthermore submitted that they did not instruct the PSA to declare any dispute on behalf of the Third and Fourth Respondents[22]. The Third and the Fourth Respondents submitted that they instructed the Fifth Respondent and not the PSA to represent then at the arbitration/conciliation proceedings[23].

[24] During the hearing at this Court, the Third and Fourth Respondent withdrew their opposition to the Applicant’s application for review. The Applicant persisted that the matter must be reviewed.

Principles in respect of the second noting

[25] In respect of the second noting of the dispute at the CCMA, the Applicant argued that this was irregular as the Third Respondent

could not note the same dispute a second time at the CCMA, whilst the first matter was still sub judicae. In Kgobokoe v CCMA and Others[24] Shai AJ held that:-

‘[41] Withdrawal of a dispute is a unilateral act by the applicant and no act by a functionary and therefore not reviewable.’

[26] In Kgobokoe v CCMA and Others[25] the Court decided that the withdrawal of a dispute at the level of conciliation does not preclude a party from making a fresh referral.

The Court said further that however, if the withdrawal is part and parcel of a final settlement of a dispute the situation will be different.

[27] It is clear that there was no lis pendens in this matter as the Applicant before the CCMA (the Second Respondent in casu), settled the dispute after the failed conciliation proceedings. The matter could not have proceeded afresh under a new case number.

The test for review

[28] The grounds for review set out in Section 145 of the Labour Relations Act are:-

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

(a) within six weeks of the date that the award was served on the applicant

(2) a defect referred to in subsection (1) means-

(a) that the commissioner-

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

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

(iii) exceeded the commissioner’s powers; or

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

[29] In Carephone (Pty ) Ltd v Marcus NO and Others[26] which was decided before the advent of PAJA, the Court enunciated the test for Section 145 of the Labour Court reviews as:

‘....is there a rational objective basis for justifying the connection made by the administrative decision maker between the material property available to him and the conclusion he or she eventually arrived at?’

[30] In Nampak Corrugated Wadeville v Khoza[27], the Labour Appeal Court held that:

‘...this discretion must be exercised fairly. A court should, therefore, not lightly interfere with the sanction imposed by the employer unless the employer acted unfairly in imposing the sanction. The question is not whether the court would have imposed the sanction imposed by the employer, but whether in the circumstances of the case the sanction was reasonable’.

[31] In Rustenburg Platinum Mines Ltd (Rustenburg section) v Commissioner for Conciliation, Mediation and Arbitration and Others[28] the Labour Appeal Court stated that Section 33 of the Constitution extended the scope of review to introduce a requirement of rationality in the outcome of decisions. Section 33 of the Constitution states that:

‘(1) Everyone has the right to administrative action that is lawful, reasonable and procedurally fair’’

[32] An objective inquiry must take place during the arbitration proceedings and be reflected in the Arbitrator’s award[29]. The award must be rationally connected to the information before the arbitrator and the reasons entered on the record. It must be established if the arbitrator properly exercised the powers given to him in compliance with Section 3 of the Labour Relations Act and the Constitution. The rational objective test set out in Carephone, supra, must thus be applied.

[33] In Sidumo and Another v Rustenburg Platinum Mines Ltd and Others,[30] Navsa AJ held that a Commissioner conducting a CCMA arbitration performs and administrative function and that the Promotion of

Administrative Justice Act does not apply to arbitration matters in terms of the Labour Relations Act. The majority of the Constitutional

Court in this matter held that section 145 of the LRA must be “suffused” with the test of reasonableness in Section 33 of the Constitution and accordingly the essential question to ask in determining if the arbitration award should be reviewed is the following:

“Is the award one that a reasonable decision maker could not reach”[31]

