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[2015] ZALCJHB 281
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Rand Water v Mhlanga and Others (JR975/13) [2015] ZALCJHB 281 (4 September 2015)
REPUBLIC
OF SOUTH AFRICA
Of
interest to other judges
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
C
ase
no: JR 975/13
In
the matter between:
RAND WATER
Applicant
and
J K MHLANGA
First Respondent
SAMWU
Second Respondent
FATEMA sHAIKH
(
N.O.
)
Third Respondent
COMMISSION FOR
CONCILIATION, MEDIATION AND ARBITRATION
Fourth Respondent
Delivered
:
04 September 2015
Summary:
(Review –
unreasonableness)
JUDGMENT
LAGRANGE
J
Introduction
[1]
This is an application to review and set
aside an arbitration award in which the arbitrator found that the
applicant’s dismissal
was substantively unfair and ordered his
reinstatement with a limited back pay.
[2]
The first respondent, Mr J K Mhlanga
(‘Mhlanga’) had been employed by the applicant as a
mechanics foreman since April
1996 and was dismissed in December
2012. He had been found guilty of a number of charges which need to
be itemised for the sake
of clarity. The charges against him were
that:
“
1.
Schedule B, clause 1.8 offence as per Rand water is disciplinary code
and grievance for deliberately giving untrue erroneous
or misleading
information or testimony whether verbal or in writing
(a)
You took a valuable Rand water assets to a supplier without
following
the required processes and lied that procurement was involved during
this process.
(d)
You handed three quotations to Rand water for the installation
of a
sampling point at K1 (Zuurbekom) Well #8 and you misled Rand water
that three suppliers attended a site meeting.
2. Schedule A, 1.8
offence “Failure to observe company policies and procedures”
(a)
You failed to complete an advice note for the removal of the
following items i.e: Hydraulic Jacks (7), generator (1), grinders
(2), and an impact wrench (1).
(b)
You failed to provide the advice note of the above items
to
procurement section to enable them to source suppliers to quote on
these items.
(c)
You failed to send the faulty equipment i.e: Hydraulic
Jacks (7),
generator (1), grinders (2), and an impact wrench (1) to the
Electrical Section for repairs.
(d)
You submitted three quotations for the installation of a sampling
point at Zuurbekom Well #8 to the procurement section without
involving the buyers in this process.
3. Schedule B, 1.18
offence, any deliberate act which causes real or potential prejudice
to the employer.
(a)
You allowed a supplier (DNM Mining and Industrial Supplies)
to remove
Rand Water property from the site without ensuring that the supplier
completes and signs the required documentation for
the equipment to
be removed.
4. Schedule B, 1.20
offence serious transgression of Rand water code of ethics b)
Corporate Assets (5.8)
Clause 5.8.3
Employees shall not use
Rand water assets, equipment and property in an improper manner or
for the purpose other than the conduct
of Rand water business.
You instructed your staff
on various occasions to transport you with Rand water’s vehicle
for your own private business.”
The
arbitrator’s findings and grounds of review
[3]
Essentially,
the review is one based on unreasonableness and relates to the
arbitrator’s finding on certain of the offences
Mhlanga was
charged with, but which she acquitted him of. The applicant also
takes issue with the arbitrator’s finding that
it suffered no
prejudice as a result of Mhlanga permitting goods to be removed
irregularly and her finding on the appropriate sanction.
Much of the
criticism is based on an alleged failure of the applicant to take
account of various evidence. It is now well established
that a mere
omission to take account of relevant evidence is not a self-standing
ground of review: it must also result in the outcome
being an
unreasonable one.
[1]
It must be
said that some of the alleged omissions mentioned by the applicant
are not omissions at all because the arbitrator clearly
mentions the
evidence in question in the course of her analysis. Nonetheless, the
issue remains whether on a holistic consideration
of all the evidence
before her, irrespective of whether she specifically mentions all of
it or not
[2]
, the outcome is one
that no reasonable arbitrator could reach. For the sake of
contextualising the matter and looking at it holistically
which is
useful to set out all the arbitrator’s findings. The arbitrator
dealt with each charge in turn, and her findings
are summarised
below. In the course of the summary, the grounds of review for
setting aside certain of those findings are considered.
