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[2011] ZALCJHB 9
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Network Field Marketing (Pty) Ltd v Mngezana No and Others (JR 2802/09) [2011] ZALCJHB 9; [2011] 7 BLLR 699 (LC); (2011) 32 ILJ 1705 (LC) (11 February 2011)
IN
THE LABOUR COURT OF SOUTH AFRICA
(HELD
AT JOHANNESBURG)
CASE
NO: JR 2802-09
In
the matter between
NETWORK
FIELD MARKETING (PTY) LTD
1
st
Applicant
and
K
MNGEZANA N.O.
1
st
Respondent
COMMISSION
FOR CONCILIATION, MEDIATION AND ARBITRATION
2
nd
Respondent
DANIEL
KGWADI
3
rd
Respondent
______________________________________________________________________________
JUDGMENT
______________________________________________________________________________
LAGRANGE,
J
Introduction
The matter before
the court is an application to review an arbitration award issued by
the first respondent, a commissioner of
the second respondent (‘the
CCMA’) on 30 August 2009. The applicant also sought
condonation for the late filing of
its heads of argument which the
third respondent did not persist in opposing. The four day lateness
in filing heads was condoned.
Background
The third
respondent, the former employee of the applicant, was dismissed on
25 November 2008. He held the position of a district
manager at the
time of his dismissal and also was a marketing representative. The
employee was found guilty of three charges
of misconduct, namely
gross dishonesty, bringing the applicant company’s name into
disrepute and acting detrimentally to
the employer-employee
relationship.
The charges all
stem from one incident involving a purported attempt by the employee
to sell battery stock to a third party whereas
that stock should
have been used to provide free stock to existing retail customers of
a client of the applicant. The client
in question is a company,
Procter & Gamble. Amongst other things it manufactures and sells
Duracell batteries. The applicant
markets the batteries to various
retail outlets identified by the client, and Procter & Gamble
supplies and sells the batteries
to the retailers.
It was alleged that
the employee had visited a former marketing contact, a Mr D
Steinberg, previously employed at a Checkers store,
at Steinberg’s
new business premises. Steinberg had recently left Checkers and was
running his own retail outlet. Steinberg,
who testified at the
arbitration hearing, claimed that the employee had tried to sell him
batteries and given him a handwritten
quotation. He said he was
suspicious about the employee’s approach because he knew from
past experience in dealing with
him at Checkers that the applicant’s
marketing representatives did not sell products themselves. After
obtaining the quotation,
he phoned another battery supplier to find
out the price they were asking for Duracell batteries.
It seems the
supplier then contacted Procter & Gamble to complain about what
it perceived to be marketing activity by the
applicant which Procter
& Gamble would not have permitted. Procter & Gamble in turn
contacted the applicant to complain
about the perceived attempt by
the employee to approach a retailer which it had not identified as a
potential customer.
The Award
In one respect the
arbitration award is substantial. The arbitrator provides a
relatively detailed summary of the evidence comprising
the bulk of
the densely typed 12 page award. The arbitrator then set out his
evaluation of the evidence in a few terse paragraphs,
as follows:
“
113. The
objective analysis of the evidence adduced by both parties’
witnesses indicates that the Applicant had not committed
any serious
misconduct that would warrant dismissal. The Respondent failed to
prove that the Applicant had tried to sell free stock
to David
Steinberg. Steinberg was totally not a reliable witness.
114. He had
testified that the Applicant had visited him in the morning around
10h00am, but when it was put to him under cross examination
that the
Applicant only visited him in the afternoon at 15h35, he said that
was possible. The two times are totally different times
and cannot be
viewed as synonymous.
115. Furthermore,
the Respondent failed to prove that the Applicant had committed any
serious misconduct dismissible in law.
116. I therefore
reject the testimony from both Respondents’ witnesses as
baseless and without substance because both witnesses
did not know
what the time was when the Applicant visited Steinberg.
117. Furthermore,
the Applicant’s actions would have only benefited the
Respondent and not himself. He would not have been
able to sell the
free stock because as he said, the party that received it must
acknowledge that it received the free stock.
118. I accept the
Applicant’s testimony because he had been consistent in his
evidence from the beginning to the end.
”
In consequence of
his findings the arbitrator then reinstated the applicant
retrospectively to the date of his dismissal
Grounds of Review
Essentially, the
applicant has raised three substantive grounds of review. Firstly,
the applicant takes issue with the arbitrator’s
stated basis
for his credibility finding against the applicant’s two
witnesses. The applicant is effectively arguing that
conflicting
evidence about the time the applicant visited Steinberg was an
insufficient factual basis for disbelieving all the
evidence of both
witnesses.
