Court name
Labour Court
Case name
Labour Chain Namibia (Pty) Ltd v Hambata
Media neutral citation
[2012] NALC 2
Judge
Smuts J





IN THE HIGH COURT OF NAMIBIA







REPORTABLE







CASE NO: LCA 14/2010


IN THE
LABOUR COURT OF NAMIBIA





In the
matter between:





LABOUR
SUPPLY CHAIN NAMIBIA (PTY) LTD
…...................
APPELLANT





and





NDAPEWA
HAMBATA
…....................................................RESPONDENT





CORAM:
Smuts, J





Heard on:
27 January 2012


Delivered
on: 3 February 2012



______________________________________________________________________







JUDGMENT



______________________________________________________________________


Smuts,
J



  1. This
    is an appeal against an award made by an arbitrator,
    Mr P
    Mwandingi under s 89 of the Labour Act, 11 of 2007 (“the
    Act”). This appeal was initially opposed but a notice was
    subsequently filed by the respondent’s legal practitioner
    withdrawing opposition to the appeal and stating that the appeal
    would proceed on an unopposed basis.







  1. Even
    in the absence of opposition or an appearance on behalf of the
    respondent, I would need to be satisfied that the award should be
    set aside. The appellant is represented Mr S Horn who filed heads of
    argument prior to the hearing.







  1. The
    appeal essentially raises two questions of law.







  1. The
    first concerns the question of jurisdiction. The point was taken at
    the arbitration that the arbitrator lacked jurisdiction by virtue of
    an agreement styled “an addendum to the employment agreement”.
    This purports to raise an agreement between the parties to agree to
    private arbitration. This preliminary point was dismissed by the
    arbitrator and the appellant contends that he erred in doing so.







  1. The
    second issue concerns the nature of the test to be applied in
    determining whether there was a constructive dismissal. It is common
    cause that the respondent had resigned her position with the
    appellant. The arbitrator found that she had been constructively
    dismissed. The appellant contends that this was on the basis of
    incorrect principles. I deal with these two issues in that sequence.
    A further point was raised that the dispute between the parties had
    become settled. In view of the conclusion I reach in respect of the
    second question, it is not necessary to deal with that issue.






Private
arbitration agreement






  1. The
    respondent was employed on 1 March 2010 in terms of an agreement
    entitled “Limited Duration Contract of Employment Agreement”.
    She was appointed as a “picker” by the appellant which
    carries on business as a temporary employment service provider or
    what would be commonly known as a labour hire or labour broker
    concern. The appointment was for the respondent to be employed as a
    picker at the premises of a client of the appellant. (I had thought
    that her occupation was a packer, but was assured by Mr. Horn that
    the designation “picker” is correct. Despite this, it
    would seem by virtue of the location of the employment at a
    warehouse and not at vines or an orchard that the term should be
    packer).







  1. The
    employment was of a limited duration and for a six month period, to
    expire upon 31 August 2010. The respondent’s remuneration was
    N$9.24 per hour or as stated in her evidence N$1,700.00 per month.
    On the same day that she signed her employment agreement, the
    respondent also allegedly signed a further document entitled
    “Addendum to Employment Contract: Private Arbitration and
    Conciliation”. The pertinent portion of this addendum is as
    follows:







The employer and employee shall refer
all disputes arising from this agreement to private arbitration as
per section 91 of the Labour Act, 11 of 2007.







The parties by their signature to this document bind themselves to
this arbitration agreement and consent herein to appoint the
Professional Arbitration and Mediation Association of Namibia to
facilitate and convene the arbitration process and hearing.







In a dispute arising between the parties from this agreement will
be resolved by means of arbitration in terms of the PAMAM Arbitration
Rules, as provided for in this agreement.







Such dispute should be declared by giving written notification
thereof to the employer, within a period of 30 calendar days after
the date of the cause of action arising.”







  1. The
    addendum further provides that the decision of a single arbitrator
    would be final and binding on the parties and that they may be
    represented by “an admitted or non-admitted legal practitioner
    (sic) or any other person of his or her choice”. It also
    provides that each party would carry their own costs and that the
    costs of the arbitrator would be paid by both parties in equal
    shares. It finally provides that the agreement to private
    arbitration can only be terminated by written consent of both
    parties.







