CCMAiL – March 2004 CASE ALERTS Lucky Moloi GA40222-02 MWU Solidarity v NAMPAK Glass (Pty) Ltd – Commissioner: Loveday Internet abuse – Contravention of company’s Internet policy The applicant was dismissed for contravening the company’s Internet policy. The applicant challenged the dismissal as being unfair by referring the matter to the CCMA. The respondent had alleged that the applicant had used a company computer to access pornographic material on the Internet. It stated that that was a serious breach of a company policy that automatically led to a dismissal of the culprits for a first offence. The applicant admitted that he was guilty of accessing pornographic material. He stated that he had tried to delete the material but it kept on reappearing. He further stated that he had expected to be given a written warning or a final warning as the company had not warned employees that abusing the Internet would lead to a dismissal. Noted: The respondent company had failed to take adequate steps to alert all employees about its Internet policy and the likely sanction of a dismissal for a first breach. Held: The dismissal of the applicant was found to have been substantively unfair and the applicant was entitled to compensation. There was no order as to costs. GA112179 Patrick Allen v Furnex Stores (Pty) Ltd – Commissioner: Murugan Unfair dismissal – Fraud and theft of cheques The applicant, a managing director and chief executive officer, was dismissed following a disciplinary hearing on charges of theft and fraud. The applicant testified that there was no fraud committed, the cheque which was computer generated was valid and had authentication. The applicant denied any misconduct on his part. Noted: The evidence of the applicant was the only version presented to the commissioner because the respondent had failed to present its version of events. Further noted: The applicant had testified openly and gave a plausible account of events. Therefore, the commissioner had no reason to disbelieve him. Held: The dismissal of the applicant was found to have been unfair and the respondent was ordered to compensate the applicant with a twelve months’ salary. Further held: The respondent was ordered to pay costs. GA901-03 Patrick L Leboho v South African Revenue Services – Commissioner: Murugan Unfair dismissal – Fraud and bribery The applicant was charged with misconduct in terms of s 22 of the Public Service Act, 1994. He was reported to the SAPS by a passenger for intimidating him as a means to forcing a bribe from him. The respondent alleged that the dismissal was for a fair reason whilst the union argued (on behalf of the applicant) that the dismissal was unfair. The union stated that the respondent’s evidence was hearsay. The union further argued that the identification of the applicant through photographs as being the one liable for the misconduct was flawed. Noted: The commissioner was satisfied that there was a proper identification of the applicant both through photographs and direct identification at the disciplinary enquiry. Further noted: The applicant had not placed any evidence before the commissioner that would prove that the file of photographs and the identification were tampered with so as to influence the complainant in identifying the applicant. Also noted: On the question of hearsay evidence, it was conceded by the respondent that, much of its evidence was, in fact, hearsay evidence, and, under normal circumstances it would not be admissible. However, the commissioner agreed with s 3 of the Evidence Act, which makes provision in circumstances whereby hearsay evidence can be admissible. The commissioner, therefore, found that that was an exceptional circumstance since it was not possible for the respondent to ensure the presence of the complainant to testify in the matter, since the applicant was from China. Further noted: The commissioner, therefore, found that the evidence and the accompanying affidavit were acceptable and lawful. Held: The commissioner found the dismissal of the applicant to be fair and dismissed the application. There was no order as to costs. WE12460-03 NUDAW obo 6 Employees v Debonair’s Bellville – Commissioner: Staden Benefits – Food allowance – An entitlement or employer’s good gesture. The commissioner had to decide whether the CCMA had jurisdiction to hear the matter that had been referred as an unfair labour practice pertaining to the provision of benefits. The commissioner also had to determine whether that allowance had amounted to a benefit. The respondent had acquired a new owner with effect from February 2002. It was common cause that the former owner gave the employees a food allowance of some R600 per month. When the new owner took over, the allowance was reduced to R300 per month and later it ceased paying that allowance. The applicant contended that such a conduct was unfair because the new owner did not consult with them. As redress, the applicant sought an order wherein the respondent should be ordered to restore the allowance. The respondent’s case was that the dispute was one of mutual