Branford v Metrorail Services (Durban) and Others (DA19/2002) [2003] ZALAC 16; [2004] 3 BLLR 199 (LAC); (2003) 24 ILJ 2269 (LAC) (13 November 2003)

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Branford v Metrorail Services (Durban) and Others (DA19/2002) [2003] ZALAC 16; [2004] 3 BLLR 199 (LAC); (2003) 24 ILJ 2269 (LAC) (13 November 2003)

IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA
CASE
NO: DA 19/2002
REPORTABLE
In
the matter between:
D.
BRANFORD Appellant
and
METRORAIL
SERVICES (DURBAN)
First
Respondent
TRANSNET
BARGAINING COUNCIL Second Respondent
J.
G. REDDY N.O.
Third Respondent
UTATU
Fourth Respondent
JUDGMENT
WILLIS
JA:
[1]
The appellant (to whom I shall refer as “the employee”), appeals
against the decision of the court
a quo
(
per
Ngcamu AJ) to review and set aside the award of Mr Reddy, the third
respondent (to whom I shall refer as “the arbitrator”).
The
arbitrator was appointed from a panel of arbitrators in terms of the
applicable agreement with the Transnet Bargaining Council
(the second
respondent) in order to determine whether the dismissal of the
employee was unfair in terms of the
Labour Relations Act, No. 66 of
1995
, as amended (“the LRA”). It was conceded by Mr Shangase who
appeared for the first respondent (to whom I shall refer as “the
employer”) that the arbitrator, if he found the dismissal of the
employee to have been unfair would have had to apply the remedies
for
unfair dismissal as provided for in
section 197
of the LRA. The
arbitrator had found the dismissal of the employee by the employer to
have been unfair and ordered the employer to
re-instate the employee
with effect from 1
st
May, 2001, the day after the award was given. The employer then
brought an application before the court
a quo
to review and set aside the arbitrator’s
award. The grounds of the review were that arbitrator had exceeded
his powers and/or committed
a gross irregularity. During the appeal
hearing, the first responded abandoned the ground that the arbitrator
had exceeded his powers.
The representatives of the parties agreed
that the principles of “unjustifiability” and “irrationality”
referred to cases
such as
Carephone (Pty) Ltd
v Marcus N.O & Others
1999 (3) SA 304
(LAC), (1998) 19 ILJ 1425 (LAC),
[1998] 11 BLLR 1093
(LAC);
County
Fair Foods (Pty) Ltd
v
CCMA & Others
(1999) 20 ILJ 1701;
Adcock
Ingram Critical Care v CCMA & Others
(1999), 20 ILJ 1799 (LAC),
[2001] 9 BLLR 979
(LAC);
Shoprite Checkers (Pty) Ltd v Ramdaw NO & Others
(2001)
22 ILJ 1603 (LAC);
Stocks Civil Engineering
(Pty) Ltd v Rip N.O. and Another
(2002) 23
ILJ 358 (LAC);
Crown Chickens Limited t/a
Rocklands Poultry v Kapp & Others
(2002),
23 ILJ 863 (LAC),
[2002] 6 BLLR 493
(LAC);
Miladys
(A Division of Mr Price Group Limited) v Naidoo & Others
(2002) 23 ILJ 1234 (LAC) and
Bel Porto School
Body v Premier Wstern Cape
2002(3) SA 265
(CC) were irrelevant to the review of the case. No allegations
pertaining thereto were made in the employer’s founding
affidavit.
The employer stated in its founding affidavit that it was relying on
the provisions of
section 33
of the
Arbitration Act, No 42 of 1965
.
Mr Bingham
, who
appeared for the employee, very fairly conceded that it did not
matter whether or not the application should have been brought
in
terms of
section 145
of the LRA: the enquiry in this case is confined
to whether or not a “gross irregularity” has been committed and
the relevant
sections in both statutes
(section 33
of the
Arbitration
Act and
section 145
of the LRA) both provide that an arbitration
award may be set aside if a gross irregularity was committed in the
conduct of the arbitration
proceedings.
It
is clear that the Labour Court had jurisdiction (See
section 157(3)
read with
section 191(5)(a)
of the LRA and
Stocks
Civil Engineering (Pty) Ltd v Rip NO and Another
(2002) 23 ILJ 358 (LAC) at para [6];
[2002] 3 BLLR 189
(LAC)).
The
court a quo
granted the relief sought by the
employer. Leave to appeal to this court was granted by the court
a
quo
.
[2] The employee, who had 21 years service
with the employer, and who at the time of his dismissal was a Traffic
Control Officer,
was dismissed for making eight fraudulent petty cash
claims totalling R834,00 for items such as tea, coffee, sugar and
milk powder.
