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[2026] ZALCCT 20
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Kleinsmith v Commission for Conciliation Mediation and Arbitration and Others (C03/2025) [2026] ZALCCT 20 (10 February 2026)
THE
LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
Not Reportable
Case
No:
C03/2025
In
the matter between:
RONALDO
GIOVANNI KLEINSMITH
Applicant
and
COMMISSION FOR
CONCILIATION
MEDIATION
& ARBITRATION
First
Respondent
ELRIDGE
EDWARDS N.O
Second Respondent
ABSA
BANK LTD
Third
Respondent
Heard
:
4 February 2026
Delivered
:
10 February 2026
JUDGMENT
JACOBS AJ
Introduction
[1]
This is an opposed review application.
[2]
The Applicant seeks an order:
2.1
Reviewing and correcting and/or setting aside the arbitration award
issued by the Second
Respondent under CCMA case number WECT20660-23
on 27 November 2024;
2.2
Alternatively, remitting the dispute to the First Respondent for an
arbitration
de novo
before an arbitrator other than the Second
Respondent;
2.3
Directing the further conduct of proceedings;
2.4
Costs; and
2.5
Further and/or alternative relief.
Historical
context
[3]
The history of the matter is common cause.
[4]
The Applicant, Mr Kleinsmith, was first employed by the Third
Respondent on 1 January 2008 as a sales consultant. After
completing
certain qualifications and qualifying for certain promotions, Mr
Kleinsmith occupied the position of Private Wealth
Banker in July
2021 when he was retrenched.
[5]
In December 2022, Mr Kleinsmith was again employed as Private Wealth
Banker. The employment contract concluded between
the parties is
dated 8 November 2022.
[6]
On 7 November 2023, Mr Kleinsmith was notified of a scheduled
disciplinary hearing. The verbatim charges were:
6.1
Gross misconduct in that you breached company policy and procedures
when failed to declare
an OBA [Outside Business Affiliation] for
Opulence Advice and Consulting (Pty) Ltd.
6.2
Gross misconduct in that you breached company policy and procedures
made use of an Absa
unapproved Introducer.
6.3
Gross misconduct in that you breached company policy and procedures
when it was discovered
that you divulged client [Mr A Petersen and/or
Mr Jantjes] private, personal and/or confidential information to a
third party.
[7]
The first charge referred to Mr Kleinsmith’s apparent failure
to disclose his business interests in Opulence Advice
and Consulting
(Pty) Ltd (Opulence) upon his appointment in December 2022. The
second and third charges related to incidents that
transpired in or
about March to April 2014.
[8]
Mr Kleinsmith was found guilty of all three charges and was dismissed
on 8 December 2023.
[9]
Mr Kleinsmith referred an unfair dismissal dispute to the CCMA, and
the matter served before the Second Respondent (the
Commissioner) on
9 July and 5, 6 and 7 November 2024.
[10]
The arbitration award which is the subject of this review
application, was issued on 27 November 2024. In his award,
the
Commissioner found the dismissal of Mr Kleinsmith to have been fair.
The
grounds for review
[11]
The Applicant listed six grounds for review.
11.1 It was
submitted that the Commissioner’s finding that the Applicant’s
dismissal was substantively fair,
was not a finding that a reasonable
decision-maker could make, because the decision was not supported by
the evidence and the decision
was based on incorrect references to
the evidence;
11.2 The
Commissioner’s analysis of evidence relating to the first
charge was lacking in that the considerations
of evidence and the
finding were not
ad idem
;
11.3 Charges
2 and 3 relate to events in 2014, and the long delay was not
considered by the Commissioner;
11.4 The
manner in which the Commissioner dealt with Mr Engelbrecht’s
apparent inconsistent testimony;
11.5 The
Commissioner’s finding that Mr Kleinsmith was dishonest, was
not supported by evidence; and
11.6 The
Commissioner erred in his evaluation of the status of an individual
(Felix) in relation to the second charge.
Jurisdictional
issue
[12]
Much of the material before court related to the second and third
charges at the disciplinary hearing.
[13]
The 11-year delay in Absa bringing the charges against Mr Kleinsmith,
was repeatedly referred to during proceedings before
the
Commissioner. The validity of disciplinary action after the
termination of the contract of employment which was in
operation
until 2021, was however raised for the first time in the
heads of argument filed on behalf of Mr Kleinsmith.
[14]
The court
is obliged to raise and determine jurisdictional questions
mero
motu,
[1]
irrespective whether the issue was pleaded or not. The parties’
representatives were accordingly requested to address the
court in
this regard.
