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IN THE LABOUR COURT OF SOUTH AFRICA

HELD IN CAPE TOWN

Case Number: C 467/05

In the matter between:

PUBLIC SERVICES ASSOCIATION (PSA) 1^ST APPLICANT

DAWID LABUSCHAGNE 2^ND APPLICANT

and

PUBLIC HEALTH AND WELFARE

SECTORAL BARGAINING COUNCIL 1^ST RESPONDENT

ADV RUSSEL MOLETSANE N.O 2^ND RESPONDENT

DEPARTMENT OF SOCIAL SERVICES

AND POVERTY ALLEVIATION

(WESTERN CAPE) 3^RD RESPONDENT

ZOLA SIKITI 4^TH RESPONDENT

JUDGMENT

molahlehi J

Introduction

1. This is an application to review and set aside the arbitration award issued by the second respondent (the commissioner) under case number PS8S214-03/04 and dated 11 June 2005. In terms of that arbitration award, the commissioner dismissed the unfair labour practice application of the first and second applicants with costs.

2. The respondents brought an interlocutory application to strike out paragraphs 15, 16, 17, 18, 19, 20, 21, 67 and the final sentence of paragraph 65. The parties agreed to strike out paragraph 20, 21, 67 and the final sentence of paragraph 65 from the supplementary affidavit. The striking out of paragraphs 15 to 19 of the supplementary affidavit remained in dispute. In relation to these paragraphs the Court issued an order striking out paragraphs 15, 16, 17, 18 and 19 and paragraph 65 from the applicant’s papers. The reasons for the order were reserved and are now set out hereunder.

3. In dealing with the issue of striking out Van Winsen, Cilliers, and Loots, in the Civil Procedure of the Supreme Court of South Africa 4^th Edition Juta at page 498 quotes with approval from the case of Meintjes v Wallachs Ltd 1911 TPD 825 at 832, where the Court says:

“It appears to me that whether the matter is or not relevant is a question of mixed fact and law. The Judge has to determine whether the facts alleged are or are not relevant to the issue. If they are relevant to the issue then they should stand, even though the plaintiff may not succeed in proving them at the trial. But if the facts are irrelevant, if they have nothing to do with the issue which has to be tried by the Court, or if evidence cannot be led upon them because they are too vague, then the Court will strike out the passages complained of because they are irrelevant to the issue”.

4. It is apparent that on the main, those paragraphs deal with issues or matters that arose after the commissioner had issued his award. The issues raised in those paragraphs cannot in my view be relevant because they deal with events which occurred after the commissioner had determined issues based on the evidence which was properly before him. The evidence contained in those paragraphs was never presented during the arbitration hearing and therefore the commissioner’s decision cannot be faulted on any of the grounds of review based on the evidence which was never before him.

5. The other reason for striking out the said paragraphs was because the applicant sought to introduce through one of those paragraphs matters relating to attempts at negotiating a settlement of the dispute. Even though the letter containing these attempts is not headed “without prejudice” it was indeed part of the settlement negotiations. In this regard the principle of our law is that settlement discussions should including correspondence relevant thereto not be disclosed to the Court in the absence of an agreement between the parties. The Court in Eskom v Rini Town Council 1992 (4) SA 96 (E) at page 99 in dealing with this issue says:

“It is well established principle that prior settlement negotiations should in the absence of agreement between the parties not be revealed to the Court and that evidence thereof is inadmissible. In the present matter the applicant, in my judgment, clearly fell foul of that principle and the respondent was entitled to bring the application to strike out”.

Background facts

6. Turning to the merits of the review, the applicant complained that the respondents had committed an unfair labour practice in that he was demoted in status and that the third respondent (the respondent) failed to upgrade his post to the position of the Deputy Director.

7. The employee was employed at the time as Assistant Director: Labour Relations (the assistant director). Prior to his employment with the respondent the applicant was employed in a similar position by the department of health. Following the restructuring of the department of health the applicant was transferred horizontally to the respondent as a unit manager for labour relations.

8. During April 2003, the respondent approved the creation of a post of Deputy Director: Labour Relations (the deputy director). It was created on the establishment on 1 October 2003. The creation of this post as will appear later in this judgment is key to the unfair labour practice dispute which the applicant declared. The applicant applied for that post but under protest because he believed that his post of assistant director should have been upgraded to that of the deputy director. He was unsuccessful and another candidate was appointed to that post starting 1^st March 2004. The applicant referred the dispute concerning an alleged unfair labour practice to the conciliation on the 19^th February 2004 and upon failure to reach a resolution, referred the matter to arbitration on the 11^th May 20004.

