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Parmalat SA (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (PR 78 /2016) [2018] ZALCPE 34 (23 November 2018)

80 Reportability
Labour Law
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Brief Summary

Labour Law — Unfair Dismissal — Review of arbitration award — Applicant sought to review an arbitration award that found the dismissal of an employee, Mr. Cook, substantively unfair — Employee dismissed for gross negligence after failing to secure a fridge door, leading to theft of stock — Arbitrator's findings challenged on grounds of failure to determine the substantive fairness of the dismissal — Court held that the arbitrator's decision to reinstate the employee was unjustified as the employee's actions constituted gross negligence, justifying the dismissal.

Comprehensive Summary

Summary of Judgment


1. Introduction


This matter concerned a review application in the Labour Court in which the employer sought to review and set aside an arbitration award issued under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA). The award had found that the dismissal of the employee was substantively unfair and had ordered retrospective reinstatement with limited backpay.


The applicant was Parmalat SA (Pty) Ltd (the employer). The first respondent was the Commission for Conciliation, Mediation and Arbitration. The second respondent was R De Lange N.O., the commissioner/arbitrator who issued the award under review. The third respondent was FAWU obo Roberto Cook, acting on behalf of the dismissed employee.


The procedural history was that the employee was dismissed following an internal disciplinary hearing on a charge framed as gross negligence. An unfair dismissal dispute was referred to the CCMA, arbitrated over various dates between November 2015 and March 2016, and resulted in an award dated 23 March 2016 in favour of the employee. The employer then approached the Labour Court to review that award. There was no dispute before the commissioner regarding procedural fairness, and the review was concerned with the commissioner’s determination of substantive fairness and remedy.


The general subject-matter of the dispute was whether the employee’s dismissal for alleged gross negligence (relating to the failure to lock a fridge/store area containing valuable stock, resulting in theft) was substantively fair, and whether the commissioner’s approach to the charge, the evidence, and the remedy fell within the bounds of reasonableness on review.


2. Material Facts


The employee commenced employment with the employer in September 1989 and worked as a checker at the distribution fridge at the employer’s Port Elizabeth plant. The incident underlying the dismissal occurred on 29 June 2015. It was common cause that five boxes of cheese were stolen from the fridge area in which the employee was counting stock.


The employee was dismissed on 16 July 2015 after a disciplinary hearing at which he was found guilty of misconduct. The charge was formulated as “gross negligence” in that, on 29 June 2015, the employee allegedly disregarded operational practice by not locking the fridge, resulting in stock being stolen. It was not the employer’s case that the employee committed theft; the employer’s case was that the employee was responsible for safeguarding stock and that his failure to lock the fridge created the opportunity for theft.


On the employer’s version (advanced through witnesses including the chair of the disciplinary hearing and the warehouse co-ordinator), the employee had been previously warned/discussed with about not leaving the fridge door open or unattended, and he had keys enabling him to lock the fridge. The employer’s evidence emphasised both stock security (cheese being expensive and frequently targeted) and the operational requirement of maintaining the “cold chain” by keeping the fridge door closed. Evidence was also led that the employee’s conduct contributed to a breakdown in trust, on the basis that he failed to follow instructions and could repeat the conduct.


It was undisputed that the stolen cheese did not ultimately leave the employer’s premises because the perpetrators were stopped at security and the boxes were confiscated. The commissioner treated this aspect as significant in his evaluation of the seriousness of the misconduct.


The employee’s version was that, on the day in question, he entered the store/fridge, left the door slightly open for safety reasons, and moved in and out (including to warm up). He disputed that he left the fridge unlocked in the manner alleged by the employer, maintaining that while working inside he closed the door but did not lock it, and that locking occurred when leaving the area. The existence of a “practice” of leaving the door open for safety was advanced in the employee’s case and supported by a shop steward witness, although that witness conceded he was not aware of injuries occurring in the fridge over many years.


