Sithole v Commission For Conciliation, Mediation and Arbitration and Others (JR1527/22) [2024] ZALCJHB 376 (20 September 2024)

THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Reportable

Case No: JR 1527/22

In the matter between:

SITHOLE, SAM SOLOMON First Applicant and THE COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION First Respondent COMMISSIONER I M SWAFO N.O. Second Respondent DIS-CHEM PHARMACIES (LTD) Third Respondent

Hearing: 20 August 2024

Delivered: 20 September 2024

This order was handed down electronically by circulation to the parties’ legal representatives by email. The date for hand-down is deemed to be 20 September 2024.

JUDGMENT

BECKENSTRATER, AJ

[1] The Applicant seeks in this matter to review and set aside the arbitration award of the Second Respondent (the Commissioner) acting under the auspices of the First Respondent (the CCMA). The Commissioner had been appointed by the CCMA to preside over the arbitration between the Applicant and Third Respondent pertaining to the Applicant’s claim of unfair dismissal. The Commissioner had upheld that dismissal as fair. The Applicant’s review centres around his contention that the Commissioner had improperly admitted hearsay evidence during the arbitration and that in consequence, the award should be reviewed and set aside.

[2] The Applicant had been employed by the Third Respondent as a Regional Security Manager in October 2008. In January 2022, the Third Respondent received a complaint from Ms Molina Zungu (Zungu). She was a member of the public, who when applying for maternity benefits from the Department of Employment and Labour, had been informed that according to their records, she was apparently employed by the Third Respondent. She had never been employed by the Third Respondent and thus reported what appeared to be a case of identity theft to the Third Respondent.

[3] Godfrey Modiba (Modiba), a Loss Prevent Officer, employed by the Third Respondent then investigated this situation. He gathered the Third Respondent’s documentation pertaining to the ostensible employment of Zungu and interviewed Tendani Hlabane (Hlabane), a Clerk of the Third Respondent who had countersigned the employment forms relating to the hiring of Zungu. He also interviewed the person who had ostensibly been hired as Zungu. He established that the person employed was actually Thandaza Baloyi (Baloyi) and not Molina Zungu. Shortly after those interviews, both Hlabane and Baloyi “ran away” from the Third Respondent.

[4] The documentation reflected that the Applicant had been the Manager who had authorised the employment and signed off the checklist of documents relevant to the employment of Baloyi (the ostensible Zungu). While that document reflected that a clear copy of the ID as well as proof of the employee’s bank account were attached, this was not correct. The copy of the identity document on file was not clear and the employee had not provided a copy of any bank account when being accepted for employment. Rather, after she had commenced employment, an affidavit requesting her salary be paid into the bank account of her brother, Prince Sithole

had been provided. Hlabane had signed that same checklist document on one page in a capacity as a Branch Manager when in fact she was a Clerk. It is also worth noting that the employee’s provident fund beneficiary nomination form also nominated Prince Sithole as the beneficiary but stated that his relationship with the employee was that of a nephew.

[5] Modiba further interviewed Mzwandile Mkhize (Mkhize), a Security Admin Manager at the Third Respondent. Mkhize had been the official who had loaded Zungu’s details onto the Third Respondent’s system after the employment. At the time, he had noted that there were no banking details and requested Hlabane to take this up with the Applicant. A few days later, the documents were returned to him for capturing together with the affidavit relating to Prince Sithole. He had then loaded the information.

[6] Modiba then ascertained from the Site Supervisors that when Baloyi had started working, she had not attended any induction but the Applicant had advised one of the Supervisors (Dlamini) that she would be posted directly to a site.

[7] At that stage, Modiba appears to have investigated other rumours of identity theft and drawn the employment files relating to another employee, Siphiwosethu Ngubane (Ngubane). That documentation established that in 2012, the Applicant had been involved in the final approval of the employment of Ngubane. He had also been the person to request the Third Respondent’s standard pre-screening verification, a so-called Managed Integrity Evaluation or MIE report. The report on file was however an incomplete one stating it was “provisional.” Not all of the information usually available from an MIE report was on the provisional form. The significance of this is that Ngubane had in fact passed away on 28 October 2009. Modiba had discovered this by obtaining a full MIE report. According to affidavits in Ngubane’s file, he had requested that his provident fund benefits be paid into the bank account of one Busisiwe Mthethwa.

