In National Union of Metalworkers of South Africa obo Members and Others v Arcelormittal South Africa Limited and Others, the South African Labour Court had to determine whether the dismissal of two employees was procedurally and substantively unfair in circumstances where the employer had substituted a disciplinary chairperson's sanction of a final written warning with that of dismissal.

The employees, represented by the National Union of Metalworkers of South Africa ("NUMSA"), brought an application to review and set aside the arbitration award issued by an arbitrator acting under the auspices of the Metal and Engineering Industries Bargaining Council ("MEIBC"). In her award, the arbitrator found that the dismissal of the employees was fair.

Background

Arcelormittal South Africa ("AMSA") employed the employees as plant shop stewards. A workplace accident occurred during which a NUMSA member, also employed by AMSA, was injured and lost three fingers. AMSA engaged with the employees when investigating the accident, but was dissatisfied with their conduct during the investigation. As a result, AMSA levelled a number of allegations of misconduct against the employees.

AMSA appointed an external party to chair the employees' disciplinary hearing. The chairperson handed down her finding on sanction which she entitled "Disciplinary Sanction Recommendation". In the finding, the chairperson gave both employees a final written warning for the single charge of failing to participate in and assist with the investigation. She also gave one of the employees a further final written warning for being insolent towards management.

However, AMSA then sent a letter to the employees in which it:

  • indicated that it was dissatisfied with the sanction because the disciplinary offences were serious and because the sanction was not in line with the guidelines set out in the collective agreement concluded between NUMSA and AMSA;
  • stated that the chairperson had not made a finding on sanction but had merely made a recommendation; and
  • invited the employees to make further submissions in relation to sanction.

NUMSA advised AMSA that the employees stood by their earlier submissions on sanction. AMSA proceeded to dismiss the employees. Dissatisfied with the employees' dismissal, NUMSA referred an unfair dismissal dispute to the MEIBC. This dispute ultimately led to the arbitrator finding the employees' dismissal to be fair.

The Labour Court decision

NUMSA's sought to review the arbitrator's award on the basis that she committed a gross irregularity by misconceiving the nature of the enquiry before her. NUMSA contended that the arbitrator treated the issue relating to the substitution of the sanction solely as an aspect of procedural fairness as opposed to both substantive and procedural fairness. Essentially, NUMSA's main challenge to the employees' dismissal was AMSA's decision to substitute the chairperson's finding on sanction with its own.

In determining the dispute, the Labour Court held that what needed to be considered was:

  • whether an employer is entitled to substitute the sanction of a disciplinary chairperson; and
  • if so, what is the procedure that should be followed.

The Labour Court categorised the powers given to a disciplinary chairperson as a form of delegated authority and stated that, as a result, the chairperson is the employer and their decision is that of the employer. Therefore, an unhappy employer's attempt to substitute the chairperson's decision would ordinarily not be allowed as the latter would have discharged their duty and where the authority to discipline has already been accomplished. Put another way, a chairperson is clothed with the persona of the employer and their decision is therefore final and binding on the employer. The employer, therefore, cannot arbitrarily substitute the sanction for one of its own.

The Labour Court then proceeded to consider a number of judgments dealing with whether or not an employer may "review" a disciplinary chairperson's decision on sanction. One of these was the judgment of the Labour Appeal Court ("LAC") in Branford v Metro Rail Services (Durban) & Others. In this matter, the LAC held that ultimately, fairness is the overarching yardstick and, as a result, an employer has the right to hold a second disciplinary enquiry where fairness dictates this. An employer must also ensure that the decision to hold such a second enquiry is not outside the legal scope of their disciplinary code.

In SARS v CCMA and Others (Kruger), the disciplinary hearing chairperson imposed a sanction of a final written warning for the employee's use of a racial slur (the "K" word) in the workplace. Aggrieved by this decision, the South African Revenue Service ("SARS") substituted the sanction with that of dismissal. The LAC held that the employee's dismissal was unfair because there was a collective agreement in place that gave the chairperson final decision-making powers. Despite this, the Constitutional Court held that re-instatement could not be granted due to the seriousness of the employee's misconduct and as a result, granted the employee compensation.

In summary, the principle formulated in the SARS decision and other cases is that if there is a collective agreement in place containing a disciplinary code, then the sanction cannot be substituted, even if the collective agreement is silent on the issue of managerial "review" of a sanction. If it is substituted, then the dismissal is unfair and the arbitrator should, in terms of section 193 of the Labour Relations Act, 1995, enquire whether reinstatement is practical or not.

Effectively, the Labour Court distinguished between an employer's ability to substitute a chairperson's decision on sanction where their powers are set out in a collective agreement from circumstances where this is not the case. In this regard, it confirmed that the principles enunciated by relevant case law were that if there is no collective agreement regulating discipline in place, an employer may substitute the sanction of a disciplinary chairperson if it is fair to do so and after engaging the employee, either in another disciplinary enquiry or by having the employee make submissions.

AMSA's disciplinary code was in the form of a collective agreement and was therefore binding between the parties. However, the disciplinary code was silent regarding whether or not the disciplinary chairperson had powers only to make a recommendation on sanction or whether she had final decision-making powers. In other words, the disciplinary code did not contain an express provision permitting AMSA to "unilaterally review" the chairperson's decision (other than in certain instances on appeal).

The Labour Court held that it was reasonable to infer that when the parties negotiated the disciplinary code, they did not intend to grant AMSA the power to review or appeal its own disciplinary decision, except through an appeal process. The court further held that to conclude otherwise would be to surmise that either party could unilaterally change the effect of the agreement.

In addition, the chairperson's description of her finding as a "Disciplinary Sanction Recommendation" was of no consequence in circumstances where the disciplinary code made no provision for AMSA to substitute the sanction. Because of this, AMSA's substitution of the chairperson's decision on sanction was in violation of the disciplinary code and, therefore, invalid.

In conclusion, the Labour Court held that, had the arbitrator considered whether the substitution impacted on the substantive fairness of the dismissal, she would have found that the dismissal was substantively unfair. The Labour Court held that, in dealing with the substitution as only an issue of procedural fairness, the arbitrator misconceived the nature of the enquiry before her, which amounted to a gross irregularity. It therefore reviewed and set aside the arbitrator's award on this basis alone. The court ordered the employees to be reinstated, subject to them being issued with the final written warnings as per the chairperson's decision.

Thoughts on the judgment

The decision of the Labour Court in this matter holds that where a disciplinary code is silent on whether a disciplinary hearing chairperson is given final decision-making powers, there would be nothing which would prevent an employer from holding a so-called "second disciplinary hearing" in circumstances where it is not satisfied with the chairperson's finding on sanction. However, this option should only be used in exceptional circumstances and subject, always, to considerations of fairness. But where a disciplinary code is also a collective agreement, the provisions of the collective agreement will regulate whether the employer can overturn the chairperson's decision or not. Silence on the issue of a chairperson's powers will not be sufficient to warrant an employer's interference with such decision.

This article was reviewed by Peter le Roux, an executive consultant in ENSafrica's employment department.

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