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IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Not Reportable

Case no: JR2316/2011

In the matter between:

BOXMORE PLASTICS SA (PTY) LTD                                                                       Applicant

and

P M VENTER N.O                                                                                          First Respondent

THE METAL AND ENGINEERING INDUSTRIES

BARGAINING COUNCIL                                                                         Second Respondent

NUMSA OBO THABO MOTLOUNG                                                            Third Respondent

Heard: 17 July 2016          

Delivered: 28 October 2016

JUDGMENT

KIRSTEIN AJ

[1] Before this Court there are three substantive applications to consider:

-          Condonation application of the applicant for the late filing of the review application.

-          Review application to set aside the rescission ruling of the first respondent dated 5 July 2011 under case number MEFS1501 issued under the auspices of the second respondent and have it substituted with an order to the effect that the default arbitration award dated 5 May 2011 be rescinded.

-          An application by the third respondent to dismiss the review application on the basis of non-compliance with the Rules of the Labour Court and unreasonable delay.

Background

[2] The employee, Motloung, was employed as a production manager at the applicant. Motloung was found guilty of inflating overtime claims and was dismissed. The third respondent referred an unfair dismissal dispute to the second respondent. On 3 May 2011, an arbitration was conducted. The applicant did not attend the arbitration. A default arbitration award dated 5 May 2011 was issued. In the award, the first respondent granted the following remedy:

‘6.        AWARD

In terms of Section 193 of the Labour Relations Act, I must reinstate the Applicant if the Applicant wishes to be reinstated provided that the reinstatement is reasonably practicable and would not lead to an intolerable employment relationship.  There is no reason for me to conclude that the above provisos are applicable in this case and I accordingly conclude that retrospective reinstatement is the appropriate remedy for the unfair dismissal.

In determining the retrospective remuneration to be paid to the Applicant, I note that the Applicant had been booked of work for seven months due to injuries sustained in a car accident.  The period during which he was available to work between the date of dismissal and the date of the arbitration was therefore about 8 months.  I accordingly order that the Applicant be reinstated retrospectively to the date his dismissal, into the position he occupied at the date of his dismissal and on the same terms and conditions of employment as pertained to that position at the time of his dismissal. I further order that the Respondent pays the Applicant an amount of R144,000-00, being the equivalent of 8 months retrospective remuneration, within 14 days of receipt of this award.

The Applicant must report for work within 7 days of receipt of this award.’

[3] The applicant applied for rescission of the default award in terms of Section 144 of the Labour Relations Act, 66 of 1995 (as amended, (LRA)). 

[4] In a ruling dated 5 July 2011, the first respondent dismissed the rescission application. On 16 September 2011, the applicant delivered the review application in terms of Section 158(1)(g) of the LRA. 

[5] On or about 24 June 2014, the third respondent delivered an application in terms of Rule 11 of the Rules of the Labour Court requesting that the review application be dismissed.

Condonation application for late referral of the review application

[6] The applicant received the rescission ruling on 5 July 2011. The review application was delivered on 16 September 2011. In the case of Weder v MEC for Department of Health, Western Cape,[1] the court suggested that because the process of Section 158 is closely aligned to the process set out in Section 145, any period of delay more than six weeks should trigger an application for condonation. The review application was delivered four weeks late. The period of lateness is not excessive.

[7] The reason for lateness and the cause of the delay is the failure of the applicant’s attorney of record to pursue the review application diligently. Although there is a limit beyond which an applicant cannot escape the consequences of its representative’s lack of diligence, the indication in the founding affidavit deposed to by the applicant’s representative is that efforts were made within a reasonable period after receipt of the rescission ruling to pursue the review application. Administrative issues in the office of the applicant’s attorney of record delayed the delivery of the review application. The reason for lateness is acceptable.

[8] The third respondent determined in the rescission application the following:

‘The Employer provided no proof that they had a faulty fax machine and/or that a fax machine was replaced. The notice of set down was faxed on 16 March 2011 which was well before the faulty fax machine was an issue. The notice of set down was faxed to their correct fax number (058-635 1300) and no mention is made that the wrong number was used by the Bargaining Council. The same fax number was also used to fax the application for arbitration and this document was received.’

