This article is an overview of the judgement in the matter of VSB Construction t/a Techni-Civils CC v NUM obo Mngqola and Others (PA11/2018) [2021] ZALAC 21 (23 July 2021)

In the absence of exceptional circumstances, it is impermissible to couple a finding that a dismissal was inappropriate with a finding that reinstatement would not be appropriate in terms of Section 193(2) of the LRA.

In this case, the employee was dismissed after being found guilty on a charge of “gross dishonesty” in that he had allegedly stated that the Chief Executive Officer was a racist. He subsequently repeated the allegation to other employees, particularly to members of the human resources department.

At arbitration, the arbitrator found in favour of the applicant and awarded him two months compensation. The arbitrator decided that the employee ought not to be reinstated for two reasons: (i) considering the employer’s submissions and the circumstances in their entirety, the trust relationship between the employer and the employee had broken down irretrievably; and (ii) the employee “was not an honest witness”.

On review at the Labour Court, the employee contended that the arbitrator had improperly exercised her discretion by refusing to reinstate him, and that this decision was unreasonable and not one which a reasonable arbitrator could have made. The Court overturned the arbitrator’s remedy and ordered reinstatement, saying – ‘”Given her findings on why dismissal was not an inappropriate sanction, the arbitrator could not possibly have found that a continued employment relationship would be intolerable”.

Dissatisfied with this order, the employer approached the Labour Appeal Court (hereafter LAC) to set aside the relief granted by the Labour Court, although it accepted that the dismissal was substantively unfair. The employer contended that the remarks made by the employee were reasonably capable of being construed in the manner complained of by the employer.

The LAC confirmed that an arbitrator must order reinstatement unless one of the exceptions in Section 193(2) of the LRA applies. The only exception applicable in this case was Section 193(2)(b), which provides that reinstatement or re-employment need not be granted when “the circumstances surrounding the dismissal were such that a continued employment relationship would be intolerable”.

The LAC confirmed that an employee’s behaviour, even if deserving of reproach, could not be construed to inhibit an order of reinstatement. In this case, the dismissal should not have legally taken place. The finding that the dismissal was substantively unfair was not contested by the employer. If a dismissal should not have occurred, the employment relationship would have continued, save for exceptional circumstances as envisaged in Section 193(2)(b) of the LRA.

Without showing exceptional circumstances, it is impermissible to couple a finding that a dismissal was inappropriate with a finding that reinstatement would not be appropriate. The LAC found that exceptional circumstances had not been established in this case – no evidence was led during the arbitration to support that reinstatement would be an inappropriate order.

This decision is in line with previous caselaw, which have said that where there is no evidence that employees committed misconduct, there is no evidence that the employment relationship cannot be sustained. The general rule of reinstatement as the preferred remedy for unfair dismissal, must then prevail.

In this case, there was no evidence led during the arbitration hearing to the effect that reinstatement would be an inappropriate order. The closest the appellant came to providing any basis for exceptional circumstances was evidence that false accusations of racism aired in public would harm its business. But the allegation made by the employee was not made in public. Moreover, the truth or otherwise of the employee’s allegation was never put to the test, and the third respondent made no express finding, that an allegation of racism is hurtful in the extreme when made with no justification. But in this case, the core finding was that the conduct of the employee could not justify a dismissal.

It is imperative for employers to lead evidence during arbitration to illustrate that the factors as per Section 193(2) of the LRA are put forth coherently.

Article by: Jamie Moodley
Dispute Resolution Official – Durban