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[2016] ZALCD 12
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Hillside Aluminium (Pty) Ltd v Mathuse and Others (D178/2014) [2016] ZALCD 12; (2016) 37 ILJ 2082 (LC); [2016] 10 BLLR 1041 (LC) (24 May 2016)
THE
LABOUR COURT OF SOUTH AFRICA
DURBAN
Reportable
Case no: D178 /2014
In
the matter between:
HILLSIDE
ALUMINIUM (PTY) LTD
Applicant
and
MOSES
MATHUSE
First Respondent
NATIONAL
UNION OF METALWORKERS OF
SOUTH
AFRICA
Second Respondent
METAL AND ENGINEERING INDUSTRIES
BARGAINING
COUNCIL
Third Respondent
HUMPHREY
NDABA
N.O
Fourth Respondent
Heard
: 1 April 2016
Delivered
: 24 May 2016
Summary :
Review application. Evidence. Status of disciplinary record at
arbitration. Arbitrator
could not consider and accept mitigating
factors reflected in minutes of the disciplinary enquiry when no
evidence was adduced
on those minutes and in the absence of an
agreement that the record would be evidence at the arbitration.
Arbitrator considered
evidence not properly before him and failed to
consider factors he was required to. Made no independent
determination regarding
the appropriateness of the sanction. Award is
reviewed and set aside and the matter is remitted for determination
on limited issues.
JUDGMENT
PRINSLOO J.
Introduction
[1]
The Applicant seeks to review and set aside
an arbitration award issued on 27 November 2013 wherein the Fourth
Respondent (‘the
arbitrator’) found the First
Respondent’s dismissal procedurally fair but substantively
unfair and ordered the Applicant
to re-instate him prospectively with
effect from 9 December 2013.
[2]
The Second Respondent (‘NUMSA’)
opposed the application on behalf of the First Respondent.
Background facts
[3]
The background facts are summarised as
follows:
[4]
On 1 June 1996, the Applicant employed the
First Respondent (‘Mathuse’) as a specialist: contractor
management. His
duties included the management of contracts between
the Applicant and service providers. In his capacity as specialist
and in the
course of performing his duties, Mathuse had access to
information relating to the service providers.
[5]
Mathuse was dismissed on 26 July 2012 for
reasons related to misconduct after a disciplinary process was
followed.
[6]
The misconduct Mathuse was dismissed for
was gross insubordination in that on 30 April 2012 and 15 May 2012 he
refused to co-operate
with the investigation into his alleged
misconduct by repeatedly stating that he wished to remain silent and
to respond to the
questions in a formal hearing.
[7]
The charge of gross insubordination
followed a statement submitted on 22 March 2012 by Mr Deon Arumugam
(‘Arumugam’),
the owner of TB Industrial, a company that
responded to the Applicant’s invitation for tenders for
cleaning services. The
value of the tender was R 100 million and
Arumugam implicated Mathuse in tender fraud by alleging that Mathuse
handed over confidential
information, including copies of invoices,
quotations and tender prices to a competitor of TB Industrial and
also a bidder in the
same tender process. The allegation was that
Mathuse leaked the confidential information in exchange for shares.
[8]
The Applicant’s code of business
conduct provides
inter alia
that
the failure to co-operate in investigations of possible breaches
regarding an employee’s own behaviour constitutes misconduct
and may result in disciplinary action. This is referred to as the
‘co-operation rule’.
[9]
Mathuse was bound by the terms and
conditions of his contract of employment and his contract provided
that he was required to comply
with the Applicant’s policies
and procedures and that included compliance with the co-operation
rule.
[10]
As part of the Applicant’s
investigation into the allegations made on 22 March 2012, Mathuse was
invited to make written representations
in response to Arumugam’s
allegations and on 23 March 2012 Mathuse recorded that ‘
the
allegations brought against me are too general to understand as they
are not specific, hence why I should not be suspended.”
Mathuse
was however suspended on 26 March 2012.
[11]
Mathuse made a written statement on 20
April 2012, at the request of Khwela, an employee relations (ER)
specialist. The request
for a statement still related to response to
Arumugam’s allegations and the fact that Mathuse was implicated
in tender fraud.
In his statement, Mathuse said that he has no
objection to make a statement but he added
inter
alia
that “
I
am unable to do so as the information provided to me is insufficient.
Also I would prefer to make the statement with the benefits
of having
my union representative present. I kindly request for the company to
make this available so that I may be able to contribute
as required.”
[12]
Griesel, a security specialist, who was
appointed to investigate the allegations, subsequently liaised with
Mathuse and he reiterated
the provisions of the co-operation rule. On
26 April 2012 Mathuse and a shop steward attended a meeting with
Griesel, during which
meeting Mathuse was informed of the allegations
that were made against him and Mathuse was requested to respond to
the following
specific questions:
“
1.
