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[2019] ZALAC 72
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De Beers Consolidated Mines Ltd (Venetia Mine) v National Union of Mineworkers and Others (JA83/18) [2019] ZALAC 72; [2020] 3 BLLR 251 (LAC); (2020) 41 ILJ 884 (LAC) (11 December 2019)
IN THE LABOUR APPEAL
COURT OF SOUTH AFRICA, JOHANNESBURG
Reportable
Case no: JA83/18
DE BEERS CONSOLIDATED
MINES LTD
(VENETIA
MINE)
Appellant
and
NATIONAL UNION OF
MINEWORKERS
First Respondent
EVODIA RATHIPA
LANDELA
Second Respondent
COMMISSION FOR
CONCILIATION,
MEDIATION AND
ARBITRATION
Third
Respondent
COMMISSIONER
K ELIAS NO
Fourth
Respondent
Heard:
27 November 2019
Delivered:
11 December 2019
Summary:
review of arbitration award—employee dismissed for failing to
declare a conflict of interest arising out of dealings
with a
contractor and sub-contractor- Court finding that employee
misconducted and conflicted herself because of her involvement
in the
transaction between the contractor and sub-contractor- court
nevertheless finding that sanction of dismissal inappropriate
but
reinstating employee as from 01 July 2019. Labour Court’s
judgment set aside and appeal partly upheld.
Coram:
Waglay JP, Jappie JA and Kathree-Setiloane AJA
JUDGMENT
WAGLAY
JP
[1]
This is an appeal against the judgment of
the Labour Court (Moni AJ) which dismissed the review application
brought by the appellant
against the award handed down by the
Commission for Conciliation, Mediation and Arbitration (the third
respondent). The fourth
respondent, the commissioner had found the
dismissal of the second respondent (employee) substantively unfair
and ordered her reinstatement.
[2]
The employee was in the appellant’s
employee for over 15 years without a blemish to her record. At the
time of her dismissal,
she held the position of a procurement clerk
responsible for contract management and procurement of outside
service providers.
[3]
The employee was found to have contravened
the appellant’s code of business conduct and ethics by failing
to disclose or avoid
a conflict of interest. The appellant held that
such conduct amounted to a failure to perform her duties
conscientiously, honestly
and in the interest of the appellant. She
was accordingly dismissed.
[4]
The facts that gave rise to the dismissal
are straight forward. Nel who is employed by the appellant as an
investigator testified
at the arbitration that he was called upon to
investigate a complaint raised by Grace Security’s (Grace)
proprietor one Mudau.
The complaint was that the appellant had failed
to pay Grace for services rendered by it to the appellant. His
investigation revealed
that: appellant contracted with Genesis
Electric Services (Genesis) – one of its service providers –
to fix an alarm
at one of its properties. Genesis was unable to
provide the service and sub-contracted the work to Grace. Nel then
established
that two technicians employed by Grace called on Mabasa,
one the proprietors of Genesis, to meet with them urgently. The two
technicians,
Mabasa and the employee were at this meeting. The
technicians indicated to Mabasa that they required a loan of R20 000
to purchase
the alarm kit and to set up an office for Grace in Musina
(where the appellant owned properties – it was apparently
envisaged
that the appellant was in the process of building in excess
of a further 100 houses in Musina). Mabasa agreed to lend the money
and it was agreed that this would be deposited into the employee’s
bank account. According to the employee, the two technicians
were her
tenants and did not have a banking account, so she allowed them to
use hers. Before making the deposit, Mabasa enquired
why he was
required to deposit the money into a personal account rather than the
business account of Grace, and was informed that
it was okay to do so
as the account holder (the employee) was employed by the appellant.
On receiving payment, the employee withdrew
R15 000.00 and paid it
over to the technicians, a further R2000.00 was paid over a day or
two later. Nothing is said about the
balance of R3000. According to
Nel, the employee informed him that she then gave her bank card to
one of the technicians so he
could draw the balance of the loan.
[5]
Grace completed the task and sent an
account in the sum of R8960.00 to Genesis for payment. Genesis added
its mark up and invoiced
the appellant for R11 564.00. The appellant
duly paid Genesis. Genesis refused to pay Grace; its refusal was
based on the fact
that it had lent Grace R20 000.00 and the R8960.00
was set off against that loan. Grace was therefore still indebted to
it.
[6]
Grace refused to accept this, hence its
attitude that appellant owed it the money because it rendered the
service to the appellant
and the appellant refused to pay.
[7]
After the dispute between Grace and Genesis
reared its head, the employee made a disclosure to the appellant to
the effect that
two persons (being the technicians of Grace referred
to earlier) were tenants on her property. It must be added that the
appellant
has a strict rule requiring employees to disclose any
possible conflict of interest an employee may have.
