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Engen Petroleum Limited v Commissioner for Conciliation Mediation and Arbitration and Others (JA12/05) [2007] ZALAC 5 (4 May 2007)

.RTF of original document

174

IN THE LABOUR APPEAL COURT OF SOUTH AFRICA

HELD IN JOHANNESBURG


Case no: JA12/05


IN THE MATTER BETWEEN


ENGEN PETROLEUM LIMITED Appellant


AND


THE COMMISSIONER FOR CONCILIATION, First respondent

MEDIATION AND ARBITRATION

COMMISSIONER THABE NKADIMENG Second respondent



JONES SIBANGANI MASHALE Third respondent




JUDGMENT


ZONDO JP



Introduction



[1] This appeal is about what the correct approach is that a commissioner of the Commission for Conciliation, Mediation and Arbitration (“the CCMA”), the first respondent in this matter, must adopt when required to decide whether or not dismissal as a sanction in a particular case is fair. In the main there are two schools of thought on what the correct approach is. The one school of thought is to the effect that the commissioner is required to make up his own mind and decide the issue according to his own opinion or judgement. For convenience I shall call this school of thought the own opinion school of thought. I call this approach the “own opinion” approach because, according to it, the commissioner must determine the fairness or otherwise of dismissal as a sanction according to his own opinion or judgement of what is fair or unfair and should not defer to anybody. The other school of thought is to the effect that the commissioner has no power to decide this question according to his own opinion or judgement but he is required to “defer to the employer” and hold the dismissal as a sanction fair unless it is so unfair that it makes him whistle or unless it is so excessive as to shock one’s sense of fairness or it is so unfair that no reasonable employer would have regarded it as a fair sanction in which case the commissioner can then interfere with the employer’s decision to impose dismissal as a sanction and hold the dismissal to be unfair. Its basis is that different reasonable employers could react to the same misconduct of an employee in different ways each one of which could fall within a range of possible reasonable responses. In terms of this school of thought it is said that the fact that the tribunal would have imposed a different sanction does not necessarily mean that the employer’s sanction is unfair. The tribunal, so goes the argument, should not substitute its own opinion for that of the employer. In this judgment I shall call this school of thought “the reasonable employer” approach or the “defer to the employer” approach.

[2] In this matter Counsel for the appellant submitted that the correct approach is the reasonable employer test and that a CCMA commissioner is not entitled to use the “own opinion” approach in deciding the issue but is obliged to use the reasonable employer test. He submitted that, if a commissioner used the “own opinion” approach and substituted his opinion for that of the employer on the issue of sanction, the commissioner will have misconstrued the inquiry and acted outside his powers and his decision would be reviewable. In support of his contention Counsel for the appellant relied upon the decision of this Court in Nampak Wadeville v Khoza (1999)20 ILJ 598 (LAC) and Ngcobo AJP’s judgment in County Fair Foods (Pty)Ltd v Commission for Conciliation, Mediation and Arbitration & others (1999)20 ILJ 1701 (LAC) both of which judgments support the contention advanced by Counsel for the appellant. Of course, after those judgments this Court handed down its judgment in Toyota SA Motors (Pty)Ltd v Radebe & others (2000) 21 ILJ 340 (LAC) in which the reasonable employer test was rejected and it was said that it was not part of our law. The question of the reasonable employer test in our law of unfair dismissal was the subject of a big debate in the labour law field for some time during the 1980’s. I thought it had been so decisively rejected by our courts then that I thought it had been buried. Of course subsequent developments have shown just how wrong I was in so thinking. In this regard I refer to the fact that in Rustenburg Platinum Mines Ltd v CCMA & others 2007(1)SA 576(A) the SCA has rejected the “own opinion” approach and adopted the reasonable employer test / the defer to the employer approach. I shall refer to this judgment of the SCA as the “Rustenburg judgment”.


[3] It is now argued in this matter that the reasonable employer approach / the defer to the employer approach is the right approach which CCMA commissioners should adopt. It was about 1984 when the industrial court imported this concept into our labour law from English law. Since then there have been long periods when it seemed to have gone away. However, from time to time the question arises as to whether Courts and other tribunals which deal with dismissal disputes are required to apply the reasonable employer test or the “own opinion” approach in determining the fairness of dismissal in our law of unfair dismissal. This time the issue has arisen again and this Court will deal with the issue fully and thoroughly once and for all. In saying this, this Court does not purport to claim a final say on the issue but it seeks to do so because it has previously rejected the reasonable employer test and it has been criticised in the Rustenburg judgment for its decision to reject the reasonable employer test. In any event, although the SCA has made its decision in the Rustenburg judgment to reject the “own opinion” approach and to prefer the reasonable employer approach, it would be within its rights to at any stage in the future reconsider the issue and either reaffirm its decision or reverse it. Should it decide to give the matter further consideration in the future, it would be able to do so with the benefit of full and thorough reasons supporting this Court’s previous decision rejecting the reasonable employer test and preferring the “own opinion” approach.


[4] The reasonable employer test or the “defer to the employer” approach comes from English law. It seems to me that it is important to consider the reasonable employer test within the different statutory frameworks which obtained in England and in South Africa during the 1980’s before it can be considered within the current statutory framework in SA.


The UK background of the reasonable employer approach / the defer to the employer approach


[5] From 1978 the statutory framework governing the reasonable employer test in the UK was sec 57(3) of the Employment Protection (Consolidation) Act of 1978. Sec 57(3) of that Act read thus:

“The determination of the question whether the dismissal was fair or unfair, having regard to the reasons shown by the employer, shall depend on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantive merits of the case” (my underlining).

It would seem that at the moment this provision is contained in sec 98(4) of the Employment Rights Act, 1996 of the UK.


[6] In British Leyland UK Ltd v Swift [1981] IRLR 91(CA) three judgments were given by the three Judges who heard the matter, namely, Lord Denning, Lord Justice Ackner and Lord Justice Griffiths. Lord Denning included in his judgment a passage which appears to be quoted frequently in support of the reasonable employer test. That passage appears in par 11 at 93 of Lord Denning’s judgment. It reads thus:

“The first question that arises is whether the Industrial Tribunal applied the wrong test. We have had considerable argument about it. They said: ‘…a reasonable employer would, in our opinion, have considered that a lesser penalty was appropriate’. I do not think that that is the right test. The correct test is: Was it reasonable for the employers to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might 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.”

Lord Justice Ackner delivered a separate judgment in which he said that he agreed that the appeal should be allowed but did not expressly say whether he agreed with the reasons given by Lord Denning in his judgment. He appears to have relied on his own reasons for his agreement that the appeal be allowed. Lord Justice Griffiths also gave a separate judgment but he expressly stated at 94 par 27 that he agreed with the reasons given by Lord Denning for the conclusion that the appeal should be allowed. Accordingly, the passage from Lord Denning’s judgment referred to above can be taken to have been part of the judgment of the Court.


The relevant statutory framework in SA during the 1980’s and early 1990’s


[7] Under the old Act the tribunal which dealt with unfair dismissal disputes at first instance in South Africa from the early 1980’s to the time of the repeal of the Labour Relations Act, 1956 (Act 28 of 1956) (“the old Act”) was the industrial court. Although called a court, that tribunal was not a court of law but did perform quasi-judicial functions. At all relevant times there was some or other definition of an unfair labour practice which the industrial court had to apply in deciding whether a dismissal was unfair. Technically, the industrial court had to decide in each dismissal dispute that came before it whether the dismissal constituted an unfair labour practice. A finding by the industrial court that a dismissal constituted an unfair labour practice meant that the dismissal was unfair. A dismissal could be found to be unfair by reason of the fact that, although the employee was guilty of misconduct, dismissal as a sanction was excessive in all the circumstances of the case, and was, therefore, unfair. Obviously the basis of the finding of unfairness could also be that the employee was innocent of misconduct or that the dismissal was not effected in compliance with a fair procedure.


