Prudence Ndhlovu v Homelink

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/626/13
HELD AT HARARE ON 7th OCTOBER,
AND 22ND NOVEMBER, 2013
CASE NO. LC/H/864/12
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IN THE LABOUR COURT OF ZIMBABWE	  JUDGMENT NO. LC/H/626/13

HELD AT HARARE ON 7th OCTOBER,

AND 22ND NOVEMBER, 2013	      		CASE NO. LC/H/864/12

In the matter between

PRUDENCE NDHLOVU				–	Appellant

And

HOMELINK						–	Respondent

Before The Honourable MUCHAWA J, Judge

For Appellant : E.T. Moyo (Legal Practitioner)

For Respondent: A.T. Muza (Legal Practitioner)

MUCHAWA, J.

This is an appeal against the decision of the Appeal authority which confirmed the appellant’s dismissal from the respondent’s employment on the 10th of October 2012.

Appellant was employed in the capacity of money transfers supervisor when she was charged of misconduct in terms of the Code of Conduct. The charges were put as:

Knowingly or negligently exceeding authority of limits discretion with substantive prejudice to the Company (Section 4.2.2f)

Mismanagement of personal finances leading to any dishonoured cheque (s), and/or repeated complaints from creditors or legal action for debt whether internal or external (section 4.2.2g).

Work related misrepresentation, falsification and dishonesty that have potential to have adverse consequences to the company and individuals (section 4.2.3u).

The facts giving rise to the charges were stated as follows:

That appellant converted fees that had been transferred to BM Msipa and Partners to her own use other than that which had been specified by the respondent.

That the appellant misrepresented facts to the lawyers to sell the property sold to her on mortgage without seeking the necessary authority from the respondent. She did not make good the funds owed to the respondent after completing the sale.

That appellant misled the respondent by failing to disclose other loans when she applied for a staff loan

That appellant put the company into disrepute by not servicing her private loans with Micro King resulting in the lender making follow ups on the unpaid debt at work.

Appellant was found guilty of charges 1 and 3 whilst charge 2 was reclassified as a minor offence since it was not repeated. The penalty was a dismissal.

The grounds of appeal before this court are that the Appeal Authority erred and grossly misdirected itself in that:

It confirmed, that the Appellant had mismanaged her personal finances when evidence was available showing that the Appellant’s loan with Microking  had been repaid.

It confirmed that the Appellant had misrepresented information when she applied for a loan despite the Appellant’s defence that it was an oversight and that the Respondent’s system had safeguards to pick up the anomaly.

It concluded that the Appellant needed the authority of the Respondent to dispose of the immovable property. The agreement of Sale  between the parties did not require the Appellant to seek such permission.

It concluded that she had converted transfer funds for her own use, despite it being common cause that the said transfer fees were loaded on to the loan amount. As such it formed part of the loan which the Appellant repaid and the Respondent suffered no prejudice.

Appellant was not availed the opportunity to make representations before the Appeal Authority.

Appellant was never given an opportunity to make submissions in mitigation resulting in the penalty of dismissal being too excessive in the circumstances.

In response, the respondent raised the points in limine that there was no appeal before me as the appeal is not in the prescribed from LC 3 in terms of Rule 15 (1)(a) of the Labour Court Rules, 2006. The second point raised was that the Appellant had not appealed before the Appeal Authority in respect of the charge outlined in section 4.2.2.(g).

It is averred that the Appeal Authority was correct in its findings and that the decision to terminate the contract of employment was justified in the circumstances.

The Points in Limine

It is alleged that the notice of appeal is defective as it is not in compliance with Rule 15(1)(a) of the Labour Court Rules, SI 59 of 2006 which prescribes that such notice must be in Form LC 3. This is seen by the respondent as a blatant disregard of the rules of this court. I was urged to consider this as a serious irregularity that is serious enough to invalidate the proceedings along the lines of my brother Judge in Zimbabwe Spring Steel (Private) Limited v Arthur Manase and Donald Mitchel LC/H/362/10.

