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[2017] ZALAC 66
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Central University of Technology v Channer and Others (JA59/2016) [2017] ZALAC 66 (1 November 2017)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
no: JA59/2016
In
the matter between:
CENTRAL
UNIVERSITY OF
TECHNOLOGY
Appellant
and
E
J
CHANNER
First Respondent
PEHELO
MOTAKE NO
Second
Respondent
COMMISSION
FOR CONCILIATION,
MEDIATION
AND ARBITRATION (FREE STATE)
Third Respondent
Heard:
17 August 2017
Delivered:
01 November 2017
Summary:
Review of arbitration award – employee dismissed for flouting
quotation processes and disobeying a lawful instruction
from his
superior – held that holistically, the evidence evinces a
scheme of quotation rigging perpetrated by the employee
to ensure
that a certain service provider gets the contract. To attain that
objective, the employee deliberately manipulated the
quotation
processes to secure the services of his preferred service provider.
Such conduct is dishonest and fosters corrupt practice
that enervates
the effectiveness, and destroys the fundamental requisite fairness,
of the procurement processes of public bodies
conducted by means of
obtaining quotations. The sanction of dismissal was appropriate. The
failure of the Commissioner and of the
court
a quo
to find
accordingly, is regrettable. A reasonable commissioner would have
concluded differently. Appeal upheld and judgment
a quo
set
aside.
Coram:
Tlaletsi DJP, Coppin and Sutherland JJA.
JUDGMENT
COPPIN
JA
[1]
This is an appeal against the order of the Labour Court (Coetzee AJ),
dismissing an application brought by the appellant (the
university)
to review an award made by the second respondent (the Commissioner),
acting under the auspices of the third respondent
(CCMA), in terms of
which the first respondent (employee) was reinstated in his
employment at the university and the latter was
ordered to pay the
employee back pay. Leave to appeal was granted on petition to this
Court.
[2]
There was no appearance by or for the employee in this Court, and
neither were heads of argument filed by or on his behalf.
[3]
At the time of the employee’s dismissal, he had been employed
by the university for a period in excess of 20 years. He
was
essentially engaged in the Maintenance Department. His dismissal
resulted from his work in assisting the facilities management
section
to obtain quotations from service providers for the painting of a
devil’s fork fence (fence) of the university before
the Soccer
World Cup of 2010.
[4]
The following is not in issue. The employee was instructed by his
senior, Mr Britz to obtain the requisite quotations from three
specific service providers (registered contractors) whose names were
provided by Mrs Prinsloo of the Procurement Department at
the
university. They were F van den Heever Dekoratief (represented by Mr
Van den Heever), Keorebotshe Trading Enterprises (represented
by Mr
Seboloa) and Marang Projects (represented by Mr Motshumi).
[5]
The employee invited all those service providers to attend an
official site meeting at the university. That meeting was only
attended by Mr Seboloa and Mr Motshumi. Mr Van den Heever
indicated that he was not able to attend the site meeting. However,
later on the same day a representative of Van den Heever Dekoratief,
on his own, attended a site meeting with the employee.
[6]
On 26 May 2010 at about 11h00, the employee approached Ms Prinsloo
requesting that the quotation box be opened. There were two
quotations in sealed envelopes inside the box, namely, those
submitted by Keorebotshe Trading Enterprises and Marang Projects.
Those quotations were then opened. At the time the employee informed
Ms Prinsloo that there was supposed to be a third quote and
that it
was probably in Mr Britz’s office.
[7]
Later that day, at approximately 16h30, the employee approached Ms
Prinsloo with a quote from F van den Heever Dekoratief. Ms
Prinsloo
then stamped the envelope containing the quote, indicating that the
quote was late.
[8]
The employee took the three quotes to Mr Britz and after he had a
discussion with Mr Britz about them, Van den Heever Dekoratief
was
informed that its quote had been accepted. Consequently, that service
provider started the work of painting the fence.
