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[2008] ZALCJHB 58
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J D Trading (Pty) Ltd t/a Giddy's Electric Express v Commission for Conciliation, Mediation and Arbitration and Others (JR208/03) [2008] ZALCJHB 58 (12 September 2008)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD
AT JOHANNESBURG)
REPORTABLE
CASE
NO: JR208/03
In the matter between:
J D TRADING (PTY) LTD
t/a GIDDY’S ELECTRIC EXPRESS Applicant
and
COMMISSION FOR
CONCILIATION,
MEDIATION AND
ARBITRATION First
Respondent
RALEFATANE M J
N.O. Second
Respondent
ECCAWUSA o.b.o M
MAKWAKWA Third
Respondent
JUDGMENT
Mayet
A J
INTRODUCTION
[1] This
is an application in terms of
section 145
of the
Labour Relations
Act, No. 6 of 1995
, as amended (“the Act”) in which the
applicant seeks to review and set aside the arbitration award handed
down by the
second respondent (“the Commissioner”) on 20
December 2002 under the auspices of the Commission for Conciliation,
Mediation
and Arbitration (“the CCMA”).
[2] The
application was opposed.
BACKGROUND
[3] The
third respondent was employed by the applicant as a Store Manager of
its Dobsonville branch until her dismissal
on 02 October 2001.
[4] The
third respondent was responsible for management of the store and for
meeting monthly sales targets set
for the Dobsonville branch.
[5] During
April 2001, the applicant’s CEO, one Chamers, noticed that the
cancellation of sales at the Dobsonville
branch was alarmingly high
and way above the norm at other branches.
[6] It
was found that the Dobsonville branch had the highest incidents of
cancellation out of a total of 105 branches.
Cancellations for the
month of August 2001 amounted to R60 000.00 at the Dobsonville branch
as opposed to other branches where
cancellations amounted to R15
000.00 per month on average.
[7] The
applicant’s divisional administrative manager, Janet Fallon,
carried out an investigation of the
cancellations at the Dobsonville
branch. She found that there was an unusual amount of invoices made
out to customers who did not
purchase goods, nor pay for them.
[8] The
fictitious transactions inflated the total of the sales made at the
Dobsonville branch. These fictitious
transactions were created on the
computer by generating a hire purchase agreement in the name of a
customer, but in actual fact,
there was no physical sale of the
goods. The sale was later cancelled on the computer. In this way the
number of sales was inflated
in that month to meet the branch target.
More importantly, the branch manager received a cash incentive for
meeting the sales target.
[9] The
third respondent, as branch manager, was the only employee at the
Dobsonville branch with access control
to the computer system. The
fictitious transactions could only have been created by her.
[10] The
loss controls department investigated the fictitious sales at
Dobsonville branch and uncovered, amongst
others, the following
fictitious transactions:
[10.1] Ndiliza
was an existing customer who had paid up all his instalments. An
amount of R2 264.28 was invoiced
on this account for a refrigerator
allegedly bought on his account on 03 April 2001 when in fact no such
transaction had taken
place. There was no deposit and no instalments
paid. The sale was reversed in June 2001.
[10.2] The
Blaai transaction was also an existing customer who was paying off an
account. The fictitious sale in
respect of the purchase of a LG hi-fi
was created on Blaai’s account in August 2001. The payments
made by Blaai on his legitimate
account were moved back and forth
between the fictitious and legitimate accounts to simulate payment on
the fictitious account.
No goods were sold or delivered to Blaai in
August 2001.
[11] Du
Plessis of the loss control department found a total of eleven
specific incidents relating to fictitious
transactions which could be
traced back to the third respondent.
[12] At
the disciplinary enquiry which took place on 26 September 2001, the
third respondent was represented by
her union representative, one
Sipho Nkosi. The third respondent was found guilty on five charges
and dismissed on 02 October 2001.
[13] The
thirds respondent lodged an appeal against her dismissal. The appeal
was dismissed.
[14] The
third respondent referred an unfair dismissal dispute to the CCMA and
the arbitration hearing was finally
heard on 20 October 2002.
