IN THE LABOUR COURT OF SOUTH AFRICA. (Held at Johannesburg) Case No: J768/98. In the matter between: FREE STATE CONSOLIDATED GOLD MINE. Applicant.

Transcription

1 IN THE LABOUR COURT OF SOUTH AFRICA (Held at Johannesburg) Case No: J768/98 In the matter between: FREE STATE CONSOLIDATED GOLD MINE Applicant and B M JAMMY First Respondent NATIONAL UNION OF MINEWORKERS & OTHERS 2nd to 14thRespondents REASONS FOR JUDGMENT Date of Hearing: 6 August 1998 Date of Judgment: 6 August 1998 On behalf of Applicant: Adv A Franklin Instructed by: Deneys Reitz Ref: Mr M E Wilken On behalf of Respondent: Adv T J Bruinders Instructed by: Maserumule & Partners Ref: Mr Msebo

2 BRASSEY, AJ: [1] This is an application for the review of an award given by the first respondent on 24 February 1998 in a dispute between the applicant and the remaining respondents arising out of the dismissal of the 3rd to 14th respondents, whom I shall refer to as the individual respondents. [2] The dismissal arises out of allegations that the individual respondents made themselves guilty of theft of gold bearing material that was found in certain lockers in rooms occupied by them. The Applicant identified them as the possessors of the gold by means of documents of varying descriptions simultaneously found in the lockers. [3] The facts giving rise to this review are as follows: Following the discovery by the applicant's security personnel of gold bearing material in lockers allegedly used by the 3rd to 14th respondents, the individual respondents were dismissed from the applicant's employ. A dispute subsequently arose between the applicant on the one hand and the second respondent and the individual respondents on the other. In order to resolve that dispute the applicant and the second respondent concluded an arbitration agreement on 15 February 1998 in terms of which the disputes arising from the dismissals were referred to arbitration by the first respondent. This arbitration agreement was concluded pursuant to the provisions of the so called individual dismissal dispute and adjudication procedure which had been entered into inter alia between the applicant and the second respondent.

3 [4] Following a pretrial conference, the terms of reference of the arbitrator were settled as follows: The arbitrator is required to determine: 1. Whether the search conducted by the respondent on 21 February 1997 at 7 Hostel, President Steyn Mine was fair, i.e. whether it was so conducted in compliance with the provisions of clause of the code of conduct entered into by the respondent and other mining parties, on the one hand, and the first applicant on the other, on 23 June 1992; 2. if so, whether the evidence obtained as a result of the search is admissible; 3. whether the evidence presented at the disciplinary hearing which resulted in the dismissal of the 12 individual applicants was sufficient to establish the commission of the offences on a preponderance of probabilities." [5] At the ensuing arbitration the record of the disciplinary hearing was apparently tendered. In addition, evidence was tendered both by the applicant and through the mouth of one of the 12 individual respondents, it being agreed between the parties that his evidence would be taken as representative of and standing for the evidence of all the other respondents. Having heard the evidence, the arbitrator gave an award in which he resolved the first two issues before him in favour of the applicant. The finding in respect of those two issues is not the subject of this application and no more therefore need be said of them save in so far as they pertain to the third.

4 [6] As regards the third issue, namely the substantive fairness of the employees' dismissal, the arbitrator found that the applicant had failed to establish the guilt of the 12 employees whose services it had terminated and accordingly reinstated them in the employment of the applicant with effect retrospective to a date six months prior to the date of his award. [7] The applicant now seeks to review and set aside the arbitrator's award in terms of section 33 of the Arbitration Act, 42 of 1965 read with section 157(3) of the Labour Relations Act, 66 of Save as I shall subsequently indicate, it is common cause between the parties and I believe rightly so that I have jurisdiction to entertain this application on this basis. [8] Section 33(1) of the Arbitration Act empowers a court on the application of any party to an arbitration to make an order setting aside the arbitration award inter alia in circumstances where the arbitration tribunal has exceeded its powers. See section 33(1)(b) of that Act. It is upon this provision that the applicant relies in seeking to review and set aside the award of the arbitrator. The applicant contends that the arbitrator exceeded his powers by applying the criminal standard of proof instead of the civil standard in deciding the third question in his terms of reference, namely whether the evidence presented at the disciplinary hearing, which resulted in the dismissal of the employees, was sufficient to establish the commission of the offences on a preponderance of probabilities.

