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[2015] ZALCJHB 263
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MEC for the Department of Education, Mpumalanga Province v General Public Service Sectoral Bargaining Council and Others (JR2592/11) [2015] ZALCJHB 263 (14 August 2015)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case no: JR 2592/11
MEC
FOR THE DEPARTMENT OF EDUCATION, MPUMALANGA PROVINCE
Applicant
and
GENERAL
PUBLIC SERVICE SECTORAL BARGAINING COUNCIL
MARTIN
SAMBO
NO
PSA
obo XABA & SIHLANGU
First
Respondent
Second
Respondent
Third
Respondent
Delivered:
14 August 2015
JUDGMENT
TLHOTLHALEMAJE,
AJ
Introduction:
[1]
The
Applicant seeks to have an arbitration award issued under the
auspices of the First Respondent (GPSSBC) by the Second Respondent
(Arbitrator) under case number GPBC1640 dated 30 August 2011
reviewed, set aside and remitted back to the GPSSBC to be heard
afresh.
[2]
In
the award, the Arbitrator had found that the dismissal of the
employees (Xaba and Sihlangu) was substantively unfair and ordered
their reinstatement with back-pay in the amount of R115 515.00 and
R142 419.00 respectively. The application is opposed.
Background:
[3]
Xaba
and Sihlangu were employed as clerks in the applicant’s Human
Resources division. Sihlangu was a Principal Personnel
Officer. Xaba
was a Senior Administration Officer and had reported directly to
Sihlangu. Xaba’s duties entailed making adjustments
to
salaries, paying allowances, bonuses etc. Sihlangu’s role as
supervisor was to ensure that the process of making such
payments was
properly followed. Employees within the department get rewarded upon
obtaining further qualifications or certificates
such as Advanced
Certificate in Education. Such certificates however should be
captured on the applicant’s system to enable
payments to be
properly processed.
[4]
Xaba
and Sihlangu were dismissed in August and September 2009. Their
dismissal followed upon disciplinary enquiries into allegations
of
fraud dishonesty. The allegations were that that they had approved
the payment of a qualification for an Advanced Certificate
twice to a
certain AS Mahlangu in the amount of R11 791. 75 on 23 June 2008 and
again on 27 June 2008 in the amount of R26 209.50.
The payments were
made in circumstances where they were not due and without the
necessary supporting documents.
[5]
They
were also charged with fraud in that they had also approved a payment
in the amount of R18 250.00 on 9 January 2006 to a certain
KS Mnguni.
This amount was allegedly unduly paid without being reflected on the
Transaction Log sheet, and was made without the
support of the
necessary documents. The Applicant’s contention was that Xaba
and Sihlangu had deliberately and intentionally
paid Mnguni and
Mahlangu dishonestly, having approved such payments for a period
before these individuals had acquired the required
qualifications or
certificates.
The
arbitration proceedings:
[6]
An
alleged unfair dismissal dispute was referred to the GPSSBC and came
before the Arbitrator. Evidence was led on behalf of the
employer by
Mr Shika, its Chief Human Resource Officer to the effect that
Sihlangu reported to her. He had testified that Mahlangu
was paid
twice for obtaining an advanced certificate. These payments were
generated by Xaba and approved by Sihlangu. Further payments
were
made to Mnguni in circumstances where there was no
justification in the latter’s file in the form of a query form.
The transaction and payment were prepared and approved by the same
person, which was against established policies and procedures.
Shika
however testified that the payment was captured by Xaba and approved
by Sihlangu.
[7]
Under
cross-examination, Shika had further confirmed that it was possible
that more than one file could have been opened for one
employee, but
this was rare. He had further confirmed that the applicant had at
some point issued a letter noting errors in the
system. He conceded
that both Mahlangu and Mnguni were in the process of repaying the
amounts irregularly made to them and that
the applicant had not
suffered a loss as a result. He nevertheless emphasised that the
backdating of payment to Mahlangu could
not have been made
erroneously.
[8]
Sihlangu’s
evidence was essentially that it was possible to have more than one
file for one employee and she had raised that
as a concern. She had
nevertheless received instructions from Shika to open a new file in
the event that the original could not
be found. In this regard, she
testified that it was not impossible to make payment on a file that
did not contain all the necessary
documents.
[9]
She
had conceded having made a double backdated payment to Mahlangu, but
contended that this was done in error. She nevertheless
testified
that there was no intention to deceive the applicant and that she had
not gained any benefit from her actions. She had
further admitted
having approved the payments without the necessary query form.
