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[2013] ZALAC 24
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Malan v Johannesburg Philharmonic Orchestra (JA 61/11) [2013] ZALAC 24 (12 September 2013)
`Reportable
REPUBLIC OF SOUTH
AFRICA
IN THE LABOUR APPEAL
COURT, JOHANNESBURG
Case no: JA 61/11
In the matter between:
JACOBUS PETRUS MALAN
...........................................................................
Appellant
and
JOHANNESBURG
PHILHARMONIC ORCHESTRA
..................................
Respondent
Heard: 02 November
2012
Delivered: 12
September 2013
Summary:Alleged
automatically unfair dismissal for making protected disclosures in
terms of the PDA- respondent facing financial
difficulties –
appellant concerned about respondent’s financial situation- and
discussed with two respondent’s
directors- appellant sending
anonymous letter to the respondent’s auditor and distributing
letters to respondent’s
employees- appellant charged and
dismissed for bringing the respondent into disrepute- appellant
alleged automaticallyunfair dismissal
for having disclosed
improprieties when he had the meeting with the two directors- no
evidence to show that previous disclosure
of the same nature was made
which was not resolved by the respondent- disclosure made in the
letters was common knowledge - evidence
showed that appellant was
provided new information he was not aware of by the directors-
disclosure not protected by virtue of
the PDA-
Alternative claim of
substantive and procedurally unfairness of the dismissal- Labour
Court lacks jurisdiction to entertain a misconduct
dispute-
appeal
dismissed with costs- Labour Court’s order set aside and
replaced with an order to the effect that dismissal of the applicant
was not an automatically unfair dismissal as contemplated by section
191(5)(b) and that it had no jurisdiction to determine the
applicant’s alternative claim of his dismissal.
Coram: Waglay AJP,
Zondi AJA and Musi AJA
JUDGMENT
WAGLAY AJP
This is an appeal
against thejudgment of the Labour Court in which Bhoola Jdismissed
with costs the appellant’s application
to have his dismissal
declared automatically unfair. The appellant’s claim was that
he had been subjected to an occupational
detriment for making a
protected disclosure, alternatively that his dismissal was both
substantively and procedurally unfair.
The Dispute
The appellant was
dismissed from the employ of the respondent, a non-profit section 21
Company, on 6 April 2009, for misconduct,
in that, it was alleged
that he brought his employer into disrepute. At the time of his
dismissal, the Appellant was on a fixed
term contract which
commenced 1 July 2008 and was due to end on 30 June 2009.
Background
The appellant, a
classical musician, was employed by the respondent as principal B;
Oboe. The appellant was one of the founding
members of the
respondent.
The issue that gave rise
to the appellant’s dismissal arose from his concerns relating
to the financial activities of the
respondent. Although these
concerns developed during 2007 when salaries were fractured and paid
late, they intensified when the
appellant attended the Annual
General Meeting (AGM) on 5 December 2008 where he was informed of
the decision to terminate the
services of Stone Music, the
respondent’s recording studio.
The Meeting with
Roberts
Subsequent to the
AGM,the appellant raised his concerns with Gary Roberts (Roberts), a
director of the respondentand also artistic
director and section
leader of the appellant’s section. The appellant testified
that at that point what was the weightiest
of matters in his mind
were the issue of fractured salaries and the payment of salaries.
Roberts confirmed that the appellant’s
basic question was
about the financial health of the respondent. According to Roberts,
the appellant wanted to know whether the
staff should be concerned
about the financial wellbeing of the respondent and if there was a
problem with expertise or with getting
sponsorships. Roberts
suggested that the appellant speaks to Steven
Jurisich(Jurisch),another director of the respondent in this
regard.
The meeting with
Jurisch
In the meeting with
Jurisch, the appellant raised the same questions he had raised with
Roberts. The conversation related to financial
management issues and
about the fractured salaries. During this discussion,Jurisich told
the appellant that commissions were
being paid to the CEO on
significant amounts received from the State Lottery. Jurisch added
that in 2006/7 the percentage commissions
paid on Government funds
had been reduced compared to that of private sources of funding.
Jurischalso told the appellant that
he had objected to a large slice
of the funding going to the CEO as commissions because the CEO was
paid a salary. The appellant
was alarmed on receiving this
information. The appellant indicated that during the conversation
with Jurisch, he felt it would
be useful for him to get access to
the financial statements, even the unaudited ones, in order to
assess to whom payments were
made and at what point of month or when
they were made. The appellant then offered to obtain the financial
statements from the
auditors.
The meeting with the
auditors
The appellant approached
the respondent’s auditor, one Gillian Smith (Smith), on 5
March 2009 to obtain a copy of the respondent’s
annual
financial statements. He raised with Smith the issue about the late
payment of salaries. According to the appellant, Smith
refused him
access to the financial statements because he was not a director.
While Smith acknowledged that the appellant had
no ulterior motives
when approaching her she did indicate, during the conversation when
he asked for audited financial statements,that
the appellant
approach the directors for the information. She also provided the
appellant with a list of directors. She indicated
that the appellant
seemed to accept her explanation for the refusal to provide him with
financial statements. She also indicated
to him that his concerns
needed to be addressed to the CEO and to the respondent's board.
Smith also indicated that the appellant's
allegation that the
financial statements were being withheld by the auditors on account
of non-payment was incorrect as payment
had simply been deferred.