5 [9] The criminal standard to which reference is made was referred to pertinently by the arbitrator in his award in the following terms: "Two cardinal rules of logic governing the use of circumstantial evidence in criminal proceedings were enunciated by the Appellate Division in R v Blom 1939 AD 288 and have basically been accepted as constituting the benchmark against which the probative value of circumstantial evidence must be assessed. They were stated as follows: 1. The inference sought to be drawn must be consistent with all the proved facts. If it is not, then the inference cannot be drawn. 2. The proved facts should be such that they exclude every reasonable inference from them save the one to be drawn. If they do not exclude other reasonable inferences, then there must be doubt whether the inference sought to be drawn is correct." The arbitrator continued as follows: "Those, as I have stated, are the principles acknowledged to be applicable in criminal proceedings where the guilt of the accused must be established beyond a reasonable doubt. It is, however, as Mr Grimsel emphasised, established labour practice in internal disciplinary proceedings that allegations against employees need be proved only on a balance of probabilities". [10] The civil standard for the drawing of inferences has been made the subject of a number of decisions in courts, among them is the decision in AA Onderlinge

6 Assuransie Assosiasie Bpk v De Beer 1982 (2) SA 603 (A) at 614H where Viljoen JA expressed himself as follows: "Dit is, na my oordeel, nie nodig dat 'n eiser wat hom op omstandigheidsgetuienis in 'n siviele saak beroep moet bewys dat die afleiding wat hy die hof vra om te maak die enigste redelike afleiding moet wees nie. Hy sal die bewyslas wat op hom rus kwyt indien hy die hof kan oortuig dat die afleiding wat hy voorstaan die mees voor die hand liggende en aanvaarbare afleiding is van 'n aantal moontlike afleidings." [11] Two other cases, which can usefully be cited, were quoted to me by counsel for the applicant. The first is Govan v Skidmore 1952 (1) SA 732 (N) at 734 where Selke J held that the selected inference must "by the balancing of probabilities be the more natural or plausible conclusion from a amongst several conceivable ones". This dictum was approved by the Appellate Division in Ocean Accident and Guarantee Corporation v Koch 1963 (4) SA 147 (A) at 259 where Holmes JA held that plausible in the context meant acceptable, credible, suitable. [12] These authorities were not cited by the arbitrator in the course of his award. The most that the arbitrator did was to caution himself that R v Blom was applicable within the criminal context and that within the civil context it was necessary that the allegation against employees be proved only on a balance of probabilities. In the passage to which I refer, which follows immediately after the arbitrator's recital of

7 the passage from R v Blom, it is by no means clear that the arbitrator appreciates the consequences of the application of the approach in R v Blom to civil proceedings. That, at any rate, is the submission that Mr Franklin, who appeared on behalf of the applicants, made before me. It is on the arbitrator s apparent failure to appreciate the distinction that the Applicant rests its attack on the award. [13] To understand the approach that was adopted by the arbitrator it is necessary to have recourse, albeit briefly, to his assessment of the evidence and the submissions made by the parties before him. [14] The essence of the case against the individual respondents, as I have already indicated, is that gold was found in lockers that could, by dint of documents that they contained, be identified as their lockers. Being in possession of the gold they must be taken to have been party to its misappropriation. [15] The gold was discovered by the use of a machine referred to as a scintilometer which apparently has the capacity to determine whether gold bearing material exists within its proximity. The arbitrator dealt with the search of the lockers in the following terms: "The search through the medium of the scintilometer indicated goldbearing material in numerous lockers in different rooms in G Block. In each case the padlocks securing the lockers in question were cut and the goldbearing material removed and placed in

8 plastic bags, together in 12 instances with documents in one form or another allegedly identifying the owners of the lockers in question." [16] In summarising the evidence of Sergeant George, who testified on behalf of the applicant before him, the arbitrator said the following: "The search then proceeded on the basis which I have described, photographs being taken of the interior of each locker which was opened. New padlocks were fitted to those to which forced entry had been obtained and the keys to each were left with Sergeant George in boxes indicating the number of the locker to which they related. In due course, he testified, each of the employees using the locker in question came to him in order to collect the new keys." [17] The arbitrator then went on to summarise the evidence of Mr N Bekumzi, the fifth applicant in the matter before him, the six respondent in the matter before me. Mr Bekumzi, said the arbitrator, testified as follows: "Goldbearing material had been found in a locker allegedly identified as belonging to him on the basis of a pay slip dated 26 August 1994 in his name which had been found therein. He knows absolutely nothing about goldbearing material in any of the three lockers used by him at the time, he stated. He has never had goldbearing material in his lockers and had absolutely no idea how the old pay slip in question came to be where it was found on the 21st February When he went to work that morning two of his lockers, as was his custom, were locked by him, the third

