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[2007] ZALAC 37
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Edcon Limited v Pillemer and Others (DA4/06) [2007] ZALAC 37; [2008] 5 BLLR 391 (LAC); (2008) 29 ILJ 614 (LAC) (28 November 2007)
IN THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
Case no DA4/06
REPORTABLE
In the matter between:
EDCON
LTD
........................................................................................
Appellant
and
B PILLEMER NO
.....................................................................
First
Respondent
COMMISION
FOR CONCILIATION
MEDIATION
AND ARBITRATION
...................................
Second
Respondent
PC
REDDY
..............................................................................
Third
Respondent
JUDGMENT
SANGONI AJA
Introduction
[1] This is an appeal against the whole of the judgment
of Pillay J handed down in the Labour Court on 9 November 2005. The
judgment
concerns the dismissal of an application to review and set
aside the arbitration award by the first respondent, the commissioner
appointed in terms of Section 191(5) of the Labour Relations Act 66
of 1995 (LRA) who arbitrated the dismissal dispute between
the
appellant and the third respondent, under the auspices of the second
respondent, the Commission for Conciliation, Mediation
and
Arbitration (CCMA).
[2] The appellant is Edcon Ltd, a duly registered
company that is the erstwhile employer of the third respondent. After
the amalgamation
with an entity called HD Lee, it took over the
employment of the third respondent in 1992. The third respondent’s
employment
with H.D Lee commenced in 1987. For purposes of this case
employment by the appellant was taken to have commenced in 1987.
Background
[3] In accordance with the applicant’s policy, the
third respondent, then CTM quality controller, was entitled to a
company
car, which she received in April 2003. There were terms and
conditions. It is common cause that in the event of an accident,
involving
the vehicle, she would be required to:
report the accident within 24hrs to the South African
Police Services and obtain a case number;
to report any accident to the appellant and to the
relevant insurance company;
to complete and sign the relevant motor accident claim
form;
not to carry out any repairs without the approval of
the insurance company.
[4] On 8 June 2003, the vehicle was involved in an
accident while being driven by her son. She did not report the
accident to the
police nor to the appellant. She did not meet the
other requirements set out in paragraph three hereof. Her husband
repaired the
vehicle in his panel beating workshop at his own cost.
It transpired later that the reason for non compliance was that she
was
under the impression that her son was precluded from driving the
vehicle in terms of the car policy. It turned out later that the
impression was wrong.
[5] After about six months from the date of the
accident, the appellant got to know about the accident. When
confronted in regard
thereto, the third respondent initially denied
the vehicle had been involved in an accident, she also denied that
her son was driving.
She eventually admitted the accident but she
still told an untruth as to where it occurred and under what
circumstances.
[6] On being questioned further, she made a clean breast
of everything. She was suspended and charged in an internal enquiry.
The
charge against her was as follows:
Failure to be honest and act with integrity in that
“
You committed an act, which has affected
the trust relationship between the company and the employee
in that on 6 June 2003; you failed to
report an accident of a Company vehicle (Reg No ND 95403, Toyota
Corolla GLE, grey in colour)
which your son was driving on the day of
the accident (8 June 2003)
and this
resulted in a breach of trust between yourself and the Company”.
(my underlining). P27
[7] She pleaded guilty and was found guilty. The real
issue for determination was whether the misconduct committed resulted
in a
breach of trust between the third respondent and the appellant
or whether the sanction of dismissal was fair in the circumstances
of
the case. It will be noted that the element of breach of trust relied
upon was the failure to report the accident. The allegations
against
the third respondent do not rely on the continuing lies by her after
the accident was discovered.
[8] The respondent challenged the dismissal at the CCMA.
In essence, the challenge related to the inappropriateness of the
sanction.
The dispute was arbitrated by the first respondent. In the
award the first respondent declared the dismissal substantively
unfair
and directed the reinstatement of the third respondent with no
entitlement to arrear salary. The first respondent found that the
appellant led no evidence relating to whether the trust relationship
had in fact broken down. She took into account the third respondent’s
unblemished record of 17 years service, and that she was two years
away from retirement. According to her, the misconduct was not
so
gross that by reason thereof, the long standing trust relationship
had been destroyed.
