Toy Mania (Pty) Ltd v Commission for Conciliation, Mediation and Others (J1550/98) [1998] ZALC 90 (28 October 1998)

7

IN THE LABOUR COURT OF SOUTH AFRICA

Held in Johannesburg

Case no J1550/98

In the matter between

Toy Mania (Pty) Ltd Applicant

and

The Commission for Conciliation, Mediation

and Arbitration First Respondent

L. Charoux Second Respondent

L. Spear Third Respondent

JUDGEMENT

ZONDO J

[1] This is an application in which the applicant is asking this Court to review and set aside an arbitration award which was handed down against it by the second respondent under the auspices of the first respondent. The arbitration award was the result of an arbitration which was conducted in terms of the Labour Relations Act, 1995 (“the Act”) in respect of a dismissal dispute between the applicant and the third respondent.

[2] For purposes of this judgement it is not necessary to go into details about the factual circumstances surrounding the dismissal dispute. It will suffice to state the facts briefly. The third respondent was employed by the applicant as a “representative” in August 1997. On 30 October 1997 two letters were addressed to the third respondent by the applicant. The one letter contained the applicant’s complaint about the third respondent’s alleged failure in her job as the applicant’s representative. It also said that, in the light thereof, her conditions of employment would be reviewed. Finally it instructed the third respondent to return a new vehicle that had been given to her for official use and to revert to using her own vehicle. The other letter contained her changed conditions of employment which were to apply from the 1st November 1997. She was asked to sign at the bottom of the letter to signify her acceptance of the changed conditions of employment. [3] The following day or so the third respondent did not come to work. One of the partners in the applicant telephoned her. There is a dispute of fact about what transpired during that telephone conversation between the partner and the third respondent.

But it is common cause that the third respondent indicated that she was going to seek legal advice about the letters she had received

from the applicant and that the partner called for the new vehicle to be returned immediately. The new vehicle was returned the same day by the third respondent. The third respondent’s version is that the partner dismissed her during that telephone conversation - a version which the applicant denied.

[2] For purposes of this judgement it is not necessary to go into details about the factual circumstances surrounding the dismissal dispute. It will suffice to state the facts briefly. The third respondent was employed by the applicant as a “representative” in August 1997. On 30 October 1997 two letters were addressed to the third respondent by the applicant. The one letter contained the applicant’s complaint about the third respondent’s alleged failure in her job as the applicant’s representative. It also said that, in the light thereof, her conditions of employment would be reviewed. Finally it instructed the third respondent to return a new vehicle that had been given to her for official use and to revert to using her own vehicle. The other letter contained her changed conditions of employment which were to apply from the 1st November 1997. She was asked to sign at the bottom of the letter to signify her acceptance of the changed conditions of employment.

[3] The following day or so the third respondent did not come to work. One of the partners in the applicant telephoned her. There is a dispute of fact about what transpired during that telephone conversation between the partner and the third respondent.

But it is common cause that the third respondent indicated that she was going to seek legal advice about the letters she had received

from the applicant and that the partner called for the new vehicle to be returned immediately. The new vehicle was returned the same day by the third respondent. The third respondent’s version is that the partner dismissed her during that telephone conversation - a version which the applicant denied.

[4] Subsequently the third respondent referred to the first respondent a case of unfair dismissal. Conciliation failed and the dispute was referred to arbitration. The second respondent was appointed to arbitrate the dispute. Before the arbitrator it appears

that the only issue was whether the third respondent had been dismissed. It seems that the understanding was that if there had

been a dismissal, such dismissal would have been unfair. [5] After listening to evidence and argument, the commissioner handed down her award in which she found that the third respondent had been dismissed and that such dismissal had been unfair. The commissioner awarded the third respondent compensation in the amount of R27 425,00 to be paid by the applicant in equal instalments over six months commencing on the 31 May 1998. It is this arbitration award that is the subject of this review application at the instance of the applicant. [6] The grounds on which the applicant seeks to have the award set aside are to be found in paragraphs 9.2.1 up to par 9.2.9 of the applicant’s founding affidavit. The deponent to the applicant’s founding affidavit sets them out as follows :- “9.2.1 The arbitrator wrongfully and unjustifiably made certain assumptions against the applicant. 9.2.3 The arbitrator was totally biased against the applicant and took into account only the version of the employee. 9.2.4 The arbitrator acted grossly unreasonable [sic] in arriving at her decision and conclusions which resulted in the award.

