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[2018] ZALAC 4
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John v Afrox Oxygen Limited (JA90/15) [2018] ZALAC 4; [2018] 5 BLLR 476 (LAC); (2018) 39 ILJ 1278 (LAC) (29 January 2018)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Case
no: JA90/15
In
the matter between:
LOU-ANNDREE
JOHN
Appellant
and
AFROX
OXYGEN
LIMITED
Respondent
Heard:
20 September 2016
Delivered:
29 January 2018
Summary:
Occupational detriment – employee alleges that she was
dismissed as a result of her disclosing the legal flaw into
the
re-grading process – employer alleging that employee dismissed
for incompatibility – Court finding that all employee
has to do
is to believe that the information disclosed shows or tends to show
that an impropriety is or may be committed –
employee’s
evidence that the re-grading of the employees would prejudicially
affect future salary increase reasonable - moreover
employer by
failing to consult the affected employees breaching its legal
obligation to do so. The court
a
quo
’s
finding that the information disclosed should be factually correct
and based on a particular section of the Act, set aside.
Employee
awarded 18 months’ compensation.
Coram:
Waglay JP Ndlovu JA and Coppin JA
JUDGMENT
WAGLAY
JP
[1]
Central
to this appeal is the question whether the appellant made a protected
dismissal consequent to such disclosure or whether
she was dismissed
for incompatibility.
[2]
It
is common cause that the respondent re-grades positions within its
organisation so as to match each position with similar positions
with
other similar employers in the industry. This also provides for
industrial salary consistency. Positions were graded by bands.
Each
band had three grades: low, medium and high. The grades constitute
different salary ranges.
[3]
The
appellant commenced employment with the respondent on 12 June 2012 as
the Head of Talent Management based in the Human Resources
Department. She had a number of persons under her supervision.
[4]
The
genesis of this matter is the discrepancy in the re-grading of one Ms
Armstrong. Armstrong worked under the appellant. On Armstrong’s
return from maternity leave, to enhance her growth and development
within the respondent, she was moved to the position of
Organisational
Development manager. Previously Armstrong held the
position of a Recruitment manager. What concerned the appellant was
the fact
that Armstrong was not re-graded properly. The catalyst to
the dispute lies in an e-mail dated 28 January 2013 which the
appellant
received from the respondent’s manager of
remuneration, compensation and benefits, Nico Wagner (“Wagner”).
The
e-mail was in reply to the appellant’s e-mail wherein she
suggested the salary offer to be made to Armstrong. Wagner responded
that he could not recommend an increase to Armstrong at that stage
because:
‘
The
transfer [of Armstrong] was lateral (Band 2M into Band 2M).
Her current
salary is well established (CR 102%) within the salary band for Band
2M.’
[1]
[5]
When
the appellant received the e-mail, she looked at the respondent’s
record and found that Armstrong’s position had
changed on 01
January 2013 from grade 2H (2 high) to grade 2M (2 medium). The
appellant e-mailed her immediate superior, Francis
Graham (“Graham”)
on 14 February 2013. The essence of the e-mail which was copied to
Wagner reads:
‘…
Also, according
to my records from SAP, the Resourcing Manager was graded a 2H and
therefore Aine [Ms Armstrong]) was a 2H. I’
am not aware of any
changes to the grading for her or her previous role and would be
concerned if this was done without any consultation.’
On
the same day, Wagner responded by stating that the grading validation
was done before the appellant joined the respondent and
was at Band
2M. Further, because it was a lateral transfer with no changes in
salary and benefits, consultation was unnecessary.
Dissatisfied with
what she believed was a lack of integrity in the process and a
discovery of further discrepancies in the re-grading
of five other
employees, the appellant referred the matter to the internal audit
department, Mr Carter, for further investigation.
The appellant also
discussed the matter with Mr Cilliers, the respondent general manager
corporate and governance and the managing
director, Mr Kimber, all of
whom she averred promised to take the matter further as she did the
right thing.
