THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case no: JA141/2022
In the matter between:
GAUTENG DEPARTMENT OF EDUCATION Appellant
and
GENERAL PUBLIC SERVICE SECTORAL
BARGAINING COUNCIL First Respondent
MATOME SEHUNANE N.O. Second Respondent
LINDIWE MALUKA Third Respondent
JABULILE TSHABALALA Fourth
Respondent
SAMKELISIWE TRACY NTOMBELA Fifth Respondent
THEBEYAPELO MOSES SIBI Sixth Respondent
Heard: 7 November 2024
Delivered: 22 January 2025
Coram: Savage ADJP, Nkutha -Nkontwana JA et Govindjee AJA
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JUDGMENT
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SAVAGE , ADJP
Introduction
[1] This appeal , with the leave of the Labour Court, is against the judgment and
order s of that Court which dismissed with costs the appellant’s application to
review and set aside the award of the second respondent arbitrator . At
arbitration , the dismissal s of the third to sixth respondents were found to have
been substantively unfair and they were retrospective ly reinstate d into their
employment with the appellant, the Gauteng Department of Educatio n.
[2] At the outset of the hearing , the appellant sought that the appeal be reinstated
and that the late filing of both the notice of appeal and the appeal record be
condon ed. The respondent employees did not oppose the application to
condone the late filing of the notice of appeal but opposed the application to
reinstate the appeal and condone the extensive 11-month delay in filing the
appeal record. Responsibility for the extensive delay in filing the appeal record
lies squarely with the appellant’s attorney, the State Attorney , whose
explanation before this Court paints a bleak picture of a lack of organisation,
lack of professionalism and apparent staff constraints at th at office. The State
Attorney is a state -funded functionary required to perform the important task
of representing the interests of government departments and entities in
various legal matters. It is in the public interest that it performs its task with the
diligence and professionalism required of it . Its excuses for its lack of both , as
evident in this matter, demand urgent action .
[3] It is trite that the factors that a court will consider in deciding whether the grant
of condonation is in the interests of justice include the nature of the relief
sought; the extent and cause of the delay; the reasonableness of the
explanation for the delay; the effect of the delay on the administration of
justice and other litigants; the importance of the issue to be raised in the
intended appeal; and the prospects of success. Determining what is in the
interests of justice must reflect due regard to all relevant factors, with the
particular circumstances of each case to determine the relevance of particular
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factors.1 Despite the State Attorney’s dilatory conduct being the cause of the
extensive delay in filing the record in this matter , having regard to factors
including the prospects of success and issues of prejudice , it is in the interest
of justice that the appeal be reinstated and the late filing of the record
condoned.
Background
[4] The respondent s were charged with misconduct which w as said to have taken
place whilst at their workstations over a period of almost two years from
1 January 2014 to 30 November 2015 and related to the appointment and
payment of ghost employees . The complaint was that the respondents had
been involved in the appointment and salary adjustment of two ghost
employees, S. Mabena and L. Mataba, as educators at Isiqalo Primary
School, despite knowing that this was wrong. In addition, t he fourth
respondent was alleged to have been involved in the extension of the
contracts of the same ghost employees and t he fifth respondent was alleged
to have been involve d in the appointment of a further two other ghost
employees , S. Kekana and Z . Mabeyo, at both Isiqalo and Munsieville
Primary School s.
[5] Following a disciplinary hearing, t he respondents were found to have
committed the misconduct alleged and were dismissed from their employment
with the appellant from 12 June 2017 to 16 October 2017 . Dissatisfied with
their dismissals , the respondents referred a n unfair dismissal dispute to the
first respondent, the General Public Service Sectoral Bargaining Council,
challenging only the substantive fairness of their dismissals.
[6] The persal system is the payroll and human resource system used by all
government departments, including the appellant. The evidence at arbitration
was that in April 2013 , the Gauteng Provincial Governments’ User ID and
Password Policy was approved which required that user staff identities and
passwords on the persal system remain private and not be shared. Clause
1 See: Grootboom v National Prosecuting Authority and Another [2013] ZACC 37; 2014 (2) SA 68
(CC) at para 22.
