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[2011] ZALCJHB 72
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Rema Tip Top (Pty) Ltd v Osman NO and Others (JR 2024/08) [2011] ZALCJHB 72 (18 August 2011)
IN THE LABOUR COURT OF
SOUTH AFRICA
HELD AT JOHANNESBURG
Case no: JR 2024/08
Reportable
In
the matter between:
REMA
TIP TOP (PTY) LTD
….................................................................................
Applicant
And
OSMAN,
S M N.O (cited in his capacity as
Commissioner
of the Commission for
Conciliation,
Mediation and Arbitration)
…...................................................
First
Respondent
THE
COMMISSION FOR CONCILIATION,
MEDIATION
AND ARBITRATION
….....................................................
Second
Respondent
THERON,
JOHAN LOMBAARD
….............................................................
Third
Respondent
JUDGMENT
BHOOLA J:
Introduction
[1] This is an
application for review and/ or set aside of the arbitration award
issued by the first respondent (“the arbitrator”)
in
terms of section 145 of the Labour Relations Act, 66 of 1995 (“the
Act”). The arbitrator found the third respondent’s
(“the
employee’s”) dismissal to have been substantively and
procedurally unfair and awarded him compensation
in the sum of R115
725.00, being an amount determined by the arbitrator to be equivalent
to three months’ remuneration.
Background facts
[2] The employee
commenced employment with the applicant on 1 September 2006 as branch
manager of its Kathu branch. He was responsible
for all aspects of
branch operations, administration and management. Various complaints
were raised regarding the employee’s
failure to adhere to work
standards, systems and procedures, which resulted in the branch
running at a loss and management of the
applicant having to take
steps to remedy the unsatisfactory state of affairs.
[3] The employee was duly
charged with five charges related to incapacity in the form of poor
work performance but at his disciplinary
enquiry was found guilty
only on charge four which related to “failure to adhere to work
standards, systems and procedures
in developing job cards and office
administration”. In addition, noting that the relationship
between the parties had deteriorated
the chairperson of the
disciplinary enquiry, Peter Gentle, recommended a warning together
with corrective remedial action as the
appropriate sanction. The
applicant however decided that a sanction of dismissal was more
appropriate and issued the employee with
a notice of dismissal. The
notice stated the reason for dismissal as being the chairperson’s
finding of guilt and that although
the sanction recommended was a
warning the applicant’s view was that “base (sic) on the
severity of the charge and
the financial implication thereof, we took
dismissal as the appropriate sanction”. The notice further
records the chairperson’s
conclusion that: “[t]he trust
relationship between the company (sic) has clearly reached a point
where to further pursue
the relationship would be untenable. There is
open hostility and during the hearing personal slights and innuendos
were made”.
Grounds of review
[4] The review is based
on the ground that the award is wrong in fact and in law, was
irregularly arrived at and cannot be objectively
justifiable having
regard to the evidence properly adduced at the arbitration. It was
submitted that it is therefore not an award
that a reasonable
decision maker could have arrived at on the material before him.
[5] The applicant takes
issue firstly with the arbitrator’s confusion about whether the
charge on which the employee was found
guilty was one of misconduct
or incapacity. In this regard the arbitrator concluded that the
applicant had “shot itself in
the foot” by submitting in
its opening statement that the employee had been charged with
misconduct but dismissed for the
trust relationship having broken
down. This tainted his approach to the entire matter and resulted in
him misconstruing the issue
raised by the applicant, which is not
that misconduct justified dismissal as a matter of principle but that
dismissal was the only
option given that the employment relationship
had become untenable. The issue therefore, the applicant submitted,
is not the misconduct
but the appropriate sanction in such
circumstances. The arbitrator, in focusing on the categorisation of
the charge and concluding
that the chairperson had erred in this
regard, misconstrued both the nature of the charge as well as the
evidence before. Instead
what he would have found had he applied his
mind to the evidence before him, was that the employee knew what was
expected of him
but failed to apply or implement the relevant rules
and procedures at his branch. This cannot be anything other than
misconduct
at its most basic level in the form of negligence in the
discharge of his duties. It is for this reason that the chairperson,
appreciating
the distinction, enquired into the existence of a rule,
knowledge of the rule and whether it had been infringed. The
employee’s
indifference to work rules was clearly misconduct
and it was not a case of him not being able to perform his job. In
failing to
appreciate this distinction the arbitrator applied flawed
reasoning which tainted the entire award. Furthermore the arbitrator
failed to have regard to evidence concerning a complete breakdown and
in fact open hostility between the employee and applicant,
which
meant that any form of corrective discipline would have been
unjustified and dismissal was the only plausible alternative.
