REPORTABLE
IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT DURBAN
CASE NO: D1405/99 & D1439/99
IN THE MATTER BETWEEN
APPLICANT
AND
THE COMMISSION FOR CONCILIATION,
FIRST RESPONDENT
SECOND RESPONDENT
THIRD RESPONDENT
JUDGMENT
NGCAMU AJ
[1] The third respondent obtained an award in his favour made by the second respondent in
which the commission found that his dismissal was procedurally and substantively unfair.
Third respondent then approached this court to make the award an order of court in terms of
section 158 (1) (c) of the Labour Relations Act No 66 of 1995. The application is being
made under case no D1405/99.
[2] The applicant has also filed an application to review the award under case no D1439/99.
The two cases have been brought together. If I find that the award has to be reviewed and
set aside I must then dismiss the application in terms of section 158 (1) (C). If on the other
hand, I dismiss the review, I must make the award an order of court.
[3] The review is opposed by the third respondent. Although I am in possession of the
CCMA transcript record, it is poor in that it does not have all what was said during the
hearing. I will therefore have to rely on the summary of the evidence as recorded by the
Commissioner in his award.
[4] The award is being attached on the basis that it is devoid of a rational objective basis and
bears no connection to the evidential material before the Commissioner. It is further
submitted that the Commissioner failed to apply his mind properly to the matter.
[5] The third respondent was employed by the applicant as a maintenance manager. He was
instructed to obtain a quotation for the installation of built in cupboards in the trauma unit of
the hospital. He obtained one quotation from a certain Patrick Pillay of R.C. Cupboards. He
was requested to obtain two further quotations. Instead of approaching other cupboard
makers he approached the same Patrick Pillay for the additional two quotations. Patrick
Pillay handed to the third respondent two quotations which were later found to be fictitious
and were made up by Patrick Pillay himself.
[6] The third respondent had previously used Patrick Pillay for the installation of built in
cupboards in his own house at a cost of R738000. The third respondent has only paid a
deposit of R200000 for the cupboards.
[7] The third respondent was accused of having committed fraud in that the bill for the units
in his house was settled by the applicant. He was further accused of having committed fraud
in obtaining all three quotations from Patrick Pillay. When the third respondent was first
confronted with these allegations he was offsick. After discussing the matter with the
maintenance Director Dr Parsoo, the third respondent tendered a letter of resignation dated
19th February 1999. The contents of the letter reads:
19th February 1999. The contents of the letter reads:
“ I, Raj Singh, am hereby placing on record a 24 Notice today, the 19/02/99, terminating any
services as maintenance manager at Victoria Hospital. The acceptance of my resignation
comes with the proviso that no criminal or civil charges will be instituted against me with
regard to my employment or work carried out at Victoria Hospital. I await your written
response within the next 24 hours.”
A response by Dr I Parsoo read:
“ Your letter dated 19 th February 1999 refers.
Your letter of resignation has been accepted by the board with immediate effect. However,
the proviso with regard to criminal or civil charges against you will not be part of the
conditions of resignation. However, please be assured that as far as is possible and if the
only major offence was in relation to the cupboard saga in the trauma unit, then all possible
leniency will be shown to you. We thank you for the period of your employment in this
institution.”
[8] Third respondent declared a dispute and referred it to the CCMA on the grounds of
constructive dismissal by the applicant. The applicant contended that the third respondent
resigned and was not dismissed. The conciliation failed and the matter was referred for
arbitration. Both parties were represented by attorneys at the arbitration hearing. Only the
third respondent gave evidence and applicant closed its case without leading any evidence.
The third respondent denied that he committed fraud. The third respondent denied that he
committed fraud.
[9] Sections 186 (e) of the Labour Relations Act defines dismissal as meaning “an employee
terminated a contract of employment with or without notice because the employer made
continued employment intolerable for the employee.” In terms of section 191 (1) of the
LRA of 1995 this constitutes unfair dismissal. The onus to prove constructive dismissal
rests on the employee. See Halgreen v Natal Building Society (1986) 7 ILJ 769 (IC).
Where the employer claims that the employee resigned but the employee denies that, the
onus rests on the employer. See Moodley v Seasands Investments (1989) 10 ILJ 1129 (IC).
[10] The employee must establish that there was no voluntary intention to resign but the
[10] The employee must establish that there was no voluntary intention to resign but the
employer caused the resignation. The court must look at the employer’s conduct as a whole
and then determine whether the cummulative effect of his conduct judged reasonable and
sensible is such that the employee cannot be expected to put up with it. See Pretoria Society
For the Care of the Retarded v Loots (1997) 18 ILJ 981 (LAC).
