REPORTABLE
IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT DURBAN
CASE NO: D 448/02
In the matter between:
UNIVERSAL PRODUCT NETWORK (PTY) LTD Applicant
and
THE COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION (CCMA) First Respondent
COMMISSIONER S PATHER Second Respondent
H GOSLIN Third Respondent
JUDGMENT
NTSEBEZA, AJ:
INTRODUCTION
[1] The Applicant in these proceedings is Universal Product Network (Pty)
Limited (Universal), a registered company carrying on business as a
distribution centre for the Woolworth chain of stores. It is headquartered
in Cape Town. The issues for this application relate to its branch in
Durban.
[2] The Third Respondent, Heather Goslin (Goslin) was ordered to be
reinstated, with retrospective effect, to her position as an employee of
Universal, (details of which I will deal with hereunder). This order for
reinstatement, [and other reliefs] were in terms of an award handed down
by the Second Respondent, Sungaree Pather (Pather), who had been
acting as a Commissioner arbitrating the matter under the auspices of the
First Respondent, the Commission for Conciliation, Mediation and
Arbitration (CCMA). The award was handed down on the 7 th February
2002. It is against that award that this application is brought. I am asked
to review and set aside Pather’s award and substitute it with one which I
may deem fit.
BACKGROUND
[3] Goslin was an employee of Universal since June 1993, and at the time of
her dismissal on 1 August 2001, she was a Human Resources
Administration Manager. Charges against her were that she had
processed, irregularly, time sheets that led to fraudulent salary payments.
She was also charged with fraudulently claiming discount in respect of
purchases made on behalf of the company, and, lastly, she was accused
of breaching company procedures by processing wages for casual
employees without supporting documents.
[4] Having been found guilty on all of the counts on which she was charged,
the disciplinary hearing’s chairperson, after hearing pleas in mitigation,
dismissed Goslin, giving her an opportunity to appeal to the Operations
Director, one Steward Matlala. Having referred the matter to the CCMA,
Goslin referred the matter further to arbitration when she and Universal
were not able to resolve the dispute by way of conciliation. Arbitration
commenced on 3 December 2001 and was completed on 30 January 2002.
BASIS FOR THE REVIEW
[5] In its founding papers, Universal, through its Employee Relations Advisor,
Mr Mark van Buuren, alleges that Pather’s award falls to be reviewed in
terms of Section 145(2)(a) of the Labour Relations Act 66 of 1995, as
amended (the LRA). Van Buuren deposed that Pather’s award (he called it
his ( sic!) award!) is not rationally justifiable on the evidence that was
before her.
[6] Van Buuren deposed that Pather unjustifiably and/or incorrectly failed
and/or committed an irregularity in failing to take into account the fact
that Goslin was employed in a position of trust and was ultimately
responsible for the actions of one Mavundla (about whom later). On the
same basis, Pather was attacked for finding that Goslin’s version was
more probable than that of Universal’s representatives at the arbitration,
which she rejected as improbable. Van Buuren went on to cite about
fourteen (14) specific instances that, in his submission, showed the
unjustifiability of the award. He, for example, charged that Pather had
been unable to appreciate the seriousness of the fact that Goslin had
failed to properly, “ reconcile major inconsistencies between her versions
at the disciplinary enquiry and at the arbitration”.
[7] Goslin had not been unfairly dismissed, so deposed Van Buuren, and
Pather’s finding that she had been, was unjustifiable or incorrect or
amounted to committing a gross irregularity. The award that
retrospectively reinstates Goslin was unjustifiable or incorrect and/or
grossly irregular, as was the order of compensation from 1 August 2001 to
date of reinstatement.
[8] In her analysis of all the evidence and argument placed before her,
Pather, with regard to the first charge, had found that Goslin’s evidence,
and that of her witness, Snyman, was that during the period under
consideration, the person who processed the wages of the casual
employees was one Mavundla. Pather found that this evidence had not
been disputed. Even though there had been an issue about Goslin being
ultimately responsible for Mavundla’s work, Pather accepted evidence
which she held was undisputed, namely, that Mavundla had been
accountable to his Commercial Manager, one V Pather.
