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[2017] ZALCJHB 354
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Van der Merwe v Shiba and Others (JR790/15) [2017] ZALCJHB 354 (27 September 2017)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case No: JR 790/15
In
the matter between
JOHN
PETER VAN DER MERWE
Applicant
And
COMMISSIONER
GEORGE SHIBA
First Respondent
COMMISSION
FOR CONCILIATION MEDIATION
AND
ARBITRATION
Second
Respondent
QUICKSURE
(PTY) LTD
Third
Respondent
Heard:
13 September 2017
Delivered:
27 September 2017
Summary:
Commissioners may find sanction harsher than the one prescribed in
the disciplinary code appropriate when there is evidence
justifying
deviation from the prescribed sanction. Absent evidence, the
commissioner’s decision that the harsher sanction
is
appropriate is unreasonable and defective as envisaged in
section 145
of the
Labour Relations Act 66 of 1995
.
JUDGMENT
Lallie,
J
Introduction
[1]
The applicant seeks an order, in terms of section 145 of the Labour
Relations Act
[1]
(the LRA)
reviewing and setting aside an arbitration award of the first
respondent who will be referred to as the commissioner
in this
judgement. The application is opposed by the third respondent.
Factual background
[2]
The facts of this matter are not in dispute. They are that the third
respondent conducts business in the financial services
sector. It
employed the applicant as a Claims Technician in February 2008. On 30
October 2014, the applicant was found guilty of
being intoxicated on
duty. Although the misconduct is dismissible at the third respondent,
the applicant was issued with a final
written warning on condition
that he sought professional help. A further condition was that he
would provide the third respondent’s
human resources manager
with regular reports on the assistance he was receiving. A progress
report the applicant submitted turned
out to be false in that it was
an attendance register which was signed by a caretaker of the venue
where he received assistance
and not his counsellor. He was charged
with dishonesty and insubordination. He pleaded guilty to dishonesty
and was found guilty
based on his plea and dismissed. He was found
not guilty of insubordination. He referred an unfair dismissal
dispute to the second
respondent Commission for Conciliation,
Mediation and Arbitration (the CCMA). His dispute was arbitrated by
the commissioner who
issued an award in which he found his dismissal
both substantively and procedurally fair. It is that award the
applicant seeks
this Court to review and set aside.
The award
[3]
The commissioner took into account the applicant’s version that
his dismissal was unfair because the sanction of dismissal
was too
harsh. He was charged with dishonesty, misconduct which fetched the
sanction of a final written warning in terms of the
third
respondent’s disciplinary code. He also considered the third
respondent’s version that the sanction of dismissal
was fair
because it conducts business in the financial services sector which
requires its employees to conduct themselves with
honesty and
integrity. It also relied on the Financial Advisory and Intermediary
Services Act
[2]
(the FAIS) which
also demands honesty and integrity from employees. It conceded that
its disciplinary code distinguished between
dishonesty and gross
dishonesty but explained that the reason for dismissing the applicant
was justified by aggravating factors
which the chairperson of his
disciplinary enquiry took into account. The reason for dismissing the
applicant was also based on
the irretrievable breakdown of the trust
relationship between the parties. The commissioner made a finding
that the sanction prescribed
in the disciplinary code should
generally be adhered to unless there are aggravating and mitigating
factors which justify deviation.
He accepted the third respondent’s
version that honesty and integrity are salient requirements of its
environment and that
the applicant dealt directly with finances of
the third respondent’s clients. He noted that although the
penalty for dishonesty
in the disciplinary code was a written
warning, aggravating factors outweighed mitigating factors justifying
deviation from the
disciplinary code. He found that it would be
irrational to expect the third respondent to trust the applicant with
its client’s
finances after he acted with dishonesty. He
accepted that the trust relationship between the parties had broken
down irretrievably
and concluded that the applicant’s dismissal
was both substantively and procedurally fair.
Grounds for review
[4]
The applicant’s main ground for review is that the
commissioner’s decision that the sanction of dismissal was
appropriate
is unreasonable. It is based on the purported aggravating
circumstances which justified deviation from the third respondent’s
disciplinary code which prescribed that dishonesty was punishable by
a written warning. The applicant submitted that no evidence
of
aggravating circumstances was led both at the disciplinary enquiry
and at arbitration. The commissioner’s decision therefore,
is
not based on evidence. The third respondent conceded that the
commissioner did not spell the aggravating circumstances out.
They
could, however, be inferred from evidence and the reasons the
commissioner gave for his decision.
[5]
The applicant’s case is in essence that, the commissioner erred
in finding the sanction of dismissal appropriate. He should
have
found that the third respondent acted unfairly in not issuing the
applicant with a written warning in terms of its disciplinary
code in
the absence of cogent reasons for deviating from the prescribed
sanction. This Court may review an arbitration award if
it is
unreasonable. Errors which justify interference with arbitration
awards are expressed as follows in
Herholdt
v Nedbank Ltd (Congress of South African Trade Unions as amicus
curiae)
[3]
:
“
For a defect in the conduct of
the proceedings to amount to a gross irregularity as contemplated by
section 145 (2)(a)(ii), the
arbitrator must have misconceived the
nature of the enquiry or arrived at an unreasonable result. A result
will only be unreasonable
if it is one that a reasonable arbitrator
could not reach on all the material that was before the arbitrator.
