Brief Summary

Labour Law — Unfair dismissal — Review of arbitration award — Employee dismissed for gross negligence, dishonesty, and misrepresentation regarding a lost laptop — Commissioner finding dismissal substantively unfair and ordering reinstatement with limited backpay — Court reviewing the award, finding inconsistencies in the Commissioner's reasoning and contradictions in the employee's testimony, ultimately setting aside the award and ruling that the dismissal was fair.

Comprehensive Summary

Summary of Judgment

1. Introduction

This matter concerned an application in the Labour Court to review and set aside an arbitration award issued under the auspices of the South African Local Government Bargaining Council. The review was pursued in terms of section 145 of the Labour Relations Act 66 of 1995 (as amended).

The Applicant was Mnquma Local Municipality. The First Respondent was SAMWU obo Thandi Constance Hlazo-Bangani (the employee). The Second Respondent was Mxolisi Alex Nozigqwaba N.O. (the arbitrating commissioner). The Third Respondent was the South African Local Government Bargaining Council.

The arbitration award (under case number ECD122023, dated 18 April 2023) had found that Ms Hlazo-Bangani’s dismissal was substantively unfair, and it ordered reinstatement with backpay limited to two months’ salary. The commissioner had also found that the dismissal was not procedurally unfair. The Municipality then approached the Labour Court seeking to have the award reviewed and set aside and, primarily, substituted with an outcome that the dismissal was fair (or alternatively remitted for a hearing de novo).

The general subject-matter of the dispute was whether the dismissal of a senior municipal employee—arising from the disappearance of a municipal laptop and related allegations of dishonesty and misrepresentation, together with other misconduct charges—was fair, and whether the arbitration award exonerating her on key charges was reviewably defective.

2. Material Facts

Ms Hlazo-Bangani was employed by the Municipality as Manager of the Legal Services Department in the office of the Municipal Manager. She commenced employment on 2 November 2015 and was dismissed on 14 December 2021 following a disciplinary hearing in which she faced five misconduct charges.

It was common cause that Ms Hlazo-Bangani had been issued with a municipal laptop for work purposes. On Friday, 9 July 2021, she drove to work, printed documents, and later stopped at Ibika garage on her way home. On arrival at home, it was discovered that the laptop was not in her vehicle.

On Monday, 12 July 2021, she and an intern searched her office for the laptop before the cleaners arrived, but it was not found. Later that day she went to Msobomvu Police Station to report the laptop stolen. The police informed her to first view the garage CCTV footage and then return to depose to a statement. It was common cause that she viewed the CCTV footage at the garage on 12 July 2021 and then signed a sworn statement at the police station on the same day.

In her sworn statement, she recorded (in substance) that her work laptop was in the boot of her vehicle; that when she arrived home she noticed it had been stolen from the boot; and that she suspected it had been stolen at the garage.

On 14 July 2021, she prepared and sent a memorandum to the Municipality’s Director of Corporate Services with the subject “REPORT FOR STOLEN LAPTOP & OTHER DEVICES FOR WORK PURPOSES.” The memorandum stated that on or about Monday, 12 July 2021, she had reported an incident of theft involving municipal assets (including an HP laptop, 3G device, hard drive, USBs and portable statutes), that a docket was opened at Msobomvu Police Station under a CAS number, and that a statement was attached (although it was only sent subsequently).

On 24 August 2021, she was issued with a notice to attend a disciplinary hearing, initially on three charges (gross negligence, dishonesty, misrepresentation), scheduled for 8 September 2021. On the same day she applied for annual leave for 30 August 2021 to 7 September 2021. It was not disputed that she did not receive approval for the leave requested, but she nonetheless did not work from 30 August 2021 and attended medical consultations thereafter. It was also material that she did not submit an application for sick leave in respect of her absences.

It was common cause that an email was sent to her private email address (in line with what was described as custom and practice at the time), instructing her to attend a meeting at 08h30 on 30 August 2021, but it was disputed whether she received that email. It was, however, common cause that she did not attend the meeting, and this contributed to additional charges.