[9]
In the interim, Mr Seboloa, who had returned to the site later in the
afternoon of the day on which he and Mr Motshumi had been
there for
the official site meeting, became suspicious when he found the
employee with the representative of F van den Heever Dekoratief
doing
an inspection of the site. Mr Seboloa had informed Mr Motshumi about
this. The two of them had monitored the situation after
neither of
their quotes was accepted, but that of F van den Heever Dekoratief
had been accepted instead, and they decided to complain
to the
management of the university.
[10]
On his way to the administrative offices to complain, Mr Motshumi
encountered the employee, who, on becoming aware of Mr Motshumi’s
grievance, asked Mr Motshumi not to say anything about it and had
assured Mr Motshumi that he (i.e. the employee) would “look
after” Mr Motshumi.
[11]
In the meantime, Ms Prinsloo had also become aware that F van den
Heever Dekoratief’s quote had been accepted after seeing
them
busy on the site. She was concerned because, according to her
recollection, that service provider’s quotation had been
late
and ought to have been discarded. She raised the matter with
inter
alia
Mr Britz, and his superior Mr Van Wyk.
[12]
An investigation followed which resulted in the employee being
charged with the following counts of misconduct:
12.1 Charge 1 –
gross insubordination in that on 26 May 2010, the employee failed to
carry out a lawful instruction
from his supervisor in that he failed
to provide the registered contractors with documents (i.e. projects
scope and attendance
registers) to attach to the contractors’
quotations and he subsequently failed to submit these documents to Ms
Prinsloo;
12.2 Charge 2 –
dishonest/fraudulent conduct in that the employee submitted a quote
for an approval from
F van den Heever Dekoratief, knowing that the
quotation was submitted late and was therefore irregular. It was
further alleged
that the employee misrepresented the true facts by
informing Mr Britz that the same quote had been approved by Ms
Prinsloo because
it was much lesser or cheaper than the other two
quotes received;
12.3 Charge 3 –
dishonest/fraudulent conduct in that on or around April/May 2010 the
employee attempted
to influence Ms Prinsloo to accept the tender of
Tau Construction for which a tax clearance certificate, BBBEE
certificate and
CK documents were outstanding after the tender closed
at 11h00;
12.4 Charge 4 –
dishonest/fraudulent conduct in that the employee misled Mr Van den
Heever to believe that
Mr Werner had no objection to him touring the
site the next day on 19 May 2010;
12.5 Charge 5 –
gross dereliction of duty in that the employee acted remissibly in
the execution of his
duties when he informed two service providers
who attended the site inspection meeting on 18 May 2010 that they are
the only bidding
service providers who submitted quotations for the
painting of the fence at the university;
12.6 Charge 6 –
gross dereliction of duty in that the employee acted remissibly in
the execution of his duties
when he conducted a site inspection with
one service provider (F van den Heever Dekoratief) on 19 May 2010;
12.7 Charge 7 –
dishonest/fraudulent conduct in that the employee informed Mr Tim
Motshumi, a service provider
of CUT when he enquired about the
outcome of the bidding for the painting of the fence that he should
not worry as the employee
would look after him.
[13]
The following witnesses testified for the employer at the internal
disciplinary inquiry: Ms Prinsloo, Mr Seboloa, Mr Britz,
Mr Motshumi
and Mr Van den Heever. The employee testified in defence of the
charges. At the conclusion of the internal disciplinary
hearing, the
employee was found guilty of charges 1, 2, 4 and 6 and his dismissal
was recommended as a sanction. The university,
acting on that
recommendation, dismissed the employee.
[14]
The employee referred an unfair dismissal dispute to the CCMA and the
matter duly proceeded to arbitration before the Commissioner.
The
substantive fairness of the employee’s dismissal was in issue.
The same witnesses that had testified at the internal
disciplinary
hearing also testified at the arbitration, except that the employer
called an additional witness, Mr Dube, Head of
Facilities at the
university, and the employee also called Dr Smith as a witness.
