Talita Laubscher BIur LLB (UFS) LLM (Emory University USA) is an attorney at Bowman Gilfillan in Johannesburg.
Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at Bowman Gilfillan in Johannesburg.
Section 197 transfers
In Maluti-A-Phofung Local Municipality v Rural Maintenance (Pty) Ltd and Another [2016] 1 BLLR 13 (LAC), the Labour Appeal Court (LAC) was required to consider whether s 197 applied on the municipality cancelling a service agreement with the service provider, Rural Maintenance. In 2011 the municipality appointed Rural Maintenance to maintain and manage the supply of electricity for a period of 25 years. On Rural Maintenance’s appointment, it was agreed that 16 of the municipality’s employees would transfer to Rural Maintenance. Over time, Rural Maintenance expanded its business and increased its workforce to 127 employees. In 2013 the municipality argued that the contract between the municipality and Rural Maintenance was null and void as the signatory to the contract did not have the requisite authority from the municipality to enter into the contract. Rural Maintenance alleged that the municipality was in breach of the contract and sought to cancel the contract on this basis.
Rural Maintenance then took steps to transfer the 127 employees involved in performing the electricity management and maintenance services to the municipality. It also returned to the municipality the properties, tools, equipment and vehicles that had initially been transferred to it when the contract commenced. Rural Maintenance did, however, retain certain assets such as vehicles and computer stations. The Labour Court (LC) found that there had been a transfer of a business as a going concern and it ordered that the 127 employees be transferred to the municipality in accordance with s 197.
On appeal, the municipality argued that s 197 did not apply as Rural Maintenance had not taken positive steps to transfer the business back to the municipality, which argument the LAC rejected. Furthermore, the municipality argued that there was not a transfer of a business as a going concern as the municipality could not carry out the business in substantially the same way as it had been carried out by Rural Maintenance and thus it did not constitute the same business but in different hands. This was because specialised tools and significant assets were not handed over by Rural Maintenance and the municipality was accordingly unable to perform the comprehensive service that had been carried out by Rural Maintenance with only the basic infrastructure at its disposal. The only way in which the municipality would be able to continue the business as a going concern was if it had received the specialised infrastructure from Rural Maintenance or had acquired it themselves. The LAC accordingly found that there had not been a transfer of a business as a going concern as the municipality was not able to seamlessly continue the business after the transfer.
Sexual harassment – a heinous misconduct that plagues a workplace
In the case of Campbell Scientific Africa (Pty) Ltd v Simmers and Others [2016] 1 BLLR 1 (LAC), the LAC considered whether unwelcome conduct of an employee, Mr Simmers, of a non-physical nature during a business trip constituted sexual harassment, which justified dismissal. The Labour Court (LC) had found that Simmer’s dismissal for sexual harassment and unprofessional conduct was substantively unfair and reinstatement with a final written warning was ordered.
Simmers stayed at a lodge in Botswana while attending to business together with a work colleague and an employee of another company, which had formed a consortium with Campbell Scientific. Evidence was led that after the three of them had dinner Simmers made unwelcome advances towards the complainant. In this regard, he asked the complainant whether she had a boyfriend and repeatedly asked her to come to his room. The complainant rejected these advances and was then told to phone him if she changed her mind. The complainant later gave evidence that she had felt uncomfortable and insulted by Simmers’ conduct and was of the view that he had acted inappropriately towards her. She consequently refused to work with Simmers going forward. Simmers’ version was that he had merely made an invitation to the complainant in a conversation between consenting adults, which had been meant to be taken lightly. He said that the invitation was made half-jokingly. A disciplinary inquiry was convened and Simmers was dismissed. When he referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration, the commissioner found that dismissal was an appropriate sanction as the misconduct was serious and Simmers did not show remorse, which demonstrated that any future relationship between the parties was not possible.
The matter was then taken to the LC where it was found to constitute an unfair dismissal. In finding that the dismissal was unfair, the LC considered factors such as the fact that Simmers and the complainant would not work together again as she had moved to Australia, they were not co-employees, there was no disparity of power, the conduct was once-off and it occurred outside of working hours. It was found that in line with the requirement to apply progressive discipline the employee should have been issued with a final written warning.
