About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2018
>>
[2018] ZALCJHB 109
|
|
Nevehethalu v Commission for Conciliation, Mediation and Arbitration and Others (JR1334/14) [2018] ZALCJHB 109 (13 March 2018)
Of
interest to other judges
THE LABOUR COURT OF
SOUTH AFRICA,
HELD AT JOHANNESBURG
Case No: JR 1334/14
In
the matter between:
NDINANNYI
NEVEHETHALU
Applicant
and
COMMISSION FOR
CONCILIATION,
MEDIATION AND
ARBITRATION
First
Respondent
COMMISSIONER MATJI
(
NO
)
Second
Respondent
PRASA CORPORATE
REAL ESTATE
SOLUTIONS
SOC LTD
Third
Respondent
Heard
:
22 February 2018
Delivered
:
13 March 2018
Summary:
(Review – dismissal – procurement irregularities –
reasonableness review – nit
picking approach to charges
particularly inappropriate given the scale of irregularities involved
– arbitrator would have
committed a reviewable irregularity had
he preferred the highly improbable version of the applicant –
no material errors
in evaluation of the evidence)
JUDGMENT
LAGRANGE
J
Background
[1]
This is a review application. The arbitrator found that the dismissal
of the applicant on various charges of misconduct relating
to
contraventions or non-compliance with supply chain management
policies and practices of the applicant was substantively and
procedurally fair. All in all the irregular expenditure incurred
amount to approximately R 2, 5 million.
The arbitration award
[2]
The charges were grouped into three categories by the arbitrator:
2.1
The first category concerned variation orders. These were variations
of previously approved orders,
which exceeded 10% of the amount of
the original order without the variation being taken to the regional
tender procurement committee
(RTPC) for approval. The variations in
question were very significant. The lowest escalation on the original
approved quote was
nearly double the original and in other cases the
escalation was nearly five times the original quote. In the most
extreme case
the escalation was nearly six times the original quote.
2.2
The second type of misconduct concerned purchases made in excess of R
350,000 without being submitted
for the invitation of tender bids as
required by 11.3.2 of the Supply Chain Management policy.
2.3
The last category concerned the applicant’s failure, in his
capacity as a supply chain manager
to advise end-users and the
regional manager about acceptable procurement policies and processes
and failure to exercise due care.
Variation
orders in excess of the 10% limit
[3]
The arbitrator found it highly improbable that the applicant was
unaware of the limit on variation orders especially given the
fact
that even one of the witnesses who was not an expert on procurement
processes knew about it. The arbitrator acknowledged that
it was not
mentioned in the written policies but was implicit in the delegation
of authority as evidenced by Mr G Matampi, the
former General Manager
of Real Estate Management (‘Matampi’). Moreover,
the policies and delegations were on
the company’s intranet and
there was no valid excuse why a person in the applicant’s
position would not have knowledge
of them. He noted also that
evidence that supply chain management practitioners ought to be aware
of the delegation of authority
for their unit managers was
unchallenged. He also found it implausible that the applicant could
have thought that initial quotes
for work which had to go through an
approval could thereafter be varied without limit and without going
through the same approval
process.
[4]
The arbitrator also dismissed another of the applicant’s
defences, namely that he merely was required to append his signature
to memorandums from facility managers without verifying their
correctness. The arbitrator held this was disingenuous and
mischievous, given evidence that the purpose of submitting
requisitions for purchase orders via an SCM practitioner like the
applicant
was specifically for monitoring and control purposes to
ensure compliance with the policy and delegations of authority.
Specific
findings
[5]
In addition, the arbitrator made certain specific findings, namely:
5.1
The applicant authorized payment of an invoice of more than R 900,000
for Limpopo stations without
approval of the RTPC which was in breach
of paragraph 9.6.3 of the SCM policy.
