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[2018] ZALCJHB 163
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Bliss Brands (Pty) Ltd v Pillay and Others (JR310/15) [2018] ZALCJHB 163 (3 May 2018)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
reportable
Case
no: JR310/15
In
the matter between:
BLISS
BRANDS (PTY) LTD
Applicant
and
KRISHNA PILLAY
First Respondent
S BHANA
N.O.
Second Respondent
COMMISSION FOR
CONCILIATION,
MEDIATION AND ARBITRATION
Third Respondent
Heard:
23 August 2017
Delivered:
3 May 2018
Summary:
Reasonableness
review – commissioner’s finding that employee not guilty
of misconduct unreasonable – award set
aside and substituted
with an order that dismissal substantively fair.
JUDGMENT
MYBURGH,
AJ
Introduction
[1]
The
employee (Mr Pillay) was employed by the applicant company as its
warehouse manager. He was dismissed on 30 May 2014 after having
been
found guilty of misconduct. In an award issued on 9 February 2015,
the commissioner found the dismissal substantively unfair
on the
basis that the company had failed to prove the charges against the
employee, and awarded him seven months’ remuneration
as
compensation, totalling some R210 000.
[2]
The company
now seeks to review and set aside the award in terms of section 145
of the LRA. Its case is that the award is substantively
unreasonable
on the
Sidumo
test. That then is the issue for determination.
Background facts and
basis of dismissal
[3]
The company
manufactures and distributes washing powders, detergents and soaps.
It has plants in Wadeville (East Rand) and at Springbok
Road (West of
Johannesburg). I refer to these plants as “Wadeville” and
“Springbok”, respectively. Although
the employee worked
at Wadeville, he was the warehouse manager of both plants.
[4]
As a
general rule, all company transactions are processed on a computer
system known as JDE. In the event of the system being down
or in the
case of a power failure, transactions are subsequently entered on JDE
when the system is up and running again. Naturally,
the failure to
enter transactions on JDE could result in records being manipulated
or being lost.
[5]
The
employee was dismissed for gross negligence and gross dishonesty
involving three incidents of alleged misconduct:
a)
On 9 April
2014, the employee sent goods (cost value R3 440, retail value
R5 300) to a colleague, Mr Chetty, for his personal
use. The
employee did not have authority to do so and admitted that he had
committed misconduct. (I refer to this as “the
first
incident”.)
b)
On 12
February 2014, the employee used a manual (handwritten) gate pass to
transfer 14 pallets for goods (valued between about R104 000
and
R170 000) from Springbok to Wadeville. On the company’s
version, the goods were not received at Wadeville. (I refer
to this
as “the second incident”.)
c)
On 17 March
2014, the employee used a manual tax invoice addressed to Primedia to
(allegedly) move goods (valued between about R50 000
and
R81 000) from Wadeville to Springbok. The goods were not
received by Primedia or (on the company’s version) Springbok.
The employee claimed that the tax invoice was addressed to Primedia
because the goods were returned by Primedia. (I refer to this
as “the
third incident”.)
The arbitration:
overview of evidence
[6]
Regarding
the first incident, the following emerged in evidence:
a)
Mr Chetty
is the company’s field sales manager for Limpopo, with Limpopo
Cash and Carry apparently being one of the company’s
clients.
b)
On 9 April
2014, a so-called commercial invoice was generated manually (not off
JDE) in favour of Limpopo Cash and Carry, with Mr
Chetty being
reflected as the reference / sales representative. The invoice was
for 12 cases of goods. Although the invoice contains
no prices, the
value of the goods was as stated above. The goods were delivered by a
company truck and driver to Mr Chetty’s
home, and not to
Limpopo Cash and Carry.
c)
In addition
to having issued the instruction for the stock to be pulled, the
employee had also instructed Afzaal Muhammed (one of
the supervisors
reporting to him) to prepare the commercial invoice. According to Mr
Muhammed, this was “
absolutely
not
”
a standard document, with documents typically being generated off
JDE. It followed that the transaction was not captured
on JDE.
