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[2015] ZALAC 121
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Massdiscounters v Kondiah and Others (DA6/2012) [2015] ZALAC 121 (13 February 2015)
REPUBLIC OF SOUTH AFRICA
THE LABOUR APPEAL COURT OF SOUTH
AFRICA, DURBAN
Case no: DA6/2012
In
the matter between:
MASSDISCOUNTERS
T/A GAME
Appellant
and
COMMISSIONER
FOR CONCILIATION, MEDIATION
AND
ARBITRATION
First Respondent
COMMISSIONER
JABULANI NGWANE N.O.
Second Respondent
DARRYL
KONDIAH
Third Respondent
Heard:
19 September 2013
Delivered:
13 February 2015
Summary:
Review of arbitration award- Employee dismissed for fraudulent
misrepresentation- Commissioner finding that employee subjected
to
double jeopardy and that sanction too harsh- Labour Court upholding
commissioner award. Appeal-review test restated- commissioner
failing
to consider gravity of misconduct; failing to apply his mind to
evidence; arriving at unreasonable outcome- Commissioner
committing
gross irregularity that vitiates his award. Award failing the review
test. Appeal upheld- employee’s dismissal
upheld.
Coram:
Tlaletsi
DJP, Dlodlo
et
Mokgoatlheng AJJA
JUDGMENT
MOKGOATLHENG AJA
Introduction
[1] This is an appeal against the
judgment of the
court a quo
(Pather AJ) in terms whereof she
upheld the arbitration award issued by the second respondent pursuant
to which the latter held
that:
(i) the dismissal of the third
respondent was substantively unfair;
(ii) the third respondent be
reinstated retrospectively from the date of his dismissal; and
(iii) the appellant must pay the third
respondent three months’ salary amounting to R10 500.00.
The
Factual Matrix
[2] The appellant is a national
retailer which conducts trade in electronic, visual and sound
equipment. The appellant employed
the third respondent on 29 October
2005 as a warranty consultant at its store at the Getaway Shopping
Centre in Durban. The third
respondent’s duties encompassed
amongst others the selling of extended warranties to purchasers of
Sony Home Theatre Systems.
[3] Prior to May 2006 there was a
nationwide practice by warranty consultants who misrepresented to
customers who purchased a single
Sony Home Theatre System unit, that
a Sony DVD System Player and/or a Sony Digital Amplifier were
constituent components thereof.
Pursuant to this misrepresentation
warranty consultants sold two extended warranties instead of one in
respect of the sale of a
single Sony Home Theatre System unit to
customers who purchased same.
[4] It is common cause that the sale
of two warranties in respect of a single Sony Home Theatre System
unit was not in accordance
with the Extended Price List which
entitled warranty consultants who executed a sale of single Sony Home
Theatre System unit to
be paid a single sale pursuant to such sale.
However, the warranty consultants who sold a single Sony Home Theatre
System unit
by such misrepresentation earned double the commission
they were entitled to.
[5] When the appellant discovered this
wide spread irregular practice it conducted a national forensic
inquiry and instructed its
store managers to remedy same. There was
however, no uniform policy adopted by the appellant’s store
managers in dealing
with recalcitrant warranty consultants guilty of
perpetrating this irregular practice.
[6] In May 2006 the third respondent
was confronted by his manager Prithiral with regard to whether he
also sold two extended warranties
in respect of the sale of a single
Sony Home Theatre System unit contrary to the dictates of the
Extended Price List which depicted
the Sony Home Theatre System as a
single unit. The third respondent admitted his guilt in this regard.
Prithiral advised him to
stop this irregular practice as same
constituted misconduct.
[7] In July 2006 after the conclusion
the national forensic investigation into the irregular sale of
extended warranties the third
respondent was charged with:
“
dishonesty in that he manipulated the Extended Warranty
Price List on four occasions by splitting the Sony Home Theatre
System into
components and selling two warranties instead of one for
(his) own financial gain.”
