THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Case no: JR2470/23
In the matter between:
MERCY ZIHOVE Applicant
and
STANDARD BANK SOUTH AFRICA (PTY) LTD First Respondent
COMMISSIONER T SERERO N.O. Second Respondent
COMMISSION FOR CONCILIATION, Third Respondent
MEDIATION AND ARBITRATION
Heard: 19 February 2026
Delivered: 31 July 2026
JUDGMENT
PHAKEDI, AJ
(1) Reportable: No
(2) Of interest to other Judges: No
(3) Revised
____________
Signature Date
2
Introduction
[1] The Applicant approached this Court in terms of section 145 (2) (a)(i ) of the
Labour Relations Act 1 (LRA) seeking to review and set aside an arbitration
award dated 1 November 2023 issued by the Second Respondent under case
number GAJB 8735-23. The First Respondent, Standard Bank of South Africa
(the Bank) is opposing the application and seeks its dismissal with costs. This
judgement was unnecessarily delayed due to circumstances outside this
Court’s control and a sincere apology is extended to both parties for the delay
in delivering the judgement.
Brief background facts
[2] The Applicant was employed by the Bank and was part of the Priority
Investigations team in the Group Forensic Services business unit from 1 July
2022 until her dismissal on 14 April 2023. She was a senior forensic
investigator and a certified fraud examiner with more than ten (10) years ’
experience. In terms of the internal reporting structure, she reported to Mr
Mabuti Radebe (Mr Radebe), who in turn reported to Mr Ajay Rampersadh
(Mr Rampersadh), the Head Group Forensic Services.
[3] On or during January 2023, the Bank was contacted by Nedbank enquiring
about a transaction of One Hundred Thousand Rand (R100 000.00)
transferred from a Standard Bank account held by a certain Ms ED Strydom
(Ms Strydom) into a Nedbank account held by one of its clients. Nedbank
cautioned the Bank that the transaction could be proceeds of fraud and asked
the Bank to investigate the matter further.
[4] During the investigations, the Bank discovered that indeed Ms ED Strydom
was its client and on or about 4 January 2023 she had made three transfers of
R100 000.00 with one of the amounts being transferred into a Standard Bank
account belonging to Mike Angies Workshop (Pty) Ltd, which account
belonged to the business owned by the Applicant . It was discovered that on
1 Act 66 of 1995, as amended.
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the day the money was deposited, the Applicant transferred an amount of R80
000.00 into a Standard Bank account and a further R10 000.00 into a First
National Bank (FNB) account belonging to Elite Ambitions.
[5] The Bank then invited Ms Strydom in for investigations and she confirmed that
she was in a roman tic relationship with a certain gentleman who provided her
with account numbers to deposit the money into including the Standard Bank
and Nedbank accounts . The Bank’s investigators concluded that Ms ED
Strydom had been a victim of a r omance scam, and accordingly advised her
to open a criminal case with the South African Police Services (the SAPS).
The Bank then looked into the role of the Applicant and invited her to share
her side of the story and explain her role in the scam since her account was
one of the recipients of the funds.
[6] On or about 6 February 2023 the Applicant submitted her response to the
investigators and confirmed that she is the owner of the workshop and the
moneys deposited into her account was for the purpose of purchasing a
vehicle on behalf of a client who was based in Dubai. She did not take steps
to verify the sources of the funds (R100 000.00) as she relied on the
information provided by her Workshop Manager, Mr Kuda Govo who indicated
that he was going to purchase and repair a vehicle on behalf of his brother. It
was Mr G ovo who had shared the banking details of her Workshop with his
brother.
[7] On or about 13 March 2023, the Applicant was issued with a notice to attend
a disciplinary hearing and the following allegations were levelled against her:
‘Charge 1
Alleged misconduct in that on 4 January 2023, you permitted / authorised for
your business current account under the name of Mike Angies Workshop with
account number 101xxxxxx293, to be the recipient of R100 000.00. The funds
of which were later discovered to be the proceeds of financial crime
perpetrated against a bank client, Ms ED Strydom. Your conduct was in
perpetrated against a bank client, Ms ED Strydom. Your conduct was in
contravention of a number of bank policies including but not limited to the
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Group Investigations Code of Conduct and has exposed the bank to undue
reputational risk and a possible financial loss.
Charge 2
Alleged Gross misconduct in that on 4 January 2023, you performed the
transfer of funds received in the account of Mike Angies Workshop, as
detailed in charge 1, without applying due diligence and care as the account
holder in verifying the source of funds as legitimate. The first payment of R80
000.00 to Elite ambitions was made to Standard Bank account number
xxxxxxxx9230 at 12h21. The second payment of R10 000.00 to Elite Ambition
was made to First National Bank account number XXXXXXXX3374, also at
12h21. Your conduct was not only in contravention of the bank's values and
policies but it has further exposed the bank to undue reputational risk and
possible financial loss.’
[8] On or about 22 March 2022 she attended a disciplinary hearing chaired by Mr
Pieter Smith one of the panelists on the Bank’s database of independent
chairpersons. Subsequent to hearing the evidence from both parties, Mr
Smith issued an outcome and found the Applicant not guilty of the
misconduct. The outcome was not formally communicated to the Applicant but
to the senior managers. Mr Rampersadh rejected the verdict and sought
intervention from other senior managers who then instructed Mr Smith to
change the verdict from not guilty to guilty. The parties were then invited to
submit mitigating and aggravating factors. Mr Smith later issued a sanction of
dismissal. The Applicant was then dismissed on 14 April 2023.
[9] She then referred an unfair dismissal dispute to the Commission for
Conciliation, Mediation and Arbitration (CCMA). The Second Respondent was
appointed to arbitrate the dispute and his arbitration award is the subject of
these review proceedings.
