Securitas Specialised Services (Pty) Ltd v Commission for Conciliation Mediation and Arbitration and Others

Mr Edward Pheme was employed as a Contracts Manager by Securitas Specialised Services for sixteen years. He was charged with multiple counts of misconduct including: (a) violence and threats of violence; (b) bringing the company's name into disrepute; (c) gross negligence; (d) unauthorised absenteeism; and (e) failure to follow lawful instructions. At his disciplinary hearing on 26 July 2011, he arrived with a union official (Mr Hlatswayo) as his representative, but the chairperson refused to allow this representation as he was neither a shop-steward nor co-worker. The employee represented himself, was found guilty of misconduct and dismissed on 12 August 2011. He did not appeal the decision. The employee referred an unfair dismissal dispute to the CCMA challenging both procedural and substantive fairness. The CCMA arbitrator found the dismissal both procedurally and substantively unfair and ordered retrospective reinstatement. The employer launched a review application which was dismissed by the Labour Court. The employer then appealed to the Labour Appeal Court with leave.

• Whether the CCMA arbitrator's award was reviewable on the grounds that it was a decision that a reasonable decision-maker could not reach
• Whether the arbitrator was biased in conducting the arbitration proceedings
• Whether the arbitrator erred in finding the dismissal procedurally unfair due to denial of representation
• Whether the arbitrator erred in finding the dismissal substantively unfair
• Whether the arbitrator properly applied progressive discipline principles
• Whether errors in the arbitrator's findings on procedural fairness affected the validity of the award on substantive unfairness
• The proper test for reviewing CCMA arbitration awards and the distinction between review and appeal

The appeal was dismissed with costs.

The binding legal principles established are: (1) The test for reviewing CCMA arbitration awards is whether the decision is one that a reasonable decision-maker could not reach, as established in Sidumo; (2) To maintain the distinction between review and appeal, an arbitrator's award will only be set aside if both the reasons and the result are unreasonable; (3) In determining reasonableness, the Labour Court must broadly evaluate the merits and consider whether the result is capable of justification for reasons other than those given by the arbitrator; (4) The result will be unreasonable only if entirely disconnected from the evidence, unsupported by any evidence, or involves speculation; (5) Review courts must consider the totality of evidence rather than adopt a piecemeal approach; (6) An error by an arbitrator on procedural fairness does not render the award unreasonable if the finding of substantive unfairness is reasonable and supported by evidence; (7) Employers must follow progressive discipline procedures before dismissing for performance-related issues - counselling alone without subsequent warnings for continued underperformance is insufficient to justify dismissal.

The Court made several non-binding observations: (1) The arbitrator's use of the word "reprimand" toward a witness was regrettable, though not indicative of bias in the circumstances; (2) Even if the arbitrator incorrectly recorded certain evidence or erroneously identified which witness made particular decisions, such errors are not material to the outcome unless they render the decision unreasonable; (3) Evidence of racial slurs by management, while summarized in the award, did not appear to influence the arbitrator's reasoning on substantive unfairness; (4) The silence of a witness under cross-examination on a pertinent question can be telling and support adverse inferences; (5) The grounds of review raised by the appellant contradicted the essence of what the Constitutional Court sought to ensure in Sidumo by impermissibly seeking to blur the lines between appeal and review.

This case reinforces the proper test for reviewing CCMA arbitration awards established in Sidumo and clarifies important principles: (1) it restates and applies the reasonableness test for review of arbitration awards - whether the decision is one a reasonable decision-maker could not reach; (2) it maintains the clear distinction between review (focusing on reasonableness) and appeal (focusing on correctness); (3) it confirms that review courts must consider the totality of evidence rather than taking a piecemeal approach to individual alleged errors; (4) it establishes that procedural unfairness findings that are erroneous do not necessarily vitiate an award where substantive unfairness is reasonably established; (5) it emphasizes that both the reasons and result must be unreasonable for an award to be set aside; and (6) it confirms that employers must properly follow progressive discipline before imposing dismissal for performance-related misconduct. The judgment is particularly important in reinforcing the limited scope of review jurisdiction over CCMA awards and preventing parties from using review as a disguised appeal mechanism.