Have you ever removed any TD Industrial invoice, specifically the
October 2011 invoice from the contractor
management files, at any
point during the period 2010 until at present?
2.
Have you ever contacted or made any such attempts to contact Jerry
Mogobane (allegedly known as
an employee of TD Industrial) and or
David Myeni (alleged to be an erstwhile employee of TD Industrial)
between the period October
2011 to date?
3.
Were any payments ever made, at any period until present, by Deon
Arumugam (directly or otherwise)
owner of TD Industrial for your
personal/private benefit, possibly for car instalment and/or child/
children’s school fees?
(Please note if the payments were
indeed made but were for any other reason than stated above, kindly
furnish the correct information
thereto).”
[13]
Mathuse responded to the aforesaid
questions as follows: “
I wish to
remain silent and wish to answer this question in the formal
enquiry.”
[14]
On 14 May 2012, Mathuse was formally
instructed in writing to furnish a written response to the three
questions by 08:00 on 15 May
2012 and he was once again made aware of
the provisions of the co-operation rule.
[15]
On 15 May 2012 Mathuse responded in writing
to the aforesaid questions that “
I
wish to remain silent and wish to answer this question in the formal
enquiry.”
[16]
On 25 May 2012 Mathuse was charged with
misconduct relating to gross insubordination in that on 30 April 2012
and 15 May 2012 he
refused to co-operate with the investigation into
his alleged misconduct by repeatedly stating that he wished to remain
silent
and to respond to the questions in a formal hearing.
[17]
The disciplinary enquiry was subsequently
held and Mathuse was found guilty and dismissed.
[18]
Mathuse referred an unfair dismissal
dispute to the Third Respondent (‘MEIBC’). The issue to
be decided was whether
Mathuse’s dismissal was substantively
and procedurally unfair.
The arbitration proceedings
[19]
The Applicant called three witnesses to
testify at the arbitration proceedings. Ms Khwela (‘Khwela’),
the ER specialist
testified that she informed Mathuse on 20 April
2012 that he was required to make a statement in respect of the
allegations. Mathuse
required further information before he would
make a statement. Mathuse was subsequently issued with a written
instruction to respond
to the allegations by 15 May 2012 and Khwela
explained to him that should he fail to comply with the instruction,
it would lead
to disciplinary action.
[20]
Khwela testified that Mathuse confirmed
that he understood the contents of the letter, yet on 15 May 2012 he
responded by stating
that he would remain silent and respond only in
a formal enquiry. Subsequent to this response, Khwela met with
Mathuse and his
representatives and attempted to obtain a response
from him, as it was a management instruction for Mathuse to provide a
response.
He however provided the same response and provided no
response to the allegations at all.
[21]
Mr Makhola (‘Makhola’)
testified that Mathuse reported to him. He was approached by Arumugam
who made the allegations
that Mathuse disclosed information that
could have influenced the tender process for a contract that was due
for renewal and out
on tender. The Applicant’s code of business
conduct prescribes that if any allegation of misconduct is brought to
the Applicant’s
attention, action should be taken and the
action he took was to instruct Mathuse to make written
representations regarding the
allegations and why he should not be
suspended. Mathuse indicated that the allegations were too vague and
subsequently Makhola
referred it for further investigation. Mathuse
was suspended pending the outcome of the investigation.
[22]
Makhola testified in respect of the
applicable policies and the importance of the rules and the fact that
Mathuse was aware of the
code of business conduct. Makhola testified
that after he requested Mathuse to provide a statement to the
allegations and after
his instruction that the matter be
investigated, a number of individuals attempted to obtain a statement
from Mathuse, without
any success.
[23]
Makhola testified that the trust
relationship was broken as Mathuse, understanding the seriousness of
the allegations that were
made against him, elected not to co-operate
with the investigation and that Mathuse could not be reinstated.
Reinstating Mathuse
would result in pandemonium and would cause other
employees to defy the rule.
[24]
Mr Griesel (‘Griesel’) was the
last witness called by the Applicant and he testified that he is
employed as a specialist
security and his main function is security
management and to conduct investigations into misconduct and
accidents. He testified
that he was appointed to investigate
allegations against Mathuse and he described Mathuse’s conduct
during the investigation
as uncooperative. Mathuse refused to comment
on the allegations and to respond to questions and said that he would
submit a written
response to specific questions. The only response
that was received from Mathuse was that he wished to remain silent
and would
respond in a formal hearing. This response was despite an
agreement that Mathuse would respond in writing to specific questions
and despite the fact that the specific questions were forwarded to
Mathuse.
[25]
Mathuse testified and his case was that his
dismissal was procedurally and substantively unfair. He testified
that Khwela and Griesel
were not his line managers and they could not
have given him instructions to comply with. His testimony was that ER
should not
have been involved, but his line manager, Makhola, should
have been involved and had Makhola investigated him, his response
would
have been different and he would have co-operated with Makhola.
