Palluci Home Depot (Pty) Ltd v Herskowitz and Others (CA21/13) [2014] ZALAC 81; [2015] 5 BLLR 484 (LAC) ; (2015) 36 ILJ 1511 (LAC) (12 December 2014)

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[2014] ZALAC 81
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Palluci Home Depot (Pty) Ltd v Herskowitz and Others (CA21/13) [2014] ZALAC 81; [2015] 5 BLLR 484 (LAC) ; (2015) 36 ILJ 1511 (LAC) (12 December 2014)

REPUBLIC OF SOUTH
AFRICA
IN THE LABOUR
APPEAL COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Case no: CA 21/13
Reportable
In the matter
between:
PALLUCI
HOME DEPOT (PTY)
LTD
................................................................................
Appellant
and
JOANNE
DEENA
HERSKOWITZ
..........................................................................
First
Respondent
COMMISSION FOR
CONCILIATION
MEDIATION
AND ARBITRATION
(CCMA)
.....................................................
Second
Respondent
JJ
KITSHOFF
N.O
....................................................................................................
Third
Respondent
Heard:
02 September 2014
Delivered:
12 December 2014
Summary: Review
of arbitration award – employee dismissed for gross
insubordination for shouting at employer and for poor
work
performance - commissioner upholding employee’s dismissal-
Labour Court reviewing and setting aside award; finding that

employee’s guilty of gross insolence and not gross
insubordination – Labour Court substituting award and awarding
compensation to employee. Appeal Distinction between insolence and
gross insubordination restated – employee not insolent
and not
wilfully defying employer’s authority - evidence showing that
employee provoked by the deduction of her salary in
contravention of
the BCEA and employer condescending towards employee –
commissioner failing to apply his mind to material
evidence –
Poor work performance – employee dismissed without any
corrective measures taken by employer – commissioner
failing to
apply his mind to guidelines of the Code of Good Practice-
commissioner deciding on issues not relied on by employer
-
arbitration award unreasonable- Labour Court’s judgment upheld
– appeal dismissed with costs.
CORAM: MUSI JA,
MURPHY
ET
SETILOANE AJJA
JUDGMENT
KATHREE-SETILOANE
AJA
[1] This is an
appeal against the judgment of the Labour Court (Visagie AJ) in which
it set aside, on review, the arbitration award
of the third
respondent (“the Commissioner”) and substituted it with
an order that the dismissal of the first respondent
by the appellant
was substantively unfair and that the first respondent be awarded
compensation in the sum of 10 months‟
remuneration
[2] On 4 January
2012, the appellant, Palucci Home Depot (Pty) Ltd, which conducts
business in the retail sector selling household
furniture and
televisions, dismissed the first respondent, whom it employed as
Company Manager, on the grounds of
inter alia
insubordination
and incapacity or poor work performance. On 1 March 2011, the
Tafelberg Furniture Stores (Pty) Ltd (“the
Tafelberg Group”)
purchased the appellant, which was previously owned by the first
respondent‟s family. The new management
team took over on 1
March 2011. The first respondent was employed to work for the
appellant as Company Manager on a fixed term
contract effective from
1 March 2011.
[3] Shortly after
the purchase of the appellant, the new management received complaints
from members of staff working under the
first respondent that she was
inclined to scream and shout at them. In early March 2011, Gareth
Baker (“Baker”), Head
of Group Human Resources, called
the first respondent to a meeting where he pointed out to her that
her conduct towards members
of staff was unacceptable, and that she
was required to refrain from such conduct in the future. On 26 April,
the first respondent
received a letter from Riaan Lambrecht
(“Lambrecht”), Managing Director of the appellant,
advising her that management
had received further complaints from
staff in relation to the manner in which she spoke to them, and
warning her that a repeat
of such conduct could land her in serious
trouble.
[4] On 28 September
2011, Ster Furnishers was purchased by the Tafelberg Group, and since
it had only one branch in Montague Gardens,
it was absorbed into the
appellant. A staff member, at the Montague Gardens branch, complained
to Lambrecht who was on a branch
visit in Somerset West, about the
abrasive manner in which the first respondent had spoken to her on
the phone. Lambrecht testified,
at the arbitration hearing, that on
receiving the complaint, he immediately sent the first respondent a
text message from his cell
phone asking her what had happened between
herself and the Montague Garden‟s staff member. She called him
telephonically
within a few minutes, and became very abusive,
screaming and shouting at him. After receiving a complaint from
Lambrecht, Baker
called for an investigation into the complaints
against the first respondent, pertaining to her repeated
“unprofessional
behaviour towards both employees and
management”. Subsequent to the investigation, Baker held a
counselling session with
the first respondent on 28 September 2011.
He then sent her a letter, dated 24 October 2011, where the following
was recorded relating
to her behaviour:
“
One of the
issues we have addressed is the fact that there are complaints
pertaining to your “screaming and shouting”
at the junior
staff members.
This issue was
addressed with you at our very first meeting with you where we
indicated to you that…you should ensure that
nobody would ever
accuse you of screaming and shouting again.
The staff reports
that you continue to scream and shout at them….
In a recent
interaction which you had with the Managing Director of Home Depot
you raised your voice and lost control of your emotions
on a
relatively minor issue. He made repeated attempts to moderate your
behaviour. These efforts proved fruitless.
If this is how you
behave towards senior management when you have been upset by an issue
then clearly you do not have the ability
to control yourself.
Your staff members
have all reported that they are extremely nervous/scared of you. They
fear your volatility and irrationality.”
[5] The letter then
records that although management had decided at that point to pursue
the path of corrective action instead of
taking formal disciplinary
steps, the first respondent is cautioned that “we will
institute a disciplinary enquiry should
there be a repeat of this
kind of behaviour. Your continued employment will then accordingly be
at risk”.
[6] Baker testified,
at the arbitration hearing, that problems continued to manifest and
on Sunday 4 December 2011, Mr Heil (Heil),
(Group - Chief Executive
Officer), visited the Home Depot (appellant‟s) section of the
Epping warehouse (“the warehouse”)
and was unhappy with
the disorganised state in which he found it. Having spoken to Baker
telephonically, he called a meeting the
next morning with the
management team including the first respondent who was responsible
for the warehouse. Although no action
was taken against the first
respondent, a rescue plan to get the warehouse in order was put in
place. In the ensuing weeks, members
of senior management made
regular visits to the warehouse in order to monitor progress with the
rescue plan. On one of such visit,
on 20 December 2011, the first
respondent and two of her members of staff requested a meeting with
Baker at which the first respondent
raised several operational
concerns with Baker. Baker requested the first respondent to put her
concerns in writing, which she
then e-mailed to him. Baker tabled the
e-mail for discussion at a management meeting the next morning (21
December 2011). Lambrecht,
who was present at the management meeting
and planned to visit the warehouse later that morning, indicated that
he would discuss
some of the operational concerns raised by the first
respondent in her e-mail to Baker, when he met with her at the
warehouse.
[7] Lambrecht met
with the first respondent at the warehouse on the morning of 21
December 2011, but the meeting was disrupted by
an altercation
between the two of them. The events leading up to this altercation
relate to the purported abuse of a company cell
phone by members of
staff under the control of the first respondent at the warehouse. As
there were no fixed telephone lines in
the warehouse, three cell
phones were given to certain members of staff in the warehouse to use
for work related purposes. However,
sometime in March 2011, the first
respondent was instructed that the cell phones were not to be used by
the warehouse staff and
that they had to be returned to her, and be
kept at all times under her control in her office. This
notwithstanding, one of the
cell phones was removed from the first
respondent‟s office, and used by members of staff at the
warehouse to make calls.
On 26 September 2011, the first respondent
wrote to Lambrecht informing him that there was a communication
problem in the warehouse,
and that warehouse staff were now using one
of the cell phones. Lamprecht testified that he called the first
respondent telephonically
reminding her of the instruction issued
earlier that the cell phones were not to be used.
[8] Thereafter,
during October 2011, the appellant received a cell phone account for
calls made from this particular cell phone
in the amount of R3000.00.
Baker advised the first respondent that this was unacceptable, and
instructed her to analyse the account
and identify the person/s
responsible for making personal calls from the phone, as they had to
be held liable for all such calls.
A month later, the appellant
received another account for calls emanating from the same cell phone
in the amount of just over R3000.00.
Baker had another discussion
with the first respondent about analysing the accounts and
identifying the culprits. He also presented
her with a list of
telephone numbers to go through, which according to the first
respondent later turned out to relate to a different
cell phone
account. This was not disputed by the appellant.
[9] When the first
respondent failed to identify the culprits, Baker advised her in an
e-mail, dated 25 November 2011, that unless
she advised management,
by 30 November 2011, which staff member abused the phone, so that the
amount of R6 297.80 (total of two
accounts) can be deducted from his
or her salary, she would be held responsible for the outstanding
account. On 30 November 2011,
the first respondent responded to
Baker, by e-mail, stating that the phone, which was kept in her
office each night and collected
by Vernon each morning to be used for
work related calls in the warehouse, was used by Vernon and Dieter.
She went on to state
that if the phone was used illegally in that
time, it was out of her control, and she could therefore not be held
financially responsible.
On the same day Baker responded by e-mail
stating:
“
If you
confirm that the blame is shared between Vernon and Diether then I
accept this. Please advise them that an amount of R3 148.
90 will be
deducted from their pay in December 2011.‟
Baker concluded the
e-mail by asking the first respondent to let him know once she had
let Vernon and Diether know. The first respondent
had not reverted to
Baker as requested in his letter of 25 November 2011.
[10] Seemingly, the
deduction was made from the first respondent‟s December salary,
and the first respondent, who was clearly
aggrieved by the deduction,
raised it privately with Baker (after his meeting with her and other
staff members, on 20 December
2011 at which she raised a number of
operational concerns with him). According to Baker, he advised her
that if she was able to
carry out the analysis of the cell phone
accounts in question, and identify the culprits, then he would
arrange to reverse the
deduction from her salary.
[11] Still
aggrieved, the first respondent attempted to raise the issue of the
deduction with Lambrecht the next morning at the
warehouse, where he
met with her to discuss some of the operational concerns which she
had raised, in her e-mail to Baker, the
day before. Lambrecht
testified at the arbitration hearing that, he indicated to the first
respondent that he was not prepared
to entertain any discussion on
the issue of the deduction, because it was part of an investigation
that Baker was attending to.
The first respondent became upset and
screamed at him within earshot of members of staff in the warehouse,
accusing him of being
unprofessional and not an “MD”.
Lambrecht repeatedly asked her to lower her voice or else he would
leave the meeting.
She persisted, and Lambrecht terminated the
meeting and walked out of her office. She followed him and confronted
him in the corridor,
again taking issue with his refusal to discuss
the deduction from her salary. She angrily shouted out to him not to
turn his back
on her again, and that he was unprofessional and not a
MD. When he went into the administration office, she passed him and
went
into the office of Helderburg International Importers, which her
husband Ayton occupied. When he passed that office on his way back
to
the warehouse, she came out and asked him for the copy of the email,
which he had in his possession. On advising her that his
copy was for
his records, and that she had a copy of the e-mail since she had
e-mailed it to Baker, she hurled similar insults
at him as earlier
that day, and demanded that he gives her the copy of the e-mail. He
repeatedly asked her to lower her voice as
the staff could hear, and
when she failed to do so, he gave her the copy of the e-mail and
left. Soon thereafter, Lambrecht asked
for the incident to be
investigated and on 23 December 2011, she was charged and given
notification of the disciplinary hearing.
The charges against the
first respondent were as follows:
“
A) GROSS
INSUBORDINATION IN THAT YOU
;
1. Again screamed
and shouted at the MD of the Company and shouted at the warehouse
manager on the 21
st
December 2011, (refer to counselling
discussion of 28
th
September 2011).
B) POOR WORK
PERFORMANCE /CAPACITY TO PERFORM AT THE REQUIRED STANDARD OF THE NEW
OWNERS OF THE COMPANY WITH REFERENCE TO BUT NOT
LIMITED TO YOUR JOB
DESCRIPTION, POINT 13 AND ATTACHMENT “A” OF YOUR
EMPLOYMENT CONTRACT:
1. Duplication of
IBT‟s
2. Control and
management of leave forms and feedback to Company
3. Sub-standard
stock management and control (stock counts/stock levels/stock
management). And failure to report findings to Managing
Director as
instructed.
4. Management and
control of supplier invoices to H/O for processing and payment.
5. Gross neglect in
the management of the warehouse and the stock resulting in a loss to
the Company of an estimated R250 000.00.
6. Failing to phone
customers back and/or failing to identify the problem and resolving
the problem. (ref to Hellopeter –
customer Anastacia and a
complaint from customer Campbell.
7. Prior to
dispatching stock to the branches you failed to ensure that the
pricing was on the computer.
8. Failure to
execute your duties to the required standard of the new owners within
the current framework and the current resources
available to you. The
Directors are of the opinion that a competent manager could
successfully run the Company with the current
resources and within
the current framework.
C) REFUSALTO
CARRY OUT REASONABLE INSTRUCTIONS GIVEN BY A SUPERIOR OR AUTHORISED
PERSON IN A SENIOR CAPACITY IN THAT YOU:
1. Allowed “small”
items to be stored in the warehouse.
2. Allowed the cell
phone to be removed from the control of the office.
3. Failed to
distribute HR posters and point of sale material to the branches
timeously.
4. Failed to obey
the instruction of the MD with regard to the scheduling of shifts at
the Canal Walk Branch.
5. Failed to control
and forward the TV licence register to H/O as instructed as this is a
legal requirement.”
[12] The
disciplinary hearing was held on 29 December 2011, and in early
January 2012, the chairperson handed his finding to the
appellant, in
which he recommended that the first respondent be dismissed on the
grounds of insubordination and incapacity to perform
her job function
in accordance with the standards and requirement of the appellant.
The first respondent was dismissed by the appellant
in terms of a
written termination notice dated 4 January 2012. Dissatisfied with
her dismissal, she referred an unfair dismissal
dispute to the CCMA
for conciliation and thereafter arbitration. The Commissioner found
the first respondent guilty of insubordination,
failure to carry out
instructions and failure to perform at an acceptable standard.
[13] The first
respondent took the matter on review to the Labour Court. The Labour
Court upheld the review application and set
aside the arbitrator‟s
finding on the bases that: (i) the first respondent could not, on the
evidence, have been found guilty
of the charge of insubordination but
should instead have been found guilty of gross insolence; (ii) the
arbitrator exceeded his
powers in finding the first respondent guilty
of the charge of failing to carry out instructions because the
chairperson of the
disciplinary hearing had not dealt with that
charge; and (iii) even if the charge relating to poor work
performance (Charge B)
was “found to be proved” by the
appellant in either the disciplinary hearing or the arbitration
proceedings, the sanction
of dismissal was too harsh as a progressive
approach, by the appellant, to the “perceived shortcomings”
of the first
respondent “would have been called for”. In
the circumstances, the Labour Court found that the sanction of
dismissal
was too harsh, and that the appellant should instead have
given the first respondent a final written warning. The Labour Court
accordingly held that had the first respondent sought reinstatement,
she would have been entitled to it, but as she sought compensation

