THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Case No: JR2841/23
In the matter between:
PROPAY PROPRIETARY LIMITED Applicant
and
NICOLAAS MARTHINUS STENGEL First Respondent
SHUMANI SYDNEY TSHAKAFA N.O. Second Respondent
COMMISSION FOR CONCILIATION, MEDIATION
AND ARBITRATION Third Respondent
Heard: 21 January 2026
Delivered: 10 February 2026
JUDGMENT
PHEHANE, J
(1) Reportable Yes/No
(2) Of interest to other Judges: Yes/No
(3) Revised
____________ ______________
Signature Date
2
Introduction
[1] The applicant launched a review application in terms of the provisions of
section 145 of the Labour Relations Act 1 (LRA) to review and set aside the
arbitration award by the second respondent dated 25 October 2023, in which
award, the second respondent found the dismissal of the first respondent from
the employ of the applicant as both procedurally and substantively unfair. This
application is unopposed.
[2] In essence, the applicant ’s grounds of review are that the second respondent
ignored the evidence before him , that the applicant gave the first respondent
instructions which the first respondent refused to follow. The applicant
contends that the second respondent misconstru ed the true nature of the
dispute before him when he found that the applicant failed to prove that the
first respondent committed misconduct and found that the true nature of the
dispute concerned poor performance. In addition, the second respondent
committed gross irregularities by failing to consider material inconsistencies in
the first respondent’s evidence relating to the instructions that were given to
him. Further, the second respondent ignored the evidence before him that the
disciplinary hearing was fair . Therefore, the applicant contends that the
second respondent’s decision is unreasonable.
Test on review and evaluation
[3] The test to succeed on review is now well established and need not be
repeated.
2
[4] The first respondent was charged with three allegations of misconduct and
was subsequently dismissed for misconduct following a disciplinary hearing.
The allegations of misconduct read as follows:
Charge 1
1 Act 66 of 1995, as amended.
2 See: Sidumo and another v Rustenburg Platinum Mines (Pty) Ltd and others ( 2007) 28 ILJ 2405
(CC).
3
Gross negligence and/ or insubordination in that you failed without proper
cause to integrate into the agile BA way of working, despite numerous
coaching sessions.
Charge 2
Gross negligence and/ or dereliction of duty in that you without proper cause,
failed to carry out your duties with a reasonable standard required when you
failed to complete an analysis for the take on of F reedom Front Plus through
the delivery of a well -documented series of stories which w ould allow the
development team to begin development of the system for this new client.
Charge 3
Gross negligence and/ or dereliction of duty in that you without just cause
failed to carry out your duties with the reasonable standard required in that
you failed to show a comprehensive analysis and produced documentation on
the integration with Easy Debit for the Debit Check requirements.3
[5] The first respondent was employed in a senior position in the role of Head of
Business Analysis. On the evidence before the second respondent, during
mid- 2022, the applicant had migrated f rom a business analysis process
termed the Waterfall methodology to the a gile methodology. This change in
process caused disruption to the applicant’s business, as staff were required
to be familiar with the new change in order to serve its clients. It is not
necessary for the purpose of this judgment to delve into the specifics of the
business processes. It is common cause that the change took effect and
caused a disruption to the applicant’s business as aforesaid . It is also
common cause that the first respondent worked well with the Waterfall
system, and although he knew of the agile methodology, he was not an expert
on it
4 and required training to utilize this new system – therefore, he upskilled
himself.5 It is common cause that the first respondent funded his own training
on the system, which he completed in December 2022. It is also common
cause that the first respondent’s manager, Mr S toltz, had numerous
cause that the first respondent’s manager, Mr S toltz, had numerous
undocumented and informal discussions and coaching sessions with the first
3 See: heads of argument at pp 4 to 5.
4 See: transcribed record at p 97.
5 See: transcribed record at p 99.
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respondent as he had expectations that the first respondent would utilize the
agile system to service the needs of the applicant’s clients.6
[6] According to the applicant, the first respondent refused to implement the agile
system when the applicant took on new work for the Freedom Front Plus
political party in 2022, with the result that this client was dissatisfied with the
applicant’s service. Consequently, the applicant suffered a financial loss and
reputational damage
[7] The evidence of Mr S toltz was that he expected the first respondent to move
over to the a gile methodology.7 He coached him and advised him to seek
guidance from colleagues who were familiar with the system and were
implementing it satisfactorily. Mr S toltz gave up on the numerous informal
coaching sessions and reported the issue to human resources, whereafter,
the first respondent was charged with misconduct.