[8] Between the early 1980’s and the repeal of the old Act, the definition of an unfair labour practice that the industrial court had to apply was amended in 1988 and 1991. The definition which applied before September 1988 read thus:

“(a) ‘unfair labour practice’ means any act or omission, other than a strike or lockout, which has or may have the effect that –

  1. any employee or class of employees is or may be unfairly affected or that his or their employment opportunities or work security is or may be prejudiced or jeopardized thereby;

  2. the business of any employer or class of employers is or may be unfairly affected or disrupted thereby;

  3. labour unrest is or may be created or promoted thereby;

  4. the labour relationship between employer and employee is or may be detrimentally affected thereby; or

  1. any other labour practice or any other change in any labour practice which has or may have an effect which is similar or related to any effect mentioned in paragraph.”


[9] Pursuant to the Labour Relations Amendment Act 1988 (Act 83 of 1988) (“the 1988 amendments”) and with effect from September 1988 the above definition of an unfair labour practice was replaced by a long definition of an unfair labour practice. It is not necessary to quote the post - September 1988 definition. It will suffice, for present purposes, to say that the part of the definition that is relevant to the issue under consideration was to be found in paragraph (a) of the definition in sec 1 of the old Act. It read as follows:

“ ‘unfair labour practice’ means any act or omission which in an unfair manner infringes or impairs the labour relations between an employer and employee and shall include the following:

(a) The dismissal, by reason of any disciplinary action against one or more employees, without a valid and fair reason and not in compliance with a fair procedure…”

[10] Pursuant to the Labour Relations Amendment Act, 1991 (Act 9 of 1991) (“the 1991 amendments”) there was a further amendment to the definition of an unfair labour practice in 1991. These amendments included a new definition of an “unfair labour practice”. The new definition read thus:

“Unfair labour practice means any act or omission, other than a strike or lock-out, which has or may have the effect that –

(i) any employees or class of employees is or may be unfairly affected or that his or their employment opportunity or work security is or may be prejudiced or jeopardised thereby;

(ii) the business of any employer or class of employers is or may be unfairly affected or disrupted thereby;

(iii) labour unrest is or may be created or promoted thereby;

(iv) the labour relationship between employer and employee is or may be detrimentally affected thereby.”


There was no further amendment of an unfair labour practice after 1991.


Powers of the industrial court “to determine” a dispute under sec 46(9) of the old Act


[11] Sec 17(11)(f) gave power to the industrial court to “make determinations in terms of sec 46” of the old Act. Under sec 46(9) of the old Act the industrial court was given power to deal with, among others, disputes concerning alleged unfair labour practices which included disputes about the fairness of dismissals. Although there were amendments to sec 46(9) in 1988 and 1991, those amendments always retained one thing. That is that an unfair dismissal dispute was always required to be referred to the industrial court “for determination” or the industrial court was required by sec 46(9) “to determine” the dispute concerning the fairness of a dismissal. It referred to such a dispute as an alleged unfair labour practice. Other disputes which were not dismissal disputes could also be referred to the industrial court for determination under that section.


[12] Sec 46(9) referred to a dispute referred to in sec 43(1)(c) of the old Act.

Sec 43 dealt with what was generally referred to as status quo orders which the industrial court had power to make thereunder. Sec 43(1)(c) referred to disputes concerning an alleged unfair labour practice. The fact that at different stages between the early 1980’s and the repeal of the old Act essentially sec 46(9) empowered or required the industrial court either “to determine” a dispute concerning the fairness of a dismissal or contemplated that such a dispute be referred to the industrial court “for determination” means that essentially the main function or power of the industrial court with regard to dismissal disputes remained intact for most of that period. The only other amendment brought about by the 1988 amendments to sec 46(9) of the old Act which is relevant to the present matter was an amendment of sec 46(9)(c) of the old Act. Before September 1988 sec 46(9)(c) of the old Act required the industrial court “to determine” the dispute without giving any indication as to how it was required to do so. After the 1988 amendments sec 46(9)(c) was amended but not so as to remove the phrase “to determine the dispute” to describe the function that the industrial court was required to perform but to deal with the terms in which it could determine a dispute concerning an unfair labour practice including unfair dismissal disputes. The amendment to sec 46(9)(c) provided that the industrial court was required to determine the dispute “on such terms as it may deem reasonable, including, but not limited to, the ordering of reinstatement or compensation.”


Powers of the old LAC in dismissal matters under the old Act.


[13] Sec 17A(1), inserted into the old Act by the 1988 amendments, established a new court, the Labour Appeal Court (“the old LAC”), which had provincial divisions on the same basis as the then Supreme Court of South Africa. A Labour Appeal Court consisted of a Judge of the Supreme Court, who would be the chairman of the Court, and two assessors except when it was dealing with a question of law or a question whether a particular question was a question of law in which case the Judge sat alone and decided such a question alone. The old LAC was given jurisdiction to deal with appeals from, among others, determinations made by the industrial court in terms of sec 46(9) of the old Act in respect of dismissals alleged to constitute unfair labour practices.


[14] Sec 17B of the old Act dealt with the powers of the old LAC. With regard to appeals from determinations of the industrial court made under sec 46(9) of the old Act sec 17B(1)(b) gave the old LAC power “to decide” such appeals.

Powers of the Appellate Division in dismissal matters under the old Act


[15] Sec 17C provided for an appeal from a decision of the old LAC to the Appellate Division (later the Supreme Court of Appeal) except on a question of fact provided that the old LAC granted leave to appeal. Where the old LAC refused leave to appeal, the Appellate Division could be petitioned for such leave. Sec 17C(2) provided that, after hearing such an appeal, the Appellate Division “may confirm, amend or set aside the decision order against which the appeal has been noted or make any other decision or order, including an order as to costs, according to the requirements of the law and fairness” (my underlining).


[16] If one has regard to sec 57(3) of the English statute which was applicable in the UK during the 19980’s as quoted earlier, one will see that sec 57(3) did not just require a tribunal to decide or determine whether a dismissal was fair – which is what can be said was required of the industrial court by the old Act in South Africa at the time. Sec 57(3) in effect instructed a tribunal that, when there was a dispute between an employer and an employee about whether the employee’s dismissal was fair, it had to answer that question not directly and by simply saying yes or no. Sec 57(3) instructed a tribunal to in effect first ask whether the employer had acted reasonably in treating the reason for dismissal as a sufficient reason for dismissal and, if the answer was yes, to then answer the question about the fairness of the dismissal by saying that the dismissal was fair but, if the answer was no, to then answer that question by saying that the dismissal was unfair. It seems to me that, had sec 57(3) not contained this instruction, the English courts might well not have decided that the reasonable employer test was applicable in the UK. It seems to me that there was nothing in the statutory framework of South Africa applicable to the industrial court, the old LAC and the Appellate Division that justified or that would have justified the adoption of the reasonable employer test, or the “defer to the employer” approach. It would seem to me that the “own opinion” approach was the approach contemplated by the old Act.


[17] Notwithstanding the absence in the old Act of a statutory provision similar to or comparable to that part of sec 57(3) which I have underlined in the quotation of that subsection above which constituted the statutory basis of the reasonable employer test in English law, some decisions of the industrial court did “import” the reasonable employer test into South Africa. The first one of these appears to have been Building Construction and Allied Workers Union of SA & another v West Rand Brick Works (Pty)Ltd (1984) 5 ILJ 69 (IC). Between 1984 and the early 1990’s the industrial court handed down other decisions which supported the reasonable employer test. However, there were also other decisions of the industrial court which rejected the reasonable employer test. It is not necessary to go into any details about the relevant decisions save to make the point that by far the majority of decisions of the industrial court applied the “own opinion” approach and not the reasonable employer approach. It would also seem that in most cases the old LAC also applied the “own opinion” approach.