[6]
The
appellant did not receive any feedback. However, on 14 March 2013,
the respondent, represented by Mr Werner Boekels (“Boekels”),
the German representative of the respondent, and Ms Winky Makwela
(“Makwela”), provided the appellant with an offer
of
termination of her services. The termination offer, according to the
respondent, was the result of a feedback from the appellant’s
subordinates about the appellant’s negative actions on the
human resources team. When the appellant protested about the process
being contrary to our labour laws, Boekels’ reaction was that
he did not “give a shit” about the labour laws
of this
country. On 19 March 2013, when it became clear that the appellant
would not accept the offer, the respondent summarily
terminated her
services. The reasons given for the dismissal was incompatibility
with colleagues.
[7]
Unhappy
with her dismissal, the appellant referred the dispute to
conciliation at the National Bargaining Council for the Chemical
Industry, alleging an automatically unfair dismissal. The court
a
quo
subsequently adjudicated the matter.
[8]
The
appellant’s case in the court
a
quo
was that the re-grading of the position, without consultation,
negatively impacted on the future salary increase of the affected
employees and also distorted the accuracy of the employment equity
report submitted to the Department of Labour. According to the
appellant, the distortion of the employment equity report was in
relation to the wage differentials.
[9]
The
respondent, on the other hand, contended that the dismissal of the
appellant had nothing to do with the disclosure but was the
result of
her incompatibility with her colleagues. Further, that the
information which the appellant claimed to have disclosed
was already
known to the employees working in the Human Resources department.
[10]
The
issue which the court
a
quo
was
to determine was whether the dismissal of the appellant was
automatically unfair, because she had allegedly been subjected
to an
occupational detriment arising from making a protected disclosure as
defined by the PDA.
[11]
The
court
a
quo
held that the disclosure must satisfy the criteria set out in section
9 of the PDA to be protected. The court
a
quo
then considered relevant authorities and held that the information
the appellant disclosed to support the existence of a reasonable
belief, in order to enjoy the protection provided by the PDA,
required a factual basis and was limited to a particular section,
or
sections, of the Labour Relations Act 66 of 1995 (LRA), Basic
Conditions of Employment Act 75 of 1997 (BCEA) or other labour
legislation.
[12]
In
relation to the appellant’s contention that the re-grading
without consultation of the positions would affect the employees’
future salary increase, the court
a
quo
held that this contention was baseless. It took the view that the
information was not serious enough to elevate the information
disclosed to the overriding importance of public interest. The court
a quo
then drew an inference that the information claimed to be protected
was already known to the person to whom it was disclosed and
therefore not protected.
[13]
As
regards the failure by the respondent to consult
the
affected employees before the re-grading
,
the court
a
quo
held that
the
appellant was unable, during cross-examination, to show on what basis
she was contending that the respondent had a duty to consult
with
those employees who were re-graded. It rejected her reliance on the
provisions of the LRA and the BCEA on the basis that a
“simple
investigation by a person at her level regarding the provisions of
the two legislation would have revealed that there
was no basis to
claim failure on the part of the respondent to consult before
undertaking the grading of employees.”
[2]
[14]
In
relation
to
the employment equity reporting, the court
a
quo
held that the appellant had failed to show that her belief was
reasonable. It upheld the respondent’s contention that the
employment equity report is made online to the Department of Labour,
audited and published in its annual report. In this regard,
it
concluded that the appellant had failed to provide a factual basis
for her belief that because the salaries of the employees
would
remain unchanged after the re-grading, that would affect the report
on the wage differentials to be made to the Department
of Labour.
Having satisfied itself that the appellant had failed to show the
existence of a reasonable belief about the information,
the court
a
quo
concluded thus:
‘
In light of
the above, I am of the view that the applicant has failed to make out
a case that the information she disclosed to the
respondent is worthy
of protection envisaged in the PDA. Put in another way, the applicant
has on the facts she presented, failed
to show the existence of a
reasonable belief that the respondent had engaged in conduct that
falls within the definition of protected
disclosure as envisage in
the PDA.’
[3]
The
court
a quo
consequently dismissed her automatically unfair
dismissal claim. It is this finding with leave of the court
a quo
that the appellant seeks to have overturned in this appeal.
[15]
The
appellant’s contention may be summed-up as follows: that the
court
a
quo
erred in finding that it was required of her to comply with section 9
of the PDA. She submits that as the disclosure was made to
her
employer, she needs only to comply with section 6 of the PDA in that
the requirement of a reasonable belief is only present
in section 9.