[9] The award was taken on review to the Labour Court in
terms of section 145 of the LRA. Pillay J dismissed the application
with
costs. She found that:
"The arbitrator took into account all the circumstances,
including her initial dishonesty and came to the conclusion that
the
employment relationship had not broken down.
There is
no reason why I should disagree with that conclusion of the
arbitrator. Her reasoning is manifestly justifiable on the
basis of
the information before her. She considered the reasons for the
dishonesty and rescued the third respondent from dismissal”.
Later in the same judgment, she remarked;
“
The CCMA is not a rubber stamp, as I have
said elsewhere before, for decisions of the employer. Justice is not
justice unless it
is tempered with mercy”.
This appeal is against that judgment
Grounds of appeal
[10] The first ground is that the Court
a quo
should have found that the respondent failed to apply her mind to the
facts of the case, more particularly in her decision that
the
misconduct committed was not gross and of such gravity that dismissal
was the appropriate sanction. The second ground relates
to hearsay
evidence allegedly admitted and acted upon by the first respondent in
considering whether a breach of trust had occurred.
The third ground
also refers to hearsay evidence with regard to whether there was
another case where the appellant company gave
another employee a
sanction other than dismissal. It refers to inconsistency in the
application of sanction. Essentially, the primary
enquiry in this
appeal is whether it can be found that the court
a quo
was
wrong in deciding not to interfere with the award of the
commissioner.
Test for appropriateness of dismissal
[11] I propose to first deal with the last two grounds.
Val Barnes and Clive Dwyer, both managers of the appellant, authored
certain
documents which were placed before the Commissioner at the
arbitration. The first document is a letter addressed to Clive Dwyer
by Val Barnes. Wherein she refers to the good working relationship
she had with the third respondent since 1976, asking that she
be kept
on her team notwithstanding the incident. She describes her as “a
very honest and hard working lady”. The other
document is
addressed by Clive Dwyer to
Whom It May Concern
. He states
that between January and November 2004, the third respondent worked
under and reported directly to him. In mitigation
as he put it, he
felt it necessary to make it known that another Quality Assurance
employee had an accident while her son was driving
a company vehicle
accused was not reported. The person concerned attempted to have the
vehicle repaired on a false insurance claim.
The outcome was that the
employee was warned and asked to pay the damages. Dwyer goes further
to say because of the similarities
in the two cases, he approached
the other employee’s manager, got a record of the case and
submitted a copy to the investigator
of the current case and to the
Chief Executive Officer (CEO) of the appellant. He then expresses a
wish that the other case be
used as a precedent, the third respondent
to be warned and called upon to pay for final repairs. (Incidentally,
such repairs are
said to be in the region of R6700.) As will be
observed the thrust of these documents is that a sanction of
dismissal in the circumstances
of this case is not appropriate as the
trust relationship has not been destroyed.
[12] The appellant challenges the admissibility of the
contents thereof on the basis of the hearsay rule. The basis for the
objection
to this kind of evidence is that the authors of the
documents did not personally give evidence and were thus not
subjected to cross
examination to test the veracity of their
testimony.
[13] From the reading of the award, it is apparent that
the commissioner considered the content of the documents in question
in
favour of the third respondent. The question is whether she
committed an irregularity in doing so, more particularly in the light
of the fact that proceedings before the commissioner should be less
formal, and in the light of the exception to the hearsay rule.
The
authors of the documents in question are part of the management of
the appellant in which case the appellant could have ensured
their
attendance as witnesses. One of them, Clive Dwyer, submitted at the
internal enquiry, a statement regarding an interview
he had with the
third respondent, as her immediate manager, in connection with the
incident in question. The document he wrote
was presented even to the
internal appeal proceedings, there considered and no objection on
hearsay basis was raised. It is common
cause that the third
respondent did not call Val Barnes to testify because she was not
available on the last day of the hearing.