She pointed out to him that deferred payment did not constitute the
failure to make payment. Smith
indicated to him that the auditors
would enquire about the non-payment of service providers and on the
amounts involved and the
reasons for the non-payment. She also
informed him that where employees were aggrieved about salaries not
being paid, they had
legal recourse.
The letter of March
2009
After the meeting with
the auditors, the appellant sent an anonymous letter from his
friend’s email to the auditor. The
auditor correctlyassumed
the emailed letter was from the appellant as they had discussed the
issues raised in the letter and
she forwarded the letter to Bokaba,
the CEO of the respondent. The letter was headed “
To Whom
It May Concern
”. In my view it is necessary to quote the
entire letter, it said:
“
As a
member of the Public and as a close associate of the Johannesburg
Philharmonic Orchestra (JPO) I am concerned about the financial
and
managerial conduct of this remarkable Symphony orchestra. Since its
conception in 2000, being the replacement orchestra of
the previously
known National Symphony Orchestra, the JPO has built a good
reputation artistically in South Africa and abroad enjoying
the
talents of the best conductors and soloists the world has on offer.
Not to mention the very remarkable input from private and
public
sponsors who willingly came to the rescue of a cultural institution
for all South Africans. Since 2000 audiences have shown
a healthy
increase in both subscribing members and ad hoc public support.
Given a mixed bag of experiences
with the orchestra I have come to the conclusion that some serious
issues regarding financial and
managerial conduct have lead to
irritations with orchestra members and service providers amongst
others.
The JPO functions as a section 21
company.
With a board of 9 directors of whom
I believe only about 4 are actively involved in the daily affairs of
the JPO, some issues have
come up and proved to be serious irritation
factors, not only in terms of human relations, but definitely so in
terms of finances.
I will try to list some of my
concerns as follows:
1 I am concerned about the fact
that the CEO not only receives a very high salary, which is a rather
big and unrelated portion compared
to the salaries earned by the
working musicians, but also receives high commissions from additional
sponsorships. Although previously
professional recruitment officers
were appointed, Mr Shadrach Bokaba has been the only recruitment
officer for sponsorship for
a long time. Money from the government
and the Lottery [has] been slow in being available, which called for
ongoing [pleads] to
the private sector to step in as rescuers.
2 A most disconcerting fact to me
is that Mr S. Bokaba received a commission on government and Lottery
money earmarked for the JPO.
As this is mainly sourced from taxpayers
money/public institutions, I feel this type of remuneration to be
unethical.
3 I am also concerned about the
fact that the chairman of the board, Mr Walter Masetla receives a
monthly salary while no other
director earns a salary. Mr Masetla
only chairs the AGMs and meetings held by the board of Directors. As
was agreed initially that
Directors would offer their services free
of charge for an institution belonging to the public and for a
greater cause, this doesn't
make sense.
4 Were these commissions ratified
by the board as a whole and are they being disclosed for tax
purposes?
5 Appointment of a bookkeeper and
certain other office staff for the task of developing an education
schedule with excellent salary
packages despite the fact that very
little progress is being made with this department.
6 As the JPO already works in
collaboration with SAMET (South African Music Education Trust) –
with a separate staff corps,
as a sort of "outreach education
arm" for which the CEO receives a further highly paid salary,
teachers for these projects
often complain of non- or late payments.
There is a general feeling that SAMET's goals of establishing music
tuition centres are
a failure.
7 that during the last two AGMs the
financials have been released late for 2007, and not scheduled for
2008, due to non-payment
of the auditing company for the 2007 audit
(Grant Thornton) and other reasons not known to me.
8 In terms of non-payment of
service providers, this issue seems to be more wide spread. Apart
from the auditors, rumours are heard
of unpaid accounts for the
recording studios (Stone Music), the Linder Auditorium, ad hoc
musicians, including international soloists
and conductors.
9 Musicians salaries are late on a
monthly basis and [have] almost become a joke amongst musicians. Yet
the salaries of the office
staff are being paid punctually.
10 concerns about human relations
may also be noted briefly, as this may be the smoke turning from a
potential fire smouldering
from within, however unnoticed at this
time.
11 This include[s] arrogant
behaviour in general which can be proved by the letters received by
at least one conductor of international
standing that the staff
member concerned may not communicate with him any longer. Many
anecdotes, matters of discipline and personal
experience of this
nature may be found amongst members of the orchestra.
12 Unilateral decision making has
been an irritation many times, the most sensational being the
dismissal of Stone Music end of
2008 as the recording studio for the
JPO. Given that the owner of Stone Music played an active role in
establishing a career for
the CEO mentioned above, being dismissed
without negotiations, this conduct seems to be very unbecoming.
I am very concerned about the
issues raised here which may (hopefully not) only represent the ears
of the hippo, and especially
the unaudited financials for 2008, as
this year may reveal the most information in terms of the company's
financial health.
There may be many of the issues
mentioned here in need of verification. It seems to be a task that
may have to be investigated.
Hopefully this can be resolved by those
who are willing and equally concerned about having and running an
institution and a country
with a clean conscience.
Yours, concerned”.
Subsequent to this
letter, the appellant was charged with trying to obtain company
information fraudulently and bringing the company
into disrepute,
and was brought before a disciplinary hearing.
