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[2019] ZALCJHB 30
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SAMWU obo Mosoma v Ledwaba NO and Others (JR1054/16) [2019] ZALCJHB 30 (28 February 2019)
in the labour court of
South Africa, JOHANNESBURG
Not Reportable
case
no: JR 1054/16
In the matter between:
SAMWU OBO ON
MOSOMA
Applicant
and
NM LEDWABA
N.O
First Respondent
SOUTH AFRICAN LOCAL
GOVERNMENT
BARGAINING COUNCIL
(SALGBC)
Second Respondent
GREATER
TUBATSE LOCAL MUNICIPALITY
Third
Respondent
Heard:
21 February 2019
Delivered:
28 February 2019
____________________________________________________________________
JUDGMENT
_____________________________________________________________________
MAHOSI. J
Introduction
[1]
This is an application in terms of section 145
of
the Labour Relations Act (LRA)
[1]
to
set aside the arbitration award (award) issued by the first
respondent (the commissioner) under case number LPD111416 dated 2
May
2016. The commissioner found that the dismissal of the applicant’s
member (the employee) was substantively fair but procedurally
unfair
and ordered the third respondent (the Municipality) to pay him
compensation in the amount equivalent to four months remuneration.
[2]
Before this Court is also an application for condonation of the late
filing of the
complete record. The Municipality consented and I am
satisfied that the applicant’s explanation discloses a good and
justifiable
reason for filing outside the prescribed time limit.
[3]
The remaining issue is whether the decision reached by the
commissioner is one that
a reasonable decision-maker could not reach.
[4]
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.
Brief
background facts
[5]
The employee
started working for the
Municipality in 2005 as an Assistant Manager: Supply Chain. At the
time of his dismissal, he had been promoted
to the position of
Manager: Supply Chain and was also the secretary on the Bid
Adjudication Committee (BAC).
[6]
During 2011, the Municipality had entered into an agreement with the
Department of
Energy for the electrification of nine regions within
its jurisdiction. In order to give effect to the agreement, the
Municipality
invited bids from service providers. The bids were
received and evaluated by the Bid Evaluation Committee (BEC) and
subsequently
forwarded to the BAC. Out of all the bids submitted,
only one of the service providers was recommended to the Municipal
Manager
for appointment. The Municipal Manager referred the matter
back to the BAC, which subsequently recommended that he explore the
provisions of the Supply Chain Management Policy to effect the
appointment of the required service providers.
[7]
These provisions included section 36 of the Second Amended Supply
Chain Management
Policy that allowed the Municipal Manager to appoint
a service provider without following the prescribed competitive
bidding process
in cases where the urgency of the matter justifies
this, or in exceptional circumstances where it was impractical or
impossible
to follow the official procurement process.
[8]
It was on the strength of the BAC’s recommendation and advice
that the then
Municipal Manager, Mr Phala, appointed the service
providers in terms of section 36 of the Second Amended Supply Chain
Management
Policy. This was done in terms of the resolution taken by
the Council, after having noted the urgency of the project.
[9]
On 30 April 2013, the Council took a resolution to appoint forensic
investigators
for the purpose of investigating irregularities in the
appointment of the service providers. Flowing from the investigation,
the
employee was suspended with effect from 09 July 2013.
Subsequently, disciplinary proceedings against the employee were
initiated.
The employee challenged some aspects of the disciplinary
process in this Court successfully.
[10]
As a result, the employee was issued with a new charge sheet on 08
November 2013. On 25 November
2015, after the disciplinary hearing
was postponed several times, the Municipality issued the employee
with a letter of dismissal.
Aggrieved by the Municipality’s
decision to dismiss him, the employee referred the dismissal dispute
to the second respondent.
[11]
The dispute was conciliated unsuccessfully, after which it was
certified as unresolved. The employee
then referred the dispute to
arbitration at the end of which the commissioner found that the
employee’s dismissal was substantively
fair but procedurally
unfair. It is this award that is the subject of this application.
The
grounds on which the applicant seeks to have the award reviewed and
set aside are considered herein below.
Grounds
for review
[12]
Although the applicant raised a
number of grounds for review, the issues were mainly firstly
whether
the commissioner determined the substantive fairness of the
employee’s dismissal. Secondly,
whether
the commissioner evaluated the facts presented before him
.
The
test for review
[13]
The test for review has become trite law. The test is whether the
decision reached by the commissioner
is one that a reasonable
commissioner could have reached. The decision must fall within a
radius of reasonableness.