Arbitration proceedings and the award
[10] The parties concluded a pre -arbitration minute and recorded that the
employment term and rank of the Applicant, her gross salary, the charges, her
employment term and rank of the Applicant, her gross salary, the charges, her
private business and its bank account , the deposit and subsequent
5
transactions, were common cause . The parties further recorded that there
was no evidence that the Applicant was complicit in the fraud scam nor that
she had knowledge of such fraud as she was relying on the information she
received from the Workshop Manager.
[11] The Bank called Mr McC rudden as its first witness. He testified that he was
the team leader within the Internal Group Forensic Investigations and had
been employed by the Bank since 2005. He was then appointed as an
investigator when the matter was reported to the Bank and he was later
appointed to initiate disciplinary proceedings against the Applicant.
[12] On or during January 2023, an elderly client of the bank, Ms Strydom made
the three (3) payments of R100 000.00 into the account numbers she had
obtained from a certain Charles Carter, whom she met on Facebook and was
involved in a romantic relationship with. The business account number of Mike
Angies Workshop was given to Ms Strydom by a certain gentleman who was
allegedly in a romantic scam with Ms Strydom . The Applicant was the owner
of Mike Angies Workshop, and she was responsible for managing the account
and handling day-to-day transactions.
[13] During the investigations, the Transactional Fraud Department identified the
Applicant’s business account as one of the recipients of the funds belonging
to Ms Strydom . On 4 January the Applicant's business account (Mike Angies
Workshop), received an amount of R100 000.00 from Ms Strydom’s account .
On the same day, the Applicant, made two payments of R80 000.00 into the
Standard Bank account and R10 000.00 into the FNB account belonging to
Elite Ambitions. Mr McC rudden found it strange that the R100 000.00 was
deposited into the Applicant’s Standard Bank account when Elite Ambitions
also had an account with Standard Bank. It was his strong view that the
Applicant should have flagged the transaction on this basis, but she did not.
Applicant should have flagged the transaction on this basis, but she did not.
[14] The Applicant was subsequently interviewed and confirmed that she received
the money and made the transactions as stated above. She was, however,
unable to explain why she had not questioned the transaction, given that the
funds were received from a Standard Bank account and that she was also
6
transferring a portion of those funds to another Standard Bank account holder.
The Applicant was also unable to explain why she was purchasing vehicles on
behalf of third parties when her business involved repairing vehicles . He
further testified that the Bank expected its employees to conduct their private
and business affairs in a manner that w ould not adversely affect its reputation
or relationship with clients. In th e circumstances, the Applicant breached the
Bank’s policies.
[15] He later interviewed Mr Govo, the Applicant’s workshop manager. His
evidence was inconsistent and contradictory to the version provided by the
Applicant in that, during the investigations he stated that he was buying the
vehicle on behalf of his brother, Marvin. However, in the statement he
indicated that the name of his brother was ED Strydom. There were also
some inconsistencies regarding the purchase price of the vehicle from both
the Applicant and Mr Govo. He further confirmed that whilst the applicant
failed to independently verify the source of the funds paid into her account,
there was no evidence that she knowingly participated in the fraudulent
transaction. , however, stated that she ought to have verified the money paid
into her account before transacting and paying the money to a third party. By
doing so, she failed to act in the best interests of the Bank and to observe its
policies.
[16] During cross examination, he was asked to comment about the changing of
the outcome of the disciplinary hearing by management, and he stated that he
had limited knowledge about the interference with the initial outcome. He
further confirmed that Standard Bank itself did not detect the fraudulent
transactions and it was alerted by Nedbank. He further confirmed that after
the Applicant’s account was blocked by the Bank, she approached Mr
Koekemoer seeking information about the reasons for the account being
blocked but she did not disclose that she was the owner of the said account.
blocked but she did not disclose that she was the owner of the said account.
Mr Koekemoer then referred her to Ms Shanila Sampersand who referred the
Applicant to Mr Keegan Nayger for further assistance. It was only during her
interaction with Mr Nayger that she disclosed that she was the owner of the
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blocked account and since she was also employed by the Bank, he reported
the matter to Mr Rampersadh.
[17] He further confirmed that after the fraudulent transactions the Applicant
created a WhatsApp Chat Group between herself, Mr Govo and Marvin and
asked Marvin about the source of the f unds. The applicant allowed her bank
account to be used to facilitate money laundering offences. He further
stressed that the charges levelled against the Applicant were serious in nature
and led to the breakdown of the trust relationship in that she was a senior
investigator and a certified fraud examiner who failed to act in the best
interests of the Bank.
[18] The Bank's second witness, Mr Rampersadh confirmed that he was employed
as the Head of Group Forensic Services. He corroborated the version of Mr
McCrudden on the inconsistent versions given by the Applicant and her
witness, Mr Govo. He further indicated that there was no evidence that Mr
Govo was an employee of the Applicant nor was he earning any salary as the
workshop manager.
[19] He testified that the Applicant was a certified fraud examiner with more than
ten years’ experience in forensic investigations. As a senior Forensic
Investigator, she ought to have scrutini sed the source of the funds before
transferring them from her business account in the manner she did. Her
failure to exercise due diligence in relation to on the transaction contravened
the Bank’s C ode of C onduct, thereby exposing the Bank to serious
reputational risk and potential financial loss.
[20] He testified that he was shocked when he learnt of the outcome of the
disciplinary hearing, in which the Chairperson found the Applicant not guilty
despite what he regarded as compelling evidence of her guilt. He then
referred the outcome to the Executive responsible for People and Culture ,
who escalated the matter to the Employee Relations Department. Mr
Lukhele, the Group Head of Employee Relations , also disagreed with the
Lukhele, the Group Head of Employee Relations , also disagreed with the
Chairperson’s findings and engaged with Mr D Bierman, who is responsible
for the panel of external chairpersons, to conduct a further review.
