Toyota SA Motors (Pty) Limited v Commission for Conciliation, Mediation and Arbitration and Others

Mr Makhotla was employed by Toyota for about 5 years when he was dismissed in March 2011 for misconduct (being absent from work for 4 consecutive days without permission). Mr Makhotla had submitted a letter of resignation on 7 March 2011 with effect from 31 March 2011, but was dismissed on 24 March 2011 (7 days before his resignation would take effect). He gave conflicting explanations for his absence: (1) telling a manager he was not well, (2) sending an SMS saying he went to the Drakensberg to clear his mind, and (3) later stating he went to rescue a girl from an initiation school. A CCMA Commissioner found the dismissal substantively unfair and ordered reinstatement plus 6 months back pay (R218,400). Toyota launched a review application timeously in October 2011, but experienced difficulties with the record because the CCMA failed to provide a complete electronic recording of the arbitration proceedings. After various attempts to reconstruct the record over many months, the union and Mr Makhotla applied in August 2013 to dismiss Toyota's review application on grounds of delay. The Labour Court dismissed the review application without adjudicating on the merits, citing Toyota's delay and poor prospects of success. The Labour Court also made the arbitration award an order of court.

• Whether the Labour Court was correct to dismiss Toyota's review application on the basis of delay without adjudicating the merits
• Whether Toyota had reasonable prospects of success in its review application
• Whether the CCMA Commissioner committed a gross irregularity or misconduct in the arbitration proceedings
• Whether reinstatement was a competent remedy given that Mr Makhotla had submitted a resignation letter before dismissal
• What obligations rest on the CCMA and parties to ensure proper and complete records of arbitration proceedings
• The legal effect of an employee's resignation and whether it can be withdrawn
• Whether an arbitrator may determine a dismissal dispute without deciding whether the employee was guilty of misconduct

By majority (Mogoeng CJ, Moseneke DCJ, Cameron J, Jafta J, Khampepe J, Madlanga J, Matojane AJ, Nkabinde J, Van der Westhuizen J and Wallis AJ): Condonation for late filing of statement of facts granted. Leave to appeal refused with costs. By minority (Zondo J): Would have granted leave to appeal, upheld the appeal, set aside the Labour Court orders, and remitted the matter for adjudication of the review application on its merits.

The binding legal principles established by the majority are: (1) Labour review applications must be prosecuted expeditiously, consistent with the LRA's primary object of speedy dispute resolution. Protracted, unexplained delays of 18+ months will justify dismissal of a review without adjudication on the merits. (2) Time periods in labour disputes are essential to achieve timely resolution. Delay undermines the LRA's objects and is detrimental to both workers and employers. (3) The Labour Court has discretion under Rule 11(4) to dismiss review applications for delay where this is necessary to achieve the objects of the LRA. (4) Where a review applicant fails to comply with procedural rules (such as Rule 7A(8)) and fails to adequately explain delays in prosecuting the review, the court may properly dismiss the application without adjudicating the merits. (5) The inability to provide a complete record due to the CCMA's failure does not excuse a reviewing party from their obligations to prosecute the review diligently and timeously.

Nkabinde J (majority): Suggested that parties to arbitration should not be required to keep their own detailed notes or recordings when the CCMA is responsible for recording proceedings mechanically. However, the Labour Court was wrong to defend the CCMA's failure and suggest parties should have kept better notes. Zondo J (minority, extensive obiter): (1) A 'gross irregularity' in proceedings is conduct that prevents a fair trial of issues or prevents a party from having their case fairly heard. It may arise from an error of law that causes the decision-maker to misconceive the nature of the inquiry. (2) An arbitrator determining a dismissal dispute must decide whether the employee was guilty of misconduct before addressing whether dismissal was a fair sanction. Failure to do so constitutes both gross irregularity and misconduct. (3) Reinstatement aims to put an employee in the position they would have been in but for dismissal. Where an employee would have left employment (due to resignation, contract expiry, retirement, or retrenchment) before the arbitration award, reinstatement is not competent under s193(2)(c) as it is not 'reasonably practicable'. (4) An arbitrator must apply their mind to all relevant facts, including an employee's resignation, when determining remedy. (5) Detailed suggestions for CCMA procedures to ensure proper recording of arbitration proceedings. (6) Courts should be strict with the CCMA regarding their duty to keep proper records and may consider costs orders in appropriate cases. Wallis AJ (concurring with majority): (1) Arbitrators should generally not file affidavits in review proceedings and should abide the court's decision - intervention may suggest partiality. (2) The legal effect of an employee's resignation and whether it can be withdrawn requires reconsideration in light of constitutional protections for fair labour practices. The old common law rule that resignation cannot be withdrawn once communicated may not accord with modern notions of fairness. This question should be left for determination in an appropriate future case.

This case clarifies important principles regarding: (1) The Court's approach to delay in prosecuting labour review applications - courts will not countenance protracted delays that undermine the LRA's object of expeditious dispute resolution, even where there may be merits. (2) The Labour Court has discretion under Rule 11(4) to dismiss review applications for undue delay. (3) The obligations on parties and the CCMA to keep proper records of arbitration proceedings, though the judgment does not definitively resolve consequences where the CCMA fails in this duty. (4) That an arbitrator must determine whether an employee was guilty of misconduct before addressing sanction - failure to do so may constitute a gross irregularity. (5) The limits of reinstatement as a remedy where the employee would not have continued in employment (e.g. due to resignation, contract expiry, or retirement). (6) Questions about the legal effect of resignation and whether it can be withdrawn were raised but left open for future determination. The minority judgment provides detailed guidance on what constitutes 'gross irregularity' in arbitration proceedings and emphasizes the need for effective (not just expeditious) resolution of disputes.