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[2017] ZALAC 49
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Workforce Group v McLintock and Others (DA08/16) [2017] ZALAC 49; (2017) 38 ILJ 2517 (LAC) (1 August 2017)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: DA08/16
In the matter between:
THE WORKFORCE
GROUP
Appellant
and
DAMIEN KENETH
MCLINTOCK
First Respondent
COMMISSION FOR
CONCILIATION
MEDIATION AND
CONCILIATION
Second
Respondent
COMMISSIONER N MATHE
N.O
Third Respondent
Heard:
21 February 2017
Delivered:
01 August 2017
Summary:
Dismissal of an employee on account of perpetration of fraudulent
activities. The CCMA – finding that the employee
was not
coerced into committing fraud and concluding that his dismissal was
substantively fair.
On
review to the Labour Court - The Court finding that the CCMA
misconstrued the nature of the enquiry it was enjoined to undertake.
Finding - that the employee had acted under economic duress when
committing the acts of misconduct. The Court - reviewing and setting
aside the award.
On
Appeal to the Labour Appeal Court- finding no evidence to support a
conclusion that the employee had acted under economic duress
–
further finding no merit in the contention that the employer was not
consistent in the application of discipline- The award
of the CCMA
fell within the purview of reasonable decision makers- The Labour
Court materially misdirected itself in upsetting
the award on review.
The
appeal upheld with no order as to costs. The Judgment of the Labour
Court substituted with an order dismissing the review application.
Coram: Tlaletsi AJP,
Landman JA and Phatshoane AJA
JUDGMENT
Phatshoane AJA
[1]
This is an appeal against the whole of the judgment and the order of
the Labour Court (per Cele J) dated 28 January 2016 reviewing
and
setting aside the arbitration award dated 17 September 2013 issued
under Case No: KNDB8371-13 by commissioner N Mathe under
the auspices
of the Commission for Conciliation Mediation and Arbitration (CCMA)
and substituting same with an order that the dismissal
of Mr Damien
Kenneth McLintock, the first respondent, was substantively unfair.
The appeal is with leave of this Court.
[2]
Workforce
Group
(Pty) Ltd (Workforce Group), the appellant,
is
a temporary employment services provider as defined in s 198(1) of
the Labour Relations Act, 66 of 1995 (LRA). It conducts
business nationally with branches in a number of the major cities
throughout South Africa.
[3]
Mr McLintock, a former
operations director for Programme Construction,
a
division of Workforce Group,
was
dismissed on 13 June 2013 pursuant to a disciplinary enquiry where he
was found guilty on four counts. For purposes of this
appeal the
following two charges are relevant:
‘
1.
It is alleged that you are guilty of instructing an employee to
commit
an unlawful act, in that on or about 08 March 2013, you
instructed Rinesh Ramessar to obtain a signature from Anesh Dookie
which
would incorrectly confirm an outstanding balance from Plessy
South Africa (Pty) Ltd to the Workforce Group of approximately
R4,503,792,90.
2.
It is alleged that you are guilty of fraud in that on or about 08
March 2013
you ticked the “
Yes
” box on a document
dated 08/03/2013 addressed to Plessy South Africa (Pty) Ltd and with
the subject: Confirmation of Balance-
East London Project.’
[4]
Early in 2012 Workforce Group received purchase orders for work to be
carried out in East London by Programme Construction.
The sum of R4.5
Million was raised for work to be executed.
Put
differently, this amount was borrowed but the work was not performed.
The amount was reflected as outstanding on Workforce Group’s
debtors’ books.
[5]
In early March 2013 Mr Lawrence Diamond (Mr Diamond), the Chief
Executive Officer of Workforce Group, requested Mr Avishkar
Maharaj
(Mr Maharaj), Workforce Group’s financial director, to provide
him with the names and contact details of all Programme
Construction
clients so as to verify the amounts owed to Programme Construction.