The basis upon which the third respondent determined that the rescission application should be dismissed is that the applicant failed to show that the award was erroneously granted in the absence of the applicant.[2] In the rescission application before the first respondent, the applicant presented an undisputed version to the extent that:

-          The applicant has been unable to find any evidence that the notice of set down had been received.

-          The telefax machine to where the alleged notification was sent was discovered to be faulty and was replaced during April 2011.

-          It was probable that the telefax was not received and the notification did not come to the attention of the Human Resource Department.

-          The applicant is a large business undertaking with dedicated Human Resources Department.

-          The dispute referred to the bargaining council is taken seriously and had the notification received the applicant would have appeared at the arbitration.  

-          The applicant attended the conciliation process.

In Mega Burger v Commissioner Louw NO and Another,[3] Landman J considered a review application of a rescission application and expressed the following at 1377H – J:

‘The Commissioner was obliged to satisfy himself on 7 August that the notice of set down had been served on Mega Burger.   The fact that it was sent by registered post goes somewhere to showing that there was, at least, an attempt at service. When informed that Mega Burger said that it had no notice of the set down, it was on the facts before him, reasonable for him to suppose that this was true.   This is particularly so in the light of the fact that Mega Burger had attended the conciliation proceedings.   There was no evidence to the contrary before him that Mega Burger did not receive the notice of set down. The Commissioner ought to have postponed the arbitration proceedings mero motu.  The Commissioner did not do this.  His action was, in my view, unreasonable and unjustifiable and constitutes a gross irregularity.’

It has been held in various matters that a fax transmission slip cannot be accepted as definite proof that a party received a notice of an arbitration hearing.

[9] The first respondent failed to consider if the applicant showed a bona fide case on the merits. The first respondent refers to the Labour Appeal Court case of Shoprite Checkers (Pty) Ltd v CCMA and Others [ 2007] 10 BLLR 917 (LAC) where it was confirmed that good cause is to be established by considering the reasons for default and if an applicant can show a bona fide case on the merits. In the case of Northern Trading Trust v Maake and Others[4]the court formulated the test as follows:

‘The enquiry in an application for the rescission of an arbitration award if bipartite. The first leg is one which is concerned with whether or not the notice of set down was sent (for instance by fax or registered post).  Should evidence show that the notice was sent, a probability is then created that the notice sent was received.  The second leg to the enquiry is one which concerns itself with the reasons proffered by the applicant who failed to attend the arbitration proceedings.  Such applicant needs to prove that he or she was not wilful in defaulting, that he or she has reasonable prospects of being successful with his or her case should the award be set aside.  However, the applicant need not necessarily deal fully with the merits of the case.’[5]

The applicant showed prospects of success in the review application.

[10] In the case of Liberty Life Association of Africa v Kachelhoffer NO and Others[6] the following has been stated with regard to the correct enquiry into prejudice:

‘The enquiry into whether prejudice is present or not entails comparing the present position of the other parties involved with what it would have been had proceedings been instituted within a reasonable time.  Prejudice will be considered to be present if because of the delay the recollection of parties or the person whose decision is being reviewed have paled; persons who have to depose to affidavits or testify are no longer available; and where documentary or other forms of evidence are no longer available… None of those considerations is present in the instant case.  The fact that certain costs might have been duplicated can be remedied by appropriate costs orders and, in our view, does not constitute irremediable prejudice.’[7]

In casu, there is no indication that any of the parties will be prejudiced because of the issues mentioned in the dictum referred to above.

[11] Various forums dealt with the requirements of an application for condonation.  It is not necessary to repeat those cases. What is important from those cases is that each matter should be determined on the circumstances of each case. This Court has a discretion when considering an application for condonation and it should exercise its discretion judicially upon a consideration of all the facts and should be in essence a matter of fairness to both parties. I am satisfied that the applicant has shown good cause to be granted condonation for the late filing of the review application.

Application to dismiss review application

[12] In the application to dismiss the review application, the basis of such application, is the unreasonable delay in pursuing the review application. 

