Consequences of an arbitrator’s failure to consider s 193(2) of the Labour Relations Act

May 1st, 2017
x
Bookmark

Moodley v Department of National Treasury and Others (LAC) (unreported case no JA13/2016, 10-1-2017) (Coppin JA) (Ndlovu JA and Savage AJA concurring)

By Yashin Bridgemohan

Section 193(2) of the Labour Relations Act 66 of 1995 (LRA) provides that the Labour Court (LC) or arbitrator (which includes a Commission for Conciliation, Mediation and Arbitration (CCMA) commissioner) ‘… must require the employer to reinstate or re-employ the employee unless –

(a) the employee does not wish to be reinstated or re-employed;

(b) the circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable;

(c) it is not reasonably practicable for the employer to reinstate or re-employ the employee; or

(d) the dismissal is unfair only because the employer did not follow a fair procedure.’

The Constitutional Court in the case of South African Revenue Service v Commission for Conciliation, Mediation and Arbitration and Others [2017] 1 BLLR 8 (CC) at para 44 held that the commissioner failed to make the s 193(2) determination and had, in fact, ignored and failed to take into account evidence that the reinstatement or re-employment of the employee would be intolerable and that the failures were unreasonable. Mogoeng CJ provided:

‘After concluding that Mr Kruger’s dismissal was unfair, the arbitrator immediately ordered his reinstatement without taking into account the provisions of section 193(2). She was supposed to consider specifically the provisions of section 193(2) to determine whether this was perhaps a case where reinstatement is precluded. She was also obliged to give reasons for ordering Sars to reinstate Mr Kruger despite its contention and evidence that his continued employment would be intolerable. She was required to say whether she considered Mr Kruger’s continued employment to be tolerable and if so, on what basis. This was not done. She does not even seem to have considered whether the seriousness of the misconduct and its potential impact in the workplace, were not such as to render reinstatement inappropriate. And those are the key factors she ought to have considered before she ordered SARS to reinstate Mr Kruger.’

Facts

In August 2007, the first respondent employed the applicant as a Director of Facilities Management. On 19 April 2011, the first respondent charged the applicant with 11 counts of misconduct relating mainly to non-compliance with procurement procedures and the failure to disclose her interests relating to certain transactions and the receipt of a gift.

The disciplinary hearing was chaired by the fourth respondent, an independent advocate. The chairperson found the applicant guilty of nine of the 11 charges. The chairperson imposed a sanction in respect of each charge and further imposed an overall sanction in respect of all the charges, which was dismissal with an alternative of demotion.

The applicant, through her legal representative, in a letter dated 15 February 2012, forwarded to the first respondent, acceptance of the lesser sanction of demotion. Notwithstanding the lesser sanction imposed by the chairperson, and the applicant’s acceptance thereof, the Director-General of the first respondent informed the applicant that she was discharged from the Public Service on account of misconduct and her dismissal was effective immediately.

The applicant’s dispute of unfair dismissal which was referred to the General Public Service Sector Bargaining Council (GPSSBC), proceeded to arbitration. The main point of the applicant’s complaint was that the department could not have substituted the chairperson’s lesser sanction of demotion with a dismissal and that such a substitution was inherently unfair.

The arbitrator made the following award:

  • The sanction of demotion should stand and the respondent is ordered to reinstate the applicant retrospectively.
  • The respondent is ordered to pay the applicant her salary from 21 February 2012 calculated at the salary scale of the applicant at the time of her dismissal.
  • The said amount must be paid on or before 30 July 2012.

The first respondent then made application to the LC on 21 September 2012 to review and set aside the award made by the arbitrator. The first respondent further sought to have the matter remitted to the GPSSBC for a hearing de novo before a new arbitrator.

The court a quo found that the arbitrator’s award did not fall within the bounds of reasonableness. The court a quo found arbitrators are required to determine, having regard to a variety of factors (including those in Schedule 8 of the LRA), whether the sanction of dismissal was fair. It was required of the arbitrator to determine what was fair and did not require the arbitrator to defer to the employer’s decision, but to consider all relevant circumstances.

The applicant then sought leave to appeal from the court a quo, which was granted.

Labour Appeal Court’s (LAC) judgment

Coppin JA found the arbitrator’s award did not refer at all to s 193 of the LRA. Similar to the arbitrator in the South African Revenue Services case, the arbitrator did not seem to have considered whether the seriousness of the misconduct and its potential impact in the workplace, were not such as to render reinstatement inappropriate. The arbitrator’s omission to do so, in circumstances where he or she, was legally obliged to have done so, was justifiably criticised as being unreasonable and as a failure of the arbitrator to apply his or her mind to the issues.

Coppin JA further disagreed with the reasoning of the court a quo on the merits, found its conclusion that the arbitrator’s award had to be set aside was correct.

The LAC accordingly dismissed the applicant’s application.

Conclusion

The judgment is important as it confirms that when dealing with unfair dismissal disputes relating to misconduct, where an employer changes a chairperson’s final sanction, there is a duty on arbitrators to consider s 193(2) of the LRA. Failure to do so by an arbitrator vitiates the arbitration award. An employer aggrieved by said failure may make application to the LC to have the arbitration award reviewed and set aside.

Yashin Bridgemohan LLB (UKZN) PG DIP Labour Law (NWU) is an attorney at Yashin Bridgemohan Attorney in Pietermaritzburg.

This article was first published in De Rebus in 2017 (May) DR 52.

Loading...