Protea Chemicals Namibia (Pty) Ltd v Wilhelm (HC-MD-LAB ...



4552950-5715000REPUBLIC OF NAMIBIALABOUR COURT OF NAMIBIA MAIN DIVISION, WINDHOEKJUDGMENTCase no: HC-MD-LAB-APP-AAA-2019/00030In the matter between:PROTEA CHEMICALS NAMIBIA (PTY) LTD APPELLANTandELIAS WILHELM RESPONDENT Neutral citation:Protea Chemicals Namibia (Pty) Ltd v Wilhelm (HC-MD-LAB-APP-AAA-2019/00030) [2020] NALCMD 29 (16 October 2020)Coram:Rakow, JHeard:Determined on papersDelivered:16 October 2020Flynote:Labour Law – Arbitral award - Appeals from arbitrator’s award- Such only permissible on questions of law - finding by the arbitrator that disciplinary hearing was both procedurally and substantively unfair was not reasonable.Labour Law – Unfair Labour Practice – what constitutes – practices under section (1) of Labour Act 11 of 2007 – Court held section 50 (1)(e) not applicable in this matter. Procedure – Respondent failing to comply with the Consolidated Practice Directives – Legal Practitioner failing to file heads of arguments – no reasons advanced to Court – Court disapproves of the respondents legal practitioners conduct – Legal Practitioner ordered not to charge respondent fees in this matter. Summary:In this matter the appellant appeals, in terms of section 89 of the Labour Act. 11 of 2007 (the Act) against an award made by the arbitrator on 07 May 2019. Respondent is employed by the Appellant and was charged with misconduct, i.e, that he disclosed confidential and private information to an unauthorised third party regarding his salary and personal benefits. He was subjected to a disciplinary hearing where he pleaded guilty and was accordingly found guilty. The respondent during his submission on mitigating circumstances pleaded with the Chairperson to be demoted rather than fired, which was in line with the company policy. Due to, inter alia, his plea of guilty and admission of wrong doing as mitigating circumstances, he received, instead of a dismissal as per the guideline of applicable sanction, a final written warning, with a recommendation by the chairperson of the disciplinary enquiry that consideration be given to a demotion of the respondent to a lower position as requested by him with a reduction in remuneration commensurate with such lower position. Respondent agreed to such a demotion and signed a written agreement to this effect. Aggrieved by the reduction in remuneration some months after working in the lower position, he referred a dispute of unfair labour practice to the office of the Labour Commissioner. On 07 May 2019 the arbitrator found that the demotion amounts to a unilateral change of condition of employment in violation of section 50 (1)(e) of the Labour Act, No. 11 of 2007. It is against this award that the appellant is appealing. Held that an application for condonation should present a reasonable explanation for the delay and also show that there are reasonable prospects of success on appeal. The court found that the appellant and respondent had met the twin requirements in the instant case.Held that the only way in which a change in the contract of employment between the appellant and the respondent could be effected lawfully was by way of negotiation and mutual agreement.Held furthermore that it is a trite principle of law of contract that a person who has signed a contractual document thereby signifies his assent to the contents of the document. Held that no reasonable arbitrator would have found that the actions of the appellant amounted to unilateral change of conditions of employment in violation of section 50 (1)(e) of the Labour Act, 11 of 2007.ORDERThe non-compliance of the appellant and respondent in respect of the applications for condonation filed are hereby condoned and the appeal succeeds.The arbitration award dated 07 May 2020 is hereby set aside. The legal practitioners of the respondent are not to charge him any fees in this matter. JUDGMENTRAKOW, J:Introduction and Background[1]In this matter the appellant, Protea Chemicals Namibia (Pty) Ltd company with limited liability and which is incorporated in accordance with the Laws of the Republic of Namibia) appeals, in terms of s 89 of the Labour Act, 11 of 2007 (the Act) against an award made by an Arbitrator on 07 May 2019. [2]From the onset I find it appropriate to mention that the appellant and respondent both brought applications for condonation, the appellant for the late filing of the reconstructed record and the respondent for the late filing of its notice of intention to oppose the appeal. I grant both these applications. I will deal with the arguments and applicable legal principles within the judgment. [3]The brief background of the facts which gave rise to this appeal is as follows: Mr Elias Wilhelm (in this judgment, I will refer to him as the respondent) is employed by the Appellant and was charged with misconduct, i.e., that he disclosed confidential and private information to an unauthorised third party regarding his salary and personal benefits. He was subjected to a disciplinary hearing where he pleaded guilty and accordingly found