MATHONSI
JA: This
is an appeal against the judgment of the Labour Court (the court a
quo)
handed down on 21 October 2016 which allowed an appeal by the
respondent against an arbitral award issued by an arbitrator on 13
October 2015.
The
court a
quo
set aside the arbitral award and remitted the matter to an arbitrator
of the parties choice or one selected by the registrar for a hearing
to determine the appropriate penalty to be imposed on the appellant.
FACTUAL
BACKGROUND
The
case itself has a chequered history being a labour dispute that has
gone backwards and forwards as the parties bickered over either the
procedure adopted or the choice of arbiter.
The
appellant was employed by the respondent as its Managing Director.
He was suspended from employment in April 2010 on allegations of
gross incompetence and gross inefficiency under section 4(f) and (h)
of the National Employment Code of Conduct, S.I. 15 of 2006 (the
National Code of Conduct).
Five
counts of misconduct were preferred against the appellant.
(i)
Firstly, it was alleged that he had submitted a report to the Board
of Directors of a net loss of US$56,930 for the year ending on 31
December 2009 when the real net loss as uncovered by external
auditors was US$657,365.
(ii)
Secondly, it was alleged that the appellant failed to fully account
for R700,000 which had been transferred from Mavambo Coaches.
(iii)
Thirdly, it was alleged that the appellant paid himself a US$2,000
long service award in January 2010 without Management and Board
approval.
(iv)
Fourthly, he was accused of authorising staff loans amounting to
US$23,549 in December 2009 and January 2010 when the company was in
financial dire straits.
(v)
Fifthly, the appellant was accused of paying management incentives
amounting to US$21,800 in December 2009 against a loss which
militated against payment of incentives.
An
internal disciplinary hearing was conducted which found the appellant
guilty and recommended his dismissal from employment.
The
appellant challenged the propriety of those proceedings through a
review application brought before the court a
quo.
That
contested review application yielded a consent order granted by the
court a
quo
on 28 October 2010 in the following terms:
“IT
IS HEREBY ORDERED THAT:
1.
The disciplinary hearing held against the applicant be and is hereby
set aside to allow a de
novo
hearing and the suspension letter dated 13 April 2010 remains in
force.
2.
The arbitration proceedings before Arbitrator M. Dangwa be and is
(sic) hereby withdrawn.
3.
A fresh disciplinary hearing shall be held before Mr J. T. Mawire as
the hearing officer and the parties shall share the costs of the
hearing officer equally.
4.
The issue of whether the applicant should be paid between the period
of April to October 2010 is reserved for ruling by the court after
receiving submissions from the parties legal practitioners before
close of business on 29 October 2010.”
I
note in passing that J. T. Mawire was appointed as a “hearing
officer” by consent of the parties. The earlier disciplinary
proceedings were abandoned in favour of a hearing de
novo
before a different hearing officer, J. T. Mawire, who was appointed
“to hear and determine the matter in terms of the code.”
Indeed,
hearing officer Mawire heard the matter, took evidence from both
parties and received written closing submissions.
In
his determination dated 22 February 2012, Mawire found the appellant
not guilty of misconduct. He ordered that he be reinstated without
loss of salary and benefits from the date of suspension.
The
respondent was aggrieved.
Initially
it made frantic efforts to appeal internally against the
determination by the hearing officer. Again the parties bickered for
some time on the choice of an appeals authority.
Problems
started when, at the instance of the appellant as claimant “an
independent arbitrator” Munyaradzi Dangarembizi, issued an arbitral
award on 13 November 2012 to wit:
“AWARD
Wherefore,
after carefully analysing the facts and the law, I make the following
award -
That
the claimant's prayer is upheld and I hereby order that the merits
of the matter be conciliated upon by the Labour Officer.”
Following
that award, it is common cause that a Labour Officer unsuccessfully
held conciliation proceedings as a result of which the matter was
referred to compulsory arbitration before an arbitrator.
When
the respondent took its grievance to the arbitrator it stated
categorically at para 2.8 of the Claimant's statement of claim and
submissions:
“2.8.
Hence, the matter in
casu,
is an appeal by the employer, the claimant herein against the
determination of Mr Mawire, the Disciplinary Authority dated 22nd
February
2012.”
It
is also beyond disputation that the arbitrator also dealt with the
matter as an appeal.
