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[2015] ZALCJHB 239
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Wholesale Housing Supplies (Pty) Ltd v Commission for Conciliation Mediation And Arbitration and Others (J3277/12) [2015] ZALCJHB 239 (6 August 2015)
REPUBLIC
OF SOUTH AFRICA
Not reportable
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
C
ase
no: J 3277/12
In the matter between:
WHOLESALE HOUSING SUPPLIES (PTY)
LTD
APPLICANT
and
COMMISSION FOR
CONCILIATION,
MEDIATION AND
ARBITRATION
FIRST RESPONDENT
PHEHELO
MOTAKE
SECOND RESPONDENT
SOLIDARITY OBO RIAAN
AGENGAG
THIRD RESPONDENT
Heard
:
13 May 2015
Delivered
:
6 August 2015
JUDGMENT
VAN
NIEKERK J
[1]
This is an application to review and set aside an arbitration award
issued by the second respondent, to whom I shall refer as
‘the
commissioner’. In his award, the commissioner held that the
dismissal of Mr. R Agenbag (the employee) by the applicant
was
substantively and procedurally unfair. The commissioner ordered that
the employee be reinstated, with partially retrospective
effect, and
with a final written warning valid for six months.
[2]
The material facts are not in dispute. The employee accepted an offer
of employment on 19 December 2011, and was engaged as
the applicant’s
financial and administration manager. The effective date of the
commencement of his employment was 9 January
2012. The
applicant’s contract of employment provided, amongst other
things, as follows:
17.1
Remuneration structure
17.1.1
Your remuneration package will be structured on a cost to company
basis, with your cost to company being R 27 000.00
per month. This
cost will consist of a mix of cash and benefits which may be varied
by agreement once per annum;
17.1.2
All reasonable cellular expenses up to a maximum of R 1000.00 per
month will be borne by the company;
17.1.3
Pensionable earnings are equivalent to 75% of the cost to company
package referred to in 18.1.1 above;
17.1.4
The cash portion of your package will be paid monthly in arrears, but
not later than the last working day of each month………
Petrol
and vehicle maintenance
17.2.1
All reasonable fuel up to a maximum of R800.00 per month will be
borne by the company;
17.2.2
All reasonable repairs and maintenance up to a maximum of R500.00 per
month will be borne by the company.
17.2.3
You will receive an amount of R800.00 to be used for vehicle
insurance purposes.
[3]
It is not in dispute that on receipt of his salary advice on 26
January 2012 the employee complained that he did not receive
the
value of the amounts referred to in clause 17.1.2 and 17.2, a total
amount of R3100.00, in addition to his salary. It
is also not
disputed that during a subsequent conference call in which the
applicant’s financial director participated, the
employee was
advised that the so-called benefit component of his remuneration
package would be paid only on the production of expenses
actually
incurred. The employee subsequently submitted a claim, with
supporting vouchers. The vouchers related to expenditure incurred
in
the purchase of fuel and airtime on 7 January 2012, the Saturday
before the applicant commenced work.
[4]
The employee was called to a disciplinary hearing to answer to the
following charges:
1.
Intention to defraud/deceive
the company – you submitted claims for a period prior to your
starting date at the company even
though you were told by Andrew
Buddricks that you could only submit slips dated after your starting
date;
2.
Unbecoming conduct in a
management position in that you submitted an invalid claim after how
to submit a claim was discussed with
you.
3.
Lack of integrity. You
indicated on two occasions, on 27 January 2012 in a conversation with
Sandra da Costa and the conversation
with Andrew Buddricks/ Sandra da
Costa/ William Maroleng, that if you did not use your full fuel
allowance, you would need to make
sure that you did so that you did
not lose out. Also your submission of this claim raises serious
doubts as to your integrity.
Especially in the position that you
occupy this is very concerning (sic).
[5]
The employee was found guilty of the above charges and dismissed on
14 February 2012. He disputed the fairness of his dismissal;
a
dispute that was referred ultimately to the first respondent for an
arbitration hearing before the commissioner.
