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[2018] ZALAC 22
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Malapalane v Glencore Operations South Africa (Pty) Ltd (Goedevonden Colliery) and Others (JA59/2017) [2018] ZALAC 22; (2018) 39 ILJ 2467 (LAC) (15 August 2018)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case no:
JA59/2017
In the matter
between:
LETHOKGO
ABRAM
MALAPALANE
Appellant
and
GLENCORE
OPERATIONS SOUTH AFRICA
(PTY) LTD
(GOEDEVONDEN
COLLIERY)
First
Respondent
COMMISSION
FOR CONCILIATION
MEDIATION AND
ARBITRATION
Second
Respondent
COMMISSIONER
M.A MASHEGOANA N.O
Third
respondent
Heard: 22
March 2018
Delivered: 15
August 2018
Summary:
Review
of an arbitration award -
Employee
dismissed for misrepresenting information regarding the grade of coal
which resulted in loss of revenue and reputational
damage –
commissioner reinstating employee on the grounds that employer failed
to prove intent and accepting the employee’s
contention that
RBCT Laboratory used a different sampling method to that of employer–
Labour Court setting aside award and
remitting dispute for
arbitration
de novo
Appeal
- the
question
central to the appeal was whether the employee misrepresented to the
employer that the coal test results furnished by his
laboratory were
accurate.
Held that the commissioner
misconceived the nature of the enquiry when he concluded that the
employer failed to demonstrate how
the employee misrepresented
information which led to the rejection of the 40 trains of coal - He
overlooked that this was a disciplinary
complaint and not a criminal
offence. Held further, that there was intention to deceive on the
part of the employee in that he
made his employer to believe that the
test results furnished were correct when, in fact, this was not true.
Court finding that Labour Court had
sufficient evidence to substitute commissioner’s award
following its conclusion that the
commissioner had misconstrued the
nature of the enquiry – Appeal dismissed– Court
substituting Labour Court’s
remittal order with an order to the
effect that the dismissal of the employee was both procedurally and
substantially fair.
Coram:
Phatshoane ADJP, Jappie and Coppin JJA
JUDGMENT
PHATSHOANE ADJP
[1]
This
is an appeal against the whole of the Judgment and order of Labour
Court (
per
Malindi
AJ) delivered on 05 January 2017, reviewing and setting aside the
arbitration award dated 10 February 2015 issued under
Case No:
MP9292/14 by Commissioner M.A Mashegoana (“the commissioner”),
the second respondent, under the auspices of
the Commission for
Conciliation Mediation and Arbitration (“the CCMA”), the
third respondent, and remitting the matter
to the CCMA for
arbitration
de
novo
before a different commissioner. The appeal is with leave of the
Court
a
quo
.
[2]
Mr
Lethokgo Abram Malapane, the appellant, was employed on 24 December
2013 in a senior position of laboratory superintendent by
Glencore
Operations South Africa (Pty) Ltd (Goedevonden Colliery)
(“Glencore”), the first respondent. He was in charge
of
the GGV
[1]
Laboratory and had four supervisors and approximately 26 laboratory
technicians reporting to him. He reported to Ms Silindekuhle
Sizo
Sithole, a senior metallurgist at Glencore and a head of a
department.
[3]
Ms
Sithole had weekly meetings with the appellant when he commenced
employment, where his KPI (key performance indicators) would
be set
and reviewed. He was trained and constantly coached to perform his
job. An internal audit was also conducted which resulted
in a number
of findings being made. On the basis of these findings, Ms Sithole
and the appellant looked into various disciplines
within the
laboratory system, such as the sampling, preparation and analysis of
the coal samples and determined what measures to
put in place in
respect of each of these disciplines. Where the coal test results of
the GGV laboratory were inadequate, or off
specifications, the
appellant would be tasked to conduct an investigation and draw an
action plan to address the problems. When
these failed, according to
Ms Sithole, two counselling sessions were held with the appellant.
[4]
The
GGV laboratory was not accredited and therefore its test results had
to be approved by the Richards Bay Coal Terminal (“RBCT”),
which had efficient laboratory systems
[2]
and was accredited to test coal for the entire industry. The
acceptable reproducibility
[3]
between GGV and RBCT is 0.3 mega joules. Anything above 0.3 mega
joules will result in the rejection of the coal.
