Agribank v Gracious Mushukuto

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/212/14
HELD AT HARARE 28TH NOVEMBER 2013
CASE NO
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IN THE LABOUR COURT OF ZIMBABWE	JUDGMENT NO LC/H/212/14

HELD AT HARARE 28TH NOVEMBER 2013		CASE NO LC/H/293/11

& 11TH APRIL 2014

In the matter between:-

AGRIBANK						Appellant

And

GRACIOUS MUSHUKUTO				Respondent

Before The Honourable R.F. Manyangadze, Judge

The Honourable L Hove, Judge

For Appellant		J Dondo (Legal Practitioner)

For Respondent		S Ngandu (Trade Unionist – ZIBAWU)

MANYANGADZE, J:

This is an appeal against the determination of the National Employment Council”(Banking Undertaking)’s Appeals Board (NEC Appeals Board) handed down on 29 April 2011.  The determination ordered the reinstatement of the respondent without loss of salary or benefits, reversing the appellant’s Disciplinary Committee’s penalty of dismissal.

The brief facts of this matter are common cause.

The respondent was employed by the appellant as a Bank Clerk.

On 6 August 2010, she was found guilty of misconduct by appellant’s Disciplinary Committee.  She had been charged with contravening category D section 15 (gross negligence causing serious loss to the Bank) and category D section 17 (failure to comply with standing instructions or follow procedures resulting in substantial loss to the Bank) of the Code of Conduct for the Banking Undertaking.

Particulars of the misconduct were that on 27 April 2010 the respondent processed a fraudulent RTGS application resulting in a loss to the Bank amounting to US$8 636.36.  The Disciplinary Committee found her guilty of violating category D section 15 of the Code of Conduct, and imposed a sentence of dismissal.

She appealed to the appellant’s Grievance and Disciplinary Committee, which became deadlocked on the question of penalty, and referred the matter to the NEC Appeals Board.

The NEC Appeals Board overturned the decision of the Disciplinary Committee and ordered the reinstatement of the respondent.  Appellant then lodged its appeal with this Court, against the decision of the NEC Appeals Board.  Its grounds of appeal are as follows:

“1.  The Appeals Board erred on a point of law in finding, as it did, that the appellant should not have charged the respondent in the alternative and that the preferred charges were ambiguous when in actual fact, at law this is allowed as it does not amount to splitting of charges and that these charges were not ambiguous at all.

The Appeals Board erred and misdirected itself on a point of law in holding, as it did, that the respondent was not trained to handle RTGS forms when in actual fact the respondent was well aware of the procedure and proceded to process the transaction despite the fact that all checks she had done had been negative.

The Appeals Board erred and misdirected itself in failing to substantiate in its final decision as to why it held that there was an element of shared responsibility with the bank when it was not disputed by the respondent that there were procedures in place and she chose to deliberately ignore them.

The Appeals Board wholly misdirected itself at law in reinstating the respondent for wrongful dismissal after having made a finding that there was an element of shared responsibility with the resultant that the appellant was made to assume full responsibility.

The Appeals Board horribly misdirected itself at law by simply failing to appreciate the matter at hand and showed a lot of bias against the employer.”

At the hearing, the respondent raised a point in limine to the effect that

appellant was not supposed to be heard as it had not filed its Heads of Argument within the prescribed 14 days.

We dismissed the point in limine and indicated that our reasons would appear in the main judgment.

Rule 19 of the Labour Court Rules is the one which deals with filing of Heads of Argument.  In terms of this provision, the obligation to file Heads of Argument arises where the applicant concerned is represented by a legal practitioner.  The applicant was, at the material time, not represented by a  legal practitioner.  It may have been assisted by its in-house legal advisors to draft some of its papers.  These however, are not practising lawyers mandated to appear on behalf of the appellant in terms of section 92 (a) of the Labour Act [Chapter 28:01].

