Jewellery Council of South Africa v Maharaj and Others (JR2527/21) [2024] ZALCJHB 236 (30 May 2024)

FLYNOTES: LABOUR – Dismissal – Gross disrespectful conduct – Altercation with CEO where eight statements made – CEO allegedly threatened – Employee put on short time and salary reduced by 40% while CEO’s salary unchanged – Employee’s position as accountant was critical and demanding and required her to work more than three days a week of short time – Threats to take CEO to CCMA and courts not constituting misconduct – CCMA commissioner found dismissal substantively unfair – What was said during altercation was largely factual and not untrue – Review application dismissed

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: JR2527/21

In the matter between:

THE JEWELLERY COUNCIL OF SOUTH AFRICA Applicant

and

ANDIRA MAHARAJ

First Respondent

XOLANI NYAMEZELE N.O.

Second Respondent

THE COMMISSION FOR CONCILIATION,

MEDIATION AND ARBITRATION

Third Respondent

Heard: 28 May 2024

Delivered: 30 May 2024

This judgment was handed down electronically by circulation to parties’ legal representatives by email. The date for hand-down is deemed to be 30 May 2024.

JUDGMENT

MAKHURA, J

[1] On 14 June 2021, the applicant (company) dismissed the first respondent (employee) following a finding of guilt by the chairperson of the disciplinary hearing on allegations that the employee was grossly disrespectful towards the Chief Executive Officer, Lorna Lloyd (Lloyd). The alleged gross disrespectful conduct emanated from eight statements allegedly made by the employee. In addition, the employee was dismissed for allegedly threatening Lloyd.

[2] Following her dismissal, the employee referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). That dispute was arbitrated by the second respondent (commissioner), who issued an arbitration award declaring the dismissal substantively unfair and ordering the company to pay the employee 8 months’ compensation. Aggrieved by this decision, the company brought these proceedings in terms of section 145 of the Labour Relations Act (LRA)[1] to review and set aside the award. The application is opposed by the employee.

[3] Prior to her dismissal, the employee had been in the employ of the company for over 13 years. She was employed as an accountant, where she was responsible for inter alia invoicing, payments, debtors, collections, salaries, budget, management accounts, annual returns, the South African Revenue Services, IRP501’s, paying Value Added Tax and Pay As You Earn, tax clearance and Broad-Based Black Economic Empowerment certificate.

[4] On 29 April 2021, the employee was served with a letter from the company confirming that “short-time will be imposed for [her] position as Accountant from 3rd May”. She was informed that she would work 3 days a week (Monday, Tuesday and Thursday) and her total remuneration package would reduce from R39 332.71 to R23 921.86 per month, a reduction of approximately 40%. Lloyd also informed the employee in this letter that she should advise if does not cope with the workload so that she (Lloyd) could look at alternatives to ensure that the work is carried out.

[5] In terms of the company’s decision, the employee was not required to work on Wednesdays and Fridays. On Friday, 4 June 2021, Lloyd sent the employee various emails enquiring about work-related issues. She also sent the employee an email on Sunday.

[6] On Monday, 7 June 2021, the employee reported for duty. She then went to Lloyd’s office. Whilst in Lloyd’s office, an altercation between the employee and Lloyd ensued. It is what happened on that day in Lloyd’s office that culminated in the employee facing misconduct allegations and her ultimate fate of joining the growing unemployment queue. On 8 June 2021, the company issued a charge sheet against the employee for gross disrespect and issuing threats. The gross disrespect refers to

various statements allegedly uttered by the employee, which I address below.

