In the matter between engen petroleum limited



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174


IN THE LABOUR APPEAL COURT OF SOUTH AFRICA

HELD IN JOHANNESBURG
Case no: JA12/05
IN THE MATTER BETWEEN
ENGEN PETROLEUM LIMITED Appellant
AND
THE COMMISSIONER FOR CONCILIATION, First respondent

MEDIATION AND ARBITRATION



COMMISSIONER THABE NKADIMENG Second respondent

JONES SIBANGANI MASHALE Third respondent


JUDGMENT
ZONDO JP

Introduction

[1] This appeal is about what the correct approach is that a commissioner of the Commission for Conciliation, Mediation and Arbitration (“the CCMA”), the first respondent in this matter, must adopt when required to decide whether or not dismissal as a sanction in a particular case is fair. In the main there are two schools of thought on what the correct approach is. The one school of thought is to the effect that the commissioner is required to make up his own mind and decide the issue according to his own opinion or judgement. For convenience I shall call this school of thought the own opinion school of thought. I call this approach the “own opinion” approach because, according to it, the commissioner must determine the fairness or otherwise of dismissal as a sanction according to his own opinion or judgement of what is fair or unfair and should not defer to anybody. The other school of thought is to the effect that the commissioner has no power to decide this question according to his own opinion or judgement but he is required to “defer to the employer” and hold the dismissal as a sanction fair unless it is so unfair that it makes him whistle or unless it is so excessive as to shock one’s sense of fairness or it is so unfair that no reasonable employer would have regarded it as a fair sanction in which case the commissioner can then interfere with the employer’s decision to impose dismissal as a sanction and hold the dismissal to be unfair. Its basis is that different reasonable employers could react to the same misconduct of an employee in different ways each one of which could fall within a range of possible reasonable responses. In terms of this school of thought it is said that the fact that the tribunal would have imposed a different sanction does not necessarily mean that the employer’s sanction is unfair. The tribunal, so goes the argument, should not substitute its own opinion for that of the employer. In this judgment I shall call this school of thought “the reasonable employer” approach or the “defer to the employer” approach.



[2] In this matter Counsel for the appellant submitted that the correct approach is the reasonable employer test and that a CCMA commissioner is not entitled to use the “own opinion” approach in deciding the issue but is obliged to use the reasonable employer test. He submitted that, if a commissioner used the “own opinion” approach and substituted his opinion for that of the employer on the issue of sanction, the commissioner will have misconstrued the inquiry and acted outside his powers and his decision would be reviewable. In support of his contention Counsel for the appellant relied upon the decision of this Court in Nampak Wadeville v Khoza (1999)20 ILJ 598 (LAC) and Ngcobo AJP’s judgment in County Fair Foods (Pty)Ltd v Commission for Conciliation, Mediation and Arbitration & others (1999)20 ILJ 1701 (LAC) both of which judgments support the contention advanced by Counsel for the appellant. Of course, after those judgments this Court handed down its judgment in Toyota SA Motors (Pty)Ltd v Radebe & others (2000) 21 ILJ 340 (LAC) in which the reasonable employer test was rejected and it was said that it was not part of our law. The question of the reasonable employer test in our law of unfair dismissal was the subject of a big debate in the labour law field for some time during the 1980’s. I thought it had been so decisively rejected by our courts then that I thought it had been buried. Of course subsequent developments have shown just how wrong I was in so thinking. In this regard I refer to the fact that in Rustenburg Platinum Mines Ltd v CCMA & others 2007(1)SA 576(A) the SCA has rejected the “own opinion” approach and adopted the reasonable employer test / the defer to the employer approach. I shall refer to this judgment of the SCA as the “Rustenburg judgment”.
[3] It is now argued in this matter that the reasonable employer approach / the defer to the employer approach is the right approach which CCMA commissioners should adopt. It was about 1984 when the industrial court imported this concept into our labour law from English law. Since then there have been long periods when it seemed to have gone away. However, from time to time the question arises as to whether Courts and other tribunals which deal with dismissal disputes are required to apply the reasonable employer test or the “own opinion” approach in determining the fairness of dismissal in our law of unfair dismissal. This time the issue has arisen again and this Court will deal with the issue fully and thoroughly once and for all. In saying this, this Court does not purport to claim a final say on the issue but it seeks to do so because it has previously rejected the reasonable employer test and it has been criticised in the Rustenburg judgment for its decision to reject the reasonable employer test. In any event, although the SCA has made its decision in the Rustenburg judgment to reject the “own opinion” approach and to prefer the reasonable employer approach, it would be within its rights to at any stage in the future reconsider the issue and either reaffirm its decision or reverse it. Should it decide to give the matter further consideration in the future, it would be able to do so with the benefit of full and thorough reasons supporting this Court’s previous decision rejecting the reasonable employer test and preferring the “own opinion” approach.
[4] The reasonable employer test or the “defer to the employer” approach comes from English law. It seems to me that it is important to consider the reasonable employer test within the different statutory frameworks which obtained in England and in South Africa during the 1980’s before it can be considered within the current statutory framework in SA.
The UK background of the reasonable employer approach / the defer to the employer approach
[5] From 1978 the statutory framework governing the reasonable employer test in the UK was sec 57(3) of the Employment Protection (Consolidation) Act of 1978. Sec 57(3) of that Act read thus:

