The Constitutional Court recently drew a firm line in the sand in South African Revenue Service v Commission for Conciliation, Mediation and Arbitration and Others [2016] ZACC 38.

Facts

Mr Jacobus Johannes Kruger (Kruger) was employed by SARS from 1991. On two occasions during 2007, Kruger hurled racial slurs at his superior. As a result, SARS instituted a disciplinary enquiry against Kruger.

Kruger pleaded guilty to the allegations of misconduct levelled against him. The chairperson imposed the following sanction- (i) a final written warning (valid for 6 months), (ii) 10 days suspension without pay and (iii) counselling.

Kruger's Employer, SARS, changed the chairperson's sanction to that of dismissal. Kruger subsequently referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA).

The CCMA arbitrator (Arbitrator) was required to determine whether (i) Kruger's dismissal was procedurally and substantively unfair and (ii) SARS had the power to issue a harsher sanction than that issued by the disciplinary chairperson.

The Arbitrator found that SARS, in terms of a collective agreement that binds it, was not entitled to substitute the chairperson's sanction with that of dismissal. The Arbitrator ordered that SARS must reinstate Kruger, on the conditions stated by the chairperson at the disciplinary hearing.

SARS challenged the award in the Labour Court and the Labour Appeal Court (both times unsuccessfully).

SARS then appealed to the Constitutional Court, whereby it sought to have the portion of the arbitration award requiring it to reinstate Kruger, reviewed and set aside. The Constitutional Court was, thus, required to consider the reasonableness of the reinstatement.

SARS contended that the reinstatement part of the arbitration award was unreasonable and must be reviewed and set aside. It submitted that, regard being had to all the circumstances, no reasonable arbitrator could have ordered reinstatement.

How to prevent reinstatement of an employee

To prevent reinstatement, the employer must lead evidence to prove that the circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable or that it is not reasonably practicable for the employer to reinstate the employee. If an employee is unfairly dismissed s/he is entitled to be reinstated if there is no evidence preventing a court from making a different order.

Section 193(2) of the LRA has a list of instances where reinstatement would not be appropriate or ordered. It provides that -

"[t]he Labour Court or the arbitrator must require the employer to reinstate or re-employ the employee unless –

(a) the employee does not wish to be reinstated or reemployed;

(b) the circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable;

(c) it is not necessary or practicable for the employer to reinstate or re-employ the employee; or

(d) the dismissal is unfair only because the employer did not follow a fair procedure."

These are exceptions to the general rule that reinstatement is a primary remedy.

Decision

SARS submitted that the Arbitrator acted improperly by ordering reinstatement and that the award was reviewable as no reasonable arbitrator could have reached that decision. SARS admitted that the dismissal was procedurally unfair, however, argued that reinstatement was inappropriate as the employment relationship had become intolerable. Kruger argued that the appeal should be dismissed as no direct evidence was led to establish an irretrievable breakdown or the intolerability of the employment relationship.

The Constitutional Court emphasised the seriousness of the racial slur used. The Court held that the use of the word amounted to hate speech and that courts are obliged to act fairly but firmly against those who use it.

The Constitutional Court found that after concluding that Mr Kruger’s dismissal was unfair, the Arbitrator ordered his reinstatement, without taking cognisance of the provisions of section 193(2).

The Arbitrator should have considered the provisions of section 193(2) to determine whether reinstatement was an appropriate remedy. She was, in addition, obliged to give reasons for ordering SARS to reinstate Kruger (despite its contention and evidence that his continued employment would be intolerable). Furthermore, the Arbitrator was obliged to advise whether she considered Kruger’s continued employment to be tolerable and if so, on what basis. The Arbitrator failed to do this.

The Constitutional Court held that by ordering SARS to reinstate Kruger, the Arbitrator acted unreasonably. That reinstatement part of her award is thus unreasonable and was reviewed and set aside.

New Hope for Employers

Should an employer, during arbitration proceedings, fail to lead direct evidence as to the intolerability of the employment relationship, there might now be scope to review a reinstatement award in light of this decision, as an arbitrator is obliged to consider the facts as a whole.