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IN THE LABOUR COURT OF SOUTH AFRICA

HELD AT JOHANNESBURG

CASE NO. J580/98

In the matter between:

SMANGA HENDRIK TOLI APPLICANT

and

B ADAIR FIRST RESPONDENT

SOUTHEN AFRICAN CLOTHING SECOND RESPONDENT & TEXTILE WORKERS UNION

COMMISSION FOR CONCILIATION THIRD RESPONDENT

MEDIATION & ARBITRATION

_______________________________________________________________

JUDGEMENT

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SEADY A J

[1] This is an application to review and set aside an arbitration award issued by the First Respondent on 5 February 1998, under CCMA Case No. GA 15606.

[2] The applicant referred a dispute about his alleged unfair dismissal to the CCMA on 10 September 1997. Conciliation failed to rsolve the dispute and it was referred to arbitration under the auspices of the CCMA. The arbitration took place on 15 December 1997 and 23 January 1998. On 5 February 1998 the First Respondent (“the Commissioner”) issued her arbitration award. She found that the dismissal of the Applicant was substantively fair but that the Second Respondent had not followed a fair procedure prior to dismissing the Applicant.

[3] The Applicant seeks to have the award reviewed and set aside on grounds that the Commissioner committed a gross iregularity in the conduct of the proceedings by;

3.1 failing to consider the evidence and Applicant’s contention that the Second Respondent was guilty of inconsistent treatment;

3.2 finding that the legislature intended the period referred to in Section 194(1) to be three months only;

3.3 suggesting to the parties before the start of the arbitration that they should settle their dispute on the basis that the Second Respondent pays to the Applicant three months salary.

The Applicant also seeks to set aside the award on the ground that the Commissioner exceeded her powers under by Section 194(1) of the Act by exercising a discretion to award three months compensation instead of calculating compensation by reference to the period from date of dismissal to the last day of the arbitration hearing.

[4] The recent, unreported decision of the Labour Appeal Court in JOHNSON & JOHNSON (PTY) LTD v CHEMICAL WORKERS INDUSTRIAL UNION, Case No. PA15/97 (21 September 1998) makes it clear that the provisions of Section 194(1) prescribe a rigid formula for the calculation of compensation if a dismissal is procedurally unfair. The Commissioner has no discretion to award an amount of compensation other than an amount that is equal to the renumeration the employee would have been paid between the date of dismissal and the last day of the arbitration hearing. However compensation may not be awarded in respect of any unreasonable period of delay caused by the employee in intiating or proceeding with the arbitration.

[5] The Commissioner found that the Applicant was unfairly dismissed on 14 February 1997. The last day of the arbitration hearing was 23 January 1998. Compensation should have been calculated for the period between these dates, a period of some eleven and a half months. It was common cause that the Applicant was responsible for the delay in referring the dispute to the CCMA and that this should have been deducted from the compensation. A period of some seven months should therefore have been deducted from the eleven and a half months for the purpose of calculating compensation in terms of Section 194(1). On this interpretation of Section 194(1) the Applicant was entitled to four and a half months compensation.

[6] The Commissioner awarded the applicant three months compensation. She was aware of the provisions of Section 194(1) but in an attempt to be fair to both parties, she took into account what she regarded as the legislature’s intention for disputes to be resolved within two to three months from date of dismissal. This had not been possible in the dispute before the Commissioner because of delays occassioned by the workload of the CCMA and the late referral of the dispute to the CCMA by the Applicant. The Commissioner awarded R10 500,00 (this being equal to three months renumeration) as compensation. She believed this amount to be fair to both parties and a reflection of the spirit and intention (rather than the letter) of the law.

[7] By failing to apply the rigid formula prescribed by Section 194(1) and by exercising a discretion that she did not have and by taking into account considerations other than those permitted by Section 194(1), the Commissioner exceeded her powers. This constitutes a defect in the proceedings and is grounds to set aside the award in terms of Section 145 of the Act. I want to point out that at the time the Commissioner made her award, there was considerable debate about the proper interpretation of Section 194(1). The law was settled by the Labour Appeal Court on 21 September 1998, several months after the Commissioner issued her award and after these proceedings were launched. [See JOHNSON & JOHNSON (supra)]

[8] The second ground for review relied on by the Applicant is that the Commissioner committed a gross irregularity by failing to consider the evidence and contentions of the Applicant concerning his inconsistent treatment by the Second Respondent. The Commissioner considered the evidence of three witnesses called by the Second Respondent and the evidence of the Applicant. She was aware that two other employees were involved in the incident that gave rise to the Applicant’s dismissal. Both of those employees gave evidence. They testified as to the disciplinary measure taken against them as a result of their involvement in the incident. She also heard evidence that all three employees were found guilty of various degrees of negligence. The Commissioner records the applicant’s contention that the inconsistent application of disciplinary measures was one of the factors that made his dismissal unfair. She nevertheless found that the Applicant did not act with due diligence and care when processing the cheques and that he was negligent with members money. On this basis she found the dismissal to be substantively fair. All this appears from the award. There is no record of the arbitration proceedings before the court. Accordingly these review proceedings must be determined on the basis of what appears from the award itself.

