THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not Reportable
Case No: JR1014/18
In the matter between:
JDG (PTY) LTD t/a HI FI CORPORATION Applicant
and
LARRY SHEAR First Respondent
COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION Second Respondent
MIRRIAM MALESHANE MSOMI Third Respondent
Heard: 20 August 2025
Delivered: 29 August 2025
This judgment was handed down electronically by circulation to the parties’ legal
representatives by email . The date for handing down judgment is deemed to be
29 August 2025.
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JUDGMENT
DE KOCK, AJ
Introduction
[1] This matter came before the court as an application to review the arbitration
award issued by the third respondent. The applicant raised various grounds of review
alleging that the first respondent committed irregularities and arrived at a decision that a
reasonable decision maker could not reach. The outcome of the award is that the third
respondent’s dismissal was substantively unfair, and the applicant was ordered to
reinstate the third respondent with no backpay.
Background
[2] The third respondent was employed as the sales manager of the applicant’s
branch in Jabulani Mall. On 22 November 2017 the third respondent took petty cash
money, on two separate occasions, from the applicant to purchase stationery for a
promotion run by the applicant. The third respondent purchased the stationery but also
bought two chocolates for her private consumption. She did not disclose this purchase
to the branch manager.
[3] A week after the above purchase the branch manager made a reconciliation and
noticed the shortage in the petty cash account. He approached the third respondent
who claimed that she did not know how to repay the money to the petty cash account.
The third respondent was brought before a disciplinary hearing, and she was found
guilty. The chairperson recommended dismissal, which was implemented.
Arbitration award
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[4] The first respondent, after surveying the evidence and argument , finds that if the
third respondent was intent on concealing the purchase, she would not have submitted
the till slips to the applicant which provided evidence of the two purchases. He found
that the till slips are there for everybody to see. The first respondent notes that he
appreciates that the third respondent was not authorised to purchase chocolates but
accepts her explanation that she was hungry and that she did not have an opportunity
to have lunch. The first respondent finds that the third respondent has a clean
disciplinary record, and, in his view, there are sufficient mitigating factors to conclude
that dismissal was an inappropriate and harsh sanction. He also finds that he does not
believe that the applicant has proved that the third respondent can no longer be trusted.
She immediately admitted to purchasing the chocolates, albeit when confronted, and
offered to repay the money. The first respondent also finds that the third respondent
was not charged with dishonesty per se, but rather with the misuse of petty cash
money. The first respondent finds that it is his intention to reinstate the third respondent,
but as she infringed the applicant’s petty cash policy, and as she did not bring the
matter to the immediate attention of the applicant, he does not order the applicant to
pay any backpay.
Review Test
[5] In Sidumo & another v Rustenburg Platinum Mines Ltd & others,1 the Court held
that “the reasonableness standard should now suffuse section 145 of the LRA”, and that
the threshold test for the reasonableness of an award was: “ … Is the decision reached
by the commissioner one that a reasonable decision maker could not reach?... ”2. In
Herholdt v Nedbank Ltd (Congress of SA Trade Unions as Amicus Curiae) 3 the Court
applied this reasonableness consideration as follows:
‘… A result will only be unreasonable if it is one that a reasonable arbitrator could
‘… 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 the particular facts, are not
1 (2007) 28 ILJ 2405 (CC); 2008 (2) SA 24 (CC).
2 Id at para 110.
3 (2013) 34 ILJ 2795 (SCA); [2013] 11 BLLR 1074 (SCA) at para 25.
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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 unreasonable.’
[6] This test has thus been applied as a two- stage review enquiry. Firstly, the review
applicant must establish that there exists a failure or error on the part of the arbitrator. If
this cannot be shown to exist, that is the end of the matter. Secondly, if this failure or
error is shown to exist, the review applicant must then further show that the outcome
arrived at by the arbitrator was unreasonable. If the outcome arrived at is nonetheless
reasonable, despite the error or failure, that is equally the end of the review application.
