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[2019] ZALCJHB 2
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Belo & Kies Construction (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR2333/2015) [2019] ZALCJHB 2 (9 January 2019)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case no: JR 2333/2015
In
the matter between:
BELO
& KIES CONSTRUCTION (PTY)
LTD
Applicant
and
COMMISSION FOR
CONCILIATION,
MEDIATIATION
AND
ARBITRATION First
Respondent
QUEENDY
GUNGUBELE
N.O
Second
Respondent
THABANG
ROBERT
MADONSELA Third
Respondent
Heard:
1 August 2018
Delivered:
9 January 2019
Summary:
Review application. Arbitrator’s findings that dismissal was
unfair is to be interfered with on review.
JUDGMENT
PRINSLOO, J
Introduction
[1]
The Applicant seeks to review and set aside
an arbitration award issued on 20 October 2015 under case number GAJB
17155-15 wherein
the Second Respondent (the arbitrator) found the
Third Respondent’s (the employee) dismissal substantively and
procedurally
unfair and awarded him compensation equivalent to nine
months’ remuneration.
[2]
The employee opposed the application.
Background facts
[3]
The employee commenced employment with the
Applicant in February 2013 as a quantity surveyor (QS). In August
2015, the employee
was charged with acts of misconduct allegedly
committed during the period October 2014 to July 2015. The charges
were related to
the employee’s failure to carry out a fair and
lawful instruction, gross negligence that led to a significant loss
for the
Applicant, poor quality of work and not working according to
the applicant’s standards, breach of the employee’s duty
of good faith to the employer and breach of trust. The employee is
said to have failed to complete a monthly cost report from November
2014 to June 2015, notwithstanding instructions to produce such a
report, which resulted in the project being re-measured and causing
a
loss of R 2 288138 for the Applicant. According to the Applicant, had
a monthly cost report been produced as required, the losses
could
have been investigated and action taken to mitigate the losses.
[4]
The employee was dismissed in August 2015,
after being found guilty of misconduct.
[5]
The employee subsequently referred an
unfair dismissal dispute to the First Respondent, the Commission for
Conciliation, Mediation
and Arbitration (CCMA) and the matter was
arbitrated in October 2015.
The evidence adduced:
[6]
The issue to be decided by the arbitrator
was whether the employee’s dismissal was substantively and
procedurally fair. As
already pointed out, the arbitrator found the
employee’s dismissal procedurally and substantively unfair and
ordered that
he be paid compensation in the amount of R 117 000.
[7]
In order to assess the arbitrator’s
findings in respect of substantive and procedural fairness and the
award she issued, it
is necessary to consider the reason the employee
was dismissed for and the evidence adduced at the arbitration
proceedings.
[8]
It is evident from the transcribed record
that in narrowing the issues in respect of procedural fairness, the
employee firstly challenged
the procedure with regard to his
suspension and secondly that the charges were not clear, were
contradictory, not elaborated on
and already decided upon.
The Applicant’s
witnesses
[9]
The Applicant’s first witness, Ms
Freislich, was the chairperson of the disciplinary enquiry and in her
testimony she dealt
with the issue of the employee’s
suspension. In my view the issue regarding the employee’s
suspension and the testimony
adduced on that, was irrelevant to the
issues that the arbitrator had to decide. A challenge to the fairness
of the employee’s
suspension should have been referred and
dealt with as an unfair labour practice dispute.
[10]
Ms Freislich testified that the employee
was given sufficient time to prepare for the disciplinary hearing,
that the charges levelled
against him were only allegations and that
the employee was expected to present his case on the charges. She
testified that the
process to be followed was explained to the
employee on the day of the hearing, the employee was asked whether he
understood the
charges and he did not at any stage indicate that he
did not understand the charges. The nature of the misconduct had been
detailed
in the charge sheet. Ms Freislich questioned the fact that
on the day of the disciplinary hearing the employee had no problem
understanding
the charges, but that this issue has been raised for
the first time in the arbitration proceedings.
[11]
Ms Freislich testified that the employee
had a full opportunity to cross-examine witnesses and to present his
case.
[12]
It is evident from the transcribed record
that the employee’s questions during cross-examination related
to issues of substantive
fairness and he did not raise any challenge
to procedural issues with the chairperson of the disciplinary
hearing.