  1. It is
    common cause between the parties that the respondent signed a brief
    resignation note on 21 July 2010 and subsequently laid a dismissal
    complaint with the Labour Commissioner’s office. When the
    complaint proceeded to arbitration, the point was then taken by the
    appellant’s managing director who represented it in those
    proceedings, claiming a lack of jurisdiction by virtue of the
    agreement to private arbitration. At the arbitration proceedings,
    the appellant disavowed both her signature to the agreement and
    denied all knowledge of its import. She stated that she is literate,
    having attended school and having completed grade 10. But it would
    appear from the record that the respondent did not appreciate or
    understand the effect of this addendum. In view of the conclusion I
    reach concerning an agreement of this nature, it is not necessary to
    further address the question as to whether there was proper
    consensus in respect of this addendum.







  1. The
    appellant claims that this addendum would preclude arbitration under
    the Act by virtue of the provisions of s 91 of the Act. The portions
    of that section relevant to this enquiry are embodied in
    sub-sections (1) and (2), which provide:







(1) For the purposes of this section
"arbitration agreement" means any agreement contemplated in
subsection (2) and includes the arbitration procedure contemplated in
section 73.



(2) Parties to a dispute contemplated under this Act may agree in
writing to refer that dispute to arbitration under this section”.



  1. This
    section contemplates that parties to a dispute have the option to
    agree in writing to refer that specific dispute to arbitration. In s
    91(1) an agreement of this nature is stated to specifically include
    an arbitration procedure contemplated in s 73. That section concerns
    disputes arising from the application, interpretation and
    enforcement of a collective agreement between an employer (or
    employers’ organisation) and a union.







  1. Section
    73 expressly requires that collective agreements must provide for a
    dispute resolution procedure including an arbitration procedure to
    resolve disputes concerning the interpretation, application or
    enforcement of a collective agreement in accordance with the dispute
    mechanisms contained in the Act. This section however provides that
    the parties may refer the dispute to the Labour Commissioner where
    the collective agreement does not provide for a procedure or where
    the procedure is not operative. This section, when read with s 91
    and its express reference to Part D of Chapter 8 (which provides for
    private arbitration) thus contemplates the referral of such a
    dispute by way of an agreement to private arbitration.







  1. The
    question arises as to whether the addendum would constitute an
    agreement to submit to private arbitration as contemplated by the
    Act. The reference to include collective agreements in s 91(1) would
    thus not limit the operation of private arbitration in s 91 to
    collective agreements. But where a submission to private arbitration
    is not contained in a collective agreement, s 91(2) in my view
    contemplates that there would first need to be a dispute between the
    parties which is then referred to arbitration. This would seem to me
    to arise from the clear language employed and the intention of this
    section, considered in the context of the Act, construed as a whole.
    It would thus be open to parties to a dispute contemplated by the
    Act to enter into an agreement to refer that specific dispute to
    private arbitration. But only once a dispute has arisen, would the
    parties be able to refer it to private arbitration if they so
    agreed.







  1. The
    agreement which the appellant relies upon does not in my view meet
    the requisites of this section. It would seem that the respondent
    and other employees of the appellant would be required to sign the
    addendum when entering the appellant’s employ. There would be
    thus no dispute between the parties at that time. It would follow in
    my view that the addendum does not amount to an agreement to private
    arbitration under the Act. It would seem to me to undermine the very
    purpose of the Act for an aspirant employee to sign such a contract
    when entering into the employ of an employer and to thus contract
    out of the protective provisions of the Act.







  1. In
    view of my finding that the addendum would not amount to an
    agreement to private arbitration as contemplated under s 91(1), it
    is not necessary for me to consider the further question, not raised
    or argued, as to whether such an agreement would in any event in the
    circumstances of this case be unenforceable by reason of being
    against public policy. Quite apart from seeking to require that a
    prospective employee contract out of several of the protective
    provisions of the Act, the agreement would furthermore require that
    the parties must equally bear the cost of the private arbitration in
    question. Quite why this should be enforced against an employee who
    earns N$9.24 per hour was not explained to me on behalf of the
    appellant.







  1. After
    I raised these concerns with Mr Horn, he informed me that the
    appellant would no longer persist with this point. In view of the
    fact that it was raised and a ruling made upon it, it has been
    necessary for me to deal with it.







  1. Although
    the arbitrator rejected the preliminary point relating to absence of
    jurisdiction for different reasons, his decision to do so is upheld.






Constructive
dismissal





The
arbitrator found that the respondent had been constructively
dismissed by the appellant. This question is to be assessed against
the factual background to this component of the enquiry.



