Impala Platinum Ltd v Jansen JA100/14 10 January 2017 [2017] 4 BLLR 325; (2017) ILJ 896 (LAC) per Waglay JP (Musi JA and Makgoka AJA concurring)

The LAC was concerned with the effect of dishonest conduct and allowed the employer’s appeal, set aside the LC judgment (Basson J) and upheld the award of fair dismissal.   A training officer with 24 years’ experience was dismissed for breaching safety rules to promote his wife’s business.  So there was a valid reason to dismiss.  But the employer did not adduce any evidence as to the effect it had on the employment relationship.  The employer argued that the employer had thus failed to prove the fairness of the dismissal.  In no uncertain terms Waglay JP stressed that employers were not always obliged to adduce such evidence.  Serious misconduct involving dishonesty self-evidently destroys the employment relationship.  The arbiter correctly found that the employee’s misconduct went to the root of the employment relationship, and no further evidence about the sustainability of an employment relationship was required.

The LAC also held that the arbiter was not biased.  In dealing with the role of arbiters it was made clear that arbiters must resolve disputes and conduct arbitrations with a minimum of legality formality and may adopt an inquisitorial approach, even when parties are legally represented.

Selected quotations from judgment (without footnotes)

“[1]   This case concerns dishonest conduct and is an appeal against the judgment of the Labour Court (Basson J).  The court a quo reviewed and set aside the arbitration award of the third respondent (“the commissioner”) in terms of which the commissioner found the dismissal of the first respondent, the employee (“Jansen”) to be fair.  The reasons for the setting aside of the award were that (i) the employer (“the appellant”) had not led evidence to show that the employment relationship between it and Jansen had broken down: and, (ii) the commissioner displayed bias against Jansen in the conduct of the arbitration proceedings.  The appellant is before this Court with leave of the court a quo.

. . . . .

[3]    Regarding the merits of the appeal, Jansen was employed as a Training Manager from 3 February 1983 until his dismissal for misconduct on 3 August 2007.  The reasons for the dismissal are to be found in the promulgation of a 2002 ministerial regulation referred to as “Fall of Ground Regulations” (“the Regulations”).  The aim of the regulations was to create and ensure a safe underground mining working environment.  All mining companies (including the appellant) had therefore to ensure that workers rendering service in an underground mining environment had been practically and theoretically assessed and declared to be fit to render services in one of two categories – Competent A or Competent B.  Each employer or any service provider accredited by the Mining Qualification Authority was responsible for the assessment of the competency test.

. . . . .

[7]    Unhappy with his dismissal, Jansen referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (“CCMA”) challenging both the procedural and substantive fairness of his dismissal.  In dismissing the procedural challenge, the commissioner found that viewed holistically, the procedure adopted by the appellant was fair because it gave Jansen full opportunity to state his case and he failed to attend the disciplinary hearing.  Concerning the substantive fairness of the dismissal, the commissioner found that Jansen was grossly negligent in allowing Vuselela’s employees to render services underground in the mines by instructing his subordinates to overlook that those workers were not certified to be underground as required by the regulations.  The commissioner further found that Jansen’s conduct was premeditated, deliberate and aimed at promoting his wife’s business.

[8]   Dissatisfied with the award, Jansen sought to have the award reviewed and set aside.  As stated earlier he was successful.  The court a quo reviewed the award on two bases:

  • that the sanction was inappropriate because no evidence was led to the effect that the trust relationship had broken down as the result of Jansen’s offence; and,
  • that the conduct of the commissioner had created an impression of bias against Jansen. These are the two issues for consideration in this appeal.

[9]   The first issue arises from the findings of the court a quo that the arbitration award was reviewable because after finding Jansen guilty of the misconduct complained of, the commissioner simply assumed that the trust relationship had broken down without the appellant leading any evidence to that effect.  In the court a quo’s view, the fact that a commissioner finds an employee guilty of misconduct does not entitle him/her to uphold an employee’s dismissal unless there is evidence presented by the employer that the relationship between them has broken down.  According to the court a quo, it is peremptory for an employer to lead evidence relating to the breakdown of the trust relationship where an employee is found guilty of misconduct before s/he can be dismissed.

The court a quo was of the view that this was expressed by the Supreme Court of Appeal (“the SCA”) Edcon Limited v Pillemer NO and others1  (“Edcon”).  The court a quo held that Edcon laid down the principle that in order for the sanction of dismissal to be appropriate, an employer must lead evidence to show that there was a breakdown in the employment relationship.  It then held that since the consideration of an appropriate sanction constitutes an important yet separate component of the arbitration process, the commissioner should not assume that the trust relationship had broken down without being presented with evidence as to what effect the misconduct had on the trust relationship between the parties.

