American Products Services (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR2507/15) [2020] ZALCJHB 113; [2021] 1 BLLR 64 (LC) (15 July 2020)
Where suspension is a holding measure pending a disciplinary hearing, suspension without pay is a material breach of contract. The Constitutional Court's observation in Long v SA Breweries (Pty) Ltd [2019] 6 BLLR 515 (CC) that a hearing is generally not required before a precautionary suspension did not apply because in this case the employee was suspended without pay.
Facts:
An employee, a driver, was involved in a vehicle accident that resulted in damage to the employer's property. The next day, the employer suspended the employee pending an investigation into the accident. The suspension was without pay.
The employer instructed the employee to produce an eye test report. The employer said that it had grounds to do so as the employee had previously mentioned that he had suffered from TB. The employer alleged that "TB can cause disease in many organs, including the eyes, causing eyesight defects". The employer further attempted to justify this instruction by referencing the National Road Traffic Act, which provides for instances whereby an individual can be disqualified from obtaining or holding a driving license, with defective vision being one such disqualifying factor.
The employee failed to produce an eye test report by the stipulated date. The employer alleged that he had unsuccessfully attempted on numerous occasions to contact the employee. They had also sent another driver to contact the employee at his registered place of residence, however this too was unsuccessful.
The employee referred the dispute over his suspension to arbitration at the CCMA, which found that the suspension was substantively and procedurally unfair and ordered the employer to pay an amount equivalent to six months' compensation, less any tax deductible.
On review, the Labour Court upheld the CCMA's award. On the issue of a pre-suspension hearing the LC distinguished the facts of the case from those in Long v SA Breweries (Pty) Ltd and others where the Constitutional Court held that a hearing is generally not required before a precautionary suspension. The LC held that this principle did not apply because in this case the employee was suspended without pay.
Extract from the judgment:
Leppan, AJ :
(note - unnumbered paragraphs under 'legal framework' in the judgment)
Section 186(2)(b) of the LRA provides that that "unfair labour practice" means any unfair act or omission that arises between an employer and an employee involving:
"the unfair suspension of an employee or any other unfair disciplinary action short of dismissal in respect of an employee".As noted by Grogan in Workplace Law, while the wording of section 145 of the LRA appears to refer to suspensions only when imposed as a disciplinary sanction, it is now settled that both precautionary and punitive suspensions fall within the terms of section 186(2)(b) of the LRA. The dicta of Murphy AJA in Member of the Executive Council for Education, North West Provincial Government v Gradwell is an appropriate starting point, where the learned judge stated that:
"Ultimately, procedural fairness depends in each case upon the weighing and balancing of a range of factors including the nature of the decision, the rights, interests and expectations affected by it, the circumstances in which it is made, and the consequences resulting from it. When dealing with a holding operation suspension, as opposed to a suspension as a disciplinary sanction, the right to a hearing, or more accurately the standard of procedural fairness, may legitimately be attenuated, for three principal reasons. Firstly, as in the present case, precautionary suspensions tend to be on full pay with the consequence that the prejudice flowing from the action is significantly contained and minimized. Secondly, the period of suspension often will be (or at least should be) for a limited duration ... And, thirdly, the purpose of the suspension - the protection of the integrity of the investigation into the alleged misconduct - risks being undermined by a requirement of an in-depth preliminary investigation".Further to this, the principles for a fair 'preventive' suspension were outlined in Mogothle v Premier of the Northwest Province as follows:
"[T]he application of the contractual principle of fair dealing between employer and employee . . . requires first that the employer has a justifiable reason to believe, prima facie at least, that the employee has engaged in serious misconduct; secondly, that there is some objectively justifiable reason to deny the employee access to the workplace based on the integrity of any pending investigation into the alleged misconduct or some other relevant factor that would place the investigation or the interests of affected parties in jeopardy; and thirdly, that the employee is given the opportunity to state a case before the employer makes any final decision to suspend the employee".This notion was embellished by the Court in Harley v Bacarac Trading 39 (Pty) Ltd where the unlawfulness of a "holding operation" suspension was linked to a breach of material terms of a contract of employment:
"Suspension without pay and the fairness thereof, are self-evidently linked to the payment of remuneration, especially where, as is the case here, an employee is suspended without pay. Where suspension is effected as a measure pending a disciplinary hearing, as is the case here, suspension without pay is a material breach of contract. In the absence of any apparent apprehension that the applicant's continued presence in the workplace prejudiced a legitimate business interest and in view of the demonstrated psychological and financial prejudice to the applicant, the applicant's suspension was also unfair".It is within this regulatory framework that this Court is mandated to assess the reasonableness of the Second Respondent's award, taking into consideration the various allegations of the Applicant.