[8] When the ostensible Ngubane resigned from the Third Respondent, the Applicant had signed his provident fund withdrawal forms on behalf of the Third Respondent. According to the Third Respondent’s authority document, the Applicant was not authorized to sign such forms at that time.

[9] After this investigation, the Applicant was charged with misconduct, the primary charge being an allegation of gross dishonesty in that “in February 2019 and May 2012, you wilfully employed a person under false credentials and/or ID. This led to a financial loss to the company and brought the company’s name into disrepute”. Pursuant to a Disciplinary Enquiry, the Applicant was dismissed and then referred a dispute in relation to his unfair dismissal to the CCMA.

[10] At the CCMA arbitration, the Applicant wished to be legally represented. After hearing argument on the issue, the Commissioner allowed legal representation. The parties exchanged a bundle of documents before the arbitration commenced. While no agreement as to the status of the documents was recorded, there was no objection to the content of the bundles exchanged. At the outset, it was agreed that procedural fairness was not in dispute but substantive fairness was disputed. The Commissioner recorded that as legal representation had been allowed, he would adopt an adversarial approach to the hearing.

[11] The Third Respondent’s first witness was Modiba who set out the Third Respondent’s case as outlined above. Included in the Applicant’s bundle were the employee recruitment/payment documents mentioned above to which he referred.

[12] Also included in the bundle was an affidavit of Hlabane in which she had stated that at the time Baloyi/ the ostensible Molina Zungu was hired, Mkhize had noted that documents were missing from the file and on his instructions, she had brought this to the Applicant’s attention who had called the ostensible Zungu to bring the documents as soon as possible. At the time that affidavit was first referred to, the Commissioner asked whether Hlabane would be testifying. Modiba confirmed that she had run away and would not be testifying. There was however no objection to the affidavit being referred to and the Commissioner told the Third Respondent’s representative to proceed.

[13] In his evidence, Modiba confirmed that this is what Hlabane had told him. When he was cross-examined, the contention that Sithole had contacted the ostensible Zungu for banking details after initially having signed off the employment checklist was not challenged. The Applicant’s version was that he processed numerous such applications and it was not unusual for an employee’s banking details to be provided at a later stage even though the checklist required that information to be provided before employment was confirmed. At that time (2019), the Third Respondent had allowed salary payments to be made into third party’s bank accounts.

[14] In relation to the Ngubane issue, the Applicant’s version was that the documentation had been brought to him for approval. He did not dispute that the provisional MIE report was obtained by him but did not accept that in 2012 the final report would have reflected more detail than the provisional report as the format of the reports changed from time to time. He disputed that he had not been authorised to sign the provident withdrawal forms around 2021 notwithstanding the authorisation document not listing his name.

[15] Mkhize testified that in relation to the employment of Zungu, he had requested Hlabane to ask the Applicant to get the documentation completed. He understood that the Applicant had attended to this because the file had later been returned to him for capturing together with the affidavit authorising the use of Prince Sithole’s bank account. He further testified in relation to the

Third Respondent’s authorisation documents that in 2021 the Applicant had not been authorised to sign off provident fund

withdrawal forms.

[16] Mohlaole testified as a Site Supervisor that he was not involved in the recruitment of Zungu. Another Supervisor Dlamini testified that it was the Applicant who had advised him that Zungu was being placed directly on the site and he had to take an existing employee off that site to accommodate her placement. She did not go to any induction training before then.

[17] The Applicant testified in relation to the Zungu issue that he signed off many such employment checklists and it was not unusual for banking account details to be provided at a later time. He denied any intentional involvement in an unlawful appointment pointing out that Hlabane had run away which indicated that she had been involved in such activities. He admitted that the request for payment into Prince Sithole’s bank account had not been present at the time he had signed the checklist and that he had seen that affidavit a few days later when it had been provided. He testified he had no knowledge of nor was related to Prince Sithole.

