Matjama v Directorate of Disputes Prevention and Resolution and Another (LC/REV 4 of 8) [2010] LSLC 24 (21 October 2010)

IN THE LABOUR COURT OF LESOTHO LC/REV/04/08 HELD AT MASERU IN THE MATTER BETWEEN TJALE MATJAMA APPLICANT AND DIRECTORATE OF DISPUTES PREVENTION AND RESOLUTION LESOTHO BAKERY (PTY) LTD 1ST RESPONDENT 2ND RESPONDENT JUDGMENT 1. 2. The applicant herein was employed by the 2nd respondent. He was dismissed on the 16th February 2007 following disciplinary proceedings in which he was charged of negligence in that he crashed his car into a stationary vehicle whilst reversing. The applicant does not challenge the decision taken to dismiss him. He is instead complaining that he was denied severance pay despite the letter of dismissal saying he was being dismissed with benefits. Applicant complains further that the benefits that were paid were underpaid in as much as 2nd respondent used a wrong basic salary. Lastly, applicant claimed salary for the months of November, December and January. 3. With regard to the three months salary applicant testified that his union had struck an agreement with the 2nd respondent that entitled them (staff) to basic salary plus a stipulated percentage as commission. He testified that with effect from November 2006, the 2nd respondent stopped paying workers basic salary and only paid them commission. This is the salary that he now claims. 4. 5. 6. 7. Under cross examination applicant stated that before introduction of commission based pay he got M1,794-00 basic salary plus commission. It later turned out that the figure of M1,794-00 was infact basic salary before commission was included. A good example was the pay slip for October 2006 which showed the basic salary as aforesaid plus commission of M919-00 ( see p.48 of record). Applicant stated that they learned in October that their payment was now going to be commission based. In November he got M3,014-00, but all that was categorized as commission. He was asked if that is the reason he considered himself to have not been paid he answered in the affirmative. He was asked if he had ever received a commission of that amount ever since he worked for the 2nd respondent. He said with an increment it could come to that. The pay slips showed that for May, July, September and October applicant received commission respectively as follows: M259-53, M297-22, M275-62 and M919-00. Evidence showed that staff was given increment of 6%. Applicant testified that in December 2006 the pay slip showed that the basic salary was M1,997-43 (see p.48 of the record). Since November the applicant admittedly received way above this amount and he says that only represented a commission. The arbitrator rightly rejected this suggestion. He said even assuming that this amount represented only a commission it was far more beneficial to staff than what they previously got. He cannot be faulted. We go further to add that the fact that applicant admits that he knew from December 2006 that his basic pay was M1,997-43 shows clearly that the amounts he got in excess of that figure represented a commission and overtime in some instances. 8. His responses to Mrs. Mokete’s questions under cross- 3 examination clearly show that applicant is playing semantics in order to get paid twice. If the employer had as he testified erroneously categorized all his payments under commission in November, he corrected that error in December and showed him that his basic salary was M1,997-43. This has constituted the basics of his claim when sought to be paid the balances by which he said he was short paid when his basic salary was taken as M1,200-00. Clearly therefore the claim for payment of anything beyond what applicant got for the three months of November, December and January is unfound. The learned arbitrator correctly rejected it and in so doing she committed no reviewable irregularity. 9. With regard to the under calculation of his benefits as a result of the use of an incorrect basic salary there was no dispute. The representative of the 2nd respondent agreed that applicant was short paid by M2,989-33. She however pleaded set off of M1,550-00. She led evidence that showed that prior to the accident that led to his dismissal applicant had been involved in another accident in which the windscreen of the vehicle he used was broken. Evidence showed that applicant was charged of negligent driving and he pleaded for leniency and undertook to pay for the cost of the replacement of the windscreen. 10. It is not clear from the record when the accident in question occurred. Neither is it clear when the hearing was held. However, the award says at page 4 and page 10 of the record that it was in November 2006. The witness testified that applicant had to sign for the decision that he was being given final written warning and that he would pay for the cost of the repair. Asked if he did sign the witness said he did not know if he signed. The witness stated that he heard during the hearing into the latest negligent driving case that applicant did not pay for the damage to the windscreen as he had undertaken. 11. In his award the learned arbitrator accepted the evidence led on behalf of the 2nd respondent that applicant had agreed to pay 4 the cost of the broken windscreen. He also accepted evidence that the repayment was not affected because the applicant allegedly refused to sign authority for such deduction to be made. She accordingly authorized that the set off be effected. 12. On the issue of severance pay applicant’s claim was based on the fact despite being dismissed for misconduct, the employer had decided that he should be paid his severance. He relied on the letter that confirmed his dismissal in these words: “Mr. Matjama will be dismissed with his benefits.” The letter was written by the Assistant General Manager who had chaired applicant’s appeal hearing. 13. The contention of the Counsel for the respondent which was accepted by the learned arbitrator was that since applicant was dismissed for misconduct he was not entitled to severance pay in terms of section 79 of the Labour Code Order 1992. The representative further produced a memorandum dated 13th December 2006 which stated that management would no longer pay severance pay to employees who are dismissed for misconduct. 