Eskom Holdings (Pty) Ltd v Ferreira NO and Others (J1624/2006) [2007] ZALC 46; (2007) 28 ILJ 2588 (LC) (29 June 2007)

IN THE LABOUR COURT OF SOUTH AFRICA

HELD AT JOHANNESBURG

CASE NUMBER: JR1624/2006

In the matter between:

ESKOM HOLDINGS (PTY) LTD Applicant

and

FERREIRA, W N.O First Respondent

COMMISSION FOR CONCILIATION,

MEDIATION AND ARBITRATION Second Respondent

GROBLER, R Third Respondent

___________________________________________________

JUDGEMENT

NGALWANA AJ

[1] This is an application for the review and setting aside of an arbitration award made by the first respondent on 10 May 2006 under case number MP261/2004 and under the auspices of the second respondent.

[2] The first respondent found that the third respondent had been unfairly dismissed (both procedurally and substantively) by the applicant. He ordered that the applicant re-instate her on the same terms and conditions as before the dismissal and pay her an amount equivalent to her twelve months’ salary, being R138 000, within 14 days of receipt of the award.

[3] The applicant submits that the first respondent’s finding of procedural unfairness, based on alleged perception of bias on the part of the chairman of the applicant’s disciplinary hearing, is susceptible to review because any procedural defects in the disciplinary hearing were effectively cured by the appeal hearing in relation to which the third respondent did not demur. The first respondent’s failure to consider this aspect, so the argument goes, constitutes a material irregularity in the arbitration proceedings. For this proposition, counsel for the applicant relied on Slagment (Pty) Ltd v Building Construction and Allied Workers Union and Others (1994) 15 ILJ 979 (A) (“Slagment”), Nasionale Parkeraad v Terreblanche (1999) 20 ILJ 1520 (LAC) (“Nationale Parkeraad”) and Semenya and Others v CCMA and Others (2006) 6 BLLR 521 (LAC) (“Semenya”).

[4] Counsel for the third respondent submits that since the applicant never contended at the arbitration hearing before the first respondent that the appeal process served effectively to cure whatever procedural defects may have marred the disciplinary hearing, the issue never arose and so the first respondent had no occasion to consider it. Applicant’s counsel countered that this is a point of law and can be raised at any time. In any event, rejoins the third respondent’s counsel, the authorities cited on the applicant’s behalf for the proposition that an appeal process cures any procedural defects by which an initial hearing may have been sullied are not of general application but depend on the facts of each case. In other words, an appeal process does not provide a cure for procedural defects in initial hearings in every case. Both Slagment and Nationale Parkeraad, says counsel for the third respondent, are in principle distinguishable from this case because both involved a full hearing of the appeal de novo in contradistinction to an appeal in the narrow sense as was the case here.

[5] I am in respectful agreement with the third respondent’s counsel that the authorities cited by the applicant’s counsel for the proposition that a properly run appeal process cures any defects attendant upon an initial disciplinary hearing are in principle not on all fours with this case. It is clear from clause 5.6 of the applicant’s disciplinary code that what is there envisaged is not a full hearing of the appeal on the merits but an appeal in the strict sense, limited only to procedural matters and enquiries as to the appropriateness of the sanction meted out. As such, I do not find the authorities cited helpful in the circumstances of this case.

[6] Since that is the only ground upon which the finding of procedural unfairness is sought to be assailed, the application in that specific respect must fail.

[7] As regards the finding of substantive unfairness, the applicant submits that the first respondent took into account irrelevant considerations on his way to the conclusion that the third respondent’s dismissal was substantively unfair. One of those considerations is the evidence of Inspector Kruger that the allegations against the third respondent were investigated but it was then decided that no prosecution would be pursued “because of a total lack of evidence”. The applicant says this was an irregularity because “the fact that the prosecutor did not prosecute for a criminal offence was completely irrelevant to the determination as to whether or not the Third Respondent had fairly been dismissed for the misconduct for which she was charged”. He then cites the authorities of the then Industrial Court and Labour Appeal Court for the proposition that the outcome in criminal proceedings is an inappropriate measure of whether or not an employee had committed a misconduct with which she has been charged by the employer because not only different standards (of proof) are applicable but also different considerations are at play in each.

[8] With reference to Rustenburg Platinum Mines Ltd (Rustenburg Section) v CCMA and Others (2006) 11 BLLR 1021 (SCA) (“Rustenburg Platinum Mines”) the applicant submits that since the first respondent relied upon this irrelevant consideration in arriving at his substantive unfairness finding, the entire award falls to be set aside because, as I understand his proposition to be, that consideration “substantially influenced” that finding.

[9] I do not understand the finding of the first respondent to be based on the “outcome of criminal proceedings” as the applicant’s counsel suggests in the heads of argument. A decision on whether or not to prosecute does not hinge upon a criminal standard; it does not even depend upon a civil standard of balance of probabilities. The standard is rather a prima facie one. The inspector found no prima facie grounds upon which to refer the matter for prosecution. That decision by a police inspector is in my view a relevant consideration in the enquiry as regards whether an employee has, on a balance of probabilities (which is a higher standard than that of deciding whether or not to prosecute), committed a dismissible misconduct. For that reason, Rustenburg Platinum Mines is not helpful in this case.