guilty. The respondent during his submission on mitigating circumstances pleaded with the Chairperson to rather be given a lower position than to be dismissed. Due to, inter alia, his plea of guilty and admission of wrong-doing as mitigating circumstances, he received, instead of a dismissal as sanction as per the guideline of sanction applicable, a final written warning, with a recommendation by the chairperson of the disciplinary enquiry that consideration be given to a demotion of the respondent to a lower position as requested by him with a reduction in remuneration commensurate with such lower position. [4]On 21 July 2016, respondent agreed to such a demotion and signed a written agreement to this effect to be effective from 01 August 2016. On 03 July 2017, some +- 10 months down the line, aggrieved by the reduction in remuneration, he referred complaint of unfair labour practice to the Office of the Labour Commission. A formal arbitration hearing was set down. On 7 May 2019, the arbitrator made an award in favour of the respondent, where he held that the demotion of the respondent amounts to a unilateral change of conditions of employment in violation of section 50 (1)(e) of Labour Act, No. 11 of 2007 and ordered the appellant to reinstate the respondent in his original position and to pay him the amount of N$148 500. It is against this award that the appellant is appealing.The pleadingsGrounds of appeal [5]As previously indicated the appellant appeals against the award made by the arbitrator. In its notice of appeal the appellant sets out its grounds of appeal as follows:‘1.The arbitrator erred in law in finding that the respondent’s employment contract was terminated, that such termination was unprocedural, that his employment contract was replaced with a new contract and that aforegoing constituted a unilateral change of terms and conditions of employment in violation of the provisions of section 50 (1) (e) of the Labour Act 11 of 2007, where:1.1the respondent’s contract of employment was not terminated;1.2 the respondent’s contract of employment was terminated un-procedurally;1.3the respondent’s contract of employment was not replaced with a new contract;1.4 there was no unilateral change of terms and conditions of employment, given that the respondent’s demotion flowed from a disciplinary hearing and furthermore the respondent agreed to such demotion;1.5under the circumstances, section 50 (1) (e) of the Act does not find application. 2. the arbitrator erred in law, under the circumstances, awarding the respondent:2.1 retrospective salary payment amounting to N$121, 500.00;2.2 retrospective housing allowances amounting to N$27,000.00 In circumstances where the demotion flowed from substantively and procedurally fair disciplinary hearing action and an agreement to demote the respondent. 3. the arbitrator erred in law in finding that the respondent could not be demoted because the company policy does not provide for demotion, in circumstances where the sanction (provided it is fair and reasonable) is the prerogative of the appellant, and the demotion was, in any event agreed between the parties. 4. the arbitrator erred in law in reinstating the respondent in his previous position in circumstances where his demotion was one of the recommendations flowing from the disciplinary hearing and the respondent subsequently, in writing, agreed thereto. 5. the appellant reserves the right to amplify, vary and add to this notice of appeal once the full and complete award is provided and/or once the arbitration record has been provided. ‘The grounds of opposition [6] As required by rule 17(16) of the Labour Court Rules, the respondent filed a notice of intention to oppose and a statement of grounds of opposition to the appeal. They are the respondent’s response to the appellant’s aforementioned grounds of appeal and they are as follows:FURTHER TAKE NOTICE THAT the grounds of first respondent’s opposition are- Generally it will be contended by the respondent that arbitrator acted fairly and within her powers conferred by the Labour Act, Act 11 of 2007 in ruling in favour of the respondent during the arbitration proceedings, and rendering the arbitration award accordingly and that this Honourable court should uphold this award. More specifically the respondent will contend that the grounds of appeal of the appellant should be rejected by this Honourable court in that:The arbitrator was correct in finding that the appellant deviated from its own company policy when the appellant demoted the respondent. The arbitrator was correct in finding that the respondent’s contract of employment was replaced by a new contract as the appellant led evidence to that effect.The arbitrator was correct in finding that the respondent agreed to the demotion out of fear of losing his employment and he acted against his will.The arbitrator was correct in finding that the appellant, by replacing the respondent’s contract of employment with a new contract, unilaterally changed the conditions of employment of the respondent.’In the result, it is