Sterling Furnishing Company (Pvt) Ltd v Elisah V Madzivire

### Preamble
THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/93/2016
HARARE, 18 JANUARY 2016
CASE NO.
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THE LABOUR COURT OF ZIMBABWE         JUDGMENT NO. LC/H/93/2016

HARARE, 18 JANUARY 2016    		         	CASE NO. LC/H/665/15

AND 4 MARCH 2016

In the matter between:-

STERLING FURNISHING COMPANY (PVT) LTD			Appellant

And

ELISAH V MADZIVIRE							Respondent

Before Honourable P. Muzofa, Judge

For Appellant		S.B. Bhebhe (Legal Practitioner)

For Respondent		T. Katsiro (Legal Practitioner)

MUZOFA, J:

On the hearing day of this appeal the respondent raised a preliminary point that the second and fourth grounds of appeal donot raise questions of Law.  They therefore should be struck off.  I dismissed the preliminary point and indicated that the reasons will follow.

In terms of section 98 (10) of the Labour Act [Chapter 28:01] ‘the Act’ only an appeal on a question of law shall lie with this court from a decision of an arbitrator.  What constitutes a question of law is now settled see Muzuva v United Bottlers (Pvt) Ltd 1994 (1) ZLR 217.  A question of fact can be a question of law where the conclusion drawn from the facts is so unreasonable in its defiance of logic.

The second ground of appeal impugns the arbitrator’s decision in that the arbitrator failed to appreciate the evidence placed before him in so doing making an incorrect decision.  A perusal of the record shows that the complainant gave evidence and there was no evidence from the respondent to counter that evidence.  Documentary evidence was produced to support complainant’s case.

On a balance of probabilities the arbitrator’s findings can be said to be unreasonable.

The fourth ground of appeal was that the arbitrator erred in finding that the hearing officer was biased when infact neither of the parties raised that issue.

The respondent submitted that the issue raised whether there was any bias is a procedural issue and therefore a ground for review.  The ground of appeal would therefore be improperly before the court.

This challenge is grounded on a failure by respondent to appreciate the issue raised on appeal.  The appellant did not allege that there was bias on the part of any one.  However the issue raised was that the arbitrator in his deliberations also considered that the hearing officer was biased. This was wrong since both parties before him did not raise the issue.

There was no basis on which the preliminary point could be sustained.  Accordingly I dismissed it.

I will now address the appeal on the merits.

The appeal is against an arbitration award handed down on 3 July 2015 in the following terms:

“That the dismissal of the claimant was unfair and that the respondent pay back pay salaries and benefits from the date of dismissal to the date of the award and damages in lieu of reinstatement as re-employment is no longer an option.  The damages are to be agreed and failure to agree any party may approach the arbitrator for quantification.”

The background of this matter is not in dispute.  The respondent was appellant’s Branch Manager based in Harare from July 2010 to May 2014.  Appellant offered the respondent certain benefits that included school fees for children, airtime and leisure/golf allowance.  The leisure/golf allowance was disputed as to its substantive form.  The charges stemmed from the way the respondent accessed these benefits. She was charged in terms of section 4 (a) and (d) of Statutory Instrument 15 of 2006 the Labour (National Employment Code of Conduct) Regulations.  It was alleged that she committed fraud and conduct inconsistent with the fulfillment of her express or implied conditions.

She was found liable and dismissed from employment.  An internal appeal was unsuccessful.  The matter was referred to a Labour Officer by the respondent and subsequently to an arbitrator.

On appeal against the arbitration order the appellant set out five grounds of appeal which to my mind raise four issues.  It was submitted that the arbitrator fell into error in that he found that there was no evidence to prove the charges, that he issued a defective order, that he found that the hearing officer was biased and that the fact that no prejudice was suffered therefore the appellant had no case against respondent.

I will address the grounds of appeal.

The Evidence

Two issues were taken for the appellant.  That the respondent’s non attendance at the disciplinary hearing meant some evidence by appellant was uncontroverted.  It was incompetent for the respondent’s legal practitioner to give evidence.  Secondly that there was adequate evidence to found the conviction and dismissal meted by the disciplinary tribunal.

It was not in dispute that the respondent did not appear before the disciplinary tribunal.  She did not give viva voce evidence and she was not subjected to cross-examination.  Respondent was represented by a legal practitioner during the proceedings who filed the respondent’s response.  According to the appellant the respondent’s absence meant some evidence was not specifically controverted.  In response respondent submitted that the absence does not constitute a fatal irregularity to vitiate the proceedings.  The audi alteram partem rule which embodies the right to be heard is primarily meant to protect the employee.  The employee can waive her right to personal attendance as happened in casu.  The respondent was represented by her erstwhile legal practitioners and her defence properly set out.

