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[2014] ZAGPJHC 45
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Mahlake v General Public Service Sectoral Bargaining Council and Others (JR1656/12) [2014] ZAGPJHC 45 (17 January 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not
reportable
Case
no JR 1656/12
In
the matter between:
P
A MAHLAKE
APPLICANT
and
GENERAL
PUBLIC SERVICE SECTORAL
BARGAINING
COUNCIL 1
ST
RESPONDENT
AC
MAANDE 2
ND
RESPONDENT
DEPARTMENT
OF SPORTS, ARTS & CULTURE
LIMPOPO
PROVINCE 3
RD
RESPONDENT
Date
heard 28 November 2013
Judgment
delivered: 17 January 2014
JUDGMENT
VAN
NIEKERK J
Introduction
[1]
This is an application to review and set aside an arbitration award
made by the second respondent, to whom I shall refer as
‘the
arbitrator’. In his award, the arbitrator ruled that the
applicant’s claim of unfair dismissal should be
dismissed, with
no order as to costs.
Material
facts
[2]
The applicant was employed by the third respondent as a senior
manager. In October 2004, she was appointed as chairperson of
a
committee to manage the Mapungubwe Arts Festival. The festival took
place in December 2004. After the festival, a forensic investigation
was conducted. The investigators recommended that the applicant and
two other employees, the head of department and the chief financial
officer be charged on various counts relating to financial
mismanagement. The chief financial officer left the department before
he could be charged; the head of department was transferred to the
office of the premier where charges against him were withdrawn.
The
applicant was afforded a disciplinary hearing at which she was found
guilty of 14 of the 18 charges brought against her, and
dismissed.
[3]
The proceedings under review were conducted on various dates between
May 2011 and February 2012. The arbitrator found the applicant
guilty
of charges 1, 2, 4, 5, 6, 8, 10, 11, 13 and 14 and upheld her
dismissal. All of these charges relate in one way or another
to
financial mismanagement and in particular, a failure to comply with
applicable regulatory measures, in relation to the festival.
[4]
I do not intend for present purposes to repeat the evidence, all of
which is on record. The only witness to give evidence for
the
respondent was a Mr. Knevitt, an accountant who conducted the
investigation into the festival. He testified that the budget
for the
festival was R5.5 million and that the actual expenditure was R 8 271
976.71, a budget overrun of some R2.77 million. In
order to achieve
this, Knevitt testified that the applicant had sought authority to
shift special-purpose funds granted by the
provincial treasury for
other purposes within the directorate without the consent of the
treasury. He testified that the applicant,
as a senior management for
her directorate and chairperson of the executive committee charged
with managing the festival, was responsible
to ensure that the
service provider appointed to manage the festival, Ziyaphenduka,
acted with the confines of its terms of reference
and the contract in
terms of which it was appointed. The investigation conducted revealed
that the applicant had failed to do so
by allowing Ziyaphenduka to
render services that were not contemplated by the contract or its
terms of reference. Further, the
applicant had allowed the
appointment of and payment to service providers without following
proper procurement procedures. In particular,
various amounts were
paid to a number of entities, all of which exceeded R 100,000, such
payments being made directly to the entities
concerned. The service
providers that were the beneficiaries of these payments had been paid
amounts ranging from R120 000 to R1.
255 million. An exemption
from procurement procedures had been granted on 16 November 2004, up
to threshold of R 30,000.
In respect of amounts beyond this
threshold, Knevitt testified that Treasury regulatory requirements
applied, and in particular,
in respect of exemptions above R 100,000
and R1 million, in respect of which differing tender procedures were
applicable.
[5]
The applicant’s defence, in the main, was not to dispute
Knevitt’s evidence in relation to the paper trail disclosed
by
him, rather than to deny any responsibility for any financial
mismanagement that may have occurred. In particular, the applicant
denied that she was responsible for the appointment of any service
providers, and asserted related all material times she acted
with the
knowledge and consent of the head of Department who was the
responsible person. In regard to any contravention of procurement
policies, the applicant’s defence was that at the time, she was
under the bona fide impression that she was acting with the
consent
an authority of the head of Department. In more general terms, the
applicant asserted that she relied upon the chief financial
officer,
the financial committee, the festival committee, the procurement
department, the compliance officer, and the head of department
to
bring to her attention that she was committing any act of misconduct.
