FBC Bank v Phillmon Chidamba

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/589/2016
HARARE, 17 MARCH 2016
CASE NO. LC/H/589/2016
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IN THE LABOUR COURT OF ZIMBABWE      JUDGMENT NO. LC/H/589/2016

HARARE, 17 MARCH 2016				     CASE NO. LC/H/314/13

AND 23 SEPTEMBER 2016

In the matter between:-

FBC BANK						Appellant

And

PHILLMON CHIDAMBA				Respondent

Before Honourable R.F. Manyangadze, J

For Appellant		Mr A.K. Maguchu (Legal Practitioner)

For Respondent		Ms Z. Chirombe (Trade Unionist)

MANYANGADZE, J:

This is an appeal against the determination of the National Employment Council Appeals Board for the Banking Undertaking; which set aside the respondent’s dismissal from employment, and substituted it with a severe written warning.

The factual background to the matter is as follows.

The respondent was employed by the appellant as a bank teller.  He was, at the material time, based at the appellant’s Masvingo Branch.  The respondent and a workmate, one Happymore Muzara, had joint responsibility for the appellant’s two ATM machines, installed at the Bank and Building Society divisions.  The machines were within easy walking distance of each other.

The respondent and Muzara exercised what is referred to in the record as joint custodianship of the ATM machines.  Their responsibilities included loading cash into the machines, and ensuring that the transactions carried out balanced. Any deficit or surplus had to be traced and corrected.  Any correction done had to be jointly verified by the tellers, before authorisation by their superiors.

The Building Society ATM revealed a discrepancy of a US$100,00 surplus.  Muzara credited the surplus into a client’s account, by the name of Simbarashe Saukwindi.  The reason for this credit was that it was a reversing entry, meant to correct an unsuccessful transaction carried out by the client.  The client denied ever making an unsuccessful transaction.  The client submitted a report in which he explained that he was contacted by phone by Muzara, who asked the client to withdraw the money and return it to Muzara, as it was for payment of Muzara’s rent.

The respondent signed the reversing entry, which entry purported to correct a failed $100,00 transaction carried out by the client.  Muzara alleged that there was connivance with the respondent when he carried out the transaction.  He claimed this was done in order to clear the discrepancy, for which they had spent four days tracing without success.  He resigned before any disciplinary action was instituted against him.

The respondent was charged in terms of the Banking Undertaking Code of Conduct.  The charges were:

“D (5)	– Theft or Fraud

D (18) – Falsification of records or any document whether of a personal nature or otherwise.”

The factual particulars of the charge are outlined in the charge letter dated 15 January 2013, captioned “INVITATION TO ATTEND A DISCIPLINARY HEARING”. The particulars of the charge are outlined as follows:

“On the 3rd of January 2013, you jointly fraudulently raised an entry for $100 with Happymore Muzara who was a joint ATM custodian with you and credited account number 5688025304656 for Simbarashe Saukwindi claiming that it was a reversing entry for an unsuccessful ATM transaction done by the client.  The ATM had a cash surplus of $100 at that time.  The client has denied this and disowned the credit stating that all transactions were successful.  During investigations by Forensic Audit, you failed to produce any supporting documentation to show that you ticked any report leading to you posting the money into the client’s account.  The client has also given a report stating that he was asked to withdraw the money and return it to Happymore Muzara for payment of rent.  Happymore Muzara has agreed to asking the customer to withdraw and return the money and written that you both hatched the plan to call the client although his cellphone was the one used.

Forensic Audit investigations also reveal that you falsified bank records by raising an entry for $100 as an ATM difference which you posted to the above client’s account.”

On 26 January 2013 the respondent’s Disciplinary Committee found the respondent guilty as charged, and imposed a penalty of dismissal.  He appealed to the Grievance and Disciplinary Committee, which was deadlocked and referred the matter to the Appeals Board.  In its determination, of 10 April 2013, the Appeals Board set aside respondent’s dismissal, and substituted it at with a severe written warning.