The LAC considered sexual harassment in light of the Constitutional right to human dignity and equality and the fact that sexual harassment constitutes a barrier to the achievement of substantive equality in the workplace. It was found that although this incident had occurred at a social event, this was a work-related social event, which Simmers and the complainant would not have been at had it not been for Simmers’ employment. The incident was thus not unrelated to his employment.
The LAC found that the LC had erred in finding that there was no power disparity. According to the LAC, there was a power differential based on Simmers’ age and gender. Thus, the fact that they were not co-employees and Simmers did not hold a more senior position than the complainant did not negate the power disparity at play. The LAC also found that the fact that this was a once-off occasion and did not involve physical conduct or the persistent pursuit of the complainant by Simmers did not mean that it did not constitute sexual harassment. The LAC did not agree with the LC’s finding that Simmers had merely been ‘trying his luck’. Simmers had violated the complainant’s right to equality in the workplace when he elected to make unwelcome advances towards the complainant. The LAC held that the Constitution affords women the right to engage constructively and on an equal basis within the workplace without infringements on their right to dignity and equality.
The LAC found that the dismissal was fair as it was serious misconduct and Simmers had not shown remorse and thus there was little opportunity for rehabilitation. The LAC also stated that it wanted to send out a message about the seriousness of sexual harassment and the fact that this will not be tolerated and will be met with the harshest penalty.
Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.
The consequence of not diligently prosecuting a review application
Toyota SA Motors (Pty) Ltd v CCMA and Others (CC) (unreported case no CCT22814, 15-12-2015) (Nkabinde J with nine other judges concurring).
On his return to work after being absent without leave from 28 February 2011 to 3 March 2011, the employee, Mr Makhotla was charged with unauthorised absenteeism by his employer Toyota SA Motors (Toyota).
Subsequent to receiving his notice to attend his disciplinary hearing, but prior to the commencement of the inquiry, Makhotla tendered his resignation on 7 March 2011 with effect 31 March 2011. Notwithstanding this, Toyota took the decision to continue with Makhotla’s hearing, which resulted in him being dismissed on 24 March 2011.
Makhotla referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). The arbitrator found Makhotla’s dismissal substantively unfair and ordered Toyota to reinstate Makhotla and pay him R 218 400 in ‘back pay’.
On 19 October 2011 Toyota launched an application to review and set aside the award on various grounds including the allegation that the arbitrator failed to have regard to Makhotla’s conflicting explanations for being absent as well as the allegation that the arbitrator prevented Toyota from cross examining Makhotla on his conflicting versions.
On 18 November 2011 the CCMA delivered an incomplete record of the arbitration proceedings – it delivered one disc that only had 20 minutes of the process recorded on it. On 30 November Toyota instructed its correspondent attorney to uplift the record at the Labour Court (LC), which it received on 2 February 2012. On 6 March 2012 Toyota sent the arbitrator’s handwritten notes to be transcribed and on 19 March 2012 delivered the record in terms of r 7A(6) but did not include the arbitrator’s transcribed notes.
In response the Retail and Allied Workers Union, acting on behalf of Makhotla, requested from Toyota the complete record. Toyota informed the union that it received an incomplete record and was awaiting a transcript of the arbitrator’s notes.
On 7 June 2012 the CCMA informed Toyota that it could not locate the remaining portion of the record and offered to set down the matter for reconstruction.
On 20 June 2012 the transcribers advised Toyota that 70% of the arbitrator’s notes were illegible but they would attempt to finalise the transcript.
On 23 August 2012 Toyota sent a second follow-up letter to the transcribers and on the same day also sent a letter to the CCMA informing it that the arbitrator’s notes were illegible and requested the matter be set down for reconstruction.
In the absence of the CCMA responding to this request, Toyota and the Union met on 28 November 2012 in an attempt to reconstruct the record. On 23 January 2013 the arbitrator’s notes were transcribed and ready for collection. On 31 January 2013 Toyota sent the Union the transcribed notes of the reconstruction process, which the parties participated in and advised them that it would be sending through the arbitrator’s transcribed notes.
