Summary of Judgment

1. Introduction

This matter concerned an appeal to the Labour Appeal Court against a judgment of the Labour Court which had dismissed an employer’s review application. The appeal arose from an unfair dismissal dispute that had been arbitrated under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA).

The appellant was The Standard Bank of South Africa Limited (the employer). The first respondent was Mr Heiden Leslie (the employee). The second respondent was Commissioner Desmond Lynch N.O., the CCMA commissioner who had issued the arbitration award. The third respondent was the CCMA itself.

The procedural history was that the employee was dismissed after a disciplinary hearing in May 2015 for alleged dishonesty involving the removal of R200 from the employer’s treasury cash centre. He referred an unfair dismissal dispute to the CCMA. The commissioner found the dismissal substantively unfair and ordered retrospective reinstatement. The employer then launched a review application in the Labour Court, which was dismissed (with no costs order). The employer appealed to the Labour Appeal Court.

The general subject-matter of the dispute was whether the commissioner’s award (both on substantive fairness and on the remedy of reinstatement) was reviewable, with particular focus on whether the evidence established dishonesty and whether reinstatement was permissible given the position involved (cash handling) and the alleged breakdown of trust.

2. Material Facts

The employee commenced employment with the employer on 1 July 2005 and, at dismissal on 14 May 2015, was deployed as a Custodian in the treasury department. In that role, he handled and counted cash under the employer’s Group Reference Guide Policy regulating bulk deposits and cash handling. The security procedures included dual control (two employees controlling cash at a time) and a rule that employees were not permitted to have cash in their possession while at work.

On 17 March 2015, the employee worked with Ms Dorcas Motsapi, who had been in the role for approximately three weeks. At the end of the employee’s shift, he was searched by security (as part of standard practice) and no money was found on him. After the end of her shift, Ms Motsapi reported to her team leader, Mr Shane Scaife, that she had observed the employee holding a calculator and that, under it, she saw what appeared to be a R100 note, which she said she then saw him place into his back pocket. Following this report, the FD40 box containing R100 notes was counted and found to be short by R200.

On 18 March 2015, the employee was suspended. He later received notice to attend a disciplinary hearing to answer an allegation framed as dishonesty, namely that he had removed R200 from the Johannesburg Cash Centre Treasury on 17 March 2015 without authorisation and/or business reason. After the disciplinary process, he was dismissed on 14 May 2015. His remuneration at that time was R14 271,67 per month.

At arbitration, the employer led evidence from three witnesses. The investigator, Mr Otto Arends, viewed CCTV footage of the relevant area. The footage showed that the employee was at the FD40 box on his own on two occasions, contrary to the dual-control procedure. Mr Scaife testified that he counted the FD40 box and found R200 missing. Ms Motsapi testified to her observation of what she believed to be a R100 note beneath the calculator and described the employee moving his left hand into his left pocket and then removing it with no cash visible in that hand.

The employee’s evidence was that he had been stressed because cash had not balanced earlier, although that issue was later resolved. He stated that he checked money in the FD40 box, first alone and then with a colleague (Leroy), because there was a shortage he wished to reconcile. He suggested that he might have put his hand in his pocket to take out a packet of chewing gum.

The commissioner found that the employer had not proved dishonesty, relying on the following material considerations: the CCTV footage was indistinct; no cash was found during the search of the employee; and, during questioning, the employee produced a blue packet of menthol gum, which he said had been in his back pocket. The commissioner concluded that the gum packet could have been what Ms Motsapi saw. On that basis, the dismissal was found substantively unfair, and the employee was retrospectively reinstated.

In the review proceedings, the Labour Court was asked to consider the record, including the video evidence. Although requested to do so, the Labour Court refused to watch the video footage. It nevertheless found no reason to interfere with the commissioner’s conclusions and dismissed the review application.