The appellant’s
letter to staff and third parties
The hearing was
scheduled for 24 March 2009 at 10am. Days prior to the hearing the
appellant requested a postponement of the disciplinary
hearing,
which request was refused, on 20 March 2009, the appellant addressed
a letter to his colleagues and friends setting
out the background to
the charges against him and requested their assistance. The
appellant distributed the letter by placing
copies on the music
stands in the orchestra pit prior to a performance. The letter
stated the following:
“
Dear
Colleagues and Friends
Due to a mix of circumstances I
have landed in a very unfortunate situation with the management of
the JPO. I will bring this to
light in a moment.
I need your support.
I believe in helping me, the
orchestra as a whole will find benefit.
I assure you that in this appeal I
mean no harm to anybody, including management and board members. I
believe human error is possible.
I also believe that any problem can
be rectified in a dignified manner. Should I be proved wrong, I
undertake to apologise and
then rectify as much as it may be humanly
possible for me.
Please remember that some members
may have only good experiences to share. Yes there are good points as
well.
I would like to hail the
introductory words used by our chairman Mr Mosetlhi during the AGM of
November 2008, more or less as follows:
"The JPO may be proud to be
run in a way that demonstrates "democracy in action".
This is my story:
Having experienced a number of
irritations with matters of governance in the JPO during the last
year, it actually came to a crisis
in my own mind during the last AGM
in November 2008.
I decided around a month ago to
have some facts and figures clarified for myself. It made sense that
I needed to verify my concerns
before I could come to any conclusions
about my irritations.
My first step was to inform two
directors on the board that I am unhappy about a number of issues, of
which the financial health
of the JPO was an issue foremost on my
list.
I found that these two directors
had the same concerns as me. They were willing to share more
information with me given their positions
where more issues were
revealed to them either through board meetings or situations at the
office. A number of further issues and
questions came to light that
to my mind of serious ethical nature.
They were in agreement with me that
by having an indepth look at the financials of the company will be a
fair place to start.
I think arranged a meeting with the
auditing company Grant Thornton's partner in charge of the JPO
Gillian Smith. On the strength
of my status as company member I
assumed that the financials for the past year may be made available
to me.
Mrs Smith however informed me that
the financials cannot be made available to me as they have an
agreement with the Board of Directors
to only reveal detailed
financials to Directors. Fair enough I thought, I could request the
Directors to request copies thereof.
Mrs Smith then informed me that due
to the fact that the audited financials for 2007 have up to that
point not been paid. That meant
that the financials for 2008 were not
to be audited, due to the auditing firms own set of rules and
regulations. (The situation
may have changed since then).
I think lodged a letter of concern,
unsigned, as I was afraid to become a whistle blower, which I emailed
to the auditing company.
I will now list my concerns hereto
for all company members to see, and for anyone else who may share
with me the dream of having
an orchestra with a secure financial and
ethic foundation. The artistic side is fantastic. My sincere
congratulations to all musicians!
MANAGEMENT IS ACCUSING ME OF
OBTAINING INFORMATION FRAUDULENTLY AND SUMMONED ME TO A DISCIPLINARY
HEARING.
They seemingly want to block me
from obtaining more information.
Please help me to have concerns
clarified and verified BY SIGNING THIS LETTER!
1 I am concerned about the
fractured payment of salaries which has become a monthly pattern.
2 I am concerned about the fact
that the orchestra is still too young to afford a high salary wages
to management staff, especially
when there is a need for more
instrumentalists.
3 I have an ethical problem with
the fact that the chairman of the Board Mr Mosetlhi earns a monthly
salary while no other director
does.
4 I have an ethical problem with a
Board that seems to have a majority vote to ratify such a salary.
5 I am concerned about the fact
that overseas artists have not been paid, for as long as a year.
6 I have an ethical problem with
the fact that salaries of management may be paid punctually (I need
the financials to verify this).
7 I have a problem with the
appointment of an expensive financial officer while there might have
been people willing to help in
view of the light that sponsorship is
apropos a deal of goodwill.
8 I have an ethical problem with
the fact that Mr Bokaba requests commissions on money allocated by
government and the Lottery.
(The Lottery is also a public
institution.)
9 I once again have an ethical
problem with the board's ratification of these commissions.
10 I am concerned that PAYE has not
been paid over to SARS.
11 I have a problem with Mr
Bokaba's appointment of yet another board member without the consent
of the company members (in fact
it may be imminent).
12 I have a problem with the fact
that detailed financials may not be seen by company members.
13 I am concerned about SAMET for
which Mr Bokaba also receives an excellent salary package and of
which Mr Mosetlhi is the Board
Chairman. I believe honoraria of two
teachers are also fractured. Given the association of SAMET with the
JPO I wish to know more
about them.
14 I am concerned about what
appears to be Mr Bokaba's unilateral decision to dismiss Stone
Musician as the orchestra's recording
studio. The Artistic Director
was not consulted. Their professional services were replaced by
amateurs. Stone Music retrieved its
equipment.
15 The [rumour] is that management
feels Stone Music is too expensive. I feel we can't afford such
expensive management.
16 I am unimpressed with a number
of experiences I had in terms of arrogant behaviour from office
staff.
17 I am concerned about the fact
that so many Board Members are inactive.
18 I am concerned that the Company
Members never get together to discuss matters such as being mentioned
here.
So much money goes into places we
need to verify. All of that could have been waiting in an endowment
fund for rescue when the Lottery
is late!
Please empower me and our Company
Members. Please remember that we all own this Company. We are
responsible for this Company. We
are also liable for its losses.