He
said so at para 5 of the arbitral award dated 8 October 2015, to wit:
“Therefore
the instant matter is an appeal by the claimant against the
determination of Mr Mawire the disciplinary authority dated 22
February 2012.”
The
arbitrator upheld the determination of the hearing officer.
He
ordered the reinstatement of the appellant to his position with no
loss of salary and benefits from the date of dismissal. In the event
that reinstatement was no longer possible, the appellant was to be
paid damages in
lieu
of reinstatement.
PROCEEDINGS
BEFORE THE COURT A
QUO
The
respondent was again unhappy with the arbitral award. It lodged an
appeal to the court a
quo
on three grounds.
(i)
The first was that the arbitrator grossly erred and misdirected
himself on a point of law by failing to make a finding that the
employee was grossly incompetent.
(ii)
The second was that the arbitrator erred and misdirected himself at
law by relying on an affidavit without according the respondent the
opportunity to cross examine its deponent and to adduce oral
evidence.
(iii)
The third ground was that the arbitrator grossly erred and
misdirected himself at law by handing down a grossly irrational and
unreasonable award.
The
court a
quo
found that the appellant had a responsibility to account to the Board
on the operations of the business. He could not simply rely on his
subordinates regarding the financial figures of the company as the
buck stopped with him because he was the Managing Director. The court
a
quo
found that before presenting the financial figures to the Board, it
was incumbent upon the appellant to verify the correctness of the
figures. In its view this was a case of res
ipsa loquitar
wherein the failure of the appellant to verify the figures was proof
of incompetence.
The
court a
quo
further found that the arbitrator's finding that the appellant was
not responsible for the presentation of the faulty accounts to the
Board flew in the face of available evidence. It was a gross
misdirection entitling the court to interfere and set aside the
award.
It
set aside the award and remitted the matter for the assessment of an
appropriate penalty.
PROCEEDINGS
BEFORE THIS COURT
It
became the appellant's turn to be aggrieved.
He
appealed to this Court on 5 grounds of appeal most of which attacked
the factual findings of the court a
quo
instead of the law as required by section 92F(1) of the Labour Act
[Chapter
28:01].
In
terms of that section an appeal lies from any decision of the Labour
Court to this Court on a question of law only.
As
that issue was not canvassed with the parties at the hearing of the
appeal it shall not be used as a basis for resolution of the appeal.
At
the commencement of the hearing Mr Maguchu,
who appeared for the appellant, took a point of law that the entire
proceedings before the Labour Officer who conciliated the matter, the
arbitrator who heard what was in fact an appeal from a decision of
the hearing officer and the subsequent appeal before the court a
quo
were a nullity.
Mr
Maguchu
entreated this Court to strike off the appeal from the roll and to
invoke its power in terms of section 25 of the Supreme Court Act
[Chapter
7:13]
to set aside those proceedings.
In
advancing that argument on nullity of the proceedings Mr Maguchu
relied on the authority of two judgments of this Court in Mabeza
v Sandvick Mining (2) Construction (Pvt) Ltd & Anor
SC 91/19 and Living
Waters Theological Seminary v Rev Chikwanha
SC
59/21.
In
those cases this Court pronounced that proceedings referred to the
court a
quo
having been adjudicated upon by a Labour Officer without authority to
do so were a nullity.
In
response, Mr Mucheche
for the respondent took a different view, namely that the authorities
in question were distinguishable from the present case.
In
his view, those authorities applied to situations where an employer
would have made a determination in terms of a code of conduct thereby
ousting the jurisdiction of the Labour Officer.
Mr
Mucheche
submitted further that in the present case the employer did not
decide the matter at all.
According
to counsel, what was placed before the Labour Officer was not an
appeal but a referral to the Labour Officer in terms of section 93 of
the Labour Act.
He
submitted that section 93 conferred what he called “a special
jurisdiction” to the Labour Officer.
Mr
Mucheche
submitted that the law which was applicable at the time the dispute
arose made it legally competent for disputes to be referred to Labour
Officers as happened in this case.
I
must mention that after hearing submissions from counsel on that
preliminary point, this Court directed the parties to file written
submissions on the point of law.
The
appellant was directed to do so by 24 January 2022 while the
respondent was directed to file a response by 27 January 2022.
The
parties managed to file their submissions timeously which is
commendable indeed.
In
his written submissions Mr Maguchu
surprisingly moved for an order that the appeal should succeed with
costs and that the decision of both the Labour Court and the
arbitrator be set aside in terms of section 25 of the Supreme Court
Act on the basis that both are a nullity.