[13] The applicant delivered the review application on 16 September 2011. On 7 August 2012, the applicant delivered an interim urgent application to stay the execution of the award and to compel the second and third respondents to deliver the record of the proceedings giving rise to the rescission application. A final order in the interim urgent application was granted on 27 September 2012. In the mentioned order, the first and second respondents was ordered to dispatch to the Registrar of the Labour Court the record of the proceedings that gave rise to the first respondent’s rescission application ruling dated 5 July 2011. 

[14] Correspondents of the applicant’s attorney of record informed them that the record was not delivered at the office of the Registrar of the Labour Court. On 20 February 2014, and subsequent to various correspondence between the applicant’s representatives and the representatives of the first and second respondents, an e-mail was received confirming that the relevant record has been sent to the Registrar of the Labour Court sometime in October 2012. On 17 June 2014, the applicant’s attorney of record managed to secure the record at the Registrar’s office.

[15] In the case of Sishuba v National Commissioner of SAPS[8] the Labour Court summarised the overall approach to be adopted in applications to dismiss as follows:

‘The focal point in considering whether to grant the order barring the employer, in this case, from proceeding further with the review application is the issue of justice and fairness to both parties. The question that then arises is whether the interest of the administration of justice, in this instance, dictates that the employer be barred from proceeding further with the review application.’[9]

The Labour Court generally considers the following in determining an application to dismiss a review application:

-          The prospects of success in the review application.

-          The respondent’s obligation to ensure that the dispute is expeditiously resolved.

In the Constitutional Court case of Toyota SA Motors (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (2016) BLLR 216 (CC) (Toyota), the Court confirmed that challenges in respect of records that are experienced by applicants in review applications are not a license to laxity. The applicant is required to diligently initiate and pursue steps aimed at addressing such challenges.

[16] The period of three years to secure the record must be regarded as excessive and an unreasonable delay. This Court must exercise a discretion as to whether the unreasonable delay should be condoned. In exercising the discretion, the following is considered:

-          The applicant secured a court order on 27 September 2012 compelling the second and third respondents to deliver the record. 

-          On 20 February 2014, and subsequent to various correspondence and visits to the Registrar to secure the record, the applicant’s attorneys of record was informed that the record was delivered to the Registrar during October 2012

-          On 17 June 2014, the applicant’s attorneys of record secured the record at the Registrar.

-          On or about 23 June 2014, the first respondent delivered the application to dismiss the review application.

-          On or about 29 July 2014, the applicant delivered the Rule 7A(8) notice.

-          On or about 26 September 2014, the third respondent delivered its opposing affidavit to the review application.

The time period of delay in the Toyota matter was similar to the delay in casu. In the Toyota matter, nothing or very little was done to secure a complete record, contrary to what has been done by the applicant’s attorney of record in casu. The Constitutional Court in the Toyota matter further indicated that Toyota had no prospects of success on review. I have already indicated in determining the condonation application for the late filing of the review application that the applicant does have prospects of success in the review application.

[17] The third respondent does not indicate why it could not assist in securing the record expeditiously. The inaction of the third respondent in not assisting in securing the record is an element that needs to be considered but not an absolute defence. If the rescission application ruling is reviewed and set aside, the third respondent will be able to challenge the alleged unfair dismissal and may be awarded the same remedy as was awarded in the default award. For the reasons referred to above, the application to dismiss the review application is not granted.

Review application

[18] The basis upon which the first respondent dismissed the rescission application is limited to what has been stated in paragraph 11 of the rescission ruling:

‘The Employer provided no proof that they had a faulty fax machine and/or that a fax machine was replaced.  The notice of set down was faxed on 16 March 2011 which was well before the faulty fax machine was an issue.  The notice of set down was faxed to their correct fax number (058-635 1300) and no mention is made that the wrong number was used by the Bargaining Council. The same fax number was also used to fax the application for arbitration and this document was received.’