The dismissal took place on 20
th
October, 2000. The employee referred his dispute concerning his
alleged unfair dismissal to the relevant bargaining council, being
the second respondent. After there had been an unsuccessful attempt
at conciliation between the parties, the arbitrator was, as mentioned
earlier, appointed in terms of the applicable bargaining council
agreement to determine the matter. As has also been noted above,
he
found the dismissal of the employee to have been unfair and ordered
the re-instatement of the employee.
[3] The alleged
misconduct of the employer is set out in the following manner:
“
1.
During August 2000 the Applicant’s Financial Accounts Manager, Mrs
Yasmin Gangadin scrutinized the invoice from Cambridge store
which
made her suspicious. The invoice did not have a stamp or Vat number.
It also reflected the word refreshments without describing
the goods
supplied by ( Mr Colin Palmer) did not correspond with his specimen
signature.
2. Ms Yasmin Gangadin
contacted Cambridge Store and faxed them a copy of the invoices. They
informed her that they had not issued
the invoices.
3. Ms Yasmin Gangadin
informed her line manager and the matter came to th attention of the
Regional Manager.
4. The regional manager,
Mr Gouws, sanctioned the investigation by Transnet Group Audit
Services (‘the Auditors”) into the alleged
petty cash
withdrawals.
5. On 16
th
August, 2000 the auditors concluded their investigation and submitted
their report. The report is annexed hereto marked ”C.
6. It is evident from the report that:
6.1 The third respondent (i.e. “the employee’) made
8 fraudulent Petty Cash claims amounting to R834.00.
6.2 On several occasions
the authorizing manager’s signature was forged on the petty cash
claims/ payment forms to conceal the irregularity.
6.3 The third respondent
made false written statements to the effect that Cambridge Store used
more than one set of invoice books
and made deliveries to the
Respondent.”
[4] The employee did not
testify at the arbitration hearing. The arbitrator gave a careful and
well reasoned award. The employee
had, in the internal disciplinary,
enquiry denied the allegations. What influenced the arbitrator, and
is the issue upon which this
appeal depends, was that prior to his
dismissal the employee was given a recorded oral warning in respect
of the very same facts.
Although Mr Shangase attempted to argue that
the facts giving rise to the recorded oral warning were different
from those upon which
the decision to dismiss was based, the furthest
that the employer went in its founding affidavit was to allege that:
“
It is
clear from the evidence presented at the arbitration hearing that
when Mr Colin Palmer issued the so-called verbal warning to
the Third
Respondent, he had no evidence demonstrating the seriousness of the
misconduct committed by the Third Respondent.”
It is common cause that
following a meeting at which the employee had been confronted with
the allegations by Mr Palmer, the line
manager, Mr Smit, the
production manager (who was senior to Mr Palmer) and Mr Pillay, a
senior manager in the finance department,
he was given this recorded
oral warning. It was formally issued by Mr Palmer. The finance
department were advised accordingly. The
record of the arbitration
proceedings records the following evidence of Mr Palmer:
“
I then
requested a meeting with Senior Manager Pillay, Mr Smit, myself and
Mr Branford (‘the employee’). The meeting was held
in Pillay’s
office. At the conclusion of the meeting Mr Pillay indicated that he
would take no further action from the finance
side and the matter is
left in Smit’s hands. He said he would not refer the matter to
audit but that Mr Smit must finalize the
matter. At this stage no
evidence given or shown to me. They may have been given to Mr Smit
but I did not see them. Mr Smit, Mr Branford
and I exited the meeting
and outside the corridor Mr Smit asked Mr Branford to give him a full
report in writing and the matter would
be put to rest. As far as I
was concerned from Smit’s side the matter was finalized and no
further action was to be taken. I then
took Branford to my office,
closed the door and gave him a dressing down in the strongest terms
and informed him that if any such
infringements came up again, it
would be out of my hands because of the pressure put on us by our CEO
that Managers must discipline
Junior Managers. I decided to record
the warning and put it on his disciplinary sheet.”
It seems that factors that influenced the
decision of leniency were that the employee had successfully reduced
overtime expenses in
the Durban yard by some R750 000,00 per year and
radio costs by some R300 000,00 per year, had introduced savings at
the Springfield
depot of some R250 000,00 per year and further
savings of some R200 000,00 in Sarnia; and he had reduced the
telephone costs of
Train Operations by R100 000,00 per year. The
employee had furthermore often acted successfully as a facilitator
and an instructor
in customer care programmes. It seems that an
additional factor was that there had for some time, apparently, been
a general laxity
in the employer’s offices about petty cash claims.