The
arbitration award
[6]
The award under review is not a model of clarity, but the essence of
it is that the employee was not guilty on the first charge
of
fraud/deception, but guilty of the second and third charges of
unbecoming conduct and lack of integrity respectively. The
commissioner’s
reasoning can be discerned from paragraph 28 of
the award onwards in which the commissioner finds that the work rules
regulating
the conduct in question existed, and that the employee
must have been aware of these rules. He also considered the rules to
be
reasonable, since they were intended to protect the legitimate
rights and interests of the applicant.
[7]
In regard to any breach of the rules, in respect of the first charge,
the commissioner finds that the applicant had failed to
establish
that the employee was guilty of fraud, in essence, because there was
no deceit on the part of the employee. The relevant
paragraphs of the
award read as follows:
[30.6]
The applicant throughout, even of the disciplinary hearing, maybe
even before that, acted like someone who genuinely
and openly believe
that he was entitled to claim as it did. He never hid or tried to
hide his intentions about the claims. He obstinately
argued that he
was entitled to claim the alleged benefits.
[30.7]
I have already indicated above that are not going to decide whether
the alleged benefits were indeed benefits
or not. What I must decide
is whether the applicant acted fraudulently or the intention to
deceive the respondent when he claimed
the alleged benefits. I
believe he did not act fraudulently or deceitfully or dishonesty.
[30.8]
Without deciding whether his interpretation of the employment
contract was correct or not, I find that the applicant
most probably
misinterpreted the contract. He genuinely but probably incorrectly
believe that he was entitled to be by the Lancers
in question in
order to make up the elite shortfall in his salary. However, that
does not make his conduct fraudulent or deceitful
dishonest in any
way! ...
[30.9.9]
In respect of charge one in charge two, as indicated, all hinted
above, the applicant breached the rule by claiming the
way he did
despite being warned against their that and because, especially in
respect of charge three, he stubbornly insisted on
claiming what he
believes or insisted was part of his remuneration.
[8]
In relation to the question of sanction, the commissioner’s
finding that the sanction imposed on the employee was too
harsh was
clearly influenced by the fact that the employee had been found not
guilty of fraud or deceitful conduct. The commissioner
says the
following:
[32.2]
Indeed if he was guilty of fraud and misconduct involving dishonesty
especially gross dishonesty, I would have
supported the sanction of
dismissal because such conduct normally destroys the trust
relationship between the employer and the
employee. However, as
indicated above the applicant’s conduct was not fraudulent
deceitful or dishonest.
[32.3]
In respect of charges two and three of which the applicant was guilty
there is no proof of the trust relationship
having been destroyed. If
the relationship was damaged or broken down, it was not damaged or
broken down to the extent that the
continuation of employment
relationship was quite no longer tenable” as stated in the De
Beer decision.
[32.4]
there was a communication breakdown between the parties in respect of
the claims of the allowances or what the
actual remuneration packages
was (sic). The respondent tried to remedy the situation through, for
instance, the teleconference.
However, seemingly much more direct
will personal (one-on-one) communicational discussion was required,
as the applicant had suggested
in his emails. The parties had only
known each other when the problem arose. The applicant had worked
about two months with the
teleconference was held (in February 2012
in which the claims issue was discussed.
[32.5]
In the light of the fact that the applicant honestly believe that he
was merely enforcing is right, the sanction
of dismissal is too
harsh.
Grounds
for review
[9]
The grounds for review are broadly stated but in essence, they
concern the factual findings made by the commissioner in relation
to
the absence of fraud or deceit, and his conclusion that the sanction
of dismissal was too harsh. In particular, the applicant
avers that
the commissioner failed to take into account particular evidence
(relating in the main to the employees experience in
financial
matters, his financial background and acumen), that the commissioner
who didn’t finding that the relationship of
trust between the
parties had not broken down, the dismissal was not an appropriate
sanction in the circumstances and that the
evidence, properly
considered, disclosed deceitful and fraudulent conduct on the part of
the employee.
