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[2019] ZALCJHB 204
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Free State Gambling and Liquor Authority v Dell NO and Others (JR2418/15) [2019] ZALCJHB 204 (15 August 2019)
THE
LABOUR COURT OF SOUTH AFRICA, HELD AT JOHANNESBURG
Case number: JR: 2418
/ 15
In
the matter between:
FREE
STATE GAMBLING AND LIQUOR
AUTHORITY
APPLICANT
and
JANA
DELL
N.O
FIRST RESPONDENT
CCMA
SECOND RESPONDENT
LEHLOHONOLO
MOTSOASELE
THIRD RESPONDENT
Hearing
date: 9 January 2019
Judgment
date: 15 August 2019
JUDGMENT
NORTON
AJ
Introduction
[1]The
Applicant is the Free State Gambling and Liquor Authority (“FSGLA”),
a regulatory body established by the Free
State Gambling and Liquor
Act of 2010.
[2]The
First Respondent is the commissioner who arbitrated an unfair
dismissal dispute.
[3]The
Third Respondent is Mr Motsoasele, the previous Finance Manager of
the FSGLA.
[4]
The Applicant dismissed Mr Motsoasele on 7 January 2014 for
misconduct. In essence he failed to obtain permission from the
current CEO to conduct business activities outside the FSGLA; he
neglected his duties, and he displayed gross insolence for sending
a
disparaging email to his supervisor.
[5]
Mr Motsoasele referred an unfair dismissal dispute to the CCMA in
Bloemfontein and the matter proceeded to arbitration for 8
days
expansively spanning from March 2014 to October 2015.
[6]The
arbitrator found that the dismissal was procedurally fair but
substantively unfair and order reinstatement retrospective
to 1
December 2015 and 7 months backpay amounting to R557 570,58.
[7]The
Applicant launched a review on the 11 December 2015 to set aside the
arbitration award. The review was opposed by the Third
Respondent,
and he (through his attorneys) filed an Answering Affidavit and Heads
of Argument.
[8]
The matter was set down for argument on 9 January 2019. The Third
Respondent did not attend. I satisfied myself that there had
been
proper service of the notice of set down on the parties, and then
proceeded to hear the Applicant’s submissions.
Factual
Background
[9]
Mr Motsoasele began employment with the FSGLA’s predecessor,
the Free State Gambling and Racing Board, (the “Racing
Board”)
in 2000. At the Racing Board Mr Motsoasele performed the function of
Manager: Compliance and Investigations.
[10]
In
June 2002, Mr Motsoasele approached the CEO of the Racing Board (Mr
Moheko) for permission to conduct business activities outside
of his
employment. This was granted. The business activities were auditing,
accounting, tax advice, investment, business plans
and management
advice. In his submission to the CEO he wrote, “
I
will not render services to any licensee of the Free State Gambling
and Racing Board and will declare all contracts / business
that may
be of a conflict of interest nature
.”
[1]
[11]
In 2010 the Racing Board merged with the FSGLA and all staff from the
Board including Mr Motsoasele transferred by virtue of
section 197 of
the LRA to the FSGLA. Mr Motsoasele’s job description and title
changed to Manager: Finance.
[12]
Between the period 2010 to 2013 Mr Motsoasele conducted private
business activities through his company “
TM Squared
”
with, amongst others, two entities of relevance to this case
(Dipontsho Trading and Golden Mile Trading).
[13]
The CEO of the FSGLA, Ms Gasela, testified that Mr Motsoasele never
asked her for permission to conduct business activities
outside of
the FSGLA.
[14]
Outside
work is governed by policy at the FSGLA. Ms Gasela referred to
section 8.14
[2]
of the Benefits
Policy which prohibits such work except with the approval of the CEO,
and provided it doesn’t amongst other
considerations,
constitute a conflict of interest.
[15]
Mr
Motsoasele signed a financial disclosure form in 2013 which showed
that he had shares, and that he was a member of numerous family
trusts and that he received about R200 000 from various
consultancies and retainers.
[3]
[16]
Supply Chain Management and the work of Mr Motsoasele as the Manager:
Finance, fell within the same business division of Finance
in the
organisational structure of the FSGLA.
[17]
The CEO became aware of Mr Motsoasele’s external business
activities in mid 2013 when both Dipontsho Trading and Golden
Mile
Trading submitted tenders to the FSGLA. The CEO testified that Mr M’s
signature on the BEE certificates could influence
SCM staff
adjudicating tenders.