Charge
1 (a)-
[4]
The arbitrator accepted that the items in
question had been sent to the supplier, (‘DMH’). She also
implicitly accepted
that the items should only have been removed for
repairs using an advice note on which the details of each item being
removed and
the name of the supplier removing them would appear.
Further, it was undisputed that the document used to remove the items
was
a gate pass, which was normally used for the removal of items
from the premises for the purpose of performing work. Mhlanga had
instructed his assistant, Mr D Msebenzi (‘Msebenzi’) to
take the items to the supplier for repair and had assumed he
would
comply with the necessary formalities. The arbitrator found that this
was merely an administrative defect and the applicant
had not
suffered any prejudice as a result of the wrong procedure being used.
In relation to the question whether Mhlanga had lied
about
procurement being involved in the process which led to the items on
leaving the premises, the arbitrator found that there
was no evidence
of any substance to support the charge or to contradict his own
evidence that he had never lied because he gave
instructions for the
items to be sent to DMH.
[5]
The applicant contends that the arbitrator
completely overlooked Mhlanga’s responsibility for what
happened and that he could
not absolve himself from responsibility
that the proper procedure was not followed because he gave the
instruction to a subordinate.
The applicant further contends that
there was no basis for the arbitrator to conclude that no prejudice
resulted from the wrong
procedure being used because there was the
undisputed evidence of the forensic investigator Mr S Mogorosi
(‘Mogorosi’)
that the tools, which had been irregularly
removed, had been discovered in a stripped and unusable state in a
bottle store.
[6]
Although it was put to Mhlanga that he had
the responsibility for performing his duties, his defence that he had
believed his subordinate
would follow the correct procedures in
taking the equipment to the supplier for repair was not seriously
challenged, and he had
not been charged with an alternative charge of
negligent supervision or something similar. There was also evidence
that Msebenzi
had the necessary level of authority to authorise goods
to leave the premises. Further the evidence of what was set out on
the
gate pass did not differ markedly from the details that would
have been included in the advice note and in that sense it was not
unreasonable of the arbitrator to conclude that no prejudice had
resulted from the use of a different form. Similarly, the fact
that
the grievance might have ended up in a state of greater disrepair
rather than being repaired does not seem to follow from
the use of
the wrong form, but more probably the competence of the supplier that
was supposed to repair them. It might be argued
that the arbitrator
focused overmuch on the question of the appropriate form and whether
the supplier could be identified from
the gate pass form, when the
bigger issue was whether there had been a proper requisitioning of
the repairs, but this was not a
prominent feature of the evidence.
[7]
In the circumstances, I do not think that
the arbitrator’s findings on this charge are ones that no
reasonable arbitrator
could reach.
Charge
1 (d)-
[8]
The arbitrator found that there was
conflicting evidence on whether Mhlanga had misled the applicant that
three suppliers had attended
a site meeting, when the evidence showed
that only one supplier’s representative from Nguko Construction
(Pty) Ltd had attended
the site on 30 August 2011. Mogorosi had
testified that Mhlanga had indicated to him that three suppliers had
attended the site
meeting on 30 August 2011 but had been
uncooperative when he attempted to meet with him to get further
information. It was common
cause that a site meeting was only
supposed to take place with the involvement of Ms M Mochane, the
procurement buyer (‘Mochane’).
Mhlanga denied
misrepresenting who had attended the meeting. He claimed that
convening a meeting at the site was something for
the buyer to do and
that he had never said there was a site meeting. The arbitrator found
that both Mogorosi’s and Mhlanga’s
versions were
credible, but in the absence of Mogorosi’s version being
corroborated she could not find Mhlanga guilty of
misleading the
applicant about who had attended the meeting.
[9]
The arbitrator treated the evidence of
Mogorosi and Mhlanga as equivalent in value even though Mogorosi was
not challenged under
cross-examination about his testimony that
Mhlanga refused to cooperate with him when he wanted to investigate
the question of
the site meeting and the three quotations further
with him. However, the respondents are correct when they point out
that Mochane
did not say in her evidence that Mhlanga had lied to her
about a site meeting having taken place and Mogorosi’s claims
about
Mhlanga having lied about the site meeting were largely based
on his interpretation of what Mochane had told him. In the
circumstances,
even though the only reasonable conclusion to draw
from the uncontested evidence of Mogorosi is that Mhlanga was
avoiding his attempts
to get information about the process leading to
the award of work at Zuurbekom, that does not mean that Mhlanga had
necessarily
misrepresented whether a site meeting had taken place or
not. His evasive conduct in that regard might have been for other
reasons.
