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[2015] ZALCJHB 249
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Billion Group (Pty) Limited v Mosheshe and Others (JR607/2013) [2015] ZALCJHB 249 (7 August 2015)
THE LABOUR COURT OF
SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case no: JR607/2013
In
the matter between:
BILLION
GROUP (PTY)
LIMITED
Applicant
and
MOTHUSI
MOSHESHE
First Respondent
THE
COMMISSION FOR CONCILIATION, MEDIATION Second
Respondent
AND
ARBITRATION.
MOTLATSI
PHALA
N.O. Third
Respondent
Heard:
15 January 2015
Delivered:
7 August 2015
JUDGMENT
OLIVIER,
A J
Introduction
[1]
This matter concerns an application by the
Applicant to review and set aside an arbitration award of the Third
Respondent in his
capacity as Commissioner of the CCMA, the Second
Respondent. This application has been brought in terms of Section 145
of the Labour
Relations Act ("the LRA").
[2]
The First Respondent was dismissed by the
Applicant on 15 November 2011 based on charges relating to his
alleged poor performance.
The First Respondent then pursued his
dismissal as an unfair dismissal dispute to the CCMA and the matter
came before the Third
Respondent for arbitration and was heard over a
number of days and finalised on 14 March 2013.
[3]
Pursuant to these arbitration proceedings, the
Third Respondent then determined that the dismissal of the First
Respondent by the
Applicant was both substantively and procedurally
unfair. The Third Respondent then ordered the Applicant to pay the
First Respondent
R216 666.68 which is four months compensation
calculated at the monthly rate of R54 166.67. This determination
by the
Third Respondent forms the subject matter of the review
application brought by the Applicant which application was according
to
the First Respondent only served and filed by 13 May 2013. The
Applicant contends that the application was served on the Second
and
Third Respondents on 3 May 2013 by hand on the attorney for the First
Respondent, Tracy Sischy Attorneys on 6 May 2013.
[4]
The First Respondent contended that the
application was made outside of the time period provided for in
Section 145 of the LRA.
The Applicant has similarly contended that
the answering affidavit filed by the First Respondent was filed
outside of the time
periods provided for in Rule 7A.
[5]
I have considered the relevant condonation
application filed by the First Respondent as well as the condonation
application made
by the Applicant's representative from the bar at
the hearing of this matter. I am of the view that the Applicant was
at all relevant
times entitled to form the view that Tracy Sischy
Attorneys were still the attorneys of record on behalf of the First
Respondent
and that the application could, accordingly, be served at
her address. The Applicant did proceed to also serve by registered
post
a copy of the application on the First Respondent. The
application was served within the relevant time periods on all the
relevant
parties prior to the expiry of the six week period. I,
accordingly, find that there was substantial compliance by the
Applicant
with the provisions of Section 145 in respect of the
relevant time periods. In respect of the late filing of the answering
affidavit
by the First Respondent, I find that the period of delay in
filing such answering affidavit is substantial. In essence, the First
Respondent relies on the negligence of both his attorney and counsel.
I have considered the facts and circumstances put forward
by the
First Respondent in this regard and have formed the view that it
would cause undue prejudice and hardship to the First Respondent
should I not condone such late filing. I, accordingly, condone the
late filing of the First Respondent's answering affidavit. The
matter
will, therefore, be considered as an opposed review application.
Background facts:
[6]
The Applicant conducts a business as an owner and
manager of various retail properties. It has operations in Gauteng as
well as
in the Eastern Cape. The main witness called by the Applicant
at the arbitration proceedings was Mr Thabo Lebelo, the Applicant's
financial director. Mr Lebelo has been a qualified Chartered
Accountant since 2001, commencing work for the Applicant on or about
6 June 2010. During June 2010, Mrs Anne Botes was employed by the
Applicant as its Financial Manager. She, however, resigned during
May
2010 with 2 months' notice; her last working day being 7 August 2010.
[7]
Mr Lebelo identified the First Respondent as a
possible applicant to replace Ms Botes. The First Respondent is a
qualified Trainee
Accountant. The First Respondent was requested to
submit his CV to the Applicant and the Applicant, thereafter,
employed him as
the Group Financial Manager on 26 July 2010 in terms
of a fixed term contract with a 6 month duration. The fixed term
contract
was due to expire on 31 January 2011.
