Tsakatsi v Arbitrator (DDPR) and Another (A0772/07; LC/REV/36/08) [2009] LSLC 5 (3 April 2009)

IN THE LABOUR COURT OF LESOTHO LC/REV/36/08 A0772/07 HELD AT MASERU IN THE MATTER BETWEEN TSEPANG TSAKATSI APPLICANT AND THE ARBITRATOR (DDPR) LESOTHO ELECTRICITY CO. (PTY) LTD 1ST RESPONDENT 2ND RESPONDENT JUDGMENT Date: 19/03/09 Review – Arbitrator dismissed the referral that was filed out of time without hearing a condonation application – This was a reviewable irregularity – Internal appeal interrupts the running of prescription. Award reviewed, corrected and set aside. 1. 2. This review application raises a very narrow issue for this Court’s determination. This is whether the learned arbitrator was justified in concluding that the DDPR did not have the jurisdiction to entertain applicant’s referral because it was allegedly made outside the six months prescribed by section 227(1)(a) of the Labour Code (Amendment) Act 2000 (the Act). The applicant was an employee of the 2nd respondent. He was dismissed on the 22nd February 2007 following a disciplinary hearing which found him guilty of a dismissable misconduct. He appealed in terms of the employer’s internal procedure. The appeal was finalized on the 18th May 2007. The outcome of the 3. 4. 5. appeal was that a new disciplinary hearing made up of different committee members be held. On the same date (i.e. 18 May) the Managing Director of the 2nd respondent wrote applicant a letter informing him that he was not accepting the recommendation that a new disciplinary hearing be held. He informed him further that he was upholding the initial recommendation that he should be dismissed. He then advised him that his letter marked “the end of the internal procedure, should you be dissatisfied, you are at liberty to seek assistance from the DDPR.” On the 20th September 2007 the applicant filed a referral with the DDPR challenging the fairness of his dismissal. On the date of hearing the representative of the 2nd respondent raised a preliminary point that the referral was time barred because six months had lapsed since the applicant was dismissed. He contended that in the absence of condonation the 1st respondent did not have jurisdiction to deal with the dispute. The representative of the applicant contended that the application was still on time if the time is counted from the 18th May when the outcome of the appeal was pronounced. The argument of the representative of the 2nd respondent was that the effective date of dismissal remained 22nd February 2007, as such as of 20th September when the referral was filed the six months had lapsed. He contended that in the absence of condonation the matter had prescribed as such the DDPR lacked jurisdiction. 6. At page 2 paragraph 6 of the award the learned arbitrator stated as follows: “The issue to determine is the date of the dismissal, whether the dismissal took place after the conclusion of the disciplinary enquiry or the outcome of the appeal. In the case of SACCAWU and Anor. .v. Edgars Stores Ltd (1997) 10 BLLR 1342, it was held that where an employer takes a decision to dismiss after a disciplinary hearing and then affords the employee an opportunity to appeal, whether in terms of the disciplinary code or not, the date 7. 8. of dismissal is the time the employee was initially dismissed, not the date that the appeal was rejected. I tend to agree with this view as enunciated in the above mentioned case. The fact that the employee lodges an appeal does not nullify the decision that was already taken.” On the strength of the above reasoning the learned arbitrator concluded that the applicant’s referral was filed out of time as such there ought to have been a condonation application accompanying the referral. He concluded further that in the absence of such an application he lacked the jurisdiction to deal with the referral. He accordingly dismissed it for lack of jurisdiction. The question that arises is whether having found that he lacked jurisdiction the learned arbitrator had the jurisdiction to dismiss the referral. It would appear not. In the case of Tumo Lehloenya & 61 Others .v. TELECOM LESOTHO LAC(CIV) No.4 of 2003 (unreported) the Honourable Peete J overturned the decision of this Court dismissing the application of the 62 applicants because it had been filed outside the six months prescribed by section 70 of the Code. The learned Judge concluded that the correct approach would have been for the court to “have declined to adjudicate in the matter until a formal application for condonation has been made.” (pp16-17 of the typed judgment). This principle ought to apply to this matter as it is in pari materia with the Lehloenya case. It follows that it was irregular for the learned arbitrator to have purported to dismiss the referral when no application for condonation had been made for his consideration. Having found that condonation was necessary he ought to have invited the applicant to make it so that he could exercise the discretion to accept or reject it. On this basis alone the award of the learned arbitrator falls to be reviewed, corrected and set aside. 