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[2011] ZALCCT 82
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Nedbank Limited v Commission for Conciliation, Mediation and Arbitration and Others (C408/2009) [2011] ZALCCT 82 (8 November 2011)
REPUBLIC OF SOUTH
AFRICA
IN THE LABOUR COURT OF
SOUTH AFRICA
HELD
IN CAPE TOWN
Not
Reportable
Of
interest to other judges
Case
No: C
408/2009
In
the matter between:
NEDBANK
LIMITED
Applicant
and
COMMISSION
FOR CONCILIATION, MEDIATION
AND
ARBITRATION
First
Respondent
COMMISSIONER
M VAN ROOYEN (
N.O.
)
Second Respondent
MARK
SOLARI
Third
Respondent
JUDGMENT
HEAD
NOTES: (review-failure to consider relevant evidence-process and
substantive review-dishonesty)
LAGRANGE, J
Introduction
[1]
I handed down judgment in this matter on 8
November 2011. The full reasons for the judgment appear below.
[2]
This is an application to view and set
aside an arbitration award issued by the second respondent, a CCMA
commissioner, on 15 April
2009. The third respondent, an area manager
of Nedbank at the time of his dismissal on 21 August 2008, was
dismissed by the bank
after being found guilty of two charges of
misconduct. The charges read:
"1. Dishonesty in
that during the period 3 September 2004 until 10 March 2008, you have
abused your position in a dishonest
manner by collaborating with
junior staff to approve and release unsecured loans from the bank
without the necessary signed documents.
Your above conduct has
resulted in potential financial risk and reputation risk to the bank.
2. E-mail abuse in that
you received, retained and forwarded pornographic
material using Nedbank
resources (E. G. Laptop and Internet access)
in contravention of the Bank's E-mail and Internet policy."
[3]
The only issue between the parties at the
arbitration was whether the third respondent's dismissal was
substantively fair.
The arbitrator's
award
[4]
The arbitrator correctly observed that most
of the facts in the matter were common cause. In early 2008 there was
a general investigation
of irregular loan authorisations made by a
certain Mr Mitchell, a team leader in Nedbank’s home loans
department. Mitchell
had made unauthorised alterations to mortgage
details of bank clients, thereby allowing the clients to borrow funds
in excess of
the registered bond value. The third respondent had
obtained three mortgage loans from the bank in respect of three
separate properties.
The registered value of the bonds were R
415,000, R 200,000 and R 110,000 respectively, amounting to a total
of R 735,000. Over
a period of few years the third respondent drew
down a further amount of R 853, 507 from these bond accounts without
the values
of the existing registered bonds being increased
correspondingly. In the case of each of the three properties it was
common cause
that the value of the property exceeded the combined
value of the bond value and the additional amounts advanced to the
third respondent
in respect of that property. Accordingly, the bank
conceded that if the third respondent had applied for an extension of
the registered
bonds to cover the additional amounts advanced he
would have qualified for the additional loans.
[5]
However, the third respondent never
registered additional bonds on any of the properties. He simply
obtained the additional loans
by communicating with Mitchell by
email. Mitchell then made the necessary changes on the existing bond
account details to permit
him to advance the extra amounts. Because
the values of the registered bonds were never increased, the bank
believed it was potentially
exposed to greater risk in respect of
these additional amounts.
[6]
The arbitrator identified two issues in
dispute between the parties regarding the first charge. Firstly, the
central question was
whether the third respondent knew, or ought to
have known, that Mitchell had conducted unauthorised transactions to
advance the
additional loans to him. Secondly, it was a matter of
dispute whether the bank held any security for the additional amount
loaned
to the applicant.
[7]
The third respondent was interviewed by an
investigator of the unauthorised loan scheme, Mr Simon. He told Simon
that he had saved
paying attorneys’ fees by using Mitchell’s
e-mail procedure. The investigator concluded that this statement
indicated
that the third respondent knew that he would have incurred
legal costs for registering an additional bond if the normal
procedure
for obtaining a further advance on an existing bond was
followed. Because the correct procedure was not followed, no credit
checks
were done and no documents such as the loan agreement were
completed as required by bank procedures.