[8]
The First Respondent's duties included amongst
others:
8.1.
the preparation of monthly management accounts for
Hemingway's Shopping Centre and the Mdantsane Shopping Centre;
8.2.
the preparation of monthly VAT returns for three
companies in the Group and the submissions of these VAT returns to
SARS;
8.3.
the preparation of payroll returns (ie the returns
to SARS in terms of which UIF, SDL and PAYE are paid to SARS for the
Applicant
and Billion Property Services (Pty) Limited.) The First
Respondent was also responsible for the submission of the said
payroll
tax returns to SARS, preparing cheques for such payments to
SARS and ensuring that these cheques were submitted to the bank on
time; and
8.4.
attending to payroll which included calculating
annual adjustments to various employees' salaries.
[9]
It is common cause that the First Respondent
reported to Mr Lebelo as his direct supervisor and if necessary, the
First Respondent
would report to the Applicant's CEO, Mr Ngebulana.
As a senior manager, the First Respondent was part of the Applicant's
management
committee and headed the Finance Department. During the
latter part of October 2010, Mr Lebelo had cause to write a
performance
appraisal letter to the First Respondent about a number
of issues of concern relating to the First Respondent's performance
which
included the failure to prepare management accounts. On 18
October, Mr Lebelo also convened a counselling meeting with the First
Respondent relating to,
inter alia,
the issue of completing the management accounts on
time. The First Respondent was also,
inter
alia,
requested to prepare management
statements for Hemingway's and Mdantsane. When such statements were
submitted to Mr Lebelo, he noted
that there were no supporting
schedules, no workings and some of the items were incorrect.
Typically management statements should
be in the form of a file with
supporting documents. For instance, under long term liabilities, the
amount was incorrect. Mr Lebelo
then had a discussion with the First
Respondent about what he regarded as incorrect figures. The company
was in the process of
considering a listing and such management
accounts were required. A number of other instances then also
occurred which the Applicant
regarded as poor performance by the
First Respondent of his duties.
[10]
On 4 November 2010, the First Respondent was
handed a “Notification to attend poor work performance
investigation” which
was scheduled for 9 November 2010. The
First Respondent attended the hearing on 9 November 2010 and
requested to have legal representation.
He was, however, informed
that he could not have legal representation but would be allowed to
be assisted by his sister.
[11]
The Applicant was represented by Dr Ebersohn, its
attorney. The chairperson was an external person Ms Smit from GEO.
The First Respondent's
sister was not available to attend the
hearing. The First Respondent further requested that the allegations
against him be clarified.
It became apparent to the chairperson that
the Applicant had charged the employee with gross negligence but that
the notification
referred to "formal poor performance inquiry".
The First Respondent stated that although he was prepared for the
inquiry
as the notice was issued, he requested a postponement in
order to prepare for the correct inquiry and to take advice on the
best
way forward. Ms Smit, at the time, formed the view that there
could indeed be confusion between the misconduct and the poor
performance
hearing. She recommended that the matter be postponed to
allow for fair procedure to be followed and that the Applicant should
reissue the notice of inquiry as either a performance inquiry or a
disciplinary inquiry and to allow the First Respondent sufficient
time to prepare. She issued such ruling on 10 November 2010.
[12]
Immediately thereafter the Applicant served the
First Respondent with another notice entitled “Notification to
Attend a Final
Poor Work Performance Investigation” and
scheduled such hearing for 14 November 2010. This charge sheet
contained the following
complaints or charges against the First
Respondent:
12.1.
gross negligence in that you failed to timeously
complete and submit VAT assessment returns for the Hemingway Shopping
Centre, Phomella
Property Investments and Mdantsane Shopping Centres.
In respect of the month of September 2010, which assessments were due
by 29
October 2010 with the result that SARS will impose severe
penalties and interest on the respective subsidiaries of Billion
Group;
12.2.
gross negligence in that you incorrectly completed
the VAT assessment return for the Hemingway's Shopping Centre by
failing to make
provision for the said subsidiary's bad debts, which
if it had not been corrected by management, could have resulted in an
overpayment
of R644 830.79;
12.3.
gross negligence in that you failed to complete
the September 2010 PAYE, SDL and UIF for Billion Group (Pty) Limited
and Billion
Property Services (Pty) Limited timeously leaving no time
for review and a cheque to be signed and deposited before the bank
closed
on 5 November 2010 which will result in SARS imposing a
penalty and interest;
12.4.
gross negligence in that you have still failed to
prepare proper management accounts for Billion Group which is causing
an embarrassment
to the Billion Group and which may have adverse
consequences for the listing of one of the Billion Group's
subsidiaries;
12.5.
negligence in that you have failed to correctly
adjust the employees' salary for October 2010; and
12.6.
gross negligence, alternatively, negligence in
that you failed to attend to the loading of payments on the computer
system and/or
failed to attend to such loading timeously, causing
embarrassment to the Billion Group and its subsidiaries.
