The application of section 193 of the LRA where evidence suggests an intolerable trust relationship
Background:
In the matter of CCI Call Centres (Pty) Ltd v Pinn (DA7/2024) [2025] ZALAC 24, the employee was employed as an Accountant. The employee had to ensure that certain payment codes were created in order for salaries to be paid to employees. Due to his own dissatisfaction about his own salary and bonus, he declined to create the necessary codes whereafter he was instructed, in writing, to create the code. Not only did he refuse but he also accused the employer of being dishonest and he used inappropriate language. The employee was charged and found guilty of insubordination, gross insolence, and inappropriate workplace conduct. The employee was dismissed.
The employee referred the matter for arbitration and an arbitrator ultimately found that the dismissal was substantively unfair. Although the arbitrator found that he was guilty of the offences, it was also found that dismissal was too harsh. The arbitrator also found that the primary remedies of reinstatement or re-employment were inappropriate and ordered the employer to pay the employee compensation in an amount equivalent to one month’s remuneration.
Labour Court
Unhappy with the outcome, the employee applied for review and the Labour Court (LC) substituted the award and ordered reinstatement. The LC disagreed with the arbitrator’s finding that the relationship had become intolerable and held that there was insufficient evidence to come to such a conclusion. The court emphasized that an important witness testified that he would still be able to work with the employee and, in the absence of the exceptions listed in section 193(2) of the LRA, the arbitrator had no discretion but to reinstate the employee, and that one month’s compensation “induced a sense of shock and was unjustifiable”. The LC subsequently ordered full reinstatement.
Labour Appeal Court
The employer subsequently approached the Labour Appeal Court (LAC) and argued that the LC applied the incorrect test on review, that the LC ignored evidence, and that the LC misdirected itself in ordering that the employee be reinstated, and by so doing, erred in its application of section 193(2)(b) and (c) of the LRA.
The LAC held that the LC did not apply the reasonableness test correctly and made no attempt to deal with the “reasonableness” of the award. The LAC continued to find that the order of the LC was not sustainable. The LC failed to consider the seriousness of the offences, something that was apparently duly considered by the arbitrator.
It was also held that the LC failed to consider the total breach in trust, thereby only focusing in on one small aspect of evidence and giving too much weight to it. The LC had disregard of various factors that aggravated the employee’s matter. The LAC concluded that the arbitrator’s findings were not unreasonable and that the continued employment relationship would be intolerable.
Paragraph 18 of the judgement reads as follows:
“[18] Section 193 (2)(a) establishes the intolerability exception by reference to ‘the circumstances surrounding the dismissal’. Intolerability generally addresses the trust relationship between the employer and the employee, a matter that is directly impacted by an employee making serious and scandalous accusations against management or where, as in Department of Finance and Economic Development v Mosome and Others, the employee had acted in a grossly insubordinate fashion toward a supervisor and used language that demonstrated disrespect, which this Court in upholding an arbitrator’s decision not to grant reinstatement, described as conduct striking at the core of the employment relationship. By any measure, the arbitrator’s conclusion that the circumstances surrounding the employee’s dismissal were such that a continued employment relationship would be intolerable met the threshold of reasonableness”.
Section 193 therefore had to apply, and the LC erred in their findings in this regard. The order of the LC was set aside and the arbitrator’s award upheld.
Key learnings:
- The test to be applied during review applications is the “reasonableness test”.
- The totality of evidence should be considered, and it would not be correct to zoom in on one small aspect of evidence without considering all the factors.
- The seriousness of an offence may lead to an intolerable relationship and lack of trust. Section 193 of the LRA will then find applicability.