[10]
On the basis of these averments, the applicant contends that the
conclusion as reached by the commissioner are ones that no
reasonable
commissioner could have arrived at, given the evidence on record. In
particular, it is contended that no reasonable
commissioner could
have found that the employee was not guilty of dishonesty or any
intention to deceive, or that the sanction
of dismissal was
inappropriate in the circumstances.
The
applicable legal principles
[11]
The threshold for review is fairly well-established. Section 145
permits the review of an arbitration award, amongst other
grounds,
where the arbitrator commits a gross irregularity. This extends to
latent gross irregularities or, put another way, instances
where an
arbitrator fails to apply him or herself to the available evidence,
makes defect of factual findings and the like. In
these instances, a
party seeking to set aside an award or ruling must establish both the
irregularity or defect relied on and
that the
Sidumo
threshold is met.
In Gold Fields Mining SA (Pty) Ltd (Kloof Gold
Mine) v CCMA & others
[2007] ZALC 66
;
[2014] 1 BLLR 20
(LAC), the Labour
Appeal Court noted that it is not sufficient for an award to be set
aside simply to establish a gross irregularity
in the conduct of the
arbitration proceedings; in the event that a gross irregularity in
the conduct of the proceedings is established,
it is incumbent on an
applicant to establish that the result was unreasonable or ‘
put
another way, whether the decision that the arbitrator arrived at is
one that falls outside the band of decisions to which a
reasonable
decision-maker could come on the available material
’. In
other words, the review court must consider whether despite the
arbitrator’s reasoning, the result is nevertheless
capable of
justification on the available material.
[12]
Precisely how this determination to be made was the subject of recent
guidance provided by the Labour Appeal Court. In head
of the
Department
of Education v Mofokeng & others
[2015]
1 BLLR 50
(LAC), Murphy AJA said the following:
‘
The
determination of whether a decision is unreasonable in its result is
an exercise inherently dependent on variable considerations
and
circumstantial factors. A finding of unreasonableness usually implies
that some other ground is present, either latently or
comprising
manifest unlawfulness. Accordingly, the process of judicial review on
grounds of unreasonableness often entails examination
of interrelated
questions of rationality, lawfulness and proportionality, pertaining
to the purpose, basis, reasoning or effect
of the decision,
corresponding to the scrutiny envisaged in the distinctive review
grounds developed at common law, now codified
and mostly specified in
section 6 of the promotion of administrative Justice act (“PAJA”).;
such as failing to apply
the mind, taking into account irrelevant
considerations, ignoring relevant considerations, acting for an
ulterior purpose, in bad
faith arbitrarily or capriciously etc . The
Court must nonetheless still consider with apart from the flawed
reasons of or any
irregularity by the arbitrator, the result could be
reasonably reached in light of the issues and the evidence (at
paragraph 31).
Further:
Irregularities
or errors in relation to the facts or issues, therefore, may or may
not produce an unreasonable outcome or provide
a compelling
indication that the arbitrator misconceived the enquiry. In the final
analysis, it will depend on the materiality
of the error or
irregularity and its relation to the result. Whether the irregularity
or error is material must be assessed and
determined with reference
to the distorting effect it may or may not have had on the
arbitrator’s conception of the enquiry,
the determination of
the issues to be determined and the ultimate outcome. If but for an
error or irregularity a different outcome
would have resulted, it
will
ex hypothesi
be material to the determination of the
dispute. The material error of this order would point to at least a
prima facie unreasonable
result.’
[13]
What this analysis requires where what is at issue is any assessment
of whether a reviewable defect and/or irregularity has
occurred or
what its impact is to be upon an award, is a determination first of
the nature of the error alleged to have been committed
by the
arbitrator and any distorting effect that the error may have had on
the outcome of the arbitrator’s award. If it is
reasonably
clear that but for the identified error relied upon the award would
have been different or cannot stand on its own reasoning,
then it is
prima facie
an unreasonable award. The court must then have
regard to the issues and the evidence as a whole to determine whether
or not the
outcome is nevertheless capable of being sustained on the
Sidumo
test.
