IN THE LABOUR COURT OF SOUTH AFRICA
SITTING IN DURBAN
CASE NO D 947/98
In the matter between:
ELLERINES HOLDINGS Applicant
and
THE COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION 1st Respondent
PETERSEN SOSIBO 2nd Respondent
JAMES ROY SMITH 3rd Respondent
J U D G M E N T
ZONDO J :
Introduction
[1] James Roy Smith, the third respondent in this matter, had been
employed by Ellerines Holdings Limited, the applicant, as a manager for
about eight years as at January 1998. As at January 1998, he was the
branch manager of the applicant's branch at Kokstad, KwaZulu Natal. He
was dismissed from his position as the branch manager of the
Kokstad Branch on the 13th of January 1998. He was unhappy with that
decision and, therefore, referred a dispute of unfair dismissal to the
Commission for Conciliation, Mediation and Arbitration, ( “the
CCMA”), the first respondent in this matter, initially for conciliation
and, later, for arbitration.
[2] The second respondent was appointed to arbitrate the dismissal
dispute in terms of the Labour Relations Act of 1995, ( "the Act" ). He
issued an award to the effect that the third respondent's dismissal was
unfair and ordered that the applicant should pay the third respondent
compensation in the amount of R51 000,00.
[3] This is a review application which the applicant has brought in
terms of section 145(2) of the Act to have that award reviewed, set aside
and corrected. The application is opposed only by the third respondent.
The first and second respondents abide the decision of this Court.
Condonation Application
[4] In terms of section 145(1)(a) of the Act, a party to a dispute which
has been arbitrated and who alleges a defect in the arbitration
proceedings under the auspices of the CCMA “may apply” to the Labour
Court for an order setting aside the arbitration award
“(a) within six weeks of the date that the award was served on such
a party unless the alleged defect involves corruption,
(b) ....”
[5] In this matter the award was telefaxed to the applicant by the
second respondent, on the 2nd November 1998. In this case, argument
was presented on the basis that the period of six weeks from the date that
the applicant was served with the award ended on Friday the 11th of
December 1998. The applicant's review application was voluminous. It
consisted of up to 170 pages, including Annexures. The application
papers were served on the first respondent by personal delivery thereof
on the first respondent’s head office. With regard to service on the second
and third respondent, the applicant sought to serve the papers by
telefaxing them. Also the applicant intended filing the papers with the
registrar by telefaxing them. As the telefax machines of the registrar's
office in this court, of the second as well as of the third respondent, (the
third respondent's fax machine in this case being, in fact, a fax machine
belonging to a firm by whom he was employed as at about
11th December 1998), could not handle such a large volume of paper, a
special arrangement was made between the applicant's attorneys and each
one of the respondents.
[6] With regard to the filing of the review application with the registrar
of this Court, the applicant's attorneys arranged with the registrar that, in
the light of the review application consisting of so many pages and the
registrar’s fax machine being unable to handle such a large volume of
papers, only the notice of motion and the founding affidavit, excluding
annexures and supporting affidavits, would be telefaxed to the registrar
on the 11 th December 1998 and the complete application papers would
be filed on another day.
[7] Similar arrangements were made between the applicant's attorneys
and the second and third respondents. In respect of the
second respondent, that was effected on the 11th of December. In respect
of the third respondent, it was arranged at the instance of the
third respondent that the notice of motion and the founding affidavit be
faxed to the applicant's regional office, which was just across the road
from the firm where the third respondent was employed at the time and
he was going to get the notice of motion and founding affidavit from that
office.
[8] A complete set of the review application was, by arrangement
between the two parties, going to be delivered to the third respondent on
a later date. The applicant faxed the notice of motion and the founding
affidavit to its regional office as arranged with the third respondent.
Someone from the regional office of the applicant took the papers and
went across the road to give the papers to the third respondent, but had to
return with them as the third respondent could not be found. On Monday,
the 14th December 1998, a full set of the papers was delivered to the
third respondent.
[9] The third respondent has taken the point that, as in this case, the
last day of the six week period referred to in section 145, was the 11th of
December, the applicant was required to ensure that the review
application was not only filed with the registrar on the 11th December,
but also that the respondents were served with copies of such application
on that day. As it was only on the 14 th December that the third
respondent was served with the review application, that was out of time
and therefore, so the argument went, the applicant had not made its
application within the period of six weeks prescribed in sec 145 of the
Act. It was argued that it would not help the applicant on this point that
the review application was filed on time with the registrar because
“apply” as used in sec 145 means to file and serve and not to file only.
[10] The third respondent's counsel submitted that, if he was correct in
this submission, his further submission was that the applicant applied to
this Court outside the six week period. He went on to submit that this
Court has no power to condone a failure on the part of an applicant in a
review application under section 145 to so apply within the six week
period. He submitted that the rationale behind the legislature's decision
not to confer such power on the Court was to ensure finality in disputes
such as this one.