[18] In relation to Ngubane, he testified that he had never been told he was no longer allowed to sign provident fund claim forms when the new authority document had been sent out. He did not deny receipt of that document but pointed to the email on file that he wanted to discuss it. He alleged that one Vincent had subsequently told him he had not been removed as an authorised signatory. That version had however never been put to any of the Third Respondent’s witnesses.

[19] At the close of the arbitration, the Commissioner noted that he had expected the Applicant to have raised and argued issues about hearsay evidence. This appears to have been in relation to the affidavit of Hlabane. He invited argument on the issue in the parties’ closing submissions.

[20] In his award, the Commissioner succinctly summarised the various parties’ evidence and then found the following:

’38. It is common cause that the Applicant approved the appointment of Ms Thandaza Baloyi who pretended to be Ms Zungu. It is also common cause that he approved her appointment on 18 February 2019 and subsequently requested her to submit an affidavit for the nomination of a third party for payment of her salary that Ms Baloyi submitted on 19 February 2019.

39. The Applicant testified that he was only involved in the approval of appointments without interacting with successful appointees and yet found the time to contact Ms Baloyi who purported to be Ms Zungu.

40. Messrs Modiba, Mkhize, Dlamini and Mohlaole appeared to be credible witnesses, as there were no contradictions with their testimonies. The essence of their testimonies is that the Applicant probably played a central role in cahoots with Ms Hlabane for the appointment of Ms Baloyi. Ms Hlabane signed the appointment documents claiming to be a Branch Manager while she was not. The fact that the Applicant approved the appointment of Ms Baloyi under the pretext that Ms Hlabane was a Branch Manager exposes of the extent of his dishonesty.

41. The Applicant’s contention that he was authorised to sign the benefit claim form was not substantiated by evidence in contrast to Mr Mkhize’s evidence in page 68 that details a list of authorised signatories to sign beneficiary forms.

42. What is of interest in both allegations against the Applicant is that a Prince Sithole was nominated as a third party by Ms Baloyi in whose bank account her salary was paid also appears as a beneficiary in the form that the Applicant signed for the release of pension funds.’

[21] The Applicant’s review application was based on the assertion that the Commissioner had improperly taken into account hearsay evidence when dealing with the matter. He placed particular reliance upon the judgment of the Labour Appeal Court in Exxaro Coal (Pty) Ltd & another v Chipana & others[1] (the Exxaro case).

[22] In particular, the Applicant stressed paragraph 24 of the Exxaro case that Section 3 of the Law of Evidence Amendment Act[2] serves as an invaluable guide to Commissioners and that given the similarities between CCMA arbitrations and civil proceedings, the Court noted the following guidelines pertaining to the admission of hearsay evidence:

‘Adapted they would include the following: (1) Section 3(1)(c) of the LEAA is not a licence 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/she or it 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 the 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 parties is paramount.’

[23] The Applicant emphasized the Commissioner’s failure to have dealt with the issue of the admission of hearsay evidence at an earlier stage of the proceedings. His counsel, Mr Mpofu, who had also represented the Applicant at the CCMA, argued this was an obligation of the Commissioner, notwithstanding that the parties were legally represented, that the arbitrator recorded he would be adopting an adversarial approach to the hearing and the lack of objection to the hearsay evidence. In argument, I enquired from Mr Mpofu what hearsay evidence had been irregularly taken into account. He identified the statements and affidavit of Hlabane as alluded to in paragraph 39 of the award and also the finding made by the Commissioner in paragraph 42 of the award.

