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[2013] ZALAC 23
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First National Bank, a Division of Firstrand Bank Ltd v Language and Others (DA 4/2012) [2013] ZALAC 23; (2013) 34 ILJ 3103 (LAC) (1 January 2013)

IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
(HELD
AT DURBAN)
LAC
Case No: DA 4/2012
In
the matter between:
FIRST
NATIONAL BANK, A DIVISION OF FIRSTRAND BANK LIMITED
Appellant
and
STEPHEN
LANGUAGE
First
Respondent
NICCI
WHITEAR NEL N.O
Second
Respondent
COMMISSION
FOR CONCILIATION, MEDIATION AND ARBITRATION
Third
Respondent
JUDGMENT:
DAVIS JA
Introduction
This is an appeal against the order
of Bhoola J of 08 December 2011 in which the learned judge dismissed
the application of appellant,
First National Bank (‘FNB’)
to review and set aside the award of second respondent handed down
in the dispute between
the appellant and first respondent.
The factual matrix
At the time of his dismissal, first
respondent was employed as a relationship manager at FNB’s
Ladysmith branch. The position,
which was a senior one, involved the
management of branch relationships with customers; for example, a
person in the position
of second respondent was required to deal
with credit applications and queries made by customers.
In order to perform this role, the
respondent was entrusted with special access codes that enabled him
to make entries on the
‘Hogan’ system, on which customer
transactions were recorded.
Apart from being a relationship
manager, first respondent was also a customer of FNB. Accordingly,
he was liable for bank charges
levied on transactions conducted on
his account. It is common cause that he used his special access code
to reverse a bank charge
of R 63.00 which was levied for duplicate
bank statements that were requested by him in respect of his
personal account.
In terms of two letters ‘a
staff defalcation letter’ of 1 May 2005 and a second document
entitled ‘reversal
of charges’ of 7 February 2005,
appellant warned bank employees not ‘
to
reverse charges or fail to process facility fees and other charges
on their and other FNB staff members accounts’
. In
terms of the document of 7 February 2005, Mr Zweli Manyathi, Chief
Executive Officer of appellant said:
“
Should
any staff member be found to be in breach of this instruction they
will be dealt with strictly in terms of the Bank’s
Disciplinary
Code and Procedure and could find themselves being faced with
dismissal”.
To the extent that there was any
ambiguity in respect of the contents of this document, it had to be
read together with another
document generated by Mr Manyathi of 1 May
2005 of which the following appears:
“
Unauthorized
access of customer and employee accounts is viewed in a very serious
light. Disciplinary action which may lead to dismissal
will be taken
against any employee that is guilty of accessing customer or employee
accounts without a valid business reason to
do so.”
Pursuant to this warning and what it
considered to be a breach thereof by first respondent, appellant
suspended respondent on
10 April 2007 and called him to a
disciplinary enquiry scheduled for 26 April 2007.
The charges against him read as
follows:
“
Theft,
fraud, dishonesty in terms of paragraph 4.2.1 of the Bank’s
Disciplinary Code and Procedure in that … whilst
acting in the
capacity as a Relationship Manager of Ladysmith Branch, on 8 March
2007 you reversed charges on your personal account,
without prior
approval. …and/or
Damage
or loss suffered by the Bank through disregard of its rules and
procedures in terms of paragraph 4.2.18 of the Bank’s

Disciplinary Code and Procedures in that … whilst acting in
the capacity of a Relationship Manager of the Ladysmith Branch
on 8
March 2007 and did not follow the correct procedures with regard to
obtaining authorization for the reversal of bank charges
on your
personal account. …”
At the disciplinary enquiry, first
respondent was found guilty of misconduct. No reasons were given for
this finding. It appears
that reasons were only to be provided in
terms of the disciplinary code, if specifically requested by the
employee concerned.
The chair of the enquiry suggested that the
sanction in this case fall short of dismissal. This recommendation
was rejected and
a decision was communicated to respondent that he
would be summarily dismissed in a letter of 22 May 2007.
First respondent then lodged an
appeal in terms of the appellant’s disciplinary code. The
appeal panel considered the application
solely on the papers, as it
deemed a further hearing to be unnecessary. The appeal was dismissed
by the appeal body and first
respondent was informed accordingly.