The appellant then submits that in light of section 6, she was only
required to prove a credible possibility that:
(a)
She
had reason to believe that the information she disclosed tended to
show that a criminal offence had been committed, is being
committed
or may be committed in the future, or that the respondent failed, is
failing or may in the future fail to comply with
a legal obligation;
(b)
She
made the disclosure in good faith; and
(c)
She
followed a procedure prescribed or authorised by her employer.
Consequently,
she submitted that she had discharged her evidentiary burden and that
even if section 9 applies, she did have a reasonable
belief. The
appellant also seeks notice pay due to her as a result of her
dismissal without notice.
[16]
The
respondent, as was the case in the court
a
quo,
pursued in this Court the same line of argument, namely, that the
appellant was dismissed for incompatibility.
[17]
Dismissal
for occupational detriment is governed by section 187(1)(h) of the
LRA. It renders automatically unfair a dismissal as
a result of an
employee having made a protected disclosure. Section 4(2)(a) of the
PDA also provides that any dismissal in breach
of section 3 is deemed
to be an automatically unfair dismissal as contemplated in section
187 of the LRA.
[18]
In
section 1 of the PDA, “disclosure is defined as”
‘
any
disclosure of information regarding any conduct of an employer, or an
employee of that employer, made by any employee who has
reason to
believe that the information concerned shows or tends to show that -
(a)
that a
criminal offence has been committed, is being committed or is likely
to be committed;
(b)
that a person has failed, is failing or is likely to fail to comply
with any legal
obligation to which that person is subject;
(c)
that a miscarriage of justice has occurred, is occurring or is likely
to occur;
(d)
that the health or safety of an individual has been, is being or is
likely to be endangered;
(e)
that the
environment has been, is being or is likely to be damaged;
(f)
unfair
discrimination as contemplated in the Promotion of Equality and
Prevention of Unfair Discrimination Act, 2000
(
Act
4 of 2000
);
or
(g)
that any
matter referred to in paragraphs (a) to (f) has been, is being or is
likely to be deliberately concealed.’
[19]
Further
disclosures made by an employee to its own employer is dealt with in
section 6(1) of the PDA which provides:
‘(
1) Any disclosure made in good
faith—
(a) and substantially in accordance
with any procedure prescribed, or authorised by the employee’s
employer for reporting
or otherwise remedying the impropriety
concerned; or
(b) to the employer of the employee,
where there is no procedure as contemplated in paragraph (a),
is a protected disclosure.’
[20]
Section
9 also concerns disclosures made by an employee concerning his/her
employer to a party other than an employer. That this
is so is
evident from section 9, which provides:
‘
(1)
Any disclosure made in good faith by an employee—
(a)
who reasonably believes that the information disclosed, and any
allegation contained
in it, are substantially true; and
(b)
who does not make the disclosure for purposes of personal gain,
excluding any reward
payable in terms of any law;
is a protected disclosure if—
(i)
one or more of the conditions
referred to in subsection (2) apply; and
(ii)
(ii) in all the circumstances
of the case, it is reasonable to make the disclosure.
(2)
The conditions referred to in subsection (1)(i) are–
(a)
that at the time the employee who makes the disclosure has reason to
believe that
he or she will be subjected to an occupational
detriment
if he or she makes a disclosure to his or her employer in accordance
with section 6;
(b)
that in a case where no person or body is prescribed for the purposes
of section 8
in relation to the relevant impropriety, the employee
making the disclosure has reason to believe that it is likely that
evidence
relating to the impropriety will be concealed or destroyed
if her or she makes the disclosure to his or her employer;
(c)
that the employee making the disclosure has
previously made a
disclosure of substantially the same information to
–
(i)
his or her employer
;
or
(ii)
(ii) a person or body referred
to in section 8,
In respect of which no action was
taken within a reasonable period after the disclosure; or
(d)
that the impropriety is of an exceptional serious nature.
