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[2008] ZALCJHB 54
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Dell v Seton (Pty) Ltd and Others (JR164/06) [2008] ZALCJHB 54 (23 July 2008)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT JOHANNESBURG
CASE
NO: JR164/06
In
the matter between:
RALPH
DENNIS DELL
Applicant
And
SETON
(PTY) LTD
1
ST
Respondent
CCMA
2
nd
Respondent
SHEEN
N.O 3
RD
Respondent
JUDGMENT
MOLAHLEHI
J
Introduction
[1]
This is an application to review and set
aside the arbitration award issued by the third respondent (the
commissioner) under case
number GJAB 16727/05 and dated 7
th
December 2005.
[2]
The first respondent contended that the
review application was two days late and that the matter stand to be
dismissed for that
reason, more particularly because the applicant
did not apply for condonation for the late filing of the review.
In terms
of s145 of the Labour Relations Act 66 of 1995(the Act), a
review application has to be brought within 6 (six) weeks of the date
of becoming aware of the arbitration award. An applicant who
brings an application outside the 6 (six) weeks period has to
apply
for condonation for such late application.
[3]
The appellant states in his founding papers
that he received the award on the 7
th
December 2005. The review application was delivered on the 20
th
January 2006. The 6 (six) weeks period expired on the 18
th
January 2006. This means that
the applicant was 2 (two) days late and therefore the applicant
should have made an application
seeking an indulgence of the court to
have the 6 (six) week’s period extended by 2 days but the
applicant has failed to do
so. The application stands to be dismissed
on this ground alone. However, 2 (two) days being such a short
period I will indulge
the applicant even in the absence of an
application for such indulgence. The late filing of the
application for review is
condoned.
Background
facts
[4]
The applicant is a former managing director
of the first respondent a private company registered in terms of the
laws of Republic
of South Africa. The other 3 (three) directors
of the first respondent are based in the United States of America and
Germany.
[5]
The applicant was, arising from a number of
allegations against him charged and dismissed for misconduct relating
mainly to acts
of dishonesty and failing to act in the best interest
of the third respondent as a director. The disciplinary hearing
was
chaired by an independent chairperson.
[6]
After his dismissal the applicant referred
an alleged unfair dismissal dispute to the Commission for
Conciliation Mediation and
Arbitration (the CCMA) for arbitration. At
the arbitration hearing the first respondent abandoned some of the
charges it had proffered
against the applicant at the disciplinary
hearing.
The
first charge
[7]
The first charge against the applicant was
that he, during December 2001, the applicant granted himself an
increase without the
necessary authorisation of the first respondent
and in particularly without knowledge of the other directors.
[8]
The version of the first respondent in this
regard was that the applicant was at the end of November 2001,
earning a salary of R68
500.00. This amount was increase in
December of the same year to R97 600.00.
[9]
The background to the increase according to
the applicant is that it was set out in dollar denomination by Mr
Hermann Winkler (Winkler),
the then vice president of the first
respondent. The increase was set out in a memorandum which was given
to Mr John Henry the
human resource manager by Winkler. This
memorandum was received by the human resource manager in the presence
of the applicant.
The human resource manager was told to keep
the contents of the memorandum confidential.
[10]
Winkler in setting out the increase as
stated earlier used the dollar denomination which set out the
increase as being from $8 245.00
to US $10 000.00. It was
testified on behalf of the first respondent that the applicant
approached the human resource manager
and provided him with a website
which could assist him in determining the correct exchange rate.
It was through this calculation
that the salary of the applicant was
increase to R97 600.00.
[11]
The testimony of the first respondent was
that the rate used to get from a rand value of R68 500 to a US dollar
value of R8 245.00
was R8.31 to the dollar. This exchange rate
was according to the first respondent provided by the applicant to
Winkler when
he provided him with a list of management personnel in
South Africa and their respective salaries for the purposes of
calculating
their increases.
[12]
The applicant caused his salary to increase
to R121 500.00 in January 2002 by informing the human resource
manager that his remuneration
was to be based on US dollar
denomination and to avoid him being prejudiced by the rate
fluctuation; the exchange rate should be
set at a particular rate.
[13]
The arrangement to have the rate set out at
a particular rate and to be adjusted once per year on the 1
st
of January was set out by the applicant in a letter dated 14 January
2002, to the human resources manager in the following terms:
“
With
reference to the fact that my monthly `basic salary which is US $
denominated. I agree that the conversion to South African
Rand is
only done once a year on the 1 January with the rate ruling at that
stage. The rate of exchange that will be used is the
rate as per the
currency conversion rate on the OANDA website. This will mean that
the monthly fluctuations do not effect (sic)
my basis remuneration
during a financial year.