[15]
In an award, dated 10 September 2011, the Commissioner concluded that
the employee could only be disciplined in terms of an
existing rule
and found that such a rule does not exist and “
that should
actually be the end of the enquiry
”, because if there was
no rule that could have been breached, there was no misconduct
whatsoever.
[16]
However, the Commissioner went on to find that even if a rule of
policy existed, it was not applied at all, or applied consistently
to
every case, or quotation. The arbitrator concluded, accordingly, that
the employee’s dismissal was substantively unfair
and that the
employee was entitled to be reinstated on or before 10 September
2011, and to be paid back pay in the amount of R146 000,00
subject to legitimate deductions such as tax, before that date. The
amount awarded to the employee was also to attract interest
at the
rate of 15,5% from the date of the award to the date of payment.
Labour
Court
[17]
The university brought an application in the Labour Court in terms of
section 145 of the Labour Relations Act No 66 of 1995
(“
the
LRA
”) to review and set aside the arbitrator’s award
and asked “
that it be determined that the employee was
dismissed in a substantively unfair manner
”. In the
alternative, the university sought an order remitting the matter to
the CCMA to be dealt with afresh before a different
Commissioner. The
university further sought a costs order against the employee and any
other party that opposed its application.
[18]
The ultimate ground relied upon by the university was that the award
was “
so irrational that no reasonable decision-maker would
have come to the conclusion eventually reached by the Commissioner
”.
Particular grounds relied on were: firstly, that the Commissioner
never addressed charge 1 at all, which related purely
to whether the
employee had failed to comply with an instruction of his superior, Mr
Britz, that he invited service providers,
who intended quoting for
the painting of the fence, with project scope and attendance register
documents. Secondly, that the rule,
that the Commissioner concerned
himself about, was not relevant to that charge and, conceivably,
could only have related
tangentially to the other charges which the
employee had been found guilty of, namely charges 2, 4, 6 and 7.
Thirdly, the Commissioner
erred in finding that no rule existed, when
it was part of the employee’s case that the rule indeed
existed, because the
employee contended that there was inconsistency
in the application of the rule, and the Commissioner found
accordingly.
[19]
The university contended, essentially, in its original founding
affidavit in support of the review application, that this latter
finding by the Commissioner vitiated the entire award. According to
the university, the evidence, in any event, was clearly to
the effect
that a rule existed, albeit not in writing.
[20]
In its supplementary affidavit, the appellant dealt with the relevant
detail of the various relevant witnesses’ evidence
in order to
illustrate that the existence of the rule (i.e. as to how to deal
with quotations) was never seriously disputed. According
to the
university, the employee’s evidence that the rule did not
exist, was not only equivocal and contradicted by the employee
himself, but was countered with credible evidence.
[21]
In his opposing affidavit the employee, basically, attempted to
defend the award. He,
inter alia
, contends that the
Commissioner had concluded that there was no rule in place, because
if it had been, then all of the employee’s
superiors ought to
have been disciplined for breaching it, but that did not occur. The
employee contends further, that in view
thereof the Commissioner’s
award cannot be faulted and should “stand”. He also avers
that there was “
no rule which was implemented or fully
implemented
” which had resulted in confusion and in
mistakes being made of the kind that occurred in this matter. He
mentions that he
apologised at the arbitration for those mistakes.
The employee further contends that in view of the length of his
employment with
the appellant, his dismissal was “
exceptionally
harsh
” and that a warning would have been appropriate. He
disputes, in general, that there were any irregularities in the
Commissioner’s
award.