[24] The second issue, relating to paragraph 42 of the award, does not relate to complaints about hearsay evidence. This argument does not appear to have been foreshadowed in the Applicant’s affidavits or heads of argument. Notwithstanding this, I give consideration to this issue below. The problem with paragraph 42 of the award is that the banking details of Prince Sithole were only used in relation to Zungu, not in relation to Ngubane, where the banking details of Mthethwa had been used. The Applicant contended that this constituted a clear error in the Commissioner’s reasoning. Mr Itzkin on behalf of the Third Respondent, interpreted the paragraph as relating to the nomination of a beneficiary for both the salary and pension fund benefits by Ms Baloyi (the ostensible Zungu). The language of paragraph 42 does not support this. The Commissioner appears to have been confused in this regard because the Applicant had never signed the pension fund release forms for Zungu. To this extent, the Commissioner did appear to make an error. I will take this into account below.

[25] The Applicant’s argument in relation to the admission of hearsay evidence is that because there was no direct evidence that Hlabane had spoken to the Applicant about obtaining banking details for Baloyi or of someone witnessing him do so, the Commissioner should not have found that the Applicant had taken the time to contact her. It is not at all evident to me that the Commissioner did take into account the affidavit of Hlabane. He does not record that he took it into account. What he did take into account was that the Applicant had taken the time to speak to Baloyi to obtain the relevant affidavit. This to my mind would have been a

legitimate inference he was entitled to draw from Mkhize’s statement that he had sent Hlabane to the Applicant to have him

obtain such a document, Mkhize’s undisputed statement that he had understood this to have happened, the document having been

subsequently obtained and in the process, at least, seen by the Applicant. In the circumstances, it is not clear the Commissioner did take into account hearsay evidence in making this finding. For the purposes of this judgment, I however accept that hearsay evidence of Hlabane was taken into account.

[26] Also, considering all the factors set out in Section 3 of the LEAA, it is not clear to me that the affidavit of Hlabane or the allegations of what she told Modiba and Mkhize should have been excluded as inadmissible hearsay evidence. She had separately advised both Modiba and Mkhize of the relevant allegations, and had provided an affidavit confirming those allegations but then had subsequently run away and thus not been contactable. The Applicant had never directly disputed that he had contacted the ostensible Zungu at the time but had confirmed that he was aware of the subsequent affidavit requesting payment into Prince Sithole’s account. The evidence is also not crucial to the determination of the matter but only relevant to one aspect. I do not however make any findings in this regard. In light of the Exxaro case, it appears inappropriate to make such rulings on hearsay evidence on review if they weren’t made timeously during the

arbitration[3].

[27] Mr Itzkin argued on behalf of the Third Respondent that the incorrect admission or rejection of hearsay evidence was not in itself a silver bullet that meant every award that may incorrectly have dealt with such an issue needed to be set aside. He argued that the proper test was to consider the totality of the evidence before the Commissioner and whether the handling of hearsay evidence had a distorting effect on the outcome of the award.

[28] I agree with Mr Itzkin that even if the Commissioner commits an error in the assessment of evidence, the subsequent award will only be set aside if that error has a distorting effect on the outcome of the award or, in other words, the resulting award can be said to be unreasonable in light of all the evidence properly before the Commissioner.[4]

[29] Consistently with the contention that the admission of hearsay evidence does not automatically require an award to be set aside, the Labour Appeal Court in the Exxaro case gave consideration to the evidence that had been excluded in that matter and found that it had prejudiced the employee and

employer resulting in the hearing not being fair. The Applicant also relied upon the decision of the Labour Court in Lyttelton Dolomite (Pty) Ltd v National Union of Mineworkers on behalf of Lekgau & others[5] which largely followed the reasoning of the Exxaro case. In the Lyttelton Dolomite case too, the Court analysed the Commissioner’s belated ruling on hearsay evidence and found that it had a direct impact on the fairness of that hearing and prejudiced the Applicant’s case.

[30] Both the Lyttelton Dolomite case and the Exxaro case emphasize the importance of rulings in relation to hearsay evidence being timeously made even where there had been no objection

to the introduction of hearsay evidence during the course of those hearings. Contextually, it is however important to note that in both those cases the evidence that was eventually ruled by the arbitrator to be inadmissible was canvassed during the arbitrations and then disallowed at the end of the arbitration, to the detriment of the party that had intended to rely on it. In the present matter, the complaint is the opposite – evidence that was led at the arbitration was, according to the Applicant, improperly allowed. In other words, this is not a case where hearsay evidence the Applicant intended to rely on was belatedly rejected, but rather where evidence led that the Applicant did not want admitted but to which he had not objected was taken into account. The prejudice to the Applicant in those circumstances is different and the outcome of those two cases must be seen in that context. This is just to emphasize that the setting aside of an award does not immediately follow from a finding that hearsay evidence was not properly dealt with at the CCMA.

