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[2011] ZALAC 32
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Mahlangu and Another v Mashigo NO and Others (JA3/05) [2011] ZALAC 32 (2 February 2011)
REPUBLIC OF SOUTH AFRICA
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
CASE NO: JA3/05
In the matter between:-
FAITH MAHLANGU
............................................................................................
First
Appellant
EMILY MOKONE
............................................................................................
Second
Appellant
and
T MASHIGO, N.O.
...........................................................................................
First
Respondent
A C BASSON, N.O.
...................................................................................
Second
Respondent
THE COMMISSION FOR
CONCILIATION, MEDIATION AND ARBITRATION
................
Third
Respondent
CLICKS (PTY) LIMITED
(SILVERTON)
......................................................
Fourth
Respondent
JUDGMENT
ZONDI,
AJA
Introduction
[1] This is an appeal,
with leave of this Court, against the judgment and order of the Court
a quo
(Per Revelas J) dismissing with costs the appellants’
application for the review and setting aside of the first and second
respondents’ (the commissioners) arbitration awards.
[2] In both arbitration
awards the commissioners found that the appellants’ dismissal
was both substantively and procedurally
fair and dismissed the
appellants’ referrals.
Condonation
Application
[3] Before proceeding to
deal with the merits of the appeal there are two preliminary issues
which merit attention. There is an
application by the applicants
seeking condonation of the late filing of the notice of appeal and
the appeal record and another
by the fourth respondent seeking
condonation of the late filing of the power of attorney and the
resolution authorising the fourth
respondent’s attorneys to
represent the fourth respondent in the opposition of the appeal. Both
applications are not opposed
and in view of the fact that there is a
reasonable explanation for the delay and granting condonation will
not cause prejudice
to any of the parties the late filing of the
appeal record, notice of appeal and special power of attorney
together with resolution
is hereby condoned.
Factual Background
[4] The first appellant
(Mahlangu) was dismissed for serious violation of the fourth
respondent’s (Clicks) rule relating to
till and cashing-up
procedures and “
breach of trust”
. With regard to
the second appellant (Mokone) she was dismissed for breach of trust
and dishonesty. At the time of her dismissal
Mokone was employed as a
cosmetic consultant and a cashier.
[5] Mahlangu had been
employed by Clicks as an office clerk and a cashier. On or about
Monday 25 June 2001 at about 08h30 the store
manager on conducting a
spot check on Mahlangu’s till discovered that her till had a
shortage in an amount of R340.00. When
the store manager confronted
Mahlangu about the shortage she was unable to account for it. In
particular Mahlangu was asked if
she had lent some of her till money
to any of the cashiers. Mahlangu denied this.
[6] Later during the day
and at about 16h00 when Mokone cashed up she surreptitiously produced
an IOU slip purporting to record
that on Friday, 22 June 2001 Mokone
borrowed a sum of R340.00 from Mahlangu’s till. Pursuant to the
IOU transaction Mokone
allegedly made payment of the sum of R340.00
into Mahlangu’s till.
[7] Clicks rejected the
legitimacy of the IOU transaction on the basis that it had not been
concluded in accordance with its till
operation procedures. The till
operation procedure regarding the conclusion of an IOU transaction
provides that only the management
is allowed to authorise the
transfer of money from one cashier to another and the IOU slip must
be generated in triplicate to record
the transfer. The IOU slip must
be signed by all the three parties involved in the transfer of money
and each cashier must keep
a copy of the IOU slip in his/her till.
The IOU slip which Mokone produced in the instant case did not bear a
signature of either
the store manager or the supervisor. It only bore
the signatures of Mokone and Mahlangu.
[8] The other basis upon
which Clicks rejected the legitimacy of the transaction pursuant to
which the IOU slip produced by Mokone
was generated, was premised on
the fact that the amount on the IOU slip did not correlate with the
total cash amount in Mokone’s
till when she cashed up.
[9] In this regard Clicks
pointed out that when Mokone began her shift on Friday, 22 June 2001
she had coins in an amount of R317.87
in her till.
[10] This amount had been
allocated to Mokone by Clicks to use as change. Clicks contended that
if Mokone had borrowed R340-00 from
Mahlangu as the IOU slip
purported to record, Mokone would have had R657.82 change in her till
when she cashed-up.
[11] The financial
records in Mokone’s till indicated that Mokone had R236-65 in
her till when she cashed-up at the end of
her shift which means that
during the day she had only used R81-17. It could be inferred from
these facts that Mokone had enough
change in her till on Friday, 22
June 2001 and did not need extra change.