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[21] A few days later , received a request from Mr McC rudden to provide
aggravating factors . In his submissions , he expressed disappointed that the
Applicant had been implicated in a fraud scam perpetuated against an elderly
client of the Bank. He further stated that the Applicant's conduct had tarnished
the good name and reputation of his team. He indicated that he could no
longer retain the applicant as a member of his team or the bank, and the trust
relationship had irretrievably broken down.
[22] Under cross examination he conceded that there was no evidence that the
Applicant had played a role in the fraud. However, the bank was concerned
with the manner in which the money was transferred out of the Applicant’s
business account and her failure to exercise due diligence.
[23] He further conceded that the Bank could not detect the fraud and it was
detected by Nedbank although Ms Strydom had made three deposits of R100
000.00 to one Nedbank account and two to Standard Bank accounts. He
maintained that the Applicant ought to have realised that there was something
wrong with the transaction because both the depositor and the recipient of the
funds were clients of the Bank. She failed to ensure that her personal
interests are not in conflict with those of the Bank.
[24] The Applicant testified in her own case and confirmed that she was employed
as a Senior Forensic Investigator by the Bank and she was also the Director
of Mike -Angies Workshop. She is a certified fraud examiner, and she had
dealt with investigations involving fraud, theft, compliance checks and money
laundering. Her company was involved in panel beating and repairing
vehicles. She had hired Mr Govo, her sister -in-law’s brother as the workshop
manager and he was responsible for any payments of up to R10 000.00. He
specialised in panel beating while her nephew speciali sed in mechanical
work.
[25] She testified that Mr Govo informed her that his brother's friend who lives in
work.
[25] She testified that Mr Govo informed her that his brother's friend who lives in
Dubai and was on a visit to South Africa wishes to purchase a vehicle.
However, he will not be able to purchase it himself as he was travelling back
to Dubai. Mr Govo asked if the friend could transfer the money to her
9
Standard Bank business account for the purposes of this transaction and she
agreed because she was aware that Mr Govo had a brother who lived in
Dubai and he usually bought cars and res old them. Upon receipt of the
R100 000.00 in her business account, s he transferred an amount of R80
000.00 into Elite Ambitions’ Standard Bank account for the purchase of the
vehicle and R10 000.00 into the same account holder’s FNB account for the
vehicle parts. She, however, stressed that she did not benefit anything from
the transaction, and this is evident from the way the money was transferred.
[26] She was not suspicious of the transaction since the money was being
deposited from a Standard Bank account into her business account. She only
learned about the fraud and scam after engaging with the investigator and
learned that Ms Strydom was a victim of romantic scam. She testified that it
was unreasonable for the Bank to expect her to detect fraud based on the
transaction and the story she was given by Mr Govo as she did not have the
resources to do so. She did not use the company’s resources to investigation
the transaction as it was a personal matter and she was going to be accused
of misusing the company’s property had she done so. She, however,
conceded that she used the Bank’s Team Chat to enquire about the
suspension of her business account.
[27] She only started investigating the matter after her bank account was blocked.
She then requested Mr Govo to create a WhatsApp group so that she could
question Marvin. Indeed, the group was created but Marvin could not answer
some of her questions. She was later placed on suspension following an
interview with the investigator, Mr McCrudden.
[28] She confirmed that she was bound by the bank’s policies and disciplinary
code. She further conceded that if an employee of the bank does something
in his or her personal capacity which has a negative impact on the bank, the
in his or her personal capacity which has a negative impact on the bank, the
bank can take action against such an employee. She further confirmed that as
an employee of the bank she had a duty to prevent fraud and she owed a duty
of care to the bank and its clients.
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[29] She refuted claims that the trust relationship between herself and the b ank
had irretrievably broken down based on the fact that the Chairperson of the
inquiry did not find her guilty but it was her employer who changed the
decision. This was further supported by the fact that her line manager, Mr
Radebe had confirmed that she was not implicated in fraud and she had no
personal knowledge of same.
[30] The Applicant then called Mr Govo as her witness. He testified that he was
employed as a manager at Mike- Angies Workshop. He corroborated the
evidence of the Applicant in respect of Marvin, his brother’s friend who
resided in Dubai. He further confirmed that Marvin who wanted to purchase a
vehicle in South Africa but could not do so as he had to travel . Prior to joining
the Applicant’s workshop, he was engaged in the business of selling motor
vehicles. Marvin subsequently deposited R100 000.00 into the business
account for this purpose of purchasing the vehicle.
[31] The vehicle he was purchasing for Marvin was priced at R80 000.00, R10
000.00 was for the mechanical parts and R10 000.00 was for mechanical
work to be done on the vehicle. He further stated that Marvin gave him the
banking details of E.D. Strydom. When he wanted to withdraw some money
from the ATM using the Applicant’s bank card, he reali sed that the bank
account was suspended. He then informed the Applicant who indicated that
she would speak to the b ank. She later requested him to depose to an
affidavit explaining what had transpired and he was also invited to attend an
interview with the b ank’s investigator. He also created a WhatsApp group as
requested by the Applicant so that she could question Marvin and he did so.
[32] During cross examination he stated that at the time of the transaction he did
not suspect any fraud but now that he has information he reali sed that Marvin
was a scam artist. He then conceded that had the Applicant posed the
was a scam artist. He then conceded that had the Applicant posed the
questions to Marvin prior the transaction she would have realised that it was a
scam.
[33] The Applicant’s second witness was Mr Radebe who testified that he was
employed as the Head of Priority Investigations and he was the Applicant’s
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line manager prior to her dismissal . He testified that he had a good
relationship with the Applicant and would not mind working with her again if
she was to be reinstated. The relationship between himself and the Applicant
got broke down when she was found guilty of a serious misconduct. He
indicated that his submissions would have been different had the Applicant
not been found guilty. Furthermore, he was only contacted after the second
report was issued. He had not seen the first finding which had found her not
guilty.