The decisions of this court are only persuasive on me and I am of the view that this is a fitting case to condone departure from the rules in terms of Rule 26 of the Labour Court Rules in the interests of justice, fairness and equity. It is undesirable to dispose of Labour matters on technicalities (See Dalny Mine v Banda 1999 (1) ZLR 220). This appeal is therefore correctly before me.

The second preliminary point related to the raising of an appeal ground before me that had not been raised with the Appeal Authority. In this respect the appellant is averring that the Appeal Authority erred and grossly misdirected itself by confirming that she had mismanaged her personal finances when evidence was available showing that the Appellant’s loan with Microking had been repaid. I agree that it is incompetent for this ground to be first raised with me as a ground of appeal yet it was not so brought before the Appeal authority. This ground of appeal is accordingly struck off.

I consider the remaining grounds of appeal below.

Opportunity to make representations before Appeal Authority

Section 5.6 and 5.7 of the Homelink (Pvt) Ltd Employment Code of Conduct provides for the appeal procedure in appellant’s case. The procedure allows the appeals authority to determine the appeal on the papers. I find that the Code was complied with. Appellant was afforded an opportunity to be heard at the initial hearing and the appeals authority decided on the basis of the grounds of appeal and the record. In the circumstances I find no merit in appellant’s assertion that she was denied the right to be heard.

Personal Loan

In respect to the personal loan the appellant was charged of work related misrepresentation, falsification and dishonesty that have potential to have adverse consequences to the company and individuals.

Appellant applied for a personal loan and in filing in the application form, she omitted to fill in a section G where there was an inquiry as to whether she had other loans running. This information would assist in assessing the amount one was eligible to get as a loan. Appellant alleges that she genuinely forgot to disclose the loan though she was making monthly loan repayments. Resultantly she got a loan for $980.00 yet she should have been entitled to only $335.46.

It was argued on behalf of the appellant that since she did not fill this section, she did not make any representation, whether false or true. It was just an incomplete form and the person processing it had a duty to check.

I find that the appellant’s conduct in the above respect amounts to a misrepresentation and dishonesty. Grogan J in Dismissal, Discrimination and Unfair Labour Practices (Juta and Co Ltd Cape Town 2004 on page 116 addresses the issue of dishonesty thus:

“Dishonesty is a generic term embracing all forms of conduct involving deception on the part of employees……..The dishonest conduct of employees need not therefore amount to a criminal offence. It can consist of any act or omission which an employer is morally entitled to expect an employee to perform or not perform. This may include withholding information from the employer, making a false statement or misrepresentation with the intention of deceiving the employer”.

It was also argued on the appellant’s behalf that the alleged dishonest act should be intrincicably linked to her work. In this case, it is argued, the conduct complained of related to a personal loan and is not work related. Respondent argued that this loan was a special facility for staff and the appellant cannot be treated as any other third party. She was getting a loan due to her position as a staff member and in transacting with her employer she had a duty to conduct herself with utmost honesty.

I find that the appellant in applying for and qualifying for the loan, did so in her capacity as an employee. Her explanation of having forgotten to fill in the relevant section is highly improbable given her position and access to these forms which she had filled in before. She was also repaying another loan. My finding is that she took advantage of her knowledge of how the system worked in order to access a higher loan.

Respondent demonstrated the potential prejudice due to the breach of its loan safeguards and the risk of deducting more than is statutorily allowed. Appellant was therefore correctly found guilty of this charge.

Exceeding Authority

Appellant was charged of knowingly or negligently exceeding authority of limits discretion with substantial prejudice to the respondent. The charge emanated from her selling of the stand she bought with a mortgage loan from the respondent without informing the respondent. Secondly she was alleged to have diverted transfer fees by having instructed the conveyancers to transfer the whole purchase price to her account including the sum of $2604.00 which was supposed to have been remitted to the respondent.

