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[2021] ZALAC 11
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Nyathikazi v Public Health and Social Development Sectoral Bargaining Council and Others (JA106/2019) [2021] ZALAC 11; [2021] 8 BLLR 778 (LAC); (2021) 42 ILJ 1686 (GJ) (26 May 2021)
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JA106/2019
In the matters between
DELIWE NANCY
NYATHIKAZI
First Appellant
and
PUBLIC HEALTH AND
SOCIAL DEVELOPMENT
SECTORAL BARGAINING
COUNCIL
First Respondent
JAMES NGOAKO MATSHEKGA
N.O
Second Respondent
DEPARTMENT OF HEALTH –
LIMPOPO
Third Respondent
MEC FOR HEALTH –
LIMPOPO
Fourth Respondent
Heard:
04 May 2021
Delivered:
26 May 2021
Coram: Davis JA,
Coppin JA and Molefe AJA
JUDGMENT
DAVIS JA
Introduction
[1]
This Court is called upon to determine an
appeal against the decision of the Labour Court in which the
appellant’s application
to review and set aside an arbitration
award that was granted by the second respondent was dismissed on the
basis that the award
was reasonable and was one to which a reasonable
Commissioner could have made. The fact that this Court is called upon
to determine
this appeal in the circumstances of this specific case
highlights that which has become a significant problem particularly
in respect
of dismissal disputes, namely that the legislative
objective of the expeditious resolution of these disputes are too
often honoured
in the breach than in compliance.
[2]
The chronology in this case is illustrative
of this problem. The award of the second respondent was made on 29
December 2016. The
judgment of the court
a
quo
in dismissing the review
application was delivered on 29 March 2019. More than two years after
the judgment was delivered, this
court is called upon to determine
the appeal. It is time that the entire legislative framework within
dismissal disputes are adjudicated
in South Africa requires a careful
and thorough re-examination, in order to assess whether the
objectives of the Labour Relations
Act 66 of 1995 (the LRA) are
adequately met in the present context.
The factual background
[3]
At the time of her dismissal, the appellant
held the position with the third respondent of Senior General
Manager: Academic and
Tertiary Department. On 8 January 2015, she
received a notification that she was required to attend a
disciplinary hearing at which
she was to be charged on two counts:
Count
1.
It is alleged that on or around March
2011 at or around Department of Health Provincial Office, Limpopo you
contravened Guide for
Accounting Officers, Public Finance Management
Act, section 38(a)-(c) of the Pubic Finance Management Act 1 of 1999
read with section
51(1) (a)-(c) of the said Act and National Treasury
Practice Note Number 6 of 2007/2008, in that you approved the
procurement of
control room/two way radio for the department of
Health from Kitso Tech Cooper radio to the amount of R 7 085 409.16
where supply
chain processes were not followed and further that
supply chain management was not involved.
Count 2. It is alleged
that on or between February and March 2011 at or around Department of
Health Provincial Office, Limpopo you
contravened Guide for
Accounting Officers, Public Management Act,
section 38
(a)-(c) of the
Public Finance Management Act 1 of 1999
read with
section 51(1)
(a)–(c) of the said Act and the National Treasury Practice Note
Number 5 of 2009/2010, in that you on or between February
and March
2011 approved the procurement and payment of additional Columbus
software to the amount of R 4 976 647.20 where supply
chain processes
were not followed and further that supply chain management was not
involved.’
[4]
The inquiry found the appellant guilty as
charged and ordered her dismissal. The appellant referred the dispute
to the first respondent
on 13 August 2015. However, conciliation
which took place on 14 September 2015 was unsuccessful and the matter
was then referred
to arbitration to be heard before the second
respondent.
The first count
[5]
It
was common cause that a letter had been generated by the Deputy
Manager Communication at the third respondent on 4 March 2010
which
read as follows
[1]
:
‘
RE:
REQUEST TO PARTICIPATE IN BID POL/05/2009-DELIVER INSTALLATION AND
COMMISSIONING GUARANTEE AND MAINTENANCE OF TWO WAY RADIO
COMMUNICATION SYSTEM
The Department of Health
and Social Development hereby wish to seek for permission to
participate in your contract BID POL/05/2009
as per Provincial
Treasury Installations on….