What this means is that prior to the assumption of agency of its current legal practitioners, appellant was a self actor.  There was, in terms of the rules, no obligations on it to file Heads of Argument.  It is for this reason that we were unable to uphold respondent’s point in limine.

I now turn to the merits of the appeal.

Ground 1 of the 5 grounds of appeal deals with the technicalities of the charges preferred against the respondent.  It attacks the NEC Appeals Board’s reasoning that the respondent should not have been charged with 2 charges, section 15 and section 17.

I agree with appellant’s submission that there was nothing improper about preferring the two charges.  It is the employer’s prerogative as to what charges to prefer, within a given set of facts or circumstances.  What is important is whether the facts provide a basis for the charges.  If the main charge fails,  the accused may be convicted of the second or alternative charge, if the facts so prove.

In any case, respondent was convicted of the main charge, and acquitted on the other charge.  At the end of the day, it was one charge, category D section 15, in respect of which she was sentenced.

It seems to me there is no need to dwell on the technicalities of the charges preferred against the respondent.  Nothing turns on the issue.  Whether respondent was convicted of one or other of the two charges appears to be of no great significance, as both are dismissal offences, being in category D, in terms of the Code of Conduct.

Much of the arguments presented in this matter dwelt on the issue in Ground 2 of the grounds of appeal.  It is the issue of the respondent’s alleged lack of training in handling RTGS transactions.

Respondent contends, in her Heads of Argument, that she should not be held liable because she received no clear instructions on how to carry out her duties.  It was the appellant’s responsibility to ensure that she received adequate training in her new role as Enquiries Clerk.  Further to that, the signature verification system was not working, and the manager to whom she referred the transaction authorised it.

Respondent went so far as to aver that the appellant was the creator of its own misfortune.  In this regard, respondent referred to the case of Quest Motor Corporation (Pvt) Ltd v Nyamakura2000 (2) ZLR 84, where SMITH J stated:

“In my opinion, Quest is the author of its own misfortunes.  It appointed Nyamakura to a position which he was obviously not able or equipped to fill and it failedto put in place any supervisory procedures to ensure that Nyamakura carried out his duties.  It is therefore responsible for the losses it incurred.”

On the other hand, applicant contended that respondent should be held accountable for her negligence.  She was a Teller who dealt with RTGS transactions, and had been doing so since 2009, though at the back office.

Appellant further contended that the issue of lack of training does not absolve respondent from liability.  What was expected of her was very clear.  It was to verify signature.  If there was anything amiss, she should have raised alarm.  Instead, she simply verified there was sufficient balance to that transfer.

Appellant distinguished Nyamakura’s case from the instant one,  arguing that respondent was able to carry out the transactions, and skipped basic procedures.

The findings of the Disciplinary Committee (Committee) are instructive.  They appear on pages 27 – 28 of the record.  The committee found that the Branch where respondent worked was not able to show that it gave her explicit instructions on how staff should handle transactions. However, the Committee went on to note that the omissions in the transactions were so glaring they should have been easily picked up.  The Committee’s remarks in this respect are pertinent.

“For example, it was pretty clear that the name of the person who brought the RTGS was not on the papers.  Any person with reasonable degree of  eye sight should have noticed this if it was an issue. Yet nobody picked this including the manager.”

The Committee was implying that the omissions were so palpable, so glaring one needed to be visually challenged to fail to pick them up.

What made respondent’s case particularly bad was that she went on to endorse that signature had been verified, well knowing that that had not been done.  That amounted to misrepresentation to her superiors.  She then processed the RTGS as if everything was normal, completely ignoring obviously negative features she had observed.  In this regard, the Committee found that:

“she proceeded to initial the customer’s signature verified section with her initials G.M. in the space provided and this signified signature verified and its understood in the banking system to be the case, next she went on to capture the RTGS as if everything was normal without raising any reservations to the superior despite all the negatives she had come across in the checking process.”

The Committee went on to comment:

“What happened after that, diligent or not diligent is for the supervisor to answer.”

