NWK Limited v NUFBWSAW obo Members and Others (JR2186/17) [2021] ZALCJHB 264 (1 September 2021)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable

Case No: JR 2186/17

In the matter between:

NWK LIMITED Applicant

and

NUFBWSAW obo 11 MEMBERS First

Respondent

COMMISSIONER PAUL POTO NO Second Respondent

BARGAINING COUNCIL FOR THE GRAIN INDUSTRY Third

Respondent

Heard: 06 May 2021

Delivered: This judgment was handed down electronically by circulation to the parties representatives by e-mail and release to SAFLII. The date and time for hand-down is deemed to be 01 September 2021.

JUDGMENT

MABASO, AJ

Introduction

[1] The nub of this review application is that the Second Respondent ("the Arbitrator"), in concluding that the dismissal of the First Respondents ("the Employees") was substantively unfair, is one that a reasonable decision-maker could not have made taking into account the totality of the material before him.

[2] In deciding this matter, this Court has to remind itself that the LAC, per Learned Davis JA,[1] writing for the Court, inculcated the review test thus:

"[I]t is clear that our law dictates that an award delivered by an arbitrator will only be considered to be unreasonable if it is one that a reasonable arbitrator could not reach on all the material that was before him or her. A material error of fact and the particular weight to be attached to a particular fact may in and of itself not be sufficient to set aside the award but will only be done if the consequence thereof is to render the ultimate outcome unreasonable."[2]

The Relevant background and the arbitration

[3] The Applicant employed the Employees, based at its Total Garage Zeerust Forecourt (“Zeerust Total”) until they were dismissed for fraud and theft. This was an after effect of a well-orchestrated fraud taking place at Zeerust Total for some time. The tip-off came from one of the Applicant's clients.

[4] A resultant investigation was headed by Mr Jaco Havenga ("Mr Havenga"). In his endeavour to determine the veracity of these claims, he relied on two sources, namely (a) documentation and (b) video footage. These sources confirmed that, indeed, there was an orchestrated fraud. After being satisfied that the Employees were involved, Mr Havenga then suspended them from duty. Later, they were summoned before the disciplinary hearing and they were found guilty of fraud and theft, and then dismissed.

[5] With the assistance of the Employee’s trade union, National Union of Food, Beverages, Wine, Spirits and Allied Workers (“NUFBWSAW”); the Employees referred an unfair dismissal dispute to the Bargaining Council For The Grain Industry (“the Bargaining Council”), which appointed the Second Respondent to arbitrate the dispute, following unsuccessful conciliation. After allowing both parties to present their respective cases, the Arbitrator issued an arbitration award wherein concluded, among other things, that indeed they committed fraud. In coming to this conclusion, he said: they worked as petrol attendants and cashiers, respectively; they made fictitious entries on both the speed point machine and the Applicant's system to action a cash withdrawal using a feed card from motorists.[3]In addition, the Arbitrator held that it is highly improbable that the Employees would manipulate the system of accessing cash to be used “somewhere else”,[4] but at the same time concludes that there was no theft proven.[5]

[6] Despite these findings, the Arbitrator proceeded to conclude that dismissal was substantively unfair and ordered the Applicant to reinstate the Employees from the date of dismissal, in addition, that they must be paid a collective compensation amounting to over half a million.

[7] The Arbitrator’s conclusion on unfairness is solely based on the fact that guilty finding does not automatically translate to dismissal; instead, an arbitrator has to take, among other things, as to whether the breached rule was applied consistently,[6] as he held that the Applicant defaulted in applying discipline consistently as they were other employees (“the Comperators”)

allegedly involved in the same offence.

[8] I interpose and say the LAC, in Absa Bank Limited v Naidu and Others, per the late Ndlovu JA,[7] cited with approval the work of Professor Grogan as follows:

"[42] Indeed, in accordance with the parity principle, the element of consistency on the part of an employer in its treatment of employees is an important factor to take into account in the determination process of the fairness of a dismissal. However, as I say, it is only a factor to take into account in that process. It is by no means decisive of the outcome on the determination of reasonableness and fairness of the decision to dismiss...The parity

principle was never intended to promote or encourage anarchy in the workplace..." (Own emphasis)

[9] Regarding this contentious issue, which is consistency, the Arbitrator confirms that Mr Havenga testified that he relied on two sources mentioned above. The reason for not summoning the Competitors before a disciplinary hearing was that the video footage did not place them at the incident scene. He confirmed that when the suspension was executed, one of the Employees advised him that others were involved but the video provided otherwise.