”
[14]
Winkler testified that it was never his
intention or that of the first respondent to pay the applicant’s
salary in dollar
denomination. He testified further that to
this extent the applicant knew that whenever he was considering
increases he would
request the applicant to convert the current
salary into dollars. This according to him did not mean that a
person’s salary
would be dollar denominated. The applicant knew
that the respondent’s practise was to pay in the currency of
the country
in which employees worked.
[15]
The first respondent contended that as a
result of the manipulation the applicant received a 100%
increase from R68
500.00 to R121 500.00. This was not the intended
consequences of Winkler’s memorandum which provided for an
increase of not
more that R21.3% increase from US$8.245 to US $10
000. This action was in breach of the fiduciary duty to act in
the best
interest of the first respondent according to Winkler.
[16]
It was further testified that the applicant
increased his salary again in January 2004, to R140 000.00 without
authorisation but
had informed human resource manager that he would
repay the over payment if he did not finally receive authorisation.
In relation
to this accusation the applicant wrote a memorandum to
the human resources manager dated 1 March 2005 wherein he stated
that:
“
Re
My salary
As you are aware there
is a lot of controversy about my salary which does not seem to get
resolved. Given this the following is
my suggestion to correct all
relevant records.
1. The increase I
received subject to confirmation from Mr Winkler in 2004 was paid
back to the company as you are aware of. This
was due to no
confirmation received despite promises up to as late as August 2004.
2. As this issue is
still under dispute/investigation I suggest that my salary is reduced
to the level as last agreed which is R121900
per month. As I have
received the higher level for January and February I propose that it
is reduced in March but effective 1 January
2005. In other words a
reduction negative salary of R18100X3 = R54300 is applied in March
and from there set to the agreed level
as above.
Please
implement the above until such time as my salary has been resolved. I
attach an email from Bob D to this effect.”
[17]
Another accusation against the applicant is
that between January and June he caused himself to receive over R83
000.00 in over payment.
In arranging to have the repayment of this
amount the applicant devised a scheme which was detrimental to the
interest of the respondent.
The first respondent alleged that the
applicant manipulated the bonus scheme in such a manner that he did
not repay the over payment
but caused himself to be over paid in his
bonus and used the same amount being R217 200.00 as the repayment.
Second
charge.
[18]
The second charge against the applicant
relates to failure by him to disclose to DeMajistre in 1999 his bonus
arrangements when
he approached him for a 25% bonus for the employees
of the first respondent who are based in South Africa. Apparently at
that stage
the applicant was already receiving 25% bonus.
Because of this when DeMajstre approved the 25% incentive bonus to
all employees
of the first respondent based in South Africa the
applicant received 2 (two) bonuses each of which was 25%.
The
third charge
[19]
In terms of the third charge the applicant
was accused of “
selling”
his annual leave to the first respondent when he realised that he was
receiving an additional amount of R83 870.00. This
amount the
applicant received from January to June 2004 totalling to sum R503
200 20.
[20]
In addressing this abnormality of receiving
an additional of R83 870.00 for which no explanation was given, the
applicant sold his
55(fifty five) days leave to the first respondent.
The
case of the applicant
[21]
The applicant denied having granted himself
an increase and testified that there was no rule that all directors
should have had
knowledge of his remuneration. He further
contended that he had in terms of the resolution of the board of
director’s
full authority on all staff matters of Seton SA.
[22]
The increase in December 2001 to US dollars
R10 000 and the implementation of the US dollar denominated salary
was according to
the applicant authorised by Winkler. He
contended that the first respondent and its management were fully
aware of all the
increases which he received and their claim that
they were not aware amounted to negligence in the manner in which
they managed
Seton SA.
[23]
In as far as charges 5 (five) and 6 (six)
were concerned the applicant contended that the issue of leave was
not a contravention
of policy but:
“
It
was a clerical error corrected
.
Negative leave are not uncommon as
it is created when short time is worked and the annual shut down
forces leave.”
[24]
In this regard the applicant went further
to state as follows in his answering affidavit:
“
As
the finding on these charge was guilty of breaching company policy
and acting without the knowledge or authority of the company
or
directors, I only referred to it in the context of no authority of
the company or its directors as the company was aware of
it. This is
based on the fact that the correction was processed. How can it
be known if it is processed. It was simply a
correction of an error
and as such cannot be breach of company policies.”
