Nedcor Bank Ltd v Jappie (JA49/97) [1998] ZALAC 6 (10 June 1998)

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[1998] ZALAC 6
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Nedcor Bank Ltd v Jappie (JA49/97) [1998] ZALAC 6 (10 June 1998)

12
IN THE LABOUR
APPEAL COURT
HELD AT JOHANNESBURG
CASE NO JA 49/97
In the matter between
NEDCOR BANK LTD Appellant
and
FAUD JAPPIE Respondent
JUDGMENT
NICHOLSON JA
[1] The respondent was employed by the appellant in July 1985 and on
the date of his dismissal (19 March 1996) was a client service
point
manager. At his disciplinary enquiry on 6 March he was charged with
(1) not adhering to bank policy
(i) in making payments to a service provider before the service
provider had rendered the service,
(ii) not scrutinising costs of excessive repairs and
(2) dishonesty by receiving monetary benefits from a service
provider during December 1995.
He was discharged on the charge set out in (1)(ii). He pleaded
guilty to the charge in (1)(i) and received a first warning. On
charge (2) he was found guilty and dismissed. The dismissal was
confirmed on appeal.
[2] The respondent approached the industrial court in terms of
section 46(9) of the Labour Relations Act, 28 of 1956. The
respondent
called four witnesses, Messrs Bailey, van Niekerk,
Pienaar and Zucconi, and respondent testified on his own behalf. He
was reinstated
on 10 June 1997 on the basis that the dismissal was
both procedurally and substantively unfair.
[3] It is common cause that at all material times Merck Motorcycles
(‘Merck’) serviced and repaired motorcycles used by appellant.
Furthermore the respondent had his personal vehicle repaired and
luxury items added to a total value of R 7 276,00 during December
1995. The repairs and additions comprised the overhaul of the
cylinder head, the fitting of tyres, mag rims, and an airconditioner
and the colour coding of the bumpers and mirrors.
Procedural unfairness
[4] The respondent approached the industrial court on the basis of
substantive unfairness alone. Mr Makinta, in opening the case
of
respondent, said the following
“And lastly, Madam President, the issue of procedure. The
[respondent] is not challenging the procedure so the only issues
will
be on the substance - substantive fairness, not the procedural
fairness, Madam President.”
Given this unequivocal statement of the issues before the industrial
court, it is difficult to understand on what basis it found
that
there was procedural unfairness. Evidence was led that the appellant
has guidelines on what is termed ‘ethical purchasing
practice’
which prohibit “soliciting or accepting monies, loans, credits or
prejudicial discount, and the acceptance of gifts,
entertainment,
favours or service from present or potential suppliers which may
influence or appear to influence purchasing decisions.”
These
guidelines were part of the conditions of employment and were
available for inspection and were on the appellant’s computer
system. Respondent maintained that he was not aware of the specific
terms of the guidelines and that he had not ever been charged
with a
breach thereof. In addition, so the argument ran, a breach of the
guidelines only entitled the appellant to issue a final
written
warning.
[5] It was upon that basis that the industrial court found that
there was procedural unfairness. It is normally
improper
for a court to give relief to the respondent on the basis of
procedural unfairness where that was not an issue on the pleadings.
See
Yskor Bpk v Meyer 1995 (16) ILJ
864 at 875 (LAC)
and
Sentraal Wes (Kooperatief) Bpk v Food & Allied Workers Union &
Others 1990 (11) ILJ 977 (LAC)
. In
the
Sentraal-Wes
case
at page 991 E-F the court found that an issue which was not pleaded
can be taken into account providing that such issue was
fully
canvassed at the trial.
[6] Respondent was charged, as I have mentioned, with dishonesty by
receiving monetary benefits from a service provider. Pienaar,
who
chaired the disciplinary enquiry, testified to the guidelines of
which I have made mention. Zucconi, who testified that he
presided
over the appeal hearing, also made mention of the fact that the
disciplinary code was not exhaustive and that there was
flexibility
in framing charges and imposing sanctions. The complaint, it seems
to me, is that respondent was never charged with
a breach of policy
but with dishonesty. The appellant by introducing the guidelines, so
it was alleged, was moving the goal posts
after the concession had
been made that procedural unfairness would not be relied on. In my
judgment the breach of the policy alleged
by appellant does involve
dishonesty and it does not seem to matter that chapter and verse of
the guidelines was not quoted. The
guidelines constituted an
amplification of the original charge. I accept that the alleged
change in the charge occurred after the
undertaking not to rely on
procedural unfairness and that the evidence covered the issue
sufficiently to enable the court to deal
with it. I do not accept,
however, that the respondent was prejudiced by the amplification of
the charge by reference to the guidelines.