[13]
The Applicant’s second witness was Mr
Andre Kies (Mr Kies), the Applicant’s contracts manager and a
shareholder. Mr
Kies testified that the employee was a qualified and
professional QS, who was appointed as such for the Thaba Mall
project. The
employee was in charge of all the costs of the site and
it was his responsibility to ensure that the project is profitable.
He
explained that the employee could work from the office or from
home, but he was expected to spend most of his time on the site.
[14]
Mr Kies explained that the employee did not
submit his monthly cost reports on the project, which is an important
tool to making
sure that on a month to month basis, the Applicant did
not lose money on the project. The Applicant trusted that the
employee,
as a professional QS, was in control of the project,
despite the fact that he did not submit his cost reports. Mr Kies
explained
that the cost report must correspond with the amount of
money spent on the project and the money claimed from the client.
[15]
The first cost report was submitted in
October 2014, based on the cost from April to September 2014, and the
report did not make
any sense because there was a R6 million
difference in the cost, as received from the Applicant’s head
office. The cost report
was inaccurate and could not be used. The
employee was instructed in October 2014 to rectify the report and to
submit a monthly
report so that the Applicant could know what was
happening on the site and to ensure that it had the cost control on
the site.
[16]
The next cost report submitted by the
employee was in February 2015, based on the period April 2014 to
January 2015. This cost report
did not relate to all the costs, it
was inaccurate and could not be used. The Applicant was unable to
determine what the financial
situation on the site was and the
employee was once again instructed to correct the report. At that
stage the Applicant had lost
trust in the employee to do a proper
cost report as an inaccurate cost report had been received in
February 2015 and the project
was completed in March 2015. The Thaba
Mall opened on 26 March 2015.
[17]
Mr Kies explained that to produce a cost
report in the last month of a project does not help anyone because
the financial losses
made up to that time could not be recovered as
it was too late to recover it when the project was finished.
[18]
The employee was instructed to leave the
cost report and instead to compile the final account. The employee
was working on the final
account during April and May 2015 and in the
week (in July 2015), that the Applicant was supposed to submit the
final account to
the client, the employee was involved in a car
accident and he could not report for duty. The Applicant had to get
other quantity
surveyors to come and assist with the finalisation of
the final account as it had to be submitted. The said quantity
surveyors
measured the whole project and it became clear that the
employee did not do his job. The employee had not measured all the
work
that was done on site and there were losses on the project that
the Applicant was unable to recover. The employee paid more per
square meter than what was claimed from the client and it is not
possible to recover the losses.
[19]
Mr Kies explained that if the cost reports
had been compiled and received monthly, the losses could have been
avoided as the problems
could have been identified and rectified and
a loss at the end of the project could have been avoided. The
Applicant suffered a
loss of R 3 million on the Thaba Mall project.
[20]
Mr Kies testified that the QS is supposed
to submit a monthly report, but as a QS is a professional, some
leeway is given and the
QS is trusted to ensure that the project is
profitable. The Thaba Mall was the employee’s only project and
he was expected
to submit a monthly cost report.
[21]
Mr Dwayne Hawkins (Mr Hawkins), the site
manager at the Thaba Mall, testified that the employee was supposed
to submit monthly reports
and for the duration of the Thaba Mall
project, he should have submitted about five to seven reports, but
the Applicant only received
three reports from the employee. The
reports so received were incomplete and could not be used.
[22]
Mr Hawkins explained that the monthly cost
reports are used to see where there was overspending or underspending
and to rectify
that in the following month. The employee’s
responsibility was to quantify the costs and to do the measurements
for the payment
of the subcontractors. If subcontractors are
overpaid, this becomes a direct loss to the Applicant and cannot be
recovered. In
this case the employee overspent on the subcontractors
and this resulted in a loss for the Applicant.
[23]
Mr Hawkins testified that during October,
November and December 2014, which was a critical period of the
project because in those
three months they had the most costs and
expenses on the project, the employee’s attendance at the site
was not sufficient
[24]
Mr Andries Ndlovu (Mr Ndlovu) testified
that he is a QS, employed by the Applicant as such since 2007.
Initially he was supposed
to work on the Thaba Mall project with the
employee, but he got involved in other projects and the employee was
placed at the Thaba
Mall project. Mr Ndlovu spent the first two
months of the project at the Thaba Mall with the employee.
