Sidumo and Another v Rustenburg Platinum Mines Ltd and Others (CCT 85/06) [2007] ZACC 22 (5 October 2007)

Introduction

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. In summary the findings are the following:^³
1. 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.
2. 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.

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.

Background

The first applicant is Mr Z Sidumo. The litigation leading up to the present proceedings had its origins in his dismissal a long time ago. On 2 December 1985 the first respondent, Rustenburg Platinum Mines Ltd (the Mine), which as its name suggests, is a company principally involved in mining platinum, employed Mr Sidumo as part of its Security Services. He was a constable until 1992. Thereafter he was promoted to the position of a Grade II patrolman. On 20 January 2000, Mr Sidumo was transferred to the Waterval Redressing Section, where he was responsible for access control. On 26 June 2000, he was dismissed from his job at the Redressing Section. He contested his dismissal. Up until the events leading up to his dismissal, Mr Sidumo had a clean disciplinary record – for a period of almost 15 years.

Little did Mr Sidumo know that after an internal disciplinary inquiry, an internal appeal and litigation in three courts over a long period of time, his dismissal dispute with his employer would remain unresolved. He could hardly have imagined that almost seven years later it would be contended before this Court that decisions in relation to his individual dismissal dispute raised important constitutional questions.

The Waterval Redressing Section is a high security facility near Rustenburg that provides benefaction services, separating high grade precious metals such as platinum, rhodium and gold from lower grade concentrate. These metals are extremely valuable and are the livelihood and core business of the Mine.

Mr Sidumo was dismissed for negligently failing to apply established and detailed individual search procedures, significantly different from the random search procedure followed in his earlier posting, prior to his transfer to the Redressing Section. The search procedures were part of the overall effort to minimise losses due, amongst other things, to theft. The dismissal followed on an internal disciplinary inquiry and an internal appeal. Subsequently, Mr Sidumo referred an unfair dismissal dispute to the CCMA in terms of section 191(1)(a) of the LRA.^⁴

Conciliation failed, and thereafter Mr Sidumo, in terms of section 191(5)(a) of the Act,^⁵ successfully challenged his dismissal under the compulsory arbitration provisions of the LRA administered by the CCMA. The third respondent found Mr Sidumo guilty of misconduct but held that dismissal was not an appropriate or fair sanction. He reinstated Mr Sidumo with three months’ compensation subject to a written warning valid for three months. I refer to the third respondent as the Commissioner.

The Mine applied to the Labour Court, in terms of section 145 of the LRA, to review and set aside the Commissioner’s award. The interpretation and application of section 145 loom large in this case and will be dealt with in greater detail in due course.

The Labour Court held that the award did not contain any reviewable irregularity and dismissed the application with costs. The Mine appealed to the Labour Appeal Court,^⁶ which held, that although some of the Commissioner’s reasons for reinstating Mr Sidumo were questionable, his finding, that dismissal was too harsh a sanction, was justified. The Labour Appeal Court dismissed the Mine’s appeal with costs. A subsequent appeal to the Supreme Court of Appeal resulted in success for the Mine.^⁷ The Supreme Court of Appeal overturned the decisions of both the Labour Court and the Labour Appeal Court and substituted the finding of the Commissioner with a determination that the dismissal was fair. Mr Sidumo then applied to this Court for leave to appeal the judgment of the Supreme Court of Appeal.

Intervention by COSATU

The second applicant, the Congress of South African Trade Unions (COSATU),^⁸ which was not a party to the preceding litigation, now applies for leave to appeal in this Court in its own name and in support of Mr Sidumo. At the time of his dismissal, Mr Sidumo was a member of a COSATU affiliate, namely, the National Union of Mineworkers. COSATU has applied for leave to appeal on the basis that the findings of the Supreme Court of Appeal have far-reaching, adverse implications for its members and affiliates. It submitted that it should be afforded standing in relation to questions that are fundamental to the industrial relations community at large. The Mine opposed the intervention at this late stage. The question of COSATU’s standing and its explanation concerning its late entry will be dealt with later.

Both Mr Sidumo and COSATU contended that the question of the correctness of the Supreme Court of Appeal’s judgment raises constitutional issues. The applications for leave to appeal have been filed outside of the prescribed time limits and are therefore accompanied by an application for condonation. These are aspects to which I will revert.

The internal disciplinary hearing and appeal

A senior superintendent at the Mine, Mr Page, conducted the internal disciplinary hearing where Mr Sidumo was charged as follows:

“(1) Negligence – Failure to follow established procedures in terms of the Protection Services Department search procedure. Which caused prejudice or possible prejudice to the Company in terms of production loss.

(2) Failure to follow established procedures in terms of the Protection Services Department search procedures.”

The facts on which Mr Page’s findings were based were largely uncontested. Mr Sidumo, was however, aggrieved at the lack of training he had received in relation to his position at the Waterval Redressing Section. He also alleged that he had not been properly informed that the search procedures at the Redressing Section were significantly different from the random searches his previous job required.

Mr Sidumo’s main duty at the Redressing Section was to safeguard the Mine’s precious metals. The detailed compulsory search procedures for all persons leaving the Redressing Section entailed an individual search of each person in a private cubicle, with close personal inspection plus a metal detector scan. The procedures were in written form and were distributed and made known to all, including Mr Sidumo. In August 1999 he signed a document acknowledging that they had been read and explained to him.

The Mine’s production continued to decrease and possible causes for the decline, including inefficient processes, poor ore quality and outdated machinery were investigated. Over three days, in April 2000, the Mine resorted to video surveillance of employee performance at various points, including the point where Mr Sidumo did duty at the Redressing Section. This revealed that of 24 specifically monitored instances involving Mr Sidumo, he conducted only one search in accordance with established procedures. On eight occasions he conducted no search at all. Fifteen other searches did not conform to procedures. The video also revealed that Mr Sidumo allowed persons to sign the search register without conducting any search at all.

Mr Page found Mr Sidumo guilty of misconduct in the form of negligence and failure to follow procedures. He concluded that the misconduct had “created potential production losses/theft”. In mitigation, he accepted that “nothing went out during your shift, as far as you know” and took into account Mr Sidumo’s service record. That notwithstanding, he found that the misconduct went to the heart of Mr Sidumo’s capacity as a member of the Mine’s Protection Services and that the relationship of trust had broken down, making a future relationship intolerable. Mr Sidumo was dismissed.

Mr Sidumo lodged an internal appeal. Another senior employee, Mr Denner, conducted the appeal hearing. He held that since Mr Sidumo had not been charged with dishonesty, the fact that losses had not occurred was irrelevant – the charge was negligently failing to follow procedures. He considered it important that through Mr Sidumo’s wrongdoing the Mine could have suffered losses. He considered alternatives to dismissal but found none appropriate. The appeal was dismissed.