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13.7 provide d that “(r)egardless of the circumstances, passwords should
never be shared or revealed to anyone else by the authorised user ”. Clause
13.8 record ed that employees as users “(a) re responsible for all activity
performed with their personal -User IDs ” and “(s) hould not allow the User -ID to
be used by anyone else ” and should “ not perform any activity with [any] other
User -ID”. There was no dispute at arbitration that the respondent s’ persal
credentials , being their usernames and passwords , were used over a period
of two years to defraud the appellant of approximately R2 million through the
appointment and payment of ghost employees . The monies defrauded were
paid in respect of these ghost employees into bank accounts belong ing to Mr
Kenneth Mothlang , who was employed by the appellant as principal personnel
officer and reported to the fifth respondent . The respondents contended that it
was Mr Mothlang who had committed the fraud , for which he was criminally
charged and convicted, and that they were not aware how he had obtained
their passwords which were repeatedly changed over the two-year period .
[7] The arbitrator found that the respondents were not charged “ in relation to the
condition of their persal credentials ” but with “ actual theft ”, which was not
proved ; and that although the misconduct was said to have occurred at their
workstations in Krugersdorp, it had been committed in Braamfontein,
Johannesburg and Pretoria. Although the arbitrator accepted that the third
respondent had signed staff appointment forms brought to her for processing
by Mr Mothlang , she was found not to have been involved in replac ing the
completed forms with incomplete forms to defraud the appellant.
[8] The a rbitrator concluded that the a ppellant’s case was “ highly improbable and
not convincing at all ” and had been based on a presumption , which was
successfully rebutted , that if an employee’s credentials were used they could
be presumed to have committed the fraud . The evidence was found not to
support a finding of fraud and the dismissal of the respondents was found to
be substantively unfair . The respondents were consequently reinstated
retrospectively into the ir employment with the appellant with backpay.
Judgment of the Labour Court
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[9] Aggrieved with the outcome at arbitration, the appellant sought the review of
the arbitration award by the Labour Court . That application was dismissed on
the basis that the appellant’s version was not probable , with the arbitrator
found to have applied his mind to the facts , which did not prove that the
respondents were aware of , or had participated in , the fraud . The Court noted
that although the respondents’ credentials were used to defraud the appellant,
no other evidence link ed them to the commission of the offences. The
respondents were not charged with sharing their persal credentials , there was
no evidence that they had done so, and they did not know how Mr Mothlang
had obtained their credentials . In addition, t hey were found not to have been
aware of the 2013 policy relating to the safekeeping of their persal credentials ,
with t he pop -up screen reminding employees to hide their credentials only
having been introduced in 2016. The Court took account of the fact that it was
the respondents who had conducted the initial investigation which led to Mr
Mothlang’s resignation and later criminal c onviction and that the appellant had
not opened a criminal case against the respondents. In addition, t he third
respondent denied having signed an incomplete HR7 form and her evidence
was that attachments to the form were replaced by the person who had the
intention to defraud their appellant.
[10] The Court therefore concluded that the arbitrator had reasonably found that
the respondents could not have been found guilty of the allegations against
them. Costs were awarded against the appellant by the Court to express its
displeasure at the conduct of the appellant on the basis th at the respondents
had been “ compelled to defend a hopeless review application ” despite the
reasonableness of the award.
On appeal
[11] The appellant contended on appeal that the Labour Court had erred in failing
to have regard to the fact that the issue before the arbitrator was whether the
respondents had participated in the appointment and payment of ghost
employees when the evidence showed that their persal credentials had been
used over a two -year period, despite each respondent changing their
pass words monthly. F rom 2013 , the respondents would have been aware of
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the relevant policy and the rule that they safeguard their passwords . The fact
that the payments had been made away from the respondents ’ workplace did
not prevent their persal credentials from being used and the evidence
supported a finding that the respondents had shared their persal credentials
with Mr Mothlang. Furthermore, the evidence showed that the third
respondent had signed an incomplete appointment form in respect of a ghost
employee which linked her to the misconduct. The fact that Mr Mothlang was
convicted and sentenced for his involvement in the matter did not exonerate
the respondents of wrongdoing . The award of the arbitrator was contended to
be one that a reasonable arbitrator could not make and, it was submitted that
the Labour Court erred in finding differently and in its order of costs made
against the appellant.
[12] The respondents opposed the appeal. They accepted that their passwords,
which on the undisputed evidence were regularly changed, had over an
extended period of time been used by Mr Mothlang but that the re was no
proof that they had committed the misconduct alleged . The appellant failed to
prove how Mr Mothlang obtained their passwords , with the evidence being
that the offences occurred at different locations away from their workstations
in Krugersdorp. Furthermore, it was contended that it was only i n 2016 that
the policy was implemented which reminded employees via a pop -up screen
to keep their persal credentials confidential. For these reasons , the
respondents sought that the appeal be dismissed with costs.
