Metro Cash And Carry v Fobb and Another (J1031/97) [1998] ZALC 40 (24 June 1998)

IN THE LABOUR COURT OF SOUTH AFRICA

HELD AT JOHANNESBURG

Case no: J 1031/97

METCASH TRADING LIMITED t/a

METRO CASH & CARRY Applicant

and

MR J FOBB First Respondent

MR GV ERASMUS Second Respondent

JUDGMENT

[1] The second respondent (“Erasmus”) was employed by the applicant as a liquor store manager at its Empangeni branch, until 21 February 97 when he was dismissed pursuant to a disciplinary enquiry and appeal at which he was charged with misappropriation of company property as well as dishonesty.

[2] Erasmus requested arbitration after The Commission for Conciliation, Mediation and Arbitration (“the Commission”)

could not resolve the dispute through conciliation. The third respondent was appointed to arbitrate the dispute.

[3] It was common cause at the arbitration that on 15 January 1997 Erasmus was filmed on a hidden video camera picking up a 250 ml plastic container of orange juice and drinking it. At the disciplinary and appeal hearings Erasmus did not admit that he consumed the stock but simply requested applicant to prove its case against him. His admission to the deed only surfaced during the arbitration proceedings. His defence was that the orange juice he consumed formed part of expired goods which were usually thrown away or consumed by staff.

[4] The third respondent found in favour of Erasmus. In his award he says:

“In terms of section 192(2) of the Act the employer bears the onus to show that the dismissal was fair. In view of the serious

doubt cast as to whether the orange juice consumed belonged to Metro or whether the ownership reverted to Clover, there [is] no certainty that the employee in fact consumed the employer’s stock. That being so I find that the employer has not discharged the onus to prove that the dismissal was fair.”

[5] The applicant seeks to review the third respondent’s award in terms of section 158(1)(g) of the Labour Relations Act no. 66 of 1995 (“the Act”). I have, in past judgments, considered the jurisdiction of this court to review arbitration awards. I do not propose to consider the issue again suffice to state that my view remains unchanged. See: Ntshangane v Speciality Metals CC [1998] 3 BLLR 305 (LC), Carephone (Pty) Ltd v CCMA & others unreported case no. J 482/97 and Pep stores v Laka & others unreported case no. J 1011/97. I will therefore decide this matter in terms of section 145.

[6] The main ground of review which I will concern myself with, is that the first respondent did not apply his mind to the relevant

issues in accordance with the behests of the Act. This ground is directed at two findings made by the first respondent which are

central to his award. These findings are that:

(1) Erasmus had consumed expired stock which did not belong to the applicant; and

(2) that the dismissal of Erasmus was not an appropriate sanction.

[7] It is clear that first respondent’s findings on the ownership of the orange juice was greatly influenced by what he viewed as evidence by Van Tonder. Van Tonder was applicant’s general manager at Empangeni. First respondent construed Van

Tonder’s evidence to be that the juice had already been assessed by Clover’s representative and was awaiting collection. First respondent took this to mean that ownership of the juice had passed to Clover.

[8] It is clear from first respondent’s notes that Van Tonder did not give this evidence. This was evidence given by Erasmus which was challenged during his cross examination. Applicant disputed Erasmus’ evidence that the juice was expired stock whose ownership had reverted to Clover. It is clear therefore that first respondent having incorrectly attributed Van Tonder’s evidence to the passing of ownership from applicant to Clover that he could only come to a conclusion that it was unfair to dismiss Erasmus under those circumstances.

[9] Further as appears from first respondent’s notes, Van Tonder’s evidence was unchallenged that a credit note for

expired stock was only given once the said stock had already been uplifted by the supplier. This means therefore that no credit note can be issued by a supplier for stock that no longer exists.

[10] It is therefore correct, as argued by Mr. Franklin on behalf of applicant that first respondent’s finding on the ownership of the orange juice was central to his award. It was central in the sense that had first respondent found that ownership had not passed to Clover then he would have found that Erasmus had misappropriated the applicant’s stock.

[11] The first respondent therefore was mistaken in misconstruing Van Tonder’s evidence.

Was this mistake so gross that it renders the award reviewable.

