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[2015] ZALCJHB 237
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John v Afrox Oxygen Limited (JS 532/11) [2015] ZALCJHB 237; [2015] 12 BLLR 1213 (LC) (4 August 2015)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Case
no: JS 532/11
DATE: 04 AUGUST
2015
Reportable
In the matter
between:
LOU-ANNDREE
JOHN
.......................................................................................
Applicant
And
AFROX OXYGEN
LIMITED
..........................................................................
Respondent
Heard: 02 March
2015
Delivered: 04
August 2015
Summary:
Automatically unfair dismissal. Protected disclosure in terms of the
Protected Disclosure Act. The employee informing the
employer that
the re-grading of positions was done irregularly because no
consultation was held with the affected employees.
JUDGMENT
MOLAHLEHI, J
Introduction
[1]
The
applicant, in these proceedings, claims that her dismissal by the
respondent was automatically unfair based on the alleged breach
of
the provisions of the Protected Disclosure Act (“PDA”).
[1]
[2]
The
respondent does not dispute the dismissal but contends that it was
not for the alleged contravention of the PDA but that it
was a
dismissal based on incompatibility on the part of the applicant.
Background facts
[3]
The
applicant, who prior to her dismissal was employed as Head of Talent
Management, in the HR department of the respondent, was
on the
version of the respondent dismissed for incompatibility.
[4]
The
case of the applicant on the other hand is that her dismissal was
automatically unfair because of the protected disclosure she
made
regarding certain irregularities committed by the respondent. The
irregularities which the applicant alleges were committed
are set out
in the statement of case and relates to the following:
‘
8.1
restructuring and/or realigning of employees’ positions;
8.2 unilateral
changes to employees’ grading status;
8.3
misrepresentations being made in respect of the respondent’s
employment equity reporting.’
[5]
The
applicant contends that the disclosure was made in terms of the PDA
in confidence, on the advice from her supervisor and the
internal
audit. She contends that the dismissal was automatically unfair in
that it was as a result of the disclosure that she
made which she
made based on her belief that the structuring of the grading of the
positions of the affected employees was done
in contravention of the
Employment Equity Act (“EEA”). It is for this reason that
she claims to have been discriminated
against by the respondent.
[6]
It
is common cause that the respondent issued the applicant with a
letter on 14 March 2013 indicating the intention to terminate
the
employment relationship with immediate effect, due to
incompatibility. The letter also contained a mutual separation
proposal
based on a financial settlement. On the same day, a meeting
was held between the parties where the applicant rejected the offer
of settlement.
[7]
On
19 March 2013, the applicant addressed a letter to the respondent
indicating amongst other things that:
‘
15.1
she was being victimised as a result of her disclosure.
15.2 she has not
been afforded any protection by the company on making the disclosure.
15.3 she was
discriminated against as a result of the disclosures.’
[8]
On
the same day the applicant received a letter notifying her of the
summary dismissal by the respondent. The disclosure which the
applicant claims she made arose subsequent to her proposal that Ms
Armstrong be transferred to the position as manager of organisational
development (“OD”).
[9]
Mr
Wagner, the group manager, agreed to the proposed transfer of Ms
Armstrong except that, according to him, it had to be done on
the
condition set out in the email dated 28 June 2013, which reads as
follows:
‘
Dear
Lou- Anndree
Our discussion on
Friday (25 January 2013), with regards to the possible salary offer,
to be made to above-mentioned employee, if
she would be appointed
into the OD Manager role, refers.
Please note I would
not recommend that we offer any percentage increase to her at this
stage. The reason for this is as follows:
·
The
transfer is lateral (Band 2M into a Band 2M).
·
Her
current salary is well established (CR 102%) within the salary band
for a Band 2M.
It is important to
note that as the custodians of the process, it would not be feasible
to act outside our own guidelines.