[11] For the proposition that the Court has no power to condone
such non compliance with the six week requirement, Mr Sarantos, who
appeared for the third respondent, relied on Queenstown Field Distributors
CC v Labuschagne NO and Others 1999(3) BLLR 268 (LC) , a judgment
of this Court given by my colleague, LANDMAN J. For the proposition
that the rationale behind the six week cut off point in section 145(i)(a) is
early finality of disputes, Mr Sarantos referred also to a judgment by my
Brother MLAMBO J in Pep Stores (Pty) Ltd v Laka NO and Others
1998(19) ILJ 1534 at 1540F , which was also quoted by LANDMAN J in
the Queenstown matter. I hasten to point out that MLAMBO J did not, in
the Pep Stores matter, hold that this Court has no power to condone
noncompliance with the six week requirement of section 145.
[12] As a result of his conclusion that this Court has no power to condone
noncompliance with the six week requirement, LANDMAN J dismissed the
review application in the Queenstown matter. Having stated that generally
there appears to be no inherent power residing in a Court to condone a
failure to comply with time limits laid down in a statute, LANDMAN J went
on to observe that there are sections in the Act where the legislature has
specifically conferred on the Court the power to condone non compliance
with time limits appearing in certain sections of the Act. In this regard he
referred to section 111(4), as well as section 191(2). He observed that in
section 145, the legislature had not made any provision giving the Court
power to condone non compliance with the time limit therein stated.
[13] LANDMAN J said the legislature was aware that the time limits it
fixed in the Act may be difficult for parties to comply with. He
concluded that the inevitable conclusion was that, in those sections, such
as section 145, where the legislature fixed time limits for the taking of
certain steps but made no provision in those sections conferring the
power on this Court to condone non compliance with them, the
legislature did not intend the Court to have the power to condone such
noncompliance.
[14] Section 158(1)(f) of the Act says this Court may: "subject to the
provisions of this Act, condone the late filing of any document with,
or the late referral of any dispute to, the Court." In this case, when I
drew the provisions of section 158(1)(f) to the attention of counsel for the
third respondent, who was relying on the decision in the Queenstown
matter, he submitted that the phrase, "subject to the provisions of this
Act", appearing therein, meant that where, as in section 145, there was
no provision giving this Court power to condone non compliance with a
timelimit in such a section, section 158(1)(f) would not confer such a
power.
[15] I pointed out to Counsel for the third respondent that the scenario
where section 158(1)(f) could quite clearly not apply to would be one
where, like in section 111(4) and 191(2), an express power to condone
noncompliance with a time limit had already been given to the Court. I
said the above because, in such a case, there was already a power to
condone conferred on the Court and there would be no need for
section 158(1)(f) for such a situation. I said the position must be that the
general provision to condone, such as the one provided for in
section 158(1)(f), must be meant for those situations in the Act where
timelimits are provided for the taking of certain steps but the sections are
themselves silent as to whether non compliance with them can be
condoned in the first place, and, if they can be condoned, on whom the
power to condone resides. When this was pointed out to the third
respondent's counsel, he indicated that he could not take the matter
further but stood by his submission. In my view, his submission cannot
be upheld.
[16] With great respect I am unable to agree with Landman J’s
conclusion that this Court has no power to condone noncompliance with
the six weeks requirement in sec 145 of the Act. This Court does have
the power to condone non compliance with the six weeks requirement in
section 145. LANDMAN J appears to have overlooked the provisions of
sec 158(1)(f) in the Queenstown matter. I am of the opinion that the
word "document" used therein is so wide that it will include, amongst
others, an affidavit, a notice of motion, an annexure to an affidavit, as
well as a statement of claim or a response to a statement of claim.
[17] Since hearing argument in this matter, my attention has been drawn
to another judgment which is to the same effect as the view I have
expressed in this matter on this issue of condonation of noncompliance
with the six week requirement in section 145. That is a judgment of
MLAMBO J in Mabombo v Shoprite Checkers Holdings (Pty) Ltd
and Others 1998(12) BLLR 1307 LC. That judgment appears to have
been given on the 13th of August 1998, which was earlier than the
judgment of LANDMAN J. In that judgment, MLAMBO J came to the
same conclusion that I have come to in this matter. It would appear that
LANDMAN J's attention was not drawn to this judgment nor, as I have
already indicated, was it drawn to the provisions of section 158(1)(f) of
the Act. I have, however, noted that LANDMAN J's matter was
unopposed and, therefore, he did not have the benefit of full argument on
the matter.
[18] At the time of proofreading the transcript of this judgement
which I had already handed down on the 5 th May 1999, I became aware
of another judgement which went the same route as Queenstown. That is
the as yet unreported judgement of Jajbhay AJ in National union of
Mineworkers v Commission for Conciliation, Mediation and
Arbitration & Others case no : J1918/98 which it appears was handed
down on the 7 th May 1999 Johannesburg two days after I had handed
down this one in Durban.
[19] I have considered that judgement. Unlike Landman J, Jajbhay AJ
did consider the provisions of sec 158(1)(f). He held that the “filing of an
application for the review of an arbitration award under the auspices
of the CCMA does not fall within the ambit of” sec 158(1)(f). He also
said “an application for a review of an arbitration award ‘does not’
constitute the referral of a dispute to the Court” . While he is probably
right on the latter, he is not right on the former.