[11] After hearing the evidence of the third respondent, the Commissioner came to the
conclusion that the third respondent’s dismissal was procedurally unfair and awarded the
amount of R3584000 as compensation. There was no evidence by the applicant to
challenge that of the third respondent.
[12] The commissioner had to determine whether or not a constructive dismissal occurred or
whether the applicant terminated his services on his own free will by resigning. The
commissioner found that the third respondent Mr Singh submitted a letter of resignation on
19th February 1999. This was common cause. The commissioner also found that Mr Singh
did not understand clearly what fraud entailed. He found that at the time Mr Singh was
confronted by two policemen he was sick. He was told he had already lost his job at the
hospital for this offence. The following day he was told by his immediate senior, Dr Parsoo
that he must resign or he would be dismissed. He further found that this coupled with the
threat of criminal charges both by the policeman and Dr Parsoo created a state of mind in the
applicant that he believed he had no option but to either resign or be dismissed.
Commissioner further found that it seemed reasonable that Mr Singh attempted to protect
himself by resigning than being dismissed to try and safeguard his future employment
opportunities.
[13] The commissioner found in favour of the applicant that it had established that Mr.
Singh knew the rules and regulations of the applicant. However the commissioner found
that Dr. Parsoo did not present the option of a disciplinary hearing to Mr Singh. He found
that Dr. Parsoo did not present the option of a disciplinary hearing to Mr Singh. He found
that Dr Parsoo said the hospital Board had made a decision that he must either resign or be
dismissed. The commissioner came to the conclusion that on a balance of probabilities
intolerable pressure was placed on Mr Singh by a combination of the SAPS and Dr Parsoo to
resign. The conclusion he came to was that the termination was at the initiative and request
of the employer.
[14] The applicant did not give evidence to refute he evidence of the third respondent Mr
Singh but sought to argue the matter on the merits by placing reliance on the resignation.
John Grogan in Rielert’s Basic Employment LawSecond edition pg 98 paragraph 7 says:
“An employer may be tempted to circumvent the substantive and procedural requirements
for a fair dismissal by attempting to persuade an unwanted employee to resign. If the
employee does so freely and voluntarily, the contract will end.” Where the employer exerts
undue pressure on the employee to resign, or where he renders the relationship with the
employee so intolerable that the employee has no option but to reign, were have what is
known as a case of constructive dismissal which entitles the employee to relief both at
common law and under the Labour Relations Act (Grogan p99).
[15] The respondent submitted that Mr Singh elected to resign after making a careful,
independent and rational decision, unrelated to any pressure exerted by the employer. This
was based on the fact that Mr Singh admitted that his conduct constituted a serious wrong
and broke his employer’s trust justifying his dismissal. It was further submitted that Mr
Singh resigned to avoid a disciplinary hearing and its consequences. I fail to follow this
submission in that there was no suggestion of a disciplinary proceeding made to Mr Singh.
No evidence was given to show that disciplinary proceedings was put as an option and that
Mr Singh decided to resign instead of facing the disciplinary action. In fact Mr Singh said
he would not have resigned if the disciplinary hearing was put as an option.
[16] It was further submitted that there was no evidence that Dr Parsoo exerted unbearable
pressure on Mr Singh. In my view, it is the cummulative effect of the employer’s action
which is the determining factor. It was not denied that the police called at Mr Singh’s
which is the determining factor. It was not denied that the police called at Mr Singh’s
residence with the hospital employee and was told he had lost his job at the hospital as a
result of the offence he had committed. Dr Parsoo also told him the board had decided to
dismiss him. It was further not disputed that Dr Parsoo told him to resign or be dismissed.
He was accused of purchasing cupboards and the bill paid by the hospital and then of
committing fraud by obtaining three quotations from one person. These facts stood
unchallenged by the applicant. The question is whether the court can review the award in
the light of these undisputed facts. When Mr Singh was first approached about the
misconduct a decision to dismiss him had been taken by the board of directors. This was not
disputed by the applicant. There was therefore no option open to Mr Singh except to resign
as suggested by Dr Parsoo. This conduct was enough to put pressure on Mr Singh.
[17] The court cannot review and set aside the award on factual issues found proved by the
Commissioner. The court is obliged to regard the award as valid, binding and final unless an
applicant on review can show that there is a defect. Taking into account the evidence
presented before the commissioner, I have no reason to interfere with the award with regard
to the proof of the dismissal. If the evidence of the third respondent is seen objectively and
taking into account the absence of the applicant’s version, it is clear that there was implied
intention on the part of the applicant to end the employment relationship. The facts found
proved which caused the commissioner to come to his conclusion were sufficient for the
finding of dismissal.