[18] One of the members of the industrial court who at some stage had handed down decisions supporting the application of the reasonable employer test in South Africa in a number of cases during the mid-1980’s turned his back on it later arguing that the amendment of the definition of an unfair labour practice by the 1988 amendments did not leave room for the reasonable employer approach (see Govender v SASKO (Pty)Ltd t/a Richards Bay Bakery (1990) 11 ILJ 1282 (IC). One of the decisions of the industrial court which rejected the reasonable employer test was Chemical Workers Industrial Union v Reckitt & Coleman (1990) 11 ILJ 1319 (IC) in which Dr John, AM, emphasised that the English statute on which the reasonable employer test was based expressly directed that the question whether a dismissal was fair or unfair was required to depend on whether the employer had acted reasonably in treating his reason for dismissing the employee as a sufficient reason.


[19] In what I believe was one of the first, if not the first, labour law book of note in this country, namely,: “The New Labour Law”, 1987, Juta & Co, by Brassey & others, Brassey dealt with the reasonable employer test at 71-78. Brassey rejected the application of the reasonable employer test in SA labour law. He argued that the South African legislature had made a policy choice to have fairness proper and not the reasonable employer approach applied in the determination of the fairness of dismissal. That was even before the 1988 amendments. Subsequent to the 1988 amendments Cameron Cheadle and Thompson, in their joint work, “The New Labour Relations Act – The Law after the 1988 amendments”, also agreed at 109 with Brassey that the South African legislature had chosen “fairness proper” as the criterion and rejected the reasonable employer test.

[20] In Tubecon (Pty)Ltd v NUMSA (1991) 12 ILJ 437 at 443-445H John Brand, a reputable arbitrator in labour disputes, rejected the reasonable employer test in unequivocal terms. He also referred at 444 to an arbitration award by CJ Albertyn in which, according to Mr Brand, the reasonable employer test was rejected as well. I accept that Mr Brand’s terms of reference may have left no room for the application of the reasonable employer test. Nevertheless, this does not detract from the validity of his reasons for rejecting it. Prof PAK Le Roux and Paul Benjamin were to later add their voices in the rejection of the reasonable employer test. (see: “THE REASONABLE EMLPOYER TEST: SOME REFLECTIONS” by prof PAK Le Roux in “Labour Law Briefs” Vol No 5 of the 15th December 1990 and : “When dismissal disputes are stifled …” by Paul Benjamin in Employment Law, Vol 6 NO 5117 at 118. In their work: “A Guide to South African Labour law”, 2nd ed, 1992 at 197-198 Rycroft and Jordaan refrained from expressing a view on the issue. Accordingly, from the early 1980’s to the early 1990’s the reasonable employer test had been used only in the minority of cases by the industrial court, had lost some of the support it had initially had among members of that court, was not used in most of the cases in the old Labour Appeal Court and had been rejected by some of the prominent academics and practitioners in the field of labour law. It would also seem that it might not have found acceptance in arbitrations as well.


[21] I stated earlier on that in addition to the definition of an “unfair labour practice” in sec 1 of the old Act, sec 46(9) was applicable when the industrial court was required to decide whether a dismissal constituted an unfair labour practice. I drew attention earlier to the fact that sec 46(9) required the industrial court “to determine” such a dispute or required that such a dispute be referred to the industrial court “for determination”.


[22] Under the current Act the bulk of dismissal claims previously done by the industrial court is now done by the CCMA. Accordingly, the industrial court can justifiably be taken as the predecessor to the CCMA. That makes it all the more important to establish whether under the old Act the industrial court was required to apply the reasonable employer test/ the “defer to the employer” approach or whether it was required to apply the “own opinion” approach.


[23] In my view the starting point in seeking to establish whether the industrial court was required to apply the reasonable employer test or the “own opinion” approach is to acknowledge that the industrial court was a creature of statute. It derived its powers within the four corners of the old Act. (See Page and Thirion JJ in Transvaal Pressed Nuts Bolts & Rivets (Pty)Ltd v President of the Industrial Court & others (1989) 10 ILJ 48 (N) at 67D-F). Accordingly, if the reasonable employer test was not authorised by the old Act, the industrial court would have had no power to apply it.


[24] In my view the question whether or not the industrial court was required to apply the reasonable employer test or the “own opinion” approach depended on the meaning of sec 46(9) of the old Act in so far as it required the industrial court “to determine” a dispute concerning an unfair labour practice as well as the provisions of the definition of an unfair labour practice in the old Act. In interpreting the old Act, it would have been important to remember that words used therein had to be given their ordinary, natural and grammatical meaning unless that would lead to an absurdity. (see Consolidated Frame Cotton Corporation Ltd v President of the industrial court & others (1986)7ILJ 489(A) at 494 F-G).


[25] In Trident Steel (Pty)Ltd v John NO and others (1987)8 ILJ 27 (W) at 39 B-E Ackerman J, after carefully and thoroughly considering the history of the relevant sections of the old Act and some decisions, came to the conclusion that the phrase “to determine” a dispute as used in sec 46(9) meant to bring a dispute to an end. In Trident Steel it had been argued on behalf of the employer that the powers of the industrial court under sec 46(9) were limited to making declaratory orders and did not include the making of a reinstatement order or an order for the payment of compensation. Ackerman J had no hesitation in rejecting this proposition and holding that the injunction “to determine the dispute” as found in sec 46(9) of the old Act empowered the industrial court to also order reinstatement as well as the payment of compensation. Accordingly, the industrial court could not be said to have brought a dispute to an end if to do so required that a reinstatement order or a compensation order be made but it did not make it. I do not think that the correctness of Ackerman J’s decision in Trident Steel has ever been questioned.


The Appellate Division speaks


[26] Before 1992 some members of the industrial court had spoken through their judgments on the reasonable employer test. Academic writers had also spoken. The Appellate Division had not as yet spoken on the issue as at the end of the 1980’s. However, the opportunity for the Appellate Division to pronounce on the issue presented itself in MWASA & others v Perskor (1992) 13 ILJ 1391 (A) (“the Perskor case”). In the light of the fact that sec 46(9) of the old Act required the industrial court “to determine” an unfair dismissal dispute, the question was what “to determine” a dispute entailed. This would be the formulation of the question in respect of the role or powers of the industrial court in dismissal disputes. In respect of the role or powers of the old Labour Appeal Court the question would be what deciding an appeal in regard to an unfair labour practice appeal entailed. This formulation of the question in regard to the old LAC is based on the fact that the relevant provisions of the old Act relating to the old LAC empowered it “to decide” an appeal to it from a determination of the industrial court under sec 46(9). With regard to the Appellate Division the relevant provision of the old act empowered it “to confirm, amend or set aside” the decision of the old LAC sought to be appealed against “according to the requirements of the law and fairness” in an appeal to it from a decision of the old LAC.

[27] The Appellate Division gave its answer to this question in the Perskor case on what approach had to be adopted by the courts in deciding the fairness of dismissal.


[28] At 1400 in the Perskor case it held that this entailed the passing of a moral judgment. It put it as follows:

“The position then is that the definition of an unfair labour practice entails a determination of the effects or possible effects of certain practices, and of the fairness of such effects. In my view a decision of the Court pursuant to these provisions is not a decision on a question of law in the strict sense of the term. It is the passing of a moral judgment on a combination of findings of fact and opinions.”

