About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Cape Town Labour Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Cape Town Labour Court, Cape Town
>>
2010
>>
[2010] ZALCCT 34
|
|
Trentyre (Pty) Ltd v Basson and Others (C873/08) [2010] ZALCCT 34 (30 November 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD
AT CAPE TOWN)
Case No:
C873/08
In
the matter between:
TRENTYRE
(PTY)
LTD
Applicant
and
LOUIS
BASSON
First
Respondent
SARAH
CHRISTIE
N.O.
Second
Respondent
MOTOR
INDUSTRY BARGAINING
COUNCIL
Third
Respondent
JUDGMENT
Cheadle
AJ:
Introduction
[1]
This is an application to review and set aside an arbitration award
handed down by the second respondent (the arbitrator) under
the
auspices of the third respondent (the Council) on 15 October 2008 in
terms of section 145 of the Labour Relations Act, 66 of
1995 (the
LRA). In terms of the award, the applicant’s dismissal of the
third respondent (Mr Basson) was found to be substantively
unfair and
the applicant was ordered to reinstate him retrospectively.
[2]
The documents in this matter are divided into two parts: the
pleadings and the record. The record includes the transcript of
the
arbitration hearing. The pleadings are cited as P with the
accompanying page or paragraph number. The record is cited as R
with
the accompanying page and line number.
Background
[3]
The applicant conducts the business of supplying and fitting motor
vehicle tyres and has branches situated around the country.
[4]
Mr Basson commenced employment with the applicant on 15 November
1974. During the course of his 34 years of employment with
the
applicant, he held various positions. In 2005, he applied for and was
appointed as the warehouse manager at the applicant’s
Epping
Warehouse.
[5]
In his
position as warehouse manager, he was responsible for ensuring that
adequate and reasonable procedures, processes and controls
were in
place to safeguard the stock which was received by, stored in and
dispatched from the warehouse and to prevent and minimize
stock
losses.
[1]
[6]
There had been no warehouse manager six months prior to his
appointment. When he started, he found that there were few systems
in
place to safeguard the stock. He introduced various measures as a
result.
[7]
In September 2007 he was disciplined for the stock loss of 27 tyres
amounting to R93, 000. He was found to have been negligent
in signing
receipt of the stock without verifying that the stock was actually
received. He received a final warning.
[8]
He was advised to introduce a system of spot checks in order to
minimize the number of thefts. The use of spot checks had been
successful in minimizing stock loss at the applicant’s other
warehouses. He did not heed this advice because he considered
it to
be impractical and that the other warehouses were differently
situated.
[9]
In November 2007 111 raw tyre casings (valued at approximately
R67,000) were discovered to be missing during a stock take. Mr
Basson
had signed receipt of the raw tyre casings into the warehouse but was
again, after investigation, unable to explain it.
As a result he was
charged with gross negligence, disobeying a lawful instruction, not
complying with company policy and procedures
and sustained
unacceptable work performance.
[10]
The disciplinary enquiry was chaired by Mr Van Niekerk, an area sales
manager of the applicant. Mr Basson was found not to
have committed
the misconduct alleged in respect of disobeying a lawful instruction
and not complying with company policies and
procedures. He was
found guilty of the other two charges namely gross negligence and
sustained unacceptable work performance.
His appeal against this
finding was unsuccessful.
[11]
Mr Basson referred the dispute to the council. After conciliation
failed, the dispute was referred to arbitration. The arbitrator
found
that the dismissal was substantively unfair. Her award is the subject
of this review.
[12]
Since the institution of these proceedings, Mr Basson has secured
employment elsewhere. If he is successful in having
this
application for review dismissed, he accordingly seeks alternative
relief to reinstatement namely an award of compensation.
The
award
[13]
The arbitrator begins her analysis by holding that not much turns on
whether the matter is more about poor performance than
misconduct
because the ‘central question is not whether the employee was
negligent or guilty of poor performance but whether
he had properly
been put on terms that any substantial losses would jeopardize his
future employment with his employer’.
[14]
She then states that she is not persuaded that Mr Basson was
‘primarily responsible’ for the loss of the 111 raw
tyre
casings in November 2007 ‘although it happened on his watch’.
She arrives at this conclusion because she holds
that in order for an
employee to be found negligent ‘the employer bears the onus of
establishing a standard that the employee
ought to have adhered to,
the steps he should have, but did not take and that the loss arose
because of the employee’s negligence.’
The applicant
failed to prove this.
