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[2016] ZALCCT 2
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Martin & East (Pty) Ltd v Bulbring NO and Others (C1051/14) [2016] ZALCCT 2; [2016] 5 BLLR 475 (LC) (2 January 2016)
REPUBLIC
OF SOUTH AFRICA
Not
reportable
Of
interest
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
C
ase
no: C 1051/14
In
the matter between:
MARTIN &
EAST (PTY) LTD
Applicant
and
BULBRING N.O.
First Respondent
CCMA
Second
Respondent
SOLIDARITY obo
DIRK DU TOIT
Third Respondent
Heard
:
18 November 2015
Delivered
:
2 February 2016
Summary:
Review – misconduct – arbitrator
finding that employee did not contravene a rule regarding
moonlighting – employee
committed fraud, was dishonest and
brought company into disrepute. Arbitrator’s finding that
dismissal was unfair not a reasonable
finding. Award reviewed and set
aside. Dismissal fair.
JUDGMENT
STEENKAMP
J
Introduction
[1]
The
applicant company, Martin & East, dismissed the third respondent,
Mr Dirk du Toit (represented by his trade union, Solidarity)
for
misconduct. He referred an unfair dismissal dispute to the CCMA. The
arbitrator (the second respondent) found that the dismissal
was
procedurally fair. She also found that the employee had been
dishonest; that he had committed fraud; and that he had brought
the
company’s name into disrepute. But she found that his dismissal
was unfair because “there was no strict application
of the
rule” against moonlighting. She said that her “impression
was that the company wanted him out and that in different
circumstances they may have dealt with this sort of misconduct
differently”. She ordered the company to pay the employee
compensation equivalent to three months’ salary, amounting to R
63 939, 00. The company seeks to have the award reviewed
and set
aside in terms of s 145 of the LRA.
[1]
Background
facts
[2]
The employee was an operators’
manager. He also trained the company’s employees and had become
an accredited assessor
and moderator during his employment. The
company alleged that he had breached the company rule against
moonlighting; that he acted
dishonestly and fraudulently by
misrepresenting the time he had spent on training and by forging a
signature and submitting false
information on other documents; and
that he had brought the company’s name into disrepute. After a
disciplinary hearing,
the company dismissed the employee as it could
no longer trust him.
The
award
[3]
The arbitrator dealt with each of the
allegations of misconduct, having regard to the evidence before her.
I shall do likewise.
Moonlighting
[4]
It is common cause that there was a rule
against moonlighting. The company alleged that the employee had
contravened the rule “in
that you did not declare or obtain
written approval to present training to an external company for
remuneration over the period
27 February 2013 to 3 March 2013.”
[5]
During this period the employee had
presented training for his own account to another company, Benbou, in
Beaufort West. He did
not ask permission to do so. And he was
actually on duty in Cape Town for at least some of the time.
[6]
The arbitrator accepted that there was a
rule and that the employee was aware of it; yet she found:
“
[M]y
sense is that there was no strict application of the rule when it
came to Du Toit”.
[7]
The arbitrator did not accept the evidence
of Du Toit’s plant manager, Johan van Straaten, that Du Toit
did not tell him that
he was going to Beaufort West. She found that
they had “had a discussion” because Van Straaten had
asked Du Toit what
he should do if he needed him during that time.
She also asked, if Du Toit had requested permission to do private
work previously,
“why was the rule not made clear to him on
those occasions?”. She concluded that the employee knew the
rule but that
it was not strictly enforced; and that, although he did
not ask permission to go to Benbou, he had told Van Straaten, who did
not
object.
Fraud
and dishonesty
[8]
This allegation related to the employee
having forged the signature of a site agent, Louis Mouton; and
submitting false documentation.
The company has a long standing
service provider relationship with an accredited training service
provider, Tjeka Training. Tjeka
could issue lawful competency
certificates after it had done training. The company concluded an
agreement with Tjeka in terms of
which one of the applicant company’s
employees, Christo Duister, was accredited to do the evaluation, on
behalf of Tjeka,
for operators employed by Martin & East. Those
employees had to be employees of Martin & East and had to be
trained by
Duister using Tjeka’s approved training material.
[9]
Du Toit, as previously explained, did
training for Benbou for his own account during the period 27 February
– 3 March 2013.