[7] First, the employee is alleged to have said to Lloyd that she was “raping” the company. The second and third allegations of gross disrespect were that the employee accused Lloyd of being too weak to make decisions on her own and that she (the employee) was sick and tired of her. The fourth and fifth allegations are that the employee said to Lloyd that she should be bringing business to the company instead if sitting behind her desk “doing nothing”[2], that she was just a pretty face that sits and drinks wine when they go to the Jewellex conference and expected the employees to do the work. Sixth, the employee is alleged to have said that the company lost money on marketing campaigns and the staff were suffering the consequence of that decision. Seventh, the employee said that she would advise the Board chairperson that Lloyd was an irresponsible CEO who lost a laptop bag and misplaced the banking dongle. Eighth, the employee allegedly refused to lower his voice when speaking to Lloyd in her capacity as “the CEO”.

[8] The commissioner, having considered and analysed the evidence, concluded that the dismissal of the employee was substantively unfair and awarded her 8 months’ compensation. He awarded compensation calculated at the rate of remuneration prior to the employee’s reduction of salary.

[9] The test to review and set aside an arbitration award was set out by the Constitutional Court.[3] The Court held that an award would be reviewable and liable to be set aside if it is one “that a reasonable decision-maker could not reach”.[4] In Duncanmec (Pty) Ltd v Gaylard NO and others[5], this test was clarified again by the Constitutional Court as follows:

‘[42] This test means that the reviewing court should not evaluate the reasons provided by the arbitrator with a view to determine whether it agrees with them. That is not the role played by a court in review proceedings. Whether the court disagrees with the reasons is not material.

[43] The correct test is whether the award itself meets the requirement of reasonableness. An award would meet this requirement if there are reasons supporting it. The reasonableness requirement protects parties from arbitrary decisions which are not justified by rational reasons.’

[10] In Head of the Department of Education v Mofokeng and Others (Mofokeng),[6] the LAC held that:

‘However, sight may not be lost of the intention of the legislature to restrict the scope of review when it enacted s 145 of the LRA, confining review to “defects” as defined in s 145(2) being misconduct, gross irregularity, exceeding powers and improperly obtaining the award. Review is not permissible on the same grounds that apply under PAJA. Mere errors of fact or law may not be enough to vitiate the award. Something more is required. To repeat: flaws in the reasoning of the arbitrator, evidenced in the failure to apply the mind, reliance on irrelevant considerations or the ignoring of material factors etc. must be assessed with the purpose of establishing whether the arbitrator has undertaken the wrong enquiry, undertaken the enquiry in the wrong manner or arrived at an unreasonable result. Lapses in lawfulness, latent or patent

irregularities and instances of dialectical unreasonableness should be of such an order (singularly or cumulatively) as to result in a misconceived enquiry or a decision which no reasonable decision-maker could reach on all the material that was before him or her.’[7] [Emphasis added]

[11] The challenge against the award is mounted on alleged irregularities and errors allegedly evidenced by the failure on the part of the commissioner to apply his mind to the evidence and other material before him and reaching misplaced, unjustified and irrational conclusions. Further, the company contends that the commissioner exceeded his powers in awarding the 8 months’ compensation at the remuneration rate prior to the employee’s reduced rate.

[12] The company complains about the commissioner’s reasoning in arriving at the conclusion that the dismissal was substantively unfair. The commissioner is criticised for allegedly placing undue weight on the issue of whistleblowing and/or abuse of power. The commissioner has however correctly identified in the award that the dispute does not hinge on what he considered protected disclosure. He simply stated that he could not ignore the circumstances that led to the charges against the employee. This issue only related to the alleged threats made by the employee to Lloyd that she would report her to the Board and that she would take

her to the CCMA and Courts.

[13] Following from the above criticism, the company then contends that the commissioner failed to properly deal with the acts of misconduct. The company argues that the commissioner should have found the employee not to be a credible witness because of the contradictions in her evidence whereas Lloyd conducted herself with respect. The criticism is that the commissioner failed to apply the principle enunciated in Stellenbosch Farmers' Winery Group Ltd and another v Martell et cie and others[8] (Stellenbosch Winery). In my view, the legal principle in Stellenbosch Winery does not even find application simply because the evidence led did not call for an assessment on credibility, probability and reliability of the witnesses. The evidence was largely uncontested in favour of the employee. There is nothing that calls for the Stellenbosch Winery test insofar as there was a dispute about whether the employee said she was sick and tired of Lloyd because nothing material turns on this.

