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[2015] ZALAC 66
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Unilever SA (Pty) Ltd v Mbekwa N.O (DA 15/2012) [2015] ZALAC 66 (13 February 2015)
REPUBLIC OF SOUTH AFRICA
THE LABOUR APPEAL COURT OF SOUTH
AFRICA, JOHANNESBURG
Case no: DA 15/2012
In
the matter between:
UNILEVER
AFRICA (PTY)
LTD Appellant
and
N
P MBEKWA,
N.O First
Respondent
FAIZEL
MOOI, N.O
Second
Respondent
COMMISSIONER
FOR CONCILIATION,
MEDIATION
AND ARBITRATION
Third
Respondent
BONGA
KWITSHANA Fourth
Respondent
Heard:
14 November 2013
Delivered:
13 February 2015
Summary: Review of arbitration
award – employee charged and dismissed for breaching company
vehicle policy- arbitrator reinstating
employee- Labour Court finding
that arbitrator not applying his mind to material evidence and that
employee guilty of misconduct
– Labour Court however finding
that dismissal unfair because no evidence from line manager that
employment relationship broken
down. Appeal – evidence showing
employee guilty of misconduct and that trust relationship broken down
– employee in
a senior management position owing a duty of
trust – breaching that fiduciary duty compromising the trust
employment relationship.
Dismissal appropriate sanction –
Labour Court and arbitration award set aside- Appeal upheld.
JUDGMENT
MOKGOATLHENG AJA
Introduction
[1] This is an appeal against the
judgment of the
court a quo
(Cele J) in terms whereof the
appellant’s review application to set aside the second
respondent’s award was dismissed.
The
court a quo
held
that although the fourth respondent was guilty of the infraction with
which he was charged, his dismissal was substantively
unfair.
Consequently, the
court a quo
ordered the reinstatement of the
fourth respondent. The appeal is by leave of the
court a quo.
Factual
Matrix
[2] The fourth respondent was employed
by the appellant as a senior divisional sales manager earning a
salary of R500 000 per
annum. Four regional sales managers and
15 sales representatives reported to the fourth respondent. In
addition to his salary,
pursuant to his employment contract, the
fourth respondent received a monthly motor vehicle allowance in the
amount of R10 000.00
which he used to fund the purchase and
maintenance of his company vehicle.
[3] In terms of the appellant’s
vehicle policy, the fourth respondent was furnished with a company
credit card which he utilised
for fuel and his company vehicle
expenses. The appellant’s vehicle policy regulated the use of
pool and hired vehicles in
two circumstances: firstly, being in the
case of a manager awaiting delivery of a new vehicle and secondly
being in the case of
business travel.
[4] In terms of clause 8.13 of the
appellant’s vehicle policy, the company was not required to
provide a substitute vehicle
in the event of the temporary
unavailability for whatever reason of a manager’s normal
vehicle. In the case of business travel,
the appellant’s
vehicle policy provided:
‘
Operational
Managers
(a)
clause
8.13(a) of the vehicle policy provides:
Managers
who are newly promoted or engaged into a position that has been
classified as operational sales and are awaiting delivery
of a new
vehicle, may have the use of a pool car until such time as the
Manager has taken delivery of his/her car;
Business
Travel
(b)
clause
8.13(b)
provides:
where
a Manager is temporarily without transport and is required to travel
on company business, it is acceptable for the company
to provide an
alternate mode of transport for these business trips. This is in line
with company policy as applicable to other
members of staff who may
be required to travel on company business; and
(c)
clause
8.13(1)(b) provided: “outside of the above exceptions,
employees are expected to make their own plans, at their own
expense
for substitute vehicles, and the company will not provide pool cars
and the like.’
[5] On or about 17 July 2009, the
appellant received an anonymous tip off to the effect that the fourth
respondent was making unauthorized
use of pool vehicles. The whistle
blower stated
inter alia
that the fourth respondent “
leaves
his own vehicle at home and then drives the company vehicle on a
daily basis, even over weekends.
”
[6] On 7 October 2009, the fourth
respondent was charged with: “
gross misconduct in that he
wrongfully utilized company pool vehicles without authority
.”
On 21 October 2009, and pursuant to a disciplinary enquiry, the
fourth respondent was dismissed. The fourth respondent
noted an
appeal against his dismissal. On 27 October 2009, the appeal was
dismissed. On 13 November 2009, the fourth respondent
referred the
dismissal dispute to the CCMA for conciliation contending that the
appellant’s sanction in dismissing him from
his employment was
unreasonably severe. The conciliation was unsuccessful and the
dispute was referred to arbitration.