[8]
The employee had taken the attitude that
since she had no business interest in either Grace or Genesis and the
money deposited into
her account was not for her benefit but that she
merely accommodated her tenants, there was no duty on her to disclose
that information.
[9]
All of the above evidence was gathered by
Nel’s investigation and was compiled as a report. On receipt of
the report, the
appellant decided to prefer misconduct charges
against the employee. It appears that what concerned the appellant
was that the
employee, a procurement clerk responsible for contract
management and procurement, was involved with parties who were
rendering
a service to the appellant. They took the view that even if
she had no business interest in either of the businesses nor received
any benefit from the loan between the two businesses, her involvement
by being present at the negotiation of the loan and its payment
into
her banking account obliged her to make the disclosure. The fact of
the matter was that both Genesis and Grace were rendering
services to
the appellant and the investigation showed that the employee was
aware of that.
[10]
The employee avers that she was not under
any obligation to declare the deposit of R20 000 into her bank
account because the source
of payment was not linked to the
appellant’s business, adding that the transaction between the
contractor and the sub-contractor
had nothing to do with the business
of the appellant. She further states that she could not have
disclosed what she was not aware
of, and that she was merely
assisting her tenants to receive money from a source that she was not
aware of and was completely ignorant
that the tenants worked for a
sub-contractor that was connected to the contractor who was a service
provider to the appellant.
[11]
The principles related to review of
arbitration awards are now trite and need not be restated. Suffice to
say that arbitration awards
may be set aside if the award is
disconnected from the evidence resulting in an unreasonable outcome.
Notwithstanding defects in
an award, if the arbitrator arrived at a
reasonable decision, the award will not be interfered with.
Reasonableness is, therefore,
the yardstick against which an award is
assessed.
[12]
The
question here is whether the employee was under the duty to disclose
the transaction and her dealings with the two employees
of Grace. The
commissioner took the view that the appellant could not prove that
the employee had any business interest in either
Genesis or Grace
and, as such, found that the employee did not commit the misconduct
with which she was charged. The commissioner
held that the employee
was merely the sacrificial lamb to protect the appellant’s
reputation as Mudau (Grace) had threatened
to go to the media about
the non-payment for the service it had rendered to the
“appellant”
[1]
.
[13]
The appellant, dissatisfied with the
arbitration award sought to review and set aside the award. The
Labour Court, like the commissioner,
found that the appellant failed
to prove that the employee broke the rule relating to the duty to
disclose. It held that the evidence
before the commissioner did not
indicate that the employee knew where the money, deposited into her
account for the benefit of
the technicians, came from or that the
technicians were sub-contracted by one of the appellant’s
service providers. The Labour
Court further found that the appellant
failed to show that the entire event caused any potential risk to the
appellant. On this
basis, the Labour Court found that the conclusion
reached by the commissioner was rationally connected to the reasons
given based
on the material available to him, and was therefore
reasonable.
[14]
Sadly, it appears that both the
commissioner and the Labour Court failed to properly consider the
evidence presented at the arbitration
and simply disregarded some of
the evidence presented. I fail to comprehend on what basis could the
evidence of Nel, which confirmed
that the employee was present when
the R20000 loan was negotiated between the employees of Grace (her
tenants) and Genesis, and
that part of the loan was for Grace to
purchase the alarm kit that was necessary to render the service that
Genesis had contracted
to render to the appellant, could be
disregarded when this evidence was never challenged. And no
explanation is provided for what
she was doing attending a meeting
between Grace and Genesis. Furthermore, if the employee had no
knowledge of the contractual arrangement
between Genesis and Grace
and that this related to services to be rendered to the appellant,
then there would also have been no
reason for her to make a
disclosure of the tenancy of Grace’s employees.
[15]
I also fail to understand the
commissioner’s finding that the employee was a “sacrificial
lamb”! The appellant
contracted with Genesis and paid Genesis
for the work done. The dispute between Genesis and Grace,
notwithstanding that Grace had
threatened to go to the press for
non-payment of its account was of no consequence to the appellant and
easily explained away by
the appellant but for the involvement of the
employee. Because her involvement meant the involvement of the
appellant in a private
transaction between two companies involved in
rendering a service to the appellant, hence the appellant could not
simply disregard
what transpired between the employee and the two
businesses. Even if the employee simply facilitated the service that
was rendered
to the appellant by providing her banking details for
Genesis to make a payment to Grace then, in my view, she had a duty
to disclose
such information to the appellant and her failure to do
so must constitute a breach of the rule and, as such, she was guilty
of
the misconduct complained of.
