GWAUNZA
DCJ:
[1] This
is an appeal against the decision of the Labour Court confirming the
draft ruling of the respondent, a labour officer. The ruling was in
favour of the appellant's former employee, Ms
Umarah Khan whose contract of employment was summarily terminated as
from 15 April 2015 on allegations of certain acts of misconduct,
including theft.
FACTUAL
CONSPECTUS
[2] The
decision to dismiss Ms Khan from employment was reached after it was
found that she had two earlier written warnings in relation to
similar offences. An amount of US$3,986-61 was paid as terminal
benefits through her bank account after Ms Khan refused to sign the
letter of termination.
[3] Aggrieved
by the decision to terminate her employment, Ms Khan filed a
complaint of unfair labour practice against the appellant in terms of
section 93 of the Labour Act [Chapter
28:01],
(“the Act”). The dispute was placed before the respondent for a
hearing. It was her case that no proper investigations were conducted
into the allegations levelled against her and further, that she was
not granted the right to be heard before she was summarily dismissed.
She thus claimed damages for unlawful dismissal totalling
US$23,253-34.
[4] Before
the labour officer, the parties did not agree on Ms Khan's monthly
salary, as the appellant alleged that it was US$750-00 while Ms Khan
argued that it was US$1,500-00. The respondent ruled in favour of Ms
Khan on this point and, having found that her dismissal from
employment was unfair, ordered the appellant to reinstate her without
loss of pay and benefits. Alternatively, the appellant was to pay Ms
Khan damages in
lieu
of reinstatement amounting to a total of US$9,000-00.
[5] Subsequently,
the labour officer applied to the Labour Court in terms of section
93(5a) of the Act for confirmation of her draft ruling. In the
application, she cited the appellant only as the respondent while Ms
Khan, in whose favour the draft ruling was made, was neither cited,
nor joined, as a party to the proceedings. The appellant opposed the
application but the court a
quo
after hearing oral argument from the appellant, granted an order
confirming the ruling.
PROCEEDINGS
BEFORE THIS COURT
[6] The
appellant was aggrieved by the decision of the court a
quo
and has appealed against it to this Court. It argues in the main that
the court a
quo
erred in simply confirming the respondent's award to Ms Khan of
US$9,000-00 as damages without fully addressing the principles of law
to be applied thereto. It further argued that the respondent made a
ruling in favour of Ms Khan despite the fact that she was charged
with disobedience of lawful orders, negligence or misuse of company
property and in addition, had failed to avail herself for the hearing
which led to her dismissal.
[7] The
respondent, that is the labour officer, did not file any heads of
argument nor did she appear before this Court on the date
of hearing. The court observed that the respondent, who was in effect
a nominal respondent, had no personal interest in the dispute nor any
outcome thereof. Ms Khan, was not cited in the appeal before this
Court. Accordingly, a default judgment in this case, whose effect
would be to set aside an award made in her favour would be manifestly
unjust, given that she would not have been notified of the hearing,
nor accorded the right to be heard before such an adverse order is
made against her.
SECTION
93(5a) – NEED FOR EMPLOYEE TO BE JOINED IN CONFIRMATION PROCEEDINGS
[8] Counsel
for the appellant rightly conceded that the Labour Court could have
properly ordered the joinder of Ms Khan to the confirmation
proceedings before it. This would have given her the right to defend
the application for confirmation of the award made in her favour,
both in the court a
quo
and in this Court. Accordingly, he further conceded that the matter
be remitted to the Labour Court for Ms Khan to be joined as a party.
The court saw merit in his request for written reasons for the
judgment, in order to clarify both the procedure and the law to be
applied, in the face of confusion as to the handling of this and
other cases brought to the Labour Court
in terms of section
93(5a) of the Act. The need was recognized for that court to follow a
procedure that would ensure that all parties who have a substantial
interest in the dispute at hand are accorded the right to argue their
respective cases before the determination is made as to whether to
confirm or not, a labour officer's draft ruling in terms of section
93(5b) of the Act.