9. The arbitrator dismissed the applicant’s application on the ground that he had failed to discharge the onus of showing that the respondent had committed an unfair labour practice.

10. It is common cause that initially the services which the respondent provided fell under the department of health and social services. With the restructuring exercise the social and welfare services were separated from health. The separation led to the establishment of the respondent. The separation and the creation of the respondent also involved the matching and placing of staff in the new structure at head office in accordance with resolution 7/08/2002. The staff members were after completing the staff profile placed in the appropriate positions in the new structure. In terms of resolution 7/08/2002, placement could not be at a higher level than that which an employee previously occupied.

11. A three phased approach was according to the applicant adopted in tackling the restructuring process. The first phase concerned the head office, the second phase concerned the district office and the third phase the province. The head office focused on policy development. The restructuring of the head office was known as the project 8 of 2003.

12. This project was finalised with the assistance of the department of labour and directorate of organisational development.

13. On the 3^rd April 2003, the Provincial Cabinet approved the proposed organisational structure, subject to job evaluation taking place before the filling of any post.

14. According to the applicant, the head office establishment grew by 58 (fifty-eight) additional posts at almost all of the levels. The Deputy Director: Labour Relations post which is the subject matter of the alleged unfair labour practice was one of the new six posts which were identified as one of the deputy director’s posts in the new organisational structure.

15. The respondent refused the request of the applicant to have his post of assistant director evaluated before the evaluation of the deputy director’s post. This approach was adopted in line with decision taken that vacant posts should be evaluated and thereafter works from senior level downwards.

Grounds for review and arbitration award

16. The applicant contended that the commissioner committed a gross irregularity in the proceedings and that his decision is not rationally justifiable in relation to the reasons given. The allegation of gross irregularity is based on the contention that the arbitrator misconceived the nature of the enquiry. The contention is specifically on the finding of the commissioner where he says that, “It was confusing as to what the Applicants’ nature of the dispute was”. The applicant submitted in his founding affidavit that the nature of the dispute could not be confusing because he had set it out very clearly in the various stages of processing his dispute, starting with the referral to conciliation and ending with the heads of argument which were submitted at the conclusion of the arbitration hearing.

17. The other complaint by the applicant is that despite raising and presenting lengthy evidence regarding the issue of demotion, the commissioner failed to address this issue in his arbitration award.

18. The nature of the dispute is defined by the commissioner in the award as follows:

“8. Although it was confusing as to what the Applicants’ nature of dispute was, he stated the following: that the Second Respondent committed an unfair labour practice against him by: (a) demoting him in status (Section 186 (2) (a) of the Labour Relations Act, 1995 as amended), (b) not promoting him by upgrading his post (Section 86 (2) (a) of the Labour Relations Act of 1995”.

19. In the supplementary affidavit the applicant contended that the arbitrator failed to apply his mind and take into account that he (the applicant) had regarded the job evaluation of the Assistant Director’s post to have been meaningless because at the stage he was required to submit a job evaluation of the post, his duties and responsibilities as assistant director had been stripped away and had diminished. The applicant in this regard addressed the letter to the respondent where he stated at the relevant portion thereof that:

“Further to your enquiry, I am of the opinion that the job evaluations of the Assistant Director: Labour Relations post would not achieve anything as the duties and the responsibilities of the post had been diminished unilaterally and the newly created Deputy Director: Labour Relations post which has already been job evaluated is, in actual fact, the ASD: LR post. The issue is currently pending”.

20. As concerning financial responsibility as an assistant director the applicant contended that although he was not appointed as the responsible manager, he was responsible for the financial management of the labour relations unit. The applicant argued that the commissioner failed to give reasons as to why he concluded that the deputy director’s post was at the higher level in particular as concerning the financial responsibility attached to it. It was for this reason that the applicant argued that the commissioner’s conclusion was illogical and irrational and more particularly because the respondent never led evidence to this extent.

21. With regard to the decentralisation of the labour relations function of the district officers, the applicant contended that the arbitrator failed to set out any rational basis for his conclusion that the need to establish a new HR practitioner post at the district level necessitated the introduction of the new Deputy Director’s post.

