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[2018] ZALCPE 36
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Madeira Pharmacies v Commission for Conciliation Mediation and Arbitration (CCMA) and Others (PR 60/16) [2018] ZALCPE 36 (5 December 2018)
IN THE LABOUR COURT OF
SOUTH AFRICA, PORT ELIZABETH
Not Reportable
Case no: PR 60/16
In
the matter between:
MADEIRA
PHARMACIES
Applicant
and
COMMISSION
FOR CONCILIATION
MEDIATION
AND ARBITRATION (CCMA)
First Respondent
ELIZABETH
TOM,
N.O
Second
Respondent
SIYABULELA
ZULU
Third Respondent
Heard:
07 June 2018
Delivered:
05 December 2018
JUDGMENT
MAHOSI,
J
Introduction
[1]
This is an application in terms of section 145 of the Labour
Relations Act
[1]
(LRA) to review
and set aside the arbitration award issued by the second respondent
(arbitrator) dated 31 March 2016 under the
auspices of the first
respondent, the Commission for Conciliation, Mediation and
Arbitration (CCMA) with case number ECEL687. In
his award, the
arbitrator found the third respondent’s dismissal unfair and
awarded him compensation.
[2]
The key question is whether the arbitrator failed to apply his mind
to the relevant evidence and consequently made an award,
which no
reasonable arbitrator could make.
Background
[3]
Prior to outlining the applicant’s case in detail and
considering the issues that gave rise to the claim, it is necessary
to outline the facts that form the relevant background to the dispute
between the parties.
[4]
The applicant employed the third respondent on 4 January 2010 as a
Phamarcist. On 27 January 2016, the third respondent was
dismissed on
account of alleged misconduct. Subsequent to his dismissal, he
referred an unfair dismissal dispute to the CCMA. The
dispute was
conciliated unsuccessfully and was referred to arbitration. The
arbitrator issued an award which is the subject matter
of this
application.
Arbitration
award
[5]
In his award, the arbitrator recorded the following three charges
leveled against the third respondent for which he was dismissed:
‘
(i)
Insubordination- In that he was given a lawful and reasonable
instruction by the Managing Director (Ms Nontuthuzelo Sibango)
on the
05 January 2016 to stop giving discount to customers that is more
than 10% and also to communicate the instruction to staff
at the
meeting held at Tshezi Building Office on the 20 January 2016.
(ii)
Insolence- In that he refused to give report to the Managing Director
(Ms. Nontuthuzelo Sibanho) regarding the instruction
that was given
to him on the 05 January 2016 to communicate the discount percentag
allowed to staff during training held on the
20 January 2016 at
Tshezi Building. He said to the Managing Director “Lonto yakho
ye discount yibuze ku Sibongiseni andizi
kuyiphendula mna” this
means: “that discount of yours, ask it from Sibongiseni, I am
not going to answer it.
(iii)
Dereliction of duties- in that he failed to perform his duties as a
responsible Pharmacist as a person in charge in the Pharmacy.
The
staff continued to give discount that is more than 10% to customers
because they did not get information from Mr. Siyabulela
Zulu that
was supposed to be conveyed in the training.’
[2]
[6]
It is common cause that the third respondent was instructed to
discontinue giving customers more that 10% discount. He was further
instructed to inform staff members to do the same. In his analysis of
the evidence and argument, the arbitrator recorded that it
was common
cause that the third respondent pleaded guilty to the offence of
continuing to give 30% discount despite being instructed
not to do so
and further that he did not deny that he failed to instruct the staff
to stop giving more than 10 % discount as instructed.
The arbitrator
rejected the third respondent’s defence that he gave 30%
discount because the customers were used to it. The
basis on which he
rejected the third respondent’s reasoning was that the
instruction was clear and he had a chance to seek
authority from the
applicant. The arbitrator found that the third respondent’s
conduct amounted to him challenging the authority
of the applicant
and further that it caused financial harm to the applicant.
[7]
The arbitrator found the third respondent’s conduct to have
amounted to gross insubordination in that he gave a 30% discount
to 3
doctors and allowed other staff members to do the same after having
established that such discount resulted in financial loss
in some
items. By so doing, in the arbitrator’s view, the third
respondent challenged the authority of the employer.
[8]
On the charge relating to insolence, the arbitrator found that the
third respondent was not guilty on the basis that the applicant
failed to lead direct evidence on the response the third respondent
gave after being requested to give a report relating to a staff
meeting of 26 January 2016. The arbitrator’s view was that the
applicant’s evidence remained hearsay as none of the
witnesses
was present at the time of the telephone conversation between the
third respondent and the applicant’s Managing
Director.