only, she was entitled to 10 months‟ salary as compensation for
her unfair dismissal. It is this decision which the appellant
now
appeals against.
Application
of the incorrect test on review
[14]
The
principal contention of the appellant is that the Labour Court
applied the wrong test on review as it was unmindful of the decision

in
Herholdt,
1
which requires a reviewing court to go beyond identifying process
related errors, and find that such errors had as their consequence
an
unreasonable result. To the contrary, I am of the view that the
Labour Court in reviewing and setting aside the award of the

Commissioner, and substituting it with a finding that the first
respondent‟s dismissal was substantively unfair, was not

oblivious to the test enunciated in
Sidumo
2
by
the Constitutional Court. However, since the Labour Court's judgment
pre-dated
Herholdt
by just under a month,
3
it would be unreasonable to expect the Labour Court to have been
mindful of the decision of the SCA in
Herholdt
or of this Court in
Goldfields
4
both of which endorsed and, admirably, refined and clarified the
operation of the
Sidumo
test.
[15] Additionally,
the Labour Court's omission to echo the
Sidumo
refrain in
concluding its review judgment cannot, to my mind, render a patently
unreasonable award such as the one we have here
– where the
Commissioner‟s findings are not supported by the evidence, and
crucially point to the failure to apply
his mind to considerations
that were material to the outcome of the dispute – reasonable.
It is apparent from the reasoning
of the Labour Court that it found
by implication that the decision of the Commissioner is one that
could not reasonably be reached.
Thus, as will be demonstrated
further in the course of this judgment, the Labour Court‟s
approach to the review of the Commissioner's
award transcends the
mere identification of process related errors to reveal the
Commissioner‟s basic failure to apply his
mind to
considerations that were material to the outcome of the dispute,
resulting in a misconceived hearing or a decision which
no reasonable
decision-maker could reach on all the evidence that was before him or
her.
[16]
Significantly,
as was held by the SCA in
Herholdt
and
endorsed recently by this Court in
Head
of the Department of Education v Jonas Mohale Mofokeng and Others,
5
“for
a defect in the conduct of the proceedings to amount to a gross
irregularity as contemplated by s 145(2)(a)(ii) of the
LRA, the
arbitrator must have misconceived the nature of the enquiry or
arrived at an unreasonable result”. Thus, as recognised
in
Mofokeng
,
it is not only the unreasonableness of the outcome of an arbitrator's
award which is subject to scrutiny, the arbitrator “must
not
misconceive the inquiry or undertake the inquiry in a misconceived
manner”, as this would not lead to a fair trial of
the issues.
6
In further approval of
Herholdt
,
this Court in
Mofokeng
stated that:
“
Mere errors
of fact or law may not be enough to vitiate the award. Something more
is required. To repeat: flaws in the reasoning
of the arbitrator,
evidence in the failure to apply the mind, reliance on irrelevant
considerations or the ignoring of material
factors etc. must be
assessed with the purpose of establishing whether the arbitrator has
undertaken the wrong inquiry, undertaken
the inquiry in the wrong
manner or arrived at an unreasonable result. Lapses in lawfulness,
latent or patent irregularities and
instances of dialectical
unreasonableness should be of such an order (singularly or
cumulatively) as to result in a misconceived
inquiry or a decision
which no reasonable decision-maker could reach on all the material
that was before him or her.”
7
[Footnote omitted]
Insubordination
v Insolence
[17] Turning then to
the charge of insubordination (Charge A), the Commissioner found the
first respondent guilty of gross insubordination
for having screamed
and shouted at Lambrecht in a passage way within earshot of staff
after he had instructed her in her office
not to address him in that
way. In the review application, the first respondent raised as a
ground of review that the Commissioner
failed to apply his mind to
the facts and the law relating to the charge of insubordination in
the workplace. The Labour Court
found, in this regard, that the
arbitrator misconstrued the nature of the enquiry by failing to
distinguish between insubordination
and insolence. Its reasons for
doing so are these:
“
In the face
of clear authority mentioned above, our law has consistently
distinguished between insubordination and insolence. …
In my view, there
could not have been any insubordination charge levelled against the
applicant arising out of her conduct on 21
December 2011. It is
common cause that she had an altercation with Lambrecht and although
she disputed whether she shouted or whether
she was loud, I accept
that her conduct was abrasive, that she was confrontational and that
she probably shouted at Lambrecht as
he and other witnesses
testified. However, there was no instruction given to the applicant
by Lambrecht prior to her shouting at
him in a loud fashion. The
conduct of the applicant, in my view, was consistent with what the
Commercial Catering and Allied Workers
Union of South Africa case
referred to as insolence. It was clear that the applicant showed
disrespect to Lambrecht in the manner
she dealt with him on the day
in question. It is clear that the applicant had no regard for her
colleagues who witnessed the incident.
However, an important factor
to take into account, which the [arbitrator] dealt with, but placed
little weight on, is the fact
that the third respondent unilaterally
made deductions from the applicant‟s salary in contravention of
section 34 of the
Basic Conditions of Employment Act. In my view, the
second respondent should have placed more weight on the conduct of
the employer,
which clearly provoked the incident and the response
from the applicant when she confronted Lambrecht.
…
[I]n my
view, the incident with Lambrecht which was clearly provoked by the
company making the unlawful deductions from the applicant‟s

