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[2018] ZALCJHB 287
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JDG Trading (Pty) Ltd t/a Supply Chain Services v Myhill NO and Others (JR958/16) [2018] ZALCJHB 287; (2018) 39 ILJ 2550 (LC) (11 September 2018)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
reportable
Case
No: JR958/16
In
the matter between:
JDG
TRADING (PTY LTD t/a SUPPLY CHAIN
SERVICES Applicant
and
MYHILL,
E L
N.O
First
Respondent
THE
COMMISSION FOR CONCILIATION
MEDIATION
AND
ARBITRATION Second
Respondent
SOLIDARITY
obo AS
SCHLEBUSCH Third
Respondent
Heard:
20 July 2018
Delivered: 11
September 2018
Summary:
Review application – award not one that another reasonable
decision maker could reach – Commissioner failing
to appreciate
that consistency only a factor to consider when determining fairness
of dismissal - award reviewed and set aside.
Employee challenging
fairness of dismissal based on alleged inconsistency in the
application of credit card policy. Failure by
managers to take
disciplinary action when policy breached over a period of time does
not automatically render dismissal unfair
if action is taken later
based on continued breach. Employee needs to illustrate that failure
to take action resulted in inconsistency
which rendered dismissal
unfair.
JUDGMENT
E
BESTER, AJ
Introduction:
[1]
This is an application for the review and setting aside of the
arbitration award dated 18 March 2016 issued under the auspices
of
the second respondent (the CCMA) by Commissioner E Myhill (the
Commissioner) under case number GAJB23031-15 (the award) and
for the
substitution of the said award by an order of this Court,
alternatively for the award to be remitted to the CCMA for
determination
by a different Commissioner, as well as for costs. The
Applicant also applies for condonation for the late filing of the
review
application. The applicant’s condonation application is
unopposed. In light of the satisfactory explanation for the
three-week
delay, which is relatively short in the circumstances, I
am satisfied that condonation should be granted.
Background
to the application for review:
[2]
The third respondent’s member in this matter, who will be
referred to herein as the respondent, was dismissed by the applicant
following allegations of misappropriation of company funds, in that
he allegedly used his company credit card for purchases that
he was
not entitled to and which led to the applicant suffering a loss of
R1028.40 over the period June 2015 to July 2015.
[3]
The following issues are common cause:
3.1 The respondent
travelled a lot in the execution of his duties and as such was issued
with a company credit card in order to
pay for certain expenses
incurred during business trips;
3.2 The applicant has a
credit card policy in place which regulates the use of the credit
card;
3.3 The respondent was
aware of the said policy.
[4]
The relevant portion of the credit card policy, under paragraph 3
thereof, provides that:
“
3.1 Unless
otherwise authorised, only expenses incurred by the cardholder, must
be paid for i.e. do not pay for anyone else’s
expenses such as
accommodation. For meals, the most senior person pays to ensure that
combined expenses are approved at most senior
level.
3.2 The following limits
are applied. In line with cost savings users must endeavour to spend
less and not use these limits as “targets”.
These limits
may be budgeted downwards in specific departments in which case the
lower limit must apply. The following relates
to expenses whilst
“sleeping out”. Employees may only sleep out if the
location being visited is further than 150 kilometres
from their home
base.
3.2.1 Accommodation per
person should not exceed the approved budget of R700.00 per night.
(Based on a market
related three-star facility).
3.2.2 The maximum
allowance for food and beverages is R300.00 per day, unless when the
accommodation includes breakfast, then this
amount reduced (sic) to
R225 per day. The following should be used as a guideline:
(a) Breakfast should not
exceed R75 and is allowed when sleeping over and the accommodation
did not provide breakfast. Breakfast
is also allowed in the morning
where an employee travels to destination that is further than 150km
from home base.
(b) Lunch is allowed when
sleeping out or where the destination is further than 150 kilometres
from the home base. The cost of lunch
should not exceed R75 all
included.
(c) Dinner and beverages
of R150.
3.2.3 Limits may not be
accumulated or carried forward i.e. did not have lunch so spent for
dinner was R200.”