Reckless Trading and the Titanic may have something in common!
The Company Members have the
authority to override decisions made by the Board. They also need
help from time to time.
I have to stand up to a
disciplinary hearing on Monday 24
th
at 10h00.
Charges:
1 Obtaining company information
fraudulently.
2 Bringing the company into
disrepute.
I don't have enough verified
information to back me up. I am being blocked from obtaining
information which is a fundamental right.
In the process an attempt
is made to criminalise me as well to phrase it more daringly. With
your mandate the Company Members will
be allowed to get access to
minutes of the board meetings and detailed financials.
VERY IMPORTANT: I have requested a
postponement of the Hearing in order to prepare and arrange for a
representative.
This fair request has not
been granted.
I suspect this is unfair procedure
and may have to be reported to the CCMA. It is common law for any
accused to be able to prepare.
As you know my working schedule for
the week leaves no time left.
Please sign and/or present yourself
as my representative at the hearing should I not succeed in
postponing it. Any number of representatives
is welcome.
Yours
Kobus Malan
Please sign here:
_______________________”
According to the
appellant, he distributed the above letter to approximately 40 to 45
musicians some of whom were employees of
the respondent while others
were
ad hoc
extra
musicians retained only for specific performances. He felt that he
had no alternative but to approach his colleagues because
there was
no trade union in the work place and he did not know if there was a
grievance procedure in place. He claimed that he
had followed the
advice of Solidarity, a trade union, to approach employees directly.
The appellant furthermore indicated that
a number of colleagues
sympathised with him but very few were willing to sign the letter
and that he destroyed signed copies
to avoid those who had signed
the document from being victimised.
On
arrival at his
disciplinary hearing on 24 March 2009, the appellant was issued him
with new charges:
‘
1 Bringing
the employer into disrepute with other employees and third parties.
2 Breach of duty of good faith.’
The disciplinary hearing
was held on 27 March 2009. At the hearing the appellant read a
prepared statement. The appellant was
found guilty of bringing the
employer into disrepute with other employees and third parties. As a
result the appellant was dismissed.
His internal appeal failed and
he referred the matter to conciliation which also failed.
Subsequently to the failure of the conciliation
process, the
appellant referred his dispute allegingautomatically unfair
dismissal to the Labour Court.
The Labour Court
At the Labour Court,the
appellant, Roberts, Jurisch, Smith,Chakarayan, Frazer and the CEO
Bokaba testified. I have dealt with
Smith’s evidence in
relation to the meeting that the appellant had with the auditors.
The evidence of the appellant and
Jurisch forms part of the
background facts recorded above.Roberts’ testimony was that
the appellant was acting out of self-interest.
According to Roberts
the decision to terminate the Stone Music contract was that of the
board. He took issue with the appellant's
anonymous letter to the
auditor because it presented a disastrous picture of the respondent
suggesting that it was punctuated
by mismanagement and arrogance. He
indicated that some of the concerns raised by the appellant were
valid but already in the
public domain. He stated that the second
letter spread like wild fire in the profession and did enormous
damage to the credibility
of the respondent as an institution so
much so that it received only three applications for senior
positions. He further indicated
that the appellant had alternative
methods of raising his concerns: he could have called a members
meeting or could have requested
Roberts or another board members to
raise any of the issues with the board. He would have been willing
to call a specific board
meeting for this purpose had the appellant
approached him.
MiroslavChakarayan gave
evidence on behalf of the respondent. He was a concert master of the
orchestra and its founding member.
He was quite disconcerted about
the fact that the appellant had addressed members of the orchestra
and left the second letter
for everybody to read before a
performance. He indicated that he was resentful about the intrusion
because the arrival of the
guest conductor was imminent. The
appellant did not obtain permission from him to make announcements
to the orchestra and he
felt that it was inappropriate for the
appellant to place the letter before musicians during a rehearsal.
He felt that the appellant
could have addressed these matters in
private. He also indicated that the appellant could have raised
these issues at the AGM.
He believed that the appellant's conduct
portrayed the respondent in a bad light, and said that the Board had
been appointed
to make decisions on behalf of the respondent and
that it was not the concern of any member what the managing director
earned.
He was offended that the appellant did not approach him or
any other members individually or through convening a meeting prior
to writing the letter. He said that the appellant's letters caused
damage to the image of the respondent and added that late
salary
payments did not have a significant impact on either him or his wife
as they trusted management's ability to run the company
properly.
Finally, he indicated that the overseas artists who were not paid on
time, received payment together with a letter
of apology and that
all the artists understood the financial crisis that the respondent
was in. He did not view the concerns
of the appellant as
seriousbecausethe appellant could have raised these matters with the
Board.
Penelope Frazer an
employee and founding member of the respondent also gave evidence on
behalf of the respondent. She was unhappy
at the fact that the
appellant chose to leave the letters for all persons before their
rehearsal and to address everybody. She
felt that the appellant
could have approached her privately and raised his concerns which
could have been reported through the
management to the board. She
felt that the appellant's conduct had damaged the respondent's
reputation and that his conduct put
unnecessary suspicion on
management. She denied fractured salaries were a monthly pattern and
that although it was correct that
some overseas artists were not
paid on time they had been informed about the delays. She was not
aware of any blacklisting of
the respondent and in regard to the
PAYE issues with SARS,as the accountant had reported at the board
meeting, she was in contact
with SARS regarding the late payment.
