Independent Risk Distributors SA (PTY) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR 1906/19) [2022] ZALCJHB 282 (11 October 2022)

FLYNOTES: DISMISSAL FOR GROSS INSUBORDINATION Labour – Dismissal – Gross insubordination – Questioning or challenging CEO during meeting – Complied

with instructions – Employees have freedom of expression in workplace – Insubordination not gross insubordination

warranting dismissal.

IN THE LABOUR COURT OF SOUTH AFRICA,

JOHANNESBURG

Not Reportable

Case No: JR 1906/19

In the matter between:

INDEPENDENT RISK DISTRIBUTORS SA

(PTY) LTD

Applicant

and

COMMISSION FOR CONCILIATION,

MEDIATION AND ARBITRATION

First Respondent

KEHEDITSE MASEGE N.O

Second Respondent

DAVID NDLOVU

Third Respondent

Heard: 01 June 2022

Delivered: 11 OCTOBER 2022 (In view of the measures implemented as a result of the Covid-19 outbreak, this judgment was handed down electronically by circulation to the parties' representatives by email. The date for hand-down is deemed to be on 11 OCTOBER 2022.)

Summary: Review of CCMA arbitration award-employee dismissed for gross insubordination for merely asking questions of clarification at a staff meeting-gross insubordination v insubordination legal principles reinstated. Held (1) The employee was merely insubordinate

at best and should not have been dismissed, (2) the CCMA arbitration award is not one that a reasonable decision-maker could not have reached, (3) the review application is dismissed with costs, (4) the employee is reinstated to the position he held prior to the date of dismissal on the same or similar terms and conditions of employment that prevailed prior to his dismissal.

J U D G M E N T

RADEBE, AJ

Introduction

[1] The Applicant in this matter seeks an order in terms of section 145 and 158 of the Labour Relations Act[1] (LRA) reviewing and setting aside an arbitration award of the Second Respondent dated 07 August 2019, under case number GAJB 5166-19,

which was rendered under the auspices of the First Respondent, the Commission for Conciliation, Mediation and Arbitration (CCMA).

[2] The Applicant also seeks costs of the application from those Respondents who oppose this application, jointly and severally, the one paying the others to be absolved.

The factual background

[3] The Third Respondent (Mr. Ndlovu) was until his dismissal employed by the Applicant on or about 03 April 2018 as a Sales Representative based at the Applicant’s Roodepoort business address.

[4] The Third Respondent was charged with misconduct, with gross insubordination. The Applicant essentially charged the Third Respondent for challenging and/or undermining the authority of the company’s CEO during a staff meeting which was held on 05 December 2018, by questioning and/or challenging an instruction issued by the CEO whilst in the presence of his colleagues.

[5] The Third Respondent had attended a meeting on 05 December 2018 with the other co-workers, and the CEO, Mr. Murray Hewlett in attendance. The purpose of the meeting was for the CEO to address the Sales

Representatives’ underperformance.

[6] During this meeting, the CEO issued an instruction to all the Sales Representatives, including the Third Respondent, to go home and reflect on their performance, and return to the office the next day with a better understanding, having so reflected.

[7] According to the Applicant, the Third Respondent proceeded to challenge and/or undermine the authority of the CEO during the meeting by questioning and/or challenging the instruction in a rude and disrespectful manner in the presence of his co-workers.

[8] The Third Respondent was notified of these allegations, and a disciplinary hearing was held on 23 January 2019, and he was found guilty of the allegations and dismissed on 31 January 2019.

[9] Following his dismissal, the Third Respondent referred an unfair dismissal dispute to the CCMA on 01 March 2019, which proceeded to arbitration after conciliation of the dispute failed.

[10] The parties failed to resolve the dispute during the CCMA conciliation/mediation process, and a certificate of non-resolution was issued as a result. The First Respondent thereafter referred her dispute to arbitration.

The Arbitration proceedings briefly and the arbitration award

[11] The Applicant led evidence of three witnesses at these proceedings,[2] while the Third Respondent testified on his behalf and did not call any other witness in support of his case.[3] It is worth noting that the Applicant did not call its CEO as a witness.