22. The relief sought by the applicant at the arbitration proceeding is quoted by the commissioner as follows:

“The remedy sought is that the arbitrator reinstates the applicant in his former position and that the job evaluation results that were in effect those of the former post be made available”.

23. After the above quotation the commissioner summarises what he was enjoined to determine as follows:

“I am therefore asked to determine if the First Respondent has committed an unfair labour practice by creating the new post of Deputy Director Labour Relations when in fact the post of Assistant Director: Labour Relations should have been upgraded”.

24. In his analysis of the evidence and argument, the commissioner accepted the version of the respondent’s witness Mr Boongaaier, a former organisational development manager, that the key performance areas could be contained in different job descriptions but aimed at different levels of responsibility.

25. The commissioner further reasoned that it was unacceptable for the applicant to have refused to subject himself to the job evaluation of the assistant director’s post, some five months before the post of the deputy director was filled.

26. The testimony of the Chief Director: Human Resources was accepted by the commissioner as convincing and he summarises such evidence at paragraph 22 of the arbitration award as follows:

“(a)The organisational needs of the First Respondent required a creation of a number middle management posts. (b) That these posts were created after a scientific study had been carried out. (c) That the Executing Authority of the Province approved the new organisational structure after the resolution of the cabinet”.

27. In dismissing the case of the applicant the commissioner found that the applicant was given an opportunity to apply on two occasions but was unsuccessful and that the applicant had accepted that the selection process was fair.

28. The commissioner then concludes:

“(a)The DD post is at the higher level specifically in relation to the financial responsibility. (b) The Applicant was asked to report to the Senior Management in the past simply because the Department was in a transitional period. (c) The cost centred approach of the First Respondent (ie the need to establish HR practitioner post at the district level) necessitated the introduction of the new post”.

29. The commissioner in dismissing the applicant’s claim also relied on the decision of the Labour Appeal Court in the case of Department of Justice v CCMA and Others (2004) 25 ILJ 248 (LAC) at paragraph 95 where Zondo JP said:

“[95] The dispute in this case should not have been referred to arbitration. The PSA with Mr Bruwer should have waited until a final decision had been made to fill the post on a permanent basis. If, at that stage they still felt aggrieved, they could then have taken the matter further. Instead of doing that, they referred the dispute to arbitration, thereafter it had to go to the Labour Court for review because the Department was aggrieved by the CCMA’s award and, because the Department was also unhappy about the judgment of the Labour Court, the matter had to come to this Court and yet they could still be another dispute making its way to the CCMA, the Labour Court and finally to this Court concerning Mr Bruwer’s not being appointed to the post when the post was finally filled on the permanent basis. In my view this is totally unaccepted as there is no reason why Mr Bruwer could not have waited until the permanent filling of the post before initiating the arbitration proceedings”.

30. The applicant’s counsel, Mr Abrahams, argued that the post of deputy director did not differ from that of the applicant, the assistant director and that the post of deputy director should not have been created on the establishment but rather the post of the applicant should have been upgraded. He further argued that the decision of the commissioner was not one which a reasonable decision maker could have reached because it is not in line with the provisions of the Public Service Regulations (the regulations). After quoting the relevant provisions of the regulations he emphasised paragraph B(1)(b) of the regulations which provides that, “a duplication of functions must be avoided.”

31. Mr Abrahams further argued that contrary to the contention of the respondent that the job description of the deputy director provides for the auxiliary services to report to the deputy director, there was nothing like that in the job description but rather the organogram provided for an assistant director auxiliary service. As concerning the financial responsibility of the applicant as an assistant director, Mr Abrahams argued that only 10% was spent on the financial management of the unit and that although he was not appointed “responsibility manager for the finance” in terms of the Public Finance Management Act 1 of 1999 (the PFMA) the applicant did monitor and control of the finances of the unit.

32. It was further argued on behalf of the applicant that the respondent unilaterally changed the job description of the applicant and thereby diminishing his job, changing his reporting lines and consequently leading his demotion. The fact that the applicant still occupy his position and his salary has not changed is according to Mr Abrahams irrelevant because this approach disregards the evidence of the applicant that his duties and responsibilities had been diminished and disregard the principle that an unfair labour practice can be committed by an employer even if the employee does not suffer loss in salary. This argument is based on the decision of Van der Riet v LeisureNet t/a Health and Racquet Club (1998) 5 BLLR 471 (LAC) where at paragraph 35 Kroon J says:

“I have no difficulty in holding that as the appellant testified, the new structure did result in an effective demotion of the appellant. Instead of his having the privilege of reporting to the group operations manager at head office, the appellant had henceforth to report the group operations manager at the head office, the appellant had henceforth to report to an intermediary at a regional office.”

