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[2011] ZALCCT 60
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Strategic Liquor Services CC t/a Beverage Merchandising & Promotions v Ndzombane NO and Others (C 862/10) [2011] ZALCCT 60 (9 December 2011)
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Not reportable
Of
interest to other judges
case
no: C 862/10
In the matter between:
STRATEGIC
LIQUOR SERVICES CC
T/A
BEVERAGE MERCHANDISING & PROMOTIONS
..................
Applicant
and
THUTHUZELA
NDZOMBANE N.O.
.....................................
First
respondent
CCMA
..............................................................................
Second
respondent
SOLIDARITY
obo AJ HUMAN
............................................
Third
respondent
Heard
:
24 November 2011
Delivered
:
9 December 2011
Summary:
Review – process related – hearsay
evidence.
judgment
STEENKAMP J
Introduction
The third respondent, Mr AJ Human (“ the employee") was
dismissed for misconduct , comprising gross negligence in
failing to
resolve complaints; and alleged dishonesty by providing false
information to the applicant's biggest (in fact, its
only) customer,
South African Breweries (SAB).
The employee referred an unfair dismissal dispute to the CCMA (the
second respondent). The first respondent (the arbitrator)
found that
the applicant had not discharged the onus to show that the employee
had been guilty of misconduct. He awarded the
employee six months'
compensation.
The applicant seeks to have that award reviewed and set aside. The
crisp question is whether the arbitrator properly found that
the
applicant had relied mainly on hearsay evidence; and that this was
not sufficient for the applicant to discharge the onus
to show that
the dismissal was fair. The applicant argues that, in doing so, the
arbitrator did not properly discharge his duties;
and that the
resultant conclusion that he came to was so unreasonable that no
other arbitrator could have come to the same conclusion.
The
applicant’s complaint is directed at the process rather than
the outcome of the arbitration proceedings.
Background
The applicant provides outsourced merchandising services to SAB. The
employee was a senior merchandiser in the Cape inland region.
He was
responsible for managing the merchandising of a number of liquor
outlets on behalf of SAB.
In the period June to August 2008 Daniel Deetlefs, an account
manager of SAB, allegedly raised a number of complaints about the
employee’s performance and his alleged failure to carry out
certain duties.
As a result, the applicant conducted a work performance discussion
with the employee on 18 September 2008.
On 17 October 2008 the applicant issued the employee with a notice
to attend a disciplinary enquiry. It alleged that SAB was
still
complaining that the employee had not addressed the issues raised in
his performance hearing; and that the employee had
been dishonest in
that he gave false information to SAB by confirming that promotions
had been implemented in various liquor
outlets whilst they were not.
The alleged misconduct leading to the disciplinary enquiry was
listed as gross negligence in the execution of his duties and
dishonesty. The hearing was held on 20 October 2010 and the employee
was dismissed. He referred an unfair dismissal dispute to
the CCMA
and the arbitration took place on 24 June 2010.
The award
The applicant’s basis for disciplining the employee was the
alleged complaints received from SAB, and specifically Deetlefs.
At
the arbitration, only the applicant’s district manager,
Stephen du Preez, testified on behalf of the applicant. He did
not
call Deetlefs or any other SAB representative to give evidence. The
employee testified on his own behalf.
Having considered these two versions, the arbitrator came to the
following conclusion:
"Having considered the
evidence I have concluded that the [company] has not proved on a
balance of probabilities that the [employee]
had committed an act of
misconduct. The [company] relied on hearsay evidence which was
countered by direct evidence of the [employee].
I find that the hearsay evidence
was not sufficient for the [company] to discharge the onus that the
dismissal was fair."
The arbitrator thus found that the dismissal was unfair and he
awarded the employee six months' compensation.
Grounds for review
The applicant takes issue with the way in which the arbitrator
conducted the arbitration proceedings. It argues that, when the
arbitrator realised that Du Preez’s evidence was based on
hearsay, he should have taken a more active inquisitorial role
and
he should have explained to Du Preez that he would need to call
Deetlefs as a witness in order to prove his case.
The applicant argues that the arbitrator misconducted himself in the
discharge of his duties, thus preventing a fair trial and
making his
award reviewable.
At the outset of his award, the arbitrator notes the following:
“
During
the arbitration proceedings it appeared that some of the evidence of
the parties was grey and I extended to the parties to
call further
witnesses if they so wish but parties decided to conclude their
respective cases."
This comment appears to relate to the following remarks made by the
arbitrator after the two witnesses had concluded their evidence:
“
...
and Daniel [Deetlefs] have seen all (inaudible). I'm not sure whether
in the process you might consider calling him, I'm not
saying you
must call him, I'm not sure whether you might consider calling him.