[8] The third respondent admitted
selling two extended warranties contrary to the Extended Warranty
Price List in respect of the
sale of a single Sony Home Theatre
System unit but contended that he did so due to a lack of training.
This defence was rejected
the third respondent was found guilty and
was dismissed.
The Arbitration
[9] The third respondent referred the
dispute to conciliation. After the unsuccessful conciliation, the
dispute was referred to
arbitration. At the arbitration the third
respondent conceded that he had not correctly applied the Warranty
Price List. The third
respondent also conceded that the irregular
conduct of selling two extended warranties in respect of the sale of
a single Sonny
Home Theatre System unit had benefitted him as he had
earned double commission he was entitled to contrary to.
[10] The second respondent found that
the third respondent had clearly committed a reprehensible act taking
into account that he
was an experienced warranty consultant. The
second respondent, however, concluded that the dismissal of the third
respondent was
not an appropriate sanction, consequently, he held
that his dismissal by the appellant was substantively unfair.
[11] The second respondent found that
despite the third respondent having been given the sanction of a
warning by his manager Prithiral,
two and a half months subsequent
thereto the appellant preferred charges of dishonesty against the
third respondent which resulted
in his dismissal. According to the
second respondent the appellant’s conduct in preferring charges
of dishonesty against
the third respondent, after receiving warning
from his manager Prithiral for the same misconduct, amounted to
the third respondent
being subjected to double jeopardy,
consequently, the second respondent held that the third respondent’s
dismissal was irregular.
The Review
[12] The
court a quo
upheld the
arbitration award. In dealing with the question of double jeopardy
the
court-a-quo
held that:
‘
While
I do not agree with the commissioner’s conclusion that the
subsequent disciplinary action against the employee amounted
to
double jeopardy, it cannot be said that the commissioner failed to
consider all the evidence before him, having due regard to
the
applicable legal principles…
It
seems to me that having found that the employee had committed the
misconduct, which in the words of the commissioner was ‘a
reprehensible act’, in deciding whether the dismissal in all
the circumstances was fair, he took issue with the sanction.
Perhaps
he concluded that dismissal in all the circumstances was harsh? The
limited back-pay awarded to the employee indicates
that the
commissioner had fully applied his mind to the issue of an
appropriate sanction for the misconduct. Therefore, although
he
eventually reached what in my view is a wrong conclusion in respect
of the double jeopardy principle, there is no doubt that
his decision
is reasonable and justifiable based on the evidence that was
presented before him.’
[13] The appellant’s counsel
correctly argued that it was erroneous for the second respondent to
have concluded that the third
respondent had been subjected to double
jeopardy because he had merely been warned by his manager Prithiral
to cease the irregular
practise that no disciplinary was held
preceding such warning.
[14] In reaching the above conclusion
the second respondent clearly did not properly apply his mind to the
evidence before him,
consequently, he committed an irregularity by
concluding that the third respondent had been subjected to double
jeopardy. It is
common cause that the appellant did not convene two
different disciplinary enquiries which subjected the third respondent
to the
same offence. See
BMW SA (Pty) ltd v Van der Walt
(2000) 21 ILJ 113 (LAC) and
Branford v Metro Rail Services
(Durban) and Others
(2003) 24 ILJ 2269 (LAC).
[15] Having regard to the second
respondent’s irregularity, it is patent that the
court-a-quo
misdirected itself in holding that it cannot be said that the second
respondent failed to consider the totality of the evidence
before him
despite having found that the third respondent was subjected to
double jeopardy. Because the second respondent did not
even consider
the gravity of the third respondent’s transgression on the fact
that dishonesty is a dismissible offence, his
erroneous finding that
the third respondent was subjected to double jeopardy is the
raison
d’être
predicating his conclusion that the third
respondent’s dismissal was substantively unfair.
[16] The conclusion by the
court a
quo
that irrespective of the second respondent having reached a
wrong conclusion regarding the issue of double jeopardy, his decision
was nonetheless reasonable is a misdirection because the learned
Judge failed to take into consideration that the second respondent
erroneously based his finding that the dismissal of the third
respondent was not an appropriate sanction on the premise that the
third respondent was subjected to double jeopardy.