No
ground of appeal attacked the proceedings a
quo
on the basis of a nullity.
The
appeal cannot succeed on non-existent grounds.
On
the other hand, in his written submissions Mr Mucheche
submitted that the appellant did not point to any prejudice suffered
as a result of the manner in which the proceedings were conducted.
On
the authorities pointing to the lack of jurisdiction by a labour
officer to deal with a referral under section 8 of the National
Employment Code, counsel submitted that those cases do not have
retrospective effect. They are not applicable to cases that were
referred to labour officers prior to their pronouncement.
Counsel
also sought to distinguish this case by virtue of the arbitral award
issued by Dangarembizi which referred the dispute to a labour
officer.
As
shall be demonstrated below this proposition is faulty.
I
also mention for completeness that the court proceeded to hear
arguments on the merits. That was done on the understanding that in
the event that the point of law raised by counsel for the appellant
found favour with the court, it would not be necessary for the court
to determine the merits.
The
point of law relating to the validity of the proceedings is
dispositive of the matter if upheld. The court would only relate to
the merits if the proceedings were valid.
The
position taken in this judgment makes it unnecessary to consider the
merits.
The
question of when a Labour Officer may exercise jurisdiction over a
dispute is one that has been with us for a long time mainly because
of the problematic wording of the relevant provisions of the Labour
Act.
In
Watyoka
v Zupco (Northen Division)
SC
87/05 the employee was charged with misconduct and dismissed from
employment before he referred the matter to a Labour Relations
Officer who ordered his reinstatement, a decision later upheld by a
senior Labour Relations Officer.
In
that case this Court considered the provisions of section 101(5) and
(6) of the then Labour Relations Act [Chapter
28:01]
which read:
“(5) Notwithstanding
this part but subject to subsection (6), no labour relations officer
or senior labour relations officer shall intervene in any dispute or
matter which is or is liable to be the subject of proceedings under a
code, nor shall he intervene in any such proceedings.
(6) If
a matter is not determined within thirty days of the date of the
notification referred to in paragraph (e) of subsection (3) the
employee or employer concerned may refer such matter to a labour
relations officer, who may then determine or otherwise dispose of the
matter in accordance with section ninety-three.”
The
court reasoned that three important conditions upon which a matter
can be referred to a labour relations officer emanated from that
provision. These were:
(i)
That the matter must not be one that is or is liable to be the
subject of proceedings under a Code of Conduct;
(ii)
The matter has not been determined within thirty days of
notification; and
(iii)
Where the parties to the dispute request it and agree on the issue in
dispute.
It
went on to pronounce at p5 of the judgment:
“Subsection
(6) of section 101 provides for a referral of the matter to a labour
relations officer if it has not been determined within thirty days.
It does not provide for a referral of a matter that has been
determined. The referral to a labour relations officer is a relief
granted to a party who is concerned about the delay in the
determination. It
is not a referral intended to challenge a determination that has
already been made.”
(Emphasis added)
A
more recent case dealing with the same issue is Mabeza
v Sandvik Mining (2) Construction (Pvt) Ltd,
supra.
Again
in that case, following an internal disciplinary hearing, the
employee was dismissed for misconduct. His internal appeal was also
dismissed. There-after the matter was referred to a Labour Officer
for conciliation which failed resulting in the Labour Officer
referring the matter to compulsory arbitration.
The
arbitrator found in favour of the employee but the employer appealed
to the Labour Court which found in favour of the employer.
On
appeal to this Court, the court considered that the matter had
proceeded to compulsory arbitration through reference to the Labour
Officer in terms of section 8(6) of the National Code of Conduct. The
relevant provisions of that Code read:
“(6)
A person or party who is aggrieved by a decision or manner in which
an appeal is handled by his or her employer or the Appeals Officer or
Appeals Committee, as the case may be, may refer the case to a Labour
Officer or an employment Council Agent, as the case maybe, within
seven working days of receipt of such decision.
(7)
The Labour Officer or an Employment Council Agent to whom a case has
been so referred shall process the case as provided for under section
93 of the Act.”
GOWORA
JA (as she then was) took the view that regardless of how the case
was disguised, it was in fact an appeal against the dismissal of the
appeal by the Appeals Authority.