Their findings clearly show that respondent was aware of what she was doing and was supposed to do. She cannot reasonably plead ignorance in those circumstances.  It cannot reasonably be argued, as she had attempted to do, that she be absolved from liability solely on the basis of lack of training.  The facts of the matter do not, in my view, support that contention.

The Disciplinary Committee carefully appraised itself of the facts of the matter.  There is no basis on which to interfere with its findings.  The Committee’s position was clear that notwithstanding the deficiency in training, the manner in which that particular transaction was processed established gross negligence on the part of the respondent.  The supervisor should be held answerable for his own negligence, at the stage at which he handled the transaction.

Ground of appeal 3 and 4 touch on the same issue, that of shared responsibility.  It has already been seen, in ground 2 of appeal, that the Disciplinary Committee found respondent liable, notwithstanding the contributory negligence of the supervisor.  In my view this issue has beenadequately addressed in the analysis on ground of appeal 2.

The appellant referred to the case of Standard Chartered Bank v Chipingu SC 104/02.

In that case the respondent, on a busy day in the bank, handed over his set of strong room keys to the Branch Operations Manager, without first obtaining authority from the Branch Manager.  This enabled the Operations Manager to enter the strong room alone, when he should have done so jointly with the respondent, as co-custodians of the Bank’s treasury cash.

The Disciplinary Committee found the bank employee guilty of gross negligence, and imposed a penalty of dismissal.  The breach of procedure relating to the custody of the safe keys was viewed seriously, notwithstanding that the person to whom the keys were handed was a co-custodian and respondent’s superior.

In the circumstances of the present case, there can be no doubt that respondent was properly convicted by the Disciplinary Committee, for breaching category D section 15 of the Code of Conduct.

I have dwelt on this issue at length because the NEC Appeals Board’s determination appears vague on the question of conviction and sentence.  It is in my view an ambiguous determination.   It reads:

“She is alleged to have processed a fraudulent RTGS.  When G Mushukuto processed the RTGS she gave her superior to authorize the transaction.  From the record it is seen that she was never trained for the duties she performed, hence  the charge was too excessive.  The Appeals Board also observed that the offence deserved only one charge.  The bank should not charge in the alternative and charges should not be ambiguous.  There is shared responsibility by the bank and employee in the loss incurred.  In the circumstance, the NEC Appeals Board ordered the reinstatement of the employee without loss of salary and benefits from the date of wrongful dismissal.”

The determination is not couched in clear and definitive terms on the question of liability.  The NEC Appeals Board appeared uncertain on how to treat the respondent’s case.  It did not pronounce itself clearly and definitively on whether or not the respondent was liable for the misconduct with which she was charged.

It reinstated without a clear and specific finding on guilt, from a reading of its determination.  A finding of not guilty has to be somewhat inferred from the order of reinstatement.

It is this vagueness and ambiguity, it seems to me, that prompted the appellant to aver, in its 5th ground of appeal, that the NEC Appeals Board failed “to appreciate the matter at hand and showed a lot of bias against the employer.”

It made a finding of “shared liability by the bank and the employee in the loss incurred,” which suggested that it found the employee liable for her part in the prejudicial transaction.

It then went on to order reinstatement, suggesting that it had absolved her from liability.  This is a confusing and contradictory approach.  It also refers to the “charge” as being too excessive.  Normally it is the penalty, not the charge,  that is described in such terms.

The NEC Appeals Board’s treatment of the appeal, as already indicated, reflects a lot of uncertainty and indecision as to whether or not respondent is guilty.

Initially, it seemed to me this was an appeal concerned with penalty only.  After looking at the NEC Appeals Board’s decision, I considered it best to look at both conviction and penalty.  This was especially so after considering respondent’s Heads of Argument and the submissions made on her behalf in court.  The Heads of Argument challenge both conviction and sentence.  The submissions in court however, seem to be focused on sentence only, as if it is conceded the conviction was proper. For the avoidance of doubt, I looked at both aspects.

