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[2015] ZALCPE 44
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Ford Motor Company (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (PR232/2014) [2015] ZALCPE 44 (16 October 2015)
REPUBLIC
OF SOUTH AFRICA
Not reportable
THE LABOUR COURT OF
SOUTH AFRICA, PORT ELIZABETH
JUDGMENT
C
ase
no: pR 232/2014
In
the matter between:
FORD
MOTOR COMPANY (PTY)
LTD
Applicant
and
COMMISSION
FOR CONCILIATION, MEDIATION
AND
ARBITRATION
First Respondent
COMMISSIONER
F FATAAR
N.O
Second Respondent
THOMAS
RALTON SHAW
Third respondent
Heard
:
13 October 2015
Delivered
:
16 October 2015
JUDGMENT
VAN
NIEKERK J
[1]
This is an application to review and set aside an arbitration award
issued by the
second respondent, to whom I shall refer as ‘the
commissioner’. In his award, the commissioner held that the
third
respondent (the employee) had been unfairly dismissed by the
applicant, and ordered that the employee be reinstated.
[2]
The material facts are not in dispute; they are referred to in detail
in the award
under review and I do not intend to repeat them here. It
is sufficient to note that the employee was employed by the applicant
as what was referred to as a release and follow-up analyst. In this
capacity, the employee was required to facilitate the uninterrupted
supply of components to the production line at the applicant’s
operation. In particular, he was required to ensure that the
services
of certain of the applicant’s service providers were timeously
secured by way of prescribed requisitions (referred
to as ‘RQ’s)
and purchase orders (PO’s). After a disciplinary hearing
convened in November 2013 at which the
employee was charged with
gross negligence and what was referred to as pre-commitment, he
entered a plea of guilty to the charge
of negligence. He was found
guilty on that charge and dismissed. For present purposes, the
employee’s disciplinary record
assumes some importance. At the
time of his dismissal, the employee’s record evidenced a
written warning valid for six months
for negligence issued on 8
February 2008, a written warning valid for six months for negligence
issued on 3 June 2009, a final
written warning valid for 12 months
for gross negligence/pre-commitment issued on 7 September 2011 and a
final written warning
valid for 12 months for gross negligence issued
on 9 October 2012. It is not disputed that at the relevant time, the
latter warning
remained valid nor was disputed that during the course
of 2013, the applicant made its employees aware, via email, of the
need
to avoid exposing the applicant to unauthorised commitments and
warning of the consequences (which included the prospect of
dismissal)
of doing so.
[3]
It is also not disputed that the applicant’s disciplinary code
procedure draws
a distinction between negligence and gross
negligence, a distinction drawn in the following terms:
The
degree of negligence is measureable in terms of cause (viz oversight,
carelessness, disregard, recklessness, forgetfulness,
etc.) and
effect (viz injury, damage, loss, etc.), on which basis one can
distinguish between ‘negligence’ and ‘gross
negligence’.
‘
Gross
negligence’ would be determined should the cause be blatant,
flagrant, obviously wrong and outside of the norm, and\or
the effect
to be long-lasting, great, significant or of such great magnitude
(i.e. severity of injury, extent of damage, amount
of financial loss,
etc.).
The
disciplinary code and procedure further provides the following:
Where,
at the Company’s discretion, the circumstances warrant this, a
more severe penalty than that indicated may be imposed.
The penalties
listed in the different categories serve as a guide only. It is not
intention to prescribe rigid rules, but to indicate
the form of
sanction that might be imposed.
[4]
The employee disputed the fairness of his dismissal, a dispute that
was ultimately
referred to arbitration. The arbitration was conducted
by the commissioner, who (correctly) recorded that the only issue in
dispute
was whether the sanction of dismissal was fair (see paragraph
17 of the award).
