NTE Company (Pty) Ltd v Ceppwawu obo Ngwenya and Others (D504/2021) [2023] ZALCD 1 (15 January 2023)

HEADNOTE: LABOUR – HEARSAY EVIDENCE AT THE CCMA LABOUR – CCMA – Evidence – Hearsay – Employer relying on hearsay evidence – Commissioner not dealing with the hearsay evidence during arbitration – Disregarding the hearsay evidence – This only made known to the parties when the award was handed down – Deprived the parties of a fair hearing.

IN THE LABOUR COURT OF SOUTH AFRICA

DURBAN

Case no: D504/2021

Not Reportable

In the matter between:

NTE COMPANY (PTY) LTD Applicant

and

CEPPWAWU obo SANDILE NGWENYA

First Respondent

COMMISSION FOR CONCILIAION MEDIATION

AND ARBITRATION Second

Respondent

SAKHILE GUMEDE N.O Third

Respondent

Heard: 18 October 2022

Delivered: 15 January 2023

JUDGMENT

ALLEN-YAMAN AJ

Introduction

[1] This applicant seeks to review and set aside the award issued by the third respondent on 1 July 2021 in terms of which the third respondent found that the dismissal of the employee, Mr Sydney Ngwenya, by the applicant had been substantively unfair and ordered the applicant to reinstate him and to pay him backpay in the amount of R30 395.43.

[2] The application is unopposed by any of the respondents.

[3] Where it is necessary to do so, the first respondent trade union will be referred to as CEPPWAWU and the first respondent employee will be referred to as ‘the employee’.

Background

[4] The applicant’s conducts the business of the manufacture of a product known as Wattle Extract. In the course of its operations, a by-product known as boiler ash is created.

[5] In the past it had been permissible for the applicant to give the boiler ash to the general public, however, at a point in time prior to February 2021, this practice became prohibited as a matter of law. From that point onwards, the applicant was only permitted to give its boiler ash to those who were ‘approved’ to take possession thereof.

[6] The applicant’s Production Manager, Mr Willem Janse van Rensburg alleged that on 22 February 2021 he had received a telephone call from a private individual who had requested a delivery of boiler ash. He alleged further that when he advised the individual that this was impermissible, the individual questioned why, if this was so, boiler ash was still being delivered on weekends.

[7] This telephone conversation led Mr Janse van Rensburg to investigate the allegations made by the person who had telephoned, which resulted in him locating two piles of boiler ash in a nearby residential area referred to as the RDP.

[8] Mr Janse van Rensburg duly reported the issue to the applicant’s Factory Manager, Mr Lawrence Savage.

[9] In the result, the employee was charged as follows,

‘1. Breach of Rule 6.4: Lawful instruction

In that you delivered ash to the RDP on the weekend of 20-21 February 2021 in contravention of the instruction by Production Manager, Mr Wille Janse van Rensburg to not drive out boiler ash without management authorisation. No such authorisation was given to deliver ash in the RDP.

2. Breach of Rule 9.2: Dishonesty

In that when asked about the ash on Monday, 22 February 2021, you denied that you had delivered it to the RDP, despite clear evidence to the contrary.’

[10] At the disciplinary enquiry which was held, the employee denied that he had been guilty of the misconduct alleged. He was nonetheless found to have done so and was found to have been dishonest in the course of his evidence given in his defence. These findings resulted in the chairperson having recommended the sanction of dismissal.

[11] The applicant accepted the recommendation as aforesaid and the employee was notified of the applicant’s decision on 18 March 2021 in the letter addressed to him by which he was dismissed.

[12] CEPPWAWU referred a dispute timeously to the second respondent on behalf of the employee, in which the fairness of the employee’s dismissal for misconduct was challenged. It was this dispute which was arbitrated by the third respondent.

[13] The applicant led the oral evidence of three witnesses in support of its case, Mr Janse van Rensburg, Mr Savage, and its Engineering Foreman, Mr Johannes Erasmus. In addition, the applicant introduced certain documentary and photographic evidence. The applicant himself testified in support of his own case.