[9] It
is noted that prior to the Labour Amendment Act No.5 of 2015, labour
disputes of right would go before a labour officer for conciliation,
and if conciliation failed and the parties did not reach a
settlement, the labour officer would refer the dispute to compulsory
arbitration, and both parties would be heard. Where an arbitral award
was made, the successful party would then file the award for
registration with a relevant court for purposes of enforcement. The
losing party on the other hand, had the right to appeal against the
award to the Labour Court.
The
legislature took the view that this procedure resulted in long delays
in the determination of the disputes in question, thus depriving
litigants of speedy justice. The enactment of section 93(5a) and (5b)
of the Labour Act was meant to address this mischief.
[10] Subsections
93(5a) and (5b) provide as follows:
“(5a) A
labour officer who makes a ruling and order in terms of ss (5)(c)
shall as soon as practicable -
(a)
make
an affidavit to that effect incorporating,
referring to or annexing thereto any evidence upon which he or she
makes the draft ruling and order; and
(b)
lodge,
on due notice to the employer or other person against
whom
the ruling and order is made (“the respondent”), an application
to the Labour Court, together with the affidavit and a claim for the
costs of the application (which shall not exceed such amount as may
be prescribed), for
an order directing the respondent
by a certain day (the “restitution day”) not being earlier than
thirty days from the date that the application is set down for
hearing (the “return day” of the application) to
do or pay what the labour officer ordered
under ss(5)(c)(ii) and to pay the costs of the application.
(5b)
If,
on the return day of the application, the respondent makes no
appearance
or, after a hearing, the Labour Court grants
the application for the order with or without amendment,
the labour officer concerned shall, if the respondent
does not comply fully or at all with the order by the restitution
day, submit the order for registration to
whichever court would have had jurisdiction to make such an order had
the matter been determined by it, and thereupon the order shall have
effect, for purposes of enforcement, of a civil judgment of the
appropriate court.” (my
emphasis)
[11] My
interpretation of the two provisions cited suggests the following
procedural steps;
(a) the
labour officer, after making a ruling in terms section 93(5)(c)(ii)
of the Act, makes an affidavit to that effect and attaches to it any
evidence on which such ruling is based.
(b) the
labour officer then gives notice to the employer
or any person against whom
such ruling and order is made (respondent), of the lodging by him, of
an application with the Labour Court for an order directing the
respondent to comply with the ruling within a period not less than 30
days from the date the matter is set down for hearing (restitution
day).
(c) the
labour officer then appears before the Labour Court on the date of
hearing, as the applicant, seeking an order confirming his or her
draft ruling.
(d) should
the respondent fail to make an appearance, the Labour Court will
nevertheless make a ruling confirming the order with or without an
amendment.
(e) on
the date of hearing, (and presumably with the respondent in
attendance) the Labour Court may also conduct a hearing and grant
(confirm) the order sought with or without amendment.
(f)
thereafter, should the respondent fail to comply with the order of
the Labour Court within 30 days of the hearing date, the labour
officer will submit to the relevant court, such order, (obtained in
default of appearance by the respondent, or after a hearing by the
Labour Court), for registration.
(g) upon
submission of the order to the relevant court for registration, it
shall have the same effect for purposes of enforcement, as any civil
judgment of that court.
[12] It
is to be noted from the above, that only if the labour officer rules
against the employer or any person will he or she be required to take
the steps outlined in sections (5a) and (5b). In other words, the
provisions do not confer on the Labour Court the jurisdiction to
confirm a draft ruling made against an employee.
That this is the case is left in no doubt by the wording of section
93(5)(c)(ii) which specifically provides for a ruling like the one in
casu
in circumstances where the labour officer finds that the dispute of
right in question 'must
be resolved against any employer or other person in a specific
manner…'
[13] Without
a clear pronouncement to that effect, there can in my view be no
doubt that reference to 'any person' in this provision, is not
to be read as including the employee in the same dispute. I am
satisfied that the import of the provision is to exclude the
confirmation and registration of a draft ruling by the labour
officer, which is made in favour of an employer and against an
aggrieved employee. It follows that the Labour Court has no
jurisdiction to entertain such a matter and should on that basis
properly decline to hear it.