The
Labour Court’s judgment
[22]
In an
ex tempore
judgment, the court
a
quo
held that the
findings of the Commissioner were not above criticism; that he had
“
clearly
misconceived some of the evidence
”;
and that he “
clearly
arrived at conclusions that were doubtful having regard to the
evidence
”. The
court
a quo,
nevertheless, gave weight to the fact that there was no evidence that
the topic of scope had been discussed with the employee or
that the
employee had received training in that regard. It also accorded
weight to the evidence of Mr Britz, to the effect that
although he
had lost a lot of trust in the employee, he could still work with
him. The employee’s long and clean service
record was another
factor taken into account. The court
a
quo
also
expressed doubt about whether the allegations of dishonesty had been
proven and found that, in the absence of a finding of
dishonesty,
dismissal was inappropriate.
[23]
Having traversed various aspects, the court
a quo
concluded as
follows: “On my assessment, therefore, the outcome of the
matter is such that a reasonable Commissioner could
have arrived at
the conclusion that whatever Mr Channer did, did not warrant a
dismissal; and that, therefore, substantively the
dismissal was
unfair.”
[24]
The court
a quo
went on to dismiss the application for review.
Discussion
[25]
There is merit in the submission that the court
a quo
had
misdirected itself in a number of respects. Before dealing with the
individual charges, of which the employee had been found
guilty, it
is noteworthy that the totality of the evidence, important aspects of
which seem to have been overlooked, glaringly
evinces deliberate
manipulation of the quotation process by the employee to secure the
services of F van den Heever Dekoratief,
i.e. “
quotation
rigging
” - a dishonest and corrupt practice that enervates
the effectiveness, and destroys the fundamental requisite fairness,
of
the procurement processes of public bodies conducted by means of
obtaining quotations.
[26]
By generalising that the matter was essentially about whether the
employee contravened a rule, the Commissioner failed to heed
the true
nature of the individual charges, what was required to be proved in
respect of each of them and the evidence presented
in discharge of
the
onus
in respect of those charges. The Commissioner’s
reasoning was not merely “
not above criticism
”,
but materially irregular in a number of respects and does not fall
within the bounds of reasonableness.
[27]
The court
a quo’s
ultimate finding that, notwithstanding
criticism of the Commissioner’s reasoning, the sanction was
reasonable, also overlooked
the exact nature of the charges and the
cogent evidence presented as proof of them. A reasonable commissioner
would not have come
to the same conclusions as the Commissioner in
this matter.
[28]
It was never the employee’s case, and no evidence was tendered,
that the employee did not understand the policy applicable
to
procurement by means of obtaining quotations, or that he did not have
sufficient training in that regard. Consequently, the
court
a quo
misdirected itself in finding for the employee on such grounds.
[29]
In considering the individual charges, it is apparent that charge 1
has nothing to do with the rule which the Commissioner
had in mind,
but relates squarely to whether the employee wilfully disobeyed a
lawful instruction given to him by his superior,
Mr Britz, to provide
the participating contractors with project scope and attendance
register documents, in order for them to submit
those documents with
their quotations.
[30]
It was not disputed that the employee never gave those documents to
the participating contractors, and that they were never
submitted by
him. It was further not in issue that he had been given the
instruction by Mr Britz and that he did not comply with
the
instruction. He only gave the representative of F van den Heever
Dekoratief an attendance register. The employee’s justification
for not complying with the instruction, which he only raised when he
gave evidence, was that it made “
no sense
”, and
he, therefore, disregarded the instruction, without seeking any
clarification from Mr Britz.
[31]
On the probabilities, the rationale for completing those documents
and furnishing them to participating service providers,
in order for
them to submit those documents with their quotes, must have been
clear to the employee. It is essential to ensure
fairness of the
quotation process. The service providers have to quote for the same
scope of work (including any specifications)
and it enables the
assessors of those quotes to compare “
like with like
”,
or “
apples with apples
”. The absence of complete,
uniform scope documents could conceivably undermine all of those
objectives and facilitate under-quoting,
or over-quoting, which could
serve the purposes of rigging.
[32]
The evidence further established that the failure to give all the
service providers an attendance register was probably deliberate.