interest. It stated that such an allowance was not something that the staff was entitled to as a result of their employment contract or emanated from a collective agreement. Noted: In Eskom v Marshall & Others [2003] 1 BLLR 12 (LC), the Court held that employees cannot obtain benefits via an unfair labour practice claim to which they are not entitled ex contractu or ex lege. Further noted: The applicant had failed to prove that the supply of food was a benefit as envisaged by the LRA. The supply of food was a gesture of the previous owner that was continued by the new owner for some time. There was no evidence to suggest that the applicant had acquired a right to the supply of the food. Held: The Commission does not have jurisdiction to hear the matter. Case references Eskom v Marshall & others [2003] 1 BLLR 12 (LC) Hospersa &Another v Northern Cape Provincial Administration (2000) 21 ILJ 1066 (LAC) Lindsay v Ithala Development Finance Corporation Ltd (2002) 23 ILJ 408 (CCMA) Mhlongo & Others v Robertsons Ltd (2002) 23 ILJ 433 (CCMA) Labour Court and Labour Appeal Court Judgements By Sarah Modise Labour Court: D199/03 Coates SA (Pty) Ltd v CCMA and 2 Others: Judge Pillay Review of CCMA award -Unavailability of records The employee was dismissed for the misappropriation of company property and insubordination. A dispute was referred to the CCMA and the commissioner held that the dismissal was unfair. The employer then applied to the Labour Court to review and set aside the commissioner’s award. Misappropriation Noted: There was no indication from the award why the commissioner had preferred the version provided by the employee to that provided by the employer. This was despite that the employer’s evidence was supported by two affidavits, which made out a strong case against the employee. Insubordination Noted: The commissioner found that the employee’s reasons for not co-operating with the investigators were justifiable as they assaulted him. Further noted: There were no records made available to the Court in order to allow the Court to make a proper assessment on the assault. Held: The Court held that it could not make a determination on the review, as there were no records available. The matter was referred back to the CCMA. The employee was, however, not allowed to call new witnesses. The employer was ordered to pay costs. Labour Court: P516/02 Eastern Cape Master Builders and Allied Industries Association and 1 Other v The Building Industry Bargaining Council and 2 Others: Judge Ndlovu Winding up of a bargaining council s59 (1)(b) The bargaining council constituted of the East Cape Master Builders and Allied Industries Association and the Electrical Contractors and Allied Industries Association together with the Amalgamated Union of Building Trade Workers of South Africa and the National Union of Mine Workers. The parties signed a collective agreement which expired in 2001.The applicant opposed extending the agreement and applied for the winding up of the bargaining council. The applicant submitted that the council needed to be wound up based on the following: The number of employees employed within the jurisdiction of the council had deteriorated, The subsidy received from the CCMA only covered closed conciliation and arbitration cases. This was not sufficient as the bargaining council had to finance the enforcement of defaulters, The council was unable to monitor compliance with the collective agreement as most of the staff had been retrenched, and The council had been operating at a loss, and therefore the parties should have formed an informal bargaining forum. The respondent association argued that the applicant did not make up a case for the winding up of the council because the applicant did not meet the requirements set down in s 59 of the Act .The respondent further argued that if the applicant was unhappy it should terminate its participation in the council. Noted: S 59 (1) of the Act stipulates that: “The Labour Court may order a council to be wound up if: a) The council has resolved to wind up its affairs and has applied to the Court for an order giving effect to that resolution; or b) The Registrar of the Labour Relations or any party to the council has applied to the Court and the Court is satisfied that the council is unable to continue to function for any reason that cannot be remedied.” Held: The applicant was not able to show that the Council was not functioning, but that it was not functioning efficiently. The application was dismissed and each party was ordered to pay their own costs. Case references: Adonis v Western Cape Education Department (1998) 19 ILJ 806 (LC) Ngqumba en ‘n Ander v Staatspresident en Andere 1988 (4) SA 224(A) Pearson v Magrep Investments (Pty) Ltd 1975 (1) SA 186 (D) Plascon-Evans Paints Ltd v Van Riebeck Paints (Pty) Ltd 1984(3) SA 623 (A) Public Servants Association and Another v Public Services Co-ordinating Bargaining Council (2001) 22 ILJ 1878(LC) Labour Court: J708/03 NUMSA and 24 Others v Greenfields Labour Hire cc and Another: Judge Kennedy Unfair retrenchment –S189A The applicant