[8] In the applicant’s view, the first respondent refused to utilize the new agile
system and in so doing, he failed to follow Mr Stoltz’ instructions. This resulted
in a financial loss in respect of the work for the Freedom Front Plus. In
addition, the first respondent failed to integrate systems in the debit order
collections project with a large client in line with the instructions of Mr S toltz,
which resulted in the client cancelling the projects. In terms of the applicant’s
code of conduct, dismissal is the appropriate sanction for insubordination. Mr
Stoltz’ evidence is that as a business head, the first respondent could not be
trusted and thus the employment relationship had broken down.
[9] On the evidence before the second respondent, at the conclusion of the
disciplinary hearing, the chairperson of the hearing, Ms Buthelezi found t he
first respondent guilty of the charges and recommended demotion as the
appropriate sanction. After making her recommendation to this effect, Mr
Stoltz and Mr Yanni Acavalos of the applicant met with the first respondent
Stoltz and Mr Yanni Acavalos of the applicant met with the first respondent
and informed him of the outcome. The first respondent was informed that “the
output hasn’t been there [and he was] found guilty of that ”
8 ; he was told to
6 See: transcribed record at pp 141, 145, 157 and 176.
7 See fn 5 supra.
8 See: transcribed record at p 171, lines 1 to 5.
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make an election – to accept the demotion or resign. Mr S toltz’ evidence was
that if the first respondent refused to accept a demotion, Mrs Buthelezi would
need to be engaged for a decision. Mr S toltz could not demonstrate that she
was engaged. On the evidence before the second respondent, after the first
respondent refused the demotion, he was dismissed on account of
misconduct.
[10] The applicant makes much of the first respondent’s initial defence being that
he was wrongly charged and ought to have been performance managed, as
poor performance was at issue, however, the first respondent moved from this
defence and denied that he had been given any instruction.
[11] In consideration of the record, the first respondent’s challenge to Mr S toltz’
evidence is that poor performance was at issue however, the applicant chose
to discipline him for misconduct.
[12] Mr Stoltz conceded that in February 2023, the first respondent sent an email
to him requiring guidance with the method of working. Mr Stoltz stated that he
was busy at the time and that he would engage with the first respondent later
to identify the gaps and training to close the gaps. However, Mr S toltz did not
do so
9. It is not disputed that the first respondent was furnished with
allegations of misconduct in March 2023.
[13] Mr Stoltz was directly challenged that he failed to produce any evidence of a
valid instruction to the first respondent. He was challenged that on his own
version, he had a number of expectations that the first respondent would
utilize the agile system with the result that he would produce what were
termed numerous “ user stories” for the development team to develop
concepts for the business of its clients. Mr S toltz’ evidence was that the
colleagues of the applicant managed to produce numerous user stories and
the first respondent failed to do so – he only managed to increase/improve the
number of stories after he was taken through a disciplinary hearing in March
number of stories after he was taken through a disciplinary hearing in March
2023 and before he was dismissed in April 2023.
10
9 See: transcribed record at pp 287 to 292.
10 See: transcribed record at pp 151 to 152.
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[14] In consideration of the totality of evidence before the second respondent, in
my view, the true nature of the dispute before him concerned incapacity
premised on poor performance. The essence of Mr S toltz’ evidence is that the
first respondent failed to produce the required outputs that were expected of
him despite numerous undocumented coaching sessions.
[15] It is trite that incapacity proceedings are no fault based and misconduct
proceedings are fault based. In Midas Group Komatipoort v NUMSA and
others
11 this Court per Snyman AJ held that incapacity proceedings and
misconduct proceedings entail different concepts and different procedures.
Where the employer fails to follow a fair procedure in dealing with poor
performance, dismissal as a result of that poor performance is unfair. The
Court went on to hold:
‘[43] The applicant’s approach in this matter was thus fundamentally flawed. It
could not ‘charge’ the second and third respondents with poor performance,
and then also insubordination (misconduct) based on the exact same set of
facts and causes of complaint. It is either the one or the other. So, either the
second and third respondent received instructions which they in a culpable
and blameworthy fashion failed or refused to carry out, or they were not
capable or unable to perform the work they were instructed to do. It cannot
be both.’12
[16] In the present case, while there is evidence of a performance standard
required, there is no evidence of any initiatives identified by the applicant to
address the gaps and no evidence of meetings or discussions over a period of
time to evaluate or assess whether the first respondent’s performance had
improved to achieve the required standard with the initiatives put in place.
