Director General; Department of Public Works and Another v Public Service Sectoral Bargaining Council and Others (JR 948/09) [2012] ZALCJHB 1; [2012] 5 BLLR 468 (LC); 2012) 33 ILJ 1649 (LC) (6 January 2012)

REPUBLIC OF SOUTH AFRICA

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

JUDGMENT

Reportable

Case No: JR 948/09

In the matter between:

THE DIRECTOR GENERAL; DEPARTMENT

OF PUBLIC WORKS …....................................................................................First Applicant

MEC, DEPARTMENT OF PUBLIC WORKS

LIMPOPO PROVICE …...............................................................................Second Applicant

and

THE PUBLIC SERVICE SECTORAL

BARGAINING COUNCIL ….........................................................................First Respondent

DANIEL SEOPELA N.O …......................................................................Second Respondent

SELLO JEREMIAH TSELANE …...............................................................Third Respondent

Heard: 01 December 2011

Delivered: 6 January 2012

Summary: Review arbitration award. Commissioner relying on defence not raised. Commissioner relying on dictionary definition of “corruption,” instead of the definition of the Prevention and Combating of Corruption Activities Act.

___________________________________________________________________

MOLAHLEHI J

Introduction

This is an application to review and set aside the arbitration award made by the second respondent (the arbitrator) under case number 760-08/09 dated 21 February 2009. In terms of the arbitration award, the arbitrator found the dismissal of the third respondent (the respondent) to have been substantively unfair and ordered that he be reinstated.

Background facts

The respondent who was prior to his dismissal employed by the applicant as a horticulturalist was dismissed for misconduct related dishonesty. The act of misconduct for which the applicant was charged with related to a tender for the planting of instant lawn on the premises of the applicant. The respondent had been requested by those in the authority to seek quotations from various dealers for the purposes of purchasing instant lawn and laying it on the premises of the applicant.

The only two quotations which the respondent received were from two companies known as Die Drift (the Drift) and Organic Compost. The tender was awarded to the Drift.

According to Mr Van Der Merwe, the owner of the Die Drift, he quoted the applicant R8.00 per square meter for the instant lawn. After the submission of the quotation he received a call from the respondent wherein it was suggested that the quotation should be adjusted upwards with the amount of 50c per meter square. Mr Van Der Merwe increased his price by 50c as advised by the respondent.

The tender was subsequently awarded to the Drift and thereafter the respondent delivered the purchase order at Mr Vander Merwe’s farm. During that visit the issue of the 50c was raised again by the respondent, according to Mr Van Der Merwe. The respondent is said to have claimed that in total the 50c for which the tender was increased amounted to R3000,00 and that he would have liked to have the money as soon as possible.

Mr Van Der Merwe promised to pay the respondent as soon as the applicant paid him for his services. He then reported the matter to one of his former colleague in the South African police, Mr Harold. An arrangement was then made for the respondent to meet with Mr Van Der Merwe for the purposes of effecting the payment demanded by the respondent and to arrest the respondent thereafter.

In the meantime, Mr Harold photocopied the notes in the amount of R3000,00 which was to be used as proof of the amount paid to the respondent. The R3000,00 was placed in an envelope which Mr Van Der Merwe would hand to the respondent when they meet at Wimpy restaurant. It was alleged that on arrival at Wimpy, the respondent enquired from Mr Van Der Merwe whether he had the money with him at which point the white envelope with money in it was placed on the table pushed towards the employee.

Mr Harold who at the time was the Superintendent in the SAPS testified that on the day in question having made the arrangement for the arrest of the respondent as soon as the money had exchanged hands, observed how the respondent and Mr Van der Merwe were looking for a table to seat as soon as they entered Wimpy restaurant. At the appropriate time, Mr Harold accompanied by two of his colleagues entered Wimpy and arrested the respondent after comparing the copy of the amount they had with that which was in the envelope. The respondent refused to compare the amount in the envelope with the photocopied money because he contended that the envelope belonged to Mr Van der Merwe.