[5]
The commissioner’s reasoning in support of his decision that
the employee had
been unfairly dismissed and ought to be reinstated
(albeit without back pay), is apparent from paragraph 23 of his
award. The commissioner
says the following:
I
have heard the evidence presented by the parties and have read their
respective arguments on this point. It is my view that the
respondent, on its own, have (sic) created two separate and distinct
offences relating to gross negligence and negligence. This
is clearly
borne out by the fact that the Code they are listed separately (sic),
and they are differentiated on the basis of severity.
Besides the
respondent’s Code, it also has written Guidelines wherein the
differentiation and distinction is clearly highlighted
and explained.
Added to this, in practice, the respondent has applied this
distinction between the two when charging and sanctioning
employees.
Take the example of the applicant. He had previously been in two
cases charged with negligence only and the respondent
had, in terms
of its Code, given him a written warning.
And
in paragraph 24:
In
my view, when an employer treats cases of disciplinary offences of
the same character as separate offences in terms of distinction
and
sanction, then they are bound to be held accountable to such policies
and practice. My view is based on the interest principle
of legality
(applied to companies) that the rules must be clear to everyone. It
also adds credence to the principles of consistency
in the
application of the rules.
[6]
Insofar as the applicant’s disciplinary code provided that the
sanctions recorded
in respect of specific offences were a guideline,
the commissioner noted that what the code provided was that harsher
penalties
than those recommended may be imposed. In his view, this
had the consequence that if an employee committed a lesser offence,
it
was not competent for the employer to impose a more serious
penalty. In short, the commissioner’s reason for his finding of
unfair dismissal was that the employee’s disciplinary record
disclosed a valid final written warning for gross negligence,
in
circumstances where the employee had been found guilty and dismissed
on the lesser charge of negligence. In his view, the employee’s
admitted misconduct ought therefore to have attracted the lesser
sanction of a written warning.
[7]
The commissioner did not consider any other factors which may have
determined the
appropriateness or otherwise of dismissal as a
sanction for the misconduct committed by the third respondent.
Indeed, the commissioner
records in paragraph 29 of his award that
his conclusion that the sanction of dismissal was unfair is reached
‘solely’
on the basis of the reasons recorded by him,
i.e. his analysis of the applicant’s disciplinary code and
procedure which required
the sanction of a written warning given the
‘lesser’ form of negligence committed by the
employee.
[8]
The applicable legal principles are well-established. In
Sidumo v
Rustenburg Platinum Mines & another
, the Constitutional Court
described the functions of a commissioner in determining the
appropriate sanction for misconduct in the
following terms:
[78]
In approaching the dismissal dispute impartially commissioner will
take into account the totality
of circumstances. He or she will
necessarily take into account the importance of the rule that had
been breached. The commissioner
must of course consider the reason
the employer imposed a sanction of dismissal, as he or she must take
into account the basis
of the employee’s challenge to the
dismissal. There are other factors that will require consideration.
For example, the harm
caused by the employee’s conduct, with
additional training and instruction may result in the employee not
repeating the misconduct,
the effect of dismissal on the employee and
his or her long service record. This is not an exhaustive list.
[79]
To sum up. In terms of the LRA, a commissioner has to determine
whether a dismissal is fair or
not. The commissioner is not given the
power to consider afresh what he was she would do, but simply to
decide whether what the
employer did was fair. In arriving at a
decision a commissioner is not required to defer to the decision of
the employer. What
is required is that he or she must consider all
relevant circumstances.
[9]
In regard to the threshold applicable in review applications brought
under s 145 of the
LRA, the prevailing authorities support a
two-stage enquiry. It is not sufficient for an applicant to establish
that the commissioner
or arbitrator committed a material error or
irregularity in relation to the evidence that served before him or
her; it must also
be established that notwithstanding the conduct
complained of, the result or outcome of the proceedings falls outside
of a band
of decisions to which a reasonable decision-maker could
come on the basis of the evidence. In
Herholdt
v Nedbank Ltd
[2013] 11 BLLR 1074
(SCA) at 1084, the Supreme Court of Appeal made
the point in the following way:
[25]
In summary, the position regarding the review of CCMA awards is this:
a review of a CCMA award
is permissible if the defect in the
proceedings falls 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 enquiry or
arrived at an unreasonable result. A 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 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 and reasonable.