[34] At the close of proceedings, the Commissioner found that the Applicant ’s
dismissal was substantively fair but procedurally unfair on the basis that the
Employer tampered with the findings of the C hairperson when the disciplinary
code did not provide for such. The Commissioner then awarded the Applicant
three months’ salary as compensation. The Applicant is not happy with the
findings and the award of the Commissioner and is challenging the same on
the grounds stated hereunder.
[35] The Applicant submitted that she does not challenge the findings of the
Commissioner in respect of procedural fairness. However, the Court needs to
consider that the b ank’s interference with the disciplinary outcome had a
serious impact on the substantive fairness of the dismissal.
Applicant’s grounds for review
[36] Amongst others, the Applicant submitted that the Commissioner failed to
apply his mind to the evidence and to deal with each aspect of the dispute.
The Applicant further submitted that the Commissioner arrived at an
unreasonable conclusion when he stated that she breached numerous
policies and failed to act in the best interests of her employer. It was further
submitted that in his analysis, the Commissioner failed to take into
consideration that it was not in dispute that there was no evidence linking the
Applicant to the fraud scam and that the money was transferred to her
account by Ms Strydom herself who was acting on the instructions of her
lover.
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[37] The Applicant further submitted that the Commissioner ’s findings were not
those that a reasonable decision maker could have reached. In particular, the
Commissioner ignored the fact that the initial finding of not guilty had been
overturned by the bank. It was further submitted that the dismissal was unfair
because there was no evidence before the Chairperson to substantiate a
finding of guilt and that the Applicant was dismissed only as a result of
interference by her superiors. The Applicant contended that th e interference
with the outcome rendered her dismissal substantively unfair because the
decision to dismiss her was effectively taken by individuals who had not
presided over the disciplinary hearing.
[38] The Applicant submitted that the Commissioner committed errors of law by
failing to take into account that the Disciplinary Code had no provision
empowering the bank to overturn the decision or outcome of the independent
chairperson. The Disciplinary Code and the General Terms of Employment
formed part of her contract of employment, and both parties were bound by
the agreement . In this case, these were not just guidelines but binding
documents hence the Bank relied on them to charge her. It was submitted
that the Commissioner erred in concluding that she was guilty of serious
misconduct.
[39] The Applicant submitted further that the Commissioner committed an error of
law by relying on the case of Brandford v Metrorail Services (Durban) and
Others ( Brandford)
2 in that she was not subjected to a second disciplinary
hearing which could constitute double jeopardy. In her case, the b ank
unilaterally overturned the initial finding of not guilty to one of guilty rendering
the second finding unlawful, invalid and unfair.
[40] The Applicant also contends that the Commissioner ought to have found that
her dismissal was both procedurally and substantively unfair as a result of the
interference from the b ank having regard to SA Revenue Service v
interference from the b ank having regard to SA Revenue Service v
Commission for Conciliation, Mediation & Arbitration & others (Kruger ).3 She
submitted further that the bank contravened its own policies and prescribed
2 [2004] 3 BLLR 199 (LAC).
3 (2017) 38 ILJ 97 (CC).
13
procedure by unilaterally overturning the finding of the independent
chairperson as a result the finding in Kruger should find application in her
dismissal.
[41] The bank opposed the Applicant’s submissions on the basis that the
Applicant’s reliance on Kruger was not pleaded and the facts in Kruger are
distinguishable from the facts in her matter. Furthermore, it was submitted that
there was nothing in the disciplinary procedure which prevented the
Chairperson from changing the outcome before it was conveyed to the
Applicant. The bank argued that the legal position in Brandford should be
preferred over Kruger and the review application must be dismissed on the
basis that the decision of the Commissioner is one which a reasonable
decisionmaker in his position could have arrived at.
Review test
[42] When dealing with an application to review and set aside an arbitration award,
the ultimate question before the Labour Court is whether the decision reached
by the arbitrator is one which a reasonable decision-maker could not reach.4
[43] In explaining the review test articulated in the Sidumo and Another v
Rustenburg Platinum Mines Ltd and Others (Sidumo)5, the Labour Appeal
Court (LAC) in Gold Fields Mining SA (Pty) Ltd (Kloof Gold Mine) v
Commission for Conciliation, Mediation and Arbitration and Others 6 had, inter
alia, the following, which is relevant for present purposes:
‘In a review conducted under s145(2)(a)(c)(ii) of the LRA, the review court is
not required to take into account every factor individually, consider how the
arbitrator treated and dealt with each of those factors and then determine
whether a failure by the arbitrator to deal with one or some of the factors
amounts to process-related irregularity sufficient to set aside the award. This
piecemeal approach of dealing with the arbitrator’s award is improper as the
review court must necessarily consider the totality of the evidence and then
review court must necessarily consider the totality of the evidence and then
4 Sidumo and Another v Rustenburg Platinum Mines Ltd and Others [2007] 12 BLLR 1097 (CC) at
para 110.
5 Ibid at para 110.
6 (2014) 35 ILJ 943 (LAC) at paras 18 and 19.
14
decide whether the decision made by the arbitrator is one that a reasonable
decision-maker could make.
To do it differently or to evaluate every factor individually and independently is
to defeat the very requirement set out in section 138 of the LRA which
requires the arbitrator to deal with the substantial merits of the dispute
between the parties with the minimum of legal formalities and do so
expeditiously and fairly. This is also confirmed in the decision of CUSA v Tao
Ying Metal Industries.’
[44] The LAC in Health and Other Services Personnel Trade Union of SA o bo
Tshambi v Department of Health, KwaZulu- Nata (Tshambi)7 held that:
‘an arbitrator is required to determine the true dispute between the parties. To
that end, it is necessary to establish the relevant facts and construe the
category of dispute correctly. An arbitrator must make an objective finding
about what is the dispute to be determined...’