d)
Read
together with what transpired at his disciplinary inquiry, the
employee’s version was this: (i) he admitted that the
stock was
not for Limpopo Cash and Carry, but instead for Mr Chetty’s
personal use; (ii) he had processed the transaction
after Mr Chetty
had asked him whether he had any “
excess
or clearance stock
”
(and contradicted himself by testifying that Mr Chetty had asked for
“
damaged
stock
”)
and had drawn the stock therefrom; (iii) staff members were given
such stock in limited quantities
[1]
on a monthly basis and because Mr Chetty “
doesn’t
come every month
”,
he considered it to be in order to give him 12 cases of stock (albeit
that he had no authority to do so; (iv) he would
always make use of a
commercial invoice where goods were not in stock / not on the system,
as was the case here; (v) in mitigation
at his disciplinary inquiry,
he had “
admit[ted]
[that] the first incident was my mistake and will not happen again
”
– something which he repeated in evidence at the arbitration;
and (vi) he did not quibble with the assertion put to
him under
cross-examination that he did not have authority to give away company
property to Mr Chetty and that, in the result,
the company suffered
adverse financial consequences.
[7]
Regarding
the second incident, the following emerged in evidence:
a)
On 12
February 2014, a manual gate pass was prepared on the instruction of
the employee to facilitate the transfer of 14 pallets
of goods from
Springbok to Wadeville, the value thereof being as stated above.
b)
Two of the
employee’s supervisors were involved in loading the truck –
Nizam Patel (the finished goods supervisor) and
Majibur-Rehman Patel
(a supervisor who reported to Nizam Patel). According to Nizam Patel,
while gate passes were sometimes used
to transfer stock, this would
then be loaded onto JDE (if the stock was on the system) or otherwise
a request would be made for
the stock to be transferred onto JDE (if
the stock was not on the system). He did not know if this occurred in
this instance. According
to Majibur-Rehman Patel, this was the first
time that he had signed / used a gate pass to effect the transfer of
stock, and was
unaware of the computer process to be followed.
c)
The goods
formed part of so-called “
segregated
items
”,
which are referred to as “
excess
stock
”,
and were waiting to be taken into the system so that they could be
added to the main inventory.
d)
According
to the company, the 14 pallets never arrived in Wadeville, with the
company’s truck tracking report showing that
the truck left
Springbok at about 09h00 on 12 February 2014, went to Klerksdorp
(which was unscheduled) and only reached Wadeville
at about 17h45,
whereas the trip from Springbok to Wadeville would not have taken
more than one hour. The driver of the truck was
one Isaac, with the
company’s evidence (via Amer Iqbal, the head of HR) having been
that the drivers reported to the employee.
e)
According
to the employee, the stock was received by Wadeville – this
insofar as he had been so informed by the Wadeville
despatch
supervisor, Asif Khan. Mr Khan (who had since been dismissed for
related misconduct) had testified at the employee’s
disciplinary inquiry that the stock had not been received (and had
signed a statement to this effect before the inquiry), but he
was not
called as a witness at the arbitration. However, the company’s
first witness, Mr Iqbal, who testified about the results
of the
investigation into the employee’s misconduct, gave evidence
that the goods had not been received. The fact that the
truck
apparently went on a frolic of its own on 12 February 2014 was also
consistent, according to the company, with the goods
not having been
delivered to Wadeville.
[8]
Regarding
the third incident, the following emerged in evidence:
a)
On 17 March
2014, the employee prepared a tax invoice – using Excel and not
JDE – reflecting, on the face of it, the
sale of goods to
Primedia (Robertville). Although the tax invoice contains no prices,
the value of the goods was as stated above.
b)
The
employee then instructed Mr Muhammed (a supervisor) to load the goods
onto a truck – this at Wadeville. As reflected by
way of a
stamp on the tax invoice, the delivery truck was driven by one Isaac
– the same driver who was involved in the second
incident.