5.2
The applicant signed an application for the approval of payment in
circumstances where the facility
manager who ought to have signed the
application would not approve a variation because it had not been
properly obtained and the
applicant must have known that he was not
entitled to sign the document because he had no authority to
authorise expenditure on
the departmental budget.
[6]
The arbitrator concluded that the applicant’s dismissal was
both substantively and procedurally fair.
Grounds of review and
evaluation
[7]
I will
concern myself only with grounds of review raised in the founding
papers. It was suggested in argument that I could also
entertain new
grounds raised for the first time in heads of argument, but the
constitutional court decision in
Commercial
Workers Union of SA v Tao Ying Metal Industries & others
[1]
has made it clear that the court is confined to what is raised in the
review application itself, except in limited exceptional
circumstances such as the existence of a jurisdictional issue neither
party had identified:
“
[67]
Subject to what is stated in the following paragraph, the role of the
reviewing court is limited to deciding issues that are
raised in the
review proceedings. It may not on its own raise issues which were not
raised by the party who seeks to review an
arbitral award. There is
much to be said for the submission by the workers that it is not for
the reviewing court to tell a litigant
what it should complain about.
In particular, the LRA specifies the grounds upon which arbitral
awards may be reviewed.
A party who seeks to review an arbitral
award is bound by the grounds contained in the review application
.
A litigant may not on appeal raise a new ground of review. To permit
a party to do so may very well undermine the objective of
the LRA to
have labour disputes resolved as speedily as possible.
[68]
These principles are, however, subject to one qualification. Where a
point of law is apparent on the papers, but the common
approach of
the parties proceeds on a wrong perception of what the law is, a
court is not only entitled, but is in fact also obliged,
mero motu,
to raise the point of law and require the parties to deal therewith.
Otherwise, the result would be a decision premised
on an incorrect
application of the law. That would infringe the principle of
legality. Accordingly, the Supreme Court of
Appeal was entitled
mero motu to raise the issue of the commissioner's jurisdiction and
to require argument thereon. However, as
will be shown below, on a
proper analysis of the record, the arbitration proceedings in fact
did not reach the stage where the
question of jurisdiction came into
play.”
[2]
(emphasis
added)
[8]
In
addition, the LAC held in
Comtech
(Pty) Ltd v Molony NO and Others
[3]
that Rule 7A(2)(c) of the Labour Court Rules requires an applicant in
a review to set out the factual and legal grounds of the
review in
the founding papers.
[4]
[9]
The grounds
of review are based on unreasonableness relating to the arbitrator’s
evaluation of the evidence. The threshold
for succeeding on this
ground is high. In
Head
of Department of Education v Mofokeng & Others
[5]
it was expressed thus:
“
[30]
The failure by an arbitrator to apply his or her mind to issues which
are material to the determination of a case will usually
be an
irregularity. However, the Supreme Court of Appeal (the SCA) in
Herholdt v Nedbank Ltd (Congress of SA Trade Unions as Amicus
Curiae)
and this court in Gold Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v
Commission for Conciliation, Mediation & Arbitration
&
others6 have held that
before
such an irregularity will result in the setting aside of the award,
it must in addition reveal a misconception of the true
enquiry or
result in an unreasonable outcome
.”
[6]
First
ground
[10]
The applicant contends that the arbitrator overlooked his evidence
that he was charged with breaching the SCM policy practice
at Prasa.
In effect, that policy permitted variations on invoiced quotes, but
Prasa relied instead on a policy of Intersite Property
Management, a
subsidiary of Prasa, which was not applicable to him. However, he
eventually conceded under cross- examination that
there was no
material difference between the two policies, so it is difficult to
understand why this is a material issue on review.
In any event as
the discussion below indicates, the applicant’s interpretation
of the policy and his responsibilities was
nothing short of perverse.