In
ignoring this critical evidence and finding that the dismissal was
unfair he therefore made an award that was unreasonable.
[6] The applicant further
takes issue with the finding that there was a procedural irregularity
in the disciplinary proceedings
in that the chairperson relied on the
written statement of a witness who was not called to testify. He
should have found that since
the statement was not disputed it was
admissible by agreement, and in failing to do so the arbitrator
misconstrued the laws of
evidence and thus arrived at a conclusion
that was unreasonable.
[7] The arbitrator’s
criticism of the chairperson of the disciplinary enquiry, Gentle, was
unjustified. All he had done was
to convey the employee’s
hostility towards management that emerged during the hearing, and
there was no basis on which the
arbitrator could have concluded that
his testimony was “aggressive”. The manner in which the
arbitrator assessed the
evidence of the chairperson was therefore
grossly irregular and he not only misconstrued the chairperson’s
role but also
his conclusion. If the arbitrator had properly
considered Gentle’s evidence and the disciplinary enquiry
record, it would
have been clear that he would in the normal course
have issued a warning together with a performance improvement process
but left
the determination of sanction to the applicant given the
relationship breakdown. This was a reasonable and proper approach and
it is unclear what the arbitrator found to problematic.
[8] The arbitrator simply
ignored crucial documentary evidence and in so doing made unwarranted
negative inferences concerning the
testimony presented by the
applicant. This emerges from the issue of legal representation. The
record of the disciplinary enquiry
indicates that the employee had
never asked for legal representation, and stated that he would
represent himself. The issue of
legal representation had been
resolved prior to the commencement of the disciplinary enquiry and
the chairperson was not expected
to make a ruling on the issue. The
arbitrator’s criticism of the evidence of Van Niekerk, the
applicant’s witness,
is therefore completely unfounded.
Furthermore, Gentle had never testified that he refused the
application for legal representation.
In fact he had said it was not
his place to rule on such issues. The arbitrator therefore
contradicts his own award, which indicates
that he did not properly
apply his mind to the evidence. Furthermore, the employee had never
objected to the disciplinary hearing
proceeding and the finding that
the employee was refused legal representation is irregular and based
on ignoring crucial documentary
evidence.
[9] The arbitrator in his
award creates defences for the employee without him having raised
these in his evidence. In this regard
the arbitrator finds that the
employee’s version was that he was unable to call witnesses
because of intimidation. This,
the applicant submitted, did not
emanate from the evidence and was a conclusion reached by the
arbitrator of his own accord and
constitutes an unfair finding as
well as a denial to the applicant of
audi alteram partem.
[10] The evidence that
the employee was dismissed for his refusal to participate in illegal
activities, or that there was a relationship
between Van Niekerk and
Gentle was never raised with the applicant’s witnesses in cross
examination nor prior to the arbitration.
The arbitrator accepted
this crucial evidence instead of rejecting it and in so doing
demonstrated that he was biased against the
applicant.
[11] The arbitrator
ignored pertinent documentary evidence in determining the employee’s
remuneration for the purposes of
the relief awarded. In this regard
payslips were placed before him which indicated that the monthly
salary of the employee was
R26 500.00 per month instead of the R38
575.00 determined by him. There is no indication of the method by
which this calculation
was reached and this is in itself a gross and
reviewable irregularity.