[12] At the conclusion of
their respective disciplinary hearings both Mokone and Mahlungu were
found guilty and dismissed. Dissatisfied
with the outcome they
referred the dispute to the CCMA for arbitration contending that they
had been unfairly dismissed.
Proceedings before
the Commissioners
[13] The arbitration
hearings were conducted before the first and second respondents
respectively. The crux of the matter at each
arbitration hearing was
whether acts of misconduct on the part of Mokone and Mahlangu had
been established and whether a fair procedure
had been followed in
dismissing them.
[14] The commissioner,
who arbitrated the dispute relating to Mahlangu, found that Mahlangu
had not followed the correct procedure
in concluding the IOU
transaction and concluded that the “
IOU slip produced by
[Mokone] was meant to
cover!uð shortage in Mahlangu’s
till”
. The commissioîer accordingly held ôèat
Mahdangu’s diómissal waó sôbstaotifel}(æair>
T`e cïlmissioner aíso fismiÿsel
Mah)angu’s0conôqntékn`|hat! proper$pögbeeõre1êed vot(bgef
followeä(in di{mis{alw(hio ind held`|hav the"dismissql
was procedurilly fair.
[15]It is not clear from
the commissioner’s seasonyng if he determined the
appropriateness of dismissal as a sanction. But
for the reasons$thav
will follow nothing tusns on it.
[16] The comoissioner,
who arbitrated Mokone’s dispute, also found that on the
evidence before him Mokone was correctly
found guilty as it was clear
that Mokone and Mahlangu had flouted Clicks’ procedures in
concluding the IOU transaction. He
concluded that the IOU slip
produced by Mokone was part of a scam to cover up the shortage in
Mahlangu’s till. The commissioner
further found dismissal as a
sanction to have been appropriate in light of the fact that Mokone’s
actions constituted dishonest
conduct. He also dismissed the
suggestion by Mokone that a proper procedure had not ben followed in
dismissing her.
Review Proceedings
[17] The appellants
thereafter launched two review proceedings in which they sought to
review and set aside the arbitration awards
contending that the
commissioners had committed reviewable irregularities in holding that
their dismissals were fair.
[18] The Court
a quo
dismissed Mahlangu’s review application holding that there was
a rational connection between the commissioner’s reasoning
and
his conclusion in relation to the evidence which was before him.
[19] It went on to hold
that “
as a matter of law and logic the dismissal was the
appropriate sanction in the circumstances”
as there had
been a breakdown in the trust relationship between Clicks and
Mahlangu.
[20] The Court
a quo
rejected Mahlangu’s procedural challenge of the fairness of
dismissal on the ground that she never raised it when she gave
evidence or during her cross examination of Clicks’ witnesses.
[21] The Court
a quo
dismissed Mokone’s review application on the ground it was not
persuaded that the arbitrator had not applied his mind.
[22] With regard to
Mokone’s attack on fairness of dismissal on procedural grounds
the Court
a quo
found it to be without basis and rejected it
on the ground that it was only raised during argument in reply when
the review application
was argued.
Proceedings before
this Court
[23] In their heads of
argument the appellants advanced two grounds upon which they attack
the judgment of the Court
a quo.
[24] They contend that
the Court
a quo
should have found that the commissioners’
awards “
were not rationally justifiable on the evidence
and facts placed before”
them having regard to the
admission by Clicks’ witnesses, firstly, that an IOU
transaction had taken place and secondly that
the chairpersons and
the initiators of the appellants’ disciplinary hearings were
one and the same persons.
[25] It is clear from the
Court
a quo’s
analysis of the review application that it
determined the matter on the basis of the review standard as
formulated by this Court
in
Carephone (Pty) Ltd v Marcus N.O. and
Others
[1998] 19 ILJ 1425 and which was the correct applicable
standard at the time. At paragraph 37 this Court formulated the test
for
review as follows:
“…
is
there a rational objective basis justifying the connection made by
the administrative decision maker between the material available
to
him and the conclusion he or she eventually arrived at?”
[26] The reasonableness
standard as the correct standard of review was recently formulated by
the Constitutional Court in
Sidumo and Another v
Rustenburg
Platinum Mines (Pty) Ltd and Others
[2007] 28 ILJ 2405 (CC). In
departing from the
Carephone
test, the Court had this to say
at paragraph 106:
“
[106]
The Carephone test, which was substantive and
involved greater scrutiny than the rationality test set out
in
Pharmaceutical Manufacturers , was formulated on the basis of the
wording of the administrative justice provisions of the Constitution
at the time, more particularly, that an award must be justifiable in
relation to the reasons given for it. Section 33(1) of the
Constitution presently states that everyone has the right to
administrative action that is lawful, reasonable and procedurally
fair. The reasonableness standard should now suffuse s 145 of the
LRA.”
