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[2016] ZALCD 8
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Department of Health, KZN v Public Health and Social Development Sectoral Bargaining Council and Others (D507/14) [2016] ZALCD 8 (29 April 2016)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA
DURBAN
Not reportable
Case no: D507/14
In
the matter between:
DEPARTMENT
OF HEALTH,
KZN
Applicant
and
PUBLIC
HEALTH AND SOCIAL DEVELOPMENT
SECTORAL
BARGAINING COUNCIL
First Respondent
PATRICK
STILLWELL
N.O
Second Respondent
ADRIAAN I HARMSE
Third
Respondent
Heard:
10 March 2016
Delivered:
29 April 2016
Summary:
Review application. Applicant’s grounds for review dismissed.
JUDGMENT
PRINSLOO J
.
Introduction
[1]
The Applicant seeks to review and set aside
an arbitration award issued on 3 May 2014 wherein the Second
Respondent (‘the
arbitrator’) found the Third
Respondent’s (‘Harmse’) dismissal substantively
unfair and ordered the Applicant
to re-instate Harmse
retrospectively.
[2]
Harmse opposed the application.
Background facts
[3]
The Applicant employed Harmse from 1 July
1988 and at the time of his dismissal in June 2013 he was employed as
an asset manager.
[4]
Harmse was a member of the Applicant’s
bid evaluating committee (‘BEC’) at the Addington
Hospital for more than
five years and from time to time he acted as
the chairperson of the BEC.
[5]
The BEC would evaluate and verify tenders
and quotations received for services to be rendered or goods to be
purchased and make
a recommendation to the bid adjudicating committee
(‘BAC’), who in turn would make the final decision on
whether to
award a bid or tender and if so, to which service
provider. It is common cause that the BEC has no decision-making
powers, but
can only make recommendations to the BAC where the final
decision is taken. The chief executive officer (‘CEO’) of
the Addington Hospital was the chairperson of the BAC.
[6]
The Addington Hospital needed to procure
training equipment and Dr Rangiah, who was in charge of the training
programme, compiled
a list of the items he required for the training.
The items Dr Rangiah required were non- stock items and as the
hospital did not
have the required items, it had to be procured from
outside suppliers. Dr Rangiah approached Survival Technologies (‘ST’)
and requested that they supply the Applicant with the required
medical training equipment.
[7]
ST provided a quotation, based on the list
of equipment required, with a letter informing Dr Rangiah that they
were the sole supplier
of the goods required. Dr Rangiah’s list
accompanied by the quotation and letter from ST were sent to the
finance section
of the supply chain management (‘SCM’)
directorate for approval.
[8]
On 8 February 2011, a BEC meeting was held.
This meeting was chaired by Harmse and the BEC recommended that the
items be purchased
from ST on the basis
inter
alia
that ST was the sole supplier.
[9]
The Applicant’s case was that
although it appeared that ST was the sole supplier, SCM should have
tried to source the items
from other suppliers and it was the duty of
the BEC to ensure that this was done and that there was compliance
with the procurement
process and where there were errors, to bring it
to the attention of the BAC.
[10]
The Applicant identified a number of
irregularities in the procurement of equipment from ST. Those are
inter alia
that
the quotation was not invited by the SCM, but by a medical doctor and
there was no written motivation for a sole supplier.
These
irregularities and shortcomings should have been picked up by the
BEC, but it was not and the recommendation was sent to
the BAC, which
approved the recommendation and the equipment was purchased from ST.
The Applicant received the goods from ST and
the Applicant’s
case is not that the goods were not in good order or were not
delivered, but that the correct procedures
were not followed.
[11]
As a result, all the individuals who were
involved were charged with misconduct, including Dr Rangiah and all
the members of the
BEC and the BAC. Dr Rangiah resigned as a result
of a settlement between the parties and all other members of the BEC
and BAC were
issued with final written warnings, except Harmse who
was dismissed. The Applicant’s case was that the difference
between
Harmse and those individuals who were given final written
warnings is the fact that they all pleaded guilty and Harmse did not.
[12]
Harmse was dismissed on 10 June 2013 and he
subsequently referred an unfair dismissal dispute to the First
Respondent (‘PHSDSBC’).
The issue that was to be decided
was whether his dismissal was substantively and procedurally fair.
The test on review
[13]
The test
that this Court must apply in deciding whether the arbitrator's
decision is reviewable has been rehashed innumerable times
since
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
[1]
as whether the decision reached by the arbitrator is one that a
reasonable decision maker could not have reached. The Constitutional
Court very clearly held that the arbitrator's conclusion must fall
within a range of decisions that a reasonable decision maker
could
make.
[14]
In
Goldfields
Mining South Africa v Moreki
[2]
the Labour Appeal Court
held that:
“
In
short: A reviewing court must ascertain whether the arbitrator
considered the principal issue before him/her; evaluated the facts
presented at the hearing and came to a conclusion that is
reasonable.”