The CCMA

An arbitration under the auspices of the CCMA is a hearing de novo.^⁹ The relevant additional evidence adduced at the CCMA is set out hereafter. Mr Botes, one of Mr Sidumo’s supervisors, who was responsible for the video surveillance, testified that during the surveillance period, though not on Mr Sidumo’s watch, one thief had been caught with materials worth R44 000 hidden between his legs. Mr Botes was adamant that Mr Sidumo was aware of how to conduct searches. Mr Sidumo had, after all, been posted to that security checkpoint to conduct searches. He conceded that the tasks entrusted to Mr Sidumo would normally have been carried out by employees graded as senior patrolpersons. Mr Sidumo, however, had been posted to the Redressing Section because of his longstanding experience in Protection Services. Mr Botes accepted that the Mine’s disciplinary code entailed that disciplinary and corrective measures be put in place to ensure that employees are put “on the right track”.

Mr Williams, the Mine’s assistant chief chemist testified that in his view, the major losses that occurred, which led to the video surveillance being installed, were due to the poor quality of the metallics. According to Mr Williams, the daily production yield loss was in the region of R500 000. Mr Sidumo testified and claimed that he had received no training in relation to the search procedures and further, that he had objected to his posting to the Redressing Section.

The Commissioner rejected both claims. He held that the rule that searches should be conducted in a particular manner was valid and that Mr Sidumo had contravened the rule. The Commissioner had regard to section 188(2) of the LRA which compels a person, when considering whether or not a reason for dismissal is fair, to take into account the Code of Good Practice (the Code) contained in Schedule 8 to the LRA.^¹⁰ The Commissioner did so and, in particular, considered article 7(b)(iv), which provides that a person determining whether dismissal for misconduct was fair should consider whether the dismissal was an appropriate sanction.

The Commissioner took the view that the concept of progressive discipline, endorsed by the Labour Court, was applicable. In terms of this concept employee behaviour is to be corrected through a system of graduated disciplinary measures, such as counselling and warning. The Commissioner considered Mr Sidumo’s service record in his favour. He concluded that dismissal was too harsh a sanction and motivated it as follows: There had been no losses suffered by the Mine; the violation had been unintentional or had been a “mistake”; and Mr Sidumo had not been dishonest. Before making his award the Commissioner stated that he did not consider the offence committed by Mr Sidumo to “go into the heart of the relationship [with the employer], which is trust.”

The Labour Court and the Labour Appeal Court

In applying to the Labour Court to review the Commissioner’s award, the Mine took the view that the Commissioner had erred in concluding that no losses had been suffered by the Mine, that the violation of the rule had been unintentional or a mistake and that Mr Sidumo’s honesty was a factor to be considered in his favour. It was submitted on behalf of the Mine that there had been evidence that, for the period February to May 2000, there had been revenue loss of approximately R500 000 per day. It had been shown that precious metals had been found on persons during the surveillance period. It was materially relevant, contended the Mine, that Mr Sidumo had been specifically employed to prevent theft and that he had conducted only one proper search over the surveillance period.^¹¹

It was submitted on behalf of the Mine that the Commissioner’s reasons were irrational and that there was no link between the evidence and his factual conclusions. The Commissioner’s finding that the misconduct did not go to the heart of the relationship was also criticised as being irrational. The Mine contended that the Commissioner had been so grossly careless that he could rightly be described as having committed misconduct. It was submitted that the Commissioner had failed to apply his mind to such an extent that the Mine did not have a fair hearing and furthermore, that the Commissioner had exceeded his powers.

The Labour Court considered that employees who perform poorly (which was how it categorised Mr Sidumo’s misconduct), but who had not been dishonest, should not automatically face dismissal. It took into account Mr Sidumo’s service record. It did not disapprove of the Commissioner’s application of the principle of corrective or progressive discipline. The Labour Court found that there was not an “iota of evidence” that theft had occurred during Mr Sidumo’s shift. It thought it significant that he had been doing work usually assigned to a more senior employee.

The Labour Court considered the test for review of a commissioner’s award as enunciated by the Labour Appeal Court in Carephone (Pty) Ltd v Marcus NO and Others::^¹²

“It seems to me that one will never be able to formulate a more specific test other than, in one way or another, asking the question: is there a rational objective basis justifying the connection made by the administrative decision-maker between the material properly available to him and the conclusion he or she eventually arrived at? In time only judicial precedent will be able to give more specific content to the broad concept of justifiability in the context of the review provisions in the LRA.”^¹³

The Labour Court concluded, with reference to the grounds of review set out in section 145 of the LRA and the test in Carephone, that there was no basis upon which it could interfere with the Commissioner’s award.

The Mine appealed to the Labour Appeal Court.^¹⁴ That court was critical of the Commissioner. It rejected his finding that no losses had been suffered by the company as a result of Mr Sidumo’s failure to conduct proper searches. The court stated that it could not be ruled out that individuals who had not been searched might have departed with precious metals on their person.

In respect of the Commissioner’s findings that the misconduct was unintentional or a mistake and that Mr Sidumo’s honesty was a factor to be taken into account in his favour, the Labour Appeal Court had the following to say:

“It is not clear what the [Commissioner] meant when he said that the violation of the rule by [Mr Sidumo] was unintentional or a ‘mistake’. He might have been referring to the fact that one of the offences that [Mr Sidumo] was found guilty of was based on negligent conduct as opposed to intentional conduct. He did not elaborate on this but, even if that were the position, that would have had to be taken into account in the light of all the circumstances. Quite frankly, how the third factor, namely, honesty, came into the picture in this case, is baffling. No dishonesty by [Mr Sidumo] was alleged.”^¹⁵

The Labour Appeal Court went on to state that, had the reasons referred to been the sole basis of the Commissioner’s award, it would have had no hesitation in holding that the award was unjustifiable. It noted, however, that the Commissioner took Mr Sidumo’s service record into account. The court also observed that the Commissioner suggested graduated disciplinary measures such as counselling and a warning. The court thought it material that in its founding affidavit in the Labour Court, the Mine failed to challenge the Commissioner’s findings on these aspects. The Labour Appeal Court concluded that Mr Sidumo’s clean lengthy service record was “capable of sustaining the finding”^¹⁶ that the sanction of dismissal was too harsh. It dismissed the appeal. The Mine appealed the Labour Appeal Court’s judgment to the Supreme Court of Appeal.