I am also prepared to
deal with this appeal on the basis of the original charge; namely,
whether respondent dishonestly received
a monetary benefit. It was
never respondent’s case that he was entitled to be dishonest.
Substantive unfairness
[7] Respondent’s evidence was that he received no favour and that
the repairs were an arms’ length transaction in which he
had
agreed to pay off the indebtedness by means of instalments of R200
per month. The first enquiry in the appeal was whether he
genuinely
made such an arrangement or whether it was concocted after the fact
to provide a defence at the disciplinary enquiry.
In determining
this matter it is necessary to examine the evidence and the
probabilities in the case. Respondent was not forthcoming
in
disclosing details of the repairs. Initially he told Bailey and van
Niekerk of the appellant’s investigation department that
the
repairs were a private matter. Thereafter he disclosed that new
tyres and mag rims were added. Finally he revealed the full
extent
of the repairs. Respondent was not able to tell Bailey and van
Niekerk the value of the work done despite himself being
in personal
difficulties and relying on his wife’s income with the bank and
certain private work that she did. Respondent was
not able to come
out on his own salary of R 4754 and during January he was not able
to pay the instalment of R200 until his wife
sold some clothes. He
initially estimated the value of the additions to his car to be R10
000. His straitened financial circumstances
make it more probable
that he would not have incurred such extravagant expenses and that
such were in the nature of a favour by
a business concern that he
had introduced to the appellant as a more competitive rival to the
two predecessors. It is common cause
in this matter that the motor
cycles of the appellant were previously repaired by two concerns
namely R & S Motorcycles and
Selwyn Lurner. The appearance on
the scene of Merck was as a result of recommendations made by
respondent, who led the appellant
to believe that they provided a
more competent and competitive service.
[8] In evaluating the manner in which Merck and respondent
transacted their business, more especially in relation to his
private
vehicle, it is necessary to take account of certain
probabilities and business practices. Under normal circumstances a
garage is
reluctant to release a vehicle to a customer without
payment as it exercises a lien to cover the repairs. The evidence
revealed
that most of the luxury additions to respondent’s vehicle
were done by outsiders i.e. not Merck and the latter would have been
out of pocket to that extent. These circumstances suggest very
strongly a special relationship with respondent which resulted in
Merck foregoing normal legal safeguards.
[9] There are a number of strange features relating to the receipts
and invoices provided by Merck. Van Niekerk interviewed respondent
on 12 February 1996 and he explained that no documents were provided
in connection with his deal with Merck. By this I understood
him to
be saying that no receipts were issued for his payments nor were
invoices provided particularising the work done on the
vehicle. It
was only thereafter that respondent obtained receipts to prove his
payments for December and January and the relevant
invoices. These
receipts follow a numerical sequence which is extremely strange
given that the payments were made allegedly a month
apart.
Furthermore, that no payments would have been made during the
intervening period justifying receipts, seems incredible
given the
volume of work done by the garage.
[10] The respondent testified that he could not afford to pay the
January instalment as he had been on holiday. The receipt, which
records such a payment as having been effected on 22 January, is
accordingly false and it is difficulty to escape the conclusion
that
respondent had a hand in the fabrication thereof. The invoices
languish under the same cloud of suspicion as their numerical
sequence is also consecutive.
[11] Mr Makinta, who appeared for the respondent both in this court
and the industrial court, submitted that the payment of R200
per
month did not necessarily provide proof that respondent was
receiving more favourable treatment at the hands of Merck. He was
dealing with the suggestion that the agreement that respondent pay
the sum of R200 per month was a most generous arrangement which
did
not include any provision for interest. He submitted that the
charges for the repairs and additions might well have included
a
generous profit margin on the work done and the interest which would
have accrued over the thirty six month period it would take
to pay
off the debt. Given the strong prima facie proof of a favour being
given, evidenced by the relaxed attitude adopted by Merck
to
repayment by respondent, it seems to me that an evidential burden
fell on respondent to counter such proof by evidence of such
a
pricing structure. Respondent did not call Mr Julian, who could have
easily provided the necessary proof. It is true that Julian
feared
the loss of the appellant’s business if he testified, but that is
unfortunately one of the consequences of litigation.
The informality
and laxness in business efficiency evidenced by Merck tends in my
view to counter the suggestion that Merck would
have suddenly
manifested a very sophisticated pricing structure to offset the
small monthly payment.