[15] The
commissioner found that the applicant’s dismissal was
procedurally and substantively unfair and
awarded the third
respondent reinstatement with immediate effect together with back-pay
in the amount of R34 800.00. It is this
award which the applicant
seeks to review and set aside.
GROUNDS FOR REVIEW
[16]
It
was argued on behalf of the applicant that the arbitration award was
to be reviewed and set aside by reason of a number of irregularities
perpetrated by the commissioner in the conduct of the proceedings. In
particular the applicant was denied a fair hearing in that:
[16.1]
The
commissioner failed to apply her mind to the documentary evidence and
testimony of expert witnesses;
[16.2] The
commissioner based her findings on the “lack of challenge”
by the applicant to evidence
put forward by the third respondent even
though the third respondent did not lead any witnesses but merely
made unsubstantiated
statements;
[16.3] The
commissioner adjourned the proceedings to establish contact with some
of the applicant’s customers;
[16.4] The
commissioner’s findings were neither rational nor justifiable
in relation to the reasons given
for it;
[16.5] The
commissioner was biased in that she focused only on three
transactions when in fact evidence was led
on five fictitious
transactions committed by the third respondent.
PROCEDURAL
FAIRNESS
[17]
It
was the third respondent’s testimony that the disciplinary
hearing was procedurally unfair because the chairperson was
biased
and did not allow her to lead evidence in mitigation.
[18]
The
transcript of the disciplinary hearing reflects that the third
respondent was represented by her union representative, one Sipho
Nkosi. The minutes of the disciplinary hearing were accepted as a
true reflection of the proceedings by the third respondent and
her
representative who both duly appended their signatures to the minutes
without raising any queries.
[1]
[19]
The
third respondent lodged an appeal against her dismissal. However, the
third respondent did not raise any procedural issues in
her
appeal.
[2]
[20]
In
finding that the disciplinary hearing was procedurally unfair the
commissioner relied on, and accepted the evidence of the third
respondent that the chairperson was biased in that he favoured the
witnesses brought forward by the applicant and did not allow
the
third respondent to lead evidence in mitigation after the chairperson
had found her guilty.
[21]
The
procedural fairness of the disciplinary hearing was not called into
question by the third respondent at the arbitration. In
fact she made
no opening statement. It was only in relation to questions put
forward by the commissioner that the third respondent
alleged that
her representative was interrupted during his cross-examination of
the applicant’s witnesses by the chairperson.
Moreover her
representative was not allowed to address the disciplinary hearing on
mitigating factors after a finding of guilty
had been entered against
her by the chairperson.
[22]
The
commissioner committed a gross irregularity when she accepted the
third respondent’s version that the disciplinary hearing
was
procedurally unfair when this version was not put to any of the
applicant’s witnesses in cross-examination. The commissioner
allowed this aspect of the third respondent’s testimony without
giving the applicant an opportunity to rebut this evidence
in line
with the
audi
alteram partem
rule.
[23]
The
third respondent failed to call in her union representative to
corroborate her evidence regarding the alleged procedural unfairness
of the disciplinary enquiry.
[24]
In
so doing the commissioner exceeded her powers and committed an
irregularity of the kind that prevented the applicant from having
a
fair hearing.
SUBSTANTIVE
FAIRNESS
[25]
The
commissioner’s award was challenged for failing to take into
account pertinent evidence and accepting the uncorroborated
evidence
of a single witness without making any credibility findings.
[26]
The
third respondent denied that the commissioner failed to apply her
mind to all the evidentiary material placed before her. The
third
respondent was of the view that if that had been the case, the
commissioner would not have adjourned the proceedings to allow
the
parties to furnish answers to written questions raised by the
commissioner.
[27]
The
third respondent was charged with eleven counts of fraud pertaining
to the creation of fictitious transactions to inflate the
number of
sales at the Dobsonville branch. The commissioner found that the
Dobsonville branch had the highest cancellation of sales
amounting to
R60 000.00 for the month of August.
[28]
In
reaching her decision the commissioner focussed on three of the five
transactions on which the third respondent was found guilty.
The
three transactions relate to the following customers, namely,
Ndilize, Blaai and Caroline Duda respectively.
