T-Systems Pty Ltd v Commission for Conciliation Mediation And Arbitration and Others (JR2720/12) [2014] ZALCJHB 431 (14 October 2014)

REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: JR 2720/12

In the matter between:

T-SYSTEMS PTY LTD

Applicant

and

THE COMMISSION FOR CONCILIATION,

MEDIATION AND ARBITRATION

Fist Respondent

M.E.MOLEFE N.O

Second Respondent

MICHAEL WORTHINGTON UNDERWOOD

Third Respondent

Heard: 03 June 2014

Delivered: 14 October 2014

JUDGEMENT

SHAI AJ

Introduction

[1] This is an application by the Applicant in terms of which it seeks to review and set aside the award made by Second Respondent on the 26th October 2012 under the auspices of the first Respondent under case number: GATW 9124-12 in terms of which the third Respondent was found to have been dismissed and the said dismissal substantively unfair.

[2] The Applicant further prayed for an order substituting the award of the second Respondent with an order that the third Respondent was not dismissed and accordingly the first Respondent lacked jurisdiction to arbitrate the dispute, and in the alternative the matter be remitted back to the first Respondent to be heard by another commissioner other than the second Respondent.

The Facts

[3] The third Respondent commenced employment with Eskom on 12th January 1979. He was later transferred to a new company known as Arivia.kom. Later Arivia.kom’s business was sold to the

Applicant. All the employees of Arivia.kom, including third Respondent were employed by the Applicant.

[4] During April 2010, the Applicant consulted with all its employees inclusive of the third Respondent in order to discuss the alignment of its conditions of employment and those of Arivia.kom. Due to alignment certain conditions of employment were changed to align them with those of the Applicant. After the consultations process effective 1st June 2011, the new conditions were implemented.

[5] The third Respondent indicated that he does not accept the terms and conditions so implemented on the 1st June 2011. On the 21st June 2011 he referred an alleged unfair Labour Practice dispute seeking to restore his previous terms and conditions. The third Respondent did not succeed and was advised to refer the matter to the Labour Court or Civil Courts.

[6] On the 24th January 2012 the third Respondent advised the Applicant that he does not accept the changes to his employment contract.

[7] On the 8th May 2012, by way of letter, the third Respondent was given three options with regard to his presentation. Firstly, if he believed that the Applicant acted unlawfully, he should approach the Labour Court or Civil courts. Secondly, he should confirm in writing that he accepts all terms and conditions of employment. Thirdly, hat he must confirm that there is no employment contract as there was apparent lack of meeting of minds.

[8] A meeting was arranged for the 9th July 2012 to discuss the matter further. In the meeting the three options were discussed further. Further that, the Applicant made it clear that the third Respondent was repudiating the contract and it has no option but to accept and cancel it. On the 12th July 2012 a letter was dispatched for the third Respondent confirming the discussion and further making it clear in the third Respondent’s mind no contract of employment exists in terms of the conditions of serves implemented on 1st June 2012.

[9] On the 18th July 2012, the third Respondent referred an unfair dismissal to the first Respondent. The Applicant opposed it on the basis that the first Respondent lacked jurisdiction to entertain the dispute as it contended that the third Respondent was not dismissed but repudiated his contract, which Applicant accepted and cancelled.

[10] The second Respondent issued the award in which he found that the third Respondent was dismissed and that the said dismissal was substantively unfair. It is this finding that is sought to be reviewed and set aside.

Grounds of Review

[11] The Award of the second Respondent is attacked on the basis that she committed a gross misconduct in the execution of his duties as a commissioner in that, she wrongly concluded that the first Respondent has jurisdiction, when the facts objectively viewed points to the fact that the third Respondent repudiated the contract and was not dismissed.

[12] Further that, it is contended that she committed an irregularity in that she took into account an issue which was not raised by any of the parties in argument or in evidence (Section 197 of the Labour Relations Act).

[13] That the conclusions that the dismissal is substantively unfair is not supported by any evidence and is inconsistent with material

properly placed before her.

The test for jurisdictional review

[14] What we have before us is essentially a jurisdictional review. The test applicable to review of a jurisdictional ruling is whether the jurisdictional facts objectively exists in order to enable the second Respondent in our case to obtain the jurisdiction, or do the jurisdictional facts obtain in order for the second Respondent to exercise power-See South African Rugby Players Association (SARPA) and others v SA Rugby PTY Limited and others; SA Rugby PTY Limited v. South African Players Union and Another [2008] ZALAC 3; [2008] 9 BLLR 845 (LAC) at paragraph 41.

[15] In the case of Jonsson Uniform Solutions PTY LTD v. Lynette Brown and others case no. DA/2012 the court said the following at paragraph 33 and 34.

“[33] The generally accepted view is that we have a bifurcated review standard viz reasonableness and correctness.” The test for reasonableness of a decision was stated in Sidumo and another v Rustenburg Platinum Mines LTD and others as follows: “Is the decision reached by the commissioner one that a reasonable decision maker could not reach”.

[34] In assessing whether the CCMA or Bargaining Council had jurisdiction to adjudicate a dispute, the correctness test should be applied. The court of review will analyse an objective fact to determine whether the CCMA or bargaining council had the necessary jurisdiction to entertain the dispute. See SARPA v. SA Rugby PTY LTD and others; SA Rugby PTY LTD v. SARPU”.