[5]
The applicant illustrated that the respondent, on many occasions
during the period June 2015 to July 2015, used his company
credit
card to buy lunch and/or dinner when he was already at home or close
to his house before lunch or dinner time and exceeded
the amounts
allowed for the purpose of paying for lunch or dinner. On one
occasion, the respondent bought cigarettes and claimed
it as being
breakfast.
[6]
The respondent’s case is that he interpreted the provisions of
the credit card policy to the effect that he was entitled
to use the
credit card to buy lunch and dinner on days that he travelled in
excess of 150 kilometres, even if he was back home
at lunch or dinner
time or before. He claimed that he travelled in excess of 150 km on
each of the occasions that the applicant
used to illustrate the
alleged credit card abuse. He furthermore alleges that, apart from
the buying of cigarettes, which he claims
was a mistake, he did
nothing wrong in that his former managers were aware that he used the
credit card in this manner and they
approved his usage thereof in
this manner.
The
award:
[6]
The Commissioner accepted that the purpose of the credit card policy
is to allow employees to use company credit cards to pay
for food and
accommodation when they are on business trips more than 150km away
from their homes and that the respondent defeated
this purpose by
using his credit card when he was already back home or close to home.
[7]
The Commissioner however held that the respondent’s dismissal
was unfair. In arriving at that conclusion the Commissioner
applied
the reasoning:
7.1 In
NUM
and Others v Amcoal Collieries and Industrial Operations Ltd
[1]
in which it was held that a historical inconsistency occurs where an
employer has in the past, as a matter of practice, not dismissed
employees or imposed a specific disciplinary sanction for
contravention of a specific disciplinary rule, but then decides to
dismiss
or impose that sanction for the contravention of the rule;
7.2 Le Roux et al
[2]
as referenced in the
Amcoal
matter, where it is stated that the unfairness of this type of
inconsistency appears to be based on the argument that failure to
discipline or impose a sanction for the contravention of a rule in
the past has created the impression that such actions will not
be
taken for such contravention. Failure to have taken action in the
past may also be an indication that the employer did not regard
the
rule as valid.
[8]
The Commissioner held that:
“
there is evidence
that Schlebusch (the respondent) had used his credit card in
contravention of the policy for a significant period
and time and,
despite him having disclosed his use of his card to two managers,
Botha and Dreyer, he was never reprimanded by either
of them”.
[9]
Based on the aforesaid, the Commissioner concluded that the applicant
acted inconsistently and found that the dismissal of the
respondent
was not the appropriate sanction for contravention of the credit card
policy of the applicant and that the applicant
had failed to prove
that it had a good reason to dismiss the respondent.
The
review application:
[10]
The applicant seeks to review the Commissioner’s award on the
basis that it is, amongst others, unsound, grossly irregular
and
unreasonable.
[11]
In support of the above the applicant contends that:
11.1 The fairness of the
respondent’s dismissal in this matter does not turn on
inconsistency, in that there is no evidence
that other employees have
been found guilty of the same misconduct and have not been dismissed.
The applicant submits that inconsistency
means that the applicant
disciplined some employees for similar transgressions but others not.
In the absence of evidence to this
effect, according to the
applicant, there cannot be an issue of inconsistency. The applicant
thus contends that the Commissioner
failed to determine what the
applicant terms as the “
real legal principle
”,
namely that of waiver. The Commissioner should, according to the
applicant, have determined whether or not the applicant,
through its
conduct and actions, waived its right to discipline the respondent
by, whilst being aware of it, reconciling itself
with the misconduct
and condoning the non-compliance with the policy.
11.2 The respondent’s
version, namely that he disclosed the use of the credit card to his
managers but that they did not reprimand
him, is insufficient to
establish a defence for his conduct. The applicant contends that the
respondent needed to prove that the
said managers were actually aware
that he acted in contravention of the policy and condoned such
contravention by not disciplining
him. This, the applicant further
contends, the respondent did not do as all he did was show that he
submitted his credit card reconciliation
forms to them. The
respondent also did not present any evidence that the applicant had
been aware of the actual misconduct that
took place before and opted
not to act on this knowledge.
