Nitrophoska (Pty) Ltd v CCMA & others (LC Case: C109/2010; Date of judgment: 4 March 2011)

Principle:

The opportunity that must be given by the employer to the employee to state a case in response to any allegations made against the employee need not be a formal enquiry; it means no more than that there should be dialogue and an opportunity for reflection before any decision is taken to dismiss.

Facts:
The employee, J, was employed as a regional manager. Only three people worked in this regional office, namely J, his wife and Mrs S. It emerged that Mrs S had perpetrated fraud and theft; she had given the employer’s customers her banking details for the purposes of making payments, as opposed to the employer’s banking details. Upon further investigation, it transpired that the fraud had been conducted over a number of years and on a massive scale. It was also established that Mrs J had shared in the spoils by receiving payments amounting to not less than R300 000, 00 from Mrs S. Both Mrs S and Mrs J were subsequently convicted in criminal proceedings of fraud and theft. Both left the employ of the employer. J was dismissed on account of his gross neglect and dereliction of his duties as a senior manager. (It was never the applicant’s case that J had participated in the fraud.)

The issue in this case was whether J’s dismissal was procedurally fair. Two days after the fraud was exposed, J met with his MD. J confirmed that his wife had also been involved in the theft and fraud. He tendered to resign on the basis that he was the person with overall accountability. The office fell under his control and was his responsibility. J acknowledged that there could be no trust relationship under these circumstances. The MD indicated that, before any decision was taken, all the facts should be unearthed through an investigation. What followed was two further meetings. At the third meeting J was informed that, in the employer’s view, a continued trust relationship was not possible. J requested the opportunity to consult with a labour advisor before responding, which he then did. With the assistance of his advisor, J addressed further submissions in writing in which he denied wrongdoing and disputed that the trust relationship was at an end. The employer responded in writing, informing J that the employer had considered his submissions but remained of the view that, as a result of his neglect of duty, the employment relationship could not continue.

The CCMA found that the dismissal of the employee was substantively fair but procedurally unfair. The applicant was ordered to pay him compensation in an amount of R69 600, 00 (about 3 months’ salary). The review application was concerned with the commissioner’s finding on procedural unfairness and the concomitant award of compensation.

Extract from the judgment:

16. The Code of Good Practice: Dismissal (Schedule 7 to the Labour Relations Act 66 of 1995 (“the LRA”) (“the code”) sets out the guidelines for a fair pre-dismissal procedure. In essence, the employee should be given an opportunity to state his case. The employer should conduct a form of investigation; however, this need not be formal inquiry.

17. The code was intended to do away with the rigid “criminal procedure style” provisions that had proliferated under the previous dispensation. Regrettably, the flexibility introduced by the code has not always been recognised by arbitrating commissioners. Halton Cheadle, in his article “Regulated Flexibility: Revisiting the LRA and the BCEA” points out that:

“Despite the clear direction given in the code, employers, consultants, lawyers, arbitrators and judges have continued to over-emphasize pre-dismissal procedures and in so doing have imposed an unnecessary burden on employers without advancing the protection of workers.”

18. These views were elaborated upon by the Labour Court in Avril Elizabeth Home for the Mentally Handicapped v CCMA & Others where Van Niekerk J held that there was clearly no place for formal disciplinary procedures that incorporate all of the accoutrements of a criminal trial. Regarding the requirement to be heard prior to dismissal:

“When the code refers to an opportunity that must be given by the employer to the employee to state a case in response to any allegations made against the employee, which need not be a formal enquiry, it means no more than that there should be dialogue and an opportunity for reflection before any decision is taken to dismiss.”

19. These principles have even greater application where senior managerial employees are involved. It has been held that the form of observance of the audi alteram partem rule may be relaxed in the case of a senior manager

24. It was accordingly common cause between the parties that Jacobs had neglected his duties as a manager, and there was no dispute concerning the relevant facts giving rise to this conclusion. Even if it may have been preferable, there was no need to hold a formal inquiry into these allegations.

25. All that remained was to determine what the impact of the misconduct should be on the employment relationship. In this regard, Jacobs was aware from the outset that his misconduct was severe enough to destroy the requisite trust relationship between the parties.

26. Specifically, Jacobs was told to put any representations in writing following the 16 July 2009 meeting with the applicant’s board. He failed to address the issue of the ongoing trust relationship in his response at all.

27. Jacobs was presented with another opportunity to state his case at the meeting on 30 July 2009, in the full knowledge that the applicant was contemplating his dismissal. He was thereafter given time to consult a labour advisor and made further representations in writing (although these effectively amounted to a bald denial).

28. At no stage (prior to the CCMA proceedings) did Jacobs complain that he was unaware of what case he had to answer. Jacobs’s submissions were taken into account by the applicant’s board prior to its decision. However, the applicant remained of the view that the trust relationship had irretrievably broken down.

29. Under these circumstances, it is inconceivable that Jacobs was not aware of the allegations against him. He had an opportunity to state his case, albeit that formal disciplinary “charges” were never laid against him.

CONCLUSION

30. In light of the aforegoing, I agree that the commissioner’s finding that Jacobs was unaware of the case against him, and that the dismissal was procedurally unfair on this ground, was grossly unreasonable and unsustainable in relation to the evidence before him.

31.The commissioner’s finding on procedural unfairness accordingly falls to be reviewed and set aside. It is submitted that this finding should be substituted with a finding that the dismissal was procedurally fair.