[14]
In
Head
of the Department of Education v Mofokeng and Others
[2]
the
Labour Appeal Court (LAC) confirmed the
Herholdt
v Nedbank Ltd
[3]
and
Gold
Fields
Mining
South Africa (Pty) Ltd (Kloof Gold Mine) v CCMA and Others
[4]
judgments
and held as follows:
‘
The
failure by an arbitrator to apply his or her mind to issues which are
material to the determination of a case will usually be
an
irregularity. However, the Supreme Court of Appeal (“the SCA”)
in
Herholdt
v Nedbank Ltd
and
this court in
Goldfields
Mining South Africa (Pty) Ltd (Kloof Gold Mine) v CCMA and others
have held that before such an irregularity will result in the setting
aside of the award, it must in addition reveal a misconception
of the
true enquiry or result in an unreasonable outcome.’
[5]
[15]
The LAC further held as follows:
‘
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. The reviewing judge must then have regard to the general
nature of the decision in issue; the range of
relevant factors
informing the decision; the nature of the competing interests
impacted upon by the decision; and then ask whether
a reasonable
equilibrium has been struck in accordance with the objects of the
LRA. Provided the right question was asked and answered
by the
arbitrator, a wrong answer will not necessarily be unreasonable. By
the same token, an irregularity or error material to
the
determination of the dispute may constitute a misconception of the
nature of the enquiry so as to lead to no fair trial of
the issues,
with the result that the award may be set aside on that ground alone.
The arbitrator however must be shown to have
diverted from the
correct path in the conduct of the arbitration and as a result failed
to address the question raised for determination.
’
[6]
[Footnotes omitted]
Analysis
[16]
In support of it’s contention that the commissioner failed to
determine the substantive
fairness of the employee’s dismissal,
the applicant referred the Court to the part of the award where the
commissioner stated
as follows:
‘
The
dismissal of Mr ON Mosoma as pronounced/confirmed by the Municipal
Manager on 25 November 2014 is upheld and remains appropriate.’
[17]
In this regard, the applicant’s contention was that the
commissioner acted
ultra vires
in confirming an unlawful
dismissal by the former acting Municipal Manager. This challenge to
the commissioner’s award is
baseless and unwarranted. The
reading of the award reveals that the commissioner was aware of the
issues before him. At paragraph
4 of his award, the commissioner
clearly states that the issue to be decided is whether the
Municipality dismissed the employee
for a fair reason and in
accordance with a fair procedure. He further stated that if he finds
the employee’s dismissal to
be fair, the LRA enjoined him to
determine the appropriate relief.
[18]
The commissioner did not stop there, he outlined the survey of
evidence and arguments raised
at the arbitration proceedings. The
evidence related to both substantive and procedural fairness of the
employee’s dismissal.
In his analysis of the evidence and
arguments, his point of departure was that to an extent that the
dismissal was not in dispute,
the burden of proof rested on the
Municipality to prove the misconduct that constituted the reason for
the employee’s dismissal.
[19]
Prior to analysing the evidence and argument before him, he
summarised the charges levelled against
the employee. These included
gross dereliction of duties, the contravention of the supply chain
management policy, a contravention
of paragraph 8 of his employment
contract, the prejudices caused by his conduct to the Municipality,
that he abused the power and
procurement policies, regulations and/or
legislation, that he lacked proper management of the assets,
dereliction of duties and
poor performance.
[20]
The dispute between the parties revolved around the appointment of
the unqualified service providers
and the payment of their service.
The applicant’s case at the arbitration and in these
proceedings was that the employee
was not responsible for the
appointment of the service providers, that the decision to appoint
them was taken by the Municipal
Manager after approval of the
Council, that he had no influence over the Municipal Manager’s
decision and that when he paid
the service providers, he acted on the
instruction of the Municipality.
[21]
In supporting its contention, the applicant referred this Court to
the judgment of
Manana
v King Sabata Dalindyebo Municipality.
[7]
In this matter, the Municipality adopted a resolution to appoint Mr
Manana in a position of Manager Legal Services and to pay him
back
pay. Mr Manana was notified of the resolution through a letter which
he signed in acknowledgement of his acceptance of appointment.
Despite the resolution and the acceptance of his appointment, Mr
Manana’s salary was not adjusted. To justify its failure
to
adhere to the resolution, the Municipality made two submissions to
the Court. Firstly, that the resolution was not relevant
because the
power to appoint vested in the Municipal Manager. Secondly, that the
resolution was invalid. On the first submission,
the Court held as
follows:
‘
[17]
In my view s 55(1) is no more than a statutory means of
conferring such power upon municipal managers to attend to the
affairs of the municipality on behalf of the municipal council. There
is no basis for construing the section as simultaneously
divesting
the municipal council of any of its executive powers. Indeed, as I
have already pointed out, the Constitution vests all
executive
authority – which includes the authority to appoint staff –
in the municipal council and legislation is not
capable of lawfully
divesting it of that power. To the extent that there might be any
ambiguity in the statute in that respect
it must be construed to
avoid that result.’