I believe nothing much turns out on this issue by the appellant.  Respondent did not waive her right to be heard so the principles referred to by the appellant in the case of Laws v Rutherfurd 1924 AD 261 at 263 are not applicable.  The respondent was heard through her statement and her legal representative.  The only issue that arises is whether the statement and the legal representative adequately set out her case.  This invariably is addressed in the second issue raised on the adequancy of evidence and whether the respondent rebutted the evidence that was placed before the disciplinary tribunal.

I will now address the adequancy of evidence

“The general rule in legal proceedings is that he who alleges must prove.  The claimant in civil proceedings must prove his claim in accordance with the standard of proof, and if he fails to do so, his claim must fail.”

Butler and Finsen, Arbitration in South Africa, Law and Practice at page 248.

In casu the appellant was supposed to prove its case on a balance of probabilities.

Three charges were preferred against the respondent relating to the leisure/golf subscriptions, school fees and airtime benefits.

Leisure/golf subscriptions

At the time the respondent was offered employment, an offer letter was written to her setting out her obligations and benefits.  The benefit for leisure/golf was not included.  According to the appellant this was a golf benefit where respondent was to join a golf club of her choice, play golf and socialize with a view to further the appellant’s business.  So payment was made to a golf club of her choice, which was Chapman Golf Club.  In the period January 2011 to November 2013 it was alleged that respondent withdrew a total of $2 400 being $300 per quarter from appellant’s petty cash as a golf benefit payable to Chapman Golf Club.  On investigation it was discovered that the respondent did not remit the money to the golf club neither did she participate in golf.  When she was confronted respondent produced forged invoices that were disowned by Chapman golf club.  It was alleged she converted the money to her own use.

In her statement of defence respondent denied that the benefit was for golf, she said it was for leisure and networking.  There was no accountability.  The money was paid as a contractual obligation and it was not induced by the production of the invoices.

From the respondent’s defence it is my view that the benefit was for golf rather than an unaccountable benefit of $300 as set out by respondent.  If it was so, there was no need for the respondent to submit invoices for the Chapman Golf Club.  In my view this would have meant that at any other time if she had not paid the golf subscriptions she should have accounted for the money.

The fact that she advised finance in an email dated April 30 2014 about the $300 subscription fees shows some form of accountability.  The benefit was not for $300 it was just the amount for quarterly subscriptions.  That is why in 2011 the invoice was $282.  The benefit was not a general leisure one but specific to golf subscriptions and clearly it was supposed to be accounted for.

Having made that finding the next level for the court to determine is whether there was fraud.  The respondent did not deny that she withdrew petty cash.  She also did not deny that she did not participate in golf at Chapman Golf Club.  To that extent whether she accounted for the money with genuine or fake receipts is not the issue.  She withdrew the money under the pretext that she will participate in golf she did not.  That is enough.

The standard of proof in such cases is only but on a balance of probabilities and I believe the appellant proved its case. In any event respondent shortchanged herself by not attending the hearing so that she can explain some of the gaps in her defence.

School Fees

It was alleged that respondent was entitled to a school fees benefit.  She would claim the money and submit proof of payment to the appellant.  According to appellant respondent’s children were attending school at Conway College and Heritage School respectively.  She claimed $3 560.  At some point she withdrew the children from the said schools, sent them to a school with lesser fees.  She continued to receive the $3 560.  In May 2014 she was asked to produce proof of payment she then advised appellant that the children had transferred; she produced proof of payment of $1 350 and $360 as transport costs.  She later claimed school fees of $1 350 and $180 per term for each of the two children.  Appellant upon investigation discovered that the school fees were $450 per term per child and there was no transport fees, at the new school.

The evidence placed before the disciplinary tribunal was that the respondent had an unlimited school fees benefit.  There were e-mail correspondences between the finance person and the respondent.  What is evident is that on 14 January 2014 the appellant deposited $3 560 being school fees in respect of two children meant for Conway College and Heritage School into respondent’s bank account.  On the same day the respondent received invoices from Northwood Primary School for the two children of $700 per child.  On 17 January 2014 deposits were made in favour of Northwood Primary School two deposits for $1 350 and two deposits for $250.  The total deposits were $3 200.  A detailed ledger from Northwood Primary showed that as at 31 May 2014 one of the Children had paid tuition for the first, second and third term at $450 per term.

There was no correspondence in relation to the first term fees of 2014.  Clearly respondent received the school fees benefit as if the children were still at their previous schools.  I did not hear the respondent explain what transpired.  She received $3 560 but used $3 200 in fees.  She did not account for the difference.  In any event there was a misrepresentation as to which schools the children were attending.

The second term school fees could have led to the opening of the padora box.  The first communication was from finance dated May 5, 2014.  This was a request for respondent to produce the first term receipts and also submit second term invoices.  On 6 May that is when respondent advised finance of the transfer to Northwood Primary School and breakdown in the payments.  On 6 May finance requested for the exact figures for payment.  On May 8 respondent notified finance that it was $1 350 school fees per child and $180 transport fees per child.