At most, the applicant concedes that she was guilty of
negligence and
that in any event, given her clean disciplinary record and the delay
in instituting disciplinary proceedings against
her, that dismissal
was not an appropriate penalty in the circumstances.
[6]
In broad terms, the arbitrator rejected the applicant’s denial
of any responsibility for financial mismanagement and in
particular,
her attempt to shirk responsibility for what occurred under her watch
as chairperson of the executive committee managing
the festival. The
applicant’s defence that she was neither responsible nor
accountable for the payment proper running of
the festival was
rejected as baseless, in that the budget and accountability for the
festival was found to fall squarely within
the applicant’s
directorate and within her sphere of responsibility as a senior
manager and chairperson of the festival committee.
In so far as the
applicant’s defence was based on ignorance of the applicable
policies and procedures, this too was dismissed,
the arbitrator
finding specifically that the applicant’s letter dated 16
November 2004 in which she sought exemption from
the threshold of R30
000 was indicative of her awareness of the applicable policies.
The
grounds for review
[7]
The applicant contends that the arbitrator committed a gross
irregularity in the conduct of the proceedings by failing properly
to
take into account relevant evidence, by failing to apply his mind to
the material evidence before him and by arriving at factual
and legal
conclusions that no reasonable decision maker would have reached in
the circumstances. For the reasons that follow, in
the absence of any
averment to the effect that the process-related conduct by the
arbitrator resulted in an award that is unreasonable,
I need consider
only the last of these grounds, and then only to determine whether
the outcome of the proceedings under review
falls within a band of
decisions to which reasonable decision-makers could come on the
available evidence..
The
applicable legal principles
[8]
The test to be applied is that enunciated by the Constitutional Court
in
Sidumo v Rustenburg Platinum Mines Ltd
, recently affirmed
by the Supreme Court of appeal in
Herholdt v Nedbank
(701/2012,
5 September 2013). In the latter judgment the court summarised the
position as follows:
‘
[25]
In summary, the position regarding the review of CCMA awards is this:
A review of a CCMA award is permissible
if the defect in the
proceedings falls within one of the grounds in s 145 (2) (a) of the
LRA. For a defect in the conduct of the
proceedings to amount to a
gross irregularity as contemplated by s 145 (2)(a)(ii), the
arbitrator must have misconceived the nature
of the inquiry or
arrived at an unreasonable result. A result will be unreasonable if
it is one that a reasonable arbitrator could
not reach on all the
material that was before the arbitrator. Material errors of fact, as
well as the weight and relevance to be
attached to particular facts,
are not in and of themselves sufficient for an award to be set aside,
but are only of any consequence
if their effect is to render
the outcome unreasonable.’
[9]
The
Heroldt
decision clarifies the
Sidumo
test, at
least to the following extent:
a. The test to be applied
is cast in the negative- the court must ask whether the arbitrator’s
decision is one that could
not reasonably be reached on the available
material.
b. The test is concerned
primarily with the result of the arbitration proceedings and not the
arbitrator’s reasoning. The
arbitrator’s reasons are
relevant only in so far as they assist the court to determine how the
result was reached, and whether
the result can reasonably be reached
by that route.
c. A ‘latent
irregularity’ or ‘dialectical unreasonableness’ on
the part of the arbitrator (i.e. a failure
by the arbitrator to take
into account one or more material facts, or the taking into account
of irrelevant facts, or any unreasonableness
flowing from the
arbitrator’s process of reasoning) is not in itself a
sufficient basis for review. The arbitrator’s
conduct in this
regard is relevant only in so far as it renders the outcome of the
arbitration proceedings unreasonable.
[10]
In
Goldfields Mining South Africa (Pty) Ltd v
CCMA
(JA
2/2012, 4 November 2013) the Labour Appeal Court confirmed that the
applicable test does not admit what has been referred to
as a
“process-related review”, at least in the sense that it
is no longer open to a reviewing court to set aside an
arbitration
award only on account of a process- related irregularity on the part
of the arbitrator. This has the consequence that
the failure by an
arbitrator to mention a material fact in the award, or to deal with
any issue that has a bearing on the issue
in dispute, or any error in
regard to the evaluation of the facts presented at the arbitration
hearing, is of no consequence. Provided
that the arbitrator gave the
parties a full opportunity to state their respective cases at the
hearing, identified the issue that
he or she was required to
arbitrate, understood the nature of the dispute and dealt with its
substantive merits, the function of
the reviewing court is limited to
a determination whether the arbitrator’s decision is one that
could not be reached by a
reasonable decision-maker on the available
material.