[34] In Herholdt v Nedbank Ltd and Another,[32] the Court found that the test applicable to Section 145 LRA reviews recognises that dialectical and substantive reasonableness is intrinsically interlinked and that latent process irregularities carry the inherent risk of causing a possible unreasonable outcome. The Court must scrutinise the Commissioner’s reasons to determine whether a latent irregularity occurred, being an irregularity in the mind of the Commissioner, which is only ascertainable from the Commissioner’s reasons. Murphy, AJA

stated:-

“There is no requirement that the commissioner must have deprived the aggrieved party of a fair trial by misconceiving the whole nature of the inquiry. The threshold for interference is lower than that; it being sufficient that the commissioner has failed to apply his mind to certain of the material facts or issues before him, with such having potential for prejudice and the possibility that the result may have been different” [33]

[35] I am satisfied that the Commissioner Munks (the Second Respondent) failed to consider all relevant factors in this matter. The decision made is one that a reasonable decision-maker could not reach.

[36] I accordingly, hold, that the Application for review be upheld.

Costs

[37] The Applicant requested no order as to costs. The Third and Fourth Respondents submitted that no costs order should follow.

[38] I have considered the requests of the parties. The matter before the Court is not a typical matter where the Court will order costs.

Order

[39] In the result therefore, it is ordered as follows:-

1. The Applicant’s application for review in terms of Section 145, is upheld;

2. No order as to costs;

_____________________

Fouché AJ

Acting Judge of the Labour Court of South Africa

APPEARANCE

For the Applicant:

G. Reddy

Instructed by:

State Attorney

For the Respondent:

In person

[1] Para 11 paginated page 8.

[2] Para 13 paginated page 8.

[3] Para 20 paginated page 10.

[4] Para 15 paginated page 9.

[5] Para 19 paginated page 10.

[6] Para 31 paginated page 12.

[7] Para 30 paginated page 12.

[8] Para 30 paginated page12.

[9] Para 24 paginated page 11.

[10] Rule 25(1)(a) CCMA. See also: Mavundla and Others v Vulpine Investments Limited t/a Keg and Thistle and Others (2000) 9 BLLR 1060 (LC

[11] Para 34 paginated page 13.

[12] See :Paragraph 5.2 Founding Affidavit of the Section 144 Application paginated page 70. See also: Day and Night Investigators CC v Ngoasheng and Other [2000] 4 BLLR 398 (LC) where error was found to means ”.that the judgment does not reflect the intention of the judicial officer concerned. It does not refer to the correctness or otherwise of the decision”.

[13] Para 38.3 paginated page 14.

[14] Case number 2546/2001 reported as 2009ZAC DHC52 on Judgments Online.

[15][15] Paginated page 41-42. The matter was settled on 11 January 2012.

[16] Replying Affidavit para 30, paginated page 104.

[17] [2000] 4 BLLR 398 (LC).

[18] (2003) BALR 149 CCMA.

[19] Paginated page 25.

[20] Annexure B paginated page 26.

[21] Para 42 of the Founding Affidavit paginated pages 17-22.

[22] Para 3 Answering Affidavit paginated page 94 and 98.

[23] Para 4 Answering Affidavit paginated page 94 and 98.

[24] (2012) 33 ILJ 235 (LC) at para 42. See also Ncaphayi v Commissioner for Conciliation, Mediation and Arbitration and Others (2011) 32 ILJ 402 (LC).

[25] Ncaphayi, supra

[26] 1999 (3) SA 304 LAC; (1998)19 ILJ 1425(LAC); [199] 11 BLLR 1093 (LAC).

[27] (1999) 20 ILJ 578 (LAC); [1999] 2 BLLR 108 (LAC).

[28] 2007 (1) SA 576 (SCA);(2006) 27 ILJ 2076 (SCA); [2006]11 BLLR 1021 (SCA).

[29] See Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs [2004] ZACC 15; 2004 (4) SA 490 (CC); 2004 (7) BCLR 687 (CC) at para 25.

[30] Sidumo supra

[31] Ibid at at para 110

[32] (2012) 33 ILJ 1789 (LAC).

[33] Ibid at para 39.