[11]
Another ground raised is that, the arbitrator allegedly failed to
take account certain aspects of the applicable disciplinary
procedure. Firstly, the fact that there was no rule in the SCM policy
that he could be held to have breached, which was contrary
to Prasa’s
own disciplinary and grievance procedure which required a rule to be
known to employees. It is true that the disciplinary
code and
grievance procedure of Prasa purports to state the tests for
substantive fairness for misconduct dismissals set out in
Schedule 8
of the LRA, but in fact it somewhat misstates it. Item 7 of Schedule
8 states:
7.
Guidelines in cases of dismissal for misconduct
Any
person who is determining whether a dismissal for misconduct is
unfair should consider-
(a)
whether or not the employee contravened a rule or standard
regulating
conduct in, or of relevance to, the workplace; and
(b)
if
a rule or standard was contravened, whether or not-
(i)
the rule was a valid or reasonable rule or standard;
(ii)
the
employee was aware,
or could reasonably be expected to have been
aware,
of the rule or standard;
(iii)
the rule
or standard has been consistently applied by the employer;
and
(iv)
dismissal was an appropriate sanction for the contravention of
the
rule or standard.”
(emphasis
added)
Clause
5.1 of the Prasa disciplinary code, while purportedly rephrasing what
is in item 7 distorts it in an important respect:
“
5.1
Substantive Fairness: Schedule 8 of the LRA 66 of 1995
5.1.1
There must be a rule
5.1.2
The employer should notify the employer allegations using a form of
language that the employee can reasonably understand.
5.1.3
The employee
must have knowledge of the rule
5.1.4
The employee must have breached the rule
5.1.5
The rule or standard must be consistently applied
5.1.6
The sanction must be appropriate for the contravention”
(emphasis
added)
Clearly,
the code as paraphrased by Prasa left out the alternative possibility
pertaining to knowledge of the standard or rule.
From the perspective
of the arbitrator, determining whether a dismissal is fair or not,
the arbitrator was entitled to rely on
the test set out in item 7.
Whether an internal code prescribes a more stringent test or not does
not alter the standard of fairness
an arbitrator must apply under
item 7 read with section 188 (2) of the LRA. Consequently, it cannot
be said that the arbitrator
could only determine that the applicant’s
dismissal was fair if the employer proved that he actually knew of
the rules and
standards applicable to the procurement decisions he
made.
[12]
The second point raised procedurally, concerns the status of the
chairperson of the enquiry. Clause 5.7.2 of the Prasa code
states
that a disciplinary enquiry against the manager had to be held by
someone in a higher position. The arbitrator concluded
that there was
no evidence that the chairperson did not satisfy this requirement and
the applicant alleges that there was no evidence
to justify his
conclusion. Whether or not there was evidence, the error in my view
was not a material as it is not a matter having
any demonstrable
bearing on the fairness of the enquiry. The applicant does not
explain what prejudice this caused him apart from
the fact that he
complained there was not compliance with the code itself and it is a
trite principle that mere non-compliance
with the disciplinary code
does not necessarily result in unfairness.
Second
ground
[13]
The arbitrator also supposedly ignored the fact that clause 11.3.2 of
the SCM policy only requires a competitive bidding process
when the
estimated value of the requirements is more than R 350 million, not R
350,000. Under cross-examination, Mr Mbatha of the
security
department which conducted the initial investigation commented that
the figure of R 350 million was clearly a typographical
error and
even the CEO did not have authority to authorise a contract of more
than 100 million. He affirmed that at a regional
level any
procurement of work above R 350,000 in value had to go to the RTPC.
[14]
It is true that there was ineptness on the part of Prasa in allowing
the numerical error to persist. However, if the arbitrator
had
accepted the error as correct, that would plainly have been
irrational on his part, both on account of the preponderance of
the
evidence about the true figure and on the grounds of simple common
sense. That the applicant can seriously advance this as
a material
error on the arbitrator’s part is astonishing. The sheer
improbability of such a limit being applicable to anyone
in Prasa’s
procurement hierarchy also has a bearing on whether or not the
applicant’s belief that he had not exceeded
any limits was
credible. The arbitrator’s failure to treat the figure of R 350
million as incorrect and the figure of R 350,000
as correct was the
most reasonable inference anyone could have made.
