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[2011] ZALCPE 16
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Ikwezi Municipality v South African Local Government Bargaining Council and Others (P233/10) [2011] ZALCPE 16; [2012] 4 BLLR 403 (LC); (2012) 33 ILJ 1447 (LC) (8 December 2011)
REPUBLIC OF SOUTH AFRICA
Reportable
THE LABOUR COURT OF SOUTH AFRICA, PORT ELIZABETH
JUDGMENT
case
no: P233/10
In the matter between:
IKWEZI
MUNICIPALITY
…........................................................................................
Applicant
and
SOUTH AFRICAN LOCAL GOVERNMENT
BARGAINING COUNCIL
….........................................................................
First
Respondent
KELVIN KAYSTER N.O
…......................................................................
Second
Respondent
SOUTH AFRICAN MUNICIPAL
WORKERS’ UNION
…................................................................................
Third
Respondent
M BLOUW
….............................................................................................
Fourth
Respondent
Heard
:
16 November 2011
Delivered: 8 December 2011
Summary: Review – not unreasonable to find sanction of
dismissal inappropriate where employee guilty of publishing criticism
about employer – award upheld
JUDGMENT
BHOOLA J
Introduction
[1] This is an application to review and set aside the award of the
second respondent (the arbitrator) dated 4 January 2010 in
terms of
section 145 of the Labour Relations Act (“the LRA”).
1
Background facts
[2] The material facts are largely common cause. The fourth
respondent (Blouw) wrote a letter to the editor of a local newspaper,
the Eastern Province Herald, which was published under his name and
designation as “shop steward”. The letter read
as
follows:
The Ikwezi (morning star) municipality, which is supposed to be
the hope for the community of Jansenville and Klipplaat, has not
lived up to its name and is in a chaotic situation. The financial
situation has reached a catastrophic state. The 2004-05 budget
is
about R8.7million, of which 56 per cent is for salaries and
allowances, and only 44 per cent for service delivery. The district
municipality has intervened financially on numerous occasions. The
provincial government contracted administrative and financial
mentors, and bought new computers but, this did not improve the
financial situation or administration. The municipality’s
debt
is about R1,9 million, but large numbers of indigent house owners
have huge credits in their accounts. Newly appointed managers
are
working separately from those perceived as coming from the old order,
which makes it difficult for the council to take informed
decisions
on crucial matters. Officials are barred from writing official
letters without sanction of the municipal manager. This
means that if
the municipal manager is out of the office for a couple of days,
municipal business must come to a standstill. We
urge the MEC for
local government to send an investigation team to Ikwezi and, if our
allegations are found to be true, that corrective
measures be taken.
[3] As a result of this publication Blouw was charged on two counts
of misconduct and found guilty on the first, which is as follows:
You conducted yourself in an unseemly and or gross manner. In that
on or around the period August 2004 you:
Published, or caused to be published false, damaging and
malicious information about your employer and senior officials of
your
employer, and in doing so, tarnished the good name and
reputation of the said employer and officials, or your actions have
the
potential of causing same.
In doing so you contravened clauses 1.2.3 and 1.2.9 of the
Standard of Conduct as contained in the Disciplinary Code.
[4] The Standard of Conduct, also referred to as the municipal code,
requires of employees that they “perform their tasks
and job
responsibilities diligently, carefully and to the best of their
ability” and “refrain from any rude, insolent,
provocative, intimidatory or aggressive behaviour to a fellow
employee or a member of the public”.
[5] The chair of the disciplinary enquiry, Claassen, found Blouw
guilty on one of the two charges he faced. He recommended a dismissal
despite Blouw’s clean record and length of service because he
found the transgression to be a serious breach of trust that
brought
the applicant’s name into disrepute. Blouw did not testify at
his disciplinary enquiry.
The arbitration award
[6] Following the referral of an unfair dismissal dispute the
arbitrator found that Blouw’s dismissal was procedurally fair
but substantively unfair. His reasons for the finding of substantive
unfairness were
inter alia
:
(a) Blouw’s argument that he was not aware of the rule
prohibiting he was charged for was “a little vexatious”.
A reasonable employee should know that s/he may not make false,
damaging or malicious allegations against his/her employer.
(b) Blouw could not be blamed for reaching the conclusion that the
financial situation was catastrophic. Any reasonable employee
would
assume that the financial situation of an employer is catastrophic if
the employer is unable to fulfil its most important
obligation
towards its employees, i.e. the payment of salaries. The employee can
therefore not be blamed for drawing that conclusion.
