Employment law update

October 24th, 2016
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Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at Bowman Gilfillan in Johannesburg.

Monique Jefferson BA (Wits) LLB (Rhodes) is an attorney at Bowman Gilfillan in Johannesburg.

Can a co-respondent file an answering affidavit in which it seeks the same relief as the applicant and raises facts and allegations that support the applicant’s claim?

In Kruger and Others v Aciel Geomatics (Pty) Ltd (LAC) (unreported case no JA87/2014, 14-6-2016) (Waglay JP, Davis JA), the Labour Appeal Court (LAC) upheld the Labour Court’s (LC) decision that the cancellation of a non-exclusive distribution agreement does not trigger the application of s 197 of the Labour Relations Act 66 of 1995 (LRA). In addition, the LAC was required to consider whether a co-respondent becomes an applicant in the proceedings should it file an affidavit that supports the relief sought by the applicant.

In this case, Geosystems Africa (Pty) Ltd (GSA) was cited as a respondent in the proceedings despite the fact that no relief was sought against GSA. This was because GSA was the old employer of the applicant employees seeking relief and it had an interest in the proceedings in that, should the applicant employees fail in their application, GSA may be required to pay severence pay to the applicant employees. GSA filed an affidavit as a co-respondent but this affidavit raised facts and allegations that supported the applicants’ claim. Furthermore, GSA sought the same relief as the applicants.

The respondent objected to the LC taking into account the affidavits filed by GSA. It argued that these affidavits should be struck out as it amounted to an irregularity. The LC did not agree and was of the view that it was entitled to depart from the accepted rules relating to motion proceedings provided that this departure was in the interest of justice and fairness. It based its decision on the fact that the objection was raised by the respondent late in the proceedings and the fact that excluding the affidavits of GSA could cause the applicants to suffer prejudice.

The LAC per Waglay JP held the view that the LC should have struck out GSA’s affidavits and should not have allowed GSA to present evidence as if it were an applicant in the proceedings. Waglay JP accordingly agreed with the submissions made by Counsel for the respondent in the LC proceedings. In this regard, counsel for the respondent argued that GSA had three options as a respondent in this matter – it could either –

  • oppose the relief sought and file an answering affidavit refuting the applicants’ case;
  • elect not to oppose the relief but to abide by the relief sought; or
  • apply to be joined to the proceedings as a second applicant.

Thus, Waglay JP held that GSA was not entitled to file an answering affidavit to assist the applicants in building a case against the respondent. Furthermore, not only was GSA assisting the applicants in building a case, but it also sought the same relief as the applicants. This had the effect that GSA was not simply placing evidence before the court but was instead making itself an applicant in the proceedings. Waglay JP was of the view that by allowing the GSA affidavits there was a further founding affidavit that the respondent was required to respond to. Waglay JP concluded that it is not permissible to allow a co-respondent to file answering papers in which it seeks the same relief as the applicant without seeking to be an applicant in the proceedings. Furthermore, a court is not entitled to exercise its discretion to determine whether or not to allow this as this would severely prejudice the respondent in that the respondent would need to defend itself against both the applicant and the co-respondent.

Waglay JP set out the following principles that apply to motion proceedings –

  • An applicant must make out its case in its founding affidavit.
  • The respondent is only obliged and entitled to respond to the case set out in the applicant’s founding affidavit.
  • An applicant can only succeed on the basis of facts in the founding affidavit, which are not disputed in the answering affidavit, read with additional facts deposed to in the respondent’s answering affidavit. Therefore, the respondent is only obliged to deal with the case made out in the founding affidavit and the applicant cannot seek to make out a cause of action based on facts in the answering affidavit which did not form part of the founding affidavit.
  • A respondent is not obliged to deal with allegations made in a co-respondent’s affidavit, which may assist the applicant’s case. This is because there is no lis between a respondent and co-respondent. The respondent is only required to deal with the case in the applicant’s founding affidavit and does not need to oppose what is stated by the co-respondent as the co-respondent is not entitled to any relief unless it becomes an applicant in the proceedings.

As regards the application of s 197 of the LRA, the applicants argued that s 197 was triggered upon the cancellation of a non-exclusive distribution agreement between GSA and Leica Geosystems AG (Leica) and that their employment should transfer to the respondent in this matter, which had become the sole distributor of Leica products since the cancellation of the agreement between GSA and Leica. The applicants argued that s 197 was triggered as a number of GSA employees had become employed by the respondent. In this regard, approximately six to eight employees had become employed by the respondent while about 22 employees remained employees of GSA. Furthermore, a number of customers of GSA had placed their custom with the respondent after the termination of the distribution agreement. The LAC, per Davis JA, found that this in itself was not enough to trigger s 197 as the applicants needed to show that there had been a transfer of a business as a going concern.

The applicants argued that there had been a conspiracy between Leica and the respondent in which there had been a gradual transfer of the business over time which had ultimately led to the cancellation of the distribution agreement. It was held that the evidence did not show that there was an ongoing discrete economic activity – which was conducted by the business structure of GSA – and which was now in the hands of the respondent. Instead, the facts showed that Leica had entered into a non-exclusive distribution agreement with GSA. Leica then experienced performance problems with GSA and decided to appoint a second distributor, the respondent, in competition with GSA in the hope that GSA would improve its performance. When GSA’s performance did not improve Leica decided to cancel the distribution agreement that it had with GSA. The respondent then simply continued to perform its functions in terms of the distribution agreement that it had entered into with Leica. As set out above, it was held that this did not constitute a transfer of a business as a going concern and thus s 197 is not triggered upon the cancellation of a non-exclusive distribution agreement.