[15]
The test on
review concerning a jurisdictional point, is whether the decision of
the arbitrator is reviewable on objectively justifiable
grounds. The
test is that of correctness, and not one of reasonableness.
[2]
[16]
If Absa lacked the right to act against Mr Kleinsmith in 2023 for
alleged misconduct in 2014 under an earlier employment
regime, the
second and third charges would be
ab initio
void, and
therefore not capable of being considered in a disciplinary hearing
or by the Commissioner at arbitration.
[17]
It is trite that prescription does not apply to disciplinary
misconduct. An employer is entitled to act in response to
apparent
misconduct when it is discovered, even if the misconduct occurred
some time in the past.
[18]
It is also
trite that, once an employment contract terminates, the employer
cannot continue with disciplinary proceedings against
an employee.
[3]
An employer will retain the right to discipline an employee only
until the requisite notice requirements have been satisfied.
[4]
It follows that an employer can also not institute disciplinary
proceedings against an employee after the employment contract
terminates.
[19]
Mr Kleinsmith’s appointment on 1 December 2022 brought with it
a new employment relationship, founded on a new
employment contract.
Mr Kleinsmith was required to comply with normal application
formalities, and a comprehensive agreement was
signed prior to
commencement of his employment.
[20]
In argument during the arbitration hearing, Absa argued that the
dismissal was fair because of Mr Kleinsmith’s
short service of
one year.
[21]
The rights derived from contract by the employer, which contract was
terminated in 2021, are not revived merely because
another contract
is concluded between the same parties 16 months later. The very
comprehensive agreement which came into effect
on 1 December 2022, at
par 13.1 thereof, determines that:
‘
This agreement
sets out the whole agreement between the parties relating to your
employment and supersedes all previous agreements
and representations
(whether oral or in writing) in connection with your employment.
’
[22]
Ms Makome,
for Absa, referred the court to the judgement in
Public
Investment Corporation v More and Others
,
[5]
and the ruling that a disciplinary hearing is held within the ambit
of the LRA. The court in
Public
Investment Corporation
,
[6]
pointed out that dismissal is not the enforcement of a contractual
right to terminate, but the exercising of a statutory right
to
terminate an employment relationship on the grounds recognised by the
LRA.
[23]
The labour law mechanism provided for to investigate a
prima
facie
case of alleged misconduct and its impact on a
continued employment relationship, can however not exist in absence
of an employment
contract, whether verbal or written. The statutory
right to terminate an employment relationship on the grounds
recognised by the
LRA, is founded in the employment contract.
[24]
It is common cause that Mr Kleinsmith was dismissed by Absa for
operational reasons in July 2021. This no-fault dismissal
terminated
the employment contract in operation at the time. The employer’s
right to institute disciplinary action against
Mr Kleinsmith for
alleged misconduct during the period of operation of that contract,
also terminated therewith.
[25]
The second and third charges against Mr Kleinsmith were for breaching
company policy and procedures under a different
employment regime. If
the alleged misconduct had a criminal aspect to it, or Absa had
suffered damages as result thereof, Absa
would not have been without
recourse to criminal and civil actions.
[26]
The second and third charges against Mr Kleinsmith are
ab initio
void and could not be considered in a disciplinary hearing or in
arbitration proceedings before the Commissioner.
The
first charge
[27]
Although charges 2 and 3 have become irrelevant to the dispute, the
Commissioner’s ruling concerning charge 1 still
requires
determination.
[28]
The first charge against Mr Kleinsmith related to his apparent
failure to declare an OBA for Opulence, a company which
he was a
director of.
[29]
Mr Kleinsmith seeks for the Commissioner’s ruling with
reference to change 1, to be reviewed and set aside on the
basis that
the sanction was too harsh.
Relevant
background to charge 1
[30]
Opulence was established in February 2022 with Mr Kleinsmith as
director. Opulence provided business leads to Absa during
the period
of May 2022 to December 2022 and would earn commission from Absa for
each referred home loan that was approved.
[31]
Opulence submitted invoices to Absa on 23 September 2022, 21 October
2022 and 17 January 2023. The last invoice was submitted
after Mr
Kleinsmith was again employed by Absa on 1 December 2022.
[32]
Mr Kleinsmith conceded that he knew that he had to declare his
interest in Opulence when his employment with Absa commenced
on 1
December 2022. During the pre-employment process, Mr Kleinsmith
declared his interest in Opulence when he submitted his application
for risk assessment on 17 September 2022. After his appointment, he
did not declare his OBA on C-Zone, a platform used to evaluate
and
manage risk and compliance relevant to potential conflicts of
interest for Absa-employees.
