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Consani Engineering (Pty) Ltd v CCMA & others

[2004] 10 BLLR 995 (LC)


Division:
Labour Court, Cape Town
Date: 23/07/2004
Case No:
C819/02
Before:
Murphy, Acting Judge
Application in terms of section 145 of the LRA
Commission for Conciliation, Mediation and Arbitration Arbitration award
Review Commissioner substituting own standards for those of employer and finding
dismissal inappropriate Award set aside.
Dismissal Misconduct Appropriate penalty Employer entitled to set reasonable
standards for employees, and to dismiss for breach thereof.
Dismissal Purpose Employer entitled to dismiss employee for theft as warning to
other employees Dismissal of employee for roll of tape therefore justified.
Dismissal Theft Employee stealing roll of tape to seal his shack against wind and
rain Dismissal fair as employer was plagued by stock loss.
Editors Summary
The respondent employee was dismissed after a roll of tape was found secreted under
his jacket by a security guard. He pleaded guilty to the charge, but referred a dispute
to the CCMA, claiming that dismissal was too harsh a sanction. The respondent
commissioner reinstated the employee without retrospective effect.
The Court noted that at the time of the dismissal the applicant was losing about
R40 000 a month through theft. It was therefore understandable that the applicant
should have viewed theft as a serious offence. Since the appointment of a new
executive director, the respondent had made considerable efforts to remedy stock loss,
and had then decided to take a firmer line with theft. The applicant had testified that
he desperately needed the tape because wind was blowing through his shack, and it
was leaking. He claimed that he could not wait to ask permission to remove the tape,
but conceded that he was aware of the respondents approach to theft. The Court noted
that the commissioner had thoroughly assessed the sanction imposed. Essentially,
however, she had reasoned that she was required to assess the penalty independently;
that the respondents zero tolerance approach to theft did not conform with its
disciplinary code, which required each case to be decided on its merits; and that there
was also a measure of inconsistency about the manner in which the respondent had
treated pilferers.
The Court held that the natural sympathy that might be evoked by a member of the
less privileged losing his employment through a single irrational act was not relevant
to the test for the fairness of a dismissal. An employer is, within reasonable limits,
entitled to set its own standards for the conduct of its employees. By allowing herself
to be swayed by sympathy, the commissioner had failed to give proper consideration
to the reason for the applicants zero-tolerance policy. That policy had been
communicated to the workforce. Furthermore, the applicant could not be bound by a
more lenient approach
Page 996 [2004] 10 BLLR 995 (LC)
adopted in the past; the applicant was entitled to change its approach, and any
inconsistency that might result from that change was neither unfair nor irrational.

The Court noted further that the commissioner had reasoned that dismissal was
inappropriate because the trust relationship had not been broken. This was not the sole
test to be used when evaluating the fairness of a dismissal; an employer is also
entitled to impose the sanction to deter other employees from theft. The commissioner
had accordingly erred by substituting her own standard for that of the employer.
The award was set aside.
Judgment
Murphy AJ:
[1]
The applicant seeks an order reviewing and setting aside the arbitration
award dated 14 June 2002 handed down by the second respondent acting in her
capacity as a commissioner of the first respondent, the CCMA.
[2]
The fourth respondent, Mr Joseph Shoko, commenced employment
with the applicant on 1 April 1996 as a crane assistant. On 21 November 2001 he was
found in unauthorised possession of a roll of rubber tape that was concealed under his
jacket. A security guard who had conducted a body search of Shoko when he was
leaving the applicants premises at the end of his shift made the discovery. He was
accordingly charged with theft of company property, alternatively attempted theft of
company property and pleaded guilty at a disciplinary enquiry held by the applicant
on 26 and 27 November 2001. After considering mitigating factors, the chairperson of
the enquiry dismissed Shoko, who then lodged an internal appeal in terms of the
disciplinary code, which was unsuccessful.
[3]
Shoko then referred the matter to the CCMA, where, after a fruitless
attempt at conciliation, it was set down for arbitration on 28 May 2002. On 14 June
2002 the second respondent handed down her award in which she reinstated Shoko as
from the date of her award and declined to award him any back pay. It is this decision
that the applicant seeks to have set aside.
[4]
From the record and the arbitration award, it is evident that in the
period preceding Shokos dismissal the applicant had experienced significant stock
losses (amounting to approximately R40 000 per month) as a result of theft
perpetrated by employees. Understandably, therefore, the applicant looked upon theft
as a serious misconduct and began to pursue a policy that proven theft would not be
tolerated in any circumstances. The disciplinary code classifies theft as a dismissible
offence, but explicitly states that each case has to be considered on its merits.
[5]
Since the appointment of the current executive director, the applicant
has spent considerable time and effort readdressing its policy relating to stock loss
problems and has opted for a firmer policy regarding theft and unauthorised
possession of company property. Some effort has been expended on keeping
employees abreast of the new policy and of the correct procedures for obtaining
permission to remove company property from the applicants premises. The applicant
describes its policy in this regard as a
Page 997 [2004] 10 BLLR 995 (LC)
zero-tolerance approach. Accordingly, in order to give effect to the
zero-tolerance policy, the applicant has effected certain changes and, in particular, has
notified its employees through various notices posted at different places throughout its
premises that unauthorised removal of company property will result in disciplinary
action possibly leading to dismissal. Photographs were admitted into evidence in the
CCMA proceedings confirming this. In particular, one sign at the gate of the
applicants premises reads unauthorized removal of any company property beyond
this point will result in disciplinary action which could lead to your dismissal. Other

