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[2017] ZALCCT 51
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Mulholland v CCMA and Others (C18/2017) [2017] ZALCCT 51 (2 November 2017)
REPUBLIC
OF SOUTH AFRICA
Not
reportable
Of
interest to other judges
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Case
no: C 18/2017
In
the matter between:
Mark
James
MULHOLLAND
Applicant
and
CCMA
First
respondent
David
WILSON
N.O
.
Second respondent
D6HLER
SOUTH AFRICA (PTY)
LTD
Third respondent
Heard:
11 October 2017
Delivered:
2 November 2017
SUMMARY:
Employee summarily dismissed in Germany. Subsequently called to
and participating in disciplinary hearing in South Africa. Dismissed
for misconduct. On review, employee raising issues of jurisdiction;
double jeopardy; and hearsay evidence. Gross misconduct by
arbitrator
not shown. Award reasonable. Application for review dismissed with
costs.
JUDGMENT
STEENKAMP
J
Introduction
[1]
The applicant, Mark James Mulholland, was employed as the General
Manager of Dehler South Africa (Pty) Ltd. It is a subsidiary
of a
German company in the food flavouring
business. He was dismissed within
a
month of taking up employment. His referral of an unfair dismissal
dispute to the CCMA found no favour with the arbitrator,
Commissioner
David Wilson (the second respondent). Mulholland seeks to have the
arbitration award reviewed and set aside.
Background
facts
[2]
The
employee started working for the company as its General Manager
responsible for South Africa operations on 18 May 2016. He went
to
Germany for training, where he spent an extensive period of time with
his superior who is based there, Mr Kurt Hufnagel. He
stayed in the
Ramada hotel in Darmstadt. Within a week of his arrival, Hufnagel
dismissed Mulholland after he had left his hotel
room in a chaotic
state, including leaving cigarette burn marks on the furniture of the
non-smoking room; and allegations of sexual
harassment by a cleaning
woman. He left the hotel by a back entrance without settling his bill
for extras such as extensive (and
expensive) telephone calls. He
returned to the airport, returning a rental car (paid for by the
company) without notifying the
car rental company of damage he
caused
to the
car
by bumping into
a
column
in
the
hotel parking garage, and without returning one of two GPS devices (a
TomTom
navigator)
[1]
. It
also
transpired
that
he
was
driving
the
rental
car without a driver's license.
[3]
Upon his return to South Africa, the company sent Mulholland a notice
to attend a disciplinary hearing on 13 June 2016. It also
informed he
that he was suspended pending the hearing. He attended the hearing.
An independent chairperson presided. The allegations
of misconduct
levelled against him were:
"a)
Hotel room damages caused whilst staying at the Ramada Hotel in
Darmstadt amounting to Eur 904,63 - see invoice and photo
evidence
attached;
b)
Additional private costs at hotel (laundry, telephone, F&B)
amounting to Eur 449,15 - see invoice attached;
c)
Rental car damage caused amounting to Eur 274,99 - see invoice from
Car Partner
I
Buchbinder Rent-a-car and photo evidence
attached;
d)
Failing to return navigational system. Had to be replaced - see
invoice attached from ProMarkt amounting to Eur 175,00;
e)
Statement from Katharina Klappich reflecting inappropriate behaviour
from yourself
[si
c
]
during your stay at the
Ramada Hotel;
f)
Statement from Volker Schmitz reflecting inappropriate behaviour from
yourself [sic] during your stay at the Ramada Hotel;
g)
Statement from Angelo de Luca from Car Partner
I
Buchbinder
Rent-a car regarding damages caused to the rental car you drove;
h)
Statement from Kurt Hufnagel summarising your inappropriate behaviour
in several cases during your visit in Darmstadt during
May 2016;
i)
Statement from Mrs du Tait reflecting inappropriate behaviour from
yourself during your stay at Zomerlust Guesthouse in Paarl
during
April 2016 - see invoice and photo attached."
[4]
At the disciplinary hearing, the company presented evidence by way of
the statements outlined above. No company witnesses gave
direct
evidence about the misconduct complained of. Mulholland testified in
his own defence. He did not dispute the damage to the
Ramada Hotel
room, but claimed that a burglar - who stole nothing - may have
caused the burn marks. He confirmed that he did not
check out and
that he left the Ramada Hotel through the basement. With regard to
the state of the room, bedding and towels at Zomerlust,
he
acknowledged that his girlfriend had spent the night with him but
claimed that he thought the room rate was a flat rate, regardless
of
the number of occupants. He admitted that, like in Darmstadt, he did
not check out at Zomerlust. He claimed that the damage
to the linen
and towels was caused by a nosebleed.
