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[2013] ZALAC 21
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Mogale v A & D Spitz (Pty) Ltd (JA 36/2011) [2013] ZALAC 21 (22 August 2013)
Not Reportable
REPUBLIC OF SOUTH AFRICA
IN THE LABOUR APPEAL COURT OF SOUTH
AFRICA, JOHANNESBURG
Case No: JA 36/2011
In the matter between:-
REFILWE MURIEL MOGALE
........................................................................
Appellant
and
A & D SPITZ (PTY) LTD
............................................................................
Respondent
Heard:
22 March 2013
Delivered: 22 August 2013
Summary: Arbitration awards-
arbitration award must be concise, well reasoned and deal with the
substantive issues of the matter-
the award must state why a
particular decision was made- arbitration awards should not be
equated to court judgments- the fact
that an issue was not mentioned
in the award does not mean that it was not considered. Consistency-
principles relating thereto
restated.
Coram: Tlaletsi JA, Musi AJA et
Coppin AJA
JUDGMENT
MUSI AJA
[1] This is an appeal, with the leave
of the court
a quo
, against the judgment of the Labour Court
(Lagrange J). The court
a quo
granted leave on a narrow issue,
which it couched as follows:
‘
The
application for leave to appeal is granted against the implicit
finding of the court that the arbitrator had given proper
consideration
to the evidence of the related disciplinary cases of
the regional manager and stock controller in evaluating the
appropriateness
of the sanction of dismissal in the applicant’s
case and, or alternatively, that his (sic) finding on the
appropriateness
of the sanction of dismissal was not unreasonable in
relation to the evidence of those cases.’
[2] The appellant was dissatisfied
with the order granting leave to appeal on the narrow issue only. She
petitioned the Judge President
seeking leave to appeal against the
whole judgment of Lagrange J. The petition was refused.
[3] The appellant commenced employment
in May 1995 with A & D Spitz (Pty) Ltd (the respondent) a retail
company which primarily
sells shoes. On 1 July 2000, she was
appointed as a branch manager at one of the respondent’s stores
situated at Sammy Marks
Square Pretoria (the store). On 1 June 2008,
she was promoted to the position of retail training officer and
transferred to the
respondent’s Bryanston offices. She was
charged with gross negligence and gross misconduct, relating to
incidences that occurred
while she was still the branch manager at
the store. She was dismissed on 13 March 2009. After conciliation
failed, she referred
the dispute to arbitration. The arbitrator found
that her dismissal was fair. She launched a review application in the
Labour Court,
which was dismissed. She was then given permission to
escalate the matter to this Court on the basis set out in paragraph
one above.
I do not intend to set out a long account of the facts
because of the crisp issues that have to be decided.
[4] During August 2008, shortly after
Nolan Billings was appointed as the branch manager of the store, he
noticed that defective
stock, which was discovered and or returned
during the appellant’s tenure, was placed amongst sellable
stock and not written-off
in terms of the respondent’s
procedures.
[5] How write-offs occurred and whose
duty it was to action on and authorise them was common cause.
Write-offs occurred in various
ways. Firstly, if stock arrived with a
factory defect, secondly, if a customer returned defective stock,
thirdly, if stock was
faded or shop soiled, fourthly, if there were
odd shoes (one size bigger than the other or different in colour.)
and lastly, singles
(when there is only one shoe instead of a pair).
All such stock will be earmarked to be written-off and sent to a
warehouse. The
stock so identified was to be placed separately from
the sellable stock.
[6] When a customer returned stock or
it is otherwise doomed to be written-off then an adjustment should be
done. The stockroom
controller was in charge of the stock in the
storeroom and kept the stock sheets. The stockroom controller would
do the stock adjustments
and the store manager would verify the
adjustment by checking the stock in question. It is then kept in the
store and when the
regional manager visited the store, the stock to
be written-off and the adjustment sheets would be presented to
him/her for authorisation.