At the arbitration he denied any involvement in the allegations
as
made by Arumugam and testified that if those questions were posed at
the disciplinary hearing, he would have denied any involvement.
He
did not provide that explanation at his disciplinary enquiry as he
was focussed on the issue of insubordination and nothing
more. He
further complained that the chairperson of the disciplinary hearing
was biased in that he refused to recuse himself.
[26]
The arbitrator found Mathuse’s
dismissal procedurally fair and substantively unfair and ordered his
prospective reinstatement
without back pay with effect from 9
December 2013.
Analysis of the arbitrator’s
findings and grounds for review
[27]
The arbitrator found Mathuse’s
dismissal procedurally fair and the Applicant took no issue with that
and the findings on procedural
fairness require no further
consideration and is not subject to review.
[28]
In the analysis of the evidence and in
consideration of the charge of misconduct Mathuse was dismissed for,
the arbitrator found
that the Applicant’s code required of
Mathuse to co-operate in investigations of breaches of an employee’s
own behaviour
and failure to do so, may result in disciplinary
action. The charge levelled against Mathuse essentially related to
his refusal
to co-operate in the investigation of possible breaches
regarding his own behaviour. In the circumstances Mathuse had no
right
to remain silent and it was irrelevant whether the instruction
was given by a superior or person of equivalent rank and after
Griesel
provided the further information that Mathuse requested, his
refusal to answer specific questions constituted a refusal to
co-operate.
[29]
The arbitrator accepted that on a balance
of probabilities the Applicant has shown that Mathuse refused to
co-operate with his own
investigation. The misconduct Mathuse was
dismissed for, was gross insubordination and the arbitrator, apart
from finding that
Mathuse refused to co-operate with the
investigation, made no findings on whether Mathuse was indeed guilty
and whether his conduct
constituted gross insubordination.
[30]
The arbitrator, without finding Mathuse
guilty of gross insubordination, then proceeded to consider whether
dismissal was an appropriate
sanction. The arbitrator concluded that
dismissal was a sanction too harsh and he based this finding on
mainly two factors that
he had considered. The first is that at the
disciplinary hearing no one posed a question as to whether Mathuse
was still refusing
to answer the questions or whether he was prepared
to honour his undertaking to cooperate at a formal enquiry. In the
arbitration,
Mathuse provided answers to all the questions asked by
Griesel when the arbitrator asked him those same questions.
[31]
The second main consideration was the
mitigating factors presented at the disciplinary enquiry. The
arbitrator considered that the
parties agreed that the disciplinary
record is a fair reflection of what transpired at the disciplinary
hearing and he listed all
the mitigating factors as raised by Mathuse
at his disciplinary enquiry. The arbitrator found the sanction of
dismissal too harsh
as the mitigating factors were not contested at
the disciplinary enquiry, the Applicant raised no aggravating factors
and Mathuse,
at the arbitration, provided positive responses to the
specific questions asked.
[32]
Having found the sanction of dismissal too
harsh, the arbitrator considered the appropriate remedy for the
unfair dismissal and
he held that since Mathuse was not innocent and
indeed committed misconduct, prospective reinstatement without back
pay would be
appropriate. The arbitrator found that he had to award
the primary remedy of reinstatement. He justified this finding by
stating
that Mathuse did not refuse to answer the questions, but only
undertook to answer the questions at a formal enquiry. Mathuse’s
conduct was unacceptable, however he answered the questions when
asked at the arbitration proceedings. So the arbitrator found.
[33]
The
Applicant raised a number of grounds for review in the founding
affidavit but the gist of the review is that the arbitrator
committed
a gross irregularity as contemplated in section 145(2)(a)(ii) of the
the Labour Relations Act
[1]
(‘the Act’).
[34]
The Applicant’s complaints on review
are that the arbitrator misconceived the nature of the enquiry, that
he failed to analyse
the evidence before him holistically, more
specifically in relation to the issue he had to decide on the
appropriateness of the
sanction, he failed to determine whether
Mathuse was guilty of insubordination, that he ignored relevant
factors such as the importance
of the rule that was breached, the
impact of Mathuse’s defiance in refusing to comply with the
rule and instructions and
the impact of Mathuse’s conduct on
the trust relationship.
[35]
The Applicant took issue with the fact that
the arbitrator considered the disciplinary record and relied on the
fact that the Applicant
has not raised aggravating factors at the
disciplinary enquiry and that the mitigating factors were
uncontested. These issues were
not raised at the arbitration and
were not put to the Applicant’s witnesses.
[36]
The Applicant subsequently filed a
supplementary affidavit to supplement the grounds for review. A
perusal of the supplementary
affidavit reveals no new or additional
grounds for review, but rather a repetition of the grounds already
raised in the founding
affidavit, albeit now under specific numbered
headings.