3. Legal Issues

The central legal questions were whether the commissioner’s arbitration award was susceptible to review under the established reasonableness standard, and specifically whether the commissioner committed a reviewable irregularity in (a) assessing the evidence relevant to the alleged dishonesty and (b) granting reinstatement as a remedy.

In relation to the finding on misconduct, the dispute primarily concerned the application of law to fact under the Sidumo reasonableness enquiry: whether, on the evidentiary material before the commissioner (including the CCTV footage and the testimony of Ms Motsapi and Mr Scaife), the conclusion that dishonesty was not proven was a conclusion that a reasonable commissioner could reach.

In relation to remedy, the issue concerned the statutory framework in section 193 of the Labour Relations Act 66 of 1995, and whether the commissioner properly considered the exceptions to reinstatement, including whether the circumstances were such that continued employment would be intolerable or reinstatement was not reasonably practicable. This involved an evaluative judgment grounded in statutory criteria, particularly tied to the nature of the employee’s role in a cash-handling environment and the trust relationship.

4. Court’s Reasoning

The Labour Appeal Court reaffirmed that a commissioner must decide a matter with appropriate regard to the conspectus of material placed before them and that the review test is well established. Relying on Sidumo and Another v Rustenburg Platinum Mines Ltd and Others, the Court emphasised that the distinction between appeal and review remains significant, and that the reviewing court’s task is to ensure that administrative decisions fall within the bounds of reasonableness, rather than to substitute its own view merely because it would have decided differently.

Applying these principles to the evidence on misconduct, the Court accepted that the video footage showed the employee at the FD40 box without a co-employee on two occasions and that he placed his hand in his back pocket shortly thereafter. The employee’s explanation that he was counting money at the box was noted, but the Court considered it significant that he did not explain why he was at the box alone despite a rule requiring dual control, and also did not explain how he could have reconciled money in the few seconds depicted on the recording. The Court characterised the employee’s conduct as giving rise to strong suspicion and described the explanation advanced as highly improbable, with the behaviour of placing his hand in his back pocket described as, at best for the employee, unusual.

Despite this, the Court held that suspicion—even strong suspicion—did not equate to proof of dishonesty on the terms contended for by the employer. The Court reasoned that the employer’s evidentiary case remained insufficient to prove that the employee removed money: for example, Ms Motsapi did not report the incident immediately during her shift (which might have enabled an immediate search and definitive resolution), and the employer did not lead evidence that the FD40 box was not already short of R200 when delivered for counting (which might have supported an inference that the shortage arose during the employee’s shift). In the absence of “clear and reliable evidence” of dishonesty, the commissioner’s conclusion that dishonesty had not been proved was found to be a conclusion that a reasonable commissioner could reach. On that basis, the Labour Appeal Court did not disturb the commissioner’s finding that the dismissal was substantively unfair.

The Court then turned to the remedy. It set out the statutory scheme in section 193(1) and section 193(2) of the Labour Relations Act 66 of 1995. While reinstatement is the primary remedy when dismissal is found unfair, section 193(2) obliges a decision-maker to order reinstatement or re-employment unless one of the listed exceptions applies, including that continued employment would be intolerable or that reinstatement is not reasonably practicable.

Relying on authority from the Labour Appeal Court, the Court stressed that the enquiry into intolerability can take account of an employee’s behaviour before or after dismissal, and that there must be an “extraordinary reason” to depart from reinstatement as the primary remedy. The Court nonetheless held that section 193(2) required the commissioner not to adopt a mechanical approach to reinstatement, but to evaluate the circumstances surrounding the dismissal to determine whether reinstatement should be refused under the statutory exceptions.