[45] The Constitutional Court disposed on the above- mentioned issue in CUSA v
Tao Ying Metal Industries8 and held that:
‘…commissioners are required to “deal with the substantial merits of the
dispute with the minimum of legal formalities.”
This requires commissioners to
deal with the substance of a dispute between the parties. They must cut
through all the claims and counter -claims and reach for the real dispute
between the parties. In order to perform this task effectively, commissioners
must be allowed a significant measure of latitude in the performance of their
functions. Thus the LRA permits commissioners to “conduct the arbitration in
a manner that the commissioner considers appropriate”. But in doing so,
commissioners must be guided by at least three considerations. The first is
that they must resolve the real dispute between the parties. Second, they
must do so expeditiously. And, in resolving the labour dispute, they must act
fairly to all the parties as the LRA enjoins them to do. A commissioner must,
fairly to all the parties as the LRA enjoins them to do. A commissioner must,
as the LRA requires, “deal with the substantial merits of the dispute”. This can
only be done by ascertaining the real dispute between the parties.’
7 (2016) 37 ILJ 1839 (LAC) at para 16.
8 2009 (2) SA 204 (CC) at paras 64 and 65.
15
[46] In Head of the Department of Education v Mofokeng and Others 9 the LAC
held that the failure by the arbitrator to apply her mind to the issue that is
relevant would ordinarily constitute an irregularity, but for an award to be
susceptible to being set aside, it must, in addition to the irregularity, result in
the misconception of the real inquiry to be determined or the ultimate outcome
must be unreasonable.
[47] The LAC in Tshambi 10 held that:
‘An arbitrator is required to determine the true dispute between the parties. To
that end, it is necessary to establish the relevant facts and construe the
category of dispute correctly. An arbitrator must make an objective finding
about what is the dispute to be determined…
[48] The Supreme Court of Appeal (SCA) in Herholdt v Nedbank Ltd and Another
(Congress of SA Trade Unions as Amicus Curiae)11 held as follows:
‘A result will only be unreasonable if it is one that a reasonable arbitrator
could not reach on all the material that was before the arbitrator. Material
errors of fact, as well as the weight and relevance to be attached to particular
facts, are not in and of themselves sufficient for an award to be set aside, but
are only of any consequence if their effect is to render the outcome
unreasonable.’
[49] It is trite that In determining whether the result of an arbitrator’s award is
unreasonable, the Labour Court must broadly evaluate the merits of the
dispute and consider whether, if the Arbitrator’s reasoning is found to be
unreasonable, the result is nevertheless capable of justification for reasons
other than those given by the arbitrator. 12 The result will, however, be
unreasonable if it is entirely disconnected from the evidence, unsupported by
any evidence and involves speculation by the arbitrator.
13
Evaluation
9 (2015) 36 ILJ 2802 (LAC) at para 30 to 33.
10 Id fn 7 at para 16.
11 (2013) 34 ILJ 2795 (SCA) at para 25.
12 National Union of Mineworkers and Another v Samancor Ltd (Tubatse Ferrochrome) and
12 National Union of Mineworkers and Another v Samancor Ltd (Tubatse Ferrochrome) and
Others [2011] 11 BLLR 1041 (SCA).
13Id fn 11.
16
[50] It is the Applicant’s contention that the Commissioner ought to have found that
her dismissal was both procedurally and substantively unfair as a result of the
Bank’s failure to demonstrate exceptional circumstances warranting
interference with the outcome. The Commissioner ordered the Bank to pay
the Applicant three months’ compensation having regard to the following
considerations: firstly, the bank had followed an unfair procedure, secondly,
the disciplinary code did not provide for a unilateral review or amendment of
the chairperson's finding, and finally, the Applicant was not afforded an
opportunity to make any representations before the outcome was altered. As
stated above, the Applicant is not challenging the outcome of the
Commissioner on procedural aspects.
[51] The primary question that follows then is whether the Commissioner dealt with
the substance of the merits within the perimeters of the LRA? The Applicant
contends that he failed to deal with the issues outlined in the signed pre-
arbitration minute. The first question according to the parties was whether the
Applicant had breached any of the Policies , and the Commissioner found that
her conduct was grossly negligent in that she failed to act in the best interest
of the b ank and breached numerous policies.
The second question was
whether the Applicant was required to verify the source of the funds deposited
into her business account and the information from her workshop manager,
and the Commissioner found that she was negligent in failing to do so. These
findings of the Commissioner were supported by concessions made by the
Applicant that she had a duty to report fraud and act in the interests of the
bank.
[52] The other issue which the Commissioner was required to deal with was
whether the Applicant’s conduct exposed the b ank to reputational risk and
potential financial loss? He answered this in the affirmative when he
concluded that the bank has a duty to protect its interests and those of its
concluded that the bank has a duty to protect its interests and those of its
clients. Finally, the other issue was whether the Applicant was reasonably
expected to be aware that her business account was being used as a conduit
for a fraudulent transaction? However, the Commissioner took note of this
17
evidence, and it was clearly recorded in the minutes where the parties agreed
that:
‘There is no evidence to suggest that the Applicant was complicit in the fraud
scam that resulted in a Standard Bank client being defrauded, or that she had
knowledge of the scam’.
[53] The final question which the Commissioner was required to deal with was
whether the dismissal of the Applicant was procedurally and substantively
fair? He concluded that the Applicant had failed to challenge the version of the
bank’s witnesses and conceded that she owed the bank a duty of care in her
position as an employee and as a client of the b ank. The Commissioner then
rejected her evidence on the basis that the Applicant and her witness, Mr
Govo contradicted each other on material aspects and found that based on
the evidence presented during arbitration proceedings her dismissal was
substantively fair.
