The employer appealed against the setting aside on review by the labour court of an arbitral award which upheld the dismissal of an employee as being fair. The employee was the manager; human resources and support services but insisted on representing fellow employees in disciplinary inquiries.  The arbiter found that the reason for dismissal was both valid and fair after a fair procedure had been followed.  Whitcher J in the labour court held that although there was a valid reason the arbiter could not reasonably have found that it was fair to dismiss.  The facts proved that the employee was grossly insubordinate and defied the municipal manager’s instruction to stop representing fellow employees.  The employee also dared the municipal manager to take action him.  In other words the arbiter’s award fell within a band of reasonable outcomes and was upheld by the LAC.

Msunduzi Municipality v Hoskins (DA14/15) [2016] ZALAC 61 (2 September 2016) per Tlaletsi AJP (Ndlovu and Sutherland JJA concurring)

Excerpts without footnotes

[6]   The facts material to the determination of the appeal are largely common cause and are set out hereunder. The appellant employed the respondent as Human Resources (HR) Support Service Manager.  In his capacity as HR official, the respondent advised other managers on employment related issues including guidelines on disciplinary matters.  He was a member of the management team by virtue of his position and role at the appellant.

[7]   He was not a member of a trade union, but had been a member of various trade unions as he moved up the ranks in the municipality. In his capacity as a member of the trade unions, he advised and represented co-employees who faced disciplinary charges at the municipality.

[8]   The respondent continued to advise and represent co-employees in matters against the appellant when he was no longer a member of a trade union but part of the management team. This practice became a source of concern for the management of the appellant as it was viewed as a conflict of interest between his responsibilities as a manager and his role in representing other employees.  Some of the managers felt uncomfortable to discuss issues openly in his presence in meetings fearing that whatever they say will be used against them by the respondent.

. . . . .

[11]   It is common cause that the respondent did not provide a written response but continued to represent a fellow employee at a disciplinary inquiry. Subsequent to this letter and in view of its stance on the matter, the appellant charged the employee with gross insubordination, gross insolence and gross misconduct.  All in all there were eight charges relating to gross insubordination by challenging the authority of the Municipal Manager by refusing to comply with his instruction to recuse himself from and ceasing to represent fellow employees in disciplinary proceedings instituted by the municipality; three counts of gross misconduct for failing to act in good faith, not acting in the best interest of the municipality and bringing the municipality into disrepute and one charge of gross insolence by being rude, disrespectful, sarcastic, abusive, insulting and provocative to the Municipal Manager.  He was found guilty of all the charges and a sanction of dismissal was imposed.

. . . . .

[14]   The Municipal Manager testified further that the respondent, by virtue of his position had access to confidential information and strategies for employment relationships. The employment relationship was destroyed and if the respondent was to return to the appellant, it would undermine the entire spirit of the organisation.  His actions were at war with the administration and showed no remorse.  His own peers felt a level of distrust and dishonesty on his part and were unable to work with him.  The Municipal Manager testified further that the respondent at the disciplinary hearing continued to be abusive and rude and at some stage mentioned that “we will see how long you last” referring to the Municipal Manager lasting in his position.  He also believes that the respondent was part of the attempts to have him removed as the Municipal Manager.  He confirmed that it would be impossible to work with the respondent.  He made every effort to accommodate the respondent even after the commencement of the disciplinary hearing, but he refused to correct his conduct.

. . . . .

[16]   The respondent testified, among others, that he was not grossly insubordinate because the Constitution of the Republic of South Africa, 1996, the Labour Relations Act 66 of 1995 (LRA) and the collective agreement guaranteed the employees’ right to be represented; that the instruction of the Municipal Manager was unlawful and in blatant violation of the employees’ rights; that there was no conflict of interest by representing the employees as he only assisted in cases that were not in his unit; that his impeccable record caused the Municipal Manager to employ two outside attorneys to preside at the hearings and that it is these attorneys who prompted the Municipal Manager to write the letter that ultimately led to his removal; that the Municipal Manager’s letter was in the form of a threat and caused gross injustice to him. He testified that his “forward approach” caused his relationship with the Municipal Manager to be unfavourable.  Baxter’s evidence was tendered to support the respondent’s version that when he delivered the letter he did not find the Municipal Manager and that she read the letter and advised the appellant that the letter was not professional, very personal and had to rewrite it.  He heeded her advice and modified the letter which he submitted.  This version was correctly rejected by the arbitrator and his finding is not being properly challenged since there is no cross-appeal.

. . . . .

[21]   The Labour Court confirmed the arbitrator’s findings as to the lawfulness and reasonableness of the instruction; that it was not intended to provoke the respondent and was not disrespectful. The learned Judge found that the respondent was guilty and that he “committed a serious offence which highly impinged on his duty to be respectful to his superior, the head of his employer institution”.