She also denied that financials were not disclosed and said staff at
the AGM were informed
that financials were not being distributed but
were available to any member who wanted a copy. She indicated that
the statement
made by the appellant about the Titanic was reckless
and that the Board had been elected by members so they should trust
them.
She also indicated that the respondent took a long time to
recover from the problems created by the letter. She indicated that
the appellant could have raised his concerns at the AGM or at a
board meeting adding that the appellant's concerns raised in
clauses
numbered 1 to18 of his letter dated 20 March 2009 created doubts
about the management and the board and his concerns
in clause
numbered 11 were completely untrue. She felt that it was not
legitimate for the appellant to express concerns about
management's
salaries as they were decided by the Board.
The CEO Shadrach Bokaba
testified that the Board had approved him receiving a commission for
monies collected for the respondent,
however, in the first year he
chose to forego 40% to 50% of the commission to which he was
entitled of his own volition. In the
second year he decided not to
claim any commission at all. Thereafter all commissions were
cancelled by the Board as being unsustainable
and the board
developed a performance based evaluation of management. He indicated
that all decisions including his salary were
ratified by the Board.
He indicated that he had paid his taxes. He explained that his
salary was split equally between the respondent
and SAMET and was in
line with administrators of orchestras in Cape Town and Durban and
benchmarked on national standards. He
indicated that there were
instances of late payment to employees and service providers due to
the cash flow crisis. He also stated
that payments were one or two
days late on about three occasions but that management would in
anticipation of such approach some
musicians to accept late payment.
Payments were never two months late as was suggested by the
appellant. He denied that management
was paid first and testified
that office staff took a conscious decision to be the last to be
paid and were sometimes paid a
month late. He disputed the
appellant’s version that there were no procedures in place to
raise grievances. The appellant
did not participate at all in the
AGM of 2006 or 2008 and did not even attend the 2007 AGM where he
would have had the opportunity
to raise his grievances. The reason
for terminatingthe contract with Stone Music’ was to reduce
costs. As a result of the
termination of the contract, the
respondent broke even and according to him was realising the full
benefit of the transaction.
He admitted that PAYE was sometimes
delayed because of cash flow but it was all paid in full. He drafted
the disciplinary charges
as he believed that the appellant's conduct
had the potential to jeopardise the respondent from obtaining
funding and damaged
the respondent's reputation. He indicated that
his own reputation was tarnished and that the trust relationship
between the appellant
and the respondent had broken down.
Based on the above facts
and circumstances the issue which the Labour Court was to determine
was whether the dismissal of the
appellant was automatically unfair
because he had allegedly been subjected to occupational detriment
arising from making a protected
disclosure alternatively whether the
dismissal was substantively and procedurally unfair based on the
appellant having committed
misconduct.
With regard to the
dismissal on account of a protected disclosure, the Labour Court
first determined whether the appellant had
made a disclosure as
defined by the Protected Disclosures Act 26 of 2000 (PDA). The court
considered relevant authoritiesand
came to the conclusion that the
appellant’s letters constituted a disclosure on the basis that
it contained information
tending to show actual or likely
impropriety. The letters disclosed contractual obligations owed by
the respondent to employees,
unconstitutional payments of salary to
the board chairman, non-compliance with tax obligations as well as
mismanagement of public
funding.
1
Having found that the
appellant did make a disclosure, the Labour Court went on to
consider whether the disclosures were protected.
In this respect
itheld that the starting point was to assess the substance of the
disclosures to determine whether the appellant
reasonably believed
them to be substantively true. After considering each disclosure,
the Labour Court held that the evidence
had established that the
appellant was genuinely concerned about the financial health of the
respondent and sought to raise his
concerns in his capacity as
member and employee in the interests of the respondent. Further,
that the appellant undoubtedly acted
in good faith and held a
reasonable belief that much of the information was substantively
true. In respect of the respondent’s
contention that the
appellant’s second letter was to seek assistance to be granted
postponement of his disciplinary hearing,
the Labour Court held that
although, it would appear that the appellant mainly acted out of
self-interest in seeking postponement
of his enquiry, it was clear
that his letter raised his concerns about financial impropriety.
Turning to the question
whether the disclosures were protected, the Labour Court had regard
to section 9(2)(c)(i) of the PDA which
provides that a disclosure is
protected if the employee had previously made a disclosure of
substantively the same information
to his or her employer in respect
of which no action was taken within a reasonable period after the
disclosure. The court also
looked at whether the disclosures were
protected in terms of section 9(2)(d) which provides for the
determination of whether
the impropriety was of an exceptionally
serious nature.
In relation to section
9(2)(c)(i), the court dismissed the appellant’s contention
that the discussions he had with Roberts
and Jurisch fell within the
ambit of the section. The court held that the appellant discussed
with them things that they were
both already aware of and
thatnothing new was disclosed to them. Likewise, the court held that
the discussion with Jurisich cannot
fall within the ambit of this
section since appellant provided no information but that it was
Jurisch who provided the appellant
with information he was not aware
of namely that the CEO (Bokaba) earned a salary and received
commissions and the chairman earned
a salary.