[12] The first respondent seems to have been preoccupied with the ownership of the orange juice. To him the enquiry was whether

ownership had passed from the applicant to the supplier. Had he applied his mind to Van Tonder’s evidence he would have

realised that ownership was not relevant where expired stock was concerned. This is so because as long as the expired stock remains

in applicant’s possession ownership does not pass. Ownership only passes once the supplier has uplifted the expired stock and issues a credit note. Clearly this preoccupation with the ownership of the juice and misconstruction of Van Tonder’s evidence in that regard influenced the award as a whole. Tip AJ in Standard Bank of South Africa v CCMA & others unreported case no. J 642/97 at para 24 page 11 said:

“ Where a Commissioner sitting as arbitrator has misconstrued oral or documentary evidence, or has ignored or misapplied relevant legal principle, to an extent that is in appropriate or unreasonable, then such Commissioner has failed in the task assigned under the Act. It cannot be so that the legislature contemplated that an aggrieved party in such circumstances would find itself without relief. The relief lies in a review application to this Court.”

[13] Furthermore in University of the North v Mthombeni NO & another unreported case no. J 630/97 the following was said at paragraph 28 p.11:

“ It is open to this court in terms of section 145 to review the awards of the Commission even where a bona fide mistake of fact or law is committed only where it can be shown that as a result there of an injustice has been perpetrated. Where no injustice has been occasioned by such a mistake the award is immune to legal challenge in terms of section 145. An injustice is perpetrated where it is shown that a party was deprived of a fair hearing or that a commissioner did not apply his mind to the matter before him either by ignoring direct evidence before him, or relying on evidence not placed before him.”

[14] Furthermore in Pep Stores v Laka NO & others unreported case no. J 1011/97 the following was said at paragraph 31 p.15:

“ I want to suggest that in addition to procedural defects, section 145 gives the Labour Court the power to enquire whether the award in question is appropriate within the meaning of section 138(9). The preoccupation of this Court in reviewing awards on this basis will be whether there has been a failure of justice. In time the Labour Court will have to establish when has justice failed. For the purpose of this judgment I want to suggest that an award will be found to be inappropriate if it is shown that:

(1) The Commissioner ignored direct evidence placed before him;

(2) The Commissioner relied on evidence not placed before him;

(3) The Commissioner committed a serious error of law.

Where it is shown that one or more or a combination of these factors is present this court will review an award of the commission.”

[15] It follows that I am of the view that the first respondent committed a mistake which is reviewable in terms of section 145.

[16] Further the following finding in the award needs consideration:

“I also regard summary termination of employment in these circumstances to be an excessive sanction. The value of the stock consumed[d] was relatively minor. The circumstances do not suggest to me premeditation. The employee had a clean record and was described as being a good manager. In those circumstances I would consider that a warning would be more appropriate.”

[17] Theft is theft and does not become less so because of the size of the article stolen or misappropriated. Trust is the core of the employment relationship. Dishonest conduct by an employee breaches the trust the employer places on the employee. See Standard Bank of South Africa v CCMA & others supra where the following was said by Tip AJ at paragraph 39 p.17:

“ The existence of the duty upon an employee to act in good faith towards his or her employer and to serve honestly and faithfully is one of long standing in the common law. It has been regularly and strongly approved by our courts in relation to the unfair labour practice jurisdiction under the previous Act, no 28 of 1956. It has been no less strongly re-affirmed in decisions dealing

with the current Act.”

I am in agreement with this principle.

[18] I am therefore satisfied that first respondent committed gross misconduct and his award should be set aside. In relation to costs I have taken into account that the applicant instituted this review application after Erasmus had already obtained an order in this court making the award an order of court in terms of section 158(1)(c). The review application was not instituted within the period stipulated in section 145, although this could have been influenced by the difference of opinion in this Court with regard to the applicability of section 145 and 158(1)(g). Under the circumstances I do not deem it just to award costs against Erasmus.

[19] I am further of the view that it would serve a useful purpose to remit this matter to the Commission for a fresh arbitration.

Section 145(4) gives this Court the power to determine the dispute in a manner it considers appropriate. It is not disputed that the first respondent simply put a number of questions to Erasmus without placing him under oath but placed Van Tonder under oath before he testified. Further it does appear that insufficient evidence was led by both parties relating to the disposal of expired stock. It is only proper that the Commission hears the complete evidence on this issue to determine if misappropriation was committed by Erasmus.

I therefore make the following order:

(1) The first respondent’s award dated 15 September 1997 is reviewed and set aside.

(2) The matter is remitted to the Commission for Conciliation Mediation and Arbitration for a fresh arbitration by another commissioner.

(3) There is no order as to costs.

MLAMBO J.

Labour Court

For the applicant : Mr A. Franklin instructed by Fluxman Rabinowitz - Raphaely Weiner.

For the second respondent: Mr. Erasmus of Doman & Kolbe Attorneys.

Date of hearing: 17 April 1998.

Date of judgment: 24 June 1998.

This judgent is available on the Internet on website: http://www.law.wits.ac.za/labourcrt