[12] It is true that there was no evidence of any benefit reaped by
Merck as a result of their preferential treatment afforded
to the
respondent. That, however, is not the test. The mischief targeted by
the rule, relating to receiving monetary benefits,
is that the
perception must not arise that the support or continued support of
Merck by appellant arises, not because of an independant
business
choice, but by virtue of the benefits. Respondent’s primary duty
was to serve his employer faithfully and not to benefit
himself or
any other person at the employer’s expense.
[13] I am of the judgment that the appellant showed in the
industrial court that there was no arrangement by respondent to pay
Merck before the respondent realised he was in trouble. Once
respondent realised his problem he arranged with Merck to pay off
the total amount in instalments of R200 per month. The industrial
court ought to have rejected his version that the transaction
was at
arms’ length.
[14] The respondent was not a credible witness and ought to have
been disbelieved by the industrial court. He was clearly not telling
the truth when he had no explanation for Merck issuing a receipt in
January when no payment had been made in that month. It would
have
been foolhardy in the extreme to have issued a receipt when no money
had been paid. None of Merck’s books would have balanced
in
relation to the sum of R200. In a letter dated 13 February 1996
respondent indicated that he had made a payment of R 200 for
December and he adds afterwards ‘& Jan’. This is clearly
false given his later evidence.
[15] There was a material contradiction on an important point in
the case relating to whether Merck approached respondent to attend
to the problem with his cylinder head - the version given by
respondent to Van Niekerk - and his evidence in court that he had
approached them. This is significant as the likelihood that Merck
would have guessed that he had such a problem is so improbable
as to
have been rejected out of hand. It is also grossly improbable that
respondent would incur over R 7 000,00 including luxury
items, when
he had an overdrawn account of R 25 000,00 which necessitated a
second bond on his house. Respondent was also most
evasive when
dealing with questions relating to whether the colour coding and
other additions were luxuries or not. He was clearly
anxious to
establish that they were necessary in order to justify the
sacrifices the family would have to make.
[16] Respondent was clearly ill at ease when asked about the casual
nature of the transaction and why no written agreement had
been
drafted reflecting the payment period, the interest rates and other
relevant information. The respondent’s answer to this
questioning
is quite revealing. He says:
“I mean it wasn’t in my position - when a man was helping me to
ask him ‘Give me a written agreement on it’. The man was
giving
- when I said I had a problem the man said he would help me.”
[17] Respondent’s explanation of the sequence of numbers in the
invoices and receipts is that they were not issued at the time
but
when he asked for them. This would appear to be the truth. The
problem is that such conduct on behalf of Merck is inconsistent
with
an arms’ length transaction and consistent with an intimate
relationship in which there was to be no charge at all. Only
when
respondent was found out did he scurry off to obtain evidence of a
genuine transaction.
[18] Respondent claims not to be familiar with the conditions set
out in the guidelines. These relate to the receiving of favours.
In
his letters to the appellant he indicates that he has been charged
with taking bribes. He clearly understands that bribery is
improper.
Bribery is the colloquial usage for dishonestly receiving monetary
benefits from a service provider. When Miss Otto,
who appeared for
the appellant in the industrial court, put to respondent that he
breached his contract of employment and that
there has been a
breakdown of trust he answers as follows:
“
The
way it’s going on as if I am the only person who has made a
mistake and has been treated like this at Nedbank. You know how
many
people are making mistakes and they just get away with it at
Nedbank.”
This candid admission by respondent indicates that he has no real
faith in his version that this was an arms’ length transaction
and
that he dealt with Merck in the way any citizen would have done so.
[19] In my view the appellant was justified in dismissing the
respondent. Respondent acted in his own interests and contrary to
those of the bank by accepting the monetary favours he did from
Merck. No employer can have the requisite faith in an employee
who
acts in that manner. It follows that the appeal must succeed.
[20] In the premises the order date 10 June 1997 declaring the
dismissal of respondent to be an unfair labour practice and
reinstating
him, is set aside. There is substituted the following
order
“1. The application in terms of section 46(9) of the Labour
Relations Act, 28 of 1956 is dismissed.
2. There will be no order as to costs.”
[21] The appeal succeeds with costs.
C R NICHOLSON JA.
I agree.
J MYBURGH JP.
I agree.
J C FRONEMAN DJP.
Date of hearing: 28 May 1998.
Date of judgment: 10 June 1998.
APPEARANCES
For appellant:
Stephen Hardie of Edward Nathan and Friedland
Inc.
For respondent:
E.S Makinta Attorneys.
This judgment is available on the Internet on website:
http//www.law.wits.ac.za/labourcrt