[15]
She elaborates on this by noting that the employer did not allege
‘strict liability in which the loss can be ascribed
to
management without showing any connection between failure to act and
the loss sustained’. Instead, the applicant claimed
‘that
it was as a result of Basson’s gross negligence that it
suffered the loss’. It did not prove that.
[16]
She notes too, in this regard, that she accepts (without deciding)
that Mr Basson was advised that he should undertake spot
checks ‘but
that that this advice had not ripened into an instruction let alone a
standard operating procedure’.
The applicant failed to
tender evidence that if spot checks had been conducted, the loss of
the tyre casings would not have occurred.
[17]
Later on in the analysis, the arbitrator states that ‘At the
heart of this case is the employer’s decision that
the loss of
the tyres was Basson’s fault and that but for his failure to do
the spot checks the loss would not have occurred.
The evidence does
not support such a conclusion…’
[18]
The arbitrator then deals with the argument that as a manager he was
responsible for devising his own standard operating procedures.
She
finds that although he made a start, he may not have been as
assertive or efficient as ought to have been. Her answer to this
is
that he was appointed as a result of a restructuring exercise and to
a post in which he had no experience particularly in respect
of
supervising staff. Moreover she finds that ‘even at the
level of middle management a person in the position of Mr
Basson
should have been given guidance and development’.
[19]
The arbitrator finds that ‘apart from failing to conduct spot
checks there was no evidence that Mr Basson was neglectful
of his
work or that his performance was inadequate’.
[20]
The arbitrator’s assessment of the evidence tendered by the
applicant in respect of the applicable performance standards
was
‘vague’ and ‘amounted to little more than he should
have ‘done more’ and specifically that it
ought to have
done spot checks’.
[21]
Although the arbitrator appears to recognise the operational
justification for reconsidering the appointment of Mr Basson as
warehouse manager, in the circumstances of the case she does not
consider it to be fair to dismiss him. The applicant had failed
to
consider his long service nor whether additional training or
instruction may not have improved his performance. Given his length
of service, the employer ought to have considered alternatives to
dismissal.
The
grounds of review
[22]
The grounds of review as they are set out in the founding affidavit
have been clustered under five heads in Mr Malan’s
heads of
argument on behalf of the applicant. I have however combined the
second and third grounds because they traverse the same
issues.
First
cluster of grounds: The failure to correctly identify the issues to
be determined
[23]
The applicant contends that the arbitrator misconstrues the issues
before her by characterizing the central issue to be decided
in the
following way:
‘
the central
question is not whether the employee was negligent or guilty of poor
performance but whether he had properly been put
on terms that any
substantial losses would jeopardize his future employment with the
employer’.
[24]
This the applicant contends, fails to correctly identify the issue
which the arbitrator was called upon to determine, namely
whether Mr
Basson was guilty of gross negligence and sustained poor work
performance following stock losses at its Epping warehouse
while he
was the warehouse manager.
[25]
Mr Badenhorst on behalf of Mr Basson argues that it is clear from
other parts of the award that the arbitrator applies her
mind to the
issue of whether or not Mr Basson Is guilty of gross negligence or
sustained poor work performance. She says for example
later in the
analysis that ‘ at the heart of this case is the employer’s
decision that the loss of the tyres was Basson’s
fault and that
but for his failure to do the spot checks the loss would not have
occurred’.
[26]
While the force of the final warning may not be the ‘central
question’, it is part of that question. The arbitrator
applies
her mind to both the question of Mr Basson’s negligence and
poor work performance and the question of the impact
of the final
warning on her assessment of the fairness of the dismissal. This
ground of review accordingly fails.
Second
and third clusters of grounds: The failure to properly take into
account relevant considerations concerning Mr Basson’s
negligence
[27]
These clusters concern the arbitrator’s finding that the Mr
Basson was not primarily responsible for the November loss
and her
finding that he was not guilty of gross negligence. The applicant
criticizes the award on the basis that she ignored or
attached
insufficient weight to a range of facts relating to the fact that Mr
Basson was a manager and responsible for the security
of the
warehouse; that he had he had sufficient time to address the problems
of security; and that he had failed to introduce measures
including
some that he had been advised to take.
[28]
The reason why the arbitrator does not give sufficient weight to
these important issues is her approach to negligence as a
species of
workplace misconduct.