2
In respect of section
9(2) (d), the court held that the appellant did not contend that the
section was applicable and that none
of the impropriety the
appellant raised can be considered to be of an exceptionally serious
nature. In this respect, The Labour
Courtconcluded that:
“
Therefore,
although he acted in good faith and was understandably naive given
his artistic temperament, his disclosures do not meet
the
requirements for protection under the PDA. Although I am cognisant of
the applicant’s submissions that whistle-blowing
should be
encouraged and is a primary requirement for a democratic and
transparent social order, it must also be responsible and
legitimate,
hence the extensive requirements in the PDA before a disclosure can
be brought under the ambit of its protection...At
no stage did the
applicant testify that he failed to approach the respondent or comply
with its procedures because he feared an
occupational detriment- It
is common cause that he was conducting an investigation into the
issues and was shocked when he received
the disciplinary charges
.”
Para
80
Having found that the
appellant’s disclosures were not protected under the PDA,
therefore not subjected to an occupational
detriment, the Labour
Courtwent on to determine whether the appellant’s dismissal
was for a fair reason in terms of section
188(1)(a) of the Labour
Relations Act 66 of 1995 (LRA).
With regard to the
substantive fairness of the dismissal, the Labour Courtheld that the
appellant was guilty of bringing the respondent
into disrepute by
distributing his second letter not only to members but also
non-member employees and other third parties.
3
Moreover, the Labour
Court found that a number of the allegations of financial
impropriety: the imputation of unilateral and dishonest
conduct by
the CEO; the failure to comply with board procedures and the
respondent’s constitution; failure to pay salaries
to staff
when management were paid; and, the siphoning off of donor money
into commissions, were untrue and defamatory.
4
In respect of the
procedural unfairness of the dismissal, the Labour Courtdismissed
the appellant’s contention that his
was not afforded
sufficient time to prepare for the enquiry. The court found that the
appellant had not made any request for
postponement to the
chairperson but that the appellant relied on his request to Bokaba
in the previous enquiry.
The Appeal
The first issue is to
determine whether the appellant’s dismissal was automatically
unfair for making a protected disclosure.
Dismissal for occupational
detriment is governed by section 187(1)(h) of the LRA which renders
automatically unfair a dismissal
as a result of an employee having
made a protected disclosure. Section 4(2)(a) of the PDA also
provides that any dismissal in
breach of section 3 of the PDA is
deemed to be an automatically unfair dismissal as contemplated in
section 187 of the LRA.
5
Protected disclosure is
governed by section 9 of the PDA which reads:
‘
9. (1)
Any disclosure made in good faith by an employee—
(a) who reasonably believes that
the information disclosed, and any allegation
contained in it, are substantially
true; and
(b) who does not make the
disclosure for purposes of personal gain, excludingany reward payable
in terms of any law;
is a protected disclosureif—
(i) one or more of the conditions
referred to in subsection (2) apply; and
(ii) in all the circumstances of
the case, it is reasonable to make the disclosure.
(2) The conditions referred to in
subsection (1)(ii) –
(a) that at the time the employee
who makes the disclosure has reason to believe that he or she will be
subjected to an occupational
detriment if he or she makes a
disclosure to his or her employer in accordance with section 6;
(b) that in a case where no person
or body is prescribed for the purposes of section 8 in relation to
the relevant impropriety,
the employee making the disclosure has
reason to believe that it is likely that evidence relating to the
impropriety will be concealed
or destroyed if her or she makes the
disclosure to his or her employer;
(c) that the employee making the
disclosure has previously made a disclosure of substantially the same
information to –
(i) his or her employer; or
(ii) a person or body referred to
in section 8,
In respect of which no action was
taken within a reasonable period after the disclosure; or
(d) that the impropriety is of an
exceptional serious nature.
(3) Determining for the purposes of
section (1)(ii) whether it is reasonable for the employee to make the
disclosure, consideration
must be given to –
(a) the identity of the person to
whom the disclosure is made;
(b) the seriousness of the
impropriety;
(c) whether the impropriety is
continuing or is likely to occur in the future;
(d) whether the disclosure is made
in breach of a duty of confidentiality of the employer towards any
other person; … and
(g) in the public interest.’
Accordingly, the general
requirements for a disclosure to be protected are the following:
there must be a disclosure; the disclosure
must be made in good
faith; the disclosure must concern an impropriety, either a criminal
offence or that a person has failed,
is failing or is likely to fail
to comply with any legal obligation to which that person is
subject;it must be reasonable for
the employee to make the
disclosure; and, that one or more of the conditions referred to in
subsection 9(2) must be satisfied
– for present purposes, any
one of them is sufficient.Where the disclosure is made to the
employer subsection (c) which
is relevant for the present purposes
provides that the employee making the disclosure must have
previously made a disclosure
of substantially the same nature to his
or her employer.
For reasons that will be
apparent later in this judgment, I do not believe it necessary to
deal with the question whether the
appellant acted in good faith;
for personal gain; or believed that the information disclosed and
allegations made were substantively
true.
The first issue is
whether the disclosures made by the appellant were protected by
virtue of section 9(2)(c) which provides that
a disclosure is
protected when an employee making the disclosure had previously made
a disclosure of substantially the same information
to his or her
employer in respect of which no action was taken within a reasonable
period after the disclosure. The appellant
argued that by disclosing
the improprieties to Roberts and Jurisch, he had discharged the
requirement of section 9(2)(c) of the
PDA.
The material portion of
the definition of disclosure in section 1 of the PDA reads that:
“
disclosure”means
any disclosure of information regarding any conduct of an employer,
or an employee of that employer, made
by any employee who has reason
to believe that the information concerned shows or tends to show one
or more of the following:
(a) …
(b) that a person has failed, is
failing or is likely to fail to comply with any legal obligation to
which that person is subject.”