First respondent then referred this
unfair dismissal dispute to the third respondent. The dispute was
unsuccessfully conciliated
on 04 December 2007 and the consequent
arbitration was finalised in January 2009, in which second
respondent decided to reverse
the decision to dismiss first
respondent. Pursuant to this decision, appellant filed a review
application on 13 May 2009, which
application was dismissed by the
court
a quo
. It is against this decision that an appeal has
been lodged in this Court.
It
is
therefore
becomes necessary to examine the reasoning adopted both by the
second respondent and by the court
a quo
.
The
arbitration award
Second respondent came to the
conclusion that, on the evidence, first respondent had not displayed
a dishonest intent in reversing
the charges on his bank account. In
second respondent’s view, first respondent’s ‘conduct
in reversing the
charges fell outside the narrow scope of the
prohibition on staff reversing charges due to the bank on their own
accounts for
personal gain.
In the alternative, second respondent
held that it had not been shown that first respondent contravened
the prohibition contained
in the letters generated by Mr Manyathi,
because there had been an inconsistent application of discipline,
pursuant to breaches
of the prohibition as set out in this letter.
In a further finding, second
respondent found that the sanction of dismissal imposed upon the
first respondent was:
“
Grossly
disproportionate to the alleged offence given the unique
circumstances of the applicant’s case (including his
unblemished
disciplinary record and some 34 – 5 years’
service to the respondent). It is fair to say that after hearing the
evidence
I felt shocked at the imposition of the sanction of
dismissal in the applicants case. I believe that it was unfair.”
The decision of the court
a
quo
In dismissing the application for
review, Bhoola J held that, if the first charges had been formulated
simply as a breach of a
rule on transacting in respect of one’s
personal account, first respondent might justifiably have been found
guilty, for
it could not then have been open to him to contend that
he was simply recovering ‘his own money’, without a
contravention
of the rule. But, in the view of the learned judge,
the issue before second respondent was whether first respondent was
guilty
of theft, fraud, dishonesty in reversing charges on his
personal account and further, in terms of the second charge whether
he
had failed to follow the correct procedures in obtaining
authorization for the reversal of bank charges on a personal account
which led to the appellant suffering a loss of R 63. 00. For the
reason she held:
“
The
arbitrator cannot be faulted for reaching the conclusion that he was
not guilty of the offence for which he had been charged
as she was
constrained by the manner in which the charges had been formulated.”
In dealing further with the second
charge, the learned judge found that no finding of guilt could be
justified because second respondent
was entitled to find that there
was no evidence of an applicable policy or procedure which, in the
circumstances, had been contravened
by first respondent.
The appeal
In
Sidumo & Another v
Rustenburg Platinum Mines
Ltd & Others
[2007] 12 BLLR
107
1097 (CC) par 268
258
Ngcobo J (as he then was)
said:
“
Where
a commissioner fails to have regard to material facts, the
arbitration proceedings cannot in principle be said to be fair

because the commissioner fails to perform his or her
the
applicant’s
mandate. In so doing … the commissioner’s action
prevents the aggrieved party from having its case fully and fairly

determined. This constitutes a gross irregularity … And the
ensuing award falls to be set aside not because the result is
wrong
but because the commissioner has committed a gross irregularity….”
The question for consideration in
this appeal turned on the extent to which second respondent and
therefore by extension the court
a quo,
had taken proper
account of the material evidence, which had been placed before
second respondent and thus the court
a quo
. Failure to
properly consider the relevant material facts placed before the
second respondent invariably leads to a conclusion
that the decision
of the second respondent cannot be one which a reasonable decision
maker would make in that proper account
had not been taken of the
relevant evidence.
