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[2013] ZALAC 16
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Sisonke Partnership t/a International Healthcare Distribution v National Bargaining Council for the Chemical Industry and Others (JA 51/10) [2013] ZALAC 16 (9 July 2013)
Reportable
REPUBLIC OF SOUTH AFRICA
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Case no: JA 51/10
In the matter between:
SISONKE PARTNERSHIP
T/A INTERNATIONAL HEALTHCARE
DISTRIBUTORS
............................................
Appellant
and
NATIONAL BARGAINING COUNCIL FOR
THE CHEMICAL
INDUSTRY
...........................................................................
First
Respondent
COMMISIONER J MATHEBULA
..............................................................
Second
Respondent
GORDENE STOCK
.......................................................................................
Third
Respondent
Heard
:
01 September 2011
Delivered: 09 July 2013
Summary:Labour Law – Review
of arbitration award of the Commission for Conciliation Mediation and
Arbitration – reliability
of the Netstar tracking device
-Commissioner correctly applying his mind to the evidence before him
and not relying entirely on
letters – Labour Court Judgment
upholding award upheld- Appeal dismissed with costs.
JUDGMENT
___________________________________________________________________
MOCUMIE AJA
[1] The appellant distributes
pharmaceutical products on behalf of pharmaceutical companies. Ms
Gordene Stock, the third respondent
(Ms Stock) was in the employ of
the appellant from January 2000 until her dismissal in 2005. This
case arises from what is generally
known as “
ghost calling”
i.e. the dishonest practice of a salesperson falsely reporting visits
to customers. Ms Stock was dismissed for allegedly engaging
in such
conduct. She was however successful in persuading the second
respondent (the Commissioner), in proceedings of the Commission
for
Conciliation, Mediation and Arbitration (CCMA), to rule that her
dismissal was substantively unfair. The appellant instituted
review
proceedings in the Labour Court seeking to have the CCMA award set
aside but the Labour Court dismissed the review application.
The
appellant now appeals with leave of the Labour Court to this Court
against the whole judgment and order of the Labour Court.
[2] In terms of the arbitration award,
the Commissioner held that the appellant’s dismissal of Ms
Stock was substantively
unfair and awarded the employee R89 280,
being six months’ salary calculated at R14 880.00 per month.
[3] It is common cause that Ms Stock
was employed as a Customer Liaison Officer (CLO) and reported to Ms
MarietaJaume (“Ms
Jaume”) a manager, until her dismissal.
She was charged with five counts of misconduct inthe internal
disciplinary proceedings
andwas found guilty of two counts ofmaking
false reports. The disciplinary enquiry findingsread as follows:
‘
1.
Breach of the company’s disciplinary code and procedure-clause
8.2-Other offences-gross dishonesty;
In
that you knowingly reported having called on the following customers
on the 5
th
of August 2005 when in fact you did not:
Highway Farm see fine 01289;Corry Farm 534382; Lifecare
Pharmaceutical Store 515268;Lifemed
Hospital Complex Dispensary
515019 and Mark Herson Pharmacy 50186.
2.
Breach of employment contract-clause 6.
“
Duties
of employee”
6.6
Be true and faithful to the company in all dealings and transactions
relating to its business and interests”
In
that you were deliberately dishonest in your reporting of the
customers visited by yourself on the 5
th
of August 2005.’
[4] The duties of a CLO are “to
build and maintain relationships with pharmacies as well as to deal
with their queries and
complaints”. The CLO is also responsible
for seeking to improve the sale of pharmaceutical products to
pharmacies by the
appellant. The appellant provided the CLO with a
company vehicle to perform her duties.
[5] As part of her duties, Ms Stock,
like other CLO’s, was required to visit pharmacies daily. Such
visits were to be recorded
and submitted in a weekly report.
[6] Sometime during the course of its
business, the appellant experienced a drop in orders, which concerned
the appellant. The appellant
took various steps to remedy the
situation, including monitoring the daily activities of CLO’s
on a random basis as part
of an audit process. To that extent it
sought assistance from Netstar Tracing and Recovery Systems Company,
a specialist company
in the recovery of vehicles.
[7] The appellant entered into a
contract with Netstar, which entailed that Netstar would place
vehicle recovery/monitoring devices
in the company motor vehicles
used by CLO’s, which devices were to be activated during
working hours. The devices would monitor
the whereabouts of CLO’s
during their daily schedules.