salary, together with whatever discussions the company may have had
with the applicant concerning the manner in which she dealt
with
colleagues, would in any event not have been sufficient to warrant a
dismissal on the charge of insolence or gross insolence
alone.
The second
respondent failed to apply his mind to the difference between
insubordination and insolence as required by the stated
authorities.
As I have indicated, based on the clear evidence provided at the
arbitration hearing, there was no question of any
insubordinate
conduct, let alone gross insubordinate conduct, concerning the
incident of 21 December 2011. On this basis alone,
the second
respondent‟s award is not one which a reasonable arbitrator
could have reached.”
[18]
The
Commissioner seemingly found the first respondent guilty of gross
insubordination in relation to Charge A on two bases: first
for
screaming at Lambrecht (Managing Director) within earshot of staff,
and (b) for failing to heed his instruction not to address
him in
that way. The purported failure of the first respondent to obey the
instruction of Lambrecht as referred to above, did not
form part of
the allegations relied upon by the appellant to found the gross
insubordination charge (Charge A). This charge was
limited to “again
screamed and shouted at the MD of the company and shouted at the
warehouse manager on 21 December 2011…”
8
It
is common cause, in this regard, that Charge A did not relate to the
first respondent‟s purported refusal to carry out
or obey an
instruction from Lambrecht prior to or during the altercation, or to
any other instruction from the appellant for that
matter. In fact,
the Commissioner recorded specifically in the award that “Lambrecht
conceded that [the first respondent]
had never refused to carry out
an instruction”. This notwithstanding, the Commissioner found
that the first respondent was
grossly insubordinate for screaming “at
Lambrecht in a passage way within earshot of staff after he had
instructed her in
her office not to address him in that way”,
prompting the Labour Court to find
inter
alia
that although the conduct of the first respondent was abrasive and
confrontational, and that she probably shouted at Lambrecht,
there
was no instruction given to her by Lambrecht prior to her shouting at
him.
[19]
It is
clear from this finding that the Labour Court failed to appreciate
that the refusal to carry out an instruction is not the
only basis
upon which to found a charge of insubordination. The offence of
insubordination in the workplace has, in this regard,
been described
by our courts as a wilful and serious refusal by an employee to obey
a lawful and reasonable instruction or where
the conduct of an
employee poses a deliberate (wilful) and serious challenge to the
employer‟s authority.
9
Whereas in some cases defiance of an instruction may indicate a
challenge to the authority of the employer, this is not so in every

case. Insubordination may also be found to be present where
disrespectful conduct poses a deliberate (wilful) and serious
challenge
to, or defiance of the employer's authority, even where
there is no indication of the giving of an instruction or defiance of
an
instruction. It is, therefore, not essential for an instruction to
be given or disobeyed to found a challenge to the employer's

authority.
[20]
The
refusal by an employee to carry out an employer's instruction is,
therefore, not always required for a finding of insubordination.

However, the failure of the Labour Court to recognise this did not,
in my view, influence its characterisation of the conduct of
the
first respondent, on the evidence led at the arbitration hearing in
relation to charge A, as constituting “insolence”
as
opposed to “insubordination”. In characterising the first
respondent's conduct as “insolence”, the Labour
Court
relied upon the decision of
Wooltru,
10
which emphasises the importance of distinguishing insubordination
from insolence simply because they are different offences.
Wooltru
equates
the offence of insolence with conduct which is offensive,
disrespectful, impudent, cheeky, rude (disrespectful in speech
or
behaviour), insulting or contemptuous, and insubordination with
“resistance to or defiance of authority; disobedience,
and
refusal to obey an order of a superior”.
11
Wooltru
makes
it clear that although an employee can be both insolent and
insubordinate at the same time, he or she can be insolent without

necessarily being insubordinate.
12
Notably, the Court in
Wooltru
held that a mere disrespect for the employer (or insolence,
impudence, cheekiness or rudeness) cannot, on its own, constitute
insubordination which by its very nature requires disobedience or an
outright challenge to authority. Insubordination it observed:
„
can manifest
itself in the refusal to obey a reasonable and lawful command or in
the challenge (or resistance) to or defiance of
(see especially
The
Shorter Oxford Dictionary above)
the authority of the employer.
It is of course required that insubordination must be deliberate
(wilful) and serious (above). This
is not to say contemptuousness of
authority (insolence, impudence, cheekiness, disrespect or rudeness)
cannot constitute a ground
of dismissal (provided, of course, that it
is wilful and serious). One should, however, always distinguish
between insubordination
on the one hand and insolence on the other
hand because they are definitely not the same kind of offence.”
13
[21] Applying these
principles
,
the Labour Court found that the first respondent's
conduct did not constitute insubordination but rather gross insolence
“as
it is clear that the applicant showed disrespect to
Lambrecht in the manner she dealt with him on the day in question”.
To
the contrary, the appellant contends that this is not a case about
a low to middle level cheeky employee who gives backchat showing

impudence or insolence, but rather one that concerns the daughter of
the previous owner of the business, and the expression of
her
defiance to the attempts by the new owner (the appellant) to exert
its authority. The contention thus advanced is that the
Labour Court
erred in failing to find that the breach of the duty to show respect
(insolence) becomes insubordination where the
disrespectful conduct
constitutes a deliberate challenge to the employer‟s authority.
The appellant, therefore, contends
that even if the first
respondent‟s conduct was to be classified as insolence, and a
lack of respect, the conduct was grossly
disrespectful and justified
the imposition of the sanction of dismissal.
[22]
As
demonstrated, there is a fine line between insubordination and
insolence, and insolence may very well become insubordination
where
there is an outright challenge to the employer‟s authority.
However acts of mere insolence and insubordination do not
justify
dismissal unless they are serious and wilful. A failure of an
employee to comply with a reasonable and lawful instruction
of an
employer or an employee‟s challenge to, or defiance of the
authority of the employer may justify a dismissal, provided
that it
is wilful (deliberate) and serious. Likewise, insolent or
disrespectful conduct towards an employer will only justify dismissal

if it is wilful and serious. The sanction of dismissal should be
reserved for instances of gross insolence and gross insubordination

as respect and obedience are implied duties of an employee under
contract law, and any repudiation thereof will constitute a
fundamental
and calculated breach by the employee to obey and respect
the employer‟s lawful authority over him or her.
14
Thus, unless the insolence or insubordination is of a particularly
gross nature, an employer must issue a prior warning before
having
recourse to the final act of dismissal.
15
[23]
In the
current matter, the first respondent was dismissed by the appellant
for being grossly insubordinate to Lambrecht. It is common
cause that
she was upset over the deduction of an amount of R 6 298 from her
salary and this led to the altercation with Lambrecht
on 21 December
2011 because he refused to entertain any discussion on the issue.
Lambrecht testified, at the arbitration hearing,
that when, on 21
December 2011, he refused to entertain any discussion on the issue of
the deduction because it was part of an
investigation that Baker (the
Human Resources Manager) was attending to, the first respondent
became upset and “screamed
and shouted” at him within
earshot of members of staff working in the warehouse, repeatedly
accusing him of, turning his
back on her, being “unprofessional”,
and “not an MD.
16
The first respondent denied in her testimony, at the arbitration
hearing, that she screamed and shouted at Lambrecht or that she