[12] The Applicant’s first witness, Mr. Renier Botha, testified in short that what created a problem for the Third Respondent was the manner in which he questioned the CEO, and according to his recollection, the Third Respondent asked how the Sales Agents were chosen, and how such an instruction was given. Significantly, Mr. Reiner could not recall the Applicant directly refusing to go home.[4]

[13] The Applicant’s second witness, Mr. Liam Coote also testified that the Third Respondent asked the CEO question and the CEO clarified. The Third Respondent however interrupted the CEO every time he tried to speak, and his tone was unacceptable and disrespectful.[5]

[14] The Applicant’s third witness, Ms. Masibongwe Gamede testified in summary that the Third Respondent asked the CEO questions at the meeting after the instruction to go home was issued, and they were all scared of losing their jobs, and she did not think the Third Respondent’s conduct was bad. The Third Respondent also asked the CEO if they could have a private conversation or whether he should continue engaging him.[6]

[15] The Applicant’s evidence in summary was that he raised his hands at the meeting after the CEO issued an instruction for them to go home and asked why he was part of the poor performers and those sent home to reflect on their performance.[7]

[16] The CEO then got angry and instructed everyone but him to leave, whereupon he was informed by the General Manager that he was being sent home because non-performance was a team issue.[8]

[17] He denied disrespecting the CEO or being insubordinate and testified that all he asked was why he was part of the non-performers. He did not refuse to carry out an instruction from the CEO, but merely sought clarity, and left after he spoke to the General Manager.[9]

[18] After analysing the evidence and argument, the Second Respondent found that the Third Respondent’s dismissal was substantively unfair and ruled that the Applicant should reinstate him to his position on the same terms and conditions that obtained prior to his dismissal, and that he must report for duty on 20 August 2019.

Summary of the grounds of review

[19] The Applicant advances the following review grounds in seeking to review and set aside the Second Respondent’s arbitration award:

19.1 The Second Respondent failed to deal with the substantive merits of the dispute;

19.2 That the Second Respondent failed to consider and/or ignored relevant facts and important evidence submitted during the arbitration. In that the Second Respondent reached an incorrect conclusion in arriving at the finding that the elements of gross insubordination were not met.

19.3 That the Second Respondent reached a decision which a reasonable decision-maker could or would not have arrived at based on the evidence.

19.4 Failed to consider the gravity and seriousness of the misconduct in that a fair and reasonable instruction was repeatedly disobeyed by an employee, which constitutes gross insubordination and warranted a dismissal.

19.5 The Second Respondent failed or ignored aggravating factors presented during the proceedings.

19.6 The Second Respondent failed to draw the most natural and probable inference flowing from a proper evaluation of the proved facts.

Survey of the applicable legal principles

The review test

[20] The test applicable to a review of the decision of an arbitrator based on the reasonableness of the outcome was set out in Sidumo and Another v Rustenburg Platinum Mines Ltd and Others[10]. The question is whether a reasonable decision-maker could not have reached the decision reached by the Commissioner.[11]

[21] The court in Sidumo held that if the decision reached by the Commissioner is one which a reasonable decision-maker could not have reached, then that decision falls to be reviewed and set aside by the reviewing court. An award will be set aside on the grounds of outcome-based unreasonableness where it is incapable of justification on all the material before the Commissioner.[12]

[22] Apart from this ground of review (outcome-based ground), an award may also be set aside on the grounds of what has been referred to as “process-based unreasonableness.” This will be the case where a Commissioner commits a gross irregularity in the proceedings, such as an error of law, failure to

apply his or her mind, failure to consider material facts related to the matter, misconduct, exceeding powers, considering irrelevant or inadmissible material, or committing other gross irregularity during the proceedings.[13]

[23] Where a Commissioner fails to take material facts into account, the arbitration proceedings cannot, in principle, be said to be fair because the Commissioner has failed to discharge his mandate. In so failing, the Commissioner prevents the aggrieved party from having his complaint fully and fairly determined. This constitutes a gross irregularity in the arbitration proceedings as envisaged in section 145(2)(a)(ii) of the LRA, and the award that follows falls to be set aside by the reviewing court for want of reasonableness.[14]