[22]
On the validity of the resolution, the Court held as follows:
‘
[21]
No authority was advanced for the submission that a duly adopted
resolution of a local authority might be ignored by its officials
if
they have a belief that it is invalid, even if that belief is
well-founded. Indeed, the contrary was held in the early case
of
Grace
v McCulloch.
In
that case a resolution was adopted by a municipal council in
contravention of its standing orders. After it was adopted the
chairman of the council ruled the resolution to be out of order and
instructed the town clerk not to act on it. Upholding a claim
by
members of the council to set aside that ruling and instruction
Curlewis J said the following:
“
When
once the council has taken a resolution it is not competent for the
chairman, any more than for any other councillor, to declare
it
invalid and of no effect; nor is it competent for him to take upon
himself the responsibility of instructing the town clerk
not to act
on a resolution passed by a majority of the council. If the chairman
or any councillor is dissatisfied with a resolution,
his course is to
give notice of motion to rescind or reconsider the resolution as
provided by the standing orders. That is one
course. If the
resolution is clearly wrong or illegal another course is to come to
Court, and ask to have such resolution declared
illegal. But I do not
think the power to declare resolutions invalid lies with the
chairman.”
[22]
Although that case was decided a considerable time ago we were
referred to no subsequent authority that conflicts with it and
I know
of none. Although this case must be decided under a different
constitutional dispensation I can see no new principle that
drives
one in another direction. On the contrary, it seems to me that it
would be conducive to disorderly public administration
if officials
were entitled to choose between executing or not executing a duly
adopted resolution of the council depending upon
their belief as to
its validity – whether or not the belief is well-founded. In
the absence of authority to that effect,
or a principled explanation
for why that should be so, neither of which is before us, I think the
submission must be rejected.
A municipal council acts through its
resolutions. No doubt a municipal council is entitled to rescind or
alter its resolutions.
And no doubt an interested party is entitled
to challenge its validity on review. But once a resolution is adopted
in my view its
officials are bound to execute it, whatever view they
might have on the merit of the resolution, in law or otherwise, until
such
time as it is either rescinded or set aside on review.’
[23]
The current matter is clearly distinguishable from
Manana
. The
Municipality was faced with the irregularly appointed service
providers which may have resulted from the conceivably corrupt
conduct of its own employees as opposed to the validity of a contract
or its resolution.
I
t is a trite principle
in our law that an employer has a right or prerogative to discipline
an employee. In this matter the Municipality
is and remains the
employer of the employee, who is responsible for public funds.
Although the Council took a resolution to appoint
the service
providers in question, it later adopted another resolution to
investigate the circumstances that led to the adoption
of its own
resolution. Based on the outcome of the audit investigation, the same
Council resolved to suspend and charge the employee.
[24]
It is apparent from the reading of the award and the record that the
commissioner considered
the evidence before him. It was common cause
that out of nine service providers, the BAC recommended only one
service provider
after having met on 18, 22 and 26 July 2011. Despite
its recommendation, the Municipal Manager proceeded to appoint other
unqualified
service providers within 48 hours of the BAC’s
decision. In addition, it was only on 21 October 2011 that the
Municipal Manager
signed the decision to appoint them in terms of
section 36.
[25]
The employee contended that as secretary of the BAC, he merely
transcribed the proceedings and
outcome of the meeting that resulted
in the recommendation to deviate from policy. Mr Phasha who testified
in support of the Municipality’s
case stated that the employee,
being the custodian of the policies, had the responsibility to advise
the Municipal Manager. His
evidence was corroborated by both Mr
Morathi and Ms Monyepao who added that the employee was responsible
to advise the Municipal
Manager through the office of the CFO. It was
on the strength of the above evidence that the commissioner found
that it was highly
probable that the employee misled the Municipal
Manager in the appointment of the service providers and that his
actions were sordid
and deplorable.
[26]
The employee confirmed that the responsibility of asset management
fell within his department.