If there is still a
need for some form of compensation, to encourage the move. I would
suggest that you do so within your budget
constraints during the
April 2013 Salary review process. Alternative approach might be to do
so during the April 2014 salary review
process, as she would have
been exposed to the new role for a period of at least one year
already. This will therefore, be based
on the performance in the new
role.’
[10]
The
applicant responded to the above email with an email dated 14
February 2013, wherein she,
inter
alia
,
states:
‘
I
will implement the lateral move as per below, but I do not believe
that this is the best approach.
Also, according to
my records from SAP, the Resourcing Manager was graded at 2H and
therefore Aine (Ms Armstrong) was 2H. I am not
aware of any changes
to the grading for her or her previous role and would be concerned if
this was done without any consultations.
Dear Nico,
Please confirm why
the comparison is for Band 2M.
Awaiting your
advice.’
[11]
Mr
Wagner responded indicating that the grading for the position to
which Ms Armstrong was to be transferred was done before the
applicant joined the respondent.
[12]
It
is apparent that the applicant was unhappy with the answer and,
consequently, addressed a further email to Mr Wagner on 1 March
2013
wherein she, amongst other things, stated that she was “extremely
unhappy about the lack of integrity of this process.”
[13]
It
is apparent that during the investigation into the grading of the OD
position, the applicant discovered that there were other
employees
affected by that process.
The case of the
applicant
[14]
The
only witness for the applicant was the applicant herself. She
testified that re-grading of a position has a negative implication
on
the future salary increase of the affected employee and more
importantly of the Employment Equity report which has to be made
to
the Department of Labour (“DOL”). According to her, the
re-grading of the positions which was made without consultation
distorted the EE report. The distortion of the EE report would
according to her occur in relation to the wage differentials.
The
case of the respondent
[15]
The
only witness of the respondent was Mrs Makwela who testified that the
dismissal of the applicant had nothing to do with the
disclosure but
was due to the incompatibility of the applicant with her colleagues.
She further testified that the information
which the applicant claims
to have disclosed was already known to the employees of the
respondent working in the HR department.
[16]
The
other point made by Mrs Makwela was that the changes made in
re-grading the positions did not prejudice the affected employees,
specifically because their salaries would not be affected.
Furthermore, she stated that the reporting on the EE is done on-line,
audited and the summary of the report has to be published to the
public.
Legal
principles
[17]
It
is apparent from the background facts above that the case of the
applicant is that the dismissal was allegedly automatically
unfair
because of the disclosure made and thus evoking the provisions of
section 187 (1) of the LRA read section 4 (2) PDA.
[18]
It
is apparent from the reading of the objectives of the PDA,
[2]
that an employee who makes a protected disclosure receives protection
at the level of automatically unfair dismissal and from being
subjected to any detrimental treatment on account of the disclosure
made.
[3]
[19]
In
order for information to be regarded as protected, it must relate to
the conduct of the employer or the employee of the employer
and it be
made by an employee who has reasonable belief that the employer or
the employee of that employer has failed to comply
with its legal
obligation or committed or likely to commit a criminal offence.
[4]
[20]
In terms of the PDA, there
are seven categories of failure on the part of the employer which
would qualify the disclosure for protection.
The categories of the
failures by the employer are set out in s 1 of the PDA in the
following terms:
‘
(a)
that
a criminal offence has been committed, is being committed or is
likely to be committed;
(b)
that a person has failed, is failing or is likely to fail to comply
with any legal obligation to which that person is subject;
(c)
that a miscarriage of justice has occurred, is occurring or is likely
to occur;
(d)
that the health or safety of an individual has been, is being or is
likely to be endangered;
(e)
that
the environment has been, is being or is likely to be damaged;
(f)
unfair
discrimination as contemplated in the
Promotion of Equality and
Prevention of Unfair Discrimination Act, 2000
(
Act
4 of 2000
);
or
(g)
that
any matter referred to in paragraphs (a) to (f) has been, is being or
is likely to be deliberately concealed.’