[17] The recommendation by Ms Buthelezi to demote the first respondent after she
had heard facts in mitigation and aggravation of sanction, indicates that the
relationship of trust had not broken down irretrievably to warrant dismissal. On
relationship of trust had not broken down irretrievably to warrant dismissal. On
the evidence of Mr S toltz, the demotion had the objective of subjecting the
first respondent to his work being micromanaged
13 – this further demonstrates
11 (JR1585/14) [2018] ZALCJHB 83 (14 February 2018) at paras 39 - 41
12 Ibid at para 43.
13 See: transcribed record at pp 171 to 172.
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that the issue of the breakdown of trust warranting dismissal did not arise.
Further, on his own evidence, Mr St oltz stated that following the hearing, the
first respondent’s performance had improved. Thus, in my view, it cannot be
that the dismissal was substantively fair and that dismissal was the
appropriate sanction.
[18] The second respondent found the dismissal was procedurally unfair as the
first respondent did not have sufficient time to prepare for the disciplinary
hearing and his evidence was interrupted during the hearing proceedings.
[19] The second respondent found that the applicant failed to prove that the
applicant was guilty of failing to follow a reasonable and lawfu l instruction,
was guilty of dereliction of duty or breached any rule. He found that the true
nature of the dispute is that the first respondent failed to perfor m his duties to
the satisfaction of the applicant and therefore, there was no evidence of
misconduct.
[20] The second respondent accordingly found that the applicant failed to
discharge the onus on it to prove that the dismissal was both procedurally and
substantively fair. He accordingly found that the first respondent’s dismissal
was fair on both procedure and substance.
[21] In my view, the second respondent did not misconstrue the nature of the
enquiry before him. He was correct to find on the totality of the evidence
before him, that the true nature of the dispute concerned poor performance.
[22] I debated this with Counsel for the applicant. He submitted that the second
respondent did not construe the true nature of the dispute as a dispute
concerning poor perf ormance – rather, he “treated” the dispute as one
concerning misconduct. Counsel for the applicant agreed that had the second
respondent found that the dispute concerned poor performance, and on that
basis found the dismissal to be unfair, the applicant would not have
challenged the outcome.
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[23] In my view, this is precisely what the second respondent finds in his
arbitration award after analysing the evidence. In paragraph 79 of his award,14
the second respondent canvasses the guidelines in determining whether a
misconduct is unfair and he finds in the dispute before him, that the issue
concerned the first respondent failing to perform his duties to the satisfaction
of the applicant and he states that there was no evidence to suggest any form
of misconduct. Thus, he finds in paragraph 80 of his award that the applicant
failed to discharge its onus to prove substantive and procedural fairness.
[24] The review Court is concerned with the outcome, as our Courts have
pronounced that the determination of a review i s outcome based.
15 In other
words, even if the commissioner committed an irregularity, if his decision falls
within the band of reasonable decisions, the decision would in that
circumstance, not be reviewable. It is only where the irregularity by the
commissioner distorts the outcome or where he or she ignores material
evidence, that the decision would be reviewable.
[25] In the present case, the totality of the evidence before the second respondent
shows that the first respondent failed to perform to a required standard and
was informally coached on several occasions. Mr Stoltz could not produce
any evidence of any instruction, other than stating that instructions of a
general nature were given in meetings and the first respondent was expected
to perform to the required standards. What is clear from the record is that the
first respondent failed to perform to the required expectations or standards.
An unmet undertaking was made by Mr Stoltz to assist the first respondent to
achieve the required performance outputs. This is different from conduct ,
which is fault based, such as gross negligence, dereliction of duty and
insubordination. According to Mr Stoltz, a demotion and micromanaging the
insubordination. According to Mr Stoltz, a demotion and micromanaging the
first respondent’s work would result in the required standard being met as Mr
Stoltz was concerned with outputs. On these facts and on the evidence before
the second respondent, the true nature of the dispute is not misconduct. Thus,
14 Arbitration award at p 30.
15 See: Herholdt v Nedbank Ltd (COSATU as am icus curiae); 2013 (6) SA 224 (SCA ) at para [25] ;
Head of Department of Education v Mofokeng and others [2015] 1 BLLR 50 (LAC).
9
his finding that the applicant failed to prove any form of misconduct and
therefore failed to prove substantive and procedural fairness is reasonable.
[26] Therefore, even on the applicant’s contention that the second respondent
treated the dispute as one concerning misconduct and not poor performance,
on the totality of evidence before the second respondent, his decision is
justifiable and reasonable.
[27] There is accordingly no basis for this Court to interfere with the arbitration
award.
[28] In the premises, the following order is made:
Order
1. The review application is dismissed.
_____________________
M. T. M. Phehane
Judge of the Labour Court of South Africa
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Appearances:
For the Applicant: Mr M Vilakazi
Instructed by: Menzi Vilakazi Attorneys Incorporated
For the Respondent: Mr P Oosthuizen
Instructed by: Oosthuizen Caine Incorporated