Again, the tracking report reflected that the truck had gone off
route – this time to Krugersdorp. According to
the company, the
goods were not received by Primedia (which turned out to be common
cause) or Wadeville.
c)
Mr Muhammed
testified (with his evidence referred to in this paragraph not having
been challenged under cross-examination) that
he was given the tax
invoice by the employee, whereupon he asked him why a standard JDE
document had not been generated. The employee’s
response was
that a standard document had been generated, and that the truck
driver (Goodman) had it, but that he was now away.
As Mr Muhammed
went on to testify:
“
So the manager told me I
must – he gave me the commercial invoice and he said I must
load the stock on this invoice on this
vehicle
.
He got the JD standard documentation and he will – there’s
no need of doing another documentation in the JD standard
system, so
as I was instructed by the manager I took the invoice and loaded the
stock.” (Own emphasis.)
d)
In response
to questions by the commissioner, the employee testified that despite
the tax invoice reflecting the buyer (and party
to be notified) as
being Primedia, its name had been used because the goods had been
returned
by Primedia. According to the employee, the alleged purpose of the
tax invoice was not to effect the delivery of the goods to Primedia,
but instead to transfer them from Wadeville to Springbok. (It goes
without saying that this makes no sense whatsoever.)
e)
Taxed under
cross-examination about the invoice, the employee contended that he
had not given it to Mr Muhammed, but instead that
Mr Muhammed had
generated it himself. The problem, though, was that Mr Muhammed’s
version had not been challenged under cross-
examination. In a follow
up line of cross-examination, the employee could not explain why a
tax invoice – as opposed to a
delivery note or inter-warehouse
transfer – was generated; repeating that it was prepared
(incorrectly) by Mr Muhammed (which
must be rejected for the reasons
already mentioned). The employee faced further difficulties when
asked how the driver would have
known, on the face of the tax
invoice, that he had to make the delivery to Springbok (and not
Primedia) – his answer being
that that “
the
supervisor tells them to unload, what to do
”.
Later on under cross-examination, he stated that he had told Mr
Muhammed: “…
move
that stock to the other warehouse that stock belongs to Primedia.
That’s when we wrote Primedia on the invoice
.”
But, again, this had not been put to Mr Muhammed, and was not the
employee’s initial answer. (This leaves a hole
in the
employee’s defence, with the obvious inference being that he
had told Isaac not to deliver the goods to Primedia as
per the tax
invoice.)
f)
Regarding
the employee’s version on whether the goods had been received
at Springbok, given that the second and third incidents
were often
conflated in evidence insofar as the alleged receipt of the goods is
concerned, the employee’s version is difficult
to decipher. At
one point, he appears to have testified that he knew that they were
received at Springbok because a request was
made to “
production
to transfer stock to the system
”,
but this was hardly convincing. Also relevant in this regard is that
the truck tracking report for 17 March 2014 does not
reflect Isaac’s
truck as having gone to Springbok (after leaving Wadeville), a fact
which appears (from the transcription
thereof) to have been common
cause at the employee’s disciplinary inquiry.
The commissioner’s
award
[9]
The
ratio
of the commissioner’s award is contained in paragraphs 30, 31
and 33 of the award. They read:
“
30.
The [company’s] version that the documents used by the
[employee] was not allowed had not
been substantiated by proving the
existence of such a rule or standard procedure. Even its own
witnesses testified that these documents
had been used in the past
especially when the JDE was down. Furthermore Iqbal reiterated that
[the employee] had to develop procedures
for his department. There
was also no evidence that excess and damaged stock must be captured
on the JDE and again the [company’s]
witnesses confirmed the
standard practice of not capturing it. [The employee’s] version
that only resalabe stock was captured
at month end had not been
rebutted.
31.
It appears that the [company] held [the employee] to be dishonest in
respect of stock that
apparently went missing when drivers deviated
from routes. There was no evidence that he had instructed the drivers
where to go;
in fact, his version that supervisors dealt with the
drivers remained unchallenged. [The employee] was an honest and
credible witness
who did not deny that these events took place. The
[company’s] witnesses were not entirely credible and Iqbal’s
evidence
and knowledge did not reflect first hand operational
experience. …
33.