In short, in order for the review to succeed, the error or failure must affect the
reasonableness of the outcome to the extent of rendering it unreasonable.
[7] Further, the reasonableness consideration envisages a determination, based on
all the evidence and issues before the arbitrator, as to whether the outcome of the
arbitrator arrived at can nonetheless be sustained as a reasonable outcome, even if it
may be for different reasons or on different grounds.
4 This necessitates a consideration
by the review court of the entire record of the proceedings before the arbitrator, as well
as the issues raised by the parties before the arbitrator, with the view to establish
whether this material can, or cannot, sustain the outcome arrived at by the arbitrator. In
the end, it would only be if the outcome arrived by the arbitrator cannot be sustained on
any grounds, based on the material, and the irregularity, failure or error concerned is the
only basis to sustain the outcome the arbitrator arrived at, then the review application
would succeed.
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[8] The court w ill now proceed to consider the review application by the applicant
against the above principles and the test applicable to review applications.
Grounds of review
4 Fidelity at para 102.
Grounds of review
4 Fidelity at para 102.
5 See Campbell Scientific Africa (Pty) Ltd v Simmers & others (2016) 37 ILJ 116 (LAC); [2016] 1 BLLR 1
(LAC) at para 32; Anglo Platinum (Pty) Ltd (Bafokeng Rasemone Mine) v De Beer & others (2015) 36 ILJ
1453 (LAC); [2015] 4 BLLR 394 (LAC) at para 12.
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[9] The essence of the applicant’s grounds for review is that the first respondent
failed to appreciate that the third respondent made herself guilty of an offence which
falls under the scope of dishonesty. The uncontested evidence was that the third
respondent utlised company funds to purchase chocolates for herself and she failed to
disclose this to anyone. It is alleged that the first respondent reached an unreasonable
conclusion by determining that because the third respondent returned the slips, she was
innocent of concealing the purchase.
[10] The applicant states that the mere fact that the third respondent did not tell
anyone about purchasing the chocolate is an act of concealment. If the slips were not
eventually checked the fact that she purchased items for herself using company funds
would never have been discovered. The first respondent therefore completely
misunderstood the evidence which leads to a conclusion that could not have been
reached by another.
[11] The first respondent committed a further irregularity by not considering the
applicant’s evidence of the misconduct and the fact that the trust relationship is
completely destroyed. The evidence of Mr. Gaza, who testified to the trust relationship,
was never disputed, as the third respondent did not cross -examine him. The first
respondent furthermore did not consider the third respondent’s own admission that she
was dishonest. It was an unreasonable conclusion to reach that the third respondent
had some sort of justification for using company funds and then not to disclose that she
had done so.
Evaluation of the grounds of review
[12] The first issue that this court must determine is whether the third respondent’s
conduct of using petty cash, on two occasions and on each occasion having bought
herself chocolates, amounts to an act of dishonesty. This must be considered in
conjunction with the undisputed fact that when she returned to the shop, on both
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occasions, she failed to bring the purchases of two chocolates, on two different
occasions on the same day, to the attention of management. The third respondent
returned and submitted the receipts for the purchases, which included the purchasing of
two chocolates for her own use.
[13] The first respondent concluded that the third respondent was not charged with
dishonesty but rather with misuse of petty cash money. It appears therefore that the first
respondent did not accept the evidence that the third respondent’s actions were
dishonest. If this was the conclusion, and this is not clearly stated in the award but
inferred from the reasons of his finding, the first respondent’s finding is clearly wrong. It
is beyond this court’s understanding that the first respondent can find that an ac t of
using petty cash monies, for an employee’s own personal use, did not constitute an act
of dishonesty. The undisputed evidence was that she did not seek permission to use
petty cash money for her own use and neither did she declare the fact that she used
petty cash money when she returned to the workplace on both occasions after she
purchased chocolates.