Evaluation
[13] An employer is required to notify the employee of allegations of misconduct
raised against the employee in sufficient detail and in a form and language
that the employee can reasonably understand in order to allow the employee
to answer to such allegations .2 It is not required , as was suggested in Murray
and Roberts Cementation (Pty) Ltd v Association of Mine workers and
Construction Union o n behalf of Dube and Others ,3 that “ when formulating
charge sheets, employers must advise the accused employee of the precise
2 Item 4(1) of Schedule 8 to the Labour Relations Act 66 of 1995 , as amended .
3 [2023] ZALAC 26; (2024) 45 ILJ 276 (LAC) .
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charge he or she is required to answer in the disciplinary hearing ”.4 This Court
has made it clear that disciplinary proceedings are not criminal trials , nor are
they intended or required to resemble highly technical civil trials . Employers in
disciplinary proceedings may not be lawyers and may at times define the
nature of the alleged misconduct raised against an employee imprecisely, too
narrowly or even erroneously record the legal basis for such misconduct , for
example as fraud when the legal requirements of theft may in fact be met . As
has repeatedly been emphasised by this Court, it is not necessary that the
employee be given notice of the precise legal basis for a complaint of
misconduct in a highly technical charge sheet . Rather the employee must be
informed in the appropriate manner of the allegation of misconduct raised in
sufficient detail to enable the employee to understand such complaint and
answer to it.5
[14] The respondents were charged by the appellant with having been involved in
the appointment and payment of ghost employees over a period of almost two
years . The undisputed evidence before the arbitrator was that Mr Mothlang
had obtained the respondents ’ persal credentials , including their passwords,
which he used to effect the fraudulent transactions . Importantly, what the
evidence showed was that Mr Mothlang had repeatedly obtained the
respondents ’ passwords , which the respondents updated monthly, over an
extended period of time. The evidence of the third respondent that the
employees changed their passwords on the persal system on a monthly basis
was not disputed by any of the other respondents . Yet, n one of the
respondents were able to explain how Mr Mothlang could repeatedly have
obtained their updated passwords. In addition , the undisputed evidence was
that the third respondent had appended her signature to the form appointing a
ghost employee which had been brought to her for processing by Mr
Mothlang.
[15] The arbitrator took a n unduly narrow and technical approach to the charge
sheet, finding that the respondents “were never charged in relation to the
4 Id at para 19.
5 See: EOH Abantu (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others
[2019] ZALAC 57 ; (2019) 40 ILJ 2477 (LAC) at para 16.
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condition of their persal credentials but were charged for actual theft ”. This in
circumstances in which it was apparent that the disciplinary complaint against
the respondents was that they had been involved in the fraudulent
appointment and payment of ghost employees . The issue for determination by
the arbitrator was whether it had been proved that the respondents had been
involved in the commission of such misconduct and whether their dismissals
were fair. In considering as much t he arbitrator found that the appellant’s case
was “ highly improbable and not convincing at all ” on the basis that even if the
respondents’ credentials were used , this did not prove that they had
committed the fraud.
[16] It is trite that a party alleging a defect in arbitration proceedings may seek the
review of an award on the grounds set out in s 145(2) of the Labour Relations
Act6 (LRA) , namely misconduct committed in relation to the duties of the
arbitrator; a gross irregularity in the conduct of the arbitration proceedings; the
exceeding of powers; or improperly obtaining an award. In Sidumo and
Another v Rustenburg Platinum Mines Ltd and Others,7 these grounds were
found to be suffused by the standard of reasonableness, with it for the review
court to determine whether the decision reached by the arbitrator was one
that a reasonable decision -maker could not reach.8
[17] In Herholdt v Nedbank (Congress of SA Trade Unions as Amicus Curiae)9, it
was stated that :
‘For a defect in the conduct of the proceedings to amount to a gross
irregularity as contemplated by Section 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 a 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 facts,
are not in and of themselves sufficient for an award to be set aside, but are
6 Act 66 of 1995 , as amended.
7 [2007] ZACC 22; 2008 (2) SA 24 (CC) at paras 105 and 110.
8 Ibid a t para 110.
9 [2013] ZASCA 97; 2013 (6) SA 224 (SCA) (Herholdt ).