[29]
The arbitrator states that ‘[at] the heart of this case is the
employer’s decision that the loss of the tyres was
Basson’s
fault and that but for his failure to do the spot checks the loss
would not have occurred’. She concludes
that the
‘evidence does not support such a conclusion…’
Earlier on in her award she draws a similar conclusion,
namely that
she was not persuaded that Mr Basson was ‘primarily
responsible’ for the loss of the stock.
[30]
These conclusions flow from her approach as to what must be proved in
order for negligence to constitute a ground of misconduct::
‘
the employer must
establish the standard to be adhered to, the steps that should have
been taken and that the loss arose because
of the employee’s
negligence’.
[2]
[31]
I wish to
deal with the conceptual difficulty first. The arbitrator equates
negligence as a species of workplace misconduct with
negligence in
the law of delict. Although there may be similarities and the
development of a coherent jurisprudence on workplace
misconduct may
draw on delictual principles, the fact is that the standard of care
required in assessing workplace misconduct is
largely defined by the
employment contract, the nature of employment and the rules of the
workplace (although always mediated by
the principle of what steps a
reasonable person in that position would take to obviate the harm)
and the fact that even if the
negligence in the workplace causes no
loss, the negligence may still constitute misconduct and if serious
enough justify dismissal
[3]
.
[32]
The arbitrator finds that the standard to which Mr Basson had to
subscribe was ‘ extremely vague’. But Mr Basson
was a
manager. As a manager, he was given discretion to introduce measures
to prevent and minimize stock loss. The delegation of
a managerial
discretion arises precisely because it is not possible to flexibly
manage an institution by inflexible rules alone.
If it was possible
to think through and draft rules for every conceivable contingency,
there would be no role for managers. It
is precisely because rules
cannot rule the roost, that there are managers to take and adapt
measures to meet the exigencies of
specific situations.
[33]
The standard to which they must comply is qualitatively different
from those who operate a machine or drive a truck.
The standard
of conduct of a manager is necessarily general in nature and assessed
very often by reference to the performance of
the entity itself –
whether the manager has reduced costs, improved efficiencies or, as
in this case, prevented loss. The
focus is more on the effect of the
measures rather than an assessment of what the manager should or
should not have done. No standard
prescribes what system he should
have put in place just that the system should be effective against
thefts involving a large quantity
of bulky items requiring several
employees, a large truck or a number of small trucks to remove from
the warehouse.
[34]
The next major difference between workplace negligence as a species
of misconduct and negligence in delict is that no loss
need be proved
in the former. All that needs to be proved is that the
loss might have occurred. In the context of managerial
responsibility
to take reasonable measures to protect the interests of the employer,
it is not necessary to prove that the failure
to take reasonable
measures ‘caused’ the loss. Loss in these
circumstances is a symptom of a management failure
– the
failure to put systems in place to prevent loss. Of course, not
every loss constitutes a symptom of a failure
to put a system in
place but in the circumstances of this case, the sheer bulk and
quantity of the items stolen constitutes evidence
of the lack of an
effective system of monitoring and controlling the movement of the
items in, on and out of the warehouse. The
loss is proof not that he
was primarily responsible for the loss but proof of a lack of an
effective system, which is what he was
responsible for as a manager.
[35]
It follows that the arbitrator’s approach to negligence in the
workplace constitutes a material misdirection because
she asked the
wrong questions and in so doing failed to give proper weight to
relevant evidence before her.
[36]
It is
important to note though that the arbitrator, albeit tentatively,
finds that Mr Basson as manager ought to have devised his
own
standard operating procedures; that he had made a start; and that he
was arguably not as assertive or efficient as he might
have been.
[4]
Later in the award she again tentatively states that ‘[i]t may
be that the decision to appoint him to the position of warehouse
manager was not appropriate and that in the circumstances of the
losses the employer would have had good reason to reconsider the
assignment’.
[5]
These
findings though set the context for the arbitrator’s finding
that his failure to introduce effective measures is exonerated
by his
lack of experience and the applicant’s failure to ‘give
him guidance and development’, which leads into
the fourth
cluster of grounds.
Fourth
cluster of grounds: The finding that the Applicant failed to give Mr
Basson guidance and development
[37]
This cluster deals with the finding that given the circumstances of
Mr Basson’s appointment as warehouse manager and
the
applicant’s failure to ‘give him guidance and
development’, it was unfair to dismiss him without considering
alternatives including whether or not with additional training or
instruction he may have improved his performance.
[38]
The finding is criticized for failing to place sufficient weight on
the fact that he had 34 years of experience with the applicant
and
almost 3 years experience as Warehouse Manager and accordingly ought
to have known what was expected of him; and that he was
given some
guidance.