notices provide: No person shall remove any article from these premises without
necessary documents.
[6]
At the arbitration hearing, Mr AM Kruger, the applicants security
manager and Mr C Stockigt, the maintenance manager testified on behalf of the
applicant.
[7]
Kruger was the person who had searched Shoko and discovered the
roll of rubber tape. While conceding that the roll of tape was scrap rubber, Kruger
testified that he had confronted Shoko with the fact that he still needed to have
completed the necessary documentation and to have obtained authorisation, in the
form of a blue slip signed by one of the managers, before removing scrap from the
premises. Shokos response was that he had wanted to use the tape to effect repairs to
the shack in which he lived and that he had been unable to obtain authorisation after
normal working hours. Krugers attitude in this regard was that Shoko should have
waited until the following day and perhaps put the scrap roll of rubber into his locker
until such time as he could receive the necessary authorisation to remove it. Kruger
further testified to the fact that the applicant was suffering severe losses as a
consequence of pilfering and the unauthorised removal of property.
[8]
Stockigt confirmed that he had chaired the disciplinary hearing and
explained his reasons for imposing the sanction of dismissal. The rule against theft is
enunciated in the disciplinary code and in view of the worsening theft problem, the
notice boards had been put up as an additional forewarning. Hence, he felt it was
reasonable to conclude that Shoko must have been aware of the rule and the
consequences of breaching it. Despite the fact that the applicant allows its employees
to remove scrap and waste from its premises, the rules and policy dictate that the
appropriate forms should be completed and authorisation be given. This procedure
applies, in Mr Stockigts view, no matter what the value of the article in question. He
placed the value of the roll of tape to be in the region of R30 to R40. However, he was
adamant that the value of the item was irrelevant for the purpose of implementing the
theft policy. Zero tolerance aims, it seems, at introducing the highest standard of
probity. He conceded that Shoko had shown remorse at the disciplinary hearing and
that he had given consideration to mitigating circumstances, including the fact that
Shoko was the sole breadwinner supporting his family. He also accepted that Shoko
was a good worker, that there had been no other problems with his performance and
that he personally would have preferred not to have imposed the sanction of dismissal.
However, he felt
Page 998 [2004] 10 BLLR 995 (LC)
compelled to do so because of the zero-tolerance policy. He too made
the point that even had Shoko needed the material for his shack, he could easily have
left the material in his locker or with security until the following day when he could
have obtained authorisation. His evidence concluded with some discussion about a
similar case involving a Mr Deon Louw to which I shall revert later in this judgment.
[9]
Shoko himself testified that he had desperately needed the tape because
the wind was blowing through his house and that he did not want to wait until the
following day because he feared that he would not find it again. As there was nobody
around from whom he could get permission at the time he was leaving work, he just
decided to put the tape under his jacket and to exit the premises. When asked why he
had not put the tape in his locker until the following day, he replied that he had not
thought about that as an option. Although he readily admitted to taking the tape, he
testified that he did not consider his conduct as amounting to theft. He further tried to
minimise the offence by emphasising that he found the roll of rubber in a waste bin.