The significance of this passage from the Perskor case is that it was applicable not only to the Appellate Division and the old Labour Appeal Court but also to the industrial court when each one of those courts was required to determine or decide whether a dismissal was fair or unfair. In this regard it needs to be pointed out that the definition of an “unfair labour practice” which each one of those courts had to apply was the same. This passage is to the effect that the definition of an unfair labour practice entailed a determination of the effects of the practice complained of such as a dismissal and the fairness of such effects. This passage is further to the effect that a decision of a Court pursuant to such provisions entailed the passing of a moral judgment on a combination of findings of fact and opinions. This passage explained the role or powers of the industrial court, the old Labour Appeal Court and the Appellate Division with regard to their respective functions in deciding or determining whether dismissal in a particular case was fair or unfair.


[29] The Appellate Division’s decision in the Perskor matter was subsequently followed in a number of decisions of the Appellate Division even as recently as in 1999. (see Atlantis Diesel Engines (Pty)Ltd v NUMSA (1994)15 ILJ 1257 (A) at 1257 A-B; NUMSA v Vetsak Co-operative Ltd & others (1996) 17 ILJ 455 (A) at 476 B-F; Wubbeling Engineering & Another v NUMSA (1997) 18 ILJ 935 (SCA) at 937E-938D; NUM v Free State Consolidated Gold Mines Ltd 1996 (1) SA 422 (A) at 446 C-I; Olivier JA’s judgment (concurred in by Zulman JA) in Betha & others v BTR SARMCOL, A DIVISION of BTR DUNLOP Ltd 1998(3) SA 349 (SCA) at 369 I-E; Streicher JA’s judgment in Betha v BTR SARMCOL, A DIVISION of BTR Dunlop Ltd 1998 (3) SA 349 (SCA) at 380 G-I;

Smalberger JA’s judgment in Betha V BTR SARMCOL, supra, at 386 H- 388 B; Scott JA’s judgment in Betha v BTR Sarmcol, supra, at 402 I-J where he said that he was in full agreement with the reasoning and conclusion in Smalberger JA’s judgment; Dube & others v Nationale Sweisware (Pty) Ltd 1998 (3) SA 956 (SCA) at 960 D-I; NUMSA v GM Vincent Metal Sections (Pty)Ltd 1999 (4) SA 304 (SCA) at 314 F-H; Benicon Group v NUMSA & others (1999) 20 ILJ 2777 (SCA) at 2779 H-J; Boardman Brothers (Natal) - v Chemical Workers Industrial Union 1998(3) SA 53 (SCA) at 58 B-C. All in all no less than twenty Judges of the Appellate Division/Supreme Court of Appeal had in different cases concurred in this approach. They are: Smalberger, Hoexter, Goldstone, Kriegler, Botha, Howie, Kumleben, Nienaber, Marais, Scott, Zulman, Plewman, F H Grosskopf, Joubert, Nestadt, Streicher, Olivier, Schutz, Hefer, Farlam, Harms JJA, Melunsky AJA, Nicholas AJA and Madlanga AJA. The above cases are authority for the proposition that under the old Act the task of deciding or determining whether a dismissal was fair or unfair entailed the passing of a moral or value judgment on a combination of findings of fact and opinions by the Court. The next question is what this entailed. Did it entail applying the reasonable employer test? Did it entail that some deference be shown to the employer’s choice of the sanction of dismissal? Did it entail the application of the “own opinion” approach? That is the question to which I now turn.


Did the passing of a moral or value judgment under the old act entail the application of the reasonable employer test/the “defer to the employer” approach or the “own opinion” approach?


[30] Did the Appellate Division’s decision in Perskor as explained above mean that the industrial court or the old Labour Appeal Court or the Appellate Division was each deciding such an issue on the basis of its own opinion / judgment or on the basis of the reasonable employer approach and not substituting its opinion for that of the employer with regard to sanction? The Appellate Division supplied the answer to this question in the same case, namely, the Perskor case. Indeed, in the Perskor case the Appellate Division made it clear beyond any doubt that it was the Court’s opinion of what was fair or unfair that the Court was required to give when passing a moral judgment in unfair labour practice disputes involving dismissals under the old Act. At 1399H—1400B in the Perskor case the Appellate Division noted that the pre—September 1988 definition of an unfair labour practice was “based on the effect which a particular practice has or may have on matters such as employment opportunities, work security, welfare, the disruption of an employer’s business, the promotion of labour unrest, etc.” The court went on to say in the next few sentences:


[20] “The question whether particular facts have or may have such effects can hardly be described as a question of law. But the matter does not end there. The court is not only to decide whether such effects have been caused or may be caused, but must also have regard to considerations of fairness or unfairness. This is stated expressly in paras (i) and (ii) of the definition [of an unfair labour practice applicable prior to September 1988], but is also implicit in the very concept of an unfair labour practice. It is further underlined by the provisions of s17 (21A) which establish the jurisdiction of the Labour Appeal Court in relation to unfair labour practice disputes. Subparagraph (c) empowers the Court on appeal in such matters to ‘confirm, vary or set aside the order or decision appealed against or make any order or decision, including an order as to costs, according to the requirements of the law and fairness.’ 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 (1986) 7 ILJ 152 (T), Brassey and others The New Labour Law at 12—13, 58—9, Van Jaarsveld and Coetzee Suid Afrikaanse Arbiedsreg vol 1 at 328” (my underlining).

The ultimate question that Grosskopf JA was referring to in this passage was the question “whether particular facts constitute an unfair labour practice.” (see p.1394H—I in the same judgment). Botha and Goldstone JJA, Kriegler AJA and Harms AJA concurred in the judgment of Grosskopf JA.


[31] In Atlantis Diesel Engines (Pty)Ltd v NUMSA (1994) 15 ILJ 1247(A) at 1257 A-B Nicholas AJA said the same thing with the concurrence of Hoexter, Kumleben, Nienaber and Howie JJA. See also Bencon Group v NUMSA and others (1999) 20 ILJ 2777 (SCA) at 2779 par 7 through Farlam AJA. See also NUMSA v Vetsak Co-Operative Ltd 1996(4) SA 557(A) at 589 and at 589 A-D through Smalberger JA in a minority judgment. In the majority judgment in the Vetsak case Nienaber JA at 592J - 593B made among others the point that as to when a point is reached in a strike when the employer would be justified in dismissing striking employees “is ultimately a matter for the courts…”. In Wubbeling Engineering & Another v NUMSA (1997) 19 ILJ 935 (SCA) at 938 A-D the SCA held in effect, through Plewman JA, that it is the task of the Court to have regard to the interests of not only the worker but also those of the employer “in order to make a balanced and equitable assessment” of what is fair in all the circumstances. In NUM v Black Mountain Mineral Development 1997(4) SA 51 (SCA) at 54 H-I Scott JA said in effect, among other things, that “the Court must necessarily apply a moral or value judgment” in “deciding the question of fairness”.


[32] It is crystal clear from the above that the legal position under the old Act, which required the industrial court “to determine” a dispute concerning an unfair labour practice, required the old LAC “to decide” an appeal to it from a determination of the industrial court under sec 46(9) and the Appellate Division to “confirm, amend or set aside” a decision of the old LAC concerning the fairness of a dismissal, was that the industrial court, the old LAC and the Appellate Division were each required to decide the fairness or otherwise of a dismissal on the basis of their respective own opinion/judgment and not on the basis of the reasonable employer test or the “defer to the employer” approach. Each one of those Courts was entitled to substitute its own opinion for that of the employer on whether dismissal as a sanction was fair in a particular case.