[10]
On the evidence, even though another
arbitrator might have come to a different conclusion on the same
evidence, it cannot be said
that the finding is one that no
reasonable arbitrator could have reached.
Charge
2 (a)-
[11]
The arbitrator accepted that Mhlanga had
delegated the task of sending the items to DMH to his assistant,
Msebenzi, and that completing
an advice note for this purpose was
within the competence of Msebenzi, as testified by Mochane.
[12]
The applicant’s criticism of this
finding is essentially covered in the discussion under Charge 1 (a)
above and consequently
I am satisfied there is no reason to disturb
the arbitrator’s finding on this charge on grounds of
irrationality.
Charge
2 (b)-
[13]
On this charge, the arbitrator accepted
that if Mhlanga had followed the proper procedure then the
procurement section would have
been involved in items being sent to a
supplier to quote on the items even if it would still have meant that
a gate pass was still
incorrectly used to remove the items from the
premises. The arbitrator consequently accepted that Mhlanga was
guilty of this charge.
Although Mhlanga did not seek to cross review
the award, it was argued at the hearing contended that it was
illogical of
the arbitrator to acquit him of Charge 2 (a), but to
find him guilty of charges 2(b) and (c). However, paradoxical though
it is,
in the absence of these claims been raised in a cross review,
the arbitrator’s findings on those charges must stand.
Charge
2(c)-
[14]
The arbitrator found that even if Mhlanga
had obtained his manager’ s permission to send the equipment to
DMH, as he claimed, he ought to have
followed the normal procedure which meant that the equipment would
first be sent to the Electrical
Department and, if they could not
repair it, a suitable contractor would be sourced by the buyer. She
also found that the appointment
of DMH as the supplier was
arbitrarily done by Mhlanga which did not follow a procedure to
ensure that the selection of the supplier
was fair and transparent.
As a result, she found Mhlanga was guilty of this charge as well.
Charge
2 (d)-
[15]
The crux of this charge was that Mhlanga
had not involved the buyers in the process which led to the award of
a contract to Nguka
Construction. The arbitrator concluded that she
could not say that either the evidence of Mr V Smith, the District
Superintendent
at Rand Water, Zuurbekom (‘Smith’) or that
of Mhlanga as to what constituted an emergency work could be
construed as
‘incorrect interpretations’ of the term
‘emergency’ in the absence of a ‘policy definition’
thereof. Consequently, she could not find that the situation which
led Mhlanga to bypass normal procurement procedures did not
qualify
as an emergency situation which justified such a measure.
[16]
The applicant complains that she
unreasonably reached this conclusion despite also finding that the
time lapse between the site
visit by the sole supplier on 30 August
2011 and the creation of the purchase order some 20 days later and
nearly two weeks after
the quotation date indicated that “the
situation at Zuurbekom may not have been an emergency”.
Further, the applicant
complains that the arbitrator ignored the fact
that there was evidence of the procedures that had to be followed
even if the work
in question was emergency work. The respondents
retort that Mhlanga testified that he had approval to go directly to
the suppliers
irrespective of whether there was an emergency
procedure. They also contended that there would be no reason for him
to mislead
the procurement Department about the existence of a site
meeting because the site meeting would have been convened by
procurement,
though it was never suggested to Mogorosi when he
testified about the procedure for procuring emergency work that such
a site meeting
with all concerned parties was not necessary.
[17]
Quite apart from not attempting to
reconcile the apparent lack of urgency in procuring the services of
the supplier to install the
sampling point, the arbitrator strangely
makes no mention of the evidence of Mogorosi about the procedures for
emergency situations
nor about Mhlanga’s version about the
source of his authority to choose a supplier himself.
[18]
What the procedure clearly showed,
amongst other things, that the adjudication of which supplier will be
selected is a matter
to be done
jointly
with the buyer and the person
requesting the service, viz:
“
6.10.1.
(d) The requester and
buyer can then source the market and adjudicate upon the service
provider and then request goods/services
with the selected service
provider.”