This was a clear misrepresentation.  The Northwood Primary School fees invoice had $450 per child.  In any event in January respondent had paid tuition fees for the three terms how is it she claimed fees again.

If respondent intended to be honest with her employer she could have disclosed the transfer of the children in January 2014.  Even after using the money she could have returned the balance.  She did not.  For the second term she claimed some more school fees.  I cannot fault the appellant, respondent was out to defraud her employer through this benefit.

The arbitrator clearly fell into error on this aspect.  An analysis of the documentary evidence spoke for itself.  There was ample evidence in relation to the school fees benefit.

Phone Allowance

The respondent was offered this benefit set out as follows:

“Your cell phone bill for company business and a reasonable private use will be paid for by the company.”

Clearly there was no limit and what is reasonable may be disputable.

According to the appellant the econet bills showed that respondent’s phone bill ranged from $178 in June 2013 to $309 in February 2014.  These amounts were not disputed.  It was alleged that in some instances respondent was not at work but she continued to incur a high phone bill.

Appellant indicated that the personal or private usage was later capped to $20 and respondent overshot that amount.  That as it maybe the appellant did not prove the charge against respondent.

Despite the econet bills that set out the phone calls made, I donot think that clearly indicated how much was used on private business.  For instance for the June 2013 bill of $178 how much of that was for business and how much was for private use.

The arbitrator was correct in the finding that there was no evidence to prove this charge.

The Order

The third ground of appeal was that the arbitrator erred by making an order of damages without an option of reinstatement.

The determination of this ground of appeal is more academic in view of my finding on the first and second grounds of appeal.

The issue for determination is whether it is competent to make an order for payment of damages without an option of reinstatement.

Both parties referred the court to Section 89 (2) (c) (iii) of the Labour Act [Chapter 28:01].  Both parties have also referred to Supreme Court decisions made prior to the amendment of the Act inserting the said section.

Section 89 of the Act provides for the functions, powers and jurisdiction of the Labour Court.  Subsection (2) (c) relates to the orders the Court can make Part (iii) thereof provides for reinstatement.  There is a proviso to that subsection that the order be coupled with an order for damages.

An order for damages can be made and the employer has the onus to prove that the employment relationship is no longer tenable.

The provision is meant to provide the employee reinstatement as the option of choice.  However in my view it is the employer who is given the choice whether to reinstate or not, hence the onus.

This is in sync with a line of cases prior to the amendment like BHP Minerals Zimbabwe (Pvt) Ltd v Takawra 1999 (2) ZLR 77 (S).

In casu the arbitrator having made a finding that there was unlawful dismissal, an order of reinstatement was supposed to be made and payment of damages in the alternative.  It would seem that payment of damages has never been intended to be the primary remedy, the primary remedy is reinstatement.

The section relied upon by both parties clearly does not empower the Labour Court to make an order for damages as a stand alone order.  That would be an anomaly.  The arbitrator fell into error.  This ground of appeal succeeds.

Bias

It was submitted for the appellant that the arbitrator erred when he made a finding that the hearing officer was biased and should not have been appointed as such.  According to the appellant the issue of bias was not raised by the respondent before the disciplinary authority or even in the internal appeal.

The function of a tribunal is to deal and address a case based on the issues raised by parties.  It would be an anomaly for a tribunal to raise an issue and base its decision on that premise see general S.T. Chitanda v United Touring Co. Ltd SC 7/99.

The submissions filed before the arbitrator do not raise the issue of bias.  There was no allegation that the hearing officer was the investigating officer.  The primary bone of contention by the respondent was the inadequancy of evidence.  However in his award the issue of bias was referred to by the arbitrator.  The internal appeal by the respondent did not raise the issue of bias.

To my mind the arbitrator considered what was not placed before him.  Even the record of the disciplinary proceedings did not show that the issue was discussed at any point.

There was an allegation that the appellant intended to get rid of the respondent considering the background of this case.  Still that would not constitute bias as set out by the arbitrator.  The arbitrator was of the opinion that the hearing officer was “the player, umpire and coach at the same time”.  That was not supported by evidence.

The ground of appeal succeeds.

Prejudice

It was argued for the appellant that the arbitrator erred in finding that since there was no prejudice befalling the appellant therefore the charge of fraud was not proved.

I have partially addressed this ground of appeal.  My determination on the adequancy of evidence invariably includes this aspect.  It is the position of the law that prejudice can be actual or potential.  In casu there was both actual and potential prejudice.

In view of the foregoing this appeal should succeed.  There was evidence on a balance of probabilities that respondent committed the misconduct alleged.  The following order is made.

The appeal be and is hereby upheld.

The arbitral award issued on 3 July 2015 is hereby set aside.  The respondent’s dismissal is upheld.

Kantor & Immerman, appellant’s legal practitioners

Sachikonye – Ushe,respondent’s legal practitioners