[37]
The matter was set down for argument on 9
March 2016, but was postponed to 1 April 2016 by agreement between
the parties. Subsequent
to the postponement, the Applicant delivered
a further supplementary affidavit, purporting to introduce a new
ground for review
namely that the arbitrator acted procedurally
unfairly by relying on the record of the disciplinary enquiry as if
it constituted
evidence before him.
[38]
The application is opposed. The Second
Respondent (‘NUMSA’) objected to the introduction of a
new ground for review
by the filing of a further supplementary
affidavit. The objection is that the Applicant now seeks to
supplement the original grounds
for review and to do so at this
stage, is extremely late, the new ground for review is not properly
before Court in the absence
of an application for condonation and
Mathuse will be prejudiced as his memory of what transpired has
dimmed over time.
[39]
NUMSA however filed an answering affidavit
to the further supplementary affidavit.
[40]
Mr Schumann for the First and Second
Respondents submitted that it would be unfair to allow the Applicant
to keep on supplementing
its case in the absence of a satisfactory
explanation and the explanation tendered by the Applicant does not
constitute a satisfactory
explanation.
[41]
Mr Myburgh for the Applicant submitted that
the first issue to be decided is whether the introduction of the
further supplementary
affidavit should be allowed.
[42]
It is
trite that the Court has a discretion, to be exercised judicially
upon a consideration of the facts of each case and that
it is
basically a question of fairness to both sides
[2]
.
An important consideration is prejudice.
[43]
I have considered the so-called new ground
for review that the Applicant seeks to introduce and it relates to
the fact that the
arbitrator accepted the evidence that was adduced
at the disciplinary enquiry as evidence before him and in doing so he
committed
a reviewable defect. I will fully deal with the merit of
this ground for review
infra
.
[44]
A perusal of the founding affidavit shows
that the Applicant has from the onset taken issue with the manner in
which the arbitrator
dealt with the evidence before him and with the
fact that the arbitrator relied on the disciplinary record in the
manner he did.
In my view the ground for the review as raised by the
Applicant in the further supplementary affidavit is not entirely new,
it
is a ground for review that is connected to the grounds for review
raised in the founding affidavit and the issue taken with the
acceptance of the disciplinary record in the manner the arbitrator
did, is not a new complaint.
[45]
NUMSA on behalf of Mathuse (‘the
Respondents’) was able to file an answering affidavit to the
further supplementary
affidavit and it does not appear from the
contents of the answering affidavit that the Respondents were unable
to file an answer
or that they were prejudiced in doing so.
[46]
As the ground for review is not entirely
new, it is not actually adding to the Applicant’s case and the
Respondents were able
to file an answer to that, I am satisfied that
NUMSA and Mathuse will not be prejudiced should the further
supplementary affidavit
and the answer thereto be allowed as further
affidavits in this matter.
[47]
I therefore allow the filing of the further
affidavits.
[48]
In my view the Applicant’s review is
limited to the arbitrator’s findings on the appropriateness of
the sanction of
dismissal and the consequential relief of
reinstatement.
[49]
I will first deal with the attack on
the appropriateness of the sanction. Before I deal with the merits of
this ground for review,
the status of the disciplinary record as
evidence in the arbitration calls for consideration.
[50]
The arbitrator concluded that dismissal was
too harsh and the mitigating factors presented at the disciplinary
enquiry were the
main factors that informed and influenced this
decision.
[51]
It is apparent from the award that the
arbitrator considered the fact that the parties agreed that the
disciplinary record is a
fair reflection of what transpired at the
disciplinary hearing. The arbitrator listed all the mitigating
factors raised by Mathuse
at his disciplinary enquiry and found the
sanction of dismissal too harsh as the mitigating factors were not
contested at the disciplinary
enquiry and the Applicant raised no
aggravating factors.
[52]
The Applicant’s case is that in
finding as aforesaid, the arbitrator relied on ‘evidence’
that was not properly
before him and in doing so without notice to
the parties and without affording them an opportunity to contest
that, he committed
a reviewable defect and had the arbitrator not
gone procedurally wrong, he would have upheld Mathuse’s
dismissal.
[53]
It is evident from the arbitration award
that the arbitrator listed 19 factors presented in mitigation, as he
found them in the
minutes of the disciplinary hearing, and that the
issue of mitigating and aggravating factors had a material impact on
the arbitrator’s
decision on the appropriateness of the
sanction. In fact, it determined the entire outcome of the
arbitration.
[54]
The Respondents admit that the arbitrator
took into consideration the mitigating factors presented at the
disciplinary hearing but
argued that the arbitrator was entitled to
do so. This is so because the parties agreed that the transcript of
the disciplinary
hearing was what it purported to be and that it was
a true reflection of what transpired during the disciplinary hearing.
The Respondents
submitted that the minutes of the disciplinary
enquiry and what was recorded therein were properly placed before the
arbitrator,
it was admissible as evidence and the arbitrator was
entitled to accept the minutes as evidence.