(c) The letter creates the impression that managers were responsible
for the poor state of the applicant’s affairs and finances;
(d) The facts warranted a finding that the letter placed the
applicant in a bad light, and was on an overall conspectus of the
evidence both damaging and malicious.
(e) Blouw was an “argumentative and evasive witness”
which reinforced the arbitrator’s view that he had indeed
intended to bring the managers into disrepute.
(f) One of the fundamental requirements of an employment relationship
was for the employee to advance and the employer’s
interests
and to act in good faith
[7] Turning his attention to sanction the arbitrator considered the
submission that the sanction of dismissal was inappropriate.
He
referred to the obligations on commissioners set out in
Sidumo
2
,
and which requires him to give consideration to the position and
interests of both the employer and employee in order to make
a
balanced and equitable assessment. The arbitrator referred to the
sanction of dismissal was being justified “only when
the
employment/trust relationship had broken down irretrievably”.
He noted that the applicant had submitted that Blouw had
committed a
serious offence which tarnished the its reputation and that he showed
no remorse when he argued that he may say what
he chooses about his
employer without having to face the consequences. Blouw, on the other
hand, submitted that the former managers
are no longer employed by
the applicant and he will not have issues with the current
administration if he were to be reinstated.
He also cited his 23
years of service and clean disciplinary record, and argued that the
applicant had failed to submit evidence
of the breakdown in the trust
relationship and had not applied progressive discipline.
[8] The arbitrator records the following conclusion on sanction:
Although the parties agreed that the employee will not rely on the
defence that he wrote the publication in his capacity as shop
steward, I have considered in mitigation that his sense of
responsibilities as a shop steward probably played a role in tempting
him to make the publication. I do however not accept it as a defence.
I have also considered that he indeed had very long service
with the
employer and had a clean record. It is correct that Hanabe and
Joubert are no longer with the municipality and there is
no evidence
before me that the current administration may have a problem with
him. Rudman also testified undisputedly that the
employee was a good
worker. Although the employee appeared argumentative I got the
impression that he is a seasoned municipal employee
who may still
have lots to offer the municipality by virtue of his experience. In
view thereof I find that dismissal was too harsh
in the circumstances
and that it was substantively unfair.
Grounds of review
[9] Mr Wade, appearing for the applicant, submitted that there was a
disjuncture between the finding of guilt and the determination
of
sanction. This implied that the arbitrator had abrogated the
responsibility entrusted to him under
Sidumo and Another v
Rustenburg Platinum Mines Ltd and Others.
3
Mr Wade submitted that the applicant’s pleaded emphasis is that
the arbitrator’s disregard of relevant and material
evidence
constituted a gross irregularity in the conduct of the arbitration,
although it is still open to it to challenge the award
under the test
of reasonableness. The challenge is therefore based on a gross
irregularity arising from the arbitrator’s
failure to apply his
mind to the material facts.
[10] Mr Wade submitted that the arbitrator had regard to two dubious
factors in mitigation of sanction. In regard to the factor
that Blouw
was not financially trained, this was hardly a mitigating factor as
it was obvious that someone who is not financially
trained should not
make dubious statements about finances. Secondly, the arbitrator had
regard to the fact that he made the statement
in his capacity as a
shop steward in contravention of an agreement between the parties
(the existence of which was disputed by
Blouw and which appeared to
relate to relying on his status as a shop steward in defence). The
arbitrator found that Blouw was
guilty of very serious misconduct
which had potentially serious consequences for the applicant, but
disregarded this completely
when it came to determining the
appropriate sanction. This is an aberration that justifies setting
aside the award on review. More
importantly, the arbitrator
disregarded his own finding that Blouw had acted maliciously and
vexatiously and that he was a poor
witness. The other factors
disregarded by the arbitrator include that Blouw felt no remorse;
that he attacked the integrity and
ability of his colleagues; that he
did not even believe his own allegations; that he did not utilise
alternative internal remedies
at his disposal to address his
concerns; that he was intent on causing the applicant harm; that he
intended maliciously attacking
the very council that employed him and
that he tried to mislead the arbitrator.
Evaluation of merits
[11] The sole issue on review, as articulated by Mr Grogan, is
whether this Court should interfere with the arbitrator’s
finding that dismissal was an inappropriate sanction in the
circumstances. Mr Wade submitted that this refers to a pure penalty
review for unreasonableness, which is not the basis of its attack. In
this vein Mr Grogan submitted that the gravity of the misconduct
is
only one of the many factors to be taken into account by the
arbitrator as set out by the Constitutional Court in
Sidumo.