He then submitted the documentation regarding
the completion of that training to Tjeka for it to issue competency
certificates
to Benbou employees. Tjeka did so. Du Toit used Tjeka
material for the training. He submitted attendance registers showing
that
the trainees attended his training on all five days. However, he
was actually at work in Cape Town – more than 400 km from
Beaufort West – on three of those days, from 27 February to 1
March 2013. It appeared that he had fabricated the attendance
registers and falsified the signatures of the trainees on those
registers. Mouton was one of the people trained by Du Toit at Benbou.
(Mouton’s brother is a co-owner of Benbou). Mouton testified
that he did not sign the attendance register; yet his falsified
signature, together with his name, surname and identity number
appeared on the attendance register for each day from day one to
day
five. The arbitrator found that Du Toit forged the signature. She
concluded:
“
He
made a misrepresentation which prejudiced the training or potentially
prejudiced it and put certificates at risk. The intention
was to
deceive the moderator. Du Toit is guilty of dishonesty and fraud.”
Bringing
the company’s name into disrepute
[10]
The arbitrator also found that the employee
brought the company’s name into disrepute. He leveraged his
position at the company
for his personal benefit. He secured an
agreement with Tjeka in his private capacity for the same deal that
his employer should
have secured. He also leveraged his relationship
with the company for his son’s benefit, thus securing a benefit
for the
company’s competitor.
Sanction
[11]
Turning to the issue of sanction, the
arbitrator took into account that the employee had previously been
reinstated by the CCMA
after a previous incident where the company
claimed that he had resigned. The arbitrator in that case found had
not resigned, but
that he had been dismissed.
[12]
Apparently because of that fact and because
of the fact that the company subsequently charged the employee with
misconduct upon
his being reinstated, the arbitrator reasoned:
“
My
impression was that the company wanted him out and that in different
circumstances they may have dealt with this sort of misconduct
differently. There was no investigation into any other employee
(Mouton facilitated the moonlighting; Smith drafted a quote during
working hours) and it does smack of a witch-hunt/spite.”
[13]
The arbitrator found that there was
inconsistency; and that this, together with “the company’s
motive” and “the
fact that Du Toit’s conduct had no
impact on the relationship of the company with Tjeka (until the
company directly confronted
Tjeka about it) makes the sanction of
dismissal inappropriate.” She also found that the dishonesty
and fraud was in relation
to Tjeka and that “it was not a fraud
on the company.” Having found that dismissal was
“inappropriate”,
she then found that the dismissal was
substantively unfair (though procedurally fair).
[14]
In considering the appropriate compensation
to award, given her finding on substantive fairness, the arbitrator
noted:
“
I
was taken aback by the fact that Du Toit was not prepared to make
even the smallest concession. He proved a difficult witness.
It was
clear to me that the company had certainly reimbursed Du Toit for his
LOA but Du Toit would not make the concession. He
would not
acknowledge any wrongdoing on his part and tried to blame the
moderators for not doing their job properly and the trainees
for
agreeing to sign documents that were false. The explanation that he
took his son to Tjeka but stood outside and left them to
do the
talking without getting involved at all is also inadequate and
untrue. I have also considered that he did not respect the
company
and respect its relationship with Tjeka.”
[15]
Despite these findings on the employee’s
dishonesty and lack of credibility, the arbitrator stated:
“
I
believe that the company would have dealt with the matter differently
had the misconduct not been uncovered off the back of the
CCMA
award.”
[16]
The arbitrator then expressed the belief
“that three months’ compensation is appropriate to remedy
the unfairness”
and ordered the company to pay that.
Review
grounds
[17]
There is no cross-review against the
arbitrator’s findings that Du Toit was guilty of dishonesty and
fraud, and of bringing
the company’s name into disrepute.
[18]
The company takes issue with the finding
that, despite the fact that the employee knew the rule against
moonlighting, he was “not
guilty” of that charge because
the arbitrator’s sense was that there was no strict application
of the rule when it
came to him. The company also seeks to review the
award of compensation. It argues that the employee should be
dismissed.
[19]
In
short, the company argued that the decision reached by the arbitrator
is one that a reasonable arbitrator could not reach on
all the
material that was before her.
[2]
Evaluation
/ Analysis
[20]
Mr
Snyman
argued that, based on the arbitrator’s
own factual findings, dismissal was a fair sanction. I agree. As set
out above, the
arbitrator found, amongst others:
20.1
The employee was aware of the rule against
moonlighting, despite him denying it.
20.2
The employee did not ask for, and was not
given permission for, the training in Beaufort West from 27 February
to 3 March 2013,
which was for his own personal benefit.
20.3
The employee had forged Mouton’s
signature on the training attendance register and had forged
documents relating to the training.