In
considering whether the arbitrator had jurisdiction to act as an
appeal tribunal, the learned appeal judge concluded that the
arbitrator did not have such jurisdiction. She remarked at p12 of
the judgment:
“In
my view, the principle emerging from all the authorities referred to
above can be summarised by the statement to the effect that a labour
officer does not have any jurisdiction under section 93 to entertain
a matter once a determination on the merits has been made through a
disciplinary process under a registered Code of Conduct. It is clear
that in this case the labour officer presided over a matter over
which he did not have any jurisdiction. As stated in Watyoka's
case (Supra),
once there is a determination on the merits of a dispute a labour
officer has no jurisdiction under section 93 of the Act.
In
this context the implications of what the arbitrator did are
obvious.”
Later
in that judgment the court stated at p14:
“I
conclude therefore that the labour officer did not have jurisdiction
to hear a complaint from the appellant of whatever nature and that
the referral to compulsory arbitration was unlawful and the
proceedings before the arbitrator were as a result an irregularity.”
See
also Munchville
Investments (Pvt) Ltd t/a Bernstein Clothing v Mugavha
SC62/19.
The
reasoning in Mabeza,
supra
rhymes with that in Sakarombe
N.O. & Anor v Montana Carswell Meats (Pvt) Ltd
SC 44/20 where the court was called upon to consider the ambit of the
jurisdiction of a Labour Officer under section 93 of the Act where a
matter is referred to him or her in terms of section 8(6) of the
National Code of Conduct.
It
concluded that under section 93(1) of the Act, a Labour Officer is
only mandated to preside over a fresh hearing where a complaint has
been lodged. The Labour Officer does not preside over any matter
where a determination has been made or one in which completed
disciplinary proceedings were conducted at the work place.
In
fact, in Living
Waters Theological Seminary v Chikwanha, supra,
the court went further to state that the provisions of section 8(6)
of the National Employment Code are rendered inoperative by their
being ultra
vires
and inconsistent with the provisions of sections 93 and 101 of the
Labour Act.
Whether
the proceedings were regular
In
this case, internal disciplinary proceedings were conducted before a
hearing officer J. T. Mawire who rendered a determination. The
determination was never set aside on appeal which the employer had
commenced, before another arbitrator erroneously referred the matter
to a Labour Officer for conciliation.
To
the extent that there was an internal disciplinary process which had
yielded a determination, by the authorities I have referred to above,
the Labour Officer did not have jurisdiction to conciliate the
matter.
The
matter had to proceed by way of an appeal firstly to an internal
appeal authority and later to the Labour Court.
I
do not agree with Mr Mucheche
that Mawire was clothed with special jurisdiction to determine the
matter in any manner outside the provisions of the National Code of
Conduct.
The
law as it existed at the time the parties reached a deadlock on the
appeals authority to hear the appeal did not allow for a referral to
a Labour Officer in the way arbitrator Dangarembizi sought to do on
13 November 2012.
The
recent authorities cited above only underscored a legal truism that
has always existed. The issue of their retrospective application
does not arise at all.
It
follows that the proceedings before the Labour Officer who referred
the dispute to arbitration were irregular, the Labour Officer not
having had jurisdiction. By the same token the arbitration yielded
by an irregular conciliation and indeed the appeal to the Labour
Court that followed, were also irregular.
Nothing
lawful could result from an invalidity.
It
follows that this appeal could not have been properly before this
Court.
DISPOSITION
An
invalidity occurred which has come to the attention of this Court.
This Court has review power reposed upon it by section 25(1) of the
Supreme Court Act. The logical thing to do is to invoke that
provision to set aside the invalid proceedings.
Regarding
the issue of costs, the jurisprudence which has come out of this
Court on the invalidity of proceedings brought before a Labour
Officer in the way the present matter was done, has been available
for quite some time. Counsel in this matter should have known of it.
They did not do anything about the fate of this appeal right up to
the date of hearing. Accordingly the view that I take is that
neither of the parties is entitled to costs for that reason.
In
the result, it is ordered as follows:
1.
The matter is hereby struck off the roll with no order as to costs.
2.
In terms of this Court's review powers in section 25(1) of the
Supreme Court Act [Chapter
7:13]
the proceedings before the Labour Officer, the arbitrator and the
Labour Court are hereby set aside.
GWAUNZA
DCJ: I
agree
CHITAKUNYE
JA: I
agree
Maguchu
& Muchada Business Attorneys,
appellant's
legal practitioners
Caleb
Mucheche & Partners,
respondent's legal practitioners
