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[2015] ZALCJHB 440
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Imperial Motor Holdings (Pty) Ltd t/a Mercedes Benz Commercial: East Rand v Moletsane NO and Others (JR3251/2009) [2015] ZALCJHB 440 (18 December 2015)
IN
THE LABOUR COURT OF SOUTH AFRICA JOHANNESBURG
Not
Reportable
Case
no: JR 3251/2009
In the
matter between:
IMPERIAL
MOTOR HOLDINGS (PTY) LTD t/a
MERCEDES
BENZ COMMERCIAL: EAST RAND
Applicant
and
MOLETSANE,
RUSSEL
N.O
. (cited in his capacity
as
Arbitrator of the Motor Industry Bargaining Council)
First Respondent
THE
MOTOR INDUSTRY BARGAINING COUNCIL
(Dispute
Resolution Centre)
Second
Respondent
MTSHALI,
VELAPHI AMOS
Third Respondent
Heard:
01 July 2014
Delivered:
18 December 2015
Summary:
Review application granted.
JUDGMENT
WATT-PRINGLE
AJ
[1]
This is an application to review and set
aside an arbitration award handed down by the first respondent (“
the
Commissioner
”) on 13 November
2009. The award concerns the dismissal of the third respondent
(“
the employee
”)
by the applicant (“
the company
”)
on 18 June 2008.
[2]
The employee was employed by the company on
1 February 2000. At the time of his dismissal he was a parts salesman
and his duties
included the sale of motor vehicle spare parts to
customers of the company. The substantive reason for the employee’s
dismissal
was gross dishonesty relating to a certain invoice number
34389, referred to in some detail below.
[3]
The relevant background to the employee’s
dismissal can be summarised as follows.
[4]
One of the customers of the company dealt
with by the employee was an entity known as Barotse Trading
(“
Barotse
”),
based in Kwa-Zulu Natal. Barotse was in the business of exporting
spare parts for trucks to clients situated in neighbouring
countries.
Barotse never took possession of the parts which it had purchased as
the arrangement was that an external courier company
engaged by
Barotse collected the spare parts and delivered them directly to
Barotse’s clients.
[5]
Orders for Barotse were generated and
processed as follows. The proprietor of Barotse, one Lester Davidoss,
would request a quotation
for spare parts by email. The quotation was
prepared in the company’s warehouse and despatched to Barotse.
If Barotse accepted
the quotation, an order was placed and an invoice
generated by a parts salesman. The employee was a salesman who dealt
with Barotse.
After Barotse had paid via electronic fund transfer
(EFT) Barotse would instruct the courier company to collect the
order, as referred
to above.
[6]
The thrust of the complaint against the
employee was that he was responsible for (or at least complicit in) a
fraudulent transaction
involving a loss to the company of R13 978.75.
The evidence establishes the following in relation to the alleged
fraud.
[7]
On 28 February 2008 an order was placed by
Barotse for spare parts to the total value of R44 343.25.
Included in this invoice
were two air filters which accounted for a
total of R13 978.75 of the total invoice amount. Barotse duly
paid the full amount
of the invoice and the parts reflected therein
were collected from the company in the usual manner.
[8]
The employee on 14 May 2008 generated what
is known as a WIP account under number 43489. This a necessary step
prior to providing
prices or quotations, generating invoices and
dispatching stock. The WIP account in question was opened in respect
of three sets
of parts, namely a crank shaft, three injector nozzles
and a set of bearings. Barotse was the customer identified in the WIP
account.
The screen shot of the entry (minus the crankshaft, which
had been removed before the screenshot was taken) shows the bearing
was
priced at R1 257.20. The correct price was in fact
R1 268.80. The relevance of this will appear below.
[9]
Later on 14 May 2008, at 16h58, the
employee generated a written estimate for the crank shaft in the same
WIP account. There are
a number of relevant factors arising from this
conduct.
9.1
The first was that Barotse had not as per
its usual procedure requested a quotation in respect of any of the
parts recorded in WIP
43489. This raises the question as to why the
employee raised this quotation at all, a question to which he failed
to provide an
answer.
