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THE LABOUR COURT OF SOUTH AFRICA, GQEBERHA

Not Reportable

case no: PR223/22

In the matter between:
THE RECLAMATION GROUP	Applicant
and
COMMISSION FOR CONCILIATION, MEDIATION AND ARBITRATION	First Respondent
COMMISSIONER FATAAR N.O.	Second Respondent
STEVEN ABBOTT	Third Respondent

Heard:         8 August 2024

Delivered:   Judgment delivered by email on 13 August 2024, which is deemed to be the date that the judgment was handed down.

Summary:  Application to review and set aside arbitration award. No basis to review or set aside the award. Application dismissed, no costs.

JUDGMENT

DANIELS J

Introduction

[1] This is an application brought to review and set aside an arbitration award issued by the second respondent (hereafter “the commissioner”). The award relates to the alleged unfair dismissal of the third respondent, Mr Steven Abbott (“Abbott”) by the applicant (“the employer”).

Material facts

[2] Abbott was engaged by the employer as its divisional or regional head, based in the Eastern Cape region. The employer suspended Abbott, and charged him with three counts of misconduct. Following a disciplinary hearing, Abbott was found guilty of all three charges, and dismissed.

[3] It is necessary to set out the charges in full:

Allegation 1: Breach of a duty of good faith and conflict of interest

It is alleged that you have engaged in serious misconduct by:

1.1 referring a supply opportunity of some 400mt per month of clean copper from Mertec Marine, a competitor of and supplier to the company, to SIMS Metal, a division of SIMS Ltd (a competitor of the company); and/or

1.2 referring a further opportunity to purchase a large amount of copper cable in Nova Scotia from Mertec Marine to SIMS Metal management.

Allegation 2: Unauthorised use and possession of company property / misappropriation of property

It is alleged that you have engaged in serious misconduct by removing or causing to remove, a “Komatsu Bulldozer” owned by the company, during 2019, without any authorisation to do so.

Allegation 3: Abuse of position of authority / breach of duty of good faith

It is alleged that you have engaged in serious misconduct by instructing and or permitting employees to engage in work related to the repair and maintenance of earthmoving equipment, including the Komatsu Bulldozer at your Farm at or near Jansenville, during the company’s work hours.”

[4] At arbitration, the commissioner found Abbott not guilty of the first charge, but guilty of the second and third charges.

4.1 The second charge was drafted in the alternative:

4.1.1 With the commissioner finding Abbott guilty of the primary charge - that he had abused his position of authority in relation to use of company property, a Komatsu Bulldozer.

4.1.2 With the commissioner finding Abbott not guilty of the alternative charge – misappropriation of company property.[1] It must be noted that the description of the charge does not cover misappropriation of company property.

4.2 The third charge was also drafted in the alternative. The commissioner found Abbott guilty, but did not specify which of the two alternatives applied.

Legal principles

[5] Below, I summarize the legal principles applicable to applications brought to review and set aside arbitration awards of the CCMA:

5.1 The question is whether the outcome is one which no reasonable commissioner could reach on the material before him or her.[2]

5.2 The reasonableness test does not do away with the procedural grounds for review in section 145(2)(a) of the LRA.[3] However, procedural defects must indicate that the commissioner misconceived the nature of the enquiry or arrived at an unreasonable result. If the commissioner misconceived the nature of the enquiry this is adequate to review and set aside the award.

5.3 The reasonableness of the award must be evaluated on the totality of all the evidence before the commissioner.[4]

5.4 If the commissioner fails to apply his or her mind to the material issues, ordinarily, this would suggest the outcome is unreasonable or the commissioner misconceived the nature of the enquiry. However, an error of law or fact does not, by itself, render the outcome unreasonable.[5] What matters is the materiality of the error. If the error has a distorting effect on the outcome this would signify that the error was material, and the outcome unreasonable. The mere fact that the arbitrator’s reasoning was flawed is insufficient because the court must consider whether the result is unreasonable in light of all the evidence.

Grounds of review

[6] In this matter, the commissioner found that the dismissal of Abbott was substantively fair. The employer does not take issue with this finding, but it contends that the reasons why the dismissal was substantively unfair must be revisited. The applicant contends that the commissioner should have found Abbott guilty of the first charge.

[7] The primary grounds of review are following:[6]

7.1 The commissioner’s finding that the dismissal was procedurally unfair is unreasonable,

7.2 Two, if the dismissal was procedurally unfair, the commissioner’s ruling that the applicant must pay the third respondent two months wages, as compensation, is shocking and unfair.

The first misconduct charge : breach of duty of good faith

[8] The commissioner found that Abbott was not guilty of this charge for two principal reasons: (1) the 400mt per month of clean copper from Mertec Marine was not available for purchase by SIMS, or the applicant, because Mertec had its own domestic outlets; (2) the applicant could not use the copper in Nova Scotia[7] because that would be in breach of its lawful obligations not to import scrap metal.

[9] The applicant does not challenge with the commissioner’s reasoning, summarised above. Accordingly, the award cannot be considered unreasonable on this basis.