Secondly, and
related to the first ground, the applicant complains that the
arbitrator failed to properly consider or take account
of the
evidence of its witnesses which ought to have been given more weight
than the uncorroborated evidence of the employee.
Thirdly, the
applicant contends that the arbitrator’s finding that the
employee’s actions would in fact have benefitted
the applicant
and not the employee himself was without a factual basis. On the
contrary, the applicant nearly lost its client
Procter & Gamble
in consequence of the employee’s approach to Steinberg.
Mr Khoza, who
represented the employee, argued that these criticisms were
misplaced. The fact that the arbitrator mentioned the
contradiction
in the evidence about the time of the visit to Steinberg was merely
illustrative and must be seen against his evaluation
of the evidence
as a whole. Secondly, it cannot be said the arbitrator did not take
account of the evidence of the applicant’s
witnesses because
he recorded it in great detail. On the third ground, he argued that
the effect of the employee’s actions
might have been to obtain
another retail supplier for the applicant’s client.
Evaluation
The first two
related grounds raised by the applicant are clearly the most
significant criticisms of the award.
It is true, as Mr
Khoza contended, that the arbitrator recounted the employer’s
evidence. It might even be said he did so
in more detail than was
necessary. Nevertheless, merely recounting the evidence of the
parties, however comprehensively, simply
gives us an indication of
whether or not the arbitrator captured the evidence properly. In
itself it does not inform the reader
if he applied his mind to it
analytically. It is a different matter if an arbitrator also
comments on the evidence in the course
of narrating it. That is not
the case here: the only evaluative portion of the award which gives
us any insight into how the
arbitrator arrived at his factual
findings is the extract quoted above.
All that can be
gleaned from the arbitrator’s evaluation is that -
He was satisfied
on an “objective analysis of the evidence adduced by both
parties” that the applicant had failed
to prove that the
employee was guilty of trying to sell free stock to Steinberg or
that he was guilty of any misconduct warranting
his dismissal.
He concluded
Steinberg was a completely unreliable witness. The only reason he
provides for this credibility finding is Steinberg’s
uncertainty about the time of day the employee came to see him.
Not only does he
reject Steinberg’s evidence for this reason, but he also
dismisses Little’s testimony in its entirety
because he also
did not know when the employee visited Steinberg.
He accepted the
employee’s evidence because it was consistent throughout.
What is immediately
striking is the contrast between the length of the arbitrator’s
summary of the evidence and the brevity
of his analysis. Secondly,
much of the brief ‘analysis’ consists simply of
conclusions with little or no support
offered for them. Paragraphs
113 and 115 of the award stand out in this regard.
In the few
instances where the arbitrator reveals his analysis what stands out
is the boldness of his conclusions about the reliability
of the
witnesses, which he appears to base on the most slender factual
foundation. He also does not tell us why an analysis of
the
conflicting evidence using a balance of probabilities could not have
produced an outcome and why it was necessary to resort
to making
credibility findings to determine the matter.
As a general rule
it is undesirable to rely on a credibility finding as the sole basis
for assessing the probative value of evidence.
Of course there are
occasions when on the face of the record of a witnesses evidence, a
witnesses’ testimony is so riddled
with patent inconsistencies
and contradictions that the unreliability of that testimony is
glaringly obvious. Ordinarily though
“
…
findings of
credibility cannot be judged in isolation, but require to be
considered in the light of proven facts and the probabilities
of the
matter under consideration.
”
1
In
Southern
Sun Hotel Interests (Pty) Ltd v Commission for Conciliation,
Mediation & Arbitration & Others
(2010) 31
ILJ
452
, Van Niekerk J also took an arbitrator to task for the
arbitrator’s one-dimensional approach to evaluating
conflicting
versions:
“
To resolve
the factual controversy between Carstens and Nkunzi,
the
commissioner had to embark upon a balanced assessment of the
credibility, reliability and probabilities associated with their
respective versions
.
But the commissioner did nothing of the sort - and instead simply
plumbed for Nkunzi's version. In the result, the award is bereft
of
any reason whatsoever for why Nkunzi 'was able to establish' her
version on this score.”
2
(emphasis added)
The importance of
relying on the record of a witnesses’ evidence as the primary
basis for making credibility findings has
been recognized:
'Of course, the
judicial officer, who has sight of the witnesses and is able to
assess their evidence from nearby, is the best person
to gauge their
demeanour.
The
record of such evidence, however, speaks for itself. If a witness is
mendacious, contradictory or evasive, this will appear
from the
record. And if a judicial officer has justified criticism of a
witness or of his or her evidence, the justification for
such
criticism will normally also appear from the record. Even more so
will this be the case when a credibility finding is made
against a
particular witness.