[7] On 3 June 2011, the second
respondent in his award held that the dismissal of the fourth
respondent was substantively unfair
and retrospectively reinstated
him. The second respondent amongst others held: “
Firstly,
the crux of the appellant’s case was that the fourth respondent
did not have permission to utilize the appellant’s
pool
vehicles. The appellant could not substantiate this contention with
any documentation demonstrating a rule to this effect.
Secondly, the respondent contended
that the use of the pool vehicle was unauthorised and unlawful as the
fourth respondent had used
it for 115 days. This cannot be the test
for unlawfulness as Jardine the appellant’s Human Resources
Manager conceded that
if the fourth respondent’s vehicle was
damaged for a day or two he would not require permission to utilise a
policy vehicle.
The fourth respondent’s contention that his
vehicle was damaged and was taken in for repairs a number of times
was not refuted.
Thirdly, the appellant contended
that the fourth respondent required the permission of his line
manager to use the pool vehicle
if he was going to require it for
more than a day or two. No proof of this by the leading of the line
manager’s evidence
was tendered nor was any documentation
proving any such rule was tendered. The applicant’s defence
that as a manager he did
not need to request permission of his line
manager to use the pool vehicle for business purposes is therefore
probable.”
[8] The court
a quo,
after
analysing and evaluating the evidence in the review, correctly found
that the second respondent had misdirected himself in
his assessment
of the evidence tendered by Jardine on behalf of the appellant. The
court
a quo
correctly found that the fourth respondent was
obviously guilty of the infraction with which he was charged. Further
the court
a quo
found that the “
applicant was able to
show that it was very probable that the fourth respondent used the
appellant’s pool cars during the
period of 88 days, that is
between 16 March 2009 to 15 July 2009, while he was simultaneously
using his subsidised motor vehicle
that this was clearly prohibited
by
clause 8.13(1)(b)
of the appellant’s motor vehicle
policy…”
Further the learned judge found that for
the period 12 August to 31 August 2009, that is 20 days, the fourth
respondent qualified
to use the appellant’s pool vehicles
provided he could show that his company vehicle was out of
commission.
[9] The learned judge correctly found
that the fourth respondent bore the
onus
to show his
entitlement to use the appellant’s pool vehicles during the
remainder of the period but held that he had failed
to discharge the
onus
he bore because his evidence lacked details of when
exactly his company vehicle was in and out of garages for repairs.
[10] Further the court
a quo
correctly held: “
that the fourth respondent did not produce
any records of such repairs. It remained doubtful whether he resorted
to pool cars due
to the unavailability of his vehicle. This is more
so as in the preceding period he used pool cars while his car was up
and running.
The fourth respondent’s version ought not
therefore to have been accepted as probable. It follows that his use
of the pool
cars during this period was unauthorised...The fourth
respondents unauthorised use of pool cars encompasses a period of 108
days.
”
[11] On 8 July 2011, the appellant
launched an application to review and set aside the second
respondent’s award. The court
a quo
dismissed the review
application and upheld the second respondent’s award that the
dismissal of the fourth respondent was
substantively unfair. The
court
a quo
retrospectively reinstated the fourth respondent
with effect from 21 October 2011.
[12] With due respect, there are
several striking anomalies in the judgment of the court
a quo
which renders its reasoning and conclusions unsustainable. The
learned judge correctly found that the second respondent’s
award was flawed in that he had not properly applied his mind to the
evidence before him, but the court
a quo,
despite this
conclusion, failed to review and set aside the second respondent’s
award. The learned judge, nevertheless, in
his order, amended the
second respondent’s award which ordered that the fourth
respondent’s reinstatement should be
with effect from 1 January
2011, by ordering that the reinstatement should be with effect from
21 October 2011.
[13] After having found that the
second respondent had committed a gross irregularity in the
assessment of the evidential material
before him because the evidence
clearly demonstrated the guilt of the fourth respondent of having
without lawful authority utilised
the appellant’s pool vehicles
for a period of 108 days, the learned judge misdirected himself by
dismissing the application
to review and set aside “
the
second respondent ‘s award wherein he found that ‘the
appellant had not proved on a balance of probabilities that
the
fourth respondent had acted wrongfully or unlawfully in using the
company pool car, that consequently, that the fourth
respondent’s dismissal was substantively unfair.”
[14] Paradoxically the learned judge
although he upheld the second respondent’s award, he
pertinently held in the review application
that the fourth respondent
was guilty of the infraction he was charged with. This finding in
essence contradicts the learned judge’s
upholding of the second
respondent’s award.