The commissioner had
expressed her intention to conclude the matter on that same day.
[14] In the interests of justice, hearsay evidence may
be admissible in terms of
section 3(1)(c)
of the
Law of Evidence
Amendment Act 45 of 1988
. The factors to be considered are the
following:
(c) the court having regard to-
(i) the
nature of the proceedings;
(ii) the
nature of the evidence
(iii) the
purpose for which the evidence is tendered;
(iv) the
probative value of the evidence;
(v) the reason why the evidence is not given by the person upon whose
credibility the probative value of such evidence depends;
(vi) any prejudice to a party which the admission of such evidence
might entail; and
(vii)
any other factor which should in the opinion of the court be taken
into account.
1
[15] The nature of the arbitration proceedings is
characterised
inter alia
, by the fact that disputes are
intended to be resolved quickly and through relatively simple and non
technical procedures. I am
of the view that
in casu,
it would
be expected that the appellant, who in any event bore the onus to
establish that the employment relationship between the
parties had
broken down, would not rigidly insist that the third respondent was
the one to call the two as witnesses. In the spirit
of employing the
minimum of legal formalities, particularly bearing in mind that they
were in its employ as managers, it could
have been relatively easy
for the appellant to call them if the evidence was in dispute. The
nature of their evidence was not of
a narrative nature but based on
their belief and opinions. No meaningful prejudice could result from
failure to call them. There
was nothing to alert the commissioner to
the fact that she should not have regard to the evidence of Dwyer in
particular. On the
contrary, if one has regard to the nature of the
evidence, the author of it, the overall circumstances of the case and
relatively
informal nature of the proceedings, I do not think the
commissioner can be criticised for having regard to that evidence.
[16] The sentiments expressed by the
learned Judge in the court
a
quo
are very much
in line with the test and standard endorsed by the Constitutional
Court in the yet unreported case of
Sidumo
and Another v Rusternburg Platinum Mines Ltd
2
registered under case CCT85/06. The
Constitutional Court overturned the judgment of the Supreme Court of
Appeal, per Cameron JA,
wherein it was found that:
“…
a CCMA commis
sioner
is not vested with a discretion to impose a sanction in the case of
workplace incapacity or misconduct. That discretion belongs
in the
first instance to the employer. The commissioner enjoys no discretion
in relation to sanction, but bears the duty of determining
whether
the employer’s sanction is fair.”
[17] Cameron JA referred to judgments
of this Court written by Ngcobo JA in
Nampak
Corrugated Wadeville
3
and
County
Fair Foods (Pty) Ltd
4
,
and set out what he identified as key elements in the test then
adopted by Ngcobo JA. These elements are:
The discretion to dismiss lies primarily with the
employer:
The decision must be exercised fairly;
Interference should not lightly be contemplated;
Commissioners should use their powers with ‘caution’;
They must afford the sanction imposed by the employer
‘a measure of deference’.
[18] In his judgment in the
Sidumo
case, in the
Constitutional Court, Ngcobo J, elaborated on the elements of the
employer’s discretion, and fairness as follows:
“
Equally true is that when an employer
determines what is an appropriate sanction in a particular case, the
employer may have to
choose among possible sanctions ranging from a
warning to dismissal. It does not follow that all transgressions of a
particular
rule must attract the same sanction. The employer must
apply his or her mind to the facts and determine the appropriate
response.
It is in this sense that the employer may be said to have
discretion.
But recognising that the employer has such discretion does not mean
that in determining whether the sanction imposed by the employer
is
fair, the commissioner must defer to the employer. Nor does it mean
that the commissioner must start with bias in favour of
the employer.
What this means is that the commissioner …. does not start
with a blank page and determine afresh what the
appropriate sanction
is. The commissioner’s starting point is the employer’s
decision to dismiss. The commissioner’s
task is not to ask what
the appropriate sanction is but whether the employer’s decision
to dis
miss is fair”.
