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[2015] ZALAC 103
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Malesela Taihan Electric Cable (Pty) Ltd t/a M-TEC v Metal and Engineering Industries Bargaining Council and Others (JA107/13) [2015] ZALAC 103 (5 October 2015)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Not
reportable
Case no: JA107/13
In the
matter between:
MALESELA
TAIHAN ELECTRIC CABLE
(PTY)
LTD t/a M-TEC
Appellant
and
METAL
AND ENGINEERING INDUSTRIES
BARGAINING
COUNCIL
First Respondent
KHABO
MAMBA N.O
Second Respondent
M.V.N
LEBONA
Third Respondent
Heard:
10 March 2015
Delivered:
5 October 2015
Summary: Review of arbitration award – employee claiming
payment for the surplus of his pension fund accrued at his former
employment – Fund erroneously paying accumulated amount during
his current employment – employer dismissing employee
for
dishonestly claiming his pension fund – employee’s
undisputed evidence was that he was claiming the surplus of
his
pension fund accrued at his former employment – arbitrator’s
finding that dismissal substantively unfair falling
within the band
of reasonableness. Appeal dismissed.
Coram:
Waglay JP, Davis JA and Mngqibisa-Thusi AJA
JUDGMENT
MNGQIBISA-THUSI AJA
[1]
This is an appeal with leave of the Labour
Court against its judgment and order (Moshoana AJ) handed down on 19
September 2013,
upholding the award issued by Mr Khabo Mamba (the
arbitrator) on 28 June 2011, acting under the auspices of the Metal
and Engineering
Industries Bargaining Council (MEIBC or the first
respondent) .
[2]
The appellant also applies for condonation
for the late filing of the notice of appeal. There are no reasons why
condonation should
not be granted, and is so granted.
Factual background
[3]
The facts leading to this dispute are
largely common cause and are as follows. The appellant is an employer
within the metal and
engineering sector falling within the MEIBC’s
jurisdiction. The third respondent was employed by the appellant on
18 August
1997 as a laboratory technician until he was dismissed in
October 2010. Before his employment with the appellant, the third
respondent
had been employed by Metal Box, another employer within
the metal and engineering sector. When third respondent resigned from
Metal
Box in 1995; he applied for and received his pension. During
his employment with Metal Box, and whilst in the employ of the
appellant
up to 2007, the third respondent was a member of the
Engineering Industries Pension Fund (the Fund) administered by the
first respondent.
[4]
However, in April 2007, the third
respondent left the Fund and joined the DJ & A pension fund (DJ &
A). On 20 November 2009,
the third respondent applied to the Fund for
a refund of his pension contributions. Pursuant to his application
for a refund, the
Fund sent the third respondent a form titled
“Application for the payment of Benefits on Resignation,
Retrenchment or Retirement”
which he completed, signed, and
returned to the Fund. On the said form, the third respondent
indicated that he was retrenched by
Metal Box and that, at the time
of application, he was unemployed. On 26 February 2010, the Fund paid
the third respondent his
contributions, which also included
contributions (approximately 6.6% of the appellant’s monthly
contributions to the pension
fund) made by the appellant up to the
date of him joining DJ & A.
[5]
During September 2010, the third respondent
inquired from the appellant’s payroll clerk, Odile Van der
Westhuizen, about the
status of his DJ & A pension. On inquiry to
DJ & A, appellant discovered that the third respondent was
registered as a
new member in April 2007 and no transfer of his
contributions from the Fund to DJ & A was made when he joined DJ
& A. On
further inquiry, the appellant discovered that the third
respondent was paid out his pension contributions in February 2010.
It
appears that in terms of the rules of the Fund, contributions
cannot be withdrawn as long as an employee is still employed within
the metal and engineering industry.
[6]
As a result, the third respondent was
charged with: i) dishonesty – where a dishonest or fraudulent
act is committed by an
employee; and ii) breach of trust –
infringement or violation of confidence placed in an employee in a
specific position
by the employer. The charges levelled against the
third respondent were based on the ground that the third respondent
misconducted
himself in claiming his provident fund contributions
from the Fund whilst still in the employ of the appellant and that he
did
not disclose his current employment with the appellant on the
claim form. Subsequent to the charges, a disciplinary inquiry was
convened and the third respondent was found guilty on both counts and
dismissed.
