Jonsson Uniform Solutions (Pty) Ltd v Brown (DA10/2012) [2014] ZALAC 79; [2014] JOL 32513 (LAC) (13 February 2014) per CJ Musi AJA (Tlaletsi ADJP & Mokgoatlheng AJA concurring)

As will appear from the judgment the Labour Appeal Court has stated that the

‘generally accepted view is that we have a bifurcated review standard viz reasonableness and correctness’.

The ‘correctness’ test applies when assessing the issue of jurisdiction over a dispute.  The ‘reasonableness’ test applies to the fairness of the reason for dismissal.

But what about the validity of the reason for dismissal? There is a difference between validity and fairness.  Surely the ‘correctness’ test should apply to the validity of the link between the ‘reason’ and conduct, capacity or operational requirements?

No link no jurisdiction and no need to consider fairness.  The fairness of the reason involves a value judgment because it considers the impact on the business and the employee.  The ‘reasonableness’ test applies.

See also in this regard the recent post Invalid reason for dismissal makes fairness irrelevant.

[1]        This is an appeal against the judgment of the Labour Court (Cele J) wherein it found that the first respondent was dismissed and that such dismissal was substantively and procedurally unfair.  The appellant was ordered to pay the first respondent R616 000,00 which was the equivalent of eight months’ salary and outstanding leave pay to the amount of R8 983,33.  The appeal is with the leave of the court a quo.

[2]       The appellant (a clothing manufacturer whose place of business is in Durban) employed the first respondent as its Managing Director.  She earned R77 000,00 per month.

. . . .

[22]     On 4 November 2008, the first respondent referred the dispute to the Second respondent.  Conciliation could not yield a positive result and a certificate of non-resolution was issued.  The first respondent then referred the dispute to arbitration.

[23]     The arbitrator found that the meeting of 6 October 2008 caused a misunderstanding.  The first respondent believed that she was being dismissed whilst Jonsson believed that she was resigning voluntarily.  He concluded that a request by an employer to an employee that she must resign cannot constitute a dismissal and that the appropriate response by the first respondent, a Senior Executive of many years’ standing, should have been to tell Jonsson that she refuses to resign.

He considered the probabilities and concluded that they favour Jonsson’s version.  He concluded that the first respondent was not dismissed and that she must be regarded as having resigned.  With regard to the claim for unpaid leave he found that the first respondent’s claim for 12.5 days’ leave pay should be set off against the undue salary that she received for October 2008.  She was paid her full salary whilst she worked until 6 October 2008.  He therefore dismissed the first respondent’s claim.

[24]     Dissatisfied with the arbitrator’s decision, the first respondent launched a review application against the award of the arbitrator.  She contended that the arbitrator committed gross irregularities in the conduct of the arbitration proceedings, because he did not apply his mind properly to the evidence presented.  With regard to the finding that the probabilities favoured Jonnson’s version, it was contended that the arbitrator overlooked important evidence and that his failure to consider relevant evidence constituted a misdirection.  The first respondent therefore contended that the arbitrator’s decision is a decision that a reasonable decision-maker could not have reached.

[25]     The court a quo applied the reasonable decision-maker test as set out in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others. The court a quo stated that:

‘It is noteworthy that the rightfulness or wrongfulness of the decision reached by a commissioner is not part of the probe as to whether such a decision is one that a reasonable decision-maker could reach…’

[26]     The court a quo correctly stated that the first respondent bore the onus to prove the alleged dismissal and that where the probabilities were evenly balanced, the application had to be dismissed.

[27]     The court a quo found that the basis on which the arbitrator accepted Jonsson’s version leaves much to be desired.  The court a quo was of the view that the arbitrator did not give any reason for his finding that the probabilities favour the appellant’s case.

[28]     The court a quo analysed the evidence and made the following findings:

. . . .

[30]     Strangely, the arbitrator’s award, which was the subject of review, was not set aside by the court a quo.  There is therefore, currently, a valid arbitration award dismissing the first respondent’s claim and a court order, ordering the appellant to pay the first respondent compensation, emanating from the same set of facts.