[5]
The chairperson, Ms Fatima van Toorn (an independent consultant),
gave the parties her findings on 20 June 2016. She found that
the
employee did commit the misconduct complained of. The company
dismissed him.
Arbitration
award
[6]
The employee referred an unfair dismissal dispute to the CCMA (the
first respondent). Conciliation having failed, he referred
it to
arbitration. The employee was legally represented by Adv Robert
Stelzner SC (instructed by his current attorney, Mr O'Dowd);
the
company was represented by Mr Stephen Kirsten, an official of an
employer's organisation. Mr
Stelzner
argued that the CCMA did
not have jurisdiction over the dismissal in Germany. Commissioner
Dave Wilson (the second respondent) found
that the CCMA did have
jurisdiction, as the company had corrected the unprocedural dismissal
by reinstating the employee - at least
tacitly - and calling him to a
fresh disciplinary hearing on different allegations of misconduct in
South Africa. The employee
participated in those proceedings. The
arbitrator found that that dismissal was fair.
Grounds
of review
[7]
Mr
De Kock,
on behalf of the employee, argued the following
six grounds of review:
7.1
The arbitrator dealt with the substantial merits of the dispute,
whereas the employee's
counsel led evidence and intended to deal only
with the question of jurisdiction and his prior dismissal in Germany.
7.2
The CCMA had no jurisdiction as the employee was dismissed in
Germany.
7.3
The disciplinary hearing and subsequent dismissal in South Africa
amounted to double
jeopardy as the company had already dismissed the
employee in Germany without following any procedure
7.4
The commissioner decided the matter based on hearsay evidence that he
should not have
allowed.
7.5
The commissioner should have found that the employee was entitled
to a notice
period of nine months.
7.6
The employee was entitled
to
a bonus of €110
000. The commissioner acted unreasonably by not
making
that finding.
Evaluation
[8]
I shall deal with each of these review grounds in turn.
What
did the arbitrator have to decide?
[9]
Mr
De Kock
strenuously argued that the parties all understood
that the commissioner would only deal, at first, with the question of
jurisdiction
and the dismissal in Germany. He argued that, only if
the commissioner decided that the CCMA did have jurisdiction, would
the question
of the fairness of the disciplinary hearing and
subsequent dismissal in South Africa come into play. It is for that
reason that
Mr Stelzner led the evidence of the employee only in
regard to what had happened in Germany; he did not lead any evidence
to dispute
the misconduct that formed the basis of the hearing in
South Africa.
[10]
At first blush, that argument appears attractive. Mr Stelzner did, on
occasion, express his views accordingly. For example,
he said in his
address at the start of proceedings:
"But
then on the next point, the paragraph, page 4 in the pre-arbitration
minute, the issues that the Commission is required
to decide then
were identified by the parties. Firstly jurisdiction and that's
because of the German connection and then what's
been identified
there as the main issue and we can respectfully submit the only issue
that the CCMA can really consider is item
2, whether the dismissal of
the employee on 25 May 2016 was procedurally [and) substantively
unfair."
"Then
what happened in South Africa later in June,... Whether that was a
foregone conclusion given that there was already a
dismissal in
Germany on the 25th May, whether the proceedings in South Africa were
a sham or not, whether they could do that, the
double jeopardy
point..."
'We
accept that that raises the question of jurisdiction and we will be
able to present some evidence on that. We can also present
evidence
while were busy on what happened in Germany and to that extent we
also agreed that the employee would give evidence first
on that
aspect, the jurisdictional aspect because I suspect we have to show
that the CCMA has jurisdiction and that is then as
far as the
employee wishes to take the matter. If the employer is going to rely
on - well, that which forms the subject of the
South African
disciplinary hearing then we'll address you in due course as to
whether the employer can do that."
[11]
But those comments - and Mr
De Kock's
argument in these
proceedings - face two hurdles.
[12]
Firstly, it is clear that the Commissioner expressed a clear
understanding on his part that he would prefer to hear full evidence
and arguments on the issues of jurisdiction, the dismissal in Germany
and the South African proceedings, as well as the objections
to
hearsay evidence, and that he would then make a final determination
on all the issues. There are a
number
of examples, but a few will suffice. Mr Kirsten
[2]
,
for Dahler, referred
to
the fact that Mulholland may have to be recalled. He added:
"And
I - the reality is I did raise this at some point, that we were going
down the route with this might be a problem and
that the applicant
might have to come back. But, of course, I'm going to put my version
to the applicant now because I'm going
to put it in evidence in chief
later."
