Hospersa obo Tshambi v Department of Health, KwaZulu-Natal (DA1/2015) [2016] ZALAC 10 (24 March 2016)

Principle:

  1. An arbitrator is required to determine the true dispute between the parties. To that end, it is necessary to establish the relevant facts and construe the category of dispute correctly. An arbitrator must make an objective finding about what is the dispute to be determined.
  2. The determination of what constitutes a reasonable time within which to refer a dispute when no fixed period is prescribed for that category of dispute (such as a section 24 dispute) is a fact-specific enquiry.
Facts:

Some time after appointing an employee, the employer learnt that an employee had falsified his academic credentials. An enquiry was held and he was dismissed on 21 October 2010. However, prior to his dismissal, he had been suspended on 7 January 2010. Thus he was on suspension for nine and a half months. During this period, he was not paid his salary. The employee did nothing to challenge the employer about non-payment during this period.

He eventually referred a dispute for conciliation to the bargaining council concerning his suspension without pay, 692 days after his dismissal. When the matter was placed before the arbitrator, the question of the long delay arose. The employer argued that the referral, which was really an unfair labour practice dispute about an alleged unfair suspension, ought to have been made within 90 days in terms of s 191(1)(b)(ii) of the LRA. As the referral was late, and as no condonation was sought of that non-compliance, the matter should not be heard.

The employee countered by arguing that the referral of the dispute was not late because what had been referred was a dispute about an interpretation of a collective agreement in terms of s 24 (2) of the LRA, as the applicable collective agreement required a precautionary suspension to be on full pay (unlike unfair labour practice and unfair dismissal disputes, s24 does not prescribe any fixed period for a referral, which only has to be referred within a reasonable time). The employee in the referral form to the bargaining council had described the issue in dispute as "interpretation and or application 24(2) and 24(5). The applicant was placed on precautionary suspension without (pay) remuneration".

The arbitrator did not interrogate whether the employee's characterisation of his dispute under s24 was objectively correct. The arbitrator merely accepted the employee's characterisation of the dispute at face value and entertained the dispute on the basis that it had not yet prescribed according to the time limits in the Prescription Act.

On review, the Labour Court set the arbitrator's ruling aside. The Labour Court reasoned that the dispute was not a s 24 dispute, but was really a dispute about an unfair labour practice concerning an unfair suspension as contemplated by s 186(2)(b) of the LRA. By implication the referral was late and in the absence of a condonation application, the matter ought not to be entertained.

On appeal, the LAC held that the invocation of s 24 by the employee and the bland acceptance of that characterisation by the arbitrator were plainly wrong. It agreed with the Labour Court's criticism of the Union's attempt to bring the dispute under s 24 to circumvent the obviously late referral of an unfair labour practice dispute.

The LAC confirmed that an arbitrator is required to determine the true dispute between the parties. To that end, it is necessary to establish the relevant facts and construe the category of dispute correctly. An arbitrator must make an objective finding about what is the dispute to be determined. The LAC also confirmed that the determination of what constitutes a reasonable time within which to refer a dispute when no fixed period is prescribed for that category of dispute, such as a section 24 dispute, is a fact-specific enquiry.

Extract from the judgment:

Sutherland JA

[11]   A reading of the ruling evidences that the arbitrator did not interrogate whether the appellant's characterisation of his dispute was, objectively, correct. Rather, after correctly disposing of the distracting irrelevancies advanced by the respondent, the arbitrator took the appellant's characterisation at face value.........................

[14]   On review, the Labour Court, set the ruling aside. The Labour Court reasoned that the dispute was not a section 24 dispute, but was indeed a dispute about an unfair labour practice concerning an unfair suspension as contemplated by section 186(2)(b) of the LRA. By implication the referral was late and in the absence of a condonation application, the matter ought not to be entertained.

[15]   In my view, the invocation of section 24 by the appellant and the bland acceptance of that characterisation by the arbitrator were plainly wrong. The Labour Court criticised the attempt to invoke section 24 as a contrivance to circumvent the obviously late referral of an unfair labour practice dispute. I agree that such an inference can be properly made.