The Charge Sheet also had
the following sentence after the aforesaid 6 charges:
‘…
thereby
irreparably damaging and destroying the trust relationship between
you and your employer.’
[13]
On the date of the hearing, 14 November 2010, the
First Respondent was accompanied by his legal representative Mr Zwane
from Lebea
and Associates. The First Respondent then noted that the
Applicant had changed the chairperson, Mrs H Smit who had made the
ruling
that led to the adjournment on 12 November and that she had
been replaced by Mrs Louise van Aswegan, an attorney. Mr Zwane then
brought an application for legal representation before Mrs Van
Aswegan. The Applicant was again represented by Dr Ebersohn, its
attorney. Ms Van Aswegan considered the application for legal
representation and declined it. The First Respondent was forced to
continue with the hearing representing himself. The First Respondent
also formed the view that the chairperson was not in control
of the
process and took instructions from Dr Ebersohn, the Applicant's legal
representative.
[14]
Following the hearing, the First Respondent was
found guilty on 5 charges and dismissed on 15 November 2010 by the
Applicant after
it accepted the recommendation by Mrs Van Aswegan
that dismissal was an appropriate penalty.
[15]
The First Respondent then referred the dispute to
the CCMA on 6 December 2010. The matter was subsequently referred to
arbitration
after the conciliation failed.
[16]
In his award, the Third Respondent ruled that the
hearing of 12 November 2010 was not a proper poor work performance
investigation
and that the findings of the chairperson showed that
she conducted a disciplinary hearing. In addition, the Second
Respondent also
made a finding that the Applicant, having chosen a
poor performance process, was required to follow such process. The
Third Respondent
found that the fact that the Applicant had in fact
charged the First Respondent with negligence and gross negligence had
created
confusion as to whether it was in fact a poor performance
investigation or a disciplinary hearing where misconduct had to be
considered.
The Third Respondent found that the findings of the
chairperson showed that, in fact, the First Respondent was subjected
to a disciplinary
hearing because he was found guilty of 5 charges
and the penalty of dismissal was imposed. According to the Third
Respondent, the
Applicant incorrectly labelled the process a poor
performance investigation and had deliberately conflated issues in
order to achieve
a predetermined outcome. According to the Third
Respondent, the chairperson of the hearing had lost control of the
hearing process
and was directed by the company's legal
representative who effectively made the decision,
inter
alia,
it was the First Respondent's
desire to be legally represented and while his appointed legal
representative was addressing the chairperson
and after the
chairperson had made the decision to dismiss the application for
legal representation, Dr Ebersohn said "tata
bye bye" to Mr
Zwane. According to the Third Respondent, such hearing was fatally
flawed and the outcome was a foregone conclusion.
The Third
Respondent concluded with the following finding:
‘
The
so-called hearing was fatally flawed and grossly unfair. It is
therefore my finding that dismissal of the Applicant was procedurally
and substantively unfair. The Applicant's relief was that the CCMA
should order the Respondent to pay him for the remainder of
the
contract. I do not have powers to make such an order. However, the
Applicant did not pray for reinstatement or reemployment
what should
follow logically is an order for compensation.’
[17]
The Third Respondent then determined that the
Applicant should pay the Third Respondent compensation equal to an
amount of 4 months'
salary at R54 166.67 a month.
The grounds of review
of the Applicant
[18]
The Applicant raised seven grounds of review in
its heads of argument. They are:
18.1.
the Third Respondent awarded more compensation
than what the First Respondent sought and what the arbitrator could
award in law
to the First Respondent;
18.2.
the Third Respondent failed to record the evidence
of Mr Lebelo that was given during cross examination and
re-examination
and failed to record the evidence given by the First
Respondent during cross examination;
18.3.
the Third Respondent ignored the parties' written
submissions and the ignored the First Respondent's opening statement;
18.4.
the Third Respondent failed to deal with the
substance of the dispute namely whether dismissal was substantively
unfair;
18.5.
the Third Respondent did not address the First
Respondent's allegation that 5 complaints against him were
mala
fide;
18.6.
the Third Respondent unfairly allowed the First
Respondent to present new documentary evidence after the Applicant
had closed its
case, and unfairly precluded the Applicant from
cross examining the First Respondent after introducing a
relevant document
into evidence during the Respondent's
cross examination;
18.7.
the award is unreasonable.
