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[2012] ZALCCT 12
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Plasticwrap, a division of CTP Ltd v Statutory Council for the Printing, Newspaper & Packaging Industry and Others (C309/2011) [2012] ZALCCT 12; (2012) 33 ILJ 2668 (LC) (15 April 2012)
Reportable/of interest to
judges
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA,
CAPE TOWN
JUDGMENT
CASE
NO: C309/2011
In the matter between:
PLASTICWRAP,
a Division of CTP LIMITED
.............................................
Applicant
and
THE
STATUTORY COUNCIL FOR THE PRINTING,
NEWSPAPER
AND PACKAGING INDUSTRY
….............................
1
ST
Respondent
VAN
ROOYEN, MARIEKE N.O.
…....................................................
2
ND
Respondent
PARENZEE,
ADRIAN
…....................................................................
3
RD
Respondent
Heard
: 15 February 2012
Delivered
:
Summary:
Review in terms of section 145 - incorrect approach
to award of compensation in terms of section 194(1) for substantively
unfair
dismissal.
JUDGMENT
RABKIN-NAICKER J
Introduction
[1] This is an application in terms of section 145 of the LRA in
which the applicant company seeks the reviewing and/or setting
aside
of the arbitration award made by the second respondent under case
number PNP11507.
[2] Third respondent (Parenzee) commenced employment with the company
in 1989 as a dispatch clerk, and over a period of 20 years
rose to
become operations director. At the time of his dismissal he was
earning a basic salary of R 62,000,00 a month.
[3] Three charges of alleged gross misconduct were levelled against
Parenzee. He was found guilty of these at a disciplinary hearing
and
dismissed as a result. In the arbitration proceedings, second
respondent found him not guilty of all but the second charge.
[4] The review application before me was confined to a challenge to
the finding that the sanction of dismissal imposed on Parenzee,
in
respect of the second charge against him, was too harsh a sanction.
Further, the company submitted that second respondent’s
award
of 8 months compensation stands to be set aside. The second charge
against Parenzee read as follows:
"Gross misconduct: despite
you been placed on a final written warning for abuse of power,
intimidation and verbal abuse you
have once again allegedly committed
similar acts in as much as that on the morning of 23 April in the
presence of your subordinates
you once again used foul language in
total disregard of your final written warning."
[5] The charge was laid in the wake of an instruction by a member of
the company’s new top management team, Mr Timothy Holden,
(Holden), to the company’s attorney to investigate the alleged
disenchantment of certain employees with management. The attorney
was
given the names of approximately 12 employees to interview. He
conducted interviews with them on the 15th and 16th of March
2010.
[6] The common theme which emerged during the interviews according to
his evidence at the arbitration, was that the workforce was
fearful
of management and that the management style was abusive in that
employees were shouted and sworn at. Parenzee was implicated
in this
management style.
[7] On the
18 March 2010, Holden addressed a letter to Parenzee dealing with
this problem. Second respondent found that the letter
constituted a
final written warning. The letter stated that the use of abusive and
vulgar language in the workplace and bullying
and aggressive
management was not condoned and must stop with immediate effect. The
letter emphasised that in the event of a breach
of this instruction,
immediate disciplinary measures would be taken and “no further
forms of corrective measures will be
implemented”. Parenzee
called his subordinates together and advised them that there would be
no further use of abusive or
foul language and that “everybody
would wipe the slate clean”.
[8] On the 22 April 2010, Parenzee’s subordinates were involved
in a trial run for the company’s Coca-Cola account
and it was
not up to standard. The next day he called the production team
together. What he said exactly during the meeting was
in dispute in
the arbitration proceedings, as was the issue as to whether he
directed his words at one particular employee or at
the team in
general. However, it was common cause that he was very angry and he
admitted that he swore.
[9] On the next day, Parenzee reported to the managing director
(Seale) that he had lost his cool and he had shouted at his
subordinates.
Thereafter the managing director received complaints
and eight employees made statements. In her award, the second
respondent recorded
that Parenzee admitted using foul language and
told the production team: “he will not be f-ed over for other
people's f-ups".
Second respondent states in her Award:
“
when a senior manager calls a meeting of
subordinates when he rants and raves at them as a group and swears
while doing it, surely
this in itself is sufficient to cause offence,
whether he swore at any particular employee or not. I therefore
conclude that the
applicant is guilty of charge two.”
[10] As regards her finding that despite Parenzee’s guilt,
dismissal was too harsh a sanction, the second respondent had
this to
say in the award:
“
It is relevant that the applicant gave his
full cooperation when he was asked by Seal to have a meeting with his
subordinates about
the letter he received from Holden; it could not
have been easy for him. It is also relevant that Swartz testified the
applicant
was justifiably angry about the Coke trial run. Without
having to make any findings on whether the applicant's complaints of
him
having been marginalised after Williams’ resignation were
justified, I can accept the applicant would at the time have been
under more pressure than normal due to him having to forge
relationships with the new management team. It is also relevant that
the use of foul language had been a long-standing practice in the
workplace and that changing a long-standing habit may not happen
overnight. This was the first incident in approximately a month after
Holden's letter.