[8] On 5August
2005, Ms Stock called on customers. She was accompanied by her
manager, Ms Jaume, on what the appellant calls “co-calling”
1
which is undertaken
every six weeks. Ms Stock submitted her weekly report between 9 and
10 August 2005 in which she recorded what
she did during the week of
5 August. The appellant considered all other records. As a result of
somediscrepancies in the records
for the week of 5 August the
appellant observed, Ms Stock was confronted. She did not give a
plausible explanation except to insist
that she had visited all the
pharmacies she had reported visiting on 5August 2005 before leaving
for Kwazulu-Natal on that day.
[9] At the arbitration the appellant
led evidence of Ms Tracy Frank (Ms Frank) and Dr Conrad Walker (Dr
Walker).Ms Frank testified
that she had worked for eight and half
years for the appellant. In 2005, she had two years in her current
position, in the Corporate
and National Clear Accounts section.
[10] She testified that during the
period of August 2005 “she was conducting an audit analysis of
CLO’s nationally”
to determine whether resources were
adequately utilised and to review the fairness of the stipulated
benchmarks for CLOs, whichwas
eight (8) customer visits per day.
Eight visits per day would require the CLO to work from 8h30 to
16h00.
[11] In her analysis, she noticed that
the Netstar report showed that Ms Stock travelled to
Pietermaritzburg, KwaZulu Natal, on
5 August and yet the weekly
report reflected that she had visited nine clients as if she had
worked for a full day,8h30-16h00,that
day. As she analysed the
information, when comparing the weekly report and the Netstar report,
the time frames and areas did not
correspond.
[12] To check this, Ms Frank drove in
her own car to the nine pharmacies between 15and 22 August. She also
met with a Mr Stouger
of Netstar who drew a map of the route the
employee was supposed to follow on her daily visits. She also
contacted some of the
pharmacies. Some confirmed that the employee
visited them whilst others did not come back to her. Based on the map
by Netstar and
her own investigations she came to the conclusion that
it was not possible for Ms Stock to have visited the nine pharmacies
she
had reported to have visited on 5 August within the time she
alleged.
[13] Dr Conrad Walker,the appellant’s
expert and Netstar Vehicle Recovery System developer testified that
the vehicle Ms Stock
was travelling in as she was visiting the
various pharmacies on 5 August 2005 was tracked and monitored by
Netstar by a device
he had developed. He also testified that the
device did not continually detect the vehicle’s movement due to
obstructions
or lack of network in certain areas where the monitored
vehicle was travelling or was stationed and that the tracking device
could
not trace the vehicle at some of the areas that it was common
cause she visited that day.
[14] Ms Stock gave evidence herself
and also led Ms Jaumeas a witness during the arbitration. Ms Stock
stated that on the morning
of 5August, she had waited athome for Ms
Jaume to arrive. Ms Jaume arrived an hour late at 9h30, and she left
her vehicle at her,
Ms Stock’s home. The two of them
thentravelled in her vehicle to the pharmacies she was accused of not
having visited. She
maintained that she did not use the routes the
appellant expected her to use.She insisted on this evenafterthe
appellant conducted
an inspection
inloco
andit emerged that
she could not point out the exact route she followed. She also
testified that she sought confirmation of her
visits from all the
pharmacists who gave her letters that the Commissioner accepted as
part of the evidence. I will revert to this
later in the judgment.
The reason why she was dismissed, she alleged, was her association or
friendship with Ms Jaume who, she
said, the appellant wanted to ‘get
rid’ of as a result of a case she had opened against one of the
appellant’s
senior managers, referred to as principals.
[15] Ms Jaume, during the arbitration,
confirmed that Ms Stock had not “ghost-called” on 5
August. As a manager, she
said, she would not have allowed
“ghost-calling” or at least would have disciplined Ms
Stock if she had become aware
that Ms Stock was “ghost-calling”.
[16] The appellant submitted that Ms
Stock ghost called on 5 August 2005 at two pharmacies based on the
Netstar report and its own
investigations. Ms Stock on the other hand
submitted that she did call on all the nine pharmacies allocated to
her but used different
routes to those the appellant expected her to
have used that is why the Netstar vehicle recovery device could and
did not pick
her vehicle even at pharmacies she had visited but
accused of not having visited.