Analysis
[14]
The basis for the attack on the commissioner’s award boils down
to an attack on his factual finding regarding the existence
or
otherwise of an intention to defraud, and his related decision that
dismissal was too harsh a sanction for the charges of misconduct
that
had been established. As I have indicated above, the
commissioner’s award is not a model of clarity, and indeed,
in
some instances, it appears to be contradictory. At paragraph 29.3 of
the award for example, the commissioner states:
It
was indeed strange for a finance manager not to realise will know
that he was breaking a rule especially after being warned against
the
claims that he was making.
And
further, at paragraph 29.5:
The
applicant’s defence that he did not know the claim procedure
cannot, in all probability, be true or correct.
Despite
these findings, the commissioner inexplicably states the following,
at paragraph 29.4:
The
position outlined above does not of course apply to the claim or
claims made for the period before the applicant started working.
He
had not been warned at the time. He probably honestly believe that he
was entitled to claim as he claimed at the time. This
involves charge
one, fraud. I have already found that he was not fraudulent,
deceitful or dishonest.
This
conclusion makes little sense given the fact that it was common cause
that the claim which included expenses relating to the
period prior
to the employees commencement of employment was submitted on 27
January 2012, after the teleconference at which the
relevant
procedure was explained to the employee. The commissioner also
contradicts his earlier findings that the employee was
aware of the
claims procedure and the fact that he was acting in breach of a rule
when he comes to the conclusion, as he does in
paragraph 30.8 that:
[The
employee] genuinely but probably incorrectly believe that he was
entitled to be paid the allowances in question in order to
make up
for the alleged shortfall of his salary. However it does not make’s
conduct fraudulent or deceitful or dishonest
in any way.
[15]
However, I am not persuaded that the commissioner ignored material
facts or failed properly to deal with the facts before him
to the
extent that it had a distorting effect on the outcome. The evidence
before the commissioner was that the employee had expected
a salary
of R 360,000 per annum, or R 30,000 per month. After payment of the
employee’s January salary, he made enquiries
as to the payment
of the amount of R 3100.00, which he clearly considered would be
payable regardless of any expenses actually
incurred by him in
regardless of any documentation in relation to any claimed expenses.
During the course of the teleconference,
the applicant’s
management made clear that the payment of the R3100.00 in respect of
the expenses listed in the contract
of employment was not automatic
and that the applicant should submit receipts to substantiate his
claims. The employee’s
response to this is recorded in his
email of 27 January is the following:
1.
I need your written summary or
the lengthy explanations you gave telephonically regarding claiming
procedures, et cetera. Please
specify what you authorise in future
when I’m claiming for cell phone, fuel and maintenance and
repairs.
2.
I will also complete another
claim form today, (Friday the 27
th
)
with slips for pay-as-you-go cell phone it down purchased, and
invoice for servicing my vehicle and one slip for putting in fuel.
It
will be up to you how and if you will entertain paying me what I am
claiming.
3.
Acknowledge please that you are
clear where my understanding came from regarding the payout of my
benefits as per my employment
contract. Note the attached documents
that clearly state what I was offered on 19 December 2011, but ask
for clarification, that
I had no other means to accept that what and
how my employment contract was worded, it indicated my expectation:
to be paid out
in cash monthly the R 3100 for cell phone, fuel,
maintenance and repairs and insurance.
[16]
This is not the language of an employee intent on defrauding his
employer. It is common cause that there was no response to
this email
and that on 27 January the employee submitted a second claim this
time with invoices and receipts to substantiate amounts
that he had
paid toward the servicing of his vehicle, cell phone and fuel. The
employee’s undisputed evidence was that by
31 January, he had
not been paid his first claim or the second, and that he had not
received any information or feedback regarding
the teleconference and
his subsequent emails. The next communication with the employee was a
notice of suspension.