[18]
In May 2013 Mr Motsoasele responded insolently to his supervisor, Mr
Skosana, when instructed to develop Standard Operating
Procedures for
the Finance Department, “
Do you serious expect me to do all
this by the mentioned dates or which part are you or someone else
going to do?”
This was after the initial instruction was
given to him February, and he was provided with the existing policies
for guidance in
April.
The
arbitration award
[19]
With
respect to the issue of whether Mr Motsoasele was required to
obtain the current CEO’s approval to pursue outside
business
interests, the arbitrator concluded, “…
I
find that the applicant (Mr M) only had to apply for new permission
from the CEO, Ms Gasela, if his activities in TM Squared resulted
in
a conflict of interest. The Respondent failed to prove on a balance
of probabilities that they were unaware of the activities
of the
employee’s business interests. The Respondent further failed to
prove that the employee’s interests in TM Squared
was indeed a
conflict of interest, for which he had to obtain permission in terms
of paragraph 8.1.4 of the FSGLA Benefit Policy”.
[4]
[20]
The
arbitrator found that Mr Motsoasele’s terms and conditions of
service remained unchanged by virtue of section 197 and
he was
entitled to continue his outside work. She wrote, “
Section
142(1)(b) of the Free State Gambling and Liquor Authority Act of 2010
stipulates that the transfer of employees amounts
to a so-called
section 197 transfer. In my interpretation of the above, I cannot
find that the permission granted by the CEO in
2002 was nullified, as
the Applicant’s conditions of service remained unchanged
.”
[5]
[21]
With
respect to the email response, the arbitrator found that the employee
was not disrespectful, that the parties were working
under extreme
pressure, and that the Respondent had failed to prove that the
actions of the employee were insolent.
[6]
l
The
attack on review
[22]
With respect to the issue of the lack of approval and the conflict of
interest the Third Respondent submitted that the arbitrator
failed to
take into account material evidence, and misdirected herself. For
example:
22.1.
Ms Gasela
gave evidence that an employee must ask and receive permission before
making the disclosure on the financial disclosure
form. She says, “
I
need to say that the process is to apply first for doing remunerative
work outside and thereafter once you have been given permission
you
must disclose in this form the work that you did.”
[7]
22.2. When Mr Motsoasele
applied for permission in 2002 he performed the function of Manager:
Compliance and Investigations. In
2010, after the transfer he held a
different position, Manager Finance. This change in position
necessitated a new application
for permission. The arbitrator
appeared to appreciate this fact in the arbitration (but inexplicably
found to the contrary in her
award):
22.2.1. Commissioner:
“
Now are you saying because his position changed to a
Manager Financial Services, he has a duty to then again apply for
permission
because his duties and responsibilities changed them?
22.2.2.
Ms
Gasela:
Yes Ma’m
22.2.3.
Commissioner:
Permission is needed as your position changes?
22.2.4.
Ms
Gasela:
Yes Ma’m
22.2.5. Commissioner:
All
right, So whether the policy changed or whether the policy did not
change, that aspect still remained the same.
22.2.6.
Ms
Gasela;
Yes Ma’m
22.2.7. Commissioner:
Do
you guys agree with me?
22.2.8.
Mr
Morobane
[8]
:
Yes
22.2.9.
Mr Joai
[9]
:
Fine…Yes
[10]
22.3. A conflict of
interest did arise. Two of Mr Motsoasele’s clients, (Dipontsho
Trading and Golden Mile Trading) who benefitted
from a BEE
accreditation provided by his company, and personally signed by
himself, tendered for the supply of goods and services
at the FSGLA.
This carried the risk that his colleagues in procurement / SCM may
have been unduely persuaded to unfairly privilege
those entities, to
the disadvantage of the other competitors.
22.4. The arbitrator
assumed that when the transfer happened the employee’s
conditions of service remained unchanged, and
presumably by virtue of
this, according to the arbitrator’s logic, the permission to
conduct external work, granted in 2002
remained.
[23]
With respect to the disparaging email, the Third Respondent
submitted that the arbitrator’s finding that there was no
insolence was not rationally connected to the evidence before her.
23.1.