Aggrieved by this determination, the appellant lodged an appeal with this court.  Its grounds of appeal are stated as follows:

“The NEC Appeals Board seriously misdirected itself and/or erred:-

1.	In reversing the employer’s decision finding the respondent guilty of theft and replacing it with a not guilty verdict.

2.	In reversing the penalty of a dismissal and replacing it with a severe written warning.”

The first ground of appeal relates to conviction, on the first charge – theft.  The main basis of the appeal here is that the finding of guilt was a result of a factual evaluation by the Disciplinary Committee that initially heard the matter.  There was no basis for upsetting that evaluation.

The court was referred to the case of S v Isolano 1985 (1) ZLR 62, where this issue received considerable attention.  The Supreme Court held that;

“I find the remarks of the Lord MacMillan in Watt (or Thomas) vs Thomas [1947] 1 ALL ER 582 (HL) at 590B-D very appropriate in this case.  He said: The appellate court had before it only printed record of the evidence.  Were that the whole evidence it might be said that the appellate judges were entitled and qualified to reach their own conclusion upon the case, it is only part of the evidence.  What is lacking is evidence of the demeanour of the witnesses, their condour or their partisanship, ad all the incidental elements so difficult to describe which make up the atmosphere of an actual trial.  This assistance the trial judge possesses in reaching his conclusion, but it is not available to the appellate court.  So far as the case stands on paper, it not infrequently happens that a decision either way may seem equally open.  When this is so, and it may be said of the present case, then the decision either way may seem equally open.  When this is so, and it may be said of the present case, then the decision of the trial judge, who has enjoyed advantages not available to the appellate court, becomes of paramount importance and ought not to be disturbed.  This is not an abrogation of the powers of a court of appeal on questions of fact.  The judgment of the trial judge on the facts may be demonstrated on the printed evidence to be affected by material inconsistencies and inaccuracies, or he may be shown to have failed to appreciate the weight or bearing of circumstances admitted or proved, or otherwise to have gone completely wrong.  See also Hughes vs Graniteside Holdings (Pvt) Ltd SC 13/84 (unreported) at 10-14.”

These are extensive remarks on the approach the court should take in such cases.  It is when the findings of the tribunal a quo are clearly shown to be grossly unreasonable that they may be interfered with.  The same position was underscored in the case of Nyahondo v Hokonya and Others 1997 (2) ZLR 475.

In response, the respondent averred that it is Muzara who should be solely held responsible for the theft. It is submitted in paragraph 2.1.8 of the respondent’s heads of argument;

“2.1.8.	The above statement shows the sole mastermind of the theft of      $100 to be Happymore Muzara and not the Respondent.”

In other words, the Disciplinary Committee erred in relying on the accomplice evidence of Muzara.  The Appeals Board correctly held such evidence to be suspect and therefore unreliable, argued the respondent.

A look at the Appeals Board’s decision shows that it was mainly influenced by Muzara’s status as an accomplice witness.  This is reflected in the remarks;

“The NEC Appeals Board however took particular notice on the opinion that there was connivance between the appellant and Happymore Muzara.  It felt that ordinarily one would have expected consistency in this alliance but it turned out the accomplice conveniently resigned days later and turned against the appellant who he is alleged to have connived with.  The NEC Appeals Board observed that under these circumstances, it left question marks as to his credibility as a witness.  It felt that having suddenly resigned, it would have been expected of him to be bitter seeing he had just had an issue with the bank.  However, during investigations, he admitted that he indeed attempted to defraud the bank but soon after he was seen with the Branch Manager of the same branch, exposing an uncommon familiarity between the two, which again clouded his whole credibility as a witness.”

It is not clear how the Appeals Board overrode the Disciplinary Committee in its assessment of the credibility of the witness.  The authorities referred to show that it is the Disciplinary Committee that was best placed to carry out such assessment.  There must be gross misdirection in that assessment for it to be overriden by that of the Appeals Board.

Apart from Muzara’s testimony, there are other features in the case that tend to incriminate the respondent.