[5]
Glencore
relied on GGV laboratory to determine the quality of coal and would
decide to which customer the coal, of a particular
specification,
would have to be directed. The accuracy of the test results was
dependent on sampling, preparations and analysis
of the samples. The
test carried out on coal destined for the RBCT had to be correct and
accurate. According to Ms Sithole, this
also depended on sampling,
preparation and analysis of the samples. As part of his duties, the
appellant was responsible to coordinate
the work of the GGV
Laboratory which included the preparation of coal, analysis and
reporting on the test results. Ms Sithole explained
that on repeated
occasions she received the test results from the GGV laboratory to
the effect that the quality of coal was on
specification and would
rely on this information to make decisions on behalf of Glencore to
dispatch the coal to the relevant customer,
who will accept the
product of the grade specified. However, upon reaching the customer
concerned, the coal would be off-specification.
[6]
Ms
Sithole intimated that the reproducibility of the laboratory prior to
the appellant’s assumption of his leadership role
was
approximately 63%. The target set by Glencore was 70%. She explained
that with the appellant’s level of expertise and
experience
Glencore expected that the reproducibility would increase. However,
under his stewardship, reproducibility declined
to 30%. The price of
coal was $65 per ton, and approximately R5.7 million in respect of
one train, should the quality be on specification.
Ms Sithole says
that 40 trains were rejected by the RBCT laboratory during the period
01 May to 19 September 2014, because the
GGV laboratory represented
to Glencore that the coal was of a particular grade which proved to
be false, following the tests which
were conducted by the RBCT. The
rejection which was below acceptable levels caused Glencore
reputational damage and loss of revenue
in the amount of
approximately R230 million.
[7]
In
defence of the claims of misrepresentation, the appellant explained
that when he commenced working for Glencore, the laboratory
had been
outsourced to an institution called ALS. During January 2014, when
ALS was in charge of the laboratory, Glencore experienced
coal
rejections which no one was held to account for. He took over the GGV
laboratory at the end of January 2014 with no systems
in place
because ALS took its equipment on its departure. He intimated that
the cause of the difference in the accuracy level of
the test results
conducted by his GGV laboratory and the RBCT was largely due to
different equipment that was used by the two laboratories
and their
methods of sampling. His laboratory took samples of export coal from
the conveyor belt every 15 minutes and put same
in wastebaskets for
preparation and analysis. After this 15 minutes interval, coal will
pass (not sampled) on the conveyor belt
to the train. He says that
the RBCT did not use the same sampling method. In his view, the
differences in the quality of coal were
inevitable and would have had
to be corrected through a process of investigation and rectifying
faults as opposed to dismissing
an employee.
[8]
The
appellant was subjected to a disciplinary enquiry on a charge of
misrepresenting information regarding the grade of coal which
resulted in loss of revenue and reputational damage to the GGV
Laboratory. At the disciplinary hearing, it was found: that he did
not verify the sample results presented to him by his laboratory;
that he failed to pick up errors in the calculations made on
the
samples, which had an impact on their quality; that 40 trains had
been rejected between May to September 2014, which resulted
in loss
of revenue; that he was aware that certain information was
misrepresented and condoned this by not taking corrective action
against his subordinates. He was found guilty as charged and
dismissed from the services of Glencore on 17 October 2014. He
challenged
the fairness of his dismissal by referring his dispute to
the CCMA for conciliation and arbitration.
[9]
In
his arbitration award the commissioner found that Glencore had failed
to demonstrate how the appellant misrepresented information
which led
to the rejection of the 40 trains by the RBCT due to poor quality.
The commissioner was of the view that misrepresentation
ought to have
an element of intention to deceive the other party, and held that
Glencore’s case had never been that the appellant
deliberately
attempted to deceive it with the intention to benefit.
[10]
The
commissioner found that Ms Sithole was not credible because, in his
view, she was selective in responding to questions posed.
He further
found that the misconduct in issue did not merit a sanction of
dismissal because the GGV was not an accredited laboratory.