[33] Indeed, it was the Appellate Division’s decision also that both the old Labour Appeal Court and itself were required to do the same in appeals that came before those Courts from determinations of the industrial court made under sec 46(9) of the old Act. In fact when one examines almost all the cases that the Appellate Division/SCA heard which emanated from sec 46(9) determinations of the industrial court, one will realise that, when it came to the Appellate Division/SCA having to decide in each case whether a dismissal constituted an unfair labour practice, such issue was decided on the basis of the Appellate Division’s/SCA’s own opinion of what was fair. The Appellate Division/SCA did not “defer to the employer” or the reasonable employer on the issue of sanction. Indeed, the Appellate Division readily substituted its opinion for that of the employer with regard to the fairness of dismissal as a sanction in dismissal cases that came before it on appeal. (See PACT V PPAWU & others (1994) 15 ILJ 65(A); Slagment (Pty)Ltd v Building Construction and Allied Workers Union and others (1994) 15 ILJ 979 (A); Atlantis Diesel Engines (Pty)Ltd v NUMSA (1994) 15 ILJ 1257 (A) at 1257 C-D;

NUMSA & others v Henred Freuehanf Trailers (Pty)Ltd (1994) 15 ILJ 1257 (A); Council for Scientific and Industrial Research v Fijen (1996) 17 ILJ18 (A) at 27H-I; NUMSA v Vetsak co-operative Ltd & others (1996) 17 ILJ 476; WG Davey (Pty)Ltd v NUMSA (1999) 20 ILJ 2017 (SCA); NUM V Black Mountain Mineral Development Co (Pty)Ltd (1997) 18 ILJ 439 (SCA); Buthelezi & others v Eclipse Foundries Ltd (1997) 18 ILJ 633(A); NUM v Free State Consolidated Gold Mines Ltd 1996 (1) SA 422 (A) at 450 E-I; Olivier JA’s judgment (in which Zulman JA concurred) in Betha v BTR SARMCOL, A DIVISION OF BTR DUNLOP Ltd 1998(3) SA 349 (SCA) particularly at 374 A-D; Streicher JA’s judgment in Betha v BTR SARMCOL A DIVISION of BTR Dunlop Ltd 1998 (3) SA 349 (SCA) at 380 H-381H.) Although at 381 F-G in Betha & others v BTR SARMCOL Streicher JA included a statement that “(i)n my view, a reasonable employer would in the circumstances not have dismissed workers who had served him loyally for 25 years, before having satisfied himself that it was in fact not possible to reach agreement on the terms of the recognition agreement,” it is clear from the next paragraph in the judgment that Streicher JA applied his own view of what was fair to decide whether the dismissal was fair. He said in the next paragraph:

“My moral or value judgment, having regard to all the aforesaid facts and circumstances, is therefore that the dismissal of the weekly paid workers was unfair.”

Smalberger JA’s judgment in Betha v BTR SARMCOL, supra, at 401 H-402E; Unilong Freight Distributors (Pty) Ltd v Muller 1998 (1) SA 581 (SCA); Dube and others v Nasionale Sweisware (Pty)Ltd 1998 (3) SA 956 (SCA) at 969 (SCA) at 969 F- 970 A; NUMSA v G.M Vincent Metal Sections (Pty)Ltd 1999 (4) SA 304 (SCA); Benicon Group v NUMSA & Others (1999) 20 ILJ 2777 (SCA) particularly at 2785 paras 39-42; Boardman Brothers (Natal) v Chemical Workers Industrial Union 1998 (3) SA 53 (SCA) at 58 D- 59.

From all of the above the conclusion is inescapable that under the old Act the legal position was that the industrial court, the old Labour Appeal Court and the Appellate Division / Supreme Court of Appeal used what I have called in this judgment the “own opinion” approach to determine whether dismissal was unfair and this included deciding whether dismissal as a sanction in a particular case was fair. That was the position as the current Act came into operation in 1996 and continued to be the position of the Supreme Court of Appeal in regard to unfair dismissal cases governed by the old Act as recently as 1999. It is now necessary to consider what the position is in this regard under the current Act.


Does the Labour Relations Act 1995 (Act 66 of 1995) (“the Act”) require a CCMA commissioner to apply the reasonable employer test / the “defer to the employer” approach or the “own opinion” approach in deciding whether dismissal as a sanction is fair or unfair in a particular case?


[34] Having come to the conclusion above that under the old Act the industrial court, the old Labour Appeal Court and the Appellate Division / Supreme Court of Appeal applied the “own opinion” approach in deciding whether the sanction of dismissal in a particular case was fair, the question that arises, which is the question that needs to be answered in this case, is whether under the current Act the CCMA is required to decide the same issue also on the basis of the “own opinion” approach or on the basis of the reasonable employer approach.

To determine which one of the two approaches is the correct one for a CCMA commissioner to adopt falls to be determined with reference to what the powers of a CCMA commissioner are in such a case.


[35] The determination of the powers of the CCMA in regard to the issue under consideration requires an interpretation of the Act. However, the Act should not be interpreted in isolation. It needs to be acknowledged that the Act is the successor to the old Act. Accordingly, the old Act and the jurisprudence which the Courts which applied that Act have bequeathed to us need to be taken into account not only to ensure that there is no repetition of the mistakes of the past but also to ensure that that which was good in that jurisprudence can be carried forward if it is not inconsistent with the current Act, its objects and the Constitution. If, as we move forward as a nation, we do not, from time to time, look back at our past in order to shape a future that is better than our past, there is a real danger that we will shape for ourselves and those to come after us a future that is no better than our past, or, even worse, a future that is worse than our past. That is true not only in our political life but also in respect of our legal system in general and our jurisprudence in particular. Courts, too, need to bear this in mind at all times.


[36] In July 1994, which was within three months of the first democratic elections in this country, the new Cabinet appointed a Ministerial Task Team of labour lawyers “to overhaul the laws regulating labour relations and to prepare a negotiating document in draft Bill form to initiate a process of public discussion and other interested parties.” (Explanatory Memorandum to the Labour Relations Bill, 1995 at (1995) 16 ILJ 278). The brief of the Ministerial Task Team, in so far as it related to the arbitration and adjudication of disputes of rights, included that the Task Team was “to draft a Labour Relations Bill which would-

The fact that the Courts under the old Act used the “own opinion” approach in determining the fairness of dismissals as dealt with above does not appear to have been one of the problems that the Ministerial Task Team, appointed by Cabinets, was asked to address in the new Labour Relations Bill, 1995. That this way of deciding whether dismissal as a sanction was unfair in a particular case was not one of such problems is evident from the fact that, when the Ministerial Task Team set out in the Explanatory Memorandum to the Bill what the problems with the old Act were and with how disputes had been dealt with under the old Act, this was not among the problems that they set out therein (see Explanatory Memorandum to the Labour Relations Bill, 1995 which appears at (1995) 16 ILJ 278). The question then arises whether, all this notwithstanding, the current Act departed from the approach of the old Act and authorised the reasonable employer test and outlawed the “own opinion” approach.


[37] In August 1998 Brassey AJ handed down his judgment in Computicket v Marcus NO & others (1999) 20 ILJ 342 (LC). In that judgment he adopted at 346 E-H the “defer to the employer” approach which seems the same as that adopted by Lord Denning in Swift although he did not say whether he, too, like Lord Denning, took the view that dismissal as a sanction would only be unfair if no reasonable employer would have dismissed the employee or if no reasonable employer might have dismissed the employee.


[38] This Court subsequently handed down its judgment in Nampak Wadeville v Khoza (1999) 20 ILJ 578 (LAC) in November 1998. Nampak was a judgment of Ngcobo JA which was concurred in by Myburgh JP and Froneman DJP. In that case this Court, through Ngcobo JA, relying on Lord Denning’s judgment in Brittish Leyland UK Ltd v Swift [1981] 1RLR 91, adopted the reasonable employer test in paragraphs 33 and 34.


[39] Paragraphs 33 and 34 of that judgment are very important in the discussion of the issue under consideration. The reader will need to bear these two paragraphs in mind as repeated references will be made to them later on. Paragraphs 33 and 34 of the Nampak judgment read thus respectively:-

33. “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. In judging the reasonableness of the sanction imposed, courts must remember that:

‘There 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.”