The
above mentioned contract is urgently needed by the department for our
2010 world cup preparations. We managed to
agree with the
service provider Kitso Tech Coopers radio on terms and conditions as
stipulated in the contract and we are now humbly
requesting your
support in this regard.
’
[6]
A year later, that is on 22 March 2011, the
appellant approved a request “for approval from control
room/centre for two-way
radios for the Department of health”.
The request was set out thus:
‘
The
Department had a contract for two-way radio technologies with Kitso
Coopers Radio, and such contract expired in 2009. Subsequent
to that
the two-way radio infrastructure stood idle and dilapidated since the
lapse of the contract. The Department wrote
a letter to
Polokwane Municipality to request participation in the contract that
the Polokwane Municipality has with Kitso Coopers
(see attached
letter dated 04/03/2010). The Polokwane Municipality then
granted permission to the Department to participate
in BID 05/2009
(which is the bid to supply, install and maintain two-way radios),
(see attached letter dated 16 March 2010).
During the
Public Service employees’ strike a special memo was written to
the HOD through the bid committee, for a once off
transaction, and
the HOD approved it.
MOTIVATION
The department needs to
urgently get the HOD’s approval in order to procure the
relevant equipment and have it installed as
well as start
negotiations for signing a Service Level Agreement (SLA). In
addition, we will review the technology offerings.
While we are
thankful that the HOD approved the memo related to two-way radio once
off transaction, we realise that the Department
needs a more robust
solution to avoid being crisis orientated. The once off solution is
inadequate, and not-integrated. We need
a comprehensive two-way radio
solution that will enable the department to deal with communication
challenges facing the Department.
A two-way radio solution provides
one-to-many and many-to-many communication network so vital for
disaster and emergency management.
FINANCIAL IMPLICATIONS
Based on quotation from
Kitso Coopers Radio, the costs for the control Centre equipment is R7
085 409.16 including VAT. This costs
can be covered before the close
of this financial year as the equipment can be delivered in this
financial year.’
On the strength of this
document, the appellant approved the acquisition of the radios from
Kitso Tech Coopers Radio (Kitso) for
an amount of R7 085 409
.16
Count 2
[7]
A memorandum was generated for the
procurement of an additional 2700 software licenses from Columbus
which application the appellant
approved on 22 February 2011. It was
common cause that the procurement agent of government for such
licenses is the State Information
Technology Agency (Pty) Ltd (SITA).
Treasury Practice Note 5 of 2009/2010 outlines the process that has
to be followed to procure
goods and/or services through SITA as well
as the accountability of accounting officers or authorities. It was
clear that the procurement
of the Columbus software which had been
authorised by the appellant constituted a deviation from s 7 of the
SITA Act 88 of 1998
(SITA Act). In terms of s 7(3) of the SITA Act,
every department must, subject to subsection (4), procure all
information, technology,
goods or services through SITA. SITA played
no role in the execution of the Columbus transaction.
The arbitration award
[8]
At the arbitration hearing, the third respondent contended that as a
consequence of
the purchase of the two way radios together with the
Columbus software, a considerable amount of public funds was
expended. In
relation to the control room equipment provided by
Kitso, the third respondent paid over an amount of R 7 085,409.16. In
relation
to the Columbus software, payment in the amount of R 4 976
647.20 was made over the Columbus. The essence of the charges was
that
the appellant had approved a considerable amount of irregular
expenditure.
[9]
The second respondent was referred to the legislative framework which
was designed
to regulate this kind of expenditure. Section 1 of the
Public Finance Management Act of 1999 (PFMA)defines irregular
expenditure
as expenditure other than unauthorised expenditure
incurred in contravention of or that is not in accordance with the
requirement
of any applicable legislation including (a) this Act or
(b) the State Tender Board Act, 86 of 1968 or any regulations made in
terms
of this Act; (c) any Provincial legislation provided for
procurement procedures in that Provincial Government.