The employee also had long service. There is nothing in the evidence
to indicate
that, on a balance of probabilities, that Mr Palmer had
not been
bona fide
in
issuing the oral warning or that he had no authority to do so. There
is also no evidence to indicate that, on a balance of probabilities,
there had been any collusion to save the employee from dismissal. An
internal audit into the issue was, however, performed and it
was
recommended that the employee be formally charged with fraud, forgery
and dishonesty. Although the auditors’ report took a
more serious
view of the facts, it became common cause during the hearing that the
report was not based on any facts which could
be described as “new”.
Some time after the issue of the oral warning, the employee was
formally so charged and a disciplinary
enquiry convened with Mr
Moeti, the Human Resources Manager at Portnet, as chair. Despite
protests that the employee had already
been disciplined in respect of
the self same acts of misconduct, Mr Moeti held that the employee was
not being twice disciplined
because the disciplinary code provided
for more severe penalties for misconduct of such a serious nature.
He decided to dismiss
the employee. The arbitrator found that:
“
It is my conclusion therefore that the applicant’s
argument that he was disciplined twice for the alleged infringements
must be
sustained.” and
“
the
only appropriate relief herein is that of reinstatement. I do not
however believe that given all the circumstances the applicant
should
be compensated in any way for the period between his dismissal and
his re-instatement.”
[5] The court
a quo
held that: “The first hearing was a mere
discussion between the line manager and the third respondent which
resulted in the verbal
warning.” The court
a
quo
said that the arbitrator “did not take
into account that the third respondent was disciplined for fraud but
when the verbal warning
was given it was for a mere irregularity.”
The court
a quo
went
on to say: “ I am also of the view that the arbitrator committed a
gross irregularity in not taking into account the fact that
the first
sanction by the line manager was without any charge being proferred
against the third respondent. It resulted from a discussion
regarding
the irregularity. No charges were proferred against the third
respondent. I would have taken a different view if there
were charges
proferred against the third respondent and that as a result of those
charges the line manager gave the respondent a
verbal warning. When
the proper disciplinary hearing was held the third respondent was
subjected to three charges and in my view
that was a proper hearing
that was held by the applicant.”
[6] In terms of
section
197
(1) read with 197 (2) of the LRA, an arbitrator who finds that a
dismissal is unfair is obliged to order reinstatement or
re-employment
of the employee unless:
“
(a)
the employee does not wish to be reinstated;
(b) the circumstances surrounding the dismissal are such
that a continued employment relationship would be intolerable;
(c) it is not reasonably practical for the employer to
reinstate or re-employ the employee;or
(d) the dismissal is
unfair only because the employer did not follow a fair procedure.”
Mr Shangase conceded that the only
provision which could be of any relevance to this case was (b). The
problem for the employer is
that no such allegation appears to have
been made in the arbitration proceedings and certainly not in the
employer’s founding affidavit.
Furthermore, the facts of this case
do not compel such a conclusion as a necessary inference, on a
balance of probabilities. It
is not an invariable rule that offences
involving dishonesty necessarily incur the penalty of dismissal.
(See, for example,
Boardman Brothers v CWIU
1998 (3) SA53 (SCA) at 59G; (1998) 19ILJ 517
(SCA);
Toyota SA Motors (Pty) Ltd v Radebe &
Others
(2000) 21ILJ 340 (LAC)
at para [44])
[7] In
BMW (SA)
(Pty) Ltd v Van der Walt
(2000) 21 ILJ 113
(LAC), Conradie JA, with Nicholson JA concurring said at para [12]:
“
Whether
or not a second disciplinary enquiry may be opened against an
employee would, I consider, depend upon whether it is, in all
the
circumstances, fair to do so. I agree with the dicta in
Amalgamated
Engineering Union of Sa & Others v Carlton Paper of SA (Pty) Ltd
(
1988) 9 ILJ 588 at 596A-D that it is
unnecessary to ask oneself whether the principles of
autrefois
acquit
or
res judicata
ought to be imported into labour law. They
are public policy rules. The advantages of finality in criminal and
civil proceedings is
thought to outweigh the harm which may in
individual cases be caused by the application of the rule. In labour
law fairness and fairness
alone is the yardstick. See also
Botha v Gengold
[1996] BLLR 441
(IC)
;
Maliwa v Free State Consolidated Gold Mines (Operations) Ltd
(1989)
10 ILJ 934 (IC)
.
I
should make two cautionary remarks. It may be that the second enquiry
is
ultra vires
the
employer’s disciplinary code (
Strydom v
Usko Ltd
[1997] 3 BLLR 343
(CCMA) at 350F-G).
That might be a stumbling block. Secondly, it would probably not be
considered to be fair to hold more than one
disciplinary enquiry save
in rather exceptional circumstances.”
In
the same case, Zondo AJP, as he then was, took a view that was more
strongly against the holding of a second enquiry.