Arbitration
[7]
Aggrieved by his dismissal, the third
respondent lodged an unfair dismissal dispute with the MEIBC on the
ground that his dismissal
was procedurally and substantively unfair.
The allegation of the procedural unfairness relates to the fact that
at the disciplinary
hearing, the chairperson did not allow the third
respondent to be represented by a union official who was not an
employee of the
appellant as provided for in the appellant’s
disciplinary code.
[8]
At the arbitration hearing, the appellant’s
contended that the third respondent had dishonestly withdrawn his
pension contributions
from the Fund because the rules of the Fund
prohibited employees still employed within the metal and engineering
industry from
withdrawing their pension contributions. It was further
contended by the appellant that in order to achieve his aim, the
third
respondent had misrepresented in his withdrawal application
form that he had been retrenched by Metal Box and was unemployed.
Furthermore,
it was the appellant’s contention that the third
respondent was aware of the appellant’s rules that if any
withdrawal
from a pension fund was to be made, it had to be done
through the appellant’s human resources department, which
procedure
the third respondent did not adhere to. The appellant
contended that the Fund had paid the third respondent not only what
might
have been outstanding in terms of his contributions whilst
working with metal Box, but also contributions made by the appellant
to the Fund up to April 2007 when the third respondent joined DJ &
A. The appellant lastly argued that taking into account
the position
occupied by the third respondent (which entailed verification of
tests done and on which the appellant relies in the
further processes
of its production line), the trust relationship had been broken down
because the third respondent misrepresented
information in his effort
to withdraw his pension funds.
[9]
The third respondent denied the allegation
of dishonesty. He testified that when he resigned from Metal Box, his
pension was paid
to him and that the application he lodged was for
the surplus funds remaining from his contributions whilst still
working at Metal
Box. The third respondent contended that the fault
lied with the Fund’s administrators for sending him the wrong
application
form, he having requested the form to claim surplus
funds. When asked about him giving the reason for obtaining his
contribution,
that of being retrenched by Metal Box, the third
respondent conceded that he was not retrenched by Metal Box but had
resigned.
[10]
The arbitrator found the dismissal of the
third respondent to be procedurally unfair in that he had previously
been allowed to be
represented by an official from Solidarity who was
not an employee of the appellant in a salary dispute. She then
awarded the third
respondent 12 months compensation. The arbitrator
further found the third respondent’s dismissal to be
substantively unfair.
In this regard, she stated that:
‘
It
is also established law that Fraud consists in unlawfully making with
intent to defraud, a misrepresentation, which causes actual
prejudice
or which is potentially prejudicial; to another. One of the essential
elements of Fraud is that the employee must intend,
when making the
misrepresentation, to cause the employer some loss. This means
that the employee must know, at the time of
making the
misrepresentation, that they are making a misrepresentation and that
such misrepresentation will cause loss or has potential
to cause
loss. The mental element is essential. It is follows therefore that
in the absence of intent, where for example, the misrepresentation
is
made under a mistaken belief with no intention to defraud, there can
be no Fraud.
[1]
”
…
I
am of the view that the error in completing and submitting the form,
in the absence of any contrary evidence, cannot be visited
upon the
Applicant alone. There was no evidence before me showing that
the applicant ought to have known which form to complete.
I
cannot simply assume this. The onus is not on the applicant to
prove that he did not know, the onus is on the Respondent
to prove
that on the balance of probability he knew or ought to have known and
I am of the firm view that the Respondent has failed
to discharge
this onus’
[2]
.
Labour
Court
[11]
The appellant launched review proceedings
in the court
a quo
in terms of section 145 of the Labour Relations Act
[3]
(LRA) for the review and setting aside of the arbitrator’s
award on the grounds that the arbitrator had exceeded her powers
in
her duties as arbitrator and that the award is unreasonable.