In that same period Mr Maharaj informed Mr McLintock
that an amount
of approximately R4.5 million was incorrectly reflected in the
company’s debtors’ book as a debt owed
by a client,
Plessy South Africa (Pty) Ltd (Plessy SA), to Workforce Group when in
fact the liability was non-existent. According
to Mr Maharaj, Mr
McLintock informed him that he would make arrangements with one Mr
Anesh Dookie (Mr Dookie) of Plessy SA to “
verify
the amount
”
[1]
as the latter owed him a favour. Two days later, Mr Maharaj says, Mr
McLintock informed him that he had approached Mr Rinesh Ramessar
(Mr
Ramessar), an employee of Workforce Group, to make arrangements for
Mr Dookie to confirm that the debt was owed. Coincidentally,
not long
thereafter Mr Diamond requested Mr Maharaj to provide him with a
written acknowledgement of Debt from Plessy SA. Mr Maharaj
says he
was under immense pressure at the time because the debt was not due
and owing. Around 08 March 2013 Mr Maharaj drafted
a letter which
acknowledged Plessey SA’s indebtedness to Workforce Group.
However, he did not send the acknowledgment of
debt to Plessy SA for
signature.
[6]
Mr McLintock informed Ms Nolene Fuhri (Ms Fuhri), the regional
managing director of Workforce Group, KwaZulu-Natal, who is also
his
common law wife, about the fictitious debt. On 11 March 2013 Ms Fuhri
and Mr McLintock drove to Workforce Group head office
in Johannesburg
to meet Messrs Diamond and Ronnie Katz, the founder and chairperson
of the Workforce Group
,
to explain to
them that the money the company sought from Plessy SA would not be
forthcoming because no debt existed. When Mr Diamond
enquired where
the money was McLintock referred him to Mr Maharaj. Mr Diamond
instructed him to “
sit down with Avi (Maharaj) and put every
purchase order and invoice together and I want you to go through each
single one of them
on every single Job
”.
[7]
Mr Maharaj says on 12 March 2013 Ms Fuhri telephonically informed him
that she had been to head office on 11 March 2013 where
she informed
Messrs Diamond and Katz that there were amounts that were borrowed
from the purchase orders while work had not been
performed to justify
the lending; and that she took full responsibility for this financial
quagmire. Ms Fuhri further told him
that Mr McLintock would visit him
that morning and together they needed to work out how much of the
outstanding debt of R4.5 million
could be recouped from the
additional work that had been performed.
[8]
Mr Maharaj testified that on that same day, 12 March 2013, he called
Ms Fuhri and enquired: “
Since everything is out in the open
do we still need the letter for East London signed?
” Ms
Fuhri at a later stage informed Mr Maharaj that the acknowledgement
of debt had to be signed. According to Mr Maharaj
he and Mr McLintock
handed over the acknowledgement of debt to Mr Ramessar in his (Mr
Maharaj’s) office for transmission
to Mr Dookie of Plessy SA.
Mr McLintock informed Mr Ramessar to tell Mr Dookie that “
they
will sort it out
”. Mr McLintock’s version, on the
conversation of 12 March 2013 they had with Mr Ramessar, is slightly
different. He
says Mr Ramessar called Mr Dookie but was a bit
reluctant to speak to him. He consequently took away the phone from
Mr Ramessar
and told Mr Dookie: “
Listen, I’ll look
after you. Meaning I will try and keep you out of any trouble…because
we all know that’s fraud and try and keep him out of
trouble
.”
(My emphasis)
[9]
The acknowledgement of debt was sent to East London where it was
signed by Mr Dookie. Later on that morning of 12 March 2013,
says Mr
Maharaj, they received a copy of a signed written acknowledgement of
debt, which reads in part:
‘
We
are currently undergoing an internal audit and would like you to
confirm the outstanding balance due as at 31 December 2012 for
the
East London Project.
Your prompt attention to this request
will be appreciated. If you could please confirm the below mentioned
balance.’
The
letter has a box which requires Plessy SA to confirm the amount of
debt by ticking the applicable box marked “
Yes
”
or “
No
”.
[10]
Mr Maharaj forwarded the acknowledgement of debt document to Ms
Fuhri. He says that few minutes later Mr McLintock received
a call
from Ms Fuhri to the effect that the “
Yes
” box
appearing on the acknowledgement of debt was not ticked. He says that
Mr McLintock responded: “
It’s not ticked- I will tick
it
.” Mr McLintock ticked the “
Yes
” box.