[14] Although both parties were represented during the course of the arbitration, neither was legally represented: the applicant was represented by an official of the employer’s organisation AHI and the employee was represented by CEPPWAWU.

[15] Upon the conclusion of the parties’ evidence the third respondent issued the award which is sought to be reviewed and set aside in these proceedings.

Analysis

[16] In its founding affidavit the applicant contended that the award was subject to review in terms of section 145 of the LRA.

[17] In particular, it was suggested by the applicant that the third respondent arrived at decisions which no reasonable decision maker could have arrived at by reason that:

1. the third respondent’s award was not rationally connected to the evidence before him;

2. the third respondent failed to fully apply his mind to the entirety of the evidence before him;

3. the third respondent misconstrued the evidence before him;

4. the third respondent disregarded vital evidence;

5. the third respondent failed to properly weigh up the evidence before him.

[18] In its supplementary affidavit, the applicant embellished upon the themes articulated by it in its founding affidavit. In addition, it alleged that the third respondent’s treatment of the hearsay evidence presented by the applicant had constituted a reviewable irregularity.

[19] Whilst the applicant is correct that the award itself contains certain errors and inaccuracies, these in and of themselves are insufficient a basis upon which it could be concluded that the award was not one which a reasonable decision maker could have arrived at.

[20] This is for the reason that the applicant’s case was premised to a large degree on its reliance on hearsay evidence. In the result, the only the direct evidence led by the applicant was that (1) the employee had exited the premises with a delivery vehicle on the weekend in question, (2) he had been the only driver on duty on that particular weekend, and (3) two piles of boiler ash were found by Mr Janse van Rensburg in the RDP.

[21] The fact that the employee may have denied that he had exited the premises at all on the weekend in question in circumstances in which he was established to have done so does not ipso facto lead to the conclusion which was required to have been arrived at in order to conclude that he had committed the infractions in question.

[22] As a starting point, for the applicant to have established that the employee’s dismissal had been substantively fair, as a starting point it was at least required to have established that the employee removed the boiler ash from the applicant’s premises without permission and had delivered it to the RDP. This it did not do and could not have done without the evidence of one of the witnesses who had allegedly observed the delivery of the boiler ash by the applicant. Instead, the applicant relied only upon hearsay evidence.

[23] In essence, Mr Janse van Rensburg testified that:

1. He had received a telephone call from an individual who requested the delivery of boiler ash and, when this was refused, who then informed him that boiler ash had been delivered in the RDP the previous weekend..

2. He himself had found two piles of boiler ash at the RDP on Monday, 22 February 2021.

3. He was told by the individual who had telephoned him and one Mr Nkomo that it had been the employee who had delivered the boiler ash which had been delivered to the RDP.

[24] In the absence of either of the individuals who had allegedly informed Mr Janse van Rensburg that the employee had delivered the boiler ash to the RDP testifying, such evidence was hearsay.

[25] In cross examining Mr Janse van Rensburg the employee’s representative expressly challenged the fact that the evidence being adduced by him, as aforesaid, was hearsay.

[26] At no point during the course of the arbitration did the third respondent alert the applicant to the potential consequences of its failure to call the witnesses in question, who would be able to testify directly relating to the issues in question. In his award, he found as follows,

‘49. There was no evidence definitively linking the Applicant to the ash dumped at those two locations. Even by the testimony of Lawrence, the ash could have been there for weeks.

50. The Respondent’s case was based on hearsay evidence. The Respondent had access to Mr Nkomo but purposely chose not to invite him.

51. It is also improbable that Willen would not earmark a number that called with information that was that important and not take a statement, even if confidential.

52. The person who did the investigation, Lawrence, never interviewed anyone or took [a] statement. His investigation was based on hearsay evidence.

53. Section 912(2) states that if the existence of the dismissal is established, the employer must prove that the dismissal is fair. In this matter, the Respondent failed to prove the fairness of the dismissal.

54. With that, I therefore find that the dismissal of the applicant was substantively unfair.’

[27] On the evidence which was before him, the findings as aforesaid are not those of an unreasonable decision maker. That, however, is not dispositive of the matter.