[24] Similarly, the process leading to the award is as important, as is the award (outcome/finding). If the process leading to the award is tainted

with an error of law, failure to consider vital evidence related to the matter, considering irrelevant or inadmissible material, failure of the Commissioner to apply his or her mind, or committing other gross irregularity during the arbitration proceedings, the award will be set aside by the reviewing court. This will apply, even where the finding or outcome is reasonable.[15] However, not every process-based irregularity in the arbitration proceedings will lead to the review and setting aside of that

arbitration award. For a process-based irregularity in the proceedings to be set aside it must have prevented a fair trial of the issues.[16]

[25] Moreover, Commissioners are not required to give “detailed and impeccable reasoning for their awards.”[17] They are however, required to deal with the substantive merits of the issues brought before them, with the least number of formalities.[18] To this end, Commissioners are required at the very minimum to state the facts found, and the reasons for the findings, the conclusion

based on those facts and the reasons for the conclusion.[19]

Insubordination v gross insubordination

[26] This review application only concerns the substantive fairness or otherwise of the dismissal. As a such, the nature and essence of the misconduct allegations levelled against an employee take Centre stage. The Third Respondent was charged with gross insubordination.

[27] In TMT Services and Supplies (Pty) Ltd v Commission for Conciliation Mediation and Arbitration and Others,[20] it was held that the enquiry into the gravity of the specific insubordination considers three aspects: the action of the employer

prior to the deed, the reasonableness of the instruction, and the presence of wilfulness by the employee.

[28] The Labour Appeal Court in TMT Services further held that to the extent that insubordination involves a defiance of authority, such a defiance can be proven by a single act of defiance, and that the employer’s prerogative to command its subordinates is the principle that is protected by the class of misconduct labelled “insubordination” and addresses operational requirements of the organisation that ensure that managerial paralysis did not occur.[21]

[29] In Sylvania Metals (Pty) Ltd v M.C Mello N.O and others[22], the Labour Appeal Court further held that:

“Insubordination in the workplace context generally refers to the disregard of an employer’s authority or lawful and reasonable instructions. It occurs when an employee refuses to accept the authority of a person in a position of authority over him or her and, as such, is misconduct because it assumes a calculated breach by the employee of the obligation to adhere to and comply with the employer’s lawful authority. It includes a wilful and serious refusal by an employee to adhere to a lawful and reasonable instruction of the employer, as well as conduct which poses a deliberate and serious challenge to the employer’s authority even where an instruction has not been given.”[23]

[30] The Court in Sylvania Metals (Pty) Ltd further held that:

“This Court in Palluci Home Depot (Pty) Ltd v Herskowitz and Others, discussed the “fine line” between insubordination

and insolence, with the latter being conduct that is offensive, disrespectful in speech or behaviour, impudent, cheeky, rude,

insulting, or contemptuous. While the Court noted that insolence may become insubordination where there is an outright challenge to the employer’s authority, “acts of mere insolence and insubordination do not justify dismissal unless they are serious and wilful”. The sanction of dismissal is reserved for instances of gross insolence and gross insubordination or

the wilful flouting of the instructions of the employer.”[24]

[31] What is more, the LRA’s Schedule 8: Code of Good Practice: Dismissal requires that the defiance must be ‘gross’ to justify dismissal. This means that the insubordination must be serious, persistent, and deliberate.[25]

Evaluation

[32] I am inclined to agree with the Second Respondent’s (Commissioner’s) conclusions that the insubordination in question was not gross insubordination to warrant a dismissal to the extent that the Third Respondent had ultimately complied with the instruction.

[33] The Third Respondent’s questions at the meeting were aimed at seeking clarification regarding why he was also being sent home, despite not having poorly performed, and once that clarification was given, he complied with the instruction to go home, and his disrespect or repudiation as the Second Respondent calls it was not serious, persistent, and deliberate, and so does not amount

to gross insubordination.