[9]
The third respondent was found guilty of the charge of deriliction of
duty in that he failed to inform the staff members about
the
instruction not to give discount in excess of 10%.
[10]
The arbitrator considered the issue of consistency of the application
of the rule and found that there was no objective reason
for the
applicant’s failure to take disciplinary measures against
Siphosethu who also gave 30% discount after the dismissal
of the
third respondent. He further considered the issue of the trust
relationship and found that it was not damaged on the basis
that the
respondent was remorseful. The arbitrator found that the third
respondent’s dismissal was substantively unfair and
awarded the
applicant three month’s compensation. It is this award that the
applicant seek to set aside.
Grounds
of review
[11]
The applicant submitted that the arbitrator is in conflict with the
provisions of the LRA and/or the Constitution. Further
that the
arbitrator committed a gross irregularity and/or acted as an
unreasonable decision-maker in arriving at a conclusion that
no other
reasonable decision maker would have arrived at by ruling that the
third respondents’ dismissal was unfair despite
conceding that
the third respondent is guilty of serious misconduct and which
misconduct caused the applicant harm.
[12]
It is further submitted that had the arbitrator had proper regard to
the evidence before her, and had she properly construed
the legal
position, she would have been compelled to conclude that the third
respondents’ dismissal was fair. Further that
the argument on
inconsistency of the application of the rule which was raised by the
third respondent was not substantiated nor
was the applicant aware of
same.
[13]
The third respondent opposed this application on the basis that the
award fell within the ambit of reasonableness.
Applicable
law and evaluation
[14]
Arbitration awards are reviewable in terms of section 145 of the LRA
that provides that any party to a dispute who alleges
a defect in any
arbitration proceedings under the auspices of the Commission may
apply to the Labour Court for an order setting
aside the arbitration
award.
[15]
The test for review which has been authoritatively stated in
Sidumo
and Another v Rusternburg Platinum Mines Ltd and Others
[3]
was reiterated in
Herholdt
v Nedbank Ltd and Congress of South African Trade Unions
[4]
as follows:
‘
[25]
In summary, the position regarding the review of CCMA awards is this:
A review of a CCMA award is permissible if the defect
in the
proceedings falls in one of the grounds in s 145(2)(a) of the LRA.
For a defect in the conduct of the proceedings amount
to a amount to
gross irregularity is contemplated by s 145(2)(a)(ii), the arbitrator
must have misconceived the nature of the enquiry
or arrived at an
unreasonable result. A result will only be unreasonable if it is one
that is reasonable arbitrator could not reach
on all the material
that was before the arbitrator. Material errors of fact, as well as
the weight and relevance to be attached
to particular fact, are not
in and of themselves sufficient for an award to be set aside, but are
only of any consequence if their
effect is to render the outcome and
unreasonable.’
[16]
The test is therefore whether the decision reached by the
Commissioner is one that a reasonable decision-maker could reach.
In
dismissals relating to misconduct,
item
7 Schedule 8 – Code of Good Practice: Dismissal, requires the
arbitrator to 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 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.’
[17]
The enquiry is whether the employee contravened a valid and
reasonable rule that he/she (the employee) was aware of and which
was
consistently applied by the employer. The commissioner is further
required to consider whether the dismissal was an appropriate
sanction for the contravention of the rule or standard.
[18]
The applicant’s contention was the arbitrator’s finding,
that the third respondents’ dismissal was unfair
despite
conceding that the third respondent is guilty of serious misconduct
and which misconduct caused the applicant harm, was
unreasonable. The
arbitrator found that the third respondent committed gross
insorbordination and failed to execute his duties
as he was in
position of trust. Further that by so doing, he caused unnecessary
financial loss for the applicant. Notwithstanding
his finding, the
arbitrator found that the third respondent’s dismissal was fair
on the basis that the applicant was not
consistent in applying the
rule and rejected the applicant’s submission that the trust
relationship between the parties had
broken down.
[19]
Item
3 of the Code of Good Practice: Dismissal provides guidance on how
the employers should deal with the determination of sanction
and it
provides as follows:
‘
3.
Disciplinary measures short of dismissal.
Disciplinary
procedures prior to dismissal.
