FBC Bank Limited v Nichola Gweshe

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO LC/H/328/2016
HARARE, 19 NOVEMBER 2015 &
CASE NO LC/H/1017/2014
13 MAY 2016
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IN THE LABOUR COURT OF ZIMBABWE	   JUDGMENT NO LC/H/328/2016

HARARE, 19 NOVEMBER 2015 &		            CASE NO LC/H/1017/2014

13 MAY 2016

In the matter between

FBC BANK LIMITED							APPELLANT

Versus

NICHOLA GWESHE							RESPONDENT

Before the Honourable R F Manyangadze J

For the Appellant	A K Maguchu  (Legal Practitioner)

For the Respondent    P C Mutasa  (Trade Unionist)

MANYANGADZE J:

This is an appeal against the decision of the National Employment Council Appeals Board for the Banking Undertaking (Appeals Board) handed down on 14 October 2014. The Appeals Board set aside the dismissal of the respondent from employment, and ordered that she be reinstated without loss of salary and benefits.

The factual background to the matter is, in the main, common cause, and is as follows:

The respondent was employed by the appellant, and was, at the material time, holding the post of Trainee Customer Services Officer. She was based at the appellant’s Mutare Branch.

On or about 16 November 2013, the respondent received account opening forms from a prospective customer, ZMDC (Pvt) Ltd. She accepted the application forms and proceeded to open an account for the customer. The process was cleared by her immediate supervisor, the Operations Manager.

The purported ZMDC client turned out to be a fraudster, who went on to withdraw an amount of US$10 000-00 on the same day the account was opened. The fraud was discovered about two months later. This loss led to the respondent facing charges of misconduct.

The respondent was charged with misconduct in terms of Category D 11 (17) of the Code of Conduct of the Banking Undertaking (“the Code”) framed as follows:

“Failure to comply with standing instructions or follow established procedures resulting in substantial loss to the bank”

On 29 April 2014, a Disciplinary Committee found the respondent guilty as charged, and imposed a penalty of dismissal.

The respondent appealed to the Grievance & Disciplinary Committee (G & DC), which, on 9 May 2014, declared a deadlock on the dispute.

There was a second appeal hearing before the G & DC, which, again, declared a deadlock on 14 May 2014.

The third appeal was before the NEC Appeals Board, whose determination is the subject of this appeal. The grounds of appeal are stated as follows:

“1.	With the Grievance and Disciplinary Committee having found the respondent guilty but disagreeing on the penalty only, the NEC Appeal Board erred at law in delving into the issue of whether or not the respondent was/is guilty.

In essence, the NEC Appeals Board which was sitting to hear issues unresolved by the Grievance and Disciplinary Committee erred in delving into an issue that had been resolved.

2.	The NEC Appeals Board erred grossly on the facts generally in finding that the respondent was lawfully empowered to authorise the opening of accounts.

The NEC Appeals Board erred grossly on the facts and at law in finding that the appellant’s failure to charge the respondent for opening ten (10) other accounts was proof that the respondent had been authorized to open the accounts generally and/or including the account in question.

The NEC Appeals Board erred grossly on the facts and at law in finding that the employer could not single out that one transaction at the exclusion of others of the same day. The employer could not single out that one transaction at the exclusion of others of the same day.

3.	The NEC Appeals Board erred at law in concluding the matter on the singular basis of whether the respondent had authority to authorize the opening of accounts yet the respondent had been charged with and found guilty of various other violations of standing instructions.”

The first ground of appeal need not detain the court. The appellant is averring that the NEC Appeals Board should have confined itself to the question of penalty. Its basis for so averring is that the G&DC disagreed on penalty only but confirmed the conviction of the respondent. It is not clear and unequivocal from the deliberations of the G&DC, that the deadlock was on penalty only. The deliberations touched on aspects relating to the question of guilt.

The NEC Appeals Board was essentially considering the respondent’s appeal against the Disciplinary Committee decision as there was no decision from the deadlocked G&DC. That appeal clearly raised issues of conviction.

It is the issues raised by the appellant against the Disciplinary Committee’s decision that informed the deliberations and determination of the Appeals Board. The Appeals Board had to consider all the issues the appellant raised, which included the question of whether or not she was properly convicted. Therefore the first ground of appeal cannot be upheld, as it is clearly devoid of merit.

The second ground of appeal deals with the question of whether the respondent was authorised to open accounts generally, and the account in question in particular.

From her heads of argument, the respondent avers that she was authorised to open accounts. She asserted that “the appellant granted the respondent authorising powers” and that her supervisor, the Operations Manager, “was the one who instructed the appellant to authorise the opening of the account and eventually sent the documents to CPC”.

