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[2017] ZALCJHB 56
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Harmony Gold Mining Company Limited v Lefosa and Others (JR2235/13) [2017] ZALCJHB 56 (7 February 2017)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
No: JR2235/13
In
the matter between:
HARMONY
GOLD MINING COMPANY
LIMITED
Applicant
and
THYS
LEFOSA
First Respondent
NATIONAL
UNION OF MINE WORKERS
Second Respondent
COMMISSION
FOR CONCILIATION, MEDIATION
AND
ARBITRATION
Third Respondent
PETER
GREYLING,
N.O.
Fourth Respondent
Heard:
14 July 2016
Delivered:
07 February 2017
JUDGMENT
AINSLIE,
AJ
Introduction
[1]
This
is a review application in terms of section 145 of the Labour
Relations Act
[1]
. The
record in this matter is voluminous with the arbitration hearing that
took place over the course of three days.
[2]
The Fourth Respondent (the Commissioner)
found that the dismissal of the employee, the First Respondent (Mr
Lefosa), by the Applicant
(the Company) was substantively unfair
since the Company failed to prove that Mr Lefosa made himself
guilty of the allegations
of misconduct that were levelled against
him.
[3]
The Commissioner found that Mr Lefosa’s
dismissal was procedurally fair.
[4]
The Company was ordered to reinstate
Mr Lefosa and to pay him back pay amounting to nine months’
remuneration.
[5]
The Company submits that on a proper
analysis of all the evidence that served before the Commissioner and
of the award, the Commissioner’s
finding that Mr Lefosa’s
dismissal was substantively unfair and his decision to reinstate
Mr Lefosa, was one that
a reasonable decision maker could not
reach.
[6]
Mr Lefosa opposes the review application.
[7]
In addition to seeking an order reviewing
and setting aside the award, the Company also seeks the substitution
thereof with an order
that the dismissal of Mr Lefosa was
substantively fair.
Applicant’s
Grounds of Review
[8]
The Company submitted that the arbitration
award stands to be reviewed and set aside on one or more of the
following grounds:
8.1
The Commissioner committed a gross
irregularity and/or misconduct in that he misconstrued the
allegations against Mr Lefosa
and, consequently, he misconstrued
the nature of the enquiry before him (review ground 1);
8.2
The Commissioner committed misconduct
and/or a gross irregularity in failing to apply his mind to material
facts regarding the existence
of the rule and, consequently, reached
the conclusion that a reasonable decision maker could not have
reached (review ground 2);
8.3
The Commissioner committed misconduct
and/or a gross irregularity in failing to apply his mind to the
material evidence regarding
the meaning of “housekeeping”
in the context of the Smelt House and, consequently, reached a
decision that a reasonable
decision maker could not have reached
(review ground 3);
8.4
The Commissioner committed misconduct
and/or a gross irregularity in disregarding the material evidence
regarding the intolerability
of the continued employment relationship
between Mr Lefosa and the Company and, consequently, reached a
decision that a reasonable
decision maker could not have reached with
respect to the appropriate remedy (review ground 4);
8.5
The Commissioner committed a gross
irregularity and/or reached a decision that a reasonable decision
maker could not have reached,
in light of the evidence before the
Commissioner (review ground 5);
Material
Background Facts
[9]
At all material times, Mr Lefosa was
employed by the Company as its Chief Smelter at its Kalgold
operations. Mr Lefosa reported
directly to Mr Jacob Mosiane
(Mr Mosiane), the acting Business Unit Leader. Mr Mosiane
reported to Mr Ramosiako
Montshonyane (Mr Montshonyane), the acting
Plant Manager. Mr Monshonyane in turn reported to Mr Paul Van As (Mr
Van As), the group
Metallurgist.
[10]
As the Chief Smelter, Mr Lefosa worked in
the Company’s Smelt House. The core function of the Smelt House
is the processing
and refining of the gold from the ore that has been
mined. As a result, the Smelt House is a high risk operation and,
therefore
has stringent security measures.
