IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
REPORTABLE CASE NO. JR1950/02
In the matter between:-
MS PHOEBE MOLOPE Applicant
and
COMMISSIONER B H MBHA First Respond e nt
THE COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION Second Respond e nt
MORKELS STORES Third Respond e nt
J U D G M E N T
CORAM FARBER AJ:
On 19 September 2002 the first respondent, a commissioner of the second
respondent, handed down an arbitration award in a dispute between the applicant
and the third respondent. He determined that the dismissal of the applicant by the
third respondent was procedurally and substantively fair. The applicant seeks to
have that determination reviewed and set aside.
The background to the matter may be summarised as follows:-
During 1996 the applicant entered the employ of the third respondent as an
administrative controller of its branch in Pretoria North.
IN THE LABOUR COURT OF SOUTH AFRICA
In 1999 she was promoted to the position of manager of that branch.
She was to advance further, for on 1 April 2000 she was appointed to the office
of Area Manager Designate, with responsibility for four of the third
respondent's stores located between Brits and Rustenburg. In this position
she reported to Mr Peter Champion, the third respondent's regional
manager.
On 21 September 2000 the applicant attended at the third respondent's store in
Rustenburg for the purposes of performing what has been described as a
"branch assessm ent". On arrival, she was told that manage m ent had
decided that she was to proceed immediately to the third respondent's store
in Brits and investigate certain transactions based on documentation with
which she was to be provided.
Arising therefrom, the applicant immediately proceeded to the store in Brits. She
set about her task, only to discover "that there were more questionable
documents and/or transactions than anticipated".
Champion was on leave. The applicant consequently advised Mr Nienaber, the
third respondent's general manager, of her findings. She requested the
IN THE LABOUR COURT OF SOUTH AFRICA
performance of a full assessment and audit of the store.
The applicant's recommendation was accepted and the requisite assessm ent and
audit was conducted by one Diane Sikie, the third respondent's then
divisional credit manager. She was assisted by Mrs Vivian Kritzinger, the
third respondent's regional credit manager.
Their investigations took place on 25 and 29 September 2000, on which latter
date Sikie reported her findings in writing. Kritzinger was intimately
involved in the audit and assessm ent and was in a position to confirm the
contents thereof.
The report, which was damning, reads as follows:-
"STOCK MANAGEMENT
A stock take was done which resulted in a shortage of R18 252,70. Part of this
shortage is due to credit notes that date back to May and June that have
never been processed and confirmed. The stock is no where to be found.
This has also resulted in Customer's having two or three accounts appear
on their statements as the new invoices were processed and completed.
The following damaged items are in the stock room:
930050, 930250, 900058, 172270.
The following Customer's property is in the stock room:
COD 65644 dated 22.4.00 - Westpoint stove
Invoice 14294 Customer P Mabala - Fridge & Stove.
Invoice 812929 Account 814844 - TV - the credit on this application was not
approved but has been confirmed as delivered (preinvoicing).
COD 65... Deal preconfirmed, this fridge has been loaned to another Customer
IN THE LABOUR COURT OF SOUTH AFRICA
for a CP1 claim that was approved. Refer CP1 claim 3501 - this was approved
by the Area Manager.
I have instructed the Manager to contact all these Customers to collect stock by
7.10.2000, if not Credit Notes will be processed.
The Terminal Operator has taken delivery of a Fridge and a Hi-Fi without the
applications being invoiced. Both the Manager and the Area Manager are
aware of this. To date these invoices have not been processed.
Dispatch and collection
There is more than one person responsible for receiving and dispatching of
stock. The Terminal Operator has a full set of keys for the store with the
Manager's Consent. I removed them from her and instructed the Manager
to lodge them with the bank immediately.
The Stock Repair Voucher Procedure is not utilized. I have explained this to the
Manager and the Terminal Operator.
Customers are paid cash for reversal of delivery charges. They were not aware
there is a reversal book.
Manual delivery notes do not have the printed SOS delivery note attached.
Stock Transfer Notes have a print screen attached.
The Stock Take Preparation Checklist is not used before a stock take is done.
Not one book pertaining to stock has been checked and signed by the Manager.
The Terminal Operator does the stock takes, compiles all the reports and
prepares the SAN as she was instructed to do so.