[27] The Court went on to
hold at paragraph 110 of the judgment as follows:
“
To summarise,
Carephone held that section 145 of the LRA was suffused by the then
constitutional standard that the outcome of an
administrative
decision should be justifiable in relation to the reasons given for
it. The better approach is that section 145
is now suffused by the
constitutional standard of reasonableness. That standard is the one
explained in Bato Star: Is the decision
reached by the commissioner
one that a reasonable decision-maker could not reach? Applying it
will give effect not only to the
constitutional right to fair labour
practices, but also to the right to administrative action which is
lawful, reasonable and procedurally
fair.”
[28]
This Court applied the reasonableness test in
Fidelity
Cash Management
Services v CCMA
(2008) 29 ILJ 964 (LAC). It held at paragraph 92:
“
To
this end a CCMA arbitration award is required to be reasonable
because, if it is not reasonable, it fails to meet the constitutional
requirement that an administrative action must be reasonable and once
it is not reasonable, it can be reviewed and set aside.”
[29]
The Supreme Court of Appeal in
Edcon Ltd
v Pillmer NO and Others
(2009) 30 ILJ
2642 (SCA) explained the application and the ambit of the
reasonableness test. At paragraph 16 it held:
“
[16]
It is therefore the reasonableness of the award
that becomes the focal point of the enquiry and in determining
this
one focuses not only on the conclusion arrived at but also on the
material that was before the commissioner when making the
award. It
is remarkable that the constitutional standard of 'reasonableness'
propounded by the Constitutional Court in Sidumo is
conceptually no
different to what the LAC said in Carephone. The only difference is
in the semantics - the LAC had preferred 'justifiability'
whilst the
Constitutional Court has preferred the term 'reasonableness'.”
[30] In determining the
question whether or not the commissioners’ awards should have
been reviewed and set aside by the Court
a quo
I will do so
using the reasonableness standard as set out by the Constitutional
Court in
Sidumo
case namely, whether the decisions of the
commissioners can be said to be decisions which reasonable decision
makers could not reach.
[31] I now turn to
consider the grounds advanced by the appellants upon which they
contend the Court
a quo
erred in not reviewing and setting
aside the commissioners’ awards.
[32] The first contention
raised by the appellants relates to the substantive fairness of their
dismissal. They argue that the Court
a quo
should have found
that the commissioners’ awards were not rationally justifiable
in that Clicks’ witnesses conceded
that an IOU transaction had
taken place between Mahlangu and Mokone. And if this fact was
accepted there existed no basis upon
which the appellants could be
found guilty of acts of misconduct.
[33] There is no merit in
the appellants’ contention. The appellants contention does not
accurately reflect the evidence of
Clicks’ witnesses in this
regard. Their admission of the existence of an IOU slip in my view
should in no way be construed
as an admission of its legitimacy.
[34] On a proper analysis
of their evidence what it intended to convey is that the appellants
produced a document which purported
to record an IOU transaction. It
is clear from the record that it was common cause that the appellants
purported to conclude the
IOU transaction. What was in dispute was
the legitimacy of the transaction. In particular Clicks contended
that the transaction
was irregular and rejected the IOU slip
concluded pursuant thereto.
[35] Clicks had put in
place till procedures according to which the IOU transaction had to
be concluded. Management had to be involved
in the conclusion of the
transaction. When the transaction in issue was concluded management
was excluded. It did not authorise
it. Mahlangu did not have
authority to conclude the IOU transaction on behalf of management.
She was a party to the transaction.
She could not have acted in two
capacities even assuming, as the appellants suggested, that she was
part of the management.
[36] In my view the
appellants were correctly found guilty. The question is whether a
sanction of dismissal was appropriate for
the acts of misconduct the
appellants were found guilty of.
[37] It is correct that
section 188(2) of the LRA enjoins commissioners in considering
whether or not the reasons for a dismissal
were fair, to take into
account the Code of Good Practice (“the Code”). This
refers to Schedule 8 to the LRA. Item
7 (b) (iv) of the Code requires
a commissioner to consider whether dismissal was an appropriate
sanction.
[38] Item 3(4) of the
Code provides that it is inappropriate to dismiss an employee for a
first offence, except if the conduct is
serious and of such gravity
that it makes a continued employment relationship intolerable.