[15] Notwithstanding the learned
judge’s express finding that the fourth respondent was guilty
as charged, he found that in
the absence of evidence from the fourth
respondent’s line manager that the trust relationship had
broken down, reinstatement
of the fourth respondent was warranted. In
my view, the learned judge’s premise that the appellant’s
failure to call
the fourth respondent’s immediate line manager
to testify on this aspect was decisive is an erroneous misdirection.
[16] In my view, the learned judge
incorrectly held that because Jardine as the appellant’s Human
Resources Manager did not
work directly with the fourth respondent,
he was incompetent to testify regarding the breakdown of the trust
and employment relationship,
because “
Jardine’s bold
but unsubstantiated statement made in this regard carried little
evidential value when seen against the fact
that the fourth
respondent was remorseful for his misdeed.”
[17] The learned judge reasoned that
although the fourth respondent committed gross misconduct over a
period of 108 days which could
lead to dismissal depending on the
circumstances of each case, in the absence of satisfactory evidence
in this regard, reinstatement
as a sanction as already alluded to by
the second respondent appears to be fair in the circumstances. I
demur.
[18] There is no lawful obligation on
an employer to lead only the subjective evidence of a line manager to
show that there has
been a breakdown in the trust and employment
relationship which justifies the dismissal of an employee.
[19] Jardine is the appellant’s
Human Resources Manager and was the appellant’s witness at the
arbitration proceedings
Jardine testified that as the appellant’s
Human Resources Manager, he was apprised of and
au fait
with
the appellant’s human resources development and employment
policies. I agree with the appellant’s counsel that
because
Jardine was not the fourth respondent’s immediate manager he is
not disqualified from expressing a view about the
appellant’s
trust and employment policy regarding what the appellant regards as
dismissible offences leading to the breakdown
of the trust and
employment relationship.
[20] In my view, the court
a quo
adopted a superficial fundamental flawed approach with regard to
whether the fourth respondent was remorseful and also regarding
the
appropriate sanction having regard to the gravity of the misconduct.
The fourth respondent was a senior divisional manager
in charge of
four sales managers and 15 sales representatives who also required
the use of pool vehicles under his management.
[21] The fourth respondent grossly
breached the appellant’s vehicle policy over a period of 108
days. The fourth respondent’s
conduct involved a serious and
sustained breach of trust amounting to misappropriation of the
appellant’s resources for his
personal gain. The fourth
respondent was a senior divisional manager in a position of trust.
The fourth respondent’s misconduct
was severely gross and
involved dishonesty and fraud.
[22] The fourth respondent’s
conduct was so manifestly dishonest and his lack of remorse or
appreciation for his wrongdoing
so egregious, that the appellant’s
decision of dismiss him was fully justified. The fact that the fourth
respondent abused
his fiduciary position of authority and trust to
remove and utilise the appellant’s pool vehicles at his will
goes to the
heart of the trust and employment relationship which an
employer is entitled to demand or expect from a senior manager.
[23] The fourth respondent’s
misconduct amounts to dishonesty calculated to destroy the trust and
employment relationship.
When an employee neither acknowledges
his/her wrongdoing nor does “
come clean
” with the
full facts of the misconduct, the continuance of the trust and
employment relationship is rendered impossible.
In his case, the
fourth respondent at his disciplinary enquiry pleaded guilty. In the
arbitration proceedings, the fourth respondent
recanted his plea of
guilty which he tendered in the disciplinary enquiry, and he also
recanted the statement he made in his plea
in mitigation that he
should not be dismissed by denying any wrongdoing in the arbitration
proceedings.
[24] In the arbitration proceedings,
the fourth respondent did not show remorse for breaching clause
8.13(1)(b) of the appellant’s
vehicle policy, but he
incongruously stated that he did not knowingly breach the appellant’s
vehicle policy. He also denied
that he required permission from his
line manager before using the pool vehicles, but this denial
contradicted his concession after
pleading guilty when reading his
statement in mitigation in the disciplinary enquiry that he did
require his line manager’s
permission to utilise the
appellant’s pool vehicle.
[25] In this
matter, it cannot be argued that the fourth respondent misconduct was
a “
once
off
”
event
which was unlikely to recur. The test remains whether the effect of
the fourth respondent’s misconduct was such as to
undermine or
seriously damage the trust and employment relationship. The following
dictum
from the judgment
of this Court in
De
Beers Consolidated Mines Ltd v Commission for Conciliation, Mediation
& Arbitration and Others
[1]
is apposite in this
regard:“
It
would in my view be very difficult for an employer to re-employ and
employee who has shown no remorse [for dishonest conduct].
Acknowledgment of wrong doing is the first step towards
rehabilitation. In the absence of a recommitment to the employer’s
workplace values, an employee cannot hope to re-establish the trust
which he himself has broken. Where, as in this case, an employee,
over and above having committed an act of dishonesty, falsely denies
having done so, an employer would, particularly where a high
degree
of trust is reposed in an employee, be legitimately entitled to say
to itself that the risk of continuing to employ the
offender is
unacceptable great.”