[20] Unfortunately Jajbhay AJ does not give any reason for his
conclusion that “the filing of an application for the review of an
arbitration award under the auspices of the CCMA does not fall
within the ambit of” sec 158(1)(f). I say he does not give any reason for
this conclusion because the objects of the Act and other views about the
need for the expeditious resolution of disputes to which he devouts much
of the judgement do not explain this particular conclusion. They are
matters which, as he correctly points out, need to be borne in mind in
interpreting provisions of the Act. But this would apply if there was
ambiguity or where to apply the ordinary and grammatical meaning of
the words used in the statute could lead to an absurdity. No one can
reasonably suggest that, if the provisions of sec 158(1)(f) were given their
ordinary and grammatical meaning namely, that, they give the Court the
power to condone, among others, a delay in filing a review application in
terms of sec 145 of the Act, that would lead to an absurdity. In fact there
can be no suggestion that the provisions of sec 158(1)(f) are ambiguous.
[21] Sec 158(1)(f) refers to the “filing of any document” . A notice of
motion is clearly a document. An affidavit is clearly a document. A
review application will consist of a notice of motion, an affidavit or
affidavits and, maybe, annexures. Once this is accepted, I can see no
reason why Jajbhay AJ could say the filing of a review application does
not fall within the ambit of sec 158(1)(f) unless he meant that the filing of
a review application does not constitute the filing of a document as
contemplated by sec 158(1)(f). That, of course, would not be justified by
the wording of the section.
[22] Contrary to the decision in Queenstown I have already concluded,
that this Court has power to condone a delay in making an application for
review under sec 145 of the Act. In the light of Queenstown, I cannot
give effect to my own conclusion without much ado simply because I do
not share Landman J’s conclusion in that case. However, it is quite clear
that Landman J’s attention was not drawn to the provisions of sec 158(1)
(f) in that matter. Accordingly Landman J did not consider those
provisions in arriving at the decision that he arrived at. In those
circumstances I am satisfied that I am at liberty not to follow the decision
in Queenstown. It is therefore open to me to give effect to my own
conclusion.
[23] Assuming without deciding that the applicant applied to this Court
as contemplated in section 145 one court day outside the stipulated
six week period, I am more than satisfied that on the uncontested
explanation given for such delay, good cause has been shown for such
noncompliance with the six weeks requirement. Accordingly, I hereby
grant condonation insofar as condonation may be required for the
applicant’s delay in making its application for review in terms of sec 145
of the Act.
[24] Before proceeding, I note that at 271A of his judgement,
LANDMAN J suggested that it could be argued that the six week
requirement infringes on the constitutional right of access to Courts but
said that, in that case, the issue could not be resolved by this Court.
LANDMAN J said this was because this Court was not empowered to
adjudicate on the constitutionality of the laws which it applies. I do not
agree with this view, nor do I agree with the reason on which it is based.
[25] My view is that this Court has power to adjudicate the
constitutionality of any statute which is relevant to a matter in respect of
which it has jurisdiction. This is because the Constitution of the Republic
of South Africa No 108 of 1996 recognises among others courts whose
status is equal to that of the High Courts and it provides that such Courts
have power to deal with the constitutional validity of statutes but, as is
the case with the High Courts, such orders of such Courts are subject to
confirmation by the Constitutional Court. Support for my view in regard
to the above is to be found in secs 166(e), 172(1) and (2) of the
Constitution read with sec 151(1) and (2) of the Act. Sec 166(e) of the
Constitution gives recognition in our judicial system to courts
“established or recognised in terms of an Act of Parliament including
any court of a status similar to either the High Court or the
Magistrates’ Courts” .
[26] Sec 172 deals with powers of courts in constitutional matters. In
sec 172(2)(a) the Constitution says : “The Supreme Court of Appeal, a
High Court or a court of similar status may make an order
concerning the constitutional validity of an Act of Parliament, a
Provincial Act or any conduct of the President, but has no force
unless it is confirmed by the Constitutional Court” . In this regard it
must be noted that the Magistrates Courts are not mentioned in sec 172(2)
(a) among the courts that have such power. Then sec 151(2) of the Act
says the Labour Court is “a superior court that has authority, inherent
powers and standing, in relation to matters under its jurisdiction,
equal to that which a court of a provincial division of the Supreme
Court has in relation to matters under its jurisdiction” . That, in my
view, shows that, if it was argued that the provisions of sec 145 relating
to the six weeks requirement were unconstitutional because they infringe
the Constitutional right of access to courts, the Labour Court would have
power to make an order of constitutional invalidity in respect of those
provisions if it found them to be inconsistent with the constitution.
Factual background to the dismissal
[27] Before dealing with the merits of the review application, it is
necessary to deal with the background to the dismissal which led to the
arbitration which, in turn, led to this review application. As already
stated above, the third respondent was employed by the applicant as the
branch manager of its branch at Kokstad. His immediate superior was
one Mr Lehman, who was the regional manager of the applicant. One of
the rules of the applicant applicable to its employees read as follows: "No
member of company personnel shall be dishonest in the performance
of his duties. Dishonesty shall include theft, fraud,
falsification/destruction of records, falsification/misrepresentation of
information and evidence where applicable."