[11]
It has been submitted on behalf of the
Company that as a result of the processes in the Smelt House, every
single particle therein
is considered to contain gold particles. The
Company’s stringent security measures require that any item
that enters the
Smelt House must be destroyed in the Smelt House and
may not again leave the Smelt House.
[12]
From time to time, the Company embarks on a
“clean-up operation”. During such an operation, the
Company collects and
refines sludge material from, amongst other
places, its sumps and eluent tanks. This sludge, it was submitted,
contains gold bearing
material that can be processed to recover gold.
Some solid gold accumulates at the bottom of the eluent tank during
the clean-up
process. This is then also where the Company will
typically find gold bearing material during the “clean-up
operations”.
[13]
On or about 2 April 2013, Mr Montshonyane
requested the eluent tank to be opened and cleaned to recover the
sludge in it. During
this “clean-up process”, four drums
of sludge were recovered. The four drums were all stored in the Smelt
House.
[14]
The content of two of the four drums was
smelted in the Smelt House subsequently, under the supervision of Mr
Lefosa. Mr Lefosa
reported that no gold was retrieved from the
smelting process.
[15]
On or about 3 May 2013, Mr Van As requested
to see the two remaining drums as he believed that it was impossible
that the content
of the four drums did not contain any gold bearing
material. Mr Van As wanted to be present when the content of the two
remaining
drums was smelted.
[16]
In anticipation of Mr Van As’
attendance, Mr Lefosa was instructed to do “Housekeeping”.
The instruction was given
to Mr Lefosa by Mr Mosiane.
[17]
On or about 4 May 2013, Mr Montshonyane
went to the Smelt House to verify and inspect the two remaining
drums. He was unable to
find the two remaining drums. Upon making
enquiries, Mr Lefosa told Mr Montshonyane that he (Mr Lefosa)
disposed of the content
of the two drums by pumping it through the
gravity spillage pump located inside the Smelt House.
[18]
Mr Lefosa was subsequently charged with the
following acts of misconduct:
“
18.1.
Gross Misconduct in that you have allowed the removal of
possible gold bearing material from the smelthouse without
the
necessary authorisation. The smelthouse is a high risk area. This is
a dishonest act in that the action concealed possible
gold theft from
the smelthouse.
18.2.
Gross negligence in that you have allowed the destroying of evidence
that could have proven possible gold
theft from the smelt house which
is a high risk area.”
[19]
Mr Lefosa was dismissed and subsequently,
with the assistance of the Second Respondent (NUM) referred an unfair
dismissal dispute
to the CCMA.
The
Commissioner’s award
[20]
In concluding that Mr Lefosa’s
dismissal was substantively unfair, the Commissioner made the
following findings:
20.1
Messrs Montshonyane, Van As and Boshof
insisted that there was a rule that Mr Lefosa was not entitled
to wash down the sludge
and that it could only have been done after
permission was obtained from Mr Montshonyane. None of the
witnesses were able
to provide any documentary proof of the existence
of such a rule. There was furthermore no evidence of any instructions
or policy
issued by management as to how to deal with eluent
material;
20.2
Mr Mohabe, a Business Unit Leader stated
that Mr Lefosa was entitled to make the decision to pump the eluent
material back into
the system. Mr Mohabe was of the opinion that
Mr Montshonyane and Mr Van As did not really understand the processes
in the
Smelt House. Mr Mohabe furthermore testified that after Mr
Lefosa was suspended, nobody was prepared to move materials from the
Smelt House. The Commissioner indicated that it was apparent that
there was confusion as to the rule;
20.3
The eluent material was washed down in the
presence of the security establishment. If there had been rules to
the contrary, the
security compliment would have been aware of the
rules;
20.4
After the first two drums were tested, Mr
Montshonyane did not give any specific instructions as to what should
happen to the remaining
two drums. Mr Montshonyane and Mr Van As
only decided to test the remaining two drums at a later stage;
20.5
The Commissioner questioned why it was
necessary for Mr Montshonyane to warn the Smelt House of the
fact that a senior individual
was visiting the Smelt House;
20.6
The Commissioner also questioned why Mr
Montshonyane made enquiries as to the whereabouts of the remaining
two drums the morning
before Mr Van As’ inspection. In
particular, the Commissioner questioned why such enquires would be
necessary if there was
a hard and fast rule that the two remaining
drums’ should not be destroyed;
20.7
It was impossible to establish whether the
sludge contained gold bearing material;
20.8
No evidence was presented that the purpose
of washing down eluent material was to destroy evidence of wrong
doing and that the Company
suffered financial loss;
20.9
There was further no evidence that Mr
Lefosa tried to conceal the theft of gold bearing material.