9.2
The second is that the quotation which was
generated was in respect of a “
Sprinter
”
taxi and this does not fall within the range of parts purchased and
sold by Barotse, which deals exclusively in truck parts.
9.3
The third is that this quotation was never
in fact sent to Barotse.
9.4
The fourth is that this conduct was an
initial step in relation to a transaction which on the employee’s
version, was only
initiated on behalf of Barotse on 21 May 2008.
[10]
The company’s system shows that the
employee accessed the WIP 43489 account on several occasions between
14 and 21 May 2008.
His purpose in doing so on so many occasions was
never explained. This is significant in view of the fact that his
activity on
this WIP account most closely connects him to the fraud
which was undoubtedly committed.
[11]
On 16 May 2011 an employee in the
warehouse, whose identity was not established, passed a credit note
for R13 978.75 on the
Barotse account for the two air filters
sold to Barotse on 28 February 2008 and subsequently collected on
Barotse’s behalf,
as referred to above. It was subsequently
established that the parts in respect of which the credit was given
were not returned
to the company’s warehouse.
[12]
At 16h48 on 21 May 2008 the employee
generated a tax invoice on WIP 43489 for the three injector nozzles
and one bearing referred
to above. Significantly, the bearing is
however again reflected as R1257.20 instead of R1 268.80. The
result of this error
is that the total invoice precisely matches the
amount of the credit note in Barotse’s favour of R13 978.75.
This appears
calculated to ensure that Barotse never became aware of
the credit note, as inevitably it would have done had there been an
amount
standing to its credit. It also facilitated the “
purchase
”
of the items on the tax invoice without any further payment having to
be made.
[13]
The parts reflected in the aforementioned
invoice of 21 May 2008 were collected on the same day allegedly by a
courier company representing
Barotse. It is common cause that the
person who dealt with the “
courier
company representative
” was the
employee.
[14]
On 22 May 2008 (upon enquiry by the
company) Davidoss sent an email to the company stating that Barotse
had not returned any purchased
goods to the company, always placed
its orders in writing and was perturbed about the fact that a credit
note bearing its name
should have been involved in an alleged fraud.
[15]
The statement made by Barotse to the effect
that it had not returned the parts constitutes hearsay. However, the
authenticity of
the email was not placed in dispute. The fact that
Barotse did not claim a credit to which it would have been entitled
had it in
fact returned goods corroborates other evidence led via the
company’s witness Mr Blom that the spares referred to in the
credit note were not to be found in the company’s inventory.
The email accordingly has probative value in relation to the
issue of
whether the credit note was legitimately issued. The evidence shows
that it was not.
[16]
On 26 May 2008 the employee attested to an
affidavit which is included in the record. His version on affidavit
was that on the afternoon
of 21 May 2008 at about 16h00 he was
approached by a man who identified himself as a representative of a
courier company representing
Barotse. The man was there to check
prices on parts. This person had advised the employee that he had
been there “
on Friday
”
(apparently 16 May 2008) when he had brought certain parts back for a
credit, but had been unable to find the employee and
he had left
again without being assisted. I understand this to mean that he had
on that occasion left with the credit note but
without having used
the credit to purchase new parts. Upon enquiry, this person stated
that he had insisted on dealing specifically
with the employee, hence
his decision to leave on Friday without having been assisted by
another person. He had so insisted because
he had seen the employee’s
name on the credit note and was aware that sales representatives work
on commission.
[17]
This person then gave the employee a
chassis number for a Mercedes Benz Sprinter and requested a set of
Conrad bearings and four
injector nozzles with specified parts
numbers. After the employee gave him the prices the man told him that
he wanted only three
nozzles “
for
his mechanic told him he can only replace the three nozzles because
he replaced the one on a previous service
”.
The employee stated that he then created WIP 43489 on the system.
This despite the fact that the parts in question had
been entered on
the system by the employee as early as 14 May 2008 and prior to the
date of the credit note, which was 16 May 2008.