The respondent does not dispute having visited Mr Van Der Merwe at his farm but says that the reason for this was to deliver the original purchase order. Thereafter he received a call from Mr Van Der Merwe enquiring as to when he would be going to Polokwane. The respondent informed him that he was going to Polokwane the following day. Mr Van Der Merwe requested him to call as soon as he arrives in Polokwane.

As arranged, the respondent called Mr Van Der Merwe on arrival in Polokwane and was advised to meet at Wimpy. On arrival at Wimpy Mr Van Der Merwe enquired from the respondent as to whether he would have something to drink and at that point Mr Van Der Merwe stood up, placed a white envelope on the table and proceeded to the counter. He was then suddenly surrounded by the police who confronted him about white envelope. He informed them that the envelope belonged to Mr Van der Merwe. The respondent says that as he had pointed out to the police he saw Mr Van der Merwe leaving the restaurant but the police did nothing to stop him. The respondent was then arrested.

The applicant was charged with corruption as defined by the Prevention and Combating of Corruption Activities Act of 2000. It seems to me that it is apposite that the provisions of section 4 of the Prevention of Corruption Act need to be quoted in full. It reads as follows:

‘Section 4. Offences in respect of corrupt activities relating to public officers.-

Any-

Public officer who, directly or indirectly, accepts or agrees or offers to accept any gratification from any other person, whether for the benefit of himself or for the benefit of another person: or

Person who, directly or indirectly, gives or agrees or offers to give any gratification to public officer, whether for the benefit of that public officer or for the benefit of another person,

In order to act, personally or by influencing another person so to act, in a manner-

that amounts to the-

(aa) illegal, dishonest, unauthorised, incomplete, or biased; or

(bb) misuse or selling of information or material acquired in the course of the,

exercise, carrying out performance of any powers, duties or functions arising out of a constitution, statutory, contractual or any other legal obligations,

that amounts to-

(aa) the abuse of a position of authority;

(bb) a breach of trust; or

(cc) violation of a legal duty or a set of rules;

designed to achieve an unjustified result; or

that amounts to any other unauthorised or improper inducement to do or not do anything,

is guilty of the offence of corrupt activities relating to public officers.’

The grounds for review

The applicant contends that the arbitrator committed a number of gross irregularities that he:

failed to apply his mind or properly applied his mind to the evidence before him

ignored and or improperly ignored the evidence properly placed before him.

reached a conclusion which a reasonable arbitrator in applying his mind and properly considering all aspects of the dispute before him could not reach

failed to consider the provisions of the Prevention and Combating of Corrupt Activities Act 12 of 2004.

The applicant further contended that the arbitrator failed to weigh the probabilities in the context where there existed two conflicting versions.

The arbitration award

The arbitrator in his analysis identified the issue he had to deal with to be concerning whether the conduct of the respondent amounted to corruption. In this respect, the arbitrator, relying on the definition of the word ‘corruption’ as set out in the Oxford dictionary said corruption is ‘dishonest or illegal behaviour, especially of people in authority or the act of making somebody change from moral to immoral standards of behaviour.’

The arbitrator rejected the version of Mr Van der Merwe seemingly on the basis that the respondent could not have sought a bribe from him because he (Van der Merwe) had previously received a tender to plant 6000m2 of lawn and that even at the stage the two dealt with each other.

The other basis upon which the arbitrator rejected the evidence of Mr Van der Merwe is that he never said that he sent a tender of R8,00 and later withdrew it and sent it with the increase of 50c.