[9] I do not think that the Applicant has shown that there was any gross irregularity in the conduct of the proceedings such as would cause these findings to be set aside on review. This court can only set aside a CCMA arbitration award if it is defective within the meaning of Section 145 of the Act. No review of a CCMA arbitration award is permitted under Section 158(1)(g). [See CAREPHONE (PTY) LTD v MARCUS NO AND OTHERS, unreported judgement of the Labour Appeal Court, Case No. J52/98]. There is ample authority for the view that this court should not readily interfere with the decision-making powers given to another independant tribunal by the Act. The Act gives the Commissioner the power to determine if there is a fair reason for the dismissal related to the conduct or capacity of the employee. This court cannot interfere with the decision of the Commissioner if it thinks that the Commissioner was wrong. That would be an appeal. There is no appeal from the Commissioner’s arbitration award. A review is not the same as an appeal. This court can only enter the merits to determine whether the outcome is rationally justifiable. If an outcome is rationally justifiable this court cannot substitute that outcome with one it thinks is correct. [See CAREPHONE (supra) at paragraphs 31 to 36]. I am of the view that the Commissioner’s findings in relation to substantive fairness are rationally justifiable and that there is no basis to set aside the award on this ground.

[10] The third basis on which the Applicant seeks to set aside the award is that the Commissioner prejudged the issues. In this regard the Applicant relies on the fact that prior to the arbitration commencing, the Commissioner suggested to the parties that the matter be settled by the Second Respondent paying three months renumeration to the Applicant and that she subsequently went on to award that amount of compensation. I agree with counsel for the Second Respondent when he says that allegations of prejudging are very serious and require full substantiation. The Applicant has not presented this court with sufficient evidence to show that the Commissioner acted with mala fides or that there was any personal turpitude on her part. Counsel for the Second Respondent concedes, correctly in my view, that if the Commissioner breached Section 138(3) by suspending the arbitration and attempting to resolve the dispute through conciliation in the absence of consent from the parties the proceedings would be defective within the meaning of Section 145 and the award should be set aside. However, the Applicant has not made out the necessary averments in this regard. The allegation that the Applicant did not consent to conciliation is not made out in the papers. It appears only in the Applicant’s heads of argument and cannot be relied on. In the circumstances I do not find that the award falls to be set aside on this basis.

[11] In conclusion I find that the award should be set aside in terms of Section 145 because the Commissioner exceeded her powers by exercising a discretion rather than applying a fixed formula in calculating the amount of compensation to be awarded in terms of Section 194(1). The parties were in agreement that this court should substitute an award for the one set aside rather than sending the matter back to the CCMA and this seems to be the most practical approach to take.

[12] The Applicant seeks costs against the Second Respondent. I have decided not to grant costs in this matter. In exercising my discretion in terms of Section 162(1) I have had regard to a number of factors including the following :

(1) The Applicant has only been partially successful ;

(2) The difference in the amount of compensation awarded by the Commissioner and this court is not great;

(3) The decision of the Labour Appeal Court in JOHNSON & JOHNSON that so materially affects the outcome of this application was handed down several months after these proceedings were launched.

[13] In conclusion I make the following order :-

(1) The arbitration award of the First Respondent dated 5 February 1998 under CCMA Case Number GA15606, a copy of which is attached to the founding affidavit is reviewed and set aside in terms of Section 145 of the Act.

(2) The following award is substituted for that award :

“The Respondent must pay to the Applicant an amount of compensation that is equal to the renumeration that the applicant would have been paid from 10 September 1997 to 23 January 1998, calculated at the rate of R3500,00 per month.”

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SEADY A J

For the Applicant : Adv. T. Motau, instructed by Tshabalala Maserumule Attorneys

For the Respondent: Adv. P. H. N. Schumann, instructed by Chennells Albertyn and Tanner

Date of hearing : 23 October 1998

Date of judgement: 23 October 1998

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