If he/she is satisfied s/he would
authorise the write-offs.
[7] Faded, odds, singles, customer
returns were supposed to be written-off by the store manager. This
was not done. Selvan Francis,
the respondent’s risk manager,
investigated the write-offs at the stores during September 2008. He
verified that the stock
that was written-off during September 2008
was stock that dated back four years and had to be written-off
between 2004 and 2008,
therefore in the appellant’s tenure. The
write-offs should have been done and adjusted in the year they
occurred. If this
is not done the profit for that financial year is
inflated and employees are given incentives based on the inflated
profits. Therefore,
if stock is returned and properly adjusted in a
particular financial year the books will reflect that there was no
sale. If no
adjustment is done a sale and therefore a profit would
reflect. Likewise, stock which was recorded as sellable stock, which
in
fact should have been written-off because it was faded would have
required a downward adjustment of the store’s income.
[8] Mr Kutlwano Diale, the assistant
manager of the store during the appellant’s tenure, confirmed
that the unsellable stock
was kept with sellable stock in the
stockroom in full view of anyone who entered the stockroom.
[9] The appellant testified that
during August 2008, the operations director of the respondent
requested the regional manager, Tshepo
Moyo, and herself to go and do
write-offs at the store. They went and unsuspectingly did the
write-offs. They were later charged.
Had they been told that they
might be charged she or they would have investigated the causes of
the write-offs before signing the
documents authorising the
write-offs. She confirms that they found approximately 168 units that
had to be written-off; which they
wrote-off. During
cross-examination, it was put to her that the regional manager was
not responsible for authorising all write-offs
and that he only
wrote-off what was presented to him. The appellant conceded that the
regional manager only dealt with stock presented
to him.
[10] The arbitrator found that the
appellant’s dismissal was substantially and procedurally fair.
She did not specifically
deal with the issue of consistency of the
sanction before arriving at her conclusion. However, in the award,
under the heading
issues to be decided, she stated that one of the
issues to be decided was the inconsistency of the sanction.
[11] In the Labour Court, many grounds
of review including the issue of consistency, were raised
unsuccessfully. With regard to
consistency, the Labour Court in
rejecting the arguments that the arbitrator did not apply her mind,
at all, to the issue of the
inconsistency of the sanction and that
the appellant was treated differently and therefore unfairly
viz-à-viz
the regional manager said the following:
‘
25.
A more important argument concerning the sanction was a claim that
the applicant’s dismissal amounted to inconsistent
treatment
because the regional manager who had also been charged in relation to
the stock adjustments only received a final written
warning. The
applicant claimed the arbitrator had failed to understand this claim.
Apart from the regional manager, the stock controller
at the Sammy
Marks store who reported to the applicant was also charged in
connection with the stock adjustments and was dismissed.
The
applicant clearly saw her conduct as on a par with the regional
manager.
26.
In the course of the applicant’s evidence the outcome of the
regional manager’s enquiry was put to her, to try and
demonstrate that her situation was not the same. In essence the
company defended the different sanction meted out to the regional
manager and the applicant on the basis that the responsibility of the
regional manager was to check and authorise stock adjustments,
but
that regional managers were only expected to do so on the basis of
the stock that is presented to them and were not expected
to check
through all stock unless they had specifically been alerted to a
problem. Although the arbitrator does not expressly deal
with this
issue in the award, it is clear from the questions put by the
arbitrator to the applicant at the end of her evidence
that the
arbitrator accepted that the regional manager was not expected to
survey all the stock in a store, but only to attend
to the stock
specifically set aside for stock adjustments. The fact that the
arbitrator pursued this issue with the applicant until
clarity was
obtained shows that the arbitrator believed it was an important issue
in evaluating the relevance of what happened
in the regional
manager’s case.
27.