A further fact emerging from the employer’s evidence was that the fridge door lock was described as stiff at the time, and that adjustments were later made to improve ease of opening and closing. The employer nonetheless maintained that the procedure required the door to be closed (and, on its case, locked) and not left open, even slightly.


3. Legal Issues


The central legal questions before the Labour Court were whether the commissioner’s award was susceptible to review under the applicable reasonableness standard, and in particular whether the commissioner:


Applied the correct enquiry to the dispute placed before him, including whether he was entitled to determine the fairness of dismissal on the basis of “ordinary negligence” when the dismissal was for “gross negligence”, and whether this amounted to changing the case the employee had to meet.


Properly considered and evaluated material evidence, or whether errors and omissions in handling the evidence distorted the enquiry and outcome in a reviewable manner.


Properly considered the appropriateness of the remedy of reinstatement, given the employer’s evidence regarding a breakdown of the trust relationship, and whether the commissioner’s approach to remedy involved a material misdirection.


The dispute before the reviewing court primarily concerned the application of law to fact within the framework of review, including evaluative judgments about the materiality of errors in the commissioner’s reasoning and whether the outcome fell within the range of reasonable decisions.


In addition, the court had to determine the appropriate remedy in review proceedings if the award were set aside, namely whether to substitute the award with a finding that the dismissal was fair or to remit the dispute for a hearing de novo.


4. Court’s Reasoning


The Labour Court approached the matter within the framework of the established review test, namely whether the commissioner reached a decision that a reasonable decision-maker could not reach. The court treated this as requiring an assessment, on the full conspectus of the material before the commissioner, of whether the commissioner properly identified and determined the dispute he was required to arbitrate.


A central feature of the court’s reasoning was that the fairness of a dismissal must be determined with reference to the reason for dismissal advanced by the employer at the time of dismissal. Against that principle, the court considered the commissioner’s finding that the employee was guilty not of gross negligence (the charge) but of ordinary negligence, and the commissioner’s consequent approach to sanction. The court held that, in doing so, the commissioner effectively changed the case the employee faced: he made findings on a lesser form of negligence which was not the basis upon which the employer dismissed the employee, and which was not framed as an alternative charge. This was treated as a misconceived enquiry, because it displaced the actual dispute referred for arbitration (substantive fairness of dismissal for gross negligence).


The court relied on principles explaining when factual or issue-related errors become reviewable irregularities. It applied the notion that an irregularity or error is material if it has a distorting effect on the commissioner’s conception of the enquiry, the delimitation of issues, or the outcome. On the court’s assessment, the shift from gross negligence to ordinary negligence was not a mere semantic adjustment; it materially influenced the commissioner’s analysis of seriousness and, ultimately, the sanction and remedy.


The court further found that the commissioner’s treatment of the evidence reflected additional misdirections. While the commissioner made findings consistent with the seriousness of the misconduct—accepting, for example, that a reasonable employee in the position would have foreseen the risk of shrinkage/theft and taken steps to lock the fridge—he then discounted the seriousness by focusing on the fact that the employer did not suffer actual loss because the cheese was recovered. The reviewing court held that this emphasis caused the commissioner to attach undue weight to considerations that were not determinative of the issue he was required to decide, and that it reflected a loss of focus on the real dispute (the employee’s compliance with the duty of care and the rule/instruction regarding locking, and the implications of non-compliance).


On remedy, the court considered that the commissioner did not properly engage with the employer’s evidence that the trust relationship had broken down. Instead, the commissioner’s reasoning moved to comparing the trust-breakdown evidence against the employer’s disciplinary code provisions on progressive discipline for a first transgression. The Labour Court found this reasoning “disconnected” from the evidence and indicative of misconceiving the issue, because it did not constitute a proper assessment of whether reinstatement was appropriate in the circumstances presented.


Having evaluated the review grounds cumulatively, the court concluded that the commissioner failed to apply his mind to material issues and thereby misconceived the nature of the enquiry. In the court’s view, this resulted in an outcome that could not be characterised as one a reasonable commissioner could reach on the evidence.