[14] There are no merits in any of the grounds advanced by the company, save for the ground relating to an award of compensation. The commissioner dealt with the alleged misconduct, which was really about the altercation between Lloyd and the employee. He considered the specific allegations and found some of the statements allegedly made by the employee to be factual and that Llyod was equally guilty insofar as the altercation was concerned.

[15] The allegation of “raping” the company was denied by the employee. According to Llyod, the employee used these words to refer to the fact that Lloyd did not take a salary reduction, whilst she was doing nothing. It was not disputed that Lloyd, obviously the highest earning employee, did not take a salary reduction but the employee did. Whilst the use of the word may be

regrettable, put in context, the employee was simply stating a fact. Considering the common cause fact that the company was experiencing

financial challenges and then imposed a decision to reduce the employee’s salary, the employee simply expressed her views that Lloyd should also take a salary reduction.

[16] The allegation that when the employees attended the Jewellex conference, Lloyd sat the whole day on the bar counter drinking wine was not disputed by Lloyd. In fact, she conceded to this version. When this was put to her, Lloyd responded “so what” and said that it was part of her job.

[17] It was put to Lloyd that she fabricated the allegations. The employee specifically put to Lloyd that she did not say that Lloyd was raping the company and that she never said she was sick and tired of Lloyd because she had high respect for her. Lloyd said that she would not make up the allegations and insisted that the employee uttered the words. Again, there is nothing significant about this allegation that calls for the application of the Stellenbosch Winery principle.

[18] What came out clearly during the cross-examination of Lloyd was that it was not contested that the company spent over R2.5 million on marketing campaigns without any return. The employee called this campaign irresponsible because the company was on a drive to save money however, money was wasted on this marketing campaign and she had to bear the brunt of that decision. Lloyd did not dispute that the company realised no return from this marketing campaign. Instead, she said that this was a “generic marketing campaign” where they were advertising jewellery and not the sales for the company. Lloyd said that this was the Board’s decision.

[19] According to Lloyd, the employee accused her of being weak because she blamed her for using the money for marketing purposes. Even if this is true, this is not disrespect but simply a true status of what happened. The money used for the marketing campaign was, on both parties’ evidence, a wasteful expenditure because it did not benefit the company. In fact, per Lloyd’s evidence, it was not intended to benefit the company. The reference to “weak” as I understand it was a suggestion that Lloyd could have resisted such a marketing campaign.

[20] With regard to the use of obscene language, the employee disputed this and said that she never used explicit language and that it was in fact Lloyd who always used this language. The employee put to Lloyd that she was the one who used explicit language all the time in the office. In response, Lloyd conceded that she used this type of language all the time in the office but that the employee also used it that day. She also testified that it did not matter.

[21] With regard to the alleged threat, the employee put to Lloyd that she came to her office and sat opposite to her. She disputed threatening her. Lloyd’s response was that she was threatened because the employee came to her office, started shouting at her and said that she was going to report her to the Board and take her to the CCMA and the Courts. The employee agreed that she informed Lloyd that she would report her to the Board. An alleged threat to take Lloyd to the CCMA and/or Courts, even if true, cannot constitute misconduct.

[22] The context that led to the altercation cannot be ignored, as the commissioner said. The employee was the only one placed on short-time and had her salary reduced by 40%.Her position was demanding. Lloyd’s conduct, from placing the employee on short-time despite the workload, reducing her salary and sending emails to the employee on days she was not supposed to be working appeared to have been calculated to frustrate the employee. However, despite the employee’s frustration, which Lloyd was well aware of, the employee did not threaten Lloyd alternatively the “threats” to take Lloyd to the CCMA and the Courts do not constitute misconduct.