Analysis
[12] The crux of the
review is whether the arbitrator failed to distinguish between the
charge of poor performance and misconduct.
The starting point is to
have regard to the issues he was required to determine as set out in
the pre-arbitration minute and which
he recorded as follows:
2. The issue to be
decided by myself pertains to whether the dismissal of the applicant
was both procedurally and substantively
fair. The applicant contested
procedurally that the finding of charge 4 at the disciplinary hearing
was not in line with the charge
and therefore the applicant was
prejudiced in that he was deprived of the right to properly prepare
on the charge; the applicant
was not afforded the opportunity to call
witnesses at the internal disciplinary hearing; the applicant was not
afforded the opportunity
to cross- examine the statement of Mr. Shaun
George whose statement was handed up to the Chairperson and finally
the applicant
was not afforded the opportunity to be represented at
the hearing as his fellow workers had feared intimidation from the
respondent
and the applicant was refused legal representation.
3. Substantively the
applicant contended that he contested the same issue as per point 1
of the procedure; that there was no rule;
the applicant had not been
aware of the rule and the appropriateness of the sanction was
challenged.
[13] The arbitrator
further had regard to the charge sheet which referred to five charges
based on incapacity for poor work performance,
and the finding of the
disciplinary enquiry that the employee was guilty in respect of
charge four. The nub of the employee’s
complaint during the
arbitration was that he was required to defend a charge related to
poor performance which was then elevated
to misconduct during the
enquiry. Gentle’s evidence was that irrespective of the
hostility between the parties he felt that
the employer should take
corrective measures. He went so far as to say that what the employee
had done was gross negligence but
he still recommended corrective
measures. This was based, as the arbitrator identified, on admitting
evidence related to misconduct,
which was not the charge being
considered.
[14] In his analysis of
the evidence and argument the arbitrator confirmed that the applicant
had “shot itself in the foot”
by contending that the
employee had been charged with misconduct when the charge stated on
the notice of disciplinary enquiry clearly
related to poor work
performance. He also noted that the applicant’s representative
had conceded that although the chairperson
recommended a warning with
corrective action for poor performance the applicant chose instead to
dismiss the employee on the grounds
of misconduct, which is not the
charge he faced. He found that the employee had in all probability
prepared his defence at the
disciplinary enquiry on the basis of poor
work performance and not misconduct. He cannot be said to have been
biased in this regard
or to have issued a ruling which was
unreasonable.
[15] In reaching his
conclusion the arbitrator also had regard to the employee’s
uncontested evidence about the context in
which the charges of
incapacity emerged. This was to the effect that he had received no
training when he was appointed; his branch
was audited three times in
nine months and no problems were found; he had been rewarded with a
performance bonus which was paid
even after his dismissal in
November; and that the branch was vastly understaffed (which Van
Niekerk had conceded).
[16] Mr Snyman, on behalf
of the applicant, submitted that corrective measures would have
served no purpose given the relationship
breakdown. He submitted
further that being pedantic about labeling the charge merely
obfuscated the conduct in that the only difference
between negligence
and poor work performance was whether the conduct was intentional.
What is significant, he submitted, is whether
the parties understood
the substance of the charge. The evidence of Van Niekerk, Gentle and
the employee was that they understood
the charge to relate to
negligence. Moreover, it was not necessary to import the exactness
required in criminal charges to disciplinary
proceedings as per the
dictum
of Van Niekerk J in
Avril Elizabeth Home
for
the Mentally Handicapped v Commission for Conciliation, Mediation and
Arbitration & others
(2006) 27 ILJ 1644 (LC). Thus when an
employee is charged with poor performance and he is found guilty of
misconduct in the form
of negligence this is a species of poor work
performance in that it relates to negligence in the performance of
his duties. However,
Mr Grobler submitted on behalf of the employee
that this obscures the real issue – that it is not fair or
appropriate to
elevate a charge during a disciplinary proceeding from
poor performance to misconduct and then to rely on the lack of
prospects
of restoring the employment relationship to justify
dismissal as a sanction. The employee was charged with incapacity and
presented
mitigation in respect of this and was found guilty on only
one charge. He charge for which he was dismissed was not put to him
at the disciplinary enquiry nor was he given an opportunity to
respond thereto. Furthermore it is trite that in the context of the
Act there is a vast difference between misconduct and incapacity both
conceptually and practically. In this context the sacrosanct
principles of natural justice were violated and the arbitrator’s
decision was justifiable and eminently reasonable.