He further testified that McLintock did not appear pressured when he
ticked the box and neither was he hesitant in
doing so. Mr Maharaj
further intimated that Mr McLintock never informed him that he was
pressured to tick the said box, nor was
any duress brought to bear
upon him in his presence. Mr McLintock admitted that he ticked-off
the “
Yes
” box and took full responsibility and
acknowledged that by ticking-off the “
Yes
” box he
committed fraud. Under cross-examination he said he did so because he
was under “
extreme pressure
” which was exerted by
the CEO, Mr Diamond, as communicated through Ms Fuhri. It was put to
him that he made no mention of
having been under any duress when he
ticked the box during his disciplinary enquiry. He conceded but
attempted to exculpate himself
that it was his first disciplinary
hearing that he had attended and was not asked how he felt. By his
own admission, Mr Diamond
did not ask him to tick the “
Yes
”
box; he also did not ask him to commit any fraud.
[11]
Having ticked “
Yes
” the acknowledgement of the
debt instrument in the amount of approximately R4.5 million was
forwarded to Ms Fuhri. Later
in the course of that day, 12 March
2013, Mr Maharaj received an e-mail from Ms Fuhri stating that Mr
Diamond wanted him to sign
the letter. He reluctantly signed the
letter.
[12]
Mr McLintock explanation of the events of 12 May 2013 was that Mr
Maharaj appeared confused after Ms Fuhri had telephonically
informed
him that she told Messrs Diamond and Katz about the fabricated R4.5
million debt. Mr Maharaj reported to him that Mr Diamond
was looking
for the acknowledgement of debt. He was puzzled by Mr Diamond’s
request because, at that stage, Mr Diamond knew
that the debt was
non-existent. He then called Ms Fuhri to enquire why the
acknowledgement of debt was still needed. Ms Fuhri called
Mr Diamond
and enquired why he needed the letter. Mr Diamond responded: “
Noels,
if you don’t get that letter for us we’re all losing our
jobs, don’t worry I will look after you
”. Mr
McLintock says Ms Fuhri insisted: “
Please we need that
letter. Do what you have to do to get it
.” Mr McLintock
says he was uncomfortable but felt obliged to comply with the
instruction as it came from those vested with
authority. Hence his
request to Mr Ramessar: “
We need this letter, you need to
get hold of Mr Anesh Dookie, please can you organise it
”.
[13]
A claim was made by Workforce Group that Mr McLintock handed over an
amount of R2000 to Mr Ramessar as a bribe to Mr Dookie
for
“
arranging
” the signed written acknowledgement of
debt, a claim Mr McLintock vehemently deny. What is astonishing
is that during
his disciplinary enquiry Mr McLintock admitted having
effected such payment which he said he regretted. When confronted on
this
piece of evidence his response was that he thought about it and
retracts it because it never happened. Mr Maharaj did not deny having
authorized that R2000 be taken out of the petty cash to compensate Mr
Ramessar for travelling to East London to have the acknowledgement
of
debt signed by Mr Dookie. He denied that Mr Ramessar went to East
London but he did learn that, on Mr McLintock’s instructions,
R2000 was paid to Mr Dookie.
[14]
Mr McLintock’s further complaint is that no disciplinary action
was taken against Messrs Diamond and Ramessar whereas
they were
complicit in the perpetration of fraud. It was contended, for Mr
McLintock, that the disciplinary action taken against
Mr Maharaj was
conveniently instituted on the eve of the arbitration proceedings
allowing Mr Maharaj to carry on with his work
as the financial
director of Workforce Group despite the damning allegation of fraud
against him.
[15]
The reason provided by Ms Faith Kristen Newat, Workforce Group’s
Human Resource and Industrial Relations Manager, for
the belated
charges against Mr Maharaj, was that he cooperated with Workforce
Group and gave all the information that was required,
even to his own
detriment. He had been furnished with a notice to attend his
disciplinary hearing on the eve of the arbitration
because the audit
process that he was assisting Workforce Group with was drawing to a
close. Mr Maharaj says Mr Diamond warned
him that what he did was
wrong and was likely to face disciplinary action. In any event,
Workforce Group curtailed his powers.