Nevertheless, he honestly conceded that he knew that the company viewed such
property, regardless of its value or scrap nature, to be its property. He denied being
aware of any discussions at the union forum at which the issue of theft had been
discussed.
[10] Finally, Mr Wellington Nkwandla, a shop steward who had represented
Shoko at the disciplinary enquiry and appeal, also gave testimony. He focused on
mitigating circumstances, the fact that the material was scrap taken from the scrap bin
and on the applicants alleged inconsistency in applying dismissal as a penalty, as
supposedly discernible from the different treatment meted out in the Louw case.
[11] In her award the second respondent records correctly that there were
no material dispute of facts. She properly found that Shoko had not shied away from
admitting that he was aware of the authorisation procedure he ought to have followed
in respect of removing property from the premises. She further noted that the
applicant had not disputed that the tape was waste, but had taken the approach that
theft is theft and that the evidence of the problem of theft facing the company was
indeed compelling. Nor was she persuaded that the value of the item should be taken
into account. The transgression, however it was categorised, was tainted, in her
opinion, as misconduct of the dishonest kind. Her assessment of the sanction imposed
is thorough and thoughtful. She formulated and dealt with the issue as follows:
As arbitrator I am required to independently assess whether the dismissal of the
applicant was fair. An issue I must address is whether the penalty of dismissal was an
appropriate sanction in all the circumstances of the case. It has been held that the
moment dishonesty is accepted in a particular case as being of such a serious degree
to be described as gross, then dismissal is an appropriate and fair sanction.
The evidence of respondents manager, Mr Stockigt, in this case was that the applicant
had shown reliability during his years of service to respondent. He stated that the
applicant was a good worker and that the company would have preferred not to
dismiss him. The statement by Stockigt that the company would have preferred not to
dismiss the applicant is not consistent with the
Page 999 [2004] 10 BLLR 995 (LC)
notion that there had been a complete breakdown of trust in the relationship. It further
suggests that the individual act of misconduct itself cannot be characterized as gross.
It was not in dispute that the applicant had shown remorse.
Stockigts evidence was that he had arrived at the sanction of dismissal because that
was the policy of the company, the term zero-tolerance could be used to describe it. I
note that approach does not correspond to the principle contained in the companys
disciplinary code which states that each case should be treated on its merits.
Another factor that I must consider in respect of the substantive fairness of the
dismissal is the issue of historical consistency. The respondent gave evidence that its
new CEO had for more than the past two years taken a hard line on the issue of theft
in the company. Numerous discussions had been held in the union forum on the
problem of theft. During this period all those found guilty of theft had been dismissed.
The applicant contended that the penalty of dismissal in this case was inconsistent in
relation to the reinstatement of Mr Louw in December 1996. Nkwandla[s] evidence
was that what distinguished the applicants and Louws case from other dismissals for
theft over the past two years was that both involved the unauthorized removal of
waste. No evidence was presented by the respondent in regard to the facts surrounding
the recent dismissals to dispute this. Louw remains in the employ of the respondent
and according to the applicants evidence the workforce were aware of his case.

