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IN THE LABOUR COURT OF SOUTH AFRICA

HELD AT CAPE TOWN

CASE NUMBER: C281/1997

In the matter of:

HICOR t/a AUDIO VISION Applicant

and

A TWIGG N.O. First Respondent

BRIAN JEFFREY ABRAHAMS Second Respondent

J U D G M E N T

ZONDO J:

[1] On 26 May 1998 I reserved judgement in this matter after hearing argument. I promised then that I would give my judgement as soon as possible. This therefore is my judgement. This is a review application which has been brought by the applicant against the first and second respondents to have this Court review and set aside an arbitration award which was handed down by the first respondent in a dismissal dispute between the applicant and the second respondent.

[2] The facts relevant to the matter and the background can be stated briefly as follows. Hicor Trading Ltd, that is the applicant in this matter, is a company which trades, among others, under the name Audio Vision. Under Audio Vision the applicant trades as a retailer in audio visual equipment, photographic equipment and other electric and electronic goods. Although the applicant’s head office is at Montague Gardens in the Cape, it has a branch in Stellenbosch and has branches elsewhere as well. One of the applicant’s competitors is Stellen Sound which features prominently in this dispute.

[3] The second respondent is an erstwhile employee of the applicant whom the applicant dismissed with effect from 11 June 1997. At the time of his dismissal the second respondent was employed as administrative manager in the Stellenbosch branch of the applicant, although he was actually paid at the rate of the branch manager. This was so because he had been employed as the branch manager but was demoted. A dispute had ensued between the second respondent and the applicant on the demotion, but it was subsequently resolved on the asis that, although the second respondent stopped being the branch manager and had been made an administrative manager, he would continue to be paid at the same salary as the salary that he had been paid as branch manager.

[4] The reason why the applicant was dismissed is that he was found guilty of disclosing confidential information of the applicant to Stellen Sound. The information that the second respondent is said to have disclosed was contained in two reports which belonged to the applicant. The applicant appears to have discovered this when those reports were faxed through to the applicant from Stellen Sound by/or on the instructions of one Mr Potash, who, apparently, is the managing director of Stellen Sound. Before the second respondent was dismissed a disciplinary inquiry was held which was chaired by the applicant's labour relations consultant. It was common cause between the parties at all times that the respondent had the two reports with himself when he was previously at the premises of Stellen Sound. The dispute was whether the second respondent had given the reports to Mr Potash, which is the applicant's version, or whether he had left the reports at Stellen Sound through oversight or negligence, without giving them to anybody, which was the second respondent's version.

[5] Subsequent to his dismissal a dispute arose about the fairness of the second respondent's dismissal. This dispute was referred by the applicant to the Commission for Conciliation, Mediation and Arbitration, that is the CCMA. After conciliation had failed, the dispute was referred to arbitration. The first respondent, the Commissioner who was appointed by the CCMA to arbitrate this dispute, arbitrated the dispute and handed down an award to the effect that the dismissal of the second respondent by the applicant was both

substantively and procedurally unfair. In this regard the first respondent ordered the applicant to pay an amount of R21226,20 as compensation/damages to the second respondent.

[6] The basis on which the first respondent came to the conclusion that the dismissal was substantively unfair was that there was no evidence to the effect that the second respondent had given the reports to Mr Potash of Stellen Sound. This was despite the fact that before the first respondent there was an affidavit which had been deposed to by Mr Potash and handed to him by the applicant's representative in which Mr Potash stated that the second respondent had given the confidential reports to him at a time when he was at Stellen Sound for an employment interview.

[7] The first respondent disregarded the affidavit of Mr Potash which contained this evidence on the basis that it was hearsay evidence as Mr Potash had not been called to give evidence before him. The applicant complains that the first respondent ought to have taken into account the contents of the affidavit or ought to have used his powers in terms of the Act to subpoena Mr Potash to give oral evidence. The applicant says that its representative, an accountant, who represented it at the arbitration was not a legal person and therefore did not know that the Commissioner had powers of subpoena and by implication, had he known, he would have asked the Commissioner to subpoena Mr Potash.

