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[2007] ZALCD 5
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Smiths Manufacturing (Pty) Ltd v Dispute Resolution Centre and Others (D344/05) [2007] ZALCD 5 (20 May 2007)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT DURBAN
(NOT
REPORTABLE)
CASE NO
:
D344/05
DATE
:
2007/04/20
In the matter between
SMITHS
MANUFACTURING (PTY)
LTD
Applicant
and
DISPUTE
RESOLUTION
CENTRE
1
st
Respondent
COMMISSIONER
PHILANI
SHANGASE
2
nd
Respondent
NUMSA
3
rd
Respondent
GORDON
MOONSAMY
4
th
Respondent
JOHANNES
DLUNGELE
5
th
Respondent
JUDGMENT
DELIVERED BY
THE
HONOURABLE MADAM JUSTICE PILLAY
ON 20 APRIL
2007
PILLAY D, J
[1] The trustees of
the pension fund of which the employees of the applicant employer
were members had resolved on 16 September
2003 that home loans
should not be used for other purposes. The employees, i.e. the
fourth and fifth respondents in this
review, obtained loans for
improving their homes by using their pension funds as security.
However, they used the loans for
purposes other than improving their
homes. They were dismissed in May 2004.
[2] The arbitrator
found that the employees’ misconduct did not amount to gross
dishonesty, firstly because there was no evidence
to show that when
the employees applied for the loans they intended to use them for
personal reasons. Only after the loans
were paid to them did
they use them for purposes other than home improvement.
Secondly, the employer granted a home loan
to another employee,
namely Sanjay Sewcharan, knowing full well that he was going to use
it to pay his debts and not for housing.
That demonstrated that
the offence is not that serious to warrant dismissal.
[3] The first reason is rationally
connected to the arbitrator’s conclusion that the misconduct
did not amount to gross dishonesty.
Although he does not say
what the misconduct was, it must be inferred that he considered it
wrong for the employees to use their
housing loans for other purposes
contrary to their undertakings.
[4] The second
reason has nothing to do with the guilt or innocence of the employee
but to the seriousness of the offence and accordingly
the
appropriateness of the sanctions.
[5] The rule was
important. Hence the trustees had recently reinforced it by
resolution. However they exercised some
flexibility in the way
they applied the rule.
[6] The employees
had an obligation to inform the fund or the employer once they
decided to use the loans for purposes other than
those for which they
gave undertakings. Their failure to do so does not
automatically lead to a conclusion that they were
dishonest.
There is an equally strong possibility that they were negligent.
[7] The arbitrator
was in a better position to assess the credibility of the employees
to determine whether their conduct was dishonest.
A compelling
factor in their favour was that they admitted from the outset that
they did not use the loans for the purposes for
which they were
given.
[8] As regards the
fairness of the sanction, dismissal was harsh for misconduct that did
not amount to gross dishonesty or even
gross negligence. The
appropriate sanction was one that deterred employees from borrowing
against their pensions for purposes
other than housing. The
penalty imposed by the arbitrator was to deprive the employees of
more than a year’s pay.
That is far more than the loans
of R10 000 and R12 000 respectively paid to the employees and is an
effective deterrent in the
circumstances.
[9] The application for review is
dismissed with costs.
-
- - - - - - - - - - - - - - - - - - - - -
_____________________________
PILLAY D,
J
DATE OF HEARING: 20/04/07
DATE OF JUDGMENT 20/04/07
FOR
THE APPLICANT: MR DUNSTAN FARRELL OF FARRELL & ASSOCIATES
FOR
THE 3
RD
& 4
TH
RESPONDENTS: RUTH EDMONDS OF RUTH EDMONDS ATTORNEYS