[15]
Following
the Supreme Court of Appeal judgment in
Herholdt
[3]
and the Labour Appeal Court’s judgment in
Gold
Fields
,
[4]
the Labour Appeal Court handed down another important judgment in
Head of
the Department of Education v Mofokeng.
[5]
In this
judgment the Court provided the following exposition of the
review test:
“
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 inquiry. 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 inquiry,
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. 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”.
[16]
This
dictum
in
Mofokeng
was further interpreted and in
Shoprite
Checkers v CCMA and others
[6]
this
Court considered the guidance
Mofokeng
provides
for determining when the failure by an arbitrator to consider facts
will be reviewable. The Court accepted 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
).
Analysis of the arbitrator’s
findings and grounds for review
[17]
The arbitrator found the employee’s
dismissal substantively unfair and ordered his reinstatement.
[18]
The Applicant raised two main grounds for
review.
[19]
Before
dealing with the grounds for review, it is pertinent to consider the
arbitrator’s analysis of and findings based on
the evidence
before him. The arbitrator made three main findings. The first
relates to the SCM procedures, the second relates to
Item 7 of
Schedule 8 of the Labour Relations Act
[7]
(‘the Act’) and the last finding relates to consistency.
[20]
The arbitrator accepted the Applicant’s
testimony in respect of the SCM procedures and found that the correct
SCM procedures
were not followed when the BEC made the recommendation
to the BAC on 8 February 2011.
[21]
The arbitrator then considered the
provisions of Item 7 of Schedule 8 of the Act. He found that the
probabilities favoured Harmse’s
version that he did not know he
was doing anything wrong. This was supported by the fact that
Augustine, who was the SCM expert
and part of the BEC process, did
not object thereto and Augustine’s silence contributed to
Harmse’s believe that the
BEC acted correctly. He also
questioned why Harmse would put his entire career in jeopardy when he
would gain nothing from it.
[22]
On the issue of consistency the arbitrator
found that the Applicant acted inconsistently when it dismissed
Harmse and not the others.
He found that the Applicant’s
justification for contemporaneous inconsistency was the application
of different sanctions
on the basis that those who pleaded guilty
were issued final written warnings and Harmse was dismissed because
he did not plead
guilty.
[23]
These are the findings the Applicant seeks
to review and set aside. The grounds for review are that the
arbitrator committed gross
misconduct in relation to his duties and
that he committed a gross irregularity in the conduct of the
arbitration proceedings.
[24]
The first ground for review relates
specifically to paragraph 5.2 of the arbitration award wherein the
arbitrator dealt with the
provisions of Schedule 8 of the Act and the
inherent probabilities and found that the probabilities favour Harmse
and paragraph
5.3 wherein the arbitrator found inconsistency.
[25]
In respect of paragraph 5.2 of the
arbitration award the Applicant’s case is that the arbitrator
cited the incorrect sub paragraph
of Item 7 of schedule 8 of the Act.
The arbitrator found that Item 7(a)(i) provides that it should be
established that the employee
was aware of the rule, whereas it is in
fact 7(b)(ii) that provides that it should be established whether the
employee was aware
of could be reasonably be expected to be aware of
the rule. The Applicant’s case is that it proved during
the arbitration
proceedings that Harmse was aware of the rule,
alternatively that he should have been aware of it and there is no
justification
in the arbitrator’s decision to accept Harmse’s
version.
[26]
In my view the reference to the incorrect
sub paragraph of Item 7 has to be considered in accordance with the
question whether the
incorrect reference produced an unreasonable
outcome or provide a compelling indication that the arbitrator
misconceived the inquiry.
In my view the answer to this is no and the
incorrect reference is neither here nor there.
[27]
The Applicant submitted that the totality
of the evidence presented proved that Harmse ought to have known that
there was a contravention
of the relevant procedures and it was
unreasonable to reach the decision that the probabilities favoured
Harmse.
[28]
I do not find that the arbitrator’s
conclusion that the probabilities favour Harmse is unreasonable, as
it was evident from
the evidence that the conduct of all the members
of the BEC and the BAC, including SCM, showed that no one was aware
of the rules
and the procedures they ought to have followed but did
not, which resulted in disciplinary action. Even if am wrong on this
aspect,
the final analysis will depend on the materiality of the
error or irregularity and its relation to the result and this Court
is
not to take a piecemeal approach but should consider the
arbitration award and the evidence adduced holistically. In my view
the
Applicant’s challenge is to show that the award, seen
holistically, is unreasonable.
[29]
In respect of paragraph 5.3 it is the
Applicant’s case that different sanctions did not only follow
from the type of plea
that was entered by the charged employees, but
also followed from the roles played by the members of the BEC and the
BAC as well
as the knowledge and expertise of the employees and the
arbitrator should not have found that it was incorrect to follow such
approach.
[30]
This ground for review is not supported by
the evidence. The Applicant’s representative, in
cross-examination of Harmse, put
it to Harmse in no uncertain terms
and in respect of the other employees who were charged for the same
misconduct but not dismissed
that “
they
were not dismissed because they pleaded guilty….”.