[28] The third respondent knew the rules of the applicant and
understood that to act dishonestly would be a violation of the rules of the
applicant. One of the applicant's requirements to the third respondent as
branch manager of one of its branches was that he had to "make budgets
at certain intervals." The requirement of “making a budget” was
simply a requirement to meet a target in terms of sales of the branch at
certain intervals or within certain time frames.
[29] In November 1997 the third respondent falsified certain documents
and inflated his sales by creating fictitious sales. The effect of this was
that it would appear to the applicant that the third respondent had reached
his targets. The further result hereof would be that the third respondent
would be entitled to a certain commission or bonus. This falsification
and misrepresentation was discovered. The third respondent was given a
final written warning for this and was informed that, if he committed a
similar offence again in the future, that could lead to his dismissal.
[30] While that the third respondent was given a final written warning
for this was common cause during argument, it was not common cause
that the giving of that final written warning was preceded by an
interview/disciplinary inquiry. The applicant said that it had been
preceded by an interview, while the third respondent maintained that it
had not been. If it becomes necessary to deal with the relevance of this, it
will be dealt with later in this judgment.
[31] The 31st December 1997 was the last day in 1997 that the
third respondent was required to “make his budget. He realised that he
was not able to meet his budget” . He realised that he could not meet
this deadline. He then telephoned his immediate superior, Mr Lehman,
and told him that he was not able to make his budget. Mr Lehman
responded by instructing the third respondent to make his budget, "by
hook or by crook." Up to that point, the parties were agreed during
argument on what transpired during the telephone conversation.
However, there was a dispute during argument about whether
Mr Lehman also said that the third respondent should "work pending
sales and lay byes." The applicant said Mr Lehman said this to the
third respondent. It was argued on the third respondent's behalf during
argument that Mr Lehman did not say this during the conversation. I will
return to the significance of this shortly.
[32] The third respondent then proceeded to dishonestly falsify the
records of the applicant and to create fictitious sales so as to represent
that the sales that had been made in the branch were such that he had
made his budget. Within a week or so after the 31st December 1997, the
third respondent reversed the fictitious sales that he had created. An
auditor discovered what the third respondent had done and the
third respondent was suspended from duty pending further investigation.
He was subsequently charged with the misconduct of falsification in that
he had invoiced deals and artificially inflated the December 1997 actual
sales in order to achieve budget. He was called to a disciplinary inquiry.
[33] During the disciplinary inquiry, the third respondent admitted the
allegations against him, but stated that he did what he did because he had
been instructed by Mr Lehman to make budget by hook or by crook. He
did not suggest that Mr Lehman had specifically instructed him to falsify
documents and to create fictitious sales in order to achieve his budget.
However, he said it was his understanding that that is what Mr Lehman
was instructing him to do when he said he should make his budget by
hook or by crook.
[34] At this stage, it is necessary to revert to whether Mr Lehman had
also said to the third respondent, during the telephone conversation of the
3rd December 1997, he should, "work pending sales and lay byes."
“Working pending sales and lay byes” is a phrase that refers to a
legitimate practice whereby a customer who has a credit balance is
contacted and asked whether he would like his credit balance changed to
a deposit for the purchase of further goods. It also refers to a situation
where a customer, who has goods on lay byes, is asked whether he is in a
position to pay the balance outstanding for a full deposit and to enter into
a Credit Agreement. In each scenario if the answer is in the affirmative,
effect is then given to such wish of the customer and that transaction
then counts as a sale which can be taken into account for purposes of
making a budget.
[35] If Mr Lehman did tell the third respondent to work pending sales
and lay byes, then it seems that that would go a long way in showing that
the third respondent, having been told this, could not possibly have
believed that Mr Lehman's instruction was that he should engage in an
illegitimate and dishonest exercise for purposes of achieving his budget.
If Mr Lehman did not say this, the position will remain where the
question on this issue would be confined to whether the mere instruction
alone, that the third respondent should make budget by hook or by crook,
was an instruction to act dishonestly. If the answer is in the negative, that
may be the end of that part of the inquiry. If the answer is in the
affirmative, it seems to me that, that would not necessarily be the end of
that part of the inquiry, but that, furthermore, the question that would
need to be addressed, would be whether that an employee has been
instructed by his superior to act dishonestly is, on its own, a defence to a
charge of acting dishonestly.
[36] I agree with Ms Fulton, who appeared for the applicant, that I must
accept that there is no dispute on the papers about the applicant's version
that Mr Lehman did say to the third respondent that he should work
pending sales and lay byes. The applicant makes the allegation in par 55
of its founding affidavit that during his evidence at the arbitration
Mr Lehman testified that he had said this to the third respondent. The
third respondent deals with the contents of paragraph 55 in
paragraph nine of his answering affidavit. There, the third respondent
does not deny that allegation by the applicant.