[25]
Mr Ndlovu explained that the main functions
of a QS are to ensure that the monthly claims to the client are
correct and to ensure
that the costs are correctly calculated and
reported on a monthly basis, according to the Applicant’s
schedule. Cost reports
had to be submitted every month to see if
there was anything negative on the costing side so that it could be
addressed and remedied
and if necessary, be raised with the client.
If this is not done, it will impact negatively on the project.
[26]
Mr Ndlovu explained that there are
instances where the cost report cannot be submitted monthly and if
this is the case, the Applicant’s
director is to be informed.
He testified that where a cost report in not submitted for a period
of three months, it would have
a huge impact on the project for
instance, if the Applicant was running at a loss, such loss could not
be picked up and remedied
timeously.
The employee
[27]
The employee testified about the procedural
fairness of his disciplinary hearing and it is evident from the
transcribed record that
he raised issues outside of the procedural
challenges. The recorded shows that the versions of the employee’s
testimony,
were never put to the Applicant’s witnesses.
[28]
The employee testified that he had done the
best he could on the Thaba Mall project and according to him, the
figures showed theft
of the material at the site. The employee was
250 km away from the site and he was not responsible for the material
on site.
[29]
The employee explained that mistakes are
rectified in the final account and the final account was his chance
to provide all the
answers regarding the project, but he was not
afforded the opportunity to provide the final account.
[30]
In cross-examination the employee conceded
that he did not submit the cost reports and when he indeed submitted
them, his manager
informed him that they were wrong.
[31]
Mr Leslie testified on behalf of the
Applicant. He is a former employee of the Applicant and was employed
as a safety site officer.
He testified about cases of theft on site
and his evidence did not take the employee’s case any further.
The arbitrator’s
findings
[32]
In her analysis of the evidence and
consideration of procedural fairness, the arbitrator found the
employee’s dismissal procedurally
unfair. She accepted the
employee’s version that his explanation and documents with
which he sought to justify the figures,
were cast aside by the
chairperson and this is so because of Ms Freislich’s utterances
that the employee’s documents
were ‘rubbish’.
[33]
The arbitrator found that Mr Kies and the
chairperson, Ms Freislich, were furious when they detected the
perceived losses and committed
irregularities in their quest to prove
the employee wrong. Mr Kies and Ms Freislich refused to look at the
employee’s documents
or listen to his explanation, which could
have explained the gaps. The chairperson entered the arena and
aligned herself with the
initiator by declaring the documents as
rubbish, which showed that the chairperson did not apply her mind.
[34]
These findings show that the arbitrator
lost sight of the issues that she recorded as challenges in respect
of procedural fairness.
The arbitrator made findings on procedural
aspects not challenged by the employee and certainly not put to Ms
Freislich during
her testimony.
[35]
In respect of substantive fairness, the
arbitrator accepted that the employee was an experienced QS who was
trusted with a big project
and he was trusted even when he did not
submit his cost reports on time and the Applicant was lenient towards
him and other QS
in the Applicant’s employ.
[36]
The arbitrator found that the Applicant’s
figures on the losses it suffered were thumb sucked and could not be
scientifically
authenticated. She held that the Thaba Mall was handed
over to the client within the targeted time and is fully operational,
without
any structural malfunctions and this should prove to anyone
who had doubts about the employee’s performance that he was a
competent employee. The arbitrator recorded that the discrepancies
could have occurred but did not go to the heart of the project
and
that the employee had acquitted himself.
[37]
This finding is indicative of the fact that
the arbitrator had no understanding of the issues she had to decide.
The fact that the
Thaba Mall was handed over in time and is
operational without structural malfunctions, is irrelevant to the
charges faced by the
employee and the reasons for his ultimate
dismissal.
[38]
The arbitrator had no regard to the issues
she had to decide namely; whether the employee was guilty of the
misconduct he was dismissed
for in that he failed to obey a direct
instruction to submit monthly cost reports, which resulted in
financial loss that the Applicant
was unable to recover.
[39]
The arbitrator recorded that it was common
cause that the employee had not submitted the cost reports as
expected, but that his
omission could be justified and understood in
a similar manner as those of Mr Ndlovu. The employee’s
misdemeanour could have
been aggravated by the fact that he was in
hospital for three weeks and thus incapacitated.