  1. It seems to me that the correct test to apply in determining whether a dismissal was fair is that enunciated by Lord Denning MR in Brittish UK Ltd v Swift at 93 para 11, which is:

‘Was it reasonable for the employer to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might have reasonably dismissed him, then the dismissal was fair”.


[40] It will be seen from par 34 of the Nampak judgment that this Court expressly adopted Lord Denning’s test for the determination of the fairness of a dismissal as found in his judgment in Swift. That test is:

“Was it reasonable for the employer to dismiss [the employee]? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might have reasonably dismissed him, then the dismissal was fair”.


[41] In June 1999 judgment was handed down in County Fair Foods (Pty)Ltd v Commission for Conciliation, Mediation and Arbitration & others (1999)20 ILJ 1701 (LAC) in which the issue of the correct approach for a CCMA commissioner to adopt when deciding the fairness of dismissal as a sanction arose again. In the County Fair case each of the three Judges who heard that matter, namely Ngcobo AJP, Conradie JA and Kroon JA, wrote his own separate judgment.


[42] In the County Fair case Kroon JA appears to have elected not to commit himself one way or another on the issue under consideration. At par 20 he was content to say in part: “Even if the correct approach were that the arbitrator could decide de novo on what would constitute a fair sanction, [the arbitrator’s] decision that fairness dictates that a sanction less than dismissal be imposed is not justifiable on any rational objective basis. The absence of that basis results in the arbitrator’s award being vitiated by gross irregularity.”


[43] Ngcobo AJP referred to the Nampak case and in particular paras 33 and 34 thereof. Although some statements in that judgment, particularly in paragraphs 28 and 29, may seem to suggest that Ngcobo AJP was saying that a commissioner may interfere with dismissal as a sanction imposed by an employer if such sanction is unfair – in other words without requiring any thing more than that the sanction of dismissal is unfair – it seems that, upon a reading of the judgment as a whole, the judgment goes further than that and says that a commissioner can only find dismissal as a sanction unfair – and can therefore, interfere with it – if it “is so excessive as to shock one’s sense of fairness.” (par 30 of the judgment). It is assumed that, when dismissal is “so excessive as to shock one’s sense of fairness”, it is one that no reasonable employer would have considered fair. However, it is arguable that not every unreasonable dismissal can be said to be “so excessive as to shock one’s sense of fairness.” Ngcobo JA also referred to Brassey AJ’s judgment in Computicket.


[44] Conradie JA disagreed with Kroon JA and Ngcobo AJP that the appeal should be upheld. However, he agreed “fully” with Ngcobo AJP’s approach that commissioners of the CCMA should show deference to the disciplinary sanctions imposed by employers. (see par 48 of the judgment in 1717). In either December 1999 or early in 2000 this Court handed down its judgment in Toyota SA Motors (Pty)Ltd v Radebe & others (2000) 21 ILJ 340(LAC) in which it rejected the reasonable employer test and, thus, departed from its own judgment in Nampak. This Court made it clear that it appreciated that it ought not to lightly depart from its own previous judgments but took the view that this was a case where it was entitled to do so. (see par 50 of Nicholson JA’s judgment). Before coming to the conclusion that the reasonable employer test was not part of our law, this Court considered some academic writings and previous decisions. Furthermore this Court considered the fact that in English law the reasonable employer test was based on a specific statutory provision and in South Africa we do not have a corresponding provision.


[45] In Rustenburg Platinum Mines Ltd v CCMA & others 2007(1) SA 576 (A) at 594 par 43, a judgement of Cameron JA in which Harms, Cloete, Lewis and Maya JJA concurred, the SCA expressed regret that this Court has “not consistently affirmed and applied the analysis” of Ngcobo JA in par 33 of his judgment in Nampak Corrugated Wadeville v Khoza (1999) 20 ILJ 578 (LAC) and Ngcobo AJP’s analysis in County Fair Foods (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and others (1999)20 ILJ 1701 (LAC) at par 28. The one in Nampak’s case is contained in par 33 of Ngcobo JA’s judgment. It reads thus:


“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.”


[46] Ngcobo AJP’s analysis in County Fair that the SCA was referring to is to be found in par 28 of Ngcobo AJP’s judgment. That part of paragraph 28 of Ngcobo AJP’s judgment that was quoted by the SCA in Rustenburg as containing part of the analysis which the SCA regretted that this Court has since “strayed” away from reads as follows:

“Given the finality of the awards and the limited power of the Labour Court to interfere with the awards, commissioners 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 the 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.”


[47] It is true that this Court has departed from the approach it had adopted in Nampak’s case on the question of how a commissioner of the CCMA should approach his task in determining the question whether dismissal as a sanction is unfair. Of course, each superior court is entitled to depart from its previous decisions in certain circumstances if there is no decision of a higher court than itself on the point in question. However, it is also true that a court should be slow to depart from its previous decisions.


[48] In the light of the SCA’s expression of regret in this regard and the fact that in Toyota this Court did not give all reasons supporting the rejection of the reasonable employer test, it seems that this Court should take this opportunity to give full reasons which support the approach that it took. There are other reasons as well why this Court should deal with the debate about the reasonable employer test fully herein. One of them is that the main issue in this appeal was what the correct approach is that a CCMA commissioner should take when he has to decide whether dismissal as a sanction is fair. Counsel for the appellant argued very passionately and yet vigorously in support of the reasonable employer test. He emphasised the need for commissioners to defer to the employer with regard to the issue of a sanction. In this regard he relied heavily on the decision of this Court in Nampak and Ngcobo AJP’s judgment in County Fair. Furthermore, the debate about what the correct approach is that CCMA commissioners should adopt in determining whether dismissal is fair is a debate on which many would wish to hear the views of this Court before it can be put to rest. I say this because of the place occupied by this Court in the arbitral and adjudicative system of labour disputes under the act


Interpretive framework


[49] Sec 23 (1) of our Constitution confers on everyone “the right to fair labour practices”. Sec 232 of the Constitution reads: “Customary international law is law in the Republic unless it is inconsistent with the Constitution or an Act of Parliament”. Sec 233 of the Constitution reads:

“When interpreting any legislation, every court must prefer any reasonable interpretation of the legislation that is consistent with international law over any alternative interpretation that is inconsistent with international law”.

Sec 39 (2) reads:

“When interpreting any legislation, and when developing the common law or customary law, every court, tribunal or forum must promote the spirit, purport and objects of the Bill of Rights”.

The purpose of the Act is:

“to advance economic development, social justice, labour peace and the democratisation of the workplace by fulfilling the primary objects of this Act…” It is not necessary to list all the primary objects of the Act. However, those listed in sec 1 (a), (b) and (d) (iv) are relevant. Respectively, they are:

Sec 3 of the Act deals with the interpretation of the Act. It reads thus:

“Any person applying this Act must interpret its provisions –

  1. to give effect to its primary objects.

  2. in compliance with the Constitution; and

  3. in compliance with the public international obligations of the Republic…”


Does the language of the Act support the reasonable employer test or the “own opinion” approach?


[50] In seeking to determine whether an arbitrator or commissioner of the CCMA is required to give his opinion or to defer to the employer when he decides whether dismissal as a sanction is or is not fair in a particular case, it seems that one must start by emphasising that the CCMA is a creature of statute and derives its powers within the four corners of the Act read with the Constitution. In this context what was said of the industrial court in Transvaal Press Nuts Bolts and Rivets (Pty) Ltd v President of the Industrial Court and others (1989) 10 ILJ 48 (N) at 67D—F by Page and Thirion JJ can be said of the CCMA albeit within the context of the current Act. There the learned Judges had this to say, among other things, about the industrial court: “The industrial court (although it is not strictly speaking a court at all—CF SA Technical Officials’ Association v President of the industrial court and others 1985 (1) SA 596 (A); (1985) 6 ILJ 186(A)—exists only by virtue of the provisions of s17 of the Labour Relations Act and is, accordingly, a creature of statute. It accordingly has no power to assume jurisdiction in respect of any matter beyond those encompassed by its statutory jurisdiction.” In determining whether the CCMA is required to defer to the employer/apply the reasonable employer test or to apply the “own opinion” approach, it is necessary to determine what the statutory powers of a CCMA commissioner are when he has to decide whether dismissal as a sanction in a particular case is fair.