(3)
In determining for the purposes of section (1)(ii) whether it is
reasonable for the
employee to make the disclosure, consideration
must be given to –
(a)
the identity of the person to
whom the disclosure is made;
(b)
the seriousness of the
impropriety;
(c)
whether the impropriety is
continuing or is likely to occur in the future;
(d)
whether the disclosure is
made in breach of a duty of confidentiality of the employer towards
any other person;
(e)
in a case falling within
subsection (2)(c), any action which the employer or the person or
body to whom the disclosure was made,
has taken, or might reasonably
be expected to have taken, as a result of the previous disclosure;
(f)
in the case falling within
subsection (2)(c)(i),
whether
in making the disclosure to the employer the employee complied with
any procedure which was authorised by the employer:
and
(g)
the public interest.
(4)
For the purposes of this section a subsequent disclosure may be
regarded as a disclosure
of substantially the same information
referred to in subsection (2)(c) where such subsequent disclosure
extends to information
concerning an action taken or not taken by any
person as a result of the previous disclosure.’ (Own
underlying)
[21]
In
the circumstances and in terms of the definition, an employee needs
only have “reason to believe” that the information
concerned “shows” or “tends to show” that the
listed impropriety “has been” or “is being”
or “may be committed in the future”.
[4]
[22]
In
this matter, the appellant made the disclosure only to her employer
and, as such, in my view, it is only section 6 of the PDA
that is
relevant. The court
a
quo
’s
view that section 9 also applies cannot be sustained. Section 9 is
concerned with disclosures made to someone other than,
or in addition
to the employer, or a co-employee. To the extent that the court
a
quo
relied
on this Court’s judgment in
Malan
v Johannesburg Philharmonic Orchestra
[5]
it
erred. In that matter, the employee concerned made disclosures to
colleagues who were not all employees of his employer. (See
also
State
Information Technology (Pty) Ltd v Sekgobela
(2012)
33 ILJ 2374 (LAC) at para 27;
SA
Municipal Workers Union National Fund v Arbuthnot
(2014)
35 ILJ 2434 (LAC) at para 5).
[23]
It
is also instructive to note that the heading to section 6 is
“Protected disclosure to employer” and section 9 is
headed “General protected disclosure” this is a further
pointer that section 6 is the applicable section where the
disclosure
is only made to the employer.
[24]
A
proper reading of section 9 reinforces this view as it provides for
disclosure to a party in circumstances where the employee
may fear
tampering of evidence by the employer or possibly occupational
detriment.
[25]
In
the circumstances, for the disclosures made by the appellant to
qualify as protected disclosure as stated earlier, the appellant
had
to have reason to believe that the information she disclosed, at the
very least, tended to show that an impropriety has, is
being, or may
be committed, or that the respondent has, is failing, or may in the
future fail to comply with its legal obligation.
Furthermore, that
the appellant acted in good faith when she made the disclosures and
in doing so followed procedures either prescribed
or authorised by
the employer.
[26]
The
court
a
quo,
while
accepting that the belief needs not be correct, took a contrary view
that the belief must be based on facts in order to enjoy
the
protection of the PDA. Based on that the court
a
quo
held that the appellant had “on the facts she presented, failed
to show the existence of a reasonable belief that the respondent
had
engaged in conduct that falls within the definition of protected
disclosure as envisaged in the PDA”.
[6]
This
approach is misconceived. In
SA
Municipal Workers Union National Fund v Arbuthnot
,
[7]
the court held that “t
he
enquiry is not about the reasonableness of the information, but about
the reasonableness of the belief”. This is so because
the
“requirement of 'reasonable belief' does not entail
demonstrating the correctness of the information, because a belief
can still be reasonable even if the information turns out to be
inaccurate.”
[8]
[27]
In
Radebe,
this Court held that the requirement of a reasonable belief:
‘…
cannot
be equated to personal knowledge of the information disclosed. That
would set so high a standard as to frustrate the operation
of the
PDA. Disclosure of hearsay opinion would, depending on the
reliability, be reasonable. A mistaken belief or one that is
factually inaccurate can nevertheless be reasonable. A mistaken
belief or one that is factually inaccurate can nevertheless be
reasonable unless the information is so inaccurate that no one can
have interest in its disclosure.’
[9]
[28]
In
holding that the appellant should prove the correctness of the facts
for existence of the belief in order to enjoy protection,
the court
a
quo
elevated
the requirement of the reasonableness of the belief to one of the
accuracy of the facts upon which the belief was based.
This sets a
higher standard than what is required by the PDA, and such a
requirement would frustrate the operation of the PDA.