[21]
It
is trite that an employee who makes protected disclosure envisaged in
section 4 (2) of the PDA is protected from dismissal. Put
in another
way, employers are prohibited from subjecting an employee who makes a
protected disclosure to any occupational detriment
on account of such
disclosure including dismissal.
[22]
The
burden to show that the dismissal falls within the confines of the
PDA rests with the employee who alleges that the dismissal
was as a
result of disclosure he or she made.
[5]
[23]
In
order to satisfy the requirements of a protected disclosure, the
disclosure must satisfy the criteria set out in s 9 of the PDA
which
reads as follows:
‘
9(1)
Any disclosure made in good faith by an employee—
(a) who reasonably
believes that the information disclosed, and any allegation contained
in it, are substantially true; and
(b) who does not
make the disclosure for purposes of personal gain, excluding any
reward payable in terms of any law; is a protected
disclosure if—
(i)
one
or more of the conditions referred to in subsection (2) apply; and
(ii)
(ii)
in all the circumstances of the case, it is reasonable to make the
disclosure.
(2) The conditions
referred to in subsection (1)(i) are–
(a) that at the time
the employee who makes the disclosure has reason to believe that he
or she will be subjected to an occupational
detriment if he or she
makes a disclosure to his or her employer in accordance with section
6;
(b) that in a case
where no person or body is prescribed for the purposes of section 8
in relation to the relevant impropriety,
the employee making the
disclosure has reason to believe that it is likely that evidence
relating to the impropriety will be concealed
or destroyed if her or
she makes the disclosure to his or her employer;
(c) that the
employee making the disclosure has previously made a disclosure of
substantially the same information to –
(i)
his
or her employer; or
(ii)
(ii)
a person or body referred to in section 8,
In respect of which
no action was taken within a reasonable period after the disclosure;
or
(d) that the
impropriety is of an exceptional serious nature.
(3) Determining for
the purposes of section (1)(ii) whether it is reasonable for the
employee to make the disclosure, consideration
must be given to –
(a)
the
identity of the person to whom the disclosure is made;
(b)
the
seriousness of the impropriety;
(c)
whether
the impropriety is continuing or is likely to occur in the future;
(d)
whether
the disclosure is made in breach of a duty of confidentiality of the
employer towards any other person; and
(g) in the public
interest.’
[24]
The
above requirements are summarised by the Labour Appeal Court (LAC) in
Malan
v Johannesburg Philharmonic Orchestra
[6]
in
the following terms:
‘…
there
must be a disclosure; the disclosure must be made in good faith; the
disclosure must concern an impropriety, either a criminal
offence or
that a person has failed, is failing or is likely to fail to comply
with any legal obligation to which that person is
subject; it must be
reasonable for the employee to make the disclosure; and, that one or
more of the conditions referred to in
subsection 9(2) must be
satisfied – for present purposes, any one of them is
sufficient.Where the disclosure is made to the
employer subsection
(c) which is relevant for the present purposes provides that the
employee making the disclosure must have previously
made a disclosure
of substantially the same nature to his or her employer.’
[25]
In
considering whether it was reasonable for the employee to make a
disclosure, the court will take into account the following
factors:
[7]
‘
(a)
The identity of the person to whom the disclosure is made;
(b) The seriousness
of the impropriety;
(c) whether the
impropriety or is continuing or is likely to occur in the future;
(d) whether the
disclosure is made is made in breach of the duty of confidentiality
of the employer towards any other person;
(e)
in
a case falling within subsection (2) (c), any action which the
employer or the person or body to whom the disclosure is made,
has
taken, or might reasonably be expected to have taken, as a result of
previous disclosure;
(f)
in
a case falling within subsection (2) (c)(i), whether in making the
disclosure to the employer the employee complied with any
procedure
which was authorised by the employer; and
(g)
the
public interest.’