[8]
Even
though the value of the properties covered the amount of the extended
loans, the investigator believed that the bank would
not be able to
recover the unauthorised loans because the additional loans were not
secured by a corresponding increase in the
registered bond or by a
new bond. Moreover, in terms of the provisions of the National Credit
Act 34 of 2005 ('the NCA'), Mitchell’s
loan authorisations
might well have constituted reckless lending in the absence of a
proper credit assessment being done before
granting the loans.
[1]
It was common cause that eighteen loan advances were made to the
third respondent before the NCA was promulgated, and another seven
thereafter. There was also evidence that the third respondent had
signed off on debt restructuring agreements for clients in which
money was drawn from the bonds to consolidate their debt, yet the
procedure he followed with Mitchell in respect of his own debt
restructuring was not the same.
[9]
Other evidence which the arbitrator
expressly considered was the fact that the third respondent had
previously worked in the home
loans department of the bank some 10 or
15 years before. The arbitrator also took account of the third
respondent’s claim
that he assumed that Mitchell was following
proper procedures. This assumption was apparently also accepted by
other staff members
who were disciplined, but not dismissed, for
obtaining unauthorised loans through Mitchell.
[10]
The third respondent claimed that he had
first contacted Mitchell, with whom he had previously worked in the
home loan department,
at a time when he was experiencing frustrations
in processing clients’ home loan applications timeously.
Mitchell had advised
him that he had the authority to do certain
transactions to facilitate the process. The third respondent then
called on Mitchell
regularly for assistance. Mitchell also advised
him that if he needed additional funds himself he could apply merely
by sending
him an e-mail. The third respondent then took Mitchell up
on his advice and on several occasions obtained extensions on his own
mortgage loans by sending Mitchell an e-mail request. Occasionally he
asked Mitchell to come back to him if there were any problems
but
Mitchell never did. In the circumstances, he said he did not have any
reason not to trust Mitchell.
[11]
The third respondent also mentioned that a
procedure for obtaining loans
without
further bond registration was described on the bank's intranet
facility and speculated that may have been the procedure which
Mitchell followed. However, he subsequently conceded that this
procedure referred to re-advances on an existing mortgage facility,
which did not apply in his case, because the loan facility was
extended beyond the value of the registered mortgage bond. In so
far
as there were formalities to be completed in order to advance the
loans, the third respondent was under the impression that
Mitchell
took care of these formalities.
[12]
In respect of the first charge, the
arbitrator concluded that it was clear that the third respondent was
not guilty of dishonesty
on the basis of the common cause facts. The
arbitrator was satisfied that the employer had not proven that the
third respondent
had an intention to deceive, defraud or steal and it
could not be said that conduct which was reckless, disobedient or
foolish
fell within the ambit of dishonest conduct.
[13]
In reaching this conclusion, the arbitrator
relied mainly on the following evidence advanced by the third
respondent in support
of his claim that he was ignorant of the
procedures adopted by Mitchell, namely that:
a)
dual control systems were in place which made it impossible for
someone like that Mitchell to grant loans unless he had the authority
to do so;
b) the loans granted were
reflected on his monthly bond statements;
c) other staff members
were also being assisted by Mitchell;
d) the process was not
done in secret;
e) the loan was secured
because the bond agreement was a continuing covering security for all
present and future indebtedness of
the third respondent to the bank;
f) the total value of the
loans never exceeded the value of the respective properties;
g) merely because his
requests for a loan were often met quickly, this could not have
alerted him to the fact that formalities were
not followed as he
would not have known if Mitchell had involved the credit assessment
department or not, and evaluation was not
always required to make
additional funds available, and
h) the bank’s
intranet (K-net) did provide for advancing loans without registration
and there had been talk for some time
of improving the system of
loans to overcome client frustrations.