In its words, the onus rests on the employer to present evidence of the breakdown in the trust relationship.  Moreover, the court a quo found that the commissioner failed to properly consider what would be an appropriate sanction because he did not take into account Jansen’s 24 years of service coupled with his unblemished record.

[10]   The court a quo’s reliance on Edcon was totally misconceived.  That judgment turned on its own facts and did not establish as an immutable rule that an employer must always lead evidence to establish a breakdown in the trust relationship in order for the sanction of dismissal to be appropriate.  An analysis of the judgment is perhaps necessary to contextualise its findings.  There, the misconduct charge framed against the employee (Reddy) was as follows:

“[Reddy] committed an act, which has affected the trust relationship between the company and the employee in that on 6 June 2003; you failed to report an accident [involving] a company vehicle .  .  .  which your son was driving on the day of the accident .  .  .  and this resulted in a breach of trust between yourself and the company”2

The misconduct charge had its genesis in an incident in which Reddy’s son had, while driving a vehicle issued to Reddy by her employer, been involved in an accident which Reddy did not report to her employer.  Once the employer found out about the incident and approached Reddy, she was dishonest in her account of the incident but eventually admitted the allegations and “made a clean breast of everything”.  At the hearing, Reddy had presented letters from two of Edcon’s managers in which she was described as a “very honest and hard-working lady” and Edcon was requested not to dismiss her as the authors wished to continue their working relationship with her.  The thrust of the letters was that the trust relationship had not been destroyed, and accordingly, dismissal was not an appropriate sanction.  The employer on the other hand led no evidence to show that the trust relationship had been destroyed.

[11]    The SCA in Edcon formulated the dispute as follows:

“The thrust of Edcon’s case is that Pillemer [ie the commissioner] had ample material before her showing that the trust relationship between it and Reddy had been destroyed by Reddy’s misconduct and lack of candour.  This, it was submitted, showed that the decision to dismiss her was justified.  The determinant issue in the appeal must therefore be whether the trust relationship .  .  .  had been shown in the arbitration to have been destroyed.  This calls for an examination of Pillemer’s reasons for her conclusion and the material that was available to her in arriving at it.”3

The SCA then concluded that:

“Pillemer was entitled and in fact expected, in the scheme of things, to explore if there was evidence by Edcon and/or on record before her showing that dismissal was the appropriate sanction under the circumstances.  This was because Edcon’s decision was underpinned by its view that the trust relationship had been destroyed.  She could find no evidence suggestive of the alleged breakdown and specifically mentioned this as one of her reasons for concluding that Reddy’s dismissal was inappropriate.”4

[12]   In the circumstances, as correctly submitted by the appellant, Edcon is no authority for the proposition that in order to justify a decision to dismiss a senior employee who has committed serious misconduct, an employer must always lead specific evidence to prove that the trust relationship between them has been destroyed.  Edcon turned on its own facts.  In Edcon, the charge against the employee was that the employee had violated the trust relationship by being untruthful (which she later admitted).  The charge specifically alleged that the trust relationship had broken down.  The employee in her defence led evidence to show that was not the case, and, it was in these circumstances that the court concluded that evidence was necessary before the commissioner could make a finding of a breakdown of trust.

[13]   Since Edcon, this Court has repeatedly stated that where an employee is found guilty of gross misconduct it is not necessary to lead evidence pertaining to a breakdown in the trust relationship as it cannot be expected of an employer to retain a delinquent employee in its employ.5

[14]   In Anglo Platinum (PtyLtd (Bafokeng Rasemone Minev De Beer and others,6  the Labour Court set aside a commissioner’s award on review because the employer had not led any evidence to establish the breakdown in the employment relationship.  This Court reversed the decision on appeal and found the award reasonable despite the absence of the evidence in question.  It upheld the commissioner because it found that:

“.  .  .  it is implicit in the commissioner’s findings that in view of the nature of the offence, which involved deception and dishonesty and, in particular, the failure of the first respondent to demonstrate any acceptance of wrongdoing or remorse, he considered the employment relationship to be destroyed and dismissal an appropriate sanction.”7

[15]   Also in Absa Bank Limited v Naidu and others,8  it was stated that

“there are varying degrees of dishonesty and, therefore, each case is to be determined on the basis of its own facts on whether a decision to dismiss an offending employee is a reasonable one.  Generally, however, a sanction of dismissal is justifiable and, indeed, warranted where dishonesty involved is of a gross nature.”9

This signifies that the nature of the misconduct may well determine the fairness of the sanction.  It must therefore be implied from the gravity of the misconduct that the trust relationship had broken down and that dismissal is the appropriate sanction.

. . . . .

