Nedbank Limited v SASBO OBO Narriman Greenaway and Others (C103/2020) [2022] ZALCCT 24; (2022) 43 ILJ 2085 (LC) (6 June 2022)

REPUBLIC OF SOUTH AFRICA

IN THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN

JUDGMENT

Not Reportable

C103/2020

In the matter between:

NEDBANK LIMITED

Applicant

and

SASBO OBO NARRIMAN GREENAWAY

First Respondent

COMMISSIONER ORLANDO MOSES N.O.

Second Respondent

COMMISSION FOR CONCILIATION, MEDIATION

AND ARBITRATION

Third Respondent

Date heard: 17 March 2022

Judgment delivered by email: June 3 2022; Deemed delivered at 10.00hr on 6 June 2022

RABKIN-NAICKER J

[1] This is an opposed application to review an arbitration award under case number WECT 14258-19. In terms of the award, the second respondent (the Commissioner) found that the dismissal of the first respondent’s member (Greenway) was procedurally fair but substantively unfair. Greenway was reinstated without back-pay.

[2] Greenway was employed as a Provincial Manager, Financial Planning for Nedbank Group. She was dismissed on 10 July 2019 after she was found guilty of the following charge:

“Gross Misconduct: Dishonesty, in that,

during the period 25 April 2018, and 4 March 2019, you approved one or more of the following expense claims submitted to Nedbank in the name of your regional assistant, Ms Nikki Booth:

2018/04/25 – R1954.74; 2018/05/10 – R1284.00; 2018/07/03 – R2697.00; 2018/07/30 – R3112.00; 2018/08/07 – R2332.50; 2018/08/15 – R1345.60; 2018/09/10 – R1771.10; 2018/12/19 – R4510.16; 2019/01/14 – R5235.98; 2019/01/29 – R495.00; 2019/01/31- R2947.08; 2019/03/04 – R950.

On the basis that:

· She had incurred the expense

· She was entitled to be reimbursed by Nedbank

· She would receive the reimbursement into her bank account, the account number of which is recorded on the SAP system as the beneficiary account to such reimbursement should be paid

When you behaved as stated above you knew that:

· Ms Booth had not incurred the expense

· Ms Booth was not entitled to be reimbursed by Nedbank

· The submission of the claim in this manner had been designed to allow for you, as Ms Booth’s line manager, to approve the claim/s instead of having to wait on the approval thereof by your manager, Mr John Karis.”

[3] The parties agreed certain common cause facts by means of a pre-arbitration minute which were recorded by the Commissioner as follows:

“6. Although the claims were submitted under Mrs Booth’s name, they were the Applicant’s claims.

7. The Applicant had a discussion with Mrs Booth to submit the claims under her (Mrs. Booth’s) own name.

8. Mrs Booth was the Applicant’s Regional Assistant and she was able to submit claims on the Applicant’s behalf.

9. When submitting requests an authorized submitter had to confirm whether the expenses belonged to him or her or someone else.

10. The process may be described as follows:

a. The Applicant sometimes deposited money into Mrs. Booth’s bank account and Mrs. Booth would make purchases from her own bank account;

b. Mrs. Booth would then submit expense claims under her own name;

c. The Applicant would then approve the claims, the money would be paid into Mrs. Booth’s account and Mrs. Booth would then transfer the money into the Applicant’s account.

d. Alternatively the applicant would make purchases using her personal credit card; the applicant would then approve the claims, the money would be paid into Mrs. Booth’s bank account and she would in turn transfer it to the Applicant.

[4] It was the evidence of company witnesses that the above methods employed by Greenway did not comply with the ‘one-up principle’ which provides that all claims for re-imbursements must be approved by one’s line manager. Greenway submitted at arbitration that this principle only applied to ‘personal claims’ and not to all claims for reimbursements for business expenses which she described as staff claims i.e. expenses relating to the running of the unit and which were for the benefit of the staff and running of the business. In his analysis of evidence and argument, the Commissioner states as follows:

“This evidence was disputed by the Respondent witnesses who testified that the one-up principle was applicable to all cases where claims for re-imbursements are instituted. The investigator and the head NFP sales both testified for the rationale behind the one-up principle and both testified for all claims the one-up principle is applicable. In considering which version is more probable. I considered that the rationale behind the principle and I considered the manner in which the claims were submitted. If the version of the Applicant is to be believed that she as the cost center owner could approve the claims there would have been no need for Mrs. Booth to indicate that the claims were her own as the Applicant would have been able to approve her own claims. The Applicant has been employed for 24 years with the Respondent and the Applicant has showed that she understands the underlying reasons for having the one-up principle. Applicant’s submissions that no training was given regarding the re-imbursement claims is unconvincing. If the Applicant was unsure she is employed in a senior managerial position and in this capacity she had to ensure that she understood the rules and regulations of the Respondent. In fact the applicant had shown that she is aware of the reimbursement policy, but she decided to implement it in a manner which does not follow the one-up principle.”