[19]
I had the benefit of the voluminous heads of
argument prepared by the Applicant's representative, Dr Ebersohn.
Such heads consisted
of a bundle of 99 pages. The First Respondent's
counsel, Advocate Mphahlele similarly prepared heads of argument. I
am indebted
to both the legal representatives for their thorough
preparation and presentation of the relevant facts and arguments.
Considering
the grounds of review raised by the Applicant, I am of
the view that the following grounds are the most pertinent:
19.1.
that the first Respondent failed to deal with
substance of a dispute namely whether dismissal was substantively
unfair; and
19.2.
the award is unreasonable.
[20]
In his award, the Third Respondent states that
because the First Respondent's dismissal was procedurally unfair his
dismissal was
also substantively unfair. (See paragraph 6.15 of the
award).
[21]
Having carefully considered the contents of the
award, it is clear that the First Respondent does not analyse the
evidence (which
evidence is according to the Applicant incompletely
recorded in his award). In his award, the First Respondent does not
deal with
the merits of the Applicant's five complaints in respect of
which the First Respondent was found guilty.
[22]
The Applicant submits that one of the primary
duties of the First Respondent was to determine whether the
Respondent was guilty
of poor work performance as alleged by the
Applicant (ie whether the First Respondent was guilty of the five
complaints). The Third
Respondent also had to consider whether the
First Respondent's dismissal was substantively fair based on the
aforesaid findings.
[23]
It is the Applicant's argument that the Third
Respondent, by failing to determine whether the First Respondent was
guilty of the
five complaints of poor work performance, therefore,
misconstrued the nature of the inquiry that he was required to
undertake and
as such, the Applicant submits that the Third
Respondent committed misconduct in relation to his duties.
[24]
I also had careful regard to the record and it is
clear that most of the evidence presented during the course of the
arbitration
proceedings pertained to the question whether the First
Respondent was guilty of the five complaints.
[25]
The Applicant further alleges that the award is
unreasonable insofar as the First Respondent held that the First
Respondent's dismissal
was procedurally and substantively unfair. The
Applicant in the heads of argument then proceeds with a thorough
analysis of the
evidence that was led by Mr Lebelo as well as the
other witnesses of the Applicant. In particular, the Applicant
submits that the
evidence clearly shows that the First Respondent was
guilty of negligence in respect of the instances listed under the
five charges.
In respect of charge 4, he was also guilty of poor work
performance for the following reasons:
25.1.
the First Respondent knew what the performance
standard was, namely, that he had to prepare correct/proper
management accounts supported
by the necessary documents. Mr Lebelo
informed the Respondent about this on 25 October 2010 and again
confirmed it in his email
of 27 October 2010;
25.2.
the First Respondent's performance fell short of
the standard (which he admitted in his heads of argument) and after
25 October
2010, the Respondent never came back to Mr Lebelo with
management accounts containing supporting documents and
figures/mistakes
which had still not been corrected;
25.3.
the First Respondent had ample opportunity to
prepare proper management accounts, especially taking into account
his own undertakings.
In respect of complaint no. 5, the Applicant
also alleged that the Respondent was negligent in that he incorrectly
adjusted certain
employee's salary for October 2010. Mr Lebelo
testified that the First Respondent incorrectly calculated the
employee's salary
increases with the result that certain employee's
received an excessive salary increase to which they were not
entitled. This caused
a financial loss to the Applicant as it had to
pay too much to these employees;
25.4.
in respect of charge 3, the First Respondent also
knew exactly what the standard was that was required of him, namely
that he had
to ensure that the payroll returns were submitted
timeously and that the payments to SARS was made timeously. The
Applicant submitted
that the First Respondent waited until the last
day to attend to the aforesaid in the context of what happened on 29
October 2010
and was as such negligent. He was also negligent in that
he failed to enquire where Mr Ngebulana was and whether he would be
available
to sign the cheques on the last day, namely 5 November
2010;
25.5.
in respect of complaint no. 3, the late
preparation and submission of the payroll returns the Chairperson
found the First Respondent
guilty of gross negligence in this regard.
