Sneller Verbatim/dd
IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG CASE NO: JR152/04
2005- 02-24
In the matter between
TIBBETT & BRITTEN (SOUTH AFRICA)
(PTY) LIMITED Applicant
and
MARILYN MARKS 1st Respondent
NATIONAL BARGAINING COUNCIL FOR
THE ROAD FREIGHT INDUSTRY 2nd Respondent
MAPALO TSATSIMPE NO 3rd Respondent
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J U D G M E N T
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REVELAS, J : This is an application for review in terms of section 32 of
the Arbitration Act, 42 of 1965, to review an arbitration award of the
third respondent in favour of the first respondent. There is also a
condonation application before me, as the application for review was
filed three days out of time.
The first respondent, Marilyn Marks, was dismissed by the applicant
following charges of the unauthorised use of the applicant's credit card
(strictly issued for use in the furtherance of the applicant's business) for
her personal benefit and the irresponsible use thereof, she being an
employee in a senior position.
The appeal against the dismissal imposed by the disciplinary inquiry
chairperson, was unsuccessful. The first respondent then referred a
dispute about an unfair dismissal for misconduct to the second
respondent where it was eventually arbitrated by the third respondent
("the arbitrator") who held that the dismissal was substantively and
procedurally unfair.
In terms of the award, the applicant was directed to pay the first
respondent compensation in an amount equal to 12 months' salary.
Costs was also awarded against the applicant on an attorney and client
scale of the High Court, despite the fact that a Bargaining Council is
precluded from awarding costs on that scale.
The applicant seeks to review this award. Before setting out the factual
background which gave rise to the application, I will list certain
preliminary issues raised by the applicant.
The applicant raised the point that the Bargaining Council did not have
the necessary jurisdiction to arbitrate this particular dismissal dispute
because the dismissal was essentially one about an automatically
unfair dismissal, since the first respondent consistently raised
victimisation as the actual reason for her dismissal. She had done so in
the disciplinary inquiry and during the arbitration proceedings.
However, the dispute which she referred to the arbitration was not one
based on victimisation.
I do not believe there is any merit in this point, since the victimisation
was one factor in the first respondent's version of events which resulted
in her dismissal. Ultimately she was dismissed for misconduct, the
nature of which was common cause. The automatically unfair dismissal
definition in section 187 of the Labour Relations Act, 66 of 1995 (“the
Act”) can be relied on only in circumstances where the exercise of the
employee's rights results in the employer takeing action in the form of
victimisation or dismissal. That is not applicable to the case in
question. The applicant had taken no steps to exercise her rights when
she was dismissed. In my view, the arbitrator committed no irregularity
she was dismissed. In my view, the arbitrator committed no irregularity
nor exceeded her powers when she assumed jurisdiction in this matter.
A further point raised by the applicant was that the first respondent was
represented during the arbitration proceedings by a person who held
himself out to be a labour consultant and a legal representative. The
person employs the title of “advocate” before his name in his
correspondence. In this regard the applicant relied on section 161
which prescribes who may appear on behalf of parties before the
Labour Court. In the respect of an employee, only a trade union or a
legal practitioner may appear.
No trade union was involved in this case and in so far as Advocate
Leffler was actually a legal practitioner on behalf of the first respondent,
the applicant relied on the case of NUMSA v Comark Holdings (Pty) Ltd
(1997) 18 ILJ 516 (LC). In that matter Mlambo J held that for an
advocate to appear in this court he had to be briefed by a practicing
attorney. The applicant contended that in the absence of a brief from
an attorney, Mr Leffler had no right of appearance.
There was not enough evidence before me to find, or to determine,
what Mr Leffler's status was at the time he appeared on behalf of the
first respondent. The matter proceeded without any serious attempt
made by any party to discredit Mr Leffler's status. To determine this
issue now, would be rather technical and this is not a matter which calls
for such an approach.
I now return to the merits and factual background of the application.
The relevant common cause facts were that the applicant was a private
company and carried on business in the warehousing and distribution
industry. It employed the first respondent as a sales and administration
manager since 1 February 2001. She was initially employed as a sales
executive on 1 March 2000.
The first respondent's functions included managing new business sales,
overseeing customer service and she was also authorised to sign
cheques on behalf of the applicant. She authorised payment requests
and the payment of petty cash. She managed suspended bills of entry
whilst also being responsible for debtors' control and several human
resources related matters.
On 23 January 2003, the first respondent was suspended without loss
of benefits pending the disciplinary inquiry in question. She was given
notice of a disciplinary hearing which was scheduled for 30 January.
