Econonet Telecom Lesotho (Pty) Ltd v Seqao Phenya and Another (LC/REV 10 of 10) [2013] LSLC 34 (16 June 2013)

IN THE LABOUR COURT OF LESOTHO LC/REV/10/10 (NO.2) HELD AT MASERU In the matter between: ECONET TELECOM LESOTHO (PTY) LTD APPLICANT and SEQAO PHENYA DIRECTORATE OF DISPUTE PREVENTION AND RESOLUTION 1ST RESPONDENT 2ND RESPONDENT JUDGMENT DATE: 09/06/13 Failure to apply one’s mind to the evidence tendered - Review of an arbitral award - Employer contending that the Arbitrator failed to apply his mind to the evidence that was tendered before him to prove an employee’s dishonesty - 1st respondent arguing that the matter is not reviewable - Court finds the Arbitrator to have failed to apply his mind to very pertinent factors that emerged in evidence - Award reviewed and set aside. 1. This is an application for the review and setting aside of an award of the Directorate of Dispute Prevention and Resolution (DDPR) in A0166/09 in which the 1st respondent had successfully challenged his dismissal and was granted an order of reinstatement. Dissatisfied with this order, the applicant instituted the current review application. 2. The facts of this case are essentially common cause. That the 1st respondent was engaged by the applicant in 1988 as a Technician in its Operations and Maintenance Division. On or around 27th June 2008 he was dispatched to install a telephone line for a customer, one Lerotholi Molapo. It is common cause that in his application the customer had cited the physical address where the telephone was to be installed as Motimposo in the Maseru Urban Area. A work order, tendered before the DDPR as part of evidence, gave his details and particulars. It however emerged in evidence that the telephone was instead installed at Ha Ts’osane, still in the Maseru Urban Area. This however only came to the company’s attention when it was discovered that the said telephone had accumulated a huge bill and appeared among the top ten in terms of consumption. The applicant submitted that the company had suffered a loss of over Sixteen Thousand Maloti (M16 000.00) for the unpaid bill. 3. Investigations undertaken by the applicant revealed that the physical location of the phone was at Ha Ts’osane and that it had been installed by the 1st respondent. He was subsequently charged with dishonesty for having installed a telephone at a place that had not been designated in the work order and failing to record such a transfer. He denied the charge, but following a disciplinary hearing he was found guilty as charged and dismissed. He gave a series of justifications for his conduct. Firstly, that it was the customer’s instructions that the telephone be installed at Ha Ts’osane as he had relocated. Secondly, that the computer system had crashed on the day that he had installed the telephone and as a result he could not effect the change to the work order. Thirdly, that the week following the installation he was due to deal with ADSL for two weeks which was further extended for a week and thereafter he was transferred to Transmission. The Court takes judicial notice of the fact that the phone was installed on a Friday. 4. In reaction, the applicant conceded that a change of location could be done if circumstances so dictated but such a change had to be reflected in the work order to facilitate billing. The learned Arbitrator concluded that evidence tendered did not reveal dishonesty but amounted to negligence and thus declared applicant’s dismissal unfair and ordered his reinstatement. The applicants have approached this Court to have this decision reviewed and set aside. They challenged the award on two grounds. GROUNDS OF REVIEW (i) Failure by the Arbitrator to apply his mind to the evidence that was tendered before him 5. The first ground for review is that the learned Arbitrator failed to apply his mind to the fact that the applicant had established a fair and valid reason for the dismissal. Counsel for the applicant, Advocate Ratau, argued that the learned Arbitrator failed to apply his mind to the following pertinent factors which may be summarised as follows: (i) (ii) That whilst the 1st respondent had been dispatched to install a telephone line at Motimposo, he instead installed it at Ha Ts’osane; That the work order which is a record that reflects where a telephone line has been installed reflected the telephone line as having been installed at Motimposo while this was not the case; (iii) That the customer in whose favour the line had been installed misused the telephone line resulting in a loss to the applicant in the total sum of M16,000.00; (iv) That the said customer was calling 1st respondent on a regular basis even at odd hours implying that the two were in some kind of a relationship; (v) That the 1st respondent never made any attempt to put the record straight of where the telephone line had been installed; and lastly (vi) That the 1st respondent never made any attempt to implore or encourage the customer to pay the aforesaid telephone bill. 6. The applicant contended that all the above factors are clear indications that the 1st respondent acted dishonestly with an intention to defraud the company. Applicant’s Counsel submitted that had the learned Arbitrator considered the above factors, he would have arrived at a different conclusion, namely, that there was a generally corrupt relationship between the 1st respondent and the customer in whose favour the telephone had been installed. He concluded therefore that the learned Arbitrator failed to apply his mind to all the material facts tabled before him and by so doing committed a gross irregularity. In a nutshell, applicant’s case is that no reasonable person properly applying his mind to the evidence before him would have arrived at the conclusion arrived at by the learned Arbitrator. On this ground they find the matter reviewable. (ii) Assumption by the Arbitrator of the employer’s managerial role 7. The learned Arbitrator concluded that the employee ought to have been found guilty of negligence and not dishonesty. As he put it at p. 5 of his award “the evidence that was furnished in the present matter does not reveal any act of dishonesty on the part of the applicant, the only issue is that the applicant failed to make the changes which in my view is tantamount to negligence.” Applicant’s Counsel submitted that the learned Arbitrator had no power to find as he did as this was the employer’s domain. He contended that the learned Arbitrator acted ultra vires his powers by his classification of the employee’s conduct as negligence as opposed to dishonesty. 