[18] It was upon the applicant to show that the dismissal was fair for reasons related to the
employee’s conduct or capacity. The applicant has not admitted or conceded the dismissal
and there fore did not submit that the dismissal was for a fair reason. What was however
argued was that Mr Singh had on his own admission committed a serious offence and was
guilty of dishonesty. It was submitted by Mr Omar for the applicant that the commissioner
should have looked at the substance of the misconduct and ask what the employer could
have done and whether the dismissal was a reasonable response in the circumstances. I
accept this submission but wish to add that no evidence was produced before the
commissioner to justify the dismissal. No fraud was proved to have been committed by Mr
Singh except the misconduct in failing to obtain the required quotations. There was no
evidence to show that Mr Singh benefited from this conduct. I am not suggesting that
receipt of benefit is required for a misconduct.
[19] It was submitted quite correctly by Mr Omar that in the constructive dismissal there is
no procedural aspect involved only the substantive aspect comes to play. In view of the
finding on procedural unfairness, can I sitting as a court of review interfere with the wrong
conclusion of the arbitrator when his conclusion is logical? Was the applicant prejudiced in
any way by this conclusion taking into account the commissioner’s remarks on substantive
fairness?
[20] I am of the view that the court cannot interfere with the award on the basis that the
conclusion is wrong. I am satisfied that conclusion reached was logical and based on the
material before the commissioner whether I agree with it is irrelevant. I am also of the view
that the conclusion reached by the commissioner did not lead to the failure of justice. A
bona fide mistake by the commissioner does not lead to the review of the award unless it
amounts to the failure of justice. I therefore find that the conclusion reached did not
prejudice the applicant and therefore immaterial.
[21] It was submitted that the commissioner substituted his decision with that of the
applicant and that the dismissal was a reasonable response. The dismissal was a reasonable
response. There was no evidence before the commissioner on this. The commissioner only
relied on the undisputed evidence of the third respondent.
[22] Any breach of trust committed by the third respondent is an issue which should have
been dealt with before the commissioner. The circumstances of the resignation were not
challenged. I therefore find that there is no evidence for coming to the conclusion that the
commissioner misdirected himself or that there was no evidential material on which the
award was based.
[23] It was submitted that the commissioner misconceived his powers, when on the question
of substantive fairness, he perceived his function as having to determine a fair sanction and
therefore acted ultra vires. This it was argued would make the award unjustifiable and has to
be set aside. Reliance was placed on the following paragraphs of the award:
be set aside. Reliance was placed on the following paragraphs of the award:
“ In terms of an appropriate sanction for such misconduct it is debatable whether this would
warrant a serious (and possibly final) disciplinary warning or whether it would warrant
dismissal, particularly taking into account the role that Mr Singh held in the hospital and the
responsibilities required of him.
Thus I find that the dismissal was not necessarily warranted in this matter but that it was
probable that if an appropriate disciplinary hearing had been conducted that in all likelihood
Mr Singh would have been placed on a final written warningtaking into account the
seriousness of this matter.”
[24] I do not understand the commissioner to have substituted what he considered to be fair.
He mentions that it is debatable if Mr Singh’s misconduct would have warranted a serious
disciplinary warning or a dismissal. A decision to dismiss or to issue a final warning would
have been determined during the hearing if there was any. The award cannot be set aside on
this ground.
[25] The employer is not expected to run a business with untrustworthy employees. When
faced with serious breach of trust, the employer is entitled to dismiss. The law still stands
which requires him to act fairly towards the employee. The employer must be able to prove
the fairness of the dismissal and prove the misconduct committed by the employee. It is not
sufficient only to prove that a serious wrong doing was committed without proving that such
wrong doing results in the dismissal of the employee. When the commissioner is faced with
one side of the story and there is no reason to reject such version he has to act upon it. The
factual findings are not disputed by the applicant.
[26] Where the employer relied on the resignation of the employee to dispute the dismissal,
it is not open to him to say the dismissal was justified when no evidence was given to prove
the fairness. I am satisfied that the commissioner properly applied his mind in coming to the
conclusion he reached. I find that the award is rational and justifiable and cannot be set
aside for any defect. I find that the applicant failed to prove the fairness of the dismissal.
aside for any defect. I find that the applicant failed to prove the fairness of the dismissal.
[27] In the circumstances the following order is made:
(a) The application to review the reward in case no D1439/99 is dismissed.
(b) The award in case no D1405/99 is hereby made an order of court.
(c) The applicant in the review application to pay the costs in respect of case no’s D1405/99
and D1439/99.
NGCAMU AJ
FOR THE APPLICANT: M.S. OMAR
FOR THE RESPONDENT: A.M.C. HUNTER