(1)
All employers should adopt disciplinary rules that establish the
standard of conduct required of their employees. The form and
content
of disciplinary rules will obviously vary according to the size and
nature of the employer‘s business. In general,
a larger
business will require a more formal approach to discipline. An
employer‘s rules must create certainty and consistency
in the
application of discipline. This requires that the standards of
conduct are clear and made available to employees in a manner
that is
easily understood. Some rules of standards may be so well established
and known that it is not necessary to communicate
them.
(2)
The courts have endorsed the concept of corrective or progressive
discipline. This approach regards the purpose of discipline
as a
means for employees to know and understand what standards are
required of them. Efforts should be made to correct employees’
behaviour through a system of graduated disciplinary measures such as
counselling and warnings.
(3)
Formal procedures do not have to be invoked every time a rule is
broken or a standard is not met. Informal advice and correction
is
the best and most effective way for an employer to deal with minor
violations of work discipline. Repeated misconduct will warrant
warnings, which themselves may be graded according to degrees of
severity. More serious infringements or repeated misconduct may
call
for a final warning, or other action short of dismissal. Dismissal
should be reserved for cases of serious misconduct or repeated
offences.
(4)
Generally, it is not appropriate to dismiss an employee for a first
offence, except if the misconduct is serious and of such
gravity that
it makes a continued employment relationship intolerable. Examples of
serious misconduct, subject to the rule that
each case should be
judged on its merits, are gross dishonesty or wilful damage to the
property of the employer, wilful endangering
of the safety of others,
physical assault on the employer, a fellow employee, client or
customer and gross insubordination. Whatever
the merits of the case
for dismissal might be, a dismissal will not be fair if it does not
meet the requirements of section 188.
(5)
When deciding whether or not to impose the penalty of dismissal, the
employer should in addition to the gravity of the misconduct
consider
factors such as the employee’s circumstances (including length
of service, previous disciplinary record and personal
circumstances),
the nature of the job and the circumstances of the infringement
itself.
(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.’
[20]
Thus, in determining the appropriateness of the sanction, the
arbitrator must enquire into the gravity of the contravention
of the
rule; the consistent application of the rule and sanction; and the
mitigating and aggravating factors. In
Sidumo,
[5]
the Constitutional Court held that:
‘
In
approaching the dismissal dispute impartially a commissioner will
take into account the totality of circumstances. He or she
will
necessarily take into account the importance of the rule that had
been breached. The commissioner must of course consider
the reason
the employer imposed the sanction of dismissal, as he or she must
take into account the basis of the employee’s
challenge to the
dismissal.
There
are other factors that will require consideration. For example, 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 his
or her
long-service record. This is not an exhaustive list
.’
[21]
In determining whether the sanction imposed by the employer is fair,
the arbitrator is required to take into account the totality
of
circumstances.
[6]
In applying
the above legal principles to the current matter, I now consider the
challenge to the award.
Inconsistency
[22]
The applicant challenged the arbitrator’s award on the basis
that in considering the issue of inconsistency
in application of the
rule,
the
arbitrator failed to take into account the undisputed evidence that
the applicant was not aware of the incident. In this regard,
the
third respondent, during cross examination, introduced a document to
the applicant’s witness, Mr Njawuzala, to show that
his
colleague Siphosethu gave a 30% discount on 25 February 2016. Mr.
Njawuzala’s evidence was that the applicant was not
aware of
the incident and that the incident would have to be investigated. The
commissioner found as follows:
‘
The
applicant argued that there was an inconsistency on the part of the
respondent in dismissing him for giving 30% discount whilst
Siphosethu did same on 25 February 2016 and she was not dismissed.
The respondent raised a subjective defence and stated that the
respondent was not aware of the document and the transaction made at
the time. There was no objective reason as to why the comparator
employee was treated differently whilst having committed the same
misconduct. At the time this 30% discount was given on 25 February
2016, all the staff must have known that the 30% discount is no
longer given to customers because it took place after the dismissal
of the applicant. In the circumstances I find that there is an
inconsistency on the part of the respondent.’
[23]
The employee may only rely on inconsistency only if the employer was
aware that the chosen comparator had perpetrated the same
offence.
[7]
In
Chemical,
Energy, Paper, Printing, Wood, and Allied Workers Union v National
Bargaining Council for the Chemical Industry and Others
[8]
the LAC held that:
‘
An
employer can only be accused of selective application of discipline
if, having evidence against a number of individual employees
it
arbitrarily selects only few to face disciplinary action.’