20.4
The employee was dishonest representing
that it did the training over five days when that was not the case.
20.5
The employee brought the company into
disrepute.
[21]
Based on these findings alone – that
have not been challenged by the employee or his trade union –
the arbitrator’s
finding that the dismissal was unfair is, in
my view, so unreasonable that no reasonable arbitrator could have
come to the same
conclusion.
[22]
The
employer’s witnesses testified that the company had lost trust
in the employee. It is common cause that he was not only
dishonest
but had committed fraud. The arbitrator clearly disregarded the
following principle set out by the Labour Appeal Court
in
Shoprite
Checkers (Pty) Ltd v CCMA:
[3]
“
[T]his
court has consistently followed an approach, laid on early in the
jurisprudence of the Labour Court in
Standard
Bank SA Ltd v CCMA
[1998] 6 BLLR 622
(LC) at paragraphs 38-41 where Tip AJ said:
‘
It
is one of the fundamentals of the employment relationship that the
employer should be able to place trust in the employee…
A
breach of this trust in the form of conduct involving dishonesty is
one that goes to the heart of the employment relationship
and is
destructive of it.”
[23]
The
LAC also dealt with dishonesty in
Toyota
SA Motors (Pty) Ltd v Radebe
:
[4]
“
I
revert now to the question whether the [arbitrator] committed a gross
irregularity in setting aside the dismissal of [the employee]
by the
[company]. If the above-mentioned case law has required that
dismissals be upheld where dishonesty has been proved, it seems
relatively clear that dismissal would be warranted we gross
dishonesty is present.”
[24]
The
arbitrator accepted that the employee’s fraud and dishonesty
caused prejudice to the company and to Tjeka as a third-party
service
provider. The following
dictum
of the LAC in
ABSA
Bank Ltd v Naidu
[5]
is apposite:
“
In
De Beers Consolidated Mines Ltd
above,
the court further pointed out that ‘the seriousness of
dishonesty – i.e. whether it can be stigmatised as gross
or not
– depends not only, or even mainly, on the act of dishonesty
itself but on the way in which it impacts on the employer’s
business.’ In the present instance, considering the nature of
the business, there can be no doubt, in my view, that Ms Naidu’s
dishonesty severely adversely impacted on the business… It
followed that she owed a fiduciary responsibility vis-a-vis the
appellant towards ensuring that, at all times, she acted and
performed her duties in a manner that was in the best interests of
both the appellant and its clients. It seems to me, accordingly, that
any false declaration or fraudulent misrepresentation that
she made
to any client – as she did in relation to Mr Khan –
constituted a breach of her duty and a breakdown in her
trust
relationship with the appellant.”
[25]
It
must also be borne in mind that the employee continued to rely on a
false defence that the arbitrator rejected. The LAC held
in
De
Beers Ltd v CCMA
[6]
:
“
Where,
as in this case, an employee, over and above having committed an act
of dishonesty, falsely denies having done so, an employer
would,
particularly where a high degree of trust is reposed in an employee,
be legitimately entitled to say to itself that the
risk of continuing
to employ the offender is unacceptably great.”
[26]
To
the findings of dishonesty and fraud must be added the finding that
the employee brought the company’s name into disrepute.
He
leveraged his relationship with the company for his personal benefit
and assisted competitor. In other words, he breached his
fiduciary
duty towards his employer. The failure of an employee with faith
award employer was dealt with by the LAC in
SAPPI
Novoboard (Pty) Ltd v Bolleurs:
[7]
“
It
is an implied term of the contract of employment that the employee
will act with good faith towards his employer and that he
will serve
his employer honestly and faithfully.… The relationship
between employer and employee has been described as a
confidential
one. The duty which an employee owes his employer is a fiduciary one
‘which involves an obligation not to work
against his master’s
interests’…. If an employee does ‘anything
incompatible with the due or faithful
discharge of his duty to his
master, the latter has a right to dismiss him’….”
[27]
The
Supreme Court of Appeal confirmed in
Phillips
v Fieldstone Africa (Pty) Ltd
[8]
that:
“
Where
one man stands to another in a position of confidence involving a
duty to protect the interests of that order, he is not allowed
to
make a secret profit at the other’s expense or place himself in
a position where his interests conflict with his duty.”
[28]
On
the arbitrator’s own findings, that is exactly what Du Toit
did. That was contrary to the principles expressed by the SCA
in
Ganes
v Telecom Namibia Ltd
:
[9]
“
As
an employee of the [company] and in the absence of an agreement to
the contrary the [employee] owed the [company] a duty of good
faith.