[26] Although this Court acknowledges
that not every dishonest act by an employee necessarily justifies
dismissal, the ultimate
test for the fairness of a dismissal for a
dishonest act is whether the employer can reasonably be expected to
continue to trust
the employee concerned (see
Anglo American Farms
t/a Boschendal Restaurant v Komjwayo
(1992) 13 ILJ 573 (LAC) at
589-90). The same consideration is sometimes phrased as follows:
whether the continuation of the employment
relationship would be
intolerable for the employer. See
Pitcher and another assisted by
the Cape Omnibus & Salaried Staff Union v Golden Arrow Bus
Services (Pty) Ltd
(1995) 16 ILJ 1201 (ICO).
[27] The position regarding the trust
and employment relationship has been admirably summarised by Grogan
AJ in
Carter v Value Truck Rental (Pty) Ltd
‘
It
is trite that, both at common law and under the equitable
dispensation created by the LRA, the employment relationship is
regarded
as one of the highest good faith: Council for Scientific &
Industrial Research v Fijen
(1996)
17 ILJ 18 (A) at 26B-F;
Standard
Bank of SA Ltd v Commission for Conciliation, Mediation &
Arbitration & Others
(1998)
19 ILJ 903 (LC) at 913E
-H;
Sappi Novoboard (Pty) Ltd v Bolleurs
(1998)
19 ILJ 784 (LAC) at para
7
and the copious authorities there cited. The success of any
enterprise depends on the absolute integrity and honesty of its
employees,
and any form of dishonesty or deception potentially may
have more serious and far-reaching consequences at executive level:
see,
for example, JD Group Ltd v De Beer
(1996)
17 ILJ 1103 (LAC) at 1112-13. ‘
Honesty’
in the employment context does not merely mean refraining from
criminal acts; it embraces any conduct which involves
deceit. As was
observed in the Sappi Novoboard
case
at 787D: ‘
Even
if the respondent did not act dishonestly, if his conduct “was
of such a type that it was inconsistent, in a grave way
–
incompatible – with the employment in which he had been engaged
as manager’ (Sinclair v Neighbour
[1966]
3 All ER 988
at 989E-F)
the
appellant was entitled to dismiss him.’
[2]
[28] Jardine’s undisputed
evidence regarding the fourth respondent’s dismissal was that
the sanction was appropriate
having regard to the gravity of the
offence. The fourth respondent committed gross misconduct which is
premised on dishonesty and
fraud over a protracted period of 108
days. The nature of the misconduct was significant and serious enough
to warrant the fourth
respondent’s dismissal because neither
the appellant nor his line manager Mehan Naaido were aware of fourth
respondent’s
misconduct and it was discovered through a whistle
blower.
[29] The fourth respondent used a pool
vehicle for company purposes despite the fact that he was in
possession of a company motor
vehicle funded by the appellant whilst
his wife simultaneously used his company motor vehicle for her
personal purposes. The fourth
respondent as a senior manager occupied
a fiduciary position. He owed the appellant a duty to be frank and to
account for his use
of the pool vehicle.
[30] The fourth respondent’s
failure to make full disclosure of his misconduct in circumstances
where as a senior manager
he was under a fiduciary duty to do so,
constitutes aggravating circumstances which compromised the trust and
employment relationship.
[31] The misconduct the fourth
respondent is guilty of strikes at the heart of the trust and
employment relationship and ought to
be objectively evaluated with
reference to the seriousness of the misconduct. The fourth
respondent’s misconduct accordingly
justified dismissal as an
appropriate sanction.
The
Order
[32] The appeal is upheld. The order
of the court
a quo
dismissing the review application is set
aside and replaced with the following order:
(i) The arbitration award of the
second respondent dated 3 June 2011 is reviewed and set aside.
(ii) The fourth respondent’s
dismissal is fair.
(iii) There is no order as to costs.
Mokgoatlheng AJA
Tlaletsi DJP and Musi AJA concur in
the judgment of Mokgoatlheng AJA
APPEARANCES:
FOR THE APPLICANT:
Mr Watt-Pringle
Instructed by: Norton Rose South
Africa (Incorporated as Deneys Reitz Inc.) La Lucia Ridge, Durban
FOR THE FOURTH RESPONDENT:
Mr Khoza of Retail & Allied Workers Union, Pretoria
[1]
(2000) 21 ILJ 1051
(LAC) at 1059D-E.
[2]
(2005) 26 ILJ 1051
(LC) at paras 22 and 25.