The Supreme Court of Appeal

The first finding – deference

The Supreme Court of Appeal held that the Commissioner failed properly to appreciate the ambit of his duties under the LRA and therefore incorrectly approached the task entrusted to him in determining whether the employer’s decision was fair.^¹⁷ In formulating what it considered to be the correct approach the Supreme Court of Appeal held that the discretion to impose a sanction for misconduct belongs “in the first instance to the employer.”^¹⁸ The Supreme Court of Appeal referred with approval to the following dictum of the Labour Appeal Court in Nampak Corrugated Wadeville v Khoza:^¹⁹

“The determination of an appropriate sanction is a matter which is largely within the discretion of the employer. However, this discretion must be exercised fairly. A court should, therefore, not lightly interfere with the sanction imposed by the employer unless the employer acted unfairly in imposing the sanction. The question is not whether the court would have imposed the sanction imposed by the employer, but whether in the circumstances of the case the sanction was reasonable.”^²⁰

The Supreme Court of Appeal summarised the key elements of the approach in Nampak as follows: “(a) the discretion to dismiss lies primarily with the employer; (b) the discretion must be exercised fairly; and (c) interference should not lightly be contemplated.”^²¹

The Supreme Court of Appeal also referred with approval to the following dictum of Ngcobo AJP (as he then was) in County Fair:

“[C]ommissioners must approach their functions with caution. They must bear in mind that their awards are final – there is no appeal against their awards. In particular, commissioners must exercise greater caution when they consider the fairness of the sanction imposed by an employer. They should not interfere with the sanction merely because they do not like it. There must be a measure of deference to the sanction imposed by the employer subject to the requirement that the sanction imposed by the employer must be fair. The rationale for this is that it is primarily the function of the employer to decide upon the proper sanction.

. . . .

The mere fact that the commissioner may have imposed a somewhat different sanction or a somewhat more severe sanction than the employer would have, is no justification for interference by the commissioner.

. . . .

In my view, interference with the sanction imposed by the employer is only justified where the sanction is unfair or where the employer acted unfairly in imposing the sanction. This would be the case, for example, where the sanction is so excessive as to shock one’s sense of fairness. In such a case, the commissioner has a duty to interfere.”^²²

The Supreme Court of Appeal considered that two further points emerged from the County Fair judgment namely, “(d) that commissioners should use their powers to intervene with ‘caution’, and (e) that they must afford the sanction imposed by the employer ‘a measure of deference’.”^²³ In its view, the analysis in the Nampak and County Fair judgments was:

“[F]irmly rooted in the prescripts of the statute and affords an approach to the duties of commissioners that is not only fair and practicable, but would also shield the labour courts from the very flood of litigation the alternative tests have mistakenly been designed to avoid.”^²⁴

The following then appears in the Supreme Court of Appeal’s judgment:

“It is in my view regrettable that the LAC has not consistently affirmed and applied the analysis. Although some panels have affirmed Ngcobo AJP’s approach, this case indicates how far the practice of the LAC has on occasion strayed from it . . . . Instead of exhorting commissioners to exercise greater caution when intervening, and to show a measure of deference to the employer’s sanction so long as it is fair, it has insulated commissioners’ decisions from intervention by importing unduly constrictive criteria into the review process.”^²⁵ (Footnote omitted.)

According to the Supreme Court of Appeal there were three main reasons underlying the analysis of Ngcobo AJP. The first was textual, the second conceptual and the third institutional. In relation to the first, the Supreme Court of Appeal pointed to section 188(2) of the LRA, which obliged commissioners in considering whether or not the reasons for a dismissal were fair, to take into account the Code of Good Practice. Item 7(b)(iv) of the Code requires a commissioner to consider whether dismissal was “an” appropriate sanction. The use of the indefinite “an” as opposed to the definite “the” was, in the view of the Supreme Court of Appeal, important. It showed that the legislature had in mind that there could be a range of responses. The Code states that it is generally inappropriate to dismiss employees for a first offence unless a continued relationship would be intolerable. This, reasoned the Supreme Court of Appeal, meant that a measure of subjectivity was brought into play. It followed that the primary assessment of intolerability unavoidably belonged to the employer.

Turning to the conceptual aspect, the Supreme Court of Appeal stated that the concept of fairness is not absolute. It affords a range of possible responses. In this regard the court referred to Todd and Damant who state the following:

“The court must necessarily recognize that there may be a range of possible decisions that the employer may take, some of which may be fair and some of which may be unfair. The court’s duty is to determine whether the decision that the employer took falls within the range of decisions that may properly be described as being fair.”^²⁶ (Footnote omitted.)

The court concluded as follows on this aspect: “The fact that the commissioner may think that a different sanction would also be fair, or fairer, or even more than fair, does not justify setting aside the employer’s sanction.”^²⁷

Dealing with the institutional aspect, the Supreme Court of Appeal stated that the solution to the problem of a flood of challenges to awards lay in pointing commissioners firmly to the limits of the statute. It reasoned that if commissioners could freely substitute their judgment and discretion for the judgment and discretion of the employer, employees would take every case to the CCMA.

The second finding – PAJA or the LRA?

It is necessary to set out in some detail the Supreme Court of Appeal’s reasoning in this regard. First, the Supreme Court of Appeal considered sections 145(1) and (2) and section 158(1)(g) of the LRA. The relevant parts of section 145, which contain the grounds of review, provide:

“(1) Any party to a dispute who alleges a defect in any arbitration proceedings under the auspices of the Commission may apply to the Labour Court for an order setting aside the arbitration award—

(a) within six weeks of the date that the award was served on the applicant . . .

(2) 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 had been improperly obtained.”

Section 158 (1) (g) reads as follows:

“The Labour Court may—

(g) subject to^²⁸ section 145, review the performance or purported performance of any function provided for in this Act on any grounds that are permissible in law.” (Footnote added.)

The Supreme Court of Appeal then referred with approval to Carephone, where the application of these two sections was discussed. The Labour Appeal Court in Carephone was not prepared to hold that section 158(1)(g) created a separate and more expansive basis of review of CCMA awards. It held that the administrative justice provisions of the Constitution (as it read then) suffused the grounds of review under section 145 of the LRA, thereby extending the scope of review of CCMA awards. The Labour Appeal Court stated that section 33 of the Constitution^²⁹ read with item 23(2)(b) of Schedule 6 to the Constitution^³⁰ extended the scope of review and introduced a requirement of rationality in the outcome of decisions:

“The peg on which the extended scope of review has been hung is the constitutional provision that administrative action must be justifiable in relation to the reasons given for it (s 33 and item 23 (b) of Schedule 6 to the Constitution). This provision introduces a requirement of rationality in the merit or outcome of the administrative decision. This goes beyond mere procedural impropriety as a ground for review, or irrationality only as evidence of procedural impropriety.”^³¹

The Labour Appeal Court stated that, when the Constitution requires administrative action to be justifiable^³² in relation to the reasons given for it, it seeks to give expression to the fundamental values of accountability, responsiveness and openness.^³³ The test formulated by the Labour Appeal Court^³⁴ was based directly on the wording contained in the very last part of item 23(2) of Schedule 6 to the Constitution^³⁵ which was part of the wording of sections 33(1) and (2) of the Constitution pending the promulgation of the national legislation which, as it turned out, was PAJA.