Evaluation of the award

33. The test to apply in determining whether to interfere with the decision of a commissioner on review is that as formulated in Sidumo & Others v Rustenburg Platinum Mines (Pty) Ltd & Others (2007) 12 BLLR 1027 (CC). The enquiry entails investigating whether the decision of the commissioner is one which a reasonable decision maker could not have reached. Thus the question is not whether or not the decision of the commissioner is correct but whether it is reasonable.

Although the Labour Appeal Court in Fidelity Cash Management Service (2008) 3 BLLR 197 (LAC), (at paragraphs 98 to 100) was dealing with an unfair dismissal case, it is submitted that the principle enunciated therein is applicable in an unfair labour practice case. The Court in that case cautioned against the reviewing Court in assessing the reasonableness or otherwise of an arbitration award substituting the decision or finding of the commissioner for its own simply because it feels that it would have arrived at a decision or finding different to that reached by the commissioner. The determination of fairness or otherwise is the sole function of the commissioner and not that of the Court setting in review. However, this does not mean that commissioners’ awards are immune from the scrutiny of the Court in as far as the determination of fairness is concerned. As a general rule the scope of reviewing CCMA commissioners’ awards has since Sidumo been highly limited. In essence the function of the Court is to affirm commissioners’ decisions unless the evaluation of fairness by the commissioner is found to be arbitrary, caprizious, an abuse of discretion or otherwise not in accordance with the established principles of law. This means that the Court should not readily interfere with the decisions or findings of commissioners and as stated earlier simply because the Court has a different view to that of the commissioner. The challenge faced by the Court as concerning whether or not to interfere was stated in Fidelity Cash Management as follows:

“In my view Sidumo attempts to strike a balance between, two extremes, namely, between, on the one hand, interfering too much or two easily with decisions or arbitration awards of the CCMA and, on the other refraining too much from interfering with CCMA's awards or decisions. That is not a balance that is easy to strike. Indeed, articulating it may be difficult in itself but applying it in a particular case may tend to even be more difficult. In support of the statement that Sidumo seeks to strike the aforesaid balance, it may be said that, while on the one hand, Sidumo does not allow that a CCMA arbitration award or decision be set aside said simply because the Court would have arrived at a different decision to that of the commissioner, it also does not require that a CCMA commissioner's arbitration award or decision be grossly unreasonable before it can be interfered with on review - it only requires it to be unreasonable. This demonstrates the balance that is sought to be made. The Court will need to remind itself that it is dealing with the matter on review and the test on review is not whether or not the dismissal is fair or unfair but whether or not the commissioner's decision one way or another is one that a reasonable decision-maker could not reach in all of the circumstances. “

34. Thus the issue which the Court needs to deal with is whether the decision reached by the commissioner in the present instance, that the respondent did not commit an unfair labour practice, is one which a reasonable decision maker could not have reached. The reasonableness or otherwise of the decision of the commissioner has to be determined taking into account the reasons for the decision including the circumstances with in which it is alleged that the unfair labour practice occurred.

35. Considering the circumstances of this case it seems to me that the starting point in the determination of the fairness of the conduct of the respondent has to turn on whether or not the respondent properly and fairly created the new post of Deputy Director: Labour Relations. Related to this enquiry would be whether the creation of the post resulted in an unfair conduct on the part of the respondent in relation to an alleged demotion in the status of the applicant. The creation of the post in question as a new post was confirmed in the answering papers of the applicant.

36. The claim of the applicant also arose in the context where the respondent was faced with a number of organisational and operational challenges. This was not disputed by the applicant including the fact that the respondent had adopted a number of phased in approaches in dealing with the restructuring process. It was also not disputed that the phased in approaches included matching and placing of staff in the new structure at the head office and that staff were placed after the completion of the matching exercise.