accused him of being “unprofessional” and “not an
MD”. Her testimony at the arbitration hearing, on this
aspect,
is this:
“
I have a
naturally loud voice and acknowledge it was raised during the
unfortunate incident in question. I was upset and frustrated
and
under extreme provocation. I was not shouting at Riaan [Lambrecht]
and had no intention of being disrespectful. I believe I
am entitled
to stand up for dignity in the face of unfairness. I was neither
defiant nor disobedient. I did not swear or abuse
him and I did not
challenge his authority. I was tremendously frustrated and provoked
because he refused to discuss with me my
very valid complaint that
R6297 was deducted from my salary unlawfully and for no good reason.
Nobody else heard what was being
said and it therefore affected no
other person and was between Riaan [Lambrecht] and myself. If he had
listened to my complaint
without turning his back and showing
contempt for me, the incident would never have happened. I believe my
problem should be discussed
with mutual respect between employer and
employee.
Riaan [Lambrecht]
came to my office on the 21
st
of December… [He]
said that he would not discuss my salary deduction, using the feeble
excuse that my email of complaint
was not addressed to him….He
also said at this Arbitration that he was waiting for the outcome of
an investigation but this
is not so. The deduction had already been
made….
When I asked him to
address the issue, he stood up, turned his back on me and said
sarcastically, without looking at me “geniet
jou dag”,
which I took as an arrogant way of saying “get lost”. I
followed him out into the corridor and said
something like “I
would like to discuss it because it is important to me. He carried on
walking with his back to me and I
followed saying “it is not
right to turn your back in the middle of a discussion.‟
[24] Members of
staff present in the warehouse at the time of the altercation between
Lambrecht and the first respondent were Fathima
Gerbier (“Gerbier”),
Ikraam Bailey (“Bailey”), Barney Bolton (“Bolton”),
Riaan Swanepoel (“Swanepoel”),
and Tertia Botha
(“Botha”). Only Gerbier, Bailey and Bolton were called to
testify on the appellant‟s behalf
at the arbitration hearing.
At the arbitration hearing, Gerbier who was approximately 11 metres
away from the first respondent
and Lambrecht during the altercation
testified that she and Botha, with whom she shared an office, were on
the telephone when they
heard the first respondent “screaming”.
She stopped talking and put her head out of the window to see what
was happening.
She saw the first respondent and Lambrecht near the
fire extinguisher then went back to the telephone and continued with
her conversation.
Bailey, on the other hand, who was the furthest
from Lambrecht and the first respondent during the altercation
testified, at the
arbitration hearing, that he was about 30 metres
away when heard the first respondent screaming at Lambrecht in the
passage “about
the email”. He said that he heard her say
that she wanted to make a copy of the email.
[25] Bolton who was
the closest (three metres away), and outside whose office the
altercation between the first respondent and Lambrecht
took place,
testified at the arbitration hearing that he heard the first
respondent say to Lambrecht, in a “raised”
voice, “don‟t
turn your back to me”. He also said that she was visibly upset
and spoke in a raised voice, but
that “sy het nie geskree nie
soos‟n besepe”. Bolton‟s testimony, at the
arbitration hearing, was consistent
with that of Riaan Swanepoel‟s,
at the disciplinary hearing, which was that he heard “loud
voices” outside his
office and went to see what was happening.
On doing so, he saw the first respondent and Lambrecht arguing
approximately three metres
away from the office he shared with
Bolton. He heard the first respondent say to Lambrecht in a raised
voice “don‟t
walk away from me” and Lambrecht
responded by asking the first respondent “to speak softly as
people were listening”.
When asked in cross-examination, at the
disciplinary hearing, if he “heard a raised voice or was it
shouting”, he responded:
“I would say her voice was
fairly raised but I wouldn‟t classify it as shouting”.
Swanepoel also pointed out
in his testimony, at the disciplinary
hearing, that those who know the first respondent well, would know
that when she is eager
and excited her voice becomes raised
naturally. Needless to say, Swanepoel was called by the appellant to
testify at the disciplinary
hearing, but not at the arbitration
hearing.
[26]
Botha, who occupied the same office as Gerbier, at the time of the
altercation between the first respondent and Lambrecht,
also
testified at the disciplinary hearing that “we just heard loud
voices”, but couldn‟t make out what was said.
She was,
predictably, also not called by the appellant to testify at the
arbitration hearing. Gerbier, who shared an office with
Botha,
corroborated her testimony by stating, at the disciplinary hearing,
that she heard “loud voices” but was unable
to hear what
was being discussed, yet surprisingly at the arbitration hearing, she
testified that the first respondent was “like
screaming”.
When the first respondent put the inconsistency of the two versions
to her in cross-examination, at the arbitration
hearing, Gerbier‟s
nondescript answer
“
[t]hat, it‟s
the same here”, made it apparent that she was unable to provide
a plausible explanation for the inconsistency.
The Commissioner
ought, for this reason, to have rejected the evidence of Gerbier that
the first respondent “screamed”
at Lambrecht.
[27] By the same
token, he ought to have drawn a negative inference from the failure
of the appellant to call Swanepoel and Botha
to testify at the
arbitration hearing, because their testimony at the disciplinary
hearing verified that the first respondent spoke
to Lambrecht with a
“raised voice” during the altercation in the warehouse,
but that she did not “scream and
shout” at him.
Consistent with their testimony was that of Bolton‟s, at both
the disciplinary and arbitration hearings,
that he heard the first
respondent say to Lambrecht in a raised voice “don‟t turn
your back on me”. He too was
adamant that the first respondent
did not “scream and shout” at Lambrecht during the
altercation. Bailey, on the other
hand, who was the furthest (30
metres away) from the first respondent and Lambrecht during the
altercation testified, at the arbitration
hearing, that he heard the
first respondent screaming at Lambrecht in the passage “about
the email” which she wanted
to copy. However, at the
disciplinary hearing, he testified that the first respondent screamed
at Lambrecht saying “give
me the paper, I want to take it
further with you”. Bailey made no mention of the latter
utterance in his testimony at the
arbitration hearing. Coupled with
this inconsistency is the improbability that Bailey, who was the
furthest away from the first
respondent and Lambrecht during the
altercation, would not have heard her “screaming” at
Lambrecht, when Swanepoel,
Bolton, Botha (and Gerbier), who were
substantially closer, heard her arguing with Lambrecht in a “loud”
or “raised”
voice. For this reason as well, the
Commissioner ought to have rejected the testimony of Bailey.
[28] In addition,
other than Lambrecht‟s testimony that the first respondent
repeatedly accused him of being “unprofessional”
and “not
an MD”, there is simply no evidence, on the record, that
supports the allegation that the first respondent
told Lambrecht that
he was “not an MD” or that he was “unprofessional”.
The first respondent in fact denied
saying this to Lambrecht in her
testimony at the arbitration hearing. I also find it highly
improbable that if, as testified by
Lambrecht, the first respondent
had repeatedly accused him of being “unprofessional and not an
“MD”, both inside
her office and in the passageway, why
none of the members of staff, who were in the immediate vicinity of
the altercation, heard
the first respondent utter those words −
particularly if, as testified by him − she “screamed and
shouted”
at him in the presence of members of staff. Thus on
the evidence and the probabilities, I find that although the first
respondent
probably spoke to Lambrecht in a brash and argumentative
manner, and insisted that he should not turn his back to her while
she
was discussing the issue of the deduction from her salary with
him, she did not “scream and shout” at him, and nor did

she accuse him of being “unprofessional” and “not
an MD”. Accordingly, I find that the Commissioner erred
in
failing to reject the testimony of Lambrecht on this aspect.
[29]
Although
the respondent‟s conduct can be described as insolent,
impudent, disrespectful, and rude, it certainly does not constitute

insubordination which in law requires a persistent, wilful and
serious challenge to, or defiance of the employer's authority.
17
Nor, in my view can the first respondent‟s conduct towards
Lambrecht be described, on the evidence, as a “calculated

challenge” to the employer‟s authority,
18
since it was neither deliberate nor intentional. The first respondent
had been provoked by Lambrecht in two respects: firstly by
the
unlawful deduction of monies from her salary which, it is common
cause was the basis of the impasse, and secondly by the condescending

manner in which Lambrecht had turned his back to her whilst she
attempted to discuss the issue of the deduction with him. This

resulted in nothing more than, at best, an isolated knee jerk in the
heat of the moment by the first respondent − who had
been
provoked by her employer. It is clear from the evidence that she did
not intend to challenge or defy Lambrecht‟s authority,
but in
her anger at the deduction coupled with Lambrecht‟s refusal to
discuss the issue with her by
inter
alia
condescendingly turning his back to her, she reacted precipitously by
demanding, in a raised voice, that he should not turn his
back to her
while she was discussing the issue of the deduction with him. Whilst
the first respondent‟s conduct was manifestly
insolent, it
cannot be said to be a serious, persistent and deliberate challenge
to the employer‟s authority, on which to
found a charge of
insubordination or gross insubordination.
[30] In addition,
the argument advanced by the appellant that the altercation on 21
December 2011 was an expression of the first
respondent‟s
defiance − as the daughter of the previous owner − to the
attempts of the new owner (the appellant)
to exert its authority, is
also not supported by any evidence and is at best conjecture. This
appears to stem from the misplaced
conclusion arrived at by the
Commissioner in the arbitration award that “the [first
respondent] was not able to accept the
new work environment probably
because she was her own boss in the past”. It is important, in
this respect, to recognise that
the first respondent was charged with
gross insubordination because of the manner in which she addressed
the Managing Director
on 21 December 2011; an isolated incident in
the context of being angry and provoked by the unlawful deduction
from her salary
of the amount of R6298, 00 coupled with the
condescending manner in which he turned his back to her in refusing
to discuss the
issue. She was not charged with continued defiance of
the appellant‟s authority due to some familial allegiance and
comparison
of business practices, nor for a failure to carry out a
lawful and reasonable instruction from her new employer as a basis
for
the charge of insubordination. The evidence did not support that.
In any event, first respondent‟s various written communications