[14] This court has no hesitation whatsoever to find that the act of using petty cash
money, without permission, constitutes an act of dishonesty. It is immaterial whether the
third respondent was charged with misuse of petty cash and not with dishonesty , as the
use of petty cash without permission is an act of dishonesty. The third respondent was
not charged with failure to comply with policies or procedures but with using petty cash
monies. The first respondent’s finding therefore is a finding that a reasonabl e decision-
maker could not reach.
[15] The act of dishonesty by using petty cash monies is exacerbated by the fact that
the third respondent, on her return to the workplace, failed to report that she used petty
cash monies for her own personal use. She simply submitted the slips in the hope that
cash monies for her own personal use. She simply submitted the slips in the hope that
the contents of the slips would not be looked at and that her use of petty cash monies
for personal use would not be discovered. The third respondent’s actions, although still
dishonest, could have been mitigated had she reported the fact that she used petty
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cash monies for her own personal use and offered to repay it immediately. However, the
fact that she twice went to the shops and on both occasions used petty cash for her own
use is indicative of the dishonest behaviour of the third respondent.
[16] This court has serious difficulties with the first respondent’s finding further that, if
the third respondent was intent on concealing the purchase, she would not have
submitted the till slips for everyone to see. This conclusion is completely unreasonable
and makes absolutely no sense at all. The third respondent had no option but to submit
the till slips to the applicant, as she used petty cash monies which had to be accounted
for. By not submitting the slips, it was inevitable that the shortage in the petty cash
would be discovered. By submitting the slips, without disclosing that she used money to
buy chocolates, it would have required someone to examine the contents of the slip
before realising that the third respondent used petty cash to purchase chocolates.
Insofar as this was a factor considered by the first respondent to support his finding, it is
illogical, unreasonable and clearly wrong.
[17] This court also has a serious issue with the first respondent’s finding that,
although he appreciates that the third respondent was not authorised to purchase
chocolates, he however accepts the third respondent’s explanation that she was hungry
and that she did not have an opportunity to have lunch. It is difficult to comprehend how
a reasonable decision-maker can accept such evidence. Based on the first respondent’s
reasoning, it is fine for an employee to use their employer’s money, without permission,
if they are hungry and did not have an opportunity to have lunch. It would lead to
anarchy in an employment context if this was to be allowed as a reason to explain an
act of dishonesty. The first respondent clearly did not apply his mind before arriving at
such a untenable conclusion.
such a untenable conclusion.
[18] This court also has serious concerns with the first respondent’s finding that he
does not believe that the applicant has proved that the third respondent can no longer
be trusted. Mr. Gaza’s undisputed, and unchallenged evidence was that the third
respondent committed a dishonest act, and she only disclosed the purchases when
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confronted a week later. He testified that he would be unable to work with the third
respondent. The third respondent occupied the position of senior sales manager, and
she was the custodian of policies and procedures and must lead by example, as she
has staff reporting to her. The first respondent’s conclusion is not supported by the
evidence, and he simply ignored Mr. Gaza’s evidence regarding the trust relationship
having been broken. In fact, the first respondent does not even address the senior
position occupied by the third respondent in his conclusion that the applicant failed to
prove that the third respondent can no longer be trusted.
[19] The first respondent failed to properly consider the evidence presented to him in
arriving at the conclusion that the third respondent’s dismissal was substantively unfair.
This finding is a very good example of instances where this court must interfere
because the finding is one that no reasonable decision- maker could reach. The findings
are illogical and completely unreasonable.
[20] The Labour Appeal Court in Nedcor Bank Ltd v Frank & Others
6 held that
dishonesty entails a lack of integrity or straightforwardness and, in part icular, a
willingness to steal, cheat, lie or act fraudulently 7. The court referred to the Canadian
case of Lynch & Co v United States Fidelity & Fidelity & Guaranty Co where the
following was said:
“Dishonest is normally used to describe an act where there has been some intent
to deceive to deceive or cheat. To use it to describe acts which are merely
reckless, disobedient or foolish is not in accordance with popular usage of the
dictionary meaning.”