[37] Insofar as the third respondent may have sought to rely on the
notes of the Commissioner to say this was in dispute, that is, in my view,
misplaced. Firstly, in motion proceedings a respondent is required to
indicate in his answering affidavit the basis on which it will oppose an
applicant's application. Insofar as a respondent may seek to travel outside
the basis of his opposition as revealed by his answering affidavit, that is
not permissible. In motion proceedings, each party stands or falls by its
papers. At any rate the notes of the Commissioner are not given under
oath, nor are they certified in any way as a true and accurate reflection of
what transpired before the Commissioner. In fact to a very large extent
they are illegible. Accordingly not much weight may be attached to them.
In those circumstances I find that Mr Lehman did instruct the third
respondent to “work pending sales and lay byes” . On this basis the
third respondent could not have understood that he was being instructed
to act dishonestly.
[38] As to the instruction that Mr Lehman gave to the third respondent
to make the budget by hook or by crook, the applicant says, by the use of
this phrase, Mr Lehman sought to create a sense of urgency in the mind
of the third respondent and that he would never have instructed the
third respondent to falsify documents or to in any way act dishonestly.
[39] The third respondent requested to be allowed to call one
Mr Vuzani as a witness. The chairman of the disciplinary inquiry refused
his request. The result of the inquiry was that the third respondent was
found guilty of the misconduct he had been charged with and was
dismissed. He lodged an internal appeal as to the chairman's refusal to
allow the calling of Mr Vuzani at the inquiry. It was suggested that the
chairman of the inquiry was justified in so refusing when the request was
made at the time of the inquiry because the applicant, being fully aware
of his rights in such a situation, should have made arrangements much
earlier for Mr Vuzani to be called to attend the inquiry and to give
evidence. The third respondent's counsel submitted that the chairman
ought to have postponed the inquiry to enable Mr Vuzani to be called as a
witness.
[40] Again, in the appeal the third respondent had asked for Mr Vuzani
to be called to give evidence for him. The chairperson of the appeal
hearing did not have Mr Vuzani called to physically attend the hearing
and give evidence. However, he did telephone him and obtain his
evidence over the telephone. According to the applicant, the
third respondent was given an opportunity to put questions to Mr Vuzani
on the telephone but the third respondent denies this and says he was not
given such an opportunity. I will revert to deal with this later on. As
already stated, the internal appeal ended with a finding or a confirmation
of the findings of the initial hearing and the dismissal of the
third respondent was confirmed. As already stated, the dispute was
subsequently referred initially to conciliation and later to arbitration
under the auspices of the first respondent.
[41] The second respondent, as already indicated, was appointed to
arbitrate the dispute. Evidence was led before him. The applicant has
given detailed evidence of that evidence that was placed before the
second respondent during the arbitration. Largely, the third respondent
admits, in its answering affidavits, the applicant's version of what
evidence was led and by whom it was led in the arbitration proceedings.
Such areas as it was submitted on the third respondent's behalf, were not
common cause in that regard seemed to have, to a very large extent, been
based on a disregard of the affidavits of the parties and, in particular, the
answering affidavit of the third respondent to the founding affidavit of
the applicant. But there are one or two areas of dispute in regard to that
issue.
[42] The second respondent's award was that the third respondent's
dismissal was both substantively and procedurally unfair. He ordered the
applicant to pay the third respondent compensation in the amount of
R51 000,00. At this stage, it is necessary to consider the grounds on
which the applicant has attacked the arbitration award of the
second respondent in these review proceedings.
Consideration of the review application
[43] The applicant's attack on the second respondent's award was
directed at both the finding that the dismissal was substantively unfair, as
well as the finding that the dismissal was procedurally unfair. In each
case, the applicant contended that the second respondent committed gross
irregularities and that he exceeded his powers inasmuch as he had given
an award which was not justifiable in relation to the reasons given for it
and which had no rationale connection with the material that was placed
before him. I will consider the finding of substantive unfairness, as well
as the finding of procedural unfairness, in turn.
Alleged Substantive Unfairness
[44] In the last page of his award, the second respondent said he found
the third respondent's dismissal to be substantively unfair. A reading of
his award suggests that this was because the second respondent found
that the third respondent had acted on the instructions of his superior.
Immediately after making this finding, the second respondent said that,
on the evidence before him, he was convinced that, if the auditor had not
discovered what the third respondent had done, Mr Lehman would not
have taken any action. It is not clear what the evidential basis is of this
statement by the second respondent, save that it might be based on the
evidence of Mr Vuzani.
[45] However, even if one were to assume that the third respondent
understood Mr Lehman's instruction to require him to act dishonestly, a
finding to that effect by the second respondent should not have been the
end of the inquiry on whether the third respondent was or was not guilty
of the dishonest conduct he had been charged with because it was not the
third respondent's evidence that the reason why he had carried out what,
on his own version, was an instruction to act dishonestly, was that, if he
had not done so, he would have been harmed in any way. In the absence
of evidence to that effect, which would have meant that, maybe, the
third respondent might have been justified in carrying out an otherwise
illegal instruction, the fact that he acted on his immediate superior's
instruction could not by itself have justified his conduct. An employee is
under no obligation to obey an illegal instruction. If he obeys an illegal
instruction knowing it to be illegal, he does so at his own risk.