The Labour Appeal Court described this approach as one of “substantive rationality”,^³⁶ likening it to administrative law concepts such as reasonableness, rationality and proportionality. In Carephone, it considered statutory arbitrations conducted in terms of the LRA to be administrative in nature and therefore reviewable on that basis.

Mindful of the fact that its approach might have the effect of blurring the line between appeal and review, the court said:

“In determining whether administrative action is justifiable in terms of the reasons given for it, value judgments will have to be made which will, almost inevitably, involve the consideration of the ‘merits’ of the matter in some way or another. As long as the Judge determining this issue is aware that he or she enters the merits not in order to substitute his or her own opinion on the correctness thereof, but to determine whether the outcome is rationally justifiable, the process will be in order.”^³⁷

After discussing Carephone, the Supreme Court of Appeal went on to consider the decision in Shoprite Checkers (Pty) Ltd v Ramdaw NO and Others,^³⁸ where the Labour Appeal Court considered the possible effect of the enactment of PAJA on section 145(2) of the LRA and found it unnecessary to decide whether PAJA applied. The Labour Appeal Court did so on the basis that the dictum in Carephone referred to in paragraph [25] above is in line with the following statements of this Court in Pharmaceutical Manufacturers Association of SA and Another: In re Ex parte President of the Republic of South Africa and Others:^³⁹

“It is a requirement of the rule of law that the exercise of public power by the Executive and other functionaries should not be arbitrary. Decisions must be rationally related to the purpose for which the power was given, otherwise they are in effect arbitrary and inconsistent with this requirement. It follows that in order to pass constitutional scrutiny the exercise of public power by the Executive and other functionaries must, at least, comply with this requirement. If it does not, it falls short of the standards demanded by our Constitution for such action.

The question whether a decision is rationally related to the purpose for which the power was given calls for an objective enquiry. Otherwise a decision that, viewed objectively, is in fact irrational, might pass muster simply because the person who took it mistakenly and in good faith believed it to be rational. Such a conclusion would place form above substance and undermine an important constitutional principle.”^⁴⁰ (Footnote omitted.)

After comparing the grounds of review under section 145 of the LRA with the more extensive provisions of section 6(2) of PAJA,^⁴¹ the Supreme Court of Appeal decided that PAJA, by necessary implication, extended the available remedies to parties to CCMA arbitrations and that PAJA superseded the specialised enactment of the LRA. Parliament enacted PAJA because of a constitutional obligation to give effect to the right to just administrative action embodied in the Constitution. That obligation, the Supreme Court of Appeal said, did not exempt from its ambit previous parliamentary enactments, such as section 145, that conferred rights of administrative review. This was so, notwithstanding that the LRA is a specialised statute.

In this regard the Supreme Court of Appeal relied on the decision of this Court in Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others^⁴² where it was stated that section 6 of PAJA revealed a clear purpose to codify the grounds of judicial review of administrative actions.^⁴³ The Constitution required PAJA to “cover the field” and it did so.^⁴⁴ The Supreme Court of Appeal reasoned that a slightly different path would lead to the same conclusion. It explained that path as follows:

“At the time the LRA was enacted, the interim Constitution required that administrative action be ‘justifiable in relation to the reasons given for it’. For the reasons set out in Carephone, this right suffused the interpretation of s 145(2). When the administrative-justice provisions of the Constitution, as embodied in PAJA, superseded those of the interim Constitution, it could not have been intended that parties to CCMA arbitrations should enjoy a lesser right of administrative review than that afforded under the interim Constitution. The repeal of the interim Constitution and its replacement by the Constitution did, in other words, not diminish the review entitlement under s 145(2). Section 6(2) of PAJA is the legislative embodiment of the grounds of review to which arbitration parties became entitled under the Constitution.”^⁴⁵

The only tension in relation to reconciling section 145 of the LRA with the provisions of PAJA, so the Supreme Court of Appeal reasoned, was in relation to time limits. Section 145 of the LRA provides that a party may apply to set aside an arbitration award within six weeks of the date that the award was served on him or her. PAJA, on the other hand, requires that proceedings for judicial review be instituted without unreasonable delay and in any event not later than 180 days after exhaustion of internal remedies or after the person concerned became aware of the action involved and the reasons for it. The Supreme Court of Appeal relying on its decision and those of this Court emphasised that labour disputes require speedy resolution and the legislature, in prescribing the time period of six weeks in section 145(1) of the LRA, gave clear effect to this imperative. Thus, according to the court, it may be expected that the legislature would legislate different time periods in different fields and that did not militate against its earlier conclusions.

The Supreme Court of Appeal held that both Carephone and PAJA required the Labour Appeal Court to consider whether the Commissioner’s decision to reinstate Mr Sidumo was “rationally connected to the information before him and to the reasons he gave for it.” According to it, the Labour Appeal Court had blurred the line between appeal and review by asking whether considerations taken into account by the Commissioner were “capable of sustaining” his finding. The question on review was not whether the record revealed relevant considerations that were capable of justifying the outcome, but rather whether the decision-maker properly exercised the powers entrusted to him.

The Supreme Court of Appeal stated that the Mine had always considered Mr Sidumo’s service record to be relevant. The Mine’s case was that despite these factors continued employment was intolerable. Its complaint before the Labour Appeal Court properly characterised, was that the Commissioner’s decision was tainted by reliance on misconceived considerations. The Labour Appeal Court did not apply the “rational objective test” explained in Carephone, which was in line with PAJA. It incorrectly asked whether there were factors capable of sustaining the Commissioner’s findings, thereby treating the matter as an appeal rather than a review.

The Supreme Court of Appeal noted that the Commissioner took four factors into account. In its view the Labour Appeal Court rightly rejected three of them, namely, absence of loss, mistake and no dishonesty. The fourth – that the misconduct did not go to the heart of the employment relationship – was, in the view of the Supreme Court of Appeal, also incorrect. It considered the failure to search, not to be “peripheral malperformance”, but a “profound failure at the very core of the employee’s functions.”^⁴⁶ The employer trusted Mr Sidumo to carry out searches. His failure necessarily violated that trust.