The first respondent was confronted with an undisputed version that the applicant did not receive the telefax because of a faulty fax machine. In the matter of Northern Province Local Government Association v CCMA and Others (Northern Province Local Government Association),[10]; the Labour Court stated the following with regard to fax transmission service:

‘It seems to me that a Commissioner in considering whether or not a notification of an arbitration hearing has indeed been received by a respondent, it is necessary to consider all the facts bearing on that question.  Axiomatically, in deciding whether or not a fax transmission was received, proof that the fax was indeed sent creates probability in favour of receipt, but does not logically constitute conclusive evidence of such receipt.  A party to proceedings who claims that it did not receive a telefaxed notification, must be put in a position where it can consider the grounds upon which it is contended that a notice was furnished to it, and thereupon give an explanation as to whether or not it was received, could have been received, and any other germane circumstance, which has a bearing on the explanation tendered that the party was ignorant that the matter has been set down.  Naturally, Commissioners must be on their guard against abuse of the process by parties who, having been properly notified but having neglected to participate in the proceedings, subsequently wail once an adverse arbitration award is served on them.  Nevertheless, the prudent need to guard against those circumstances should not disturb a fairminded enquiry into whether or not as a fact the notice did not come to the attention of the party.’[11]

[19] The first respondent was confronted with an undisputed version supported by documentary evidence that the employee Motloung was dismissed for submitting fraudulent overtime claims. The first respondent did not consider the applicant’s version it intended to present at the arbitration. 

In the Northern Province Local Government Association (referred to supra) the following was inter alia stated in paragraph 47:

‘If that explanation was wanting in any respect to demonstrate that there was a wholly blameless absence at the time of the hearing, the force of that explanation should have been balanced against the force of the case which the Applicant sought to present in support of its decision to dismiss the Third Respondent.  The weight of a solid bona fide case will usually make up for the thinness of the explanation for the default.’

[20] In the matter of Shoprite Checkers (Pty) Ltd v CCMA and Others (Shoprite)[12] the Labour Appeal Court stated the following:

‘[37]     In considering good cause, the second respondent took into account only one aspect of the test.  That is to say he only considered the fact that Booysen had mis-diarized the date of the arbitration hearing.  He clearly did not consider the appellant’s defence to the third respondent’s claim as he made no mention of it in his decision.  In my view, the second respondent, failed to weigh together all the relevant factors in determining whether it was just and fair and therefore, whether good cause had been shown for the rescission of the arbitration award.  It follows that the second respondent did not apply his mind to all the issues before him and if he did, he ought to, in the circumstances of his case, to have rescinded his earlier default award.

[38]      When the matter came before the Labour Court, Pillay J adopted the approach that good cause is not a requirement in an application for the rescission of a decision of the CCMA and a commissioner was obliged to take it into account.  As already shown above, I take a different view.  Section 144 must be interpreted so as to also include good cause as a ground for the rescission of a default arbitration award.  Accordingly, a commissioner may rescind an arbitration award under section 144 where a party shows good cause for its default.  In my view this approach of interpreting the Act is in line with the approach adopted by this Court in the Queenstown case referred to above, particularly at paragraph 17-24 thereof.  It, therefore, follows that the decision of the Labour Court is to be set aside.’’[13]

[21] In line with the Shoprite matter (referred to above), the indication is that the first respondent failed to weigh up the relevant factors in determining the rescission application. Accordingly, in my view, the rescission ruling by the first respondent should be reviewed and set aside.

Remedy

[22] Having considered the explanation of the applicant’s failure to attend the arbitration and the weight of a bona fide case to be presented in an arbitration, it is determined that the rescission application of the applicant must be granted. The default award issued by the first respondent is rescinded in order to give both parties an opportunity to present their case in relation to the alleged unfair dismissal dispute. The second respondent must set down the matter for arbitration before an arbitrator other than the first respondent. In regard to the question of costs, I take the view that it would be inappropriate to make a costs order. I make the following orders:

Order

1.            The condonation application for the late delivery of the review application is granted.

2.            The Rule 11 application to dismiss the review application is not granted.

3.            The review application is granted.

4.            The rescission ruling of the first respondent under case number MEFS1501 dated 5 July 2011 is reviewed and set aside.

5.            The rescission application to rescind the default arbitration award under case number MEFS1501 dated 5 May 2011 is granted.

6.            The second respondent must set down the alleged unfair dismissal dispute for arbitration to be arbitrated by an arbitrator other than the first respondent.

7.            No order as to costs.

_________________

Kirstein AJ

Acting Judge of the Labour Court of South Africa

APPEARANCES:

FOR THE APPLICANT:                              M E Stewart  

FOR THE THIRD RESPONDENT:             S Mthiyana

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