In my respectful view, the CCMA
commissioner, Mr Rycroft, has given a very careful review of the law
in regard to this issue in
Frost v Telkom SA
(2001) 22 ILJ 1253 (CCMA). In my view, he
has, at least for most practical purposes, correctly summarised the
position thus at 1260B:
“ The norm in assessing the fairness of a
disciplinary offence is a single disciplinary enquiry conducted in
compliance with the
employer’s disciplinary code. Where there has
been compliance with the company’s disciplinary code and the first
enquiry has
adequately canvassed the facts involved, it will be
unfair to hold a second enquiry.”
[8] Assume that this
court were to be persuaded that the arbitrator erred:
1 in finding that:
1.1 the enquiry which resulted in the dismissal of the
employee was a second enquiry in respect of the same alleged acts of
misconduct;
and/or
the dismissal was unfair; and/or
2 in ordering the re-instatement of the employee.
Would this mean that the arbitrator had committed a
“gross irregularity”?
In
Goldfields
Investment Ltd & Another v City Council of Johannesburg &
Another
1938 TPD 551
at 560 Schreiner J, as
he then was, said the following in considering whether a gross
irregularity of the latent kind had occurred
(Mr Shangase conceded
that the arbitrator had committed no patent gross irregularity):
“
In matters relating to the merits the magistrate
may err by taking a wrong one of several views or he may err by
mistaking or misunderstanding
the point in issue. In the latter case
it may be said that he is in a sense failing to address his mind to
the true point to be decided
and therefore failing to afford the
parties a fair trial. But that is not necessarily the case, it would
be straining the language
to describe it as a gross irregularity or a
denial of a fair trial. One would say that the magistrate has decided
the case fairly
but has gone wrong on the law. But if the mistake
leads to the court’s not merely missing or misunderstanding appoint
of law on
the merits, but to its misconceiving the whole nature of
the enquiry, or of its duties in connection therewith, then it is in
accordance
with the ordinary use of language to say that the losing
party has not had a fair trial.”
This extract was quoted with approval in
the
Toyota
case
(
supra
) at para [41]
and in a long line of other cases in other courts and has been
endorsed by the Supreme Court of Appeal, the most recent
case in that
court being
Paper Printing Wood & Allied
Worlers Union v Pienaar NO & Others
1993
(4) SA 631(A)
at 638G; (1993) 14 ILJ 1187 (A).
I consider
it appropriate to quote from the same
Toyota
case at para [53] where it was said:
“
If there is a yawning chasm between the sanction
which the court would have imposed and that which the commissioner
imposed then it
would seem to me that a gross irregularity has been
committed. ”
Although the context is different, I think
the principle is relevant. The fact that a reviewing court may have a
come to a different
conclusion from the decision sought to be
reviewed (and the basis for arriving at it) does not mean that a
gross irregularity has
been committed. There comes a point, however,
when the reviewing court is so offended by the yawning chasm between
its reasoning
and its conclusion on the one had and that of the
decision sought to be reviewed on the other, that it decides that a
gross irregularity
has been committed. It this case there may be
room for legitimate debate about the correctness of the arbitrator’s
decisions covered
in the points at the beginning of this paragraph.
Opinions among reasonable men and women may differ. Nevertheless, one
has no sense
that there would be any “yawning chasms” between the
reasoning of the arbitrator and that which any member of this court
may
have adopted. The arbitrator’s reasoning can certainly not be
said to have been so flawed that one must conclude that there has
not
been a fair adjudication of the issues. (See
Miladys
v Naidoo & Others
(supra) at para [30].)
[7] In the light of the facts in this case
and the current state of the law, it cannot be said that the
arbitrator committed a gross
irregularity in finding that the
dismissal was unfair. Furthermore, I would wish to note that the
relative informality with which
the first disciplinary enquiry was
held does not, in itself, make it
pro non
scripto
. There is therefore no basis upon
which a court could interfere with the arbitrator’s decision. The
court
a quo
was wrong
in deciding to interfere with the arbitrator’s award.
[8] There is no reason
why costs should not follow the result.
[9] I propose that the
following order be made:
The appeal is upheld;
The order of the
court
a quo
is
set aside and following is substituted therefor:
“
The application is dismissed
with costs.”
(iii) The first respondent is
to pay the costs of the appeal.
____________________
WILLIS J A
JAFTA AJA:
[10] I have had occasion to read the
judgment prepared by my brother
Willis JA
in
this matter but regrettably I find myself constrained to respectfully
disagree with his main finding on whether or not the arbitrator
committed a gross irregularity and the ultimate conclusion that the
appeal should succeed. In my respectful view, the facts of the
case
and the applicable law demonstrate that the arbitrator misconceived
the true legal position before arriving at the main finding
to the
effect that the appellant could not be disciplined twice for the
alleged infringements and as a result the dismissal which
was imposed
pursuant to the formal disciplinary enquiry was rendered unfair by
the sole basis that the appellant had previously been
issued with a
written warning.