[55]
The parties clearly hold a different view
as to whether the arbitrator was entitled to rely on the minutes of
the disciplinary hearing
based on the agreement that it is what it
purported to be and a fair reflection of what transpired at the
disciplinary hearing.
The status of the disciplinary
record as evidence before the arbitrator
[56]
In litigation parties would prepare bundles
of documents and the documents included in the trial bundles, would
be included as documentary
evidence which the parties intend to rely
on in support of their respective cases. It is a common practice for
parties to agree
on the status of the documents to be included in the
trial bundle.
[57]
In my view there are three possible
scenarios.
[58]
The first scenario is where there is no
agreement on the authenticity or status of documents or where the
authenticity is disputed.
In such instances the party wishing to
produce a document and wants to rely on the document as evidence, has
to prove the authenticity
of the document by leading evidence and if
the authenticity is not proved or admitted, the document is
inadmissible, may not be
used in cross-examination and cannot be
considered as evidence.
[59]
The second scenario is where parties agree
that documents are what they purport to be. This means that the party
wishing to rely
on the document, does not have to prove the
authenticity of the document but may lead evidence and rely on the
document on the
basis that it is what it purports to be. In this
instance documents must be introduced as evidence and
cross-examination on such
documents is permissible. The presiding
officer can accept the document as evidence insofar as it was
properly introduced by witnesses.
Where a document is agreed to be
what it purports to be, but no evidence is adduced on the document,
the presiding officer cannot
mero motu
consider such document as evidence merely because it is included in a
trial bundle.
[60]
The third scenario is where the parties
agree that the documents in the bundle should be regarded as
evidence. In this instance
the presiding officer is entitled to
accept the contents of the documentary evidence as if it were
evidence adduced before him
or her and even if no witness testifies
about it, it can be considered as relevant and admissible evidence.
[61]
Where the document is a transcript or
record of another proceeding, the same principles apply. Where the
parties agreed that the
transcript is what it purports to be and a
true reflection of what purports to be recorded, it means that the
record is authentic
and correctly reflects that the proceedings
indeed took place. In this scenario contradictions in testimony could
be canvassed
during cross-examination. The presiding officer is
entitled to consider the portions of the transcribed record that were
introduced
by witnesses, either in evidence in chief or
cross-examination, as evidence. The presiding officer cannot merely
accept the entire
record as evidence, but can accept as evidence
those portions introduced by witnesses.
[62]
Where the parties agreed that the entire
transcript should be regarded as evidence before the presiding
officer, the entire record
could be considered and accepted as if it
was evidence that was adduced before the tribunal where it was
introduced, without the
need for evidence to be adduced on it. In
this scenario the evidence given at the disciplinary hearing is
regarded as evidence
at the arbitration. This is an extraordinary
scenario and requires an explicit and clear agreement between the
parties.
[63]
In casu
it
is common cause that the parties agreed that the record of the
disciplinary hearing was what it purports to be and that it was
a
fair reflection of what transpired. As such the parties could use the
record in cross-examination and as part of the evidence
they wanted
to introduce.
[64]
There was no agreement between the parties
that the record of the disciplinary hearing would be accepted as
evidence in the arbitration.
The agreement was limited to an
acceptance that it was what it purported to be.
[65]
In argument before this Court Mr Myburgh
submitted that the arbitrator was, in the absence of an agreement
that the record would
be evidence before him, not free to dip into
the record of the disciplinary hearing and to take from that record
what he likes
and to use that in the determination of the issues.
[66]
Mr Schumann on the other hand submitted
that the technical rules of the law of evidence do not apply in
arbitration proceedings
as the rule of fairness applies. In my view
fairness is to be determined by considering all the facts and
evidence and even in
arbitration proceedings one cannot escape the
application of the law of evidence. This is more so where the parties
are represented.
[67]
It is common cause that at no point during
the arbitration did any of the parties refer to the portion in the
record that deals
with the mitigating and aggravating factors and
that was not part of the facts placed before the arbitrator.
[68]
In my view the arbitrator could, in the
absence of an explicit agreement that the record would be evidence in
the arbitration, only
consider those portions of the record the
parties introduced as evidence by way of testimony.
[69]
In
Karan
Beef (Pty) Ltd v Mbovane NO and others
[3]
this Court found that a conclusion based on evidence not properly
before the arbitrator was unreasonable. It was held that:
“
The
commissioner also accepted the evidence that the second test was done
based on the transcript of the disciplinary hearing. The
commissioner
accepted this evidence despite the fact that the two security
officers who testified during the disciplinary hearing
did not
testify before her and there was no evidence that the parties had
agreed that the record of the disciplinary hearing
would serve
as evidence at the arbitration hearing.
It
is therefore my view that the conclusion by the commissioner that the
second test was done was unreasonable because she arrived
at this
conclusion on evidence which was not properly before her.