9. There is however a further ground on which the learned arbitrator’s award falls to be reviewed and that is the learned arbitrator’s failure to apply his mind to the facts and the principles of the common law which makes his award to fail the 4 test of rationality. In paragraph 7 of his ward, the learned arbitrator correctly observed that under the common law appeal stays execution. Having said that he failed to connect that principle of stay of execution with its equivalent in cases of prescription and that is the principle of interruption or suspension of the running of the period of prescription. In the case of Volkskas BPK .v. The Master and Others 1975 (1) SA 69 at 73 D-E Margo J held that “under the common law the two chief causes of interruption of prescription are acknowledgments of liability by the debtor (recognitio) and the institution of legal proceedings against the debtor (interpellatio).” In casu the applicant did not just seat back and do nothing after his purported dismissal. He instituted legal proceedings by way of an internal appeal to challenge the dismissal. This is a proper case where prescription can be said to have been interrupted and the learned arbitrator said as much when he recognized that appeal stays execution. In the same manner it stays the running of prescription as it interrupts its operation. Clearly, therefore, the learned arbitrator’s award contradicted his own correct statement of the law and as such it is irrational. The learned arbitrator’s decision to dismiss the referral violated applicant’s right to present his claim. The decision was based on the principle in the Edgars Stores case which principle is not at all settled. Furthermore, the learned arbitrator failed to appreciate that the case of the applicant is distinguishable from the Edgars Stores case. The latter case was concerned with the proper forum to adjudicate the dispute of the parties during the transition period from the old Labour Relations Act of 1956 of the Republic of South Africa to the new Act of 1995. The brief facts of the Edgars Stores case are that members of the applicant union were dismissed on the 8th November 1996. The applicable law at the time was the 1956 Act, under which unfair labour practices were dealt with by the Industrial Court. The dismissed employees lodged an appeal which was finalized on the 13th December 1996. On the 11th November 10. 11. 12. 5 1996, the 1956 Act was repealed and replaced by the 1995 Act which established the CCMA. 13. On the 10th January 1997, the union referred the dispute arising out of the dismissal of its members to the CCMA which had come into being with the new Act. The employer objected to the CCMA’s jurisdiction to hear the dispute because the cause of action had arisen under the 1956 Act. The CCMA upheld the objection. On review, the Labour Court per Zondo AJ as he then was reversed the CCMA award holding that even if the dismissals occurred on the 8th November the dispute concerning the fairness or otherwise of the dismissal did not arise until the internal appeal procedure was finalized. (See SACCAWU .v. Edgars Stores Ltd & Anor. (1997) 18 ILJ 1064 at 1078 I. The learned Judge relied on the remarks of Silke J. in Durban City Council .v. Minister of Labour & Another 1953 (3) SA708 at 712 where he said the following: “I think it is unnecessary – and it certainly would be unwise – to attempt a comprehensive definition of the word dispute as used in sec. 35(1) of the Industrial Conciliation Act. But whatever other notions the word may comprehend, it seems to be that it must as a minimum, so to speak postulate the notion of the expression by parties, opposing each other in controversy, of conflicting views or counter claims.” 