The Manager clearly has no control over Stock Management and displays a
total lack of interest and knowledge.
Audit Trails
All Audit Trails are not checked and signed by the Manager. She admits that
she has not checked Audit Trails since the store opened. These checks
are done by the Terminal Operator. Audit Trails are two weeks behind.
The Branch Delivery Control Report does not reconcile to the Undelivered
File.
DEBTORS MANAGEMENT
The cod and 900 Account are filed every month without being actioned. The
DEBTORS MANAGEMENT
The cod and 900 Account are filed every month without being actioned. The
Manager claims she does not know how to reconcile these accounts
despite the fact she was trained for two months.
The 900 Account has had a debit balance since May. There are no Re-
conciliation's on file.
The Area Manager only rectified some queries on the 22.9.00.
The cod Account has had a debit balance since July, once again no Re-
conciliation's on file. This was finally rectified on the 27.9.00.
Cash Control
No action taken on the Deposit Held Account since 27.9.00.
Deposits date back to April which all formed part of the queries on the 900 and
cod Account.
IN THE LABOUR COURT OF SOUTH AFRICA
The Area Manager has not checked the Bank Summaries.
There are still many Manual Receipts that have no SOS copies attached.
The Manual Receipt Books have no indication of spot checks been done by the
Manager or Area Manager.
The Relief Cashier Procedure is not adhered to. The stamped Deposit Slips are
not attached to the Bank Summary but filed separate.
Cash taken for Manual Receipts is dropped but not given to the Security
Company the next day.
No authority is obtained from the Area Manager for shortages.
Shortages are not questioned or actioned by the Manager.
Signing the Bank Summary is clearly a paper exercise for the Manager.
Expense Control
There is no control over Cash Payment Vouchers.
There are cash payment vouchers totaling R388..... that have not been
processed.
The processing copies are filed separate and not with the Cash Audit Trail.
Blue copies are filed with the Bank Summary and not separate.
I rectified this with the Cashier.
The Manager has been claiming money for petrol since April for the collection of
stock and attending training. No authority numbers have been obtained. She
claims the Area Manager is aware of this.
Listed below is the amount she has taken:
September - R200.00
August - R600.00
July - R950.00
June - R1400.00
May - R860.00
April - R150.00
In June the Area Manager also claimed R200.00 for petrol.
There are cpvs where the money taken does not equal the Tax Invoices.
The Cashier over-banked her float, instead of declaring a shortage the next day
a cpv was prepared for a further float of R125.00.
I rectified this with a Sundry Receipt and explained the procedure to the
Cashier.
Customers are being paid by us to hire transport to collect their goods.
The Area Manager drew R60.00 on cpv Number 263645 dated 7.7.2000 to
have shoes repaired.
The Manager had her Cell Phone repaired at our expense cpv Number 263562
The Manager had her Cell Phone repaired at our expense cpv Number 263562
dated 3.6.2000.
Refer to cpv Number 263463 R46.90 drawn for food for the Manager.
Refer to cpv Number 263684 R240.00 taken by the Area Manager.
For VIP Events no tax invoice.
The General Assistant is paid Spiv's when he writes a deal.
... payments to Sales staff is not controlled, no Invoice Numbers are indicated
on the cpvs. No Spiv Control Sheets are used.
IN THE LABOUR COURT OF SOUTH AFRICA
Not all cpvs are approved by the Manager.
Agreements
The adherence to Credit Granting is poor. The completion and quality of
agreements is also poor. Some Agreements not signed by the Customer.
Loan Agreements are incomplete.
The Terminal Operator mostly does the approval of credit.
Agreements are not filed in invoice or account number order.
Monthly Performance Tracking for the Sales Staff has not been done since the
store opened. The Terminal Operator was last tracked in July. There are
no goals on file for the out of line areas.
Conclusion
It is clear from the above that many breaches have occurred in this store.
When I discussed these issues with the Manager she called the Terminal
Operator to explain. She has no idea what is happening in her store. The
staff is clearly confused. The Terminal Operator is seen as the Manager
by the staff.
The Terminal Operator was able to answer all my questions regarding the
stock.
It is clear she has been running the store in the Managers presence.
The Manager lacks management and leadership skills to a great degree, is
unable to use her initiative and is of no support to the staff.