On the question of relief in review, the employer sought substitution (a final determination that the dismissal was fair) or, in the alternative, remittal. Although the employer urged substitution in oral argument, the court exercised its discretion against substitution. The basis for this was that the commissioner failed to decide the “very reason” for dismissal—gross negligence—and therefore the principal issue had not been properly determined at arbitration. In those circumstances, the court considered it appropriate and in the interests of justice for the matter to be properly ventilated and decided afresh at the CCMA before a different commissioner.


Finally, the court exercised its discretion on costs and held that the interests of justice were best served by making no costs order.


5. Outcome and Relief


The Labour Court reviewed and set aside the arbitration award dated 23 March 2016 issued under case number ECPE 4286-15.


The unfair dismissal dispute was remitted to the CCMA for a hearing de novo before an arbitrator other than the second respondent.


No order as to costs was made.


Cases Cited


Sidumo and Another v Rustenburg Platinum Mines Ltd and Others 2007 28 ILJ 2405 (CC)


Fidelity Cash Management Service v Commission for Conciliation, Mediation and Arbitration and Others (2008) 29 ILJ 964 (LAC)


Head of the Department of Education v Mofokeng [2015] 1 BLLR 50 (LAC)


Legislation Cited


No legislation was expressly cited in the judgment text provided.


Rules of Court Cited


No rules of court were expressly cited in the judgment text provided.


Held


The court held that the commissioner’s award was reviewable because the commissioner misconceived the enquiry by determining substantive fairness on the basis of ordinary negligence when the employee had been dismissed for gross negligence, thereby altering the dispute and the case the employee faced.


The court further held that the commissioner’s approach to the evidence and to reinstatement reflected material misdirections that distorted the enquiry and outcome, with the result that the award could not be said to fall within the range of reasonable decisions.


The award was set aside and the matter was remitted to the CCMA for a fresh arbitration before a different arbitrator, with no order as to costs.


LEGAL PRINCIPLES


The reasonableness standard in review requires an assessment of whether the commissioner’s decision is one that a reasonable decision-maker could reach on the material properly before the commissioner, and whether the commissioner properly identified and determined the dispute requiring determination.


The fairness of a dismissal must be determined with reference to the reason for dismissal relied upon by the employer at the time of dismissal; a commissioner may commit a reviewable irregularity where the commissioner effectively changes the case by determining fairness on the basis of a materially different charge not forming the reason for dismissal.


Errors or irregularities in relation to facts or issues are reviewable where they are material, meaning they have a distorting effect on the commissioner’s conception of the enquiry, the delimitation of issues, or the outcome; materiality is assessed with reference to whether, but for the error, a different result may have followed.


Where the commissioner fails to determine the principal dispute referred for arbitration, a reviewing court may set aside the award and, in the exercise of discretion, remit the matter for a hearing de novo rather than substitute, particularly where the issues were not properly ventilated or determined in arbitration.

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[2018] ZALCPE 34
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Parmalat SA (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (PR 78 /2016) [2018] ZALCPE 34 (23 November 2018)

THE
LABOUR COURT OF SOUTH AFRICA
,
PORT
ELIZABETH
Not Reportable
Case no: PR 78 /2016
In
the matter between:
PARMALAT
SA (PTY) LTD
Applicant
and
COMMISSION FOR
CONCILIATION,
MEDIATION
AND ARBITRATION
First
Respondent
R
DE LANGE
N.O
Second
Respondent
FAWU
obo ROBERTO COOK
Third