[26]
In
dealing with whether the disclosure relied on by the employee and
impropriety alleged on the part of the employer, qualified
for
protection under the PDA, Van Niekerk J, in
CWU
v MTN
[8]
held
that:
‘
The
disclosure relied on by the second applicant as a protected
disclosure was no more than an expression of a subjectively held
opinion or an accusation, rather than a disclosure of information. It
is clear from the judgment in
Grieve v
Denel
(
supra
)
that the disclosure considered worthy of protection in that instance
was a disclosure of information that, on a
prima
facie
basis at least, was both
carefully documented and supported. The disclosure was clearly
indicative of a breach of legal obligations
and possibly criminal
conduct on the part of the employer concerned. In the present
instance, the only information proffered by
the second applicant (and
this was conceded by his counsel) was that contained in his e-mail
dated 4 April 2003, and in particular
his statement to the effect
that Thlalefang was being used as a sole agency to supply temporary
employees. There is no factual
basis, however tenuous, in any of the
second applicant’s communications to justify the conclusion
that they constituted anything
other than his personal opinion that
what appears to amount to a preferred supplier arrangement was
improper. There is no information
offered that indicates in the
slightest any impropriety on the part of any member of MTN’s
management.’
[27]
In
Grieve
v Denel
,
[9]
the
court held that the intention of the PDA was not to protect
disclosures that amount to rumours and conjuncture. In other words,
for the disclosure together with its allegation to deserve
protection, it must be supported by facts.
[28]
Whilst
accepting that reasonable belief need not be correct, it seems to me
that the belief must be based on facts and reasons for
the belief to
enjoy the protection. It is also apparent from the authorities that,
wild and unsubstantiated allegations cannot
find protection under the
PDA. In
State
Information Technology
,
Mlambo, JP, in dealing with the issue of reasonableness of the
belief, held that:
‘
[32]
…. for a disclosure to qualify for protection it must show
that the employee reasonably believed that the information
disclosed
and any allegation contained in it was substantially true.’
[10]
[29]
In
SA
Municipal Workers Union National Fund v Arbuthnot
,
[11]
the
LAC per Waglay JP found as misconceived the argument on behalf of the
employee that:
‘
[15]
...
The
enquiry is not about the reasonableness of the information, but about
the reasonableness of belief
vis-a-vis
the truthfulness of the information. The requirement of 'reasonable
belief' does not entail demonstrating the correctness of the
information, because a belief can still be reasonable even if the
information turns out to be inaccurate. In this regard, this
court,
in
Radebe and Another v Premier, Free State Province and Another
(
footnote
omitted) held that:
“
The
requirement of "reasonable to believe" cannot be equated to
personal knowledge of the information disclosed. That
would set so
high a standard as to frustrate the operation of the PDA. Disclosure
of hearsay opinion would, depending on the reliability,
be
reasonable. A mistaken belief or one that is factually inaccurate can
nevertheless be reasonable. A mistaken belief or one that
is
factually inaccurate can nevertheless be reasonable unless the
information is so inaccurate that no one can have interest in
its
disclosure.”’
[30]
The
applicant contended in her testimony that the re-grading affected the
income differentials which are to be included in the report
to the
DOL in terms of the EEA. The re-grading affected the EE report
because according to the applicant salaries of the affected
employees
remained unchanged. This, according to the applicant, distorts the
report to be made to the DOL.
[31]
The
report which a designated employer such as the respondent has to make
to the DOL in terms of the EEA is governed by s 21 of
that Act.
Section 21 of the EEA provides a procedure to be followed by the
designated employer for the purposes of employment equity
reporting.
A designated employer that is a public company is also required by
section 22 of the EEA to publish that the report
in the summery form
in its annual financial report.
[32]
Section
27 of the EEA, under the heading “Income differentials and
discrimination,” provides:
‘
(1)
Every designated employer, when reporting in terms of section 21(1),
must submit a statement, as prescribed, to the Employment
Conditions
Commission established by section 59 of the Basic Conditions of
Employment Act, on the remuneration and benefits received
in each
occupational level of that employer's workforce.