The Supreme Court of Appeal held that it could not be said that the decision to reinstate Mr Sidumo was rationally connected to the information before the Commissioner. The following appears in the judgment of the Supreme Court of Appeal:

“Nor does PAJA oblige us to pick and choose between the commissioner’s reasons to try to find sustenance for the decision despite the bad reasons. Once the bad reasons played an appreciable or significant role in the outcome, it is, in my view, impossible to say that the reasons given provide a rational connection to it.”^⁴⁷

Because of the time lapse, the parties agreed that, in the event of the award being set aside, it would not be in the interests of justice to remit the matter and that the Supreme Court of Appeal should finally decide it. In the result, the Supreme Court of Appeal upheld the dismissal of Mr Sidumo and set aside the decisions of the Labour Appeal Court, Labour Court and the Commissioner.

Is a constitutional issue raised?

It is accepted by the parties that this case raises constitutional issues. It involves the interpretation and application of the LRA and PAJA. These statutes were enacted to give effect to the rights contained in sections 23 and 33 of the Constitution, respectively. Thus, matters relating to the application and interpretation of the LRA and PAJA are constitutional matters.^⁴⁸

In addition, this case concerns the powers and functions of the Labour Court. The Labour Court and the Labour Appeal Court, both of which were established in terms of the LRA, are courts which have the same status as the High Court and Supreme Court of Appeal, respectively. The powers and functions of the courts are constitutional issues.^⁴⁹

COSATU’s standing and condonation

It is true that COSATU was not a party to the preceding litigation. It is equally true that until the litigation in the Supreme Court of Appeal, it could not be predicted that Mr Sidumo’s individual dismissal would result in the findings that are in issue before us.

Relevant factors to be considered in deciding whether to grant COSATU leave to pursue an appeal at this stage are set out in Campus Law Clinic, University of KwaZulu-Natal v Standard Bank of South Africa Ltd and Another:^⁵⁰

“[W]hether there is another reasonable and effective manner in which the challenge may be brought; the nature of the relief sought and the extent to which it is of general and prospective application; the range of persons or groups who may be directly or indirectly affected by any order made by the Court and the opportunity that those persons or groups have had to present evidence and argument to the Court; the degree of vulnerability of the people affected; the nature of the rights said to be infringed; as well as the consequences of the infringement. The list of factors is not closed.”^⁵¹ (Footnotes omitted.)

COSATU is acting, at the very least, on behalf of all of its members and the outcome of this case is generally of importance to employees, who are a vulnerable group in society. In addition, I am satisfied that a proper case has been made for condonation of the late filing of COSATU’s papers as well as Mr Sidumo’s late application for leave to appeal.

The Constitution and the statutory scheme

The starting point is the Constitution. Section 23(1) provides that everyone has the right to fair labour practices.^⁵² Although the right to fair labour practices extends to employees and employers alike,^⁵³ for employees it affords security of employment.

One of the primary purposes of the LRA is to give effect to the fundamental rights conferred by section 23 of the Constitution. The relevant parts of section 1 of the LRA read as follows:

“The purpose of this Act is to advance economic development, social justice, labour peace and the democratisation of the workplace by fulfilling the primary objects of this Act, which are—

(a) to give effect to and regulate the fundamental rights conferred by section 23 of the Constitution;

(b) to give effect to obligations incurred by the Republic as a member state of the International Labour Organisation;

. . .

(d) to promote—

. . .

the effective resolution of labour disputes.”

Section 3 of the LRA provides that any person applying the provisions of the LRA must interpret its provisions to give effect to its primary objects; in compliance with the Constitution; and in compliance with the public international law obligations of the Republic. Commissioners are thus obliged to act accordingly.

Section 185 of the LRA provides that every employee has the right not to be unfairly dismissed and subjected to unfair labour practices. Where an employee claims that he or she has been unfairly dismissed, the dismissal dispute is submitted to compulsory arbitration in terms of section 191(5)(a), either before the CCMA, or a bargaining council. On the other hand, section 192 of the LRA, under the title Onus in dismissal disputes, provides that once an employee establishes the existence of the dismissal, the employer must prove that the dismissal is fair.

The statutory scheme requires a commissioner to determine whether a disputed dismissal was fair. In terms of section 138 of the LRA, a commissioner should do so fairly and quickly. First, he or she has to determine whether or not misconduct was committed on which the employer’s decision to dismiss was based.^⁵⁴ This involves an inquiry into whether there was a workplace rule in existence and whether the employee breached that rule. This is a conventional process of factual adjudication in which the commissioner makes a determination on the issue of misconduct. This determination and the assessment of fairness, which will be discussed later, is not limited to what occurred at the internal disciplinary inquiry.

The Supreme Court of Appeal placed undue reliance on item 7(b)(iv) of the Code which requires the commissioner to consider whether dismissal was “an” appropriate sanction. The use of the indefinite article is not decisive. As indicated earlier the Code derives from NEDLAC and is a guide.^⁵⁵ In any event it can hardly take precedence over the Constitution and the clear provisions of the LRA.

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.^⁵⁶ Any suggestion by the Supreme Court of Appeal that the deferential approach is rooted in the prescripts of the LRA cannot be sustained.

Fairness of the dismissal

The next part of the process is that the fairness of the dismissal must be assessed. As part of this process, the reasonableness or validity of the rule allegedly breached must be considered. The Code sets out factors that ought to be considered in relation to that aspect.

The question of an approach to the inquiry into fairness is not novel. At the time that the LRA came into force, there was already an established jurisprudence in this regard. The Appellate Division^⁵⁷ dealt with this question in relation to the Labour Relations Act 28 of 1956. In Media Workers Association of South Africa and Others v Press Corpration of South Africa Ltd (‘Perskor’)^⁵⁸ it was stated as follows:

“Clearly, the Court’s view as to what is fair in the circumstances is the essential determinant in deciding the ultimate question. See Marievale Consolidated Mines Ltd v President of the Industrial Court and Others 1986 (2) SA 485 (T) at 498J-490I; Brassey and others The New Labour Law at 12-13, 58-9; Van Jaarsveld and Coetzee Suid –Afrikaanse Arbeidsreg vol 1 at 328.

. . .

In my view a decision of the Court . . . is not a decision on a question of law in the strict sense of the term. It is the passing of a moral judgment of a combination of findings of fact and opinions.”^⁵⁹

Thus, the court is called upon as an impartial adjudicator to determine fairness.