Respondent
Heard:
20 June 2018
Delivered:
23 November 2018
Summary:
Review application. Arbitrator’s findings that dismissal was
unfair is to be interfered with on review. Arbitrator
failed to
determine the dispute.
JUDGMENT
PRINSLOO, J
Introduction
[1]
The Applicant seeks to review and set aside
an arbitration award issued on 23 March 2016 under case number
ECPE4286-15 wherein the
Second Respondent (the arbitrator) found Mr
Cook’s (the employee) dismissal substantively unfair and
ordered his reinstatement.
[2]
The application is opposed by the Third
Respondent.
Background facts
[3]
The employee commenced employment with the
Applicant in September 1989 and he was employed as a checker at the
distribution fridge,
situated at the Applicant’s Port Elizabeth
plant.
[4]
The employee was dismissed on 16 July 2015,
following a disciplinary hearing where he was found guilty of
misconduct. The charge
levelled against the employee was ‘gross
negligence in that on 29 June 2015 he disregarded the practice within
the operations
by not locking the fridge which resulted in stock
being stolen.’ It is common cause that five boxes of cheese
were stolen
from the fridge where the employee was counting stock.
[5]
The Third Respondent subsequently referred
an unfair dismissal dispute to the First Respondent and the matter
was arbitrated on
various dates between November 2015 and March 2016.
The evidence adduced
[6]
The issue to be decided by the arbitrator
was whether the employee’s dismissal was substantively fair in
that he had to decide
whether or not the employee transgressed the
workplace rule for which he was dismissed and if the sanction of
dismissal was appropriate.
There was no challenge in respect of
procedural fairness.
[7]
In order to assess the arbitrator’s
findings in respect of substantive fairness and the award he issued,
it is necessary to
consider the reason the employee was dismissed
for, namely gross negligence, and the evidence adduced at the
arbitration proceedings.
[8]
The Applicant’s first witness, Mr
Sydney Titus (Mr Titus), is the fleet manager and he was the
chairperson of the employee’s
disciplinary hearing. He
testified that he found the employee guilty of misconduct and
dismissed him because the employee had been
warned previously by his
supervisor not to leave the fridge doors open, but he kept on doing
that. Furthermore, the employee was
not honest regarding whether
there was a truck in front of the fridge door at the time of the
incident. The employee’s version
was that there was no truck,
but in fact there was a truck loading at the time and it was possible
for somebody to go into the
fridge as the door was not locked. The
employee should not have left the door unlocked or the fridge
unattended.
[9]
Mr Titus testified that dismissal was an
appropriate sanction as evidence was presented that the trust
relationship between the
Applicant and the employee was broken
because there were numerous previous discussions with the employee
not to leave the fridge
door open or unattended. In cross-examination
Mr Titus confirmed that the issue was not whether the employee was
able to see what
was happening in the fridge behind him, but the fact
that the fridge door was left open and unattended.
[10]
The employee’s
version put to Mr Titus was that it was a common practice to leave
the fridge door open. This was disputed
by Mr Titus as the
Applicant’s version was that employees should not break the
cold chain and by leaving a fridge door open,
the cold chain is
broken.
[11]
Mr Titus explained that he found the
employee guilty of gross negligence because the employee was
entrusted with responsibility
and he had to ensure that the
Applicant’s products were kept safe, there is a lot of
expensive products in the storeroom
and by leaving the door open, the
employee created an opportunity for people to enter the fridge and
steal products. Furthermore,
by leaving the door open, the employee
was not doing his job and he failed to protect the Applicant’s
products.
[12]
Mr Titus confirmed that the boxes of cheese
that were stolen, did not leave the Applicant’s premises as the
thieves were stopped
at security and the boxes were confiscated.
[13]
It is evident from the transcribed record
that in the arbitrator’s engagement with Mr Titus, he (the
arbitrator) was of the
view that there is a significant difference
between ‘negligence’ and ‘gross negligence’
and that the fact
that the boxes of cheese were confiscated and that
the Applicant ultimately did not suffer a real loss, played a
significant role.
[14]
Mr Jacques Basson (Mr Basson), the
Applicant’s warehouse co-ordinator, testified in respect of the
Applicant’s products
and where the products are produced at the
different Parmalat sites. He explained that cheese is not produced at
the Port Elizabeth
site, but elsewhere and transported to the Port
Elizabeth site, where it is offloaded, checked by the checkers and
moved to the
refrigerated area where it is stocked.
[15]
On the day of the incident, 29 June 2015,
Mr Basson was called by Ms Coleen Else to go with her to the
security. There they found
a driver Enoch, with his truck at the
security gate and they were informed that the security found five
boxes of cheese underneath
the truck in a tool box. The cheese was
identified as coming from the Applicant’s fridge. Mr Basson
explained that the said
truck is not a fridge truck and it is not
used to transport cheese, as cheese can spoil easily and has to be
refrigerated all the
time to maintain the cold chain to ensure the
lifespan of the product.
[16]
Mr Basson subsequently asked the employee
to do a stock count and he confirmed that five boxes of cheese were
missing from the East
London stock that was in the fridge.
[17]
Mr Basson testified that the employee was
not charged with theft, as the Applicant could not prove that he was
involved in the theft,
but he was charged with gross negligence,
because the fridge door was left open and unattended.
[18]
The witness explained that the Applicant
provides its employees with refrigerator clothing to keep them warm
in the areas where
they are working and there is no need for the
employee when he had to work in the fridge, to come out every few
minutes to warm
up. This is indicative of the fact that he broke the
cold chain every few minutes, which impacts on the life span of the
produce.
He further testified that the employee had a set of keys to
lock the fridge because he had reported that somebody was stealing
cheese and he had to control the area to keep the cheese safe.
[19]
Mr Basson testified about the breakdown in
the trust relationship and he stated that the employee had no regard
for the Applicant’s
products and the need to safeguard them and
to maintain the cold chain. The employee created opportunities for
somebody to steal
the products and this would result in losses for
the Applicant. If the door had been locked as it was supposed to be,
it would
not be possible for anyone to gain access and to steal the
products. The issue about the closing of the fridge door had been
discussed
at management meetings. In cross-examination Mr Basson
confirmed that he discussed the closing of the door and maintaining
the
cold chain with the employee and he trusted that the employee
would comply, yet the employee left the door open and failed to lock

