National Union of Metalworkers South Africa and Another v Commission for Conciliation, Mediation and Arbitration and Others (JR 935/2020) [2023] ZALCJHB 240 (10 August 2023)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: JR 935/2020

In the matter between:

NATIONAL UNION OF METALWORKERS SOUTH AFRICA First Applicant ANGEL MTHIMKHULU Second Applicant and COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION First Respondent TEBOGO SHADWICK MAFUJANE N.O. Second Respondent DISTELL LIMTED Third Respondent

Heard: 08 August 2023

Delivered: 10 August 2023

(This judgment was handed down electronically by circulation to the parties’ legal representatives, by email, publication on the Labour Court’s website and released to SAFLI. The date on which the judgment is delivered is deemed to be 10 August 2023.)

JUDGMENT

VAN NIEKERK, J

[1] The applicants seek to review and set aside an arbitration award issued by the second respondent (the arbitrator). In his award, the arbitrator held that the second applicant’s dismissal by the third respondent was substantively fair.

[2] The factual background to the dispute between the parties is set out in the award under review. For present purposes, it is sufficient to record that the third respondent produces and distributes alcoholic beverages throughout the country. The second applicant (the employee) was engaged in March 2017 in the position of an administrative clerk. Her duties encompassed, amongst other things, the capturing on the SAP system of promotional orders of alcoholic beverages as recorded and approved in what was referred to as the ‘promotional liquor book’. This book is used to record the requisitioning of beverages for promotional purposes. Once

an order is recorded in the book it is approved by a manager with the necessary authority, and then captured on SAP for processing. The employee was one of five employees responsible for capturing approved orders on SAP. During October 2019, the third respondent’s

financial manager undertook a routine internal audit, comparing orders in the promotional liquor book with orders captured on SAP.

Some 53 orders were audited, with the result that only 43 orders on SAP matched the relevant approved orders contained in the book. The 10 unexplained orders had been captured on SAP by the employee, and had resulted in an additional 18 cases and 4 pieces of stock being ordered that had not been approved. The employee was charged with misconduct in the form of dishonesty, with gross negligence as an alternative charge. After a disciplinary inquiry, the employee was found guilty of dishonesty and dismissed. The union referred a dispute to the CCMA contending that the employee’s dismissal was substantively unfair. The dispute was ultimately referred to arbitration.

[3] In his award, the arbitrator summarised the evidence, which included evidence by the financial manager with and the employee. The financial manager testified that all of the irregular orders had been processed by the employee between 29 March 2019 and 28 August 2019. She testified that the employee had no authority to amend or add a promotional order without instruction from the originator of the request of promotional liquor, and that she had been dishonest in adding additional stock without permission. Under cross-examination, the financial manager testified that prior to the capturing of promotional liquor on the system, the request had to be approved by the general manager. In each case, the employee had added liquor in addition to the approved quantity. The applicant testified that she had been instructed by one Karabo to amend the quantity of liquor ordered, by adding additional liquor when capturing the order. The employee denied that there was any standard operating procedure on how to process approved requests for promotional liquor. In his analysis of the evidence, the arbitrator recorded the employee’s defence in the form of the instruction by Karabo to add additional beverages. He noted that Karabo did not attend the proceedings and that without him testifying, his statement

was hearsay. Regarding the evidence by the employee to the effect that there was no rule regarding the capturing of promotional orders on SAP, the arbitrator rejected this evidence as highly improbable, since the employee had been engaged as an administrative clerk for more than 32 months and that captured orders on SAP without mishap. Finally, the arbitrator noted that the union had failed to challenge crucial documentary evidence. He considered that the evidence presented by the third respondent was more probable than that presented on behalf of the employee and in particular, that the version of the third respondent was more credible since it has been supported by documentary evidence. On this basis, the arbitrator found that the third respondent had discharged the onus of proving that the employee’s dismissal was substantively fair.

[4] The founding and supplementary affidavits do not express the grounds for review with any particularity or clarity, but in the heads of argument filed on their behalf, the applicants have articulated three grounds for review. The first two relate to what is contended to be the arbitrator’s misconception of the nature of the enquiry; the third relates to a finding by the arbitrator that certain WhatsApp discussions to which the second applicant was a party were inadmissible. The third ground for review finds no reflection in the founding and supplementary affidavits, and was properly abandoned at the hearing.

[5] The applicants submit that the arbitrator misconceived the nature of the enquiry first, because he found that the second applicant was guilty of dishonesty because the first respondent, the union, had failed to challenge the documentary evidence produced by the third respondent. Secondly, the applicants submit that the arbitrator misconceived the nature of the enquiry when he concluded that because the second applicant had been an administrative clerk for 32 months she could not state that there was no rule regarding the capturing of promotional liquor orders on SAP.