In arriving at the conclusion that the respondent was innocent, the arbitrator took into account the following facts:

Mr Van Der Merwe reported the matter to the applicant only after the tender was awarded and that if he (Mr Van der Merwe) wanted to fight corruption then he should have reported the matter to the applicant immediately he was approached by the employee.

the respondent could not have bribed Mr Van der Merwe because he was a person who had no say in the issuing of tenders.

the reason for entrapping the respondent and reporting the matter to the applicant was because Mr Van der Merwe wanted to carry favour with the applicant for purposes of further tenders. This, the arbitrator found that was the reason for arranging the meeting at Wimpy.

In relation to the role played by the police, the arbitrator found that, those involved in the arrest of the respondent were involved in an ‘evil game’ and that the respondent was correct in refusing to compare the money in the envelop and the copies which the police had because that was not his money.

The arbitrator in his arbitration award says that he does not reject the credibility of the police in relation to their version of the events but at the same time seems to accord no weight to that evidence because according to him the ‘prisons are also filled with people who are not supposed to be there.’

Evaluation

The applicant challenges the arbitrator's award on the basis of gross irregularity as envisaged in section 145(2) of the LRA1. Gross irregularity as a ground for review may, as was indicated in Goldfields Investment v City of Johannesburg,2 take place in two ways. It may manifest itself in the form of latent or patent defect. The patent irregularities can be identified from the manner in which the arbitration proceedings were conducted, for instance where the arbitrator refuses to allow the right to call witnesses or to cross-examining witnesses. And patent irregularity can be determined from analysing the reasoning of the Commissioner. This is a defect that occurs in the mind of the arbitrator and can be observed from the analysis of his or her reasoning.

Generally speaking, latent defects occur where the Commissioner fails to apply his or her mind to the evidence or the facts properly placed before him or her. The latent defects occur also where the arbitrator misconceives the issues he or she is supposed to deal with. It may also occur where the arbitrator fails to understand or misconceive the scope of his or her mandate.

Both latent and patent irregularities could, depending on their extent and materiality, vitiate the arbitration award irrespective of the reasonableness of the outcome of the arbitration award. In that regard, the arbitration award will not be vitiated by the unreasonableness of the outcome of the arbitration award but by the irregularity committed by the arbitrator. In other words, the arbitration award would be set aside because of the defect in the reasoning process rather than the reasonableness of the arbitration award.3

The critical question in determining whether to interfere with the arbitration award because of latent or patent defects are, as was stated in Goldfields Investment and Another v City of Johannesburg and Another,4 to determine whether the defect is so serious as to prevent the trial of the issues resulting in the denial of a fair hearing of the affected party. In this regard, Schreiner J dealing with the same issue in that case observed that:

‘. . . If it did prevent a fair trial of the issues then it will amount to a gross irregularity. Many patent irregularities have this effect. And if from the magistrate’s reasons it appears that his mind was not in a state to enable him to try the case fairly this will amount to a latent gross irregularity. If, on the other hand, he merely comes to a wrong decision owing to his having made a mistake on a point of law in relation to the merits, this does not amount to gross irregularity.’

In Sidumo and Another v Rustenburg Platinum Mines Ltd and Others,5 the Constitutional Court per Ncobo J held that that it cannot be said to be fair when a commissioner fails to have regard to the material facts before him or her as in doing so he or she fails to perform his or her mandate.

In the present instance, the arbitrator failed to appreciate the material issues he had to deal with and thus his arbitration award is vitiated by that latent defect. In the first instance, the arbitrator failed to appreciate that he was faced with having to resolve the two conflicting versions. The version of the applicant as presented before the arbitrator was that the respondent had asked Mr Van der Merwe for payment of R3000,00 arising from the tender that had been awarded to him and thus committing an offence of corruption. The respondent on the other hand denied all allegations levelled against him by the applicant.