[31]     Ms Naidoo, for the appellant, argued that the court a quo applied the incorrect test.  The test set out in Sidumo supra, so she argued, was not applicable because the true question in this matter was whether there was in fact a dismissal.  If there was no dismissal then the second respondent would not have jurisdiction to adjudicate the dispute.  She submitted that the dispute is therefore a jurisdictional one and as such the correctness of the arbitrator’s decision had to be determined from the objective facts.  That being the case, the court a quo analysed and approached the matter incorrectly.  She contended that the court a quo assessed the objective facts incorrectly because the probabilities in fact favoured the appellant’s version.  She submitted that the words you must resign immediately cannot be construed to be a dismissal.

[32]     Mr Van Niekerk, on behalf of the first respondent, was constrained to accept that the court a quo applied the incorrect test.  He however argued that the court a quo approached and analysed the facts as if it were an appeal and not a review.  He submitted that even though the court a quo applied the wrong test it inadvertently used the right approach and therefore reached the right conclusion.  He further submitted that the court a quo’s analysis of the probabilities and its conclusions were correct.

[33]     The generally accepted view is that we have a bifurcated review standard viz reasonableness and correctness.

The test for the reasonableness of a decision was stated in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others as follows:

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

[34]     In assessing whether the CCMA or the Bargaining Council had jurisdiction to adjudicate a dispute, the correctness test should be applied.

The court of review will analyse the objective facts to determine whether the CCMA or Bargaining Council had the necessary jurisdiction to entertain the dispute.  See SARPA v SA Rugby (Pty) Ltd and Others; SA Rugby (Pty) Ltd v SARPU.

[35]     The issues in dispute will determine whether the one or the other of the review tests is harnessed in order to resolve the dispute.  In matters where the factual finding of an arbitrator is challenged on review, the reasonable decision-maker standard should be applied.  Where the legal or jurisdictional findings of the arbitrator are challenged the correctness standard should be applied.  There will, however, be situations where the legal issues are inextricably linked to the facts so that the reasonable decision-maker standard could be applied.

[Footnote: In many matters the admissibility of evidence, which is a legal question, could be inextricably linked to the facts and the decision of the arbitrator will be guided by the facts.  The determination of the admissibility of hearsay evidence is an example of a legal question that is inextricably linked to the facts.]

[36]     It is therefore important to determine whether the dispute, between the parties, is a jurisdictional one or not.  The dispute to be resolved determines the test to be applied.  In this matter, the dispute between the parties was whether there was in fact a dismissal.  If there was no dismissal the Bargaining Council would not have jurisdiction.

If there was a dismissal the Bargaining Council would have jurisdiction.  The existence or otherwise of a dismissal is therefore a jurisdictional issue.  The correctness standard and not the reasonableness standard should therefore be applied.  The court a quo, as both parties agreed, applied the wrong standard.

[43]    I agree with the arbitrator that the probabilities favour the appellant’s version.  In my view the court a quo’s conclusion is wrong.

[44]     The first respondent bore the burden of proving that she was dismissed.  She did not relieve herself of that burden.  She did not prove that she was dismissed.

[45]     The first respondent was also awarded an amount of R8 983.33 as outstanding leave pay.  I agree with the arbitrator that the 12.5 days leave pay should be set off against the salary that she received for October 2008 whilst she only worked for 6 (six) days in October 2008.  The court a quo’s conclusion that she was officially on leave from 14 October 2008 to 24 October 2008 is, based on my conclusion that she was not dismissed, erroneous.

[46]     The requirements of the law and fairness militate against a costs order in this matter.

[47]     In my view, the appeal ought to succeed.

[48]     I accordingly make the following order

a.         The appeal is upheld

b.         The order of the court a quo is set aside and replaced with the following:

The review application is dismissed with no order as to costs.

c.         No order as to costs is made.