In any
event, he held that the GGV and the RBCT systems were different, in
that the latter was automated and inspected regularly.
[11]
The
commissioner was of the view that the appellant was a credible
witness who did not deviate from his undisputed version that,
following the termination of the services of ALS, coal was
transported directly into the trains via conveyer belts for
distribution
to the customers without having been tested. Further,
that during the transportation,
en
route to Richards Bay, the exposed coal lost its moisture. He
concluded that the appellant’s dismissal was procedurally fair
but substantively unfair. He awarded the appellant compensation in
the amount of R342 000.00.
[12]
On 10
April 2015, Glencore brought an application to review and set aside
the commissioner’s award in terms of
s145
of the
Labour
Relations Act, 66 of 1995
. On review, the Labour Court identified
that the issue that arose for consideration was whether, absent
accreditation, the GGV
laboratory produced results that were
credible. The case was not about the difference in the sampling test
(repeatability) done
at the GGV laboratory, but was about the
certified quality of coal produced by GGV which had not been
confirmed by the RBCT (reproducibility).
The Court found that the
appellant did not present evidence that the GGV results were invalid.
On the contrary, the appellant questioned
why the RBCT results were
preferred over his GGV’s results.
[13]
The
Court
a
quo
found the commissioner to have erred in the conduct of the
arbitration proceedings because the central issue was not about which
laboratory had been accredited. The appellant’s version that
the two laboratories were different and used different methods
had
not been put to Ms Sithole, whose unchallenged evidence was that the
two laboratories used the same method of sampling. The
Court found no
substance in the commissioner’s finding that Ms Sithole was not
a credible witness. It had not been put to
her that she was evasive.
She fairly answered all questions put to her. It further found that
the commissioner erred in relying
on the appellant’s version
that the quality of coal could have been affected due to exposure to
the elements because this
version was not put to Ms Sithole.
[14]
On
the question of misrepresentation, the Court found that the GGV had
to meet a target of 70% accuracy in respect of its coal
specification. During the period May to September 2014 it achieved
50% and was at 30% in the latter part of the period. It found
the
appellant to have seriously deviated from the standard set. What had
to be considered was whether his conduct constituted
misrepresentation. It found that the commissioner incorrectly applied
the criminal law requirements that misrepresentation must
have an
element of intent to deceive the other party. It held that intention
was not a requirement. It was sufficient that over
the period,
despite attempts at corrective action, the appellant misrepresented
to Ms Sithole that 40 trains had coal that met
the specifications for
the categories of quality that he communicated to Ms Sithole. The
information he supplied was found to be
incorrect because of the
significant disparity in the data he provided from the required
specifications.
[15]
As
already alluded to, the Court
a
quo
reviewed and set aside the commissioner’s award and remitted
the matter to the CCMA for arbitration afresh before a commissioner
other than the third respondent.
[16]
The
grounds of appeal can be summed up as follows. It was contended, for
the appellant, that the Court
a
quo
erred:
16.1 in reviewing and setting aside
the arbitration award;
16.2 in finding that the commissioner
incorrectly applied “the principle of misrepresentation”;
16.3 in finding that the appellant was
guilty of serious deviation from the company standards,
notwithstanding that this was not
a charge he faced.
16.4 in interfering with the
credibility findings made against Ms Sithole by the commissioner when
this aspect resided within the
knowledge of the trier of facts;
16.3 in accepting Glencore’s
version without justification; and
16.4 in finding that there was
mischaracterization of the offence committed, despite the precise
nature of the charge and evidence
to the contrary.
[17]
The
pertinent question to be ventilated in this appeal is whether the
appellant made a misrepresentation to Glencore that the coal
test
results furnished by his laboratory were correct and accurate. The
insurmountable hurdle the appellant faces is that he did
not
challenge the evidence that 40 trains were rejected by the RBCT
laboratory during the period 01 May to 19 September 2014 because
his
GGV laboratory represented to Glencore that the coal was on
specifications which proved to be false, following the tests which
were conducted by the RBCT. He did not dispute that he provided Ms
Sithole with false information, which Glencore relied upon to
its
detriment. He sought to exonerate himself from any wrongdoing by
stating that the cause of the difference, in the accuracy
level of
the test results conducted by the two laboratories, was mainly due to
different equipment that was used by these laboratories
and their
methods of sampling. The evidence by Ms Sithole that the two
laboratories used the automated mechanical form of sampling
was not
challenged. The Court
a
quo
was right that this was not what this case was about. The issue, as
correctly found by the Court
a
quo
,
was concerning the quality of coal produced by the GGV laboratory
which had been rejected by the RBCT laboratory.
