Reasonable employer test: Sidumo extracts

Sidumo v Rustenburg Platinum Mines Ltd

(CCT 85/06) [2007] ZACC 22; [2007] 12 BLLR 1097 (CC); 2008 (2) SA 24 (CC) ; (2007) 28 ILJ 2405 (CC); 2008 (2) BCLR 158 (CC) (5 October 2007)

EXTRACTS

NAVSA AJ:[1]

Introduction

[1] In this case, issues of importance to employees and employers alike arise because of two key findings by the Supreme Court of Appeal (Cameron JA, with Harms, Cloete, Lewis and Maya JJA concurring).2 The question is whether the findings are correct.

[2] In summary the findings are the following:3

• • In deciding dismissal disputes in terms of the compulsory arbitration provisions of the Labour Relations Act 66 of 1995 (LRA), commissioners acting under the auspices of the Commission For Conciliation, Mediation and Arbitration (CCMA), should approach a dismissal with “a measure of deference” because “it is primarily the function of the employer” to decide on a proper sanction. In deciding whether a dismissal is fair a commissioner need not be persuaded that dismissal is the only fair sanction – it is sufficient that the employer establishes that it is a fair sanction.
  • Compulsory statutory arbitration in terms of the LRA undertaken by the second respondent, the CCMA, constitutes “administrative action” as defined in section 1 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and is therefore subject to the standard of review set under that Act rather than that provided for in the LRA – the review criterion is whether the decision is rationally connected with the information before the commissioner and the reasons for it.

[3] The applicants and the CCMA adopt the position that the Supreme Court of Appeal erred in relation to the first finding in that, on a proper interpretation of section 23 of the Constitution and the relevant provisions of the LRA, commissioners should determine whether a dismissal was fair without deference to either side in the dispute. In respect of the second finding, the applicants and the CCMA submit that the Supreme Court of Appeal erred in that CCMA arbitrations are judicial proceedings and not administrative action and are consequently not subject to review in terms of section 33 of the Constitution and PAJA. The first respondent supports the Supreme Court of Appeal’s findings.

. . . .

The Supreme Court of Appeal

[61] There is nothing in the constitutional and statutory scheme that suggests that, in determining the fairness of a dismissal, a commissioner must approach the matter from the perspective of the employer. All the indications are to the contrary. A plain reading of all the relevant provisions compels the conclusion that the commissioner is to determine the dismissal dispute as an impartial adjudicator.

Article 8 of the International Labour Organisation Convention on Termination of Employment 158 of 1982 (ILO Convention) requires the same.[2]

Any suggestion by the Supreme Court of Appeal [per Edwin Cameron JA] that the deferential approach is rooted in the prescripts of the LRA cannot be sustained.

…

[74] The Constitution and the LRA seek to redress the power imbalance between employees and employers. The rights presently enjoyed by employees were hard-won and followed years of intense and often grim struggle by workers and their organisations. Neither the Constitution nor the LRA affords any preferential status to the employer’s view on the fairness of a dismissal. It is against constitutional norms and against the right to fair labour practices to give pre-eminence to the views of either party to a dispute. Dismissal disputes are often emotionally charged. It is therefore all the more important that a scrupulous even-handedness be maintained. The approach of the Supreme Court of Appeal tilts the balance against employees.

[75] It is a practical reality that in the first place it is the employer who hires and fires. The act of dismissal forms the jurisdictional basis for a commissioner, in the event of an unresolved dismissal dispute, to conduct an arbitration in terms of the LRA. The commissioner determines whether the dismissal is fair. There are therefore no competing “discretions”. Employer and commissioner each play a different part. The CCMA correctly submitted that the decision to dismiss belongs to the employer but the determination of its fairness does not. Ultimately, the commissioner’s sense of fairness is what must prevail and not the employer’s view. An impartial third party determination on whether or not a dismissal was fair is likely to promote labour peace.