It is common cause that the First Respondent had to calculate the
UIF, SDL and PAYE
and had to ensure that this was paid to SARS by the
relevant companies. He also had to prepare the payroll tax returns to
be submitted
to SARS and had to do so timeously. The Applicant
submitted that the First Respondent waited until the last day, namely
5 November
to do the necessary calculations and only prepared the
payroll tax returns and the two cheques on 5 November for signature;
25.6.
in respect of complaint no. 2, the Respondent's
VAT calculations for Hemingways were incorrect. The Applicant alleges
that the First
Respondent was grossly negligent in that he completed
the VAT return for Hemingways without making provision for said
Company’s
bad debts and if the same had not been corrected by
management it would have resulted in overpayment of R644 830.79. It
is the
First Respondent's defence that Hemingways had no formal or
written Bad Debit Policy and that he was of the opinion that it would
be illegal to claim more bad debt. The Applicant argued that such
defence did not have merit;
25.7.
in respect of complaint no. 1, it was alleged by
the Applicant that the Respondent was grossly negligent in that he
failed to timeously
complete and submit VAT assessment returns for
the relevant subsidiary companies of the Applicant in respect of the
month of September
2010. These assessments were due by 29 October
2010. These returns were submitted late and with the result that SARS
imposed penalties
and interest on the respective subsidiaries of the
Applicant. Substantial evidence was led by Mr Lebelo in this regard.
Although
the First Respondents defence was that he was unable to
obtain the relevant information from representatives in East London
timeously
because of problems with his gmail address, it was common
cause that the returns in respect of the three subsidiary companies
were
submitted late and that SARS had to impose penalties and
interest. This was as a direct result of the First Respondent's
conduct.
25.8.
on the First Respondent's own version, he had not
even started with the preparation of the said VAT returns by midday
on 29 October
2010 and had not obtained the relevant information from
the Eastern Cape. The Applicant submitted that any reasonable
employee
in the position of the First Respondent would have foreseen
that something may happen on the last day which prevents VAT returns
from being prepared and/or filed.
[26]
From the aforesaid, it is therefore clear that the
nature of the charges against the First Respondent related to poor
performance
of his duties, that he was fully aware of the relevant
standard and that it was alleged by the Applicant that his conduct
fell
short of what a reasonable manager would have done in the
circumstances. To a certain degree, there is, therefore, a conflation
between the elements necessary to prove poor performance and
misconduct. It was, however, the Third Respondent's duty to properly
consider the nature of the evidence and charges and to weigh such
evidence and arrive at a reasonable conclusion as to whether
the
Applicant had been able to prove such charges on a balance of
probabilities. This, he failed to do.
The
relevant test for review
[27]
An arbitration award can be reviewed on the
grounds listed in section 145 of the LRA, i.e if there is a defect in
the award. Defect
means that the Commissioner:
27.1.
Committed a misconduct in relation to the duties
of the Commissioner;
27.2.
Committed a gross irregularity in the conduct of
the arbitration proceedings;
27.3.
Exceeded the Commissioner's powers; or
27.4.
The award was improperly obtained.
[28]
The main objective of a review is for the Labour
Court to determine whether a Commissioner had perpetrated some
irregularity that
has denied the other party a fair hearing. This may
be determined from the manner in which the hearing was conducted,
from the
manner in which the Commissioner approached the evidence or
from the conclusion the Commissioner drew from the evidence.
[29]
Generally, slight procedural irregularities or
minor errors of reasoning do not constitute grounds for review if
they did not materially
prejudice a party. Where, however, a
procedural misdirection or an error of reasoning denies a party a
fair hearing, the Court
is entitled to intervene.
[30]
The
starting point in determining the power of the Labour Court to
intervene is as stated above in the case of
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
.
[1]
According
to the Constitutional Court, the main objective of review is to
determine whether the Commissioner has perpetrated some
irregularity
that has denied either party a fair hearing. A review of a
Commissioner's decision is not an appeal. The test in the
Sidumo
matter
reduces the significance of an arbitrator's reasons because the
reviewing Court applying the test examines the result. There
is a low
threshold of interference set by
Sidumo
.
[31]
In one
of the most recent cases i.e
Herholdt
v Nedbank Limited
(
Congress
of South African Trade Unions as Amicus Curiae),
[2]
the
Supreme Court of Appeal held that the test is as follows:
‘
A review of CCMA
awards is permissible if a defect within the proceedings fall within
one of the grounds in Section 145(2)(a) of
the LRA. For a defect in
the conduct of the proceedings to amount to a gross irregularity as
contemplated by Section 145(2)(a)(ii)
the arbitrator must have
misconceived the nature of the inquiry or arrived at an unreasonable
result. The result will only be unreasonable
if it is one that a
reasonable arbitrator could not reach on all the material that was
before the arbitrator. Material errors of
fact, as well as the weight
and the relevance to be attached to particular facts, are not in and
of themselves sufficient for an
award to be set aside, but are only
of consequence if the effect is to render the outcome unreasonable.’