The respondent contended that if she was so authorised, then no liability for misconduct should attach to her. She would not have violated any standing instructions. Responsibility for the loss lay with the one who granted her the authority to do what she did. It was the appellant’s fault, not hers. In this regard, she referred to the case of Quest Motor Corporation (Pvt) Ltd v Nyamakura 2000 (2) ZLR 84, and submitted in paragraph 9 – 10 of her heads of argument.

“9.	In line with this, it is humbly submitted that the appellant is the author/creator of its own misfortunes. See the case between Quest Motor Corporation (Pvt) Ltd v Nyamakura 2000 (2) ZLR 84 where it was correctly stated that:

‘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 failed to put in place any supervisory procedures to ensure that Nyamakura carried out his duties. It is therefore responsible for the losses it incurred.’

10.	The appellant granted the respondent authorizing powers and now simply wishes to adhere to a redundant policy to whose terms the respondent had been advised otherwise by lawful authorities.”

A reading of the NEC Appeals Board’s decision shows that it was on this basis that it exonerated the respondent from liability, and set aside the Disciplinary Committee’s decision. It held the view that the respondent was authorised to open the ZMDC account, and ten other accounts opened on the day in question.

The appellant, on the other hand, contended that the appellant was not authorised to carry out her duties in the manner she did. It averred that on record, there is no evidence clearly showing that the respondent had been granted authority to open the account in question, or any other accounts for that matter. The respondent’s assertion that she had such authority is based on inferential reasoning, that because she opened ten other accounts without any queries being raised, therefore she was authorised. That cannot be the basis for authority. Mr Maguchu, on behalf of the appellant, argued:

“The fact that the respondent opened ten other accounts on the same day, is not indicative of authority having been given. What the respondent is saying is:

‘I violated the same procedures eleven times, and you charged me for one.’

That does not mean she was given authority. That is an inference ….

The other ten accounts opened without authority had not resulted in loss to the Bank. The Bank could have chosen to add on to the charges on the same day. It chose not to.”

It appears, on the papers on record, there is no evidence of authority having been expressly granted. It is inferred, by the respondent, from the fact that she executed similar duties without issues arising. The respondent’s point is that the practice, admittedly irregular, was condoned by the appellant.

It seems the respondent’s argument is premised on the understanding that the basis of the misconduct charge is the unauthorised opening of the account in question. The respondent’s whole case, according to the appellant, appears to be focused on that.

To clearly appreciate the charge the respondent is facing, one must look at the factual particulars upon which the charge is based. The starting point in gaining such an appreciation would obviously be the notification to attend a hearing. This document, which basically was the charge sheet, is filed of record and captioned “NOTIFICATION TO ATTEND DISCIPLINARY HEARING”. The relevant portion reads as follows:

“Contrary to standing procedures, it is alleged that you proceeded to open an account in the name of Z.M.D.C (Pvt) Ltd without ensuring that the documentation was authentic and correct. You accepted the mandate with various irregularities such as inconsistences on addresses and proof of residence, copies of proof of residence were accepted instead of originals, the mandate was also incomplete with resolution signed by one signatory, memorandum and articles of association and CR14 are suspicious and were certified as true copies of the original documents and yet they are in fact originals which is an indication that proper attention was not given on receipt of this mandate. Notwithstanding the fact that the mandate was not checked by the Operation Manager and authorized by the Branch Manager you went on to instruct the Back office clerk to open the account without Branch Management’s approval, which is contrary to standing instruction. This resulted in the Bank losing $10 000-00 which was withdrawn from the same account on 15 January 2014.

In the circumstances, you are being charged under S I 273 of 2000 Category D (17) “Failure to comply with standing instructions or follow established procedures resulting in substantial loss to the bank.” (emphasis added)

This charge sheet outlines the factual basis of the charge, i.e. what it is the respondent did which constitutes the alleged misconduct. It was that she accepted the application from Z.M.D.C. (Pvt) Ltd “without ensuring that the documentation was authentic and correct”. The charge sheet then goes on to enumerate the various irregularities that demonstrate that the documentation was not authentic. The respondent then went on to open the account without the Branch Manager’s approval. It is this last item on which the defence rests, to the exclusion of the preceding items or particulars.

At the disciplinary hearing, the appellant maintained its position as particularised in the charge sheet. Presenting the appellant’s case as the complainant, Mr Lovemore Makuni is recorded as having advised the hearing committee that:

“NG proceeded to open an account in the name of Z.M.D.C (Pvt) Ltd without ensuring that the documentation was authentic and correct contrary to the standing instructions.

NG accepted the mandate with various irregularities such as inconsistencies on addresses and proof of residence.

Copies of proof of residence accepted instead of originals.