On a narrow construction of the first
charge as to whether a theft, fraud or dishonesty had taken place,
it may well have been
that a reasonable decision maker would have
concluded that, given that first respondent was doubly charged R
63.00 for the bank
statements so provided, there was insufficient
evidence to justify a guilty verdict on this charge. However,
insofar as the second
charge was concerned, there can be little
doubt that the evidence showed that the first respondent was aware
of the prohibition
generated in the two letters to which reference
has been made; that is a prohibition against employees of appellant
using their
access to the special code in order to alter their
personal bank accounts. To the extent that there is any doubt about
this conclusion,
the email generated shortly after the act of
reversing the charges by first respondent to his superior Mr Gary
Ponting is definitive:
“
Attached
please see statements where fees were reversed and refunded. We [
sic
‘I’] have overlooked the need to obtain your prior
approval and kindly request that you condone our actions. The reason

for re-printing statements is that these are not posted, but printed
at the branch and it was to be delivered to me. It is believed
that
the last statements were printed, but not delivered to myself.
‘Possibly shredded by staff’. Total refund –
R
63.00.”
It is only after Mr Ponting had
refused to condone first respondent’s action, that the latter
changed his approach and claimed
that he had a right to reverse the
charges because the R 63.00 was not due to the bank and therefore Mr
Manyathi’s letters
were inapplicable. Condonation replaced by
a claim of right. This latter approach is evident from a letter
generated by first
respondent on 13 May 2007 to the Manager
Industrial Relations of appellant in which he claimed he was
entitled to claim that
which appellant owed him; R63.00.
Even within the context of this
argument, first respondent could not claim that he was unaware of
the contents of Mr Manyathi’s
letters. It was clearly as a
result of these letters that he sought condonation for his action
through the email he sent to Mr
Ponting. No other reasonable
inference can be drawn from the evidence than that first respondent
was aware that there was a prohibition
against accessing appellant’s
computers to reverse charges on personal bank accounts and that he
acted with reckless disregard
thereto, together with the clear
knowledge that he was acting improperly. It was this realization
which was the reason for his
email to Mr Ponting.
As Mr Brassey, who appeared together
with Mr Cook on behalf of the appellant, submitted, first respondent
could never have believed
that he was entitled to act as he did. Mr
Brassey submitted that
It
it could hardly be
contended nor was it by first respondent’s representative Mr
Bezuidenhoudt that, if “short changed”
at an ATM, a bank
employee would be entitled to open a teller’s draw and simply
take the shortfall.
By resorting to self-help, first
respondent acted in a manner which was inimical to a society in
which the rule of law prevails.
But that is exactly what first
respondent did by way of his actions. He helped himself to R 63.00
through a reversal of the charge
and did so in a flagrant violation
of a clearly stated prohibition. To the argument that the second
charge was not as precisely
drafted as it should have been, this
Court in
Woolworths (Pty) Ltd v CCMA and others
(2011) 32 ILJ
2455 (LAC) at paras 32 – 33 said:
“
Unlike
in criminal proceedings where it is said that ‘the description
of any statutory offence in the words of the law creating
the
offence, or in similar words, shall be sufficient”, the
misconduct charge on and for which the employee was arraigned
and
convicted at the disciplinary enquiry did not necessarily have to be
strictly framed in accordance with the wording of the
relevant acts
of misconduct as listed in the appellant’s disciplinary codes,
referred to above. It was sufficient that the
wording of the
misconduct alleged in the charge-sheet conformed, with sufficient
clarity so as to be understood by the employee,
to the substance and
import of any one or more of the listed offences.”
This approach needs to be followed so
as to avoid arbitrators utilizing the justification of inelegant
drafting or semantic oversight
to approach a charge in an overly
formalistic test in disciplinary proceedings. See Coetzer “
Substance
over form – the importance of disciplinary charges in
determining the fairness of a dismissal for misconduct
”
(2013) 34 ILJ 57 and the cases cited therein.
In my view, a reasonable decision
maker would have known that the conduct of first respondent, as is
clear from the evidence,
was not in compliance with the rule set out
by Mr Manyathi. So much was clearly known to first respondent. By
his unilateral
action in breach of this rule and by the exercise of
self-help, he had caused damage or loss to appellant.
The charge and its application to
these facts should and must have been clear to any reasonable
decision maker. The fact that
the second respondent adopted a
different approach therefore justifies the conclusion that, on the
Sidumo
test, the conclusion reached by the second respondent
should have been set aside on review by the court
a quo
.