[32]
Where a Commissioner evaluated all the facts
presented at the hearing and came to a conclusion, the question is
whether that conclusion
is reasonable based on the evidence before
him. It needs to be considered whether the Commissioner's decision
falls within a band
in which reasonable Commissioners might
reasonably agree.
[33]
In
Malelane
Toyota v CCMA,
[3]
the
arbitrator also failed to understand that an arbitration is a
de
novo
hearing.
The arbitrator was preoccupied with the evidence presented during the
disciplinary inquiry and ignored the evidence presented
during the
arbitration proceedings. In this matter, the arbitrator failed to
determine whether the employee's dismissal was substantively
fair
based on the evidence presented during the arbitration hearing.
Mlambo, J stated the following:
‘
His preoccupation
with the internal disciplinary process, whilst understandable in
certain respects, was erroneous in regard to
the substantive fairness
of Ngwenya's dismissal. To determine the substantive fairness he had
to consider the evidence placed before
him which he did not.’
[4]
[34]
In
Goldfields
Mining SA (Pty) Ltd (Kloof Gold Mine) v CCMA and Others,
[5]
the
Labour Appeal Court, subsequent to the decision by the SCA and in
Herholdt
referred
to above, expressed itself as follows on the relevant review test
after
Sidumo
:
‘
A
review court must ascertain whether the arbitrator considered the
principal issue before him/her; evaluated the facts presented
at the
hearing and came to a conclusion which was reasonable to justify the
decisions he or she arrived at.
The
fact that an arbitrator committed a process-related irregularity is
not in itself a sufficient ground for interference by the
reviewing
court.
The fact that an arbitrator commits
a process-related irregularity does
not
mean that the decision reached is necessarily one that a reasonable
commissioner in the place of the arbitrator could not reach.
In a review conducted
under section 145(2)(a)(ii) of the LRA, the reviewing court is not
required to take into account every factor
individually, consider how
the arbitrator treated and dealt with each of these factors and then
determine whether a failure by
the arbitrator to deal with one or
some of the factors amounts to process related irregularity
sufficient to set aside the award.
This piecemeal approach to dealing
with the arbitrators award is improper as the reviewing court must
necessarily consider the
totality of the evidence and then decide
whether the decision made by the arbitrator is one that a reasonable
decision maker could
make.’
[35]
In
Goldfields,
the
LAC was satisfied that the Commissioner had misconceived the nature
of the enquiry. The Commissioner had confused the two forms
of
dismissal, namely, dismissal based on misconduct and that relating to
poor performance. By doing so, he committed a gross irregularity
in
the conduct of the proceedings. The next question was whether this
was enough in itself to nullify the award. The court found
that it
can only be the case if an error led the Commissioner to a conclusion
that could not have been arrived at by a reasonable
decision maker on
the evidence.
[36]
It is my view that the
dicta
in the
Herholdt,
Gold Fields
and
Malelane Toyota
decisions
above find application in the present matter based on the review
grounds submitted by the Applicant. It is clear that
the Third
Respondent having made a finding that the disciplinary proceedings
were procedurally unfair jumped to the conclusion
that this also led
to a fatally defective hearing and therefore substantive unfairness.
The two do not necessarily follow. The
Second Respondent as a result
of such misdirection failed to consider the relevant evidence as to
whether the Applicant was able
to prove on a balance of probability
whether the First Respondent was guilty of the six charges brought
against him. The Third
Applicant, therefore, misconceived the nature
of the inquiry and what was required of him in the circumstances. His
failure to
consider the relevant evidence relating to the five
charges makes his finding that there was substantive unfairness
unreasonable.
The finding by the Second Respondent that the
dismissals were substantively unfair is, therefore, reviewable and
stands to be set
aside.
[37]
The Applicant has requested that the matter is to
be referred back to another arbitrator for a fresh hearing. I am of
the view that
the evidence, as contained in the record, taking into
account the Applicant's version as well as that of the First
Respondent provides
a sufficient basis for this Court to supplant
such finding which makes it unnecessary to refer it back for a fresh
hearing. In
this regard, I am also guided by the fact that the fixed
term contract on which the First Respondent was appointed, was due to
terminate through an effluxion of time and as provided for in the
agreement by 31 January 2011. The First Respondent was dismissed
on
15 November 2010 and, as such, there was only a further two and a
half months left of his fixed term contract.