employees were informed of retrenchments through their union. Several meetings were held between the applicant union and the respondent. After deadlocking, the parties decided to refer the matter to the CCMA for facilitation. The facilitator held several meetings with the parties and at the second last meeting the parties agreed on the selection criteria and the procedure to be followed if a dispute arose. The last meeting was held in the absence of the facilitator and the parties agreed on the following: the names of the employees to be retrenched, severance pay, recall procedure, the type of assistance to be given by the company and the employees that were to be retained. The union, thereafter, wrote a letter to the respondent proposing the substitution of some of the employees to be retained. The union also submitted a list of nine employees who were prepared to take a voluntary retrenchment package. The respondent then replied that it needed to consider its position. It responded and accepted the request to retain a further four employees. It also gave a notice for retrenchment and stated that it would only be able to pay the statutory minimum severance pay. The union then declared a dispute and the parties agreed that the matter should be referred to arbitration. The union however, decided to refer the matter to the Labour Court after the respondent informed it that it would be paying the retrenched employees the following day. Noted: The union argued that the retrenchments were unfair because the respondent had failed to consult fully regarding the following: Selection procedure; The recalling of employees once there was work available; and Voluntary retrenchments. Held: Based on the evidence, the Court held that the consultation process was adequate and complied with the requirements of s 189. The application was dismissed and the applicant was ordered to pay the costs of the first respondent. Labour Court: D067/03 Roshni Lutchman v Pep Stores & Others: Judge Ntsebeza Application to set aside settlement agreement -condonation application The applicant was employed as a store manager and was dismissed for gross negligence. She referred an unfair dismissal dispute to the CCMA. The matter was resolved at conciliation and a settlement agreement was signed. The employee then later alleged that she was forced to sign the settlement agreement. Her attorneys then wrote a letter of complaint to the CCMA, requesting it to investigate the matter. The CCMA responded by stating the settlement agreement was signed with the consent of both parties. Point in limine Noted: The applicant ‘s attorney referred the matter to the Labour Court after eight months to have the settlement agreement and the certificate set aside. Citing Macyusuf v Northwest Communication Services (1999) 20 ILJ 1061 (IC) it argued that the application was not one that needed to be brought “in a reasonable time or within a prescribed time limit”. Held: The applicant could not show any connection between the argument and the authority relied upon as the Macyusuf case mainly dealt with the powers of the commissioner at conciliation proceedings. Further noted: The applicant also argued that she did not read the contents of the agreement nor was she informed of what was contained in the agreement. It was only after she was home that her son informed her of the contents. Held: The applicant’s version could not be relied upon, when considering what happened subsequently, that is, firstly, it took the applicant eight days to contact her attorney and complain about the agreement, secondly, the applicant’s son had not filed a confirmatory affidavit, nor was it clear whether he was of age, and thirdly it took eight months for the applicant’s attorney to refer the matter to the Court without a condonation application. Further held: The applicant could not prove that there was a mistake on her side when she signed the agreement. There was also no evidence to indicate that the commissioner was biased in the manner that he had presided over the conciliation hearing. The application was dismissed and the applicant was ordered to pay 25% towards the respondent’s costs Case references: CWIU and Another v Ryan and Others (2001) 4 BLLR 337 (LC) Fidelity Guards Holdings (Pty) Limited v Epstein NO and Others (2000) 21 ILJ 2382 (LAC) Macyusuf v Northwest Communication Services (1999) 20 ILJ 1061 (LC) Mavundla and Others v Vulpine Investment Limited t/a Keg and Thistle and Others (2000) 21 ILJ 2280 (LC) Pillay v Krishna 1946 AD 946 South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) Ltd 1977 (3) SA 534 (A) Decisions: Other Dispute Resolution Forums By Dorothy Khosa Supreme Court of Appeal: 13/2003 Denel (Pty) Ltd v Vorster: Judges Harms, Farlam, Nugent, Conradie & van Heerden Dismissal – Determine fairness of dismissal – Dismissal of employee in breach of terms of his contract of employment. The respondent was summarily dismissed in September 1996. He sought redress in the Industrial Court but the proceedings were abandoned before a conclusion could be reached. The respondent then sued the