[13]
The Commissioner responds, "that's fine", and Mr Stelzner
noted that he had no objection. Having dealt with some
of the
incidents in Germany and at Zomerlust guesthouse, Kirstein added:
"It
does become a little bit tricky, Commissioner, in the sense that I
will reserve my right to cross question or re-examinethe
applicant on
our version that we would present in evidence in chief if the
applicant wishes to refute the testimony. He should
be recalled as a
witness if he wishes to. But we are going to present - we still
have to present our case and our evidence.
Commissioner:
Yes. So are you going to be relying on the conduct both in Paarl and
in Germany?
Mr
Kirstein: Hmm, in Paarl and in Germany; that's correct, Commissioner.
Commissioner:
Yes, which - and those are issues that were dealt with at the South
African hearing?
Mr
Kirstein: Yes, they were, Commissioner.
Commissioner:
So you are in fact going to be relying on all of those issues to
justify the dismissal.
Mr
Kirstein: Yes, I am; absolutely, Commissioner. I know that before I
enter into that evidence lately will be, you know, an objection
because much of it is hearsay evidence. But I will lead argument in
the adducing of that evidence and in fact I will just leave
it there.
So
it's our intention to lead evidence regarding the applicant's conduct
in Germany and the charges that were put to the applicant
at the
disciplinary hearing."
[14]
At the close of his cross-examination, the Commissioner ascertained
from Mr Kirstein that "the version that you are putting
to the
applicant is that the reason for his dismissal related misconduct in
Germany... As well as's conduct at the guesthouse in
[Zomerlust]."
And at the end of Mulholland's evidence, dealing with the issue of
the hearsay evidence led at the South African
disciplinary hearing --
before Mostert was called as a witness at the arbitration -- the
Commissioner noted quite clearly that
he would allow the hearsay
evidence relating to the South African hearing:
"No,
I don't think it's an appropriate time to argue it now. I think let's
hear the evidence and the parties can argue afterwards
about
admissibility and about the weight that I should attach to that
evidence."
[15]
That is also what the parties - represented by the same counsel in
the case of the employee - had foreshadowed in the pre-arbitration
minute. Under the heading, "The issues that the Commission is
required to decide", the parties recorded:
15.1
Jurisdiction;
15.2
Whether the dismissal of the employee on 25 May 2016 was procedurally
/ substantively unfair; and also,
15.3
"Whether the local employer could dismiss the employee once
again after his services had been terminated
in Germany;
15.4
Whether he could be dismissed by the SA company without the German
company revoking its decision and reinstating
the employee in order
for there to be a second hearing; and
15.5
The fairness thereof."
[16]
Secondly, and more importantly, Mr Stelzner did not confine his
argument to the issues excluding the fairness of the dismissal
in
South Africa. Nor did he recall Mr Mulholland, despite indications to
the contrary during the arbitration. On the contrary,
he
unequivocally elected not to make use of the opportunity to do so. At
the outset of his lengthy written submissions to the arbitrator
-
comprising 72 pages -- he states in no uncertain terms:
"He
[Mulholland] was ultimately not called to present any evidence in
respect of the South African dismissal given that the
employer
tendered no admissible evidence in support of the charges, that which
he admitted to was not sufficient to justify his
dismissal, whether
in SA or in Germany, and for him to have given evidence before the
CCMA in order to once again 'prove his innocence'
in the face of
inadmissible hearsay evidence would simply have been to perpetuate
and duplicate the unfairness of the disciplinary
hearing in South
Africa.... Mr Mulholland was in any event only going to be recalled
if necessary and if the evidence the employer
had yet to produce
required an answer."
[17]
Having elected not to recall Mulholland, Mr Stelzner then dealt at
length with the allegations of misconduct that formed the
basis of
the disciplinary hearing and dismissal in South Africa - evidence
that the employer led (albeit by way of hearsay and
documentary
evidence) and that Mulholland elected not to dispute by way of his
own evidence. The employer's argument simply remained
that all of
this evidence was inadmissible and that, therefore, Mulholland was
not called upon to answer.
[18]
It does not lie in the mouth of the employee to complain after the
fact that he did not have the opportunity to state his case.
