Pharma-Q Holdings (Pty) Ltd v National Bargaining Council for The Chemical Industry and Others (JR 1964/20) [2023] ZALCJHB 16 (31 January 2023)

FLYNOTES: MISCONDUCT AND DAMAGED MACHINE Labour – Dismissal – Misconduct – Damage to machine – Using incorrect procedure – Colleague not disciplined despite also violating policy in attempting to help – Company contending that employee not showing remorse and that trust relationship broken – Dismissal not appropriate and reinstatement ordered with a final warning.

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Reportable

Case No: JR 1964/20

In the matter between:

PHARMA-Q HOLDINGS (PTY)LTD Applicant

and

NATIONAL BARGAINING COUNCIL

FOR THE CHEMICAL INDUSTRY First

Respondent

PANELIST SOLOMZI MPIKO N.O. Second Respondent

SACWU obo LETJAGE SOLOMON MADISHA Third Respondent

Heard: 26 January 2023

Delivered: 31 January 2023

JUDGMENT

MABASO, AJ

Introduction

[1] In this review application, this Court has to answer two intertwined questions, as Pharma-Q Holding (Pty) Ltd ("the Applicant") contends that the Second Respondent ("the Arbitrator") committed reviewable irregularity in issuing an arbitration award in favour of the Third Respondent ("Mr Madisha"), which are: (a) Whether the Arbitrator misunderstood the issues that he had been called to decide? (b) Did the Arbitrator deal with the substantial merits of the dispute? Only Mr Madisha is opposing this application.

[2] Mr Madisha was employed by the Applicant until dismissed following a guilty finding on charges of misconduct. He then declared an unfair dismissal dispute to the National Bargaining Council for the Chemical Industry (the Bargaining Council). The Arbitrator, who had been tasked to decide the dispute identified the issues as whether the dismissal was both procedurally and substantively unfair. The Arbitrator ultimately concluded that the dismissal was only substantively unfair and ruled thus:

"[30] I order that [the Applicant] reinstates [Mr Madisha] on the same or similar terms and conditions that regulated his employment before he was dismissed on 18 March 2020. The Applicant is to report for duty on 01 December 2020

[31] [The Applicant] is to pay [Mr Madisha] R94 016.00…which is equivalent to the salary the Applicant lost during the period of unfair dismissal from 18 March 2020 to 30 November 2020). [Mr Madisha] is to report for duties at the offices of [the Applicant] on 01 December 2020."(Own emphasis)

[3] The Applicant takes no issues in the manner in which the Arbitrator couched the arbitration award (the award), however, this Court opines that after the Arbitrator had concluded as he did in the Award[1], legally he was not permitted to make the order subsequently made therein[2].

[4] The Arbitrator concluded that Mr Madisha was guilty of the offences charged with, but the dismissal was unfair on the basis that the Applicant did not apply discipline consistently, meaning reinstatement was based on the parity principle.

[5] Both in the papers and the oral argument, by Mr Levin for the Applicant, submitted that the Applicant's concern is that the Arbitrator should not have ordered reinstatement at all but to confirm dismissal, as it was argued that the misconduct affected the trust relationship which has subsequently broken down. This Court has to take into account that the Arbitrator was excising his discretion to order reinstatement, found in section 193(2)(b) read with 193(1) of the Labour Relations Act[3] (LRA), and cannot easily interfere with such an outcome unless it is satisfied that the Arbitrator misapplied the law to the disadvantage

of the Applicant which lead to preventing the Applicant from having a fair trial of issues.

Assessment and analysis

[6] Mr Madisha worked for the Applicant as its machine operator between 31 July 2021 and 18 March 2020. The latter date being a dismissal date. The reasons for dismissal were that he acted negligently in handling a machine of the Applicant. It is common cause that Mr Madisha established a problem with the machine, and in the process of trying to fix it, he used an incorrect procedure which resulted in the machine being damaged. During this process, Mr Madisha invited a fellow employee, Mr Christopher Cancer (Mr Cancer), who subsequently also violated the policy of the Applicant by using a screwdriver. Both were trying to fix the machine, and no evidence was presented to suggest that their conduct was, for example, to sabotage the Applicant.