applicant in the Pretoria High Court for damages for breach of his employment contract and for damages for injuria. Before the commencement of the trial, the parties agreed that the merits of the claims should first be tried and that the quantum should be held over for a later decision. The trial judge made no formal ruling to that effect but the trial nevertheless proceeded in accordance with the agreement and ultimately the respondent’s claims were dismissed. On appeal, the trial court’s decision in relation to the first claim was reversed and its order substituted with an order declaring that the applicant “succeeded on the merits”. The appeal relating to the claim for damages for injuria was dismissed. The appeal was then confined to the claim for damages for breach of contract and it came before the Supreme Court with the special leave of this Court. Noted: That the procedure that had to be followed when disciplinary action was taken against an employee, and the identities of the persons who were authorised to take such disciplinary action, were circumscribed in the applicant’s disciplinary code. The terms of the disciplinary code were expressly incorporated in the conditions of employment of each employee with the result that they assumed contractual effect. Held: That it was not disputed that the applicant had proper substantive grounds for summarily terminating the respondent’s employment. The respondent’s complaint was confined to the process that was adopted. The procedure provided for in the disciplinary code was clearly a fair one. It would hardly be open to the applicant to suggest that it was not and the respondent was entitled to insist that the applicant abide by its contractual undertaking to apply it. Further held: That the applicant terminated the respondent’s employment in breach of the terms of his contract of employment. That is, the applicant did not follow the procedures set out in its disciplinary code of conduct when dismissing the respondent. The application was dismissed with costs. Case references Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A) at 532H-533A South African Mutual Aid Society v Cape Town Chamber of Commerce 1962 (1) SA 598 (A) 615D-E Fedlife Assurance Ltd v Wolfaardt 2002 (1) SA 49 (SCA) Trotman & Another v Edwick 1951 (1) SA 443 (A) 449B-C SA Eagle Versekeringsmaatskappy Bpk v Harford 1992 (2) SA 786 (A) 792B-E High Court, Cape Town: 1853/00 Grobler v Naspers Magazine Printers & Samuels: Judge Nel Sexual harassment – Employer liable for damages conducted by former employee to another employee. The applicant had been sexually harassed for several years by the second respondent. She had informally complained several times that he was harassing her but the first respondent failed to take action against him. After lodging a formal complaint, the second respondent was called to a disciplinary hearing. He was also accused of harassing other females. He was found guilty and subsequently dismissed. The applicant had been diagnosed with post-traumatic stress disorder as a result of the harassment and was found to be unable to work. The applicant sued the first respondent for failing to take action against the second respondent Noted: That the first respondent had appointed the second respondent as the applicant’s direct supervisor and that he (second respondent) abused his position of authority, which enabled him to create a hostile work environment. The second respondent’s behaviour was foreseeable. Held: That the first respondent was vicariously liable for the damages because: It had failed to protect the applicant from the harassment by the second respondent, an employee at the time, and It had failed to create an environment in which its employees’ right to dignity was preserved. The Judge ordered both respondents jointly and individually to pay the applicant the following amounts: R150 000. 00 for general damages, R23 128. 00 for medical expenses and R47 348. 00 for loss of income. The applicant was also awarded a provisional amount of R750 000. 00 for a loss of future earnings but the judge indicated that the amount would still need to be finalised. The first respondent was again ordered to pay the applicant’s legal costs, which were still to be determined. Public Health and Welfare Sector Bargaining Council, Bloemfontein: SHS 1288 Phadu & Others v Department of Health, Free State: Arbitrator Osler Dismissal – Substantive fairness – Misconduct – Theft – Employees selling employer’s goods for personal gain – Dismissal justified. The applicants referred an unfair dismissal dispute for arbitration after it remained unresolved at conciliation. They were dismissed after they were captured on video tape selling medical supplies belonging to the respondent for their own gain to an undercover agent posing as a “doctor”. The video was also recorded by agents of a security company that were employed by the respondent. One applicant denied having sold anything belonging to the respondent and the other claimed that he had sold the goods on the instructions of the agent. Both applicants claimed that