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[2008] ZALCCT 13
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Worldnet Logistics (Cape) (Pty) Ltd v Maritz NO and Others (C434/206) [2008] ZALCCT 13 (22 September 2008)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT CAPE TOWN
Case
no: C434/206
In
the matter between:
WORLDNET
LOGISTICS (CAPE) (PTY)
LTD
Applicant
And
MARITZ
N.O
1
st
Respondent
COMMISION
FOR CONCILIATIOIN,
MEDIATION
AND
ARBITRATION
2
nd
Respondent
GUNTRAM
HERLES
3
rd
Respondent
JUDGMENT
MOLAHLEHI
J
Introduction
[1]
This is an application to review and set
aside the arbitration award issued by the first respondent (the
commissioner) on the 26th
May 2006 under case number WE7396-05. The
commissioner issued the following award:
“
1.
The Respondent has shown that the dismissal as such was substantively
and procedurally fair but not that the
terms of the dismissal were
fair.
2.
The Respondent, Worldnet Logistics
Cape (Pty) Ltd must pay to the Applicant [“the employee”]
Herles, an amount of R182400, 00 being in respect of the notice
period determined in his contract of employment. Payment must be
made
on or before 30 June 2006.”
Background
facts
[2]
The third respondent, Mr Herles, (the
employee) was prior to his dismissal by the applicant employed as the
director effective from
1st March 2003. He was charged with the
following:
“
Insubordination-
you have failed and/or refused to carry out a lawful and valid
instruction to repair the gate, which was damaged
on the company
premises in Cape Town. You refused and/or failed to carry out this
instruction despite having received both verbal
and written
instruction from your managing director to his effect.
Breach of a material
obligation contained within your contract of employment as you failed
to pay and observed certain reasonable
directions and instructions
which have been given to you by your managing director.
Breach of contract in
that you have failed to observe a material term of your employment
contract which clearly stipulates that
you are no entitled to sign
any lease, rental or loan agreement without the written consent of
the board or without am appropriate
directors resolution you have
failed to obey instruction from your managing director. You have
engaged in sub-letting the company’s
premises despite
instructions to the contrary. You have failed to obtain the consent
of the board and further you did not obtain
the appropriate
directors’ resolution”
[3]
The employee was further charged with
misconduct arising from the above in that his conduct was in this
regard regarded as detrimental
to the interest of the applicant in
that it led to potential damages which could have arisen
from the lessees claiming
compensation for having to evacuating the
applicant’s premises leased to them by the employee.
[4]
The managing director, Mr Bade (Blade)
testified that because of the nature of the business which the
applicant ran, security was
of utmost importance. The applicant had
its state of art warehouse from which it ran its operations from the
Airport Industria
in Cape Town.
[5]
Whilst, the applicant was responsible for
the Cape Town operations of the applicant, the overall responsibility
and authority rested
with Bade. To this extent the employee was
accountable to Bade.
[6]
Bade testified that during February 2005,
visited the Cape Town operations only to find that the heavy
electronically controlled
gate which was not easy to operate
manually, had not been operational for some time. On that particular
day when he attended there
he had to assist the security guard to
open it. After meeting with Mr Osler, the financial director and Mr
Mc Namara, the consultant,
Blade instructed that the gate should be
repaired with immediate effect. This instruction was confirmed in an
email by Blade on
his return to Johannesburg. Blade testified that
the issue that had arisen as a result of the broken gate related to
both security
and that image of the applicant.
[7]
The employee indicated during this visit by
Blade there was a plan to bring Consignment Processing Services
(CPS), textile oriented
business onto the applicant’s premises.
This plan included changes to the premises to accommodate office
space for the new
business. The comment from Osler regarding this
proposal was that it was not in line with the business of the
applicant and that
the proposal should be considered if there was a
clear agreement.
[8]
Blade testified that when he visited Cape
Town again during April 2005, he found that three offices had been
built and there were
already a number of CPS employees on the
premises. In addition to CPS the other company that had moved in at
that stage was Dayton
Chemicals.
[9]
The response he received from the employee
when he enquired from the employee as to what was happening was that
because there was
no response from Osler to the proposed plan he had
sent him he decided to proceed and implement the plan.
[10]
The other thing which Blade found during
his visit in April 2005 was that despite his instruction the gate was
still not repaired.
And pursuant to this Blade wrote to the employee
accusing him of ignoring his instruction and proposed termination of
the relationship
between the employee and the applicant. The employee
was then suspended and called to a disciplinary hearing on 19th May
2005 which
was chaired by a member of the Johannesburg Bar.