[38]
In view of the aforesaid, I find that there were
indeed substantive reasons for the Applicant to have formed the view
that the First
Respondent was not able to conduct his services as a
senior manager at the required level or standard as required in the
circumstances,
and that sufficient grounds existed for the
termination of his employment. It is also highly unlikely that in
such circumstances
the Applicant would have offered the First
Respondent a further fixed term contract or have extended such
contract. I, therefore,
find that the dismissal on 15 November 2010
was substantively fair.
The Second
Respondent's finding of procedural unfairness
[39]
The First Respondent held that the decision of the
chairperson to deny the First Respondent's legal representation was
ill-considered
taking into account the nature of the issues raised in
support of such application. The Applicant, in the heads of argument,
submitted
that in order for the Second Respondent to have determined
whether the chairperson's refusal to allow the First Respondent's
legal
representation for purposes of the investigation was
correct/fair, had to take the following facts and issues into
account:
39.1.
the First Respondent had no absolute right to be
legally represented during the investigation;
39.2.
the chairperson of the investigation had the
discretion whether to allow the First Respondent legal
representation;
39.3.
the Applicant's disciplinary code did not allow
for employees to be legally represented;
39.4.
the Applicant had verbally indicated to the
respondent that it wanted to keep the proceedings internal and, as
such, would only
allow the Respondent to be represented by his
sister;
39.5.
the nature of the complaints against the First
Respondent all related to his performance and the First Respondent
indicated that
he understood the complaints and that he will answer
questions about his performance;
39.6.
the degree of factual and legal complexity of the
complaints; the First Respondent's case was that they were not
factually or legally
complex;
39.7.
the potential seriousness of the consequences of
an adverse finding against the First Respondent;
39.8.
the fact that the applicant would be assisted
during the investigation by an attorney and whether the investigation
would be fair
if the employer was not allowed legal representation.
[40]
To a large extent, the representative of the First
Respondent agreed with the aforesaid legal position as set out by the
Applicant.
The First Respondent, however, argued that the Third
Respondent was conscious of the importance of legal representation
and applied
the legal principles correctly. According to the First
Respondent, the mere fact that the chairperson considered the issue
of legal
representation and declined the First Respondent the right
to be legally represented while the Applicant was represented by its
attorney, Dr Ebershon, speaks volumes.
[41]
It is
clear from the record and the findings of the chairperson of the
inquiry that she did not properly consider the factor of
the
comparative abilities of the representatives and/or parties at the
disciplinary proceedings and whether it would be fair
if the
First Respondent was not allowed legal representation but the
Applicant was allowed to be represented by Dr Ebershon. In
the matter
of
MEC:
Department of Finance, Economic Affairs and Tourism Northern Province
v Mahumani
,
[6]
the
SCA asserted that it will be required of the presiding officer to
apply his mind to the need for legal representation after
considering
the circumstances of the case. It is my view that on a full
conspectus of all the circumstances, it was indeed unfair
of the
chairperson not to allow legal representation, particularly where the
First Respondent had to continue to represent himself
in a matter
which did in fact contain quite complex factual issues. He was also
confused in his own mind as to whether it was indeed
a hearing
relating to misconduct or in relation to allegations of poor
performance. The unequal ability in dealing with such factual
and
legal issues was quite apparent in that Dr Ebershon, who is an
experienced legal representative, was allowed to represent the
Applicant's case and cross-examine the First Respondent who at the
same time had to keep his wits about him to represent himself
in such
hearing and to testify as well. From the record, it is clear that the
chairperson failed to properly consider such factor
and even allowed
Dr Ebershon, without any censure to, in a cynical, if not sarcastic
manner, reply to the First Respondent's legal
representative with a
"tata, bye bye" when he left after she had made the
decision not to allow legal representation.
[42]
In the circumstances, I find that the refusal to
allow legal representation in such circumstances constitutes
procedural unfairness.
The nature of the evidence led at the
arbitration proceedings where both parties were in fact represented
by legal representatives
speaks volumes in this regard. I am of the
view that the First Respondent was indeed at a distinct disadvantage
at the hearing.
The fact that he had to represent himself, lead
evidence and face the cross-examination of an experienced litigator
without the
assistance of his legal representative was prejudicial
and unfair.
The appropriate remedy
[43]
Section
193(1)(c) of the Labour Relations Act
[7]
provides
that an arbitrator appointed in terms of the Act who determines that
a dismissal is unfair, towards compensation. When
dealing with the
discretion, such as provided for in section 193(1)(c) of the LRA, the
Court must consider if the arbitrator properly
took into account all
the factors and circumstances in coming to his decision and the
decision arrived at is justified.