14. On this basis Zondo AJ concluded that the CCMA had the jurisdiction to deal with the dispute. However the Labour Appeal Court reversed that finding and concluded that it was the Industrial Court that had the jurisdiction to deal with the dispute. The Labour Appeal Court relied on a transitional provision which provided that: “In any pending dispute in respect of which the industrial court or the agricultural labour court had jurisdiction and in respect of which proceedings had not been instituted before the commencement of this Act, proceedings must be instituted in the industrial court or agricultural labour court (as the case may be) and dealt with as if the labour relations laws had not been repealed. The industrial court or the agricultural labour court may perform or exercise 6 any of the functions and powers that it had in terms of the labour relations laws when it determines the dispute.” The court concluded that since the employees were dismissed on the 8th November 1996, when the industrial court still existed their dispute ought to be referred to that court in terms of the transitional arrangements notwithstanding that their appeals were finalized after the repeal of the old law. 15. It is common cause that the Edgars Stores decision was upheld by majority in the case of SACCAWU & Anor. .v. Shakoane & Others (2000) 21 ILJ 1963 (LAC). The facts were similar. The 2nd appellant had been dismissed on 29th August 1996. She had lodged an appeal, the outcome of which she was notified of on the 4th April 1997. In her referral to the CCMA she alleged that the dispute arose on the 4th April, the date of the outcome of her appeal. The CCMA agreed with her and assumed jurisdiction over the dispute. On review the Labour Court reversed the commissioner’s award and held that the industrial court, not the CCMA had jurisdiction over the dispute. 16. The Labour Appeal Court upheld the decision of the Labour Court by majority. Nicholson AJ dissented and felt that the CCMA was right. At page 1982 B-C he stated as follows: “The requirement that domestic remedies be exhausted before a court of law is approached has been justified because it is unreasonable for a party to rush to court before his domestic remedies are exhausted; the domestic remedies are usually cheaper and more expeditious than the judicial remedies, and the fact that, until a final decision has been given against an applicant by a domestic tribunal, any irregularity complained of may still be put right and justice done.” 17. Further down the same page across to page 1983, the learned judge said the following: “The problem in my view with this court’s decision in the Edgars Stores case relates to the reasons that the rule requiring domestic remedies be exhausted. If a party were to rush off to court after the dismissal and before his appeal was dealt with, it would be not only expensive but 7 counter productive… It goes without saying that the domestic remedies are usually cheaper and more expeditious than the judicial remedies. If an aggrieved employee sought the aid of the industrial court in terms of section 43 for his interim reinstatement, that might also be a futile exercise as he might still be successful with his domestic appeal. In fact my own impression is that the employer would have rushed off to the court and blown the whistle on such proceedings on the basis that it was a waste of money and effort as the appeal might be successful. To argue otherwise would be to suggest that an appeal is a waste of time. The parties certainly did not think so when they spent considerable time and effort devising a fair appeal procedure. My experience reveals that appeals are successful on a number of occasions and are fully justified. To hold that a dispute does not arise until the appeal has been disposed of therefore is fully consonant with the above mentioned rule of administrative law, that until final decision has been given against an applicant by a domestic tribunal, any irregularity complained of may still be put right and justice done.” 18. In Information Trust Corporation .v. Gous & Others (2005) 26 ILJ 2351 the Labour Appeal Court was again faced with a claim of an employee who filed her claim outside the 30 days from date of her dismissal because she was awaiting the outcome of her internal appeal. The CCMA refused to condone her late referral because in the view of the commissioner: “the Labour Appeal Court in Edgars Stores Ltd .v. SACCAWU held that a dismissal dispute arose on the date when the original dismissal was communicated to the employee. This was again confirmed in SACCAWU .v. Shakoane. Thus the finalization of the appeal does not extend the date of dismissal….” The Labour Court reviewed, corrected and set aside the award of the commissioner but granted leave to appeal its conclusions to the Labour Appeal Court. 