[18]
Insofar
as the commissioner concluded that Glencore failed to demonstrate how
the appellant misrepresented information which led
to the rejection
of the 40 trains by the RBCT he misconceived the nature of the
enquiry he was enjoined to undertake because he
overlooked that this
was a disciplinary complaint and not a criminal offence. There is a
long line of authority in this Court on
the formulation of
disciplinary charges; that they need not be strictly framed in
accordance with the wording of the relevant acts
of misconduct as
listed in the employer’s disciplinary codes. It was sufficient
that the misconduct alleged in the charge-sheet
was set out with
sufficient clarity so as to be understood by the employee.
[4]
In any event, in my view, there was an intention to deceive on
the part of the appellant in that he made Ms Sithole to believe
that
the test results furnished were correct when, in fact, this was not
true.
[19]
The
criticism by the commissioner that Ms Sithole was not a credible
witness is not borne out by the record. In
Medscheme
Holdings (Pty) Ltd v Bhamjee,
[5]
the SCA sounded a warning against undue weight to the advantages that
are said to be enjoyed by the trial court w
ithout
a careful evaluation of the evidence that was given, as opposed to
the manner in which it was delivered, against the underlying
probabilities
.
Furthermore, in
Minister
of Safety and Security and Others v Craig and Others NNO,
[6]
the SCA remarked:
‘
[58]
Although courts of appeal are slow to disturb findings of
credibility, they generally have greater liberty to do so where
a finding of fact does not essentially depend on the personal
impression made by a witness's demeanour, but predominantly upon
inferences and other facts, and upon probabilities. In such a case a
court of appeal, with the benefit of a full record, may often
be in a
better position to draw inferences.’
[20]
Having
had the benefit of perusing the record, I am of the view that, the
Court
a
quo
was correct in finding that Ms Sithole answered questions put to her
fairly. Not the same can be said of the appellant. While one
appreciates that he represented himself at arbitration, and was
therefore a lay litigant, he never put his defences to Ms Sithole,
inter
alia
,
that difference in the accuracy level of the test results conducted
by his GGV laboratory and RBCT was due to different equipment
that
was used by the two laboratories and their methods of sampling, or
that the quality of coal could have been affected by loss
of moisture
when conveyed to the RBCT laboratory. Regard being had to the
importance of the issues he raised, and further taking
into account
his level of seniority and expertise, it could not have escaped him
to put his defences to Ms Sithole when the opportunity
presented
itself.
[21]
In
accepting the appellant’s defences, which were not relevant to
the question he was called to answer, the commissioner committed
a
gross irregularity in the conduct of the arbitration proceedings. His
assessment
of the evidence was incorrect and resulted in a decision which a
reasonable
decision-maker
could not reach. The Court
a
quo
correctly concluded that the arbitration award stood to be reviewed
and set aside. What merits attention is whether this case ought
to
have been remitted to the CCMA for arbitration afresh before a
different commissioner. The basis upon which the Court
a
quo
remitted the matter to the CCMA is not apparent from the record. This
Court in
Palluci
Home Depot (Pty) Ltd v Herskowitz and Others
[7]
held:
‘
[58]
Where all the facts required to make a determination on the disputed
issues are before a reviewing court in an unfair dismissal
or unfair
labour practice dispute such that the court 'is in as good a
position' as the administrative tribunal to make the determination,
I
see no reason why a reviewing court should not decide the matter
itself. Such an approach is consistent with the powers of the
Labour
Court under
s 158
of the LRA, which are primarily directed at
remedying a wrong, and providing the effective and speedy resolution
of disputes. The
need for bringing a speedy finality to a labour
dispute is thus an important consideration in the determination by a
court of review
of whether to remit the matter to the CCMA for
reconsideration or substitute its own decision for that of the
commissioner.’