[10]
Xaba’s
testimony was that there are about 9000 teachers employed by the
applicant and some had duplicate files. He conceded
having made two
payments to Mahlangu, but contended that the second payment was made
in error as it was meant for another person
with the same surname and
initials. His contention was that the first and second payments were
made in error. This was however
as a result of a variety of factors
including the bonus payment, which was in arrears in respect of
Mnguni, the fact that there
were incorrect calculations made, and an
underpayment which was due to Mnguni in the amount of R9263.65.
The
award:
[11]
The Arbitrator had established that the dismissal of Xaba and
Sihlangu was procedurally fair. He had however had regard to
Item 7
of Schedule 8 - Code of Good Practice as contained in the LRA and
found the dismissal to be substantively unfair on the
following
grounds;
(a)
Both
Xaba and Sihlangu admitted having made two payments to Mahlangu for
an advanced certificate, and also having made the payments
to Mnguni
in an amount of R18 250.00 without the necessary supporting
documents.
(b)
Despite
these concessions, there was no element of dishonesty or fraud in the
actions of Xaba and Sihlangu.
(c)
On
the evidence of Shika, there were instances where telephonic and
verbal queries could be made even if such had to be reduced
in
writing.
(d)
Shika
further confirmed that the calculations made in respect of Mnguni
could have been incorrect and had conceded that there was
an
underpayment made. Nevertheless even if some money was due to Mnguni
it was more the correctness of the calculation that should
have been
an issue.
(e)
In
respect of Mahlangu, the Arbitrator agreed with Shika that the back
payments were not made in error, and that there was no justification
by Sihlangu for not recalling what documents she had used to approve
the payment.
(f)
The
conduct of Xaba and Sihlangu was more negligent than fraudulent or
dishonest, and they had not therefore breached ‘
the
rules of dishonesty or fraud, but they were negligent in the
execution of their duties’
(g)
The
rules or standards applicable were reasonable as they were meant to
curb maladministration of public funds, and Xaba and Sihlangu
were
aware of these rules or ought to have been aware of them.
(h)
Since
there was no dishonesty or fraud on the part of Xaba and Sihlangu,
and further since their actions ‘bordered’
on
negligence even though this was not the charge, a sanction of
dismissal was unfair.
The
legal framework and evaluation:
[12]
The applicable test in review applications is whether the decision
reached by the commissioner is one that a reasonable decision-maker
could not have reached in relation to the material placed before him
or her
[1]
. It has also been held
that provided that the arbitrator gave the parties a full opportunity
to state their respective cases at
the hearing, identified the issue
that he or she was required to arbitrate, understood the nature of
the dispute and dealt with
its substantive merits, the function of
the reviewing court is limited to a determination whether the
arbitrator’s decision
is one that could not be reached by a
reasonable decision-maker on the available material
[2]
.
[13]
In further summarizing the review test and in reference to
Herholdt
v Nedbank Ltd (COSATU as amicus curiae)
[3]
,
the Labour Appeal Court (per Kathree-Setiloane AJA) in
Quest
Flexible Staffing Solutions (Pty) Ltd (a division of ADCORP
Fulfilment Services (Pty) Ltd) v Lebogate
[4]
held that;
“
The test that the Labour Court
is required to apply in a review of an arbitrator’s award is
this: “Is the decision reached
by the commissioner one that a
reasonable decision-maker could not reach?”. Our courts have
repeatedly stated that in order
to maintain the distinction between
review and appeal, an award of an arbitrator will only be set aside
if both the reasons and
the result are unreasonable. In determining
whether the result of an arbitrator’s award is unreasonable,
the Labour Court
must broadly evaluate the merits of the dispute and
consider whether, if the arbitrator’s reasoning is found to be
unreasonable,
the result is, nevertheless, capable of justification
for reasons other than those given by the arbitrator. The result
will, however,
be unreasonable if it is entirely disconnected with
the evidence, unsupported by any evidence and involves speculation by
the arbitrator”
(Citations omitted)
The grounds of review
and evaluation:
[14]
In this case, I did not understand it to be the applicant’s
case that arbitrator failed to give the parties a full opportunity
to
state their respective cases at the hearing, or that he failed to
identify the issue that he was required to arbitrate, or
misunderstood the nature of the dispute. Central to the applicant’s
grounds of review is that the Arbitrator failed to deal
with the
substantive merits of the dispute and thus arrived at an unreasonable
outcome.
[15]
The first ground of review raised by the applicant was that t
he
arbitrator ignored material evidence adduced by the applicant which
was calculated to prove that there was a valid reason for
the
dismissal. Submissions made on behalf of Xaba and Sihlangu on the
other hand were that the applicant had not pointed out what
‘material
evidence’ which was adduced by it was ignored by the
Arbitrator.