[16]
Added to this is the unchallenged evidence
that she was present at the meeting at which the appellant’s
service provider agreed
to make the loan to Grace for amongst other
things, to purchase items needed to provide a service required by the
appellant, then
whether she received any benefit or not was totally
irrelevant as she had a duty to inform her employer about her
involvement with
the two companies.
[17]
With regard to the potential reputational
risk, here it must be taken into account, no matter how inappropriate
or groundless the
complaint lodged by Mr Mudau of
Grace regarding the
non-payment of the service rendered by it and its threat to go to the
media, this would have exposed, as stated
earlier, the involvement of
an employee of the appellant with its external service provider, and
this could cause it potential
reputational harm.
[18]
The fact of the matter is as the appellant
contends: the employee was central to the whole dealings and should
have declared her
interest or at least her involvement to the
appellant. In this appellant is correct. The employee’s version
that all she
did was allowed her tenants to use her account becomes
totally far-fetched when she declares that having paid them R17000
she then
decides to hand over her bank card to them to withdraw the
R3000. This is bizarre. Not only does she help these tenants of hers,
but also gives them her bank card - to an account which is in regular
use. In my view, the employee’s story is so far-fetched
that it
should be rejected as being false. More importantly, I do not accept
that a person in the position of the employee would
simply give her
banking details and her bank card to some people living at her
premises who, on her own admission, she only knew
on their first
names.
[19]
As an employee in procurement, specifically
dealing with outside service providers, she could not ignore that
Genesis and therefore
Mr Mabasa is a service provider of the
appellant. This should have alerted her of the need to disclose the
deposit. The simple
fact that the employee had received money from
Mabasa of Genesis, a service provider of the appellant, is on its own
a conflict
of interest and she should have disclosed that to the
appellant.
[20]
The lack of candour becomes more
pronounced when she only discloses to the appellant her housing the
two Grace’s employees
this also only after Mr Mudau of Grace
made the complaint. The employee chose to disclose that she rented a
room to two tenants
of Grace but conveniently ignored the fact that
she should have disclosed receiving money on their behalf in her bank
account.
[21]
Notwithstanding
all of the above, the Labour Court agreed with the commissioner that
the appellant failed to prove on the probabilities
that the employee
failed to disclose her conflict of interest.
[22]
It seems implicit in the commissioner’s
reasoning that the clause of the Code of Ethics under which the
employee was charged
was inconsistent with the evidence led. The
commissioner was of the view that there was no conflict of interest
because the employee
had no business interest with Genesis and Grace.
This was a rather artificial analysis of the evidence and a failure
to analyse
the evidence holistically. Of course at face value, the
employee did not have any business interest with either Genesis or
Grace
and did not have anything to disclose. However, a holistic
assessment of the evidence shows that she was involved with the
parties
who were service providers to her employer and, as such, she
had a duty to disclose this. In the circumstances, the only
reasonable
finding on the evidence presented to the commissioner was
that the employee had committed the misconduct with which she was
charged.
[23]
On the appropriateness of the sanction that
should have been imposed m
uch
is made about the evidence of the employee’s immediate superior
who testified at the disciplinary hearing that the employee
should
not be dismissed. Just because one in authority over an errant
employee requests that dismissal be avoided, does not mean
that the
presiding officer is bound to grant such a request. This evidence may
mean that the working relationship can be restored
but it does not
mean that dismissal is nonetheless not the appropriate sanction.
[24]
Although the employee is guilty of the
misconduct, I am not satisfied that this is a matter where dismissal
is not an appropriate
sanction. However, reinstatement with full
back-pay disregards the serious wrong committed by the employee. I
believe that it is
more appropriate that there is a serious penalty
for her misconduct and that her reinstatement only takes effect from
01 July 2019.
[25]
In the result, I make the following order:
31.1
The appeal succeeds partially.
31.2
The award of the arbitrator is set aside
and replaced with the following:
“
The
dismissal of the employee is substantively unfair and that she be
reinstated as from 01 July 2019.”
31.3
There is no order as to costs.
_________________
Waglay
JP
I
agree
_________________
Jappie
JA
I
agree
_________________
Kathree-Setiloane
AJA
APPEARANCES:
FOR THE
APPELLANT:
Mr Doctor Cithi
Instructed
by Mervyn Taback Attorneys
FOR THE FIRST AND SECOND:
RESPONDENTS:
Adv Q M Dzimba
Instructed
by Mothobi Attorneys
[1]
Clearly,
Grace had not rendered any services to the appellant but to Genesis.