For instance, Workforce Group
withdrew his power to approve transactions.
The Arbitration Award.
[16]
The commissioner found
that the evidence established that Mr McLintock instructed his
subordinate, Mr Ramessar, to obtain Mr Dookie’s
signature on
the acknowledgment of debt for fraudulent purposes because the debt
purportedly owed by Plessey SA to Programme Construction
did not
exist. The commissioner concluded that Mr McLintock’s conduct,
in obtaining the fraudulent acknowledgment of debt,
was dishonest in
nature.
[17]
The commissioner held that no one had exerted any pressure or forced
Mr McLintock to fraudulently obtain the signature of Mr
Dookie on the
fake document and that he did so out of his own free will or
volition. He concluded that Mr McLintock was correctly
found guilty
of misconduct and that this transgression alone merited the sanction
of dismissal.
[18]
The commissioner noted that Mr McLintock conceded that he ticked off
the “
Yes
” box depicted on the written
acknowledgement of debt confirming that the amount of R4.5 Million
was owed, when he knew it
was not and took full responsibility for
having done so. The commissioner was of the view that Mr McLintock’s
argument that
he was acting under duress was ‘
a gross
exaggeration’.
In any event, Mr McLintock’s
claim of duress was contrary to the evidence presented by Ms Fuhri.
He also found
that Mr McLintock stood to benefit from obtaining the
acknowledgment of debt
.
[19]
The commissioner concluded that Mr McLintock committed serious
offences that breach the relationship of trust and severed the
employment ties. Resultantly, he found that Workforce Group succeeded
in proving that Mr McLintock’s dismissal was for a
fair reason
and upheld the sanction of dismissal.
The proceedings before
the Labour Court:
[20] The Court
a quo
noted that Messrs Diamond and Katz were not called to testify at the
disciplinary hearing and at the arbitration. It further noted
that,
if the alleged evidence of their complicity and Mr Diamond’s
instruction to Ms Fuhri were disputed by Mr McLintock,
they ought to
have been called as the truth thereof depended on their evidence.
[21]
The Court found that Mr McLintock correctly contended that there were
two factual findings in respect of which the commissioner
misdirected
himself. Firstly, he misconstrued Mr McLintock’s defence by
examining whether or not Mr Maharaj exerted undue
pressure on him
because that was never his case. Mr McLintock’s defence
was that the pressure came from Mr Diamond
through Ms Fuhri. The
Court
a quo
was
of the view that the commissioner must have confused the evidence
relating to the initial pressure which Mr Maharaj exerted
on Mr
Ramessar to get Mr Dookie to sign the letter with the pressure
experienced by Mr McLintock at the hands of Mr Diamond. Secondly,
the
Court
a quo
could not find anything on the evidence supportive of the
commissioner’s finding that Mr McLintock was motivated by some
benefit from which he stood to gain if he secured the fraudulent
acknowledgment of debt. On the contrary, the Court found, it was
Workforce Group that stood to benefit from its financier’s
overdraft facilities on the basis of the potential injection of
R4.5
million into its account.
[22]
The Court
a quo
further held that, on the assessment of the evidence, there were
facts presented by Mr McLintock which were not seriously challenged
through cross-examination. For example: McLintock had been opposed to
the initial arrangement by Mr Maharaj for Mr Ramessar to
travel to
East London to have the acknowledgement of debt signed; Mr McLintock
and Ms Fuhri reported the fraudulent activities
to Messrs Diamond and
Katz; Mr Diamond instructed the duo to collate the invoices for
work done and determine the extent
of workforce Group’s
liability; Mr McLintock reported to Ms Fuhri pertaining to the
re-emergence of the demand by Mr Diamond
of the
acknowledgement of debt which they had hoped had been kept in
abeyance until the books were reconciled; Mr McLintock
was informed
by Ms Fuhri that the letter had to be obtained failing which he would
lose his employment; he procured the letter
on Ms Fuhri’s
instruction. The Court
a
quo
found that this
evidence, when properly assessed, demonstrated that Mr McLintock
acted on instructions of his superiors “
failing
which he would have to face the wrath of the company
”.