[14]
The employer submitted, in the alternative
to a charge of dishonesty, that the third respondent could be found
guilty of serious
misconduct in the form of intentionally obtaining
unsecured loans without the bank's knowledge by not committing a
gross violation
of loan procedures, but the arbitrator found that
such a charge has never been put to the third respondent during the
hearing and
could not be entertained.
Analysis
[15]
What was the third respondent’s
understanding of whether the loans were unauthorised or not? This
question was critical to
the arbitrator’s deliberations.
Clearly, if the third respondent knew or ought to have known that the
procedure of obtaining
extended loans from Mitchell was not
authorised, then he was a party to such an improper transaction. The
reasoning of the arbitrator
on the question of the third respondent's
knowledge of the un-authorised nature of the loan advances is set out
in paragraphs 44
and 45 of the award:
"
[44] After his
first interview with the investigators the Applicant made a written
statement [...].
Therein the applicant states the procedure
employed by Mitchell is strange in hindsight and he should have
investigated
. He also states
he saved attorneys
fees by following Mitchell's procedure
. These two aspects
were highlighted by the respondent and used in support of its
argument that the applicant knew the correct procedures
were not
being followed. If the statement is read and evaluated as a whole
however
it becomes clear that the applicant's version
remained the same throughout
. He states he experienced
frustrations at branch level and Mitchell advised him that home loans
department was able to increase
the limited registration amounts
provided there was sufficient value in the property. All that was
required was an e-mail.
He was under the impression that
the e-mail served as a written application and constituted his
electronic signature. He benefited
from this procedure as he saved
attorneys fees. Because he was never told the system does not allow
the transactions he never thought
it was not authorised
.
[45]
In his e-mail to Mitchell, the applicant asked for increases to the
limit of his bonds. Six of these e-mails were included
in
respondent's bundle [...]. In two of Mitchell's replies to the
applicant he states the amounts available to the applicant were
less
than what was requested [...]. In the e-mail on page 47 Mitchell
replies to the applicant "Check if enough". In
the context
he seems to say it to the applicant to check whether the funds that
were made available are sufficient.
From
these e-mails it appears that applicant did not have free rein to ask
for as much funds as he wanted
.
There were certain limits to what
Mitchell was able to do on the system. I am of the view the
respondent was not able to present
sufficient explanation for the
fact that these limits were applicable given the respondent is
evidence that Mitchell merely made
indicative changes to the system
to accommodate the applicant while the applicant knew full well the
transactions were unauthorised.
These limits that were applicable
supports the applicant's version that he was unaware of the
wrongdoing by Mitchell rather than
the respondent's version that the
applicant knew the transactions were underhanded
.
"
(
sic
)
(my emphasis)
[16]
The applicant argues that the arbitrator’s
reasoning above shows that she found that the third respondent was
probably unaware
that Mitchell’s transactions were unauthorised
because Mitchell appeared to be subject to certain limits on what he
could
do. Taking into account the contents of paragraph 44 of the
award the arbitrator was also clearly persuaded by the consistency of
the third respondent's account of how he came to use Mitchell's
procedure. I agree with the applicant that it does not seem to
follow
that because the third respondent stuck to his version throughout
that this increases the plausibility of his account. [17]
The relevance of the third respondent‘s
access to K-Net is that the facility contained explicit instructions
to the effect
that "if a client wants to increase the loan
amount, a new Agreement of Loan/Re-advance must be completed".
The procedures
and requirements for different types of loans
are set out in structured and detailed way on the system, which
contrasts starkly
with the procedure followed by Mitchell.
[18]
The employer's representative in the
arbitration asked the third respondent if he accepted that the
practice at the bank had been
that a further bond would be registered
against the property and he would have been called in by attorneys to
sign the documentation
for the registration thereof. The third
respondent confirmed that this was the practice which applied before
he used new procedure
facilitated by Mitchell. The third respondent
had registered three bonds in his own name using the formal process.