[28] In Exxaro Coal (Pty) Ltd v Chipana and Others [2019] 10 BLLR 991 (LAC) the Labour Appeal Court determined a matter in which the employer in question had placed reliance on hearsay evidence and the commissioner had failed to deal with the issue of its admission timeously, which the Labour Appeal Court found had deprived the parties of the opportunity of knowing what more, if any, evidence was required in the presentation of their respective cases. The Labour Appeal Court stated,

‘A reasonable commissioner in the position of the arbitrator in this matter would not only have known what the law on the admission of hearsay was, if he sought to invoke the law (i.e., the formal rules for the admission of evidence), but would have been alert to the introduction of the hearsay evidence and would have addressed its admissibility promptly so as to ensure fairness and expediency.’

[29] The Labour Appeal Court set out the appropriate approach to be adopted by commissioners when confronted with the introduction of hearsay evidence, in the following terms,

‘(1) Section 3(1)(c) of the LEAA is not a license for the wholesale admission of hearsay evidence in the proceedings;

(2) In applying the section the commissioner must be careful to ensure that fairness is not compromised;

(3) a commissioner is to be alert to the introduction of hearsay evidence and ought not to remain passive in that regard;

(4) a party must as early as possible in the proceedings make known its intention to rely on hearsay evidence so that the other party is able to reasonably appreciate the evidentiary ambit, or challenge, that he or she is facing. To ensure compliance, a commissioner should at the outset require parties to indicate such an intention;

(5) the commissioner must explain to the parties the significance of the provisions of section 3 of the LEAA, or of the alternative, fair standard and procedure adopted by the commissioner to consider the admission of evidence;

(6) the commissioner must timeously rule on the admission of the hearsay evidence and the ruling on admissibility should not be made for the first time at the end of the arbitration, or in the closing argument, or in the award.

The point at which a ruling on the admissibility of evidence is made is crucial to ensure fairness in a criminal trial. The same ought to be true for an arbitration conducted in an adversarial fashion because fairness to both sides is paramount.’

[30] As has been stated, the third respondent did not at any point in the arbitration raise the issue that the evidence sought to be relied upon by the applicant constituted hearsay evidence, nor what the possible consequences thereof might be. In his award, he disregarded the evidence so led in its entirety, without having applied the provisions of section 3 of the LEAA, or any other test which he might have found to have been appropriate in the circumstances of the arbitration. His decision to exclude from all consideration the hearsay evidence led by the applicant was made known to the parties only at the time when the award was handed down. The third respondent’s failure to have dealt with the applicant’s reliance on hearsay evidence as aforesaid accordingly deprived the parties of a fair hearing.

[31] As was stated in BAUR Research CC v Commission for Conciliation, Mediation and Arbitration [2014] 4 BLLR 374 (LC),

‘What this means is that where it comes to an arbitrator acting ultra vires his or her powers or committing misconduct that would deprive a party of a fair hearing, the issue of a reasonable outcome is simply not relevant. In such instances, the reviewable defect is found in the actual existence of the statutory prescribed review ground itself and if it exists, the award cannot be sustained, no matter what the outcome may or may not have been.’

[32] In the circumstances, the applicant’s application to review and set aside the award on the basis that the third respondent misconducted himself in relation to his duties as an arbitrator, alternatively, that he committed a gross irregularity in the conduct of the arbitration proceedings, must succeed.

[33] As the parties did not address the issue of whether the interests of justice warranted the admission of the hearsay evidence, this court is not in a position to make such a determination. The matter will therefore be required to be remitted to the second respondent to be arbitrated de novo.

Costs

[34] The applicant sought the payment of its costs only in the event of opposition to its application by the first respondent, of which there was none.

Order

1. The arbitration award issued by the third respondent under the auspices of the second respondent under case number MPEM2272-21 is reviewed and set aside and the dispute is remitted to the second respondent to be arbitrated de novo before a commissioner other than the third respondent.

2. There is no order as to costs.

Kelsey Allen-Yaman

Acting Judge of the Labour Court of South Africa

APPEARANCES:

APPLICANT: Mr

D de Jager briefed by Redfern and Findlay Attorneys

RESPONDENTS: No appearances