[76] The view that if there was no deference afforded to the employer’s sanction there would be a flood of cases to the CCMA is no more than supposition.

As the Labour Appeal Court [per R Zondo JP] correctly stated in Engen Petroleum:

“[It] reveals a failure to appreciate the full rationale behind the creation of the CCMA. It is right and proper that as many disputes as possible that are not resolved amicably in the workplace, should be referred to the CCMA or bargaining councils and other mutually agreed fora for conciliation and, later, arbitration, irrespective of what any one may think of the merits or demerits of such disputes.

The existence of the CCMA . . . helps to channel, among others, workers’ grievances to where they can be ventilated without any interruption and disruption of production – at least up to a point. It is also right and proper that unions should be encouraged and not discouraged to refer dismissal disputes with employers to the CCMA for arbitration if they feel aggrieved by such dismissals.

In that way, they can ventilate all issues about their grievances in regard to such dismissals in that forum before a third party, who can listen to all sides of the dispute and, using his own sense of what is fair or unfair, decide whether the dismissal is fair or unfair. In that way, the workers would have less urge to resort to industrial action over dismissal disputes.”[3]

[77] Employees are entitled to assert their rights. If by so doing a greater volume of work is generated for the CCMA, then the State is obliged to provide the means to ensure that constitutional and labour law rights are protected and vindicated.

[78] In approaching the dismissal dispute impartially a commissioner will take into account the totality of circumstances. He or she will necessarily take into account the importance of the rule that had been breached. The commissioner must of course consider the reason the employer imposed the sanction of dismissal, as he or she must take into account the basis of the employee’s challenge to the dismissal. There are other factors that will require consideration. For example, the harm caused by the employee’s conduct, whether additional training and instruction may result in the employee not repeating the misconduct, the effect of dismissal on the employee and his or her long-service record. This is not an exhaustive list.

[79] To sum up. In terms of the LRA, a commissioner has to determine whether a dismissal is fair or not. A commissioner is not given the power to consider afresh what he or she would do, but simply to decide whether what the employer did was fair.

In arriving at a decision a commissioner is not required to defer to the decision of the employer. What is required is that he or she must consider all relevant circumstances.

…

[110] To summarise, Carephone [LAC per J Froneman DJP] held that section 145 of the LRA was suffused by the then constitutional standard that the outcome of an administrative decision should be justifiable in relation to the reasons given for it. The better approach is that section 145 is now suffused by the constitutional standard of reasonableness.

That standard is the one explained [by constitutional court per Kate O’Regan J] in Bato Star:

Is the decision reached by the commissioner one that a reasonable decision-maker could not reach?

Applying it will give effect not only to the constitutional right to fair labour practices, but also to the right to administrative action which is lawful, reasonable and procedurally fair.

…

Applying the standard

[113] The Commissioner gave three reasons for regarding the sanction as excessive and unfair.

• • The first was that no losses were sustained.
  • The second was that the misconduct was unintentional or a “mistake” and the
  • third was the absence of dishonesty.

He also took the view that the offence committed by Mr Sidumo did not go to the heart of the relationship of trust between Mr Sidumo and the Mine.

[114] It is clear that there was no evidence presented that the Mine suffered any loss as a consequence of Mr Sidumo’s neglect. It is true that losses could have been occasioned by his misconduct, but it is equally true, as submitted on behalf of Mr Sidumo, that no loss was proven to have flowed from it.

[115] In respect of the Commissioner’s finding that the misconduct was unintentional or a mistake, it was correctly pointed out on behalf of Mr Sidumo that it was Mr Botes, in his evidence before the Commissioner, who characterised his misconduct as “mistakes”.

It is true that Mr Sidumo did not conduct individual searches which were his main task. Therefore to describe his conduct as a “mistake” or “unintentional” is confusing and in this regard the Commissioner erred.

[116] In respect of the absence of dishonesty, the Labour Appeal Court found the Commissioner’s statement in this regard “baffling”.