Pursuant to the disciplinary hearing she was found guilty and dismissed
on 5 February 2003. She was found guilty on charges of the
unauthorised use of a company credit card for personal benefit and the
irresponsible use of a company credit card, she “being a person in a
senior position.”
Both chairmen in the appeal hearing and the disciplinary inquiry in
effect found her guilty of fraud and made specific reference to
“fraudulent” behaviour. The applicant appears to regard this as mere
observations. However, the arbitrator held this to be a serious
procedural defect in the proceedings in that the charges were totally
procedural defect in the proceedings in that the charges were totally
unrelated to the findings of fraud. I will return to this question later in
this judgment.
The arbitration hearing was concluded on 10 September 2003. During
the arbitration proceedings it was common cause that the card in
question was a company credit card, that it was to be used solely for
company purposes (that is to further the applicant's business) and that
the usage was unauthorised. The first respondent knew she had to
repay the applicant after the use of her card. She also did not take any
necessary precautions to ensure that, what she termed “confusion” over
the company's card and her own credit cards, did not occur again.
The applicant called three witnesses, Mr Parton, Ms Singh and Mr
Austin King. The latter person was the chairperson of the disciplinary
hearing. The chairperson of the appeal hearing was not called.
The applicant led evidence to the effect that the chairperson of the
disciplinary inquiry hearing was specifically appointed to that position
because he was employed in a different business unit and had no prior
dealings with the first respondent or any of the witnesses in connection
with the matter and had no prior knowledge of it.
What is very important in this regard, and this probably explains the
wording of the charges, is that the first respondent reported herself to
Ms Singh of the financial department in an “e- mail” letter, wherein she
advised that she had used the company credit card for her own
personal expenses and that she wanted to know how she could effect
repayment.
Thereafter (the “e- mail” letter was sent on 25 October 2002) she
continued using the card, though not on many occasions. The extent to
which the first respondent used the credit card was an agreed figure of
R1 000,00, although mention was made of an amount of R7 000,00 at
one stage and R2 000,00 at another stage of the proceedings.
The first respondent argued that there was no written policy explicitly
dealing with the use of company credit cards. The applicant contended
that it was expected of managers to show the necessary discretion and
trustworthiness in relation to the applicant's credit facility and to use it
for business purposes only. The use of the company credit card was
always subject to the condition that it should be used only to pay for
client expenditure and business related expenses. There was a
business and ethical value policy signed by the first respondent which
made it clear that all financial transactions should be ethically correct.
The applicant further argued that even if there was no written rule
The applicant further argued that even if there was no written rule
regarding the limitations or use of the company credit card employees
who were extended the privilege of a company credit card were
inherently senior and considered responsible enough not to abuse the
privilege.
Once the card in question was allocated and entrusted to a senior
employee, there was no method of monitoring or ensuring that the
credit card was only used for business purposes. However in this
context the respondent still used the card for inter alia making personal
purchases at Edgars and Woolworths.
I do not accept that it was reasonably true that she confused her
personal card with the applicant's credit card. She should have kept
these cards separate, even though they are similar or perhaps exactly
the same in appearance. Furthermore, once she had become aware of
her mistake and had even gone the extra mile to report it, she should
then have made very sure that the so-called confusion did not recur.
Counsel on behalf of the applicant conceded that the fact that she
reported her conduct to her employer made a difference to the type of
misconduct, and alerted me to the fact that, for precisely that reason,
the charges levelled against the first respondent were couched in the
terms that they were. (Not referring to fraud).
I do not agree with the arbitrator's finding on the wording of the charge
sheet and that they did not find their origin, or were not sourced, in the
disciplinary code. There was a standard form of ethical behaviour and
the first respondent was a senior employee and need not be reminded
that personal purchases with the applicant's credit card was wrong.
The fact that that misconduct is not specifically described in the code is
of no consequence in this particular matter and on these facts.
The findings of the disciplinary enquiry chairperson falls to be criticised
on the basis that the first respondent was not specifically charged with
fraud or dishonesty and on the facts of the matter, which were common
cause, she was not guilty of fraud and she should not have been found
guilty thereof. I do not agree that the chairperson made a mere
observation that her behaviour was fraudulent. It was a specific finding
which he was not entitled to make on the facts before him. Yet this error
does not detract from the fact that dismissal was appropriate in this
case.
The first respondent's possession of a personal credit card supports the
case.
The first respondent's possession of a personal credit card supports the
conclusion that the applicant's credit card was to be used for the
applicant's business only. If the first respondent were free to use the
applicant's credit card at all times irrespective of whether the expenses
were personal or not, it would make no sense for her at all to have a
personal credit card. It was brought to her attention that the credit card
was for business purposes only. Her behaviour was unethical, albeit not
fraudulent and therefore dismissal was appropriate. She was not
entitled to use the credit card for her own personal use and I believe
that the arbitrator had misdirected herself in finding that the dismissal
was substantively unfair.