[19]
Mhlanga’s first version of the source
of his authority to appoint a supplier was put to Mogorosi as
originating in the emergency
requisition procedure mentioned above.
It is true that procedure requires management approval to initiate
the requisitioning process,
but as the Clause cited above shows,
approval of a supplier did not lie in the hands of the requester,
which in this case was Mhlanga.
All that was put to Smith when he was
cross-examined was that it needed senior management’s sanction
to classify a job as
emergency work. Mhlanga’s own testimony
was that he had obtained the approval of the section manager for the
requisition
on the basis that it was an emergency and then gave the
buyer the purchase requisition number. He then claimed to have
solicited
quotations based on business cards he had. Even on a narrow
view of the charge, there was no evidence that the selection was done
jointly with the buyer and it is hard to understand how the
arbitrator could have avoided finding Mhlanga guilty of the charge
if
she had read the provision cited above herself when witnesses were
referred to it. It is interesting to note in this regard
that on each
occasion when Mhlanga’s representative read out the provision,
he read it in such a way that the buyer was not
mentioned in the
clause.
[20]
In any event, it seems that having got
caught up with the question about whether the Zuurbekom work truly
constituted emergency
work she forgot that this was merely a
preliminary question to be determined before deciding whether he
ought to have nonetheless
involved the buyer in the procurement
process. The arbitrator also did not pay any attention to the
evidence that the work on the
Zuurbekom site had already started on 9
September before the purchase order had been created nearly two weeks
later, and only two
days after the three quotations were issued on 7
September, which suggest that there was something amiss about the
appointment
process. Given also the undisputed evidence of Mogorosi
that all three of the quotes obtained emanated from businesses
controlled
by the same person, it is hard to understand why the
arbitrator did not see the need to scrutinise compliance with the
procedures
especially in relation to the complaint underlying the
charge, which was about the failure to engage with the buyer to the
extent
required by the procedure.
[21]
Had the arbitrator dealt with all the
evidence and completed the enquiry about whether Mhlanga had taken
control of the appointment
process himself, without the prescribed
involvement of the buyer, it is difficult to see how she could have
escaped the conclusion
that Msebenzi had not complied with the
procedure for requisitioning emergency work, even if it is assumed in
his favour that it
had been classified as such. She would have been
hard pressed to avoid the conclusion that he was guilty of charge 2
(d) as well.
Charge
3 (a)-
[22]
The arbitrator concluded that because the
gate pass clearly showed that DMH had signed and completed the
document, the fact that
it was not an advice note was an
administrative defect and did not result in any prejudice to Rand
Water. Mogorosi had testified
that if the advice note was not
completed, the assets could be removed without the applicant’s
knowledge and they would not
be able to trace them.
[23]
The applicant argues that by making direct
arrangements to send the tools to a supplier, Mhlanga was able to
bypass the normal procedures
for requisitioning repairs which Mr P
Coertzen , the applicant’s Electrical Foreman in Bulk Water
Distribution, had testified
to. Although the applicant may well be
right about this, it does not relate directly to the charge as it was
framed and I cannot
see how this reveals that the finding is flawed
for being irrational.
Charge
4-
[24]
The arbitrator found that in the absence of
evidence from Mhlanga’s supervisor, Mr C Dintwe, contradicting
Mhlanga’s
own evidence that he had only instructed the driver
to take him to see the doctor with his supervisor’ s
permission, she
could not attach much weight to the evidence of
Mogorosi. Mogorosi had testified that Mhlanga had given instructions
to his subordinates
to transport him for his own personal business
without the knowledge of management.
[25]
Although there was hearsay evidence given
by Mogorosi and that management had not given Mhlanga permission to
use the applicant’s
vehicles for his own private business, that
hearsay evidence was never corroborated. In the circumstances, I do
not think the arbitrator
can be blamed for not attaching probative
weight to it.
Sanction
[26]
In considering the appropriate sanction,
the arbitrator noted that both charges 2b and 2c were categorised as
Schedule A offences,
amounting to a failure to observe company
policies and procedures. In terms of the company’s own
disciplinary code and grievance
procedure, an employee guilty of such
an offence may be formally counselled or issued with a warning. In
the circumstances, she
held that committing a “Schedule A
offence is not necessarily appropriate.” She further accepted
that Mhlanga held
a position of trust but there was no indication
that continuing the employment relationship would be intolerable and
accordingly
dismissal was not appropriate as a sanction. For the same
reason, there was no bar to reinstatement as a remedy.