[19]
In his first handwritten statement made on
26 June 2008, the third respondent stated:
"
We were told 5-6
years ago that bond admin can
increase limits of
registration amounts
to assist clients provided there is
sufficient value in the property.
Based on this I asked and
was told all that is required is an e-mail
. I have made
use of this to increase the value of the property further by doing
renovations and alterations.
...
As mentioned above and
due to pressures at branch level, Parow branch to be exact, we had,
in order to assist clients, maintained
good relationship with the H/L
teams. Client became increasingly frustrated with H/L. Jonathan
Mitchell who I worked with and socialised
with on the odd occasion
advised me that it was possible to increase limits of registered
amounts on H/loans.
I admit that I should have investigated
how this is possible but took it on his word
. I know for a fact
that we assisted at least one or two clients on this basis.
...
As
I required more money [to fund property improvements] and based on
what Jonathan had told me about the system change I approached
him
for assistance.
All that was
required was an e-mail stipulating the amount. I thought nothing of
it and did not find it strange, although in hindsight
it is
.
However, all the funds were not used for personal gain but to do
improvements, whether superficial or structural:
the
only important thing for me was the saving on registration fees the
attorneys would charge
.
"
(
sic
)
[20]
During his evidence in chief, the third
respondent elaborated on Mitchell’s advice to him about the
email procedure. He claimed
that when Mitchell told him he had a
mandate to increase mortgage limits he had asked him “
Are
you sure? How is it possible?
”
[21]
Under cross-examination, the third
respondent qualified his statement about the fees he saved under the
new arrangement. Essentially,
his evidence was that he never paid
attorneys for bond registration services in the past because they had
done it as a favour for
him. All he previously had to pay was the
bond registration fee itself. He further testified that Mitchell
actually told him that
he would do the bond registration. Later,
under cross-examination, he qualified this to say that Mitchell told
him he would ‘do
the necessary’ which he took to mean he
would attend to all the formalities including valuations and bond
registration.
[22]
In a subsequent letter from the third
respondent, dated 11 July 2008, he said the following, amongst other
things:
"
The reason for
my being questioned and subsequently suspended took me by surprise as
the reason for my drawing funds from my bonds
was never with the
intention of placing the bank at risk, being dishonest or abusing any
system. I was told by someone in the home
loan department who was at
that stage team leader, that they had been given a mandate to
increase limits on bonds. This providing
that they be sufficient
value & affordability in place. I had no cause or reason not
question this as there were always initiative
sought out to improve
service to clients.
There were continued talks of the bank
wanting to do their own registrations at the deeds office
.
As I was newly appointed as a branch manager Parow this was good news
to us. I advised the bankers that if they needed assistance
with home
loan issues that they should refer to Jonathan as he will assist.
...
Not
once was there a thought of defrauding the bank in anyway
.
The only people who lost anything
are the attorneys as they did not register a bond
.
The risk of the bank is no different whether a bond was registered or
not. Whenever the bond is cancelled either by repaying,
or sale and
then claim the full amount plus interest as the cancellation amount
this is fully covered in the bond deed and loan
agreements.
"
[23]
It is evident from the above that the third
respondent was acutely aware of the fact that no registration fees
would be payable
by himself using Mitchell’s services, but he
also understood that it was the registered amount of the bond that
would be
increased. He also appears to suggest that he understood
that Mitchell's activity was a logical outcome of the previously
expressed
wish of the bank to do its own deed registrations, and he
still believed that formalities would have to be attended to. Thus,
the
third respondent’s version of his understanding was that
the application process was now greatly simplified but there were
still attendant formalities that would be dealt with by the bank and
did not require his personal attention or financial outlay.
He
expanded on this by testifying that he believed the e-mail request
made to Mitchell qualified as his electronic signature signifying
his
agreement to the new loan facility.