to the appellant clearly demonstrate that she had earnestly attempted
to conform to their requirements, and attempted to assist
with the
running of the business. Thus, on a proper consideration of the
evidence led at the arbitration hearing, there is no support
for the
conclusion reached by the Commissioner that the first respondent‟s
conduct constituted insubordination let alone
gross insubordination.
[31] The appellant‟s
submission that insolence can only relate to “a cheeky low to
middle level” employee is not
supported by any authority, and
is unsustainable. The Labour Court found in line with
Wooltru
that the first respondent‟s conduct in this matter did not
constitute insubordination as it was not a serious, persistent
and
deliberate challenge to the authority of the appellant. It, however,
found her conduct to constitute gross insolence, which
should have
been sanctioned with a final warning. I am unable, on a proper
analysis of the evidence, to endorse this finding. The
conduct
complained of, in my view, was simply insolence as it was neither
serious nor wilful and ought, in the circumstances, to
have been
sanctioned with a warning.
[32] The purported
warning that the appellant gave the first respondent in October 2011
has little relevance to the conduct of the
first respondent whether
viewed as insolence or insubordination, as it was not issued after a
proper enquiry during which the first
respondent was given the
opportunity to defend herself by stating her case, cross-examining
the complainants and adducing evidence
in defence of the charge
levelled against her. The Commissioner in fact recognised this during
the arbitration when he said this:
“
The fact is
you were counselled about it, it is not a disciplinary hearing, it is
not a procedure…it is not, it is not a
warning, it cannot be
used as a warning.”
He even went further
to assert: “I just want to satisfy the [first respondent] that
it was not a warning”, but concluded
inexplicably that it was
made clear to the first respondent in September 2011 that she “had
to correct her manner or disciplinary
action would be instituted
should there be a repeat of „this kind of behaviour” −
an oblique reference, I believe,
to her “unprofessional
behaviour towards both employees and management”
19
– a wholly unrelated transgression to my mind, which fails to
justify the first respondent‟s dismissal for the commission
of
conduct, on the evidence, which points to insolence and not
insubordination. Insolence, as pointed out, would only justify
dismissal if it is serious and wilful, which the first respondent‟s
conduct was not, making it quite clear that the appellant's
primary
objective was to “get rid” of the first respondent. The
fundamental point being that the Commissioner failed
to apply his
mind to the difference in principle between the two forms of
misconduct when he assessed the facts of the matter,
concluding there
was insubordination, when the facts supported only one reasonable
conclusion − that the first respondent‟s
conduct amounted
to no more than insolence, which should have been acted upon by the
appellant with a written warning − and
not dismissal.
[33]
Whether
misconduct amounts to insubordination depends on a number of factors
including the wilfulness of the employee‟s defiance,
the
reasonableness of the order that was defied and the actions of the
employer prior to the purported act of insubordination.
20
Provocation by an employer prior to the act of insubordination by an
employee, is thus an important factor that must be considered
in
assessing its gravity. The same principle in my view would apply to
the act of insolence or gross insolence. If the employee
was provoked
into insolence or insubordination, it may have a considerable
mitigating effect on the seriousness of the offence
and may render
the dismissal inappropriate.
[34] Monies were
unilaterally deducted from the first respondent‟s salary in
contravention of s 34 of the Basic Conditions
of Employment Act,
21
(“BCEA), more particularly sections 34(2)(b) and (c) thereof.
An employer is prohibited, in terms of s 34(1)(a) of the BCEA
from
making any deductions from an employee's remuneration unless, subject
to s 34(2) of the BCEA,  the employee in writing
agrees to the
deduction in respect of a debt specified in the agreement. Section
34(2) of the BCEA, in turn, provides that a deduction
in terms of s
34(1)(a) of the BCEA may be made to reimburse an employer for loss or
damage only if –
“
(a) the loss
of damage occurred in the course of employment and was due to the
fault of the employee
(b) the employer has
followed a fair procedure and has given the employee a reasonable
opportunity to show why the deduction should
not be made;
(c) the total amount
of the debt does not exceed the actual amount of the loss and damage;
and
(d) the total
deductions from the employee‟s remuneration in terms of this
subsection do not exceed one-quarter of the employee‟s

remuneration in money.”
[35] The deduction
of monies from the first respondent‟s salary was, in my view,
made in contravention of sections 34(2)(b)
and (c) of the BCEA as the
appellant had not followed a fair procedure, and had not given the
first respondent a reasonable opportunity
to show why the deduction
should not be made. Moreover, the amount deducted exceeded the actual
amount of the purported loss incurred
by the appellant. The monies
deducted from the first respondent‟s salary constituted a
significant percentage of the first
respondent‟s monthly
salary, and the unfairness associated therewith aggrieved her. The
unfairness is not only manifested
in the deduction itself, but also
in the arbitrary manner in which the deduction was made.
[36]
The appellant attempted to justify the deduction on the basis that
the announcement that a deduction would be made from the
first
respondent‟s salary, unless she identified the true culprits,
was communicated to her on 25 November 2011, but she
engaged in “open
confrontational behaviour” with Lambrecht only on 21 December
2011, in circumstances where she had
already had an opportunity to
“ventilate her objections” in interaction with Baker, the
Human Resources Manager. This
reaction, in my view, was not
unexpected of the first respondent because by the date of impasse (21
December 2011) she had seen
that the deduction had physically come
off her salary whereas in November, she was merely advised that the
appellant may take this
action. However, even if it is accepted that
the first respondent had an opportunity to ventilate her objections
in interactions
with Baker in November 2011, the deduction from the
first respondent's salary, in any event, remains arbitrary and in
contravention
of s 34 of the BCEA by virtue of the fact that the
total quantum of the cell phone bill was deducted, in circumstances
where it
is common cause that only a portion of the calls were said
to be unauthorised. In addition, the appellant is a VAT vendor and
would
therefore recoup the VAT paid on the accounts. No provision was
made for this eventuality when the appellant deducted the monies
from
the first respondent's salary.
[37]
The impasse between Lambrecht and the first respondent arose as a
result of this unlawful deduction, which she wished to discuss
with
him and was fully entitled to do, but which he simply refused to
entertain on the basis that it was being investigated by
Baker. This
begs the question: what, in circumstances where the monies had
already been deducted, required investigation? It furthermore
turns
out that the first respondent had not been provided with the correct
statement of account in order to enable her to investigate
which
members of staff, in particular, were responsible for making
unauthorised personal calls from the cell phone. This, as the

evidence reveals, was only made available to her approximately seven
months later on 28 June 2012, during the arbitration hearing.
I am of
the view that it could not, in the absence of so essential a
document, have been expected of the first respondent to investigate

who the “real culprits” responsible for making the so
called unauthorised calls were or, for that matter, show why
the
deduction (equivalent to the costs of the unauthorised calls) should
not have been made from her salary?
[38]
The appellant contended that in the workplace a defence of
provocation does not depend on the wrongfulness of the employer‟s

conduct (as the employee will always say that he or she was
grievously wronged) but on whether there were other means, not
amounting
to misconduct, open to an employee to express his or her
displeasure, such as a grievance procedure. As contended for by the
first
respondent, the appellant‟s reliance on a grievance
process is merely an attempt to obscure the real issue, as a
grievance
procedure has no relevance in the context of this matter
pertaining, as it does, to an unlawful action by the employer which
the
employee herself sought to resolve by attempting to raise the
issue which aggrieved her with the employer directly, but which the

employer was simply not prepared to entertain. In the circumstances,
I find that the appellant had failed to prove on a balance
of
probabilities that the unauthorised personal calls were made from the
third cell phone, that it incurred a loss, and that the
first
respondent was liable for such loss. Accordingly, I consider that the
Labour Court was correct in considering the illegal
deduction to be a
mitigating factor in assessment of the seriousness of the offence of
insolence, which the Commissioner had simply
failed to apply his mind
to.
[39]
The sanction of dismissal was, regardless of whether the conduct
constituted insubordination or insolence, manifestly incongruent
and
unfair. The appellant‟s own code of conduct recommends a
written warning for the first offence of impertinence/insolence,
and
a final written warning for the second. Dismissal is only recommended
for the third offence of insolence. Similarly, item 3(4)
of the Code
of Good Practice for Dismissals in Schedule 8 to the LRA (“the
Code of Good Practice”) deems it inappropriate
for an employer
to dismiss an employee for a first offence, except if the misconduct
is serious and of such gravity that it makes
a continued employment
relationship intolerable. Gross dishonesty or wilful damage to the
employer‟s property, wilful endangering
of the safety of
others, physical assault on the employer, a fellow employee, client
or customer and gross insubordination are
listed as examples of
serious misconduct, subject to the rule that each case must be judged
on its own merits. This, the Commissioner,
similarly failed to apply
his mind to.
[40]
Also,
as alluded to earlier, the Commissioner failed to apply his mind to
the fact that the charge of screaming and shouting at
Lambrecht could
not on the facts (evidence) and the law be interpreted as
insubordination in light of established authority, which
requires the
presence of a wilful and serious challenge to, or defiance of, the
authority of the employer to found a charge of
insubordination or
gross insubordination.
21
The distinct difference between insubordination and insolence is that
of disobedience (in intentionally refusing to carry out an