[54] As indicated earlier, it is the Applicant’s contention that the Commissioner’s
failure to interrogate the procedure followed by the Employer was a
misdirection in law and a flagrant disregard of multiple authorities on this
aspect. She submitted that the bank acted unfairly towards her by unilaterally
changing the outcome from not guilty to guilty without affording her an
opportunity to participate in this second process. The Commissioner dealt with
this issue by first accepting that the disciplinary procedure of the b ank did not
authorise interference and unilateral changing of the outcome of an
independent chairperson and stated the following:
‘150. With regard to procedural fairness, the respondent has submitted that
it is unclear what the procedural defects are as the applicant did not
lead any evidence in this regard. The respondent submits that the
process followed was fair and there was nothing that prevented it from
assessing the circumstances it was faced with and responding
accordingly. Additionally, there was nothing wrong with the
accordingly. Additionally, there was nothing wrong with the
chairperson's reconsideration of his earlier decision and issuing a new
decision based on the merits of the case. The respondent's policies
18
are silent on this matter, but they constitute a mere guideline. The
respondent has a duty to protect its interests and those of its clients
and hence its decision to raise concerns about the initial finding
cannot be faulted. As it was apparent during the arbitration the
applicant's conduct was grossly negligent and she failed to act in the
best interest of the respondent and breached numerous policies.
151. On the other hand, the thrust of the applicant's case is that the
chairperson of the disciplinary enquiry did not find her guilty. The
respondent changed the outcome and that this constitutes a violation
of its disciplinary code. In his closing argument the applicant's
representative, Adv. Mohlala made reference to some legal authorities
to buttress her case that the dismissal was both substantively and
procedurally unfair. The employer can only change the decision if
there are exceptional
circumstances and is permitted by its
disciplinary code to conduct a second enquiry’
152. The respondent's disciplinary code provides that once the employee is
not found guilty there are no further processes. The review was an
unlawful conduct by the respondent. They merely instructed the
chairperson of the hearing to amend his initial findings. The employee
was not afforded any opportunity to put her own side of the story. The
respondent has failed to deal with this aspect during the arbitration
process to demonstrate that there were exceptional circumstances
which warranted its decision.
…
161. I now turn to deal with the issue of procedural fairness, as correctly
submitted by the respondent the applicant did not place any evidence
challenging the procedure that was followed during her disciplinary
enquiry. The applicant's gripe mainly pertains to the respondent's
decision to change the initial findings.’
Can the employer unilaterally substitute or overturn the decision of the chairperson?
[55] The Applicant relies on the decision of Kruger to argue that the disciplinary
[55] The Applicant relies on the decision of Kruger to argue that the disciplinary
procedure read with the General Terms of Employment policy formed part of
19
her contract of employment and they do not have a provision empowering the
Employer to interfere in the outcome . She is relying on Part 7 of the Code
outlining the stages of the hearing as follows:-
“.... After both the bank and the employee and/or his/her representative have
stated and presented what they wish to, the chairperson will arrive at a
decision regarding the employee's guilty or innocence. This decision will be
conveyed to the employee, and where the employee is found not guilty, the
hearing will be closed."
[56] It was further submitted that the b ank acted ultra vires, and the Commissioner
ought to have concluded that the process followed by the bank was
fundamentally flawed and unlawful. It was submitted that based on Kruger ,
the LAC found that:
‘where the process leading to dismissal is itself unlawful or ultra vires,
the resultant award
upholding such dismissal is reviewable for gross
irregularity and excess of powers.’
[57] It was submitted further that in terms of the Code, the Chairperson ought to
have shared the initial outcome with the Applicant and not defer such to any
other employee of the bank and he ceased to be independent the moment he
allowed the bank to interfere with the outcome.
[58] According to the Applicant, the Chairperson ought to have communicated the
outcome and ensure that the hearing is closed. However, even if the
Chairperson can be blamed for not communicating the outcome earlier to both
parties, the fact of the matter is that when the outcome was brought to the
Applicant, she had been found guilty hence she submitted mitigating factors.
[59] The second factor which needs to be considered is that the CCMA does not
have powers to review the findings of the Chairperson. If the Applicant was
adamant that the bank acted unlawfully as opposed to unfairly, the CCMA
was not the correct forum to deal with such a claim. However, in her case, she
referred a dispute of unfair dismissal to the CCMA for arbitration of an alleged
referred a dispute of unfair dismissal to the CCMA for arbitration of an alleged
unfair dismissal. The Applicant, cannot, in the review proceedings claim that
20
the Commissioner exceeded his powers when he arbitrated her dispute of
unfair dismissal. An employee who is relying on the LRA is entitled to the
relief mechanisms available in the LRA.
[60] The Applicant further stressed that in her case and that of Kruger , there was
only a single disciplinary hearing. As such, the Commissioner erred by relying
on Brandford in that Brandford was only concerned with fairness while Kruger
offered fairness and authority to act . It was submitted further that the
Commissioner misdirected himself by failing to acknowledge that the b ank
had no authority to substitute or overturn the decision of the chairperson as
such he exceeded his powers. As stated above, the Commissioner took this
into account and awarded the Applicant compensation for the violation of her
rights not to be dismissed unfairly.
[61] Furthermore, the bank conceded that the process it followed was not in the
policy nor in the disciplinary code. It was , however, stressed that the outcome
was overturned before it was conveyed to the Applicant to protect the bank’s
reputation and minimise financial risk for its clients. It was further submitted on
behalf of the b ank that the LAC decision in Kruger is not good law in that it
failed to appreciate that the LRA is concerned with unfair as opposed to
invalid dismissals. In the present matter, the Commissioner was required to
determine the fairness of the dismissal not whether the dismissal was valid or
invalid. Furthermore, it was submitted that in Kruger, there were two decisions
while in this matter there was just one outcome by Mr Smith who later issued
an independent sanction of dismissal without any interference from the bank.