[24]
When he was taken through the bank’s
policy on re-advances under cross-examination he conceded that a new
loan agreement had
to be concluded even when the borrower was seeking
to borrow the difference between the original loan and the
outstanding balance.
He also agreed that there was no document to
suggest that this policy had been substituted with a new email
application procedure.
He admitted he ought to have checked up or
questioned the new procedure, but said he had no reason not to trust
Mitchell.
[25]
The third respondent’s trust extended
also to assuming that the loans were properly authorised, in
circumstances where large
advances of up to R 97, 000-00 were
approved within three-quarters of an hour of sending the email
request and, in one case, within
10 minutes.
[26]
When Simon was cross-examined on the need
to conclude a written agreement before money could be advanced, it
was suggested to him
that this was unnecessary if the existing bond
provided for continuing covering security for all amounts owed to the
bank. However,
it is clear that this was not the reason the third
respondent was unconcerned about the apparent lack of formalities
required of
him. On the contrary, his stated belief at the time was
that the bank would attend to these, not that he assumed such
formalities
were unnecessary based on his interpretation of the terms
of the existing bond.
Grounds of review
[27]
The applicant's principal attack on the
arbitration award is that the arbitrator simply failed to grapple
with the evidence and
relied solely on the parties’ submissions
and some limited aspects of the evidence, without attempting to
resolve factual
disputes and draw conclusions on all the evidence
based on a balance of probabilities.
[28]
In
so doing, the applicant relied principally on a so-called ‘process
based’ review rather than a ‘result based’
review
in the sense in which those two approaches were distinguished by
Ngcobo, J in
Sidumo
& another v Rustenburg Platinum Mines Ltd & others
(2007)
28
ILJ
2405 (CC) at 2490-2491, [267 - 268]. Nonetheless, as the applicant
recognised, if the irregularity concerns a Commissioner's failure
to
have regard to the material facts, of necessity that also raises the
question whether the result could have been a reasonable
one, as the
Constitutional Court pertinently observed in
Minister
of Health & another NO v New Clicks SA (Pty) Ltd & others
(Treatment Action Campaign & another as Amici Curiae
)
2006 (2) SA 311
(CC) at 470, [511].
[2]
Indeed, it is difficult to see how a process based review concerning
a failure to have regard to material facts could ever
be truly
distinguished from an outcome based review based on
unreasonableness.
[29]
The applicant's chief complaint is that the
commissioner failed to deal with the all important issue about
whether or not the third
respondent knew or ought to have known that
the correct procedures were not being followed in regard to
deregistration of further
mortgage bonds when he required additional
funds exceeding the registered amount of his existing bonds. It is
not strictly true
that the arbitrator failed to deal with the issue.
However the narrower focus of the applicant's attack is that the
arbitrator
failed to consider all the material evidence in
determining this issue.
[30]
The applicant argues that the arbitrator’s
conclusion that simply because the third respondent’s account
was consistent,
could not explain why he did not think the procedure
was strange at the time or why it was reasonable for him to believe
that he
suddenly no longer had to pay bond registration fees, yet the
formalities would still have to be completed by Mitchell. The
evidence
relating to this question will be considered later.
[31]
The applicant contends arbitrator was also
swayed in her evaluation by the fact that sometimes Mitchell did not
authorise a loan
for the full amount requested. She accepted that it
was reasonable of the third respondent to have believed that because
of this
it was reasonable for the third respondent to infer that
there was nothing untoward about the transactions because they would
not
have been subject to such occasional limitations if they were
unauthorised.