She blames the Area Manager and continued to state that she had not been
trained properly.
I believe that majority of these issues could have been prevented by the Area
Manager had she been more involved.
The staff lack knowledge with certain admin aspects and I would suggest that a
Workshop Training Cession is held."
Following thereon, the store's manager, one Hannie Schutte, and its terminal
operator, Karen Kleinhans, were suspended pending the finalisation of
disciplinary proceedings which had been instituted against them on the
grounds of their gross negligence.
This hearing was scheduled to commence on 10 October 2000. Prior thereto,
Schutte and Kleinhans resigned from the service of the third respondent,
IN THE LABOUR COURT OF SOUTH AFRICA
with the result that the hearing against them did not proceed.
On 10 October 2000 the applicant was suspended and notified of the third
respondent's intention to institute disciplinary proceedings against her on
the following charges:-
"1.GROSS NEGLIGENCE
It is alleged that you were grossly negligent in the performing of your functions
as an Area Manager Designate, with particular reference to your
responsibilities in the Brits branch for which you were responsible.
Staff removing stock from the store, of which you were aware, but failed
to check if all policies had been complied with, evidences
this. I.e. applications being invoiced, all credit granting
criteria adhered to.
You failed to ensure that there was only one set of keys in the branch.
You failed to ensure that the staff performed their functions, e.g. balancing of
900/005 accounts, balancing of branch delivery control report to the undelivered
file. No action taken on the deposit held account.
You failed to ensure that the credit granting policy and the completion of deals
were maintained at an acceptable level.
You failed to ensure that performance tracking was carried out on all staff, every
month.
Not one book pertaining to stock has been checked/signed by yourself.
You allowed customers to be paid cash for reversal of delivery charges.
You failed to ensure that all cash and banking procedures were adhered to in
the store.
You failed to ensure that all expenditure in the store was for company purposes,
and had the appropriate signatures.
You failed to ensure that all debtors systems assurance related issues were
adhered to.
2.UNAUTHORISED USE OF COMPANY FUNDS
It is alleged that you utilized company funds for your own private use without
authority: 1. Drawing company funds for your own private use - ref.
Cpv 263645, for shoe repairs.
3.BREACH OF COMPANY POLICY
IN THE LABOUR COURT OF SOUTH AFRICA
It is alleged that in all the above instances a number of company policies were
breached, which you allowed to go unchecked from the time that
the store opened, despite your numerous visits to the store."
The hearing was scheduled for 20 October 2000, and in the notice convening it
the applicant was, inter alia, advised that "you may call on a fellow
employee from your operating unit to act as your representative".
It commenced on 20 October 2000 and was completed on 23 October 2000. The
verdict returned was that the applicant has misconducted herself in the
respects alleged in count 1 (gross negligence in the performance of your
functions/duties as Area Manager Designate) and count 2 (unauthorised use
of company funds). Misconduct based on the allegations embodied in count
3 (breach of company policy) was not sustained.
Count 1 attracted the sanction of "a final written warning with demotion". Count
2 was far more severely dealt with and attracted the sanction of "summary
dismissal".
The applicant pursued an appeal, which appeal was dismissed on 30 October
2000.
The applicant then referred the matter to the first respondent for conciliation. To
that end, a meeting took place on 26 January 2001. It was unsuccessful and
IN THE LABOUR COURT OF SOUTH AFRICA
the matter then proceeded to arbitration before the first respondent, who
adjudicated thereon on 3 July and 9 September 2002. As previously
indicated, he determined that the applicant's dismissal was substantively and
procedurally fair. It is this finding which the applicant now seeks to
impeach.
I turn to the question of substantive fairness.
As to count 1, the objective facts relating to the manner in which the affairs of the
third respondent's branch in Brits had been conducted was not in issue in the
arbitration. The applicant's defence was that in her position of Area Manager
Designate she was, in relation to that branch (and the other branches which fell
within her area of responsibility), only required to fulfil such functions and
discharge such obligations as had been assigned to her on an ad hoc basis from
time to time by Champion. She contended that she had no authority to act
independently as was required of an Area Branch Manager. She further
contended that she had never been asked by Champion to deal with any of the
matters foundational to count 1. As such, she could not be held accountable for
the acts of mismanage m e nt articulated therein.