(2)
Where disproportionate income differentials, or unfair discrimination
by virtue of a difference in terms and conditions of employment
contemplated in section 6(4), are reflected in the statement
contemplated in subsection (1), a designated employer must take
measures
to progressively reduce such differentials subject to such
guidance as may be given by the Minister as contemplated in
subsection
(4).
(3)
The measures referred to in subsection (2) may include
(a) collective
bargaining;
(b) compliance with
sectoral determinations made by the Minister in terms of section 51
of the Basic Conditions of Employment Act;
(c) applying the
norms and benchmarks set by the Employment Conditions Commission;
(d) relevant
measures contained in skills development legislation;
(e) other measures
that are appropriate in the circumstances.
(4) The Employment
Conditions Commission must research and investigate norms and
benchmarks for proportionate income differentials
and advise the
Minister on appropriate measures for reducing disproportional
differentials.
(5) The Employment
Conditions Commission may not disclose any information pertaining to
individual employees or employers.
(6)
Parties to a collective bargaining process may request the
information contained in the statement contemplated in subsection
(1)
for collective bargaining purposes subject to section 16(4) and (5)
of the Labour Relations Act.’
Evaluation and
Analysis
[33]
In
my view, the information disclosed by the applicant has no factual
basis to support the existence of a reasonable belief required
in
order to qualify as protected disclosure envisaged by the PDA. The
totality of the facts and the circumstances of this case
do not
support the contention of the applicant that the information
disclosed was of such a nature as to deserve protection.
[34]
The
information which the applicant relies on for the purpose of the PDA
in this matter relates to the report made to officials
of the
respondent regarding the re-grading of positions of certain
employees. The grading system of the respondent provide grades
1 to
11. There are three salary bands within each grade, categorised into
High (H), Middle (M) and Lower (L). It seems common cause
that in the
re-grading process some employees were graded higher and others lower
than where they were before the re-grading. As
appears from the
above, the case of the applicant is that the re-grading of the
positions was irregular and the consequence thereof
is:
(i)
The
affected employees were prejudiced because they were not consulted.
(ii)
Could
have the effect of presenting to the DOL false reports in terms of
the EEA; in relation to the income differentiation.
[35]
In
relation to the issue of the duty to consult the affected employees
before the re-grading, the applicant was unable, during cross
examination, to show on what basis she was contending that the
respondent had a duty to consult with those employees. She stated
that the duty arose from the provisions of the LRA and the Basic
Condition of Employment Act (the BCEA) but could not say which
sections of those statutes require consultation in grading employees’
positions. Her explanation for failing to provide the
specific
provisions of the BCEA and LRA upon which she relied on was that she
is a lay person and not a lawyer. Accepting that
to be the case, she,
however, is not an illiterate person. She was, prior to her
dismissal, a manager in the HR department and
thus the basic
knowledge of these statutes should have come without much difficulty
to her. A simple investigation by a person
at her level regarding the
provisions of the two legislation would have revealed that there was
no basis to claim failure on the
part of the respondent to consult
before undertaking the grading of employees.
[36]
The
version of the respondent that not only did the re-grading occur
prior to the applicant joining its employ but also that the
affected
employees were not prejudiced by that was not seriously challenged by
the applicant. It should also, in this respect,
be noted that there
is no evidence presented by the applicant that the respondent falls
within a sector governed by sectoral determination
regulating wages
to be paid to employees or for that matter, the manner in which the
grading of employees is to be done by the
employer. There is also no
evidence of a collective bargaining agreement regulating the same and
upon which it could be said that
it is reasonable to believe that the
respondent had failed to comply with its legal duty because of the
manner it went about re-grading
the positions of its employees.
[37]
The
contention of the applicant that the re-grading would affect their
future salary increase bears no merit in the context of this
matter.