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only of any consequence if their effect is to render the outcome
unreasonable. ’10
[18] This Court in Head of Department of Education v Mofokeng and Others11,
noted that a material error or irregularity may have a “distorting effect ” on the
decision arrived at such as that it may lead to an unreasonable result, in the
sense that but for an error or irregularity , a different outcome would have
resulted .12 Errors of fact or law may therefore not be enough to vitiate an
award unless it is established that the arbitrator undertook the wrong enquiry,
in the wrong manner or arrived at an unreasonable result.13
[19] In this matter, the arbitrator fail ed to have regard to all of the evidence before
him, including that which was not disputed, and carefully weigh it up in the
required manner. It was a relevant consideration which required the careful
attention of the arbitrator that the respondents failed to tender any explanation
as to how Mr Mothlang could have repeatedly obtained their updated
passwords over a period of almost two years. Their failure to proffer any such
explanation was glaring, more so given the undisputed evidence that they had
repeatedly and regularly reset their own passwords. The appellant’s 2013
policy expressly required that passwords should not be shared, with the user
employee responsible for all activity performed using their persal credentials.
It was reasonable to assume that, given t he positions in which they were
employed , the respondents were aware of, or ought reasonably to have been
aware, of the rule set out in this policy ; and that they would have known, or
ought reasonably to have known, that the purpose of a password is to protect
important information and to safeguard their own user and password
credentials. Without any proper explanation provided by the respondents, an
assessment of the probabilities supported a conclusion that Mr Mothlang
would not, without the involvement of the respondent s, have obtain ed their
updated passwords repeatedly every month over a period of two years in
order to then commit the fraud .
10 Ibid a t para 25.
11 [2014] ZALAC 50; (2015) 36 ILJ 2802 (LAC).
12 Ibid at para 33.
13 Herholdt supra at para s 21 - 25.
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[20] The fact that the misconduct was detailed in the charge sheet as having
occurred at the respondents’ workstations when the evidence was that the
payments were not made from their workstations is of no moment. This is so
since it is patently clear that an employee’s persal credentials could be used
at any location. The finding of the arbitrator, supported by the Labour Court ,
that the employees had a valid alibi in that they are based in Krugersdorp and
that the appellant did not produce evidence that placed them at the offices on
the days that acts were committed was consequently without foundation and
unsupported by the fact s. Furthermore, the steps taken by the respondents
apparently to investigate the fraud committed did not alter the fact that on a
proper consideration of the evidence before the arbitrator, the probabilities
supported a finding that the respondents had been involved in the commission
of the misconduct of which they were charged.
[21] In his approach to the arbitration it is apparent that the arbitrator committed a
material misdirection in preferring certain aspects of the evidence over others ,
without having regard to whether such evidence was plausible or tenable and
in the absence of a proper assessment of the probabilities. This had a clear
distorting effect on the outcome at arbitration . It prevented a fair a proper
determination of the issues from taking place and it caused the arbitrator to
reach a conclusion which was one that a reasonable arbitrator on the material
before them could not reach . It followed for these reasons that the award of
the arbitrator fell to be set aside on review.
[22] In its approach to the review application , the Labour Court erred in its
conclusion that the award of the arbitrator was reasonable. This when it was
apparent that the arbitrator’s failure to undertake a proper and careful analysis
of the evidence had had a distorting effect on the outcome at arbitration.
Despite its conclusion that the award was reasonable, the Court engaged in a
process more akin to an appeal than a review , finding that on the evidence
the respondents could not have been found guilty of the allegations against
them when they had not been shown to have been aware of the user 2013
policy . The Court disregarded the fact that , on their own version, the
respondents had not dispute d that they updated their passwords regularl y and
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had not den ied that passwords should be safeguarded to protect the integrity
and confidentiality of the system and prevent misuse . Since the conspectus of
evidence was not properly considered in the manner required, the decision of
the arbitrator fell outside of the ambit of reasonableness required and the
award therefore ought properly to be set aside on review . In finding differently
the Labour Court erred.
[23] For these reasons , the appeal must be upheld . The orders of the Labour
Court consequently fall to be set aside and the decision of the arbitrator set
aside and substituted with a finding that the dismissal s of the respondents
were substantively fair. Having regard to considerations of law and fairness,
there is no reason why an order of costs should be made in this matter.
The following order is therefore made:
Order
1. The appeal is reinstated and the late filing of the notice of appeal and
record of appeal are condoned.
2. The appeal is upheld with no order of costs.
3. The orders of the Labour Court are set aside and substituted as
follows:
‘1. The review application succeeds.
2. The award of the arbitrator is set aside with the dismissal of the
respondent employees found to be procedurally and
substantively fair.’
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SAVAGE ADJP
Nkutha -Nkontwana JA and Govindjee AJA agree.
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APPEARANCES:
FOR THE APPELLANT: E. Masombuka
Instructed by the State Attorney
FOR THE RESPONDENTS: L. M. Moloi and T A Modisane
Instructed by Luyanda Ngcani Inc.