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[2006] ZALCJHB 4
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Hospitality And General Provident Fund v Commission for Conciliation And Arbitration and Others (JR1392/05) [2006] ZALCJHB 4 (1 December 2006)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
CASE NO: JR 1392/05
In
the matter between:
HOSPITALITY
AND GENERAL PROVIDENT
FUND
Applicant
and
COMMISSION
FOR CONCILIATION,
MEDIATION
AND
ARBITRATION
1
st
Respondent
RODNEY
FITZCHARLES
N.O.
2
nd
Respondent
JAMES
MOKGOSI
3
rd
Respondent
JUDGMENT
REVELAS
AJ
[1]
The applicant seeks to set aside an award made in favour of the third
respondent, who had been employed as its Assistant Principal
Officer.
The applicant, a provident fund, had dismissed the third respondent
during November 2004, following charges that he had
received certain
commission payments made to him, which he did not disclose to the
trustees of the applicant.
[2]
The third respondent had received payments from SAICOM (“Saicom”)
Payphones for the purchase of 130 mobile payphones,
on three
different occasions, totalling R35 000. 00. He received commission of
R300. 00. from Saicom, per mobile pay phone purchased
by the
applicant. At the disciplinary hearing held to investigate his
misconduct, his defence was that there no rule in place against
the
non-disclosure of commission earned and that he would have disclosed
it at an appropriate time. He described the non-disclosure
as the
“only skeleton” in his “cupboard”. The
chairperson of the disciplinary hearing, who imposed summary
dismissal, was motivated by the following considerations:
(a)
On his version, the third respondent was aware that he should have
disclosed the payments in question
to his employer, irrespective of
the existence or not of a rule to that effect.
(b)
The third respondent deposited the monies into his own account. In
doing so he could not have been acting
in his employer’s best
interests. He was either taking a bribe from Saicom for accepting
business on behalf of his employer,
thereby prejudicing his
employer’s reputation or he was accepting a “commission”
intended for the applicant and
directing it into his own account.
[3]
The chairperson held that the third respondent’s conduct
constituted gross dishonesty. The dismissal was upheld on appeal
on
15 December 2004, whereafter the third respondent referred a dispute
about an alleged unfair dismissal to the first respondent,
where the
matter was eventually arbitrated by the second respondent (“the
arbitrator”). In terms of the award, the
third respondent had
to be reinstated with retrospective effect, the dismissal having been
found to be substantively unfair.
[4]
In the review application argued before me yesterday morning, it was
strongly contended that since there was no rule against
earning
commission as was done in this case, and since the applicant suffered
no financial loss, dismissal was inappropriate.
[5]
It was also argued that the applicant had waited for too long to take
steps against the third respondent in 2004, when one of
the instances
of taking commission occurred in 2002. There is no merit in this
point because the applicant only became aware of
the offences much
later.
[6]
The applicant instituted disciplinary action against the third
respondent as soon as it became aware, as a result of an audit
conducted in November 2004, of the third respondent’s
misconduct. The arbitrator’s finding that the applicant was
estopped or deemed to have waived its right to dismiss the third
respondent is clearly unjustifiable on the facts.
[7]
The finding that the applicant acted
ultra vires
by dismissing
the third respondent without the consent of trustees is also
unjustifiable because it is factually incorrect. Mr
Horwitz gave
evidence that he considered it appropriate to take the matter up with
the trustees, and they gave their consent to
dismiss the third
respondent.
[8]
The arbitrator, the third respondent’s legal representative and
doubtless many others, hold the view that the third respondent’s
conduct did not constitute dishonesty. There are those who would
argue that as long as the employer suffered no loss, the employee
can
conduct his or her employer’s business in any manner that can
ensure extra income. It is ultimately a question of morality
and
calls for a value judgment. Any employer should be entitled to set a
high standard of ethics in conducting its affairs, particularly
where
it is the guardian of poor people’s money. It is simply not
open to commissioners of the first respondent to ridicule
that
standard and replace it with their own personal standard, without
good reason.
[9]
The fact that there was no express rule against making secret
commission and profits does not render it permissible or acceptable.
That argument is in any event disingenuous because the third
respondent admitted at the hearing, that he had read James Dowsey’s
book, Elements of Retirement Fund Management. The applicant uses it
as part of its training for trustees. He agreed that it was
a basic
manual. This manual makes it plain that trustees (and that would
include the third respondent) had a duty to act with care
and in good
faith and avoid conflicts on interest.
[10]
The third respondent was second in command at the applicant, a
position of high authority. Senior employees in particular,
owe a
fiduciary duty to their employers, which would include a rule against
secret profits.
[11]
The actions of the third respondent, at the very least, had the
potential of a conflict of interests that could impact on the
applicant. The applicant was entitled to set its own standards of
ethics and to act against him and dismiss him where he had clearly
breached that standard.
[12]
The award falls to be set aside and substituted with the following:
“
The dismissal of
the third respondent was procedurally and substantively fair”.
________________
Elna
Revelas
Acting
Judge of the Labour Court
Date
of hearing:
30 November 2006
Date
of judgment:
1 December 2006
On
behalf of the Applicant:
Adv.
Heidi Barnes, instructed by Cheadle Thompson and Haysom Inc.
On
behalf of the Respondent:
Mr
Stephen Vivian, of Johan Kotze Attorneys