[62] Finally, the bank made compelling submissions on why Kruger should not be
followed on the basis that it suggests that an employer who has not complied
with a disciplinary code or a collective agreement should be deprived of the
with a disciplinary code or a collective agreement should be deprived of the
right to have its dispute resolved through the courts as envisaged in section
34 of the Constitution. It is the bank’s contention that it only interfered with the
verdict and not the sanction of the hearing. Mr Smith, the C hairperson of the
hearing determined the appropriate sanction on paper without the involvement
of the bank having considered submissions by both parties.
21
[63] Furthermore, this Court did not follow Brandford 14on the basis that the facts in
these two matters are distinguishable. In Brandford, the employee was issued
with an oral warning by his line manager and he was also formally charged at
a later stage in respect of the same misconduct. During the hearing, the
employee protested that he was being disciplined twice for the same
misconduct. The chairperson of the disciplinary hearing rejected his
contention and concluded that he was not disciplined twice. The majority
concluded that fairness alone is to be the decisive factor in determining
whether or not the second enquiry is justified and held:
‘As a result of the arbitrator’s misconception of the law relating to the propriety
of holding second disciplinary enquiry, the employer in the present matter was
denied the opportunity of having the issue of fairness of the dismissal
considered in a fair public hearing and by means of applying the relevant law.
The arbitrator failed to consider whether or not in the circumstances of the
present matter the employer was entitled to hold the enquiry that led to the
appellant’s dismissal and if so whether the sanction of a dismissal was fair.’
[64] In County Fair Foods (Pty) Ltd Commissioner for Conciliation Mediation and
Arbitration and Others ,15 the arbitrator had found that the dismissal was
procedurally unfair for reasons that an employer had altered the earlier lesser
sanction to one of dismissal. Before the LAC, the dispute concerned the
unfairness of interfering with the decision of the disciplinary tribunal when
there was no express provision contained in the disciplinary code justifying
such interference. It was then decided that it is procedurally unfair for an
employer to interfere with an imposed sanction in the absence of express
provisions in the disciplinary code to do so. It is therefore an accepted
principle that an employer who substitutes a sanction without being authorised
principle that an employer who substitutes a sanction without being authorised
by the disciplinary code acts ultra vires and, on that basis, alone the dismissal
becomes unfair.
[65] It is trite that arbitration proceedings are a hearing de novo and the
Commissioner is expected to decide for himself or herself whether an
14 Id fn 2 at para 21.
15 (2003) 24 ILJ 355 (LAC).
22
employee was dismissed for a fair reason based on all this evidence
presented in the arbitration and not necessarily before the chairperson of the
disciplinary enquiry. In County Fair Foods (Pty) Ltd v Commission for
Conciliation, Mediation and Arbitration and Others16 it was held that:
‘… It remains part of our law that it lies in the first place within the province of
the employer to set the standard of conduct to be observed by its employees
and determine the sanction with which non- compliance with the standard will
be visited, interference therewith is only justified in the case
of unreasonableness and unfairness. However, the decision of the arbitrator
as to the fairness or unfairness of the employer's decision is not reached with
reference to the evidential material that was before the employer at the time
of its decision but on the basis of all the evidential material before the
arbitrator. To that extent the proceedings are a hearing de novo.’
[66] In the present matter, the Commissioner concluded that the bank failed to
demonstrate exceptional circumstances which warranted its decision to reject
the initial outcome of the chairperson and demand an adverse one. He,
however, made a U -turn by stating that the Applicant had failed to place any
evidence challenging the procedure that was followed during her disciplinary
enquiry and this is incorrect. The Applicant had succeeded at forcing the
bank’s witnesses and representative to concede that they had followed a
foreign process which was not regulated in any of the internal policies. With
this concession in mind, the Commissioner was placed in a position to now
determine whether the b ank’s interference influenced the decision of the
chairperson to dismiss the Applicant. Section 185(a) of the LRA provides that
every employee has the right not to be unfairly dismissed.
[67] Section 188(1)(a) of the LRA provides that a dismissal that is not
automatically unfair, is unfair if the employer fails to prove that the reason for
automatically unfair, is unfair if the employer fails to prove that the reason for
dismissal is a fair reason related to the employee’s capacity and (b) that the
dismissal was effected in accordance with a fair procedure.
16 (1999) 20 ILJ 1701 (LAC) at 1707G -I. See also Wasteman Group v SA Municipal Workers Union
and Others, 2012) 33 ILJ 2054 (LAC) at 2057I where it was said; ‘… The commissioner is required to
come to an independent decision as to whether the employer's decision was fair in the circumstances,
these circumstances being established by the factual matrix confronting the commissioner …’.
23
[68] In undertaking the enquiry into the fairness of the dismissal and the procedure
followed, the Commissioner has to follow the spirit and letter of the LRA. The
LRA is concerned with the fairness not lawfulness of a dismissal. The CCMA
does not have jurisdiction to deal with any dispute where an employee is
challenging the validity or lawfulness of his or her dismissal, the
Commissioner is only empowered to determine the fairness of the dismissal.
This view is supported by the majority in Steenkamp and Others v Edcon
Ltd17.
[69] Based on the above authority, this Court did not follow Kruger . In Kruger, the
Commissioner of SARS had rejected the decision and sanction of the
Chairperson and issued his own independent sanction. In the present matter,
the Bank influenced the Chairperson to change his finding of not guilty to one
of guilty and only one outcome was communicated to the Applicant. This was
done despite the disciplinary procedure empowering the Chairperson to make
a decision and not the b ank. He subsequently issued a sanction of dismissal
despite his earlier independent outcome that the Applicant was not guilty of
misconduct. It is undeniable that the conduct of the b ank influenced the
decision of the C hairperson to dismiss her. However, this does not mean that
she was dismissed unlawfully or that the dismissal was invalid. The
Commissioner, having regard to the evidence in an independent hearing
concluded that the Applicant was dismissed for a fair reason but not in
accordance with a fair procedure and awarded her compensation.