On the evidence, the Court considered that the employee had failed to comply with operating procedures and that the behaviour captured on recordings was “noticeably unusual and suspicious”. The Court concluded that, if the commissioner had carefully evaluated the employee’s unlikely explanation in conjunction with the evidence of Ms Motsapi and Mr Scaife, the commissioner ought reasonably to have found support for the employer’s position that the trust relationship had broken down. The Court placed weight on the fact that the employer operated in an environment where employees responsible for counting large sums of money must display honesty and integrity, and that it could not reasonably be expected of the employer to reinstate an employee into such a role where significant trust issues had arisen. The Court therefore held that reinstatement was inappropriate because the circumstances made continued employment intolerable.

Having found reinstatement inappropriate, the Court considered the appropriate alternative remedy. Taking into account the employee’s nine years’ service and the circumstances, the Court held that compensation was appropriate and that there was no reason to limit compensation below the maximum. The Court therefore awarded the maximum 12 months’ compensation permitted by section 194.

In relation to costs, the Court held that having regard to considerations of law and fairness, no costs order was appropriate.

5. Outcome and Relief

The appeal succeeded in part. The Labour Appeal Court set aside the Labour Court’s order and replaced it with an order that the review application succeeded only to the extent that the commissioner’s reinstatement remedy was reviewed and set aside.

The reinstatement order was substituted with an order directing the employer to pay the employee twelve months’ compensation in the amount of R171 260.00, payable within ten days of the date of the arbitration award.

No order as to costs was made.

Cases Cited

Sidumo and Another v Rustenburg Platinum Mines Ltd and Others [2007] ZACC 22; [2007] 12 BLLR 1097 (CC); 2008 (2) SA 24 (CC); (2007) 28 ILJ 2405 (CC); 2008 (2) BCLR 158 (CC).

Glencore Holdings (Pty) Ltd and another v Sibeko and others [2018] 1 BLLR 1 (LAC).

Afgen (Pty) Ltd v Ziqubu [2019] 10 BLLR 977 (LAC).

Maepe v CCMA and another [2008] ZALAC 2; [2008] 8 BLLR 723 (LAC).

Legislation Cited

Labour Relations Act 66 of 1995, section 193(1) and section 193(2).

Labour Relations Act 66 of 1995, section 194.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Labour Appeal Court held that, although the employee’s conduct created strong suspicion and his explanation was improbable, the evidentiary case remained insufficient to prove dishonesty. The commissioner’s conclusion that the employer had not proved dishonesty, and that the dismissal was substantively unfair, was not a conclusion that fell outside the range of reasonableness on review.

The Court further held that the commissioner erred in granting reinstatement without properly considering the statutory limitations on reinstatement under section 193(2), given the cash-handling context and the resulting trust issues. On the evidence, continued employment was intolerable, making reinstatement inappropriate.

The Court accordingly upheld the award of substantive unfairness but replaced reinstatement with an award of maximum compensation of twelve months.

LEGAL PRINCIPLES

The reasonableness standard on review requires that the reviewing court determine whether the arbitrator’s decision is one that a reasonable decision-maker could reach on the material before them, and the distinction between review and appeal remains significant. The reviewing court does not intervene merely because it would have arrived at a different outcome.

Proof of misconduct, particularly dishonesty, requires sufficient evidence, and suspicion alone—however strong—is not treated as equivalent to proof on the material presented. Where the evidentiary foundation does not permit a reliable inference of guilt, an arbitrator’s refusal to uphold dismissal for dishonesty may fall within the bounds of reasonableness.

Although reinstatement is the primary remedy for unfair dismissal under section 193 of the Labour Relations Act 66 of 1995, section 193(2) requires reinstatement unless specified exceptions apply. The decision-maker must consider whether the circumstances make continued employment intolerable or reinstatement not reasonably practicable, and is not permitted to approach reinstatement mechanically.

In assessing intolerability under section 193(2)(b), the circumstances surrounding dismissal, including the nature of the position and the trust relationship implicated by the employee’s conduct, are material. Where the employment relationship depends on a high degree of trust and integrity (such as in cash-handling functions), and the evidence demonstrates significant trust issues, reinstatement may properly be refused and substituted with compensation under the statutory framework.