8 19. The Labour Appeal Court confirmed the finding of the Labour Court. In doing so the court drew a distinction between, the cases of Edgars Stores and Shakoane on the one hand and the one under consideration in that in the Edgars Stores and the Shakoane cases, the court was dealing with transitional provisions which were applicable in moving from the Labour Relations Act of 1956 to the new Labour Relations Act. The court went on to emphasize at page 2356 D of the judgment that: “not only logic but also fairness to both employers and employees requires that the merits of a dismissal of an employee must be viewed and determined in terms of the law applicable at the time when the decision was taken to dismiss him or her.” The learned Judge of Appeal went on to quote a passage from the judgment of Pillemer AJ in Fidelity Guards Holdings (Pty) Ltd .v. Epstein & Others (2000) 21 ILJ 2009 where the following was said: “It seems to me to be absurd that an applicant who pursues an internal appeal procedure would be precluded from utilizing the dispute resolution procedure provided in sec. 191 of the Act if the decision on his appeal is delivered more than 30 days after the date of dismissal because he believes he was dismissed on the day he is notified that he has lost his appeal. It is also ridiculous in my view for an applicant to have to proceed against his employer in the CCMA while an appeal is pending or the result thereof is awaited, when to do so may well sour the relationship and/or affect the result of the appeal. The absurd consequence may be a procedural requisite in cases such as the present one. condonation in such a case must inevitably be granted and furthermore, it is perfectly reasonable for the employee to believe that the date the dispute arose is the date he is told finally that his appeal against his dismissal has been refused.” (emphasis added). 20. Quite clearly the cases of Edgars Stores and that of Shakoane are distinguishable from the present case. While those cases dealt with transitional arrangements which had specific 21. 22. provisions governing them the present case deals with prescription. The dissenting views of Nicholson AJ which were confirming those of Zondo AJ when the Edgars case was before the Labour Court must prevail; because there is no way the dispute could arise before the parties themselves agreed that they were in disagreement. Evidence before the learned arbitrator was that the Managing Director himself was life to the fact that there was no dispute to refer to the DDPR before the internal disciplinary procedure was finalised. This is evidenced by the Managing Director’s remark in his letter to the applicant when he said “may I take this opportunity to convey to you that this marks the end of the internal procedures; should you still be dissatisfied, you are at liberty to seek assistance from the DDPR.” This letter formed part of evidence tendered at arbitration. The statement of the Managing Director confirms the view expressed by Nicholson AJ in his dissenting judgment when he said an employee who refers a dispute to court before internal appeal procedure is finalized may well be faced with an employer coming to court blowing the whistle on such proceedings on the basis that the appeal which may be successful is pending. From what the Managing Director said in his letter it is clear that the employer in this case would have done just that. In his referral the applicant said the dispute arose on the 22nd May 2007. That could be the date that the Managing Director’s letter reached him. However, in submission before the arbitrator his representative said the dispute arose on the 18th May being the date that the letter informing the applicant of the outcome of the appeal was written. The difference between the two dates is not significant for our purposes. What is important is that it was not unreasonable for the applicant to hold that view that the dispute arose after the date that he was finally informed that his appeal had failed. This was according to available evidence what both parties expected to be the case and indeed logic and the common law dictate so. Accordingly prescription cannot run while proceedings on the same matter in dispute are pending before a court or tribunal. 10 23. In the circumstances, the award of the learned arbitrator in dismissing applicant’s referral on the merits is neither rational nor justified either in law or in fact. This calls for this court’s interference with the award. The applicant was entitled to take the date that the dispute arose to be the date that he learned of the outcome of the appeal. Accordingly, the award in referral A772/07 is reviewed, corrected and it is set aside. The matter is remitted to the DDPR to be proceeded with on the merits. THUS DONE AT MASERU THIS 3RD DAY OF APRIL 2009 L. A. LETHOBANE PRESIDENT L. MATELA MEMBER D. TWALA MEMBER I CONCUR I CONCUR FOR APPLICANT: FOR RESPONDENT: ADVOCATE H. SEKONYELA ADVOCATE R. NTSIHLELE 10