[11]
At paragraph [20] of the judgment, the court stated:
‘
The
questions to ask are these: (i) In terms of his or her duty to deal
with the matter with the minimum of legal formalities, did
the
process that the arbitrator employed give the parties a full
opportunity to have their say in respect of the dispute? (ii)
Did the
arbitrator identify the dispute he was required to arbitrate (this
may in certain cases only become clear after both parties
have led
their evidence)? (iii) Did the arbitrator understand the nature of
the dispute he or she was required to arbitrate? (iv)
Did he or she
deal with the substantial merits of the dispute? and (v) Is the
arbitrator’s decision one that another decision-maker
could
reasonably have arrived at based on the evidence?
[21]
Where the arbitrator fails to have regard to the material facts it is
likely that he or she will fail to arrive at a reasonable
decision.
Where the arbitrator fails to follow proper process he or she may
produce an unreasonable outcome (see
Minister
of Health and Another v New Clicks South Africa (Pty) Ltd and Others
2006 (2) SA 311
(CC)). But again, this
is considered on the totality of the evidence not on a fragmented,
piecemeal analysis. As soon as it is
done in a piecemeal fashion, the
evaluation of the decision arrived at by the arbitrator assumes the
form of an appeal. A fragmented
analysis rather than a broad-based
evaluation of the totality of the evidence defeats review
as a
process. It follows that the argument that the
failure to have regard to material facts
may potentially
result in a wrong decision has no place in review applications.
Failure to have regard to material facts must a
actually
defeat the constitutional imperative that the award must be rational
and reasonable - there is no room for conjecture and
guesswork.
[12]
The test to be applied clearly maintains the distinction between a
review and an appeal. The correctness of the commissioner’s
decision is not in issue, and the court is not entitled to interfere
only because it would have come to a different conclusion
on the same
material. It also requires the court to overlook any lapses in
reasoning on the part of the commissioner and to determine
whether
the outcome of the proceedings is nonetheless reasonable.
[13]
To apply the criteria identified in the
Goldfields
judgment,
it cannot seriously be disputed that the arbitrator understood the
nature of the dispute before him and that he dealt
with its
substantive merits. In so far as the applicant contends that the
outcome of the proceedings under review represent a decision
to which
no reasonable decision-maker could come, in my view, it is not
unreasonable to conclude on the basis of the available
evidence that
the applicant was responsible for the budget allocated to the
festival, and more specifically, that she was ultimately
responsible
for the instances of financial mismanagement that formed the subject
of the findings against her. In particular, it
should be recalled
that the merits of the investigation conducted by Knevitt were not
seriously called into question during cross
examination. It may be
that other employees of the third respondent, and in particular the
head of department and chief financial
officer were also culpable and
that by leaving the third respondent’s employ, they have
escaped the consequences of their
actions. But that in itself does
not absolve the applicant of accountability for the financial
mismanagement which no doubt occurred.
The applicant was a senior
manager and chairperson of the committee tasked with the production
and management of the festival.
In that capacity, she was ultimately
accountable for the acts of mismanagement that occurred and it is not
unreasonable to require
her to bear responsibility for them. For
these reasons, in my view, the arbitrator’s decision cannot be
said to be one that
a reasonable decision-maker could not reach on
the available evidence. For this reason, the application stands to be
dismissed.
[15]
In so far as costs are concerned,s 162 of the LRA afford this court a
wide discretion to make orders for costs according to
the
requirements of the law and fairness. In practice, this court is
reluctant to make orders for costs against individuals who
might
otherwise be dissuaded from pursuing their rights on account of the
prospects of an adverse order for costs. In the present
instance, I
accept that the applicant feels genuinely aggrieved about the outcome
of the proceedings under review, that she initiated
these proceedings
in good faith and in circumstances where the application is neither
frivolous nor vexatious. For that reason,
I intend to make no order
as to costs
I
make the following order:
1. The
application is dismissed.
2.
There is no order as to costs.
ANDRE
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
APPEARANCES
For
the applicant: Adv AL Cook, instructed by Koikanyang Inc.
For
the third respondent: ADv N Cassim SC, with him Adv DT Skosana,
instructed by the state attorney.