The [company] had failed to prove the [employee’s] guilt on
charges of dishonesty
and negligence, let alone gross dishonesty and
negligence. The [employee] admitted that he did not have the
authority to send goods
to Chetty, but his version that Chetty asked
for them remained unchallenged. In any event this does not prove that
he was dishonest
or negligent and I’m not convinced that it
justifies dismissal as a sanction because he had not acted in an
underhand manner
or benefitted from it. It follows that the [company]
had failed to prove it had a valid reason to dismiss the [employee]
and the
dismissal is therefore substantively unfair.”
[10]
In
circumstances where the employee sought compensation, as stated
above, the commissioner awarded him seven months’ remuneration
as compensation.
Grounds of review:
analysis and evaluation
[11]
As stated
above, the company contends that the award is reviewable because the
outcome is unreasonable.
[12]
To begin
with the commissioner’s findings (in paragraph 33 of his award)
on the first incident (involving Mr Chetty), I am
of the view that
they are unreasonable, for these reasons:
a)
Once it is
accepted that the employee did not have the authority to give away 12
cases of goods with a retail value of R5 300, in
the absence of him
proffering an acceptable explanation for this extraordinary
misconduct, the reasonable inference to be drawn
is that he was
either dishonest (or at least) grossly negligent in doing so. The
employee came nowhere near providing an acceptable
exculpatory
explanation, and the fact that the commissioner attached any weight
to the fact that Mr Chetty had asked for the goods
is, in itself,
unreasonable. (This notwithstanding the fact that Mr Chetty
apparently denied having done so at the employee’s
disciplinary
inquiry.)
b)
That the
employee was dishonest is apparent from the fact that he was
responsible for the generation of an invoice made out to Limpopo
Cash
and Carry and misrepresented that the goods were to be delivered to
it, in circumstances where, in truth, the beneficiary
was Mr Chetty
and the delivery address was Mr Chetty’s home. The employee
surely engaged in this deception so as to hide
his unlawful
dispossession of company property, which was clearly dishonest. A
reasonable commissioner could not have acquitted
the employee of
dishonesty in relation to the first incident.
c)
Turning to
the issue of sanction, the commissioner’s finding that
dismissal was not warranted rings hollow, in circumstances
where he
(unreasonably) did not find the employee guilty of dishonesty. In any
event, contrary to what was found by the commissioner,
the employee
clearly acted in an “
underhand
manner
”
– this in the circumstances described above. And the fact
that there was no evidence that the employee benefitted
from the scam
(by for example, sharing in the spoils or getting a kick-back from Mr
Chetty) does nothing to improve his position.
d)
Given the
employee’s seniority and the trust that the company must
obviously have placed in him – as the warehouse manager
of both
Wadeville and Springbok – to properly control its stock, a
reasonable commissioner would have upheld the employee’s
dismissal in relation to the first incident alone.
[13]
Turning now
to the third incident (which I deal with before the second incident),
to my mind, the commissioner’s acquittal
of the employee was,
again, unreasonable for these reasons:
a)
The
commissioner’s finding in paragraph 30 of his award to the
effect that the documents used by the employee (not generated
off
JDE) were in order, could not reasonably have applied to the third
incident. This is so because: (i) the employee did not explain
why he
had not used a gate pass, as he had done in respect of the second
incident, which he contended was an acceptable manner
of transferring
goods between the plants; (ii) it was the employee’s case
(albeit false) that he had not generated the Primedia
tax invoice,
but that Mr Muhammed had done so and incorrectly; (iii) Mr Muhammed’s
uncontested evidence was that he had raised
with the employee the
fact that the document was irregular in that it had not been
generated off JDE; (iv) the employee’s
response that the JDE
generated document was with the driver (Goodman) appears contrived
given that the document never surfaced
in evidence – nor was
there any evidence of the transaction having been entered onto JDE;
(v) the generation of a tax invoice
in the name of Primedia in
circumstances where it had (allegedly)
returned
the goods has all the hallmarks of a scam designed to facilitate the
theft of the goods; and (vi) the employee’s version
that what
the Primedia tax invoice was actually meant to authorise was the
transfer of the goods from Wadeville to Springbok also
smacks of a
fabrication – it being utterly incompatible with the tax
invoice itself.