[18]
The employee stated that he then enquired
as to how the man was going to pay for the parts and was told that he
had received a credit
note on Friday 16 March 2008 for parts which he
brought back and that he would take the parts on that credit note. He
showed the
original credit note and a copy of an invoice with the
paid stamp on it for an amount of R44 343.27. The employee
thereupon
assisted the man with the parts that he sought. He further
claimed that he did not again access WIP 43489 after 17h00 on 21
March
2008.
[19]
This version was in my view justifiably
denounced by the employer as a fabrication on the part of the
employee. The employee had
cast an unknown person, supposedly as a
representative of a courier company engaged by Barotse, as the
purchaser of parts in Barotse’s
name. Even if the employee was
not involved in issuing the credit note and even if he genuinely
believed that the credit note had
been legitimately issued to
Barotse, it is highly unlikely that he would have handed over parts
to a person, not known to him and
purportedly representing a courier
company which he was also unable to identify, utilising Barotse’s
credit.
[20]
To his knowledge, the procedure leading to
sales to Barotse was as described above. The employee would in this
instance have had
no prior request for a quotation from any person
known to him to be authorised to represent Barotse, no written
quotation and no
confirmation from Barotse that the price verbally
quoted on the spare parts “
sold
”
that day were acceptable.
[21]
It would furthermore be apparent to him
that the parts were not truck parts as would invariably been the case
had this been a genuine
Barotse transaction.
[22]
The fact that the employee quoted an
incorrect amount for the bearing item, so that the total of the
invoice perfectly matched the
credit note, is a circumstance which
cannot be put down to mere co-incidence. It directly implicates the
employee in a scheme to
defraud the employer to the tune of the
amount in the credit note. A further fact irreconcilable with the
employee’s version
in the affidavit that he had for the first
time generated the WIP 43489 account on 21 May 2008, is that he had
in fact done so
on 14 May 2008. This clearly demonstrates that he and
not Barotse or the man from the “
courier
company
” initiated the
transaction.
[23]
On 9 June 2008, the employee was charged
with gross dishonesty relating to invoice number 43489. The
disciplinary hearing on 12
June 2008 resulted in a guilty verdict and
a decision that he be dismissed. The decision was handed down on 18
June 2008. The employee
filed a notice of appeal on 23 June 2008 in
which he claimed as his only ground of appeal that the decision was
too harsh. The
company did not entertain the appeal as it was out of
time. The period within which the employee was obliged to note an
appeal
was three days. He was in time if one excludes the Saturday
following the date on which he delivered his notice, but out of time
if one includes it. I will return to this issue in due course.
[24]
On 29 September 2008 and in circumstances
not necessary to canvass at this stage, the employee obtained a
default award against
the employer pursuant to which he had been
awarded compensation of four months’ salary. It appears that he
did not in those
proceedings seek reinstatement. That award was
however rescinded and the arbitration proceedings before the
Commissioner were subsequently
commenced and ultimately finalised on
2 November 2009.
[25]
Both procedural and substantive fairness
were in issue before the Commissioner. The sole point on procedure
was that the employee
was not allowed to prosecute his appeal.
[26]
The disciplinary outcome invited the
employee to appeal within three working days. He did so on the fourth
day if one includes Saturday
in that computation. The company was
open for business on Saturdays and sales personnel worked Saturdays,
although not all worked
every Saturday. The employee was not required
to work that Saturday for the simple reason that he had been
dismissed. The right
to appeal a decision to dismiss does not suspend
the dismissal. I see no difficulty in the employer regarding Saturday
as a working
day for purposes of the computation.
[27]
In this application to review and set aside
the Commissioner’s award dated 13 November 2009, the company
essentially relies
on three grounds. The first is grounded in the
Constitutional Court’s judgment in
Sidumo
& Others v Rustenberg Platinum Mines Limited and Others
(2007) 12 BLLR 1097(CC)
, that the Commissioner reached a conclusion
which no reasonable decision maker would make, having due regard to
the evidence before
him. The second arises from section 145(2)(i)
and/or (ii) of the Labour Relations Act 66 of 1995 (“
the
LRA
”), that the Commissioner’s
failure to take account of relevant evidence; his failure to
appreciate the significance
of the evidence before him or properly to
analyse it in weighing the probabilities is such that he committed
misconduct or that
there were gross irregularities in the conduct of
the arbitration . The third is that he exhibited bias, which would
fall under
section 145(2)(ii) – gross irregularity in the
conduct of the arbitration.