In National Union of Metalworkers of SA v Vetsak Co-operative Ltd and Others,^⁶⁰ the Appellate Division stated the following:

“Fairness comprehends that regard must be had not only to the position and interests of the worker, but also those of the employer, in order to make a balanced and equitable assessment. In judging fairness, a court applies a moral or value judgment to established facts and circumstances (NUM v Free State Cons at 446I). And in doing so it must have due and proper regard to the objectives sought to be achieved by the Act. In my view, it would be unwise and undesirable to lay down, or to attempt to lay down, any universally applicable test for deciding what is fair.”^⁶¹

In Chemical Workers Industrial Union & Others v Algorax (Pty) Ltd^⁶² the Labour Appeal Court once again stressed that fairness had to be assessed objectively.

In NEHAWU this Court said:

“[T]he focus of s 23(1) is, broadly speaking, the relationship between the worker and the employer and the continuation of that relationship on terms that are fair to both. In giving content to that right, it is important to bear in mind the tension between the interests of the workers and the interests of the employers which is inherent in labour relations. Care must therefore be taken to accommodate, where possible, these interests so as to arrive at the balance required by the concept of fair labour practices. It is in this context that the LRA must be construed.”^⁶³

The dicta in the preceding paragraphs and the ILO Convention clearly illustrate the importance of holding the scales between the competing interests of employees and employers evenly in the balance.

The Labour Appeal Court in Nampak and County Fair was rightly concerned to ensure that, in determining whether a dismissal was fair, commissioners should not approach the matter on the basis of what decision they would have made had they been the employer. It was addressing the issue identified by Myburgh and Van Niekerk in their article Dismissal as a Penalty for Misconduct: The Reasonable Employer and Other Approaches:^⁶⁴

“There is a disturbing inclination on the part of commissioners to substitute their personal opinions for those of employers. Whether that inclination is due to partiality, a different ethical code, inexperience or lack of training, is neither here nor there.”^⁶⁵

In Nampak, the Labour Appeal Court was careful to state that the fairness of a dismissal must be considered against the facts and circumstances of the case – an objective approach.^⁶⁶ Regrettably, the decisions in Nampak and County Fair, in expounding on how a commissioner should approach his or her task, resorted to the reasonable employer test used in England. That test has its origins in section 57(3) of that country’s Employment Protection (Consolidation) Act of 1978.^⁶⁷ It is significant that the provisions of that section are very different to the provisions of the LRA relating to the determination of the fairness of a dismissal.

In applying that section the courts in England have resorted to the “band of reasonableness” test. In British Leyland UK Ltd v Swift,^⁶⁸ Lord Denning stated the following:

“[T]here is a band of reasonableness, within which one employer may reasonably take one view: another quite reasonably take a different view. One would quite reasonably dismiss the man. The other would quite reasonably keep him on. Both views may be quite reasonable. If it was quite reasonable to dismiss him, then the dismissal must be upheld as fair: even though some other employers may not have dismissed him.”^⁶⁹

This approach, which was followed by the Supreme Court of Appeal, has been extensively criticised in England on the basis that it does not allow for a proper balancing of the interests of employer and employee.^⁷⁰

As pointed out by the Supreme Court of Appeal, the Labour Appeal Court has been inconsistent in dealing with the question under discussion. In Toyota SA Motors (Pty) Ltd v Radebe & Others,^⁷¹ decided after County Fair and Nampak, Nicholson JA noted that the LRA was differently worded from the English statute, providing as it does that an arbitrator should decide whether a dismissal is fair— he or she is not required to determine if the sanction is one which a reasonable employer would have arrived at.^⁷² With specific reference to Nampak, Nicholson JA stated the following:

“As I mentioned above the ordinary rule is that this court is bound by its own decisions and unless a decision has been arrived at on some manifest oversight or misunderstanding, something in the nature of a palpable mistake, a subsequently constituted court has no right to prefer its own reasoning to that of its predecessors. I believe that the application of the reasonable employer test was such a palpable mistake which permits us to overrule it.”^⁷³

In BMD Knitting Mills (Pty) Ltd v SA Clothing & Textile Workers Union,^⁷⁴ Davis AJA said the following:

“I have some doubt as to whether this deferential approach which is sourced in the principles of administrative review is equally applicable to a decision by an employer to dismiss employees particularly in the light of the wording of the section of the Act, namely, ‘the reason for dismissal is a fair reason’. The word ‘fair’ introduces a comparator, that is a reason which must be fair to both parties affected by the decision.”^⁷⁵

In deciding how commissioners should approach the task of determining the fairness of a dismissal, it is important to bear in mind that security of employment is a core value of the Constitution which has been given effect to by the LRA.^⁷⁶ This is a protection afforded to employees who are vulnerable. Their vulnerability flows from the inequality that characterises employment in modern developing economies.^⁷⁷ The relationship between employer and an isolated employee and the main object of labour law is set out in the now famous dictum of Otto Kahn-Freund:

“[T]he relation between an employer and an isolated employee or worker is typically a relation between a bearer of power and one who is not a bearer of power. In its inception it is an act of submission, in its operation it is a condition of subordination, however much the submission and the subordination may be concealed by that indispensable figment of the legal mind known as the ‘contract of employment.’ The main object of labour law has always been, and we venture to say will always be, to be a countervailing force to counteract the inequality of bargaining power which is inherent and must be inherent in the employment relationship.”^⁷⁸

In Engen Petroleum Ltd v CCMA & Others^⁷⁹ Zondo JP, although considering himself bound by the Supreme Court of Appeal’s judgment in this matter, was critical of its stance in relation to the approach to be adopted by commissioners in adjudicating dismissal disputes. He stated the following in relation to the reasonable employer test:

“Such a test is based on the perceptions and values of the employer side to these disputes. It emphasises the interests of employers more than those of workers. Such a test is, probably, as objectionable to workers as a ‘reasonable employee test’ would be to employers.”^⁸⁰

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.

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.

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 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.”^⁸¹

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.

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.

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.

PAJA or the LRA?