In my view, the Commissioner cannot be faulted for considering the absence of dishonesty a relevant factor in relation to the misconduct.

However, the Commissioner was wrong to conclude that the relationship of trust may have not been breached.

Mr Sidumo was employed to protect the Mine’s valuable property which he did not do. However this is not the end of the inquiry. It is still necessary to weigh all the relevant factors together in light of the seriousness of the breach.

[117] The absence of dishonesty is a significant factor in favour of the application of progressive discipline rather than dismissal.

So too, is the fact that no losses were suffered. That Mr Sidumo did not own up to his misconduct and his denial that he received training are factors that count against him. His years of clean and lengthy service were certainly a significant factor.

There is no indication that the principle of progressive discipline will not assist to adjust Mr Sidumo’s attitude and efficiency. In my view, the Commissioner carefully and thoroughly considered the different elements of the Code and properly applied his mind to the question of the appropriateness of the sanction.

[118] CCMA figures reveal that each year between 70 000 – 80 000 cases are referred to the CCMA for conciliation in respect of dismissals. Given the pressures under which commissioners operate and the relatively informal manner in which proceedings are conducted, and the further fact that employees are usually not legally represented, it is to be expected that awards will not be impeccable.

[119] To my mind, having regard to the reasoning of the Commissioner, based on the material before him, it cannot be said that his conclusion was one that a reasonable decision-maker could not reach.

This is one of those cases where the decision-makers acting reasonably may reach different conclusions. The LRA has given that decision-making power to a commissioner.

Moseneke DCJ, Madala J, O’Regan J and Van der Westhuizen J concur in the judgment of Navsa AJ.

O’REGAN J:

[122] I have had the opportunity of reading the judgments prepared in this matter by Navsa AJ, Ngcobo J and Sachs J. I concur in the judgment of Navsa AJ.

Ngcobo J raises some important issues concerning the scope of “administrative action” in section 33[4] of the Constitution to which I wish briefly to respond.

…

[141] For these reasons then, and for the additional reasons given by Navsa AJ at paragraphs [81]-[88] of his judgment, I agree with him that arbitrations by commissioners in the CCMA constitute administrative action within the contemplation of section 33 of the Constitution. I also concur with the rest of his judgment.

SACHS J:

[142] This case illustrates the need for our constitutional jurisprudence to find the space in appropriate cases to move away from unduly rigid compartmentalisation so as to allow judicial reasoning to embrace fluid concepts of hybridity and permeability in those matters.

…

[158] In my view, then, the key to the present case is to interpret and apply section 145 in a manner that is compatible with the values of reasonableness and fair dealing that an open and democratic society demands.

What is largely implicit in the judgments of my colleagues should, I believe, be the centrepiece of the analysis.

I agree with what appear to be the underlying premises of the two judgments:

• • in an open and democratic society based on human dignity, equality and freedom, it would be inappropriate to restrict review of the commissioner’s decision to the very narrow grounds of procedural misconduct that a first reading of section 145(2) would suggest;
  • at the same time, the labour-law setting, requiring a speedy resolution of the dispute with the outcome basically limited to dismissal or re-instatement, makes it inappropriate to apply the full PAJA-type administrative review on substantive as well as procedural grounds; and
  • to the extent that the right to just administrative action is involved, the values of fair dealing that underlie section 33 of the Constitution must be respected.[5]

I accept that inasmuch as the right to a fair labour practice is at the centre of the analysis, the outcome of the arbitration process must not fall outside the bounds of reason; to accept it doing so would hardly represent a fair outcome.

Finally, acknowledging the adjudicatory element that implicates the right to a fair hearing under section 34, I would hold that a fair hearing demands that at the very least there be some reasonably sustainable fit between the evidence and the outcome.

[159] To my mind, acknowledging hybridity and permeability leads to direct and unstrained engagement with the particular constitutional interests and values at stake. I weigh the facts in the same way according to the same basic criteria, and arrive at the same conclusion as they do. It follows that I concur in the order made by Navsa AJ and supported by Ngcobo J.

