Ethekwini Municipality v Hadebe (DA17/14) [2016] ZALAC 14 ; [2016] 8 BLLR 745 (10 May 2016) per Makgoka AJA [Tlaletsi DJP and Ndlovu JA concurring]

Inconsistent unfair discipline does not affect the validity of the reason for dismissal.  It affects the result or fairness of the dismissal.  It is not regarded as affecting the procedural fairness of the dismissal.  In other words the question is whether other employees who engaged in such misconduct were treated in the same way.  So unless employers can rationally justify treating one employee differently, they must act consistently.  This may be splitting hairs but it affects the relief that can be granted.  It would probably be wiser to have one test based on fairness, reasonableness and justice.

The LAC allowed the employer’s appeal and set aside the Labour Court’s order of reinstatement and restored the arbitral award which compensated the employee for a ‘substantively’ unfair dismissal but without reinstatement.

Excerpts without footnotes

Introduction

[1] This is an appeal against the whole of the judgment and order of the Labour Court (Mhlongo AJ) handed down on 11 June 2014, in terms of which the dismissal of the first respondent (Ms Hadebe) by the appellant (the municipality) was found to be substantively unfair.  The Labour Court ordered that Ms Hadebe be reinstated to her previous position, with compensation.  The Labour Court also ordered the municipality to pay the costs of the review application on an attorney and client scale.  The appeal is with leave of the Labour Court, which was granted on 5 November 2014.  The appeal is directed against the order of reinstatement, and the costs order made against the municipality.

The Parties

[2] The appellant is a municipality established in accordance with s 12 of the Local Government: Municipal Structures Act 117 of 1998, and which, in terms of s 2(d) of the Local Government: Systems Act 32 of 2000, has a separate legal personality.  Ms Hadebe is an erstwhile employee of the municipality.  The second respondent is a dispute resolution body established in terms of the Labour Relations Act 66 of 1995 (the LRA).  The third respondent (the arbitrator) an appointed panellist of the second respondent, conducted arbitration proceedings under the auspices of the second respondent.

The facts

[3] The facts are simple.  Ms Hadebe was employed by the municipality in 1999, in a unit known as Water and Sanitation.  In 2003, she was appointed as a senior buyer, being responsible for, among others, the procurement of goods from suppliers in accordance with the municipality supply chain management policy.  An internal audit into the affairs of the sanitation unit of the municipality for the period July to October 2006 revealed that there were several breaches of the supply chain management policy.

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[13] The arbitrator considered that the order of reinstatement would be inappropriate.  In reaching that conclusion, the arbitrator took the following factors into consideration: the nature of the offences Ms Hadebe had been found guilty of; that she did not demonstrate any remorse for her conduct; that she had conceded that the relationship at work was no longer good, which point was further confirmed by her union representative at the appeal hearing; that the trust relationship had broken down in the buying section and that Ms Hadebe was prepared to accept reinstatement without back-pay to any other position.  The arbitrator accordingly granted Ms Hadebe compensation in the amount equivalent to nine months’ remuneration, calculated at her monthly salary of R9 133.72, which adds up to a sum of R82 203.48.  The arbitrator considered this compensation to be just and equitable.  The prayer for reinstatement was refused, and the arbitrator made no order as to costs.

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Review application in the Labour Court

[14] Ms Hadebe approached the Labour Court in terms of s145 of the LRA seeking to review and set aside the award by the arbitrator on the basis that it was not one which a reasonable decision-maker could have made.  She contended that the arbitrator was obliged to order her reinstatement once he had found that the dismissal was substantively unfair, unless any of the factors referred to in s 193(2) were applicable.  It was further submitted that the municipality did not lead any evidence that the trust relationship between the parties had irretrievably broken down.  She argued that, on the contrary, there was evidence that she had a good relationship with her erstwhile manager and his successor.  The municipality opposed the review application, and supported the award by the arbitrator.

[15] It must be stated at the outset that in the review application, Ms Hadebe did not challenge the finding of the arbitrator that her dismissal was substantively unfair only due to inconsistency.  She also did not join issue with the findings of lack of honesty and integrity inherent in those charges which she was found guilty of.  She merely sought to have the award [ed] varied with an order that she should have been reinstated to her employment on the same terms and conditions that applied to her employment prior to her dismissal.

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[29] With respect to the learned Acting Judge, and as correctly argued on behalf of the municipality, this is a conflation of the factors relied on by the arbitrator to determine the quantum of compensation with those which militated against an order for reinstatement.  The ultimate question is whether the conclusion reached by the arbitrator is not one which a reasonable arbitrator could reach.  I am firmly of the view that the conclusion reached by the arbitrator “falls within the band of decisions that a reasonable decision-maker could make on the facts available to him” and therefore, not reviewable.  The Labour Court accordingly misdirected itself in concluding the contrary, and therefore, on this basis alone, the appeal has to succeed.