[16]   An arbitrator is required to determine the true dispute between the parties. To that end, it is necessary to establish the relevant facts and construe the category of dispute correctly. An arbitrator must make an objective finding about what is the dispute to be determined. This Court in Wardlaw v Supreme Mouldings (Pty) Ltd (Wardlaw),addressed directly the question of whether the employees characterisation of a dispute should enjoy deference and rejected that approach. Distinguishing the formalistic school of thought from that of the substantive school of thought, this Court held that the latter should prevail. As a result, in Wardlaw, an arbitrator was held to have incorrectly assumed jurisdiction over a dispute that was about an automatically unfair dismissal, a category of dispute reserved for adjudication by the Labour Court. The Constitutional Court disposed of this issue in CUSA v Tao Ying Industries and Others

'A commissioner must, as the LRA requires, 'deal with the substantial merits of the dispute'. This can only be done by ascertaining the real dispute between the parties. In deciding what the real dispute between the parties is, a commissioner is not necessarily bound by what the legal representatives say the dispute is. The labels that parties attach to a dispute cannot change its underlying nature. A commissioner is required to take all the facts into consideration including the description of the nature of the dispute, the outcome requested by the union and the evidence presented during the arbitration. What must be borne in mind is that there is no provision for pleadings in the arbitration process which helps to define disputes in civil litigation. Indeed, the material that a commissioner will have prior to a hearing will consist of standard forms which record the nature of the dispute and the desired outcome. The informal nature of the arbitration process permits a commissioner to determine what the real dispute between the parties is on a consideration of all the facts. The dispute between the parties may only emerge once all the evidence is in.'

That approach has been reaffirmed by this Court in NUMSA (Sinuko) v Powertech Transformers (DPM) and Others(2014) 35 ILJ 954 (LAC) at [16] - [21] per Coppin JA.

[17]   What is a "dispute" per se, and how one is to recognise it, demands scrutiny. Logically, a dispute requires, at minimum, a difference of opinion about a question. A dispute about the interpretation of a collective agreement requires, at minimum, a difference of opinion about what a provision of the agreement means. A dispute about the application of a collective agreement requires, at minimum, a difference of opinion about whether it can be invoked. What is signally absent from the record is any clue that the respondent disputes that the collective agreement provides that an employee on suspension is entitled to full pay. Indeed, on the basis of the allusions in the ruling, that fact seems to be common cause. Similarly, there is no clue that the respondent disputes that the collective agreement binds itself and the appellant. What then, can possibly be the dispute about the application of the collective agreement?

...............................

[27]   Martin Brassey, in Employment and Labour Law, Vol III,Commentary on the Labour Relations Act, A3-46, expresses the opinion that a general rule exists that section 24 "...is inapplicable to disputes for which remedial processes are especially created in the statute". The proposition is based on the decision in G A Winders (East Cape) CC and Another v Director, CCMA (2000) 21 ILJ 323 (LAC)in which, this Court dealt with an award purporting to have been made pursuant to section 24 enforcing the provisions of a collective agreement upon an employer who had claimed not to be bound. Upon a proper characterisation of the dispute, it was held that the controversy was a demarcation dispute and should have been dealt with in terms of section 62. The point can be made, in my view, that the LRA creates several "special remedial processes" to address different kinds of disputes, assigning some to particular fora, and others to be dealt with in accordance with particular procedures; one of which is a class of unfair labour practices as contemplated in section 186(2).............................

[30]   There is accordingly no need nor any justification to understand section 24 in a sense so broad that any alleged breach of a term of a collective agreement means the dispute automatically falls within section 24. In the result, the arbitrator misdirected himself by not determining objectively the true dispute and had he done so he would have found that the true dispute was one contemplated by section 186(2)(b) of the LRA, and, in consequence, startlingly out of time, requiring an application for condonation.

[31]   Accordingly, it must follow that the order of the Labour Court, setting the award aside and finding that the dispute is an unfair suspension dispute, should be upheld...

Order

[33]   The order of the court is as follows:

33.1.   The appeal is dismissed.