The appeal was dismissed with costs, including the cost of two counsel.

 

 

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

Moksha Naidoo BA (Wits) LLB (UKZN) is an advocate at the Johannesburg Bar.

Record of an internal disciplinary hearing – the probative weight at arbitration in appropriate factual circumstances

Minister of Police v M and Others (LC) (unreported case no JR56/14, 19-8-2016) (Whitcher J).

‘RM’, a member of the South African Police Service (SAPS), was criminally charged for raping his daughter over a period of four years. Pursuant to this the SAPS convened an internal disciplinary inquiry and charged RM for certain acts of misconduct, including contravening the SAPS code of conduct.

At his inquiry, RM’s daughter (K) testified how and when her father had raped her. Her testimony was corroborated by RM’s son (S) and current wife (D) who both testified on behalf of the SAPS.

Each of the SAPS’s witnesses were asked probing and relevant questions by RM’s representative, as well as the chairperson of the inquiry, thus their respective testimonies were ‘clear, thoroughly ventilated and tested’.

RM was found guilty of the charges and subsequently dismissed, whereafter he challenged the substantive fairness of the dismissal at the bargaining council.

At arbitration the challenge for the SAPS was that it could not locate RM’s daughter, son or wife to testify on its behalf and as a result thereof, the only evidence the SAPS tendered in support of its case was the transcribed record of the disciplinary inquiry.

Although the arbitrator found the record was admissible she, however, held that in the absence of any corroborating or additional evidence in support of its case, the hearsay evidence was insufficient, at a de novo hearing, to find RM guilty of the charges he was dismissed for. In addition the arbitrator found that RM was prejudiced as he could not exercise his right to cross examine the SAPS’s evidence.

On review the SAPS argued that the arbitrator committed a reviewable irregularity by failing to apply her mind to the evidence before her.

As a starting point the court, per Whitcher J, noted that in the same manner a commissioner may commit a reviewable act by attaching too much weight to hearsay evidence, the same can hold true under circumstances where the commissioner places insufficient weight to hearsay evidence.

Having examined the transcribed record the court held.

‘In my view, the commissioner did not seem to realise that the transcripts before her were no ordinary hearsay. The transcripts were hearsay of a special type.  Considered in full, they comprised a bi-lateral and comprehensive record of earlier proceedings in which K’s evidence against RM was indeed corroborated by S and D; in which this substantiation survived competent testing by way of cross-examination; and in which RM’s own defense was ventilated and exposed as being implausible.’

While the court found that the verdict reached by the internal chairperson was irrelevant at proceedings before the arbitrator, the records, however, ‘constitute a comprehensive and reliable record of a prior quasi-judicial encounter between the parties’ and for this reason should have been afforded greater intrinsic weight than one would to normal hearsay evidence such as a witness’s statement.

The inherent prejudice in leading a written statement at arbitration is the fact that the person against whom such evidence is led, is not in a position to cross-examine the author of the statement, yet in this case, through his representative at his internal hearing, RM cross examined all three witnesses extensively. Thus the prejudice RM faced at arbitration was reduced to not having a second opportunity to cross examine the very same witnesses.

Having made this point the court went onto say:

‘I do not mean to suggest that transcripts take the place of live witnesses or that arbitrations should not function as hearings de novo. The issue is that in appropriate factual circumstances, a single piece of hearsay, such as a transcript of a properly run internal hearing, may carry sufficient weight to trigger the duty in the accused employee to rebut the allegations contained in the hearsay…’.

A reading of the transcribed record demonstrated that K’s corroborated version was more probable than RM’s version and for this reason he had a prima facie case to answer to.

In light of its findings the court took the opportunity to set out some guidelines on when a single piece of hearsay evidence, led at arbitrations under the Labour Relations Act 66 of 1995, could shift the evidentiary burden to an employee to rebut. The hearsay should:

‘(1) be contained in a record which is reliably accurate and complete;

(2) be tendered on the same factual dispute;

(3) be bi-lateral in nature.  In other words, the hearsay should constitute a record of all evidence directly tendered by all contending parties;

(4) in respect of the allegations, demonstrate internal consistency and some corroboration at the time the hearsay record was created. …;

(5) show that the various allegations were adequately tested in cross-examination. For example, the transcripts record not only K’s allegations but also RM’s attempts to discredit them;

(6) have been generated in procedurally proper and fair circumstances. For example, the internal hearing that generated the hearsay records was run in a scrupulously fair manner by Snr Supt Matabane, with RM free to conduct his defence as he wished.’

Returning to the merits of the review application the court found that the arbitrator erred in unreasonably assigning minimal weight to the transcribed record which in turn unduly distorted the outcome of the matter. The transcribed record, under these factual circumstances, was sufficient to put up a prima facie case against RM for which he had to answer to.

The award was reviewed and set aside and remitted to the bargaining council for a hearing de novo. No order as to costs was made.

 

These articles were first published in De Rebus in 2016 (Nov) DR 55.