Grounds
for review
[25]
The applicant contended that contrary to the provisions of the first
respondent’s own disciplinary code, he was denied
the right to
appeal against the decision of the disciplinary hearing.
[26]
The approach to be adopted when dealing
with a situation where an employer has failed to follow its own
internal disciplinary code
was considered in the case of
Highveld
District Council v CCMA and Other
(2002) 12 BLLR 1158
(LAC)
, where the
Labour Appeal Court held:
“
Where
the parties to a collective agreement or an employment contract agree
to a procedure to be followed in disciplinary proceedings,
the fact
of their agreement will go a long way towards proving that the
procedure is fair as contemplated in Section 188 (1)(b)
of the Act.
The mere fact that a procedure is an agreed one does not however make
it fair. By the same token, the fact that an
agreed procedure is not
followed does not in itself mean that the procedure actually followed
was unfair…
.
When
deciding whether a particular procedure was fair, the tribunal
judging the fairness must scrutinize the procedure actually
followed.
It must decide whether in all the circumstances the procedure was
fair.”
[27]
In dealing with the same issue in
Leonard
Dingler (PTY) Ltd v Ngwenya
(1999)
5 BLLR 431
(LAC)
, Kroon JA
stated:
“
In
my judgement, and having regard to all circumstances, the time when
and the manner in which the apparent hearing was held, while
not
strictly in accordance with the appellants disciplinary code, were
substantially fair, reasonable and equitable.”
[28]
The Supreme Court of Appeal (SCA) in
Denel
(PTY) Ltd v D.P.G Vaster
2004 (4) SA 481
(SCA)
,
adopted a different but a distinguishable approach to the above
mentioned cases. The SCA held that the employer was bound to follow
a
disciplinary code which it had incorporated into the employment
contracts with its employees.
[29]
In my opinion the
Denel
decision is distinguishable from the
Leonard Dingler’s
case in that in the
Denel
case
the
Supreme Court of Appeal, was dealing with a situation where the
disciplinary code was incorporated into the contract of employment
of
each of the employees. In this regard the Court held in dismissing
the contention of the appellant that it was not correct that
the only
thing required of the parties was that they act fairly towards one
another, despite the contractual obligation requiring
something more.
[30]
It is also important to note that the
matter in the
Denel’s case
came before the SCA on appeal from the Pretoria High Court where the
Court was faced with having to decide on damages for breach
of
contract of employment and damages for
injuria
.
The claim for
injuria
was dismissed and the court confined itself to damages for breach of
contract.
[31]
In the light of the above I am of the opinion that the applicable law
is that as stated in both the
Highveld
District Council and Leonard’s
cases.
See also,
Khula Enterprise Finance
Limited v Madinane and others
(2004) 4 BLLR 366
(LC) and SA Tourism
Board v CCMA and Others
(2004) 3 BLLR 272
(LC).
[32]
In the present instance the commissioner in
applying his mind to this issues before him, accepted as common cause
that the applicant
was denied an appeal hearing. In his evaluation
and assessment of the circumstances of this case the commissioner,
correctly it
is submitted, came to the conclusion that the fact that
the appeal was not held did not make the procedure defective.
[33]
In circumstances of this case what needs to
be considered, in my view, is firstly whether or not there are valid
reasons for deviation
from the internal disciplinary procedure,
secondly and more importantly is whether or not such deviation
deprived the employee
a fair hearing. The explanation for the
deviation given by the first respondent is in my view reasonable and
acceptable. The applicant
was a senior employee in South Africa and
one of the directors of the first respondent. Another factor to be
taken into account
in assessing the fairness or otherwise of the
failure to follow the disciplinary procedure is the fact that the
disciplinary enquiry
was chaired by an independent chairperson. In my
view the circumstances of this case do not support the contention
that the failure
to provide the applicant an appeal was unfair.
[34]
The other complaint by the applicant is
that DeMajistre was present through both the disciplinary and
arbitration hearings. This
in my view does not take the case of the
applicant any further. At that time DeMajistre was both the president
and chief operating
officer of the first respondent. There is no
evidence that shows in what way or manner the presence of DeMajistre
during both the
disciplinary and arbitration proceedings prejudiced
the applicant.
[35]
A further criticism against the
commissioner by the applicant is that he allowed the legal
representative of the first respondent
“
to
argue certain issues.”