In argument in court, it was submitted that the applicant’s
responsibility was analogous to that which the regional manager
had,
namely that the branch manager was only responsible to check and
authorise stock adjustments brought to her attention, and
if this was
not done she could not be held accountable for stock adjustments that
ought to have taken place, but there is nothing
on the record to
indicate that this argument was presented to the arbitrator.’
[12] Ms Steenkamp, on behalf of the
appellant, submitted that the Labour Court erred in its finding
because it was clear that the
arbitrator failed to deal with the
issue of consistency and that the Labour Court’s judgment
should be set aside. She unsurprisingly
failed, during argument, to
make good on the proposition that the Labour Court erred. She was
unable to make any submission as
to why she says that the Labour
Court erred in its approach and conclusion on this issue.
[13] Mr Belger, on the other hand,
argued that the duties and responsibilities of the store manager and
the regional manager differed.
He submitted that the store manager’s
degree of culpability was much greater than that of the regional
manager. His ultimate
submission was that it lays within the
reasonable bounds of fairness for a differentiation to be made
between the regional manager
and the appellant and that the sanction
meted out in each case was clearly justifiable given the facts of the
matter.
[14] The issues that fall to be
decided are firstly, whether the failure of the arbitrator to
specifically deal with the issue of
inconsistency in her award means
that she did not apply her mind thereto at all and secondly, if the
answer to the first issue
is in the negative, whether taking into
account the inconsistent treatment, the commissioner’s decision
was one which a reasonable
commissioner could not reach.
[15] In terms of
section 138(7)
of the
Labour Relations Act 66 of 1995
, the commissioner must within 14 days
of the conclusion of the arbitration proceedings issue an award with
brief reasons, signed
by him/her. Although the reasons must be
concise, they must be well reasoned and deal with the substantive
merits of the matter.
The reasons must not only include what the
arbitrator decided but also why he/she decided as he/she did. A
well-reasoned award
that deals with all the issues properly is likely
to be more palatable to the parties and might obviate the need to
challenge it
by way of review in the Labour Court. Commissioners must
bear in mind that an award may be challenged for what was stated in
the
award and for that which was omitted from it.
[16] In
Country
Fair Foods (Pty) Ltd v CCMA and Others
1
it was said that:
‘
Given
the finality of the awards and the limited power of the Labour Court
to interfere with the awards, commissioners must approach
their
function with caution. They must bear in mind that their awards are
final – there is no appeal against their awards.
In particular,
commissioners must exercise greater caution when they consider the
fairness of the sanction imposed by an employer.’
I agree fully with this part of
paragraph [28] of the
Country Fair
judgment. The rest of the
paragraph relating to deference to be shown to the sanction of the
employer was the subject of controversy
which was ultimately resolved
by the Constitutional Court
in Sidumo and Another v Rustenburg
Platinum Mines and Others
[2007] 12 BLLR 1097
(CC) at paragraph
[79].
[17] On the other
hand, courts should be mindful of the fact that arbitration awards
should not be equated to judgments of courts
of law and that
arbitration awards like judgments are not meant to be perfect. The
fact that a particular issue was not mentioned
in the award does not
necessarily mean that it was not considered. The facts of the case,
including the nature of the evidence,
the importance of the issue and
whether the issue was canvassed in the evidence will assist in
determining whether the issue was
considered. The fact that a
particular conclusion could not have been reached without considering
the issue not mentioned is also
relevant. In
Rex
v Dhlumayo and
Another
,
2
Davis, AJA said the
following
:
‘…
Indeed,
even in a written judgment it is often impossible, without going into
the facts at undue length, to refer to all the considerations
that
arise. Moreover, even the most careful Judge may forget, not to
consider, but to mention some of them. In other words, it
does not
necessarily follow that, because no mention is made of certain points
in the judgment – more especially, of course,
if that judgment
be an oral and extempore one – they have not been taken into
account by the trial Judge in arriving at his
decision. No Judgment
can ever be perfect and all-embracing It would be most unsafe
invariably to conclude that everything that
is not mentioned has been
overlooked.’