[21] The third respondent’s actions were not merely reckless, disobedient or foolish.
The third respondent was aware that she is not allowed to use petty cash for her own
use, and she attempted to conceal her dishonesty by submitting the slips, without
6 (DA4/01) [2002] ZALAC 11; [2002] 7 BLLR 600 (LAC); (2002) 23 ILJ 1243 (LAC) (8 May 2002).
6 (DA4/01) [2002] ZALAC 11; [2002] 7 BLLR 600 (LAC); (2002) 23 ILJ 1243 (LAC) (8 May 2002).
7 Id at para 14.
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disclosing what she did, in the hope that no one would look at the slips to notice her
dishonest use of petty cash money.
[22] The Labour Appeal Court in Anglo American Farms t/a Boschendal Restaurant v
Komjwayo8 the following was said:
“It seems to me that the relationship between such an employer and such an
employee is of such a nature that, for it to be healthy, the employer must, of
necessity, be confident that he can trust the employee not to steal his stock -in-
trade. If that confidence is destroyed or substantially diminished by the realisation
that the employee is a thief, the continuation of their relationship can be expected
to become intolerable, at least for the employer.”
[23] In the matter before this court, a senior sales manager used petty cash money
belonging to her employer to purchase chocolates on two separate occasions on the
same day without disclosing same until confronted a week later. This is act of
dishonesty that destroyed the trust relationship between an employer and an employee.
The value of the chocolates may not have been high, but this is irrelevant in the context
of this case. What is relevant, and which the first respondent compl etely overlooked, is
that the third respondent’s conduct destroyed the trust that the applicant placed in her.
The fact that the third respondent had a clean disciplinary record, that she was hungry
and that she did not have time to have lunch can by no stretch of the imagination be
held to have constituted sufficient mitigating factors to excuse the acts of dishonesty.
[24] This court is aware of the requirement that, even in cases where there is an act
of dishonesty, each case must be determined on its own merits and that in exceptional
cases years of service, the amount in question, and a clean disciplinary record may
have an impact on the appropriateness of the sanction of dismissal. This, however,
would be in exceptional cases and the case before this court is not such an exceptional
would be in exceptional cases and the case before this court is not such an exceptional
case. In Shoprite Checkers (Pty) Ltd v Commission for Conciliation, Mediation and
8 (1992) 13 ILJ 573 (LAC)
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Arbitration and Others 9 the Labour Appeal Court accepted that, despite the employee
having a clean disciplinary record and having worked for the employer for nine years,
the acts of dishonesty led to the trust relationship having broken down and the dismissal
had been fair. This court has no hesitation in finding that, because of the third
respondent’s acts of dishonesty, the trust relationship had broken down completely, as
per the unchallenged evidence of Mr. Gaza.
Costs
[25] In terms of the provisions of section 162(1) of the LRA, this court has wide
discretion when it comes to the issue of costs. The court is mindful of the dictum of the
Constitutional Court in Zungu v Premier of the Province of Kwa- Zulu Natal and Others
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when it comes to the issue of costs in employment disputes. This court is of the view
that in this matter where the third respondent defended an award that was granted in
her favour, unreasonably so, it will not be in the interest of law and fairness to saddle
her with a cost order.
[26] In the premises, the following order is made:
Order
1. The application for the arbitration award to be reviewed and set aside is
granted. The t hird respondent’s dismissal is found to have been substantively
fair.
2. There is no order as to costs.
C. de Kock
Acting Judge of the Labour Court of South Africa
Appearances:
9 (JA 08/2004) [2008] ZALAC 9; [2008] 9 BLLR 838 (LAC); (2008) 29 ILJ 2581 (LAC) (20 June 2008).
10 (2018) 39 ILJ 523 (CC).
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For the Applicant: A J Postuma from Snyman Attorneys
For the Third Respondent: L Seapela
Instructed by: Wits Law Clinic