[51] In determining what the powers of the CCMA are when it has to decide whether dismissal as a sanction is fair, one should start with the language of the statute creating the CCMA. In this regard it is important to bear in mind that the primary rule in the construction of statutes is that words and expressions used in a statute must be interpreted according to their natural, ordinary or primary meaning unless this would lead to an absurdity. However, no less important is the proposition that the words or expressions used in a statute must also be interpreted in the light of their context, including “the matter of the statute, its apparent scope and purpose, and, within limits, its background.” (see Jaga no and Another. 1950 (4) SA 653 (A) at 662 per Shreiner JA; Consolidated Frame Cotton Corporation Ltd v The President of the Industrial Court and Others (1986) 7 ILJ 489 (A) at 494F—G).


[52] It would appear that the provisions of the Act that contain the powers of a CCMA commissioner when he has to decide whether dismissal as a sanction is unfair are the following:

(a) secs 115(b), 133(2)(a) and 136(1) – which provide that the commission must “arbitrate the dispute”,

(b) sec 138(1) – which provides that a commissioner may conduct an arbitration in a manner that the commissioner considers appropriate “in order to determine the dispute fairly and quickly, but must deal with the substantial merits of the dispute with minimum legal formalities” (underlining supplied).

(c) Sec 138(6) – which provides that a commissioner must take any code of good practice issued by NEDLAC or guidelines published by the Commission in accordance with the Act into account in determining whether dismissal is fair.

(d) Sec 138(9) – which provides: “the commissioner may make any appropriate arbitration award in terms of this Act, including but not limited to an award –

(a) that gives effect to an arbitration agreement;

(b) that gives effect to the provisions and primary objects of this Act;

(c) that includes, or is in the form of a declaratory order” (underlining supplied).


[53] The language that seems significant under sec 138 relating to powers of a commissioner is the choice of the words “to determine the dispute fairly” in sec 138(1) and the choice of the words “may make any appropriate arbitration award” in terms of this Act in sec 138(9).


[54] In my view the phrase “to determine the dispute fairly” in sec 138 (1) is pivotal in deciding what the statutory powers are which the CCMA has in deciding whether dismissal as a sanction is fair. This is because a dispute about the fairness of a dismissal (see sec 191 (1) of the Act) encompasses both the issue whether the employee is guilty of misconduct as well as the question whether dismissal as a sanction is fair in the particular circumstance of a case except, of course, in those cases where one of these is not an issue between the parties to an unfair dismissal dispute. Where both the guilt of the employee and the fairness of dismissal as a sanction are in issue between the parties, it would not be a determination of the dispute in the sense of bringing it to an end if the tribunal found that the employee was guilty of misconduct but did not determine or decide whether dismissal as a sanction was fair.


[55] The phrase “ to determine the dispute” when used in respect of the Industrial Court’s powers under sec 46 (9) in the old Act was interpreted by Ackerman J, as already stated, in Trident Steel to say that it meant to bring a dispute to an end. Those same words, as well as the statutory provisions of the old Act which empowered the old Labour Appeal Court “to decide” an appeal concerning an alleged unfair dismissal matter and the Appellate Division / Supreme Court of Appeal “to confirm, amend, or set aside the decision or order against which the appeal has been noted or make any other decision or order, including an order as to costs, according to the requirements of the law and fairness” were held by the Appellate Division in Perskor and the other subsequent decisions that I have referred to above to mean that the industrial court, the old Labour Appeal Court and the Appellate Division were required to decide the fairness or otherwise of dismissal as a sanction according to their own opinion or judgment of what was fair or unfair in all the circumstances of a particular case.


[56] It is difficult to see what basis could possibly exist to justify giving the phrase “to determine the dispute” in sec 138 (1) of the Act a meaning that is different from the one that was given to the same phrase in sec 46 (9) of the old Act by the Appellate Division. That meaning does not lead to any absurdity. Accordingly, it seems fair to say that sec 138 (1) of the Act empowers a CCMA commissioner to pass a moral or value judgment when it decides whether dismissal as a sanction is fair and that a CCMA commissioner is required to decide that issue in accordance with his own opinion or judgment of what is fair or unfair in all the circumstances of a particular case.


[57] The decision of this Court in Toyota to reject the reasonable employer test and to say in effect or by implication that the “own opinion” approach applies accords with this approach taken by the Appellate Division in Perskor and the other cases referred to above in relation to statutory language in sec 46 (9) of the old Act that is identical to the statutory language used in sec 138 (1) of the current Act in relation to CCMA commissioners. I do need to point out that the employee’s right not to be unfairly dismissed which the Courts enforced under the old Act and, therefore, the employer’s duty or obligation not to dismiss an employee unfairly under that Act, although not provided for in those terms, was founded upon the definition of “unfair labour practice” in sec 1 of the old Act. The definition of an “unfair labour practice”, together with sec 46(9) of the old Act, was also the source of the unfair labour practice jurisdiction of the industrial court which it used to decide the fairness or otherwise of dismissals in dismissal disputes under sec 46(9). Therefore, although sec 46(9), read alone, did not expressly require the industrial court “to determine the dispute fairly”, which is what sec 138(1) requires of the CCMA, when read with the definition of an “unfair labour practice”, that is also what it required of the industrial court (my underlining). Accordingly, it cannot be said that, because, with regard to dismissals, there is no applicable definition of an “unfair labour practice” under the current Act similar to one or more of the definitions of “unfair labour practice” which appeared in the old Act at different stages, which may have influenced the Perskor decision and other decisions of the Appellate Division, those cases cannot apply under the current Act. So what one has is that sec 46(9) of the old Act read with the definition of “unfair labour practice” required the industrial court to exercise its unfair labour practice jurisdiction “to determine” whether an employee’s dismissal was unfair. Sec 138(1) of the current Act requires the CCMA “to determine fairly” whether an employee’s right not to be unfairly dismissed which is provided for in sec 185 has been infringed. That, of course, means that it must determine whether the dismissal was fair.


[58] As to the meaning of the phrase “to arbitrate” the dispute, which is to be found in sections 115(b), 133(2)(a) and 136(1) of the Act, in my view the phrase bears the same meaning for purposes of the Act as the phrase “to decide”. Under the old act when that phrase described the function of the old LAC in relation to unfair dismissal appeals it was held in the Perskor case to mean that the old Labour Appeal Court was required to pass a moral or value judgment on findings of fact and opinion and that it had to make such a decision on the basis of its own opinion of what was fair or unfair in a particular case. That being the case, in my view, the same must hold true for the phrase “to arbitrate” the dispute. Accordingly, in my view that phrase in sec 115(b), 133(2)(a) and 136(l) of the Act must be given the same meaning as “to determine” or “to decide” as discussed in the Perskor case.


[59] With regard to sec 138(9) the language used therein, i.e. “the commissioner may make any appropriate arbitration award”(my underlining) seems so wide as to give power to a commissioner to make such award as he may, in his opinion, consider appropriate or fair to make as opposed to requiring him to defer to the employer or to a reasonable employer.


[60] Apart from those provisions of the Act which deal with the powers of a commissioner in determining whether dismissal as a sanction in a particular case is fair, there are also other provisions of the Act which, in my view, seem more consistent with the “own opinion” school of thought than with the “defer to the employer” school of thought. I deal with them next.