18] Although the arbitrator did not
specifically deal with the issue of consistency of discipline in her
award, it is clear that
she tabulated it as one of the issues that
fell to be decided. Paragraph 2 of her award reads as follows:
‘
2.
ISSUE TO BE DECIDED (sic)
2.1
In terms of procedure, the applicant’s hearing was chaired by
an external person. The same charges were brought against
a regional
manager, his hearing was chaired by an employee of the respondent.
…
2.3
The applicant was the only one dismissed, the sanction was
inconsistent.
2.4
The applicant had pleaded not guilty to the charges.’
19] I agree with the Labour Court, for
the reasons stated by it that the facts of this case clearly
demonstrate that the issue of
consistency was indeed considered,
although not mentioned, by the arbitrator. This issue was pertinently
canvassed in the evidence
and the appellant conceded that there were
differences between her case and that of the regional manager. The
issue of the difference
in roles and functions between the appellant
and the regional manager in relation to write-offs was also
emphasised by the respondent’s
risk manager, Selvan Francis.
[20] Having regard to the evidence led
and particularly the emphasis placed, during the arbitration
proceedings, on the disparity
of the sanction meted out to the
appellant in relation to that given to the regional manager, I am of
the view that the failure
of the arbitrator to mention that in her
award does not render it unreasonable. In my judgment, it was
considered with the other
evidence but not mentioned in the award.
[21] I now turn to
consider the disparity issue. In
National
Union of Metalworkers of SA and Others v Henred Fruehauf Trailers
(Pty) Ltd
,
3
it was said that
:
‘
Equity
requires that the courts should have regard to the so-called ‘parity
principle’. This has been described as the
basic tenet of
fairness which requires that like cases should be treated alike (see
Brassey ‘The Dismissal of Strikers’
(1990) 11 ILJ 213 at
229-230. So it has been held by the English Court of Appeal that the
word ‘equity’ as used in
a United Kingdom statute dealing
with the fairness of dismissals, ‘comprehends the concept that
the employees who behave
in much the same way should have meted out
to them much the same punishment’ (
Post
Office v Fennell
(1981) IRLR 221
at 223). The parity principle has been applied in
numerous judgments in the Industrial Court and the LAC in which it
has been held
for example that an unjustified selective dismissal
constitutes an unfair labour practice.’
[22] In
SACCAWU and
Others v Irvin and Johnson Ltd
(1999)
20 ILJ 2303 (LAC) at paragraph 29 Conradie JA,
inter
alia,
stated
that there is no separate principle involved in parity of discipline
and that consistency is simply an element of disciplinary
fairness.
[23] In
Cape
Town City Council v Masitho and Others,
4
Irvin &
Johnson
supra
was clarified and
the principles stated therein reiterated as follows:
‘
In
SACCAWU
& Others v Irvin & Johnson
[1999] 8 BLLR 741
(LAC) at 751B this Court reiterated that
consistency is an element of disciplinary fairness, and that it “is
really the perception
of bias inherent in selective discipline which
makes it unfair” but went on to observe that the flexibility
which is inherent
in the exercise of a discretion will inevitably
create the potential for some inconsistency. I am not at all sure
that disciplinary
decisions involve the exercise of a discretion, but
even if that is so, fairness would seem to me to generally require
any such
discretion to be exercised consistently. While it is true
that an employer cannot be expected to continue repeating a wrong
decision
in obeisance to a principle of consistency (751D), in my
view the proper course in such cases is to let it be known to
employees
clearly and in advance that the earlier application of
disciplinary measures cannot be expected to be adhered to in the
future.
Fairness, of course, is a value judgment, to be determined in
the circumstances of the particular case, and for that reason there
is necessarily room for flexibility, but where two employees have
committed the same wrong, and there is nothing else to distinguish
them, I can see no reason why they ought not generally to be dealt
with in the same way, and I do not understand the decision in
that
case to suggest the contrary. Without that, employees will
inevitably, and in my view justifiably, consider themselves to
be
aggrieved in consequence of at least a perception of bias.’