[17] Because the second respondent
conclusion that the third respondent was subjected to double jeopardy
underpinned his decision
that his dismissal was an inappropriate
sanction, it cannot be said that the second respondent’s award
was a reasonable award
a reasonable arbitrator could have made having
regard to the evidential material before him, consequently, his award
is flawed.
[18] The third respondent’s
counsel argued that although the appellant’s contention was
that the sale of two warranties
in respect of the sale of a single
Sony Home Theatre System unit constituted the misconduct of
dishonesty which is a dismissable
offence, the second respondent had
correctly found that the dismissal of the third respondent was not
the appropriate sanction
having regard to the circumstances of this
case. I demur.
[19] Regarding the seriousness of the
offence, the conduct of the third respondent in fraudulently
manipulating the Extended Warranty
List, the bar codes and selling
two extended warranties instead of one in respect of the sale of a
single Sony Home Theatre System
unit, the misrepresentation that a
Sony DVD System Player and a Sony Digital Amplifier were components
of a Sony Home Theatre System,
and the fact that this fraudulent
misconduct unlawfully benefit the third respondent to the prejudice
of the appellant, were exigencies
and factors not appreciated either
by the second respondent or the
court-a-quo
. See
Toyota SA
Motors (Pty) Ltd v Radebe and Others
(2000) 21 ILJ 304 (LAC),
Woolworths (Pty) Ltd v CCMA and Others
[2011] 10 BLLR 963
(LAC).
[20]
This court revisited the question of dishonesty in the judgment of
Miyambo
v CCMA and Others
[1]
wherein Patel JA reiterated the fact that acts of dishonesty
described as petty pilfering were simply not acceptable. The Learned
judge rejected the distinction between theft and petty pilfering and
upheld the dismissal of the employee as a valid operational
prerogative of an employer.
[21]
The question is whether the award the second respondent made is a
reasonable award in accordance with the test enunciated in
Herholdt
v Nedbank Ltd
[2]
.
In my view it cannot be for two reasons. Firstly, the second
respondent committed a gross irregularity in his assessment that
the
third respondent was subjected to double jeopardy, this conclusion is
the lynch pin of the reasoning predicating the award.
Secondly, there
was a complete lack of appreciation of the complex
modus
operandi
of the dishonesty perpetrated by the third respondent in this
particular case, and the fact tha the seriousness of the dishonesty
merited to be visited with summary dismissal.
[22]
In
Herholdt
Nedbank Ltd,
[3]
Wallis JA regarding the review of CCMA awards stated:
‘
In
summary, the position regarding the review of CCMA awards is this: A
review of a CCMA award is permissible if the defect in the
proceedings falls within one of the grounds in s 145(2)(a) of the
LRA. For a defect in the conduct of the proceedings to amount
to a
gross irregularity as contemplated by s145(2)(a)(ii), the arbitrator
must have misconceived the nature of the inquiry or arrived
at an
unreasonable result. A result will only be unreasonable if it is one
that a reasonable arbitrator could not reach on all
the weight and
relevance to be attached to particular facts, are not in and of
themselves sufficient for an award to be set aside,
but are only of
any consequence if their effect is to render the outcome
unreasonable.’