b)
Once it is
accepted, as it must be, that the employee generated the Primedia tax
invoice – and that it was irregular and contrived
– then
the spectre of the employee having acted (further) dishonestly in
colluding with the driver (Isaac) to dispossess
the company of the
goods looms large. Why else generate the phoney tax invoice? The
commissioner never considered this because
he found unreasonably that
the Primedia tax invoice (not generated off JDE) was in order.
c)
To make
matters worse, having apparently found that “
stock
… went missing when drivers deviated from routes
”,
the commissioner acquitted the employee because “
[t]here
was no evidence that he had instructed the drivers where to go; in
fact his version that supervisors dealt with the drivers
remained
unchallenged
”
(paragraph 31 of the award). This, too, is manifestly unreasonable.
In fact, on a conspectus of the evidence, the employee
– and
not Mr Muhammed – must have told Isaac not to deliver the goods
to Primedia – this in circumstances where
the employee never
put to Mr Muhammed that he had done so, or that Mr Muhammed even knew
that the goods were not destined for Primedia
as per the tax invoice
(see para 8(e) above). In circumstances where the employee first
irregularly prepared a tax invoice and
then irregularly convinced
Isaac not to deliver the goods to Primedia as per the invoice, it is
highly improbable that he did not
play a hand in the disappearance of
the goods.
d)
In the
light of the above, the only reasonable inference to be drawn is that
the employee acted dishonestly in relation to the third
incident. In
not so finding, the commissioner acted unreasonably. Had the
commissioner found the employee guilty of dishonesty
in respect of
the third incident, as he ought to have done, it would surely have
followed that the sanction of dismissal was fair.
[14]
Turning now
to the second incident, there can be little doubt that the employee’s
behaviour was suspicious, particularly as
a pattern of behaviour may
have emerged. However, insofar as the commissioner apparently found
the employee not guilty for the
reasons set out in paragraphs 30 and
31 of the award, I am unpersuaded that a reasonable commissioner
could not have come to such
a finding. This for the following
reasons:
a)
In the
first instance, the finding to the effect that the use of a gate pass
to transfer excess stock – that had yet to be
loaded on JDE –
between Springbok and Wadeville was not irregular, is not
unreasonable. Indeed, Nizam Patel (a company witness)
testified that
this sometimes occurred (albeit that a subsequent JDE entry would be
made).
b)
Secondly,
different to the third incident, the gate pass was not fictitious
(like the Primedia tax invoice was), and it cannot necessarily
be
inferred that the employee interacted with Isaac over the delivery of
the goods in question.
c)
Thirdly,
the company failed to establish in evidence that the stock was not
received at Wadeville. This in circumstances where Mr
Khan (whose
evidence the company relied upon at the disciplinary inquiry) was not
called as a witness at the arbitration, and where
(different to the
third incident), the truck tracking record was not necessarily
dispositive of the issue, in that although Isaac
undertook an
unauthorised detour, he did eventually reach Wadeville (where the
delivery might potentially have been made).
[15]
In summary,
while the commissioner’s decision in relation to the second
incident was not unreasonable, the same cannot be
said for his
decision in relation to the first and third incidents. For the
reasons stated above, had the commissioner found the
employee guilty
of dishonesty in relation to the first and third incidents (as he
ought to have done), he could not reasonably
have avoided finding
that the sanction of dismissal was fair.
Order
[16]
In the
circumstances, the following order is made:
a)
The award
issued by the second respondent is reviewed and set aside;
b)
The award
is substituted with an order that the applicant’s dismissal of
the first respondent was substantively fair;
c)
There is no
order as to costs.
________________________________
Myburgh, AJ
Acting
Judge of the Labour Court of South Africa
Appearances:
For the applicant:
Mr I Haffegee of Haffegee Roskam
Savage
For the first
respondent: Mr T M Graham of Graham Attorneys
[1]
Reference was made in argument to a
monthly quota of R150 per employee.