The first respondent rejected the very substratum of the applicant's case for
reasons which I believe are substantial and compelling. They are as follows:-
On the evidence adduced before the first respondent, it is clear that the third
respondent had not appointed an Area Manager in respect of the stores in
question. It was hardly likely to have jettisoned the need for so important a
controlling functionary, unless that role was required to be fulfilled by the
applicant, albeit that she was then only the Area Manager Designate which,
applicant, albeit that she was then only the Area Manager Designate which,
so it seems, was a probationary appointment which would crystallise into a
full appointment by the end of 2000.
IN THE LABOUR COURT OF SOUTH AFRICA
On the undisputed evidence of Mr Burrows, Mr Ferreira and Mrs Kritzinger, an
Area Manager and an Area Manager Designate are required to fulfil
identical functions. It was common cause before the first respondent that an
Area Manager was charged with the responsibilities and functions which
underpinned count 1.
The performance of the applicant as Area Manager Designate was assessed by
Champion. Such assessm ent covered areas which fell within the ambit of
an Area Manager's functions and responsibilities. This tends to serve as a
powerful indicator that the applicant in fact fulfilled those functions and
responsibilities, or was at least required to do so.
During the course of her evidence before the first respondent, the applicant
contended that the functions and responsibilities of an Area Manager
Designate were never explained to her. This contention stood in sharp
contrast to the evidence adduced at the disciplinary hearing as, on that
occasion, Champion testified that he had in fact fully explained the position
to the applicant. The applicant did not then contest Champion's assertion.
The applicant from time to time submitted written reports relating to the
functions which she had fulfilled as an Area Manager Designate at the
various branches under her ambit of responsibily. Many of the activities
reported on related to the very functions which an Area Manager would in
IN THE LABOUR COURT OF SOUTH AFRICA
the ordinary course have been required to fulfil.
It was common cause that Champion, in conjunction with the applicant, had
compiled what was described as a "branch check list". This document
detailed the functions which the applicant was required to perform in her
capacity as Area Manager Designate. A great number of the omissions
identified in count 1 fell within the range thereof.
The applicant admitted that she held the responsibility normally associated with
that of an Area Manager, but not the authority to act as such. This
essentially represented a contradiction in terms which was not properly
explained during the course of the hearing.
As to count 2, it was not in issue that moneys which had been withdrawn from a
"staff account" maintained at the branch in question was used to pay for the repair
of the applicant's shoes. Her case was that she was totally unaware thereof. On
this score, she testified that on 5 July 2000 one Andries, a store assistant
employed at the branch, advised her that he was going to the shops. He asked her
if she required anything. The applicant enquired whether there was a shoe repair
shop in the vicinity. When she was told that there was in fact one, she produced a
pair of shoes from the boot of her motor vehicle, gave it to Andries and asked
him to hand it in for repair. Andries apparently did so and on his return to the
branch he advised the applicant thereof, indicating that the repairs would cost
R60,00. The applicant advised Andries that she would leave that amount with
Thabitha, a cashier employed at the Brits store, and that when the shoes were
ready for collection he was to collect the moneys in question from her so that
ready for collection he was to collect the moneys in question from her so that
payment for the repair might be made. The applicant later on that day handed
Thabitha the sum of R60,00. On 10 July 2000 the applicant again visited the
branch. On that occasion, Andries advised her that the shoes were ready for
collection. Later that day they were handed to her by the manager of the branch.
The first respondent rejected the applicant's version for what I consider to be
IN THE LABOUR COURT OF SOUTH AFRICA
substantial and compelling reasons. They are as follows:-
It was common cause that the branch's funds were in fact used to pay for the
repair of the applicant's shoes. A "cash payment voucher" which was
signed by Thabitha and the branch's manager reflected the withdrawal
thereof from the branch's funds. There was really no need for any of this
had the applicant in fact placed Thabitha in funds to pay for the repairs.
During the course of her evidence before the first respondent, the applicant quite
firmly and unequivocally testified that she had handed the funds in question
to Thabitha. During the course of her evidence during the disciplinary
hearing, she was somewhat uncertain as to whether she had in fact left
money at the branch, and if so, with whom. She at that hearing ultimately
identified the manager as the person in question.