”
[70]
If I am wrong in finding that the arbitrator could not have
considered the portion of the record as he did and if the arbitrator
was indeed entitled to consider the record of the disciplinary
hearing because of the agreement between the parties, another
important
factor comes into play.
[71]
The
audi
alteram partem
rule
requires that parties and their representatives be given an
opportunity to be heard in regards to every matter and every piece
of
evidence the arbitrator may take into account
[4]
.
Where the
audi alteram
partem
rule is not complied
with, parties are denied a fair hearing.
[72]
In casu
the arbitrator considered factors that were not
canvassed in evidence, he never alerted the parties to the fact that
he would use
and consider it in deciding the fairness of Mathuse’s
dismissal and that he never invited the parties or afforded them the
opportunity to lead evidence or make submissions on the factors he
intended to consider.
[73]
Even if the arbitrator was entitled to consider the record of the
disciplinary enquiry, he could not have considered it without
alerting the parties to the fact that he would consider it, more so
where those facts had a material impact on the outcome of the
arbitration.
Grounds for review
[74]
As already alluded to, the Applicant raised
a number of grounds for review but in my view there are two main
grounds for review
and the Applicant’s case is two-fold. On the
one hand issue is taken with the arbitrator’s finding regarding
the appropriateness
of the sanction and on the other hand is the
issue of reinstatement.
The appropriateness of the sanction
of dismissal
[75]
The first main ground for review relates to
the finding regarding the appropriateness of the sanction. In summary
the Applicant’s
case is that in deciding the appropriateness of
the sanction, the arbitrator considered evidence that was not
properly before him,
that he failed to analyse the evidence before
him holistically, he failed to determine whether Mathuse was guilty
of insubordination,
that he ignored relevant factors such as the
importance of the rule that was breached, the impact of Mathuse’s
defiance in
refusing to comply with the rule and instructions and the
impact of Mathuse’s conduct on the trust relationship.
[76]
The second main ground for review relates
to the decision to reinstate Mathuse and on the issue of
reinstatement the Applicant’s
case is that the arbitrator
failed to take all the evidence before him into consideration and he
misconceived the enquiry.
[77]
I will deal with the two main grounds for
review separately. However, in my view the manner in which the
arbitrator dealt with the
evidence that was before him, how he
assessed the evidence and the findings he made based on that evidence
is central in considering
all the grounds for review. A crucial issue
to be decided is not only whether the arbitrator ignored relevant
evidence, but also
whether he considered evidence not properly before
him when he considered the appropriateness of the sanction of
dismissal.
[78]
The arbitrator’s finding that the
sanction of dismissal was too harsh, was premised on three reasons.
[79]
Firstly, that Mathuse was not asked at his
disciplinary enquiry whether he was prepared to honour his
undertaking to cooperate at
a formal enquiry. Mathuse provided
positive responses to the questions he previously and consistently
refused to respond to when
they were posed to him by the arbitrator
at the arbitration.
[80]
The arbitrator regarded the positive
responses as a ground to find the sanction of dismissal too harsh. In
this respect he misconceived
the enquiry and ignored the evidence
adduced by the Applicant in respect of Mathuse’s persistent
refusal to co-operate and
the evidence that it constituted gross
insubordination. The arbitrator found that Mathuse refused to
co-operate, but made no findings
on whether Mathuse was indeed guilty
of gross insubordination, despite the fact that it was a material
issue he had to decide and
despite the fact that the Applicant
adduced evidence regarding Mathuse’s misconduct which related
to gross insubordination.
[81]
Secondly the arbitrator found that the
sanction of dismissal was too harsh on account of the 19 mitigating
factors raised by Mathuse
in the disciplinary enquiry and thirdly on
account of the fact that at the disciplinary hearing ‘
no
aggravating factors were raised by the company representative nor
were the mitigating factors disputed.”
[82]
The mitigating and aggravating factors
considered by the arbitrator is nothing more than an extract quoted
from the minutes of the
disciplinary hearing. The arbitrator found
that the mitigating factors were not contested and the Applicant
raised no aggravating
factors. At the arbitration Mathuse gave no
evidence in mitigation of the sanction, let alone traverse the 19
factors the arbitrator
listed in mitigation, nor were these factors
in mitigation advanced in arguments submitted at the arbitration. The
arbitrator’s
findings in this respect were not based on
evidence before him, but were based on a portion of the record no
evidence was adduced.
[83]
I have already found that the arbitrator
was not entitled to consider such portion of the record in the
absence of an explicit agreement
that the record would stand as
evidence. In the event he was so entitled, he should have applied the
audi alteram partem
rule
and alerted the parties to the fact that he would consider those
factors and afforded them the opportunity to be heard on that.
[84]
The fact that the arbitrator considered
factors without affording the parties an opportunity to respond
thereto by way of evidence
or submissions, constituted a disregard
for the rules of natural justice and deprived the parties of a fair
hearing.