[17] In considering the evidence of
the appellant’s key witness concerning the operation of the
tracking device, Dr Walker,
the Commissioner found that
‘
I
am also not persuaded by the evidence of Mr Walker with regard to the
accuracy of the tracking system used by the respondent
[appellant].While Ms Anderson tried her utmost to prove otherwise
through cross-examination she could offer nothing more than the
creation of doubt that an obstacle could block the tracking device
from picking up a signal in the applicant vehicle. Mr Walker
had
conceded to this…The 85% recovery rate left room for a margin
of error, which Mr Walker attributed to corruption, thieves
finding
[the] device as well as the failure of the beacons…Even with
the evidence Mr Walker, cross examination by Ms Anderson
yielded some
concessions on his part. He could not explain why the applicant was
not picked up at Goldman and Third streets. He
agreed that in vast
areas more than 100metres apart the applicant could not have been
picked up. He also conceded that the applicant
could have used
alternative routes since she was not picked up by the signpost at 6
th
and
Goldman Streets. He also said it was unlikely in this case…I
find it difficult to conclude that the tracking system was
without
flaws…’
[18] The Commissionercame to the
conclusion that Ms Stock’s dismissal was substantively unfair
and ordered the payment of
just and equitable compensation.
[19] Aggrieved by the Commissioner’s
award, the appellant launched an application to review and set aside
the award principally
on the following grounds:
(a) theCommissioner’s finding
that the appellant did not prove Stock’s gross dishonesty was
not rationally justifiable
having regard to the evidence before him;
(b) the Commissioner’s reliance
on hearsay evidence was inappropriate;
(c) theCommissioner’s
finding,that the appellant had not proved that Stockhad breachedher
duty to be true and faithful to
the appellant in all dealings and
transactions relating to its business and interests was irrational on
the evidence.
[20] In dismissing
the application for review and setting aside of the Commissioner’s
award, the Labour Court referred to
section 145 of the Labour
Relations Act 66 of 1995 (the LRA) and was conscious of the test laid
down in the seminal judgment of
Sidumo
andAnother v Rustenburg Platinum Mines Ltd and Others.
,
2
The
Court understood thatthe essential question was whether the award was
one that a reasonable decision-maker could reach. However,
it
accepted Ms Stock’s version to be more probable and held that
the Commissioner had applied his mind to the material facts
before
him and that his decision was reasonable.
[21] The Labour Court also concluded
that it could not be said that the Commissioner did not apply his
mind to the appropriateness
of the sanction. It was of the view that
the Commissioner took into account the years that Ms Stock had been
in the appellant’s
employ. It was however common cause that Ms
Stock was in the appellant’s employ for five and a half years
at the time of
her dismissal and not one year as was found,
erroneously, by the Labour Court.
[22] On appeal, the appellant’s
counselsubmitted that the Commissioner’s disregard of Dr
Walker’s evidence constituted
an irregularity. It was submitted
further that the fact that Dr Walker conceded that the tracking
device could not detect Ms Stock’s
vehicle in certain areas was
adequately explained in that Dr Walker gave a reason for every
failure in the tracking process. The
appellant also noted that some
of the charges proffered against Ms Stock had been abandoned or were
not pursued given the identified
tracking failures. What remained
clear from Dr Walker’s evidence, argued appellant’s
counsel, was the fact that the
tracking device did not confirm that
Ms Stock had visited two hospitals, Lifemed and Lifecareshe asserted
she had. According to
Dr Walker, which was also common cause between
the parties, the twohospitalshave a common entrance and the tracking
device at that
entrance was functioning properly on 5 August, yet the
vehicle she was travelling in that day was not detected entering or
leaving
the premises of the two hospitals.
[23] Ms Stock’s evidence during
the arbitration was that, with regard to the two hospitals she is
accused of not having visited,
she walked into the premises and did
not drive.
[24] Did the arbitrator fairly
disregard evidence of the Netstar vehicle recovery device?The essence
of Dr Walker’s evidence,after
a number of pointed concessions
on the unreliability of the Netstar devicewith respect to the
route(s) that Ms Stock took on 5
August as well asher failure to
explain why the device did not detect her vehicle at the entrance to
the two hospitals she’s
accused of not having visited is that,
based on the fact that the device at this particular entrance was
functioning properly,
which was common cause between the parties, Ms
Stock did not visit Lifemed and Lifecarehospitals.As indicated
earlier on, these
two hospitals, Lifemed and Lifecare, used one
entrance as an entrance and exit point.Not only did the device did
not detect hervehicle
at these hospitals, so the appellant submitted,
no one saw her and no one acknowledged her presence or corroborated
her version.