[19] What seems to be highlighted in this passage is the
fact that “fairness requires that regard must be had to the
interests
both of the workers and those of the employer”.
Regarding the ‘reasonable employer test’, Navsa AJ, who
wrote
the main judgment in the
Sidumo
case referred with approval to the following passage by
Zondo JP in
Engen Petroleum Ltd v CCMA &
Others
5
:
“
Such a test is based on the perceptions and
values of the employer side to these disputes. It emphasises the
interests of employers
more than those of workers. Such a test is,
probably, as objectionable to workers as a ‘reasonable employee
test’ would
be to employers”.
[20] I proceed to briefly outline the facts in the
Sidumo
case. The employee was a security officer whose duty
was to search employees before leaving a certain point. Video
surveillance
revealed that he had, in 24 specifically monitored
instances, conducted only one search in accordance with established
procedures.
On eight occasions, he conducted no search at all.
Fifteen other searches did not conform to the procedures. The video
also confirmed
that Sidumo allowed persons to sign the search
register without conducting any search at all. For this he was
dismissed. The commissioner
took into account the employee’s
long service, the fact that no losses appear to have resulted from
his failure to perform
his duty, that the violation had been
unintentional or a ‘mistake’ and that it had not been
shown that the employer
had been dishonest and found that the
dismissal was too harsh a sanction. He did not consider the offence
committed to “go
into the heart of the relationship (with the
employer), which is trust”. This resulted in the award
reinstating the employee.
[21] The so called ‘reasonable decision
maker-test’ serves as a basis for the decision in
Sidumo
.
If the commissioner made a decision that a reasonable decision maker
could not reach, he/she would have acted unreasonably which
could
then result in interference with the award. This in my view, boils
down to saying the decision of the commissioner is to
be reasonable.
To my understanding the dictum in
Sidumo
is not about shifting
from the ‘reasonable employer test’ in favour of the so
called reasonable employee test. Instead,
meaningful strides are
taken to refocus attention on the supposed impartiality of the
commissioner as a decision maker at the arbitration
whose function it
is to weigh all the relevant factors and circumstances of each case
in order to come up with a reasonable decision.
It is in fact the
relevant factors and the circumstances of each case, objectively
viewed, that should inform the element of reasonableness
or lack
thereof.
[22] In
Bato Star Fishing (Pty)
(Ltd) v Minister of Environment Affairs
6
,
the Constitutional Court, per O’ Regan J, had added more detail
to the principle relating to the reasonable decision maker.
She put
it this way:
“
What will constitute a reasonable decision
will depend on the circumstances of each case, much as what will
constitute a fair procedure
will depend on the circumstances of each
case. Factors relevant to determining whether a decision is
reasonable or not will include
the nature of the decision, the
identity and expertise of the decision-maker, the range of factors
relevant to the decision, the
reasons given for the decision, the
nature of the competing interests involved and the impact of the
decision on the lives and
well-being of those affected. Although the
review functions of the court now have a substantive as well as a
procedural ingredient,
the distinction between appeals and reviews
continues to be significant. The court should take care not to usurp
the functions
of administrative agencies. Its task is to ensure that
the decisions taken by administrative agencies fall within the bounds
of
reasonableness as required by the Constitution”.
[23] The concept of ‘reasonableness’
as a standard of review is not
anything
new in our law. I understood Mr Redding SC for the applicant to have
held the same view as regards the formulation of the
test in
Sidumo
.
As an example, in the South African Law Commission Report (SALC)
7
a similar phrase is used. ‘The
decision was so unreasonable that no reasonable organ could have made
the decision’.
The commissioner‘s conclusion
in
casu
,
set out in paragraph 8 above as well as the facts of the case are
such that it cannot be found that a reasonable decision maker
in the
position of the commissioner could not reach the conclusion which she
did.
[24] It is interesting to note that in the founding
affidavit filed on behalf of the appellant, deposed to by Leoni Petro
Valentine
the following averment was made:
“
The charge of failing to report the
accident is not itself misconduct that would ordinarily lead to
dismissal. The problem the Third
Respondent faced was the question of
whether her lack of candour during the investigation destroyed the
trust relationship, which
if established then dismissal would be
appropriate.”