[9] Snyman had testified that the gate-control register was used to control
access of casual employees for purposes of their attendance at fire drills.
Since, as casuals, their names and numbers were not stable – like
permanent employees – the gate-control register was a mechanism to
monitor the goings in and out by casuals. The gate-control register, Pather
held Snyman to have testified, was not a register authorised by managers
for the purposes alleged in the charge. For example, there were occasions
when the gate-control register would be signed by the casuals on arrival
when they came to the premises only for weekly union meetings and for
nothing else, certainly not to work. Pather had found this evidence
compelling, reasonable and probable.
[10] She rejected as improbable that a rule existed that required that the gate-
control register had to be checked before the processing of casual
employees’ wages. If such a rule existed, the Human Resources Manager
would have ensured that every staff member was aware of both the rule
and the penalties for non-observance thereof. On that basis she had
refused to find Goslin guilty of the charge she was accused of with regard
to the casual workers’ wage payments.
[11] With regard to the fraud charge, Pather found it highly improbable that
Goslin, after eight (8) years of loyalty and competent service to the
company, could have attempted to defraud Universal for what to Pather
were “ insignificant amounts ”. Pather firstly attacked Universal’s
reconciling system for lack of structure and control in that an employee
was expected to, for example, submit a claim to the petty cash clerk,
receive a refund of the amount “ owed” to her, and having received this
“refund” then have to “ refund” from her own refund the amount
representing the 12% discount on all transactions made from Woolworths
involving the use of a credit card. Pather found that it would far rather
have been better if the petty cash clerk could have calculated the
discount, deducted the relevant amount before refunding the amount of
the purchase to Goslin.
[12] Pather found that the evidence had been inconclusive as to whether
Goslin had deliberately failed to refund the discount. For example, the
petty cash clerk had two receipt books operating at the same time, and
that whereas at one stage the allegation had been that she had, on two
occasions, taken staff discounts for her own benefit, it had subsequently
been established that she had in fact paid in the amount of R17,99
(seventeen rand ninety-nine cents) although this was not reflected on the
petty cash schedule. In such circumstances, Pather had concluded that
even if this inconclusive evidence showed that some R17,99 had not been
paid in, this could be attributed to human error rather than to fraud. It
would therefore be unfair to convict Goslin for fraud when in all probability
she had, to Pather’s satisfaction, done all she had been required to do
with regard to the refunding of the 12% discount in trying to meet the
demands of an “inadequate accounting system”.
[13] With regard to the third charge, Pather dismissed it offhand on the basis
that Bosch, Universal’s witness, had made several concessions the nature
of which rendered the charges devoid of substance. Bosch had stated,
Pather found, that Goslin could have provided the supporting documents
she was accused of having failed to produce. Besides, it was the petty
cash clerk’s responsibility to ensure that all supporting documents were
on record. No evidence had been led to show that Goslin had not provided
the supporting documents, as charged. This meant that Universal had
failed to discharge an onus resting upon it, of proving their case against
Goslin, Pather found.
[14] Pather did not consider that there was a major issue to be made of what
she termed, “ the minutes of the disciplinary hearing ” and Goslin’s
“apparent conflicting evidence at this hearing ”. Pather, firstly, found
Goslin to have been an honest and credible witness before her. She found
her evidence was corroborated in all material respects by Snyman, whom
she found also to have been “ credible and solid as a witness ”. Pather
found Goslin’s explanation for what she termed “ minor inconsistencies” to
be acceptable, reasonable and probable, regard being had to what Goslin
had described as a trauma of her sudden suspension that disorientated
her, and had made it difficult for her to apply her mind properly. In any
event, Pather held, the arbitration before her was a hearing de novo and,
by implication, she was going to be in the least influenced by what the
record of the disciplinary hearing showed, particularly if the content of
that record was being relied upon to persuade her against Goslin’s
acceptability as a reliable witness.
GENERAL LEGAL POSITION
[15] I will upset the findings of an arbitrator, (when his or her award is sought
to be reviewed and set aside on Section 145(2)(a) grounds), only if the
award lacks “rationality” or “justifiability” in relation to the evidence
placed before an arbitrator. Our law is replete with cases that bear out
this proposition.