This cannot be correct because duringarbitration,Ms
Stock testified that at one of the hospital pharmacies she spoke to
somebody
but that person was busy and thus she could not spend more
time with him after he indicated that much. Ms Jaume did not go into
the pharmacy with her as she did at other pharmacies but remained in
the vehicle in the parking area, answering her cell phone.At
the
second hospital pharmacy, she spoke to the person at the ‘gate’
as the hospital,the TB one, generally did not allow
people in based
on its policy on communicable diseases. However she got the
information she required. She confirmed that she did
not go into the
premises of the two hospitals in her vehicle but walked from a
parking area of a hospital she visited nearby the
two hospitals.On
this basis alone, there can be no merit in the appellant’s
submission that the Commissioner’s consideration
of Dr Walker’s
evidence was inappropriate.
[25] Should the corroborating hearsay
letters from pharmacies have been admitted?As regards the
Commissioner’s reliance on
“hearsay evidence”, the
appellant argued that the Commissioner should not have admitted the
letters from the pharmacists
without the authenticity of such letters
having been proven alternatively without the pharmacists having been
called to testify.
That on its own, the appellant argued, was an
irregularity so gross that it made the decision of the Commissioner
irregular and
thus reviewable as contemplated in section 145(2)(a).
[26] The law applicable to the
admission of hearsay evidence is encoded in section 3 of the Law of
Evidence Amendment Act 45 of
1998 which states:
‘
3(1)
Hearsay evidence shall not be admitted as evidence, unless the party
against whom such is to be adduced agrees to its admission-,
the
person upon whose credibility the probative value of the evidence
depends or testifies or
(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 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, is of the opinion that such evidence should
be admitted
in the interests of justice.’
[27] There is no
absolute prohibition against the admission of hearsay evidence by a
Commissioner in arbitration proceedings,which
are meant to be swift
and informal. The Labour Appeal Court considered section 3 of the Law
of Evidence Amendment Act in the
Southern
Sun Hotels
(
Pty
)
Ltd
v
SA
Commercial Catering & Allied Workers Union and Another,
3
where
Zondo AJP stated:
‘
Furthermore
it must also be taken into account that, since the legislature
intended hearsay evidence to be admitted in courts of
law if to do so
would be in the interest of justice, it is highly unlikely that the
legislature would demand a higher test before
hearsay evidence can be
admitted by an administrative tribunal like the Industrial Court than
the test to be applied by courts
of law in the admission of hearsay
evidence.’
[28] As aptly
pointed out by Cele AJ in
Swiss
South Africa
(
Pty)
Ltd
v
Louw
NO and Others,
4
:
‘
D
epending
on the circumstances of each particular case, hearsay evidence may
accordingly be admitted by an arbitrator in the proceedings
held
before him or her under the auspices of the CCMA.A further aid to the
arbitrator in this regard lies in s138 of the Act. It
provides:
The
commissioner may conduct the arbitration in a manner that the
commissioner considers appropriate in order to determine the dispute
fairly and quickly, but must deal with the substantial merits of the
dispute with th
e
minimum of legal formalities.’
[29] Section 138 of the LRA also
requires an arbitrator to deal with a matter quickly and fairly with
the least legal formalities,
but with the obligation to deal with the
substantial merits of the dispute. I cannot find fault in the manner
in which the Commissioner
dealt with this aspect. There is nothing
that prohibited him from doing so in this case. In any event, he did
not rely entirely
on the letters produced by Ms Stock. He also relied
on calls made to pharmacies by the appellant through Ms Frank, some
either
confirmed the visits and others did not respond. This is so,
particularly taking into account that, ultimately the appellant’s
case was based on ‘ghost calling’ of only two hospitals
which did not impact on the appellant’s case at all,
which was
to a large extent reliant on Netstar’s report.[30] Did the
arbitrator properly assess the relevance of Ms Frank’s
evidence?The least that the Commissioner can be criticised on is his
disregard of Ms Frank’s evidence that she conducted
her own
investigations; comparedNetstar’s report [with all its
shortcomings] to Ms Stock’s own weekly report, travelled
the
same routes Ms Stock was supposed to have travelled on 5 August i.e.
nine clients/accounts in seven areas; and found that the
time taken
did not correspond to what Ms Stock had set out in her report and
thus she could not have visited all nine clients from
9h30 to at
least 11h30 or 12h30, when Netstar detected her vehicle back at her
premises and, in her own version, then left for
Pietermaritzburg.If
it is accepted as Ms Frank testified that each CLO spent seven and
half to eight hours per day visiting clients,
then logically Ms Stock
could not have visited nine pharmacies andarrived in Pietermaritzburg
by 18h00.