[33]
Although an invoice was submitted in January 2023, the work done by
Opulence to qualify for the commission claimed in
this invoice, was
undertaken 3 to 4 months earlier – prior to Mr Kleinsmith’s
employment on 1 December 2022. After
Mr Kleinsmith’s employment
on 1 December 2022, Opulence ceased doing work for Absa.
The
arbitration award
[34]
In concluding that Mr Kleinsmith was indeed guilty of charge 1, the
Commissioner found that Mr Kleinsmith omitted to
declare his OBA on
C-Zone because he knew he would forfeit the lucrative business
generated by Opulence.
[35]
The Commissioner found that, although Mr Kleinsmith had not declared
his OBA on C-Zone, he did disclose this fact in
his risk assessment
and Absa appointed him after assessing the potential risks.
[36]
The Commissioner pointed out that Absa had not shown what the impact
was of Mr Kleinsmith not reporting the OBA on C-Zone,
or why
rectifying this oversight was not possible.
[37]
The Commissioner also found that Absa did not allege or prove any
actual risk arising from the situation and concluded
that Absa’s
actions were too harsh.
[38]
The Commissioner further found that, despite not being charged with
dishonesty, Mr Kleinsmith had been dishonest. This
finding was
however made after the Commissioner had considered the second and
third charges and his finding that Kleinsmith was
guilty of those
charges.
Evaluation
[39]
The Commissioner’s finding that Mr Kleinsmith omitted declaring
the OBA on C-Zone because he would forfeit the
lucrative business
generated by Opulence, fails to account for the common cause fact
that Mr Kleinsmith and Opulence ceased working
for Absa when Mr
Kleinsmith was appointed in December 2022. The inference drawn by the
Commissioner is not based on evidence and
is not reasonable.
[40]
The Commissioner’s findings that, although Mr Kleinsmith had
not declared the OBA on C-Zone, he did disclose his
interests earlier
and Absa had appointed him after assessing the possible risks, are
reasonable.
[41]
The Commissioner’s findings that Absa had not shown what the
impact was of Mr Kleinsmith not reporting the OBA
on C-Zone, or why
rectifying this oversight was not possible, are also reasonable.
[42]
The Commissioner’s finding that Absa did not allege or prove
any actual risk arising from the situation and his
conclusion that
Absa’s actions were too harsh, are reasonable.
[43]
The record before court is comprehensive and the court is in a
position to make an appropriate order.
[44]
In the result, the following order is made:
Order
1.
The
arbitration award issued
by the Second Respondent under CCMA
case number WECT20660-23 on 27 November 2024 is reviewed and set
aside
.
2. The award is
substituted with the following order:
2.1.
The second and third charges against the Applicant
are declared
ab initio
void.
2.2.
The dismissal of the Applicant was substantively
unfair.
2.3.
The Third Respondent is ordered to reinstate the Applicant
retrospectively
from the date of his dismissal on the same terms and
conditions of employment that existed prior to his dismissal and
without any
loss of benefits.
2.4.
The Third Respondent is ordered to pay the Applicant backpay from the
date
of dismissal to the date on which he reports for duty, within 14
days of this order.
2.5.
The Applicant is issued with a written warning.
3.
There
is no order as to costs.
W
Jacobs
Acting
Judge of the Labour Court of South Africa
Appearances:
For the
Applicant:
- Adv D
Seale
Instructed
by:
- CK Attorneys
For the Third
Respondent: - Adv L Mukome
Instructed
by:
- Phatshoane Henney Attorneys
[1]
Couto v
Commission for Conciliation, Mediation and Arbitration and Others
(JR2442/23) [2025] ZALCJHB 24
[2]
Ukweza
Holdings (Pty) Ltd v Nyondo and Others
(PA2/19)
[2020] ZALAC 7
;
[2020] 6 BLLR 544
(LAC); (2020) 41 ILJ 1354
(LAC)
[3]
See eg
:
Toyota
SA Motors (Pty) v CCMA and Others
[3]
(2016) 37 ILJ 313 (CC);
[2016] 3 BLLR 217
(CC);
2016
(3) BCLR 374
(CC) at para 142;
Sihlali
v SA Broadcasting Corporation Ltd
(2010) 31 ILJ 1477 (LC)
[4]
See eg
:
Standard
Bank of South Africa Limited v Chiloane
(JA 85/18)
[2020] ZALAC 58
;
[2021] 4 BLLR 400
(LAC); (2021) 42 ILJ
863 (LAC)
[5]
(JR 2121/2022) [2025] ZALCJHB 159; (2025) 46 ILJ 1775 (LC) at par
[90] to [94]
[6]
Supra