[17] The arbitrator’s
conclusion that the chairperson’s failure to invite submissions
on legal representation could
have resulted in the employee being
denied the right to a fair hearing at the disciplinary enquiry. The
employee’s evidence
was his attorneys sent a written request
that they be permitted to represent him at the disciplinary enquiry
and he was informed
that “this is not an issue we are
addressing you”. The chairperson decided it was not his role to
hear submissions
since the applicant had made the decision to refuse
legal representation at the disciplinary enquiry. The arbitrator’s
criticism
did not amount to saying this reasoning was wrong, but that
submissions could have been invited on the issue in order to
determine
whether the complexity of the charges warranted
representation. He held that “in the absence of such a
consideration the
applicant could have been denied his right to a
fair hearing”. This was based on submissions made by the
employee at the
arbitration and not raised
mero motu
by the
arbitrator and is in my view not assailable.
[18] In regard to the
intimidation finding the arbitrator appears to have drawn an
inference from the employee’s evidence
that colleagues were
approached to represent him but declined because they were afraid of
being victimised. This was also an issue
identified in the
pre-arbitration minute. However the evidence related only to
representation at the enquiry and the employee admitted
that he was
afforded the opportunity to call witnesses. The arbitrator, in
stating that “in all probability” the employee
could not
call witnesses because of intimidation and victimisation, appears to
have drawn an inference based on this evidence and
this cannot be
said to be an unreasonable inference.
[19] In regard to the
hearsay statement of George being admitted, irrespective of whether
it was challenged by the employee or not
it would remain
inadmissible. It contained allegations that appear to have led partly
to the conclusion about the employee’s
misconduct, and when it
was put to Gentle that it was inappropriate to admit the statement in
a poor work performance enquiry his
response was to the effect that
“a rose like any other name is still a rose”. This can
hardly be said to epitomise
the fairness that underpins the
disciplinary process in terms of the Act, and the arbitrator’s
conclusion that Gentle confused
the different standards of conduct
involved in misconduct and poor performance and therefore admitted
irrelevant evidence would
appear to be justified.
[20] Finally, on the
ground of review pertaining to the basis on which the arbitrator
computed the employee’s remuneration,
it is clear from the
record that the parties were unable to reach agreement on all the
components of his remuneration for the purposes
of any compensation
award to be made. The arbitrator requested written submissions on the
issue and ultimately appears to have
made his determination based on
the written submissions of the employee’s attorneys which
computed his remuneration at R38 575.00
per month based on a
basic salary of R21 000.00 and various allowances, most of which
(save for the housing allowance) appears
to have been an agreed
component of the employee’s package despite being disputed at
the arbitration. This cannot be said
to be a misdirection or gross
irregularity that justifies setting aside the remedy as unreasonable.
[21] In the circumstances
none of the grounds of review are in my view justified. Therefore,
the following order is made:
The review application is
dismissed with costs.
_________________________
U.
Bhoola
Judge
of the Labour Court
Date
of hearing: 11 August 2011
Date
of judgment: 18 August 2011
Appearance
:
For
the applicant : Mr S Snyman of Snyman Attorneys
For
the Third Respondent : Advocate S Grobler instructed by Johan
Lombaard Theron c/o Louw and Da Silva Inc.
9