Seen
in context the publication of the letter did not constitute
misconduct of such gravity so as to automatically warrant dismissal.
It reflects the kind of criticism that appears in the media daily. In
any event, there is no misconduct, however serious, that
automatically licences an employer to dismiss an employee. The LAC
confirmed in
Toyota South Africa Motors (Pty) Ltd v Radebe and
Others
4
that mitigating factors must always be considered. This would mean
that even where an employee is found guilty of serious misconduct,
on
consideration of
all
the facts dismissal may not be determined
to be an appropriate sanction. The applicant’s submission that
there is in essence
a contradiction between the finding that the
employee is guilty of misconduct and the remedy of reinstatement
cannot therefore
be sustained. The ultimate test is whether the
arbitrator applied his mind to determining whether the sanction is
appropriate in
the circumstances having regard to, among other
factors, the misconduct committed.
[12] Mr Grogan submitted that the question this Court is therefore
required to ask is as follows: is the finding that dismissal
was an
inappropriate sanction so unreasonable that it falls outside the band
of reason within which two reasonable people might
reasonably
disagree? The applicant submits that the arbitrator failed to have
regard to a number of critical facts. It implies
that writing a
letter critical of the employer inevitably leads to collapse of the
employment relationship. The applicant also
asserts that the central
allegations in letter, other than the disclaimer, are largely
unwarranted. However, the “sting”
of the letter, on a
dispassionate reading, is merely that the municipality is in
financial distress, its administration leaves
much to be desired and
its affairs need to be investigated by the MEC for local government.
The applicant’s concern with
the reinstatement order would
appear to emanate from its concern that the allegations were untrue
and that it had been placed in
a bad light. Blouw’s explanation
for his conduct however, is that he wanted to provide an opportunity
for the applicant to
put its version and, if necessary, to prompt
corrective measures. This motive is consistent with the contents of
the letter. Although
the truth of the allegations is not relevant to
these proceedings, the arbitrator had regard to the disclaimer in the
final paragraph
of the letter in which Blouw calls for an
“investigation if the allegations are true”.
[13] Of course the question as formulated would not be appropriate if
one were to approach the matter as a process-related review
based on
the arbitrator disregarding material evidence in determining what is
an appropriate sanction. This, as Mr Wade submitted,
is not an attack
directed at the reasonableness of the outcome. The arbitrator must
consider
all
the evidence and cannot simply disregard critical
factors. On this test Mr Wade submitted, the letter can on no
interpretation
be read benignly – it must be seen in the
context of Blouw’s evidence and on that evidence the arbitrator
found he
acted for ulterior purposes and attempted to create an
incorrect impression of the applicant. The disclaimer does not
absolve him
from the consequences of a seriously malicious statement,
although acting maliciously destroyed his relationship with his
employer.
The issue is whether he believed in what he was saying, and
the arbitrator had no regard to this factor. The award is so
inherently
contradictory in that the arbitrator correctly records the
law and finds that it is breached by acting against the employer’s
interests, but then proceeds to reinstate the employee. In any event
the 5 years’ of income that he was deprived of by the
arbitrator is not a penalty, the arbitrator was trying to be fair to
the employer and attempting to balance interests as he was
required
to do. In the end where he found that the relationship was affected
detrimentally he could not have reinstated the employee,
but he
nevertheless proceeded to do so in flagrant disregard of his duty to
evaluate all the material evidence.
[14] Mr Grogan submitted however that none of the facts alleged by
the applicant to have required the arbitrator to apply his mind
are
material. Lack of remorse is not relevant in the absence of evidence
that Blouw lied: In this regard remorse is relevant to
serious
misconduct as dealt with in
Maepe v CCMA and Another.
5
Secondly, there is no evidence other than the letter itself that his
conduct was vexatious and malicious, and given the disclaimer
the
letter on its own hardly justifies that conclusion. Thirdly, the
letter does not mention any managers by name and a number
of the
municipality’s own witnesses testified to the chaos in the
administration. The witness Rudman testified that the applicant
had a
problem with Blouw and he would have liked Blouw to come back. There
was moreover no evidence that Blouw had acted dishonestly.
Lastly,
there is ample authority that where a commissioner does not
specifically say something in the award it does not mean that
he did
not apply his mind to that fact. The arbitrator states this clearly
in his award.