[5] The Commissioner’s key finding that appears to have led to his conclusion that the dismissal of Greenway was substantively unfair is his view that the misconduct complained of by the employer: “did not relate to conduct normally associated with dishonesty”. Under the heading “Was dismissal the appropriate sanction?”

the Commissioner states inter alia as follows:

“ 46. The Respondent submitted that the misconduct of the Applicant related to dishonesty whilst the Applicant submits that the misconduct

related to a breach of the companies Rules and Regulations. Employees are expected to act in the best interests of the employer’s

business any act of dishonesty is viewed as sufficient indication that a breach of trust exists and in such circumstances is fair.(sic). In general it is accepted that misconduct which relates to dishonesty normally relates to misconduct that involves theft, fraud, and misappropriation of the employer’s assets and submissions of falsified cheques, quotations or business documents. The Respondent’s own witness, Mrs. Booth, testified that all the claims submitted to reimbursement were for actual expenses incurred in the course of business. Evidence was presented that the business suffered no actual losses, although this is not an indication that there may not have been dishonest conduct, and the Respondent did not find that any fraudulent documents were submitted when the claims for reimbursement was approved by the Applicant. No evidence was tendered on the employer’s behalf that the Applicant claimed for any expenses that was not incurred. The evidence submitted by the Respondent focused on the Applicant’s failure to comply with the application of the one-up principle that any claims had to be approved by his or her senior and I find that the misconduct did not relate to conduct normally associated with dishonesty……..”

[6] Nedbank submits that the Commissioner misconceived the nature of the enquiry and/or ignored material evidence in assessing the nature of the First Respondent’s misconduct in that he held that the misconduct was not dishonest but merely a failure to follow company process. Greenway’s line manager, Mr Karis explained the one-up principle as follows:

“MR KARIS: So the one-up principle is very clear that you cannot approve your own claims. So your line manager as I alluded to earlier…… cost centre owner whoever has the relevant authority, needs to approve your claims and it is from a business point of view, so one is that we can from a budgeting point of view, and two it is just good business practice one cannot mark your own homework.”

[7] He went on to state in examination in chief that in relation to the transactions identified in the charge against Greenway that:

“MR KARIS: …..I think that the seniority of the position and the fact that the one-up principle was not obeyed, it deprived me of approving any of these particular transactions but what it also did was, the explanation of why it was done in a dishonest way and I want to go back to the point, is the process of handing the responsibility over to a subordinate to process it which clearly goes against company policy was an abuse of power and as such I think the level of trust is broken down and I would not be comfortable with reinstatement.”

[8] In the Court’s view this evidence before the Commissioner i.e. Greenway’s method of processing the claims “in a dishonest way” does not appear to have been considered by him, and/or he failed to grasp the nature of a charge involving of dishonesty. As the Supreme Court of Appeal has stated[1]:

“[23] Cases dealing with dishonesty as an element of the offence in South Africa have tended to suggest that the element of dishonesty must be an ingredient of the offence. In Ex parte Bennett, in dealing with offences committed under the Companies Act, 11 Le Grange J said:

'What is an ''offence involving dishonesty''? In its ordinary meaning dishonesty in this context denotes:

''Lack of probity: disposition to deceive, defraud or steal. Also, a dishonest act.''

(See The Shorter Oxford English Dictionary, sv ''dishonesty'' 4.) In Brown v R 1908 TS 211 Solomon J said at 212 that in its ordinary sense ''dishonest'' involves an element of fraud. (Cf R v White 1968 (3) SA 556 (RA).) In Words and Phrases Legally Defined (2nd ed by J B Saunders; 1976 Supplement at 57) there is a quotation from a judgment of the Canadian Supreme Court:

''. . . 'Dishonest' is a word of such common use that I should not have thought that it could give rise to any serious difficulty, but in construing even plain words regard must be had to the context and circumstances in which they are used: Canadian Indemnity Co v Andrews & George Co Ltd (1953) 1 SCR 19 at 24. However, to try to put a gloss on an old and familiar English word which is in everyday use is often likely to complicate rather than to clarify. 'Dishonest' is normally used to describe an act where there has been some intent to deceive or cheat. To use it to describe acts which are merely reckless, disobedient or foolish is not in accordance with popular usage or the dictionary

meaning. It is such a familiar word that there should be no difficulty in understanding it. Lynch & Co v United States Fidelity & Guarantee Co (1971) 1 OR 28 per Fraser J at 37, 38.''