Given the above factors, the applicant's long years of service and
his clean disciplinary record, I conclude that the sanction
of
dismissal for this charge in these circumstances is a decision that
is too harsh and must therefore be set aside."
[11] Having found that the applicant was not guilty of the other two
charges preferred against him, second respondent approached
the
remedy to be awarded as follows:
“
As
remedy the applicant asked not to be reinstated; this leaves
compensation as the only other available remedy. Compensation must
be
just and equitable in all the circumstances and may not exceed the
equivalent of 12 months remuneration calculated at the employee’s
rate of remuneration on the date of dismissal (section 194 of the
LRA). In deciding on an appropriate amount of compensation to
award I
have taken the applicant's length of service (20 years) into
consideration, his unblemished disciplinary record as well
as his
personal circumstances. The applicant's baby daughter was born about
a month before his dismissal. The applicant was the
family’s
breadwinner as his partner was retrenched from her job shortly before
the birth of their daughter. The applicant
has a son from a previous
marriage who has special needs related to cerebral paulsy for whom he
pays maintenance. The applicant
has a heavily bonded home. The
applicant found an alternative job soon after his dismissal in June
2010, but at a much lesser salary.
He now earns R22,125.00 gross and
R17,160.22 after deductions with no pension, medical aid or other
benefits…… I
have also considered that the applicant is
guilty of charge two but that dismissal was an unfair sanction.
In the circumstances I am of the
view it is fair and equitable to award the applicant compensation
equal to 8 months’ salary.”
Evalua
tion
[12] The company’s grounds for submitting the award is
reviewable can be encapsulated as follows. First, the finding that
Parenzee had been under pressure with the introduction of a new
management team, was not a relevant consideration in determining
the
fairness of the sanction of dismissal. Secondly, that despite
concluding that Parentzee was under a final written warning issued
a
month before the incident in question, the finding that dismissal was
too harsh a sanction. The company also takes issue with
the quantum
of compensation awarded in the circumstances.
[13] For the company, it was submitted that the second respondent
paid no heed to the ramifications facing the company if it decided
to
ignore the final written warning. Reference was made to the matter of
NUM v Greenside Colliery
[1995] 4 BLLR 29
(LAC) in which Nugent J (as
he then was) held at 31B- C that:
"A final warning as
contemplated by the disciplinary code is precisely what its name
suggests. It is a warning to the employee
that he will receive no
further warnings but will be dismissed if he again transgresses. The
employer is of course not bound to
carry out the threat, but an
employee can have little grant for complaint if he chooses to do so.
To hold otherwise would be to
equate a final warning with any other
warning, which clearly it is not."
[14] The test that this court must employ as to the finding of the
Second Respondent that dismissal was too harsh in these
circumstances,
is that set out in Sidumo and Another v Rustenburg
Platinum Mines Ltd and Others
1
:in
which the court 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 had been breached. The commissioner must
of course consider
the reason the employer imposed the sanction of
dismissal, as he or she must take into account the basis of the
employee's challenge
to the 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.”
[15] An important evaluation of the Sidumo judgment and its
implications for the Labour Court’s powers of review is
contained
in the judgment of Zondo JP (as he then was) in the case of
Fidelity Cash Management Service
2
as follows:
“
What is the difference between the approach
enunciated in Carephone and that enunciated in Sidumo with regard to
the grounds of
review set out in s 145 of the Act? The difference
seems to me to be twofold. Firstly, Carephone sought to construe s
145 so as
to bring it in line with a constitutional imperative at the
time which was to the effect that an administrative action had to be
justifiable in relation to the reasons given for it, whereas Sidumo
seeks to construe s 145 so as to meet the current constitutional
requirement that an administrative action must be lawful, reasonable
and procedurally fair. It seems to me that, even if there
may have
been a debate under Carephone and prior to Sidumo on whether a
commissioner's decision for which he or she has given bad
reasons
could be said to be justifiable if there were other reasons based on
the record before him or her which he or she did not
articulate but
which could sustain the decision which he or she made, there can be
no doubt now under Sidumo that the reasonableness
or otherwise of a
commissioner's decision does not depend - at least not solely - upon
the reasons that the commissioner gives
for the decision. In many
cases the reasons which the commissioner gives for his decision,
finding or award will play a role in
the subsequent assessment of
whether or not such decision or finding is one that a reasonable
decision maker could or could not
reach. However, other reasons upon
which the commissioner did not rely to support his or her decision or
finding but which can
render the decision reasonable or unreasonable
can be taken into account. This would clearly be the case where the
commissioner
gives reasons A, B and C in his or her award but, when
one looks at the evidence and other material that was legitimately
before
him or her, one finds that there were reasons D, E and F upon
which he did not rely but could have relied which are enough to
sustain
the decision.”
[16] I am satisfied that Second Respondent took relevant
considerations into account in her decision regarding the fairness of
the dismissal, when she considered the pressure under which Parenzee
was put by the new management team. His evidence to this effect
in
the disciplinary proceedings includes his testimony that he had
considered resignation on two occasions due to this pressure.