[14] It
is noted further that the wording of sub-section (5b), albeit
not specifically stating so, excludes the employee concerned from the
confirmation proceedings. This is an employee who would have been an
active party in, as well as the instigator of, the proceedings that
resulted in the draft ruling of the labour officer. This is also the
same employee who, having won a draft award, may quite possibly have
it set aside by the Labour Court without reference to him or her. In
other words, this would happen without the employee being afforded an
opportunity to be heard or adduce evidence in defence of the award in
question.
[15] It
is beyond dispute that such an employee has a direct and substantial
interest in the confirmation proceedings before the Labour Court. He
or she has the right to be heard in proceedings that may
fundamentally affect their interests. Even if the nature of the
hearing mentioned in subsection (5b) is not clear,
one may safely assume that like in any hearing, all interested
parties must be afforded the opportunity to be heard, unless they
choose not to be heard. Only then would the Labour Court be in a
position to fully determine the matter and render a judgment that
meets the justice of the case.
[16] The
employee on these grounds can in my view properly apply to be joined
to the confirmation proceedings in terms of Rule 33(2) of the Labour
Court Rules, SI 150/17. The joinder of a party mero
motu
by the court is not expressly provided for in Rule 33, however. I am
nevertheless satisfied that this shortcoming is not to be interpreted
as ousting the jurisdiction of the Labour Court in a deserving case,
to order mero
motu
the joinder of an employee who stands to be affected one way or the
other, by the outcome of the confirmation proceedings. Such an order
would ensure full compliance with the common law rule, audi
alteren partem.
[17] The
importance of joining an interested party to the proceedings in a
court is authoritatively articulated in a number of authorities.
Cilliers
AC, Loots C and Nel HC Herbstein and van Winsen, The
Civil Practice of the High Courts and the Supreme Court of Appeal of
South Africa
(5th
edn, Juta & Co Ltd, Cape Town, 2009) vol. 1 at page 215 explain
non-joinder by stating as follows:
“A
third party who has, or may have a direct and substantial interest in
any order the court might make in proceedings or if such an order
cannot be sustained or carried into effect without prejudicing that
party, is a necessary party and should be joined in the proceedings,
unless the court is satisfied that such a person has waived the right
to be joined.… in fact, when such person is a necessary party in
the sense that the court will not deal with the issues without a
joinder being effected, and no question of discretion or convenience
arises.” (my
emphasis)
The
meaning of direct and substantial interest is explained at page 217
to 218 as follows:
“A
'direct and substantial interest' has been held to be 'an
interest in the right which is the subject-matter of the litigation
and not merely a financial interest which is only an indirect
interest in such litigation'. It is 'a legal interest in the
subject matter of the litigation, excluding an indirect commercial
interest only'. The possibility of such an interest is sufficient,
and it is not necessary for the court to determine that it in fact
exists. For joinder to be essential, the parties to be joined must
have a direct and substantial interest not only in the subject-matter
of the litigation but also
in the outcome of it.”
(my
emphasis)
[18] It
hardly needs emphasis that, albeit
not applicable in
casu,
an outcome in the confirmation proceedings that has the effect of
reversing an award made by a labour officer in favour of an employee
would clearly prejudice him or her. The potential of a prejudicial
outcome therefore in my view, confers requisite interest upon the
employee, to merit his or her joinder to the proceedings. The
employee in any case would still have a legal interest in the outcome
even where the ruling of the labour officer is confirmed, with or
without amendment. The employee would therefore be perfectly within
his or her rights to seek a joinder to the confirmation proceedings.
The Labour Court can and should properly grant such an application,
or where it is not made, order mero
motu
that the employee be joined to the proceedings, so as to be afforded
an opportunity to make submissions in response to those of the
respondent.