[39]
Mr Khosa
submitted on behalf of the appellants that a sanction of dismissal is
not fair in the absence of evidence suggesting that the appellants
had acted fraudulently in concluding an IOU transaction. He argued
that at the very least the evidence indicated that the appellants,
in
concluding an IOU transaction, breached the till operation
procedures.
[40] Secondly, he
submitted that it was unfair to dismiss the employees such as
appellants who have worked for an employer for approximately
10 (ten)
years without any bad disciplinary record.
[41] While it is correct
that there is no direct evidence indicating that the appellants had
acted fraudulently in concluding the
IOU transaction, indirect
evidence of dishonesty may be inferred from their conduct.
[42] In my view the only
reasonable inference that could be drawn from the proved facts is
that the appellants’ conclusion
of the IOU transaction was an
after thought attempt to establish an
ex post facto
explanation for shortage in Mahlangu’s till.
[43] It is common cause
that when the store manager cashed up Mahlangu’s till on the
morning of Monday, 25 June 2001 she discovered
shortage in an amount
of about R340.00. Mahlangu was unable to account for it. To her
knowledge she had not lent her till money
to any of the cashiers.
[44] The situation
remained unresolved until later in the day when Mokone’s till
was cashed up. It is at that stage that Mokone
miraculously produced
to the store manager an IOU slip purporting to record that she had
borrowed R340.00 from Mahlangu’s
till money.
[45] Clicks rejected the
legitimacy of the belated IOU slip on the basis, firstly, that its
conclusion was in breach of its till
operation procedures and
secondly that the total cash in Mokone’s till did not support
the claim of the IOU transaction having
been concluded.
[46] There is no doubt in
my mind that dishonesty affects the element of trust which is the
foundation upon which the employment
relationship is built. That
relationship will cease to exist once trust disappears
(
Anglo-American Farms t/a Boschendal Resaurant v
Komjwayo
(1992) 13 ILJ 573 (LAC).
[47] In my view having
regard to the commissioners’ reasoning, based on the material
before them, it cannot be said that their
conclusions were
conclusions that a reasonable decision-maker could not reach. In the
result I find that the Court
a quo
did not err in not
reviewing and setting aside the commissioners’ award.
[48] I now proceed to
consider the appellants’ second ground of attack on the Court
a
quo’s
judgment. It relates to the Court
a quo’s
finding that the appellants’ dismissals were procedurally fair.
[49] The submission made
by the appellants in this regard is that the Court
a
quo
erred in finding that the commissioners had not committed a
reviewable irregularity in holding that the appellants’
dismissal
was procedurally fair.
[50] In developing this
argument it was pointed out on behalf of the appellants that at the
disciplinary hearings Rachidi, one of
Clicks’ witnesses,
admitted that the person who presided over the disciplinary hearing
at which the appellants were found
guilty, performed a dual function.
He acted both as an initiator and the chairperson.
[51] There is no merit in
the appellant’s submission. In this regard Mahlangu failed to
raise the procedural irregularities
relied upon at the arbitration
hearing and neither did Mokone. In the circumstances the appellants’
attack on the Court
a quo’s
judgment based on procedural
fairness cannot be entertained. In any event the argument is
misconceived. The chairperson did not
act as an initiator but adopted
an inquisitorial approach which he was entitled to do.
[52] The next question to
consider is whether the Court
a quo
was correct in ordering
the appellants to pay costs.
[53] In terms of section
162 of the LRA the Labour Court may make an order for the payment of
costs, according to the requirements
of the law and fairness. It
therefore has discretion to award costs and its discretion would not
be lightly interfered with unless
it was improperly exercised. The
Court
a quo
ordered the appellants to pay costs. There is no
suggestion by the appellants that the Court
a
quo
improperly exercised its discretion when it awarded costs against
them. In the circumstances there is no basis to interfere with
the
order and it should stand. In the present matter I would, however,
not be inclined to make costs order relating to the appeal
as in my
view there was a genuine dispute and the appeal was not unreasonable.
Order
[54] In the circumstances
I make the following order:
The appeal is dismissed
with no order as to costs.
_______________
ZONDI, AJA
I agree
_______________
WAGLAY, DJP
I agree
_______________
LANDMAN, AJA
APPEARANCES
For the appellants : W
Khosa
Instructed by : Retail
& Allied Workers Union
For the fourth
respondent : Adv. Michael Van As
Instructed by: Deneys
Reitz Attorneys
Date of Hearing : 16
November 2010
Date
of Judgement: 02 February 2011