[19]   As held in G4S Secure Solutions (SA) (Pty) Ltd v Ruggiero NO and others,12  an “employment relationship by its nature obliges an employee to act honestly, in good faith and to protect the interests of the employer.13  The high premium placed on honesty in the workplace has led our courts repeatedly to find that the presence of dishonesty makes the restoration of trust, which is at the core of the employment relationship, unlikely.14  Dismissal for dishonest conduct has been found to be fair where continued employment is intolerable and dismissal is “a sensible operational response to risk management”.15  In a recent and as yet to be reported judgment of Schwartz v Sasol Polymers and others,16  this Court dealt with the case of an employee found guilty of conflict of interest in that his wife had received gifts from several of his employer’s service providers.  Unlike in this matter, the commissioner there found the employee’s dismissal to be substantively unfair.  In setting aside the award, this Court (upholding the Labour Court judgment on substantive fairness) held that the dishonest nature of the employee’s misconduct was of such a nature as to make continued employment intolerable.  It further held that it would be fundamentally unfair and unjust to expect an employer to retain in its workplace a senior employee who has shown himself to be guilty of dishonesty.17  The court also took the view that if the employee was remorseful, the nature of the dishonesty was such that these mitigating factors could not help in mitigating the harsh sanction of dismissal.  In this respect, the court held that:

“While I agree .  .  .  that the lack of remorse shown by appellant is relevant, even if genuine remorse had been shown by him, this would only have been a factor to be considered in his favour in determining sanction and would not have barred his dismissal, remorseful or not, having regard to the seriousness of the misconduct committed.”18

[20]   The commissioner rightly found that Jansen’s conduct went to the root of the employment relationship deserving of the severest sanction.  This cannot be faulted.  In fact, it would be unfair to expect the appellant to retain Jansen in its employ where Jansen had not only displayed gross misconduct in failing to comply with statutory regulations but also contravened the duty to act in good faith by promoting his wife’s business to appellant’s service providers thereby compromising fairness and honesty within the appellant’s business relationships.  In the circumstances, there was no need to lead any evidence of a breakdown in the relationship, as it was obviously the case.  This ground of appeal thus succeeds.

. . . . .

[22]   An arbitration conducted in terms of the Labour Relations Act 66 of 1995 (“LRA”) must not be equated with the processes in a civil court.  It is not a civil trial but a process governed by section 138 of the LRA, which provides:

“(1)      The commissioner may conduct the arbitration in a manner that the commissioner considers appropriate in order to determine the dispute fairly and quickly, but must deal with the substantial merits of the dispute with the minimum of legal formalities.

(2)        Subject to the discretion of the commissioner as to the appropriate form of the proceedings, a party to the dispute may give evidence, call witnesses, question the witnesses of any other party, and address concluding arguments to the commissioner.”

[23]   Section 138 gives the commissioner a discretion as to the form of the proceedings and the manner in which the proceedings are conducted.  The Act prescribes that the commissioner must deal with the substantial merits of the dispute with the minimum of legal formalities.  The Act envisages the role of the commissioner to be more investigative than adversarial.20  This is less formal and should provide an expeditious access to justice.  Section 138 therefore sets out two essential requirements: (i) that the commissioner must conduct the proceedings in a manner that the commissioner considers to be appropriate in order to determine the dispute fairly and quickly (ii) that the commissioner does so with the minimum of legal formalities.21

[24]   A commissioner has relative carte blanche to conduct the proceedings with the minimum of legal formalities in an inquisitorial or investigative mode.  He or she is entitled to solicit information himself/herself in order to come to a finding that is fair.  This would also means that a commissioner who adopts an adversarial approach to the proceedings must not simply sit back and not interfere or solicit any information from a witness.  S/he is entitled to do so, more so if s/he believes that certain issues are not sufficient clear and where he/she is of the view that s/he requires more information.  Seeking clarity is a right of any presiding officer, otherwise how else would s/he come to a just finding?

[25]      In the circumstances, commissioners are entitled in terms of section 138 to question witnesses.  Whereas in formal civil proceedings an irregularity may arise from a presiding officer entering the fray, commissioners conducting arbitration proceedings, are in fact, in my view, entitled to adopt an inquisitional approach, which necessarily affords them greater latitude to question witnesses.  Such questions need not be limited to obtaining clarity on any issues, but entitles the commissioners to ask questions of an investigative nature.  This is so even where the parties are legally represented and a largely adversarial process is adopted.  The entitlement to so enter into the fray comes from the duty imposed on the commissioner to “determine the dispute fairly and quickly…with the minimum of legal formalities.”

. . . . .

[29]   The commissioner was, on a holistic consideration of the record, even-handed and consistent in his approach in relation to questioning witnesses.  He did not seek to undermine Jansen’s case in soliciting the information he did.  There is in the circumstances, no basis on which to conclude that a reasonable apprehension of bias arose”.