[11] In the review
application, in the court a quo, the arbitrator’s award was
challenged on, inter alia, the basis that he committed
a gross
irregularity in failing to note that the determination of whether the
employee could be disciplined more than once for the
same offence
depends on whether or not it is fair to do so. In the founding
affidavit, this ground of review was articulated in the
following
terms:
“
The issue of paramount importance is fairness as
opposed to importing the inflexible legal principles into the sphere
of the employer-employee
relationship.
32.5 The second respondent omitted to decide the fairness or
otherwise of subjecting the third respondent to a disciplinary
enquiry
and failed to decide on the merits or demerits of the case.”
[12] The aforesaid ground appears to have
been extracted from the decision of this court in
BMW
(SA) Pty Ltd v Van der Walt (2000) 21 ILJ 113 (LAC
).
In that matter the court had to consider the propriety of instituting
a second disciplinary enquiry against an employee. Writing
for the
majority
Conradie JA
(
with whom
Nicholson JA
concurred) answered the question by stating the following principle
at para [12]:
“
[12]
Whether or not a second disciplinary enquiry may be opened against an
employee would, I consider,
depend
upon whether it is, in all the circumstances fair to do so
.
I agree with the dicta in Amalgamated Engineering Union of SA &
Others v Carlton Paper of SA (Pty) Ltd (1998) 9 ILJ 588 (IC)
at 596
A-D that it is unnecessary to ask oneself whether the principles of
autrefois acquit or res judicata ought to be imported
into labour
law. They are public policy rules. The advantage of finality in
criminal and civil proceedings is thought to outweigh
the harm, which
may in individual cases be caused by the application of the rule.
In
labour law fairness and fairness alone is the yardstick.
See
also Botha v Gengold
[1996] BLLR 441
(IC); Maliwa v Free State
Consolidated Gold Mines (Operations) Ltd (1989) 10 ILJ 934 (IC). I
should make two cautionary remarks.
It may be that the second
disciplinary enquiry is ultra vires the employer’s disciplinary
code (Strydom v Lesko Ltd
[1997] 3 BLLR 343
(CCMA) at 350 F-G). That
might be a stumbling block. Secondly, it would probably not be
considered to be fair to hold more than one
disciplinary enquiry save
in rather exceptional circumstances.”
[Emphasis
supplied]
[13] Although during the hearing of this
appeal Mr Bingham, for the appellant, contended that the test laid
down in
Van der Walt’s
case (supra) was that a second enquiry was permissible only in
exceptional circumstances, that is not borne out by the dictum in
para [12] quoted above. In that paragraph it is quite clear that
Conradie
JA
considered fairness alone to be the decisive
factor in determining whether or not the second enquiry is justified.
The learned Judge
of appeal mentioned the issue of exceptional
circumstances merely as one of the two caveats and not as the actual
or real test to
be applied. Therefore, in my view, it is incorrect to
contend that the test espoused in
Van der
Walt
is that a second
enquiry would only be permissible in exceptional circumstances. The
true legal position as pronounced in
Van der
Walt
is that a second enquiry would be
justified if it would be fair to institute it. This is also the
interprtetation attached to para
[12] by
Zondo
JP
in the minority judgment in the same
matter. At para [32] the learned Judge President stated:
“
[32] My colleague Conradie JA,
expresses the view in his judgment that an employer is entitled to
subject an employee to more than
one disciplinary enquiry if it is
fair to do so. Elsewhere he says it would probably not be considered
to be fair to hold more than
one disciplinary enquiry save in rather
exceptional circumstances. According to Conradie JA, the test whether
or not an employer
is entitled to subject an employee to more than
one disciplinary enquiry is whether or not it would be fair for the
employer to do
so.”
[14] The concept of fairness, in this
regard, applies to both the employer and the employee. It involves
the balancing of competing
and sometimes conflicting interests of the
employer, on the one hand, and the employee on the other. The weight
to be attached to
those respective interests depends largely on the
overall circumstances of each case. In
National
Union of Metalworkers of SA v Vetsak Co-operative Ltd
[1996] ZASCA 69
;
1996 (4) SA 577
(A), Smalberger JA
made the following remarks
on fairness at 589 C-D:
“
Fairness
comprehends that regard must be had not only to the position and
interests of the worker, but also those of the employer,
in order to
make a balanced and equitable assessment. In judging fairness, a
court applies a moral or value judgment to established
facts and
circumstances (Num v Free State Cons at 446I). And in doing so it
must have due regard to the objectives sought to be achieved
by the
Act. In my view, it would be unwise and undesirable to lay down, or
attempt to lay down, any universally applicable test for
deciding
what is fair
.”