Having not received the transcript of the arbitrator’s notes, the Union on 8 August 2013 launched an application to the LC to have Toyota’s review application dismissed (the dismissal application) on the basis of undue delay in prosecuting its application and further to make the arbitration award an order of court.
The LC per Fourie AJ granted Makhotla’s dismissal application. Both the LC and the Labour Appeal Court (LAC) refused Toyota’s application for leave to appeal, therein after Toyota approached the Constitutional Court (CC).
Although the CC found it had jurisdiction over the matter, the question was whether or not it should exercise its discretion in favour of Toyota by granting leave to appeal. While not a decisive factor into this inquiry, an important factor was whether or not Toyota had prospects of success if leave to appeal was granted; put differently whether the LC was correct in granting Makhotla’s dismissal application.
The court went on to say that when assessing the reasonableness of a delay one must incorporate the ethos of the Labour Relations Act 66 of 1995 (LRA) into such an inquiry – the LRA provided for the simple, quick, cheap and informal approach to labour disputes.
Having evaluated the sequence of events that culminated in Makhotla’s dismissal application, the court held:
‘… it is plain that in 22 months Toyota did very little to prosecute the review. The delay is wholly excessive. There is no explanation for the delays between 30 November 2011 and 24 January 2012, and 19 March and 23 August 2012. The approach to procuring a full record of the hearing was not diligent, the prosecution of the review was not expeditiously pursued and the explanation for the delays is not reasonable … .
Another hurdle of an added inordinate delay that Toyota had to surmount, which remains unexplained, relates to the period between about February and August 2013. It is common cause that the transcription of the arbitrator’s notes was done on 22 January 2013 and the transcribed notes were subsequently filed by the CCMA with the Registrar of the LC on 23 January 2013. These notes were made available to Toyota on or about 29 January 2013. Despite all of this, Toyota only delivered the reconstructed record on 27 August 2013 – some seven months later. This was after Mr Makhotla’s application to dismiss the review and make the award an order of Court was lodged.’
The court went on to find that as the party who initiated a review application, Toyota, was obliged to take steps to reconstruct the record as soon as it became aware that there was a problem with the record (that being in February 2012).
Turning to the merits of Toyota’s review application and after reading the reconstructed record, the CC found that there was no merit in Toyota’s argument that the arbitrator failed to consider Makhotla’s different explanations for being absent or that Toyota was prevented from cross examining him over this issue.
The court further declined to consider Toyota’s argument that the arbitrator erred in awarding Makhotla reinstatement when he was dismissed seven days before his resignation was to come into effect. In so doing the court held that Toyota failed to place this argument before the LC in opposing the dismissal application and it would be unfair on Makhotla, at this stage of litigation, if Toyota were allowed to pursue this argument for the first time.
In its order the court refused Toyota leave to appeal with costs.
In a dissenting judgment Zondo J, began by recording the reasons why the LC granted Makhotla’s dismissal application. These reasons were: Firstly, Toyota did nothing for 18 month’s to ‘improve the record’; and, secondly, Toyota did not have ‘excellent’ prospects of success and thirdly, Toyota failed to place an adequate record before the court.
On an overall assessment of the events Zondo J held that the LC erred in finding Toyota had not done anything to pursue its review application for some 18 months and further erred by finding Toyota was at fault for failing to file the record, under circumstances were the onus was with the CCMA to file a complete set of digital recording at the LC.
Zondo J criticised the LC for failing to take into account the issue of prejudice. Had the court done so, it ought to have found that any prejudice Makhotla suffered due to the delay in finalising the review application, would have been cured if Toyota’s review application was dismissed on merit (as opposed to being dismissed for want of prosecution). In contrast by granting the dismissal application, Toyota was saddled with an award without having the legal recourse to test the competency of same.
Next Zondo J turned to Toyota’s prospects of success in the review application and found that Toyota had reasonable prospects of success in that the arbitrator –
Zondo J concluded by saying he would have granted Toyota leave to appeal and upheld the appeal by substituting the LC’s order with an order dismissing
Makhotla’s dismissal application.
This article was first published in De Rebus in 2016 (March) DR 38.