[44]
In
essence, therefore, a review of the discretion exercised in terms of
section 193(1)(c) of the LRA is essentially no different
to an appeal
because the reviewing court will be required to consider all the
facts and circumstances which the arbitrator had
before himself or
herself and then decide based on a proper evaluation of those facts
and circumstances whether or not the decision
was judicially a
correct one.
[8]
In
Kemp
t/a
Centralmed v Rawlings
,
Zondo, JP (as he then was) also held specifically in relation to the
exercise of the discretion under section 193(1)(c) of the
LRA that
the "ultimate question" that the arbitrator has to answer
in determining whether compensation should or should
not be granted
is which one of the two options would better meet the requirements of
fairness, having regard to the circumstances
of the case? The
reviewing court is required to evaluate all the facts and
circumstances that the arbitrator had before him or
her and then
decide, based on the underlying fairness to both the employer and
employee, whether the decision was judicially correct.
According to
the Court, the arbitrator passes a moral or value judgment on the
basis of the requirements of fairness and justice
and this is not the
normal reasonable review test that is to be applied.
[45]
The
aforesaid approach in the
Kemp
case
was also followed in
Kukard
v GKD Delkor (Pty) Limited
.
[9]
Having
found that the Third Respondent was indeed correct in having found
that there was procedural unfairness, I am of the view
that it is not
fair to refer the decision on the appropriate amount of compensation
to be awarded back to the Second Respondent
for a fresh hearing. I am
of the view that all the relevant facts and circumstances are
properly before this Court as contained
in the record and the issues
have also been appropriately addressed by the relevant legal
representatives in argument. The Respondent
had referred the dispute
to the Second Respondent in terms of which he challenged the
substantive and the procedural fairness of
his dismissal. In both the
First Respondent's referral to conciliation and in his referral to
arbitration, the relief that the
Respondent sought was to be paid out
for the remainder of his employment contract, The remainder of the
contract after 15 November
2010, being the dismissal date, is
therefore two and a half months' salary. The date on which the
employment contract would have
terminated was 31 January 2011. From
the record, it is also clear that the First Respondent's
representative also confirmed to
the arbitrator that the "fight"
between the parties was about two and a half months.
[46]
It is
furthermore trite that where an employee was employed in terms of a
fixed contract, an arbitrator cannot award more compensation
to the
employee who was unfairly dismissed than what the said employee would
have earned during the remainder of its employment.
[10]
In the
circumstances, I determine that the appropriate remedy in terms of
section 193(1)(c), where compensation is to be ordered
relating to
the unfairness of a dismissal based on the procedural defect, could
not have been more than two and a half months'
salary. The Third
Respondent erred in awarding four months of compensation and in any
event failed to take the aforesaid factors
into account.
[47]
In the premises, I make the following order:
47.1.
the dismissal of the First Respondent was
substantively fair;
47.2.
the dismissal of the First Respondent was,
procedurally unfair;
47.3.
the Applicant is ordered to pay the First
Respondent an amount equal to two and a half months' compensation,
calculated at the monthly
rate of R54 166.67 with interest calculated
at the prescribed rate from the date of the hearing of this matter
being 15 January
2015;
47.4.
no order as to costs is made.
____________
Olivier, AJ
Acting Judge of the
Labour Court of South Africa
Appearances
For
the Applicant:
Dr
Ebersohn
For
the Respondents:
Advocate Mphahlele
Instructed
by:
Tracy Sischy Attorneys
[1]
(2007)
281 ILJ 2405 (CC).
[2]
(2013)
34 ILJ 2795 (SCA) at para 25.
[3]
[2005] ZALC 8
;
(1999)
6 BLLR 555
(LC).
[4]
Ibid
at para 14.
[5]
[2007] ZALC 66
;
(2014)
1 BLLR 20
(LAC) at paras 16 - 18.
[6]
[2005]
2 BLLR 173
(SCA) at
para
15.
[7]
Act
No. 66 of 1996 (as amended) ("the LRA").
[8]
Kemp
t/a Centralmed v Rawlings
(2009)
30
ILJ
2677
(LAC).
[9]
[2015]
1 BLLR 63
(LAC) at para 31.
[10]
Tshongweni
v Ekurhuleni Metropolitan Municipality
(2012)
ILJ
2847
(LAC) at para 40.