[10]
This test was recently elaborated upon by Murphy AJA in
Head of
the Dept. of Education v Mofokeng
[2015] 1 BLLR 50
(LAC), where
the court emphasised that errors or irregularities in relation to
facts or issues may or may not produce an unreasonable
outcome; what
matters is the materiality of the error or irregularity and its
relation to the result. The court said the following:
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.
[11]
As Myburgh AJ pointed out in
Shoprite Checkers v CCMA and others
(unreported JR 2471\13, 31 July 2015), what this amounts to 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’ (at paragraph 10)
[12]
In essence, this is the applicant’s case in the present
proceedings – it contends
that by making a finding in isolation
(that relating to the applicant’s disciplinary code), the
commissioner ignored a host
of material facts, which had the effect
of causing an unreasonable result.
[13]
In my view, there is merit in the review application. In the first
instance, it is clear that
the commissioner made a decision on
sanction solely on the basis of the view that he took of the
provisions of the applicant’s
disciplinary code and procedure.
Indeed, as I have indicated above, the commissioner acknowledges as
much. Having decided that
the final written warning for gross
negligence was to be disregarded for the purposes of applying
corrective discipline in terms
of the applicant’s disciplinary
code, that was not the end of the enquiry. It was incumbent on the
commissioner to have applied
the analysis set out in
Sidumo
,
and to have considered the relevant circumstances as a whole. To the
extent the that the commissioner failed to have regard to
the
totality of circumstances (or, put another way, to the extent that he
considered only the provisions of the disciplinary code
and in
particular, the distinction it draws between negligence and gross
negligence and the respective recommended penalties) the
commissioner
made a finding without having regard to all of the relevant facts and
circumstances.
[14]
In consequence of his failure to undertake a proper enquiry into
sanction, the commissioner failed
to have regard to a number of
relevant facts, all of which had a direct bearing on sanction. In
particular, there are the provisions
of the applicant’s
disciplinary code itself. The code does not operate so as to create
an impermeable divide between a charge
of gross negligence as opposed
to one based only on negligence. The code contains a list of certain
defined misconduct, without
that list being intended to be a complete
list of all possible offences. The code further records that, at the
applicant’s
discretion, a more severe penalty than that
indicated by the code may be imposed, and records further that the
penalties listed
in the different categories of misconduct described
serve as a guideline only, and not as a set of rigid rules. Gross
negligence
and negligence are grouped together as part of a single
item, with a note indicating that the severity and nature of the
negligence
will determine the appropriateness of the penalty. The
wording of the code does not suggest, as the commissioner held, that
any
flexibility in the application of the code is limited to
circumstances where the applicant seeks a harsher sanction than that
recommended.
What the code (sensibly) suggests is that the code
enjoys the status of a set of guidelines and that by definition, it
is not intended
to be rigidly applied.
[15]
To the extent that certain tasks were removed from the employee with
effect from 1 October 2013
(i.e. shortly prior to his dismissal),
this does not in itself assist the employee. What is at issue is the
employee’s conduct
viewed holistically. In 2011 and 2013, his
negligence related to RQ’s and purchase orders. In 2012, he was
disciplined for
his failure to deal appropriately with critical
indicators. The applicant’s conduct, whatever its
manifestation, was the
subject of five charges of negligence in 2008,
2009, 2011 2012 and 2013.
[16]
To the extent that it might be suggested that another act of gross
negligence was required to
justify the employee’s dismissal,
this cannot be so. There can be no misconduct in the form of gross
negligence without negligence
also being present. Gross negligence
inevitably has the same core content as the concept of ‘ordinary’
negligence;
in other words, the failure to comply with the standard
of care that would be exercised in the circumstances by a reasonable
person.