The Supreme Court of Appeal found that PAJA applies. It took the view that because PAJA was the national legislation passed to give effect to the constitutional right to just administrative action, was required to “cover the field” and purported to do so, it applied to awards by commissioners. In this regard it relied on decisions of this Court in New Clicks^⁸² and Bato Star.^⁸³ It did not examine the nature of a commissioner’s function by reference to section 33 of the Constitution, nor did it explore whether PAJA provided an exclusive statutory basis for the review of all administrative decisions.^⁸⁴

In President of the Republic of South Africa and Others v South African Rugby Football Union and Others^⁸⁵ the following appears:

“In s 33 the adjective ‘administrative’ not ‘executive’ is used to qualify ‘action’. This suggests that the test for determining whether conduct constitutes ‘administrative action’ is not the question whether the action concerned is performed by a member of the executive arm of government. What matters is not so much the functionary as the function. The question is whether the task itself is administrative or not.”^⁸⁶

In form, characteristics and functions, administrative tribunals straddle a wide spectrum. At one end they implement or give effect to policy or to legislation. At the other, some tribunals resemble courts of law.^⁸⁷ The old Industrial Court established in terms of the Labour Relations Act 28 of 1956, although performing functions similar to that of a court of law, was regarded as administrative in nature. In this regard, the Appellate Division said the following:^⁸⁸

“An administrative body, although operating as such, may nevertheless in the discharge of its duties function as if it were a court of law performing what may be described as judicial functions, without negating its identity as an administrative body and becoming a court of law.”^⁸⁹

The Amnesty Committee, established in terms of the Promotion of National Unity and Reconciliation Act 34 of 1995, was empowered to conduct hearings in relation to applications for amnesty. Its proceedings were similar to those of a court of law. Nevertheless, it was an administrative body.^⁹⁰

There are similarities between CCMA arbitrations and proceedings before a court of law. Section 138(2) of the LRA provides for the manner of adducing evidence, the questioning of witnesses and concluding arguments. Section 142 gives the Commissioner powers of subpoena. Section 142(8) provides for contempt proceedings in the Labour Court in the event that a party fails to comply with an award that orders the performance of an act other than the payment of money. Section 143(1) of the LRA provides that an award is final and binding and may be enforced as though it were an order of the Labour Court. A commissioner may make an order for payment of costs in terms of section 138(10) of the LRA.

However, there are significant differences. The CCMA is not a court of law. A commissioner is empowered in terms of section 138(1) to conduct the arbitration in a manner he or she considerers appropriate in order to determine the dispute fairly and quickly, but with the minimum of legal formalities. There is no blanket right to legal representation. The CCMA does not follow a system of binding precedents. Commissioners do not have the same security of tenure as judicial officers.

Commenting on the status of the CCMA, Brassey states as follows:

“Unlike the Labour Court, it enjoys none of the status of a court of law and so has no judicial authority within the contemplation of the Constitution. It is an administrative tribunal in the same way as the industrial court was and, being an organ of state under s 239 of the Constitution, is directly bound by the Bill of Rights. It is also subject to the basic values and principles governing public administration.”^⁹¹ (Footnotes omitted.)

Currie and De Waal state:

“The CCMA is not a branch of the judiciary and does not exercise judicial power. Rather, the exercise of the compulsory arbitration power is an exercise of public power of an administrative (‘governmental’) nature. The arbitration power is designed to fulfil the primary goal of the Act which is to promote labour peace by the effective settlement of disputes. It does so with an element of compulsion, corresponding to the traditional government/governed relationship.”^⁹²

Compulsory arbitrations in terms of the LRA are different from private arbitrations.^⁹³ CCMA commissioners exercise public power which impacts on the parties before them. In the language of the pre-constitutional administrative law order, it would have been described as an administrative body exercising a quasi-judicial function.^⁹⁴ I conclude that a commissioner conducting a CCMA arbitration is performing an administrative function.

Section 33(3) of the Constitution^⁹⁵ provides that national legislation must be enacted to give effect to the right to administrative action that is lawful, reasonable and procedurally fair. Section 145 of the LRA constitutes national legislation in respect of “administrative action” within the specialised labour law sphere. Of course, section 145 has to meet the requirements of section 33(1) of the Constitution ie it has to provide for administrative action that is lawful, reasonable and procedurally fair. This is a question to which I shall return in due course.

The LRA, including section 145, was in place at the time that the Constitution came into force. Section 33(3) read with item 23(2) of Schedule 6 to the Constitution^⁹⁶ contemplates that the national legislation referred to in section 33 of the Constitution is to be enacted in the future. It is clear that what was envisaged was legislation of general application. PAJA was the resultant legislation. The definition of administrative action in PAJA is extensive and intended to “cover the field”.^⁹⁷

Nothing in section 33 of the Constitution precludes specialised legislative regulation of administrative action such as section 145 of the LRA alongside general legislation such as PAJA. Of course, any legislation giving effect to section 33 must comply with its prescripts.

In Bato Star the following appears:

“The provisions of s 6 divulge a clear purpose to codify the grounds of judicial review of administrative action as defined in PAJA. The cause of action for the judicial review of administrative action now ordinarily arises from PAJA, not from the common law as in the past. And the authority of PAJA to ground such causes of action rests squarely on the Constitution. It is not necessary to consider here causes of action for judicial review of administrative action that do not fall within the scope of PAJA. As PAJA gives effect to s 33 of the Constitution, matters relating to the interpretation and application of PAJA will of course be constitutional matters.”^⁹⁸ (Emphasis added.) (Footnote omitted.)

PAJA is a codification of the common law grounds of review. It is apparent, though, that it is not regarded as the exclusive legislative basis of review.

It is against this background that the following dictum in New Clicks (relying on Bato Star) is to be understood:

“PAJA is the national legislation that was passed to give effect to the rights contained in s 33. It was clearly intended to be, and in substance is, a codification of these rights. It was required to cover the field and purports to do so.”^⁹⁹ (Footnote omitted.)

This does not in any way detract from the reservation contained in the quoted dictum from Bato Star.

I have found that arbitration by a commissioner is administrative action. Does this mean that review provisions of PAJA are automatically applicable in the present context? To answer this question it is necessary first to deal with the LRA and its applicable provisions in relation to PAJA. The LRA is specialised negotiated national legislation^¹⁰⁰ giving effect to the right to fair labour practices. The Ministerial task team responsible for the drafting of the Bill that led to the LRA was tasked, amongst other things, to “provide simple procedures for the resolution of disputes through statutory conciliation, mediation and arbitration and the licensing of independent alternative dispute resolution services”.^¹⁰¹ The task team was tasked to “provide a system of labour courts to determine disputes of right in a way that would be accessible, speedy and inexpensive, with only one tier of appeal”.^¹⁰² NEDLAC referred the Draft Bill to Cabinet recommending its adoption subject to agreed amendments.^¹⁰³ Section 145 was purposefully designed as was the entire dispute resolution framework of the LRA.

The Supreme Court of Appeal was of the view that the only tension in relation to the importation of PAJA was the difference in time-scales in relation to reviews under section 145 of the LRA and PAJA. This difference is but one symptom of a lack of cohesion between provisions of the LRA and PAJA.