He did,
but elected not to make use of that opportunity. And he had the
benefit of representation and advice of a senior attorney
and senior
counsel throughout - unusually in misconduct proceedings at the CCMA,
especially where the employer had no legal representation.
The
admissibility of the employer's evidence is the subject of another
ground of review; but the employee did have a full opportunity
to
state his case and was clearly well aware of the fact that the
arbitrator would decide on the South African dismissal if he
decided
that he had jurisdiction and he would attach sufficient weight to the
employer's evidence.
[19]
This ground of review must fail.
Jurisdiction
[20]
Did the CCMA have jurisdiction?
[21]
The arbitrator found that it did. That is not an unreasonable
finding; indeed, I think it is the correct one.
[22]
It is common cause that Kurt Hufnagel dismissed Mulholland in
Germany.
Hufnagel,
a German citizen, is not acquainted with South African labour
law
or the procedures outlined in the LRA. Faced with that situation, the
South African company called Mulholland to a properly
constituted
disciplinary hearing chaired by an independent outsider. That is
something that an employer can do to remedy a procedural
irregularity.
[3]
It i n formed
him that he was suspended pending that hearing. He participated in
the hearing. He was paid until the date of his
dismissal on 20
June 2016 (albeit belatedly) and accepted that payment. It
beggars belief that Mulholland - a senior
and well educated employee,
and clearly no shrinking violet - would have been under the
impression that he was no longer employed
and that a hearing would
serve no purpose. The arbitrator's finding that the
company had, at the very least,
tacitly withdrawn the
German dismissal, cannot be
faulted.
[23]
In any event, both parties agreed that the CCMA did have territorial
jurisdiction. The real question was whether the arbitrator
should
have dealt with the South African dismissal.
Double
jeopardy
[24]
Related to the jurisdictional point is the argument that the
arbitrator should have found that the employer could not subject
Mulholland to a disciplinary hearing in South Africa, having already
dismissed him in Germany, based on the principle of double
jeopardy.
[25]
There are two answers to this argument. Firstly, Mulholland was not
called upon to answer to the same allegations twice - the
allegations
of misconduct that formed the subject of his disciplinary hearing in
South Africa hardly overlapped with the reasons
why Hufnagel fired
him in Germany. And secondly, the employer realised that Hufnagel -
not being familiar with South African law
- had acted unfairly, and
took immediate steps to rectify that unfairness. Doing so, it gave
Mulholland a full opportunity to be
heard and ensured that an
independent outsider, who cannot be said to have presented Mulholland
with a decision already
taken, chaired the
disciplinary hearing.
[26]
This scenario is akin to that in
Semenya
&
Ors
v NUMSA
[4]
,
a
case where the employer had also offered the employee a fresh
disciplinary process chaired by an independent person after she
had
been dismissed. Zonda JP noted:
"[21]
The [employee's) contention that the opportunity to be heard was not
good enough because it was offered after the decision
to dismiss her
had been taken requires close examination. It is not our law that an
opportunity to be heard that is given after
the relevant decision has
been taken is never good enough. Although generally speaking such an
opportunity should be given before
the decision can be taken, there
are circumstances where an opportunity to be heard that is given
after the decision has been taken
is acceptable. Where the
opportunity to be heard is given after the decision has been taken
and it is one of those situations where
it is acceptable and the
person concerned spurns that offer or does not make use of it, it
cannot lie in such person's mouth to
say that he was not given an
opportunity to be heard. In such a case an opportunity to be heard
has been given and rejected. The
audi alteram partem
rule has
been complied with in such a case.
[22]
I do not propose to set out a list of situations where an opportunity
to be heard that is given or offered after the decision
has been
taken is acceptable. Probably it is not advisable to attempt to give
an exhaustive list of such situations. However, it
seems to me that,
where it can be said that the opportunity to be heard that is given
after the decision has been taken is no less
fair than the
opportunity that should have been given before the decision could be
taken, it ought not to make a difference that
it was offered after
the event. In this regard I have in mind that the basis for the
proposition that the opportunity to be heard
should be before the
decision can be taken is that, once the decision has been taken, it
may be difficult for the decision-maker
to change his mind even when
the representations made to him by or on behalf of the affected
person are such that his decision
should be one favourable to the
affected person. However, where the opportunity to be heard is
offered after the decision has been
taken but the person who will
consider the representations and decide on whether the decision
should be in favour or against the
affected person is a different
person from the one who initially made the decision and is
independent of him or his organisation
and can act impartially and
make a fresh decision on the matter, there is no reason in principle
why an opportunity to be heard
given after the decision had been
taken should not be accepted as satisfying the
audi alteram partem
rule. It seems to me that in such a case that opportunity to be
heard satisfies the
audi alteram partem
rule because, though
given after the decision, it is as fair as, if not in fact fairer
than, the opportunity that should have been
given before the
decision.