[85]
The issue about the determination of the
appropriateness of the sanction, however goes further and is to some
extent connected to
the Applicant’s case that the arbitrator
misconceived the nature of the enquiry because he did not determine
whether Mathuse
was guilty of gross insubordination or not. Logic
dictates that there should be a finding on guilt in respect of the
charge of
misconduct before there can be a proper consideration of
the appropriateness of the sanction.
[86]
In casu
the
arbitrator accepted that the Applicant has shown that Mathuse refused
to co-operate with his own investigation. He never made
a finding in
respect of the misconduct Mathuse was dismissed for and he failed to
determine whether Mathuse was guilty of gross
insubordination or not.
The point of departure of the arbitrator’s enquiry into the
appropriateness of the sanction, could
not have been anything else
but that Mathuse merely refused to co-operate with an investigation.
The arbitrator approached the
determination of the appropriateness of
the sanction without making a finding on gross insubordination, a
material issue he had
to decide first. In considering the
appropriateness of the sanction the arbitrator lost sight of the fact
that Mathuse was dismissed
for gross insubordination.
[87]
The
Constitutional Court in
Sidumo
[5]
has set out the factors to be considered in determining the fairness
of the sanction. Those are as follows:
“
In
approaching the dismissal dispute impartially a 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 the 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, whether 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.
To
sum up. In terms of the LRA, a commissioner has to determine whether
a dismissal is fair or not. A commissioner is not given
the power to
consider afresh what he or 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.”
[88]
A consideration of these factors is
glaringly absent from the arbitration award.
[89]
This, in my view, flows from the
arbitrator’s failure to make a finding on whether Mathuse was
indeed guilty of gross insubordination
or not and is a perpetuation
of the failure to decide the material issues.
[90]
In casu
the
minutes of the disciplinary enquiry listed 19 factors in mitigation
which the arbitrator regarded and accepted as uncontested
and which
clearly influenced the outcome of the arbitration. In fact, the
consideration of these 19 mitigating factors played a
dominant role
in the decision that the sanction of dismissal was too harsh.
[91]
It is evident that the arbitrator dismally
failed to consider any of the factors as set out in
Sidumo
and he equally failed to consider all
the relevant circumstances to decide whether Mathuse’s
dismissal was an appropriate
and fair sanction.
[92]
The arbitrator was required to determine
the appropriateness of the sanction of dismissal
de
novo
and independently, based on the
evidence placed before him and with due consideration of the relevant
factors.
[93]
The arbitrator did none of that. He merely
repeated factors listed in the minutes of the disciplinary enquiry
without any independent
determination of the appropriateness of the
sanction. The arbitrator dismally failed to carry out his duties when
he failed to
decide material issues.
Reinstatement
[94]
The second ground for review relates to the
relief of reinstatement.
[95]
The arbitrator found that Mathuse should be
reinstated as he did not refuse to answer the questions
in
toto
, he only undertook to answer at a
formal enquiry and although his conduct was unacceptable, he answered
the questions satisfactory
when asked at the arbitration. The
arbitrator held further that it was unfortunate that that Mathuse was
not asked whether he was
prepared to answer the questions at his
disciplinary hearing after he was found guilty.
[96]
The reasoning of the arbitrator in
determining an appropriate remedy is astonishing and it is not
surprising that the Applicant
takes issue with the reinstatement.
[97]
The Applicant’s case is that on a
proper assessment of the evidence, the decision that the sanction of
dismissal was inappropriate
and reinstatement was appropriate, is
unreasonable for a number of reasons. Those are
inter
alia
that the arbitrator never
determined whether Mathuse was guilty of gross insubordination, he
never properly assessed the gravity
of Mathuse’s misconduct, he
failed to consider the evidence the Applicant’s witnesses
adduced about the gravity of
the misconduct and the breakdown of the
trust relationship. What is more is the fact that the arbitrator
reinstated Mathuse prospectively,
effectively suspending Mathuse for
16 months without pay and the Applicant submitted that this is
manifestly irrational and an
acknowledgement that the sanction of
dismissal was fair.
[98]
In finding that Mathuse should be
reinstated for the reasons set out in the arbitration award and
already alluded to, the arbitrator
ignored material evidence and
misdirected himself. Had he considered the evidence properly, he
could not have ordered Mathuse’s
reinstatement. For the
arbitrator to order prospective reinstatement with 16 months without
pay underlines the inappropriateness
of reinstatement.
The test on review
[99]
The test
that this Court must apply in deciding whether the arbitrator's
decision is reviewable has been rehashed innumerable times
since
Sidumo
[6]
as whether the decision reached by the arbitrator is one that a
reasonable decision maker could not 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.
[100]
In
Goldfields
Mining South Africa v Moreki
[7]
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.”