[See: Shoprite Checkers (Pty) Ltd v Ramdano NO & Others
[2000] 9 BLLR 1011 LAC at 1022 B and 1024 H.]
[16] “Misconduct” as a ground of review must relate to some form of bad faith
(mala fides) or conduct that is obviously wrong in the circumstances.
[See: County Fair Foods (Pty) Ltd v CCMA & Others (1999) 20 ILJ
1701 (LAC).]
As “gross irregularity” is also a ground relied upon in this review,
Universal’s will succeed to have Pather’s award reviewed and set aside
on that basis only if I am persuaded that Pather misconducted herself
so irregularly that it can clearly be said there was no proper hearing.
[See: Maarten & Others v Rubin NO & Others (2000) 21 ILJ 2656
(LC) at 2659, para. 4.]
[17] An arbitrator’s award will not be reviewed by a judge merely because the
review judge would have come to a different conclusion had a judge been
sitting as an arbitrator. It is impermissible to do so. The judge, if satisfied
that the arbitrator considered all the facts, and applied relevant legal
principles, must not review and set aside an award merely because s/he
thinks the arbitrator is incorrect in his/her conclusions because his/her
conclusions are different to what his/hers would have been had s/he sat as
an arbitrator.
[See: Carephone (Pty) Ltd v Marcus NO & Others [1998] 11 BLLR
1093 (LAC).]
[18] Insofar as there is a call upon me to substitute my own award for that of
Pather, I will do so only if I am satisfied that the findings of the arbitrator,
and the reliefs she granted, are a travesty of justice in that they make no
sense and exhibit a lack of care and reasonableness in the way the
arbitrator approached all the evidence before her. After all, the arbitrator
has one definite advantage over me. She listened to the evidence, formed
an impression of the witnesses, and is therefore in a far better position
than I to make a credibility finding, for example, with regard to the
witnesses and the evidence they gave.
[See: Rex v Dhlumayo 1948 (2) SA 678 (A).]
Against this backdrop, I now turn to the arguments of the parties’ legal
representatives.
ARGUMENTS BY COUNSEL/LEGAL REPRESENTATIVE
[19] I am deeply indebted to the legal representatives for their able, oral
arguments. I was quite disoriented by the written Heads filed on behalf of
Goslin. For one thing, the page references were altered as we went on. For
another, there was one reference to case law, the Carephone case
(supra). That was the sum total of Mr Reardon’s reliance on case law in
support of his submissions. I am disappointed in a Respondent’s legal
representative, who in all likelihood responds to Applicant’s Heads in
which a body of case law is relied upon, but who finds it unnecessary to
articulate the jurisprudence that underpins his submissions on the facts.
Once again, I find it necessary to remark that Heads of Argument are
intended to assist judges to come to appreciably just findings on both the
facts and the law. They are not to be filed merely to meet deadlines.
[20] Perhaps before I begin an analysis of the oral and written argument that
was put before me on the 8 th April 2003, I need to deal quickly with the
condonation application by Goslin for her late filing of her Answering
Affidavit. Insofar as the application is not opposed, and also to the extent
that reasons have been given to explain the delay, it is not something that
should further delay me. By her account, Goslin was 36 (thirty-six) days
out of time. There is no objection by Universal to her application for
condonation. To the extent it is necessary for me to make a formal
pronouncement there anent, I grant the condonation accordingly.
[21] I propose to deal with the evidence charge by charge. I proceed to do so.
Charge 1
Universal heavily relied on what its witness, Chadinah, claimed was
Goslin’s main duty, namely to ensure that the processing of payrolls
was accurate in that all relevant documentation was attached to them.
On Universal’s behalf it was argued that in order to process casual
employees’ wages, Goslin had to satisfy herself that the casuals had
attended work before processing their wages. This she could do only if
she reconciled the access control register kept at the gate with the
attendance register in the office.