[46] In the light of this, the second respondent's finding that the
dismissal was substantively unfair is, in my view, one which is not
justifiable in relation to the reason given for it and falls to be reviewed
and satisfied. The third respondent's counsel also sought to justify the
second respondent's finding of substantive unfairness on the basis that the
applicant had applied discipline inconsistently in this case because the
third respondent was dismissed for his misconduct and yet on the
evidence which was given by Mr Vuzani at the appeal hearing, it was
clear that Mr Vuzani had also committed the same offence and yet had
not been dismissed.
[47] There are three observations I wish to make in regard to this
submission. The first is that it does not appear from the
second respondent's award that he found that there had been a case of
inconsistency and that that was part of the reason why he found that the
dismissal was substantively unfair. Secondly, a reading of the
respondent's answering affidavit does not disclose that this would be part
of the basis on which he was opposing the applicant's review application.
In fact, he presented his case in the answering affidavit, not on the basis
that he was not guilty, but on the basis that dismissal was not an
appropriate penalty. Thirdly, the third respondent was on final written
warning for a similar offence already. Mr Vuzani was not on final
written warning. That alone would be a sufficient ground to distinguish
between the two cases. In fact, on the evidence presented by the
applicant, Mr Vuzani had been counselled already in relation to his
misconduct. In this case, the third respondent had been given a final
written warning in relation to a similar offence only one month before the
incident which gave rise to his dismissal and it was not his case that he
should not have been given a final written warning in relation to that
incident because he was not guilty of the misconduct complained of. His
complaint was simply that with regard to that final written warning, the
giving of such final written warning had not been preceded by a
disciplinary interview.
[48] It seems to me that once it is accepted, as I think it must be, that
the third respondent accepts that he was guilty of a similar offence
one month before the incident which gave rise to his dismissal, then his
case cannot be said to be comparable to that of Mr Vuzani. The
argument presented by the third respondent's counsel was that insofar as
the applicant says Mr Vuzani had been counselled in relation to such
misconduct, that was not enough. He said this was a case where the
applicant, in order to be consistent in its application of discipline, ought
to have taken formal disciplinary action against Mr Vuzani. He said, in
the light of the way in which the applicant had treated Mr Vuzani in
relation to similar conduct, the third respondent ought not to have been
given a penalty of dismissal, but should have been given a lesser penalty.
There is, in my view, no justification for that submission.
[49] The applicant was faced with an employee who had committed
very serious misconduct in November of 1997 by falsifying and acting
dishonestly by creating fictitious sales. The employee, on his own
version, knew the rules of the company. He had been a manager for close
to eight years or thereabout. He was a branch manager and was required
to show example and he engaged in what was clearly a dishonest
exercise. He was lucky that he was not dismissed at that stage but was
given a final written warning. The documents presented by the applicant
show, and this is not denied by the third respondent, that the
third respondent was informed at that time that if he committed a similar
offence again, he could be dismissed.
[50] Hardly a month later, the third respondent engaged in a similar
exercise in circumstances where one would have thought that he would
have been careful because, the fact that he was on a final written warning
ought to have been a notice to him that he should mend his ways. He did
not mend his ways and in relation to the incident of December 1997, he
was dismissed. In my view, there can be no justification in the complaint
that the applicant ought not to have dismissed him, but to have given him
a lesser penalty because of the fact that Mr Vuzani had been engaged in a
similar exercise.
The procedural finding
[51] I now need to deal with the procedural unfairness point or finding
of the second respondent. The applicant has attacked the finding of the
second respondent that the dismissal of the third respondent was
procedurally unfair on the same grounds that it has used to attack the
finding that the dismissal was substantively unfair. The applicant
contends that the second respondent committed gross irregularities and
exceeded his powers in that he made a finding on procedural unfairness
which was not justifiable in relation to the reasons given for it and that
the finding has no rational connection with the material which was before
the second respondent.
[52] The award which has been given by the second respondent is
difficult to follow in certain respects. I have already said that in the last
page of the award, the second respondent said he was finding the
dismissal of the third respondent to be both substantively and
procedurally unfair. When I say that the award of the second respondent
is difficult to follow in certain respects, this must be seen against the last
three paragraphs of the award which will indicate, at least in part, what I
am referring to. There the second respondent says ; "I find that the
dismissal of the applicant was substantively and procedurally unfair.
I find that the applicant was denied the basic rights to exercise at the
inquiry and this was conceded by Mr Jordaan who was called as the
company witness. The chairman should have recused himself
because it is trite law that if the chairman is seen by the accused to be
biased or prejudiced, he should recuse himself."
[53] Further on he said: "With evidence before me, I am convinced
that the applicant acted on instructions by the area manager who
was his superior. It was never contradicted that the applicant had a
clean loyal service for seven years, it is only with the introduction of
Mr Lehman. I am further convinced that if the auditor did not find
the applicant reversing the balances in January, Mr Lehman could
not have taken any action against the applicant. I find that just and
equitable compensation in the circumstances is the total of
six months' wages. The employer is ordered to pay the employee the
sum of R51 000,00 within 14 days of this award."
[54] From what I have read of the last page of the second respondent's
award, it will be clear that there are sentences which simply not make
sense. But quite apart from that, I also do not understand from at least
that part of the award what the basis was for the finding that the dismissal
was procedurally unfair. The second respondent says that the
third respondent was denied, "The basic rights to exercise at the
inquiry." I do not know what the second respondent meant by this.