[29]
All
that is required is for the appellant to reasonably believe that the
conduct is unlawful. In this matter, the appellant’s
contention is that the discrepancies she noticed in the re-grading
process would be detrimental to any future salary increase of
the
affected re-graded employees and that it would also affect the
employer’s employment equity reports, which it is legally
obliged to make to the Department of Labour. The appellant reasonably
believed that there were inaccuracies in the re-grading system.
This
was conceded by the respondent’s witness, Ms Makwela, under
cross-examination. The explanation she gave for the inaccuracy
is
that the system takes longer to implement the change.
[10]
In view of the concession that the system was not up to date with the
changes, it was not erroneous for the appellant to believe
that the
information she disclosed was substantively true. Having found that
the appellant reasonably believed that the disclosure
was
substantively true, namely, that the employees were re-graded to a
lower grade without their knowledge or consent, the next
leg of the
inquiry is whether it was reasonable for the appellant to have made
the disclosure.
[30]
The
court
a
quo
did
not deal with the question of whether it was reasonable to have made
the disclosure, being content with its finding on
the failure
of the appellant to prove the existence of a reasonable belief.
Consequently, the parties did not deal with the question,
save for
the appellant’s submission that the respondent had failed to
comply with its legal obligation to consult the employees
who were
being prejudiced by the unilateral re-grading. In any event, the
assessment of the reasonableness of the disclosure is
done in light
of the two reasons advanced by the appellant in justifying her
disclosure viz (i) that the re-grading without consultation
would
affect future salary increases of the employees and (ii) the
incorrect re-grading would affect the report submitted to the
Department of Labour.
[31]
The
appellant’s case is that the re-grading was not in compliance
with the employer’s legal obligation. In the case
of Armstrong,
the appellant observed her notch has changed from 2 H to 2M and
alerted the employer. She first e-mailed her immediate
supervisor,
Wagner, who stated that because it was a lateral transfer, the salary
should remain unchanged. She then e-mailed Graham
and stated that
Armstrong was graded 2H and was not aware of any change. A further
e-mail from Wagner explained that the grading
process was done prior
to the appellant joining the respondent.
[32]
What
is surprising in all of these explanations is that the change
occurred in early January 2013. By that time the appellant had
been
with the respondent for some six months. The explanation that the
grading process was done before the appellant joined the
respondent
is irreconcilable with the explanation of Ms Makwela under
cross-examination. She testified that the change to the system
does
not happen immediately, in that there is always a delay in the
implementation date. It is improbable that the respondent would
take
more than six months to effect a change in the system. Moreover, I
find it strange that the appellant was not given that same
explanation when she queried the discrepancies.
[33]
Furthermore,
Ms Makwela’s testimony was that the positions were downgraded
because the reporting line changed from Graham
to the appellant.
This, if anything, indicates that there was non-compliance in the
re-grading process. The further question that
arises is why did the
explanations only surfaced during the court proceedings especially,
as put by the appellant, when she had
discussed the matter with no
less than five senior managers.
[34]
Following
on
SFW
Group
Limited and Another v Martel Et Cie and Others,
[11]
I am of the view that the
probabilities favour the appellant. The initial explanations provided
by the respondent about the discrepancies
in the re-grading process,
differ from the explanation given in the court proceedings. The
respondent’s evidence also demonstrates
that the re-grading was
done without following due process. The explanations provided by the
respondent are, in my view, all an
afterthought. Since there was no
compliance with due process, it, ultimately, follows that the
appellant rightly believed that
the re-grading process would
prejudicially affect employees’ future salary increase. This is
also borne out by Wagner’s
e-mail to the appellant, that no
salary increase was foreseeable for Armstrong in the near future
because of the re-grading. The
re-grading had placed Armstrong on a
scale above the norm for her new grade.
[35]
It
is curious that the court
a
quo
held
that there was no duty on the part of the respondent to consult
because the appellant failed to refer to specific provisions
of the
LRA or the BCEA enjoining consultation.
[36]
It
is not disputed that the employees that were re-graded were not
consulted. The respondent’s justification for the failure
to do
so is that the grading did not affect employees’ salary and
benefit, thus there was no need to consult with them. By
failing to
consult the affected employees and by unilaterally re-grading the
employees, the respondent failed to follow the very
basic prescript
of our labour laws which is to consult an employee or his/her
representative when the employees’ rights are
to be affected.