[22] Fraudulent claims of wages had been so prevalent that Goslin herself had
implemented this system in order to curb the fraud. Chadinah had
testified that an audit she conducted had established that between April
and May 2001 four casual employees had been paid in respect of days on
which their names did not appear in either the gate control register or the
attendance register. The employees were Kerwin Snyman, Carlos
Abranches, Remanus Shandu and Maureen Archibald. Chadinah testified
that under no circumstances should Goslin have processed hours for
payment purposes where the attendance register had not been signed by
the employee concerned.
[23] In her defence, Goslin had testified that the gate access control register
had been set up for safety and emergency purposes, not as an official
mechanism for the payment of wages. She denied that she had told
Chadinah anything otherwise. She testified that the gate access register
was used if queries arose in respect of staff who worked night shift. It was
Mavundla who processed the wages of casuals. Goslin denied that as
Human Resources Administration Manager, she was accountable for the
processing of casual employees’ wages.
[24] Mr Myburgh argued that on a closer examination of her evidence, despite
her denial that she was accountable, as Human Resources Administration
Manager, for Mavundla’s work, one observed that Goslin, under cross-
examination, made concessions that proved otherwise. She had, for
example, conceded that in processing the casual wages, Mavundla was
doing part of her job and standing in for her; that she would have been
the person Mavundla would have raised his queries with; that if Chadinah
herself, her direct superior had any problems with processing of wages,
she would have raised same with her, Goslin, in her capacity as the
“accountable person ”; that ordinarily she was accountable for ensuring
that the information presented which triggered employment was correct
and that persons in exactly the same position as she who had failed in
their accountability had been dismissed in the past.
[25] Insofar as reliance was placed on the corroboration of Goslin’s evidence
by the evidence of Aubrey Snyman, Mr Myburgh argued that Snyman’s
evidence could not be relied upon. Mr Reardon had argued that Snyman’s
evidence had been to the effect that Goslin would not have regard to the
gate control register if a worker had signed the attendance register. She
would only peruse the gate control register if the attendance register had
not been signed, just to make sure that the worker had indeed been at
work. It was at his (Snyman’s) suggestion that this mechanism had been
resorted to in order to avoid the necessity of telephoning shift managers
at home whether workers who had not signed the attendance register had
in fact been at work.
[26] Snyman had further testified that Goslin, on going on leave, had been
required to hand over her duties to Mavundla who was accountable to V
Pather as aforementioned. Mr Reardon argued that save for the gate
register for the 23 rd April 2001, Goslin had placed in dispute all the gate
control registers relied upon by Universal. On various occasions
throughout the proceedings, Goslin had challenged the correctness of the
registers for gate access control. On that basis, it was argued, I must
endorse Pather’s conclusion that Goslin had not committed the alleged
misconduct.
[27] In arguing against Snyman’s testimony, Myburgh argued that in cross-
examination, it had transpired that Snyman had in fact been dismissed by
Universal and that one of the charges giving rise thereto related directly
to the operation of the gate access control register. Myburgh argued that
far from Snyman corroborating Goslin in any respect material to the
charge, Snyman, in the end conceded that as Human Resources
Administration Manager, Goslin was accountable for the processing of
wages and that ordinarily, it was her responsibility to ensure that the data
had been captured correctly. It was her responsibility to ensure that the
hours worked by casuals were correctly captured onto the system. In that
sense, in the position she held, she was accountable.
[28] In the light of the arguments presented by Myburgh, and with clear and
copious references to the evidence, even in a review (as distinct from an
appeal) it is difficult to find on what basis Pather could rationally and
justifiably have come to the conclusion that Goslin was not guilty of gross
misconduct of negligence in respect of processing of irregular time sheets
leading to fraudulent salary payments. Nothing that was argued before
me, and nothing that I have found in reading the transcript, convinces me
that Pather did not conduct herself irregularly in concluding, in essence,
inter alia , that “ since Mavundla had processed the wages in question,
there can be no question that [Goslin] breached the rule. ” Pather took too
peripheral a view of all the evidence and her conclusions in this regard
cannot be justified in the light of the evidence that was placed before her.