[70] Despite the acknowledgement and concession from the b ank that the
Applicant was not complicit in the scam, she allowed her bank account held
with her employer to be used as a vehicle to commit fraud against a client of
the bank. She was employed as a senior investigator who was a certified
fraud examiner. This means, she ought to have exercised some caution with
fraud examiner. This means, she ought to have exercised some caution with
regards the instructions for her to transfer the money in the manner which she
did. The Bank relies on its employees such as the Applicant to ensure that its
17 [2016] 4 BLLR 335 (CC).
24
clients’ monies are safeguarded and internal controls are strengthened to
attract confidence of new clients and business partners.
[71] In ABSA Bank Ltd v Naidu 18 the LAC confirmed that employees must at all
material times act in the best interests of their employers and held as follows:
‘... it followed that she owed a fiduciary responsibility to the appellant t o
ensure that, at all times, she acted and performed her duties in a manner that
was in the best interests of both the appellant and its clients...’
Conclusion
[72] Having regard to the nature of the allegations levelled against the Applicant,
the magnitude and seriousness thereof justify her dismissal especially
considering her position as a senior forensic investigator and a certified fraud
examiner. In Sappi Novoboard (Pty) Ltd v Bolleurs19 the LAC held as follows:
'It is an implied term of the contract of employment that the employee will act
with good faith towards his employer and that he will serve his employer
honesty and faithfully... The duty which an employee owes his employer is a
fiduciary one ‘”which involves an obligation not to work against his master's
interests” ... If an employee does “anything incompatible with the due or
faithful discharge of his duty to his master, the latter has a right to dismiss
him” ...'
[73] In his conclusions the Commissioner considered that the Applicant had been
in the Bank’s employment for a period of eight months and awarded her
compensation for a period of three months. Compensation has been found to
be an appropriate remedy in Kruge r20 where the Constitutional Court held as
follows:
‘In terms of our law compensation is not automatic. It is a discretionary
matter. A whole range of factors must be taken in to account to determine
whether compensation has to be paid and if so, for how many months. In this
18 (2015) 36 ILJ 602 (LAC) at para 54.
19 (1998) 19 ILJ 784 (LAC) at para 7.
20 Id fn 3 at para 52.
25
regard one of the key factors is the need to ensure that employers are not
inadvertently encouraged by the non- payment of compensation to adopt a
shotgun approach of dismissing employees without affording them the
opportunity to be heard. Employees are ordinarily vulnerable because, unlike
employers, they do not often have the resources necessary to vindicate their
rights by prosecuting cases all the way up to this Court. Condoning the
flouting of laws that govern the fate of people's livelihood is a matter so
serious that it always requires greater sensitivity and care...’
[74] The Applicant conceded to having breached the Bank’s policies in the manner
in which she handled her private business affairs. Although the Bank was not
authorised to influence the Chairperson to overturn the outcome in the
manner in did, the Commissioner has awarded the Applicant a handsome
compensation and this Court does not wish to interfere with the award.
[75] Based on the authorities referred to above and on the principle of stare
decisis, this court comes to a conclusion that the award falls within the band
of reasonableness and warrants no interference. The review application
therefore stands to be dismissed.
Costs
[76] It is trite that the awarding of costs in the Labour Court is discretionary as
envisaged in section 162 of the LRA. The Constitutional Court in Booi v
Amathole District Municipality and Others21, dealt with the issue of costs in the
Labour Court and held as follows:
‘However, this is a labour matter and this Court’s jurisprudence is settled: the
ordinary rule that costs follow the result does not apply in labour matters.
Rather, what emerges from the provisions of the LRA and the jurisprudence is
that courts, when awarding costs in labour disputes, must consider what
fairness demands and err on the side of not discouraging parties from
approaching the courts for the peaceful resolution of labour disputes. Further,
approaching the courts for the peaceful resolution of labour disputes. Further,
if costs are to be awarded in labour matters, there must be reasons that justify
21 (2022) 43 ILJ 91 (CC) at para 60.
26
a court’s decision to depart from the position that a losing party should not be
mulcted in costs in labour disputes.’
[77] The above-mentioned principle was clearly espoused in Member of the
Executive Council for Finance, KwaZulu- Natal v Dorkin N.O and another 22
where the Court held:
‘In making decisions on cost orders this Court should seek to strike a fair
balance between, on the one hand, not unduly discouraging workers,
employers, unions and employers’ organisations from approaching the
Labour Court and this Court to have their disputes dealt with, and, on the
other, allowing those parties to bring to the Labour Court and this Court
frivolous cases that should not be brought to court. That is a balance that is
not always easy to strike but, if the court is to err, it should err on the side of
not discouraging parties to approach these courts with their disputes. In that
way these courts will contribute to those parties not resorting to industrial
action on disputes that should properly be referred to either arbitral bodies for
arbitration or to the courts for adjudication.’
[78] This Court has considered that there is an existing working relationship
between the Applicant and the Third Respondent . It is therefore in the
interests of the law and fairness that each party be burdened with its own
costs.
[79] Accordingly, the following order is made:
Order
1. The review application is dismissed.
2. There is no order as to costs.
_______________________
G C Phakedi
22 2008 (29) ILJ 1707 (LAC) at para 19.
27
Acting Judge of the Labour Court of South Africa.
Appearances:
For the Applicant : Aziz Kathrada of A Kathrada Inc.
For the Respondent : Adv Anton Myburgh SC
Instructed by : Bowman Gilfillan Inc.