NGCOBO J:

Introduction

[160] This case raises important questions concerning the determination of fair labour practices. These questions arise out of the dismissal from employment of a worker for failure to follow correct procedures in the performance of his duties as a security officer at a platinum mining company.

• • The first question concerns the proper approach that commissioners, who are charged with the duty to arbitrate disputes concerning alleged unfair dismissals under the Labour Relations Act 66 of 1995 (the LRA), should adopt.
  • The second question concerns the ambit of the grounds of review in section 145(2)(a) of the LRA.[6]
  • The final question is whether, on the facts of this case, the decision of the commissioner that the dismissal of the worker was unfair should be interfered with on any of the grounds of review contained in section 145(2)(a) of the LRA.

…..

[165] Thus construed, the commissioners are required to act fairly in the determination of unfair dismissal disputes. If a commissioner fails to do so he or she commits a gross irregularity in the conduct of the arbitration proceedings and the ensuing arbitral award falls to be reviewed and set aside. Similarly, if a commissioner makes an award which is inconsistent with his or her obligations under the LRA, he or she acts in excess of the powers conferred by the LRA and the award falls to be reviewed and set aside. On the facts of this case I am unable to say that the conduct of the commissioner falls into any of the grounds of review contained in section 145(2)(a) of the LRA. I therefore agree with the conclusion reached by Navsa AJ.

The test to be applied by the commissioner

[168] There can be no question that the ultimate test that a commissioner must apply is one of fairness. This test is foreshadowed both in section 23 of the Constitution[7] and section 188 of the LRA.[8] All the parties accepted this. And this is the effect of the judgment of the Supreme Court of Appeal and the decisions of the Labour Appeal Court which have had the occasion to consider the test to be applied by commissioners.

…

[178] But recognising that the employer has such discretion does not mean that in determining whether the sanction imposed by the employer is fair, the commissioner must defer to the employer. Nor does it mean that the commissioner must start with bias in favour of the employer. What this means is that the commissioner, as the CCMA submitted, does not start with a blank page and determine afresh what the appropriate sanction is. The commissioner’s starting point is the employer’s decision to dismiss. The commissioner’s task is not to ask what the appropriate sanction is but whether the employer’s decision to dismiss is fair.

…

[180] But it could not have been the intention of the law-maker to leave the determination of fairness to the unconstrained value judgment of the commissioner. Were that to have been the case the outcome of a dispute could be determined by the background and perspective of the commissioner. The result may well be that a commissioner with an employer background could give a decision that is biased in favour of the employer, while a commissioner with a worker background would give a decision that is biased in favour of a worker. Yet fairness requires that regard must be had to the interests both of the workers and those of the employer. And this is crucial in achieving a balanced and equitable assessment of the fairness of the sanction.

[181] These considerations imply certain constraints on commissioners. However, what must be stressed is that having regard to these considerations does not amount to deference to the employer’s decision in imposing a particular sanction. As COSATU put it, what is required of a commissioner is to take seriously the reasons for the employer establishing the rule and prescribing the penalty of dismissal for breach of it. Where an employer has developed and implemented a disciplinary system, it is not for the commissioner to set aside the system merely because the commissioner prefers different standards.

The commissioner should respect the fact that the employer is likely to have greater knowledge of the demands of the business than the commissioner.

[182] However, such respect for the employer’s knowledge is not a reason for the commissioner to defer to the employer. The commissioner must seek to understand the reasons for a particular rule being adopted and its importance in the running of the employer’s business and then weigh these factors in the overall determination of fairness.

…

[281] The commissioner accepted that the worker had violated a reasonable rule relating to searches. However he took the view that the dismissal was not appropriate. He advanced three reasons in support of this view, and these were the subject of the attack in all three courts below.