they were unfairly treated when the employer conducted the “trapping” operation. Noted: That it was necessary to separate the case of the first applicant (Mr Phadu) from that of the other two. It was because it became apparent that the issue in dispute had been incorrectly stated with regard to the first applicant and that he denied any wrongdoing at all. Held: That the applicants were involved in a transaction they knew was unauthorised. The respondent had been plagued by stock loss, and had done everything in its power to detect the culprits. The applicants had not been tempted by the agents to sell the goods. Further held: That employers need not comply in every respect with the requirements of the Criminal Procedure Act 51 of 1997 before and while conducting a trapping exercise, in particular, authorisation need not be obtained from the office of the Director of Public Prosecutions. The trap had been properly authorised by a senior official of the respondent, otherwise, it complied in all respects with the requirements of the law. The evidence obtained by the trap was accordingly admissible. It disclosed a fair reason for the employees’ dismissal. The application was dismissed. There was no order as to costs. General Public Service Sectoral Bargaining Council, Johannesburg: PSGA 5062 Public Service Association of SA obo Jordaan v Gauteng Department of Transport & Public Works: Arbitrator Sirkhot Bargaining council – Jurisdiction – Council lacking jurisdiction to entertain dispute concerning refusal to appoint employee to externally advertised post. Unfair labour practice- Failure/refusal to appoint – Employer refusing to appoint recommended employee to externally advertised post not dispute about promotion. The applicant employee applied for an external advertised post and was recommended for appointment. His supervisor objected to the recommendations. The respondent informed the supervisor that “nothing would stand in the way” of the applicant’s promotion. However, the applicant was subsequently transferred to a post in another department on the same grade as his existing post. Noted: That, while the respondent’s selection panel did not have powers to appoint, the heads of department should have given reasons as to why they had declined to accept a recommendation. However, the case turned not to be on a disputed promotion but on a disputed failure to appointment. Held: That the applicant employee was a job applicant in these circumstances and s186 (2)(a) did not apply to him. If the applicant had a remedy, it was not to be found in the LRA. The respondent had not committed an unfair labour practice. The application was dismissed. Case references Department of Justice v CCMA [2001] 11 BLLR 1229 (LC) Public Servants Association v Northern Cape Provincial Administration [1997] 18 ILJ 1137 (CCMA) LABOUR WATCH DOUBLE JEOPARDY By Elaine Milton Workplace discipline has always been a minefield for employers, small and large alike. The issue of whether an employee may only be subjected to one hearing or whether an employer may follow a first hearing where a particular penalty was issued with a second hearing, is an interesting if rather complex one. According to Mischke (2004:1), employers sometimes follow a first hearing up with a second hearing in order, for example, to impose a different sanction on an employee where there is no agreement with the initial sanction which was imposed by the chairperson of the disciplinary hearing. A second hearing is also sometimes imposed if new information has come to light since the first hearing. The question is whether such an approach can ever be fair. Grogan (2003:179) states that if an employee has been acquitted at a disciplinary hearing or if the presiding officer has imposed a penalty less severe than dismissal, they cannot generally be subjected to a second enquiry in terms of the same offence. Grogan also indicates that management may not ignore the decision of the chairperson of a disciplinary hearing and substitute its own decision, particularly where such a decision is harsher than that imposed by the chairperson of the first properly constituted hearing. Where a disciplinary chairperson’s decision is substituted by management, particularly where such a decision involves the dismissal of an employee, it may very well be unfair as per the principles set out in Botha v Gengold Ltd (1996) 4 BLLR 441 (IC). CRIMINAL AND CIVIL LAW PRINCIPLES Mischke (2004:1) states that in criminal law an accused cannot be convicted of the same crime twice. Further, if someone was acquitted, he could generally not be prosecuted for the same offence on another occasion (the so-called autrefois acquit principle). Similarly, in civil matters, disputes are considered res iudicata once settled by a court of law. Mischke (2004:2) further indicates that similar principles can be applied to labour law cases particularly matters involving misconduct, even when such matters are still in internal disciplinary stages. Generally, when employees are found not guilty of misconduct such as theft, they cannot, based on the same