Even if that was to be the case, I do not believe that it would be
serious enough to elevate the information disclosed
to the overriding
importance of public interest. It is also important in the evaluation
of the reasonableness of the belief, which
the applicant had to show
in order to enjoy the protection, to note that the information in
question was already known to the employees
of the respondent in the
HR department. The reasonable inference that can be drawn from this
is that the information claimed to
be protected was already known to
the person to whom it was disclosed.
[38]
In
relation to the EE reporting, the applicant has, in my view, also
failed to show that her belief was reasonable. The version
of the
respondent which was not challenged was that the EE report is made
on-line to the DOL, audited and published in its annual
report. In
this regard, my view is that the applicant has failed again to
provide a factual basis for her belief that because the
salaries of
the employees would remain unchanged after the re-grading, that would
affect the report on the wage differentials to
be made to the DOL.
There is nothing in s 27 of the EEA that says a report to the DOL has
to reflect differences in the salary
of each employee of the
designated employer. The only requirement of s 27 of the PDA is for
the respondent to make sure where there
is disproportionate income
that measures are put in place to progressively reduce such
differentials. I have already indicated
somewhere else in this
judgment that there is no evidence of a sectoral or collective
bargaining agreement governing the sector
in which the respondent
operates in.
[39]
In
light of the above, I am of the view that the applicant has failed to
make out a case that the information she disclosed to the
respondent
is worthy of protection envisaged in the PDA. Put in another way, the
applicant has on the facts she presented, failed
show the existence
of a reasonable belief that the respondent had engaged in conduct
that falls within the definition of protected
disclosure as envisage
in the PDA.
[40]
It
should be apparent from the above that I did not deal with
alternative prayer of unfair dismissal which as would appear relates
to the dismissal for incompatibility. It is trite that this court
does not have jurisdiction to entertain such a claim.
[41]
Turning
to the issue of costs which is governed by s 162 of the LRA, I am of
the view that it would not, in the circumstances of
this matter, be
fair to order costs consequent to the outcome of the proceedings.
Having regard to the importance of the matter
the dictates of justice
direct that costs should not be allowed to follow the results. The
awarding of costs in a matter of this
nature would in my view have a
chilling effect on other individuals who may wish to raise similar
issue in future.
Order
[42]
In
the circumstances, the applicant’s claim of automatically
unfair dismissal is dismissed with no order as to costs.
Molahlehi, J
Judge
of the Labour Court of South Africa
Appearances:
For the
Applicant: Mr J Baloyi of Baloyi Attorneys
For the
Respondent: Advocate H A Van Der Merwe
Instructed
by: Senekal Simmonds Inc.
[1]
Act
No 26 of 2000.
[2]
The objectives of the PDA reads:
“
(a)
to
protect an
employee
,
whether in the private or the public sector, from being subjected to
an occupational
detriment
on account of having made a
protected
disclosure
;
(b)
to provide for certain remedies in connection with any
occupational
detriment
suffered on account of having made a
protected
disclosure
;
and
(c)
to provide for procedures in terms of which an
employee
can, in a responsible.”
[3]
See section 4(2) of the PDA.
[4]
See
s 1 of the PDA which defines “protected disclosure” to
mean: “
any
disclosure of information regarding any conduct of an
employer
,
or an
employee
of that
employer
,
made by any
employee
who has reason to believe that the information concerned shows or
tends to show one of the categories of failures by the employer
or
commission or likely commission of criminal conduct by the employer.
[5]
See
State
Information Technology Agency (Pty) Ltd v Sekgobela
(2012) 10 BLLR 1001
(LAC) at para 17.
[6]
(JA
61/11)
[2013] ZALAC 24
(12 September 2013) at para 29.
[7]
The
factors to consider are set out in s 9(3) of the PDA.
[8]
(2003)
8 BLLR 741
(LC) at para 22.
[9]
(2003)
4 BLLR 366
(LC).
[10]
State
Information Technology Agency (Pty) Ltd v Sekgobela (supra)
at
para 32.
[11]
(2014)
35
ILJ
2434 (LAC) at para 15.