[22]
The
Court
a
quo
fully traversed the merits and made a finding
that
the GGV Laboratory failed to meet the reproducibility target of 70%
in respect of its coal specification and that the appellant
had
seriously deviated from the standard set. It then concluded that: “
It
is sufficient that the complaint is that over a period, and despite
endeavours to correct the situation, he represented to Sithole
that
the 40 trains contained coal that met the specifications for the
categories of quality that he communicated to Sithole.”
All that remained was the determination of the appropriate sanction
to be imposed upon the appellant for the deviation. There was,
in my
view, sufficient material before the Court
a
quo
to make that determination. After all, what would be the point of
remitting the matter when the Court had already made a substantive
finding on the merits. This would merely serve to prolong the
inescapable results.
[23]
By
the appellant’s own admission he was well experienced and a
“perfect person for the job”. He worked in laboratories
in different capacities since 2006. The system of graduated
discipline, which Ms Sithole says she invoked in the quest to assist
him to produce the reproducibility target set, came to naught. All
that he ought to have done was to inform Ms Sithole of the correct
test results of his laboratory so that the coal produced could be
directed to a customer prepared to accept the coal of that quality.
Instead, he opted to deceitfully provide incorrect information on the
results. The undisputed evidence, that his misconduct resulted
in
approximately R250 million loss in revenue to Glencore and
concomitant reputational damage, cannot be downplayed. On the whole,
I am of the view, that the sanction of dismissal is appropriate in
the circumstances of this case.
[24]
Regard
being had to the requirements of law and fairness I am not swayed
that the costs should follow the result of the proceedings
in the
Court
a
quo
and this appeal because the arbitration award issued by the CCMA may
have led to the appellant’s entertainment of false hopes
of
achieving success in pursuing this litigation. In the result I make
the following order:
Order
1.
The
appeal is dismissed 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 to review and set aside the arbitration award
dated
10 February 2015 issued under Case No: MP9292/14 by Commissioner M.A
Mashegoana, the third respondent, under the auspices
of the
Commission for Conciliation Mediation and Arbitration, the second
respondent, is upheld;
2.
The arbitration award
dated
10 February 2015, issued under Case No: MP9292/14, is reviewed and
set aside;
3.
The dismissal of
Mr
Lethokgo Abram Malapane, the first respondent, from the services of
Glencore Operations South Africa (Pty) Ltd (Goedevonden Colliery)
(“Glencore”), the applicant, is found to have been
substantively and procedurally fair.
4.
No order is made as to costs.
”
_________________________
MV Phatshoane
Acting Deputy Judge President - The
Labour Appeal Court
Jappie and Coppin JJA concur in the
judgment of Phatshoane ADJP
APPEARANCES:
FOR THE APPELLANT: Mr C Mogane
Instructed by Moshoana Mabena Mogane
Inc.
FOR THE FIRST AND
SECOND RESPONDENT: Mr D Cithi
Instructed by
Mervyn Taback Inc.
[1]
The acronym was not explained on the
record.
[2]
Ms Sithole described RBCT as having
had “
highly optimised
laboratory systems which have proven themselves
.”
[3]
This refers to the level of accuracy
of the test results. Ms Sithole explained this to be the difference
in the test results performed
by two laboratories-the GGV and the
RBCT. The difference should not be more than 3 mega joules per kg
which is computed in terms
of percentages. For example, where 10
trains are loaded in a period of a month and 7 of those trains are
within 3 mega joules
the reproducibility for the particular month
will be 70%.
[4]
Woolworths (Pty) Ltd v Commission
for Conciliation, Mediation & Arbitration and Others
(2011) 32 ILJ 2455 (LAC) at para 32;
First
National Bank—A division of First Bank Ltd v Language and
Others
(2013) 34 ILJ 3103
(LAC) at 3108 para 23.
[5]
2005 (5) SA 339
(SCA) at 345 para 14.
[6]
2011 (1) SACR 469
(SCA) at 479 para
58.
[7]
(2015) 36 ILJ 1511 (LAC) at 1538 para
58.