The applicant, on her own version, concluded an agreem ent in relation to the
repair of her shoes with Andries. He was to take possession thereof, to then
deposit them for repair, and to collect and pay for them. There was no real
explanation as to why in these circumstances the applicant did not simply
hand the sum of R60,00 to Andries. Instead, she involved a person entirely
extraneous to the transaction as the repository thereof.
In summary then, I am in no doubt that the first respondent's findings in regard to
the substantive fairness of the applicant's dismissal was rationally connected to
the evidence which was placed before him. Count 2 was particularly serious,
IN THE LABOUR COURT OF SOUTH AFRICA
involving as it did a breach of trust. It was not for the first respondent to even
begin to second guess the penalty of summary dismissal which the third
respondent imposed in respect thereof.
No case for interference has been established on this leg of the case.
The question of procedural fairness stands on a different footing. According to
the applicant, she had secured the services of Joyce, the third respondent's
Regional Credit Manageress, to represent her at the disciplinary enquiry. Joyce
had withdrawn from acting on the evening of 19 October 2000. The applicant
immediately telephoned Champion to advise him of this fact and to request a
postponem ent of the hearing. He advised her to raise the matter at the enquiry on
the following day. According to the applicant, she advised the enquiry that her
representative had withdrawn on the previous day and that in consequence she
sought a postponem ent of the matter.
Her request was not acceded to. So much is common cause. However, according
to Ferreira who chaired the enquiry, the applicant in moving for a postponem ent
did not mention that her representative had only withdrawn on 19 October 2000.
The minute of the enquiry records that in her reference to the withdrawal of her
representative, the applicant mentioned Tuesday, 17 October 2000. Ferreira
stated that the declination of the postponem ent was based on three considerations,
namely that the applicant had received ten days notification of the hearing, that
she had not requested a postponem ent prior to the hearing itself, and that in the
event of a postponem ent senior personnel would have been substantially
inconvenienced.
The first respondent dealt with the matter on a somewhat different basis. On this
The first respondent dealt with the matter on a somewhat different basis. On this
score he said the following in his award:-
"The Applicant's gripe as far as the procedure is concerned is that she was
never afforded an opportunity to have a representative at her hearing. This
must be viewed against the backdrop that she had ten day's notice before the
hearing. This must also be viewed in relation to her testimony at this arbitration.
It will be recalled that she testified to the effect that her alleged representative
only contacted her on Thursday the 19th advising her that she was not going to
be available at the hearing on the next day. This is contradicted by what is
recorded on the minutes. On page 5 of the minutes it is recorded that the
Applicant actually testified that her representative contacted her on Tuesday.
Even if one were to hold that this contradiction is not material however looking
at the entire record of the hearing it is clear that the Applicant was afforded an
adequate opportunity to present her case. The record of the hearing also
shows that she effectively cross-examined all the witnesses who testified on
behalf of the company."
IN THE LABOUR COURT OF SOUTH AFRICA
I am, with diffidence, unable to subscribe to the approach adopted by both
Ferreira and the first respondent in regard to the question of a postponem ent.
It is now clearly established that one of the requirements of a procedurally fair
and just hearing embraces the entitlement of an employee to be represented
thereat by a co-employee or a trade union official or a lawyer. [NUM v Blinkpan
Collieries Ltd 1986 ILJ 579 (IC); NUMSA v Elm Street Plastics t/a ADV Plastics
1989 ILJ 328 (IC); ACTWUSA V JM Jacobsohn (Pty) Ltd 1990 ILJ 107 (IC);
Ibhayi City Council v Yantolo 1991 ILJ 1005 (E); Trauschweitzer v Robert Skok
Welding (Pty) Ltd t/a Skok Machine Tools 1991 ILJ 1099 (IC); Tonga v ICA
Group Ltd ta Renown Meat 1994 ILJ 669 (IC); Lamprecht v McNeillie 1994 ILJ
998 (A); Dywili v Brick & Clay 1995 7 BLLR 42 (IC); NUMSA v Steloy Stainless
Precision Casting (Pty) Ltd 1995 7 BLLR 87 (IC); Cuppan v Cape Display
Supply Chain Services 1995 ILJ 846 (D); Dladla v Administrator, Natal 1995 ILJ
1418 (N); Holgate v Minister of Justice 1995 ILJ 1426 (E); Myburgh v Voorsitter
van die Schoemanpark Ontspanningsklub Dissiplinêre Verhoor 1995 9 BCLR
1145 (O); Coin Security Group (Pty) Ltd v TGWU 1997 10 BLLR 1261 (LAC);
Van Jaarsveld 1993 De Jure 176; Olivier 1996 DR 669.]