[39]
There is
uncontested evidence that he was given advice to institute spot
checks – the contested issue was whether that the
advice had
crystallized into an instruction. The arbitrator’s
approach however was to consider whether ‘his failure
to do
spot checks the loss would not have occurred’.
[6]
But the point is not whether the advice would have worked, but
whether he got advice. To that extent he did get guidance and the
arbitrator’s conclusion is accordingly not a reasonable one in
the circumstances. It should also be recognized that he had
been in
the position for almost three years and had long experience with the
applicant’s business. His response to
the advice
indicates just what the nature of his role is: he had to make his own
decision based on the exigencies of the particular
workplace. The
case does not turn on whether he was right or wrong not to institute
spot checks but whether he implemented appropriate
measures to
prevent loss. The issue of spot checks is evidence that there was
guidance and illustrative of the Mr Basson’s
failure to
implement appropriate measures in general.
Fifth
cluster: Finding that the applicant did not have a valid and
sufficient basis to dismiss
[40]
The attack under this cluster is that the arbitrator failed to take
properly into account the fact that Mr Basson was an experienced
managerial employee, that he was on a final warning, that he had been
given guidance, that he had not put measures in place to
prevent
large scale theft, and that the decision to dismiss was a sensible
operational response to risk management.
[41]
This attack is very similar to the one raised in the second and third
clusters of grounds. It turns on the arbitrator’s
failure to
recognize what is needed to prove negligence or poor performance in
respect of a managerial employee. It is because
the focus was on what
caused the loss rather than the failure to put measures in place to
prevent large scale loss of the kind
that occurred in respect of the
111 tyre casings. It is because the arbitrator misconceives the true
enquiry that she fails to
properly take into account the evidence
that was placed before her in respect of: his being a manager with
responsibility to put
measures in place to prevent loss; that he was
in the position for almost three years; that he got advice on
measures that worked
elsewhere; that there were no measures in place
to prevent large scale theft; and that he was on a final warning for
negligence
(also related to a lack of a system).
[42]
It follows that under this cluster of grounds, the arbitrator
misconstrued her brief and accordingly misdirected herself.
Conclusion
[43]
I accordingly hold that the award is reviewable and should be set
aside. The applicant seeks an order substituting the relief
granted
in the award with a finding that the dismissal was fair. I am
of the view that it is unnecessary to remit the matter
back to the
arbitrator.
[44]
It is clear that Mr Basson was a manager and as such responsible for
instituting measures to prevent loss from occurring. He
had a final
warning for negligence which itself arose from the lack of a system
for the physical check of received goods into the
warehouse. Although
he had instituted measures, these were manifestly not sufficient to
prevent a large scale loss of stock –
it was the quantity and
the bulk that demonstrated that appropriate systems were not in
place. He accordingly did not fulfill the
role expected of him after
nearly three years in the job. He was accordingly, notwithstanding
his length of service, justifiably
dismissed for misconduct and
sustained poor work performance.
[45]
Although costs normally follow the result, I think that it would not
be fair to require Mr Basson, an individual employee,
to pay the
applicant’s costs. Costs orders can have a chilling effect on
access to justice particularly in the case of employees.
Order
[46]
The arbitration award dated 15 October in favour of Mr Basson is
reviewed and set aside.
[47]
That award is substituted with the following :
‘
The employee’s
dismissal was for a fair reason related to his capacity and conduct.
There is no order as to costs’.
[48]
There is no order as to costs in this application.
________________
CHEADLE
AJ
Date
of Hearing : 20
th
May 2010
Date
of judgment : 30
th
November 2010
Appearances
For
the Applicant : Bowman
Gilfillan Inc
Instructed
by
: Adv L M Malan
For
the Respondents: Theron & Partners
Instructed
by
: N L Badenhorst
[1]
This is a broad summary of his responsibilities described in the
Founding Affidavit at P7 para 13 based on or implied from the
evidence presented at the arbitration. This description is admitted
(with qualifications that do not affect the broad description
of his
responsibilities) by Mr Basson see P55 at para 31.
[2]
[3]
Grogan,
Workplace
Law
,
Juta at 4.11 at page 226.
[4]
P22.
[5]
P24.
[6]
P23.
In this respect she states that evidence does not support such a
conclusion despite uncontested evidence on record that the
implementation of spot checks at other warehouses had been
successful.