Sekwati v CCMA and Others (JR2032/15) [2017] ZALCJHB 226 (19 April 2017)

IN THE LABOUR COURT OF SOUTH AFRICA

HELD AT JOHANNESBURG

CASE NO: JR2032/15

DATE: 2017-04-19

In the matter between

JOHN RAMOTLAU SEKWATI Applicant

and

CCMA First

Respondent

DUMISANI NGWENYA Second

Respondent

EDCON LTD Third

Respondent

JUDGMENT

STEENKAMP, J:

This[1] is an application by the applicant, Mr John Ramotlau Sekwati, to have an arbitration award by Commissioner Dumisani Ngwenya, a panellist of the CCMA, reviewed and set aside. It arises from the dismissal of the employee by his employer, Edcon Ltd, the third respondent.

The employee was a store manager of Edcon’s Jet Mart Germiston store. The company had implemented a strategy commonly known as an “SOP” (an abbreviation for “Stock Optimisation Procedure”). The employee went on sick leave from 22 November 2014 and returned on 2 December. There is a dispute whether he was then granted further compassionate leave after that; I will return to that aspect, as it forms part of the grounds for review.

On 12 December Mr Mike Weston conducted an audit of the store and found it wanting. That was preceded by the employee having been given a verbal reprimand on 10 December. The employee did not challenge that reprimand in the CCMA by way of an unfair labour practice referral or, indeed, in terms of any internal process. On 13 December (a Saturday) Mr Mabena also visited the store and similarly found that the SOP had not been complied with. On 17 December Ms Karien Kruger again visited the store and found that it was still in disarray despite the employee having been reprimanded a week earlier (on 10 December) and despite the follow-up visits. On 18 December Mr Weston (who is the Senior Optimisation Manager) saw fit to send in a task team to turn the store around. Although the employee complained that he was excluded from that process, it appears from Ms Kruger’s testimony that she walked the floor with him on at least two occasions (on 17 and 30 December) and also that the task team had communicated with the employee’s line manager, who would then have been in touch with him. The task team was in place from 18 to 22 December. Another eight days after that, on 30 December, Ms Kruger again visited the store. She described what she found comprehensively at the arbitration but it was perhaps summed up by these words:

“So on the 17th December myself [sic] visited the store with chain visual and we found that the store is in a bad state. I also found missed mark-ups on girls wear, after actually verifying with Ismail, who is the ROM, submit price adjustments were all up to date, according to him.

He even confirmed to me that he actually walked the store with the EDA scanner himself, doing spot checks…”

And, in summary, she then stated that one of the primary campaigns that had to be implemented at that stage, namely the “Back to-School”

campaign, had not been put in place. It is against that background that disciplinary proceedings were instituted against the employee and he was dismissed for gross dereliction of duty.

The arbitrator found that the dismissal was substantively fair but procedurally unfair. The procedural unfairness stemmed from the fact that at the internal disciplinary hearing, after the chairperson had found that the employee had committed the misconduct, she did not give him an opportunity to present evidence in mitigation. The arbitrator took that into account, finding that there was procedural unfairness, but then stated:

“In determining whether to order compensation, I have considered the fact that the applicant [the employee] has committed serious misconduct, and the egregious nature of his misconduct militates against any monitory order, as it would mean that [he] would profit from his deplorable conduct; I thus make no compensation order in respect of the procedural flaw.”

On review the employee takes issue with that compensation order, or rather the lack of compensation, given the procedural unfairness, as well as a number of grounds of review on the merits. The heads of argument were prepared by the employee’s erstwhile attorney, Mr Mkhize. When the matter was called today, Mr Geldenhuys appeared for the employee.

To his credit, he abandoned two of the grounds of review: The one was that the employee, through his then attorney, complained of double jeopardy – that arises from the fact that he was reprimanded on 10 December and then disciplined subsequently. Mr Geldenhuys, quite correctly, abandoned that ground as it is clear that the reprimand related to the period before 10 December and the

further discipline to the period subsequent to that.

The second issue raised initially was that it was not shown that Edcon had suffered any loss – that was also abandoned by

Mr Geldenhuys.

The third issue was that the employee’s then attorney argued that if his so-called “dereliction of duty” were to be addressed at all, it was a matter of poor performance and not of misconduct – Mr Geldenhuys also did not pursue that grant of appeal.

What was left was the issue on compensation for procedural unfairness, and then the finding of the arbitrator that the employee did make himself guilty of gross dereliction of duties. His main attack on that finding stems from the period of sick leave. Arising from that, Mr Geldenhuys argued that the arbitrator did not properly apply his mind to the evidence before him, did not weigh up the probabilities and did not come to a balanced conclusion.