[19] That
the court has the authority to proceed thus is justified on the need
to safeguard the interest of third parties in any matter before it as
the passage below illustrates;
“In
cases of joinder of necessity, if the parties do not raise the issue
of non-joinder, the court should raise it mero
motu
to safeguard the interest of third parties and it should decline to
hear the matter until such joinder has been effected, or until the
court is satisfied that the third parties have consented to be bound
by the judgment or have waived their right to be joined.”
When
this is related to the circumstances of this case, it cannot in my
view be contested that the joinder of the employee, Ms Khan, was
necessary.
[20] While
it is noted in
casu
that the Labour Court found in favour of the employee and therefore
confirmed the draft ruling, the fact cannot be ignored that the court
effectively heard evidence from one side of the dispute and not the
other, before making its determination. As the judgment indicates,
the court heard oral submissions from the respondent in its
opposition to the confirmation of the draft ruling. It then
essentially weighed the respondent's submissions against what was
contained in the affidavit of the labour officer,
and made its determination. The procedure would have worked
substantial injustice upon the employee if the Labour Court had
declined to confirm the draft order, or confirmed it with an
amendment, for instance, reducing the quantum
of the award. Nor, however could the same procedure be said to have
been fair on the respondent, who could be forgiven for thinking that
the employee had been accorded the unfair advantage of having her
case 'argued' for her by the labour officer.
[21] There
are further compelling grounds justifying the joinder of the employee
to the confirmation proceedings. Firstly, by allowing the respondent
to be served with the notice of hearing of the confirmation
proceedings, subsection (5b) affords the employer an opportunity to
oppose the confirmation of the ruling in question. Such opposition
may logically be supported by some evidence or arguments that the
employee concerned would not be present to counter. It is evident
from subsection (5b) that before the Labour Court, all that the
labour officer is required to do is confirm that the application
before the court was submitted by him in his role as, effectively, a
nominal applicant. He is in reality not a party to the proceedings
since he would have no personal interest in the outcome, whatever its
effect. He cannot therefore be expected to defend his ruling in the
face of any submissions made by the respondent in opposing its
confirmation. Defending the labour officer's ruling should properly
be the province of the person directly affected by it, that is, the
employee concerned. In my view, the Labour Court's confirmation or
non-confirmation of the ruling after effectively hearing one side of
the dispute is at best an irregularity and at worst a travesty of
justice.
[22] Secondly,
the procedure presupposes that a ruling made by the labour officer in
favour of an employee will meet that employee's satisfaction. It
shuts the door for instance on an employee who
is
awarded damages that fall substantially short of what he or she had
claimed, who might wish to seek an upward variation of that quantum,
in confirmation proceedings before the Labour Court. A joinder to the
proceedings would accord the employee the opportunity to, as it were
'cross oppose' the confirmation proceedings in the desired
respect.
[23] Thirdly,
in the case where the draft ruling of the labour officer is not
confirmed by the Labour Court for one reason or the other, the
employee might wish to take up the matter on appeal. He would
however, be hamstrung by the fact that he was not a party to the
confirmation proceedings. Further, the employee cannot expect the
labour officer to appeal against the non-confirmation of the order,
on his or her behalf.
[24] Fourthly,
the confirmation proceedings trigger or may trigger a number of
undesirable procedural consequences. One such consequence is brought
into sharp focus where the employer, being disgruntled at the
confirmation of the draft ruling, takes that decision on appeal to
this Court, citing only the Labour Officer as the respondent. This is
what happened in
casu.
All too often this type of appeal has been set down without any input
from the employee or employees concerned, since they were not cited
in the confirmation proceedings. They may therefore not even be aware
that the matter proceeded to the Supreme Court on appeal. Equally
often, the respondent cited in the appeal, that is the labour
officer, makes no appearance on the date of hearing, nor does he file
any heads of argument. Although vexing, this situation does not come
as a surprise to the court, since there is no legal basis set for the
labour officer's appearance.