[23]
The Court
a quo
further held that Mr McLintock was acting under economic duress
(reasonable fear of losing his job) because he was made to act
against what he believed was correct. The Court was further of the
view that Mr McLintock’s defence was that the exigency
demanded
that he follow the superior’s orders which were unlawful.
[24]
The Court
a quo
reasoned that, in respect of the two acts of
misconduct said to have been committed by Mr McLintock, the
commissioner did not consider
the key issues arising for
consideration; had failed to properly evaluate the facts presented at
the arbitration; and had not attached
proper weight to such facts.
Consequently, he came to a conclusion which no reasonable
commissioner could reach.
[25]
The Court concluded that Mr Maharaj was the main architect of the
misconduct in that he initiated “
the
whole false accounting of work done by feeding the head office with
false information
”.
The Judge reasoned that when Mr McLintock commenced acting the
fraudulent activities were already afoot. Mr Diamond had
issued a
firm instruction that the acknowledgement of debt be procured while
he knew that the debt did not exist.
[26]
The Court
a quo
found that three employees (Mr Maharaj, Mr
Diamond and Mr Ramessar) were never effectively disciplined by
Workforce. The belated
charging of Mr Maharaj and the curbing of his
powers “
were cold comfort when it is considered that he was
the main protagonist
”. Premised on the aforesaid findings
the Court
a quo
concluded that ‘
When all [the]
facts of this matter are considered and weighing up the interests of
[Mr McLintock]
this
outweigh those of [Workforce
Group].
[27]
The Court reviewed and set aside the arbitration award. It concluded
that Mr McLintock’s dismissal was substantively
unfair and
determined that he was entitled to the fullest of the redress
permissible in terms of s 194 of the LRA. Therefore, it
ordered that
Workforce Group pay him an amount equivalent to his twelve (12)
months’ salary; and the costs of the application.
The
grounds of appeal:
[28]
The grounds of appeal boiled down to this. The Court
a quo
erred:
28.1
In finding that the commissioner misconstrued Mr McLintock’s
defence by finding in
effect that Mr Maharaj exerted pressure on him
when in fact the pressure came from Mr Diamond through Ms Fuhri. It
was contended
that any pressure which may have existed was directed
at Mr Maharaj and Ms Fuhri and not at Mr McLintock. In any event, it
was
Ms Fuhri who requested Mr McLintock to assist in ‘sorting
out’ the issue of Plessy SA indebtedness. During the meeting
of
11 March 2013 Mr McLintock was merely requested to attend to a
reconciliation of Plessy SA’s account by collating the
invoices
in respect of the work done.
28.2
Insofar as it concluded that
ex
facie
the record of
the arbitration there is no reference to any benefit which Mr
McLintock derived from securing the fraudulent acknowledgement
of
debt. It was also contended
,
inter alia
, that by
obtaining the fraudulent acknowledgement of debt Mr McLintock and Ms
Fuhri would benefit from concealing their fraudulent
conduct.
28.3
In finding that neither Mr Katz nor Mr Diamond were called to testify
at the arbitration.
It was contended that the Court erred in placing
undue weight on the alleged knowledge of the fraudulent action by
Messrs Diamond
and Katz. Mr McLintock’s version was that
he did not receive instructions from Mr Diamond to attend to any
unlawful
activities. In any event, it was not put to any of Workforce
Group’s witnesses that Mr Diamond perpetrated the fraud.
Therefore,
there can be no suggestion that Mr Diamond was required to
give evidence at arbitration, the grounds continued.
28.4
In finding that Mr McLintock was under duress and was coerced to
commit fraud and further
that he followed the instructions of his
superior. It was contended that Mr McLintock did not provide
sufficient evidence for a
realistic fear and that such fear was so
material as to override his misconduct.
28.5
In finding that the three employees were never effectively
disciplined and that the disciplinary
action taken against Mr Maharaj
was “
cold
comfort
” when
he was the key player in the commission of fraud.