[101]
Following
the Supreme Court of Appeal judgment in
Herholdt
[8]
and the Labour Appeal Court’s judgment in
Gold
Fields
,
[9]
the Labour Appeal Court handed down another important judgment in
Head of
the Department of Education v Mofokeng.
[10]
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.”
[102]
In summary: I must ascertain whether the
arbitrator considered the principal issue before him, evaluated the
facts presented and
came to a conclusion that is reasonable.
[103]
Viewed cumulatively, and in line with the analysis as set out in
Mofokeng,
the arbitrator’s failure to consider the
evidence adduced or, as the flip side of the same coin, his
consideration of evidence
that was not properly before him, was
material to the determination of the dispute and led him to
misconceive the nature of the
enquiry.
[104]
The arbitrator failed to address the principal issues he had to
determine, such as whether Matushe was indeed grossly insubordinate
and whether dismissal was an appropriate sanction based on the
evidence before him and the factors he had to consider.
[105]
Based on the above, I am persuaded that the
arbitration award cannot stand and should be interfered with on
review.
Relief
[106]
This leaves the issue of relief.
[107]
The Applicant seeks for the arbitration award to be reviewed and set
aside and to be substituted with an order that Mathuse’s
dismissal was procedurally and substantively fair.
[108]
Mr Myburgh submitted that in the event the award is set aside on
review, this Court has a discretion whether or not to finally
determine the matter. He submitted that the Court is in as a good
position as the MEIBC to decide the matter and should thus finally
determine the matter by substituting the award with and order that
Mathuse’s dismissal was fair.
[109]
In my view the the appropriateness of the sanction of dismissal is a
material issue to be decided. The Applicant takes issue
with the fact
that such a material aspect was decided without affording the
Applicant an opportunity to lead evidence on it or
to make any
submissions on it and without hearing any evidence on it, with
specific reference to the factors the arbitrator considered
in this
regard.
[110]
No evidence was placed before the arbitrator on the appropriateness
of the sanction with reference to the mitigating and aggravating
factors that were considered and no such evidence is before this
Court to consider. For this reason the Court is not in a position
to
substitute the award for a finding that Mathuse’s dismissal was
fair.
[111]
The matter should be remitted to the MEIBC as there is not sufficient
information on material issues upon which this Court
can finally
determine the matter.
[112]
The remittal is limited and the only issues to be decided are whether
Mathuse was guilty of gross insubordination as no finding
on this was
ever made and whether dismissal was an appropriate sanction. It
follows that the appropriate relief will be decided
de novo
after
proper consideration of the aforesaid issues.
[113]
The remittal of the aforesaid issues and the determination thereof is
to be done on the existing transcribed record of the
arbitration
proceedings.
[114]
Mr Myburgh stated that the Applicant is not
seeking a cost order against Mathuse. I agree with the
Applicant’s position
in respect of costs as this is a case
where the conduct of the arbitrator deprived the parties of a fair
hearing and the interests
of justice and fairness would at this stage
be best served by no cost order.
Order
[115]
In the premises I make the following order:
1.
The
arbitration award issued on 27 November 2013
under case number MEKN 6605
is reviewed and set aside in the
following extent:
2.
The arbitrator’s findings on procedural fairness are confirmed.
3.
The matter is remitted to the MEIBC in relation to substantive
fairness
on the following terms:
3.1 The only issues to be decided
de
novo
are whether the First Respondent was guilty of gross
insubordination and whether dismissal was an appropriate sanction;
3.2 The appropriate relief if any, is
to be decided
de novo
after determination of
the aforesaid issues;
3.3 The determination of the issues
set out in paragraph 3.1 and 3.2 of this order is to be made on the
existing transcribed record
of the arbitration proceedings;
3.4 The presiding arbitrator may
permit the parties to adduce evidence on the appropriateness of the
sanction.
4. There is no order as to costs.
______________
C.
Prinsloo
Judge
of the Labour Court
Appearances:
For
the Applicant : Advocate A
Myburgh SC
Instructed
by
: Norton Rose Fulbright South Africa Inc Attorneys
For
the First and
Second
Respondents: Advocate P Schumann
Instructed
by
: Brett Purdon Attorneys
[1]
Act 66 of 1995.
[2]
James Brown and Hamer (Pty)
Ltd v Simmons
1963 (4) SA
656 (A).
[3]
(2008) 29 ILJ
2959 (LC)
[4]
Portnet (A division of
Transnet Ltd) v Finnemore and others
(1999) 2 BLLR 151 (LC).
[5]
(2007) 28 ILJ 2405 (CC) at paras 78 and 79.
[6]
S
upra
[7]
(2014) 35
ILJ
943 (LAC).
[8]
[2013] 11 BLLR 1074 (SCA).
[9]
[2014] 1 BLLR 20 (LAC).
[10]
[2015] 1 BLLR 50
(LAC), para 33.