[23] The evidence presented at arbitration proceedings established that - the company was experiencing financial challenges, the employee was the only one affected by short-time and a 40% salary reduction, her position as an accountant was critical to the company, was demanding and required her to work more than the three days a week (as she continued to do), Lloyd did not take a salary cut, the company wasted over R2.5 million on a marketing campaign that had no benefit to it, Lloyd used to sit and drink wine the whole day when they attended the Jewellex conference, Lloyd once lost a banking dongle and the employee threatened to report her to the Board. Therefore, whatever was said during the altercation was largely factual and not untrue. Accordingly, the review grounds on the merit of the dismissal are weak and stand to be dismissed.

[24] Finally, the company contends that the commissioner should have taken into account that the employee’s remuneration was reduced and that the amount of compensation should have been calculated at the reduced rate. Section 194 of the LRA provides that the amount of compensation to be awarded to the employee whose dismissal was found to be substantively unfair may not exceed the equivalent of 12 months’ compensation and must be calculated at the remuneration rate of the employee at the time of dismissal.

[25] The employee’s total package before the company “imposed” short-time and a remuneration reduction was R39 332.71 per month. At the time of dismissal, her total remuneration package was R23 921.86, a whopping 40% reduction in her salary. Whilst this may appear to be unfair considering that this apparent unilateral reduction of the employee’s salary was implemented a month prior to her dismissal and that she was dismissed based on flimsy allegations, that is what section 194

of the LRA provides for. The employee has, at the time of the hearing and this judgment, not challenged the company’s decision to reduce her salary. There was therefore no dispute on this issue. Equally, there is no cross review to claim the maximum compensation

at the reduced salary rate.

[26] I agree with Ms Hoosen for the applicant that the amount of compensation should have been calculated or determined at the employee’s remuneration rate at the time of her dismissal. The commissioner awarded 8 months’ compensation. This amount must therefore be calculated at the employee’s rate of R23 921.86 per month.

[27] Accordingly, the commissioner’s decision in this regard constitutes an error of law and is liable to be set aside. This part of the award must be substituted with an order directing the company to pay the employee compensation in the amount of R191 374.88, being R23 921.86 x 8 months.

[28] Both parties have partly successful in the matter. I see no reason to make any costs order.

[29] In the premises, the following order is made:

Order

1. Paragraphs 30 and 32 of the award are reviewed and set aside and substituted with the following:

‘[i] The respondent (company) is ordered to pay the applicant (employee) compensation in the amount of R191 374.88 (Hundred and Ninety-One Thousand Three Hundred and Seventy Four Rands and Eighty-Eight Cents), which is equivalent to 8 months’ remuneration.

[ii] The company is ordered to pay the amount in paragraph [i] above within 10 court days of this judgment.’

2. Save as mentioned above, the review application is dismissed.

3. There is no order as to costs.

M. Makhura

Judge of the Labour Court of South Africa

Appearances:

For the Applicant: Adv. Z. Hoosen

Instructed by:

Biccari Bollo & Mariano Inc.

For the First Respondent: Adv. V. Heideman

Instructed by:

Nico Beyers Attorneys

[1] Act 66 of 1995, as amended.

[2] It was alleged that the employee used an obscene language – that Lloyd was doing “f&%$ all”.

[3] Sidumo and Another v Rustenburg Platinum Mines Ltd and Others [2007] ZACC 22; (2007) 28 ILJ 2405 (CC).

[4] Ibid at para 110.

[5] (2018) 39 ILJ 2633 (CC); [2018] 12 BLLR 1137 (CC) at paras 42 - 43.

[6] (2015) 36 ILJ 2802 (LAC); [2015] 1 BLLR 50 (LAC).

[7] Ibid at para 32.

[8] 2003 (1) SA 11 (SCA); [2002] ZASCA 98 at para 5.