[24] Where the employee alleges that
the employer acted inconsistently, the employer will have a duty to
show that it acted consistently
in disciplining its employees or
where there was differentiation the employer will have to demonstrate
that the different treatment
was justified. See
Early Bird Farms
(Pty) Ltd v Mlambo
[1997] 5 BLLR 541
(LAC) at 545 J.
[25] The employer’s reasons for
imposing different sanctions are set out in the reasons for the
recommendation of the chairperson
of the disciplinary inquiry of Mr
Tshepo Moyo, the regional manager, where he said the following:
‘
The
bulk of the ‘problem stock’ was in fact odds and faded
which is the responsibility of the branch manager. If this
stock was
put back into stock with (sic) that is where the fault lies.
The
regional manager (sic) can only be held responsible for stock that is
presented to them. It would be unreasonable to expect
them to have to
check through all the stock in the stockroom unless they anticipated
that there was a problem or had been alerted
to the fact that
irregularities were occurring.’
[26] The appellant admitted that the
regional manager could only do write-offs that were presented to him
and that he does not check
the stock in the stockroom. She also
admitted that it was her duty, as the store manager, to present the
stock to be written-off
to the regional manager; which she did not
do.
[27] Billings’ evidence is
clear, the unsellable stock was kept amongst the sellable stock and
that he saw this within a few
days after arriving at the store.
Although keeping and controlling stock was the duty of the stockroom
controller – who was
also found guilty of misconduct and
dismissed – the store manager had oversight over the stock and
write-offs.
[28] I am satisfied that the employer
succeeded in justifying the inconsistent treatment between the
appellant and the regional
manager for the following reasons
demonstrated by the employer:
28.1. The appellant was in control of
the store as the store manager. She had an oversight role to play.
28.2. She was supposed to write off
certain stock which she did not write off.
28.3. As the store manager, she had
access to the stockroom and was supposed to see that the unsellable
stock is kept, contrary
to company policy, with the sellable stock.
28.4. She was supposed to present
stock to be written off to the regional manager. She did not do so.
28.5. Most of the stock that was not
written off, contrary to company policy, was the responsibility of
the appellant and not the
regional manager.
28.6. The appellant was aware that
write-offs should be done in the year that they were discovered or
returned. She did not do that,
in breach of the company policy.
[29] The arbitrator found that
dismissal is an appropriate sanction ‘due to the nature of the
relationship. The applicant
was a senior employee and should have led
by example. The trust relationship was certainly broken down as the
applicant had breached
policy for a four year period.’ The
Court
a quo
correctly in my view found that the arbitrator’s
reasoning cannot be faulted. I also agree with the Court
a quo
that the decision of the arbitrator is not one which a reasonable
arbitrator could not reach. In my view, the appeal ought to be
dismissed.
[30] The dictates of fairness do not
demand that a costs order be made in this matter.
[31] I accordingly make the following
order:
a) The appeal is dismissed.
b) No order as to costs is made.
_______________
C. J. Musi AJA
Tlaletsi JA and Coppin AJA concur in
the judgment of Musi AJA
APPEARANCES:
FOR
THE APPELLANT: Adv. Steenkamp
Instructed
by: E.S. Makinta Attorneys
Fourways
Johannesburg
FOR
THE RESPONDENT: Adv. Belger
Instructed
by: Wright Rose Innes Inc
Saxonworld
Johannesburg
1
[
1999]
11 BLLR 1117
(LAC) at paragraph 28.
2
1948
(2) SA 677
AD at 702
.
3
[1994]
15 ILJ 1257 (A) at 1264A-D.
4
(2000)
21 ILJ 1957 (LAC) at paragraph [14].