8. He further submitted that the learned Arbitrator ignored a number of important factors including the fact that evidence was led that the customer was calling the 1st respondent on a regular basis, a printout reflecting this was tendered as Exhibit “A”. Evidence was also led to the effect that the customer misused the telephone, making international calls including calls to the 1st respondent when the installation had not been recorded. Applicant’s Counsel submitted that these factors reasonably led one to conclude that the two were out to defraud the company. He brought to the Court’s attention that the question of these telephone calls was not addressed by the learned Arbitrator. 9. 1st respondent’s Counsel, Advocate Mosotho, submitted that all the grounds raised by the applicant are not grounds of review but of appeal as they tend to attack the learned Arbitrator’s decision. He contended that the test for review as enunciated in Sidumo & Another v Rustenburg Platinum Mines Ltd & Others (2007) 28 ILJ 2450 (CC) is whether or not a reasonable decision - maker could reach a decision that the Arbitrator had arrived at not whether the Court agrees with such a decision. THE COURT’S ANALYSIS 10. Our starting point will be to ascertain whether or not this matter is reviewable. It is trite that where a party is unhappy with the award or ruling of the DDPR, he or she does not have the right of appeal. In terms of Section 228 F (1) of the Labour Code (Amendment) Act, 2000 (as amended), DDPR awards may only be subjected to review. The Section provides further in subsection (3) that the “Court may set aside an award on any grounds permissible in law and any mistake of law that materially affects the decision.” Reference to “any grounds permissible in law” is to the normal common law grounds of review. 11. Evidence was tendered on behalf of the applicant that the phone in issue had accumulated a bill of Sixteen Thousand Maloti (M16,000. 00) over a span of about two months (from 27/06/08 to 02/09/08) as reflected in the computer printout. According to the record, several attempts were made requesting the customer to come to applicant’s office, but to no avail. He actually undertook to report to the office but he never did. The evidence tendered by DW 1, the Fraud Data Analyst, revealed that if the system had crashed, the 1st respondent ought to have effected the change on paper. To this end, the witness was asked in cross- examination (page 6 of the record) - Q. “l am putting it to you that due to the crash and transfer he couldn’t have corrected the record?” A. “He could have done it on paper ha a sitoa ho e changer computer” 12. The learned Arbitrator appears to have dwelled mainly on the failure by the 1st respondent to alter the work order. As aforesaid, the main reasons advanced for this were that the system had crashed on the day the 1st respondent had installed the phone and that he was due for a transfer to another Section. On the basis of this the learned Arbitrator came to a conclusion that this was negligence as opposed to dishonesty. One finds it very strange that the 1st respondent whilst still deployed within Econet and not at a different entity could not bring the transfer to the attention of the relevant authorities. In my opinion he could have altered the work order even at a later stage in order to facilitate listing and billing of the phone. It is worth noting that the 1st respondent is a very experienced employee with more than twenty years continuous service with the applicant and was naturally aware of its procedures. 13. The learned Arbitrator failed to deal with the following very important considerations and their totality; (i) That investigations which were not rebutted revealed that the customer had misused the telephone resulting in a bill amounting to M16,000.00 within two months; (ii) That the customer was calling the 1st respondent on a regular basis as evidenced by the computer printout tendered before the DDPR as Exhibit “A”. Was this a sheer coincidence? (iii) The fact that the 1st respondent was due for a transfer and the crashing of the computer, notwithstanding, combining the above two considerations with the fact that the telephone installation was not recorded surely warranted some consideration and determination. By not considering these factors the learned Arbitrator failed to exercise a discretion endowed on him. Had he considered or applied his mind and pronounced himself to these factors which were raised by applicant’s Counsel and reached whatever decision he deemed fit, this Court would not interfere because by so doing it would be challenging the outcome as opposed to the process. 14. According to Coetzee v Lebea NO & Another (1999) 20 ILJ, 129 (LC) the concept of “failure to apply one’s mind” describes a process failure in the reasoning phase of a Tribunal’s (Court’s) proceedings. The Court went further to point out that the best demonstration of applying one’s mind is whether the outcome can be sustained by the facts found and the law applied. The Court had this to say on the concept in Shidiack v Union Government (Minister of Interior) 1912 AD, 642 at 651-2 that if a presiding officer Has duly and honestly applied himself to the question which has been left to his discretion, it is impossible for a Court of law either to make him change his mind or to substitute its conclusion for his own [however] there are circumstances in which interference would be possible and right. If for instance such an officer had acted mala fide or from ulterior or improper motives, if he had disregarded the express provisions of a statute - in such cases the Court might grant relief. But it would be unable to interfere with a due and honest exercise of a discretion, even if it considered the decision inequitable or wrong. 