it, notwithstanding the discussions they had. The trust relationship
was broken because even after discussions with the employee,
he still
did what the Applicant did not want him to do and he could do that
again.
[20]
In cross-examination, Mr Basson conceded
that the lock of the fridge door was a bit stiff and it made it
difficult to open it. The
rollers on top of the door had since been
adjusted and it is easier to open and close the door. He specifically
testified that
the procedure was to close the fridge door to maintain
the cold chain and it was not allowed for the door to be left open,
even
slightly so.
[21]
The employee testified that on the day of
the incident, he went to store number 3, he unlocked the door, went
inside and left the
door slightly open for safety. He testified that
the practice was to leave the door open for safety reasons. Whilst
inside, he
counted the pallets with cheese and after a few minutes,
he came outside and closed the door, where after he repeated this by
going
inside, counted the pallets and went outside to warm up. He
testified that when he worked inside the fridge or store room, he
closed
the door and the door was only locked when he left the area.
The employee disputed that he left the fridge unlocked and explained

that whilst he was working inside, he closed the door but did not
lock it.
[22]
The employee confirmed in cross-examination
that cheese was the Applicant’s most expensive and most stolen
product. He further
conceded that the cheese went missing while he
had the key to the storeroom in his possession and whilst the store
room was under
his control.
[23]
Mr Lungisani Sebezela (Mr Sebezela)
testified for the employee. He is a full time shop steward and
represented the employee at his
internal disciplinary hearing.
[24]
Mr Sebezela testified that the employee was
not guilty of ‘gross negligence’ as the Applicant’s
disciplinary code
stipulates that ‘gross negligence’ is
total negligence due to disregard of policies and procedures within
operations
and the employee did not disregard any policies and
procedures. He testified that there was no procedure in place to
control the
fridge and that all the employees working in the fridge,
do not close the door completely as the practice was to leave the
door
open when they work inside the fridge. The reason being that
something could happen with the employees inside the fridge and it