[15] The record of the
arbitration proceedings in the present matter reveals abundantly
clear that circumstances leading to two punishments
that were
imposed on the appellant, were placed before the arbitrator. The
evidence of Mr Colin Palmer(Palmer) who issued the warning
was to the
effect that he was informed by his superior, Mr Smit (Smit) that
there were irregularities. He went to enquire from certain
people
whether when they attended a meeting they were served with tea,
coffee and biscuits. His enquiry yielded an affirmative response.
Thereafter, he requested a meeting with a senior manager, Mr Pillay
(Pillay). Smit and the appellant were also in attendance. At
the
conclusion of the meeting Pillay indicated that the finance division
would take no further steps and the matter was left in the
hands of
Smit to finalise. The latter asked the appellant to give him a full
report in writing and stated that the matter would be
put to rest.
Immediately, after the said meeting Palmer took the appellant to his
office and “gave him a dressing down in the strongest
term”. Then
he proceeded to issue a written warning against the appellant without
any formal inquiry. It is significant to note
that Palmer stated,
during the arbitration proceedings, that at the stage of the meeting
and the subsequent warning, no evidence
relating to the matter was
given to him. Furthermore, he said they had no information indicating
that fraud had been committed. Nonetheless,
he hurriedly issued the
warning even before the appellant could furnish a written report
asked for by his superior, Smit. It should
be remembered that
according to Palmer, on hearing about irregularities, he took the
matter to a meeting with his superiors( Pillay
and Smit) who
considered it and Smit suggested that a particular step should be
followed by the appellant. It is not clear from the
record what
prompted Palmer to take the action he took when he stated, in his
evidence, that his superiors did not instruct him
to take further
action. The problem in this matter is that Palmer, it would appear,
did not know how to discipline an employee properly.Although
it may
have needed a lawyer to properly interpret the facts in question i.e.
did they constitute a mere irregularity or a forgery,
fraud and\or
theft, it was still unfair to the company to have it denied the
opportunity of having the facts evaluated by its Human
Resources
Manager who was probably more familiar with its disciplinary code
than Palmer who hastily decided to discipline the appellant
even
though he had insufficient information and the latter had not then
furnished a written report. In these circumstances it would
manifestly be unfair for the company to be saddled with a quick,
ill-informed and incorrect decision of its employee who misconceived
the seriousness of the matter and hurriedly took an inappropriate
decision leading to an equally inappropriate penalty.
[16] It appears from the
arbitration record that audit investigations were later conducted by
the employer’s agents who were not
informed by Palmer that he had
already disciplined the appellant. Those investigations revealed that
the appellant was not just guilty
of irregularities but that fraud,
forgery and dishonesty had been committed. This led to the formal
enquiry which led to the appellant’s
dismissal. During the
subsequent arbitration, the appellant did not testify. Instead he
contended that it was improper to subject
him to a disciplinary
enquiry because he had already been disciplined. The arbitrator
upheld the contention and found the dismissal
to have been unfair
only on the basis that the employer was not entitled to hold the
enquiry because the appellant had been disciplined
and that the
employer was bound by the warning given to him.
[17] Even though, strictly speaking, there
was only one enquiry in the present matter, I am prepared to approach
it on the assumption
that there were two enquiries, as it was the
position in
Van der Walt’s
case, because two successive punishments were imposed. I shall
further assume that the principle in
Van der
Walt
equally applies to the present matter.
In accordance with that principle, the employer is entitled to hold a
second disciplinary enquiry
if it would be fair to do so. The
arbitrator’s award deviates from the aforesaid principle. Even if
the test was that a second
enquiry was permissible only in
exceptional circumstances, the arbitrator would have still failed to,
on the present facts, apply
it and consider issues placed before him.
[18] The question arising for consideration
is whether the arbitrator has committed a gross irregularity, which
entitled the court
a quo to interfere with the award. As a starting
point, this court has in the past urged arbitrators to approach the
employers’
dismissals with some measure of caution. In
County
Fair Foods (Pty) Ltd v CCMA
and
Others [1999] 11
BLLR
1117 (LAC)
Ngcobo AJP
said at para [28]:
“
[28] Given the finality of the awards and the limited power of
the Labour Court to interfere with the awards, commissioners must
approach
their function with caution. They must bear in mind that
their awards are final-there is no appeal against their awards. In
particular
commissioners must exercise great caution when they
consider the fairness of the sanction imposed by the employer. They
should not
interfere with the sanction merely because they do not
like it. There must be a measure of deference to the sanction imposed
by the
employer subject to the requirement that the sanction imposed
by the employer must be fair. The rationale for this is that it is
primarily the function of the employer to decide upon the proper
sanction.”