[12]
The court
a
quo
dismissed the review application
and concluded that:
‘
[4]
In matters of this nature, the court, hearing an application for a
review, sit (
sic
)
as a court of review and not of appeal. By so saying, I mean to
say that even if the court may not like the decision arrived
at by
the commissioner, the test is whether that decision falls within the
bounds of reasonableness. The commissioner in this matter
sought to
decide the matter based on the state of mind of the third respondent
at the time. She stated certain factor (
sic
)
that she took into account to establish the state of mind of the
third respondent at the time. In particular, she took into
account the UIF forms and the inquiries that were lodged by the third
respondent to the applicant.
…
[6] Under the circumstances, it
is not appropriate for a court of review to interfere with an award
that is well-reasoned, even
if the court might have come to a
different conclusion. As I have pointed out, the test is if an
award falls within the bounds
of reasonableness then the court’s
hands are tied.’
[13]
The court
a
quo
further upheld the arbitrator’s
decision that the third respondent’s dismissal was procedurally
unfair.
[14]
The appellant contends before this Court
that the court
a quo
erred:
14.1 in finding that the arbitration award was reasonable;
14.2 in not finding that the arbitrator failed to apply her mind to
the issue to be determined by failing to take into account
relevant
facts and miscategorising the offence with which the third respondent
was charged with as fraud; and
14.3
in upholding the arbitrator’s
conclusion that the third respondent’s dismissal was
procedurally unfair.
[15]
In determining whether
an
arbitration award is reviewable, one is
guided by
the test enunciated in
Sidumo and Another v Rustenburg
Platinum Mines Ltd and Others (Sidumo).
[4]
The question to be asked is whether the arbitrator’s decision
is one that a reasonable decision-maker could reach on the
available
material. Endorsing
Sidumo,
this Court in
Gold
Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v CCMA and Others,
[5]
held that:
‘
[14]
Sidumo
does not postulate a test that requires 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 by the
arbitrator. The court in
Sidumo
was at pains to state that arbitration awards made under the Labour
Relations Act
[6]
(LRA) continue to be determined in terms of s145 of the LRA but that
the constitutional standard of reasonableness is “suffused”
in the application of s145 of the LRA. This implies that an
application for review sought on the grounds of misconduct,
[7]
gross irregularity in the conduct of the arbitration proceedings,
[8]
and/or excess of powers
[9]
will not lead automatically to a setting aside of the award if any of
the above grounds are found to be present. In other
words, in a
case such as the 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 unreasonable, or put another
way, whether the
decision that the arbitrator arrived at is one that falls within a
band of decisions to which a reasonable decision-maker
could come on
the available material’
[10]
[16]
With regard to procedural fairness, I am of
the view that the decision of the arbitrator is reviewable and ought
to be set aside
for the following reasons. The third respondent was
aware that at the disciplinary hearing, he could only be represented
by .a
shop steward or a fellow employee employed by the appellant.
His contention that an official from Solidarity previously
represented
him cannot be sustained because that representation was
not related to a disciplinary hearing but to a salary negotiation
where
Solidarity as a trade union could negotiate at the appellant on
behalf of employees. Moreover, the appellant’s disciplinary
code only allows for an employee to be represented by someone working
with the appellant. It follows that the chairperson committed
no
procedural irregularity in disallowing the third respondent’s
request which was in clear violation of the disciplinary
code.
[17]
Concerning, the substantive fairness of the
dismissal, the appellant contended that the arbitrator misconstrued
the issue to be
determined in concluding that the appellant had not
proven that the third respondent had committed a fraud, as the mental
element
of intent was not proven. It was submitted on behalf of the
appellant that the third respondent had been dishonest when he
completed
the claim form for payment of his pension contributions.
Such dishonesty, the appellant submits, is destructive of the trust
relationship
between the appellant and the third respondent even if
the dishonesty was not directed at the appellant
per
se
, if one takes into account his
position in the appellant. It was argued that the third respondent
was wilfully dishonest and had
shown no remorse.
[18]
On behalf of the third respondent, it was
submitted that the issue of the payment of contributions had nothing
to do with the appellant,
as it was an issue between the third
respondent and the Fund. Further, it was argued that it was the Fund,
which had caused the
mistake by sending the third respondent the
incorrect form even though he had indicated to the Fund that he was
claiming his surplus
for the period he was with Metal Box.