In
addition Parentzee’s contriteness after his outburst, his long
service and unblemished disciplinary record are all factors
which
would have contributed to the value judgment made by the second
respondent.
[17] However Second Respondent failed to rely on a valid reason as to
why, despite the issuing of a letter in the nature of a final
written
warning, she could still have found dismissal to have been an unfair
sanction. In paragraph 79 of the Award she records
that: “The
Applicant testified he did not understand the letter to be a final
written warning as the normal workplace procedures
that precede
written warnings were not followed. According to the applicant there
was a company policy dealing with the correct
procedures to be
followed and this policy was also applicable to senior employees. It
is trite that employers are expected to adhere
to their own policies,
but I was not given a copy of the policy referred to by the applicant
and I am therefore am able to make
any decisions about policy.”
[18] It was put to the managing director of the company at the
arbitration proceedings, that Parenzee: “…. will testify
that the long-standing practice at the company was that final written
warnings would only be issued after a formal disciplinary
hearing had
been held with the issuing of a notice to attend the hearing, a
formal hearing taking place. It would not simply be
a letter that
would be sent from a member of the board of directors to an employee
would you agree with me?” Seale merely
replied: “I do not
know the previous practice. I was not there.” This reply
amounts to a failure to dispute these allegations.
Parenzee did
indeed testify to this and further insisted, under cross-examination,
that there was a relevant document on disciplinary
process which had
been drafted by the company’s attorney and co-signed by Holden
which applied to senior management. Taking
this evidence into account
I find that the company failed to establish that there would be
ramifications to it and its disciplinary
regime, if it failed to heed
and act on the final written warning.
[19] In so far as the quantum of compensation awarded is concerned,
section 194(1) of the LRA confers a wide discretion on arbitrators
and judges when quantifying compensation. The Labour Appeal Court has
considered how a reviewing court should deal with the discretion
exercised by an arbitrator in terms of section 194(1) of the LRA, as
follows
3
:
“
When the discretion that is challenged is a
discretion such as the one exercised in terms of s 194(1) the test
that the court, called
upon to interfere with the discretion, will
apply is to evaluate whether the decision maker acted capriciously,
or upon the wrong
principle, or with bias, or whether or not the
discretion exercised was based on substantial reasons or whether the
decision maker
adopted an incorrect approach.”
[20] Given the factors taken into consideration by second respondent
when awarding the amount of eight months compensation (more
especially those concerning the bond on the employee’s house,
the health condition of one of his children and the need for
him to
pay maintenance for that child), it would appear that the second
respondent adopted a wrong approach, blurring the distinction
between
the factors to be taken into account in exercising a discretion to
award a specific quantum of compensation in terms of
section 194(1)
of the LRA, and those mitigating factors normally taken into
consideration by a tribunal when it decides, having
established
guilt, on an appropriate penalty.
[21] As regards the determination that that an arbitrator or court
makes in respect of compensation the Labour Appeal Court
4
had this to say:
“
The
compensation which must be made to the wronged party is a payment to
offset the financial loss which has resulted from a wrongful
act .The
primary enquiry for a court is to determine the extent of that loss,
taking into account the nature of the unfair dismissal
and hence the
scope of the wrongful act on the part of the employer. This court has
been careful to ensure that the purpose of
the compensation is to
make good employee’s loss and not to punish the employer. See M
S M Brassey Commentary on the Labour
Relations Act A8-155; also
Ferodo (Pty) (Ltd) v De Ruiter (1993) 14ILJ 974 (LAC)”.
[22] In the premises this court does not consider the finding that
the dismissal of Parenzee was substantively unfair susceptible
to
review. However, paragraphs 108,109 and 112 of the award stand to be
set aside. It would not serve any purpose to send the matter
back to
First Respondent. I consider it fair and equitable given that
Parenzee’s remuneration is now much less and he does
not have
benefits as before, and taking into account that he was found guilty
of the misconduct in question (the scope of the wrongful
action of
the employer is pertinent here), as well as the principle that
compensation should not be regarded as punitive to a party,
that he
be awarded an amount equal to six months of his salary at the time of
his dismissal. I do not regard it appropriate to
order costs in this
matter. In the result I make the following order:
Order
The application to
review succeeds to the extent that paragraphs 108,109 and 112 of the
Award are set aside and substituted with
the following:
“
The
Respondent is ordered to pay the Applicant an amount equal to 6
months’ remuneration (R62 000 x 6 =R372,000).”
There is no order as to
costs
_______________________
Rabkin-Naicker J
Judge of the Labour Court of South Africa
APPEARANCES:
APPLICANT: Mr A Soldatos of Fluxmans Attorneys
THIRD RESPONDENT: Adv. M. O’Sullivan
instructed by Chennels Albertyn Attorneys
1
(2007)
28 ILJ 2405 (CC) at paragraphs 77-79
2
Fidelity
Cash Management Service v CCMA & others (2008) 29 ILJ 964 (LAC)
at para 102
3
Kemp
t/a Centralmed v Rawlings (2009) 30 ILJ 2677 (LAC) at para 55
4
Le
Monde Luggage CC t/a Pakwells Petje v Dunn NO & Others (2007) 28
ILJ 2238 (LAC)