Mr Mackay demanded severance pay from the employer, claiming it was not paid nine years earlier when he was retrenched by Cochrane Steel (an associate of the employer). He lodged a formal grievance and referred a dispute to the Bargaining Council. A commissioner dismissed his claim, finding he had been paid. The employer then charged Mr Mackay with attempted fraud and dishonesty for trying to defraud the employer by demanding payment of severance that had allegedly already been paid. Mr Mackay was dismissed on charges of gross dishonesty and attempted fraud. He referred a dispute to the Metal and Engineering Industries Bargaining Council where the commissioner ruled the dismissal unfair and ordered reinstatement with backpay. The employer sought to review and set aside this award, conceding the dismissal was procedurally flawed but contesting the substantive fairness finding.
1. The arbitration award dated 8 March 2021 (case number MEGA55742) was reviewed and set aside in its entirety and substituted with an order that the dismissal of Mr Mackay was for a fair reason. 2. The employer was ordered to compensate Mr Mackay in an amount equivalent to five months' salary within 14 days for its failure to comply with procedural fairness. 3. No order as to costs.
An arbitration award is reviewable where the commissioner fails to properly resolve material disputes of fact and does not apply the test for resolving factual disputes by considering credibility, reliability, and probabilities. A commissioner who does not apply her mind to all material issues before her and does not properly evaluate the evidence commits gross irregularities in the conduct of arbitration, resulting in an award that is not one which a reasonable decision maker could have made and falls outside the band of reasonableness. In terms of section 193(2)(d) of the LRA, reinstatement may not be ordered where the dismissal is unfair only because the employer did not follow a fair procedure - in such cases, compensation for the procedural unfairness is the appropriate remedy.
The court expressed agreement with the principle in Coca Cola Sabco (Pty) Ltd v Van Wyk that a commissioner may not order that reinstatement will start from a date after the issuing of the arbitration award, though it was not necessary to decide this issue given the finding that reinstatement was not competent. The court noted that while section 193(1) of the LRA allows a commissioner to make reinstatement retrospective, reinstatement operates from the date of the award unless the commissioner elects otherwise. The court also observed that no explanation was provided in evidence for why Mr Mackay claimed severance pay from the employer when he had been retrenched by Cochrane Steel, an associate company.
This case reinforces important principles regarding the review of arbitration awards in South African labour law. It emphasizes that commissioners must properly apply their minds to material evidence and resolve factual disputes by considering credibility, reliability, and probabilities as set out in SFW Group Ltd v Martell et Cie. The case confirms that failure to properly evaluate evidence and consider material issues constitutes a gross irregularity that renders an award reviewable as falling outside the band of reasonableness. The judgment also confirms that reinstatement is not competent where a dismissal is only procedurally unfair per section 193(2)(d) of the LRA, and that compensation is the appropriate remedy in such circumstances. The case illustrates the Labour Court's approach to determining when a commissioner's award is unreasonable and demonstrates the court's willingness to substitute its own order rather than remit where it would serve no purpose.