Gerber v Stanlib Asset Management (Pty) Ltd

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Waglay JP and Davis JA and Kubushi AJA
• Judgment Date: 13 December 2021
• Court: Labour Appeal Court
• Hearing Date: 21 September 2021
• Docket Number: JA92/20

Kubushi AJA:

[1]

The appeal with leave of the court a quo is against part of the judgment and order of that court, which provides that:

'The respondent's jurisdictional point in respect of claims B and D is upheld and the proceedings are stayed in respect of those claims, which are referred to arbitration in terms of section 158(2)(a) of the LRA, [1] the arbitration to be conducted in terms of the respondent's compulsory private arbitration policy.'

[2]

Before the commencement of argument, the appellant applied for and was granted condonation for the late delivery of his heads of argument and power of attorney.

[3]

The appellant had referred three disputes to the court a quo comprising of claims A, B, C and D. Only claims B and D are relevant for purposes of this

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appeal. Claim B pertains to a dispute in terms of section 187 (1) of the Labour Relations Act 66 of 1995 (LRA), referred by the appellant to the court a quo on the basis that his dismissal was automatically unfair. Claim D, on the other hand, was pleaded in the alternative to the other claims, and pertains to the dispute that the dismissal was both substantively and/or procedurally unfair.

[4]

The issue that came for adjudication, amongst others, before the court a quo, was whether that court has the requisite jurisdiction to entertain claims B and D, when the appellant is contractually obliged to refer the disputes to compulsory private arbitration.

[5]

The genesis of the issue before the court a quo, was as a result of one of the in limine points raised by the respondent in his statement of response in answer to the claims raised by the appellant in his statement of claim. The respondent supported the points in limine by a separate interlocutory application with a founding affidavit. The appellant delivered an answering affidavit in answer to the interlocutory application raising various defences to which the respondent replied. The matter was, thus, adjudicated by the court a quo based on a substantive application.

[6]

The in limine point concerned the question of jurisdiction in that it was contended that the court a quo was non-suited to entertain the disputes which ought to have been referred to compulsory private arbitration as required by the terms and conditions of employment contained in the employment contract of the appellant. The said terms and conditions of employment are averred to have been incorporated by reference in the letter of employment which the respondent issued to and was accepted by the appellant by attaching his signature thereto.

[7]

When opposing the respondent's point in limine before the court a quo, the appellant, in the main, disputed that he was bound by the handbook which required dismissal disputes to be referred to compulsory private arbitration. He, further, proffered various other defences, for instance: that compulsory private arbitration was not discussed with him at the time of his employment, he was not advised subsequently about any changes to the terms and conditions of employment, the relations handbook was not incorporated into his contract of

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employment, the respondent misrepresented certain facts to him, the doctrine of election, and the disputes concerning dismissal for reasons that are automatically unfair are not contemplated by the contractual provision on which the respondent relied.

[8]

In upholding the respondent's point in limine on jurisdiction, the court a quo reasoned as follows:

'[13] First, in general terms, it should be recalled that the LRA encourages private dispute resolution. If the parties to a contract of employment agree that any disputes that arise between them will be privately arbitrated, the principle pacta sunt servanda applies. . . Indeed, the provisions of clause 12.1.1 of the respondent's Handbook have been subject of at least two judgments by this court, both of which uphold the principle of compulsory arbitration introduced by this provision. . . There can be no objection in principle therefore to the requirement that the applicant refers any dispute concerning the fairness of his dismissal to arbitration in terms of the compulsory arbitration process established by the applicant's contract of employment. Insofar as the applicant claims ignorance of the relevant provisions, the fact remains that by signing his letter of appointment, he accepted that his appointment was in terms of the respondent's terms and conditions of employment, and specifically the disciplinary code and procedure, as published in the internet, which he was urged to read. The applicant's letter of appointment specifically required him to familiarise himself with the contents of and functions of both the employee relations handbook and the employee handbook and to abide by the provisions. Insofar as the applicant contends that the employee relations handbook was created in 2010 and thus post-dated his appointment, it is clear that the handbook is regularly amended and updated and the document to which the applicant refers (which refers to a date in 2010) is simply an updated version of the handbook. It is not in dispute that the compulsory private arbitration procedure has been in effect since 2002 and that it has been the subject of the employee relations handbook since the applicant's letter of employment describes the employee relations handbook in specific and particular terms for it to be validly incorporated by reference. The employee relations handbook, which contains the disciplinary code and procedure, is not presented in any terms that entitle the applicant to rely on the caveat subscriptor rule, or to claim that there was a misrepresentation as to the contents of the respondent's

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policies and procedures by the respondent when the applicant was offered employment on the terms reflected in his letter of appointment. Insofar as the applicant contends that the respondent waived its rights to enforce compliance with the compulsory private arbitration provision, but it is correct that the applicant's unfair dismissal disputes were referred for conciliation and that the respondent attended the conciliation meeting, this is not in itself evidence of a waiver of any right that the respondent may have enjoyed. Clause 19.2 of the applicant's letter of appointment contains a standard non-variation clause which requires any variation to the contract to be in writing and signed, and provides that any failure by the respondent to enforce any of its rights under the agreement at any time shall not be deemed to be a waiver. That notwithstanding, the respondent was entitled to raise the obligation to refer disputed dismissals to compulsory arbitration at any time. The point is a jurisdictional point, not subject to waiver and which a party (and even the court acting mero motu) is entitled to raise at any time. Finally, the applicant contends that the compulsory private arbitration procedure does not apply because at least claim A, his claim is one of automatically unfair dismissal, a matter that ought to be dealt by the court. This submission cannot be sustained by the plain wording of the employee relations Handbook. Clause 8.5.2 records that a disciplinary enquiry will be held if 'termination of services is possible due to misconduct'. If the employee is dismissed and the employee is not satisfied with the outcome, the employee can refer the matter to private arbitration with 30 days of the date of termination. Considered as a whole and given its proper context, the provision requires any dispute regarding a dismissal for misconduct to be referred to private arbitration. If an employee chooses to characterise the dispute as a dismissal for a reason that is automatically unfair, that is a matter that must be determined at the arbitration process. The present instance, there is no dispute that the applicant was dismissed by the respondent for misconduct, after an informal disciplinary enquiry. The dispute is one that accordingly falls within the ambit of the private arbitration agreement.'

[9]

The appellant's point of departure, as far as the appeal is concerned, is that the court a quo erred in that firstly, it did not correctly consider the factual question of whether there was a contract between the parties that bound them to compulsory private arbitration in the circumstances of their relationship. Secondly, if the court a quo had found that there was such an agreement

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between the parties, as it did, the court a quo did not exercise a discretion on whether to refer the dispute before it to arbitration, judicially; hence the core issue for adjudication by this court is whether the court a quo erred in making a finding that there is a valid enforceable private arbitration agreement between the parties; and if so, whether the court a quo judicially exercised its discretion to stay the proceedings in respect of claims B and D and to refer same to compulsory private arbitration.

[10]

In essence, the appeal turns on the narrow issue of whether the court a quo had the requisite jurisdiction to entertain the aforesaid claims when the appellant is contractually bound to compulsory private arbitration. If it is found to be so, then the second part of the enquiry, that of the court a quo's decision to stay the proceedings and refer the dispute to compulsory private arbitration, kicks in, and if it is not so, then that is the end of the enquiry.

[11]

I deal, hereunder, with the two issues in turn.

Whether there is a validly enforceable compulsory private arbitration between the parties:

[12]

In trying to overturn the court a quo's judgment and order on this point, the appellant raised the same argument and defences that were raised before the court a quo. [2] What he puts at issue is whether the compulsory...