[32]
The applicant identifies the portions of
the evidence, which it claims the Commissioner ignored in her
evaluation. If the claims
are correct and the evidence ignored is
relevant to the matters the arbitrator had to decide and if it is of
sufficient weight
to have materially affected the findings she made,
then the reasonableness of her award will be implicated. The evidence
referred
to is evaluated below:
[33]
The applicant contends that in finding that
the third respondent was ignorant of any wrongdoing, she failed to
give any weight to
his 26 years of experience with the bank and his
previous knowledge and familiarity with the formalities of the bond
registration
process. I agree. It seems the arbitrator evaluated the
reasonableness of the third respondent’s belief not from the
perspective
of a relatively senior manager of the bank with a
quarter-century of experience, but from the perspective of someone
who was virtually
ignorant of standard banking practices.
[34]
It is inconceivable that the third
respondent could have believed that the bank would simply pick up the
bond registration fee and
that a loan agreement could be concluded by
an informally worded e-mail request for funds without any reference
even to a loan
agreement. Moreover, in so far as he claimed to
believe that the formalities would still be completed by Mitchell, it
is difficult
to understand how he could possibly have believed that
Mitchell could authorise the loan in under an hour when such
formalities
could not have been completed in that time. Even on
his own version it is not in fact true that he thought nothing of it.
A person who assumes everything is above board does not ask: “
Are
you sure? How is it possible?
”
Interestingly, he never told the arbitrator what Mitchell’s
supposed answer to these questions were.
[35]
A further complaint is that the arbitrator
also failed to consider whether it was reasonable for the third
respondent to believe
that a bond registration could have been
effected without him signing any document at all and without any
valuation of his property
being done.
[36]
The applicant contends that the arbitrator
failed to consider why the third respondent only thought afterwards
that he should have
been more circumspect about Mitchell’s
system, but did not think so at the time. In any event, his own
version on whether
he had doubts at the time, is contradictory
because on the one hand he claims to have trusted Mitchell but on the
other claims
he questioned him on how it was possible for him to
approve loans on such an informal basis. Those questions demonstrate
that he
had in fact real concerns that something was not right about
the method used by Mitchell, but he simply suppressed these doubts.
Likewise, the arbitrator simply ignored this evidence.
[37]
Given these doubts and given that the only
written policies on loans which existed indicated that a new
agreement would have to
be completed, it is difficult to understand
how the arbitrator could have accepted that the third respondent
could not have realised
that something was amiss and that Mitchell’s
method was simply too good to be true. The arbitrator also failed to
consider
why the third respondent simply accepted such a radical
departure from the formal procedure he had been accustomed to, and
which
was set out in the bank’s written policies, was possible
without any variation of the express written policies.
[38]
It
is true that an arbitrator does not have to set out every factor
considered in arriving at her findings, but where there is no
sign
that significant material evidence was considered and no apparent
reason why the arbitrator felt that evidence could be discounted,
a
natural inference arises that arbitrator failed to consider it
all
[3]
, which constitutes a
valid ground of review on basis of a flawed process. There is
authority that such flaws cannot be remedied,
even if the outcome
might still be justified on the basis of the evidence before the
arbitrator
[4]
, but if
significant material evidence is ignored, it will seldom be the case
that it does not also affect the reasonableness of
the award, and
Ngcobo J’s dictum in
Nu-Clicks
will usually apply.
[39]
On the basis of what is set out above, I am
satisfied that the arbitrator did not conduct a balanced assessment
of all the significant
evidence that was material to deciding if the
third respondent knew, or probably knew that he was making use of an
unauthorised
loan facility. In ignoring important evidence and
failing to evaluate the evidence pointing to the third respondent’s
probable
knowledge of the illegitimate nature of the loan
transactions, the arbitrator denied the applicant a fair hearing and
thereby committed
a reviewable irregularity. Moreover, her failure to
do so meant that her findings on the critical question of the third
respondent’s
knowledge of the improper nature of the
transactions were not rational and she reached conclusions no
reasonable arbitrator should
have reached.
[40]
There were significant problems with the
third respondent’s explanation for his alleged ignorance of the
improper nature of
Mitchell’s method of originating loans. In
summary,
a.