[16]
Recently in
Shoprite
Checkers v CCMA & others
[5]
,
Myburgh
AJ summarized the exposition of the review test as elucidated in
Head
of the Department of Education v Mofokeng
[6]
,
and in particular where it is alleged in review proceedings that a
Commissioner ignored some material facts. In this regard, it
was held
that;
“
This dictum in
Mofokeng
says many important things about the review test. But for present
purposes, consideration need only be given to the guidance that
it
provides for determining when the failure by a commissioner to
consider facts will be reviewable. The dictum provides for the
following mode of analysis:
a.
the first enquiry is whether
the facts ignored were material, which will be the case if a
consideration of them would (on the probabilities)
have caused the
commissioner to come to a different result;
b.
if this is established, the
(objectively wrong) result arrived at by the commissioner is
prima
facie
unreasonable;
c.
a second enquiry must then be
embarked upon – it being whether there exists a basis in the
evidence overall to displace the
prima
facie
case of
unreasonableness; and
d.
if the answer to this enquiry
is in the negative, then the award stands to be set aside on review
on the grounds of unreasonableness
(and
vice
versa
).
The shorthand for all of this is the
following: where a commissioner misdirects him or herself by ignoring
material facts, the award
will be reviewable if the distorting effect
of this misdirection was to render the result of the award
unreasonable”
[7]
.
[17]
The facts of this case are relatively common cause up to a certain
point. Sihlangu and Xaba had conceded that a double payment
which was
also backdated was made to Mahlangu. An irregular payment was equally
made to Mnguni. Their main defense was that this
was done in error.
It was further common cause that these payments were made and
approved without the necessary query forms and
other supporting
documents. Xaba’s other defense was that the error was
attributable to the fact there was another person
with same surname
and initials.
[18]
The issue before the Arbitrator in the light of these concessions and
common cause facts was which version was more probable.
This required
an analysis and evaluation of the probabilities and improbabilities
of each party’s version on the issue whether
there was
dishonesty and fraud or whether the payments were genuinely made in
error as alleged by Xaba and Sihlangu. It further
required a
formulation of these contending versions and their weighing up to
determine which one was the more probable.
[19]
The Arbitrator in my view failed in regard to these obligations, and
all that he came up with was that Xaba and Sihlangu did
not strike
him as ‘
none
credible witnesses’
[8]
(Sic). This credibility finding was made notwithstanding the
Arbitrator’s own conclusion that he agreed with Shika that the
back-dating of the payment was not made in error, or his further
conclusion that he had found no justification by Sihlangu as to
the
reason she could not recall what documents were used to approve the
back dated payments. Furthermore, the Arbitrator had accepted
the
payments were made without the necessary supporting documents.
[20]
In the light of these common cause facts, the concessions made and
the Arbitrator’s own conclusions, it was remarkable
that he
would nevertheless still conclude that
the
conduct of Xaba and Sihlangu was more negligent than fraudulent or
dishonest, and they had not therefore breached ‘
the
rules of dishonesty or fraud, but they were negligent in the
execution of their duties’
(Sic). He made no finding as to the probabilities of Xaba and
Sihlangu’s version that their conduct was attributable to an
error.
[21]
In
Nedcor
Bank Ltd v Frank and Others
[9]
,
the Labour Appeal Court (per Wallis JA) held that “
Dishonesty
entails a lack of integrity or straightforwardness and, in
particular, a willingness to steal, cheat, lie or act
fraudulently
”
[10]
.
The LAC further held that the term implied intention on the part of
an employee. Negligence cannot give rise to a charge of dishonesty.
[22]
An error ordinarily refers to a mistake or miscalculation. Negligence
on the other hand refers to a failure to adhere or to
act in
accordance with a set standard of care. In general terms, an employee
is negligent if his or her conduct deviates from the
conduct that a
reasonable person would have adopted in the same or similar set of
circumstances. Negligence ordinarily does not
require willfulness or
intent.
[23]
Once it was established that an act occurred in unjustifiable
circumstances and was not as a result of an error as in this
case,
such an act could not therefore be attributable to negligence, more
particularly in circumstances where this was not Xaba
and Sihlangu’s
case at the arbitration proceedings or in the internal disciplinary
enquiry. The Arbitrator’s conclusion
that the acts of Xaba and
Sihlangu were due to mere negligence is unsupported by evidence, and
was thus based on mere conjecture.
[24]
Crucial in determining whether there was an element of dishonesty or
fraud in this case was the fact that before the arbitrator,
it was
common cause that employees within the department use unique and
personal persal numbers for the purposes of making payments.
Even if
there were two individuals sharing the same initials and surname, the
unique persal number was used to distinguish between
those
individuals, and thus to prevent margins of error. The Arbitrator
again ignored this factor.
[25]
Where a payment, which was not due was made and approved without the
necessary documentation, not once, but twice, and also
in
circumstances where payments could only be effected in accordance
with the persal system, there cannot be talk of error or negligence.