To an extent that the employee refused to
respond to a question on whether he managed his department
efficiently, the commissioner
drew a negative inference. He further
did not dispute that he signed the internal purchase requisition to
facilitate the payment
of the service providers in question and
testified that payment would not have been effected without his
signature. His justification
was that he could have been charged with
insubordination had he refused to do so. The commissioner rejected
this justification
on the basis that, in his position, the employee
knew or ought to have known that he approved payment for unqualified
service providers.
Consequently, the commissioner was convinced that
the Municipality proved that it suffered unauthorised, irregular and
wasteful
expenditure in favour of the unqualified service providers.
[27]
It was on the basis of the above evidence that the commissioner found
that the Municipality discharged
the onus of proving that the
employee breached the applicable rules as contained in the SCM policy
and the PFMA which rules he
was repeatedly trained on at the
Municipality’s expense.
[28]
Having made his finding on the existence of the rule and the
knowledge thereof, the commissioner
considered the evidence relating
to the procedural fairness. He found that, contrary to the Collective
Agreement and the LRA, the
Municipality failed to accord the employee
an opportunity to state his case in a fully constituted disciplinary
hearing. On this
basis, he concluded that his dismissal was
procedurally unfair.
[29]
The commissioner further considered the appropriateness of the
sanction of dismissal. 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.’
[30]
Thus, in determining the appropriateness of the sanction, the
commissioner must enquire into
the gravity of the contravention of
the disciplinary rule; the consistent application of the disciplinary
rule and sanction; and
the mitigating and aggravating factors. In
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others,
[8]
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
.’
[31]
It is trite that in determining whether the sanction imposed by the
employer is fair, the commissioner
is required to take into account
the totality of circumstances.
[9]
In this case, the commissioner
took
into account the seriousness of the misconduct the employee was
charged with and the importance thereof. The commissioner further
took into consideration the evidence led in relation to the
allegation of lack of consistency in the application of the rule and
found that the applicant could not substantiate its claim.
[32]
In the circumstances of this case, taking into account the employee’s
position, the serious
nature of the allegations against him, the
public interest in ensuring that allegations of corruption and
mismanagement at the
highest levels of the public service are acted
against swiftly and efficiently, I am satisfied with
the
commissioner’s conclusion that the employee’s dismissal
was substantively fair.
[33]
It is my view that the commissioner was reasonable in his assessment
of the evidence before him.
He reached a conclusion that any
reasonable decision-maker would have reached on the issue of the
probabilities of the versions
placed before him. The manner in which
he analysed the evidence and the arguments does not support the
applicant’s version
that he misconstrued the enquiry he had to
conduct or that he ignored materially relevant facts. The applicant
further failed to
establish that the arbitrator conducted the enquiry
incorrectly because, as the award reflects, he dealt with the issue
before
him correctly and he considered all the evidence that was
placed before him. What the applicant seeks to do in this application
is to bring an appeal against the decision of the commissioner in a
guise of a review.
[34]
The applicant has not established any basis upon which the Court
could find that the commissioner’s
award was reviewable. As
such, it failed to discharge the
onus
of establishing that the
commissioner either committed misconduct in relation to his duties as
an arbitrator, a gross irregularity
in the conduct of the arbitration
proceedings, or that he exceeded his powers. There is, therefore, no
reason for this Court to
interfere with his award.
Costs
[35]
In terms of section 162 of the LRA, the Court has wide discretion in
awarding costs. The Constitutional
Court has recently reiterated in
Zungu
v Premier of the Province of Kwa-Zulu Natal and Others,
[10]
that costs orders should be made in accordance with the requirements
of law and fairness. In this matter, the requirements of law
and
fairness dictate that there should be no order as to costs.
[36]
In the circumstances, I make the following order.
Order
1.
The review application is dismissed.
2.
There is no order as to costs.
__________________
D. Mahosi
Judge
of the Labour Court of South Africa
Appearances:
For the
applicant:
Advocate Baloyi
Instructed
by Maenetja Attorneys
For
the respondents:
Mr Shongwe of Shongwe Attorneys
[1]
Act
66 of 1995 as amended.
[2]
[2015]
1 BLLR 50 (LAC).
[3]
[2013]
11 BLLR 1074 (SCA).
[4]
[2014]
1 BLLR 20 (LAC)
[5]
At para 30.
[6]
At para 33.
[7]
[2011] 3 BLLR 215
(SCA); (2011) 32 ILJ 581 (SCA);
[2011] 3 All SA
140
(SCA) (
Manana)
.
[8]
[2007] 12 BLLR 1097
(CC)
at
para 78.
[9]
Sidumo
at
para 78.
[10]
(2018)
39 ILJ 523 (CC);
[2018] 4 BLLR 323
(CC) at para 24.