The determination of the question whether the dismissal was fair or unfair, having regard to the reasons shown by the employer, shall depend on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantive merits of the case(my underlining).



It would seem that at the moment this provision is contained in sec 98(4) of the Employment Rights Act, 1996 of the UK.
[6] In British Leyland UK Ltd v Swift [1981] IRLR 91(CA) three judgments were given by the three Judges who heard the matter, namely, Lord Denning, Lord Justice Ackner and Lord Justice Griffiths. Lord Denning included in his judgment a passage which appears to be quoted frequently in support of the reasonable employer test. That passage appears in par 11 at 93 of Lord Denning’s judgment. It reads thus:

The first question that arises is whether the Industrial Tribunal applied the wrong test. We have had considerable argument about it. They said: ‘…a reasonable employer would, in our opinion, have considered that a lesser penalty was appropriate’. I do not think that that is the right test. The correct test is: Was it reasonable for the employers to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view: another quite reasonably take a different view. One would quite reasonably dismiss the man. The other would quite reasonably keep him on. Both views may be quite reasonable. If it was quite reasonable to dismiss him, then the dismissal must be upheld as fair: even though some other employers may not have dismissed him.”



Lord Justice Ackner delivered a separate judgment in which he said that he agreed that the appeal should be allowed but did not expressly say whether he agreed with the reasons given by Lord Denning in his judgment. He appears to have relied on his own reasons for his agreement that the appeal be allowed. Lord Justice Griffiths also gave a separate judgment but he expressly stated at 94 par 27 that he agreed with the reasons given by Lord Denning for the conclusion that the appeal should be allowed. Accordingly, the passage from Lord Denning’s judgment referred to above can be taken to have been part of the judgment of the Court.
The relevant statutory framework in SA during the 1980’s and early 1990’s
[7] Under the old Act the tribunal which dealt with unfair dismissal disputes at first instance in South Africa from the early 1980’s to the time of the repeal of the Labour Relations Act, 1956 (Act 28 of 1956) (“the old Act”) was the industrial court. Although called a court, that tribunal was not a court of law but did perform quasi-judicial functions. At all relevant times there was some or other definition of an unfair labour practice which the industrial court had to apply in deciding whether a dismissal was unfair. Technically, the industrial court had to decide in each dismissal dispute that came before it whether the dismissal constituted an unfair labour practice. A finding by the industrial court that a dismissal constituted an unfair labour practice meant that the dismissal was unfair. A dismissal could be found to be unfair by reason of the fact that, although the employee was guilty of misconduct, dismissal as a sanction was excessive in all the circumstances of the case, and was, therefore, unfair. Obviously the basis of the finding of unfairness could also be that the employee was innocent of misconduct or that the dismissal was not effected in compliance with a fair procedure.
[8] Between the early 1980’s and the repeal of the old Act, the definition of an unfair labour practice that the industrial court had to apply was amended in 1988 and 1991. The definition which applied before September 1988 read thus:

(a) ‘unfair labour practice’ means any act or omission, other than a strike or lockout, which has or may have the effect that –



  1. any employee or class of employees is or may be unfairly affected or that his or their employment opportunities or work security is or may be prejudiced or jeopardized thereby;

  2. the business of any employer or class of employers is or may be unfairly affected or disrupted thereby;

  3. labour unrest is or may be created or promoted thereby;

  4. the labour relationship between employer and employee is or may be detrimentally affected thereby; or

  1. any other labour practice or any other change in any labour practice which has or may have an effect which is similar or related to any effect mentioned in paragraph.”


[9] Pursuant to the Labour Relations Amendment Act 1988 (Act 83 of 1988) (“the 1988 amendments”) and with effect from September 1988 the above definition of an unfair labour practice was replaced by a long definition of an unfair labour practice. It is not necessary to quote the post - September 1988 definition. It will suffice, for present purposes, to say that the part of the definition that is relevant to the issue under consideration was to be found in paragraph (a) of the definition in sec 1 of the old Act. It read as follows:

“ ‘unfair labour practice’ means any act or omission which in an unfair manner infringes or impairs the labour relations between an employer and employee and shall include the following:



(a) The dismissal, by reason of any disciplinary action against one or more employees, without a valid and fair reason and not in compliance with a fair procedure…”



[10] Pursuant to the Labour Relations Amendment Act, 1991 (Act 9 of 1991) (“the 1991 amendments”) there was a further amendment to the definition of an unfair labour practice in 1991. These amendments included a new definition of an “unfair labour practice”. The new definition read thus:

Unfair labour practice means any act or omission, other than a strike or lock-out, which has or may have the effect that –



(i) any employees or class of employees is or may be unfairly affected or that his or their employment opportunity or work security is or may be prejudiced or jeopardised thereby;

(ii) the business of any employer or class of employers is or may be unfairly affected or disrupted thereby;

(iii) labour unrest is or may be created or promoted thereby;

(iv) the labour relationship between employer and employee is or may be detrimentally affected thereby.”
There was no further amendment of an unfair labour practice after 1991.
Powers of the industrial court “to determine” a dispute under sec 46(9) of the old Act
[11] Sec 17(11)(f) gave power to the industrial court to “make determinations in terms of sec 46” of the old Act. Under sec 46(9) of the old Act the industrial court was given power to deal with, among others, disputes concerning alleged unfair labour practices which included disputes about the fairness of dismissals. Although there were amendments to sec 46(9) in 1988 and 1991, those amendments always retained one thing. That is that an unfair dismissal dispute was always required to be referred to the industrial court “for determination” or the industrial court was required by sec 46(9) “to determine” the dispute concerning the fairness of a dismissal. It referred to such a dispute as an alleged unfair labour practice. Other disputes which were not dismissal disputes could also be referred to the industrial court for determination under that section.
[12] Sec 46(9) referred to a dispute referred to in sec 43(1)(c) of the old Act.