However, there were certain procedural irregularities which warrant
some form of compensation.
The third respondent, ultimately found that the chairpersons of the
disciplinary and the appeal hearings ignored the issue of victimisation
raised by the applicant.
The first respondent did raise the issue of victimisation at the
disciplinary hearing but was told that these were separate issues.
There is a suggestion that there was an agreement on this aspect but
that is not clear. There was no unequivocal waiver on this point.
At the appeal hearing the first respondent again raised the issue of
victimisation but was told that the two processes were not to be “mixed
up”, or in other words, conflagrated.
Neither chairperson should have adopted such an approach. The
question of victimisation could have had a bearing on the sanction
imposed by them. It tends to support a suggestion of bias on their part,
or a justified perception of bias. The arbitrator also found that the
allegations of bias were true. It was also brought to my attention that
the appeal chairperson was not appraised of the record of what had
occurred at the disciplinary hearings. I believe that it is probably correct
that he merely rubberstamped the disciplinary inquiry's findings, if he
did not have any record.
In my view, there is no basis to interfere with the findings of the
arbitrator with regard to the unfair procedure. I may just add, that the
defects in the procedure could also have had an impact on the
substantive findings and therefore, that should also be taken into
account in awarding the compensation.
The arbitrator also held that it was necessary to call the chairperson of
the appeal hearing to testify at the arbitration in order to refute the
allegations of bias. This was not done and therefore the proceedings
were not proved to be in accordance with fairness. In the normal
circumstances where bias is found, it is usually based on a perception
circumstances where bias is found, it is usually based on a perception
and if the first respondent had justifiably had such a perception the
proceeding are deemed to have been unfair.
The first respondent was thus entitled compensation. Before I return to
that question, I wish to deal with the question of condonation.
Condonation
It was suggested that because this matter was dealt with in terms of the
Arbitration Act that different considerations should apply whether to
grant condonation or not.
In my view, all condonation applications for a delay in time for the filing
of applications and the like, should be dealt with in the manner
suggested in Melane v Santam Insurance Co Ltd 1962(4) SA 531 AD
wherein it was held that what a court when granting condonation should
take into account the degree of lateness, the explanation for the delay
and the prospects for success. In this case the degree of lateness was
negligible in that it was three days. The prospects of success would to
some extent appear from the judgment herein and the explanation for
the delay was acceptable. Therefore condonation for the late filing of
this application is granted.
I now return to the question of compensation.
Compensation
The arbitrator made no attempt to justify how the substantial
compensation award, equal to 12 months’ salary was arrived at, and
that indeed calls for an explanation. The first respondent used a
business card for buying personal goods to the amount of at least R1
000,00 for herself with the applicant's money. She knew that her
conduct was irresponsible. Even though she reported herself to Ms
Singh she continued to use the card and never, until the arbitration
hearing, made any attempt of repaying it. By granting such an
employee compensation equal to 12 months’ salary is indeed rewarding
her for misconduct.
In the absence of any rational justification for the award, I must accept
that the arbitrator did not exercise her discretion in a judicial manner, or
at all, and the award ought to be set aside on this ground.
In my view it would be a waste of time and effort to remit the matter to
the Bargaining Council to determine the question of compensation
afresh. I believe I have been appraised of sufficient facts to substitute
the arbitrator's award with my own. I take into account the following
factors:
(1) The first respondent found new employment five months after her
dismissal, albeit it at lesser remuneration.
(2) The amount spent by her with the applicant's business card will
apparently be set off against the award made.
(3) I do believe that the conduct of the chairpersons in both the
disciplinary enquiry and the appeal invites a certain measure of
censure.
In my view compensation in an amount equal to six months salary will
meet the case fairly.
In the circumstances I make the following order:
meet the case fairly.
In the circumstances I make the following order:
The award of the third respondent is hereby set aside and substituted
with the following:
"1.The applicant is to pay the first respondent compensation equal to
six
months’ salary."
I decline to make any costs order as the applicant was only partially
successful and since I have effectively halved the compensation
awarded it would be unfair to make a cost order against either party.
______________________
E. REVELAS
DATE OF HEARING: 23 February 2005
DATE OF JUDGMENT: 24 February 2005
APPLICANT’S COUNSEL: Adv Chris Orr
INSTRUCTED BY: Bowman Gilfillan Inc.
RESPONDENT’S ATTORNEY: Mr David Short