humbly prayed that the appeal be dismissed with costs. Additional issue[7]Before I proceed with the grounds of appeal I wish to address a disturbing issue being the fact that the legal practioner of the respondent failed to file his heads of arguments as agreed between the parties on 1 June 2020 in compliance with the State of Emergency Directive 2.5.2.7. In the written agreement the parties agreed that the matter be heard on papers before Court without the need for oral arguments. Cheda J in the matter of Kwedhi v Amupolo Building Construction CC at par 7 stated that with regards to conduct of the legal practitioners who fail to comply with the rules of the court:‘7. I am of the considered view that the respondent approached this matter with a lack of seriousness. Such conduct in my view deserves disapproval. Therefore any litigant who disregards the rules of court deserves to be followed by the full wrath of the law Rules of the court should be respected by all those who are bound by them; a party who seeks to deviate from those rules cannot avoid the court’s indignation by being ordered to pay punitive costs…..9. … these courts have a duty to enforce their own rules. Therefore any litigant who without just cause choses to breach them should no doubt be prepared to incur the wrath of the courts. . Respondent’s legal practitioner towards these can be best described as uncaring. ‘The respondent’s legal practitioner failed to comply with the rules of this Court; he also did not file any document explaining his non-compliance with the said rules or seeking an indulgence from this Court and must therefore deal with the consequences of his actions. I am therefore in agreement with Cheda, J. Application for condonation[8]In Angula v LorentzAngula Inc, the court stated that ‘the granting of condonation is a discretion that the court exercises … the test applied by the courts in these cases is trite as set out in the case of Itula v Angula NO that the applicant must show 'something which entitles him to ask for the indulgence of the Court'. What that something is must be decided upon the circumstances of each particular application'. In addition, the courts have required the applicant to give a reasonable explanation for his default; the application must be made bona fide ...’ All in all, the party seeking condonation bears the onus to satisfy the court that there is sufficient cause to warrant the grant of condonation’. .[9]The appellant has made an application for condonation in respect of his non-compliance with the rules of this Honourable Court in relation to its late filing of the reconstructed record and applied for reinstatement of the appeal. The respondent also made an application for condonation in relation to the late filing of his notice to oppose the appeal and filing of his statement containing the grounds of opposition.[10]In my view, the reasons for default furnished by the appellant and respondent for their late compliance are acceptable and therefore are condoned by this court. I further find that good cause has been shown in terms of rule 15 of the Labour Court Rules, and no evidence of wilful default on the part of the appellant and respondent and their reasons for the default are condoned. The respondent is a lay person in law and he could not on his own comply with the rules without the services of a legal practitioner. Issues on appeal[11]In view of the grounds of appeal and the grounds of opposition, I am of the view that the question which I am called upon to determine is whether or not the arbitrator erred in his finding that the actions of the appellant to demote the respondent amounted to the violation of section 50 (1)(e) of the Labour Act, Act 11 of 2007.[12]Having briefly set out the background and the grounds of appeal and opposition I will now turn to deal with the legal principles and case law.Unilateral change [13]Section 50 (1)(e) the Labour Act, 2007 provides as follows:‘It is unfair labour practice for an employer or an employers’ organisation- (e) to unilaterally alter any term or condition of employment.’[14]Parker in his works Labour Law in Namibia at page 30, states that there is generally only one lawful way in which terms of a contract of employment may be varied and that is through agreement between the employer and employee. In Smith v Standard Bank Namibia the Labour Court held that:‘The only way in which a change in the contract of employment between the applicant and the respondent could be effected lawfully was by way of negotiation and mutual agreement’.[15]Parker further stated that at page 31 to 32:‘Thus, once a contract has been concluded, the terms it contains are fixed and is not up to a party to vary them unilaterally: a party may do so if the contract provides for variation. But even then a party may not vary the terms unilaterally unless such was the understanding and in respect of certain matters. (own emphasis)Caveat subscriptor[16]Shivute CJ in Hugo v Council of Municipality of Grootfontein stated the following:‘It is a trite principle of law of contract that a person who has signed a contractual document thereby signifies his assent to the contents of the document.’ Further, Maritz JA in Namibia Broadcasting Corporation v Kruger and others said the following about signing documentation:‘9. … Fagan CJ remarked in George v Fairmead (Pty) Ltd ‘When a man is asked to put his signature to a document he cannot fail to realise that he is called upon to signify, by doing so, his assent to whatever words above his signature.’10. Absent credible allegation of misrepresentation, subterfuge, dishonest concealment, duress, fraud or the other exceptions to the general rule, the second to 22nd respondents are bound by qualification of the severance payments reflected in their respective deeds of settlement with the appellant. They agreed to receive them in full and final settlement of their respective claims and, in that sense, their signatures not only sealed the quantum of their severance entitlements but also the fate of their application.’ (own emphasis)Compromise – at law [17]In Elizabeth Mbambus v Motor Vehicle Accident Fund, Van Niekerk J, stated the following citing with approval of the definition given to a compromise, otherwise referred to as a transactio in Estate Erasmus v Church, where the following appears:‘A transactio is an agreement between two or more person, who, for preventing or ending a law suit, adjust their differences by mutual consent, in the manner in which they agree on; and which every one of them prefers to the hopes of gaining, joined with the danger of losing’ (own emphasis). [18]The contention that the respondent was placed under duress in my view was an after-thought at the arbitration proceedings. I say so, mainly because of the following: the respondent signed the demotion/agreement letter on 21 July 2016, which clearly indicated his new salary structure; worked in that lower position for a period of over 9 months and then referred his complaint to the office of the Labour Commissioner as unfair labour practice. The respondent had the opportunity to appeal the outcome of the disciplinary hearing and to decline to sign the demotion agreement/letter. This he did not do and therefore the respondent failed to exhaust his internal remedies. As a result it can be accepted that the parties where ad idem as to the terms of the demotion and the respondent was of his rights and obligations at the time of the signing of the demotion agreement/letter. Furthermore, he also intended to be bound by the terms of the demotion agreement/letter and considered him bound by it for about 9 months.[19] The appellant’s policy on disciplinary code and procedures does not make provision for a demotion but rather for a dismissal for the offence the respondent was charged with. However the respondent during his mitigation at the disciplinary hearing pleaded with the chairperson that he be pardoned and offered to work in a much lower position. [20]In Country Fair Foods (Pty) Ltd v CCMA & Others (1999) 20 ILJ 1701 (LAC) the court stated that ‘it remains part of our law that it lies within the province of the employer to determine sanctions in relation to noncompliance with standards set by the employer. The court further stated that interference with such sanctions is only justified in cases of unreasonableness and unfairness.’ The court went on to state that “interference would only be justified if the sanction is so excessive or lenient that in all good conscience it cannot be allowed to stand.’[21]I am therefore of the considered opinion that the sanction is fair and reasonable under the circumstances and therefore does not fall within the ambit of section 50 (1)(e) of the Labour Act 11 of 2007, in that the respondent agreed to the changes being made to his employment conditions. The appellant did not unilaterally change those conditions as the respondent signed the demotion agreement/letter and he worked in those conditions for a period of more than 9 months. [22] In light of the above the court finds that no reasonable arbitrator would have found that the actions of the appellant amounted to unilateral change of conditions of employment in violation of section 50 (1)(e) of the Labour Act, 11 of 2007. [23]The appeal succeeds for the above reasons and the court sets aside the Arbitrator’s award dated 07 May 2019. The legal practitioners of the respondent are not to charge him any fees in this matter as they failed to present any arguments on behalf of the respondent. The court therefore makes the following order:1.The non-compliance of the appellant and respondent in respect of the applications for condonation filed are hereby condoned and the appeal succeeds.2.The arbitration award dated 07 May 2020 is hereby set aside. 3.The legal practitioners of the respondent are not to charge him any fees in this matter.---------------------------E. RAKOWJudgeAPPEARANCES:APPELLANT:Mr Kopplinger Instructed by Kopplinger Boltman Legal Practitioners WindhoekRESPONDENT:Mr CoetzeeInstructed by Tjitemisa & AssociatesWindhoek ................
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