[29]
The
applicant’s uncontested evidence that in all three transactions
investigated by its loss department no deposit was paid
and no goods
delivered was rejected by the commissioner on the basis that the
applicant had failed to prove the irregularities
complained of.
[30]
Instead
the commissioner accepted the sole evidence of the third respondent
even though her version was not put to any of the applicant’s
witnesses during their cross-examination at the arbitration hearing
and despite the fact that this version was not raised at the
disciplinary enquiry.
[31]
In
so doing the commissioner failed to appreciate that the third
respondent, as branch manager, was the only employee at Dobsonville
with authority to access the computer. The fictitious transactions
could have only been entered into the computer by the third
respondent.
[32]
In
Marapula & Others v Consteen (Pty) Ltd 1999 20 ILJ 1837 (LC) it
was held that:
“
The
credibility of witnesses and the probability or improbability of what
they say should not be regarded as separate enquiries
to be
considered piecemeal. They are part of a single investigation into
the acceptability or otherwise of the employer’s
version, an
investigation where questions of demeanour and impression are
measured against the content of the witnesses’
evidence, where
the importance of any discrepancies or contradictions are assessed
and where a particular story is tested against
facts which cannot be
disputed and against the inherent probabilities, so that at the end
of the day one can say with conviction
that one version is more
probable and should be accepted, and that therefore the other version
is false and maybe rejected with
safety.”
[33]
The
commissioner ignored all documentary evidence in particular, the
sworn statements of the affected customers who state under
oath that
they had not entered into any of the fictitious transactions created
in their name and that they neither paid nor received
any goods in
respect of the fictitious transactions. The affected customers felt
aggrieved by the fact that their names had been
used to generate
fictitious transactions
[34]
The
commissioner’s conduct of the arbitration proceedings was
called into question by the applicant for the manner in which
the
arbitration proceedings were adjourned to allow the parties to
respond to the commissioner’s written questions. The applicant
was of the view that the interruption of the proceedings by the
commissioner was done to give unfair advantage to the third
respondent
and this shows that the commissioner was biased.
[35]
I
am of the view that the commissioner has the discretion to conduct
the proceedings in the manner she deems fit without detracting
from
the common law principles required for a fair hearing. The
commissioner cannot be faulted for adjourning the proceedings to
allow both parties to respond to the questions raised by her.
[36]
While
I have found that the commissioner was not biased in the way she
conducted the proceedings I do not believe that the award
is
rationally justifiable with the reasons given for it. The
commissioner completely ignored the entire disciplinary hearing and
the record of the appeal as well as the sworn statements which form
part of the applicant’s bundle. This is clearly irregular
and
in so doing, the commissioner failed to appreciate the true issues in
dispute and this amounts to a gross irregularity which
justifies the
review and setting aside of the award.
[37]
By
all accounts, the applicant has in my view presented a compelling
case for the review and setting aside of the commissioner’s
award.
[38]
The
applicant has submitted that the court should substitute its decision
for that of the commissioner in the event of the application
for
review being upheld. I am not satisfied that this court is in a
position to make a finding of fact on the papers. One of the
issues
which must be determined is the credibility of the witnesses and that
is pre-eminently a matter which falls within the domain
of the person
presiding over the hearing. The presiding officer has advantages
which this court cannot have in seeing and hearing
the witnesses and
in being immersed in the atmosphere of the hearing so as to observe
the demeanour of witnesses, their appearance
and mannerisms.
[39]
There
is no reason why costs should not follow the result.
[40]
In
the premises I make the following award:
1. The arbitration
award issued by commissioner Ralefatane, the Commissioner for the
CCMA under Case No. GA23916/610 and dated
20 December 2002 is hereby
reviewed and set aside.
2. The
matter is referred back to the CCMA for the appointment of an
arbitrator other than the second respondent
to re-hear the case.
3. The third
respondent is to pay the costs.
Mayet A J
Acting Judge of the
Labour Court of SA
Date
of hearing: 11
September 2007
Date
of judgment: 12
September 2008
APPEARANCES:
For
the applicant: Mr
S Snyman of Snyman Attorneys
For
the third respondent: Mr
S. Mbau of Nomali Tshabalala Attorneys
[1]
See Bundle page 198 to 202
[2]
See Bundle page 204