[4] Subsequently the third respondent referred to the first respondent a case of unfair dismissal. Conciliation failed and the dispute was referred to arbitration. The second respondent was appointed to arbitrate the dispute. Before the arbitrator it appears

that the only issue was whether the third respondent had been dismissed. It seems that the understanding was that if there had

been a dismissal, such dismissal would have been unfair.

[5] After listening to evidence and argument, the commissioner handed down her award in which she found that the third respondent had been dismissed and that such dismissal had been unfair. The commissioner awarded the third respondent compensation in the amount of R27 425,00 to be paid by the applicant in equal instalments over six months commencing on the 31 May 1998. It is this arbitration award that is the subject of this review application at the instance of the applicant.

[6] The grounds on which the applicant seeks to have the award set aside are to be found in paragraphs 9.2.1 up to par 9.2.9 of the applicant’s founding affidavit. The deponent to the applicant’s founding affidavit sets them out as follows :-

“9.2.1 The arbitrator wrongfully and unjustifiably made certain assumptions against the applicant.

9.2.3 The arbitrator was totally biased against the applicant and took into account only the version of the employee.

9.2.4 The arbitrator acted grossly unreasonable [sic] in arriving at her decision and conclusions which resulted in the award.

9.2.5 The arbitrator totally ignored my letter dated 3 November 1997, which was sent to the employee requesting her to return to work until such time that the matter was resolved. 9.2.6 The arbitrator was biased in accepting that the employee was given wrong advice by an employee of CCMA. 9.2.7 The arbitrator clearly showed bias, especially taking into account points 9.4.1 and 9.4.2 above, and where I was given wrong advice relating to the word ‘reinstate’. This was used fully against the applicant by the arbitrator. 9.2.8 The arbitrator was clearly biased in its extreme in her decision when taking the employee’s version of the story as ‘fact’ and disregarding the version of that of the applicant. 9.2.9 The arbitrator was not prepared to waste time on any depth into this case. I therefore believe that her findings and award of this arbitration, were predetermined ”

9.2.5 The arbitrator totally ignored my letter dated 3 November 1997, which was sent to the employee requesting her to return to work until such time that the matter was resolved.

9.2.6 The arbitrator was biased in accepting that the employee was given wrong advice by an employee of CCMA.

9.2.7 The arbitrator clearly showed bias, especially taking into account points 9.4.1 and 9.4.2 above, and where I was given wrong advice relating to the word ‘reinstate’. This was used fully against the applicant by the arbitrator.

9.2.8 The arbitrator was clearly biased in its extreme in her decision when taking the employee’s version of the story as ‘fact’ and disregarding the version of that of the applicant.

9.2.9 The arbitrator was not prepared to waste time on any depth into this case. I therefore believe that her findings and award of this arbitration, were predetermined ”

[7] Before I can proceed I need to mention that in terms of the founding affidavit, the applicant said that this review application was being brought in terms of sec 158(1)(g) alternatively sec 145 of the Act. The founding affidavit was deposed to before the as yet unreported judgement of the Labour Appeal Court in Carephone (Pty) Ltd v Marcus NO and Others, case noJA52/98 in which it was held that applications for the review of CCMA awards can only be brought under sec 145 of the Act - and not under sec 158(1)(g) as had been previously decided in some of the judgements of this Court. [8] Reviews under sec 145 are contemplated if a party to a dispute “alleges a defect in arbitration proceedings under the auspices of the Commission ..” A defect such as is envisaged in sec 145(1) can take, according to sec 145(2), any one of four forms ; namely :- “(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 was improperly obtained”. [9] In par 20 of the Carephone judgement the Labour Appeal Court had the following to say in relation to the ruling that review applications relating to CCMA awards have to be brought under sec 145 of the Act:-

[7] Before I can proceed I need to mention that in terms of the founding affidavit, the applicant said that this review application was being brought in terms of sec 158(1)(g) alternatively sec 145 of the Act. The founding affidavit was deposed to before the as yet unreported judgement of the Labour Appeal Court in Carephone (Pty) Ltd v Marcus NO and Others, case noJA52/98 in which it was held that applications for the review of CCMA awards can only be brought under sec 145 of the Act - and not under sec 158(1)(g) as had been previously decided in some of the judgements of this Court.

[8] Reviews under sec 145 are contemplated if a party to a dispute “alleges a defect in arbitration proceedings under the auspices of the Commission ..” A defect such as is envisaged in sec 145(1) can take, according to sec 145(2), any one of four forms ; namely :-

“(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 was improperly obtained”.