It was thus the duty of the arbitrator to resolve such conflicting versions through the use of the appropriate test. It is trite that when faced with two conflicting versions the enquiry which the arbitrator has to conduct is that which was set out in Stellenbosch Farmers' Winery Group Ltd. and Another v Martell & Kie SA and Others.6 The enquiry set out in that case essentially entails assessing and making a finding on the credibility of witnesses including the probabilities to determine where the truth lies in the matter. It would seem to me that the key aspect of this inquiry is whether the probabilities favour the party that bears the onus of proof. It is also important to note that whilst the credibility of a witness is in an extricable manner bound to the consideration of the probabilities of the case, the arbitrator should resort to credibility where the probabilities fails to point which version embraces the truth.

Because of his failure to appreciate the task created by the conflicting versions, the arbitrator never came closer to performing his duties as was expected.

The reading of the record reveals that the version of Mr Van der Merwe, concerning the testimony that the respondent approached him firstly with the advice that he should add a 50c on his tender and later claimed the same amount from him, is more probable than that of the respondent which is a simple denial. The fact that Mr Van der Merwe never submitted a tender of R8.50 is immaterial in the assessment of whether the respondent committed misconduct in terms of the Act.

It is also apparent that in approaching the evidence before him, the arbitrator adopted a piece meal approach in determining whether the respondent was guilty of the offence of corruption. The proper analysis of the totality of the evidence before the arbitrator presented a version which was consistent with the applicant’s contention that the respondent was guilty of corruption. In this respect, it makes no sense in the first instance why Mr Van der Merwe would accuse the respondent of having told him to adjust his tender submission by 50c and secondly say that the respondent subsequently raised the 50c issue when he delivered the purchase order at his farm. That chain of events which, in my view, establishes that in all probabilities the respondent did ask for the amount of R3000,00 which is 50c x 6000mt lawn2 of the instant lawn, continued thereafter with the meeting at Wimpy restaurant.

The fact that the respondent did not take the money which was placed on the table by Mr Van der Merwe seems to me irrelevant in the totality of the evidence and the circumstances of the case against him.

In my view, the arbitrator would have reached a different conclusion had he applied his mind to the definition of corruption as set out in the Act. Had he applied his mind to the definition in the Act, he would have taken into account and accorded the appropriate weight to the fact that the respondent was given the responsibility of facilitating submission of the quotation necessary for the determination of the tender. In that regard, the respondent was privy to the information about how many people submitted their tenders and the price they quoted therein. Thus considered with all other facts, the fact that he did not have a say over the awarding of the tenders could not rule out the possibility of wanting and receiving gratification as envisaged by the Act.

I have already indicated that the arbitrator resorted to ignoring the provisions of the Act and resorted to the dictionary definition. In approaching the definition of corruption in the manner he did, the arbitrator adopted a narrow definition of the misconduct the respondent was accused off and thus committed a gross irregularity in that he operated outside his mandate. He accordingly exceeded his powers. In considering whether the respondent was guilty of corruption, the arbitrator ought to have had regard to the fact that the reason for dismissing the respondent was because he had contravened the provisions of the Act which makes the misconduct much more serious than any other offence that may be provided for in the disciplinary code.

The arbitrator’s arbitration award is further vitiated by the fact that he gave the respondent the benefit of the defence he never pleaded. It was never the case of the respondent during the arbitration proceedings that the charges against him arose from an improper or unfair entrapment by the applicant. There is no evidence that the applicant knew or was part of the plan to arrest the respondent as soon as he received the amount in question. The arbitrator seems to have misunderstood the facts that were presented before him. The facts indicate very clearly that the applicant came to know about the conduct of the respondent after the event in as far as his arrest by the police can be categorised as an entrapment.

Even if this was to be regarded as entrapment, the arbitrator seems to have also missed the point that not every entrapment is necessarily improper and unfair. In this respect, the arbitrator further failed to appreciate that the defence of entrapment is generally based on the principle that the offender was induced to commit an unlawful act by those who set up the trap. The notion of entrapment has been used largely in criminal law where the complaint by the offender would be that he or she was induced into committing an offence by the law enforcement officers.