[8] The difficulty that I have with this argument is that there is evidence which the applicant has not challenged- such evidence coming from the first respondent, that when the affidavit of Mr Potash was handed to him at the arbitration, the first respondent told the applicant's representative that he was not sure that he could give weight to the affidavit because Mr Potash had not been called to give evidence. It seems to me that, if this evidence is true, and in this regard I have to accept that it is true because it is not challenged, the applicant's representative ought at that stage to have taken steps to ensure that Mr Potash was called as a witness. Indeed the evidence from the Commissioner, that is the first respondent, which is also unchallenged, is that, prior to the date when the arbitration between the parties took place, the arbitration had been set down for hearing but had to be postponed at the instance of the applicant because, among other reasons, Mr Potash was not available to give evidence. This evidence suggests that the applicant's representative had appreciated, prior to the date of the arbitration, that it was necessary that Mr Potash be available to give evidence.

[9] If one has regard to this evidence that the Commissioner warned the representative of the applicant and the evidence that, prior to the date of the arbitration, the matter had been postponed for, among other reasons, the reason that Mr Potash was not available, it seems to me that the Commissioner cannot be blamed in any way for the manner in which he dealt with the matter. What the Commissioner did say, which has no basis, is that the evidence contained in Mr Potash's evidence did not take the matter any further. That was one of the reasons why he did not give weight to the affidavit. That was simply not true.

[10] The contents of Mr Potash's affidavit were very material to the dispute between the parties, namely,:- did the second respondent give the confidential reports to Mr Potash or did he leave the reports by mistake at the premises of Stellen Sound? However, as I have indicated, the fact that Mr Potash was not called as a witness cannot be a ground to criticise the Commissioner. With regard to the substantive fairness of the dismissal, it follows that without the evidence of Mr Potash, the Commissioner only had the evidence of the second respondent, which was to the effect that he had left the confidential reports at the premises of Stellen Sound by mistake and that he realised this later. Actually he says he realised this after he was called for a disciplinary inquiry.

[11] Although there are aspects of the second respondent’s explanation which are unsatisfactory, e.g. how he could have come to leave those confidential reports in the premises of Stellen Sound by mistake and for what purpose he had taken the reports with him to Stellen Sound, the Court has got to look at the matter on the basis that his evidence was unchallenged. If there had been evidence that sought to contradict the second respondent's version which had been placed before the Commissioner, other than the affidavit, that is if Mr Potash had come and given oral evidence, it may well be that any finding by the Commissioner preferring the evidence of the second respondent might well have been a sufficient ground for the Court to intervene. But, as I have indicated, that is not the case here. For that reason, insofar as the applicant sought to challenge the Commissioner's decision not to give weight to, or to disregard the affidavit of, Mr Potash, which was placed before him, I am unable to uphold its challenge.

[12] There was a second point on the basis of which the Commissioner found that the dismissal was unfair and this related to the disciplinary inquiry. The Commissioner found that the disciplinary inquiry to which the second respondent was subjected was unfair because the inquiry made a finding that the second respondent was guilty on the basis of evidence from the company which was based on what Mr Potash had told somebody from the company with regard to how the confidential reports had come to be in the possession of Stellen Sound. In this regard the second respondent had presented evidence at the inquiry to the effect that he had not given the reports to anybody deliberately but that he had left them by mistake or through oversight at Stellen Sound. That evidence had been uncontradicted and such evidence as had been presented by the company to the contrary was hearsay.

[13] At the inquiry the second respondent had requested that Mr Potash be called to give evidence and the chairperson did not call him and indicated that this was not necessary, probably because Stellen Sound, of which Mr Potash is the managing director, is a competitor to the applicant. The question arose during argument whether or not the second respondent should himself have called Mr Potash to come and testify at the disciplinary inquiry, seeing that the two of them knew each other well. The difficulty with this is that the second respondent had given his evidence and his evidence had been to the effect that he had left the confidential reports by mistake at Stellen Sound and he had denied the hearsay evidence presented that he had given the reports to Mr Potash. This means that, if the company sought to secure a finding from the chairperson of the disciplinary inquiry to the effect that the second respondent had given the reports to Mr Potash, it was up to the company to call Mr Potash and if it did not call Mr Potash to give evidence, it was at its own risk that it omitted to do so. This is more so if one has regard to the fact that the Act places the onus to prove the fairness of a dismissal on the employer. To require or expect that the employee in that situation should have himself called Mr Potash is, with respect, to shift the onus from the employer to the employee. In my view, the Commissioner, in finding that the dismissal was procedurally unfair or in finding that the inquiry was unfair, made a finding which is justifiable and which is also borne out and supported by the evidence which was before him.