[34] It is also telling that it is not the CEO who complained about the manner in which the Third Respondent asked his questions, but Mr. Renier Botha, the General Manager who was at the meeting, and who took it upon himself to be offended by the Third Respondent’s questions, and not once did the CEO object to the Third Respondent’s questions or take exception with his questions and the manner in which they were asked.

[35] What is more, its axiomatic that employees do not lose their constitutional rights as guaranteed in the Bill of Rights, such as freedom of expression guaranteed in section 16(1) of the Constitution of the Republic of South Africa, 1996, merely by reason of being in the workplace.

[36] It follows then, based on the foregoing, and having considered the parties’ submissions, and the law, that the dismissal of the Third Respondent by the Applicant was substantively unfair. Therefore, subject to the order below, the Second Respondent’s arbitration award is not one that a reasonable decision-maker could not have made.

Costs

[37] It is now trite that costs in this Court do not follow the result, unlike the opposite position in the High Courts of South Africa.[26] I am however, in the exercise of my discretion of the view that the Applicant should have known that the Third Respondent’s conduct during their meeting and asking questions seeking clarification did not rise to the level of gross insubordination. As a result, and in the exercise of my discretion, I intend to depart from the general rule on costs in this Court, and award costs in favour of the Third Respondent.

[38] In the premise, the following order is made:

Order

The application is dismissed, with costs.

S. B. Radebe

Acting Judge of the Labour Court of South Africa

Appearances:

For the Applicant:

Mr. Justin Hattingh

Instructed by:

CTL Management Forum (Employers’ Organization)

For the First Respondent:

Adv N. Rambachan-Naidoo

Instructed by:

AJ and venter Associates Attorneys

[1] No. 66 of 1995, as amended.

[2] Record p 11 – 12.

[3] Record p 12 – 13.

[4] Record p 11 paras 11 – 12.

[5] Record p 11 – 12 paras 15 – 16.

[6] Record p 12 paras 19 – 20.

[7] Record p 12 – 13 paras 22 and 24.

[8] Supra note.

[9] Record p 13 paras 25 -26.

[10] [2007] 12 BLLR 1097 (CC)

[11] See: Sidumo and Another v Rustenburg Platinum Mines Ltd and Others [2007] 12 BLLR 1097 (CC) para [110]. The Sidumo test has been confirmed in numerous recent cases, such as in Idwala Industrial Holdings v Commissioner Pieterson NO and Others (JR 2783/18) ZALCJHB 176 (19 July 2019) at paras 14 – 16.

[12] See: Sidumo (Id fn 11) at paras [110] – [268].

[13] See: Sidumo (Id fn 11) at paras [279] – [289].

[14] See: Sidumo (Id fn 11) at paras [110] – [268].

[15] See: Southern Sun Hotel Interests (Pty) Ltd v CCMA and others [2009] 11 BLLR 1128 (LC); SA Airways (Pty) Ltd v Blackburn and others [2010] 3 BLLR 305 (LC) at 313D-E; Pam Golding Properties (Pty) Ltd v Erasmus and others (2010) 31 ILJ 1460 (LC) at para [8].

[16] Transnet Freight Rail v Transnet Bargaining Council and Others at [2011] 6 BLLR 594 (LC) para [9].

[17] See: Sidumo (Id fn 11) at para 282.

[18] See: Sidumo (Id fn 11) See also: Section 138(1) of the LRA.

[19] See: Sidumo (Id fn 11) at para 283.

[20] (2019) 40 ILJ 150 (LAC); [2019] 2 BLLR 142 (LAC) para 4.

[21] Id fn 21 at para 19.

[22] (JA83/2015) [2016] ZALAC 52 (22 November 2016).

[23] Ibid at para 17.

[24] Id fn 23 at para 18.

[25] J. Grogan Workplace Law 13th ed (Second Impression, 2021, Juta) at 198.

[26] Zungu v Premier of the Province of KwaZulu-Natal (2018) 39 ILJ 523 (CC) at paras 22 – 26.