11.3 The Commissioner
failed to apply his mind to the applicable requirements when
determining whether or not dismissal was an appropriate
sanction and
ignored the clear evidence of the applicant that the trust
relationship between the parties had broken down.
Evaluation
[12]
In
Southern
Sun Hotel Interests (Pty) Ltd v CCMA and Others
[3]
,
Van Niekerk J stated the following:
“
[10] The legal
principles applicable to consistency in the exercise of discipline
are set out in Item 7 (b) (iii) of the Code of
Good Practice:
Dismissal establishes as a guideline for testing the fairness of a
dismissal for misconduct whether ‘the rule
or standard has been
consistently applied by the employer’. This is often referred
to as the ‘parity principle’,
a basic tenet of fairness
that requires like cases to be treated alike. The courts have
distinguished
two
forms of inconsistency –
historical
and contemporaneous
inconsistency. The former requires that an employer apply the penalty
of dismissal consistently with the way in which the penalty
has been
applied
to
other employees
in the past; the latter requires that the penalty be applied
consistently as between two or more employees who commit the same
misconduct. A claim of inconsistency (in either historical or
contemporaneous terms) must satisfy a subjective element - an
inconsistency
challenge will fail where the employer did not know of
the misconduct allegedly committed by the employee used as a
comparator
(see, for example,
Gcwensha
v CCMA & Others
[2006]
3 BLLR 234
(LAC)
at paras 37-38). The objective element of the test to be applied is a
comparator in the form of a similarly circumstanced
employee
subjected to different treatment, usually in the form of a
disciplinary penalty less severe than that imposed on the claimant.
(See
Shoprite
Checkers (Pty) Ltd v CCMA & Others
[2001] 7
BLLR 840
(LC), at para 3.) Similarity of circumstance is the inevitably most
controversial component of this test. An inconsistency challenge
will
fail where the employer is able to differentiate between employees
who have committed similar transgressions on the basis
of inter alia
differences in personal circumstances, the severity of the misconduct
or on the basis of other material factors”
.
(Own
emphasis, references excluded)
[13]
Sutherland AJA in
National
Union of Mineworkers, obo Botsane v Anglo Platinum Mine (Rustenburg
Section)
[4]
held
that:
“
The idea of
inconsistency in employee discipline derives from the notion that it
is unfair that like are not treated alike. The
core of this ‘factor’
in the application of employee discipline (it would be a
misconception to call it a principle)
is the rejection of capricious
or arbitrary conduct by an employer.’
And
‘
It has application
in two respects. Mainly, it is a recognition of the unfairness of the
condemnation of one person for genuine
misconduct when another
indistinguishable case of misconduct by another person is condoned.
The second application is the recognition
of the unfairness that
results when disparate sanctions are meted out for indistinguishable
misconduct to different persons”
[5]
.
[14]
I do not agree with the applicant’s argument that inconsistency
can only take place where there are more than one employee
involved.
The code of good practice: Dismissal as contained in Schedule 8 of
the Labour Relations Act provides as follows:
“
Dismissals for
misconduct
(6) The employer should
apply the penalty of dismissal consistently with the way in which it
has been applied to
the same
and other employees in the past,
and consistently as between two or more employees who participate in
the misconduct under consideration.
(Own emphasis).
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 work-place; and
(b) if a rule or standard
was contravened, whether or not –
…
.
(iii) the rule or
standard has been consistently applied by the employer;…”
[15]
Southern Sun Hotel Interests (Pty) Ltd v CCMA and Others
as
well as
National Union of Mineworkers, obo Botsane v Anglo
Platinum Mine (Rustenburg Section)
were decided in the context of
inconsistent application of discipline between different employees. I
am of the view that these
cases cannot be interpreted to imply that
inconsistency cannot take place in the context of inconsistent
application of a rule
relating to a single employee.
[16]
In
SA
Commercial Catering
and
Allied Workers Union andOothers v Irvin & Johnson Ltd
[6]
the
Labour Appeal Court at paragraph [29] held that:
"In my view too
great an emphasis is quite frequently sought to be placed on the
'principle' of disciplinary consistency, also
called the 'parity
principle.' Consistency is simply an element of disciplinary
fairness. Every employee must be measured by the
same standards.