Analysis
Returning to the Labour Appeal Court decision in Fidelity Cash Management Service v Commission for Conciliation, Mediation and Arbitration and others Zondo JP outlined the delicate balance that this Court must strike when asked to review awards of the First Respondent:
"The test enunciated by the Constitutional Court in Sidumo for determining whether a decision or arbitration award of a CCMA commissioner is reasonable is a stringent test that will ensure that such awards are not lightly interfered with. It will ensure that, more than before, and in line with the objectives of the Act and particularly the primary objective of the effective resolution of disputes, awards of the CCMA will be final and binding as long as it cannot be said that such a decision or award is one that a reasonable decision maker could not have made in the circumstances of the case. It will not be often that an arbitration award is found to be one which a reasonable decision maker could not have made but I also do not think that it will be rare that an arbitration award of the CCMA is found to be one that a reasonable decision maker could not, in all the circumstances, have reached".The Court must return to the Applicant's submissions in motivation for this review application...
The Applicant's assertion that the Second Respondent failed to apply his mind to the facts in so far as he failed to have regard to material facts and took into account irrelevant considerations fails to appreciate the true nature of the dispute that was before the Second Respondent. While it may be the case that no disciplinary action would commence had the Third Respondent submitted the eye test report, this is irrelevant to the finding that the suspension without pay was unlawful. The Second Respondent correctly found that this suspension was a "holding operation" and not a disciplinary sanction in and of itself. The Applicant admits as much by confirming that had the eye test report been submitted, there would have been no subsequent disciplinary action taken against the third respondent...
As held by the Constitutional Court in Long v South African Breweries (Pty) Ltd, it is settled that "where the suspension is precautionary and not punitive, there is no requirement to afford the employee an opportunity to make representations". With this said, I am not of the opinion that this creates a blanket exemption from affording employees with an opportunity to make representations. The Court in Long however went on to assess that based on the facts before it:
"The finding that the suspension was for a fair reason, namely for an investigation to take place, cannot be faulted. Generally, where the suspension is on full pay, cognisable prejudice will be ameliorated. The Labour Court's finding that the suspension was precautionary and did not materially prejudice the applicant, even if there was no opportunity for pre-suspension representations, is sound".The facts before this Court are distinguishable. The prejudice caused to the Third Respondent by Applicant have rather been exacerbated by the Applicant's decision to suspend him without pay. There is nothing to motivate the failure to provide the Third Respondent with an opportunity to make representations regarding his suspension. I am of the firm view that given the punitive nature of the suspension, a hearing ought to have been conducted prior to the action being taken. This would not have been the case were the suspension to have been with pay.
Conclusion
This matter finds its genesis in late 2015. It is a matter of great importance for the Third Respondent and is one that requires an outcome.
On an analysis of the pleadings and record before me, the decision of the Second Respondent was one that a reasonable decision-maker could reach. The Applicant has failed to satisfy the standard of review and has furthermore failed to address the central point of application, namely that the Third Respondent's suspension without pay was both substantively and procedurally unfair, and therefore the review application falls to be dismissed...
In the premises the following order is made:
Order
- The review application is dismissed with costs.