The third respondent on the one hand said
he had queried how it could be possible that the scheme could work
the way it did, but
on the other hand simply accepted Mitchell’s
word. Likewise, he admits that he should have been more circumspect
about the
scheme and claims he did raise his concerns at the time,
but never explains why those concerns were allayed.
b.
The third respondent had worked for years
in an environment in which loan applications were regulated by
written policies and procedures,
yet he blithely assumed that these
practices had simply been swept away and replaced by a completely
informal one where the only
document attesting to his consent to a
significant loan supposedly secured by the value of his property was
his email request for
the loan. Moreover, there was not a single bank
document to support such a radical departure from prior practices,
yet he was supposedly
reassured about the propriety of the quick and
easy procedure simply on the basis of the say-so of Mitchell.
c.
In a similar vein, it stretches the limits
of credulity to accept that the third respondent honestly believed
that all the costs
and effort of registering an additional bond had
simply been absorbed by the bank, without such a major benefit ever
being announced
through any of the bank’s communication
channels.
d.
It is also difficult to credit that the
third respondent could honestly have thought that all formalities
such as a loan agreement,
registration of a further bond etc, would
take place ‘behind the scenes’ so to speak, and he would
only have an informal
email to evidence his application.
[41]
In the circumstances, I am satisfied that
the third respondent most probably knew that Mitchell’s method
was not above board
and he took advantage of it knowing that it was
not an approved method. By so doing he became complicit in taking
advantage of
an unauthorised method of obtaining loans. It is so that
the amount of the loan appeared against his account and that he did
not
fail to pay the loan instalments. Therefore it must be accepted
that the existence of the loan was not concealed and the third
respondent was not attempting to defraud the bank of funds, but the
method of obtaining the loan bypassed the procedures which,
in part
at least, are designed to minimise the risks of lending and
Mitchell’s procedure clearly bypassed these safety mechanisms.
[42]
Moreover, despite his claims that the
original mortgage loan agreement covered all future indebtedness he
might have incurred on
each bond, that was not true. The
document makes it clear that, even though all debt incurred
would be secured by the
bond, this was only true if the total debt
did not exceed the amount of the registered bond. What made the third
respondent’s
conduct dishonest was that he must have known he
was not entitled to obtain the loans in the way he did, and that the
bank could
not have been aware of how the transaction was effected,
yet he continued to make use of the procedure to procure the funds,
thereby
obtaining the money without proper vetting of the transaction
by the bank. The arbitrator’s characterisation of dishonesty
as
necessarily involving an intention to steal or defraud overstates the
requirement for dishonest conduct. In this instance the
third
respondent consciously made use of an improper procedure to obtain a
benefit he must have known he was not entitled to obtain
in that
manner. That was dishonest.
[43]
I accept that the third respondent had long
service, but he also occupied a senior position in which he was
expected to behave responsibly,
yet he became party to an
unauthorised scheme by which significant amounts of money were
advanced to him by a procedure which did
not have the bank’s
approval. Such conduct was highly irresponsible on his part and his
dismissal was justified on this basis.
[44]
On the charge relating to pornography it is
not necessary to deal with this in the light of my conclusions on the
first charge,
though a few comments would be in order as this was a
matter still canvassed at the review hearing. The third respondent’s
computer was found to contain approximately a thousand pornographic
images, samples of which were in the bundle depicting what
might be
termed celebrity exposures and equine encounters. Despite what might
be considered a sizeable volume of sexually explicit
imagery, the
third respondent displayed indifference towards his collection and
would not concede that the number of images stored
on his computer
was significant.
[45]
The arbitrator held that the bank’s
policy of electronic communications should not be construed too
narrowly, but nonetheless
emphasised the narrowness of the charge
against the third respondent, namely that it concerned the receiving,
retaining and forwarding
of the salacious material. The third
respondent received photo images from another staff member, nicknamed
‘Poppekas’,
depicting one Britney Spears exposing her
private parts. The email was sent to Mitchell too. The email subject
line was “Get
in the groove for sales!!” The third
respondent reacted to this by re-sending the same email to Mitchell
in which he noted
that Mitchell had received the same email from
Poppekas. He further exhorted Mitchell in the forwarded message: “You
can’t
let Poppekas beat you, let’s see if you can equal
or better.” The third respondent, defended this statement by
saying
that he was referring to sales and not to the images.