At the disciplinary hearing, she faced five charges: gross negligence in losing the laptop (with reference to section 78(1) of the MFMA and an alleged loss of approximately R30 100 inclusive of accessories), dishonesty regarding her police statement in circumstances where the CCTV footage allegedly showed no theft, misrepresentation in reporting that the laptop had been stolen when the CCTV allegedly showed no evidence of such crime, gross insubordination for failing to attend instructed meetings, and gross misconduct for unauthorised absence/leave.

Ms Hlazo-Bangani did not participate in the disciplinary enquiry after preliminary points raised by her representative were dismissed. She was found guilty on all charges and dismissed. Her internal appeal was dismissed. The Municipality deducted the value of the lost assets from her final payslips after dismissal (in two parts).

In arbitration, the commissioner found the dismissal procedurally fair. He found her guilty of charges 1 and 5 (gross negligence and unauthorised leave/absence) but held these did not justify dismissal because the Municipality’s policy provided for repayment and warnings as remedies. He found her not guilty on charges 2, 3 and 4 (dishonesty, misrepresentation, and gross insubordination). On review, the Municipality’s principal focus was on the commissioner’s treatment of charges 2 and 3 (dishonesty and misrepresentation).

A further set of facts relied upon by the Labour Court concerned the nature of Ms Hlazo-Bangani’s evidence at arbitration. The Court recorded that in cross-examination of the Municipality’s witnesses it was put that her sworn statement was correct, but during her own testimony she introduced additional propositions and versions not contained in her statement and not put to the Municipality’s witnesses. The Court highlighted contradictions and concessions, including that the CCTV footage was unclear, that the laptop could have been lost or stolen elsewhere, that the laptop might have been behind the seat rather than in the boot, and that she was not sure what had happened to the laptop (lost, misplaced, or stolen). The Court also noted that she did not mention in her statement that she had viewed the CCTV footage, despite the garage manager maintaining that the footage confirmed no incident at the garage.

3. Legal Issues

The central legal questions were whether the arbitration award was reviewable and liable to be set aside under section 145 of the LRA, particularly in relation to the commissioner’s findings that Ms Hlazo-Bangani was not guilty of dishonesty and misrepresentation (charges 2 and 3), and whether those findings (and the ultimate remedy of reinstatement) were sustainable on the material before the commissioner.

The dispute before the Labour Court was principally concerned with the application of law to fact within the statutory review framework, including whether the commissioner committed reviewable irregularities by failing to consider material evidence, failing to engage with contradictions and concessions, and reaching a conclusion that did not fall within the bands of reasonableness contemplated by the review test applied by the Court.

A further issue was remedial: if the award was reviewable, whether the Labour Court should substitute the outcome with a finding that the dismissal was substantively fair (as sought by the Municipality), or remit the matter for re-arbitration.

4. Court’s Reasoning

The Court approached the matter as a section 145 review and assessed whether the commissioner’s award was reasonably connected to the evidence and issues before him. The Court recorded that the commissioner recognised the general principle that the employment relationship is grounded in trust, that employees are expected to act honestly in dealing with their employer’s affairs, and that dishonest conduct involves moral turpitude and may take the form of withholding information or making false statements or misrepresentations intended to deceive the employer.

Notwithstanding those acknowledged principles, the Court held that the commissioner’s reasoning process was materially deficient in his assessment of the evidence on dishonesty and misrepresentation. The Court emphasised that the commissioner accepted Ms Hlazo-Bangani’s evidence-in-chief without dealing with contradictory aspects that emerged in cross-examination, without engaging the fact that her arbitration testimony diverged materially from the version put to the Municipality’s witnesses, and without reasoning through concessions made during cross-examination. The Court treated these omissions as significant because they related directly to whether her account to the police and to the Municipality was truthful and complete, and whether she had misled the Municipality regarding the circumstances of the loss.

The Court highlighted that her sworn police statement presented a relatively firm account: the laptop was in the boot; it was stolen from the boot; she suspected the theft occurred at the garage. However, her later evidence was that she was not sure whether the laptop was stolen, lost, or misplaced; she could not recall with certainty whether it was in the boot or behind the seat; and she introduced the possibility that it could have gone missing elsewhere or in another manner. The Court considered it material that she and the intern searched the office, which the Court regarded as inconsistent with a firm assertion that the laptop had been stolen from the boot at the garage. The Court also considered it significant that she did not mention in her statement that she had viewed CCTV footage, despite having done so, and despite the garage manager’s evidence that the footage showed no incident involving her vehicle.