[36]
The transcript of the arbitration
proceedings reveals the applicant having objected to legal
representation. It is apparent that
the respondent abandoned the use
of legal representative and appointed Mr Evans as its representative.
The applicant also objected
to Mr Evans representing the respondent.
After considering the submissions as to the objection the
commissioner ruled that Mr Evans
had
locus
standi
to represent the
respondent.
[37]
As concerning consideration of the charges
which were proffered against the applicant, the evaluation and
assessment of the evidence
to sustain such charges, I am of the view
that the commissioner’s award is in line with the standard
required by
Sedumo v Rustenburg Platinum
Mines Limited (2007) 28 ILJ 2405 (CC),
and
can therefore no be faulted for being unreasonable.
[38]
In terms of the
Sedumo
decision it is only an award which is unreasonable that will attract
interference by the Court on review. An award would
not be
sustainable if the decision reached therein is one which a reasonable
decision- maker could not reach. The scope of this
test is confined
to determining the reasonableness of the decision and not its
correctness. The test for determining the correctness
of a decision
lies in the appeal proceedings.
[39]
In the
Fidelity
Cash Management Services
, the
Labour Appeal Court, per Zondo JP (at paragraph [97])
held that:
“
If
it is an award or decision that a reasonable decision-maker could not
reach, then the decision or the award of the CCMA is unreasonable
and, therefore reviewable and could be set aside. If it is a decision
that a reasonable decision-maker could reach, the decision
or award
is reasonable and must stand. It is important to bear in mind that
the question is not whether the arbitration or decision
of the
commissioner is one that a reasonable decision maker
would
not
reach but one that a
reasonable decision maker could not reach.”
[40]
The Court further held that the test
enunciated in
Sidumo
for determining whether a decision or an award is reasonable:
“…
is
a stringent test that will ensure that such awards are not
lightly interfered with. It will ensure that, more than before,
and
in line with the objective of the Act and particularly the primary
objective of the effective resolution of disputes, awards
of the CCMA
will be final and binding as long as it cannot be said that such a
decision or award is one that a reasonable decision-maker
could not
have made in the circumstances of the case. It will not be often that
the decision of the arbitration award of the CCMA
is found to be one
that a reasonable decision-maker could not, in all circumstances,
have reached.”
[41]
I have already indicated that the decision
of the commissioner cannot be faulted for unreasonableness. The
finding by the commissioner
that the applicant wilfully and knowingly
attempted to manipulate the increase he received at the end of 2001,
may well be incorrect
but it is not unreasonable and therefore there
is no bases for this Court to interfere with the award.
[42]
The applicant being the director of
the first respondent in South Africa owed the first respondent a duty
to act in good faith.
He had a duty to ensure that his interests do
not override those of the first respondent. He was under an
obligation not to place
himself in a situation where his interests
undermine those of the first respondent. It is in this regard that I
agree with the
commissioner’s finding that the applicant abused
the position of trust that was placed on him by the first respondent.
[43]
It is also for the above reasons that I
agree with the commissioner that the dismissal was the appropriate
sanction taking into
account the evidence and the circumstances of
this case. And more importantly the record shows that the
applicant has not
shown any remorse before and during the
proceedings.
[44]
I
n conclusion, it is my view, regard being
had to the evidence which was presented before the commissioner and
the circumstances
of this case, that it cannot be said that the award
of the commissioner is one which a reasonable
decision-maker could
not have reached. In fact it would seem to me
that the attack of the commissioner’s award by the applicant is
based more
on its correctness rather than its reasonableness. In
Fidelity Cash Management (supra)
the Court at para 99 held:
“
Sidumo
does not allow that a CCMA arbitration award or decision be set aside
simply because the Court would not have arrived at
a different
decision to that of the commissioner…”
[45]
It would not in my view, be fair in the
circumstances of this case to allow cost to follow the result.
[46]
In the premises I make the following order:
1.
The application to review and set aside the
arbitration award under case number GJAB 16727/05 and dated 7
th
December 2005, is dismissed.
2.
There is no order as to costs.
_______________
MOLAHLEHI
J
DATE
OF HEARING :
31 JANUARY 2008
DATE
OF JUDGMENT : 23 JULY 2008
APPEARANCES
For
the Applicant : RALPH DENIS DELL (in person)
For
the Respondent: Ludwig Frahm-Arp (Attorney
)
Instructed
by : Bell Dewaar &
Hall