Charge 2: Claiming of discount in respect of purchases made on behalf of the
company
[29] Universal, in support of this charge, relied on Bosch’s evidence. Bosch
testified that if an employee made a purchase from a Woolworths store –
Universal being a wholly owned Woolworths subsidiary – and the
employee used a Woolworths card, the employee was entitled to a 12%
discount on such purchase, refundable to the employee through salary.
Where a purchase was made for Universal, by an employee using a
Woolworths card, on claming the refund of that payment from Universal,
the employee would be required to repay the amount of discount to avoid
the employee receiving a double benefit of that discount. Goslin had
previously transacted purchases that called upon her to refund Universal,
said Bosch. In a purchase of R149,88 (one hundred and forty-nine rand
and eighty-eight cents) that Goslin had made on behalf of Universal, using
her Woolworths card, there had been no record that she had made a
R17,99 (seventeen rand and ninety-nine cents) refund to Universal. This
Bosch had discovered in the course of a commercial audit.
[30] Whilst Goslin did not dispute these details, she testified that she had
originally been charged for two separate incidents of not refunding a
discount. On requesting copies of receipts issued to her, she had received
schedules that showed that one of the discounts had been refunded by
her. Charges against her were dropped. She was confident she had
refunded the other R17,99 (seventeen rand ninety-nine cents) in question.
Her confidence was boosted by her recall of an occasion when an
employee, Vedna, who had kept two receipt books, had approached her
with regard to an excess of R17,99 (seventeen rand ninety-nine cents) in
her petty cash account. Mr Reardon argued that in the circumstances,
Goslin could not be held liable for anything, if at all, worse than that there
had been a human error that could account for the failure to establish
whether or not the discount had been paid in. besides, Universal bore the
onus of proof of wrongdoing on the part of Goslin and had failed to do so.
[31] Mr Myburgh, not unexpectedly, did not accept this version and argued
that Goslin’s inconsistencies were glaring. In the disciplinary enquiry, she
had stated that she had not paid the discount due to an oversight. At the
arbitration she maintained that she had repaid the discount. For the
confusion, Goslin had proffered the reason that she had been disoriented
by the treatment which she got from Universal, an explanation that Pather
found reasonable in the circumstances.
[32] I cannot fault Pather’s findings with regard to this charge merely because I
would have found differently had I been sitting as Arbitrator. Pather had
taken the attitude that the proceedings before her were de novo, that
she was not going to be influenced, for that very reason, by what had
taken place at the disciplinary hearing. She had been quite happy to
accept that, at worst, Goslin had committed a human error. I cannot rule
that that observation was wrong. In the view that she took of the evidence
she viewed the contradictions as “ minor inconsistencies ” and that
probably was due to the fact, also, that the amounts involved are
infinitesimal. I am not able to find on the evidence that fraud, by whatever
interpretation, has been proved. I decline to upset Pather’s findings on
this charge. I do not think she was correct in her evaluation but I do not
think she misconducted herself as contemplated in Section 145(2)(a) of
the LRA.
Charge 3: Breach of procedure, processing of wages without supporting
documents
[33] Again, Bosch’s evidence was relied upon for this offence. According to
him, Universal’s procedure for payment of wages outside the normal roll
required the preparation of a schedule indicating who was to be paid,
what amounts had not been paid, and so on. This kind of documentation
would be handed over to the petty cash clerk who was required to make
out a cheque requisition which would be authorised by the Commercial
Manager or Senior Manager.
[34] The cheques in question were those of the 22 nd and 23 rd June 2000,
accompanied only by coinage analysis. In respect of both cheque
requisitions, it was Goslin (and not the petty cash clerk) who had signed
the requisitions. In her defence, and in argument on her behalf, it was
contended that Goslin had indeed signed the requisition – (which would
normally have been signed by the petty cash clerk) – because the petty
cash clerk was not at work. Besides, she had provided pay slips showing
under-payments for the amounts of the requisitions for which the cheques
were sought and that constituted the necessary supporting
documentation. Mr Reardon therefore argued that Bosch’s evidence was
far from conclusive that the supporting documentation had not been
provided. The Arbitrator had correctly held that there was no substance to
the charge.