Analysis
[29]
In
Herholdt
v Nedbank Ltd (Congress of SA Trade Unions as Amicus Curiae
[2]
the
Supreme Court of Appeal summarized the position regarding the review
of CCMA awards as 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 s 145(2)
(a)
(ii),
the arbitrator must have misconceived the nature of the enquiry 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
material that was before the arbitrator. Material
errors of fact, as
well as 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.’
[30]
As I see it, to determine whether the decision reached by the
commissioner fell within the purview of reasonable decision makers,
there are three issues emerging for consideration in this appeal.
First, whether Mr Diamond exerted any undue pressure on Mr McLintock
to commit fraud. Second, whether Mr McLintock stood to derive any
benefit in securing the fraudulent acknowledgement of debt. Third,
whether Workforce was consistent in the application of discipline.
The
question of duress
[31]
Programme Construction, Kwazulu-Natal, under the control of Ms Fuhri,
was run into the ground. The unchallenged evidence by
Ms Newat was
that approximately R15 to R20 million had been lost through fraud and
financial mismanagement. At the time of the
arbitration the company
was closing down. The three remaining employees were busy selling off
its assets. Regard being had to this
state of affairs I am not
persuaded that on 11 March 2013 Ms Fuhri and Mr McLintock met Messrs
Diamond and Katz solely for purposes
of disclosing R4.5 million fraud
case. Ms Fuhri says, in a nutshell, they disclosed “
the fact
that the invoicing that we had found was overstated with some of the
contracts
and that
clients
in actual fact did not owe us that money
.”
[32]
The discussion of 11 March 2013 could not only have been about the
Plessy SA’s transaction. There was more. It is not
surprising
that Mr Diamond instructed Ms Fuhri and Mr McLintock to return to
Durban and alert Mr Maharaj that Ms Fuhri met Messrs
Diamond and Katz
and that Ms Fuhri and her colleagues had to “
sit with all
the invoices and all the work, jobs that had been done, and
correspond the invoices to the outstanding work or work
in progress
so that we could see what the overruns actually were because at that
point we weren’t sure what the amount was
”. What is
remarkable about the ultimate instruction given by Mr Diamond to Ms
Fuhri and Mr McLintock is that Diamond said
nothing to them about
obtaining the acknowledgement of debt of the debt purportedly owed by
Plessy SA to Workforce Group.
[32]
As already alluded to, the evidence was that at the beginning of
March 2013 Mr Diamonds started making enquiries at the Durban
branch
regarding the names and contact details of the clients. It was in
this time-frame that Mr Maharaj informed Mr McLintock
of the amount
of approximately R4.5 million which was incorrectly recorded in the
company’s debtors’ book as a debt
owed by Plessy SA. On
the probabilities, Mr McLintock and Ms Fuhri met Messrs Diamond and
Katz in an attempt to exculpate themselves
from the financial
mismanagement that was at play in their Durban branch.
[33]
Mr McLintock was alive to the fact that he was committing fraud when
he facilitated the procurement of the acknowledgement
of debt. This
is apparent from what he told Mr Dookie
:
“
Listen, I’ll look after you meaning ‘I will try
and keep you out of any trouble’…because
we
all know that’s fraud and try and keep him out of trouble
.”
[34]
The acknowledgement of debt could not have been a product of duress.
Mr Maharaj testified
that Mr McLintock was not forced to “
tick
the box
”.
Mr
McLintock himself conceded during his disciplinary hearing that Mr
Diamond did not instruct him to commit fraud or to tick the
“
Yes
”
box on the acknowledgment of debt. These concessions are
irreconcilable with his version at arbitration which was to the
effect that Messrs Diamond and Katz exerted pressure on him through
Ms Fuhri to tick the “
Yes
”
box.
This must be seen
in the context that it was Mr McLintock who proposed that another
employee, Mr Ramessar, arrange that the document
be signed. When
Ramessar appeared hesitant Mr McLintock took over and spoke to Mr
Dookie. There appears to be no reason to doubt
the testimony of Mr
Maharaj. He had nothing to lose or gain by telling the truth. He gave
his cooperation to Workforce despite
the fact that he was told that
he would be disciplined for taking part in the fraudulent schemes.