In this sense, the employee repeated the same form of
misconduct when he failed to raise RQ’s and brought about
pre-commitments.
The difference between negligence and gross
negligence, as the applicant’s disciplinary code suggests, is a
matter of degree.
The commissioner’s reasoning and finding has
the absurd result that if the employee had previously been issued
with a final
written warning for negligence, his dismissal would have
been justified.
[17]
The commissioner’s omission had the consequence to that the
concept of progressive discipline
was ignored. In
National Union
of Mineworkers & another v and Amcoal Colliery t/a Arnot Colliery
& another
[2000] 8 BLLR 869
(LAC), the Labour Appeal court
suggested that even where present offences were unrelated to prior
misconduct, an employee’s
disciplinary record should not be
disregarded in the assessment of a fair sanction. Where a code
provides (as it does in the present
instance) for a progression of
penalties, the rationale is that there would come a stage beyond
which the accumulated penalties
cannot be allowed to progress
further, and where the cumulative effect provides clear evidence of
indiscipline which would render
a continued employment relationship
intolerable. In the present instance, it is clear that the approach
of progressive discipline
adopted by the applicant was not having the
desired effect. Insofar as the tolerability or otherwise of continued
employment is
concerned, one of the reasons for the imposition of the
sanction of dismissal was quite obviously that the applicant felt
that
it could not leave the employee in charge of any of its affairs,
given that he could not be trusted to conduct himself in compliance
with his fundamental duties. Further, evidence was led that this
failure had the potential of causing significant harm to the
applicant, running into hundreds of thousands of Rands in the event
of a line stoppage. The commissioner notes, in paragraph 10
of his
award, that three of the applicant’s witnesses testified that
they could no longer trust the employee to work at the
applicant’s
plant, in the sense that they had no confidence in his ability to
discharge his duties, given his prior conduct.
That evidence cannot
be ignored.
[18]
Insofar as the employee’s long service is concerned, while it
is correct that he has long
service (nearly 23 years), that is not
the end of the enquiry. The weight attached to long service is to be
determined from the
circumstances. As the Labour Appeal Court pointed
out in
De Beers Consolidated Mines Ltd v CCMA & others
[2000] 9 BLLR 995
(LAC), long service is not be equated with
reliability. Long service may be relevant where it shows that an
employee has little
propensity for offending. But where the required
degree of trust and the employee’s commitment to reform are
absent, the
employer’s assessment that the continued employment
of a long-serving employee will prove operationally risky will trump
(see paragraph 24).
[19]
That can be no doubt that had all of the material facts been
considered by the commissioner,
he would, on the probabilities, have
come to a different conclusion on sanction. In this sense, in terms
of the principle established
in the
Mofokeng
judgment, the
award is
prima facie
unreasonable. In relation to the second
enquiry, i.e. as to the existence of a basis in the evidence overall
to displace the
prima facie
case of unreasonableness, the
considerations recorded above establish that there is no such basis
in the present instance. The
result is that the award is unreasonable
and that it stands to be reviewed and set aside.
[20]
Finally, in relation to costs, the applicant charitably did not press
for a costs order. The
parties were also agreed that in the event
that the application was successful, the court ought to substitute
the commissioner’s
order for one reflecting a finding of fair
dismissal.
I
make the following order:
1.
The
arbitration award issued by the second respondent on 10 September
2014 under case number ECPE 5622-13 is reviewed and set aside.
2.
The
arbitration award is substituted with an order that the third
respondent’s dismissal was fair
3.
There is no
order as to costs.
ANDRÉ
VAN NIEKERK
JUDGE
OF THE LABOUR COURT
REPRESENTATION
For
the applicant: Adv. F le Roux, instructed by Chris Baker &
Associates
For
the third respondent: Adv. B Dyke, instructed by Brown Braude &
Vlok Inc.