The
unsuccessful providers were told that they were the only ones
attending the site meeting and were led to believe that they
would be
the only contenders for the job. Unbeknown to them, the employee
allowed another provider a separate site visit. There
is no evidence
that the scope of work, as communicated by the employee to the
unsuccessful providers, and that communicated by
him to F van den
Heever Dekoratief, were identical in all material respects.
[33]
The first charge was proved on the evidence and the failure of the
Commissioner to find accordingly was a material irregularity.
The
court’s failure to conclude accordingly was, similarly, a
misdirection.
[34]
The second charge was also proven. Ms Prinsloo’s evidence to
the effect that the late quotation was not to be accepted
and was to
be discarded was not contested. When she subsequently discovered that
F van den Heever Dekoratief had been appointed,
she queried it,
because that provider’s quote was supposed to have been
discarded, or disallowed, for being late. Mr Britz
testified that the
employee told him that Ms Prinsloo had no difficulty with the late
quotation and that it was acceptable because
it was the lowest quote.
But that was a lie. The employee had dishonestly misrepresented the
true facts and had deliberately misled
Mr Britz into accepting the
late quote.
[35]
Charge 4 was proven. Mr Britz gave uncontested evidence that he would
not have allowed F van den Heever Dekoratief to attend
a separate
site inspection. The employee was not authorised by any of his
superiors to allow F van den Heever Dekoratief a separate
site visit.
[36]
Charge 6 was also proven. The employee did not seek permission
from his superiors to allow F van den Heever Dekoratief
to conduct a
separate site visit, and the rationale for not allowing a separate
site visit must have been known to the employee.
That he must have
appreciated the impropriety of such a visit, is evident
inter alia
from the fact that he did not inform the other two service providers
of the indulgence which he was to afford F van den Heever
Dekoratief,
instead he made them believe that they were the only parties
competing for the job.
[37]
Similarly, charge 7 was proven. The explanation the employee advanced
for the promise which he made to Mr Motshumi, when he
realised that
Mr Motshumi was going to complain about the separate site visits, is
not credible. The employee was clearly aware
of Mr Motshumi’s
grievance and the promise was made in order to prevent Mr Motshumi
from bringing those irregularities, which
he observed, to the
attention of the university authorities. The employee promised that
he would “
look after”
Mr Motshumi. In its context,
it was a promise of (an) implied, unmerited favour(s) that he would
in future do for Mr Motshumi, in
return for Mr Motshumi’s
silence about the irregularities.
[38]
As stated at the outset of this discussion, viewed in its totality,
the evidence evinces a scheme of “
quotation rigging
”
perpetrated by the employee to ensure that F van den Heever
Dekoratief got the contract to paint the fence. To attain that
objective, the employee not only told lies, which were the subject of
certain of the charges, but also lied to Ms Prinsloo, for
example,
about the existence of the third quote which he alleged was probably
in the office of Mr Britz, while he knew full well
that he had told
Mr Van den Heever to put the quote under the door of his office and
not in the quotation box.
[39]
In light of the seriously dishonest conduct of the employee, the
sanction of dismissal was appropriate. The failure of the
Commissioner and of the court
a quo
to find accordingly is
regrettable. A reasonable commissioner would have found differently.
In light of the fact that there was
no opposition to the appeal there
should be no costs order.
[40]
In the result:
40.1 The appeal
succeeds.
40.2 The order of
the court
a quo,
dismissing the appellant’s review
application, is set aside and is replaced with the following order:
‘
1.
The arbitration award issued by the second respondent under case
number F51237/11,
on 10 September 2011, is reviewed and set aside;
2.
The dismissal of the first respondent (Mr E J Channer) was
substantively fair;
3.
The first respondent is to pay the costs of the application.
’
_______________________
P Coppin
Judge
of Appeal
Tlaletsi
DJP and Sutherland JA concur.
APPEARANCES:
FOR
THE APPELLANT:
S Grobler
Instructed by Phatshoane Henney Inc
FOR
THE FIRST RESPONDENT:
No Appearance