The second (alternative) misconduct charge : misappropriation of property

[10] In my view, the applicant does not make out a case that Abbott should have been found guilty of misappropriating the Komatsu Bulldozer (the “bulldozer”). The applicant ought to have set out the totality of the evidence, and then explain the commissioner’s finding was unreasonable. Instead, the applicant does not deal with all the relevant evidence. For instance, the applicant fails to deal with Abbott’s evidence that:

10.1 The idea to use the bulldozer emanated from one of the managers junior to him,

10.2 He intended to use the bulldozer for a single weekend,

10.3 The bulldozer was brought to his farm with the knowledge of several employees,

10.4 The bulldozer broke down and could not easily be returned,

10.5 He suffered a back injury which delayed the return of the bulldozer,

10.6 The COVID19 pandemic and the hard lockdown further delayed the return of the bulldozer.

[11] The lengthy period, for which Abbott kept the bulldozer in his possession, does not, by itself, establish that he intended to permanently deprive the employer of the bulldozer. All the factors in paragraph 10 above indicate that Abbott had no such intention. The totality of the evidence, in my view, demonstrates that the commissioner’s finding was reasonable.

Commissioner erred by finding that the dismissal was procedurally unfair

[12] At the disciplinary hearing, the following was evident:

12.1 Abbott placed before the chairperson an application for a postponement and for legal representation. Abbott informed the chairperson that he requested a postponement and he had directed his request to the company’s representative, the employer’s legal advisor, Mr Frank.

12.2 Abbott asked the chairperson when he would read the application for legal representation and postponement (it was not a formal application because the affidavit was not commissioned or signed). The chairperson replied, abruptly, that he had not looked at the application and did not intend to do so either.

12.3 The application contained all the submissions which Abbott intended to place before the chairperson in relation to his request for a postponement and legal representation.

12.4 During the exchanges between the employee and the chairperson the following is evident:

12.4.1 The chairperson was made aware that Abbott was prejudiced by the short notice of the hearing, and that he was participating in the hearing through MS Teams, on his mobile phone, with limited WIFI access, in a room at home (which is both a study and laundry room).[8] At one point, Abbott informed the hearing that he could not hear the proceedings - because he was working from his mobile phone.  

12.4.2 The chairperson was informed by Abbott that he wished to postpone the hearing. Despite this, the chairperson failed to grant him an opportunity to make representations regarding his request to postpone the hearing. The chairperson made no ruling on the application for a postponement. Instead, he simply proceeded.

12.4.3 The chairperson did not allow Abbott an opportunity to make representations on legal representation either. He questioned the employee about his intention to use a legal representative, warning him that legal representatives would unnecessarily complicate the hearing. After questioning the employee, the chairperson concluded that the employee was just as capable of presenting his case as the company’s legal representative. At no stage did the chairperson question the employer’s representative about whether he is a qualified attorney.

12.4.4 Although the chairperson referred to the disciplinary code (which does not permit legal representation at internal hearings) he did not question the employer’s representative about the status of the code, or its application to senior management.

[13] The applicant submits that the chairperson’s refusal to consider the application for legal representation and postponement did not result in procedural unfairness because Abbott conceded that it would have made no difference. I do not accept this submission. The question of whether the procedure was fair was an objective issue for the commissioner to decide after considering all the evidence.

[14] The employer’s representative did not ask Abbott if he was prejudiced by the chairperson’s refusal to consider the application. In any event, Abbott did testify that he was prejudiced because he had insufficient time to prepare.[9] Abbott testified that he was unable to consult his attorney because his attorney’s office had to be cleaned following a Covid19 incident.[10] Abbott testified that after he received the disciplinary charges, he was also charged with a criminal offence and he had to deal with that. As a result, Abbott was sitting at home, under prepared, in a room which doubled as both a study and laundry room, trying to follow the proceedings through his mobile phone. This while the chairperson was conducting the hearing, in Johannesburg, with the representatives of the employer. Some witnesses of the employer were testifying from the employer’s offices in Gqeberha (Port Elizabeth).

[15] At a basic level, absent a disciplinary procedure which states otherwise, “the conception of procedural fairness incorporated into the LRA is one that requires an investigation into any alleged misconduct by the employer, an opportunity by any employee against whom any  allegation of misconduct is made, to respond after a reasonable period with the assistance of a representative, a decision by the employer, and notice of that decision.”[11] (Own emphasis) In the present circumstances, the chairperson deprived the employee of a reasonable period to respond to the alleged misconduct. Unlike the employer and the disciplinary chairperson, Abbott did not have the benefit of seeing the employer’s witnesses (in person) as they testified. In addition, the employee was not always in a position to hear the evidence. On all the evidence before the commissioner, the finding that the dismissal is procedurally unfair was a reasonable one.

Commissioner erred by awarding two months wages as compensation

[16] The applicant submits that the commissioner’s findings on the substantive issues had a distorting effect on the amount of compensation ordered for procedural fairness.

[17] The applicant contends that the commissioner “of necessity” took into consideration substantive issues when he determined compensation for procedural unfairness. This contention is not grounded in the award, or the record. For this submission to be sustainable, there must at least be some indication that the commissioner considered substantive issues when considering relief for procedural fairness. Neither the award nor the record reveals any such error.

[18] As explained in paragraphs 14 and 15 above, Abbott indeed suffered prejudice from the chairperson’s refusal to entertain his application for a postponement. The chairperson gave no reasons for refusing to postpone the hearing. Accordingly, the finding that the dismissal was procedurally unfair is not a finding which is so unreasonable that no decisionmaker could reach it.

Conclusion

[19] In my view, there is no merit to the review. The award is not one which no reasonable decision maker could reach on all the evidence. The application is dismissed with no order as to costs.

RN Daniels

Judge of the Labour Court of South Africa

Appearances:

For the Applicant:

Adv BC Dyke SC

Instructed by BBV Attorneys

Email: craig@bbv.co.za / tanya@bbv.co.za  

For the Respondent:

Adv A Bishop

Instructed by Cowen, Harper & Madikizela Attorneys

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