charges, be disciplined again. Grogan (2003:180) qualifies the principles set out by Mischke by stating that the courts may condone deviations from the double jeopardy principle but that generally, the circumstances would have to be fairly extreme. The Labour Appeal Court in the Amalgamated Engineering Union of SA and Others v Carlton Paper of SA (Pty) Ltd (1988) 9 ILJ 588 (IC) case held, in connection with a second hearing, that “whether or not a second disciplinary hearing should be instituted against an employee would depend on all the circumstances and would only be fair if the circumstances involved dictated fairness”. The court further held that in labour law fairness alone, rather than legal principles such as autrefois acquit and res iudicata, was the most crucial principle. If fairness was used as a test and a second hearing was ultra vires an employer’s disciplinary code, that could be problematic to say the least. Further, it would be unfair to hold a second disciplinary hearing unless the circumstances were particularly severe or exceptional. According to the Carlton Paper case, in a case where an employer had acted in good faith and an employee had acted dishonestly or misled an employer throughout a hearing thereby resulting in an acquittal, a second hearing could well be in order. The types of circumstances a court would find severe or exceptional enough to justify a second hearing was one of the issues in BMW (SA) v Van der Walt (2000) 9 LAC 1.21.1 . Van der Walt was found guilty of misrepresentation as he had removed scrap metal belonging to the employer in order to sell it. At the first hearing, the sanction of a final written warning was imposed. However, it was later found that Van der Walt had intended to sell the metal for his own profit. The company charged him for a second time (with fraud) and he was found guilty and a sanction of dismissal was imposed. The Court was divided in its ruling on this matter. One of the judges held that “the double jeopardy principle was too important to sacrifice on the altar of general principles of fairness”. Two judges found that, in an employment situation, fairness to both parties was of paramount importance. In this matter, the company had discovered that the employee had committed a type of misconduct which was very different from the type with which he had initially been charged. The judges held that he deserved to be dismissed and could not benefit by criminal law rules (autrefois acquit) as different considerations applied. The BMW matter was considered a precedent setting matter for a long time. However, more recently, in Branford v Metrorail Services (Durban) & Others (2003) 12 LAC 1.11.42, the principles set out in the BMW case were questioned. An employee had been issued with a verbal warning for incorrect petty cash withdrawals (irregularities) by a line manager. He was subsequently dismissed pursuant to a disciplinary hearing for making fraudulent petty cash withdrawals. Prima facie, it appeared that the employer had charged the employee twice for the same misconduct. The arbitrator who had heard the matter decided that the manager’s act of issuing a warning was binding on the employer and that the employer was, therefore, precluded from holding another disciplinary hearing. The question that the court asked when adjudicating the case was whether fairness was the overriding test or whether a second disciplinary hearing could only be held in exceptional circumstances. The Court held that the principle of fairness applied to both the employer and the employee and that the arbitrator had erred in his decision - an employer should be given an opportunity to have the issue of the fairness of a dismissal considered in a fair hearing and the relevant law must be considered. Mischke (2004:2) indicates that the Branford decision may have far reaching implications for internal disciplinary practice and procedures within companies in cases where line managers impose disciplinary sanctions on employees, only to have those sanctions legitimately overturned by a disciplinary committee or tribunal. He indicates that there may be implications for the authority of managers in that position. What is clear from the opinions of respected labour writers and academics as well as case law is that, in order to stand up to the scrutiny of labour tribunals and the Courts, employers contemplating instituting second disciplinary hearings against employees should proceed with great care and allow the principles of fairness to inform their decisions in this regard. Cases Botha v Gengold Ltd (1996) 4 BLLR 441 (IC). Amalgamated Engineering Union of SA and others v Carlton Paper of SA (Pty) Ltd (1988) 9 ILJ 588 (IC) BMW (SA) v Van der Walt (2000) 9 LAC 1.21.1 Branford v Metrorail Services (Durban) & others (2003) 12 LAC 1.11.42 References Grogan J. 2001. Workplace law 6th edition, Juta law. Cape Town. Rossouw J and B Conrandie. 1999: A Practical Guide to Unfair Dismissal Law in South Africa. Butterworths Publishers (Pty) Ltd. Cape Town. Mischke K. 2004 Double jeopardy. Accessed from irnetwork.co.za