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[2008] ZALAC 24
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Cheryl Gaw Agencies CC v Toli NO and Others (JA37/07) [2008] ZALAC 24 (8 October 2008)
IN THE LABOUR APPEAL COURT OF
SOUTH AFRICA
HELD AT JOHANNESBURG
Case
no: JA37/07
In the matter between:
Cheryl Gaw Agencies CC
Appellant
and
Smanga Toli N.O.
First Respondent
Commission for Conciliation
Mediation and Arbitration
Second Respondent
Ilza Brits
Third Respondent
JUDGMENT
KRUGER AJA:
[1] This is an appeal against the judgment of the Labour
Court upholding an award by the first respondent that the dismissal
of
the third respondent was substantively unfair, and ordering the
appellant to pay compensation of R64 000, equivalent to four months’
salary. The two related questions which arise for decision in this
case are first, the appropriateness of the sanction of dismissal
in
the circumstance and second the question whether a reasonable
arbitrator could have come to the conclusion which the first
respondent reached.
[2] The third respondent was employed by Famoco (Pty)
Ltd as a sales manager in a division trading as Network Field
Marketing. She
started working there on 1 September 1998. The
appellant Close Corporation, of which Cheryl Gaw was a member, bought
the Network
Field Marketing division of Famoco (Pty) Ltd in February
2003, and that division was transferred to Cheryl Gaw Agencies CC as
a
going concern in March 2003. The third respondent was dismissed on
1 July 2005.
[3] The conduct of the third respondent complained of
was the selling of a product called “Loose it”, from
October 2002
to January 2003, which was not sold on behalf of Network
Field Marketing, and which the third respondent, as a sales manager,
asked
the sales representatives working under her if they would be
interested to sell so as to make extra money.
[4] After the Close Corporation took over the business,
Ms Gaw for the first time became aware of the third respondent’s
involvement
in the sale of “Loose it” on 17 June 2005
when one of the employees, who resigned, Christelle Streal, told Gaw
about
the sales. One of the sales representatives Monica Mare, who
sold “Loose it” during that period, was merely counselled
by Gaw, and given the position of “sales supervisor”.
[5] The third respondent received a notification to
attend a disciplinary enquiry on a charge of misconduct: “gross
dishonesty
in that you conducted your own business in Network Field
Marketing time in 2002-2003”. At the disciplinary enquiry she
was
convicted and the sanction was summary dismissal. The third
respondent took the matter to the Commission for Conciliation,
Mediation
and Arbitration (“CCMA”) (second respondent)
where the first respondent found the dismissal to be substantively
unfair
and ordered the appellant to pay four months’ salary (R
64 000) in compensation. The first respondent ordered the appellant
to pay third respondent’s costs. The main findings of the first
respondent were the following:
“
This dismissal was unfair under the
following reasons:
(1) I hold a strong opinion that Labour disputes have
to be dealt with totally different from criminal matters. In criminal
law
a crime is punishable no matter the duration whereas in labour
law is not necessarily the case.
(2) The applicant was harshly dealt with for a three
year old offence, which was unfair and unreasonable.
(3) The offence occurred before the present management
bought the respondent.
(4) The respondent suffered no prejudice or harm as a
result of the applicant’s conduct then, under the old employer.
She
never repeated the same offence with the new employer.
(5) If this offence was recent, I would have decided in
favour of the respondent for numerous serious reasons”.
[6] The appellant took the matter on review to the
Labour Court. The Labour Court held that the conclusions of the first
respondent
were rationally connected to the evidence. The Labour
Court set aside the costs order against the appellant made at the
CCMA, but
otherwise left the order made at the CCMA intact. The
Labour Court ordered the appellant to pay the costs of the review.
[7] The appellant now appeals against the judgment of
the Labour Court, with leave of that court. Mr Beaton on behalf of
the appellant
argues that the reasons advanced by the first
respondent do not justify the conclusions drawn from them. He refers
to three considerations
which he submits led to the finding of the
first respondent that the dismissal was unfair:
(a) The length of time between the conduct complained of
and the dismissal -
some two and a half years.
(b) The fact that there was different management at the
time of dismissal (the Network Field Marketing Division was taken
over by
Cheryl Gaw Agencies CC).
(c) The fact that Apellant suffered no prejudice because
the conduct occurred under the previous employer.
The appellant’s case is that the reasons adduced
by the first respondent do not justify the conclusions drawn, with
reference
to
Sidumo and Another
v
Rustenburg Platinum Mines
(Pty) Ltd and Others
(2007) 28 ILJ 2405 (CC) paras [105]-[110].
[8] Mr Beaton contends, as to the delay, that the first
respondent should have considered whether the delay was such as to
render
disciplinary proceedings and the resultant dismissal unfair
with reference to the unreported judgment in
NUM and Another
v
CCMA and Others,
Case NO: JR 1896/06 of 22 February 2008. He
submits that the circumstances of the delay were:
i. Applicant only became aware of the misconduct during
June 2005.
ii. The third Respondent’s conduct was
deliberately kept from Appellant’s member, Ms Gaw at third
respondent’s
instance.
iii. Third respondent was aware that the practice of
selling “other” products was wrong.