[
19] Had the
arbitrator heeded the above caution and had he appreciated the
correct legal position, he probably would have come to
a different
conclusion or at least he would have properly considered the real
issue before him which was the fairness of the dismissal.
Nonetheless
that is not the test: the proper test for interference with his
award, in the context of this case, is whether he has
committed a
gross irregularity. As stated in para [10] above, the award
demonstrates that the arbitrator completely misconceived
the
correct legal position as currently enunciated in
Van
der Walt
and he arrived at the incorrect
conclusion that the holding of the “second enquiry” per se
rendered the dismissal unfair. In
this regard the only issue
traversed by the arbitrator was whether the employer was bound by the
action of Palmer in issuing the
warning to the appellant. Having
considered the employer’s disciplinary code, elsewhere in his award
the arbitrator states:
“
The
above provisions validate Mr Palmers actions entirely. There is no
basis to suggest that Mr Palmer acted beyond his powers,
although
his decision may have been incorrect.
The respondent is accordingly bound by Mr Palmer’s actions. The
respondents contended that Mr Palmer came to the assistance of the
applicant in order to prevent him from facing serious charges.
In my view it
is unfortunate for the
respondent that even if this contention is true it is bound by Mr
Palmer’s conduct.
As a senior
manager one would have expected Mr Palmer to exercise extreme caution
when dealing with this matter because of the serious
nature of the
allegations. His decision to invoke discipline in the manner that he
did is somewhat but not entirely mitigated by
Mr Pillay and Mr Smit’s
decision not to pursue the matter. It is my conclusion therefore that
the aplicant’s argument that he
was disciplined twice for the
alleged infringements must be sustained. As a result of this
conclusion it is not necessary for me
to traverse all the evidence
led concerning the allegations of fraud, dishonesty and forgery”
[Emphasis added].
[20] Undoubtedly, the aforesaid reasoning
by the arbitrator reveals, in my respectful opinion, a fundamental
flaw in every step of
the way towards his conclusion that the
dismissal was unfair. His material reasons do not logically lead to
the conclusion he arrived
at (
Miladys (A
Division of Mr
Price
Group Limited) v Naidoo & others (supra) at para [29]).
Firstly, the arbitrator was faithfully married to the idea that since
it was competent for Palmer to issue the written warning, the
employer was bound by the latter’s action irrespective of whether
Palmer’s decision to issue a warning was correct or not and
despite
the possibility of Palmer having been influenced by ulterior motives
to issue the warning. It would be recalled that through
his own mouth
Palmer stated that the information at his disposal was scanty in that
he only heard from Smit that there were irregularities
and further
that his own investigation was confined to asking certain people
whether when they had a meeting they were served with
tea and
biscuits. Nothing suggested the commission of offences such as fraud,
forgery and dishonesty. Moreover, according to Palmer,
although his
superior had asked for a written report from the appellant and
indicated that the matter would then be closed, on his
own, he
immediately issued the warning without any enquiry. Therefore, it is
clear that the arbitrator held the view that if Palmer’s
action in
issuing the warning was binding on the employer, it was not
permissible for the employer to later charge him in respect
of the
same conduct.
[21] As a result of the arbitrator’s
misconception of the law relating to the propriety of holding a
second disciplinary enquiry,
the employer in the present matter was
denied the opportunity of having the issue of the fairness of the
dismissal considered in
a fair public hearing and by means of
applying the relevant law. The arbitrator failed to consider whether
or not in the circumstances
of the present matter the employer was
entitled to hold the enquiry that led to the appellant’s dismissal
and if so whether the
sanction of a dismissal was fair. In my opinion
this constituted a gross irregularity on the part of the arbitrator.
The arbitrator’s
reasoning was so flawed and the ultimate
conclusion he arrived at so unsound to the extent of constituting a
gross irregularity as
pronounced in
Goldfields
Investment Ltd and Another v City Council of Johannesburg and Another
1938 TPD 551
. At 560
Schreiner
J
is reported to have stated:
“
It seems to me that gross
irregularities fall broadly into two classes, those that take place
openly, as part of the conduct of the
trial they might be called
patent irregularities- and those that take place inside the mind of
the judicial officer, which are only
ascertainable from the reasons
given by him and which might be called latent…Neither in the case
of latent nor in the case of patent
irregularities need there be any
intentional arbitrariness of conduct or any conscious denial of
justice. The crucial question is
whether it prevented the fair trial
of the issue. If it did prevent a fair trial of the issues then it
will amount to a gross irregularity.”
This case was later approved and followed
by the Appellate
Division
in
L.R.T.B and Another v D.C.C and Another
1965 (1) SA 586
(A) at 598
.