Ms Fulton also could not make sense out of it. The third respondent's
counsel attempted to say this must have meant that the second respondent
found that the dismissal was procedurally unfair because the
third respondent was denied the right to call Mr Vuzani to the
disciplinary inquiry. I am far from satisfied that this necessarily refers to
that. But at any rate, earlier on in the award in the same paragraph, which
is the third paragraph on the last page of the award, there appears to be a
reason which the second respondent was relying upon for saying that the
dismissal was procedurally unfair. He says, "The chairman should
have recused himself because it is trite law that if the chairman is
seen by the accused to be biased or prejudiced, he should recuse
himself."
[55] It seems to me that this is the basis on which the second respondent
found that the dismissal was procedurally unfair, namely that the
employee, the third respondent, had asked that the chairperson of the
initial inquiry should recuse himself and that the chairperson had wrongly
refused to recuse himself. It seems that the only basis on which the
second respondent found that this was unfair is that he believed the law to
be that as long as an employee says or believes that the chairperson of an
inquiry will be biased, that is enough to require the chairperson to recuse
himself, and that the chairperson cannot refuse in those circumstances to
recuse himself. That, of course, is simply not the law.
[56] Such suspicion as a party might have of bias on the part of a
presiding officer, is required to be one which can reasonably be
entertained by a lay litigant. The third respondent's counsel was unable
himself to support this reasoning by the second respondent. It seems to
me that, insofar as the question of procedural unfairness is concerned,
there can be no doubt that the reason given by the second respondent for
his conclusion that the dismissal was procedurally unfair, is simply not
justifiable and had no rational connection with the material that was
placed before him and that, on that ground, it ought to be set aside.
[57] The one point which remains which was pressed by the
third respondent's counsel during argument was his submission that the
dismissal remained procedurally unfair because the third respondent had
asked that he should be allowed to call Mr Vuzani as a witness, but had
been denied such opportunity. The third respondent's counsel submitted
that this made the dismissal procedurally unfair and that the
second respondent's finding of procedural unfairness is defensible on that
basis.
[58] Ms Fulton's reply to this was that the chairperson of the
disciplinary inquiry had been justified in refusing to have Mr Vuzani
called because there was no explanation given why the third respondent
had not made prior arrangement for Mr Vuzani to be called, especially
because the applicant was dealing with a senior employee, a branch
manager who, on the evidence before this Court, knew at all times
material hereto what his rights were in relation to disciplinary hearings
and the calling of witnesses.
[59] Ms Fulton also submitted that, in any event, even if the chairperson
of the inquiry was wrong not to allow Mr Vuzani to be called, even if the
chairperson ought to have postponed the inquiry, in order to give the
third respondent an opportunity to call Mr Vuzani, such defect in the
initial inquiry, as may have existed, was cured by the full hearing that
took place at the appeal stage. The third respondent's counsel, with
regard to the giving of the evidence by Mr Vuzani at the appeal stage,
submitted that:
1. A fair appeal hearing does not cure a defective initial hearing.
2. He submitted that the third respondent had not been given an
opportunity to put questions to Mr Vuzani because only the chairperson
of the appeal hearing spoke to Mr Vuzani.
[60] There appears to be a dispute of fact with regard to this because the
applicant, in its founding affidavit, says that although Mr Vuzani gave his
evidence telephonically, the third respondent was given an opportunity to
put questions to him and elicit whatever evidence he wanted to elicit.
Determination, or, Remittal, of the dispute?
[61] The question that arises in relation to this is what the effect is of
this dispute of fact. It seems to me that this can be dealt with in
conjunction with an issue which also arose during argument, namely
what I should do with the matter if I came to the conclusion that the
award of the second respondent should be reviewed and set aside. The
issue is whether I should refer the matter back to the CCMA to be heard
by the same Commissioner or I should refer the matter back to the
CCMA with an order that it should be heard by another Commissioner, or
whether this Court should itself determine the dispute as requested by the
applicant.
[62] In this regard, Ms Fulton emphasised that, as far as the applicant
was concerned, its submission was that this was a proper case where
the Court should determine the dispute itself. This submission was based
largely on the fact that, to a very large extent, the facts were common
cause and that it would cause an unnecessary delay and cost to refer the
matter back to the CCMA. However, she submitted that, if I decided that
it would be preferable to refer the matter back to the CCMA, then in that
event, the matter should not be heard by the same Commissioner and I
should order that it should be heard by another Commissioner.
[63] On this part of the matter, both Ms Fulton and counsel for the
third respondent were agreed that if I referred the matter back, it should
not be heard by the same Commissioner. In this regard, it transpired
during argument that the third respondent was also unhappy about some
aspects of the award of the second respondent, namely the amount of
compensation that was awarded. Counsel for the third respondent
indicated that, although the second respondent appears to have wanted to
award compensation equal to six months' salary for the third respondent,
the amount of R51 000,00 simply did not reflect six months' salary in
respect of the third respondent. He sought to ask the Court to vary the
award in this regard but was not able to present any argument as to how
the Court could do that in circumstances where the third respondent had
not filed a counter review application which would have had to be served
on the second respondent to give him an opportunity to defend his award
with regard to the period of six months, as well as the amount of
compensation that he ordered. The conclusion that I have reached is such
that it does not make it necessary for me to deal with that. In those
circumstances, I am satisfied that I should not deal with that aspect of the
matter.