Once the second respondent had come
to the conclusion (as she should have) that first respondent was
guilty of the second charge,
the question as to the appropriate
remedy then had to be considered. In this connection, second
respondent considered that an
employee, who had committed this act
within the context of 34 years of unblemished service, should not
have been dismissed. At
the time that she came to this conclusion,
the major factor which would have justified the dismissal would have
been the breach
of trust on the part of the employee in failing to
comply with a regulation which, as has been set out, was formulated
because
of a deep concern for wrongful practices which had been
perpetuated in the various branches of appellant. However in terms
of
the standard of a reasonable decision maker, it cannot, in my
view, be considered to be in formulating the appropriate
disciplinary
steps unreasonable to have taken account of his record
and what occurred to prompt his act including his manifest
frustration
in the failure of appellant to deal with his requests to
reverse the charge of R 63.00.
Hence, reinstatement may not, at an
early stage have been regarded as an unreasonable exercise of a
decision making function.
As first respondent said in his answering
affidavit,
“
[w]hen
I was eventually provided with statements and charged fees again I
was livid and publically stated that I was sick and tired
of this and
since no one else was going to do their jobs, I will do so because
the bank cannot simply repeatedly and continuously
take my money
.’
However, the difficulty with regard
to the appropriateness of an order of reinstatement is that first
respondent exhibited an
extraordinary, vexatious and ill-tempered
attitude towards appellant and its staff during the course of these
proceedings. Personally
and through his legal representative, he
accused appellant of falsifying documentation, stealing his money, a
deliberate concealment
of facts and documents, of lying of ‘people
who are unscrupulous’ and of lacking
bona fides
.
Although he stated in his answering affidavit that he was ‘livid’,
at no stage throughout the entire duration of
these proceedings did
first respondent show any remorse or write any letter to appellant
in which he explained his frustration,
apologized for his conduct
and thus sought some form of reconciliation with his employer.
Reflective of this approach was the
following passage in the
answering affidavit:
“
It
does not point to dishonest intent. It points to a manager with 34
years and a clean disciplinary record whose money has repeatedly
been
stolen by this morally elevated bank which then refuses to attend to
his complaints in this regard.”
When the court
a quo
treated
this conduct as falling beyond the court’s consideration, this
approach misconceived the law. An employee’s
misconduct
following dismissal is relevant in determining whether the employer,
though shown to be unfairly dismissed, should be
reinstated. See
Zilwa Cleaning and Gardening Services CC v CCMA and others
(2010)
31 ILJ 780 (LC).
Had first respondent acted in a
fashion which exhibited some form of self-reflection and remorse, a
decision to issue a final
written warning and hence to reinstate, on
whatever conditions might have appeared appropriate, could then have
been a suitable
and reasonable option.
In the present case, whether because
first respondent was poorly advised by his legal representatives or
through his own violation,
reinstatement is not a viable option. The
trust between the parties would certainly have been significantly
jeopardized by the
initial conduct for which the first respondent
was found guilty. It has now been shattered as a result of the
acrimonious approach
adopted by first respondent throughout these
proceedings. A court, in terms of s 193 (1) of the Act, if it finds
the dismissal
to be unfair can order the employer to pay
compensation. In my view, given the nature of the offence and his
record, but taking
account of the fundamental break in trust, the
preferred approach at the time of the disciplinary proceedings would
have been
to have found the first respondent guilty as charged and
to order the appellant to pay compensation in the amount of 12
months’
salary.
For these reasons therefore the
following order is made:
1. The appeal succeeds.
2. The order of the court
a quo
is set aside and replaced with the following:
2.1. The award made by the second
respondent is set aside and replaced as follows:
2.1.1. Respondent is found guilty of
the second charge, that is of damage or loss suffered by the bank
through disregard of its
rules and procedures in terms of paragraph
4.2.18 of the Banks Disciplinary Code and Procedure, in that while
acting in the capacity
of relationship manager of the Ladysmith
branch on 8 March 2008 he failed to follow the correct procedures
with regard to obtaining
authorization for the reversal of bank
charges on his personal account.
2.1.2. The employment relationship
between the applicant and the respondent is terminated.
2.1.3 The applicant is ordered to pay
respondent 12 months compensation at the rate of compensation which
was payable to the respondent
as at March 2007.
3. There is no order as to costs.
______________
DAVIS JA
________________
MOLEMELA AJA
_________________
FRANCIS AJA