[40]
This finding too is indicative of the fact
that the arbitrator misunderstood the nature of the misconduct the
employee was dismissed
for and she misunderstood the evidence. The
employee was charged and dismissed for his failure to complete and
submit monthly cost
reports from November 2014 until June 2015,
despite a direct instruction to do so. There was no evidence to show
that the employee’s
failure to submit a cost report was for
reasons similar to the reasons presented by Mr Ndlovu and such a
finding is not supported
by the evidence. Furthermore, the employee
was involved in a car accident on 4 July 2015 and he was hospitalised
thereafter. The
employee was not charged for his failure to present
the final account, which was due on 14 July 2015, but for his failure
to submit
monthly cost reports for a period that far preceded his
hospitalisation and his period of incapacity.
[41]
The arbitrator found that the Applicant had
not applied the rule consistently and that the sanction of dismissal
was not appropriate
as the Applicant did not follow progressive
discipline. Furthermore, the Applicant did not discharge the onus to
show that it had
a fair reason to dismiss the employee.
The grounds for review
[42]
I
have to deal with the grounds for review within the context of the
test 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.
[43]
The
Labour Appeal Court (LAC) in
Gold
Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v CCMA
[2]
affirmed the test to be applied in review proceedings and held that:
‘
In
short: A reviewing court must ascertain whether the
arbitrator considered the principal issue before him/her;
evaluated
the facts presented at the hearing and came to a conclusion
that is reasonable.’
[44]
The
review Court is not required to take into account every factor
individually, consider how the arbitrator treated and dealt with
each
of those factors and then determine whether a failure by the
arbitrator to deal with such is sufficient to set the award aside.
This piecemeal approach of dealing with the award is improper as the
reviewing court must consider the totality of the evidence
and then
decide whether the decision made by the arbitrator is one that a
reasonable decision maker could make, based on the evidence
presented
[3]
.
[45]
The Applicant raised a number of grounds
for review in its founding and supplementary affidavits. The heads of
argument submitted
by the Applicant’s counsel were of no use or
assistance to this Court as 29 pages of the heads of argument
contained nothing
but a
verbatim
repetition of the founding and
supplementary affidavits. There was no attempt whatsoever to narrow
the issues and to present them
in the form of heads of argument. A
repetition of affidavits and lengthy quotations from case law do not
assist this Court and
heads of arguments as submitted by the
Applicant burdened rather than assist this Court.
[46]
The employee’s heads of arguments
were equally of no assistance as they addressed only the first ground
for review raised
by the Applicant and no further arguments were
submitted in respect of the other grounds for review.
[47]
The first ground for review is that the
arbitrator acted with bias in respect of the exchange of bundles of
documents submitted
by the parties. In my view there is no merit in
this ground for review and I do not intend to deal with it in any
detail.
[48]
The remaining grounds for review all relate
to the manner in which the arbitrator dealt with the evidence before
her. In my view
there is merit in the remaining grounds for review.
[49]
The Applicant’s case is that the
arbitrator failed to consider the evidence and she failed to apply
her mind to the evidence.
Furthermore, the arbitrator attached undue
weight to the fact that the employee was hospitalised during July
2015 and she failed
to consider that the project had been handed over
by March 2015, long before the employee was hospitalised and by the
time the
employee was hospitalised, he had already committed the acts
of misconduct he was charged with.
[50]
The arbitrator failed to consider that the
employee in cross-examination conceded that he had failed to submit
the cost reports
and that he had admitted that when he indeed
submitted the reports, they were inaccurate.
[51]
The Applicant also took issue with the
arbitrator’s findings that the employee’s dismissal was
substantively unfair
due to the inconsistent application of the rule.
The evidence was that it happened from time to time that a monthly
report would
be submitted late and that such delays were acceptable
for specific reasons, for example when the documents needed to
complete
and submit an accurate report were delivered too late for
the report to be submitted on the due date and such late submissions
could be justified and were accepted or instances where the QS was
working on several projects simultaneously and showing a profit
on
all the projects. However, the employee has not provided any reason
or justification for his failure to submit the monthly reports,
more
so where he was given a direct instruction to submit his cost report
monthly and where the Thaba Mall was the only project
he was working
on.
[52]
The arbitrator’s finding that there
was an inconsistent application of the rule was not supported by the
evidence and in finding
that there was such inconsistent application,
she failed to apply her mind to the evidence that was adduced. The
evidence showed
that there was justification for the late submission
of the cost reports submitted by Mr Ndlovu, however, there was no
such evidence
presented in respect of the employee.