14. The memo was produced to counter applicant’s contention that the Assistant Manager had not written the letter the way he wrote it by accident. It was actually in keeping with practice of the 2nd respondent to pay employees severance pay even when they are dismissed for misconduct. As we said the learned arbitrator agreed with the representative of 2nd respondent and disallowed applicant’s claim for severance pay. 15. Applicant applied for the review and setting aside of the award of the learned arbitrator on these findings. Applicant contended that the arbitrator erred and misdirected herself in law in disallowing his claim for severance pay despite clear evidence of the letter of termination which said he would be terminated with benefits. He contended further that the learned arbitrator erred in law and misdirected herself in allowing 2nd respondent to move the application for set off from the bar which had never been an issue in dispute before. 5 16. It is clear from the award that the learned arbitrator disregarded the documentary evidence which was not denied by the 2nd respondent that the employer decided to terminate applicant’s services with benefits notwithstanding the fact that he was dismissed for misconduct. The learned arbitrator was persuaded by argument of the representative which was based on section 79(2) of the Code which provides that “an employee who has been fairly dismissed for misconduct shall not be entitled to a severance payment.” 17. The representative of the 2nd respondent further tendered evidence in the form of a memo dated 30/12/06 in which the employer had sought to inform staff that following advise given, employees dismissed for misconduct would no longer be paid severance payment. Applicant categorically denied knowledge of the memorandum. (see p.46 of the record). Mrs. Mokete for the 2nd respondent did not take that point any further. It appears from the award that the learned arbitrator rightly discarded that piece of evidence because she did not rely on it in coming to the conclusion that she arrived at. 18. The sole reason for disallowing the claim for severance pay was therefore that the law did not permit payment of severance pay where an employee is dismissed for misconduct. In so doing the learned arbitrator disregarded the evidence that showed that notwithstanding section 79(2) the employer decided to terminate applicant with benefits. The learned arbitrator acted irregularly in disregarding that evidence and thereby committed a material error of law of disregarding mandatory principle which ought to be used in interpreting and administering the code. 19. Section 4 of the Code provides for the principles which must be used in interpreting and administering the Code. The principle applicable to the case at hand is enshrined in paragraph (a) and this is what it says: “(a) The standards laid down in the Code are minimum legally obligatory standards and are without prejudice to the right of workers individually and 6 collectively through their trade unions to request, to bargain for and to contract for higher standards, which in turn then become the minimum standards legally applicable to those workers for the duration of the agreement.” The employer clearly acted in terms of the spirit of this section, which permits employers and their employees to agree on any terms which are more beneficial to an employee than those provided for by the Code. Infact the proper interpretation of section 79(2) will show that it does not disallow payment of severance payment where an employee is fairly dismissed for misconduct. 20. It simply says such an employee is not entitled, but he becomes entitled once the employer decides to award him the severance payment notwithstanding that he or she was dismissed for misconduct. This was the case in casu. Applicant became entitled to severance pay just like other benefits which were paid e.g. notice pay, once the employer exercised the discretion that he should not forfeit his benefits. It follows that he learned arbitrator acted irregularly in not considering the documentary evidence tendered and in the process committed a material error of law which materially affected her decision. 21. Applicant contended further that the learned arbitrator acted irregularly in allowing application for a set off to be moved from the bar and that in any event such set off had never been an issue. In the arbitration proceedings before the DDPR there is no other way the employer could raise set off apart from the way 2nd respondent went about it, because there are no pleadings. Accordingly, the 2nd respondent cannot be faulted for raising the issue of set off from the bar as the representative allegedly did. 22. There is however merit in the 2nd contention raised that the issue of set off never featured at any time prior to the arbitration stage. If the employer required that the set off be effected, it did not require the approval of applicant to effect it. Section 85(3) 7 empowers an employer to “take fair and reasonable deductions from the wages of an employee in respect of….loss or damage caused by the deliberate default or gross neglect of such employee to any tools, material or other property of the employer.” The employer could have deducted the loss in terms of this section if that was indeed its intention to recover the loss. 23. Furthermore, at the time of dismissal the employer paid applicant what it considered benefits due to him in full and final settlement. The employer did not effect the set off of the loss it now seeks to enforce. The applicant is correct when he says the issue of a set off is an afterthought. The employer would have long recovered the loss if it had been its intention to recover it. It follows that the learned arbitrator acted irregularly in allowing the set off which can at best be seen as vindictive against applicant for pursuing his right to have his benefits calculated properly. 24. It follows that applicant’s application for review in respect of the issues of severance pay and set off succeed. The review in respect of salary for the three months of November, December and January fails. Accordingly, the 2nd respondent must pay the applicant severance pay for the period of 11 years applicant worked for it and the full amount by which his terminal benefits were under calculated as determined by the DDPR. There is no order as to costs. THUS DONE AT MASERU THIS 21st DAY OF OCTOBER, 2010. 8 L. A. LETHOBANE PRESIDENT R. MOTHEPU MEMBER I CONCUR M. THAKALEKOALA MEMBER I CONCUR FOR APPLICANT: FOR RESPONDENT: MR. THULO MR. NTAOTE 8