[31] The only remark the Commissioner
made with regards to Ms Frank’s evidence during the arbitration
award is that
‘
[t]he
testimony of Ms T Frank was that the applicant had difficulty in
recalling the route on the day of the disciplinary hearing.She
also
could not give this route on the day of the inspection in loco. It is
strange that on the day of the arbitration she could
recall the route
she had taken, which is after the respondent had struggled to piece
together what might have been her route. I
find this conduct
opportunistic and cannot make head or tail of it...’
[31] However that is not what the
appeal is about. The gravamen of the appellant’s submissions
that,
‘
(a)
the Commissioner’s finding that the appellant did not prove
Stock’s gross dishonesty was not rationally justifiable
having
regard to the evidence before him;
(b)
the Commissioner’s reliance on hearsay evidence was
inappropriate;
(c)
the Commissioner’s finding, that the appellant had not proved
that Stock had breached her duty to be true and faithful
to the
appellant in all dealings and transactions relating to its business
and interests was irrational on the evidence.’
is not supported by the evidence which
was before the Commissioner.
[32] In light of
the conclusion I have come to above, I cannot find that the
Commissioner’s decision was not one a reasonable
Commissioner
could not make. Accordingly, the
Labour Court did not err in
its conclusion that the Commissioner’s decision was reasonable
and the
appeal can therefore not succeed.
[33] The respondents have been
successful there is no reason why costs should not follow suit.
[34] In the circumstances, I would
dismiss the appeal and order that the award of the Commissioner be
confirmed.Costs to follow
suit.
______________
Mocumie AJA
[35] I have considered the judgment
prepared by Mocumie AJA and whilst I agree with the conclusion she
has arrived in, I prefer
to state my reasons differently.
[36] Perhaps as a point of departure
it must be stated that the commissioner considered all the evidence
before him before issuing
the award in favour of Stock. It is clear
to me, contrary to the appellant’sargument on appeal that the
letters written by
the pharmacists, confirming her attendance at
their premises on the day she is alleged to have ghost called,played
no pivotal role
in the commissioner’s reasoning. In this regard
there is direct evidence that a certain Ms Frank, an employee of the
appellant,
telephoned the pharmacists Stock is alleged not to have
visited. The evidence on record is to the effect that the pharmacists
confirmed
to Ms Frank that Stock had indeed visited them during the
period in issue and that Jaume was with her.
[37] In any event the foundational
reasoning of the commissioner focuses on the reliability of the
Netstar device relied on by the
appellant to track Stock’s
movements on the day in question. In this regard it is common cause
that the device is not a vehicle
tracking device but a recovery one.
The appellant’s expert confirmed that the device does not have
satellite nor GPS capabilities
and that it relied on radio waves
transmitted by receivers fitted on street light poles and buildings.
The appellant’s expert
conceded that the functional capability
of the device was influenced by buildings, large vehicles and other
obstacles. Clearly
this affected the reliability of the device, and
the commissionerwas alive to this reality.
[38] The commissioner’s view of
the unreliability of the device was fortified by the fact that the
device did not pick up
Stock when she visited certain pharmacies on
the day in question which is common cause that she did. An example is
Stock’s
visit to Station pharmacy which went undetected by the
device. It is also common cause that there are at least two periods
of 36
and 67 minutes when the device did not pick up Stock’s
movements.
[39] The commissioner can therefore
not be faulted in reasoning that the Netstar device solely relied on
by the appellant could
not be relied on to show that Stock had made
herself guilty of ghost calling. This, we should remind ourselves,
discounts the role
if any, of the letters from the pharmacists, which
informs the appellant’s hearsay complaint.
[40] In my view, the commissioner
clearly considered all the material before him and arrived at a
decision that a reasonable decision-maker
would have arrived at.
Based on these brief reasons, I agree that the appeal be dismissed
with costs.
______________
Mlambo JP
I concur
_____________
Sandi AJA
APPEARANCES:
FOR THE APPELLANT: Cowen Harper
Attorneys
FOR THE THIRD RESPONDENT: Riki
Anderson Attorneys
1
Co-calling
means the employee is accompanied by her supervisor or manager
during her or his customer visits to improve the employee’s
performance or take note of her or his performance during the
visits.
2
[2007]
12 BLLR 1097
(CC).
3
(2000)
21 ILJ 1315 (LAC) at para 28.See too
Edcon Ltd v Pillemer NO and
Others
[2007] ZALC 101
;
[2008] 5 BLLR 391
(LAC);
Foschini Group v Maidi and
Others
[2010] 7 BLLR 689
(LAC).
4
(2006)
27 ILJ 395 (LC) at 403 C-D par 43.