[24]
In
Mogale
v AD Spitz (Pty) Ltd
[9]
the LAC
held that:
‘
Where
the employee alleges that the employer acted inconsistently, the
employer will have a duty to show that it acted consistently
in
disciplining its employees or where there was differentiation the
employer will have to demonstrate that the different treatment
was
justified. See
Early
Bird Farms (Pty) Ltd v Mlambo
[1997]
5 BLLR 541
(LAC) at 545 J.’
[25]
In the current matter, the arbitrator failed to apply his mind to the
fact that the incident relied on by the third respondent
occurred
after his dismissal and further that the employer was not aware of
the misconduct committed by the comparator. The arbitrator
simply
accepted the customer’s receipt showing that the comparator
committed the same offence. No case of arbitrary or
subjective selection by the applicant not to discipline the
comparator was proven. Therefore, the applicant’s
inconsistency
challence has to succeed.
Trust
relationship between the applicant and the third respondent
[26]
A reading of the award reveals that, in rejecting the applicant’s
contention that the trust relationship between the
parties was broken
down, the arbitrator found that the third respondent’s
unblemished long service, his plea of guilt and
the remorse he showed
when confronted about the misconduct were an important consideration.
[27]
The undisputed evidence before the arbitrator was that the third
respondent pleaded guilty to the charge that he failed to
adhere to
an instruction not to give more than 10% discount. The arbitrator
viewed the third respondent’s conduct of challenging
the
authority of the applicant and found it to amount to gross
insubordination. However, he
took
the view that misconduct relating to gross negligence did not warrant
dismissal and that the employer should compensate the
third
respondent.
[28]
There is no basis for the arbitrator to trivialize the seriousness of
a misconduct relating to gross insubordination and dereliction
of
duty, which was committed by the third respondent. The third
respondent was employed as a Pharmacist for six years and he failed
to exercise the standard of care and skill that was reasonably
expected of an employee with his degree of skill and experience
and
his conduct resulted in financial loss to the applicant. In addition,
it was not in dispute that his conduct and/or omission
was serious in
itself. In fact, from
the
arbitrator’s finding, it is apparent that the misconduct
committed by the employee was serious in that it involved wilful
disregard to the employer’s policy and procedure.
The
applicant was entitled to discipline him because he owes a duty of
care to it (the applicant), its clients and his own colleagues.
The
Code of Good Practice: Dismissal, in Item 3(3) of the LRA, recognises
that the sanction of dismissal is fair and appropriate
in such
circumstances.
[29]
It is my view that
the
arbitrator failed to
take
into account the seriousness of the misconduct the employee was
charged with, the importance thereof, the applicant’s
total
disregard of its gravity and the effect the said misconduct had on
the continued employment relationship between the parties.
Had
the arbitrator considered
all
the material that was before him, he would have arrived at a
different conclusion.
[30]
The
arbitrator’s decision could, therefore, not be one that a
reasonable decision-maker could have arrived at. As such, his
award
falls to be reviewed and set aside. With regard to costs, I am of the
opinion that the requirements of law and fairness dictate
that there
should be no order as to costs.
[31]
In the premises, I make the following order:
Order
1.
The arbitration award issued by the second respondent (the
arbitrator) under the auspices of the first respondent, the
Commission
for Conciliation, Mediation and Arbitration (the CCMA),
under case number
ECEL687
dated
22 March 2016
is
reviewed and set aside and replaced with the following order:
‘
(a)
The third respondent’s dismissal was substantively and
procedurally fair.’
2.
There is no order as to costs.
D.
Mahosi
Judge
of the Labour Court of South Africa
Appearances:
For
the Applicant:
Advocate Grobler
Instructed
by:
Kirchmans
Inc. Attorneys
For
the Respondent:
Mr E. Van Staden of Legal Aid Board
[1]
Act 66 of 1995 as amended.
[2]
Index to pleadings, page 12
[3]
2007 (28) ILJ 2405
(CC).
[4]
2013 (6) SA 224
(SCA);
2013 (11) BLLR
1074
(SCA);
2013(34)
ILJ 2795(SCA) at para 25.
[5]
Supra n 3 at para 78.
[6]
See:
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
[2007]
12 BLLR 1097 (CC).
[7]
Grogan:
Dismissal
,
Juta page 153; See also:
Southern
Sun Hotel Interests (Pty) Ltd v CCMA and Others
[2009] 11 BLLR 1128 (LC).
[8]
[
2011] 2 BLLR 137 (LAC).
[9]
Case
No: JA 36/2011 para 24.