[14] The chairperson of the inquiry was not entitled in the circumstances of this case to reject or disregard unchallenged evidence before him in favour of hearsay evidence. In my view the disciplinary inquiry was therefore unfair and the Commissioner's finding to that effect was fully justified, both by the facts as well as by law. There was another basis on which the Commissioner found the dismissal to be unfair. That was that the disciplinary inquiry was allowed to proceed on the first day without the representative of the employee being present. I cannot understand the Commissioner's reasoning in this regard because the evidence that was placed before him quite clearly showed and actually he himself referred to this, that the employee did agree that the inquiry should proceed even in the absence of his representative.

[15] During argument Mr Arendse, who appeared for the second respondent, did not associate himself with this finding by the Commissioner, and in my view, wisely so. The result of all this is that there is a finding of the Commissioner which I am unable to interfere with, namely, that the dismissal of the second respondent was unfair by virtue of the inquiry to which he was subjected being unfair. The effect of his finding is simply that the inquiry that the second respondent was subjected to was unfair for the reason that I have indicated.

[16] The question which arises now is where this finding takes us, namely the dismissal was unfair by virtue of the unfair inquiry. In this regard Mr Oosthuizen, who appeared for the applicant in this Court, asked for an opportunity to file supplementary submissions in regard to this point because at the time that the point was raised he indicated that he had not had time to give it thought and he subsequently filed supplementary submissions in this regard. The supplementary heads which he has submitted are based on the distinction between the procedural unfairness and substantive fairness of a dismissal. He argues that the issue of whether or not the chairperson of the disciplinary inquiry should have made the finding that he made without Mr Potash having been called goes to the substantive fairness of the dismissal and not to the procedural fairness.

[17] In my view, although labels such as "procedural fairness" and "substantive fairness" can be useful, one has to be cautious in using them because at the end of the day these are labels. Insofar as Mr Oosthuizen submits that the finding of the chairperson of the disciplinary inquiry that the second respondent gave the confidential reports to Mr Potash goes to the substantive fairness of the dismissal, that does not, even if one were to assume that to be correct, dispose of the fact that the inquiry was unfair because the chairperson of the inquiry made a finding which had no evidential basis. A chairperson of an inquiry is not entitled to make findings which are not supported by evidence before him. In this case the chairperson of the inquiry made a finding which went contrary to unchallenged evidence before him. That simply means that the inquiry which the employee was subjected to was unfair and, in my view, that means that the dismissal was procedurally unfair. The result of this finding is that even if I were to have found in favour of the applicant that the Commissioner ought to have had regard to the affidavit of Mr Potash and that the Commissioner committed an irregularity, or even a gross irregularity in not giving weight to that affidavit, that finding would be academic because of the finding that the disciplinary inquiry was unfair any way.

[18] In this case the Commissioner did not order the reinstatement of the employee, even though there may have been no grounds for not ordering such reinstatement. What he did was to award compensation and the compensation that he awarded, it seems, was for the period from the date of dismissal up to the date of the arbitration award, which is what the Commissioner was entitled to do if the dismissal was unfair only because the applicant did not follow a fair procedure.(see sec 194 (1) of the Act). In those circumstances it seems to me that the relief that was awarded to the second respondent was the relief that the Commissioner was entitled to award and that, even if the applicant were to have been correct in the contentions that I have rejected, in the end the second respondent would not be awarded lesser relief than that which was awarded. On the contrary, there may well have been a case for the Commissioner to have awarded other relief which might have been more prejudicial to the applicant. In those circumstances I have come to the conclusion that the applicant's application falls to be dismissed and it is dismissed with costs.

R. M. M. ZONDO

Judge : Labour Court of S.A.

Date of Trial : 26 May 1998

Date of Argument : 26 May 1998

Date of Judgement : 01 June 1998

For the Applicant : Mr A. C. Oosthuizen

Instructed by : Marais Muller Inc

For the Respondent : Mr Norman Arendse

Instructed by : Vijay Moodaley Attorneys

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