[10]
Section 76(1)
(a)
of the PFMA authorises National Treasury to
make regulations concerning any matter that must be prescribed for
departments in terms
of the Act. Pursuant thereto, Regulation 16 A,
6.1 of Treasury Regulations issued on 15 March 2005 provides that,
‘procurement
of goods and services either by way of quotations
or through a billing process must be within the threshold values that
is determined
by the National Treasury.’ In addition, Practice
Note of 8 of 2007/2008 generated by National Treasury requires that
any
goods or services by R 500 000 must be acquired through a
competitive bidding process. In addition, Regulation 16 A, 6.6 of the
2005 Regulations provides that ‘the accounting officer or
accounting authority may, on behalf of the department, constitutional
institution or public entity, participate in any contract arranged by
means of a competitive bidding process by any other organ
of State,
subject to the written approval of such organ of State and the
relevant contractors.
[11]
The second respondent found that the evidence showed compellingly
that, while the third respondent
had followed a competitive bidding
process in respect of the initial provision of two-way radios from
Kitso in the amount of R
2 392 628.70, no similar mandated set of
procedures had been followed before the appellant approved the
payment of R 7 085 409.16
on 23 March 2011 for “the delivery of
the equipment”. In his reasons, the second respondent found
that the procurement
of these goods from Kitso clearly constitutes
irregular expenditure as defined and that the charge of misconduct
against the appellant
in respect of the Kitso transaction had been
properly established.
[12]
Turning to the procurement of software from
Columbus, the second respondent recorded that the appellant had
argued that the procurement
of the Columbus Software had been
acquired in accordance with the provisions of the contract that had
been entered into between
Eclipse Networks (Pty) Ltd and SITA
(referred to as the RT543 contract). However, that contract provided
expressly ‘that
the supplier shall not, without the prior
written consent of SITA sign the agreement or any part thereof or any
benefit or interest
thereunder without the written consent of SITA
which consent shall not be unreasonably be withheld.’ It was
common cause
that, while Eclipse had entered into a contract with
SITA, Columbus had not been part of that contract. Hence, in similar
fashion
to the Kitso transaction, the procurement of goods from
Columbus by the third respondent and the R 4 976 647.20 expenditure
that
had been incurred as a result thereof constituted irregular
expenditure. For these reasons, the second respondent found that the
fourth respondent had proved on the balance of probabilities that the
appellant had approved irregular expenditure.
[13]
The second respondent however went on to
deal with an inconsistency challenge raised by the appellant, namely
that the third respondent
had failed to take similar disciplinary
action against other heads of department who had been equally guilty
in authorising irregular
expenditure. The second respondent held that
‘it was not in dispute that they (the three other acting heads
of department)
had approved memoranda that culminated in expenditures
on both the Kitso and the Columbus transactions. It is also not in
dispute
that their role and/or involvement became known to the
respondent and that no disciplinary action was taken by the
respondent against
the trio.’ The second respondent found that
the third respondent had provided no “reliable evidence and
reasonable
explanation” why these employees had not been
disciplined notwithstanding that they played a role similar to that
of the
appellant. Accordingly, the second respondent held that the
dismissal of the appellant had been substantively unfair.
[14]
There was also a question of procedural
fairness which was raised by the appellant. On 14 July 2015, the
appellant was in attendance
at the disciplinary hearing. Those who
were responsible for the conducting of the hearing had not arrived.
As a consequence of
having waited for a while without any appearance
of a presiding officer, the appellant left the venue where the
hearing was to
take place. The question which the second respondent
was required to consider was whether the appellant had waived her
right to
be heard. The second respondent found that the decision to
proceed with the disciplinary hearing, notwithstanding the
appellant’s
absence while those conducting the hearing had
initially been in default, was grossly unreasonable and thus
procedurally unfair.
[15]
In the light of these findings, the second
respondent found that it was not possible to reinstate the appellant.
Not only had irregular
expenditure been incurred of more than R 11
million but the appellant had showed no remorse nor had she
acknowledged any wrong
doing on her part. The continuation of a
normal employment relationship was therefore intolerable. Invoking s
194(1) of the
LRA, the second respondent awarded the appellant
compensation in the amount of R 181 495.32 being the equivalent of
two months’
remuneration calculated at the appellant’s
rate of remuneration at the date of dismissal.
