Employment law update – Rescission

July 1st, 2012

By Talita Laubscher

In Builders Trade Depot v CCMA and Others [2012] 4 BLLR 343 (LC) the fourth respondent employee, Naidoo, was dismissed on 1 December 2009 for drinking on duty. He referred a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA) on 23 December 2009. The matter was set down for con-arb on 25 January 2010. The employer objected to con-arb on 12 January. On 13 January Naidoo’s attorney wrote to the CCMA and confirmed that only conciliation would take place on 25 January. The employer did not attend the conciliation but Naidoo did. Despite the employer’s objection to con-arb and the confirmation by Naidoo’s attorney, the commissioner, Bulose, proceeded with arbitration in the employer’s absence and heard Naidoo’s evidence. He found that Naidoo’s dismissal was fair.

After becoming aware of the award, the employer’s attorneys wrote to Naidoo’s attorneys on 17 February 2010 seeking clarification as to why the arbitration went ahead. Shortly thereafter, Naidoo filed a rescission application in the CCMA. The employer opposed the application, arguing that Naidoo did not have locus standi to apply for rescission as the arbitration was not heard in his absence – it was the employer that was not present at the arbitration. The employer further contended that Naidoo had dishonestly carried on with the arbitration and that, in any event, the dismissal was fair.

Commissioner Bulose handed down his rescission ruling on 19 March 2010. He ignored the preliminary point regarding locus standi and, while he agreed that Naidoo had acted reprehensibly, he rescinded the award. Arbitration was then set down before another commissioner, Van Zyl, who held that Naidoo’s dismissal was substantively unfair.

The employer applied for the review of Commissioner Bulose’s rescission ruling and the arbitration award of Commissioner Van Zyl.

The Labour Court, per Steenkamp J, first considered the review of the rescission ruling. It noted that it was unusual for a party who was present at the arbitration, rather than the absent party, to apply for the rescission of the award and then considered whether this was allowed, that is, whether Commissioner Bulose exceeded his powers by considering the rescission application. Naidoo had submitted in his rescission application that the award had been ‘erroneously granted’ and, as such, appeared to have relied on s 144(a) of the Labour Relations Act 66 of 1995 (LRA). However, this section does not only provide that the award must have been ‘erroneously granted’, in addition, it provides that the award must have been erroneously made ‘in the absence of any party affected by that award’. Interpreting this section, the court held that only an award ‘erroneously made’ ‘in the absence of any party affected by that award’ may be rescinded. In this case, Naidoo certainly was affected by the award, but it was not made ‘in his absence’. Therefore, an employee who is present at the arbitration and who is affected by the award cannot apply for rescission.

The court then considered whether the award could be rescinded in terms of s 144(c), namely whether the award was made ‘as a result of a mistake common to the parties to the proceedings’. Here the court noted that the parties (or at least their legal representatives) were ad idem that the dispute should only be conciliated on 25 January. The commissioner mistakenly proceeded with arbitration. Hence, if there was a mistake, it was made by the commissioner. It was not a mistake ‘common to the parties’, and thus s 144(c) did not apply.

In the circumstances, the court held that Commissioner Bulose exceeded his powers when he granted the rescission application. The rescission ruling was accordingly reviewed and set aside.

Abuse of alcohol

The court then considered the review of Commissioner Van Zyl’s arbitration award. It noted that it was common cause that Naidoo was under a written warning for driving a forklift while under the influence of alcohol. It was further common cause that on the day in question he was not performing functions as a relief forklift driver, but was dealing with members of the public in his capacity as a salesman. The employer’s branch manager, Axon, had visited the store and, when he spoke to Naidoo, he smelled alcohol on Naidoo’s breath. He further noted that Naidoo was unsteady on his feet, that he slurred his speech and that his eyes were bloodshot. Naidoo denied that he had been drinking, but a breathalyser test showed that his blood-alcohol level was over the legal limit to drive a vehicle. Only then did Naidoo admit that he had drunk a 450 ml beer on an empty stomach during his lunch break.

During the arbitration before Commissioner Van Zyl, Naidoo strenuously denied that he had a drinking problem. Commissioner Van Zyl further noted that Naidoo had changed his version a few times and accepted that there was an existing written warning against Naidoo for similar misconduct. He nevertheless found that Naidoo was not under the influence of alcohol ‘to such an extent that he could not perform his duties properly’, that his dishonesty was not sufficiently serious to warrant dismissal, and that the dismissal was therefore substantively unfair. He ordered the employer to reinstate Naidoo from the date of the award coupled with a final written warning for six months.

Steenkamp J held that this award was unreasonable and reviewable. He noted that Commissioner Van Zyl had acknowledged that Naidoo had a valid written warning against him, yet he saw fit to reinstate Naidoo with a further written warning. This could not be reconciled with the concept of progressive discipline and was in itself so unreasonable that no reasonable arbitrator could have come to the same conclusion.

The court further noted that the commissioner sought to impose a greater duty on the employer to investigate the cause of Naidoo’s drinking, despite the fact that Naidoo was adamant that he was not an alcoholic. In this regard, the court held that there is a distinction between alcoholism as a form of incapacity and being under the influence of alcohol as a disciplinary offence. In the case where an employee suffers from alcoholism as a form of incapacity, counselling and rehabilitation may be appropriate measures to be undertaken by the employer. However, where an employee, who is not an alcoholic and does not claim to be one, reports for duty under the influence of alcohol, he is guilty of misconduct. In determining the fairness of a dismissal in these circumstances, the commissioner must consider the following –

  • whether the employee knew the rule and was aware that breaching it could lead to dismissal;
  • whether the employee wilfully committed the misconduct;
  • the nature and responsibilities of the employee’s job function;
  • the employee’s defence;
  • the importance of the rule breached;
  • the application of progressive discipline and the importance of consistency;
  • the employee’s disciplinary record; and
  • the harm (or potential harm) as a result of the misconduct.

Steenkamp J held that the commissioner failed to consider these factors and his award was accordingly reviewable. The award was set aside and the court confirmed that Naidoo’s dismissal was fair.

Talita Laubscher BIur LLB (UFS) LLM (Emory University USA) is an attorney at Bowman Gilfillan in Johannesburg.

This article was first published in De Rebus in 2012 (July) DR 55.