The argument before this
Court is that the information the appellant discussed had with
Roberts and Jurisich made the information
discussed a protected
disclosure as contemplated by the PDA. The respondent argues on the
contrary that the appellant had not provided
Roberts and Jurisich
with any information they were not aware of. Disclosure means ‘action
or act of making known’.
6
The question that arises
is whether the appellant had made known to Roberts and Juirschany
information which they were not aware
of? And if so, were they or
were they not willing to act on such information?
From the evidence, it is
clear that the respondent was facing financial difficulties
whichwere a general concern. As Roberts put
it, it was no secret
that the respondent was not financially stable. It follows that no
information emerged during the discussions
which either Roberts or
Jurisch was not aware of. When asked what the purpose of the
appellant’s discussions was, the appellant
answered that he
wanted to ask Roberts whether the respondent’s financial
challenges were a normal situation. His basic
question was to ask if
there was any concern about the financial health of the company and
if something could be done to remedy
the situation. Clearly the
appellant was not disclosing any information. Moreover, Jurisch
brought to the attention of the appellant
information which he was
not aware of. This is why the appellant requested the respondent’s
financial statements. In this
respect, when asked about the purpose
of obtaining these financial statements, the appellant testified
that the purpose of requesting
the financial statements was to
verify whether the concerns they discussed were founded. The
appellant was simply conducting
an investigation into the
respondent’s financial challenges so as to determine the cause
of the problem. The evidence can
be reconstructed as follows: after
discussing with Roberts and Jurisich who shared the same concern
about the respondent’s
financial difficulties, the appellant
undertook to request the financial statements in order to obtain
clarity about the respondent’s
financial state. Hence, there
is no evidence that the appellant made any disclosure to either
Roberts or Junisch which they were
not aware ofraising them of and,
in any event, there is no evidence that either of them were
uncooperative or unwilling to remedy
any wrong or that they or
either of them embarked upon a path to victimise the appellant for
discussing the issues he raised
rather than act on it.
In
Tshishonga
v Minister of Justice & Constitutional Development and
Another,
7
it
was held thatthe requirement for a disclosure is that information
must be disclosed.(See also
Radebe
v Premier Free State
2012
(5) (LAC) SA 100 at para 20). In
City
of Tshwane Metropolitan Municipality v Engineering Council of SA and
Another,
8
the
courtheld that aperson’s opinion is information falling within
the meaning of disclosure. Contrary to the latter case,
where the
employee expressed a view that the employer was creating a danger at
work by employing unqualified people to do specialised
work, which
information was not known to the rest of employees, the present case
differs. This is because in this matter, what
the employee discussed
was common cause to all employees of the respondent. Nothing new was
brought that Roberts and Jurisich
did not know. Moreover, it was the
latter thatprovided the appellant with information he did not know.
It follows that the discussions
the appellant had with Roberts and
Jurisichdo not fall within the definition of disclosure as defined
in section 1 of the PDA.
Having found that the
discussions the appellant had with Roberts and Jurisch do not fall
within the definition of disclosure,
it follows that such were not
protected. Since the appellant had not disclosedany information,it
cannot be said that by writing
the two letters the appellant had
satisfied the requirements as enunciated in section 9(2)(c) of the
PDA mainly that he had previously
disclosed the same information in
respect of which no action was taken.The appellant has not
discharged the requirement of section
9(2)(c) in that at no stage
did the appellant argue that he (i) approached the respondent with
information of any failure to
comply with any legal obligation by
the respondent; or, (ii)did not approach the respondent or comply
with its procedure because
he feared an occupational detriment.
Furthermore, and
assuming the issues raised by the appellant constituted disclosures
and that the disclosures were about financial
impropriety, then, in
order to satisfy the requirement of whether it was reasonable for
the appellant to make the disclosure
one must take into account the
seriousness of the impropriety. The PDA is there to protect whistle
blowers who disclose serious
improprieties. It is necessary
therefore for a person seeking to rely on the PDA not only to
establish an impropriety but also
to establish that it is serious.
In the present case none
of the appellant's complaints satisfy the requirements of
establishing a serious impropriety. In the
present case the
appellant's complaints can be broken down into the following
categories:
Firstly, late or
fractured payments to employees or service providers – there
is nothing to indicate that this was a serious
concern or
impropriety or that the beneficiaries did not condone these late
payments. There was no evidence that any employee
took action
against the employer for making late payments or indeed any third
party had taken or even threatened to take action
against the
employer as a result of the late payments. By all accounts when the
appellant wrote his letter the problem of fractured
payments seems
to have been resolved and there is no evidence that it was on-going
or likely to occur in the future.
Secondly, the
appellant's concerns about the commissions and salary structure of
the directors of the respondent and indeed of
the CEO was not a
concern about an impropriety. If salaries are determined by a duly
constituted Board of Directors and there
is proper disclosure and
there is no evidence that the Board of Directors acted in breach of
their fiduciary duties in establishing
a person's salary then there
can be no impropriety. The appellant's evidence with respect to the
salary of the directors of the
Board and indeed the CEO falls far
short of establishing any impropriety whatsoever. It does raise
concerns about the costsof
employing the CEO in circumstances of the
respondent facing financial difficulties but not impropriety.
Thirdly, the appellant's
concerns that members were denied access to financial statements did
not establish a serious impropriety.