[7] The Applicant led evidence of Mr Leon Cancer (the witness). During cross-examination, this witness confirmed that the comparator, Mr Cancer, was not subjected to a disciplinary hearing.[4]

[8] Upon reading the arbitration award, it is clear that the basis of the Arbitrator's conclusion is an inconsistent finding relating to the different treatment of Mr Madisha and Mr Cancer. As indicated above, the Applicant takes issue with the approach taken by the Arbitrator; as they say, he did not understand the question before him. Mr Levin, during oral argument, submitted that the aggravating factors that should have been taken into account were, as emphasised by the points appearing in the papers, that Mr Madisha showed no remorse and that fixing the machine cost them R61 000.00, so the dismissal was an appropriate sanction. In summary, the Applicant's argument revolves around the alleged breakdown of trust between it and Mr Madisha and costs.

[9] Once an arbitrator has concluded that an employee has committed an offence, the subsequent inquiry, depending on the issues raised by the parties and or apparent in the evidence that he is seized with, is located in clause 7 (b)(iii) and (iv) of the Code of Dismissal on Misconduct, which reads thus:

“(iii) the rule or standard has been consistently applied by the employer; and

(iv) dismissal was an appropriate sanction for the contravention of [such conduct]”

(Own emphasis)

[10] Before an arbitrator finds that reinstatement is appropriate, there must be an inquiry made in line with the provisions of section 193(2), and the presiding arbitrator would have to give brief reasons for his conclusion as enjoined by section 138(7)(a) of the LRA. If one reads arbitration records the reasons provided must be apparent[5], because in overturning a decision of an employer ,by finding that the dismissal was unfair, he is applying "[an outsider]'s sense of fairness [which] what must prevail and not the employer's view".[6]

[11] In casu, the Award does not show that the Arbitrator specifically deliberated on the inquiry of 7(b)(iv) of the Code, except what is contained in the Award, where he held thus: “In the light of the evidence led …cannot conclude that [the Applicant] proved its case on the balance of probability.”[7]

[12] So this Court concludes that the Arbitrator indeed committed an irregularity, but the question remains as to whether this Court can set aside the award on this basis alone. I do not think so because this Court is expected to consider the arbitration records and determine all the material that was before the Arbitrator. If there is material that supports the Arbitrator's conclusion, then the unfair findings would stand, and this Court will highlight the same hereafter as it is still necessary to weigh the aggravating and mitigating factors considering the nature of the offence Mr Madisha was found guilty of. If this Court concludes that dismissal was not an appropriate sanction, it still has to use its discretion relating to whether progressive discipline rather than dismissal is not an appropriate sanction.

[13] Generally, a dismissal is reserved for the most serious infringements and/or repeated misconduct; however, in certain circumstances, an employer may successfully call for dismissal, depending on the seriousness of the offence.[8] Item 3(4) provides that: “it has to be shown that the continued employment relationship is "intolerable"”. Therefore, one must look to the seriousness of the charge and the intolerability of the employment relationship. At the end of the day, if an employee commits a crime such as theft, dismissal may be an appropriate sanction.

[14] In Booi v Amathole Municipality[9] the Constitutional Court held thus in relation to the question of continued employment:

“It is accordingly no surprise that the language, context and purpose of section 193(2)(b) dictate that the bar of intolerability is a high one. The term "intolerable" implies a level of unbearability and must surely require more than the suggestion that the relationship is difficult, fraught or even sour. This high threshold gives effect to the purpose of the reinstatement injunction in section 193(2), which is to protect substantively

unfairly dismissed employees by restoring the employment contract and putting them in the position they would have been in but for the unfair dismissal. And, my approach to section 193(2)(b) is fortified by the jurisprudence of the Labour Appeal Court and the Labour Court, both of which have taken the view that the conclusion of intolerability should not easily be reached, and that the employer must provide weighty reasons, accompanied by tangible evidence, to show intolerability."(Own emphasis)

[15] Commenting on the provisions and application of inconsistency in dismissal dispute matters, the Labour Appeal Court (LAC) in Absa Bank Limited v Naidu and Others[10] held that is not the only deciding factor , as it said:

“[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 this court 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. As stated earlier, I reiterate there are varying degrees of dishonesty and, therefore, each case will be treated on the basis of its own facts and circumstances."