would be very difficult for them to open the door under such
circumstances. He however conceded that he was not aware of any
injury
an employee sustained in the fridge for the past 18 years.
[25]
Mr Sebezela testified that dismissal was a
sanction too harsh and that the Applicant should have given the
employee a corrective
penalty instead.
The arbitrator’s
findings
[26]
In his analysis of the evidence, the
arbitrator focussed on the two substantive issues that he was
required to decide firstly; whether
the employee committed misconduct
in the form of gross negligence and secondly whether the sanction of
dismissal was appropriate.
[27]
In respect of the first issue, the
arbitrator accepted that the employee left the fridge door open
whilst busy working inside the
fridge and that there was a need to
keep the fridge door closed to ensure product quality within the
concept of a cold chain. The
charge for which the employee was
dismissed concerned the requirement that the fridge door be locked at
all times and the basis
for this requirement was primarily to prevent
theft from the fridge.
[28]
The arbitrator rejected the employee’s
reason for failing to close the fridge door and locking it, to wit
his safety concerns,
as unconvincing and unreasonable. He found that
a reasonable person in the employee’s position would have been
aware of the
requirement that the fridge door should be kept locked,
even when working inside it, and would have taken steps to ensure
that
it remained locked. The employee has a lengthy service with the
Applicant, he is an experienced worker and it could reasonably have

been expected of him to understand the concept of cold chain and the
potential effect on product quality. The employee was aware
that
cheese was the most stolen product and potential theft of cheese was
a real concern of which the employee was aware.
[29]
The arbitrator found that a reasonable
person in the employee’s position would have foreseen the risk
of shrinkage and would
have taken the appropriate step of locking the
fridge to prevent that. The employee has reasonably and objectively
failed to comply
with the duty of care required from a person in his
position.
[30]
The arbitrator however did not view the
employee’s actions as being so serious as to be regarded as
‘gross negligence’.
This is so, the arbitrator found,
because the employee was not previously disciplined for not locking
the fridge door, this was
a first act of this nature by the employee,
the Applicant did not suffer loss of the cheese as the security
prevented the completion
of the theft and there was no evidence of
product loss that occurred as a direct result of the fridge door not
being locked. The
arbitrator found the employee guilty of ‘ordinary’
negligence as opposed to ‘gross’ negligence. The employee

was negligent by not locking the fridge door, but he was not
‘grossly’ negligent.
[31]
In respect of the second issue, the
arbitrator held that the Applicant was entitled to expect a duty of
care and diligent conduct
from the employee and there was a real
potential of financial loss if the perpetrators were able to leave
the Applicant’s
premises with the stolen cheese. Although the
employee was only found guilty of negligence, as opposed to gross
negligence, this,
by no means, detracted from the seriousness of
negligence in the workplace in general.
[32]
The arbitrator considered the Applicant’s
version that the trust relationship had broken down because the
employee failed
to carry out an instruction to keep the fridge door
closed or locked and the employee can no longer be trusted to execute
instructions.
He held that this evidence should be weighed against
the provisions of the Applicant’s disciplinary code, which
provides
for a sanction of a warning or final warning in respect of a
first transgression of the rule to obey an instruction. Dismissal for

a first transgression of the rule against negligence was not
appropriate, more so where there was no evidence that the employee

would not reform if he were subjected to progressive discipline and
where it was very likely that had progressive discipline been

applied, the employee would have rehabilitated.
[33]
The arbitrator concluded that because the
employee was not dishonest but negligent, he should have been
afforded the opportunity
to correct his behaviour and a final written
warning would have been more appropriate in the circumstances. The
trust relationship
had not irretrievably broken down in the absence
of an opportunity for the employee to rehabilitate. The arbitrator
also considered
that the Applicant took further steps, subsequent to
the employee’s dismissal, to ensure the safety of the products
in the
fridge.
[34]
The sanction of dismissal was found to be
too harsh and the employee was re-instated retrospectively, with the
payment of back pay,
limited to four months’ salary. This
relief was granted in view of the arbitrator’s finding that the
employee did not
approach the CCMA with ‘clean hands’ and
that he was guilty of a serious offence.
The grounds for review
[35]
I
have to deal with the grounds for review within the context of the
test that this Court must apply in deciding whether the arbitrator's