Appellant argued that for this charge to stick, three elements have to be proved. First that appellant exceeded authority, secondly that she did so with knowledge or negligence and lastly that such an act caused substantial prejudice to the respondent.

It was argued that in applying for a loan relating to property, appellant was not exercising duties relating to employment but was just like any third party. When she instructed the conveyancers to effect a third party transfer, it is alleged, she did this as a purchaser and not an employee. She was not exercising any authority for and on behalf of the respondent. Fault must therefore lie with the conveyancers. Further appellant avers that the respondent has not suffered any prejudice as the mortgage loan was paid off well before the date of 2022 in the agreement.

Respondent argued that the facility in question was offered to employees and should be treated as a staff loan. It was meant to motivate and retain staff. In acting as she did appellant is alleged to have taken advantage of her position as an employee and issued an instruction on transfer and payment into her account. Respondent alleges that the prejudice suffered was the lack of security as no mortgage bond was registered and the outstanding amount was recovered only after follow up.

I perused the agreement of sale between the parties and found that it is silent on the issue of whether the appellant needed respondent’s permission in selling the property in question. I also agree with the appellant that the mere requirement for the registration of a mortgage bond over the property to secure the respondent’s loan did not have the effect of prohibiting the appellant from selling the property. This is particularly so as clause 13 of the sale agreement acknowledges the agreement as the entire contract between the parties. I note too that the mortgage bond itself had not been registered and the effect of this was stated by Professor Christie, Business Law in Zimbabwe, 1985 at page 448;

“…………the only way in which a mortgage can be created is by execution of a mortgage bond”.

I find that there was no mortgage bond executed, appellant had no obligation to inform the mortgagor of her intentions to sell. In this respect, appellant did not exceed any authority.

I however find that the appellant did not have a right to instruct the conveyancers not to go ahead with the registration of the mortgage bond in favour of the respondent. Even though the conveyancers may be at fault for actioning this instruction, appellant seems to me to have taken advantage of her employment with the respondent to instruct as she did. The question is how her instruction was received by the conveyancers. It is very probable that they perceived this as an instruction coming from the respondent. Appellant herself apologizes for this and claims she was not aware that the funds were supposed to be paid to Homelink first then transferred to her.

I therefore find that the appellant overstepped her authority in respect of the diversion of transfer fees.

Mitigation

At the hearing, the respondent attempted to tender a new set of minutes of the disciplinary hearing which go up to page 15 yet those on record only go up to page 13 and are duly signed. I refused to accept this new set of minutes which was different and unsigned. I therefore find that on the record, appellant was not given an opportunity to make submissions on mitigation.

Section 12B(4) of the Labour Act enjoins that mitigation of the misconduct should be considered other than just the nature and gravity of the misconduct before dismissal. Section 5.4.2 vi of the Homelink Code of Conduct provides that in assessing evidence the committee should consider precedents and the offender’s record of employment including mitigation factors. From the record, this seems not to have been done. Appellant listed factors such as her clean disciplinary record, her 4 years of service. Further the fact that the appellant had personally disclosed the sale of the stand, the payment of the mortgage loan speedily and the failure of the respondent’s system to detect the unfilled section in the loan application form.

Propriety of the Dismissal Sanction

I find that the respondent took a serious view of the acts of misconduct as elements of dishonesty were involved. It has been held that dishonest damages the trust relationship on which the contract of employment is founded. (See Innscor Africa (Private) Limited v Letron Chimoto SC 6/2012)

Appellant has not demonstrated to me that such conduct was inadvertent and excusable that the penalty of dismissal was not warranted. This is especially because the appellant worked in a supervisory role in a financial institution. In the circumstances appellant has not demonstrated successfully the prejudice suffered as a result of failure to address in mitigation.

In the circumstances I do not find any merit in the grounds of appeal to warrant interference with the dismissal verdict. I therefore order as follows:

“The appeal being without merit is dismissed with costs”.