Representation is not a matter of discretion. Nor is it tied to the exercise of a
prerogative or an indulgence. It is a matter of entitlement and it will generally
require very weighty considerations before an employee falls to be deprived of
the right foundational thereto.
On this score, it seems to me to matter little whether the applicant's representative
withdrew from acting on 17 or 19 October 2000. In each instance, the
withdrawal would, in relation to the proximity of the hearing, have been
IN THE LABOUR COURT OF SOUTH AFRICA
extremely late. I say this because of the serious nature of the complaints which
had been proffered against the applicant, their complexity and the time which was
fairly required for preparation so as to permit of meaningful representation. In
this context, the date on which the applicant was advised of the hearing is wholly
irrelevant. What is relevant was the withdrawal of her representative in relation
to the proximity of the hearing. On any basis, it was "late".
Nor does the fact that the applicant did not request a postponem ent in advance of
the hearing carry weight. On her version, she raised the matter at the first
available opportunity. In all events, I know of no rule or principle which required
her to raise the matter before the hearing, other than perhaps by virtue of "good
etiquette". A failure in etiquette does not warrant a declination of a
postponem ent. The inconvenience which it is said might have been occasioned to
members of the disciplinary panel in the event of a postponem ent is in my
judgment a mere "make weight" when considered against the applicant's
entitlement and its fundamental importance.
The consideration of the first respondent that the applicant appears to have
conducted her defence with competence and that she had every opportunity of
doing so is, with respect, equally misconceived. The applicant was, as a matter
of right, entitled to representation. Her adequacy and competence is no substitute
therefor.
Ferreira's approach was wholly misconceived. The first respondent ought to have
found accordingly and his attempt to justify the fairness of the procedure adopted
was equally misconceived.
I am thus of persuasion that the dismissal of the applicant was tainted by
procedural unfairness.
procedural unfairness.
The applicant ought in my view to succeed to that extent. It is accordingly not
necessary to consider the other instances of procedural unfairness relied upon by
the applicant in seeking to impugn the integrity of the hearing.
The procedural unfairness which I have identified was only cured during the
course of the arbitration, almost two years after the dismissal. The applicant may
well have a substantial claim for compensation against the third respondent. She
at the time of the dismissal earned a basic monthly salary of R6 500,00. She may
have received other benefits. The question of compensation is best considered by
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the first respondent in light of such evidence which he may be disposed to hear in
relation thereto.
Although the applicant has only been partially successful in the matter, such
success is substantial. Costs ought consequently to follow the event.
The following orders will issue:-
The decision of the first respondent in upholding the dismissal of the applicant on
the basis of procedural fairness is set aside.
It is declared that the third respondent acted procedurally unfairly in
dismissing the applicant.
The matter is remitted to the first respondent for the determination of the
compensation, if any, payable by the third respondent to the applicant
arising from the provisions of paragraphs A.1 and 2 hereof.
The costs of the application are to be paid by the third respondent.
Save as aforesaid, the applicant's application is dismissed.
To the extent that it may be rendered necessary, it is consequently declared
that the applicant's dismissal was substantively fair.
G FARBER
ACTING JUDGE OF THE
LABOUR COURT
IN THE LABOUR COURT OF SOUTH AFRICA
DATE OF HEARING:
11 NOVEMBER 2004
DATE OF JUDGMENT:
01 FEBRUARY 2005
MR KHOZA ADV HEIDI BARNES
Applicant's Represe nt ativ e Third Respond e nt's Counsel
c/o Retail & Allied Workers UnionInstructed by:
4th Floor, Suite 445 Hofmeyr Herbstein & Gihwala Inc
Karl Kling Building 6 Sandown Valley Crescent
262 Vermeulen StreetSand o w n
PRETORIA CENTRALSANDTON
Tel/Fax: (012)32 3 5879Tel: (011)286 1145
Fax: (011)28 6 1269
(Refer A Makka/mvdh/001 8 3 8 4 1 )