[21]
The Commissioner concluded that the Company
failed to prove that Mr Lefosa made himself guilty of the
alleged allegations of
misconduct.
Assessment
of the grounds of review
[22]
It was argued by Mr Malan, appearing for
the Company, that the Commissioner committed a gross irregularity in
that he misconstrued
the nature of the enquiry before him. He
specifically referred to paragraphs 23 and 25 of the award where the
Commissioner found
that:
22.1
It was impossible to establish whether the
sludge contained gold bearing material; and
22.2
There was no evidence that Mr Lefosa tried
to conceal the theft of gold bearing material and that the Company
suffered financial
loss.
[23]
It was argued that the Commissioner had a
material lack of understanding of the enquiry that he had to
undertake. Based on the wording
of the complaints against Mr Lefosa,
it was not necessary for the Company to:
23.1
Prove that there was in fact gold bearing
material in the eluent tanks and therefore in the remaining two
drums;
23.2
Prove that Mr Lefosa actually discarded the
content of the remaining two drums to destroy evidence of theft; and
23.3
Prove that the Company suffered a loss as a
result of Mr Lefosa’s actions.
[24]
Instead, it was argued that the Company
only had to demonstrate that:
24.1
There was
possible
gold bearing material in the two remaining drums; and
24.2
Mr Lefosa allowed the contents of the two
drums to be pumped away in circumstances where the contents
could
have proven
possible
gold theft.
[25]
To my mind, the Commissioner did embark on
the wrong enquiry and asked the wrong questions. He diverted from the
correct path and
essentially failed to address the correct issues
that were raised for determination.
[26]
Mr
Malan referred me to the judgment in
African
Bank v Magashima & Others
[2]
where it was held that once the Commissioner misconstrues the nature
of the enquiry before him/her, the result will invariably
be
unreasonable.
[27]
I am of the view that in this matter, the
fact that the Commissioner misconstrued the nature of the enquiry
before him, in fact
resulted in an unreasonable finding.
[28]
To my mind, had the Commissioner embarked
on the correct enquiry, he would have considered the evidence that
served before him regarding
the fact that the two remaining drums
possibly
contained gold bearing material. This evidence include but is not
limited to the following:
28.1
Mr Van As’ evidence that there are
two sets of products namely physical gold and sludge. Whilst physical
gold is gold in metal
form that can be separated, the sludge would
also contain gold;
28.2
Mr Van As’ evidence that sludge is
never thrown away. Sludge is dispatched to Rand Refinery;
28.3
The sludge accumulated during May 2012,
which included the sludge from the first two drums that were smelted,
was sent to Rand Refinery.
According to the results received from
Rand Refinery, there were relatively high values of gold in the
sludge;
28.4
Mr Montshonyane’s evidence that it
was possible for the material to have gold in it because when the
first two drums were
smelted, gold was found in the samples of the
sludge;
28.5
Mr Lefosa’s own confession that there
was a possibility that the sludge from the first two drums contained
gold. In this regard,
the Commissioner himself asked Mr Lefosa the
following:
“
Commissioner:
But the essence is that there was a possibility that they could
have
contained gold?
Mr
Thys Lefosa:
Correct.
Commissioner:
Now in the second two drums let’s assume that it
will also not
smelt out any gold, because they come from the same drum eluent tank
is that what you call it?
Mr
Thys Lefosa:
Yes.
Commissioner:
but then there is still a possibility that their might
be gold in the
sludge, isn’t it?
Mr
Thys Lefosa:
Yes it is.”
28.6
Mr Sehlapelo’s evidence that the
remaining two drums contained gold bearing material and that there
was a possibility that
there was gold in those drums.