All these factors point to intent, and the Arbitrator chose to
completely ignore them. The facts ignored by the Arbitrator including
his own conclusions on the facts were indeed material, and had he
properly considered them, he would have on a balance of
probabilities,
concluded that there was indeed dishonesty.
[26]
There is therefore no merit in the submissions made on behalf of Xaba
and Sihlangu that there was a clear explanation as to
the reasons the
payments were made, or that those reasons were not contested by the
applicant. Of significance is that the Arbitrator
considered these
explanations and rejected them
albeit
for different reasons.
[27]
A further ground of review raised was that the arbitrator had
misdirected himself as regards the issues before him as a result
of
which he made an award which in the circumstances was unreasonable.
Submissions made on behalf of Xaba and Sihlangu in this
regard were
that the applicant failed to mention the specific issues that the
Arbitrator allegedly misdirected himself with.
[28]
Central in the provisions of section 188 of the LRA
[11]
is that an Arbitrator is required to determine whether the
reason
for a dismissal was fair, and this requires the Arbitrator to apply
his or her mind fully to the issues before him and to consider
whether the reason for the dismissal of Xaba and Sihlangu related to
dishonesty and fraud was fair. It has already been concluded
elsewhere in this judgment that the Arbitrator failed in this regard
by completely ignoring or disregarding his own conclusions
and common
cause facts. In the light of the conclusions already reached, more
particularly in regards to the material ignored,
the Arbitrator
misdirected himself in respect of this particular enquiry, especially
in the light of the unreasonable conclusions
reached in regards to
the issue of negligence, which was clearly not an issue before him.
[29]
Having evaluated the merits of the dispute, the common cause facts,
the concessions made by Xaba and Sihlangu and the conclusions
reached, I am satisfied that the facts ignored by the Arbitrator were
indeed material, and had they been properly considered, the
Arbitrator would have on a balance of probabilities, arrived at a
different result. To the extent that the Arbitrator misdirected
himself in ignoring such evidence, the award is reviewable as the
distorting effect of this misdirection rendered the result of
the
award unreasonable. The Arbitrator’s reasoning in the light of
the material before him was unreasonable and the result
cannot be
justified. In these circumstances, it is concluded that the award
should be reviewed and set aside, as the decision reached
is one that
a reasonable decision-maker could not have reached in relation to the
material that was placed before him.
[30]
The applicant in accordance with its Notice of Motion sought that the
matter be remitted back to the GPSSBC for a fresh hearing
before
another arbitrator. In the light of conclusions reached in respect of
the approach adopted by the Arbitrator, I am satisfied
that fairness
dictates that this matter be remitted back to be heard afresh.
Furthermore, there is no basis in law or fairness
for any cost order
to be made.
Order:
i.
The
arbitration award, issued by the Second Respondent under case number
GPBC1640 dated 30 August 2011is reviewed and set aside.
ii.
The
matter is remitted back to the First Respondent to be heard
de
novo
before an Arbitrator other than the Second Respondent
iii.
There
is no order as to costs.
________________
Tlhotlhalemaje, AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES:
On
behalf of the Applicant:
Mr JM Matladi of the
State Attorney
On
behalf of the Respondent:
Adv GS Maritz
Instructed
by:
M Wentzel attorneys
[1]
Sidumo and
another v Rustenburg Platinum Mines Ltd and Others
[2007] 12 BLLR 1097
(CC) at para [110]
[2]
See
Goldfields
Mining South Africa (Pty) Ltd v CCMA
(2014) 35 ILJ 943 (LAC) at para [20]. See also
South
African Medical Association obo Mabuza and Others v Commissioner
Moletsane and Others
(JR834/12) [2014] ZALCJHB 66 (14 March 2014) at para [8]
[3]
[2012] 11 BLLR
1074
(SCA) at paras [12] and [13]
[4]
[2015] 2 BLLR 105
(LAC) at para [12]
[5]
Case no: JR2471/13
(Delivered on 31 July 2015)
[6]
[2015] 1 BLLR 50
(LAC)
[7]
At paras [9] to
[10]
[8]
Page 6 of the
award (page 27 of the indexed bundle)
[9]
(2002) 23 ILJ 1243
(LAC)
[10]
At para [15] See
also John Grogan: Dismissal. (Juta) at p188
[11]
“
(1)
A dismissal that is not automatically unfair, is unfair if the
employer fails to prove-
(a)
that the reason for dismissal is a fair reason-
i
related to the employee’s conduct
(2)
Any person considering whether or not the reason for dismissal is a
fair reason
or whether or not the dismissal was effected in
accordance with a fair procedure must take into account any relevant
code of
good practice issued in terms of this Act”