decision is reviewable. The test has been set out in
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
[1]
as whether
the
decision reached by the commissioner is one that a reasonable
decision maker could not reach.
The
Constitutional Court very clearly held that the arbitrator's
conclusion must fall within a range of decisions that a reasonable

decision maker could make.
[36]
In its founding and supplementary
affidavits, the Applicant raised a number of complaints and grounds
for review. In my view the
gist of the Applicant’s case is
threefold. First, that the arbitrator misconceived the nature of the
enquiry, second, that
the arbitrator failed to apply his mind to
material facts placed before him and lastly the issue of
reinstatement as relief.
[37]
In my view there is merit in the grounds
for review.
[38]
The first main ground for review is that
the arbitrator misconceived the nature of the enquiry when he found
that the employee was
guilty of ‘ordinary’ negligence as
opposed to ‘gross’ negligence.
[39]
In
Fidelity
Cash Management Service v Commission for Conciliation, Mediation and
Arbitration and others
[2]
the
Labour Appeal Court (LAC) held that:
‘
It
is an elementary principle of not only our labour law in this country
but also of labour law in many other countries that the
fairness
or otherwise of the dismissal of an employee must be determined
on the basis of the reasons for dismissal which the
employer gave at
the time of the dismissal.’
[40]
In making the finding on the employee’s
guilt as the arbitrator did, he changed the case the employee faced
at the disciplinary
hearing and made findings in respect of a charge
the employee was not charged with in the main or in the alternative.
[41]
In
Head
of the Department of Education v Mofokeng
[3]
the
LAC provided the following exposition of the review test:
‘
Irregularities
or errors in relation to the facts or issues, therefore, may or may
not produce an unreasonable outcome or provide
a compelling
indication that the arbitrator misconceived the inquiry. In the final
analysis, it will depend on the materiality
of the error or
irregularity and its relation to the result.
Whether the
irregularity or error is material must be assessed and determined
with reference to the distorting effect it may or
may not have had
upon the arbitrator’s conception of the inquiry, the
delimitation of the issues to be determined and the
ultimate outcome.
If but for an error or irregularity a different outcome would have
resulted, it will
ex hypothesi
be material to
the determination of the dispute.
A material error of this order
would point to at least a
prima facie
unreasonable result’.
(My emphasis)
[42]
This Court has to consider whether the
error or irregularity had a distorting effect upon the arbitrator’s
conception of the
enquiry, the issues to be determined and the
ultimate outcome.
In casu,
the
arbitrator’s findings on the employee’s guilt of
‘ordinary’ negligence as opposed to ‘gross’