The court a quo
[16]
Sitting in the court
a
quo
Lallie J found that the second
respondent’s decision had been supported by the evidence
tendered at the arbitration. Her
finding is captured in the following
paragraph:
‘
She
approved payment which was effected based on her approval. The
finding that the so called participation was not on the
same terms
and conditions of the contract entered into between Kitso and the
Polokwane Municipality and the breach of the relevant
rules is
therefore reasonable. The argument that the arbitrator
interpreted “irregular expenditure” incorrectly
does not
assist the applicant. Even if the arbitrator made an error of
law in the manner in which he interpreted “irregular
expenditure”, errors of law only do not constitute valid
grounds for review. In addition to proving that an arbitrator
has made an error of law, the applicant is required to establish that
the error led the arbitrator to reach an unreasonable decision.
The
reasonableness of an award is based on the totality of the
evidentiary material tendered at arbitration. When all the
evidence is taken into account it does not vitiate the reasonableness
of the award.’
[17]
To appellant’s argument regarding the
Columbus acquisition that the appellant was not aware of the exact
nature of contract
RT543 which the second respondent held could not
justify a contractual relationship with Columbus and hence upon which
finding
the conclusion of misconduct had been based, Lallie J found
‘the arbitrator cannot be faltered for reaching the decision
that applicant should have obtained knowledge of the relevant
information before approving procurement of the software judging by
the applicant’s seniority and the millions of rands the
contract cost the third respondent.’
[18]
Turning to the question of a practice of
discriminatory discipline, Lallie J found that the second
respondent’s decision regarding
the third respondent’s
failure to apply discipline consistently was reasonable as it was
based on the evidence before him
and therefore was not subject to
being reviewed. The court
a quo
held further that the decision not to order reinstatement was based
on the clear consequences of appellant’s conduct which
rendered
the continuation of a normal employment relationship intolerable as
between the appellant and the third respondent. For
these reasons,
the court
a quo
found no reason by which to interfere with the award, including the
amount of the award of compensation.
The appeal
[19]
On appeal, two questions arose for
determination. In the first place there was an application for
condonation by the appellant regarding
noncompliance with Rule 5(8)
and 6(1) of the Labour Appeal Court Rules and the related Practice
Directive. Briefly, on 24 November
2020 the appellant’s appeal
had been struck off the roll for noncompliance with the Rules.
[20]
The Constitutional Court in
Steenkamp
& others v Edcon Ltd
2019 (40) ILJ
1731 (CC) has held that, in consideration of a condonation
application, the purpose of the LRA namely that labour
disputes
should be resolved expeditiously was a significant consideration
which had to be taken into account in deciding the issue
of
condonation. Much of this case was litigated in a chaotic
state. The full record had not been provided by the time the
matter
was to be heard on 24 November 2020. Subsequently thereto, there were
further delays in the filing of record and then a
vast swathe of
documents was filed, much of which proved to be inconsequential with
regard to the determination of this dispute.
The question of
prospects of success will invariably weigh heavily in such an
application. Given the approach that I adopt
to the question of
the merits of the case, I propose to dispose of the entire dispute
Thus for this reason alone the merits of
the appeal should be finally
determined.
[21]
After the decision in
Sidumo
and another v Rustenburg Platinum Mines Ltd and another
2008 (2) SA 24
CC and the further the explication in
Herholdt
v Nedbank Limited
2013 (6) SA 224
(SCA), it is clear that our law dictates that an award delivered by
an arbitrator will only be considered to be unreasonable if
it is one
that a reasonable arbitrator could not reach on all the material that
was before him or her. A material error of fact
and the particular
weight to be attached to a particular fact may in and of itself not
be sufficient to set aside the award but
will only be done if the
consequence thereof is to render the ultimate outcome unreasonable.
[22]
The observation made earlier in this
judgment about the inability to expeditiously resolve these kinds of
disputes is luminously
illustrated in this case. The
Sidumo
test is now clearly established law. There is nothing on the evidence
as contained in the record to suggest that in this case an
unreasonable award in respect of the misconduct perpetrated by the
appellant was made, let alone that the outcome is unreasonable.