[10] Another ground on which the applicant avers the first respondent’s award falls to be reviewed is that he approached the case against the third respondent as one based on receipt by her of “backhands”. The applicant submits that the third respondent had been charged not with receiving “backhands” but with receiving payments without the applicant’s written consent, through her husband’s bank account, from a company that is contracted to the applicant as a service provider. She was also dismissed for making a false statement to an internal investigator in relation to that charge. Thus, avers the applicant, the first respondent entirely misconstrued the basis upon which the third respondent had been dismissed and this is a “fundamental irregularity”.

[11] But it was Mr Giyane, the applicant’s internal investigator, who in his evidence at the arbitration hearing referred to the misconduct with which the third respondent was charged as “backhands” by which he understood “undue payments” and “corruption”. There can thus be no basis for the charge that the first respondent “entirely misconstrued” the basis upon which the third respondent had been dismissed.

[12] The applicant also challenges the first respondent’s award on the ground that he accepted “blindly” the entire evidence of the third respondent’s uncle even for purposes for which the applicant had not called him as a witness. It is alleged that the uncle was called only “to clarify that payments had been made by Vitex to the Third Respondent” and that he was “not … to be believed for everything else”, such as his testimony (corroborating that of the third respondent) that the payment to the third respondent’s husband’s bank account by Vitex was in fact repayment of a personal loan that she and her husband had given him. This is an extraordinary submission. The applicant cannot call a witness and then surgically excise from the first respondent’s consideration evidence of that witness which does not meet with the requirements of its case. The third respondent’s case has always been that she did nothing wrong in accepting payments from Vitex because Vitex was merely an agent for her uncle in the repayment of a personal loan she and her husband had given him. The applicant should have been alive to the real possibility of the uncle testifying to that effect when it decided to call him as its witness. It cannot now pick and choose which aspects of his evidence the first respondent should have considered.

[13] The other charge against the first respondent’s award is that he ignored the fact that the complaint against the third respondent was that she received payments from the applicant’s contractor which she did not disclose. This is not the charge as formulated in the “NOTICE TO ATTEND A CONFRONTATION DISCUSSION” sent by the applicant to the third respondent on 9 September 2003. The charge (Misconduct 25) was that the third respondent (1) accepted a benefit or compensation in cash (2) without the written consent of the applicant (3) from his association, engagement or duties with the applicant. Mr Giyane’s understanding of what this charge entailed (and he was the applicant’s internal investigator and testified on the applicant’s behalf at the arbitration) was that of “corruption” or “undue payments”. On his evidence and that of Mr Kruger (the third respondent’s uncle who was also the applicant’s witness at the arbitration) there is no suggestion of corruption.

[14] Firstly, there is no suggestion that she received “a benefit” or “compensation”. Both words connote a quid pro quo for something beneficial that the receiver thereof had done. None of the applicant’s witnesses suggested that the third respondent had done anything beneficial for Vitex as a result of which Vitex paid her a benefit or compensation.

[15] Secondly, there has been no suggestion that she received payment from Vitex by reason of her association or engagement or duties with the applicant. This requires in my view proof that the payments were received in the course and scope of the third respondent’s performance of her duties as an employee of the applicant. Otherwise why would she be required to obtain written consent from the applicant for receipt of payments unrelated to the applicant’s business or her duties. It can surely not be said that employees of the applicant who happen to belong to a stokvel with employees of companies that render services to the applicant must first obtain the applicant’s written consent before collecting their share of the stokvel spoils from those employees or their employer through a third party payment system.

[16] The third respondent’s defence was in my view not shown as being inconceivable, the finding of Mr Payne in his assessment of Mr Kruger’s evidence at the disciplinary hearing notwithstanding. That defence was corroborated by the applicant’s own witness in Mr Kruger himself at the arbitration.

[17] The evidence of Mr Roux Du Toit that he advised the third respondent to “come clean” does not advance the applicant’s case either. In evidence, Du Toit says he advised her to come clean and tell the applicant that this money related to a personal loan. For one thing, it was none of the applicant’s business what the third respondent was receiving those moneys for because it was not a benefit or compensation for anything she had allegedly done for Vitex’s benefit. For another, she eventually did just that and the applicant did not believe her. The first respondent committed no irregularity in not giving weight to Mr Roux Du Toit’s evidence.

[18] As regards the second charge of making a false statement about the receipt of moneys from Vitex, I am satisfied that the third respondent did not lie within the context of Misconduct 30 because she did not (nor was it the contrary established) receive a “benefit” or “compensation” in the course and scope of her employment by reason of her association or engagement with the applicant. The payments were received from Vitex as an agent of the uncle. The applicant did not prove otherwise at the arbitration hearing.

[19] In the result, I can find no basis for the review and setting aside of the first respondent’s arbitration award.

[20] The applicant also sought condonation for the late filing of this review application. The third respondent opposes the application on the ground that, while the review application was filed only two days late, the condonation application itself was only served on the third respondent more than four months after the review application had been filed. Because of the conclusion at which I have arrived on the merits of the main application, I consider it unnecessary to decide the issue of condonation.

[21] I thus make the following order:

[a] The application for review is dismissed with costs.

[b] In addition to paragraph 1 of the arbitration award of 10 May 2006 under case number MP261/2004, the applicant is ordered to pay the third respondent an equivalent of her salary as at the date of her dismissal calculated from 10 May 2006 until date of final payment.

____________________

Ngalwana AJ

Appearances

For the applicant: Mr A Mosam

Instructed by: Shirish Kilian and Singer Horwits

For the 3rd respondent: Mr R Venter

Instructed by: Andre de Klerk Attorneys

Date of hearing: 31 May 2007

Date of judgment: 29 June 2007