[9] In par 20 of the Carephone judgement the Labour Appeal Court had the following to say in relation to the ruling that review applications relating to CCMA awards have to be brought under sec 145 of the Act:-

“20 The constitutional imperatives for compulsory arbitration under the LRA are thus that the process must be fair and equitable; that the arbitrator must be impartial and unbiased; the proceedings must be lawful and procedurally fair; that the reasons for the award must be given publicly and in writing; that the award must be justifiable in terms of those reasons; and that it must be consistent with the fundamental right to fair labour practices. [10] In par 24 the Labour Appeal Court continued and said :- “Where a commissioner exceeds the constitutional constraints on his or her powers on the arbitration, this can be reviewed by the Labour Court under sec 145(2)(a)(iii)”. The Labour Appeal Court then stated in par 35 that when the constitution requires administrative action to be justifiable in relation to the reasons given for it, it seeks to give expression to the fundamental values of accountability, responsiveness and openness but it does not give the courts the power to perform the administrative function themselves which would be the effect if justifiability in the review process is equated to justness or correctness. [11] Then in paragraphs 36 and 37 the LAC finally said :- “36 In determining whether administrative action is justifiable in terms of the reasons given for it, value judgements will have to be made which will, almost inevitably , involve the consideration of the ‘merits’ of the matter in some way or other. As long as the judge determining this issue is aware that he or she enters the merits not in order to substitute

his or her own opinion on the correctness thereof, but to determine whether the outcome is rationally justifiable, the process will be in order.

“20 The constitutional imperatives for compulsory arbitration under the LRA are thus that the process must be fair and equitable; that the arbitrator must be impartial and unbiased; the proceedings must be lawful and procedurally fair; that the reasons for the award must be given publicly and in writing; that the award must be justifiable in terms of those reasons; and that it must be consistent with the fundamental right to fair labour practices.

[10] In par 24 the Labour Appeal Court continued and said :-

“Where a commissioner exceeds the constitutional constraints on his or her powers on the arbitration, this can be reviewed by the Labour Court under sec 145(2)(a)(iii)”.

The Labour Appeal Court then stated in par 35 that when the constitution requires administrative action to be justifiable in relation to the reasons given for it, it seeks to give expression to the fundamental values of accountability, responsiveness and openness but it does not give the courts the power to perform the administrative function themselves which would be the effect if justifiability in the review process is equated to justness or correctness.

[11] Then in paragraphs 36 and 37 the LAC finally said :-

“36 In determining whether administrative action is justifiable in terms of the reasons given for it, value judgements will have to be made which will, almost inevitably , involve the consideration of the ‘merits’ of the matter in some way or other. As long as the judge determining this issue is aware that he or she enters the merits not in order to substitute

his or her own opinion on the correctness thereof, but to determine whether the outcome is rationally justifiable, the process will be in order.

37 Many formulations have been suggested for this kind of substantive rationality required of administrative decision makers, such as ‘reasonableness’, ‘rationality’, ‘proportionality’ and the like (Cf. E.g. Craig,

Administrative Law, at 337-349; Schwarze, European Administrative Law, 1992 at 677). Without denying that the application of these formulations in particular cases may be instructive, I see no need to stray from the concept of justifiability itself. To rename it will not make matters any easier. It seems to me that one will never be able to formulate a more specific test other than that, in one way or another, asking the question: is there a rational objective basis justifying the connection made by the administrative decision-maker between the material properly available to him and the conclusion he or she eventually arrived at? In time only judicial precedent will be able to give more specific content to the broad concept of justifiability in the context of the review provisions in the LRA”. [12] In the light of the above, I then proceed to examine the applicant’s grounds of review :- 12.1. as to the ground in par 9.2.1, that cannot be considered properly because the assumptions which the commissioner is alleged to have made “wrongfully and unjustifiably” have not been disclosed. Accordingly this ground must be rejected.

37 Many formulations have been suggested for this kind of substantive rationality required of administrative decision makers, such as ‘reasonableness’, ‘rationality’, ‘proportionality’ and the like (Cf. E.g. Craig,

Administrative Law, at 337-349; Schwarze, European Administrative Law, 1992 at 677). Without denying that the application of these formulations in particular cases may be instructive, I see no need to stray from the concept of justifiability itself. To rename it will not make matters any easier. It seems to me that one will never be able to formulate a more specific test other than that, in one way or another, asking the question: is there a rational objective basis justifying the connection made by the administrative decision-maker between the material properly available to him and the conclusion he or she eventually arrived at? In time only judicial precedent will be able to give more specific content to the broad concept of justifiability in the context of the review provisions in the LRA”.