The objective facts demonstrate
that the auditor did not refuse the appellant access to financial
statements but that the auditor
in fact told the appellant he was
free to obtain financial statements from a Board member and in fact
provided him with a list
of the directors for that purpose. There is
no evidence that the appellant requested a member of the board for
access to financial
statements in terms of the requirements of the
Companies Act, nor is there any evidence that if the appellant has
simply gone
to a director and requested financial statements before
penning down his letter that that request would have been refused.
Finally, the issues
about the non-payment of PAYE, other taxes or bills were either
untrue or paid albeit after the dates on which
the accounts were
due.
In any event, none of
the appellant's complaints disclose any serious impropriety. The
requirement that the impropriety should
be serious is an important
requirement. One must bear in mind that the PDA should not be
interpreted in a manner which would
result in the victimisation of
the employers. For whistle blowers to receive protection, it is
necessary that the impropriety
that they disclose be serious and not
simply reveal alleged breaches of contract when there is no evidence
that those who are
allegedly the victims of the breaches have taken
any action about it. In fact all the evidence in this matter
relating to fractured
payments or late payments for instance
demonstrate that they were condoned.
In the circumstances,
the appellant’s appeal against the finding that his dismissal
was an automatically unfair dismissal
must fail.
Substantive and
procedural fairness of the dismissal
[39] The appellant
challenges the Labour Court findings of the alternative claim that
his dismissal for misconduct was substantively
fair. In this regards,
it appears that both parties simply overlooked the fact that the
Labour Court had no jurisdiction to deal
with the fairness of a
dismissal based on misconduct.
[40] In terms of section
191(5)(b), when an employee alleges his dismissal was automatically
unfair s/he has to refer the dispute
to the Labour Court for
adjudication. On the other hand, if the dismissal relates to the
conduct of the employee then, in terms
of section 191(5)(a) of the
LRA the dispute must be referred to the council or the CCMA to be
arbitrated.
[41] I have dealt with
the appellant’s claim of automatic unfair dismissal. As regards
his alternative claim, this claim falls
under section 191(5)(a) of
the LRA as such the Labour Court had no jurisdiction to consider the
claim or pronounce thereon unless
it, with the consent of the
parties, had decided to arbitrate the dispute.
[42] The issue of
jurisdiction in respect of dismissals based either of section
191(5)(a) or (b) of the LRA has been dealt with
fully in
Wardlaw
v/s Supreme Moulding (Pty) Ltd
[2007] 6 BLLR 487
(LAC)
(Wardlaw).In that matter, this Court held that while it is the
applicant who will determine the nature of the dispute when
referring
the matter to arbitration or adjudication, the arbitrator or the
court must determine whether it has jurisdiction to
entertain the
dispute. This Court in Wardlawrecognised that it may only become
clear after all the evidence is led as to whether
or not the body
ceased with the matter had jurisdiction to determine the dispute
referred to it. Where it is the case that the
dispute is not one
within the jurisdiction of the body hearing the matter it cannot
determine the dispute.
[43] In this matter, the
appellant’s alternative claim about his dismissal being unfair
(based on his conduct) could not be
entertained by the Labour Court
because it fell within section 191(5)(a) of the LRA and had to be
referred to arbitration. It is
also not a matter where for purposes
of expediency the Labour Court could entertain the matter as section
157(5) of the LRA specifically
provides:
“
(5)
Except as provided in section 158 (2), the Labour Court does not have
jurisdiction to adjudicate an unresolved dispute if this
Act requires
the dispute to be resolved through arbitration”.
[44] In the
circumstances, it is up to the appellant, if he so desires to refer
his dispute relating to his dismissal based on his
conduct to the
CCMA for arbitration.
[45] The issue of
procedural fairness is related to substantive fairness and must be
dealt with at arbitration as well.
[46] With regard to
costs, I see no reason why in both law and fairness costs should not
follow the result in the appeal. This is
so because I am of the view
that the appeal on the automatically unfair dismissal issue was of no
merit.
Order
[47] In the result, I
make the following order;
(i) The appeal is
dismissed with costs,
(ii) The order of the
Labour Court is set aside and replaced with the following:
“
a)
The dismissal of the applicant was not an automatically unfair
dismissal as contemplated by section 191(5)(b);
This Court had no
jurisdiction to determine the applicant’s alternative claim of
his dismissal being substantially and procedurally
unfair as
contemplated by section 191(5)(a);
There is no order as to
costs”
______________
Waglay JP
I agree
______________
Musi AJA
I agree
_____________
Zondi AJA
APPEARANCES:
FOR THE APPELLANT:
Gilbert Marcus SC and Adv Jason Brickhill
Instructed by Bowman
Gilfillan Attorneys
FOR THE RESPONDENT: Adv
Joe Campanella
Instructed by Richard
Zanner& Associates Attorneys
1
See
para 69 of the judgment.
2
At
para 79 of
the judgment.
3
At
par 83 of the judgment.
4
At
para 81 of the judgment.
5
Section
3 of the PDA reads that: ‘
3. No
employee may be subjected to any occupational detriment by his or
her employer on account, or partly on account, of having
made a
protected disclosure.’
6
Leyley
Brown et al (eds) Oxford English Dictionary vol 1 (2007 Oxford
University Press) p 698.
7
(2007)
28 ILJ 195 (LC) at para 179.
8
(2010)
31 ILJ 322 (SCA) at para 41-42.