Discipline must not be capricious. It is really the perception of
bias inherent in selective discipline which makes
it unfair
"(
references not included).
[17]
An employer can act inconsistently by not enforcing a rule at a prior
point in time, only to enforce it thereafter, without
warning, in
respect of the same employee. In that context, the inconsistency is
based on the impression which is created that the
rule or standard in
no longer applicable; is not regarded as serious by the employer,
that disciplinary action will not necessarily
be taken for
non-compliance with the rule or that the type of behaviour is
condoned by the employer. If the rule is then suddenly
enforced,
resulting in dismissal, the inconsistent application of the rule by
the employer will be a factor which must be considered
in order to
determine whether the dismissal was unfair.
[18]
In
Minister
of Correctional Services v Mthembu NO and Others
[7]
,
the Court held as follows:
“
The
consideration of consistency or equality of treatment (the so-called
“parity principle”) is an element of disciplinary
fairness, and it is really “the perception of bias inherent in
selective discipline that makes it unfair.” (See
Early
Bird Farms (Pty) Ltd v S Mlambo
[
1997]
5 BLLR 540
(LAC) at 545H-I;
SA
Commercial Catering And Allied Workers Union and Others v Irvin &
Johnson Ltd
[1999] 20 ILJ 2302 (LAC) at 2313D-E;
Cape
Town City Council v Masitho and Others
[2000] 21 ILJ 1957 (LAC) at 1960F-1961F and
National
Union Metal Workers of SA v Henred Fruehauf Trailers
[1994]
ZASCA 153
;
1995
(4) SA 456(A)
at
463G-I.)
When
an employer has in the past, as a matter of practice, not dismissed
employees or imposed a specific sanction for contravention
of a
specific disciplinary rule, unfairness flows from the employee’s
state of mind, i.e. the employees concerned were unaware
that they
would be dismissed for the offence in question.
(own
emphasis) When two or more employees engaged in the same or similar
conduct at more or less the same time but only one
or some of them
are disciplined, or where different penalties are imposed, unfairness
flows from the principle that like cases
should, in fairness, be
treated alike.”
[19]
The above forms of inconsistency are distinguishable from the
principle of condonation of an employee’s conduct by the
employer, in terms of which principle the employee will be able to
argue that the failure by the employer to take action when an
incident of misconduct occurred, prohibits the employer from taking
disciplinary action at a later stage for that incident of misconduct
in appropriate circumstances. The condonation of misconduct under
such circumstances is akin to a waiver by the employer of its
right
to take disciplinary action later, in that the employer, with full
knowledge of an act of misconduct, elected deliberately
to “forgive”
that particular act of misconduct and not to take action or to take
action within a reasonable time period.
[20]
The mere failure to take disciplinary action against an employee who
contravenes a rule for a period of time does not automatically
mean
that the employee has been led to believe that the rule is no longer
applicable; is not regarded as serious by the employer,
that
disciplinary action will not necessarily be taken for non-compliance
with the rule or that the type of behaviour is condoned
by the
employer. The employee has to illustrate that the failure by his
employer to take action has resulted in him having a
bona fide
belief to that effect.
[21]
In this case, the respondent claims that the employer acted
inconsistently and that the credit card policy was no longer
applicable
in that his managers were aware of his credit card usage
in contravention with the credit card policy but did not reprimand
him.
On this basis alone, his dismissal was held to be unfair. The
respondent did not however illustrate that the failure by his
managers
to reprimand him created a
bona fide
belief that the
policy was no longer valid or applicable as he alleges. He merely
illustrated that he used his credit card in contravention
with the
policy and that his credit card reconciliation statements were
approved by his former two managers. He did not present
any evidence
to the effect that any of the two managers comprehended fully that he
contravened the policy and condoned his contravention
thereof
knowingly and with such comprehension. He did not put this to his
managers at the disciplinary hearing when he had the
opportunity to
do so but only presented evidence in this regard for the first time
when the employer’s case was already closed.
He also did not
call any of his former managers to give evidence hereto during the
arbitration proceedings.