37. The creation of the new post also occurred in circumstances where, it is common cause that there had been extensive consultation between the respondent and labour concerning the restructuring process. The structure itself was approved by the Provincial Cabinet on condition that posts under the new structure are job evaluated. And more importantly, it was not disputed that the head office staff establishment grew by 58 additional posts at almost all levels and the post in question was one of the six new deputy director’s post in the new structure. In line with Public Service Regulations, the respondent took a decision to evaluate all the vacant posts from the most senior to the lower levels and thereafter to evaluate and grade filled posts in the establishment.

38. Section 186(2)(c) of the Labour Relations Act 66 of 1995 (the Act) defines unfair labour practices as follows:

“Unfair Conduct by the employer relating to the promotion, demotion, probation excluding disputes about dismissals for reasons relating to probation or training of an employee or relating to the provisions of benefit to an employee”.

39. It seems common cause that the commissioner did not in his award deal with the issue of whether or not the creation of the new post as provided for in Section 186 of the Act equalled to demotion of the applicant.

40. The impact of that failure by the commissioner must be assessed within the context of the provisions of Section 138 of the Act which gives commissioners powers to conduct the arbitration proceedings in the manner in which they considers appropriate in order to determine the substance of the dispute fairly and quickly but must deal with the substantial merits of the dispute with minimum legal formalities.

41. The question that arises from such failure is whether it was of such a degree or nature that the commissioner could not be said to have fully and fairly considered the issues which were before him.

42. In this regard assuming that the new post resulted in the demotion of the applicant, the issue would then be whether the conduct of the respondent to this extent amounted to unfair conduct; in relation to that demotion. In deciding this issue reference would have to be had to the decision in Sidumo and the subsequent decision of Fidelity Cash Management. The authorities of those decisions are as stated earlier that in addition to evaluating the reasons for the conclusion of the commissioner, regard should also be had to the context within which the alleged demotion took place including reasons that do not appear on the ward of the commissioner but can be discerned from the record. In as far as the latent reasons are concerned, it is clear from the reading of the award that the commissioner took into account the reason for the creation of the new middle management posts which included the deputy director’s post. The commissioner was, in my view correctly so, influenced in arriving at his decision by the fact that the applicant refused to subject his post to a scientific and objective evaluation. If it turned out that the evaluation was a sham, or a mere formality as the applicant would seem to suggest, simply seeking to legitimate the conduct of the respondent, that would have not been the end of the matter for the applicant because he had the right to appeal against such outcome.

43. The other important reason given by the commissioner for his conclusion is that the post of the deputy director was at a higher level as opposed to the assistant director’s post because of the formal financial responsibility that was imposed on the incumbent. It is also clear from the record that the post of the deputy director was created at a different level to address strategic and operational needs of the respondent. Whilst the applicant may have been responsible for preparing, managing and monitoring the budget of the unit, the responsibility and the consequences of failure to comply with the same is different to that of a deputy director, imposed by the PFMA. The applicant never held the same responsibility as that imposed on the deputy director by the PFMA.

44. The context within which the alleged unfair labour practice and in particular demotion took place was discussed earlier. It should be emphasised that the applicant did not question the legality or validity of the decision to create the new post by the Provincial Cabinet.

Gross irregularity

45. Turning to the issue of gross irregularity, I do not agree with the contention of the applicant that the commissioner misconceived the nature of the enquiry he was supposed to conduct. Reliance on the statement of the commissioner that the dispute of the applicant was confusing does not assist the case of the applicant. It would seem the applicant interpreted this comment to mean that the commissioner was so confused to an extent that he was unable to determine the matter. In my view, the commissioner made this statement in the context where he was analysing the manner in which the applicant had formulated his dispute. The commissioner had a good understanding of the issues that were before him and dealt with them in a manner that reveals a clear and good appreciation of what was expected of him. If there was any irregularity, it was not one which in my view would have deprived the applicant of a fair hearing.

46. In the light of the above, in particular regard being had to the facts, circumstances and the evidence which was presented before the commissioner, in my view, it cannot be said that the decision of the commissioner is one which a reasonable decision maker could not reach. Accordingly, the applicant’s review application stands to be dismissed. It seems to me that it would not be fair to grant costs in this matter.

47. In the circumstances the following order is made:

    1. The review application is dismissed.

    2. There is no order as to costs.

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Molahlehi J

Date of Hearing : 28^th March 2008

Date of Judgment : 31^st October 2008

Appearances

For the Applicant : Mr Anton Steenkamp of Edward Nathan Sonnebergs

For the Respondent: Adv Hilary Naicker

Instructed by : Babalwa Mantame Attorneys

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