[9] The common-cause evidence before the Commissioner reflects that the method by which the transactions were undertaken involved deception or ‘cheating’. As the LAC has found, where an employee contravenes company policies by means of deception, this amounts to dishonesty[2]. The evidence before the Commissioner also showed why the check and balance process was critical. Mr Karis explained:

“MR KARIS : I can recall and I might not be 100% right with the dates but approximately the 28 January last year we had a discussion around – I was going to be in Cape Town for a meeting and I said we would like to get together with the team and I was informed by Narriman that she had organized a team build, team meeting with her regional managers. I had indicated to her via email on the 29th January 2019 that in the light of cost-cutting and what-have-you I did not think it was appropriate to continue with the event and I was disappointed that they had decided to continue with it. I was not - never aware of any of the costs, be it the B&B where they were staying or the cost of the food and drinks they purchased for the event, those invoices were – some of the invoices I think you have on record that were – went through the system without my approval.”

[10] Under cross-examination, Mr Karis was asked to explain how “was the applicant dishonest in this whole process beside giving a wrong instruction?” He responded as follows:

“MR KARIS: So the instruction is one element and that is an ethical behavior of how you abuse your power. The dishonesty is hiding these invoices/expenses from her line manager in a deliberate way, particular if I go back to the particular team build where I had requested that they cancel the event they went ahead and incurred expenses not only on the rental of accommodation but food, drinks, petrol and so on. So that to me is against the principle of honesty, openness, disclosure of what you were spending and it seemed like a deliberate way to avoid me seeing any of the claims and therefore she was able to claim via the subordinate who submitted it. That to me is dishonesty.”

[11] Mr Karis also testified that in his opinion there were expenses incurred by the applicant which could have been avoided. Company policy allowed only for valid and substantiated expenses to be reimbursed to any employee.

[12] Despite the above evidence, and the Commissioner’s own finding that Greenway understood the rationale for the one-up policy, the Commissioner went on to find that dismissal was too harsh a sanction. He emphasised the 24 years’ service of the employee, and her senior position (although he confirmed this was an aggravating factor). He acknowledged that the banking sector places a premium on ethical behavior. However, he decided that ‘corrective discipline’ was appropriate. In his decision on remedy, he stated, incorrectly, (given the clear evidence given by Mr Karris), that the employer had shown no impediment to reinstatement. He then ordered reinstatement without back-pay stating that:

“I exercise my discretion and order that the applicant is reinstated with no the (sic) back pay due to the Applicant (sic) due to the fact that the applicant was a senior employee and I found that the applicant was complicit in the misconduct of Mrs. Booth, although the misconduct did not amount to dishonesty. The applicant was not truthful during the arbitration and tried to shift the blame to Mrs. Booth and throughout the hearing she failed to show any understanding that her conduct was inappropriate and failed to show any remorse and I exercise my discretion and order that applicant is reinstated without back pay.”

[13] The crux of this Court’s task in a review is to determine whether the Award of the Commissioner falls within the bounds of reasonableness or not. I am of the view that it does not. In sum, the Commissioner misconstrued the nature of the misconduct the applicant was charged with; he ordered reinstatement despite finding that the applicant lied under oath at arbitration and showed no remorse; the employer’s evidence regarding the breach of the trust relationship; and his acknowledgment that her seniority could not serve as a mitigating factor. By ordering reinstatement (albeit without back pay), in all the facts and circumstances of the evidence serving before him, the Commissioner made a decision that a reasonable decision maker could not make. In the premises, his Award stands to be reviewed. No purpose would be served in remitting the matter back to arbitration. I make the following order:

Order

1. The Award under case number WECT 14258 is reviewed and set aside and substituted as follows:

“The dismissal of Narriman Greenway was procedurally and substantively fair.”

2. There is no order as to costs.

H. Rabkin-Naicker

Judge of the Labour Court of South Africa

Appearances

Applicant: Cliffe Dekker Hofmeyr Inc

First respondent: C Goosen instructed by BJ Pieterse-Erasmus Attorneys

[1] In ESTATE AGENCY AFFAIRS BOARD v McLAGGAN AND ANOTHER 2005 (4) SA 531 (SCA)

[2] Pick ‘Pay retailers (Pty) Ltd v Maluleke & Others JA26/1919; delivered 7 September 2020 at paragraph 24.