In labour matters, depending on the facts and the circumstances of a given case, an employee could escape liability on the basis that the entrapment was inappropriate and thus the dismissal arising from such circumstances amounted to unfair dismissal.

In the present instance as indicated earlier, the respondent did not and correctly so, rely on entrapment as a defence or mitigating factor. There is also no evidence that the respondent was induced by Mr Van der Merwe to inflate the amount of the tender. The analysis of the arbitrator’s award is that the arbitrator arrived a conclusion based on defence which was never pleaded by the respondent neither was there evidence upon which such a defence could be founded.

In dealing with the issue of the Commissioner basing his finding on a defence not pleaded, this Court in Rustenburg Platinum Mines (Rustenburg Section) v CCMA and Others,7 held that:

‘In essence the conclusion of the commissioner amounted to a defence of "incitement" on the part of the respondents. It is unjustified and in a technical sense the commissioner committed a gross misconduct in relying on a defence that was not pleaded nor articulated by Modisakeng in his testimony. It is a defence which was never brought to the attention of applicant and accordingly the applicant was denied the opportunity to respond to the defence. Reliance on this defence gave the employees an unfair advantage.’

The principle governing reliance on a defence not pleaded was set out in the unpublished judgment of Matla Coal Ltd v Commissioner for Mediation and Arbitration and Others8, where Van Dijkhorst AJA said:

‘Where a defence is not pleaded and not articulated in evidence it is not a defence and a Court errs when that “defence” is made a reason for its conclusion. The essence of our procedure is to give each party to a dispute a fair opportunity to put his or her case and meet the allegation made by the other party. To this end there are pleadings which define and therefore give fair warning of the issues in dispute.’

Again even if the conduct of Mr Van der Merwe and the police was to be regarded as entrapment, it has to be noted that the applicant was not party to that process. The applicant acted against the respondent after the event. The applicant instituted the disciplinary proceedings after it received information regarding the conduct of the respondent. In any event, if the converse was to be true the conclusion would still fall short of producing a fair decision as the arbitrator failed to consider whether in the circumstances of this case the entrapment was fair and appropriate.

In the Cape Town City Council v SAMWU and Others9 case, the court held that entrapment is permissible in the labour market but traps must be conducted fairly and in accordance with the requirements of the law.

In light of the above, I am of the view that the arbitration award of the arbitrator stands to be reviewed and set aside. I do not however belief that costs should follow the results.

In the premises, the following order is made:

The arbitration award of the second respondent is reviewed and set aside with no order as to costs.

The arbitration award is substituted with the following award:

‘(a) The dismissal of the applicant is fair and his claim of unfair dismissal is dismissed.’

___________________

Molahlehi J

Judge of the Labour Court of South Africa

APPEARANCES:

FOR THE APPLICANTS: Adv A P Laka instructed by the State Attorney

FOR THE THIRD RESPONDENT: Adv C Prinsloo instructed by Du Toit Attorneys.

1Section 145 (2) of the LRA provides: (2) A defect referred to in subsection (1), means- (a) that the commissioner- (i) committed misconduct in relation to the duties of the commissioner as an arbitrator; (ii) committed a gross irregularity in the conduct of the arbitration proceedings; or (iii) exceeded the commissioner's powers; or (b) that an award has been improperly obtained.

2 1938 TPD 551

3See Sasol Mining (Pty) Ltd v Commissioner Ngeleni and Others [2011] 4 BLLR 404 (LC). For a detailed discussion on the difference between process related and outcome based review see Adv Myburgh; ‘Determining and Reviewing Sanction after Sidumo’; Industrial Law Journal (2010) 31 ILJ 16.

4 1938 TPD 551 at 560.

5 [2007] 12 BLLR 1097 (CC).

6 2003 (1) SA 11 (SCA).

7 [2007] JOL 19298 (LC); (2007) 28 IL 1107 (LC) at para 28.

8case number JA33/04 at page 6. .

9 [2000] 11 BLLR 1239 (LC).