negligence had a distorting effect on the arbitrator’s
conception of the enquiry and the ultimate outcome.
[43]
The second main ground for review relates
to the evidence that was presented and how the arbitrator dealt with
the evidence placed
before him. There are many instances where the
arbitrator disregarded material evidence or considered irrelevant
evidence and I
do not intend to deal with each and every instance, as
those instances are sufficient to justify the review and setting
aside of
the arbitration award.
[44]
To illustrate this, I will refer to one
instance where the arbitrator disregarded material or considered
irrelevant evidence, which
had a distorting effect upon the ultimate
outcome. The Applicant’s case was that the employee was
entrusted to secure the
products and he was expected to lock the
fridge to prevent theft. The employee was aware that cheese was the
most stolen product
and potential theft of cheese was a real concern
for the Applicant’s business. The arbitrator found that a
reasonable person
in the employee’s position would have been
aware of the requirement that the fridge door should be kept locked,
even when
working inside it, and would have taken steps to ensure
that it remained locked as he should have foreseen the risk of
shrinkage
and taken the appropriate step of locking the fridge to
prevent that. The arbitrator found the misconduct serious. These
findings
were reasonable and in accordance with the evidence
presented.
[45]
In the same breath however, the arbitrator
found that the misconduct was not particularly serious because the
employee was not previously
disciplined for not locking the fridge
door, the Applicant did not suffer loss of the cheese and there was
no evidence of product
loss that occurred as a direct result of the
fridge door not being locked. The arbitrator considered the fact that
no loss was
suffered as a determining factor. The arbitrator in
finding as such, lost sight of the issue he had to determine and
attached undue
weight to evidence not relevant to the issue before
him.
[46]
The last ground for review relates to the
issue of relief and the fact that the arbitrator re-instated the
employee. The Applicant’s
case is that if the arbitrator had
assessed the facts placed before him, the only reasonable conclusion
he could have come to was
that a continued employment relationship is
intolerable. The arbitrator failed to properly consider whether
reinstatement was an
appropriate remedy, given the Applicant’s
evidence on the trust relationship.
[47]
It is evident from the arbitrator’s
findings that in considering the Applicant’s version that the
trust relationship
had broken down, he made the leap that this
evidence should be weighed against the provisions of the Applicant’s
disciplinary
code, which provides for a sanction of a warning or
final warning in respect of a first transgression of the rule to obey
an instruction.
This finding is disconnected with the evidence,
disregarded the Applicant’s evidence in respect of the trust
relationship
and misconceived the issue to be decided.
[48]
In summary: I must ascertain whether the
arbitrator considered the principal issue before him, evaluated the
facts presented and
came to a conclusion that is reasonable.
Viewed
cumulatively, the arbitrator’s failure to apply his mind to
issues, which as demonstrated above, were material to the

determination of the dispute, led him to misconceive the nature of
the enquiry. It cannot therefore be said that the arbitrator’s

decision was one that a reasonable arbitrator could have reached on
the full conspectus of all the facts before him.
[49]
Based on the above, I am persuaded that
this award cannot stand and should be interfered with on review.
[50]
The Applicant seeks for the arbitration
award to be reviewed and set aside and to be substituted with an
order that the employee’s
dismissal was fair and that his case
be dismissed. Alternatively, the Applicant seeks an order remitting
the matter for a hearing
de novo.
The
same relief was sought in the Applicant’s heads of argument.
However, in Court, Mr Cokile for the Applicant, submitted
that this
Court should not remit the matter but substitute the award.
[51]
In the event the award is set aside on
review, this Court has a discretion whether or not to finally
determine the matter.
[52]
In casu,
the
arbitrator failed to decide the very reason why the employee was
dismissed  in the first place. Instead, the arbitrator
made
findings on a lesser form of negligence, something the employee was
never charged with and that was not the reason for his
dismissal. The
arbitrator failed to determine the real dispute and in those
circumstances it is not appropriate to substitute the
award, but
rather to remit the matter for a hearing
de
novo.
I am not inclined to substitute
the award where the principal issue was not properly determined. I am
of the view that it would
be in the interest of the parties and of
justice to have the matter properly ventilated and decided
de
novo
at the First Respondent.
[53]
This Court has a wide discretion in respect
of costs and in my view this is a matter where the interest of
justice will be best
served by making no order as to cost.
[54]
In the premises, I make the following
order:
Order
1.
The
arbitration
award issued on 23 March 2016 under case number ECPE 4286-15
is
reviewed and set aside;
2.
The dispute is remitted for a hearing
de
novo
before an arbitrator other than
the Second Respondent;
3.
There is no order as to costs.
Connie Prinsloo
Judge
of the Labour Court of South Africa
Appearances:
For the
Applicant:

Mr Cokile of Siya Cokile Inc Attorneys
For
the Third Respondent:
Mr S Mhlahlo of FAWU
[1]
2007
28 ILJ 2405 (CC) at para 110.
[2]
(2008)
29 ILJ 964 (LAC)
[3]
[2015]
1 BLLR 50
(LAC), para33.

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