[35]
Mr Maharaj prepared the acknowledgement of debt several days prior to
the meeting of 11 March 2013 between Ms Fuhri, Mr McLintock,
Mr
Diamond and Mr Katz. Mr McLintock says Mr Maharaj made him
aware of this letter. It is clear that there was some planning
involved in the execution of this fraudulent scheme prior to the
alleged ‘pressure’ which McLintock intimated was exerted
on him. Apart from his self-contradictory say so, t
here
is no evidence that Mr McLintock was initially opposed to the
perpetration of fraud or the dishonest conduct.
[36]
The fact that Mr Diamond had requested that the acknowledgement of
debt be signed by Mr Maharaj or had enquired about Mr Dookie,
whose
name appeared
ex facie
the acknowledgment of debt, does not
mean that he knew or was aware of the fraudulent activities. To hold
otherwise would be to
venture into impermissible spectrum of
conjecture. Even assuming that he was aware, that does not
exonerate Mr McLintock
and Mr Maharaj from their own fraudulent
activities.
[37]
The conclusion reached by the Court
a quo
that Mr McLintock
initially resisted the scheme of things initiated by Mr Maharaj; that
he was coerced into compliance; he was made
to act against what he
believed was correct; and was acting under economic duress, is simply
not supported by the evidence. It
is clear that Mr McLintock and Mr
Maharaj acted in cahoots to perpetrate the fraud.
The
question of whether Mr McLintock stood to derive some benefit in
securing the fraudulent acknowledgement of debt
[38]
As adumbrated earlier, the acknowledgment of debt was prepared by Mr
Maharaj and both Mr McLintock and he took steps to have
it signed by
Plessey SA. The benefit that Mr McLintock stood to gain was the
concealment of their fraudulent activities.
The fact that Mr
McLintock and Ms Fuhri had decided to disclose the financial
mismanagement to Messrs Diamond and Katz does not
detract from Mr
McLintock’s fraudulent conduct. A motive
is
the underlying reason why an employee would commit a particular
offence. It is irrelevant, particularly in the circumstances
of this
case, in establishing the employee’s guilt. It may well play a
role in determining the appropriate sanction.
[39]
The Court
a
quo
incorrectly
found that there was no evidence in support of the
commissioner’s conclusion that Mr McLintock was motivated
by
some benefit from which he stood to gain if he secured the fraudulent
acknowledgement of debt. It also erred insofar as it concluded
that
it was Workforce Group that stood to benefit from the fraudulent
activity on the basis of the fabricated R4.5 million revenue.
There
could never have been anything peculiar in Workforce Group having
sought to reconcile its financial information so as to
establish its
true exposure in respect of one of its debtors and presenting that
information to its financier for purposes of maintaining
its
overdraft facilities.
The question of
inconstancy in the application of discipline
[40]
Our
law requires that employees who have committed similar misconduct
should not be treated differentially
[3]
.
However,
the parity principle may not be applied willy-nilly without any
measure of caution. In
Absa
Bank Ltd v Naidu & others
this
Court pronounced:
[4]
‘
(T)he
element of consistency on the part of an employer in its treatment of
employees is an important factor to take into account
in the
determination process of the fairness of a dismissal. However, as I
say, it is only a factor to take into account in that
process. It is
by no means decisive of the outcome on the determination of
reasonableness and fairness of the decision to dismiss.
In my view,
the fact that another employee committed a similar transgression in
the past and was not dismissed cannot, and
should not, be taken
to grant a licence to every other employee, willy-nilly, to commit
serious misdemeanours, especially of a
dishonest nature, towards
their employer in the belief that they will not be dismissed. It is
well accepted in civilised society
that two wrongs can never make a
right. The parity principle was never intended to promote or
encourage anarchy in the workplace.
As stated earlier, I reiterate,
there are varying degrees of dishonesty and, therefore, each case
will be treated on the basis
of its own facts and circumstances.
[41]
The undisputed
evidence before the CCMA was that disciplinary proceedings had been
instituted against the other employees of Workforce
Group. For
example, Ms Fuhri had already been disciplined and dismissed. Mr
Maharaj had received notice to attend his disciplinary
hearing on the
eve of the arbitration. It was also shown that his disciplinary
hearing was delayed because he was assisting with
the investigation.