[29]
Had the Commissioner considered the
evidence referred to above, he would not have reached the conclusion
which he came to in paragraph
23 of his award but would have found
that the Company did prove that the remaining two drums possibly
contained gold bearing material.
[30]
Similarly, had the Commissioner embarked on
the correct enquiry regarding the second complaint against Mr Lefosa,
he would have
considered the following evidence:
30.1
Mr Van Der Merwe’s evidence that gold
is the primary product of the Company, and that when gold is lost or
stolen the Company
suffers financial loss;
30.2
Mr Van As’ evidence that the
Company’s Kalgold operations experienced a shortage of gold
production over a period of
time and that he, with the acting Plant
Manager, devised a plan to investigate possible gold losses;
30.3
Mr Van As’ evidence that upon being
told that the first two drums yielded no gold, he was interested to
see the content of
the material that came out of the eluent tank and
his evidence that he wanted to be present at the smelting of the
remaining two
drums’ contents;
30.4
Mr Montshonyane’s evidence that he
instructed Mr Mosiane that Housekeeping must be performed in
anticipation of Mr Van As’
visit to the Smelt House;
30.5
The evidence that Mr Lefosa was instructed
to ensure that Housekeeping is done in anticipation of a visit from
Senior Management;
30.6
Mr Lefosa’s evidence that he received
the instruction to do good Housekeeping from Mr Mosiane on 1 May 2012
and that he discarded
the contents of the remaining two drums on 3
May 2012 as part of the Housekeeping exercise;
30.7
The Company’s overall evidence that
because the content of the two remaining drums was discarded, the
Company was unable to
determine the source of the gold losses.
[31]
Had the Commissioner considered the
evidence listed above, along with the probabilities of the witness’s
evidence, he would
have come to a different conclusion than the one
that he came to in paragraph 25 of the arbitration award and would
have found
that Mr Lefosa was guilty of the second complaint
against him.
[32]
In light of the above, I am of the view
that the Commissioner misconstrued the nature of the enquiry before
him and this defect
resulted in an unreasonable result that is not
connected with the evidence that was placed before him.
[33]
Accordingly, I find that the arbitration
award is reviewable in its entirety on this ground alone.
[34]
Notwithstanding the above, I will in any
event briefly deal with the Company’s remaining grounds of
review.
[35]
It was argued on behalf of the Company that
the Commissioner failed to have regard to material facts regarding:
35.1
The existence of the rule (review ground
2);
35.2
The meaning of “Housekeeping”
(review ground 3)
and
as a result reached a conclusion that a reasonable decision maker
could not have reached.
[36]
Regarding the existence of the rule, Mr
Lefosa initially alleged that he, as the Chief Smelter in the Smelt
House, had the authority
to wash the content of the two remaining
drums away and that there was no rule or practice stating that he
needed the permission
of the acting Plant Manager to discard
material.
[37]
All of the Company’s witnesses
testified that Mr Lefosa was not permitted to remove any possible
gold bearing material from
the Smelt House without the authorisation
of at least the Plant Manager.
[38]
Mr Mosiane, one of Mr Lefosa’s
witnesses, agreed and testified that Mr Lefosa did not have authority
to discard possible gold
bearing material.
[39]
Mr Lefosa was extremely vague in his
evidence when asked about the rule. In his evidence, he
suggested that the Business Unit
Leader or Plant Manager had to make
a decision whether to continue smelting material or whether to throw
it out.
[40]
To my mind, the Commission placed undue
weight on the absence of a written rule or policy especially in
circumstances where there
was direct evidence from a number of
witnesses regarding the existence of a rule. The Commissioner equally
attached undue weight
to the evidence of Mr Mohabe. Mr Mohabe’s
evidence on which the Commissioner relied in his award, namely that
Mr Montshonyane
and Mr Van As did not understand the processes
in the Smelt House was never put to either of these witnesses. The
Commissioner
accordingly committed an irregularity in relying on
Mr Mohabe’s evidence in this regard.
[41]
In addition, the Commissioner also attached
undue weight to the fact that the content of the remaining two drums
were washed away
in the presence of the security establishment. There
was simply no evidence before the Commissioner to suggest that the
security
officers who were present were aware of whether the dumping
was appropriate or not or carried out with the necessary permission.