[61] In sec 140 (2) it is provided: “if in terms of section 194(1), the commissioner finds that the dismissal is procedurally unfair, the commissioner may charge the employer an arbitration fee” (underlining supplied). Sec 141 (1) allows the CCMA to “arbitrate the dispute” if such dispute was supposed to be referred to the Labour Court for adjudication but instead all parties to the dispute consented that it be arbitrated by the CCMA. These provisions seem to me to be more consistent with the “own opinion” approach than with the “defer to the employer” approach.


The reasonable employer test and the presumption of fairness of dismissal


[62] Sec 188(1)(a)(i) provides:


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


  1. that the reason for dismissal is a fair reason—


  1. related to the employee’s conduct or capacity.”


The formulation of sec 188(1) where it is said that a dismissal that is not automatically unfair “is unfair if…..” connotes an objective determination of the fairness of the dismissal. It states that, if the conditions it prescribes are met, the dismissal is unfair. In other words, once one or both of the conditions are met, the unfairness of the dismissal does not depend upon a reasonable employer. The dismissal is determined by the statute to be unfair in such cases.


[63] It also seems that the reasonable employer test or the “defer to the employer” approach is in conflict with sec 188(1) of the Act. The relevant part of sec 188(1) has just been quoted above. It says that a dismissal that is not automatically unfair is unfair if the employer fails to prove that there is a fair reason for the dismissal. In my view, once it has been established that the employee is guilty of misconduct, the commissioner would turn to the employer and say: Although the employee is guilty of misconduct, tell me why I should find that this is a fair reason to dismiss! If he was not satisfied with what he was told by the employer, he would, in accordance with the opening part of sec 188(1), find that the dismissal is unfair. The reasonable employer test or the “defer to the employer” approach actually requires the opposite. According to this approach, once it has been established that the employee is guilty of misconduct, the commissioner would turn to the employee and say: “Tell me why I should find that this is not a fair reason to dismiss. You see, your employer here thinks that dismissal is a fair sanction for this misconduct on your part. Why should I interfere with his opinion of what is a fair sanction in this case?” If he was not satisfied with what he was told by the employee, he would, in conflict with the opening part of sec 188(1), find that the dismissal is fair. Accordingly, the reasonable employer test/the “defer to the employer” approach creates a presumption that, if an employee is guilty of misconduct, the sanction of dismissal chosen by the employer is fair unless the employee demonstrates the contrary – a presumption that cannot be found anywhere in the act.


The reasonable employer test and the onus provisions


[64] Section 188A deals with pre—dismissal arbitration conducted by agreement between an employer and an employee when the employer seeks to bring disciplinary charges against such employee. Sec 188A (9) reads: “An arbitrator conducting an arbitration in terms of this section must, in the light of the evidence presented and by reference to the criteria of fairness in the Act, direct what action, if any, should be taken against the employee” (underlining supplied). The significance of sec 188A (9) is the reference therein to “the criteria of fairness in the Act.” It seems that here the drafters of the Act wanted to emphasise that the criterion that the Act uses is that of fairness. In my view when this is read, it must be read to say that the criterion prescribed by the Act is that of fairness and not reasonableness.


The reasonable employer test and the onus provisions


[65] Sec 191(1) deals with a dispute about the fairness of a dismissal and a dispute about an unfair labour practice. The same disputes are contemplated in sec 191(5)(a) and (b). Sec 191(5) provides that the CCMA must “arbitrate the dispute” at the request of the employee if “the employee has alleged that the reason for dismissal is related to the employee’s conduct or capacity unless paragraph (b)(iii) applies,” Sec 192(2) provides: “If the existence of the dismissal is established, the employer must prove that the dismissal is fair.” Through a provision such as sec 192(2) the drafters of the Act sought to ease the employee’s burden by making sure that, once he has proved the existence of a dismissal, it is upto the employer to prove that the dismissal is fair. The requirement that the employer must prove that the dismissal is fair is not confined to the employer simply proving that the employee is guilty of misconduct. It also entails that, where the employee admits that he is guilty or is properly found to be guilty, the employer must also prove that dismissal as a sanction is fair.


[66] In my view the “defer to the employer” approach or the reasonable employer test has the effect of turning sec 192(2) around as if it read: “Once the existence of a dismissal has been established, the employee must prove that the dismissal is unfair.” This is because in terms of the reasonable employer test in effect the view of the employer that the employee’s act of misconduct deserves to be punished with dismissal is required to be shown a deference or must be accepted as fair and left intact unless it is grossly unfair or shockingly excessively unfair or so unfair that no reasonable employer would have regarded it as fair or so excessive as to shock one’s sense of fairness. This is contrary to sec 192 (2). The “own opinion” approach is in harmony with sec 192(2).


[67] Sec 193 (1) provides that “(i)f the Labour Court or an arbitrator appointed in terms of this Act finds that a dismissal is unfair, the Court or the arbitrator may…” and then different remedies are set out which may be granted. The first part of this subsection seems to be more in line with the proposition that what the commissioner finds is that which constitutes the commissioner’s opinion on the facts and other matters. It does not appear to me to be in line with a person who does not think that the dismissal is unfair but nevertheless says it is fair because the employer thinks it is fair which is what the “defer to the employer” approach requires of a CCMA commissioner. In my view, if the drafters of the Act had sought to say the latter, it would have been the easiest thing for them to say so in clear terms. The question arises: in what other way would the drafters have formulated this subsection if they wanted that the commissioner’s finding should be his opinion or judgment and not that of the employer? It is difficult to think of any.


[68] If one has regard to the provisions of the Act that I have referred to above, and they cover the powers of a CCMA commissioner when dealing with the issue facing us in this matter, one will notice that the provisions that are specific about what the commissioner is required to do either say he is required to “arbitrate the dispute” or that he is required to “determine the dispute”. Within the context of a dismissal, the dispute that those provisions say the commissioner is required to arbitrate or determine is a dispute such as is contemplated in sec 191(1) of the Act. That is a “dispute about the fairness of a dismissal”. In my view the phrase “to determine the dispute” must have been chosen because the old Act had the same phrase in sec 46(9) and, it having been judicially interpreted, its meaning was well-known. In my view the use of that phrase suggests that the drafters of the Act contemplated that the arbitrator was going to need to pass a moral or value judgment on the fairness of a dismissal as a sanction. After all it is trite that, if the legislature uses the same words in a statute that it has previously used in a repealed statute dealing with the same subject matter, it must be taken to intend such words to be given the same meaning as the meaning that the Courts have given to them in the repealed statute. It seems to me that, if the drafters of the Act had intended that the commissioner, in determining the dispute, should defer to the view of the employer, they would have gone further than simply saying that the commissioner must “arbitrate” or “determine” the dispute and they would not have chosen words that have been interpreted to mean the opposite of what they intended.


A comparison of sec 157(3) of the English Statute and sec 138 of the Act


[69] As has already been said, the “reasonable employer” test is derived from English law. Sec 57(3) of the Employment Protection (Consolidation) Act of 1978 read as follows:

“(T)he determination of the question whether the dismissal was fair or unfair, having regard to the reasons shown by the employer, shall depend on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantial merits of the case” (underlining supplied).


[70] That part of sec 57(3) which has been underlined above and which appears between the word “employer” and the word “and” are the words in that subsection which authorised the adoption of the reasonable employer test because they directed how a tribunal dealing with an unfair dismissal claim had to go about determining whether a dismissal was fair. In our country there was no such provision in the old Act and there is no such provision in the current Act. It seems that the English legislature chose to add those words in sec 57(3) because it thought that, if the English statute simply required a tribunal to determine whether a dismissal was unfair, the tribunal would give such provision its ordinary and natural meaning which is that the tribunal should decide such an issue according to its own opinion of what