Shoprite Checkers (Pty) Limited v A. Ramdaw and others (LAC, DA 12/00)

Recent labour Court rulings that affect the employment relationship

By Perrot, Van Niekerk, Woodhouse, Matyolo Inc.

Shoprite Checkers (Pty) Limited v A. Ramdaw and others (LAC, DA 12/00)

On 29 June 2001, approximately a year after being heard, the Labour Appeal Court delivered its judgement in the matter. In this case the appellant, aggrieved by the arbitration award issued by the CCMA, brought an application in the Labour Court for an order reviewing and setting aside the award. The Labour Court considered that the ground for review upon which the applicants relied had been justifiability and held that justifiability was not a ground upon which a CCMA award could be reviewed. The Court however found that if justifiability was a ground of review, it would have concluded that the award was indeed reviewable.

This decision came as a surprise to the labour law community as, until then, the Labour Appeal Court decision in Carephone (Pty) Ltd v Marcus N.O and others (1998) 19 ILJ 1424 had consistently been relied on and referred to as authority for the fact that justifiability was a ground of review. The main thrust of the decision in this matter was that the issuing of an arbitration award by a CCMA commissioner constituted administrative action. The Court stated further that the ground of review contained in section 145 (2)(a)(iii), namely the exceeding of a commissioner’s powers, incorporated the constitutional requirement that an administrative action must be justifiable in relation to the reasons given for it.

The main question before the Labour Appeal Court in the Shoprite Checkers matter was whether the Court’s decision in the Carephone case was still "good law".

In the course of coming to its decision the Court considered the Constitutional Court Judgement handed down in Pharmaceutical Manufacturers of SA: in re Ex Parte President of the RSA 2000 (2) SA 674 (CC). In this matter the Constitutional Court found that as long as a particular decision is the result of an exercise of public power such a decision can be set aside by a court if it is irrational.

In the context of the Pharmaceutical case, the Labour Appeal Court had regard to what the court had to say in the Carephone case about the reviewability of CCMA awards on the grounds of unjustifiability. The Court noted that a requirement of rationality in the merit or outcome of the administrative action should be imported when determining the justifiability of an administrative act.

The Labour Appeal Court in the Shoprite Checkers case then went on to consider whether the terms ‘justifiable’ and ‘rational’ bear the same meaning.

In this regard the Court found that although the terms justifiable and rational many not strictly speaking be synonomous, they bear a sufficiently similar meaning to justify the conclusion that rationality can be said to be accommodated within the concept of justifiability used in Carephone.

Finally, the Labour Appeal Court considered implications of the recently enacted Promotion of Administrative Justice Act 3 of 2000 ("the PAJA"), the broad purpose of which is to give effect to the right to administrative action that is lawful, reasonable and procedurally fair. In section 1 of the PAJA, "administrative action" is defined as meaning "any decision taken or any failure to take a decision by inter alia:

"(b) a natural or juristic person, other than an organ of state, when exercising a public power or performing a public function in terms of an empowering provision, which adversely affects the rights of any person and which has a direct, external legal effect…"

The Court held, without coming to any final conclusions, that if the PAJA applies to the making of arbitration awards by the CCMA commissioners, section 6 of the PAJA comes into operation. Section 6 provides that an administrative action may be reviewed if procedurally unfair or if it is not rationally connected to the information before the administrator or the reason given for it by the administrator.

In conclusion, the Court found that having regard to all the circumstances and in order to bring about certainty and stability in the law it would serve no purpose for the court to consider whether or not the decision in Carephone was correct but then stated that "Carephone stays".

The implications of this judgement are that the debate whether CCMA awards can be reviewed and set aside if they are not justifiable in relation to the reasons given for them has hopefully come to an end. Ironically, as far as the merits of the review are concerned the court found that even on the ground of justifiability, the arbitration award did not stand to be reviewed.