[10] In favour of the Employees, the Arbitrator relied on documentary evidence, which according to him, showed that the Comparators signed those documents. Furthermore, he concludes that Mr Havenga did not present evidence that he investigated the Comparators to get a version despite being highly implicated. Concludes that “the trust relationship can still be maintained between the parties as some of those employees who have committed the same act of misconduct as [the Employees] are still within the respondent’s employ”.[8]

Grounds for review, and the law

[11] The Applicant contends that the Arbitrator committed gross irregularity and the arbitration award is one that a reasonable decision-maker could not have made considering that there was undisputed evidence before him in that;

(a) the Employees did not provide the Employer with the names of those who were also involved in the commission of the misconduct;[9]

(b) the three Comparators could not be seen on the video that the witness used; [10]

(c) there is no malice on the Applicant's part, considering that the witness identified that it genuinely believed that was insufficient evidence to charge the other three employees.[11]

[12] In a review application, in this Court, records read together with an arbitration award should evince gross irregularity and unreasonableness of the outcome for a review to succeed, unless alleged irregularity is something that happened outside the arbitration hearing. Cf. Goldfields Mining South Africa (Pty) Ltd (Kloof Gold Mine) v CCMA and Others unreported case No JA2/12 (4 November 2013) at para 14. The same Court in Head of Department of Education v Mofokeng & others at para 32, per Learned Murphy AJA, held thus:

"…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..." (Own emphasis)

[13] It is important to highlight that in a dismissal dispute, an employer has the onus to show the fairness thereof. However, this does not mean that an employee would fold hands; sometimes, an employee is expected to present evidence in respect of a point in contention. For example, in a situation whereby an employee is claiming inconsistency in the application of discipline, such employee would have to assist the Employer in providing details in respect of that, unless such evidence was apparent to the Employer at the time of dismissal. This does not mean the onus of proof changes but a burden to present evidence.

[14] Once parties have considered presenting their evidence, an Arbitrator would be required to determine contentious issues by analysing using probabilities, if need be, credibility. See House of Flowers and Others v Radebe and Others.[12] Recently, the Constitutional Court in Public Protector and Others v President of the Republic of South Africa and Others [13]summed up this principle as follows:

"Moreover, the Public Protector could not disregard the evidence of the campaign managers solely on account of the e-mails that diverged with that evidence on the involvement of the President in the campaign's affairs. Instead, she was required to evaluate those witnesses' credibility and reliability of their testimony on the one hand and the authenticity and reliability of the e-mails, on the other. And she should have also tested each version against the probabilities. When the versions placed before the Public Protector diverged on some of the relevant issues, she could not without more prefer one version over the other. The truth is established by facts and not one's preference."[14]

[15] Considering the authorities mentioned above, in the end, this Court is required to decide as to whether the Arbitrator's decision is a reasonable one or not. In investigating this question, as the Constitutional Court in Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others[15] at para 45, applied by the LAC in Woolworths[16], that it depends on the circumstances of each case, which involves a range of factors relevant to the decision, I must also add that the nature of the process involved plays a role, the reasons given for the decision and the impact of the decision taken to those affected.

[16] In casu, the latter factor relates not only to the Employees, but this involves the Employer. Meaning, what is the impact of the arbitration

award, which confirms that employees committed fraud. Despite confirmation of fraud, the Arbitrator directs that the Employees

should be reinstated together with backpay based on one factor, which is parity principle, despite (a) the Arbitrator been given undisputed reasons as to why the Comparators were not charged and (b) the LAC in Naidu[17] supra warned that “It is by no means decisive of the outcome on the determination of reasonableness and fairness of the decision to dismiss”, (c) Furthermore, the proceedings that the Arbitrator should be involved in are arbitration processes, not criminal Court proceedings, now expecting the Applicant to play video footage where it was not contested that the Comparators were not appearing is tantamount to the criminal proceedings where a state has to prove its case beyond a reasonable doubt.

[17] The Arbitrator faced uncontroverted evidence by Mr Havenga that the reason for him not to institute disciplinary hearing against the Comparators was because he used two sources, documentary evidence and video footage,[18] to establish who was present during the entire transactions. It was Mr Havenga’s evidence that the Comparators were not there. He further mentioned that during the disciplinary hearing of the Employees, none of them mentioned the Comparators as being some of the people involved in this fraud. Mr Havenga furthermore stated that one of the Employees, Mr Michael Odiseng, did not testify during the disciplinary hearing, and he presented evidence that the Employees cannot be trusted, as “the customers wont use us again because of this”.[19] This evidence was not disputed.

[18] As the truth has to be established by facts, Mr Havenga’s evidence that the Employees did not come forth with the names of others involved in the misconduct and that video footages did not show that the Comparators were present and or involved, a reasonable decision-maker could have noted that such evidence was not disputed, furthermore, that the Employees for the first time during the arbitration mentioned the names of some of those who were involved. This is supported by what Mr Havenga said about Mr Odiseng, as stated in the preceding paragraph. Using the principle as in the Public Protector’s and House of Flower’s supra clearly, the Employees versions were an afterthought, so the Arbitrator should have realised that the Employees were not credible

witnesses and accepted the Applicant’s uncontested version as to why the Comparators were not charged and in respect of the impact of the fraud to the Applicant’s clients. Furthermore, considering the uncontested evidence, asking for video footage in the arbitration proceedings, I opine that equals criminal trial proceedings which is not appropriate.