Skosana
testified that the employee was not under pressure and had sufficient
capacity to carry out the instruction. Mr Skosana
said that “
there
was adequate time for him to formulate these SOP’s
”,
that “
in
most instances we were battling to get hold of him
”,
and “
everyone
was inundated with work except him
”
[11]
Discussion
and analysis
[24]
The arbitrator concluded that the employee was not obliged to obtain
permission to continue remunerative work outside the FSGLA
despite
the fact that the original permission had been obtained 8 years prior
to the transfer; his job description and job title
had changed; he
reported to a new employer; there was a new CEO; and his private
business had led to a conflict of interest in
the finance department.
Furthermore the arbitrator found that the permission transferred by
virtue of section 197.
[25]
An exception to policy, to perform work outside the employment
relationship cannot reasonably be construed as a term and condition
of employment transferred to a new employer. The permission granted
to Mr Motsoasele did not convert into a legal entitlement operative
in perpetuity. The old employer exercised a discretion in Mr
Motsoasele’s favour. It could have been withdrawn at any time,
and Mr Motsoasele could not have triggered a valid contractual claim
for enforcement. In law the agreement between the previous
CEO and Mr
Motsoasele lacked animus contrahendi (intention to contract).
[26]
It would be unreasonable for a new employer (such as the FSGLA) to be
bound by an exception granted gratuitously by an old
employer,
especially one that potentially runs counter to the new employer’s
business interests. In this case the arbitrator
endorses the position
that the new employer will be bound by an exception to policy, even
one to which the new employer knows nothing
about. That simply cannot
be correct. In my view the arbitrator has committed a material error
of law to assume that an agreement
between an old employer and an
employee, which lacks the necessary quality of
animus contrahendi
survives a section 197 transfer.
[27]
Returning to the remaining ground of review, the arbitrator
materially misconceived the evidence. The wording of the
email is
clearly disrespectful, and the context within which the employee sent
it to his superior was not one of undue pressure.
The distinct
impression gleaned from the transcript is that the employee failed to
take his responsibilities seriously, and absented
himself from work.
[28]
The threshold to succeed in a review is set out in section 145 of the
Labour Relations Act – misconduct, gross
irregularity,
exceeding of powers or an award improperly obtained. These grounds
have been suffused by the standard of reasonableness,
and an
arbitration award is reviewable if the decision reached by the
arbitrator is one that a reasonable decision maker could
not reach.
Expressed differently, an award is reviewable if the defect is
material such that the outcome of the award is not sustainable
on the
facts and the evidence led at the arbitration.
[29]
This is one such case.
Conclusion
[30]
The Applicants have passed the review threshold.
[31]
The arbitration spanned 1.5 years, the dismissal occurred over 5.5
years ago, the transcript and documents are voluminous.
To send the
matter back to the CCMA to be heard before a different commissioner
would be unduly and unnecessarily burdensome. I
am in a good position
to decide the matter.
[32]
The Third Respondent did not attend the hearing of this matter. There
is no continuous relationship between the parties and
this has a
bearing on costs.
[33]
Accordingly I make the following order
33.1. The arbitration
award is reviewed and set aside
33.2. The dismissal was
fair
33.3. The Third
Respondent is to pay the Applicant’s costs.
_____________________
Norton
AJ
Acting
Judge of the Labour Court of South Africa
Appearances
For
the Applicant: Adv T Govender representing Sunil Narian Incorporated
Attorneys
For
the Third Respondent: No Appearance
[1]
Bundle A1, pg 23
[2]
8.14 OUTSIDE WORK BY OFFICIAL (OUTSIDE OF THE EMPLOYMENT WITH THE
AUTHORITY)
1.
No member of staff shall perform or engage him or herself to perform
remunerated work outside his or her employment with the
Authority,
without the written permission of the CEO (the Authority in the case
of the CEO). Such application be made in the
form supplied (Form
08007)
2. Such permission shall
be subjected to the following:
a. Must not constitute a
conflict of interest in relation to the Authority;
b. Should not interfere
with the Staff member’s employment with the Authority;
c. Should not be
performed using Authority resources in contravention with the Staff
Policy resulting in financial loss to the
Authority; and
d. Should comply with
Section 12 of the Free State Gambling and Liquor Act, No 6 of 2010.
[3]
Bundle A1, p 24
[4]
Arbitration award, paragraph 101
[5]
Arbitration
award, par 91
[6]
Arbitration award, para 116.
[7]
Transcript, pg 19
[8]
Representative for the employer
[9]
Representative of the employee
[10]
Transcript, pg 93 and 94
[11]
Transcript pg 260 and 261