Absa Bank Ltd v Naidu (DA 14/12) [2014] ZALAC 60 [2015] 1 BLLR 1 (LAC) (24 October 2014) per  Ndlovu JA [Waglay JP and Coppin AJA concurring]

Appeal allowed:

LAC summary:

“‘Parity principle’: Employee ‘convicted’ of misconduct involving dishonesty and dismissed.  Both CCMA & LC held that dismissal was substantively unfair (and ordered reinstatement) on ground that another employee who previously committed similar transgression was only given final written warning and not dismissed.

Held: Parity principle to be applied with caution.  Each case to be treated on its own facts and circumstances.  The principle not intended to profit employees engaged in serious acts of misconduct.  In this instance, dismissal was substantively fair.”

Excerpt

“[1] This appeal is against the judgment and order of the Labour Court (Cele J) handed down on 28 June 2012, in terms of which the Labour Court dismissed with costs the application launched by the appellant Bank, seeking to review and set aside the arbitration award issued by the second respondent (the commissioner) on 28 June 2010, acting under the auspices of the third respondent (the CCMA).  Leave to appeal to this Court was granted by the Supreme Court of Appeal.

. . . .

[34] Ms Naidu complained that her dismissal was unfair because the same sanction was not imposed on Ms Pin Lai who, according to her, had committed a similar misconduct as hers, yet was not dismissed but only issued with a final written warning. Therefore, her plea raised the issue of alleged inconsistency on the part of the appellant in its treatment of employees in relation to discipline. In other words, the appellant did not follow the parity principle.

[35] It is trite that the concept of parity, in the juristic sense, denotes a sense of fairness and equality before the law, which are fundamental pillars of administration of justice. In the Australian decision in Green v The Queen, it was said that

“the parity principle is an aspect of the systemic objectives of consistency and equality before the law – the treatment of like cases alike, and different cases differently.”

Indeed, in Chemical Energy Paper Printing Wood & Allied Workers Union and Others v Metrofile (Pty) Limited, this Court also stated:

‘[35]. Our law requires that employees who have committed similar misconduct should not be treated differentially. In National Union Metalworkers of SA v Haggie Rand Ltd (1991) 12 ILJ 1022 (LAC) Goldstein J had occasion to consider the fairness of an offer of re-employment with loss of allowances linked to length of service. The learned judge reasoned, in that case, at 1029G-H, that the offer of re-employment was unfair because its acceptance would have resulted in employees losing allowances that depended on length of service. This, the learned judge found, would mean that employees were being unequally punished.

[36] This principle, also referred to as the ‘parity principle’, was aptly enunciated in National Union of Metalworkers of SA and Others v Henred Fruehauf Trailers (Pty) Ltd (1994) 15 ILJ 1257 (A) where the court stated at 1264A-D:

‘Equity requires that the courts should have regard to the so-called “parity principle”. This has been described as the basic tenet of fairness which requires that like cases should be treated alike (see Brassey “The Dismissal of Strikers” (1990) 12 ILJ 213 at 229-30). So it has been held by the English Court of Appeal that the word “equity” as used in the United Kingdom statute dealing with the fairness of dismissals, “comprehends the concept that the employees who behave in much the same way should have meted out to them much the same punishment” (Post Office v Feennell (1981) IRLR 221 at 223). The parity principle has been applied in numerous judgments in the Industrial Court and the LAC in which it has been held for example that an unjustified selective dismissal constitutes an unfair labour practice.’

[36] However, it ought to be realised, in my view, that the parity principle may not just be applied willy-nilly without any measure of caution.

In this regard, I am inclined to agree with Professor Grogan when he remarks as follows:

‘[T]he parity principle should be applied with caution. It may well be that employees who thoroughly deserved to be dismissed profit from the fact that other employees happened not to have been dismissed for a similar offence in the past or because another employee involved in the same misconduct was not dismissed through some oversight by a disciplinary officer, or because different disciplinary officers had different views on the appropriate penalty.’

[37] In SACCAWU and Others v Irvin and Johnson (Pty) Ltd, this Court (per Conradie JA) stated:

‘In my view too great an emphasis is quite frequently sought to be placed on the principle of disciplinary consistency, also called the ‘parity principle’ … There is really no separate principle involved. Consistency must be measured by the same standards … Discipline must not be capricious. It really is the perception of bias inherent in selective discipline that makes it unfair. Where, however, one is faced with a large number of offending employees, the best one can hope for is reasonable consistency.

Some inconsistency is the price to be paid for flexibility, which requires the exercise of a discretion in each individual case. If a chairperson conscientiously and honestly, but incorrectly, exercises his or her discretion in a particular case in a particular way, it would not mean that there was unfairness to the other employees. It would mean no more than his or her assessment of the gravity of the disciplinary offence was wrong.

It cannot be fair that other employees profit from that kind of wrong decision. In a case of plurality of dismissals, a wrong decision can only be unfair if it is capricious, or induced by improper motives or, worse, by a discriminating management policy … Even then I dare say that it might not be so unfair as to undo the outcome of other disciplinary enquiries. … If, for example, one member of a group of employees who committed a serious offence against the employer is, for improper motives, not dismissed, it would not … necessarily mean that the other miscreants should escape. Fairness is a value judgment.’

[38] There was unchallenged evidence from Ms Andrews to the effect that an employee (one Mike Pillay) who committed “exactly” the same dishonest misconduct as Ms Naidu, was dismissed. In my view, therefore, there seems to be no justification, on the facts of this case, in holding that, just for the single instance of Ms Pin Lai, the appellant exhibited

“the propensity of condoning acts of misconduct performed under dishonest circumstances” and that the appellant’s tolerance of such acts of misconduct showed “that it is prepared to live with it”.

[39] I agree with counsel for the appellant that the situation in relation to Ms Pin Lai was not comparable to that of Ms Naidu. Ms Pin Lai was a bond insurance advisor whereas Ms Naidu was an executive investment broker. Unlike Ms Naidu’s, the misconduct committed by Ms Pin Lai – although also containing an element of dishonesty – did not involve a financial transaction. It only involved a bond insurance quote from Sanlam which, Ms Pin Lai processed by using the client’s signature from a previous transaction.

In other words, in Ms Pin Lai’s case, no client’s monies in the appellant’s custody were interfered with, without the client’s knowledge and authorisation, which was what Ms Naidu did with Mr Khan’s investment funds. Indeed, there was evidence that in Ms Pin Lai’s matter, the client was aware and had given permission that the insurance quote be obtained from Sanlam. The signature was not possible to get since the client was out of the country. There was further evidence that Ms Pin Lai had acted impulsively when she committed the misconduct. On the other hand, the telephone conversations which Ms Naidu had with Ms Wrogermann, as illustrated above, patently demonstrated that Ms Naidu had ample opportunity to reflect on what she was contemplating to do and to refrain from doing it. However, she reconciled herself with her determination to proceed and commit the dishonest misconduct.”