Section 157(1) of the LRA provides that, subject to the Constitution and except where the LRA provides otherwise, the Labour Court has exclusive jurisdiction. Section 157(2) provides that the Labour Court has concurrent jurisdiction with the High Court in respect of any alleged or threatened infringement of any right in the Constitution and arising, inter alia, from employment and labour relations. High Courts will of course always have jurisdiction where a fundamental right is pertinently implicated in the labour relations field, as for example, when a union might seek to interdict an employment practice that is obviously racist. This of course, does not mean that in the ordinary course of reviewing decisions of CCMA commissioners concerning unfair labour practices, the Labour Court does not enjoy exclusive jurisdiction.

If PAJA were to apply, section 6 thereof would not allow for such exclusivity and would enable the High Court to review CCMA arbitrations. This would mean that the High Court would have concurrent jurisdiction with the Labour Court. This negates the intended exclusive jurisdiction of the Labour Court and provides a platform for forum shopping.

The powers of the Labour Court set out in section 158 of the LRA differ significantly from the powers of a court set out in section 8 of PAJA. The powers of the Labour Court are directed at remedying a wrong and, in the spirit of the LRA, at providing finality speedily. If an application in the normal course for the review of administrative action succeeds, an applicant is usually entitled to no more than the setting aside of the impugned decision and its remittal to the decision-maker to apply his or her mind afresh. Section 8(1)(c)(ii) of PAJA provides that only in exceptional cases may a court substitute the administrative decision or correct a defect resulting from the administrative action. This is a significant difference between the LRA and PAJA.

All of this explains why section 210 of the LRA was enacted, and why it was not amended or repealed by PAJA. Section 210 of the LRA provides as follows:

“If any conflict, relating to the matters dealt with in this Act, arises between this Act and the provisions of any other law save the Constitution or any Act expressly amending this Act, the provisions of this Act will prevail.”

The State in both its executive and legislative arms was involved in finalising the LRA together with persons representing business, labour and community interests. Section 210 is unsurprising. The main protagonists in industrial relations, having negotiated the terms of the legislation, were not likely to countenance any non-agreed intrusions. This is particularly so in relation to the method and manner of determining disputes.

For more than a century courts have applied the principle that general legislation, unless specifically indicated does not derogate from special legislation. Lord Hobhouse delivering the judgment of the Privy Council in Barker v Edger and Others^¹⁰⁴ stated the following:

“When the Legislature has given its attention to a separate subject, and made provision for it, the presumption is that a subsequent general enactment is not intended to interfere with the special provision unless it manifests that intention very clearly. Each enactment must be construed in that respect according to its own subject-matter and its own terms . . . . It would require a very clear expression of the mind of the Legislature before we should impute to it the intention of destroying the foundation of the work which it had initiated some four years before, and to which the Court has ever since been assiduously addressing itself.”^¹⁰⁵

In R v Gwantshu,^¹⁰⁶ after citing Barker with approval, the court quoted the following passage from Maxwell on the Interpretation of Statutes:^¹⁰⁷

“Where general words in a later Act are capable of reasonable and sensible application without extending to subjects specially dealt with, by earlier legislation, that earlier and special legislation is not to be held indirectly . . . altered . . . merely by force of such general words, without any indication or particular intention to do so.” (Emphasis added.)

The legislature had knowledge of section 210 of the LRA and deliberately decided not to repeal that section or section 145 of the LRA. Moreover, it resulted from intense negotiations that led to the enactment of the LRA. This is an appropriate case for the application of the principle that specialised provisions trump general provisions.

For the reasons set out above, the Supreme Court of Appeal erred in holding that PAJA applied to arbitration awards in terms of the LRA. That however, is not the end of the inquiry. What must now be addressed is whether the standard of review set by section 145 of the LRA is constitutionally compliant.

The standard of review

As stated earlier,^¹⁰⁸ section 3 of the LRA provides, inter alia that its provisions must be interpreted in compliance with the Constitution. Section 145 therefore must be read to ensure that administrative action by the CCMA is lawful, reasonable and procedurally fair.

The Carephone test, which was substantive and involved greater scrutiny than the rationality test set out in Pharmaceutical Manufacturers, was formulated on the basis of the wording of the administrative justice provisions of the Constitution at the time, more particularly, that an award must be justifiable in relation to the reasons given for it. Section 33(1) of the Constitution presently states that everyone has the right to administrative action that is lawful, reasonable and procedurally fair. The reasonableness standard should now suffuse section 145 of the LRA.

The reasonableness standard was dealt with in Bato Star. In the context of section 6(2)(h) of PAJA, O’Regan J said the following: “[A]n administrative decision will be reviewable if, in Lord Cooke’s words, it is one that a reasonable decision-maker could not reach.”^¹⁰⁹

This Court recognised that scrutiny of a decision based on reasonableness introduced a substantive ingredient into review proceedings. In judging a decision for reasonableness, it is often impossible to separate the merits from scrutiny. However, the distinction between appeals and reviews continues to be significant.^¹¹⁰

Review for reasonableness, as explained by Professor Hoexter, does threaten the distinction between review and appeal. The Labour Court in reviewing the awards of commissioners inevitably deals with the merits of the matter. This does tend to blur the distinction between appeal and review. She points out that it does so in the limited sense that it necessarily entails scrutiny of the merits of administrative decisions. She states that the danger lies, not in careful scrutiny, but in “judicial overzealousness in setting aside administrative decisions that do not coincide with the judge’s own opinions.”^¹¹¹ This Court in Bato Star recognised that danger.^¹¹² A judge’s task is to ensure that the decisions taken by administrative agencies fall within the bounds of reasonableness as required by the Constitution.^¹¹³

To summarise, Carephone 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 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.

A further aspect must be addressed. In contending that commissioners do not perform an administrative function and that their awards should not be subject to administrative review under PAJA, counsel for the applicant and the CCMA submitted that the rights sought to be vindicated in arbitrations conducted under the LRA are linked to the fundamental rights provided for in sections 23 and 34 and not to the right to just administrative action contained in section 33 of the Constitution. Section 34 of the Constitution provides:

“Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.”

This submission is based on the misconception that the rights in sections 23, 33 and 34 are necessarily exclusive and have to be dealt with in sealed compartments. The right to fair labour practices, in the present context, is consonant with the right to administrative action that is lawful, reasonable and procedurally fair. Everyone has the right to have these rights enforced before the CCMA acting as an impartial tribunal.^¹¹⁴ In the present context, these rights in part overlap and are interconnected.^¹¹⁵

Applying the standard

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.

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.

In respect of the Commissioner’s finding that the misconduct was unintentional or a mistake, it was correctly pointed out on behalf of Mr S

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South Africa: Constitutional Court

Sidumo and Another v Rustenburg Platinum Mines Ltd and Others (CCT 85/06) [2007] ZACC 22 (5 October 2007)