On the side of the company, on the basis that there
were initial
e-mails or complaints and it appears that when you addressed with the
applicant there is no other (inaudible) instead,
you had a meeting
with the bosses of SAB and they would come with that information
today, and then I am not sure whether you are
going to consider
calling those witnesses, I'm not sure, but it's up to you, I'm just
giving that indication that you still open
to those ones. Or are you
going to say no, forget about these two witnesses, information that
is before you is enough for you to
make a decision, I will still do
that. Okay."
Du Preez’s response to those remarks is:
“
No,
for as it enough Commissioner, (inaudible) testify.”
The applicant argues that the Commissioner should have done more
than this. Du Preez is not legally trained. Therefore, says
the
applicant, the arbitrator should have taken a more active role and
should pertinently have alerted Du Preez to the fact that
he would
have to call Deetlefs (or another SAB representative) in order to
discharge the onus to show that the dismissal was
fair.
On the other hand, the employee’s representative argues that
Du Preez was fully aware of the significance of hearsay evidence
and
that the onus rested on the company; and that, in any event, he had
the company’s human resources manager sitting next
to him at
arbitration, who could have advised him of the consequences of the
failure to call Deetlefs.
Legal principles
As Wallis AJ
1
remarked in
Naraindath v CCMA
2
:
“
It
is obviously not possible to lay down specific guidelines for
commissioners as to the manner in which they should conduct
arbitrations.
There may well be cases where the adoption of a
traditional adversarial approach is justified, for example, because
the true issue
depends upon the resolution of a clear dispute of fact
which can only be determined by listening to evidence and determining
the
credibility of the witnesses. In that case a conventional trial
format with evidence and cross-examination may be the most
expeditious
way of resolving the dispute. Such cases should in my
view, however, be relatively rare. In general a commissioner will
start with
the brief statements required by the rules setting out the
stances of the respective parties. The task of commissioner may be
eased
by having available a record of what relevant witnesses said at
a disciplinary enquiry. There may well be documents which are
relevant
and the consideration of which will dispose of peripheral
matters. Ordinarily there will be no legal representation. In those
circumstances
it is wholly appropriate for the commissioner to
conduct the proceedings in the same manner in which commissioners of
the Small
Claims Court have for many years conducted proceedings with
conspicuous success. The proceedings before that tribunal are
informal
in nature and conducted in a manner determined by the
commissioner subject to the overriding need to comply with the
principles
of natural justice (
Smit
v Seleka en andere
1989 (4) SA 157
(O) at 164D–G). As regards the success of following that
approach in the Small Claims Court
it is noteworthy that so far as I
have been able to find there are only three reported cases since
Small Claims Courts were established
by the Small Claims Court Act
61
of 1984
where the decision of a commissioner has been successfully brought
under review and only one of those arose from the manner in
which the
commissioner conducted the proceedings. I point out that the grounds
of review established by
section
46
of the Small Claims Court Act
61
of 1984
are very similar to those provided for by
section
145
of the LRA.”
Should the commissioner in this case have adopted a more
inquisitorial approach?
In
Klaasen v CCMA
3
this court expressed the following view:
“
Commissioners
acting under the auspices of the CCMA in terms of the LRA are
expected to act inquisitorially or investigatively.
Section 138(1) of
the LRA provides that a commissioner may conduct the arbitration in a
manner that he or she considers appropriate
in order to determine the
dispute fairly and quickly, but must deal with the substantial merits
of the dispute with a minimum of
legal formalities. This
includes
stepping momentarily and cautiously into the arena to direct the
proceedings in the interests of justice. In
Consolidated
Wire Industries (Pty) Ltd v CCMA & others
(1999)
20 ILJ 2602 (LC)
;
[1999] 10 BLLR 1025
(LC) the Labour Court stated:
'The
parties were laymen unrepresented by legal practitioners and without
the benefit of pleadings to tie the parties to a version.
When a
version is changed or a new version is suddenly presented the
arbitrator must take charge of proceedings. He cannot rely
on the
parties to realize what it expected of them unaided.'
By
the same token, and perhaps even more so, one might expect the
commissioner to take charge by instructing a party to put a version
(of which he is aware) under oath or risk the consequence of an
adverse inference or his acceptance of the uncontradicted testimony.
The failure to give that warning, in
F
the
light of a commissioner's inquisitorial function and duties, in my
assessment, constitutes a reviewable irregularity.
I find
support for this proposition in the judgment of Gamble AJ in
Scholtz
v Commissioner Maseko NO & others
(2000)
21 ILJ 1854 (LC)
;
[2000] 9 BLLR 1111
(LC) at 1119-20 where in relation to similar but
not identical facts he held:
'It
seems to me more probable that the applicant did not give viva voce
evidence before the first respondent because she did not
comprehend
that she was obliged to do so. Certainly, the first respondent took
no steps to inform the applicant that the only way
in which she could
place her evidence before him was by giving viva voce evidence. Nor
did the first respondent warn the applicant
of the possible
consequences of her failure to testify.