[23]
If an opportunity to be heard that is offered after the decision has
been taken is that fair, the affected person is not prejudiced,
and
if he, nevertheless, spurns that offer, he ought not to be allowed to
complain. Let me give an example. A foreigner commences
business in
South Africa and employs a number of employees. Within the first two
or three months he is unhappy with the conduct
of one of the
employees. He dismisses him without first affording him a hearing. He
is then told that the dismissal is procedurally
unfair because in
South Africa an employee has a right to be heard before he can be
dismissed. He then says that he did not know
that and offers that
there be a hearing which will be chaired by a person that both he and
the employee can agree upon and that
person will make the decision
whether the employee is guilty of misconduct and, if so, whether
dismissal is an appropriate sanction
in that case. That opportunity
to be heard that that employer will be offering is, without doubt,
either as fair as, or even fairer
than, the opportunity to be heard
that the employee was entitled to be afforded before the decision was
made. Why should such an
obviously fair opportunity to be heard not
be good enough simply because it was offered after the decision
had been taken?
I cannot see any reason why that should be so.
[24]
It is true that, where a person or official has made a decision and
only hears the other party after the decision has been
made, he may
well be inclined not to change the decision that he has already made.
That is why the general rule is that the opportunity
to be heard
should be before the decision can be made. However, that concern does
not arise where another person - particularly
if he is
independent of the first one - hears the representations of the
affected person and makes a fresh decision on the
matter.
[25]
It may be argued that in the example I have given, the fact that the
opportunity to be heard is given after the decision has
been taken is
understandable because the employer is a foreigner and is unfamiliar
with the laws of our country. It would be argued
that this is
different from a case such as the present one where the employers are
lawyers who are in practice. My answer to this
is: provided the
opportunity to be heard that they offer after the decision is as fair
as, or, even fairer than, the opportunity
to be heard that she was
entitled to before the decision and a fresh decision can be taken,
that is good enough. In my judgement
in such a case it matters not
that the employer may not have had any acceptable explanation for not
giving the opportunity to be
heard before the decision. Form must not
be observed for its own sake. Effect must be given to substance.
Accordingly, I am of
the view that, if a person was offered such an
opportunity to be heard after the decision had been taken and he
spurned such an
offer simply on the basis that it was made after the
decision had been taken and with no regard to how fair an opportunity
to be
heard it was, such a person cannot be heard to complain.
[26]
With regard to the observance of the audi rule before or after the
decision has been taken, Goldstone J had this to say in
Momoniat
v Minister of Law
&
order
&
others ;
Naidoo
&
others v Minister of Law and Order and others
1986(2) SA 265 (W) at 274 D:
'Failure
to observe the audi alteram partem principle before the decision is
taken, as a general rule, will lead to invalidity.'
In
this regard it is important to draw attention to the fact that
Goldstone J there said 'as a general rule'. He therefore did not
say
that the audi rule must always be observed before the decision is
taken failing which the decision would be invalid. Indeed,
soon
thereafter Goldstone J referred with approval to a passage in
Sachs
v Minister of Just
i
ce
1934 AD 9
at 22 which was
approved on appeal (see 1934 AD at 38) where Tindall J inter alia
said: 'But the fact that the persons to whom
the decision is
entrusted has
(sic)
in the first instance acted
e
x
parte
,
without affording the person
affected
such opportunity,
does not necessarily make h
i
s
order
i
nvalid if he thereafter affords such
opportunity
" (underlining supplied)."
[27]
This is exactly such a case.
[28]
This point of review also fails.
Hearsay
evidence
[29]
The employer's case was almost entirely based on hearsay
evidence in the form of statements taken in Germany from
the
following people:
29.1
Angelo de Luca, an employee of Buchbinder Rent-a-Car, who confirmed
(with photographic evidence)
the damage that Mulholland had caused to
the rental car in Darmstadt;
29.2
Angelika Schmitt, employee of the Company in Darmstadt, regarding his
failure to return the TomTom
GPS unit;
29.3
Katharina Klappich, an employee of Ramada Hotel Darmstadt, with
regard to the sexual harassment;
29.4
Volker Schmitz, Ramada hotel manager, concerning the damage to the
furniture in the hotel and his surreptitious
exit via the emergency
exit; and
29.5
Oumie du Tait, Zomerlust guesthouse manager, regarding the extra
unpaid guest in his room; his
leaving the guesthouse without booking
out or settling the bill; and the damage to bedding and linen.