[11]
Osler remembered the discussion about the
CPS issue and suggesting that a contract be drawn which would also
need the approval of
the board. He further indicated having received
the power point presentation from the employee relating to the CPS.
This presentation
was according to him more of a proposal rather than
a business plan.
[12]
The employee testified in support of his
case that at the meeting of February 2005, he explained cause of the
damage to the gate
and how temporary repairs were done to it to
ensure that it could be closed and opened manually. He denied that it
was difficult
to open the gate such that a forklift was required to
pen it. He acknowledged that Blade had indicated to him that the
repair of
the gate was a major concern and that it needed to be
repaired as soon as possible. He suggested the cause of the delay in
repairing
the gate was because the insurance company wanted to have
repaired rather than replace it. He had in this regard engaged the
insurance
company who had finally agreed to replace the gate but
there was a delay in paying the money over because of the change in
the
banking details.
[13]
Turning to the issue of CPS, the employee
testified that he had discussed the issue with both Bade and Osler at
the meeting of February
and shown them the drawings of what he had in
mind. According to him, he motivated at this meeting that it would be
a good thing
to enter into the textile processing market. The only
comment that came from Bade after sharing with them his plan was that
he
should make sure that the colour scheme and furnishings are the
same as those of the applicant.
[14]
The employee claimed that it was only in
May that he became aware that Bade’s view was that the
applicant should only be involved
in the high end of the market.
Grounds
for review and the award
[15]
At the time of filing the review the
applicable test was that of justifiability and rationality as was set
out in the
Carephone (Pty) Ltd v
Marcus No (1998) 19 ILJ 1625 (LAC)
. The
applicant in this regard contended that the commissioner
unjustifiably interfered with and committed a gross irregularity
in
finding that the sanction imposed by the applicant was in
appropriate. The applicant further contended that the commissioner
unjustifiably ignored the significance of the fact that the employee
had “wilfully, deliberately and persistently”
gone
against the wishes of the applicant and that he was “guilty not
only of being in breach of his contract but also of
gross
insubordination.”
[16]
In his award the commissioner found that
the employee had failed to follow the procedure provided for in his
contract of employment
and had gone against the wishes of Bade. The
commissioner then concluded that:
“
On
that basis I am of the opinion that the Applicant was guilty not only
of being in breach of his contract but also of gross insubordination.
I am further of the opinion that considering the above a continuation
of the relationship was not feasible for the Respondent and
that
dismissal was justified.”
[17]
However having arrived at the above
conclusion the commissioner concluded that the employee at all times
acted in the best interest
of the applicant and for that he should
not have been dismissed summarily but that the applicant should have
given him 3 (three)
months notice. In as far as the loss that the
applicant could suffer as the result of the employee’s
unauthorised action
the commissioner accepted that potential loss
could result from such conduct but this did not materialise and that
the applicant
would be able to resist any claim that might arise from
the conduct of the employee.
[18]
It was for the above reasons that the
commissioner ordered the applicant to pay the employee compensation
equivalent to 3 (three)
month’s notice
Evaluation
of the award
[19]
This matter turns around the issue of
whether the commissioner, having found that the dismissal was both
substantively and procedurally
fair, was entitled to interfere with
the sanction of dismissal imposed by the applicant. Thus, in essence
the issue which the commissioner
was called upon to consider was
whether the sanction imposed by the applicant was fair.
[20]
In determining the fairness of the
dismissals the first inquiry that the commissioners need to conduct
is a factual inquiry concerning
whether or not the misconduct was
committed. In conducting this inquiry the commissioners act in the
similar manner like a court.
[21]
The second inquiry that the commissioners
must conduct is that of determining the fairness of the dismissal. In
conducting this
inquiry the commissioners must take into account the
reasonableness of the rule breached by the employee and the
circumstances
of the infringement.
[22]
In
Engine
Petroleum Ltd v CCMA & others (2007) 28 ILJ 1507 (LAC)
,
the Labour Appeal Court held that the reasonable employer test must
not be applied and there should be no deference to the employer’s
choice of a sanction when a CCMA commissioner decides whether
dismissal as a sanction is fair in a particular case. The
commissioner
is required to decide the issue of the appropriateness
of the sanction in accordance with his or her own sense of fairness.
(See
Engen
at par 117) This is the same approach which the Court had adopted in
Chemical Workers Industrial Union &
others v Algorax (Pty) Ltd (2003) 24 ILJ 1917 (LAC).