  1. The
    respondent stated at the proceedings that a supervisor in the employ
    of a client company to the appellant where the respondent performed
    her work, CIC, had told her to resign. This, she stated, arose in
    the following way. A security guard, employed by a security company
    at the premises (of the client company) where the respondent worked
    had apparently accused the respondent of being implicated in the
    theft of face lotion. It had not been found upon the respondent but
    in the locker of a female security guard. It would seem that the
    security guard alleged that the respondent was complicit in the
    theft of that lotion.







  1. On
    the appellant’s version the security guard then raised this
    more than once with the respondent. She in turn complained to the
    supervisor at the client company, Mr Boois, (also referred to as Mr
    van Damme,) about the accusations levelled against her by the
    security guard. It was then that the supervisor had suggested to her
    that if she was unhappy in her employment, she should consider
    resigning. The respondent stated that he informed her that if she
    did so she would receive three months pay plus a further N$1,000.00
    as a bonus.







  1. This
    supervisor was called by the appellant as a witness. He denied
    making any such promise but confirmed that he had suggested to the
    appellant that she may want to resign if she was unhappy in her
    employment, given her ongoing dispute with the security guard in
    question.








  1. The respondent also stated that the security guard in question had
    requested her to fill in a form and informed her that he had the
    right “to chase her from the company”. When asked if she
    believed this by the arbitrator, she answered in the negative. The
    respondent also stated that she then went to the supervisor in the
    employ of the appellant, Mr Heita Nghiyoonanye and stated that he
    made a similar promise to her had been given by Mr Boois.


  2. Mr
    Nghiyoonanye gave evidence for the appellant and denied this. He
    stated that he would not have any authority to do so. Nor was there
    any precedent in the appellant’s employment regime for such a
    promise to be made. He testified under oath that the respondent had
    come to his office and said she wanted to resign. In response, he
    said that she may do so but that she should herself record this in
    writing and provided a blank piece of paper for her to record that
    she wanted to resign. It is common cause that the respondent stated
    under her signature on 21 July 2010:







I Ndapewashali Hambata want to resign
from LSC.”













  1. It is
    also common cause that she duly did so and collected her outstanding
    pay in the sum of N$1,728.38 during the following week and on 28
    July 2010. When collecting her pay, she was however required to sign
    a form containing her name that she received the sum in full and
    final settlement of all claims against the appellant by virtue of
    her “consensual termination of employment”. In view of
    the conclusion I reach, it is not necessary to determine whether
    this constituted a valid and enforceable compromise.







  1. In
    the course of the arbitration, the respondent stated that she did
    want to resign but her desire to do so had arisen in the
    circumstances of the accusation levelled against her and after a
    suggestion to that effect made by Mr Boois together with the alleged
    promises made by him and by Mr Nghiyoonanye.







  1. Mr
    Nghiyoonanye also testified that at the time the respondent
    approached him to resign, he was unaware of the allegations made by
    the security guard against the respondent. He said that he only
    learned of these after she had left the employ of the appellant on
    21 July 2010. The respondent had stated that Mr Nghiyoonanye was
    aware of the allegation or imputation when she had approached him.







  1. The
    arbitrator approached the enquiry on the basis that the appellant
    had the burden of proof of essentially establishing that there had
    not been a constructive dismissal. This is incorrect. This Court has
    referred to constructive dismissal as arising where an employee
    terminates or agrees to terminate the employment relationship due to
    the conduct of an employer and under circumstances which render the
    termination tantamount to or in substance a termination by an
    employer. 1
    This Court proceeded in that matter to hold, with reference to South
    African authority 2,
    that an employee essentially had the onus to establish that the
    resignation amounted to a constructive dismissal. Only once this is
    established, would the onus then shift to an employer with reference
    to the circumstances which prompted the resignation as being fair or
    unfair.







  1. The
    applicable test was recently lucidly explained by Cameron, JA in the
    South African Supreme Court of Appeal as follows: 3







[12] …… These cases have
established that the onus rests on the employee to prove that the
resignation constituted a constructive dismissal: in other words, the
employee must prove that the resignation was not voluntary, and that
it was not intended to
terminate
the employment relationship. Once this is established, the inquiry is
whether the employer (irrespective of any intention to repudiate the
contract of employment) had without reasonable and proper cause
conducted itself in a manner calculated or likely to destroy or
seriously damage the relationship of confidence and trust with the
employee. Looking at the employer's conduct as a whole and in its
cumulative impact, the courts have asked in such cases whether its
effect, judged reasonably and sensibly, was such that the employee
could not be expected to put up with it.