[30]
The only direct evidence that the company led was that of Mr Mostert
and Ms van Toorn, both of whom could only testify as to
the
disciplinary proceedings in South Africa. But that evidence included
their testimony regarding Mulholland's evidence at the
disciplinary
hearing in which he hardly disputed the factual allegations against
him; and that testimony was not challenged at
the arbitration.
[31]
The company could undoubtedly have gone to more trouble to elicit
direct evidence. Ms du Toit lives in Paarl - she could have
been
called to testify. Hufnagel regularly visits South Africa. And the
employee's counsel expressed his willingness to cross examine
the
company's other German witnesses via Skype. It did not take up the
invitation.
[32]
Despite this, the arbitrator accepted the arbitrator accepted the
hearsay evidence. Does that make his award reviewable?
[33]
I think not. The arbitrator applied his mind to the relevant legal
principles. He conducted the hearing in a manner that he
considered
appropriate, dealing with the substantial merits "with a minimum
of legal formalities", as he is enjoined
to do by s 138(1) of
the LRA.
[34]
It seems to me that the arbitrator conducted the process
fairly, in line with
the
Constitutional Court's guidelines when it interpreted the provisions
of s 138(1) in
GUSA
v Tao Ying Metal lndustries
[5]
:
"This
requires commissioners to deal with the substance of a dispute
between the parties. They must cut through all the claims
and
counter claims and reach for the real dispute between the
parties. In order to perform this task effectively, commissioners
must be allowed a significant measure of latitude in the performance
of their functions. Thus the LRA permits commissioners to
'conduct
the arbitration in a manner that the commissioner considers
appropriate' But in doing so, commissioners must be guided
by at
least three considerations. The first is that they must resolve the
real dispute between the parties. Second, they must do
so
expeditiously. And, in resolving the labour dispute, they must act
fairly to all the parties as the LRA enjoins them to do."
[35]
The commissioner in this case resolved the real dispute between
the parties, being the question whether Mulholland was
fairly
dismissed. He did so expeditiously in circumstances where most
of the employer’s witnesses were in Germany.
And to my mind, he
acted fairly, even though he allowed hearsay evidence.
[36]
Mulholland disputed very little of the factual allegations contained
in the statements that were allowed into evidence. He
elected not to
testify as to the veracity of those allegations. He had a full
opportunity to do so but did not make use of it.
He cannot
persuasively complain after title fact that he was not given a fair
hearing.
[37]
As the LAC stated in
Satani
v Department of Education, Western Cape
[6]
:
"Conducting
proceedings 'with the minimum of legal formalities' suggests that
arbitration proceedings are not a court of law
and do not follow a
system of binding precedents. Their proceedings are strictly speaking
not required to mimic rules and procedures
adopted in courts of law.
To this end, the commissioner has a discretion to elect among others,
an inquisitorial or adversarial
approach in conducting arbitration
proceedings. Such a choice, in my view, should be dictated by the
nature of the dispute, the
parties to the dispute as well as all
other factors that might be relevant in order to achieve the goal of
dealing with the substantial
merits of the dispute fairly,
even-handedly, quickly and with minimum of legal formalities."
[38]
This Court has dealt with the admission of hearsay evidence in
arbitrations on many occasions, but the
locus
classicus
probably
remains
Naraindath
[7]
where Wallis AJ noted:
"It
would stultify the
entire
purpose of the legislation if this court were, in the face of such
clearly stated intentions
[8]
, to
insist on arbitrators
appointed
by the CCMA to resolve unfair dismissal disputes conducting those
proceedings in slavish
imitation
of
the
procedures
which
are
adopted
in
a
court of law and subject to the technical rules of evidence which
apply in those courts: Such an approach is also in my view contrary
to the express provisions of the LRA. Section 138(1) is the decisive
provision in this regard. It empowers the commissioner to
conduct the
arbitration in such manner that
the
commissioner
considers appropriate in order to determine the dispute both fairly
and quickly. Lest the commissioner is under any
is apprehension as
to
what is required the section goes on to direct that he or she
discharge his or her functions "with the
minimum
of
legal formalities".