[19] What also works against the Employees in this matter is that Mr Havenga's unchallenged evidence relating to his investigation, and advised the Arbitrator that there was no ulterior motive not to charge the Comparators.[20] Now, it is unreasonable as to why would the Arbitrator require video footage being presented whilst there are no allegations that the Comparators were appearing in the video. Using probabilities, the Applicant's evidence cannot be faulted. Cf. Public Protector's supra, at para 80.

[20] As per the case law above, the parity principle is a factor that has to be taken into account "no means decisive of the outcome of the fairness of the dismissal”. It is my considered view that the Arbitrator misconceived the nature of the law that he was required to apply when he ruled that the dismissal was substantively unfair. The Employees committed serious misconduct of fraud. Evidence presented that the Comparators were not linked to such fraud and the was no malice on the part of the Employer in not charging them, so the Arbitrator's conclusion that they should be reinstated and be back paid is is contrary to the evidence of the person who investigated and found that there was no case against the Comperators. Therefore, it is my view that such a decision cannot be the one that a reasonable decision-maker could have made, taking into account the blameless opinion of Mr Havenga.

[21] Furthermore, the Employees were dismissed for serious misconduct of fraud which the Arbitrator has confirmed. The LAC Schwartz v Sasol Polymers and Others [21]flag against reinstating a dishonest employee thus;

"[30] In the current matter, the dishonest nature of the appellant's misconduct which was of such a nature as to make continued employment intolerable and dismissal "a sensible operational response to risk management". It would be fundamentally unfair and unjust to expect an employer to retain in its workplace a senior employee who has shown himself guilty of dishonesty in the manner of the appellant. The high premium on honesty in the workplace and the presence of dishonesty makes the restoration of trust, which is at the core of the employment relationship, unlikely."

[22] Based on the above, I conclude that it was unreasonable for the Arbitrator to direct the Applicant to reinstate the Employees after finding them guilty of fraud. The Employer cannot trust people who have committed fraud in the workplace and stated a reasonable reason why trust is broken as the misconduct is serious, including dishonesty.So, I conclude that no mitigation factors in this matter which outweigh aggravating circumstances.

[23] In the circumstances, I conclude that the Arbitration Award found that the dismissal was unfair and ordered the Applicant to reinstate the Employees with back pay is one that a reasonable decision-maker could not have made taking into account the evidence presented before him.

[24] Wherefore, the following order is made:

Order:

1. The arbitration award of the Second Respondent, acting under the auspices of the First Respondent, under case no. BC 07/09/16 is reviewed and set aside and is substituted with the following:

’1. The dismissal of Applicants was procedurally and substantively fair.

2. There is no costs order.'

2. No costs order is made.

Sandile Mabaso

Acting Judge of the Labour Court of South Africa

Appearance:

For Applicant: Adv Cook

Instructed by: Cliffe Dekker Hofmeyer Inc.

For the Respondent: Mr Haffeege

From Haffeegee Roskam, Savage Attorneys

APPEARANCES:

For the Applicant:

Instructed by:

For the first Respondent:

[1] Nyathikazi v Public Health and Social Development Sectoral Bargaining Council and Others (JA106/2019) [2021] ZALAC 11 (26 May 2021) at para 24.

[2] Own emphasis.

[3] Pleadings Bundle, p 30.

[4] Ibid.

[5] Ibid.

[6] Code of Conduct on Dismissal

[7] Writing for the Court.

[8] Ibid, p 39.

[9] Pleadings: p 13, para 11.1 to 11.3, 11.5.

[10] Ibid: para 11.4

[11] Ibid.

[12] (JA53/2012) [2013] ZALCJHB 337

[13] 2021 (9) BCLR 929 (CC). (“the Public Protector”)

[14] Ibid, para 79.

[15] 2004 (7) BLLR 687 (CC)

[16] (2018) 39 ILJ 222.

[17] (2015) 36 ILJ 602 (LAC)

[18] Records: p 209: “MR HAVENGA: Yes, because I took all the guys that I could see physically there at the scene at the time. I took them to this hearing”.

[19] Records, p 199.

[20] SACCAWU & Others v Irvin Johnson Limited [2008] BLLR 868 (LAC), Samancor Limited (Eastern Chrome Mines) v Commission for Conciliation, Mediation and Arbitration Limpopo and Others [2020] 9 BLLR 908 (LAC).

[21] (JA46/2014) [2015] ZALAC 58(5 October 2015)