Mr Beaton submits that these factors were not properly
considered, or given due weight, by the first respondent. This
amounted to
a failure on the part of the first respondent to consider
the real issue, which is a reviewable irregularity (
SA Revenue
Service
v
CCMA and Others
(2001) 22 ILJ 1680 (LC) par 32).
Thus counsel submits that the award is tainted with gross
irregularity or was a conclusion to which
no arbitrator could
reasonably have come.
[9] In response to Mr Beaton’s contentions as to
the time lapse, Mrs Anderson, for the third respondent, submits that
it is
insignificant that the appellant only became aware of the third
respondent’s conduct during June 2005. The first respondent
correctly found it as a fact because it was common cause. Mrs
Anderson points out that the time lapse is significant because it
eliminates speculation about appellant’s future conduct. Third
respondent stopped with the sales when she heard that Gaw
was taking
over the business. Third respondent never repeated the same offence
under the new employer. One now knows that she did
not repeat that
conduct for three years.
[10] The second criticism levelled against the award
relates to the change in management. The finding of the first
respondent was
that one of the reasons why the dismissal was unfair
was because “The offence occurred before the present management
bought
the respondent”. Mr Beaton, for appellant, contends that
this was a Section 197 take over, and the rights to dismiss were
transferred to the new employer.
[11] Mrs Anderson points out that third respondent never
took issue with the Appellant’s right to have taken
disciplinary
action against her. In view of the concession of Mr
Anderson that section 197 applies, it is not necessary to decide
whether section
197 also grants rights to the employer. The third
respondent’s case was always that dismissal is not an
appropriate sanction.
On behalf of the third respondent the point is
made that there was no evidence as to what the old employer’s
attitude would
have been on the issue of the gravity of the offence,
trust, and the appropriate sanction. No evidence was given on those
topics.
The duty to prove the fairness of the dismissal rests on the
appellant. In the absence of evidence that the conduct would
constitute
a dismissible offence in relation to the old employer,
fairness cannot be said to have been established by the appellant,
either
in terms of the consistent application of the rule by the old
employer or with reference to consistent application of dismissal
for
this type of transgression.
[12] With reference to the finding that there was no
prejudice to the employer, Mr Beaton refers to
Sappi Novaboard
(
Pty
)
Ltd
v
Bolleurs
(1998) 19 ILJ 784
(LAC), especially par [9], where the Labour Appeal Court held that
the earning of an undisclosed commission constituted
conduct
inconsistent with the fiduciary relationship, giving a valid reason
to dismiss. Mrs Anderson correctly points out that
the facts in
Sappi
Novabord
(
supra
) are distinguishable. In
Sappi Novabord
the commission which the employee, an admitted attorney, took was
directly linked to the performance of his duty to collect the
monies
owed by a debtor. He kept the commission and falsely reflected it as
a fee earned as a lawyer (par [9]). In third respondent’s
case
the monies earned were unconnected to any product of her employer,
and the money was not taken from her employer. No prejudice
to the
employer was established.
[13] In assessing whether the dismissal was an
appropriate sanction, in
Sidumo
(par [117]) it is stated that
the absence of dishonesty is a significant factor in favour of the
application of progressive discipline.
The absence of losses is also
a significant factor. The period of service without having committed
any transgressions (clean and
lengthy service) is a significant
factor (
Sidumo
par [117]). In this case the third respondent
had seven years’ service without even a written warning. No
losses were suffered
by the old or new employer. She never denied
what she did. Because of the time lapse after the conduct, one knows
that the risk
of repetition was slight. These were all important
factors against dismissal being an appropriate sanction. The first
respondent
was correct to take the time lapse into account as a
factor in favour of the third respondent. As to the relevance of
different
management, the first respondent did not hold that the new
management was barred from acting - it is however relevant that there
was no evidence as to what the old employer’s policy was.
Regarding the lack of prejudice, the third respondent has established
that the employer suffered no prejudice and it cannot be said to have
been wrong for the first respondent to take that into account.
[14] The test to be applied, according to
Sidumo
,
is whether the decision reached by the commissioner is one that a
reasonable decision maker could not reach. The test is not limited
to
the question whether the decision is justifiable in relation to the
reasons (
Sidumo
par [110] contrasting
Carephone
(
Pty
)
Ltd
v
Marcus NO and Others
1999 (3) SA 304
(LAC);
(1998) 19 ILJ 1425 (LAC)). Mr Beaton concedes that the first
respondent’s finding is justifiable based on the evidence.
That
means that the first respondent’s decision cannot be said to be
one which a reasonable decision maker could not reach
(
Sidumo
par [110]).
[15] On the evidence it cannot be said that the decision
of the first respondent was one which a reasonable decision maker
could
not reach.
[16] The Appeal is dismissed with costs.
_____________
Kruger AJA
______________
I agree
Khampepe ADJP
______________
I agree
Tlaletsi AJA
Date of hearing 11 September 2008
Date of Judgment 08 October 2008
For the Appellant Advocate Beaton
Instructed by: Fred Vogel Attorneys
For the Respondent Mrs R Anderson (Attorney)