In
my view it is perfectly clear in these circumstances that a complaint
that a commissioner has conducted proceedings in a way
which differs
from the way in which the same dispute would be dealt with before a
court of law cannot as such succeed. It is only
where the person
seeking to challenge the commissioner's award can point to specific
unfairness arising from that action by the
commissioner that a proper
ground for review is established. A failure to conduct arbitration
proceedings in a fair manner, where
that has the effect that one of
the parties does not receive a fair hearing of their case, will
almost inevitably mean either that
the commissioner has committed
misconduct in relation to his or her duties as an arbitrator or that
the commissioner has committed
a gross irregularity in the conduct of
the arbitration proceedings.
If
that is the approach in our courts of law then it follows a
fortiori
in my view that reliance by an arbitrator upon hearsay evidence
which he or she is satisfied on proper grounds is reliable does not
constitute a reviewable irregularity."
[39]
In his award, the arbitrator referred
to the well-known case of
Avril
Elizabeth
[9]
where the Court held that "there is clearly no place for formal
disciplinary procedures that incorporate all of the accoutrements
of
a criminal trial, including the leading of witnesses, technical and
complex 'charge sheets', requests for particulars, the application
of
rules of evidence,
legal
arguments, and the like."
He
also had regard to
Matsekoleng
v Shoprite Checkers
[10]
in which the LAC confirmed that
the
Law of Evidence Amendment Act
[11]
conferred a discretion on a tribunal to admit hearsay evidence if it
considered it to be in the interests of justice. The late
Ndlovu JA
held
[12]
:
'The
fact that the respondent's representative would not have been in a
position to cross examine the author of, or deponent to,
the
affidavit if it was admitted, was not, in my opinion, a legally sound
ground to have refused admission of the affidavit, in
the light of
section 3(1}(c). That aspect of the matter would only be relevant on
the question of the evidential weight to be attached
to the affidavit
evidence concerned."
[40]
In this case, the arbitrator exercised his discretion to allow
hearsay evidence. This Court or another arbitrator may have
decided
differently; but that is not the test. In my view the arbitrator did
not act arbitrarily or capriciously in exercising
that discretion; on
the contrary, he applied his mind and came to a conclusion that
another reasonable arbitrator could have reached,
especially in the
exercise of discretion. And then, when weighing up the credibility of
the evidence before him, he came to a reasonable
conclusion that the
employer had shown on a balance of probabilities that the employee
had committed most of the misconduct complained
of. It is also
indicative of the careful way in which the arbitrator assessed the
evidence that he concluded on a balance of probabilities
that the
employer had not proven that Mulholland had failed to report the
damage to the rental car.
Bonus
[41]
Mulholland claims that he was entitled to a guaranteed bonus of €110
000. The agreement on which he relies speaks of subterfuge
that does
not reflect well on either party. His contract of employment provides
for "an annual performance- and result-based
bonus based on the
remuneration structure of the Dehler Group in the amount of €25
000". That is reiterated in a covering
letter from Hufnagel
dated 2 March 2016 in which he says:
"Your
monthly fixed salary is € 7500. In addition, you can receive a
results based, target-dependent annual bonus
of € 25 000
per annum on the basis of our remuneration system."
[42]
But Mulholland relies on a so-called 'side letter' that was not
disclosed to the authorities or the management team in South
Africa.
That letter, date the same day and signed by Hufnagel and the HR
Business Partner, Philipp Moermann, states:
"This
letter is to confirm our joint agreement to guarantee you a total
bonus pay out of at least€ 110 000 in April 2017.
Further we
agree to on [sic] a minimum salary level of € 12 500 base pay
per month and € 50 000 target bonus as of May
2017."
[43]
The employee was paid a pro rata share of a bonus on termination. The
arbitrator found that he should have been paid a pro
rata share of a
€75 000 bonus, based on three months' service, and that he was
short paid € 6 250. He ordered the employer
to pay Mulholland
that amount.
[44]
The arbitrator accepted that Mulholland was due a pro rata share of
bonus of €75 000 and not of€ 110 000. He based
that finding
on the explanation proffered by Moermann in an email of 7 April 2016
in which he discusses a way "to avoid making
your total cash
visible" with Mulholland and in which he proposes:
"We
could - provided you agree - set up a contract that we can forward to
Johan that reflects a lower base and bonus (eg 7
500 x 12 + 25k =
115k) that would temporarily leave an amount of 85k out of the
equation (roughly double Johan's salary).