Although
a Court of appeal is reluctant to interfere with credibility findings
made by the court of first instance, it is not obliged
to accept such
findings if they should not appear to be justified
.
3
(emphasis added)
In this instance
the arbitrator identified testimony on the record, which related to
only one incidental question,
as
the basis for making sweeping credibility findings. Even that
finding was unjustified on the evidence because it could hardly
be
characterized as an anomaly. Steinberg had initially testified that
he thought the employee had come to his premises in the
morning.
Later he agreed it
could have been in the afternoon. This is not a basis for finding
that the entirety of a witnesses’ evidence
is unreliable: at
best it is a finding that he was uncertain about that aspect of his
evidence and his testimony could not be
relied on in that respect.
If all of his evidence had been like this then the reliability of
his testimony as whole might be
impugned, but uncertainty about a
single detail could hardly be a basis for making a credibility
finding against him.
4
Even if the
uncertainty in Steinberg’s evidence as to the timing of the
employee’s visit to his premises could be
construed as an
anomaly in his evidence, which it is not, that would not be
sufficient to found a credibility finding.
5
Lastly, in relation
to the arbitrator’s dismissal of Little’s evidence on
the same basis as his dismissal of Steinberg’s
evidence, the
arbitrator did not even have any factual basis for making an adverse
credibility finding, quite apart from whether
such a factual basis
could justify an adverse finding: Little did not testify about the
time the applicant visited Steinberg
at all, so there was no
evidentiary basis for the arbitrator’s adverse credibility
finding against him.
It is possible that
there might have been another basis for doubting the value of Little
and Steinberg’s evidence but if
there was it did not form part
of the arbitrator’s reasoning in dismissing the credibility of
Steinberg’s testimony
on the most slender basis and, in the
case of Little, there was no factual basis at all. By excluding the
applicant’s evidence
from serious consideration on this
unwarranted basis, the arbitrator effectively denied the applicant a
fair hearing which amounts
to misconduct by the arbitrator in
relation to his duties in terms of
section 145(2)(a)(i)
of the
Labour Relations Act 66 of 1995
. Quite apart from this, his bold
findings on credibility are ones that no reasonable arbitrator would
have made.
Conclusion
For the reasons set
out above, I believe the arbitrator’s award must be set aside.
While the record is substantial, both
parties were of the view that
it would be preferable for the matter to be set down before another
arbitrator for a fresh hearing.
This might be a matter in which the
court should substitute its own decision for that of the arbitrator,
but as credibility has
become such an issue, it seems that this
might be an instance in which scope for a re-hearing should be
allowed. However, in
order to try an curtail the length of such
further proceedings I see no reason why the current record should
not form part of
those proceedings, subject to other evidence the
parties may wish to lead.
Order
Accordingly, an
order is made in the following terms -
The arbitration
award of the first respondent is reviewed and set aside.
The matter is
referred back to the second respondent which must appoint a senior
commissioner other than the first respondent
to re-hear the matter.
The commissioner
re-hearing the matter shall decide the matter on the record of the
arbitration before the first respondent,
and such additional
evidence as the parties may present.
No order is made
as to costs.
ROBERT
LAGRANGE
JUDGE OF THE LABOUR COURT
Date of hearing:
9 February 2011
Date of judgment:
11 February 2011
Appearances:
For
the applicant: Mr R Beaton SC, instructed by Vogel Malan Attorneys
For
the respondent: Mr W Khoza of Retail and Allied Workers Union
1
Santam
Bpk v Biddulph
2004
(5) SA 586
(SCA)
at
589, par [5].
2
At
462, par [20]
3
Van
Zyl J, in the judgment in
Foodworld Stores Distribution Centre
(Pty) Ltd and Others v Allie
[2002] 3 B All SA 200 (C)
cited with approval by Navsa JA, in
Allie v Foodworld Stores
Distribution Centre (Pty) Ltd & others
2004 (2) SA
433
(SCA)
2004 (2) SA p433
at 442, par [38].
4
In
this regard se
e
Body
Corporate of Dumbarton Oaks v Faiga
[1998] ZASCA 101
;
1999 (1) SA 975
(SCA)
at 979H-980A, and
Santam Bpk v Biddulph
2004
(5) SA 586
(SCA)
at 589, par [5, both of which caution
against making credibility findings in isolation without regard to
the proven facts and
probabilities of the matter.
5
See
President of the Republic of South Africa and others v South African
Rugby Football Union and others
2000 (1) SA 1
(CC)
at
55, par [113].