15. The question in a review is not whether the review Court would have come to a different conclusion. It is trite that a review concerns itself with the manner in which a lower Court comes to its conclusion and not with the result. An appeal on the other hand is concerned with the correctness of the result. In this case the Court had no alternative but to enter into the merits of the case in order ascertain whether applicant’s assertions that the learned Arbitrator failed to consider or make a decision on very pertinent issues which had he considered he could have arrived at a different outcome. This was succinctly captured by the Court in Carephone (Pty) Ltd v Marcus NO & Others (1998) 19 ILJ, 1425 at 1426 ( para 9) that ; In determining whether administrative action is justifiable in terms of the reasons given for it, almost inevitably, involve the consideration of the ‘merits’ in some way or another. As long as the judge in determining [the] issue is aware that he or she enters into the merits not in order to substitute its opinion on the correctness thereof, but to determine whether the outcome is rationally justifiable, the process will be in order. The line between a review and an appeal can be very thin at times as in this case. In the circumstances of this case, the Court finds this matter reviewable. 16. Corbett JA., explained the concept of a failure to apply one’s mind in Johannesburg Stock Exchange v Witwatersrand Nigel Ltd 1988 (3) SA 132 (AD) at 152 C-D as: Proof, inter alia, that the decision was arrived at arbitrarily or capriciously or mala fide or as a result of unwarranted adherence to a fixed principle or in order to further an ulterior or improper purpose; or that the [Arbitrator] misconceived the nature of the discretion conferred upon him and took into account irrelevant considerations or ignored relevant ones; or that the decision of the [Arbitrator] was so grossly unreasonable as to warrant the inference that he had failed to apply his mind to the matter aforestated.” 17. In ascertaining the fairness of a dismissal the main consideration is whether on a balance of probabilities the employer had found the employee guilty of the misconduct with which he or she is charged. In labour cases as with other civil matters, the party bearing the burden of proof need to prove his or her case only on a balance of probabilities. Guilty or not guilty verdicts are determined by whether there is enough proof to find the employee probably guilty. It is in criminal cases that the rules of evidence require the guilt to be proven beyond reasonable doubt. 18. Classification of the employee’s conduct as negligence as opposed to dishonesty is indeed a managerial prerogative. Whether or not the 1st respondent’s conduct amounted to dishonesty or negligence could not be dictated upon by the learned Arbitrator. According to one of the eminent labour law authors Grogan J., in Workplace Law, 8th ed., at p. 91 “the power to prescribe standards of conduct for the workplace and to initiate disciplinary steps against transgressors is one of the most jealously guarded territories of managers everywhere, forming as it does an integral part of the broader right to manage or managerial prerogative.” 19. Employers have wide powers of discipline which the law requires to be exercised in a fair and reasonable manner - See Pillay J., in Jonker v Okhahlamba Municipality & Others (2005) 26 ILJ 782 at 786 I - J which was cited with approval in my late brother Lethobane P.,’s judgment in Maboee Moeko v Maluti Mountain Brewery LC59/11 (reported in saflii). This was a case in which the applicant had approached this Court to seek an interdiction against the holding of a disciplinary hearing by his employer. The Court held that the disciplinary process is an employer’s prerogative. As long as hearings are conducted fairly, Courts have no place. Courts should therefore be slow to interfere with the employer’s powers in this regard. Thus it was irregular for the learned Arbitrator to have defined the conduct that the 1st respondent ought to have been charged with in suggesting that it ought to have been negligence instead of dishonesty. 20. In SABC v CCMA & Others (2006, 6 BLLR 587) the CCMA had found that the employee had been unfairly dismissed because he was dismissed for misconduct. The allegations made however related to poor performance on the part of the employee, which of course is different from misconduct. The Labour Court set aside this award on the basis that it was wrong for the CCMA to categorise the offence. The Court held that an assessment of what the employee had done was more important than placing the behaviour in a category. In casu, the learned Arbitrator fell into a similar trap of categorising 1st respondent’s conduct as negligence instead of evaluating what the employer’s charge was based on, and making a decision thereon. On the basis of the above analysis the Court comes to the conclusion that the learned Arbitrator failed to apply his mind to the evidence tendered before him and comes to the following conclusion;  That the DDPR award in A0166/09 is reviewed and set aside;  There is no order as to costs. THUS DONE AND DATED AT MASERU THIS 09TH DAY OF JUNE, 2013. F. M. KHABO PRESIDENT (a.i) P. LEBITSA MEMBER R. MOTHEPU MEMBER I CONCUR I CONCUR FOR THE APPLICANT: FOR THE 1ST RESPONDENT: Adv., T. MOSOTHO Adv., S. RATAU