[6] The approach to be adopted is well-established and I do not intend to repeat it here. It is sufficient to record that the test for review is a two-stage test that requires an applicant first, to establish the existence of a reviewable irregularity, and then to demonstrate that the outcome of the proceedings is such that it falls outside of a band of decisions to which a reasonable decision-maker could come. Put another way, the first hurdle that an applicant must clear is to demonstrate the existence of a reviewable irregularity on the part of the arbitrator. While the existence of an irregularity will more often than not point to an unreasonable outcome, this is not necessarily so, and it is incumbent on the applicant to demonstrate that the decision to which the arbitrator came is one to which no reasonable decision-maker could come on the available evidence. To the extent that the applicants rely on what they contend to be a gross irregularity by the arbitrator in that he misconceived the nature of the inquiry, it should be recalled that the compass of this phrase, properly interpreted, is narrow. In Telcordia Technologies Inc v Telkom SA Ltd [2006] ZASCA 112; 2007 (3) SA 266 (SCA), Harms J said the following:

‘The fact that the arbitrator may have either misrepresented the agreement, fail to apply South African law correctly, or had regard to inadmissible evidence does not mean that he misconceived the nature of the inquiry or his duties in connection there with. It only means that the third in the performance of his duties. An arbitrator ‘has the right to be wrong’ on the merits of the case, and it is a provision of language and logic to label mistakes of this kind is a misconception of the nature of the inquiry - they may be misconceptions about meaning, law or the admissibility of evidence but that is a far cry from saying that they constitute a misconception of the nature of the inquiry’.

[7] As Myburgh and Bosch (Reviews in the Labour Courts 2016) point out, there are judgments in this court that use the phrase ‘misconceived the nature of the inquiry’ in a wider sense, to describe a gross irregularity that caused a commissioner to produce a substantively unreasonable award (see p 93). An applicant relying on a misconception of the nature of the inquiry as a ground for review ought to proceed with caution, and avoid conflating this ground with a one to the effect that the arbitrator committed a reviewable irregularity in the assessment of the evidence. The distinction is material, if only because a misconception of the nature of the inquiry warrants a setting aside of the award without any consideration of the reasonableness of the outcome (see Myburgh and Bosch at 94).

[8] In the present instance, I fail to appreciate on what basis it can be said that the arbitrator misconceived the nature of the inquiry. The founding affidavit avers without elaboration that the award is not one that a reasonable arbitrator could have reached, that the arbitrator committed unnamed gross irregularities, that he failed to apply his mind to the facts presented (without reference to a single fact), and that the award is not rationally connected to the evidence, without any indication of the nature of this alleged disconnect between the evidence and the outcome of the proceedings. As I have indicated, pleading in this form is inherently contradictory when the ground relied on is a misconception of the nature of the inquiry, since the reasonableness of the result is not a relevant consideration. In so far as the two grounds for review find expression in the supplementary affidavit the first, as I have indicated, relates to the arbitrator’s finding that the union had failed to challenge the third respondent’s documentary evidence. It is apparent from a reading of the record and the award that the arbitrator came to this finding on a conspectus of the evidence as a whole. He records at paragraph 32 of the award that the employee’s representative did not dispute or challenge the documents that the employee had captured. The arbitrator can hardly be faulted for accepting the third respondent’s unchallenged evidence. In the absence of a cogent explanation from the employee to explain the discrepancy between the manual entries in the promotional liquor book and her entries on the SAP system, the only reasonable inference to be drawn from the common cause facts is that she had been dishonest. It is most improbable that the employee made a bona fide error on 10 separate occasions when the orders that she captured on SAP were not aligned with the approved orders reflected in the promotional liquor book.

[9] To the extent that the applicants submit that the arbitrator made a finding as to the existence of a workplace rule in the absence of any supporting evidence, there is no basis for that contention. The third respondent’s financial manager gave evidence as to the standard procedure that applied in relation to the recording of information regarding promotional liquor and any amendment to that information. The arbitrator cannot be faulted for finding that the employee was, or ought to have been, aware of the standard procedure given that she had been performing in that role for almost 3 years.

[10] In short: the arbitrator fully appreciated the nature of the inquiry before him. He fully appreciated the applicable test and applied that test to the evidence before him. There is no basis to contend that he misconceived the nature of the inquiry. To the extent that the applicants contend and rely on a failure properly to assess the evidence, the arbitrator fully appreciated that what served before him were mutually destructive versions. He fully appreciated the role of considerations of credibility and the application of the test of a balance of probabilities. In these circumstances, the applicants have failed to establish any gross irregularity or other reviewable irregularity on the part of the arbitrator and for this reason, the application stands to be dismissed.

[11] Neither party pursued the issue of costs with any enthusiasm and given the broad discretion afforded the court in terms of section 162 of the LRA, the requirements of the law and fairness are best satisfied by each party bearing its own costs.

I make the following order:

1. The application is dismissed.

André van Niekerk

Judge of the Labour Court of South Africa

Appearances:

For the applicant:

S Chetty, Serena Chetty Incorporated Attorneys

For the respondent:

F Malan, ENS Africa