The
appellant was rightly concerned with the legal flaw in the re-grading
process and properly raised it with her employer.
[37]
In
relation to the employment equity reporting: the court
a
quo
held
that the appellant failed to show that her belief was reasonable. The
court
a
quo
upheld
the version of the respondent as unchallenged, namely, that the
report is made online to the Department of Labour, audited
and
published in its annual report. This was never put to the appellant
in cross-examination for comment. That being the case,
there was no
basis for the court
a
quo
to
accept the respondent’s version or regard it as unchallenged.
The court
a
quo
then held that the appellant had again failed to provide a factual
basis for her belief that because the salaries of the employees
would
remain unchanged after the re-grading, that would not affect the
report on the wage differentials to be made to the Department
of
Labour. As stated earlier, the court
a
quo
’s
finding is misconceived. The appellant should simply have a
reasonable belief that the discrepancies in the re-grading
process
would influence the employment equity report. To require the
appellant to factually prove the basis for the reasonableness
of her
belief is not a requirement. In fact, the court in
SA
Municipal Workers Union National Fund v Arbuthnot
,
held that
a
belief can still be reasonable even if the information turns out to
be inaccurate.
[12]
[38]
In
this case, it is found that there were irregularities, but even if
the reasons for her belief appear unfounded, that does not
render the
disclosure unreasonable, because the information disclosed was
substantively true. I agree with the court
a
quo
that
section 27
of the
Employment Equity Act 55 of 1998
only requires
a designated employer to put measures in place where there is a
disproportionate income in order to progressively
reduce such
differentials, but failed to recognize that a skewed report could
affect how the information is interpreted. As submitted
by the
appellant, all what was required of the appellant was a reasonable
beliefthat the information she disclosed tends to show
that “a
skewed report may be produced for purposes of the
Employment Equity
Act&rdquo
;.
[39]
In
light of the above, the appellant reasonably believed that the
re-grading process was done in a manner that violated the legal
obligation to which the respondent was bound and it was reasonable to
have made the disclosure. There is no ulterior motive; the
appellant
acted in good faith and reasonably believed that the information was
substantively true. It then follows that the respondent’s
contention that the appellant was dismissed for incompatibility is
nothing short of fiction and the only probability is that the
appellant’s dismissal was in retaliation for her disclosure of
the irregularities in the re-grading process. The appellant
was
dismissed for making a protected disclosure and as a result suffered
occupational detriment. Her dismissal is therefore automatically
unfair and, as such, she is awarded compensation equivalent to 18
months’ remuneration based on the gross salary she was
earning
at the time of her dismissal.
[40]
With
regards to the claim of notice pay, in view of the above compensatory
order, I see no reason to add notice pay to her award.
[41]
Having
regard to considerations of law and fairness, there is no reason why
costs should not follow the result, both in this Court
and in the
court
a
quo
.
Order
[42]
In
the result,the following is ordered:
1
The appeal
is upheld with costs.
2
The order
of the court
a
quo
is
substituted with the following order:
‘
(i)
The applicant’s dismissal constitutes an automatically unfair
dismissal and
the respondent is ordered to compensate the applicant
in a sum equal to 18 months’ salary.
(iii)
The respondent is to pay the
costs of suit.’
______________
Waglay
JP
I
Agree
_______________
Coppin
JA .
APPEARANCES:
FOR
THE APPELLANT:
Adv H Van der
Merwe
Instructed
by Senekal Simmonds Inc
FOR
THE RESPONDENT:
Adv Terry Motau SC
Instructed
by Baloyi Attorneys
[1]
Record vol 1 at
40.
[2]
At para 35.
[3]
At para 39.
[4]
See
Radebe
v Premier Free State Province
(2012) 33 ILJ 2353 (LAC) at para 20 (
Radebe
).
[5]
(JA61/11)
[2013]
ZALAC 24
at para 11.
[6]
At para 35.
[7]
(2014) 35
ILJ
2434 (LAC) at para 15.
[8]
At para 15.
[9]
At para 36.
[10]
Record vol 2 page
103.
[11]
2003
(1) SA 11
SCA.
[12]
At para 15.