[15] Mr Wade correctly submitted that the test is not what the
arbitrator would do or this Court would do on the same facts –
the test is designed to avoid arbitrary interference. The issue is
that the arbitrator applied the wrong test in reflecting on
what an
employer does with an employee who is found to have acted
maliciously. Thus while commissioners should not defer to the
sanction imposed by employers, they are required to consider all
relevant factors, including the reason for the employer establishing
the rule and prescribing the penalty of dismissal, in the process of
determining whether the sanction of dismissal was fair. Commissioners
cannot decide on sanction afresh nor can they do so on the basis of
what they would have done in the employer’s shoes. Nor
can this
Court step into the Commissioner’s shoes and determine what it
would have decided on the relevant and material facts.
[16] In
Sidumo,
in giving clear direction to Commissioners on
their duties Navsa J held:
In approaching the dismissal dispute impartially a commissioner
will take into account the totality of circumstances. He or she will
necessarily take into account the importance of the rule that has
been breached. The commissioner must of course consider the reason
the employer imposed the sanction of dismissal. There are other
factors that will require consideration. For example, the harm
caused
by the employee’s conduct, whether additional training and
instruction may result in the employee not repeating the
misconduct,
the effect of dismissal on the employee and his or her long-service
record. This is not an exhaustive list.
To sum up. In terms of the LRA, a commissioner has to determine
whether a dismissal is fair or not. A commissioner is not given the
power to consider afresh what he or she would do, but simply to
decide whether what the employer did was fair. In arriving at a
decision a commissioner is not required to defer to the decision of
the employer. What is required is that he or she must consider
all
relevant circumstances.
6
[17] In
Fidelity Cash Management Services v CCMA and others
7
Zondo JP, (as he then was) applied this test, setting out a detailed
list of what Commissioners are required to do. The Court held:
Once the commissioner has considered all the above factors and
others not mentioned herein, he or she would then have to answer the
question whether dismissal was, in all the circumstances, a fair
sanction in such a case. In answering that question, he or she
would
have to use his or her own sense of fairness. That the commissioner
is required to use his or her own sense of justice or
fairness to
decide the fairness or otherwise of the dismissal does not mean that
he or she is at liberty to act arbitrarily or
capriciously or to be
mala fide. He or she is required to make a decision or finding that
is reasonable.
[18] The arbitrator was required therefore to determine whether
dismissal is an appropriate sanction in this context and was required
to apply his mind to all relevant and material facts and
circumstances in doing so.
Sidumo
also requires a balancing of
interests and this is what the arbitrator did. He in fact deprived
Blouw of five years’ salary.
This is a significant penalty, for
an act which may have been an error of judgment on his part but which
was not the dire misconduct
the applicant depicts it to be. No names
are mentioned in the letter and there was no suggestion that he was
dishonest in doing
what he did. The arbitrator did what he was
required to do and did not defer to the employer on sanction but
exercised his own
sense of fairness and made a value judgment on the
facts before him. For these reasons any interference with the
sanction he determined
would in my view directly violate principles
and precepts following from
Sidumo.
In the end he found that
there was no evidence that the relationship of trust had been
irretrievably damaged and in these circumstances,
having had regard
to all relevant facts, it cannot be said that reinstatement is not an
appropriate remedy. I cannot agree with
Mr Wade therefore that the
arbitrator manifestly relinquished the authority conferred on him by
Sidumo
in a manner that would justify setting aside the award.
There is no evidence that he failed to apply his mind to the material
facts
and circumstances and which resulted in the proceedings being
tainted by gross irregularity with the result that a fair trial was
denied to the applicant. Nor indeed can it be said even on a pure
penalty review that the outcome was so unreasonable that it could
not
have been made by a reasonable arbitrator on the evidence before him.
In the circumstances, the award stands to be upheld on
either test,
and there is no reason in fairness and justice why costs should not
follow the result.
Order
[19] In the premises, I make the following order:
The application is dismissed with costs.
_______________________
Bhoola J
Judge of the Labour Court
APPEARANCES
APPLICANT: R B Wade SC
Instructed by Wikus van Rensburg Attorneys, Port Elizabeth.
THIRD AND
FOURTH RESPONDENTS: J G Grogan
Instructed by, Wheeldon, Rushmere and Cole, Grahamstown
1
66
of 1995.
2
Sidumo
v Rustenburg Platinum Mines Ltd
(2007)
28
ILJ
2405
(CC).
3
2008
(2) SA 24.
4
[2000]
3 BLLR 243
(LAC) at para 44.
5
[2008] ZALAC 2
;
[2008]
8 BLLR 723
(LAC).
6
Sidumo
supra at paras 78-79.
7
[2008]
3 BLLR 197
(LAC) at paras 94-95.