[25] When one looks at the misconduct charged in the
internal enquiry, appearing in paragraph 6 of this judgment, it will
be noted
that the essence of the allegations against the third
respondent is ‘failure to be honest’, only in the context
of
failure to report the accident. In his submission Mr Redding
sought to extend the element of dishonesty to untruthful accounts of
the accident made by the third respondent during investigations. Fair
enough, that element of dishonesty may be considered together
with
other factors for purposes of the appropriateness of the sanction. If
it is however “her lack of candour during the
investigation
(that) destroyed the trust relationship” as the averment goes
in paragraph 23 supra, does not beg the question
whether that should
not have been specifically alleged in the charge to enable the third
respondent to appreciate the real nature
of the charge(s) against
her. That appears to be a very crucial allegation, in the absence of
which, as the appellant seems to
suggest in the excerpt above, the
appellant would not consider dismissal on the basis of the
destruction of the trust relationship.
[26] The contention of the appellant is that all the
instances of lies were traversed at the arbitration in the course of
leading
the evidence. This may be so. That does not however take away
the duty to inform the accused person, with sufficient particularity,
of the real nature of the charge.
[27] In light of the foregoing I would dismiss the
appeal. There is no reason why costs should not follow the result.
Having regard
to the fact that the retirement date of the third
respondent has gone past it is felt that that there would be a need
to spell
out the implications of the order in the event the appeal
was dismissed. The parties were invited to participate in the
formulation
of the order in this regard without abandoning their
respective stances but purely to avoid confusion. The parties agreed
to the
terms set out in paragraph 2 of the order.
[28] In the result the following is the order of this
court:
1. the appeal is dismissed with costs;
2. the appellant pay to the third respondent all arrear
salary due to her from the date of the order by the first respondent
reinstating
the third respondent to her employment, being the 5
th
July 2004 until the date of her mandatory retirement on the 5
th
August 2006, including salary increments, bonuses and total
contributions to the provident fund on her behalf (in the amount of
R31 113.06)
________________________
CT
SANGONI
ACTING JUDGE OF APPEAL.
[29] I am less sanguine than Sangoni AJA about the
implications of the judgment in
Sidumo
. Nevertheless, I agree
that, in the light of the test applied in that case, more
particularly the facts thereof, one cannot conclude
that the court
a
quo
was wrong in failing to interfere with the decision of the
commissioner. I agree that the appeal must be dismissed with costs. I
am also pleased to note that paragraph 2 of this court’s order
is made with the agreement of the parties in the event that
paragraph
1 followed upon this court’s conclusions.
______________________
NP WILLIS
JUDGE OF APPEAL.
I agree with SANGONI AJA.
_______________________
L P TLALETSI
ACTING JUDGE OF APPEAL.
APPEARANCES:
For the Appellant: Adv Redding SC
Instructed
by: M Alaxander of Deneys Reitz Inc.
For
the Respondent: Adv Madhoo
Instructed
by: R Naidoo of Naidoo and Company
1
S
v Ndlovu & Others
2002 (6) SA 305
(SCA); Tshilonga v Minister of
Justice & Consitutional Development
2007 (4) SA 135
(LC) at 162
B
2
Sidumo
and Another v Rusternburg Platinum Mines Ltd
registered
under case CCT85/06
3
Nampak
Corrugated Wadeville V Khoza (1999) 20 ILJ 578 (LAC) para 33
4
County
Fair Foods (PTY) LTD v CCMA (1999) 20 ILJ 1701 (LAC) para 28
5
Engen
Petroleum Ltd v CCMA & Others (2007) 28 ILJ 1507 (LAC) para 73.
6
Bato
Star Fishing (Pty) (Ltd) v Minister of Environment Affairs 2004 (4)
SA 490 (CC).
7
SALC
(1991), clause 3 (1) (g).