[27]
In essence, the applicant contends that the
arbitrator simply failed to consider that the evidence tendered by
the applicant that
Mhlanga could no longer be trusted and that he
knew and accepted the company’s code of ethics and the
consequences of breaching
that code. I agree with the respondent that
the first question to be determined is whether the dismissal as a
sanction was warranted
in relation to the misconduct Mhlanga was
found guilty of. The arbitrator had only found Mhlanga guilty of
charges 2 (b) and (c)
which arguably were not serious enough to
warrant dismissal on their own.
[28]
However, as the outcome of this review
application has the effect of the arbitrator’s finding in
respect of charge 2(d) being
set aside and substituted with a finding
that Mhlanga was guilty of the charge as well, the appropriate
sanction will necessarily
have to be revisited. In reconsidering the
appropriate sanction, a worrying aspect of the three charges which
Mhlanga was guilty
of is that they entailed the short-circuiting of
established procurement procedures and effectively meant that Mhlanga
alone determined
which supplier would be used. Clearly, this type of
conduct lends itself to the development of corrupt practices, whether
that
occurred in Mhlanga’s case or not. The fact that there was
evidence that the two of the quotations for the Zuurbekom job appear
to have been contrived and given that Mhlanga claimed he selected the
potential suppliers for that work himself would naturally
be a cause
of great concern to an employer who entrusts him with significant
responsibilities in the procurement process by virtue
of his
position.
[29]
Mhlanga was a senior employee managing a
budget of R 6 million and a staff of approximately 70. It is true
that Mhlanga had a clean
disciplinary history and long service, but
on the other hand he occupied a responsible senior position in which
the employer ought
to have had no concerns that it needs to keep a
constant eye on his activities, because he cannot be relied upon to
follow standing
operating procedures which provide built-in
safeguards to ensure the integrity of procurement processes.
[30]
In the circumstances, Mhlanga’s
dismissal was appropriate.
Order
[31]
The finding of the third respondent that
the first respondent was not guilty on charge 2 (d) is reviewed and
set aside, and substituted
with a finding that he was guilty of that
charge.
[32]
The third respondent’s findings in
respect of all other charges remain undisturbed.
[33]
The third respondent’s finding that
the first respondent’s dismissal was substantively unfair is
set aside and substituted
with a finding that his dismissal was
substantively fair.
[34]
No order is made as to costs
_______________________
Lagrange J
Judge
of the Labour Court of South Africa
For
the Applicant: KCaddy
For:
Cliffe Dekker Hofmeyr
For
the Respondents: Adv. V.D. Riet, SC
Instructed
by: KD Maimane Attorneys
[1]
See
Herholdt
v Nedbank Ltd (Congress of SA Trade Unions as Amicus Curiae)
(2013) 34
ILJ
2795 (SCA
)
at 2806, para [25], viz:
“
Material
errors of fact, as well as the weight and 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 any consequence if their
effect is to render the outcome unreasonable.”
[2]
See
Gold
Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v Commission for
Conciliation, Mediation & Arbitration & others
(2014)
35
ILJ
943 (LAC)
at
950, viz:
“
[21]
Where the arbitrator fails to have regard to the material facts it
is likely that he or she will fail to arrive at a reasonable
decision. Where the arbitrator fails to follow proper process he or
she may produce an unreasonable outcome (see
Minister of Health &
another NO v New Clicks SA (Pty) Ltd & others
2006 (2) SA
311
(CC)). But again, this E is considered on the totality of the
evidence not on a fragmented, piecemeal analysis. As soon as it is
done in a piecemeal fashion, the evaluation of the decision arrived
at by the arbitrator assumes the form of an appeal. A fragmented
analysis rather than a broad based evaluation of the totality of the
evidence defeats review as a process. F It follows that
the argument
that the failure to have regard to material facts
may potentially
result in a wrong decision has no place in review applications.
Failure to have regard to material facts must actually defeat
the
constitutional imperative that the award must be rational and
reasonable — there is no room for conjecture and guesswork.”