Turning to the first charge, it was clear that on the evidence, the
second respondent correctly found that the procurement of goods
from
Kitso for the third respondent and consequently the R 7 085 409.16
incurred as a result thereof stood in contravention of
s 217 of the
Republic of South African Constitution 1996, the PFMA and, in
particular, Treasury Regulations 6 of 2007/2008.
[23]
There is simply no factual or legal basis
by which to argue that, because an initial contract had been issued
for the acquisition
of two-way radios pursuant to the 2010 world Cup,
somehow this 2010 contract for the urgent provision of these radios
extended
to the procuring one year later of additional goods from
Kitso. To the extent that there was an argument that the third
respondent
benefitted from this procurement, this was clearly not the
case as is evident from the uncontested evidence, particularly that
of Mr Masegela, who testified before the second respondent that these
radios were never installed in the ambulances and that they
were
never required. To the extent that the appellant relied on contract
RT 543 to justify the acquisition of the Columbus software
it too was
clear that the procurement of this software constituted a deviation
from s 7 of the SITA Act., No user specifications
had been submitted,
SITA played no role in the execution of this transaction and
accordingly the impugned procurement could not
have been undertaken
in terms of the contract RT 543. Therefore, it had not been concluded
in compliance with s 7 (3) of the SITA
Act. Even a swift reading of
contract RT 543 between Eclipse and SITA should have made the
appellant realise that there was a provision
in that contract which
read ‘the supplier shall not without the prior written
permission of SITA assign the agreement or
any part thereof or any
benefit or interest thereunder without the written consent of SITA…’.
[24]
Perhaps in realisation of the parlous state
of the appeal on the merits of the appellant’s conduct, much of
the argument raised
by appellant’s counsel concerned the
question of discriminatory treatment.
[25]
In this connection, it is regrettable that
the approach adopted both by the second respondent and the court
a
quo
stands in contradiction that of
this Court as set out in
Absa Bank Ltd v
Naidu and others
[2015] BLLR 1
(LAC).
Ndlovu JA, after a careful analysis of the existing jurisprudence
regarding discriminatory decisions with regard to dismissal
stated at
para 35:
‘
It
is trite that the concept of parity, in the juristic sense, denotes a
sense of fairness and equality before the law which are
fundamental
pillars of the administration of justice.’
The learned judge of
appeal then went on to say:
‘
It
ought to be realised, in my view, that the parity principle may not
just be applied willy-nilly without any measure of caution.
In this
regard I am inclined to agree with Professor Grogan when he remarks
as follows:
“
The
parity principle should be applied with caution. It may well be that
employees who thoroughly deserved to be dismissed profit
from the
fact that other employees happened not to have been dismissed for a
similar offence in the past or because another employee
involved in
the same misconduct was not dismissed through some oversight by a
disciplinary officer, or because disciplinary officers
had different
views on the appropriate penalty.
”’
(at
para 36).
[26]
In short, the parity principle may well
mean that in the previous case which is invoked in support of the
application of an argument
concerning discriminatory discipline, then
the gravity of the initial disciplinary offence had not been properly
appreciated. In
such circumstances, it may be unjustified to invoke
the parity principle, where an employee has committed a serious
offence against
the employer and the only defence raised is that in a
previous case a wrong decision had been arrived and so that the
employee’s
misconduct in the subsequent case can be overlooked.
In the present case, the egregious misconduct of the appellant in two
cases,
justifies the application of the caution adopted by Ndlovu JA
in the
Absa
case. However, as no cross-appeal was lodged by the third respondent
against this part of the finding of the second respondent
which, in
turn, was confirmed on review by the court
a
quo
, the appellant can therefore count
herself fortunate in this regard.
[27]
For all of these reasons therefore, the
appeal is dismissed with costs.
_____________
Davis JA
Coppin JA and Molefe AJA
concur.
APPEARANCES:
FOR THE
APPELLANT:
Adv MZ Makoti and Adv RC Mathevula
Instructed
by Nazia Cassim Attorneys
FOR THE THIRD
RESPONDENT:
Adv Mphahlele SC
Instructed
by State Attorney
[1]
Regrettably
the letter as it appears in the record is a very poor copy; hence
the gaps in its reproduction in this judgement