[23]
In
Sidumo&
Anoter v Rustenburg Platinum Mines (PTY) Ltd & Others
[2007] 12 BLLR 1097
(CC)
(at paras 75
and 76), the Court held that the notion of fairness or
appropriateness of a dismissal as a sanction is an issue to
be left
to the commissioner and not the employer and I may add not to the
Court seating on review. In this regard it was said in
Sidumo (at
par. 75) that:
“
Ultimately,
the commissioner’s sense of fairness is what must prevail and
not the employer’s view.”
[24]
The factors which a commissioner must take
into account when weighing whether a dismissal is an appropriate
sanction or otherwise,
are stated Sidumo (at par. 78) as follows:
“
In
approaching the dismissal dispute impartially a commissioner will
take into account the totality of circumstances. He or she
will
necessarily take into account the importance of the rule that had
been breached.; the basis of the employee's challenge to
the
dismissal; whether additional training and instruction may
result in the employee not repeating the misconduct,
the effect
of dismissal on the employee and his or her long-service record.
The
commissioner must of course consider the reason the employer imposed
the sanction of dismissal, as he or she must take into
account the
basis of the employee's challenge to the dismissal. There are other
factors that will require consideration. For example,
the harm caused
by the employee's conduct, whether additional training and
instruction may result in the employee not repeating
the misconduct,
the effect of dismissal on the employee and his or her long-service
record.”
[25]
It has been accepted that the factors
listed in
Sidumo
are
not exhaustive and therefore there are other factors which the
commissioners may take into account, including those mentioned
in
Engen’s
case. In terms of Engin’s case in assessing the fairness of the
sanction account should be taken of the provisions of section
188(1),
and section 192(2) of the Act including Schedule 8 of the Code of
Good Practice: Dismissal. The essence of this is that
commissioners
in considering the appropriateness of the dismissal must take into
account the provisions of the Code of Good Practice
and more
importantly the fact that the burden to prove the fairness of the
dismissal rests with the employer.
[26]
In the present instance the commissioner in
interfering with the decision of the applicant to dismiss the
employee took into account
the terms of the employment contract and
the principle of fairness in a more general application.
[27]
The commissioner reasoned in relation to
the CPS issue that there existed elements of a lease in as far as CPS
arrangements were
concerned. However, the commissioner found that in
entering into the arrangement with CPS the employee did so in what he
believed
to be in the interest of the applicant. It should be
remembered that clause 15 of the employment contract prohibited the
employee
from signing any lease agreement without written consent of
the board or the directors’ resolution.
[28]
It may well be that subjective belief of
the employee did not absolve him from his responsibility in as far as
breach of the contract
of employment was concerned. However, this
would relate to the first part of the investigation into the
substantive fairness of
the dismissal. In relation to the
investigation relating to the appropriateness of the sanction, it is
my view that the subjective
perception of the employee plays an
important and is critical in the determination of the fairness of the
sanction.
[29]
In my view where it is established that an
employee in doing whatever may be wrong against the employer did so
with the believe
that that what he or she was doing was in the
interest of the employer and not his or her own interest, would go
long way to tilting
the scales in favour of a lesser punishment. The
record reveals that the employee did not deny his wrong doing in
concluding the
arrangement with CPS. Similarly, with the issue of the
gate, it cannot be said that there was open defiance of Bade’s
instruction.
The employee explained that the delay in implementing
the instruction was caused by the view of the insurance that it
should be
repaired rather than be replaced.
[30]
The above authorities indicate very clearly
that the court should be very slow in interfering with the
determining the fairness
of the sanction by the commissioner. It is
only in extreme cases where it has been established that the
commissioner exercised
his or her discretion without having regard to
the interests of both the employer and employee. This would be in a
situation where
the commissioner acted capriciously in the
determination of the fairness of the sanction.
[31]
In the circumstances of this case I have
not been able to find a basis for interfering with the decision of
the commissioner relating
to the fairness of the sanction which he
regarded as being unfair. Therefore, the applicant’s
application to review and set
aside the decision of the commissioner
stands to be dismissed.
[32]
I see no reason in both law and fairness
why the costs should not follow the results.
[33]
In the premises the application to have the
commissioner’s award issued on the 26th May 2006 under case
number WE7396-05 reviewed
and set aside is dismissed with costs.
_______________
Molahlehi
J
Date
of Hearing :27 March 2008
Date
of Judgment : 22 September 2008
Appearances
For
the Applicant : Adv. Cook
Instructed
by :Howes Inc
For
the Respondent: Adv Bremridge
Instructed
by : C & N
Friedlander