[31] In order to consider whether this issue affected to outcome, I will give consideration to the totality of the evidence led excluding any information obtained from Hlabane’s interviews or affidavit. This is the evidence that she had relayed to the Applicant Mkhize’s request to have the banking detail documents obtained and that the Applicant had phoned Baloyi to obtain it.

[32] If I discount that information in its totality and also discount the Commissioner’s mistake in paragraph 42 of the award, and thus accept that Prince Sithole’s bank account was only used in the Zungu issue, not in the Ngubane issue, I still cannot find the Commissioner’s conclusion unreasonable.

[33] In relation to Zungu: The material issue is to what extent the Applicant had been involved in the appointment. The Applicant had been involved in processing the employment and by more than simply signing the final employment checklist as he had advanced. He was aware that the banking account details were obtained at a later time and had instructed her placement directly at the site, without an induction. The employment form as approved by him was, in several respects, inaccurate and the accompanying documents dubious. The person appointed was not Molina Zungu. As Mr Itzkin argued, there was consequently, an evidentiary burden on the Applicant to explain how this could have occurred[6]. The Applicant’s version was simply that he processed many such documents and couldn’t therefore be responsible. That

explanation ignored that his involvement in the matter was more than simply signing off the employment enrolment form.

[34] In relation to Ngubane: the Applicant had signed off the employee enrolment form in terms of which the Third Respondent hired somebody who had been deceased for a number of years. The MIE report on file as part of the pre-employment verification was requested by the Applicant and self-evidently incomplete. The Applicant had signed off the provident fund withdrawal form in circumstances where he was not authorized to do so in terms of the Third Respondent’s list of authorized officials. His belated explanation that in discussion with one “Vincent” he had been told that his authority had not been removed cannot be accepted when it was not put to the Third Respondent’s

witnesses and is inconsistent with the documentation. Again, the Applicant’s contentions do not disturb the prima facie case against him.

[35] To my mind, the Commissioner’s finding that the Applicant was involved in both of these illegal recruitments was in the circumstances reasonable.

[36] In the above circumstances, the award cannot be reviewed.

[37] While the Third Respondent did seek costs because of what it contended was the Applicant’s demonstrable involvement in potentially criminal activities, it will be noted that the award has been upheld, not because I have found the Commissioner’s outcome to be correct, but because that outcome was reasonable. In those circumstances, I believe the normal rule relating to costs in labour matters should apply.

[38] In the circumstances, I make the following Order:

Order

1. The application is dismissed.

2. There is no order as to costs.

C. Beckenstrater

Acting Judge of the Labour Court of South Africa

Appearances

For the Applicant: Advocate Themba Mpofu For the Respondent: Instructed by: Advocate Riaz Itzkin Cliffe Dekker Hofmeyr Inc.

[1] (2019) 40 ILJ 2485 (LAC); [2019] 10 BLLR 991 (LAC).

[2] Act 45 of 1998 (LEAA).

[3] See para 33 of the Exxaro case.

[4] Head of the Department of Education v Mofokeng and others [2015] 1 BLLR 50 (LAC); (2015) 36 ILJ 2802 (LAC); Herholdt v Nedbank Ltd (Congress of South African Trade Unions as amicus curiae) [2013] 11 BLLR 1074 (SCA); (2013) 34 ILJ 2795 (LAC).

[5] (2020) 41 ILJ 2871 (LC) (the Lyttleton Dolomite case).

[6] Mzeku & others v Volkswagen SA (Pty) Ltd & others [2001] 8 BLLR 857 (LAC) at para [17]; Woolworths (Pty) Ltd v CCMA & others [2011] 10 BLLR 963 (LAC) at para [34].