[22]
The respondent did not seriously dispute the fact that the policy was
applied in full force elsewhere within the workplace
as well as his
department. The overwhelming probabilities are that the employee was
not only fully aware of the existence of the
policy (which is common
cause) but that he “took chances” by contravening it and
“got away” with it for
a while. This can never equate
with a genuine
bona fide
belief that a policy is no longer
applicable or not regarded as serious based on the inconsistent
application of the policy by
the employer.
[23]
An arbitrator is required to determine whether the sanction imposed
by the employer is fair and not to impose a sanction afresh.
In
African
Bank v Magashima and Others
[8]
Tlhotlhalemaje
AJ (as he then was), held that:
“
In
determining whether an employer had acted fairly in dismissing an
employee, an arbitrator should also consider the factors outlined
in
Sidumo
[9]
.
Other than these factors, where an employee claims inconsistency,
further factors inclusive of those outlined in
Sidumo
to be considered include the following:
a) The circumstances
surrounding the act of misconduct committed by individual employees;
b) The personal
circumstances of the employees, including their length of service,
and the employees’ disciplinary records;
c) The positions they
occupied at the time of the commission of the misconduct, the nature
of the duties they performed and hierarchy
within the organisation;
d) The severity of the
misconduct or its impact on the employer and its operations;
e) The consequences of
the misconduct
vis-à-vis
the sustainability of the
employment relationship between the employer and the employee, and
also as between co-employees;
f) Whether the employees
have shown genuine contrition. Genuine contrition implies that an
employee owned up to the misconduct as
soon as it took place, and
showed remorse from that moment. This should be distinguished from
the charade of showing remorse at
disciplinary proceedings, purely
for the purposes of pleading in mitigation of sanction.”
[24]
The Commissioner indeed took no account of the fact that the
applicant testified that the trust relationship between the parties
had broken down, or for that matter, of any other relevant factor
when considering whether a dismissal is fair. He failed to appreciate
that consistency is an element of a fair dismissal and not a rule
onto itself. Had he taken account of other relevant factors,
including the evidence of the respondent relating to the trust
relationship; the fact that, instead of accepting accountability
for
his actions, the respondent preferred to opportunistically base his
case on the failure of his managers to take action as well
as the
position of the respondent as risk officer, he would have held that
the dismissal of the respondent was fair.
[25]
In the light of the aforesaid, I find that the Commissioner’s
award is not one that a reasonable decision maker could
have reached
based on the evidence before him and therefore should be set aside.
[26]
The respondent opposed the review application in circumstances where
he had an award in his favour. His opposition of the review
application was not unreasonable in the circumstances and does not
warrant a cost order.
[27]
In the premises the following order is made:
Order
1. The late filing of the
applicant’s review application is condoned.
2. The arbitration award
is set aside and substituted with an order that the dismissal of the
employees was substantively fair.
3. There is no order as
to costs.
__________________________
E
Bester
Acting
Judge of the Labour Court of South Africa
Appearances
For
the applicant:
Mr. A.J Posthuma of Snyman Attorneys
For
the respondent:
Ms N Ras of Solidarity
[1]
(1992) 13 ILJ 1449 (LC).
[2]
South African Law of unfair dismissal (7
th
Ed) p110.
[3]
[2009]
11 BLLR 1128 (LC).
[4]
(JA2013/42)
[2014] ZALAC 24
(15 May 2014) at para 25
[5]
At
para 26.
[6]
[1999]
20 ILJ 2302 (LAC).
[7]
(JR953/04) [2006] ZALCJHB 30 (24 March 2006) at para 8.
[8]
[2014] ZALCJHB 298 at para 24.
[9]
2008 (2) SA 24
(CC) at Paras 78 – 79. These include the
totality of the circumstances of the matter; whether what the
employer did was
fair; the importance of the rule that the employee
breached; the reason the employer imposed the sanction of dismissal;
the basis
of the employee’s challenge to the dismissal; the
harm caused by the employee’s conduct; whether additional
training
and instruction may result in the employee not repeating
the misconduct; the effect of dismissal on the employee and the long
service record of the employee.