[35] Mr Myburgh argued that Universal’s Human Resources Manager’s
procedure for the payment of wages outside the normal payroll cycle was
a control mechanism designed to prevent theft. A failure to follow this
procedure could constitute gross negligence. On the two days, Myburgh
argued, Goslin had completed a cash/cheque requisition and had herself
received the money (R396,89 (three hundred and ninety-six rand and
eighty-nine cents) on 22 June 2000 and R673,03 (six hundred and
seventy-three rand and three cents) on 23 June 2000). The only
supporting documentation was a coinage analysis, as aforementioned.
Myburgh argued that in the absence of real supporting documentation in
the form of “payslips, or a schedule, or spreadsheet indicating who would
receive the casual wages and why ,” the whole purpose of the procedure
was defeated.
[36] Mr Myburgh argued that in chief, Myburgh stressed that it was the petty
cash clerk who ought to have made out and signed the requisition (with
the supporting documentation) and not Goslin. In response to Goslin’s
speculative response that the supporting documents must have been
mislaid by the petty cash clerk when she returned, hence they could not
be found, Bosch had testified that the result of his audit was that the
supporting documents were not there.
[37] Mr Myburgh further argued that Goslin’s own evidence on this change had
been peppered with mendacity. Goslin could not explain satisfactorily why
she, and not the replacement petty cash clerk, had filled out the
requisition form (which she could not do, and still be the one to receive
the money). She had testified it was because the replacement petty cash
clerk would not have been familiar with how to fill in the form. In the end,
so argued Myburgh, Goslin had been forced to concede that she had
effectively stood in for the petty cash clerk, on her own version. The
responsibility had thus become hers to ensure that supporting
documentation was attached to the requisitions.
[38] In the light of Myburgh’s analysis of all the evidence in regard to this
charge, I find Pather’s conclusions completely unjustifiable. Almost with a
wave of a hand, she dismissed the charge as one without substance. It
seems to have been on the basis of her acceptance of Goslin’s evidence,
without subjecting it to proper analysis. The cardinal question of why
Goslin prepared a requisition, submitted it herself, and received the
money herself was not answered by Pather, particularly in view of Bosch’s
evidence that the procedure that the requisition, with supporting
documentation should be by the petty cash clerk, and submitted to the
Commercial Manager for authorisation, had been designed to prevent
theft.
[39] On both days, Goslin herself had taken over the roll of petty cash clerk,
without anyone to act as a check and balance mechanism. Requisitions
had to be accompanied by documentation, with the details already
referred to hereinabove. The obligation to supply the documentation with
the requisition, was hers, and hers alone.
[40] Pather clearly grossly misconducted herself in holding otherwise. She was
precipitate in holding that only Goslin and Snyman’s evidence was
credible – and failed to appreciate the ring of truth in Bosch’s evidence on
this charge, particularly. In any event, it was her duty to look at all the
evidence. I am satisfied that on this third charge, her findings are not
justified and have no rational connection to the evidence put before her.
They cannot stand. They must be reviewed and set aside.
[41] It remains for me to determine whether I am persuaded that this an
appropriate case which I can, in reviewing and setting aside Pather’s
award – which I do – substitute it with one that I deem fit. Had I not found
as I did in respect of the second charge, I would have had no hesitation in
seriously considering that route. However, I elect to order as follows:
41.1 The application for the review and setting aside of the award of
the Second Respondent, handed down on the 7 th
February 2002 under case no. KN 8135/01 hereby
succeeds and is upheld. The award is accordingly
reviewed and set aside, and it is so ordered.
41.2 The Third Respondent is ordered to pay the costs of the
application.
41.3 The matter is remitted to the First Respondent to be dealt with
further, if needs be, by a different commissioner.
________________________________________________
D B NTSEBEZA
Acting Judge of the Labour Court of South Africa
Date of Hearing: 8 April 2003
Date of Judgment: …………………………….
For the Applicant: Adv A Myburgh
Instructed by: Perrot, van Niekerk & Woodhouse
Inc.
Durban
For the Third Respondent: Mr B A Reardon
From: Millar & Reardon
Durban