Shoprite Checkers v CCMA (JR2471/13) [2015] ZALCJHB 229; [2015] 10 BLLR 1052; (2015) 36 ILJ 2908 (LC) (31 July 2015) per Myburgh AJ.
The Labour Court reviewed and set aside an award and upheld the dismissal. In other words the employer had proved that there was a valid and fair reason to dismiss. It is not clear from the report whether it was done lawfully, in the sense of giving reasonable notice or paying instead of notice. Myburgh AJ identified the relevant facts ignored by the commissioner and considered them to be material. If they had been considered the commissioner would (on the probabilities) have come to a different conclusion on whether the reason for dismissal was fair. For that reason the award was found to be prima facie unreasonable. Concerning the second enquiry Myburgh AJ decided that there was no basis in the evidence overall to displace the prima facie case of unreasonableness and that meant the award was unreasonable and had to be set aside.
Myburgh AJ considered the guidance provided for determining when the failure by a commissioner to consider facts will be reviewable:
- whether the facts ignored were material, in the sense that had they been considered (on the probabilities) the commissioner would have reached a different result;
- if so the (objectively wrong) result arrived at by the commissioner is prima facie unreasonable;
- a second enquiry is then necessary namely whether the evidence overall displaces the prima facie case of unreasonableness; and
- if not then the award should be set aside on review on the grounds of unreasonableness.
[10] The shorthand for all of this is the following: where a commissioner misdirects him or herself by ignoring material facts, the award will be reviewable if the distorting effect of this misdirection was to render the result of the award unreasonable.
[11] Essentially, this is the case that the company mounts on review – it contends, in effect, that the commissioner ignored a host of material facts, which had the distorting effect of causing an unreasonable result.
In his latest Comment When does a factual error by an arbitrator render an award reviewable? on IR Network, published by LexisNexis [subscription required] Prof Darcy du Toit makes some telling points about this decision of Myburgh AJ.
To begin with, the court noted that the commissioner, far from considering “all relevant circumstances”, had ignored at least 13 facts and issues that were directly relevant to the appropriateness of dismissal (see para 13).
. . . . .
In applying the test the court held,
firstly, that the above facts were material “because if they had been considered by the commissioner, he would (on the probabilities) have come to a different conclusion on sanction”. As a result the award was prima facie unreasonable.
Secondly, viewing the evidence as a whole, the court could find no basis for regarding the award to be reasonable despite the commissioner’s failure to consider these facts. As a result the award was unreasonable and fell to be reviewed.
. . . . .
Having said that, it must be emphasised that an award is not reviewable because it is unreasonable. It is reviewable only if one of the procedural defects set out in section 145 of the LRA is present: gross irregularity, misconduct or excess of power by the arbitrator. The test of reasonableness tells us when a review must succeed – i.e., if one of the defects listed in section 145 leads to an unreasonable decision.
The commissioner’s failure to consider the factors set out above, in other words, amounted to a gross irregularity (or misconduct) which rendered the award unreasonable.
This decision again demonstrates the urgent need to adopt a holistic approach when resolving dismissal disputes. The employee’s pleadings should have included a claim for reasonable notice pay, assuming that the dismissal was summary (without notice). If the employer is unable to prove a material breach of contract justifying summary dismissal it would have to be found that the dismissal was unlawful, even though it could be regarded as fair. This is so because there are two separate causes of action: based on #1 unfairness and #2 unlawfulness.
Employee’s material breach
How can employers discharge the onus of proving that they acted lawfully by dismissing summarily? In simple terms gross misconduct should normally be regarded as a material breach. There is little doubt that any serious criminal conduct or wilful insubordination will be regarded as a material breach.
When in doubt
But employers wishing to put the issue of unlawfulness beyond doubt should pay reasonable notice, unless they are certain that there is clear and convincing evidence of a material breach.
In other words treat the matter as falling within the ‘grey area’ of uncertainty and pay the notice pay in compliance with the BCEA and the common law. It can even be done ‘without prejudice’ and without admitting any liability to do so.
ILO Convention of 1982
It is worth pointing out, once again, that the 1982 ILO Convention on termination of employment does just that. Fairly dismissed employees only forfeit their right to notice, and even severance benefits, if the employer proves ‘gross misconduct’.
See:
Dishonesty: meaning and shades of grey
Specific performance: Unlawful termination of contract.
Specific performance: unlawful breach of contract
Halton Cheadle: valid reason and fairness to dismiss
Jurisdiction: lawful or fair dismissal
Jurisdiction: unlawful dismissal and fairness
Dismissal law and lack of understanding
Misconduct and 50 shades of grey
which includes links to Earlier relevant posts
Dismissals must be valid, lawful and fair
ILO: Difference between ‘misconduct’ and ‘serious misconduct’
Development of Labour Law since 1981
Where have all the employee rights gone ?
Reported [2015] 10 BLLR 1052; [2015] JOL 33522 (LC) with headnote
Arbitration award – Review – Test – Commissioner finding dismissal too harsh a penalty without considering material facts – Award set aside as Commissioner’s error had distorting effect that led to unreasonable result.