[28]
In my view there is much to be said for all
three of the grounds advanced. The Commissioner’s summary of
the evidence given
by Mr Bloem for the company and by the employee is
perfunctory, in part inaccurate and fails to note all of the material
facts
referred to above. However more to the point is the
Commissioner’s failure properly to have weighed the
probabilities arising
from the evidence summarised above. Instead the
Commissioner became fixated on parts of the evidence, sometimes
incorrectly stated
and he failed to pick up the thread of the
company’s case against the employee. I will deal with aspects
of his piecemeal
approach below.
[29]
The Commissioner made a finding that the
company had failed to prove that the credit note had not properly
been issued on the basis
that it had neither led admissible evidence
that the spares referred to in the credit note had not been returned
nor it had called
the author of the email from Barotse to confirm the
truth of the statement that Barotse had not returned the spares and
was not
aware of any credit note. He ruled Bloem’s evidence
that the warehouse had been checked to ascertain whether the spares
referred
to in the credit note had been returned as inadmissible
hearsay. In fact Bloem testified that both he and the employee’s
supervisor one Malikihane had checked the warehouse and that the
parts were nowhere to be found. The evidence was thus not hearsay
and
ought not to have been left out of account. I have referred to the
probative value of the email from Barotse, above. These
were pivotal
findings on the part of the Commissioner.
[30]
A further finding made by the Commissioner
was that according to Bloem, the “
wrong
”
that the employee committed was to create an invoice on 14 May 2008,
in advance, given that the email from Barotse stated
that they had
never returned spare parts. He then referred to his earlier findings
that the email dated 22 May 2008 from Barotse
had been ruled
inadmissible. What the Commissioner entirely failed to appreciate was
the significance of the fact that the WIP
account had been opened by
the employee on 14 May 2008; that the credit note had been issued on
16 May 2008 and that the parts
“
sold
”
using the credit note, to the mystery courier representative, were
amongst those referred to in the WIP account created
prior to the
credit note having being issued. In the absence of an explanation
from the employee, this was damning evidence which
entirely eluded
the Commissioner.
[31]
The Commissioner refused to take account of
the proposition put to the employee that it was contrary to the
manner in which courier
companies’ work, for a courier company
representative to execute a purchase order on behalf of Barotse. The
Commissioner
ruled this as opinion evidence which could only be given
by an expert. This ruling of the Commissioner is without merit. The
employee
was familiar with the manner in which Barotse conducted its
business with the company and was familiar with the role of the
courier
companies representing it. A person in a position of the
applicant could reasonably be asked to respond to such a proposition
which
is one of fact relating to everyday life particularly in the
business in which the employee was engaged. As such it clearly did
not constitute opinion, much less “
expert
opinion
” requiring the evidence
of an expert and the Commissioner was wrong in disregarding the
improbability of the employee’s
version that he believed that
he was dealing with a courier company representative acting on behalf
of Barotse.
[32]
The Commissioner made much of the fact that
it was not shown that the employee had issued the (fraudulent) credit
note. In my view
nothing turns on this. Whether the employee issued
the credit note or whether he acted in collusion with some other
person whose
identity has not been uncovered, the inference that he
knowingly processed a transaction resulting in the illegitimate use
of the
credit note by a person whom he knew not to be a
representative of Barotse, is in my view inescapable. All of the
proved facts
are consistent with this inference.
[33]
It follows that in my view the Commissioner
reached a conclusion on the evidence before him which no reasonable
decision maker properly
applying his mind to those facts could have
reached.