[19]
Item 7 of the Code of Good Practice:
Dismissal reads as follows:
‘
Any
person who is determining whether a dismissal for misconduct is
unfair should consider –
(a)
whether
or not the employee contravened a rule or standard regulating conduct
in, or of relevance to, the workplace; and
(b)
if
a rule or standard was contravened, whether or not –
(i)
the
rule was a valid or reasonable rule or standard;
(ii)
the
employee was aware, or could reasonably be expected to have been
aware, of the rule or standard;
(iii)
the
rule or standard has been consistently applied by the employer; and
(iv)
dismissal
was an appropriate sanction for the contravention of the rule or
standard.’
[20]
The third respondent was charged with being
dishonest for claiming that he was retrenched by Metal Box and that
he was unemployed
at the time of submitting his claim. In terms of
clause 3.7 of the disciplinary code, dishonesty is described as “a
dishonest
or fraudulent act committed by an employee”. Even
though the arbitrator concentrated on the element of fraud, there is
a
thin line distinguishing “dishonesty” and “fraud”.
Both have an element of gain. However, dishonesty unlike
fraud does
not necessarily involve deceit. However and regardless of the
distinction between dishonesty and fraud, the appellant
did not
pursue this contention and nothing therefore turns on the allegation
that the arbitrator misconstrued the offence with
which the third
respondent was charged with. Nevertheless, what remains crucial is
whether the arbitrator’s conclusion is
one that a reasonable
decision-maker would reach with the available evidence. The appellant
did not present any evidence to the
effect that the third respondent
was aware of the fact that whilst still employed within the metal and
engineering industry, he
could not withdraw his pension
contributions. The third respondent’s evidence which remains
uncontradicted is that he was
applying for refund of the surplus of
his contributions when he was employed at Metal Box since his pension
had already been paid
out when he resigned from Metal Box. Further,
there was no evidence contrary to the fact that he had communicated
with the Fund
on numerous occasions inquiring about the payment of
his surplus which accrued during his employment at Metal Box. It is
apposite
to point out that after the third respondent had resigned
from Metal Box in 1995, there is nothing evincing that he remained
employed
within the metal and engineering sector until he was
employed by the appellant in 1997. In the absence of any evidence
that the
third respondent remained employed within the metal and
engineering sector after he had left Metal Box, he was entitled to
withdraw
his pension contributions.
[21]
It is common cause that the third
respondent falsely indicated that he was retrenched and did not
disclose his current employer.
However, when it was pointed out to
him that he should not have claimed his contributions, his evidence
was that he was only claiming
his surplus while employed at Metal Box
and that the Fund was at fault to pay the contributions made by the
appellant. In any event,
the third respondent and the Fund came to an
agreement that he would pay back what was paid to him. I am of the
view that the false
statements made by the third respondent could not
have seriously damaged the employment relationship, particularly if
one accepts
that the third respondent thought he was applying for his
surplus
[22]
I am therefore of the view that the award
with regard to the dismissal of the third respondent is one a
reasonable decision-maker
could make with the material before her and
is therefore not reviewable.
[23]
With regard to costs, there is no reason on
the basis of equity to make any order in respect of costs.
[24]
Accordingly, the following order is made:
The
appeal is dismissed.
Mngqibisa-Thusi
AJA
I
agree
Waglay
JP
I
agree
Davis JA
APPEARANCES:
FOR THE APPELLANT:
Adv GA Fourie
Instructed by Cliffe Dekker Hofmeyr Inc
FOR THE RESPONDENT:
Mr Ngobeni
Instructed
by Ngobeni Attorneys
[1]
Page 102 of the record at lines 15 – 23.
[2]
Page 103 of the record at lines 6-11.
[3]
66 of 1995.
[4]
2008 (2) SA 24 (CC); [2007] 12 BLLR 1097 (CC).
[5]
[2014] 1 BLLR 20 (LAC).
[6]
66 of 1995.
[7]
S 145(2)(a)(i) of the LRA.
[8]
S 145(2)(a)(ii) of the LRA.
[9]
S 145(2)(a)(iii) of the LRA.
[10]
At para 14.