This duty entailed that he was obliged not to work against the
[company’s] interests; not to place himself in a position
where
his interests conflicted with those of the [company]; not to make a
secret profit at the expense of the [company]; and not
to receive
from a third party a bribe, secret profit or commission in the course
of or by means of his position as employee of
the [company].”
[29]
And
finally, in
Stoop
& Ano v Rand Water
[10]
Basson J held with reference to
Volvo
SA v Yssel
[11]
:
“
[The
employees] not only had the express duty to maintain the highest
level of ethics and transparency but, as senior employees,
they had a
fiduciary duty to ensure total honesty and integrity when goods and
services were procured.”
[30]
Du Toit held a position of trust. He abused
it. He acted against his fiduciary duty to his employer, acted in his
own interests,
and to the prejudice of his employer. That in itself
destroyed the employment relationship.
[31]
Turning to sanction, it is difficult to
fathom on what basis the arbitrator formed the “impression”
that the company
wanted the employee out and that it conducted a
“witch-hunt” against him out of “spite”. Her
impression
that, in different circumstances, the company “may
have dealt with this sort of misconduct differently” does not
amount
to evidence of inconsistency. The fact is that the employee
committed serious misconduct, including dishonesty, fraud and
bringing
the company’s name into disrepute. The company led
clear evidence that it had lost trust in him. For the arbitrator to
find
that, in those circumstances, the sanction of dismissal imposed
by the company was unfair, is entirely unreasonable in my view.
[32]
The arbitrator also does not set out any
basis for her “belief” that the company would have dealt
with the matter differently
had the misconduct not been uncovered
“off the back of the CCMA award”. And she does not deal
with the fact that neither
Mouton nor Smith committed misconduct in
the form of dishonesty or fraud. There is no rational basis for her
finding of inconsistency.
Conclusion
[33]
The
employee committed gross misconduct. The arbitrator accepted that he
was dishonest, that he committed fraud, that he brought
the company’s
name into disrepute, and that he acted to the prejudice of his
employer for his own benefit. He destroyed the
relationship of trust
between him and his employer. Her finding that his dismissal was
nevertheless substantively unfair is, in
my view, so unreasonable
that no reasonable arbitrator could have come to the same conclusion.
As the LAC held in
Toyota
[12]
:
“
Although
a long period of service of an employee will usually be a mitigating
factor where such employee is guilty of misconduct,
the point must be
made that there are certain acts of misconduct which are of such a
serious nature that no length of service can
save an employee who is
guilty of them from dismissal. To my mind one such clear act of
misconduct is gross dishonesty.”
[34]
As to the appropriate relief, it would
serve no purpose to remit this dispute to the CCMA for a fresh
arbitration before another
arbitrator. On the first respondent’s
own findings, the dismissal was fair.
[35]
With
regard to costs, I take into account that the employee had an
arbitration award in his favour; and that he is represented by
a
trade union that has an ongoing relationship with the employer.
Taking into account the law and fairness
[13]
,
I do not consider a costs award to be appropriate.
Order
The
arbitration award of the first respondent, Commissioner Ursula
Bulbring, under case number WECT 5862-14 dated 20 October 2014
is
reviewed and set aside. It is replaced with an award that the
dismissal of the employee, Dirk du Toit, was fair.
_______________________
Anton
Steenkamp
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
Sean Snyman
(attorney).
THIRD RESPONDENT:
Gerrit Visser
(trade union representative, Solidarity).
[1]
Labour Relations Act 66 of 1995
.
[2]
Sidumo
v Rustenburg Platinum Mines Ltd
(2007) 28
ILJ
2405
(CC) para [110];
Herholdt
v Nedbank Ltd
[2013] 11 BLLR 1074
(SCA) para [25].
[3]
[2008] ZALAC 9
;
[2008] 9 BLLR 838
(LAC) para [16].
[4]
(2000) 21
ILJ
340 (LAC) para [51].
[5]
[2015] 1 BLLR 1
(LAC) paras [53]-[54] (footnotes omitted).
[6]
(2000) 21
ILJ
1051 (LAC) para [25].
[7]
(1998) 19
ILJ
784
(LAC) para [7] (references omitted).
[8]
(2004) 25
ILJ
1005 (SCA) para [22].
[9]
(2004) 25
ILJ
995 (SCA) para [25].
[10]
(2014) 35
ILJ
1391 para [99].
[11]
(2009) 30
ILJ
2333 (SCA).
[12]
Above para [15].
[13]
LRA
s 162.