[16] During the opening statement, in terms of the records, the Applicant's legal representative stated that Mr Madisha went to the machine and identified that there was a problem with it; he then used ink that he was not supposed to use, so he acted contrary to the operating procedures. This indicates that when this offence was committed, Mr Madisha was executing his duties but, unfortunately,

not following the procedure.[11] Mr Madisha worked for the Applicant for a period of more than seven years. No evidence was presented before the Arbitrator that the business was interrupted as a result thereof and that the Applicant suffered a loss, except the one of R61 000.00 for the fixing of the machine.

[17] Considering the facts of this case, it is clear that the concern of the Applicant which necessitates the imposition of the dismissal was because Mr Madisha did not show any remorse, and money was spent to fix the machine. Mr Levin, who also represented the Applicant during the arbitration, which produced the arbitration award before this Court, reiterated these two factors and in addition stated that if Madisha had acknowledged his wrong then the sanction would have been different, and he dwelled on the issue of lack of trust. Despite the submissions by the Applicant that there is no longer a trust relationship, this Court must take into account that Mr Madisha asked for reinstatement which is the primary remedy as per the provision of section 193(2)(b). This Court agree with the Applicant that the Arbitrator did not fully understand the inquiry before him relating to sanction, so this Court has to decide an appropriate sanction.

[18] The aforementioned mitigating factors outweigh the aggravating circumstances herein, and this Court could not find the reasons advanced by the Applicant to deal with intolerability, also considering that Mr Cancer was not disciplined despite being one of the people that violated the same rule. Furthermore, Mr Madisha did not have any previous disciplinary record which works in his favour. Consequently, it is concluded that dismissal was not an appropriate sanction. Instead, progressive discipline would be a suitable one.

[19] Now dealing with retrospective reinstatement, as ordered by the Arbitrator, this means a person is entitled to all the benefits and conditions applicable at the time of dismissal. Considering paragraph 30 and 31 of the Award the Arbitrator seemed to not fully understand the inquiry before him as he is not allowed to order both retrospective reinstatement and compensation in terms of section 193(1)(c) of the LRA as they are mutually exclusive remedies. This Court is permitted to correct this error in the interest of justice.[12]

[20] It is the duty of this Court to correct this error by the Arbitrator, as the Arbitrator exceeded his powers in ordering both retrospective reinstatement and compensation. This Court also considers that since Mr Madisha was been found guilty of the offences, there must be consequences thereof.

[21] In the premises, the following order is made:

Order

1. Orders 30 and 31 of the arbitration award are set aside and substituted thus:

“1.1. The Applicant is ordered to reinstate Mr Letjage Solomon Madisha from 01 December 2020.

1.2. The Applicant is to issue Mr Letjage Solomon Madisha with a final written warning valid for a period of 6 months.

2. There is no order as to costs.

Sandile Mabaso

Acting Judge of the Labour Court of South Africa

Appearances:

For the Applicant: Mr

Clifford Levin

Instructed by: Clifford

Levin Incorporated

For the Third Respondent: Adv Sebai Mahontola

Instructed by: Machete

Attorneys

[1] See: para 30 of the award.

[2] See: para 31 of the award.

[3] No. 66 of 1995, as amended.

[4] See: Transcript at p. 31.

[5] House of Flowers and others v Radebe and others 4 BLLR 366 (LAC) at para 16).

[6] Sidumo and Another v Rustenburg Platinum Mines Ltd and others [ 2007] 12 BLLR 1097 (CC) at paras 75 and 78. Cf. SARS v CCMA and Others 2017 (2) BCLR 241 (CC) at para 44-5.

[7] See: para 27 of the arbitration award.

[8] See Item 3(3) of the Code.

[9] 2022 (2) BCLR 265 (CC) at para 40.

[10] [2015] 1 BLLR 1 (LAC)

[11] See: Transcript at p 26, lines 4 -13.

[12] SA Teachers Union obo Kruger v Gauteng Department of Education and Others Case Number JA73/2019, at paras 14 - 21, delivered on 11 December 2020.