[23] In other words
the approach is to consider whether a material irregularity has
occurred. If it did, the second part of the
inquiry is, whether the
outcome is unreasonable. This approach has been followed by Waglay JP
in a recent judgment in the
Goldfields
Mining South Africa (Pty) Ltd (Kloof Gold Mine) v The Commission
Conciliation Mediation and Arbitration
[4]
wherein at
paragraph 14 the Learned Judge President states:
‘
Sidumo
does not postulate a test that require a simple evaluation of the
evidence presented to the arbitrator and based on that
evaluation a
determination of the reasonableness of the decision arrived at. The
Court in Sidumo was at pains to state that arbitration
awards made
under the Labour Relation Act continue to be determined under Section
145 of the LRA, but that the Constitution standard
of reasonableness
is” suffused” in the application for review sought on the
grounds of misconduct, gross irregularity
in the conduct of the
arbitration proceedings and/or excess powers, will not lead
automatically to the setting aside of the award
if any of the above
grounds are found to be present. In other words in a case such as
present where a gross irregularity in the
proceedings is alleged, the
inquiry is not confined to whether the arbitrator misconceived the
nature of the proceedings, but extends
to whether the result was
reasonable, or put another way, whether the decision that the
arbitrator arrived at is one that falls
in the band of decisions to
which a reasonableness decision-maker could come on the available
material.’
[5]
[24]
The Learned Judge President has elaborated further on what Wallis JA
held in
Herholdt
(supra) and states at paragraph 16:
‘
In
short, a review Court must ascertain whether the arbitrator
considered the principal issue before him/her, evaluated the facts
presented at the hearing and came to a conclusion that is reasonable’
[25]
In distancing himself with a piecemeal approach to review, the
learned Judge President says at paragraph 20 of the judgment
states
that:
‘
the
award is open to be set aside where an arbitrator, fails to mention a
material fact in his or her award: or, fails to deal in
his award in
some way with the issue which has some material bearing on the issue
in dispute and/or commits an error in respect
of the evaluation and
consideration of facts presented at the arbitration…
and
at paragraph 21:
‘
Where
the arbitrator fails to have regard to material facts, it is likely
that he or she will fail to arrive at a reasonable decision.
Where
the arbitrator fails to follow proper process, he or she may produce
an unreasonable outcome.’
[26] In the award the second
respondent in respect of the sanction clearly failed to take into
account the dishonesty which was
patent in the manipulation of the
Extended Price List, and the barcodes, that the conduct was
deliberate and fraudulent and was
perpetrated for the benefit of the
third respondent to the prejudice of the appellant. Although each
fraudulent manipulation of
the sale of a single Sony Home Theatre
System unit did not amount to a considerable payment of the
commission fraudulently earned,
that is neither here nor there
because it is the cumulative context in relation to which the
perpetration of the fraudulent dishonesty
is decisive when coupled
with the fact that the appellant regarded the conduct of the third
respondent as a gross violation of
the employment and trust
relationship.
[27]
Consequently, in accordance with the
Sidumo
and Another v Rustenburg Platinum Mines (Pty) Ltd and Others
[6]
test,
on the totality of the facts before the second respondent the
decision he reached is not a reasonable decision and is consequently
susceptible to be set aside as enunciated in
Herholdt
supra and in Goldfields Mining (supra). In the present matter there
is undoubtedly a gross irregularity in the reasoning of the
second
respondent in finding that the third respondent had been subject to
double jeopardy, this gross irregularity resulted in
an award that is
unreasonable and which does not fall within the band of reasonable
decisions a reasonable arbitrator would arrive
at.
[28]
In the premises, I make the following order:
(i)
The appeal is upheld;
(ii)
The dismissal of the third respondent is fair;
(iii)
There is no order as to costs.
Mokgoatlheng AJA
The
Deputy Judge President of the Labour Appeal Court of South Africa
Tlaletsi
DJP and Dlodlo AJA concur in the judgment of Mokgoatlheng AJA
APPEARANCES:
FOR
THE APPELLANT:
Adv G Van Niekerk
SC
Instructed by
Messrs Shepstone & Wylie
FOR
THE RESPONDENT:
Adv M Pillemer SC
Instructed
by Messrs Jafta Incorporated
[1]
[2010] 10 BLLR 1017 (LAC).
[2]
[2012] 33ILJ 1789 (LAC).
[3]
[2013] 11 BBLR 1074 (SCA) at para 25.
[4]
[2014] 35 ILJ 943
(LAC).
[5]
At para 14.
[6]
2008 (2) SA 24
(CC); (2007) 28 ILJ 2405 (CC).