[12] In the light of the above, I then proceed to examine the applicant’s grounds of review :-

12.1. as to the ground in par 9.2.1, that cannot be considered properly because the assumptions which the commissioner is alleged to have made “wrongfully and unjustifiably” have not been disclosed. Accordingly this ground must be rejected.

12.2. The grounds of review numbered paragraphs 9.2.3, 9.2.6, 9.2.7 and 9.2.8 can be dealt with simultaneously because they all relate to alleged bias on the part of the commissioner. These allegations of bias have not been substantiated in any way. In par

9.2.3 the basis for the allegation of bias there is given as that the commissioner took into account only the version of the third respondent. This is not supported by a reading of the commissioner’s award. For that reason I am unable to uphold the ground of review advanced in par 9.2.3. 12.3. I am also unable to uphold the unsubstantiated allegation in par 9.2.6 that the commissioner was “biased” in accepting that the third respondent had been given wrong advice by an employee of the CCMA. As to the allegation in par 9.2.7, the reference there to 9.4.1 and 9.4.2 seems to be a wrong reference and, for that reason, I do not know what the allegation relates to. In so far as in the same paragraph the applicant relies on the allegation that it had been given wrong advice which the commissioner used “fully” against it, again this is an unsubstantiated allegation. At any rate not only was it, in my view, legitimate for the commissioner to take into account the letter concerned in deciding which version to accept but also it was obliged to take that letter into account. Finally on bias, the complaint in par 9.2.8 is totally unsubstantiated and must be rejected.

12.2. The grounds of review numbered paragraphs 9.2.3, 9.2.6, 9.2.7 and 9.2.8 can be dealt with simultaneously because they all relate to alleged bias on the part of the commissioner. These allegations of bias have not been substantiated in any way. In par

9.2.3 the basis for the allegation of bias there is given as that the commissioner took into account only the version of the third respondent. This is not supported by a reading of the commissioner’s award. For that reason I am unable to uphold the ground of review advanced in par 9.2.3.

12.3. I am also unable to uphold the unsubstantiated allegation in par 9.2.6 that the commissioner was “biased” in accepting that the third respondent had been given wrong advice by an employee of the CCMA. As to the allegation in par 9.2.7, the reference there to 9.4.1 and 9.4.2 seems to be a wrong reference and, for that reason, I do not know what the allegation relates to. In so far as in the same paragraph the applicant relies on the allegation that it had been given wrong advice which the commissioner used “fully” against it, again this is an unsubstantiated allegation. At any rate not only was it, in my view, legitimate for the commissioner to take into account the letter concerned in deciding which version to accept but also it was obliged to take that letter into account. Finally on bias, the complaint in par 9.2.8 is totally unsubstantiated and must be rejected.

12.4 With regard to the complaint in par 9.2.4., this is also totally unsubstantiated and must be rejected. The complaint in par 9.2.5 is also unsubstantiated. The letter of the 3rd November 1997 was dealt with by the commissioner in the third page of her award. Accordingly this complaint is without merit. As to the complaint in par 9.2.9., same is also totally unsubstantiated and must be rejected. [13] As I have not been able to find even one of the “grounds of review” relied upon by the applicant to have merit, it follows that the application for review falls to be dismissed. Accordingly the applicant’s application is dismissed. R. M. M. ZONDO Judge of the Labour Court of SA Date of Argument 28 September 1998 Date of Judgement 28 October 1998 For the Applicant Mrs C. Zeborah (Director) 3rd Respondent in person Mrs L. P. Spear

12.4 With regard to the complaint in par 9.2.4., this is also totally unsubstantiated and must be rejected. The complaint in par 9.2.5 is also unsubstantiated. The letter of the 3rd November 1997 was dealt with by the commissioner in the third page of her award. Accordingly this complaint is without merit. As to the complaint in par 9.2.9., same is also totally unsubstantiated and must be rejected.

[13] As I have not been able to find even one of the “grounds of review” relied upon by the applicant to have merit, it follows that the application for review falls to be dismissed. Accordingly the applicant’s application is dismissed.

R. M. M. ZONDO

Judge of the Labour Court of SA

Date of Argument 28 September 1998

Date of Judgement 28 October 1998

For the Applicant Mrs C. Zeborah (Director)

3rd Respondent in person Mrs L. P. Spear