In addition, the Court addressed the Municipality’s contention that the commissioner had effectively created a defence by stating in the award that the Municipality did not further engage Ms Hlazo-Bangani in an investigation before charging her. The Court held there was no evidence that the Municipality bore such a duty on the facts as presented. The Court emphasised that Ms Hlazo-Bangani had provided the sworn statement to assist the Municipality in assessing the circumstances of the loss and whether her conduct was negligent or intentional, and that she did not provide an updated statement or indicate a desire to correct or supplement the account.

The Court placed weight on Ms Hlazo-Bangani’s position and professional standing. It noted that she was the Municipality’s Manager of Legal Services and an admitted advocate, which the Court regarded as giving rise to a heightened duty to maintain honesty and to disclose relevant information to her employer in relation to the loss of municipal assets.

Against that context, the Court concluded that the commissioner’s finding that she was not guilty of dishonesty and misrepresentation was inconsistent with the evidence, including her own admissions of inaccuracies and omissions in her statement. The Court accepted that the misrepresentation lay in misleading the employer into believing that the laptop was placed in the boot and stolen at Ibika garage, while her evidence suggested the laptop could have been behind the seat and visible, and that it might not have been stolen at all. The Court further reasoned that maintaining the version of theft from the boot would avoid a finding of negligence that could arise if the laptop had been left in open sight; the Court recorded that Ms Hlazo-Bangani admitted warnings had been circulated about leaving valuables in open sight.

In the Court’s assessment, these deficiencies meant the award was not reasonably connected to the outcome reached. The Court stated that the award did not fall within the bands of reasonableness, and it followed that the commissioner’s award was reviewable and should be set aside. On the merits as evaluated by the Court, it considered that the dismissal should be upheld.

On costs, the Court exercised its discretion and declined to order costs against the First Respondent, reasoning that it was not blameworthy for attempting to defend an award of reinstatement made in its favour.

5. Outcome and Relief

The Labour Court reviewed and set aside the arbitration award issued under case number ECD122023 dated 18 April 2023.

The Court substituted the award with an order that Ms Hlazo-Bangani’s dismissal was procedurally and substantively fair.

The Court made no order as to costs.

Cases Cited

No cases were cited in the judgment.

Legislation Cited

Labour Relations Act 66 of 1995 (as amended), section 145.

Local Government: Municipal Finance Management Act 56 of 2003, section 78(1).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Labour Court held that the arbitration award was reviewable under section 145 of the Labour Relations Act because the commissioner failed to engage with material evidence, including contradictions and concessions in Ms Hlazo-Bangani’s testimony and discrepancies between her sworn statement, the version put to the Municipality’s witnesses, and her later evidence. On that basis, the Court found the award did not fall within the bands of reasonableness.

The Court further held, on the evidence it considered material, that Ms Hlazo-Bangani had misrepresented the circumstances of the loss of the municipal laptop to her employer and that the dismissal should be upheld as fair. The arbitration award was therefore set aside and replaced with a finding that the dismissal was procedurally and substantively fair, with no costs order.

LEGAL PRINCIPLES

The Court applied the principle that an arbitration award may be reviewed and set aside under section 145 of the Labour Relations Act where the commissioner’s decision-making process and outcome are not reasonably connected to the material before the commissioner, assessed by reference to whether the result falls within the bands of reasonableness.

The judgment reaffirmed the principle that the employment relationship is founded on trust, and that dishonesty or misrepresentation—including through false statements or omissions intended to mislead—undermines the trust relationship and may justify dismissal, particularly where the employee occupies a senior position requiring heightened honesty in dealings with the employer.

The Court applied the principle that a commissioner must properly evaluate and take account of material evidence, including contradictions, concessions, and material discrepancies between versions presented. A failure to do so may render the award reviewable where it leads to an unreasonable outcome on issues central to the dispute.

The Court also applied the remedial principle that, where appropriate, the Labour Court may substitute an arbitration award with the court’s own determination of fairness, rather than remit the matter, when the record permits a final determination.

Mnquma Local Municipality v SAMWU obo Hlazo-Bangani and Others (PR103/23) [2026] ZALCPE 1 (19 January 2026)