I have already concluded that the Disciplinary Committee properly convicted the respondent and that there is no basis on which to interfere with its findings in respect thereof.  I must now consider the appropriateness of the penalty.

In this regard, the question is whether the NEC Appeals Board was justified in substituting the Disciplinary Committee’s decision to dismiss with an order of reinstatement.

Some of the factors respondent relied on in urging the court to set aside the dismissal have been looked at in the analysis of the appropriateness of the conviction.  They can also serve as mitigatory factors, in appropriate circumstances.  These include the lack of training, supervisor’s contributory negligence, what the respondent referred to as shared responsibility for the loss.

In addition, respondent implored the court to take into account the need for a correctional and educational approach to sentence, instead of a punitive one.

It has been stated in numerous cases, that the penalty for an employee found guilty of misconduct is principally the prerogative of the employer.  It is the employer who sets the norms, values and standards by which an employee’s performance and conduct is to be measured within its organisation.  The employer also decides on the sanctions for any breach of these values and standards.

This was the position taken in County Fair Foods (Pvt) Ltd v CCMA&Others  (1999) 20  ILJ 1701 (IAC) wherein it was stated:

“It lies in the first place within the province of the employer to set the standard of conduct to be observed by its employees and to determine the situation with which non-compliance will be visited, interference therewith is only… in the case of unreasonable and unfairness.”

Recent Supreme Court decisions in Zimbabwe take the same position. In Innscor Africa (Pvt) Ltd v LetronChimoto SC 6/12

MALABA DCJ stated at page 2 of the cyclostyled judgment:

“A principle has now been firmly established to the effect an appellate court should not interfere with an exercise of discretion by a lower  court or tribunal unless there has been a clear misdirection on the part of the lower court.  In this case the Labour Court did not even appreciate that it was dealing with a case of an exercise of discretion by the arbitrator.  The Labour Court merely substituted its own discretion  for that of the arbitrator, without finding any recognisable misdirection on the part of the arbitrator.”

Similarly, in the instant case, the NEC Appeals Board merely substituted its own discretion for that of the Appellant’s Disciplinary Committee.  No justification has been satisfactorily shown for such substitution.

In the Innscorcase, supra, there was no prejudice to the employer. The value of the property involved was only US$4.00.  Yet the Supreme Court held that the penalty of dismissal should not be interfered with.

In casu, the prejudice was US$8000.00.  The employer viewed the misconduct as a serious form of negligence.  It was worried about the erosion of public confidence in it as a banking institution, occasioned by the processing of the fraudulent RTGS transaction, in circumstances where “Any person with a reasonable degree of eyesight should have noticed” the irregular nature of the transaction and raised alarm.  The misconduct thus went to the root of the employment relationship.  The gravity with which the misconduct was viewed is clearly reflected in these comments by the Disciplinary Committee:

“From the evidence by the defendant herself I find it baffling that a bank official at any level of seniority can wilfully process the transaction without verifying signature or verifying with the client or parent branch telephonically.  It is clear that Gracious had no regard or understanding of this due process which she attempted to follow but surprisingly ignored her findings and proceeded despite the checks proving negative.She cannot therefore claim ignorance about a process she did on her own volition because if she had diligently followed all the pointers she would have thwarted the fraud.  She was indeed grossly negligent.  The bank lost $8 636.36.”

There can therefore be no doubt that appellant regarded respondent’s misconduct as serious.  There is no justification for tempering with the penalty it imposed, through its Disciplinary Committee.  The NEC Appeals Board’s alteration of that penalty cannot be upheld in the circumstances.

In the result;

The appeal be and is hereby allowed.

The decision of the NEC Appeals Board dated 29 April 2011 be and is hereby set aside.

The decision of the appellant’s Disciplinary Committee dated 5 August 2010 be and is hereby upheld.

Each party shall bear its own costs.

……………………………………….

R.F. MANYANGADZE

JUDGE

...……………………………………	I agree

L HOVE

JUDGE