[17]
The employee’s evidence was that the documentation submitted in
support of the second claim submitted after the telephone
conference
related to expenditure in respect of fuel, maintenance and air time,
incurred on 6, 7 and 8 January, the weekend before
the employee
commenced work (on Monday 9 January) and in anticipation of the
commencement of work. The applicant is version before
the
commissioner was that after the teleconference the employee was left
in no doubt that the amounts payable to the employee over
and above
is salary were not automatic payments of the maximum permissible
allowances, and that the employee was advised in no
uncertain terms
that he should submit documentation to verify that the costs of the
amount claimed had in fact been paid. The employee’s
case
ultimately was that a finding ought to have been made that the
employee was only entitled to claim expenses actually incurred
after
his commencement of employment on the basis of the terms of his
contract of employment, his commencement date of 9 January
2012, the
explanation to him that he was required to submit proof of expenses
actually incurred and the fact that he was in a senior
managerial
position and all to be expected to be familiar with the management of
finances. What was not established though was
that it was made clear
to the employee that he was not entitled to submit any claims in
respect of the period prior to 9 January.
This is precisely the
question asked by the employee in his email on 27 January, and never
answered. The employee’s undisputed
evidence was that the
expenses that he had incurred, in respect of fuel and maintenance and
airtime, had been incurred on the weekend
prior to his commencing
employment and into anticipation of that commencement. It is
difficult appreciate our this might amount
to fraud or deceitful
conduct, particularly given the terms of the email are clear as to
what is being claimed and extend a clear
invitation to challenge the
basis on which the claim was presented. Taking into account all of
the evidence, the commissioner (correctly)
found that the employee’s
had been obstinate; he may even have been pig-headed about what for
him was his employer’s
different and incorrect understanding on
how his remuneration package would be made up and paid, but the
evidence fell short of
establishing any intention to deceive. Being
difficult is not tantamount to being deceitful. I am unable to agree
therefore that
the commissioner’s finding in relation to the
absence of deceit or any intention to defraud the applicant had any
distorting
effect on the outcome of the proceedings under review.
[18]
Insofar as the applicant contests the commissioner’s findings
on the appropriateness of dismissal as a sanction, again,
the court’s
capacity to interfere is limited. The commissioner was acutely aware
that he was not entitled to impose the remedy
that he considered to
be appropriate in the circumstances – he specifically
recognised that his function was to determine
whether the sanction of
dismissal was fair or not. The commissioner had regard to the
relevant factors that are ordinarily to taken
into account in dispute
such as the present and after addressing each one, concluded that a
lesser sanction would have been fair,
given his findings on the
second and third charges against the employee. His assessment that
the award of reinstatement should
not be fully retrospective and that
a final written warning valid for six months should be imposed in
respect of charges 2 and
3 reflects the outcome of the
decision-making process which properly have regard to the irrelevant
factors and to the interests
of both parties and which sought to
achieve an appropriate balance. In my view, the applicant has failed
to establish that the
commissioner’s award of limited
reinstatement coupled with a final written warning falls into the
latter category. For these
reasons, the application stands to fail.
It is not necessary for me in these circumstances to consider the
submissions made in
respect of the commissioner’s findings of
procedural fairness.
[19]
Finally, there is no reason why costs should not follow the result.
Although the employee is represented by a trade union,
there is no
evidence that the union and the applicant are engaged in a
collective-bargaining relationship, or that any order for
costs might
prejudice that relationship. In my view, and in the exercise of the
broad discretion conferred on this court by the
provisions of s 162
of the Act, the interests of the law and fairness are best served by
an order to the effect of that costs follow
the result.
I
make the following order:
1.
The
application is dismissed, with costs.
ANDRÉ VAN NIEKERK
JUDGE
OF THE LABOUR COURT
APPEARANCES
For
the Applicants: Adv. A Mosam instructed by Van Veijeren Incorporated.
For
the Respondent: Ms. N Greef, Solidarity