These findings were: that

• • a) the employer did not suffer any loss;
  • b) the violation of the rule was unintentional or a mistake; and
  • c) the level of the honesty of the worker had to be considered.

Having considered other factors including the fact that the worker had an unblemished period of fourteen years with the employer, the commissioner concluded as follows:

“It is therefore my view that the type of offence committed by the employee does not go into the heart of the relationship, which is trust. I therefore believe that the continued employment relationship is still intact. To deprive the employee of his employment in this circumstance would be wholly unfair.”

[282] In evaluating the reasoning of the commissioner what must be borne in mind is that commissioners are not expected to give detailed and impeccable reasoning for their awards. They are required to “deal with the substantial merits of the dispute with the minimum of legal formalities.”[9]

This has regrettably resulted in unsubstantiated statements being made in awards. And without substantiation, it is often difficult to determine whether the statements made have any basis in the evidence or whether they demonstrate that material factors were ignored. This is often compounded by the fact that some statements are capable of more than one meaning.

In these circumstances, the reviewing court must first ascertain what the statement intended to convey before embarking upon the task of determining whether these statements demonstrate that a gross irregularity occurred in the proceedings or that the commissioner exceeded his or her powers.

[283] While cognisance should properly be taken of the circumstances under which commissioners’ work, this is no excuse for making unsubstantiated statements or reasons for a conclusion. At the bare minimum, an award should set out facts found and the reasons for the finding, the conclusion based on those facts and the reasons for the conclusion. It should not be necessary for the reviewing court to ask, “what did the commissioner mean by this statement?”

A reviewing court should not be left to speculate on what the commissioner had in mind. Statements made may be fully justified, but if left unexplained a statement may be easily misunderstood. Such statement may easily fall prey to an attack based on gross irregularity in the conduct of the proceedings.

[284] The present award is not a model of clarity. The findings under attack on their face may appear to be wholly unfounded. They have to be interpreted in order to be understood. This is the task that the Labour Appeal Court embarked upon. Although it found some of the reasons baffling, it found a possible explanation for some.

[285] The finding that the employer suffered no loss as a result of the worker’s failure to search according to the procedure means no more than that there was no direct link between a failure to search and any theft that occurred. This does not mean that a potential loss as opposed to actual loss was ignored in the reasoning process.

Similarly the finding that the misconduct was unintentional or a mistake may well have been intended to convey that the employee was found ‘guilty’ of negligent conduct as opposed to intentional conduct. This does not mean that the commissioner did not take into account all the circumstances surrounding the misconduct which he should have taken into consideration. He simply did not elaborate on this finding.

And I think it is in this context that a statement that the level of the honesty of the worker should not be ignored, can also be understood. The worker was not found ‘guilty’ of an ‘offence’ involving dishonesty.

[286] It is against this background that the ultimate conclusion by the commissioner that the type of offence did not go into the heart of the relationship which is trust, must be understood. What the commissioner may well be saying here is that if one has regard to the unblemished record of fourteen years of service, it cannot be said that the worker could not be trusted with any other functions by the employer.

For fourteen years the worker had not rendered himself ‘guilty’ of any misconduct. He had been loyal to the employer. One incident which did not involve dishonesty could not, in the view of the commissioner, whose duty it was to assess these matters, wipe out the trust that was built over a period of fourteen years.

In effect what the commissioner is saying is that if one has regard to all the circumstances of the case it could not be said that the relationship between the worker and the employer had become intolerable. There was nothing to suggest that he could not be entrusted with some other functions other than those relating to searches. That seems to me to be the context in which the commissioner made a statement. Seen in this sense, the statement cannot be faulted.