instruction or an intentional and serious challenge to, or defiance
of the employer‟s authority) and a failure to respect
the
employer. The Commissioner did not appreciate the difference, nor did
he apply the relevant legal principles, resulting in
him
misconstruing the whole nature of the enquiry, and his duties in
connection therewith. Similarly, the Commissioner made errors
of fact
by failing to appreciate the weight and relevance to be attached to
particular facts, such as that the first respondent
was provoked into
being insolent and disrespectful to Lambrecht, first by the illegal
and arbitrary deduction of monies from her
salary, and thereafter by
condescendingly turning his back to her when she raised the issue of
the deduction with him.
[41]
However, as held by this Court in
Mofokeng
, mere
irregularities or errors in relation to the facts or the law are not
sufficient to vitiate the award as they may not produce
an
unreasonable outcome or lead to the conclusion that the arbitrator
misconceived the whole nature of the enquiry. Ultimately,
it will
depend on the materiality of the error or irregularity and its
relation to the result. Materiality of the error, it held,
must be
assessed and determined:
“
with
reference to the distorting effect it may or may not have had upon
the arbitrator‟s conception of the inquiry, the delimitation
of
the issues to be determined and the ultimate outcome. If but for an
error or irregularity a different outcome would have resulted,
it
will
ex
hypothesi
be
material to the determination of the dispute. A material error of
this order would point to at least a
prima
facie
unreasonable
result. The reviewing judge must then have regard to the general
nature of the decision in issue; the range of relevant
factors
informing the decision; the nature of the competing interests
impacted upon by the decision and then ask whether a reasonable

equilibrium has been struck in accordance with the objects of the
LRA. Provided the right question was asked and answered by the

arbitrator a wrong answer will not necessarily be unreasonable. By
the same token, an irregularity or error material to the
determination
of the dispute may constitute a misconception of the
nature of the inquiry so as to lead to no fair trial of the issues
with the
result that the award maybe set aside on that ground alone.
The arbitrator however must be shown to have diverted from the
correct
path in the conduct of the arbitration and as a result failed
to address the question raised for determination.”
23
[Footnote omitted]
[42]
The Commissioner, in the current matter, made material errors in fact
and law by failing to apply his mind to the distinction
on the facts
and the law between insubordination, and insolence in determining
whether the first respondent had committed the offence
of gross
insubordination upon which the appellant based its decision to
dismiss her. Then in determining the fairness of the dismissal
he
failed to appreciate the distinction between gross insubordination
and insolence, and that an employee can only be dismissed
for gross
insolence and not mere insolence. Furthermore, in assessing the
fairness and appropriateness of the dismissal, he failed
to assess
the gravity of the misconduct with reference to the fact that it was
neither wilful nor serious, and that the first respondent
was
provoked into conducting herself in an insolent manner by the
employer in two important respects, first by the unlawful deduction

of monies from her salary, which was the basis of the impasse, and
second by the condescending manner in which Lambrecht had turned
his
back to her while she tried to raise the issue with him. It is a key
principle of the Code that employers and employees must
treat each
other with respect. Both Lambrecht and the first respondent were
members of senior management. That he was her immediate
superior did
not give him
carte blanche
to treat her with disrespect. The
Commissioner's failure to properly apply his mind to these material
considerations led him to
misconceive the nature of the enquiry by
failing to address the question for determination as revealed by the
evidence, namely
whether the dismissal of the first respondent for a
first transgression of insolence, where she was provoked by the
appellant,
was fair.
Going
beyond the findings of the disciplinary chair
[43] The
Commissioner furthermore, in my view, misconstrued the true nature of
the enquiry and his mandate in connection therewith
by making a
determination on aspects of the charges, which neither the chairman
of the disciplinary hearing nor the appellant relied
upon, at the
time of the first respondent‟s dismissal, in concluding that
her dismissal was unfair. The Commissioner dealt
in his award with
sub-charges A1 (gross insubordination), B5 (gross neglect in the
management of the warehouse and the stock resulting
in the loss to
the company of an estimated R250 000 00,00, C2 (allowed the cell
phone to be removed from the control of the office),
C3 (failed to
distribute HR posters and point of sale material to the branches
timeously) and C5 (failed to control and forward
the TV licence
register to the H/Q as instructed as this is a legal requirement).
[44] However, the
chairman of the disciplinary hearing, in his recommendation, dealt
only with sub-charges A1 (insubordination),
B1 (duplication of
IBT‟s), B3 (sub-standard stock management and control −
stock counts/stock levels/stock management
and failure to report
findings to managing director as instructed), C2 (allowed the cell
phone to be removed from the control office
and C4 (failed to obey
the instructions of the MD with regard to the scheduling of the
shifts at the Canal Walk Branch). The chairman
did not deal with the
remainder of the charges, but went on to recommend the dismissal of
the first respondent on the basis of
his findings that she was guilty
of insubordination and poor work performance only.
[45] The chairperson
of the disciplinary hearing, accordingly, refrained from enquiring
into, and finding the first respondent guilty
of the sub-charges
relating to her purported refusal to carry out instructions as
described in Charge C. He furthermore did not
recommend to the
appellant that she be dismissed on the basis of a guilty finding on
this charge, and nor did the employer rely
upon a finding on this
charge as a basis for dismissing the first respondent. Although the
chairperson of the disciplinary hearing
touched briefly upon
sub-charge C2 relating to the removal of a cell phone from the
control of the first respondent‟s office,
he did not find the
first respondent guilty of this charge. What he did find, however, is
that the first respondent failed to carry
out the instruction “to
determine which calls made from the phone were personal in nature in
order to ensure that the responsible
person was held accountable for
incurring these costs”. It must be pointed out, however, that
the appellant had never charged
the first respondent with failing to
carry out any such instruction.
[46]
This
finding by the chairperson was, in any event, made in the context of
the poor work performance/incapacity charge (Charge B),
and not the
failure to carry out reasonable instructions (Charge C). This
notwithstanding, the Commissioner in his award went beyond
the
findings of the chairperson in his recommendation, and dealt with all
the sub-charges under Charge C and arrived at a finding
that the
first respondent had failed to carry out instructions as described in
that charge. In
Fidelity
Cash Management Services v CCMA and Others,
24
this
Court held that:
“
It is an
elementary principle of not only our labour law in this country, but
also of labour law in many other countries that the
fairness or
otherwise of the dismissal of an employee must be determined on the
basis of the reasons for  the dismissal which
the employer gave
at the time of the dismissal. The exception to this general rule is
where, at the time of the dismissal, the
employer gave a particular
reason as the reason for the dismissal in order to hide the true
reason such as union membership. In
such a case, the court or
tribunal dealing with the matter can decide the fairness or validity
of the dismissal not on the basis
of the reason that an employer gave
for the dismissal but on the basis of the true reason for the
dismissal.”
25
Accordingly, the
Commissioner undertook the enquiry in a misconceived manner by
determining the fairness of the first respondent‟s
dismissal on
the basis of reasons for the dismissal, which the appellant did not
rely upon at the time of dismissing the first
respondent. But for
this error, I believe that the Commissioner would have arrived at a
different result in the award.
Poor
Work Performance
[47] The
Commissioner found the respondent guilty of poor work performance as
set out in Charge B on the basis of: (a) the state
of the warehouse
which the first respondent was responsible for; (b) damage to stock
in the warehouse which was packed incorrectly
and left unprotected;
(c) her failure to deal with the processing of creditors invoices
which led to the loss of discounts; (d)
failure to control television
licensing; (e) failure to distribute the BCEA, Employment Equity Act
and health and safety posters
to two shops under her control.
[48]
The
Code of Good Practice on Dismissals provides that person‟s
determining whether a reason for dismissal related to poor
work
performance is fair should consider whether the employee failed to
meet a performance standard, and if so, whether (a) the
employee was
aware, or could reasonably be expected to have been aware of the
required standard; (b) the employee was given a fair
opportunity to
meet the required standard; and (c) dismissal was an appropriate
sanction for meeting the required standard.
26
[49] However, the
Commissioner found the first respondent guilty of poor work
performance as described in Charge B without giving
consideration to
any of the factors outlined in the Code. There is no indication from
the evidence on the record that the appellant
had put in place
certain performance standards, and that the first respondent was
aware of them. As much was conceded by Lambrecht
in his testimony at
the arbitration hearing, but he then went on to glibly state with
reference to performance standards that “everybody
knew what it
means”. There is, furthermore, no indication on the record that
the appellant had followed an adequate evaluation
procedure to
determine whether the first respondent failed to meet the required
standards. This notwithstanding, the Commissioner
found as follows:
“
The
respondent has discharged the
onus
of proof that the appellant
…did not perform her duties at the acceptable standard…
The sanction to dismiss the applicant
was appropriate.
The applicant was
aware of what was expected of her. She was paid a salary of R35000
per month and she purported that she had managed
the business prior
to the buy-out. A manager has to control the work the staff do and
the manager is in the end responsible for
errors and omissions of the
staff….”
[50]
Even
though the first respondent had managed the business prior to the
buyout by the appellant, and that her responsibilities may
have been
similar to her previous duties, this did not absolve the appellant
from following an evaluation procedure before dismissing
the first
respondent for poor work performance. To my mind, the failure to do
this rendered the decision of the appellant to dismiss
the first
respondent neither objective nor reasonable.
27
Accordingly, in my view, the Commissioner‟s failure to apply
his mind, to these material considerations, led to his failure
to
address the question relevant to the enquiry, namely whether the
appellant had proved that the first respondent had failed to
meet the
standards of work performance.
[51]
The
Commissioner furthermore failed to recognise that it was
impermissible for the employer to dismiss the first respondent on
grounds of incapacity/poor work performance alone, as it sought to
do, without first (a) conducting an investigation to establish
the
reasons for the unsatisfactory performance, (b) giving the employee
the right to be heard; (c) giving the employee appropriate