The
issue that the others pleaded guilty to the charges and Harmse not
was a theme that remained throughout the cross-examination
of Harmse.
[31]
Schedule 8 of the Act requires that
employers should apply the penalty of dismissal consistently with the
way it was applied in
the past (historic consistency) and as between
two or more employees who participate in the same misconduct
(contemporaneous consistency).
Consistency is an element of fairness
and an important consideration in the determination of the fairness
of a dismissal.
[32]
In casu
the
arbitrator was faced with a question of contemporaneous inconsistency
where all other employees who were charged with the same
or similar
misconduct as Harmse and who were part of the same BEC and BAC
process, were not dismissed. A perusal of the transcript
of the
arbitration leaves no other conclusion that all the other employees
who were part of the BEC and BAC when ST was appointed
and who were
charged for the same or similar misconduct as Harmse, were not
dismissed but either resigned, reached a settlement
with the
Applicant or were issued final written warnings and the main reason
to differentiate was because they pleaded guilty.
[33]
The fact that Harmse was the only member of
the BEC who was dismissed for the reasons related to the BEC of 8
February 2011, clearly
shows inconsistency and without justification
for the differentiation other than a plea of guilty, rendered his
dismissal unfair.
[34]
The arbitrator’s findings on
inconsistency are supported by the evidence that was adduced and are
not unreasonable in view
of the evidence that was placed before him.
I can see no reason to interfere with the arbitrator’s findings
on inconsistency
and as contained in paragraph 5.3 of the arbitration
award.
[35]
The second ground for review is that the
arbitrator committed a gross irregularity in that the totality of his
reasoning is flawed,
his decision is not connected to the evidence
led and is not rational. Apart from this sweeping and bold statement,
the Applicant
did not make any averments to substantiate or explain
in what respect the arbitrator’s reasoning is flawed and the
decision
disconnected from the evidence.
[36]
In my view more is needed than a mere,
unsubstantiated allegation of irregularity. It is simply not enough
to say that the totality
of the arbitrator’s reasoning is
flawed and this Court cannot and should not entertain unsubstantiated
claims of irregularity,
more so where the test on review is a
stringent one.
[37]
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 inquiry, the delimitation of the issues to be
determined and the
ultimate outcome. Without any averments setting
out what the irregularity is, such an assessment is impossible and
the ground for
review cannot stand.
[38]
In
summary, where it is alleged in review proceedings that an arbitrator
ignored certain material facts, the enquiry is whether
indeed this
was the case, and if so, whether these facts were material. If it is
found that they were indeed ignored as alleged,
and were material, it
follows that the arbitrator would have come to a different conclusion
had he taken them into account, and
therefore the result arrived at
would
prima
facie
be unreasonable
[8]
.
[39]
In
Herholdt
v Nedbank
Ltd
the Supreme Court of Appeal amplified the review test as
follows:
“
…
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
unreasonable.”
[40]
I must ascertain whether the arbitrator
ignored material facts, considered the principal issue before him,
evaluated the facts presented
and came to a conclusion that is
reasonable.
[41]
Having considered the evidence adduced at
the arbitration proceedings, the findings made by the arbitrator and
the grounds for review
as raised by the Applicant, I cannot find that
the arbitrator ignored material facts. The onus was on the Applicant
to prove that
Harmse’s dismissal was fair and it failed to do
so. The arbitrator could, on the evidence before him, make the
findings and
reached the conclusions he did.
[42]
Viewed cumulatively, and in line with
Harold
and
Mofokeng,
I am not convinced that the arbitrator’s decision was one
that a reasonable arbitrator could not have reached on the full
conspectus of all the facts before him.
[43]
Having found that relevant facts were not
ignored by the arbitrator, there is no need to proceed with the full
Mofokeng
analysis.
[44]
The award and findings contained therein are
reasonable and are not to be interfered with on review. It follows
that the application
in terms of section 145 of the Act fails.
[45]
Both parties argued that the costs should follow
the result and I can see no reason to disagree.
Order
[46]
In the premises I make the following order:
46.1 The application for review is
dismissed with costs.
______________
C.
Prinsloo
Judge
of the Labour Court
Appearances:
For
the Applicant: Advocate V Naidu
Instructed
by : State Attorney
For
the Third Respondent: Mr E Geldenhuys of Tomlinson Mnguni James
Attorneys
[1]
(2007) 28 ILJ 2405 (CC) at para 110.
[2]
(2014) 35
ILJ
943 (LAC).
[3]
[2013] 11 BLLR 1074 (SCA).
[4]
[2007] ZALC 66
;
[2014] 1 BLLR 20
(LAC).
[5]
[2015] 1 BLLR 50
(LAC), para 33.
[6]
(2015) 36 ILJ 2908 (LC).
[7]
Act 66 of 1995.
[8]
Head of the Department of
Education v Mofokeng
[2015] 1 BLLR 50
(LAC). See also
Shoprite
Checkers v CCMA and others
(unreported case no: JR2471/13 ) at paragraph [10] where it
was held that;
“
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”