[53]
The Applicant also took issue with the
arbitrator’s findings on procedural fairness and submitted that
the arbitrator confused
the fact that the employee submitted a poor
quality cost report in October 2014 which the Applicant referred to
as ‘rubbish’,
with the chairperson’s alleged
refusal to admit the employee’s evidence by making it off as
‘rubbish’.
The employee was asked in cross-examination
about the poor quality of the report he submitted and the same word
‘rubbish’
was used in the question. The arbitrator’s
conclusion that the chairperson refused to accept the employee’s
evidence
at the hearing because she called his evidence ‘rubbish’,
was unfounded and indicative of the fact that the arbitrator
misconceived the evidence.
[54]
There was no evidence to support the
arbitrator’s finding that the chairperson entered the arena and
failed to apply her mind
at the disciplinary hearing. This was never
put to the chairperson and was not the version presented by the
employee.
[55]
The arbitrator made no findings on the
issues the employee challenged in respect of procedural fairness, but
instead made findings
on issues he did not challenge.
[56]
The ultimate question is whether
holistically viewed, the decision taken by the arbitrator was
reasonable based on the evidence
placed before her. I have considered
this question after perusal of the transcribed record, the
arbitration award and the grounds
for review raised by the Applicant.
In my view the arbitrator’s findings do not fall within the
bounds of reasonableness,
based on the evidence that was placed
before her.
[57]
The issue the arbitrator had to consider
was whether
the employee was guilty of the
misconduct he was dismissed for and from a perusal of the arbitration
award, it is evident that the
arbitrator lost sight of the issue she
had to decide and she ignored material evidence placed before her.
The evidence, on a balance
of probabilities, shows that the employee
indeed failed to submit the cost reports on a monthly basis and
persisted with this failure,
even after he was given a direct
instruction to do so, which resulted in a financial loss for the
Applicant. The Applicant’s
case that the loss could have been
avoided had the employee submitted the cost reports on a monthly
basis, was not disputed.
[58]
The arbitrator misdirected herself by
finding that because the Thaba Mall was handed over on time and was
well functioning, shows
that the employee was a competent employee.
The charges had nothing to do with the timing of the handing over of
the Thaba Mall
or the structural condition of the building works, but
the charges related to the employee’s failure to submit cost
reports
and the fact that the Applicant suffered considerable
financial losses due to his failure to submit the cost reports
timeously,
and that when he did, the reports were inaccurate and
could not be used.
[59]
Based on the above, I am persuaded that the
award cannot stand and should be interfered with on review.
Relief
[60]
This leaves the issue of relief.
[61]
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.
[62]
In the event the award is set aside on
review, this Court has a discretion whether or not to finally
determine the matter. The matter
could be finally determined where
there is a full record of the proceedings before Court and where it
would be in the interest
of justice to do so.
[63]
I am indeed in a position to decide and
finally determine the matter based on the record as it is before me
and
where the parties’ cases were
fully ventilated.
[64]
It is also in the interest of justice to
determine the matter finally and not to order a re-hearing of the
matter as the employee’s
dismissal took place as far back as
2015 and in my view, keeping in line with the tenet of LRA, to have
labour matters dealt with
expeditiously, this matter should be and
could be brought to finality.
Costs
[65]
This Court has a wide discretion in respect
of costs, guided by the principles of justice and fairness. In my
view, this is a matter
where the interest of justice will be best
served by making no order as to cost.
[66]
In the premises, I make the following
order:
Order
1.
The
arbitration
award issued by the Second Respondent on 20 October 2015 under case
number GAJB 17155-15
is reviewed and set
aside;
2.
The arbitration award is substituted with
an order that the Third Respondent’s dismissal was
substantively and procedurally
fair;
3.
There is no order as to costs.
______________
Connie Prinsloo
Judge of the Labour Court
of South Africa
Appearances:
Applicant: Advocate H
Bucksteg
Instructed by: Carel J
Schoeman Inc Attorneys
Third Respondent: Mr T J
Khomola of Khomola Boshomane Attorneys
[1]
2007
28 ILJ 2405 (CC) at para 110.
[2]
(2014)
35 ILJ 943 (LAC).
[3]
(2014)
35 ILJ 943 (LAC) at paras 18 and 19.