evaluation, instruction, training, guidance and counselling, and (d)
after a reasonable period of time for improvement, the employee

continues to perform unsatisfactorily.
28
The uncontested testimony of the first respondent is that the
appellant never once, prior to charging her on 23 December 2011,
gave
her an indication verbally or in writing that it was of the view that
she was lacking in capacity to perform her duties. She
also testified
that the appellant never once suggested to her that her work
performance was substandard and could lead to her dismissal.
Nor did
the appellant implement a system of progressive or corrective
discipline to assist her in improving her performance. When
pressed
under cross-examination, at the arbitration hearing, to provide
evidence of written warnings given, and progressive actions
taken to
correct what it viewed as first respondent‟s substandard
performance,
29
the only response that Lambrecht could muster was this: “I
don‟t have anything pertaining to that here with me, but
we did
speak to you”.
[52] The appellant
not only failed to comply with its obligations to the first
respondent in so far as a dismissal for incapacity/poor
work
performance is concerned, but its Human Resources Manager Baker, who
deposed to the appellant‟s answering affidavit
in the review
application on its behalf, expressly stated on oath that a dismissal
for incapacity does not require any form of
progressive discipline.
Not only is this statement premised upon an incorrect legal
assertion, but it demonstrates a complete lack
of understanding on
his part of cursory principles of labour law, which in so far as
dismissal on the grounds of incapacity is
concerned, requires an
employer prior to dismissing an employee for incapacity/poor work
performance to give the employee an appropriate
evaluation,
instruction, training, guidance or counselling, and only after a
reasonable time for improvement has elapsed resulting
in the employee
continuing to perform unsatisfactorily, can the employee be
dismissed. Significantly, in this regard, the appellant‟s
own
disciplinary code required it to give the first respondent a verbal
warning for her purported transgressions relating to poor
work
performance.
[53]
Although
in certain circumstances, for instance where the employee is a member
of senior management, and her knowledge and experience
qualifies her
to judge for herself whether she meets the required standard, an
employer may not be required to follow a formal
procedure or counsel
the employee.
30
This expectation would, of course, depend on the existence of
acceptable standards of performance which as indicated − do
not
exist in the context of this matter − despite the appellant's
express commitment, in the first respondent‟s letter
of
employment, to establish same:
“
The company
will establish acceptable standards of performance for staff. You
will be required to achieve this level of performance
on a monthly
basis. Your failure to do so will be deemed to be substandard sales
performance and as such a material breach of the
performance standard
which we expect of you.”
[54] As indicated,
even though the first respondent had managed the business prior to
the buy-out by the appellant, and that her
responsibilities may have
been similar to her previous duties, this did not absolve the
appellant from setting performance standards
against which to judge
the first respondent‟s performance, before dismissing her for
poor work performance, particularly
because as a new owner of the
business, its new management team was expected to have a different
philosophy on how to manage the
business. Even if, I am mistaken in
this view, and the appellant was entitled, by virtue of the first
respondent's seniority, experience
and knowledge, not to follow a
formal evaluation procedure and counselling, I believe that she was,
as a manager, still entitled
to a warning that poor performance could
lead to her dismissal and to be given a reasonable time to improve.
She was, however,
given no such warnings or opportunity to improve.
31
These are further material considerations, which the Commissioner
simply failed to apply his mind to.
[55] Item 3(4) of
the Code of Good Practice provides that “[w]hatever the merits
of the case for dismissal might be, a dismissal
will not be fair if
it does not meet the requirements of s 188”
32
.
Section 188(2) of the LRA expressly enjoins a person
considering whether the reason for dismissal is a fair reason or
whether the
dismissal was effected in accordance with a fair
procedure to take into account the Code of Good Practice. There is
scant indication
from an analysis of the Commissioner‟s award
that he took the Code of Good Practice into account in considering
whether the
appellant‟s reasons for the first respondent‟s
dismissal were substantively fair.
[56] Viewed
cumulatively, the Commissioner's failure to apply his mind to issues
which, as demonstrated above, were material to
the determination of
the dispute, led him to misconceive the nature of the enquiry by
failing to address the questions raised for
determination, namely
whether the dismissal of the first respondent was fair for a first
transgression of: (a) insolence where
she was provoked into such
conduct by the employer, (b) poor work performance where no
evaluation procedure was followed and no
progressive disciplinary
measures were taken; and (c) refusing to carry out instructions,
which reason the employer did not rely
upon at the time of dismissing
the first respondent? The failure of the Commissioner to properly
apply his mind to the Code of
Good Practice, and additionally to the
material fact that the first transgressions of insolence and poor
work performance are not
dismissible offences, reflect not only on
the Commissioner‟s failure to address the questions raised for
determination, but
also that he made a decision which no reasonable
decision-maker could have made, principally because he wholly
misconstrued the
nature of the enquiry before him and his duties in
connection therewith. But for these material irregularities in the
award, the
Commissioner would have arrived at a different result. It
cannot, therefore, be said that the first respondent was given a fair

hearing or that the Commissioner's decision was one that a reasonable
arbitrator could have reached on the full conspectus of the
evidence
before him. In the circumstances, I consider that the Labour Court
was correct in concluding that the first respondent‟s
dismissal
by the appellant on the grounds of insolence, poor work performance,
and failure to carry out instructions was substantively
unfair.
Substitution
and quantum of the compensation
[57] Having found
that the dismissal of the first respondent to be substantively
unfair, the Labour Court substituted the Commissioner‟s
finding
with a finding that the first respondent's dismissal was
substantively unfair and that she be awarded compensation in the
sum
of 10 months' remuneration in the form of her salary prior to
dismissal. The Labour Court‟s reason for not remitting
the
matter to the CCMA for a rehearing is this:
“
At the
hearing of the matter, both representatives of the parties agreed
that the facts of the matter are fairly common cause. In
addition to
comprehensive pleadings that were prepared in this matter, there is a
full record of the proceedings of the CCMA, which
included the record
of the disciplinary proceedings. In those circumstances, it is my
view that all the facts required to make
a determination by the court
have been placed before this court and the court is in as good a
position to make the decision.”
[58]
Where
all the facts required to make a determination on the disputed issues
are before a reviewing court in an unfair dismissal
or unfair labour
practice dispute such that the court “is in as good a position”
as the administrative tribunal to
make the determination, I see no
reason why a reviewing court should not decide the matter itself.
Such an approach is consistent
with the powers of the Labour Court
under s 158 of the LRA, which are primarily directed at remedying a
wrong, and providing the
effective and speedy resolution of disputes.
The need for bringing a speedy finality to a labour dispute is thus
an important consideration
in the determination, by a court of
review, of whether to remit the matter to the CCMA for
reconsideration, or substitute its own
decision for that of the
commissioner.
33
Thus, where the issues are largely common cause, the pleadings
comprehensive, the full record of both the disciplinary and
arbitration
proceedings are before the court, and there has been a
elapse of almost 20 months from the date of dismissal to the date of
finalisation
of the review application, such as in this case, the
consideration of bringing the dispute to a speedy finality would
certainly
have a bearing on the decision of the reviewing court to
decide the dispute, and not remit it to the CCMA, because it is “in

as good a position” as the CCMA to do so. The Labour Court‟s
decision not to remit the dispute to the CCMA for determination
is
accordingly justifiable upon a consideration of the facts of this
case.
[59] Turning then to
the issue of compensation which was awarded by the Labour Court to
the first respondent in its substituted
finding, it is important to
bear in mind that at the arbitration hearing, the remedy which the
first respondent sought, in the
event of a finding that her dismissal
was unfair, was compensation and not reinstatement because she
believed that a continued
employment relationship would be
intolerable. In granting the first respondent compensation equivalent
to 10 months of her salary,
the Labour Court reasoned as follows:
“
The [first
respondent] has not asked for reinstatement. In light of my view that
the [the first respondent‟s] dismissal was
substantively
unfair, had the applicant sought reinstatement she would have been
entitled to her salary retrospective to the date
of her dismissal. I
also take cognisance of the fact that at the time of her dismissal,
the [first respondent] was on a 2.5 year
contract which commenced 1
March 2011. Effectively therefore, on the date of her dismissal,
there were 20 months left on her contract
of employment.”
[60]
Relying
on the decision of this Court in
Tshongweni
v Ekurhuleni Metropolitan Municipality
,
34
the
appellant contends that the Labour Court erred in finding that the
factors relevant to the determination of the quantum of compensation

included the amount that the first respondent might have been
entitled to in the breach of her fixed-term contract, and the amount

that she might have been entitled to by way of back-pay in the event
that she had elected to seek reinstatement and not merely