[34]
His failure to grasp what the material
facts before him were and what inferences ought reasonably to be
drawn from them and his
failure even to undertake that analysis were
such that in my view he also committed misconduct or irregularity
within the meaning
of these terms in section 145 of the LRA. In this
regard I refer to the
dictum
of Murphy AJA in the matter of
Head of
Department of Education v Mofokeng & Others
(2015) 36 ILJ 2802 (LAC) at paragraph 33:
‘
[33]
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.
12
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
upon the arbitrator's conception of the enquiry, the delimitation 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.
A material error of this order would point to at least a prima facie
unreasonable result. The
reviewing judge must then have regard to the
general nature of the decision in issue; the range of relevant
factors informing the
decision; the nature of the competing
interests impacted upon by the decision; and then ask whether a
reasonable equilibrium has
been struck in accordance with the objects
of the LRA.
13
Provided
the right question was asked and answered by the arbitrator, a wrong
answer will not necessarily be unreasonable.
By the same token,
an irregularity or error material to the determination of the
dispute may constitute a misconception of
the nature of the enquiry
so as to lead to no fair trial of the issues, with the result that
the award may be set aside on that
ground alone. The arbitrator
however must be shown to have diverted from the correct path in the
conduct of the arbitration
and as a result failed to address the
question raised for determination.’
14
”
[Footnotes omitted]
[35]
The Commissioner’s finding on
procedural fairness was equally flawed. He based his findings on a
“
concession
”
by Bloem that Saturday is an optional work day and a further
concession that the employee was under suspension at the time.
As
pointed out above, the employee was not suspended, he had been
dismissed. In any event, even if the Commissioner meant that
the
employee was not obliged to work on that Saturday by virtue of his
dismissal, this logic would apply to all working days and
could not
reasonably be invoked to determine the question of whether the
Saturday ought to be included or excluded from the computation.
[36]
Simply put, the issue is not whether the
employee would, but for his dismissal, have been required to work on
that Saturday but
rather whether in the parlance of the company
Saturday was a working day. Since the company was open for business
and its employees
(or at least some of them) were required to render
services on Saturday, it was in my view a working day.
[37]
It also bears mention that there was no
criticism levelled by the employee against the procedure followed
which resulted in his
dismissal following upon his disciplinary
inquiry. It follows that it was common cause that the employee
received a fair hearing
prior to that decision and that is all that
is statutorily required. Whilst I do not thereby suggest that an
employee who is accorded
the right to an appeal by his employer but
who is wrongly prevented from exercising that right, would not be
able to raise this
as an issue pertaining to procedural fairness, at
worst for the company in this case there was a
bona
fide
difference of interpretation as to
the meaning of “
working day
”
and as I have found above, the company’s conclusion is in my
view the correct one. The Commissioner arrived
at the wrong
conclusion by asking himself the wrong question, namely: was the
employee required to work on that Saturday?
[38]
On the question of bias it is apparent both
from the record and from the Commissioner’s award that there
was a measure of
personal animus between him and the company’s
legal representative in the arbitration. This may well give rise to a
reasonable
apprehension of bias on the part of the company,
particularly when viewed in conjunction with the Commissioner’s
poor assessment
of the facts and probabilities. In view of the
conclusion which I have reached on the first two grounds of review I
deem it unnecessary
to deal with the issue of bias.
[39]
This Court is at large, when it is in as
good a position to make the finding which the Commissioner ought to
have made, to substitute
its decision for that of the Commissioner.
This matter has a long history and it would not be in the interest of
justice to order
a hearing done over when this Court is by virtue of
the record of evidence in as good a position to decide as the
Commissioner
was.
[40]
I do not consider this an appropriate
matter in which to order costs against the employee, who represented
himself in this application.
[41]
In the result I make the following order:
(a)
The arbitration award of the first
respondent dated 13 November 2009 is hereby reviewed and set aside.
(b)
The award of the first respondent is
substituted with the following order:
“
The
application is dismissed.
”
_________________________
CE
Watt-Pringle AJ
APPEARANCES:
FOR THE
APPLICANT:
Mr S Snyman of Snyman Attorneys
FOR THE
RESPONDENT: In
person