[287] Mr Sidumo was employed by the employer since 2 December 1985. He rose through the ranks. At the time of his dismissal he was a Patrolman Grade 2. He was stationed at Precious Metal Refineries and was transferred to Waterval Redressing Section of Rustenburg Platinum Mines. On the evidence only Patrolmen Grade 3, who are senior patrolmen, work in that section. He was posted at that section because of his working experience. He had mostly worked in a section where searches were conducted at random. It is true, on the evidence he had signed documents acknowledging that he knew search procedures. His evidence was that Mr Sibakela did not explain to him the procedures. The surveillance shows that he conducted random searches. Admittedly he failed to perform satisfactorily the duties he was hired to perform. But he had devoted fourteen years of loyal service to the employer.

[288] Ultimately, the commissioner had to balance, on the one hand, employment justice and the need to protect the worker from harsh and arbitrary action, and on the other hand, the need for efficient operation of the employer’s business and the employer’s entitlement to satisfactory conduct and work performance from Mr Sidumo.

Balancing these interests, in the light of the facts and circumstances of this case, the conclusion by the commissioner that dismissal was not fair, cannot be said to be unfair to the employer.

[289] In all the circumstances, I am unable to find that the commissioner ignored any material factor in evaluating the fairness or otherwise of the sanction imposed by the employer. In the result I cannot say that the employer did not have a fair trial before the commissioner with the result that a gross irregularity in the proceedings occurred. Nor can I, in all the circumstances of this case, conclude that the award made by the commissioner was manifestly unfair to the employer. It follows from these conclusions that the commissioner did not exceed his powers under the LRA. Nor can I say that the commissioner committed a misconduct.

In the event none of the grounds of review have been established. For these reasons I concur in the order proposed in the judgment of Navsa AJ.

Mokgoro J, Nkabinde J and Skweyiya J concur in the judgment of Ngcobo J.

Footnotes:

 

[1] Navsa AJ is a judge with the Supreme Court of Appeal who, at the time of this judgment, was appointed as an Acting Justice of this Court for the period 15 February to 30 June 2007.

[2] Article 8 of the ILO Convention requires that an employee whose employment has been unjustifiably terminated be afforded recourse to “an impartial body, such as a court, labour tribunal, arbitration committee or arbitrator.”

[3] Id at para 117.

[4] Section 33 provides that:

“(1) Everyone has the right to administrative action that is lawful, reasonable and procedurally fair.

(2) Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons.

(3) National legislation must be enacted to give effect to these rights, and must-

(a) provide for the review of administrative action by a court or, where appropriate,an independent and impartial tribunal;

(b) impose a duty on the state to give effect to the rights in subsections (1) and (2); and

(c) promote an efficient administration.”

[5] As Wade and Forsyth state in the preface to their book on administrative law in England, at the heart of all new developments in administrative law is the need to bring more fairness, along with justice, into the law. All the particular rules must be related to that primary purpose, directly or indirectly, and “amid much discussion of proportionality and legitimate expectation, it is the ordinary person’s sense of fairness which is the touchstone.” See Wade and Forsyth Administrative Law 8 ed (Oxford University Press, Oxford 2000) at viii.

[6] Section 145(2) of the LRA provides:

“A defect referred to in subsection (1), means-

(a) that the commissioner-

(i) committed misconduct in relation to the duties of the commissioner as an arbitrator;

(ii) committed a gross irregularity in the conduct of the arbitration proceedings; or

(iii) exceeded the commissioner’s powers; or

(b) that an award has been improperly obtained.”

[7] Section 23(1) of the Constitution provides:

“Everyone has the right to fair labour practices.”

[8] Section 188 of the LRA provides:

“(1) A dismissal that is not automatically unfair, is unfair if the employer fails to prove-

(a) that the reason for dismissal is a fair reason-

(i) related to the employee’s conduct or capacity; or

(ii) based on the employer’s operational requirements; and

(b) that the dismissal was effected in accordance with a fair procedure.

(2) Any person considering whether or not the reason for dismissal is a fair reason or whether or not the dismissal was effected in accordance with a fair procedure must take into account any relevant code of good practice issued in terms of this Act.”

[9] Section 138(1) of the LRA.