[16] The test is, therefore, not whether the arbitrator reached a conclusion a decision maker could not reach, but whether the arbitrator was correct based on facts whether the CCMA or bargaining council was clothed with jurisdictional authority.

Evaluation

[17] The employee worked for Eskom with effect from 12th January 979. He was then transferred to Arivia.kom and later to T-System, the Applicant. The transfer from Arivia.kom to T-Systems

came as a result of the whole or part of the business being sold to T-Systems. According to evidence of the third Respondent at the arbitration hearing was that the employees were informed that they were being transferred in terms of Section 197 of Labour Relations Act 66 of 1995 as amended. His evidence was that in his view his conditions of service including those provided for by the collective agreements whilst working at Arivia.kom were transferred to the new employer, T-System (the Applicant).

[18] The said transfer took place with effect from 1st January 2010. The proposed amendments to the third Respondent’s conditions of service took effect on the 11th June 2011, just four months after the completion of a year since transfer of business.

[19] The second Respondent considered whether the dispute could be regarded as arising from the transfer of business in terms of section 197 of the Labour Relations Act 66 of 1995 as amended but rejected that notion on the basis that the dispute arose after a year of the transfer.

[20] Section 197 of the Labour Relation provides as follows:

“(2) If a transfer of a business takes place, unless otherwise agreed in terms of subsection (6) –

(a) the new employer is automatically substituted in the place of the old employer in respect of all contracts of employment in existence immediately before the date of transfer;

(b) all the rights and obligations between the old employer and an employee at the time of the transfer continue in force as if they had been rights and obligations between the new employer and the employee;

(c) anything done before the transfer by or in relation to the old employer, including the dismissal of an employee or the commission of an unfair labour practice or act of unfair discrimination, is considered to have been done by or in relation to the new employer; and

(d) the transfer does not interrupt an employee’s continuity of employment, and an employee’s contract of employment continues with the new employer as if with the old employer”.

[21] It was argued for the Applicant that in entertaining section 197 of Labour Relation Act 66 of 19995 the second Respondent concerned herself with the irrelevant, and something that was not raised by either of the parties at the arbitration. I do not agree. The third Respondent testified that the employees were told that they were transferred in terms of Section 197 of the Labour Relation Act 66 of 1995 as amended and hence considered that his previous terms and conditions were so transferred to the employer. It was therefore correct for the second Respondent to consider it as she grappled with the issue of jurisdiction.

[22] However, her conclusion that Section 197 of the said Act does not apply merely because one year and couple months had elapsed since the transfer is not correct. Nowhere, in Section 197 of the Act it is stated the time frames within which a dispute arising out of or for a reason related to the said section must be lodged and that if such period has lapsed, such a dispute ceases to be a dispute arising out of or a reason related to section 197. The dispute remains squarely within section 197 of the LRA of 1995 as amended.

[23] Section 187 (1) provides that a dismissal is automatically unfair if the employer, in dismissing the employer act contrary to Section5 or, if the reason for the dismissal is-

“g. a transfer, or a reason related to a transfer, contemplated in Section 197 or 197 A……………………………”

[24] Section 191 (5) (b) provides that if a dispute remains unresolved after conciliation the employee may refer the dispute to the Labour Court for adjudication if the employee has alleged that the reason for dismissal is amongst others automatically unfair.

[25] It is clear from the foregoing that the labour court is the one that is clothed with authority to determine the dispute and hence the second Respondent was not correct concluding that she was clothed with such authority.

[26] Secondly, the circumstances of this case are such that the employee was being forced to accept new terms and conditions of employment. Section 187 (1) (c) provides as follows:

“A dismissal is automatically unfair if the employer, in dismissing the employee, acts contrary to Section 5, or , if the reason for the dismissal is (c) to compel the employee to accept a demand in respect of any matter of mutual interest between the employer and the employee”.

[27] This therefore means that the second Respondent was not clothed with the authority to entertain the dispute on this angel too. It appears that the reason why the second Respondent concluded that this dispute does not really fall within the section 187 (1) (c) is because the employer did not mention in his letter of dismissal that such a demand to accept new conditions was used as a power play. The employer need not do so. It is sufficient if there was a demand to accept new terms and conditions which the employee refused to accept.

[28] I do not agree with the Applicant in its argument that the third respondent repudiated his contract. Which contract is he supposed to have repudiated? There is only one contract and it is the one the third Respondent does not agree to have it amended. Does this amount to repudiation? I do not agree. If there is repudiation it is by the Applicant as it is the one that changed the existing contract of employment to something else. Therefore Applicant cannot hide behind the none- existent repudiation by the third Respondent. I am of the view that if the Applicant had the problem with the third Respondent’s attitude with regard to the new terms, a proper procedure should be followed and the commissioner hinted at this option when she said in certain circumstances the courts have decided that dismissals for operational reasons in similar circumstances may be regarded as fair.

[30] In the premise I make the following order:

(a) The award of the second Respondent issued on the 26th October 2014 under case number GATW 9124-12 under the auspices of the first Respondent is reviewed and set aside.

(b) The above award is substituted with an order that the first Respondent does not have the jurisdiction to arbitrate the dispute.

(c) I make no order as to costs.

_____________________

Shai AJ

Acting Judge of the Labour Court

Appearances:

For the Applicant: Mohlaba & Moshoana Inc

For the Respondent: Mostert Attorneys