[64] The question that arises is, insofar as the third respondent might
have been dealt with unfairly in that he was not allowed to call a witness
that he sought to call at the initial hearing, that might well have made his
dismissal to be procedurally unfair. As I have already indicated, there is
a dispute of fact in relation to that aspect. Otherwise the facts appear to
be largely common cause.
[65] If because of that the dismissal was procedurally unfair or could be
said to have been procedurally unfair, it appears to me that rather than
refer this review application to oral evidence which neither party actually
asked for, I would need to consider whether I should not refer the matter
back to the CCMA for arbitration by another Commissioner who would
then deal with, among other issues, that issue. However, I am of the
opinion that I ought not even to refer the matter back to the CCMA
because even if one were to assume that the third respondent was treated
unfairly, in that he was not allowed to call Mr Vuzani at the initial
hearing, this is a situation where, in all probability, the fact that the
dismissal may have been procedurally unfair on that basis, would
probably not be sufficient to justify the awarding of any relief to the
third respondent.
[66] I say that because the dispute relates to a serious act of misconduct
involving dishonesty, one of which the third respondent had made
himself guilty of at least on one previous occasions already. One is here
dealing here with a case where the third respondent gives no explanation
why, knowing his rights in relation to disciplinary inquiries as we now
know he does, he did not make prior arrangements for Mr Vuzani to be
present at the inquiry. Furthermore, it is not suggested that the
third respondent did request the chairman of the initial inquiry to
postpone the inquiry.
[67] With regard to the appeal, insofar as the third respondent may be
saying that he was not given an opportunity to put questions to
Mr Vuzani on the telephone, he does not say why he did not request to do
so if he wanted to put questions to Mr Vuzani. This is not a case where
he asked to put questions to Mr Vuzani on the telephone, but was not
given that opportunity. That is so even on the third respondent’s own
version. On the applicant's version, he was given such an opportunity
and did put questions. The mere fact that Mr Vuzani gave evidence
telephonically and did not physically attend the appeal hearing, would not
by itself necessarily detract from the fairness, of the appeal hearing. The
question at the end of the day would be whether or not the
third respondent had been given a fair hearing at the appeal. If Mr Vuzani
had given his evidence telephonically and the third respondent had put
questions to him and had been able in that way to elicit all the evidence
he sought to elicit, that would have been a fair hearing unless there was a
reason why his physical presence at the inquiry was crucial for the
fairness, or otherwise, of the appeal hearing.
[68] I also put it to the third respondent's counsel that it was not clear
exactly what the purpose had been of calling Mr Vuzani, namely whether
the purpose of calling Mr Vuzani was to establish that there had been
inconsistency in the application of discipline by the applicant as between
the third respondent and Mr Vuzani or whether the purpose was to elicit
evidence that would establish that there was a wide spread practice that
whenever Mr Lehman required branch managers to “make budget by
hook or by crook” , that implied that he was requiring them to act
dishonestly.
[69] I say this without being unmindful of the fact that the
third respondent is not lawyer and, therefore, was not presenting his case
as a lawyer. But nevertheless, one is dealing here with a
senior employee, a manager, because one would expect that, if he wanted
to put questions to Mr Vuzani during the appeal hearing over the
telephone, he would have asked to be given that opportunity.
[70] In all the circumstances, it seems to me that there is overwhelming
evidence that would tend to indicate that, even if I referred this matter
back to the CCMA on the basis that there may well be a case for the
third respondent to pursue with regard to procedural fairness of the
dismissal based on his denial of the right to call Mr Vuzani as a witness,
at the end of the day the arbitrator would not exercise his discretion in
favour of awarding the third respondent any compensation. In this regard
I am referring to the discretion which an arbitrator, as well as this Court,
has in dealing with dismissal which is unfair only because no fair
procedure was followed, whether to award or not to award compensation
in such a matter.
[71] In those circumstances, I am of the opinion that this Court ought to
itself determine the dispute. Having regard to the material before the
Court, the only determination that the Court is driven to is that the
dismissal of the third respondent by the applicant was not unfair and that
his claim of unfair dismissal ought to have been dismissed.
[72] In the circumstances, the order that I make is, therefore, the
following:
1. The award of the second respondent in the dispute between the
applicant and the third respondent under case number 14082 is hereby
reviewed and set aside.
2. It is determined that the dismissal of the third respondent by the
applicant in January 1998 did not constitute an unfair dismissal.
3. The third respondent is ordered to pay the applicant's costs of this
application.
R. M. M. ZONDO
Judge in the Labour Court of SA.
Date of Argument : 3 May 1999
Date of Judgement : 5 May 1999
For the Applicant : Miss K. Fulton
Instructed By : Bowman Gilfillan INC
For the 3 rd Respondent : Mr A. M. Sarantos
Instructed by : Elliot & Walker