[25] Ordinarily
where a party who was properly served fails to appear on the date of
hearing, the party present may move for a default judgment against
the defaulting party. The point has already been made that the
entering of a default judgment where a labour officer fails to attend
court would result in one setting aside of the award made in favour
of an employee without such employee's knowledge. The injustice of
such an outcome needs no emphasis.
[26] Finally,
the appearance of the labour officer as the respondent in a few
appeals in this Court, and in the absence of the employee concerned,
has also presented procedural problems. In such cases the question of
the labour officer's competence to so appear has arisen. In
particular, the question is asked as to whose interests he would be
representing in the appeal, and on what legal basis? It hardly needs
mentioning that these questions would not arise if the employee
concerned is joined to the confirmation proceedings before the Labour
Court. He or she would then be in a position to file papers and
attend court on the date the appeal is heard.
[27] Other
aspects of the procedure suggested by subsections (5a) and (5b) of
section 93 of the Act merit some comment. Subsection (5b) makes it
clear that the role of the labour officer ends with the submission,
by him, of the confirmation order of the Labour Court to a relevant
court for registration. The provision is premised on another
assumption, which is that the employer will accept as final, the
order of the Labour Court pursuant to the confirmation proceedings.
That this assumption is misplaced is borne out by the frequent
appeals brought to this Court by employers disgruntled at the Labour
Court's confirmation of the labour officer's ruling.
[28] Further,
while subsection (5b) clarifies that registration of the confirmation
order with a relevant court is meant to facilitate its enforcement,
it is silent as to who would drive the process, in particular, who
would take out the requisite warrant of execution. Without being
cited as a party, there would be confusion as to whether the
'claimant' that is the employee would have the authority to do
it. On the other hand, the labour officer, not being a substantive
party to the confirmation proceedings, would lack the requisite locus
standi,
and more so because subsection (5b) does not mandate him to do so.
The danger of the Labour Court's order being rendered a brutum
fulmen
becomes
real.
[29] In
conclusion, while one might argue in view of the absurdities
chronicled above, that not enough thought was put into the
formulation and practical import of these two provisions, I take the
view that the absurdities could not have been consciously intended by
the legislature. The simple cure for such absurdity, as has already
been stressed, is to join the employee concerned to the proceedings
before the Labour Court.
The
legislature might well wish to consider addressing this and the other
concerns set out in this judgment.
DISPOSITION
[30] When
all is said and done and in view of the foregoing, it is my finding
that there was a fatal non-joinder of the employee, Ms Khan, to the
proceedings a
quo.
Such proceedings can therefore not be allowed to stand.
In
the result, the following order is made:
1.
The appeal be and is hereby allowed.
2.
The proceedings and judgment of the court a
quo
be and are hereby quashed.
3.
The matter is remitted to the Labour Court for a rehearing after the
employee, Ms Khan, has been joined to the proceedings.
4.
Each party shall bear its own costs.
MAKARAU
JA: I
agree
MAKONI
JA: I
agree
Vasco
Shamu and Associates,
appellant's legal practitioners
1.
This paragraph provides in the relevant part that a labour officer,
after issuing a certificate of no settlement, may order that the
employer pays damages to the employee or that he ceases or rectifies
any alleged unfair labour practice that is a dispute of rights
2.
Such
employee would, it seems, have to pursue other avenues to appeal
against the draft ruling
3.
The hearing is certainly not an appeal against nor a review of, the
Labour Officer's ruling. This is because the procedure that is set
out in sub-sections (5a) and (5b) is not capable of accommodating an
appeal or review process in relation to the labour officer's ruling
4.
See Herbstein and van Winsen's 'The Civil Practice of the High
Courts and the Supreme Court of Appeal of South Africa' (supra)
at pages 208 to 209
5.
Before the court
a quo
the
labour officer briefly repeated the facts of the dispute and the
details of the award she had made