As far as the sick leave is concerned, it is common cause that the employee did go on sick leave from 21 November until 2 December.

What is disputed is what happens after that. He says that his line manager verbally granted him further compassionate leave from 3 until 10 December. Arising from that, he argues that he was not responsible for the state of the store when he returned on 10 December and when Mr Weston visited the store on 12 December.

There are two answers to that attack: The first is that the arbitrator did weigh up the probabilities. He had regard to the leave records and noted that there was no record at all of the employee having been given leave subsequent to 3 December. His version that he was given further leave verbally by his line manager was also not put to the company’s witnesses and the employee failed to call the line manager to corroborate that version. On the probabilities the arbitrator’s finding is not so unreasonable that no other arbitrator could have come to the same conclusion.

But in any event, as Ms Leyden pointed out, it is a bit of a red herring. The employee was reprimanded on 10 December – the events after that date led to his dismissal, and not the events before that, even during the time when he says he was on compassionate leave; that grant of review must therefore fail.

I will return to the issue of compensation, having dealt with the substance. On the substance, once again, the arbitrator weighed up the probabilities, he weighed up the evidence before him and he came to the conclusion that the employee was guilty of a gross dereliction of his duties. That conclusion, given the evidence before the arbitrator – and now before this Court -- is not so unreasonable that no other arbitrator could have come to the same conclusion. It must be seen against the background of at least two visits to the store by Mr Watson, two visits by Ms Kruger and one by Mr Mabena. The employee had more than sufficient opportunity to turn the store around. He did not do so, thus necessitating the implementation of a task team, and even then, after the task team had left, he did not implement the necessary protocols for the “Back to School” campaign.

The test on review is by now trite; it is, as I have said, the one set out in Sidumo v Rustenburg Platinum Mines [2007] 12 BLLR 1097 (CC), as expanded upon by the SCA in Herholdt v Nedbank (2013) 34 ILJ 2795 (SCA). In that case the court held at paragraph 25:

“For a defect in the conduct of the proceedings to amount to a gross irregularity, as contemplated by section 145(2)(a)(ii), the arbitrator must have misconceived the nature of the inquiry or arrived at an unreasonable result. A result will only be unreasonable if it is one that a reasonable arbitrator could not reach on all the material that was before the arbitrator. Material errors of fact, as well as the weight and relevance to be attached to particular facts, are not in and of themselves sufficient for an award to be set aside, but they are only of any consequence if their effect is to render the outcome unreasonable.”

In this case the arbitrator carefully considered the evidence before him, he considered the probabilities and he came to a conclusion that another arbitrator could reach. The award is not reviewable on the substance of that finding.

That leaves the question of compensation, having found that the employer did act procedurally unfairly. As both Ms Leyden and Mr Geldenhuys accepted, the arbitrator has a discretion to grant compensation for procedural unfairness, which is in the nature of a solatium. Ms Leyden referred in this regard to the judgment of the Constitutional Court in Equity Aviation Services (Pty) Ltd v CCMA 2009 (1) SA 390 (CC), where that court emphasised the discretionary nature of compensation under sections 193 and 194 of the LRA.

As was explained by this court recently in Solidarity obo Eminis v Sirius Risk Management (Pty) Ltd on 20 August 2015, this discretion operates at two levels; first, the court has a discretion whether or not to award any compensation pursuant to a finding of procedural fairness; and, secondly, once the court has elected to award compensation, the compensation must be just and equitable.

The first point of enquiry therefore is whether the court, or the arbitrator in this case, should grant compensation at all. The arbitrator decided not to, given the gross nature of the misconduct – that is a discretionary remedy and a discretionary decision.

It is not unprecedented, for example, in Kemp t/a Centralmed v Rawlins (2009) 30 ILJ 2677 (LAC), where the Labour Appeal Court decided to refuse compensation notwithstanding that the dismissal in that case was held to be unfair. In this case the arbitrator properly applied his mind to the question whether or not he should award compensation. This Court or another arbitrator may have decided otherwise, but the court will not likely interfere with a discretionary remedy, especially on review, as opposed to appeal. In exercising his discretion, the arbitrator did not act so unreasonably that no other arbitrator could have exercised his or her discretion in the same way. That ground of review must also fail.

With regard to costs, both parties asked that costs should follow the result. I see no reason in law or fairness to differ.

ORDER

The application for review is dismissed with costs.

__________________________

STEENKAMP J

APPEARANCES

APPLICANT: C J Geldenhuys (attorney).

THIRD RESPONDENT: Ms S Leyden of Shepstone & Wylie.

___________________________

JUDGE OF THE HIGH COURT

[1] Please note: This is the transcript of an ex tempore judgment handed down on 22 April 2017. The transcript was only sent to me for editing and signature on 30 May 2017.