[22]   The Labour Court, however, concluded thus:

‘However, even on the strict review test, I am of the view that if the arbitrator had properly applied his mind to the material before him and truly thought about it, he would have found that the sanction of dismissal was harsh in the circumstances of this case.  These circumstances include the fact that the applicant was over 50 years old, there were no evidence of past similar misconduct, the applicant had been in the employ of the respondent for over 25 years (basically all of his life) and his age militated against prospects of future employment.  Moreover there was no evidence that the respondent had lead evidence that reinstatement was not practical.  The applicant further did not work directly under the manager- in other words there was no evidence that he works closely with him and receives his daily instructions from the manager.  In these circumstances I believe that a reasonable arbitrator would have found that such an employee deserves a second chance, albeit with a serious sanction imposed against him, such as a final written warning or punitive suspension.  In determining the extent of the retrospective part of the reinstatement order, I have taken into consideration that considerable time has passed but the reasons for this is the fault of the applicant.  If he had pleaded guilty, apologised and not persisted with consuming hearings, this case may not have arisen.

In all these circumstances, I find that the sanction of dismissal was not reasonable based on the material before the arbitrator and I thus substitute the award with a reinstatement order.  However, for the reasons set out above, I order that it be retrospective only for (6) months.’  

[23]   The issue to be considered on appeal is whether the Labour Court misdirected itself in finding that the sanction of dismissal in the circumstances of this case was a decision that a reasonable arbitrator could not reach. Mr Pillemer SC, who appeared on behalf of the appellant contended that the Labour Court erred in its approach as to the applicable test on review.  The Labour Court, it was contended, merely considered whether the sanction imposed was harsh as opposed to considering whether the arbitrator (in finding that the dismissal was fair on the basis of a value judgment of the arbitrator based on the evidence before her ) had come to a decision which a reasonable arbitrator could have come.

. . . . .

[27]   The contents of the letter are in my view a reflection of one of the most classical examples of gross disobedience that one can find. The respondent made it clear that he was not going to obey the instruction and even dared the Municipal Manager to take further steps he had warned would be taken should he continue with his conduct.  He warns him that he is due to fail against him like his predecessors he named in the letter.  He further refers to his fellow employees as faceless, spineless and nameless advisors.

. . . . .

[29]   In my view, the arbitrator correctly applied his mind to all the material that was placed before him. He took into account the seriousness of the insubordination, the respondent’s blatant well-publicised challenge to the authority of the Municipal Manager, that he showed no remorse when he appeared at the arbitration and found the dismissal to be an appropriate sanction.  The fact that the arbitrator did not make specific reference to Schedule 8 of the LRA does not detract from the fact that factors relevant to sanction were in this matter taken into account.  The arbitrator considered progressive discipline and found that given, inter alia, the seriousness of the transgression, lack of remorse and instead being defensive, the complete breakdown in the employment relationship between the respondent and the Municipal Manager, as well as the responsibility of the municipality to deliver services, it would not be practicable to restore the employment relationship.  I also find no merit in the submission made on behalf of the appellant that the respondent was three management levels below the Municipal Manager and as such contact between the two in the course of the daily operations of the municipality would be either non-existent or minimal Contact between the two will not be avoidable because the respondent is part of the management team led by the Municipal Manager.  Furthermore, since it is the respondent who published his gross insubordination and insolence to be known by all and sundry towards him, it would send a wrong message to the entire staff to hide the respondent from the Municipal Manager or create a no-go zone or an enclave for him in order to keep the respondent in employment.

[30]   The proper test to be applied in a review of an arbitration award on sanction is whether the decision of the arbitrator about the fairness of the sanction imposed by the employer is a decision that a reasonable arbitrator could not reach[1]. The simple answer to this question in the circumstances of this case is that the decision is reasonable.  The decision is indeed justified by the material placed on record.  It was therefore not open to the court a quo to consider whether the sanction was harsh and impose a sanction that in its opinion is not harsh.  It is the call of the arbitrator and not that of the Labour Court to assess the fairness of the sanction of the employer.  The court a quo further misdirected itself by finding that the arbitrator should have found that the respondent deserved a second chance without advancing any reason why a second chance would be appropriate in the circumstances.  As pointed out already, the respondent was given an opportunity to reflect on his conduct.  He instead proceeded to do precisely what he was warned not to do.  He would have continued to do so even if given a further chance as he was not open to any persuasion.  The arbitrator, in my view, complied with what was required of him to do, in order to meet the standard set by the Constitutional Court, namely: . . . .