As
pointed out above, the first respondent has in fact drawn an adverse
inference from the applicant's failure to testify. In my
opinion the
applicant was prejudiced by the first respondent's failure to inform
her of the rules of evidence and his intention
to rely thereon, to
the extent that she failed to present a proper case at the
arbitration. The applicant has not had the benefit
of the ''fair
play" approach in CCMA proceedings and the first respondent's
admitted assessment of the evidence before him
and his failure to
properly advise the applicant constitutes a further irregularity in
the proceedings.'
On a similar line of reasoning I
am persuaded by Mr
Whyte
, who appeared on behalf of the
applicant, that the commissioner misconducted himself by neglecting
to inform the applicant that
the only way in which he could place
evidence before him was by giving viva voce evidence under oath and
by not warning him of
the possible consequences of his failure to
testify. The laissez faire approach adopted by the commissioner was
inappropriate in
the circumstances. He was under a duty to inform the
applicant of the rules of evidence and his intention to rely upon
them to
accept an uncontradicted version or to draw an adverse
inference.”
There are some indications in the transcript of the arbitration
proceedings that Du Preez was more
au fait
with what was
expected of him than the applicant now argues; and that the
commissioner provided at least some guidance.
Also, Mr
Pio,
who appeared for the employee at the
arbitration and in these proceedings, alerted Du Preez to instances
of hearsay evidence when
cross-examining him.
Nevertheless, in circumstances where the arbitration award stands or
falls on the admission of hearsay evidence, I am persuaded
that the
commissioner did not pertinently alert the applicant (and
specifically Du Preez) to the consequences of his failure
to call
Deetlefs (or another SAB representative).
The CCMA Guidelines on Misconduct Arbitrations
4
,
albeit effective only from 1 January 2012, are also instructive
insofar as it codifies existing case law.
For example, Item 21 notes:
“
If
it is evident ... that a party or its representative does not
understand the nature of proceedings and that this is prejudicing
the
presentation of its case, the arbitrator should draw this to the
attention of the party. Circumstances in which it may
be
appropriate for the arbitrator to do this include if a party -
21.1
fails to lead evidence of its version under oath or affirmation;
21.2
fails to cross-examine the witnesses of the other party or fails to
put its version to those witnesses during cross-examination;
and
21.3
changes its version of events or puts a new version during
proceedings.”
It seems to me that, similarly, an arbitrator should alert an
unrepresented party to the effect of his failure to call a witness
to corroborate hearsay evidence. It would also be appropriate for an
arbitrator in these circumstances to adopt a more inquisitorial
approach, as envisaged by item 33 of the Guidelines:
“
An
inquisitorial approach will often be appropriate if one or both
parties is unrepresented, or where a representative is not
experienced.
Arbitrators adopting an inquisitorial approach must be
careful to ensure that the parties are aware of, and have the
opportunity
to exercise, their rights under section 138(2). An
arbitrator may conduct an arbitration in a form that combines these
two approaches
provided this is done in a manner that is fair to both
parties.”
And further in item 40:
“
The
arbitrator may suggest that the parties lead evidence on a particular
issue relevant to the dismissal in order to gain a full
understanding
of the issues in dispute or call a witness for this purpose.”
This was a case in point. The arbitrator should have made it clear
to Du Preez that, should he not call Deetlefs, the evidence
pertaining to the alleged complaints from SAB would be disregarded.
In failing to do so, he committed a reviewable irregularity.
Remit or substitute?
This is a matter where the very basis of the review is aimed at the
process followed at arbitration. It must be remitted in order
for a
proper arbitration process to be followed.
This process has had the unfortunate result that the employee has
had to incur further legal costs. It was not brought about
through
his doing. He should not, in law or fairness, be held liable for the
applicant’s costs.
Ruling
The arbitration award issued by the first respondent under case
number WE 15023-08 on 4 July 2010 is reviewed and set aside.
The dispute is remitted to the second respondent (the CCMA) for a
fresh arbitration before another arbitrator.
There is no order as to costs.
_______________________
A J Steenkamp
Judge
APPEARANCES
APPLICANT: S Snyman of Snyman attorneys.
THIRD RESPONDENT: EH Pio of Solidarity.
1
As
he then was – now JA.
2
[2000]
6 BLLR 716
(LC) paras 20 – 35.
3
(2005)
26
ILJ
1447
(LC) paras 27 – 30.
4
Notice
602 0f 2011 (
Government Gazette
34573).