[42]
In assessing whether the rule existed or
not, the Commissioner made no attempt to resolve any factual
dispute. He offered
no basis or support for rejecting the
evidence of the Company’s witnesses who all corroborated the
Company’s version
and who, by virtue of their positions within
the Company’s structure, were best placed to testify about the
Company’s
practices and procedures. Similarly, the Commissioner
offered no explanation for preferring Mr Mohabe’s evidence.
[43]
Accordingly, I agree that the Commissioner
failed to apply his mind to material facts regarding the existence of
the rule and that
he reached a conclusion that a reasonable decision
maker could not have reached.
[44]
Turning to whether Mr Lefosa was indeed
instructed to pump away the content of the remaining two drums as
part of the Housekeeping
exercise, there was a material dispute of
fact before the Commissioner.
[45]
During the arbitration proceedings, the
various witnesses testified as follows regarding the “Housekeeping”
process:
45.1
Mr Lefosa indicated that he disposed of the
content of the remaining two drums as part of the Housekeeping
exercise;
45.2
Mr Lefosa himself testified that good
Housekeeping was to “take things and pack them accordingly”;
45.3
Mr Van As testified that good Housekeeping
simply involved placing everything in the Smelt House in its correct
place. This was
corroborated by Mr Montshonyane, Mr Mosiane and Mr
Sehlapelo.
45.4
Mr Van As testified that whilst Mr Lefosa
had discarded the content of the remaining two drums (allegedly as
part of the Housekeeping
operation) he did not dispose of the rubbish
in the Smelt House or the polystyrene containers which contained food
and which were
piled up in the airlock. This evidence was not
disputed;
45.5
Mr Van As was adamant in his evidence that
the Company does not get rid of gold bearing material in the process
of Housekeeping;
45.6
It was common cause that the two remaining
drums were stored in the airlock and that it ought not to have been
stored there. Mr
Van As testified that as part of the Housekeeping
operation, the two drums ought to have been taken out of the airlock
area and
ought to have been put in its correct place. The material
should not have been thrown away;
45.7
Mr Montshonyane also testified that the
Housekeeping process did not entail the removal of gold bearing
material. Apart from Mr
Van As’ evidence about the poor state
of the Smelt House, Mr Montshonyane testified that in addition to the
two drums of
material which Mr Lefosa discarded, there was a
third drum in the Smelt House that contained rocks. Mr Lefosa did not
remove
this third drum with rocks but only removed the two drums that
contained the sludge;
45.8
Mr Boshof corroborated the presence of a
third drum containing rocks which Mr Lefosa did not remove
during the Housekeeping
exercise. Mr Boshof came to the
conclusion that Mr Lefosa used the Housekeeping exercise as a
“cover-up” because
the third drum containing rocks was
kept inside the Smelt House;
45.9
Mr Mosiane testified that he gave Mr Lefosa
the instruction of the good Housekeeping that “inspired him to
discard those drums”.
During cross examination, he was
confronted with his earlier version of the events which he gave
during the internal disciplinary
enquiry namely that he did not give
Mr Lefosa an instruction to pump the contents of the remaining
two drums through the gravity
pump and that Mr Lefosa took this
decision on his own;
45.10
It appears from Mr Lefosa’s evidence
that he discarded the content of the two remaining drums because it
was waste material.
In his evidence he indicated that after the
smelting of the first two drums, Mr Montshonyane told him that
it was better to
discard the rest of the material as it was a waste
of chemicals and electricity. He did not discard it at the time. He
only discarded
the material on 3 May 2012 after he was instructed to
clean the Smelter House and to remove all waste materials on 1 May
2012.
He contended that by virtue of these two instructions, he
discarded the content of the two remaining drums.
[46]
Apart from considering the fact that the
material was washed out in the presence of security, the Commissioner
failed to have regard
to any of the evidence listed above.