[22] Although the aforesaid dictum was made
65 years ago, it is consistent with the current constitutional
demands as entrenched in
s 34 of the Constitution which elsewhere
requires, in peremptory terms, that when the courts are construing
any legislation they
should promote the spirit, purport and objects
of the Bill of Rights. It is needless to say s 34 referred to herein
forms an integral
part of the said Bill of Rights. The issue of
fairness occupies center stage in the said section which also affirms
one of the foundational
values to our Constitution. Thus in
De
Beer No v North
-
Central
Local
Council etc
[2001] ZACC 9
;
2002
(1) SA 429
(CC)
Yacoob
J
(writing for the court) stated at para
[11]:
“
[11]
This s 34 fair hearing right affirms the rule of law, which is a
founding value of our Constitution. The right to a fair hearing
before a court lies at the heart of the rule of law. A fair hearing
before a court as a prerequisite to an order being made against
anyone is fundamental to a just and credible legal order. Courts in
our country are obliged to ensure that the proceedings before
them
are always fair. Since procedures that would render the hearing
unfair are inconsistent with the Constitution courts must interpret
legislation and Rules of Court, where it is reasonably possible to do
so, in a way that would render the proceedings fair.”[
Footnotes
omitted]
[23] In spite of the fact that
Yacoob
J
in
De Beer
referred specifically to courts of law, s 34 expressly refers also to
other impartial tribunals such as those over which arbitrators
preside.
See Transport Fleet Maintanance (Pty)
Ltd and Another v Numsa
and
Another
-yet unreported judgment of this court
delivered on 6 August 2003 under Case No PA1/02-at para [23]. So, by
parity of reasoning,
arbitrators are obliged to ensure that
proceedings before them are always fair. The parties that appear
before them should equally
receive a fair hearing. Once one of such
parties proves successfully that it did not receive a fair hearing in
the context referred
to by
Schreiner J
in
Goldfields Investment
,
then the reviewing court is entitled to set aside the award. Quite
clearly the arbitrator in the present case has committed what,
in the
language of
Schreiner J
in
Goldfields Investment
,
can be described as a latent irregularity in the sense that he has
failed to deal with the real issues he was called upon to decide
and
thereby denied the employer a fair hearing. This approach was
approved by this court in
Toyota SA Motors
(Pty) Ltd v Radebe &Others and Stocks Civil Engineering (Pty)
Ltd v Gip No and Another
,
both of which are referred to in
Willis JA
’s
judgment. In
Stocks Civil Engineering
case
van Dijkhorst AJA
said at paras[53]-[55]:
“
The crucial question is whether the
irregularity prevented a fair trial of the issues. A wrong conclusion
on law or fact does not
necessarily lead to a conclusion that there
has not been a fair trial. But if a mistake of law leads to a
material misconception
of the nature of the enquiry or of the court’s
duties in connection therewith, then the losing party has not had a
fair trial.
[54]
The concept of irregularity in the proceedings was dealt with by the
full court in Ellis v Morgan & Desai
1909 TS 576
at 581 which
remarked that ‘an irregularity in the proceedings does not mean an
incorrect judgment; it refers not to the result
but to the methods of
a trial, such as, for example, some high-handed or mistaken action
which has prevented the aggrieved party
from having his case fully
and fairly determined’. Mala fides is therefore not a prerequisite
and the bottom line is : has there
been a fair trial ? See also
Paper Printing Wood & Alled Workers Union v Pinaar NO
[1993] ZASCA 98
;
1993 (4) SA
621
(A) at 638 H. In this case Botha JA expressed doubts whether the
approach to errors in the context of common-law reviews as
summarized
in Hira’s case, can be accommodated under s24(1)( c) of
the Supreme Court Act 59 of 1959 which grants power of review in the
case
of gross irregularity in the proceedings (at 639 D). Insofar as
errors of law relate to the functions of an arbitrator, I do not
share the doubts. Such errors if material amount to a gross
irregularity in the sense this phrase has acquired
.
[55] The meaning of
the phrase “gross irregularity has therefore been widened to
include patent thought processes in the mind of
the arbitrator which
adversely impact upon the fairness of the proceedings. It must be
accepted that the legislature was aware of
this when the
Arbitration
Act was
passed.”
[24] In the
circumstances I uphold the decision of the court a quo and at the
same time dismiss the appeal with costs.
________________
JAFTA AJA
I agree.
___________________
NICHOLSON JA
Counsel
for Appellant:
M. Bingham
Attorneys for Appellant:
Van Onselen O’Connell
Attorneys
for First Respondent: A. P Shangase & Associates
Date of hearing: 10
September, 2003
Date of Judgment: 13
November, 2003