The mandate was also incomplete with resolution signed by one signatory.

Memorandum, articles of association and CR4 were suspicious and were certified as true copies of the original documents yet they are in fact originals which is an indication that proper attention was not given on receipt of this mandate.

The mandate was not checked by the operations Manager and authorized by the Branch Manager as required by standing instructions.

NG went on to instruct the Back Office clerk to open the account without Branch Manager’s approval violating the standing instruction.

The complainant advised that the allegations resulted in the Bank losing             USD10 000-00 which was withdrawn from the same account on 15 January 2014.”

It can be seen that among the list of the factual particulars, the one relating to the Branch Manager’s approval is numbered last, under paragraph (vi).

The standing instructions were made part of the record, and appear as Annexure B to the respondent’s supplementary submissions. The duties of the customer services officer are listed as, inter alia:

“1.	Scrutinise the application forms for correctness.

2.	Certify the copies against the originals.

3.	Date stamp all the documents (application form and attachments).

4.	Sign as the interviewer on the application form.

5.	Forward the documents to the Back Office Clerk.”

Thus, the charge sheet, the presentation in the disciplinary hearing, the standing instructions, are consistent on the particulars that constituted the misconduct. Significantly, these facts are admitted by the respondent. She only sought to escape liability on the basis that past practice allowed her to open accounts without the Branch Manager’s authorisation. Past practice did not, however, allow her to open accounts without authenticating the necessary documentation. It is that failure to carry out the crucial task of authentication that enabled fraudsters to open an account and access funds from the bank. As seen on the standing instructions, the duties of verifying the correctness and genuiness of documents submitted fell on the respondent. They were not onerous duties. It was a basic checking or verification process, meant to ensure that original documents tally with the copies supplied. It cannot be said that the respondent required training beyond what she already knew, to carry out such a task. This clearly distinguishes her circumstances from those obtaining in the case the respondent relied on, Quest Motor Corporation (Pvt) Ltd v Nyamakuza 2000 (2) ZLR 84. In that case, the respondent been appointed to a post “he was obviously not able or equipped to fill”, which resulted in his poor performance.

As for the omissions by the operations manager, the position of the law is such that there cannot be a defence available to the respondent. It is up to the appellant to also discipline the operations manager for her own shortcomings. This position was made clear in the case of Lancashire Steel (Pvt) Ltd v E Z Mandevuna & Ors SC 29-25, which was cited with approval by ZIYAMBI JA in Vimbainashe Dube v Standard Chartered Bank SC 105-04, where the learned judge of appeal stated:

“Turning to the second ground of appeal advanced on behalf of the appellant, namely, that the learned Deputy Chairman erred and misdirected himself in law in holding that the manner in which a fellow employee was punished was not a relevant consideration, the leaned Deputy Chairman relied on the remarks of McNALLY JA in Lancashire Steel (Private) Limited v Elijah Zvidzai Mandevana & Ors SC 29/95 at p 6 of the cyclostyled judgment where he said:

‘Arguments may be addressed ad misericordiam as to how unfair it is that the four respondents out of a number of forty workers who participated in the unlawful collective job action should have been selected for punishment, but such arguments cannot absolve them of their breach of their statutory duty not to participate in such action. It is not uncommon for the alleged ringleaders in any unlawful gathering or action to be singled out for punishment. If they are guilty it is not in law relevant that others may also have been guilty.’

In the instant case authority was granted to terminate the appellant’s services on the grounds of gross incompetence or inefficiency in the performance of his work. It matters not that authority was not sought for the dismissal of others who performed badly. The learned Deputy Chairman was correct in his application of the law.” (emphasis added)

Given the clear and undisputed instances of failure to verify or authenticate the documents in question by the respondent, she cannot escape liability for the alleged misconduct.

On penalty, the authorities are clear and consistent that this falls within the discretion of the employer. See Tobacco Sales Floors Ltd v Chimwala 1987 (2) ZLR 210 (SC), Standard Chartered Bank Zimbabwe Ltd v Chapuku SC 125-04 and Innscor Africa (Pvt) Ltd v Letron Chimoto SC 6-12.

In the circumstances obtaining in the instant case; it has not been satisfactorily demonstrated that the approach made by the disciplinary committee was such a gross misdirection as to warrant interference, both with respect to the conviction and penalty.

Instead, it is the Appeals Board which seriously misdirected itself by interfering with the decision of the Disciplinary Committee.

In the result, it is ordered that:

The appeal be and is hereby allowed.

The decision of the NEC Appeals Board made in favour of the respondent on 14 October 2014 be and is hereby set aside.

The respondent shall bear the appellant’s costs.

Dube, Manikai & Hwacha, appellant’s legal practitioners