With regard to Messrs Diamond and Katz, there is no evidence
which support the conclusion that they gave
any unlawful instructions
to Mr McLintock, Ms Fuhri or Mr Maharaj or that they were complicit
in the fraudulent activities.
[42]
As found by the Court
a
quo
, Mr Maharaj may
have “
initiated
the whole false accounting of work done by feeding the head office
with false information and was accordingly the main
architect of the
misconduct”
.
However, what bears scrutiny in this case is the role Mr McLintock
played after ‘
the
wheel was set in motion’.
The fact the Mr McLintock may or may not have participated in the
fraudulent activities from the outset does not excuse or
mitigate his
later involvement. There is simply no merit in the argument that
Workforce Group was inconsistent in the application
of discipline.
Conclusion
[43]
In
Shoprite
Checkers (Pty) Ltd v Commission for Conciliation Mediation and
Arbitration and Others
[5]
this
Court quoted with approval the earlier
dictum
of the Labour Court in
Standard
Bank of SA Ltd v CCMA and Others
[6]
to
the effect that:
‘
It is one of
the fundamentals of the employment relationship that the employer
should be able to place trust in the employee. A
breach of this trust
in the form of conduct involving dishonesty is one that goes to the
heart of the employment relationship and
is destructive of it.’
[44]
Mr McLintock occupied a very senior position at Workforce Group which
demanded a lot of integrity and trust. He breached that
trust. I am
satisfied that the commissioner did not misconceive the nature of the
enquiry he was enjoined to undertake and neither
was the outcome of
the arbitration unreasonable on the available evidential material.
The commissioner correctly concluded that
the dismissal of Mr
McLintock was an appropriate sanction. His award falls within the
band of reasonable decision makers. Insofar
as the Court
a
quo
concluded
otherwise it erred. The arbitration award ought not to have been
upset on review. The material misdirection by the Court
a
quo
justifies the
setting aside of its order. The Corollary of this is that the appeal
should succeed.
[45] In respect of costs,
I am of the view that it will not be in accordance with the
requirement of law and fairness that they
should follow the result of
both the proceedings before the Labour Court and in this Court. I
make the following order.
Order
1.
The
appeal is upheld with no order as to costs.
2.
The
order of the Court
a
quo
is set aside and substituted with the following:
“
1.
The application for the review and setting aside of the arbitration
award dated
17
September 2013 issued under Case No: KNDB8371-13
by
the Commission for Conciliation Mediation and Arbitration is
dismissed.
2.
No order is made as to costs.”
________________
MV Phatshoane
Acting
Judge of the Labour Appeal Court
Tlaletsi
AJP and Landman JA concur in the judgment of Phatshoane AJA
APPEARANCES:
FOR
THE APPELLANTS:
Adv LM Malan & S Jackson
Instructed by Hunts
Attorneys
FOR
THE FIRST RESPONDENT:
Adv RG Ungerer
Instructed
by Weber Attorneys
[1]
In other words to falsely confirm that Plessy SA owed Workforce
Group an amount of R4.5 million.
[2]
(2013) 34
ILJ
2795
(SCA)
at
2806
para 25
[3]
Chemical
Energy Paper Printing Wood & Allied Workers Union & others v
Metrofile
(Pty) Ltd (2004) 25 ILJ 231 (LAC)
[4]
(2015)
36 ILJ 602 (LAC) at 618 para 42
[5]
(2008) 29 ILJ 2581 (LAC); See also
Shoprite
Checkers (Pty) Ltd v Commission for Conciliation, Mediation &
Arbitration & others
2009 (3) SA 493
(SCA); (2009) 30 ILJ 829 (SCA);
Absa
Bank Ltd v Naidu & others
(2015) 36 ILJ 602 (LAC);
Miyambo
v Commission for Conciliation, Mediation & Arbitration &
others
(2010) 31 ILJ 2031
(LAC)
[6]
(1998) 19 ILJ 903 (LC) at 913 para 38.