compensation. In
Tshongweni
,
this Court found that the applicant sought reinstatement in the guise
of damages, because what he really wanted was his salary
for the
period he was unemployed between July 2006 and February 2010,
equivalent to 43 months' salary (an amount in excess of R2
million),
being his positive interest, which would be the actual loss of his
salary for the nine months remaining on the unexpired
period of his
fixed term, as well as consequential losses in respect of the salary
he would have earned had his fixed term contract
been renewed for at
least 34 months. The problem with granting such a remedy, the Court
found, was that the LRA does not provide
for damages for unfair
dismissal, and that where reinstatement is not granted, the court is
limited to granting compensation in
a maximum amount of 12 months.
35
In relation to the award of compensation equivalent to nine months‟
salary, the Court found that the Labour Court was evidently
guided by
the fixed term contract having nine months to run at the date of
dismissal, and that in the absence of any misdirection
or error,
there is no basis for interfering with the award of compensation.
[61] Unlike in
Tshongweni
, where the dismissed employee sought reinstatement
under the guise of damages, in the current matter the first
respondent, in accordance
with the limitation in s 194 of the LRA,
sought compensation equivalent to 12 months remuneration, calculated
at her rate of remuneration
on the day of dismissal. Moreover,
although the Labour Court took into consideration that, had the first
respondent sought reinstatement
she would have been entitled to her
salary retrospective to her date of dismissal, and that on her date
of dismissal there were
20 months left on her contract of employment,
it was at all times alive to the fact that in awarding compensation
to the first
respondent, in terms of s 194 of the LRA, it was limited
to awarding compensation which is not more than the equivalent of 12
month‟s
remuneration calculated at the employee‟s rate of
remuneration on the day of dismissal. The Labour Court accordingly
awarded
the first respondent compensation equivalent to 10 months
remuneration, calculated at the rate of her remuneration on the day
of
her dismissal.
[62] The Labour
Court, in my view, cannot be faulted in its quantification of the
compensation awarded to the first respondent,
nor the principles
applied in determining same. The compensation awarded, in my view,
was an attempt to offset the financial loss
which resulted from a
wrongful act of the employer (the appellant), and was not an attempt
to punish the appellant. The Labour
Court considered the amount of
time remaining of the 30 month period, during which the first
respondent could not be removed from
her employment by the appellant,
and tempered the award by reducing the 12 month‟s compensation
to 10 months. This decision,
in my view, is in accordance with the
Labour Court‟s discretion under s 194(1) of the LRA, and is
accordingly not open to
question.
[63]
As
recently reiterated by this Court in
Kukard
v GKD Delkor (Pty) Ltd
,
36
the power of the Labour Appeal Court to interfere with the quantum of
compensation awarded by an arbitrator or the Labour Court
under s
194(1) of the LRA is circumscribed and can only be interfered with:
“
[O]n the
narrow grounds that the arbitrator exercised his or her discretion
capriciously, or upon the wrong principle, or with bias
or without
reason or that she adopted a wrong approach. In the absence of these
grounds, this Court has no power to interfere with
the quantum of
compensation awarded by the Commissioner. An appeal court will,
furthermore, not interfere merely because it would
come to a
different decision. It is therefore for the [employer] to persuade
this Court that the quantum of compensation awarded
by the
Commissioner may be impugned on one of the narrow grounds referred to
above. This it has simply failed to do.”
37
[Footnote omitted]
[64] Thus other than
the appellant‟s complaint that the Labour Court gave
consideration to the fact that if the first respondent
had sought
reinstatement, she would have been entitled to her salary
retrospective to her date of dismissal, and that on her date
of
dismissal there were 20 months left on her contract of employment,
which as demonstrated above are valid considerations in the
context
of awarding compensation to an employee who has been unfairly
dismissed, the appellant has simply failed to persuade this
Court
that the Labour Court‟s award of compensation may be impugned
on one of the circumscribed bases referred to above.
In the
circumstances, I find no basis for this Court to interfere with
compensation which the Labour Court awarded to the first
respondent.
[65] In the
premises, I find that the award was correctly reviewed and set aside
by the Labour Court. The appeal, therefore, falls
to be dismissed. I
see no reason, in law or fairness, why costs should not follow the
result.
[68]
In the result, I make the following order:
“
The appeal is
dismissed with costs.”
__________________________
F
Kathree-Setiloane AJA
Musi JA and Murphy
AJA concur in the judgment of Kathree-Setiloane AJA
APPEARANCES:
FOR
THE APPELLANT: Mr C Kahanovitz SC
Instructed by Louis
Van Zyl Attorneys
FOR
THE FIRST RESPONDENT: Mr R Stelzner SC
Instructed by
Assheton-Smith Inc
1
Herholdt v Nedbank Ltd (COSATU as amicus curiae)
[2012] 11 BLLR 1074 (SCA).
2
Sidumo and Another v Rustenburg Platinum Mines Ltd and Others
2008 (2) SA 24 (CC) at para 110.
3
The
Labour Court delivered its review judgment on 8 August 2013, and the
SCA delivered
Herholdt
on 5 September 2013.
4
Goldfields
Mining SA (Pty) Ltd (Kloof Gold Mine) v CCMA
[2014]
1 BLLR 20 (LAC).
5
Head
of Department of Education v Jonas Mohale Mofokeng and Others
,
Case No: JA 14/2014, 1 October 2014, Labour Appeal Court,
paras 30-33
6
Mofokeng
at
paras 30-33.
7
Mofokeng
at para 32.
8
Apparently,
the latter aspect of Charge A, namely that the first respondent
shouted at the warehouse manager, was not persisted
with at the
arbitration hearing because as Company Manager, the first respondent
would have been senior to the warehouse manager.
9
Commercial
Catering & Allied Workers Union of SA & Another v Wooltru
Ltd t/a Woolworths (Randburg)
(1989) 10 ILJ 311 (IC) at 314H-J.
10
Wooltru
at 314-315 A-B.
11
Wooltru
at
314-315 A-B.
12
Wooltru
at 315 D-E
13
Wooltru
at
315 E-G.
14
Mqhayi
v Van Leer SA (Pty) Ltd
1984
(5) ILJ 179 (IC) at 182A-D, citing
London
Chronicle (Indicator Newspapers) Ltd
[1959] 2 All ER 285 at 287F and 288A.
15
Wooltru
at
315 H.
16
“MD”
refers to Managing Director.
17
National
Union of Public Service & Allied Workers and Others v National
Lotteries Board
2014 (3) SA 544 (CC) at para 213, minority judgment per Dambuza AJ;
Lynx
Geosystems SA v CCMA and Others
(2010) JOL 26424 (LC).
18
Transport
and General Worker Union and Another v Interstate Bus Lines (Pty)
Ltd
(1988) 9 ILJ 877 (IC) at 880-1.
19
As per the 24 October 2011 letter.
20
John
Grogan
Dismissal,
Discrimination and Unfair Labour Practices
2
nd
edition (Juta) 2007 at 309, cited in
National
Union of Public Service & Allied Workers and Others v National
Lotteries Board
2014 (3) SA 544 (CC) at para 214, minority judgment per Dambuza AJ.
21
75 of 1977
21
;
Wasteman
Group v South African Municipal Workers Union
[2012] 8 BLLR 778 (LAC);
SACWU
obo Mokoena v Afrox Ltd (Newcastle)
[2007] JOL 19354 (NBCCI);
Enviroserv
Waste Management (Pty) Ltd v Mosime NO and Others
[2010] JOL 25671 (LC). See also
LAWSA
Vol.13 (1) Paras 203204.
23
At
para 33.
24
[2008]
3 BLLR 197 (LAC).
25
At para 32.
26
Item
9 of the Code of Good Practice: Dismissals, Schedule 8 to LRA.
27
Gostelow
v Datakor Holdings (Pty) Ltd t/a Corporate Copilith
(1993) 14 ILJ 171 (IC).
28
Item 8(2) of the Code of Good Practice: Dismissals, Schedule 8, LRA.
29
The
first respondent pertinently asked Lambrecht in cross-examination at
the arbitration hearing: “for example did you say
to me you
were not happy with the way I dealt with customers, ask me if I was
having a problem with it, or what do I think was
causing the problem
or do I require extra training, do I need assistance etc. or how can
you help me reach my potential or even
suggest the way you would
like to be dealt with or anything like that?”
30
Eskom
v Mokoena
[1997] 8 BLLR 965 (LAC);
Brodie
v CCMA
(2013) 34 ILJ 608 (LC).
31
Unilong
Freight Distributors (Pty) Ltd v Muller
[1997] 11 BLLR 1497 (SCA).
32
Section
188 of the LRA provides:
“
(1)
A dismissal that is not automatically unfair, is unfair if the
employer fails to prove−
(a)
that the reason for
dismissal
is a fair reason−
(i)
related to the employer‟s conduct or capacity; or
(ii)
based on the employer‟s
operational requirements
; and
(b)
that the
dismissal
was effected in accordance with a fair
procedure.
(2)
Any person considering whether or not the reason for
dismissal
is
a fair reason or whether
or
not the
dismissal
was effected in accordance with a fair
procedure must take into account
any
relevant
code of good
practice
issued in terms
of this Act.”
33
Sidumo
at para 98.
34
(2012)
33 ILJ 2847 (LAC) at paras 31 to 43.
35
Tshongweni
at
para 40.
36
Ruan
Kukard v GKD Delkor (Pty) Ltd
,
Case No: JA52/2013, LAC, 7 October 2014.
37
At
para 37.