I
would then prepare a side letter signed by Kurt and myself
[sic]
that...
1)
guarantees you a payout in April 2017 of at least 85k + 25k (that is
a higher guarantee than agreed up to now)
2)
and defines a shift back to 12 500 fixed and 50 000 bonus as of April
'17."
[45]
The arbitrator explained the cumulative effect of these negotiation
and the subterfuge that the parties agreed on as follows:
"The
initial proposal was that the applicant's South African salary would
be reduced from €50 000 to €25 000, with
the balance in
both cases to be placed in a separate account. The reduced amounts
were reflected in the final contract of employment,
with the
additional amounts intended to be covered in the side letter. Mr
Moermann explained that this would not solve the problem,
as the
company would need to report the payments in a way that would be
transparent to the South African subsidiary. He therefore
explained
that the 'shortfall' - i.e. €5000 per month x 12 months (equal
to €60 000) and the missing half of the bonus
of €25 000
would be paid as a bonus in April 2017, together with an additional
amount of €25 000 (possibly to compensate
for the fact that the
amount of €5000 would only be paid at the end of the year rather
than monthly, although this is not
stated). The full amount of the
'bonus' would then be €110 000. This was in fact a fiction;
however the effect of this proposal
was that the guaranteed bonus was
increased from €50 000 to €75 000, with €25 000 paid
transparently, and the balance
as part of an additional 'guaranteed
bonus'. It is clear that this was the intention, and that the side
letter was simply badly
worded, possibly because of the drafter's
unfamiliarity with the English language."
[46]
This appears to me to be a reasonable construction of what was
intended. The arbitrator clearly applied his mind to the issue.
He
concluded that the company short changed the employee by €6 250
and ordered it to make good the shortfall (an amount of
R88 506, 25).
That conclusion is not so unreasonable that no other commissioner
could have come to the same conclusion. This ground
of review must
fail.
Notice
[47]
Mulholland claimed nine months' notice despite the fact that he had
been summarily dismissed.
[48]
The contract of employment caters for summary dismissal "for
extraordinary reasons":
"In
case of severe infringements of the obligations as general director,
especially of the obligation to seek the approval
of the Board of
Directors meeting in accordance with § 2 of this agreement, this
agreement can be terminated immediately for
extraordinary reasons."
[49]
The word "especially' clearly denotes that
the parties did not foresee a
numerus
clausus
- the contract could be terminated without notice for any
'extraordinary reasons'. And gross misconduct must surely be such a
reason.
[50]
The arbitrator found that Mulholland was not entitled to
notice pay. Summary dismissal was justified for his gross
misconduct. That is not an unreasonable finding. This ground of
review also fails.
Sanction
[51]
On the probabilities, and taking into account that Mulholland "did
not make a good impression as a witness" and contradicted
himself several times, the arbitrator found that he did commit the
misconduct outlined above; and that he brought the company's
name
into disrepute. He
was,
the arbitrator found, "a most
unsuitable choice" for the position of general manager. He took
into account the nature
of the misconduct and the seniority of the
position and found that dismissal was a fair sanction. That
conclusion is not so unreasonable
that no other commissioner could
have come to the same conclusion.
Conclusion
[52]
The award is not reviewable.
[53]
Both parties have asked for costs to follow the result. I see no
reason in law or fairness to disa
gree.
Order
The
application for review is dismissed with costs.
_______________________
Anton
Steenkamp
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
Coen de Kock
Instructed
by
Sean O'Dowd of Carelse Khan Inc.
FOURTH
RESPONDENT: Glen Cassells of Maserumule Inc.
[1]
One was issued by the car rental company and one by Dohler in
Darmstadt.
[2]
His name is reflected as "Kirstein" in the transcript of
the arbitration proceedings.
[3]
Rawlins
v Kemp t/a Centramed
(2010)
31
ILJ
2325
(SCA).
[4]
[2006] 6 BLLR 521
(LAC) paras 21-26 .
[5]
(2008) 29
ILJ
2461
(CC) par 64.
[6]
(2016) 37 ILJ 2298 (LAC) par 14.
[7]
Naraindath
v CCMA
(2000)
21
I
LJ
1151
(LC) paras 26 and 31.
[8]
[in the explanatory memorandum]
[9]
Avril
Elizabeth Homes for the Mentally Handicapped v CCMA
(2006)
27
ILJ
1644
(LC).
[10]
[2013] 2 BLLR 130
{LAC).
[11]
Act 45 of 1998.
[12]
Par 41.