It has been stated that consistency as an element of fairness has been emphasized in
numerous decisions and awards. However, inconsistency is not automatically
regarded as unfair. An employer may be able to justify inconsistency or differentiated
actions on grounds such as the employees disciplinary record, length of service, or
the seriousness of the contravention. If one considers the circumstances of the Louw
case and that of the applicant there do not appear to be such grounds for
differentiation. Both employees had good records, showed remorse and the
seriousness of the contravention was similar. The company did not dispute the
evidence by Nkwandla that the union had raised the issue of inconsistency at the
union forum meetings.
In view of the above and despite the fact that the applicant was guilty of misconduct
and dishonesty, my assessment is that dismissal was not the appropriate penalty in this
case and therefore the employer has not proved that dismissal was substantively fair.
[12] The reasoning underpinning the second respondents assessment of the
sanction, it would seem therefore, ran essentially as follows: As arbitrator she was
required to independently assess whether the dismissal of Shoko was fair, including
determining whether the penalty of dismissal was an appropriate sanction in all the
circumstance of the case. The applicants reliance on a zero-tolerance policy in respect
of theft of company property did not correspond with the principle contained in the
disciplinary code, which stated that each case should be treated on its merits. And,
finally, taking into account the necessity for historical consistency, Shoko should not
have been dismissed because Mr Louw, another employee, was not dismissed on
similar grounds some six years earlier in 1996.
[13] The applicant seeks to review the award on the basis that the second
respondents findings in regard to substantive unfairness were not rationally justified
in relation to the evidence presented to her at the arbitration. Put in another way, it
was alleged that there is no rational objective basis
Page 1000 [2004] 10 BLLR 995 (LC)
justifying the connection made by the commissioner between the
material available to her and the conclusion she eventually arrived at. In particular, it
was argued that she failed to properly apply her mind to the evidence regarding the
applicants reasons for terminating Shokos employment for theft in the context of its
operational requirements and the problems it was facing with ongoing stock losses.
[14] It deserves re-emphasis that the second respondent correctly held that
there was no material dispute of fact regarding the theft, that Shoko was aware of the
authorisation procedure he should have followed, that the evidence of the problem of
theft was compelling, that the offence amounted to misconduct involving dishonesty,
that the value of the item should not be taken into account and that Shokos reasons
for taking the property were unconvincing.
Having accepted these facts as proven, the second respondent, it was
submitted, erred significantly by materially altering the nature of the enquiry to one of
determining whether Shokos dishonesty was gross or not. According to the applicant,
the correct enquiry should have been whether the theft by Shoko constituted serious
misconduct in the circumstances. Moreover, it was contended that the second
respondent disregarded the applicants evidence relating to the interpretation and
application of its disciplinary policy. It was common cause that with the appointment
of the new CEO theft of company property was dealt with severely in accordance with
the principle of zero tolerance. Shoko knew of the change in policy and what the
probable consequences of non-compliance were. Yet, so the applicant submitted, the
second respondent clearly failed to take these facts properly into account.

[15] In conjunction with various other grounds, the applicant, in the final
analysis, basically submitted that the second respondent erred by substituting her
personal opinion for that of the applicant regarding dismissal as the appropriate
penalty. In so doing, it is claimed, she committed an irregularity in the conduct of the
arbitration proceedings by misconstruing the nature of her functions and the extent to
which she was empowered to intervene in the sanction imposed by the applicant.
[16] Ms Kapa, a union official, who appeared on behalf of Shoko,
submitted briefly that the second respondents award was defensible on the following
grounds. The applicants zero-tolerance approach, in her view, did not correspond
with the principle contained in the companys disciplinary code which stated that each
case should be treated on its merits. Furthermore, the evidence of historical
inconsistency was undeniable in that there was no difference between Shokos case
and that of Mr Louw who had been reinstated for a similar offence five to six years
previously. Both employees had good records, had showed remorse and the
seriousness of the contravention was similar in that the object taken in both instances
was waste matter. Accordingly, she submitted that the second respondent had properly
applied her mind to the evidence led by the applicant and that she was within her
rights to enquire whether the dishonesty was gross or not and to substitute a different
sanction. She, in addition, laid emphasis on the fact that despite the applicants alleged
new
Page 1001 [2004] 10 BLLR 995 (LC)
zero-tolerance policy, no steps had been taken to amend the
disciplinary code to reflect it.
[17] This case conjures the somewhat painful image of a member of the
less-advantaged sector of our society losing his livelihood on account of a single act
of irrationality; his knowingly stealing an item of little value to repair his shack and
shelter his family from the occasional inclement weather in Cape Town. Dismissal for
such an offence could be seen as harsh in the social context in which it has occurred.
Many reasonable and compassionate people would almost certainly opt for greater
tolerance and leniency. That said though, such considerations alone can never be the
test for determining the appropriateness of a sanction for dishonesty in unfair
dismissal law. Decision-makers called upon to assess the justifiability of an employer
sanction are required by the law to act objectively. The decision-maker should embark
upon the reasoning process of assessing a sanction by recognising that, within limits,
the employer is entitled to set its own standards of conduct in the workplace having
regard to the exigencies of its business. See Computicket v Marcus NO & others
(1999) 20 ILJ 342 (LC)1 at 347AB. The employer sets the standard and has the right
to determine the sanction with which non-compliance with the standard will be
visited. As has been stated in various cases, a commissioner should appreciate that the
question of sanction for misconduct is one on which reasonable people can readily
differ. There is a range of possible sanctions on which one person might take a view
different from another without either of them being castigated as unreasonable. If the
sanction falls within a range of reasonable options a commissioner should generally
uphold the sanction, even if the sanction is not one that the commissioner herself
would have imposed. Only if there is a striking disparity between the employer
sanction and the one the commissioner would have imposed should the commissioner
interfere. As Ngcobo AJP (as he then was) put it in County Fair Foods (Pty) Ltd v
CCMA & others (1999) 20 ILJ 1701 (LAC),2 a commissioner is only justified in
interfering in a sanction where the sanction is so excessive as to shock ones sense of
fairness.

