Arries v CCMA & others (2006) 27 ILJ 2324 (LC)

Principle:

In challenging a refusal to promote, an employee can only succeed in having the employer's discretion interfered with if it is demonstrated that the discretion was exercised capriciously, or for insubstantial reasons, or based upon a wrong principle or in a biased manner.

Facts:

An employee referred a dispute to the CCMA relating to the company's failure to promote her to the position of assistant general manager at the Beacon Island Time Share Resort. From the evidence before the CCMA it was clear that the employee had on numerous occasions applied for various managerial positions at the company's hotels in the Western Cape. She had never been successful and had lodged a grievance. The grievance was taken to the highest level, where the company's human resources director ruled that the employee had not been victimized, as she alleged, but that she was simply not a suitable candidate for the position of an assistant general manager without further training and experience. The failure to resolve her grievance led to the employee referring a dispute to the CCMA. The company did not oppose, and the commissioner concluded that no unfair labour practice had been committed by the company.

On review the court first considered the courts' approach to interference with a discretion, exercised by a party competent to exercise that discretion. It confirmed that there are limited grounds on which an arbitrator, or court, may interfere with the exercise of such a discretion. Applying this to the employment field, the court was of the view that an employee can only succeed in having the exercise of a discretion of an employer interfered with if it is demonstrated that the discretion was exercised capriciously, or for insubstantial reasons, or based upon a wrong principle or in a biased manner.

The court rejected the employee's argument that, as she had at least made out a prima facie case that she was qualified to be appointed as an assistant general manager, in the absence of rebutting evidence from the company, she had established a basis for an inference by the commissioner that the company's failure or refusal to promote her was unfair. The court found that the approach which the commissioner had taken was in effect to determine whether the company had exercised its managerial prerogative (its discretion) on the basis of some unacceptable, irrelevant or invidious comparison. This approach could not be faulted.

The court was satisfied that the commissioner, firstly, correctly analysed the legal principles applicable to a matter when asked to interfere with the exercise of a discretion by an employer and, secondly, did not commit any irregularity whatsoever in considering the reasons of the company contained in the documents for not promoting the employee. In assessing whether the commissioner's award was not rationally justifiable in relation to the reasons given for it, the court found that the award was sustainable both by the facts and the applicable law.

The court accordingly dismissed the application with costs.

Extract from the judgment:

[17]   Taking this proposition further, and applying what our courts have said in this regard to the employment field, I am of the view that an employee can only succeed in having the exercise of a discretion of an employer interfered with if it is demonstrated that the discretion was exercised capriciously, or for insubstantial reasons, or based upon any wrong principle or in a biased manner (see Rex v Zackey 1945 AD 505 at 513; Madnitsky v Rosenberg 1949 (2) SA 392 (A) at 398; Ex parte Neethling & others 1951 (4) SA 331 (A) at 335D; Benson v SA Mutual Life Assurance Society 1986 (1) SA 776 (A) at 781J and 783C; Shepstone H & Wylie & other v Geyser NO 1998 (3) SA 1036 (SCA) at 1045A).

[18]   This approach, I believe, is consistent with the test applied by judges sitting in the Labour Court and commissioners of the CCMA when considering the principles applicable to interference with an employer's decision in relation to the promotion or non-promotion of employees.

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[29]   I am of the view that the approach which the commissioner was compelled to take was in effect to determine whether the employer exercised its managerial prerogative (its discretion), to use the commissioner's words 'on the basis of some unacceptable, irrelevant or invidious comparison'. The commissioner's approach on this aspect cannot in my opinion be faulted.

[30]   This self-same proposition could be stated along the lines that the commissioner was called on to determine whether the employer had exercised its discretion (managerial prerogative) capriciously, or frivolously or pursuant to a failure to apply its mind thereto, or for insubstantial reasons, or based on any wrong principle or in a biased manner.