The Appeals Board made reference to an email, dated 2 January 2013, authored by the respondent, wherein he sought assistance in tracing the $100,00 discrepancy.  The Appeals Board’s reasoning was that it was “highly unlikely that the appellant would on the following day, January 3, 2013, connive with a co-custodian to steal the missing $100 which he had reported himself to Head Office.”

However, the record of the disciplinary hearing shows that the respondent distanced himself from this email. He denied authorship thereof.  It can thus not be used to aid his defence.

It appears the difficulty the respondent found himself in is that this email refers to a surplus “as from 17 – 18 December 2012.” The transaction being reversed or corrected was done on 15 December 2012.  If the ATM transactions were balancing prior to the period indicated in the email, the surplus could not possibly arise out of the December 15 transaction.  Any reference to that transaction as the source of the discrepancy could only be fraudulent.

The situation is compounded by the respondent’s endorsement of the reversal, jointly with Muzara.  Given the patent anomalies, it is most improbable he “blindly” made such an endorsement. The facts inexorably point to his awareness of the fraudulent nature of the transaction.

Taking into account all the features making up this case, the Disciplinary Committe cannot be faulted for returning a verdict of guilty.  It can certainly not be said that its decision was grossly unreasonable in the circumstances.

Even if one were to entertain doubt in associating the respondent with Muzara’s intention to steal the $100.00 surplus, he cannot be exempted from the fraudulent entry.  The facts looked at militate against his innocence. They show participation in a fraudulent transaction.  It matters not whether the intention was actually to steal, or to clear, by fraudulent means, ATM transactions they found not to be balancing. His actions, in my view, would be within the ambit of the charges in first count, being theft or fraud.

If doubt is entertained in respect of theft or fraud, the respondent would certainly not escape liability for the second count, which is falsification of records.  A false entry for $100,00 was raised and misrepresented as an ATM difference traced to an account whose transactions had not created such a difference.

In my view, the Appeals Board’s decision does not show a justifiable basis for tampering with the verdict of guilty, in respect of both charges.

On penalty, the Appeals Board substituted dismissal with a severe written warning.  The Appeals Board’s decision is unclear. It is not clear whether it had substituted the conviction for the second count - falsification of record - with some other charge.  It should have made it clear and specific, in respect of what charge, in terms of which provisions of the Code, it was returning a verdict of guilty.  This portion of its determination is vague, making it difficult to appreciate on what basis the severe written warning was imposed.

In paragraph 14 of its heads of argument, the appellant submits that the Appeals Board found the respondent not guilty of theft, but “however confirmed that the respondent was guilty of falsification of records.” A reading of the Appeals Board’s determination, as already indicated, does not indicate such confirmation.  The verdict returned by the Appeals Board is not precise and concise as to which charge that verdict relates.  At best, it leads to an assumption that it cleared the respondent on the first charge - theft or fraud, and found him guilty of the second charge – falsification of records.

Be that as it may, the Disciplinary Committee’s determination found the respondent guilty of both charges.  Both are dismissible offences in terms of the Code. There was therefore no room to change the penalty.

Even if the respondent was found guilty of the second count only – falsification of records – he cannot escape the ultimate penalty.  It is an offence the appellant, as employer, certainly viewed seriously.  Its discretion on penalty cannot be substituted with that of the Appeals Board.  The Appeals Board could only do so in the event of a clear and serious misdirection on the part of the Disciplinary Committee.  See Innscor Africa (Pvt) Ltd v Letron Chimoto SC 6/12, Mashonaland Turf Club v George Mutangadura SC 5/12, and Standard Chartered Bank v Chapuka SC 125/04.

No such misdirection has been demonstrated.  The appeal, in the circumstances, must succeed.

It is accordingly ordered that;

The appeal be and is hereby allowed.

The determination of the National Employment Council Appeal Board of 10 April 2013 be and is hereby set aside.

The determination of the Disciplinary Committee of 26 January 2013 be and is hereby upheld.

The respondent shall bear the appellant’s costs.

Dube, Manikai & Hwacha, appellant’s legal practitioners