[18] It seems to me that the commissioner in this instance, impelled perhaps


by understandable philanthropic motives, has indeed erred in seeking to correct the
employers sanction. Clearly, she opted for a sanction which she considered more
individually just in the circumstances. In so doing she failed to give due and proper
consideration to the employers zero-tolerance policy. While it is correct that the
disciplinary code permitted some discretion, requiring each case to be considered on
its merits, such did not amount to an absolute bar to the subsequent, legitimate
adoption of a zero-tolerance policy, which the evidence reflects was properly
communicated to the workforce. Indeed, once the policy had been communicated, the
imposition of the dismissal penalty, in the light of that communication, accorded with
a proper consideration of the merits of the specific case.
Page 1002 [2004] 10 BLLR 995 (LC)
[19] In similar vein, the applicant could, or at least should, not be held
bound to the approach it had adopted six years earlier in the case of Mr Louw. The
requirement of consistency is not a hard and fast rule. It is something to be kept in
mind as an aspect of disciplinary fairness. Flexibility in adapting to a changing
environment is equally important. Shifts in policy inevitably introduce standards not
consonant with past practices. The applicants change in policy to one of zero
tolerance hence can be fairly regarded as a legitimate modification of the operational
means for protecting the company from ongoing stock losses. Any ensuing element of
inconsistency cannot be considered arbitrary or in bad faith in the circumstances.
[20] Accordingly, the second respondents adherence to the idea of
consistency as an almost immutable principle caused her to exercise her discretion on
a flawed basis, leading in the end to her substituting her own judgment on an
appropriate sanction for that of the reasonable sanction of the applicant. In the result,
her decision falls to be set aside.
[21] Moreover, the second respondent seems to have taken the view that the
sanction of dismissal was too harsh because the trust relationship had not in fact
irretrievably broken down, especially in the light of the evidence of the chairperson of
the inquiry that Shoko was a good worker and that he regretted having to dismiss him.
This conclusion too is unjustifiable. An observation that a worker was a good worker
does not lead of necessity to an inference that after an incident of theft he can
continue to be trusted. Then again, such is not the sole consideration, and on this
aspect I align myself with the standpoint of Grogan Dismissal Juta Cape Town 2002
at 99, when he says:
An employer has two reasons for wanting to rid itself of a dishonest employee. One
is that the employee can no longer be trusted. The other, less frequently acknowledged
but no less legitimate, is the need to send a signal to other employees that dishonesty
will not be tolerated. This consideration relates to the deterrence theory of
punishment. The question to be asked is whether a repetition of the misconduct, either
by the same employee or by others, will adversely affect the employers business, the
safety of the workforce and/or the employers trading reputation.
[22] The point was made similarly in De Beers Consolidated Mines Ltd v
CCMA & others (2000) 21 ILJ 1051 (LAC)3 at 1058 where the court held:
Dismissal is not an expression of moral outrage; much less is it an act of vengeance,
it is, or should be, a sensible operational response to risk management in the particular
enterprise. That is why supermarket shelf packers who steal small items are routinely
dismissed. Their dismissal has little to do with societys moral opprobrium of a minor
theft; it has everything to do with the operational requirements of the employers
enterprise.

[23] In the premises, I have reached the conclusion that the second
respondent erred in substituting her own standard for that of the employers. She
failed to recognise that the employers conduct fell within the range of reasonable
options in the circumstances, and, albeit on the harsh side,
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dismissal as a sanction fell within the band of reasonableness in this
instance. I find therefore that no rational objective basis existed in terms of which the
second respondent was justified in not endorsing the employer sanction.
[24] In the result the following order is made:
(a)
The award of the second respondent is hereby set aside and for it is
substituted an award declaring the dismissal of the applicant to have been fair.
(b)
There is no order as to costs.
For applicant:
GJ Cassells of GJ Cassells Attorneys
For 3rd and 4th respondents:
NN Kapa of the National Union of Metalworkers of SA