[13] It deserves emphasis that the mere fact that an employee
resigns because work has become intolerable does not by itself make
for constructive dismissal. For one thing, the employer may not have
control over what makes conditions intolerable. So the critical
circumstances 'must have been of the employer's making'. But even if
the employer is responsible, it may not be to blame. There are many
things an employer may fairly and reasonably do that may make an
employee's position intolerable. More is needed. The employer must be
culpably responsible in some way for the intolerable conditions: the
conduct must (in the formulation the courts have adopted) have lacked
'reasonable and proper cause'. Culpability does not mean that the
employer must have wanted or intended to get rid of the employee,
though in many instances of constructive dismissal that is the case.”






  1. The
    arbitrator thus clearly misunderstood the test in establishing a
    constructive dismissal (and the concept itself) and specifically the
    question of the onus.







  1. Even
    upon the respondent’s own version considered on its own, it
    would not seem to me that the test was established. But the
    respondent had the onus to establish that her resignation amounted
    to a constructive dismissal as contemplated by the authorities. Both
    the respondent’s supervisor in her employment with the
    appellant, Mr Nghiyoonanye, as well as the supervisor on the side at
    the client company, Mr Boois, denied making the alleged promise to
    her. But more importantly, in considering all the facts, it would
    rather seem to have occurred that Mr Boois had suggested that the
    respondent may wish to resign, given her unhappiness arising from
    the accusations levelled against her. This would not in my view
    amount to conduct calculated or likely to destroy or damage the
    employment relationship.







  1. The
    respondent herself stated that she wished to resign and it would
    seem that her ultimate unhappiness was rather a consequence of not
    having received the incentive which she contends had been promised
    to her for her resignation. Her employment would in any event had
    come to an end at the end of the following month. Mr Nghiyoonanye’s
    version was not disputed, despite being subjected to vigorous
    cross-examination by the arbitrator. It is also unlikely that he
    would offer such an incentive which would amount to payment after
    her employment would have come to an end.







  1. Upon
    these facts, it is clear to me that the respondent did not establish
    a constructive dismissal. The arbitrator erred in making a finding
    of that nature. It would follow that the arbitrator’s award
    would need to be set aside for this reason alone.







  1. It is
    accordingly not necessary to further address his award in an amount
    equal to four months employment even though the respondent’s
    employment contract would have ended on
    31 August 2010, a little
    more than a month after her resignation.







  1. In
    setting aside the award, I also wish to refer to certain
    irregularities which occurred in the proceedings. Despite the
    representative of the appellant expressly requesting it, the
    arbitrator declined to require that the respondent give her evidence
    under oath. She merely made a statement even though the arbitrator
    permitted cross-examination of her. On the other hand, he required
    that the appellant’s witnesses to give their evidence under
    oath. This amounts to an irregularity. Parties are to be treated
    alike.







  1. In
    the course of their testimony, the arbitrator subjected the
    appellant witness to extensive and hostile cross-examination. This
    is not in keeping with his position as an arbitrator. Whilst I
    appreciate that an arbitrator may in the context of an unrepresented
    employee need to ask probing questions of an employer’s
    witnesses, an arbitrator should not descend into the arena and
    engage in vigorous and hostile cross-examination of the witnesses of
    one side, including on issues which were not even raised in the
    employee’s statement. This also constitutes an irregularity in
    those proceedings. Had there not been the incorrect application of
    the test involving constructive dismissal, I would have been
    inclined to set aside the proceedings on the grounds of these
    irregularities.







  1. The
    order I accordingly make is that the award of the arbitrator dated 1
    November 2010 is hereby set aside.


















________________



Smuts, J



ON BEHALF OF APPELLANT MR. HORN



Instructed by: MB DE KLERK & ASSOCIATES










1Cymot
(Pty) Ltd v Mcloud 2002 NR 391 (LC) at 393




2Jooste
v Transnet Ltd t/a SA Airways (1995) 16 ILJ 629 (LAC) at 638 B.




3Murray
v Minister of Defence 2009(3) SA 130 (SCA) at 137 at par [12]-[13].
This approach is reaffirmed by the Constitutional Court in Strategic
Liquor Services v Mvumbi NO 2010(2) SA 92 (CC) at 94