Adapt (Pty) Ltd v Maseko and others
| Jurisdiction | http://justis.com/jurisdiction/166,South Africa |
| Judge | Swartz AJ |
| Judgment Date | 13 January 2023 |
| Citation | 2023 JDR 2633 (LC) |
| Hearing Date | 08 November 2022 |
| Docket Number | JR701/2019 |
| Court | Labour Court |
Swartz AJ:
Introduction
In this matter, the applicant has applied to review and set aside the award dated 23 February 2019 of the second respondent in which the second respondent found that the applicant had committed an unfair labour practice by failing to subject the first respondent to a performance review to increase the first respondent’s salary as well as to give her year-end bonus for the financial year ending on 30 June 2017.
The first respondent’s unfair labour practice referral was brought under s186(2)(a) of the Labour Relations Act [1] (LRA) relating to the provisions of benefits.
The second respondent awarded the first respondent a total amount of R214 966 consisting of two months’ compensation (R145 818) together with a salary increase (R42 506) plus a bonus (R26 642).
The applicant applied for condonation for the late filing of its review application. I am satisfied that the prejudice caused by the short delay in filing the founding affidavit was not one of great magnitude, caused no demonstrable prejudice to the first respondent and that the applicant should not be deprived of the opportunity of bringing this application. Accordingly, condonation for the late filing of the review application is condoned.
Factual background
The first respondent was employed by the applicant on 16 September 2015 as Human Capital Business Partner. Paragraph 2.6 of the first respondent’s employment contract states:
“Discretionary Annual Performance Bonus
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Swartz AJ
The Company has a discretionary performance bonus scheme, which all employees participate in. You will be eligible to participate in the Company’s discretionary, performance-based Short-Term Incentive Plan (Annual Performance Bonus), subject to the rules of the plan.”
The first respondent did not undergo a performance appraisal in 2015 as her employment commenced after this process had already been completed for the other employees. However, in July 2016, the first respondent underwent a performance appraisal and received a salary increase as well as a bonus for that financial year. The first respondent did not undergo a performance appraisal for the financial year ending on 30 June 2017 and received no salary increase nor a bonus for that financial year. The applicant contends that no performance appraisal was conducted for the first respondent as a result of the first respondent being under a performance improvement plan (PIP) and thus not eligible for the applicant’s discretionary salary increase and bonus. The first respondent contends that the failure by the applicant to conduct a performance appraisal and for her not to receive a salary increase as well as a bonus amounted to an unfair labour practice.
On 9 February 2018, the first respondent was dismissed for poor work performance with effect from 28 February 2018.
On 14 February 2018, the first respondent referred an unfair labour practice dispute to the Commission for Conciliation, Mediation and Arbitration (“the CCMA”). In May 2018, the first respondent referred a second dispute for unfair dismissal.
On 4 April 2018, the third respondent issued a condonation ruling in respect of the first respondent’s late referral of her unfair labour practice. The matter was then set down for arbitration on 20 July 2018.
At the 20 July 2018 arbitration the applicant raised a point in limine that the CCMA lacked jurisdiction as the first respondent’s dispute that she did not receive a salary increase and bonus was discretionary and thus did not constitute an unfair labour practice.
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Swartz AJ
At the 20 July 2018 arbitration, the applicant also brought an application for a postponement in order to apply for the rescission of the 4 April 2018 condonation ruling. The second respondent granted the applicant a postponement and ruled that the applicant was to apply for its rescission within 14 days of the postponement. The applicant never applied for rescission.
The unfair labour practice dispute was again set down on 19 September 2018 for arbitration before commissioner Sello. The matter was again postponed by the third respondent in order for this dispute to be set down before the second respondent.
On 6 December 2018, the unfair dismissal dispute was settled by the third respondent under case number GAJB 4890/18.
On 6 February 2019, the unfair labour practice was set down for arbitration before the second respondent.
Parties’ Submissions
The applicant’s case
At the commencement of the 6 February 2019 arbitration, the applicant raised a preliminary point that both the unfair labour practice dispute and the unfair dismissal dispute were settled on 6 December 2019 in the amount of R150 000. The second respondent dismissed this point, finding that only the unfair dismissal dispute was settled on 6 December 2019.
Thereafter the applicant sought a postponement. The reasons advanced for the postponement were that the applicant was not prepared to run the arbitration as it was under the impression that the unfair labour practice dispute had been settled on 6 December 2019 and that the applicant’s previous legal representative had recently withdrawn. The applicant was not prepared to run the arbitration. The application for postponement was opposed.
The second respondent refused the postponement for the reason amongst others, that this matter had a long history of postponements and a further postponement would prejudice the first respondent.
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Swartz AJ
Although the applicant called no witnesses, Happy Molefe (Molefe) being the applicant’s Human Capital Executive went through the applicant’s defence that the first respondent was not subjected to a performance appraisal as a result of the first respondent being under a PIP and thus was not eligible for the applicant’s discretionary salary increase and bonus. Molefe also cross-examined the first respondent.
In essence, the applicant’s defence was that there was no unfair labour practice as the first respondent did not qualify to be appraised and thus did not qualify for any salary increase or bonus. The applicant had a discretion to increase salaries and bonuses based on the applicant’s and the first respondent’s performance. There was no benefit to be disputed or claimed by the first respondent.
The first respondent’s case
All employees of the applicant were annually appraised and received salary increases and a bonuses. The first respondent did not receive this and thus was deprived of a benefit which amounted to an unfair labour practice.
In 2016, the first respondent was appraised and received a salary increase from R840 000 per annum to R882 506 per annum and a bonus of R26 642.
The first respondent testified that in 2017, every employee of the applicant was subjected to a performance review for the 2016 to 2017 financial year except her and that she issued the increase letters to all other employees.
When the first respondent enquired from the applicant why she was not subjected to a performance review, her line manager told her that it was because she was not performing and when she requested a meeting to engage in a performance review it was declined for the same reasons.
The arbitration award
The second respondent found that the applicant did not lead any evidence to rebut the first respondent’s version that the applicant’s failure to subject her to a performance review for 1 July 2016 to 30 June 2017 led to the first respondent
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not receiving a salary increase and a year performance bonus for that period. There was no evidence led which proved that the first respondent was not performing satisfactorily during this same period.
The conduct by the applicant in this regard was unfair and the second respondent concluded that if the first respondent had been subjected to a performance review she would have qualified for a salary increase and a year-end bonus.
On the first respondent’s version alone, the second respondent found that the applicant had committed an unfair labour practice.
The second respondent then delved into the financial loss that the first respondent suffered as a result of not receiving her salary increase and a bonus, and relied on section 195 of the LRA to justify awarding the first respondent a salary increase and a bonus amount based on her previous increase and bonus.
The second respondent awarded the first respondent a salary increase, a bonus as well as two months’ compensation.
The grounds of review and the evaluation thereof
The grounds of review are not well articulated in the applicant’s papers. The grounds in the founding affidavit are curiously contained in the notice of motion.
The applicant’s grounds in terms of section 158(1)(g) of the LRA are based on the principle of legality. The applicant also relies on certain grounds in terms of section 145 of the LRA.
The section 158(1)(g) grounds will now be evaluated.
The acceptance by the second respondent of an invalid referral form
I could not find any reference to this ground in the applicant’s papers nor in its heads and oral argument.
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Swartz AJ
The referral form indicates that the first respondent is referring an unfair labour practice dispute. What is absent from the referral form is the relief sought that the first respondent was claiming her salary and a bonus that was not paid for the 2016 to 2017 financial period.
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