[47]
He furthermore failed to have regard to the
probability of Mr Lefosa’s version. As Mr Malan indeed
put it, the fact
that Mr Lefosa seems to have only attended to the
discarding of the contents of the two remaining drums as part of the
Housekeeping
exercise but failed to clear out the rocks and items
that were obviously meant to be cleared out, is strongly indicative
of the
fact that Mr Lefosa wanted to cover-up possibly evidence
of theft.
[48]
Insofar as it was Mr Lefosa’s version
that he had an earlier instruction from Mr Montshonyane to
discard the rest of
the material as it was a “waste of
chemicals and electricity”, the Commissioner did not deal with
this evidence in
any meaningful way either. In evaluating this piece
of evidence afresh, Mr Lefosa’s version and that of Mr
Mosiane namely
that Mr Montshonyane told Mr Lefosa to discard the
rest of the materials, being the third and fourth drum, as it was a
“waste
of chemicals and electricity” was never put to
Mr Montshonyane. Mr Ngangiwe, who appeared for Mr Lefosa,
conceded that
this evidence of Mr Lefosa and of Mr Mosiane was
untested. The further difficulty I have with Mr Lefosa’s
version is
that he never discarded the rest of the material when he
was, on his version, instructed to do so by Mr Montshonyane. On
his
own version he waited until the beginning of May after he became
aware of Senior Management’s intended visit.
[49]
To my mind, had the Commissioner applied
his mind to the evidence listed above and had he considered the
probabilities of the witnesses’
versions and their credibility
as he was tasked to do, he would have found that Mr Lefosa was
not instructed to dispose of
the contents of the remaining two drums
as part of the Housekeeping exercise. Instead, the Commissioner came
to a decision that
a reasonable Commissioner could not have come to.
[50]
Regarding the fourth ground of review, I
similarly find that the Commissioner reached a decision that a
reasonable decision maker
could not have reached with respect to the
appropriate remedy.
[51]
It is clear from the award that the
Commissioner did not have any regard to the appropriateness of
reinstatement as a remedy even
in circumstances where the
Commissioner believed that the dismissal was unfair.
[52]
In my view, there was ample evidence before
the Commissioner to suggest that reinstatement may not be
appropriate. This evidence
included evidence regarding the Smelt
House being a high risk area and evidence in support of the fact that
the trust relationship
between the parties has broken down
irretrievably. There was simply no independent assessment of any
evidence relating to the appropriateness
of sanction.
[53]
By
way of summary, in applying the review test and in particular the
analysis which the Labour Appeal Court conducted in the matter
of
Head
of the Department of Education v Mofokeng and Others
[3]
,
to my mind, the relevant facts which the Commissioner ignored
constitute material facts. Had the Commissioner considered these
facts and the probabilities, he would have come to a different
conclusion on the finding of Mr Lefosa’s guilt and on sanction.
As a result, the award is
prima
facie
unreasonable and there is no basis in the evidence to displace the
prima
facie
case of unreasonableness. The Commissioner’s failure to
consider a number of material facts distorted the outcome of the
hearing and resulted in an unreasonable and thus reviewable award.
[54]
Accordingly, the award stands to be
reviewed and set aside.
Substitution
of the award
[55]
As indicated above, the Company seeks the
substitution of the award with an order that the dismissal of Mr
Lefosa was substantively
fair.
[56]
The record before this Court is complete
and in the interests of justice and expeditious dispute resolution, I
can see no reason
why the award cannot be substituted.
Order
[57]
In the result, the following order is made:
57.1
The arbitration award issued by the Fourth
Respondent is reviewed and set aside;
57.2
The arbitration award is substituted with
an order that the First Respondent’s dismissal was fair;
57.3
There is no order as to costs.
__________________
Ainslie,
AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES:
On
behalf of the Applicant:
Fritz Malan
Instructed
by:
ENS Inc.
On
behalf of the Respondent:
Luyanda Nyaugiwe
Instructed
by:
Isang Nakale Inc.
[1]
66
of 1995.
[2]
(JR2419/12)
[2014] ZALCJHB 298 (5 August 2014) unreported case.
[3]
[2014]
ZALAC 50
;
[2015] 1 BLLR 50
(LAC); [2015] 36 ILJ 2802 (LAC).