[46]
The arbitrator found that since Mitchell
had already received the explicit images and the third respondent
knew this when he resent
the same e-mail to Mitchell, it could not be
said in the true sense that he had ‘forwarded’
pornographic material to
Mitchell because he already had it. She also
found the email policy did not prohibit the receipt and retention of
pornographic
images. In her view, the fact that the bank’s IT
policy required employees to purge their email inboxes regularly did
not
prohibit the retention of such material, and if the bank thought
that a failure to clear the images out of his computer was a serious
offence, it would have charged him with this.
[47]
In any event, the arbitrator found that
another individual charged with visiting pornography websites on the
internet had only received
a final written warning so it was
inconsistent to have dismissed the third respondent on this charge,
even if he was guilty.
[48]
There is reason to consider the arbitrator
misconstrued the policy by entertaining the unnecessary philosophical
question whether
the images of Ms Spears amounted to pornography in
circumstances whereas the bank policy did not refer to pornography
but prohibited
the transmission of ‘sexually explicit’
images. The arbitrator also took an unreasonably narrow view of what
it means
to forward such material to another staff member. However,
even if her reasoning can be criticised on these grounds, and her
finding
of not guilty must be set her aside, her finding that it
would have been inconsistent to have dismissed the third respondent
for
this charge is not unreasonable given what was before her and
there is no reason to overturn her findings that dismissal would have
been too harsh a sanction for that charge in the circumstances.
Conclusion
[49]
The arbitrator committed reviewable
irregularities in failing to consider relevant and material evidence
in arriving at her findings
on whether the third respondent was
guilty of the charges for which he was dismissed. The arbitrator’s
findings were also
ones no reasonable arbitrator could have reached.
[50]
The conduct of the third respondent, given
his seniority and given the extent of his unauthorised loans was
serious enough to warrant
his dismissal on the first charge alone.
Order
[51]
The third respondent’s late filing of
heads of argument is condoned.
[52]
The arbitration award issued by the second
respondent on 15 April 2009 under CCMA case number WE 11082-08 is
reviewed and set aside.
[53]
The arbitrator’s finding on the
substantive fairness of the third respondent’s dismissal is
substituted with a finding
that his dismissal was substantively fair.
[54]
No order is made as to costs.
ROBERT
LAGRANGE
JUDGE
OF THE LABOUR COURT
Date
of judgment: 08 November 2011
Full
reasons filed: 25 November 2011
Appearances:
For
the Applicant: A T Myburgh, SC instructed by Cliffe Dekker
Hofmeyer Inc.
For
the Third Respondent: W Fisher instructed by M Abrahams
[1]
Chapter
IV, Part D of the NCA, amongst other things, prohibits reckless
lending and makes provision for the suspension of credit
agreements
which are considered reckless.
[2]
Viz:
“
[511]
There is obviously an overlap between the ground of review based on
failure to take into consideration a relevant factor
and one based
on the unreasonableness of the decision. A consideration of the
factors that a decision-maker is bound to take
into account is
essential
to a reasonable decision. If a decisionmaker fails to take into
account a factor that he or she is bound to take into
consideration,
the resulting decision can hardly be said to be that of a reasonable
decisionmaker.
”
[3]
See
Corobrik
(Pty) Ltd t/a Brick & Tile v CCMA & Others
[2002] 8 BLLR 738
(LC)
at 740,[7].
[4]
Southern
Sun Hotel Interests (Pty) Ltd v CCMA & others
[2009] 11 BLLR 1128
(LC) at 1134, [17]