Sec 43 dealt with what was generally referred to as status quo orders which the industrial court had power to make thereunder. Sec 43(1)(c) referred to disputes concerning an alleged unfair labour practice. The fact that at different stages between the early 1980’s and the repeal of the old Act essentially sec 46(9) empowered or required the industrial court either “to determine” a dispute concerning the fairness of a dismissal or contemplated that such a dispute be referred to the industrial court “for determination” means that essentially the main function or power of the industrial court with regard to dismissal disputes remained intact for most of that period. The only other amendment brought about by the 1988 amendments to sec 46(9) of the old Act which is relevant to the present matter was an amendment of sec 46(9)(c) of the old Act. Before September 1988 sec 46(9)(c) of the old Act required the industrial court “to determine” the dispute without giving any indication as to how it was required to do so. After the 1988 amendments sec 46(9)(c) was amended but not so as to remove the phrase “to determine the dispute” to describe the function that the industrial court was required to perform but to deal with the terms in which it could determine a dispute concerning an unfair labour practice including unfair dismissal disputes. The amendment to sec 46(9)(c) provided that the industrial court was required to determine the dispute “on such terms as it may deem reasonable, including, but not limited to, the ordering of reinstatement or compensation.
Powers of the old LAC in dismissal matters under the old Act.
[13] Sec 17A(1), inserted into the old Act by the 1988 amendments, established a new court, the Labour Appeal Court (“the old LAC”), which had provincial divisions on the same basis as the then Supreme Court of South Africa. A Labour Appeal Court consisted of a Judge of the Supreme Court, who would be the chairman of the Court, and two assessors except when it was dealing with a question of law or a question whether a particular question was a question of law in which case the Judge sat alone and decided such a question alone. The old LAC was given jurisdiction to deal with appeals from, among others, determinations made by the industrial court in terms of sec 46(9) of the old Act in respect of dismissals alleged to constitute unfair labour practices.
[14] Sec 17B of the old Act dealt with the powers of the old LAC. With regard to appeals from determinations of the industrial court made under sec 46(9) of the old Act sec 17B(1)(b) gave the old LAC power “to decide” such appeals.

Powers of the Appellate Division in dismissal matters under the old Act
[15] Sec 17C provided for an appeal from a decision of the old LAC to the Appellate Division (later the Supreme Court of Appeal) except on a question of fact provided that the old LAC granted leave to appeal. Where the old LAC refused leave to appeal, the Appellate Division could be petitioned for such leave. Sec 17C(2) provided that, after hearing such an appeal, the Appellate Division “may confirm, amend or set aside the decision order against which the appeal has been noted or make any other decision or order, including an order as to costs, according to the requirements of the law and fairness” (my underlining).
[16] If one has regard to sec 57(3) of the English statute which was applicable in the UK during the 19980’s as quoted earlier, one will see that sec 57(3) did not just require a tribunal to decide or determine whether a dismissal was fair – which is what can be said was required of the industrial court by the old Act in South Africa at the time. Sec 57(3) in effect instructed a tribunal that, when there was a dispute between an employer and an employee about whether the employee’s dismissal was fair, it had to answer that question not directly and by simply saying yes or no. Sec 57(3) instructed a tribunal to in effect first ask whether the employer had acted reasonably in treating the reason for dismissal as a sufficient reason for dismissal and, if the answer was yes, to then answer the question about the fairness of the dismissal by saying that the dismissal was fair but, if the answer was no, to then answer that question by saying that the dismissal was unfair. It seems to me that, had sec 57(3) not contained this instruction, the English courts might well not have decided that the reasonable employer test was applicable in the UK. It seems to me that there was nothing in the statutory framework of South Africa applicable to the industrial court, the old LAC and the Appellate Division that justified or that would have justified the adoption of the reasonable employer test, or the “defer to the employer” approach. It would seem to me that the “own opinion” approach was the approach contemplated by the old Act.
[17] Notwithstanding the absence in the old Act of a statutory provision similar to or comparable to that part of sec 57(3) which I have underlined in the quotation of that subsection above which constituted the statutory basis of the reasonable employer test in English law, some decisions of the industrial court did “import” the reasonable employer test into South Africa. The first one of these appears to have been Building Construction and Allied Workers Union of SA & another v West Rand Brick Works (Pty)Ltd (1984) 5 ILJ 69 (IC). Between 1984 and the early 1990’s the industrial court handed down other decisions which supported the reasonable employer test. However, there were also other decisions of the industrial court which rejected the reasonable employer test. It is not necessary to go into any details about the relevant decisions save to make the point that by far the majority of decisions of the industrial court applied the “own opinion” approach and not the reasonable employer approach. It would also seem that in most cases the old LAC also applied the “own opinion” approach.
[18] One of the members of the industrial court who at some stage had handed down decisions supporting the application of the reasonable employer test in South Africa in a number of cases during the mid-1980’s turned his back on it later arguing that the amendment of the definition of an unfair labour practice by the 1988 amendments did not leave room for the reasonable employer approach (see
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