Material errors of
fact, as well as the weight and relevance to be
attached to particular facts, are not in and of themselves sufficient
for an award
to be set aside, but are only of any consequence if
their effect is to render the outcome unreasonable”
[6]
The test is approved in the following words in
Head
of Department of education v Mofokeng and others
[4]
:
“
To repeat: flaws in the
reasoning of the arbitrator, evidenced in the failure to apply the
mind, reliance on irrelevant considerations
or the ignoring of
material factors etc must be assessed with the purpose of
establishing whether the arbitrator has undertaken
the wrong enquiry
undertaken the enquiry in the wrong manner or arrived at an
unreasonable result. Lapses in lawfulness, latent
or patent
irregularities and instances of dialectical reasonableness should be
of such an order (singularly or cumulatively) as
to a result in a
misconceived enquiry or a decision which no reasonable decision-maker
could reach on all the material that was
before him or her”.
[7]
It is common cause that disciplinary codes are guidelines and not
cast in stone. It is further common cause that the third respondent
differentiates between dishonesty and gross dishonesty. The former is
punishable by a written warning and the latter by dismissal.
It is
further common cause that the applicant was dismissed for dishonesty.
The commissioner was therefore required to determine
whether the
third respondent’s conduct of dismissing the applicant for
dishonesty was fair. The applicant made himself guilty
of dishonesty.
The third respondent conceded that aggravating circumstances should
exist before a sanction harsher than the one
prescribed in its code
could be justified. It was submitted on behalf of the third
respondent that aggravating circumstances could
be inferred from
evidence. Defending the reasonableness of the award, the third
respondent submitted that the reasons the commissioner
gave for his
decision cannot be faulted as the nature of its business requires a
zero tolerance to dishonesty. It was further argued
that there were
no degrees of dishonesty as an employee is either honest or
dishonest.
[8]
The applicant’s argument is that the third respondent’s
version is untenable is correct. The third respondent created
the
distinction between dishonesty and gross dishonesty in its
disciplinary code. It further prescribed different sanctions for
the
acts of misconduct. By prescribing the sanction of a written warning
for dishonesty, the third respondent communicated to its
employees
the message that it tolerates dishonesty. No evidence of aggravating
circumstances was led to prove that the gravity
of the applicant’s
misconduct justified a sanction harsher than the written warning
prescribed in the disciplinary code.
The reasons the commissioner
relied on for finding deviation from the disciplinary code
justifiable are unreasonable because the
third respondent decided, in
its disciplinary code, that dishonesty is punishable by a written
warning. The reasons on which the
commissioner based his decision on
the appropriateness of the sanction of dismissal are disconnected
from evidence. Absent aggravating
circumstances, the decision that
the dishonesty led to an irretrievable breakdown of the employment
relationship between the parties
is unreasonable. The commissioner
erred in finding the sanction of dismissal appropriate. His error had
the effect of rendering
his decision unreasonable. The application
must, in the circumstances, succeed.
[9]
The applicant sought an order substituting the award. It was argued
on behalf of the applicant that he sought reinstatement
or
compensation. The applicant did not insist on reinstatement and
having taken into account the circumstances surrounding his
dismissal, I came to the conclusion that a continued employment
relationship between the parties would not be tolerable. The
appropriate
relief would, in the circumstances, be compensation. I
have taken into account the applicant’s length of service of
about
seven years. His dismissal was substantively unfair. He was,
however, not before the arbitrator with clean hands in that by his
own admission, he made himself guilty of dishonesty. His disciplinary
record was not clean in that he was on a final written warning
for
being intoxicated on duty. It is just and equitable in all the
circumstances of this matter to grant the applicant compensation
in
the amount of R58 892.00 which is equivalent to remuneration he would
have earned over a period of four months calculated at
his rate of
remuneration on dismissal which was R14 723.00 per month.
[10]
In the premises, the following order is made:
Order
1.
The arbitration award issued by the first respondent under case
number GAEK1520-15
and dated 31 March 2015 is reviewed and set aside
and substituted with the following:
1.1
The applicant’s dismissal was substantively unfair.
1.2
The third respondent is ordered to pay the applicant compensation in
the amount of R 58
892.00 minus the statutory deductions.
Z
Lallie
Judge
of the Labour Court of South Africa
Appearances
For the
Applicant:
Mr Mashiloane an official of UCCIMESHAWU
For the Third
Respondent: Advocate Pottas
Instructed by:
Van Heerden’s Incorporated
[1]
Act
66 of 1995 as amended.
[2]
Act 37
of 2002
[3]
[2013] 11 BLLR 1074
(SCA) at para 25.
[4]
(2015) 36 ILJ 2802 (LAC) at para 32.