Third
ground
[15]
The applicant claims the arbitrator ignored relevant evidence in
concluding that he must have been aware of the 10% variation
limit on
variation because he ignored the fact that the SCM policy did not
make provision for a 10% variation limit, by contrast
with the
allegedly inapplicable Intersite policies which did contain such a
provision. During the course of the arbitration, the
respondent had
argued that procurement policy set a framework and the procurement
practices emanated from that framework, one of
which concerned the
variation of orders. Matampi also testified on the delegation of
authority which specified the 10 % variation
restriction. Moreover
clause 23.1 of the Prasa supply chain management policy required
users to comply with the controls and delegations
of authority.
[16]
What the arbitrator was faced with was an employee who had accepted
an appointment as a procurement manager, but apparently
did not
bother to familiarise himself with the ambit of his authority to
authorise expenditure and who fully understood and accepted
that a
procedure had to be followed before a quote could be accepted, but
claims, in effect, to be so naive that he believed that
it was not
necessary to obtain quotes for the additional work required even when
the amount he approved eclipsed the original value
of the approved
quote by multiples of 100% and more. On the evidence before the
arbitrator, his interpretation that a reasonable
limit applied to
varying or extending original quotations is eminently more plausible
than the applicant’s version that there
was no applicable
limit, or that it was not something he could be expected to know as a
procurement manager. It is interesting
to note that his knowledge of
procedures was selective: he was well aware of the existence of
emergency procurement procedures,
but conveniently was unaware
anything that might have limited his discretion.
Fourth
ground
[17]
The last ground raised is that the arbitrator apparently failed to
appreciate that he was not charged for breaching the Intersite
policies but Prasa policies. Matampi testified that the policies
applied by PRASA were the policies applied by Intersite a subsidiary
of Prasa which managed facilities and the property portfolio of
Prasa. In the light of the discussion above, and the applicant’s
own concession that there was no material difference between the
policies, this ground rests on a very technical and literal approach
to the charges. The real thrust of the charges against the applicant
was that he approved vast expenditure to the value of approximately
R
2.4 million in a matter of a few months, which was irregularly
authorised by him and that he should have been aware of the limits
of
his authority. To the extent that he relies on the failure to
stipulate the 10% variation limit in the Prasa policy itself when
authorising the amounts he did, it is implausible that he would not
have sought clarity on his authority to clear such vast escalations,
and would not have enquired about the extent of his authority as
determined by the delegations. The value of those escalations
was
such that it is a perfectly reasonable inference to draw that he
could not have had a
bona fide
belief that there was nothing
untoward in endorsing them, without some independent confirmation of
the scope of his authority.
Had the irregular expenditure he
authorised only marginally exceeded the limits of his authority, his
case might have been a bit
more plausible. In the circumstances, it
cannot be said that even if the Prasa policy was the applicable one,
that the arbitrator’s
overall conclusion was one that no
reasonable arbitrator could have reached.
Costs
[18]
Mr Short,
who appeared for the applicant did so
pro bono
and put the applicant’s case in the strongest light. The
court is indebted to him for his efforts. On account of the applicant
having been found to warrant
pro bono
representation, I am
disinclined to make the cost award I would otherwise have made
against him.
Order
[1]
The review application is dismissed.
[2]
No order is made as to costs.
_______________________
Lagrange
J
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANT:
D
Short of Fairbridges
Wertheim
Becker
RESPONDENT:
D
Norton of Mkhabela Huntley
&
Adekeye Inc
[1]
(2008) 29
ILJ
2461
(CC)
[2]
At 2483-4
[3]
(DA12/05)
[2007] ZALAC 40
(21 December 2007)
[4]
At paras [15] – [19].
[5]
(2015) 36
ILJ
2802 (LAC)
[6]
At 2811-2