9 containing his underground clothes was left unlocked. When he returned from his shift one of the two secured lockers had been opened, the other was still locked. No new padlocks had been used on any of them." [18] Having considered the balance of Mr Bekumzi's evidence, he then deals with the failure by the other individual respondents to testify as follows: "It was correct, according to Mr Msebo [who appeared on behalf of the individual respondents], that none of them had elected to make a statement in the course of disciplinary proceedings for the simple reason that they would have been able to say nothing more than was now being submitted namely that they knew nothing of the allegation and the charges against them." [19] After dealing with the first two issues, the arbitrator turns to the third, that is the one with which I am concerned, and deals with it in substance as follows. He says that the company's case against the individual employees was based entirely on circumstantial evidence. By this he means that none of them was present when the search was conducted and that the goldbearing material alleged to have been stolen by them was never produced or presented to any of them. He makes the point that the purported identification of the culprits, i.e. the individual respondents, is based solely on the presence in each of the lockers of some form of documentary evidence pay slips, identity documents and/or tax certificates purportedly identifying the locker as belonging to the individual in question. He says it is the probative value of that

10 evidence alone upon which the company's case against them must be evaluated. [20] After summarising the submissions made before him by Mr Grimsel, who appeared on behalf of the company, the arbitrator concludes that the inference he is asked to draw from the facts to which Mr Grimsel refers is a compelling one; but, he says, it cannot be properly assessed without a careful examination of the factors advanced by the union as negating it. [21] The status of the factors he then lists was made the subject of debate before me. Mr Franklin rightly pointed out that they originate in, and are referred to as, the submissions made by the union in its argument before him. It seems clear, however, from the way he deals with them that he considers them to be cogent. This is evident from the fact that in his precursor to the summary he refers to the material that was made the subject of the submissions before him as requiring careful examination. That remark would not have been made had he simply been reciting what submissions were made. [22] One of the submissions was the following: Virtually all the documents relied upon in that context were historically dated and there was, it was submitted, a real possibility that these either had been left or had found their way into different lockers subsequently used by other persons long before February 1997 when the search was conducted. The importance of that paragraph is that it records the submission that was made to him on the basis that a real possibility was said to exist that the

11 documents in the lockers bore no relationship to the owners of the lockers and thus no relationship to those who were in possession of the gold. What makes it, as I say, all the more important is that this submission was treated by the learned arbitrator as requiring his careful examination. [23] A second paragraph which is also important in this summary is the following: "The evidence of Mr Bekumzi acknowledged to be similar evidence to that which, had it been expedient to do so in the opinion of the parties, would have been presented by the other applicants, permits of or even suggests numerous inferences as valid and legitimate as that urged by the company and which accordingly preclude the acceptance of the circumstantial evidence upon which the company relies as the basis of the guilt of each individual for which it contends." [24] At this juncture in the award, therefore, we have the arbitrator recognising that the company's case was based on circumstantial evidence; accepting that it required the drawing of secondary inferences from primary facts namely, the existence of gold in lockers in which identification documents belonging to the alleged culprits were found; then reciting the test for the drawing of inferences in criminal proceedings where the onus is beyond reasonable doubt; and then cautioning himself that he must remember that the proceedings with which he is concerned entail the application of the civil standard, namely on a balance of probabilities. We have the arbitrator reciting the submissions of the company which he finds to be compelling; then reciting those of the union which are to the effect that firstly, a number of inferences, each of them as

12 valid and legitimate as the next, can be drawn from the existence of the documents in the lockers containing gold material and secondly, that there is a real possibility, and it is put no higher than that, that these documents had been left in the lockers when the person using them moved his possessions to another locker. [25] Having engaged upon that analysis, the arbitrator then turns to formulate his conclusion as follows: "A careful review of the totality of this evidence and of the submissions made to me and the authorities referred to by the representatives of the parties in this not uncomplicated matter, leads me to conclude that notwithstanding the lesser onus required to be discharged by it in proceedings of this nature as compared with that applicable in criminal prosecutions, the company has failed, where the ordinary accepted principles of assessment of circumstantial evidence are applied, to identify on an acceptable basis the individual applicants as the perpetrators of the theft with which they were respectfully charged. The inference which I am asked to draw in that regard from evidence which by its very nature is inconclusive is patently not one which excludes all other possible inferences which may be drawn from the facts upon which the company relies. It is possible that Mr Bekumzi's evidence, and hence the similar evidence which I am asked to assume that the other applicants would have presented had they testified, is not true but it contains, in my view, no elements of fanciful or potential fiction which would justify its rejection on a balance of probabilities. In these circumstances, where that criterion is applied, the company

13 has, in my opinion failed in the arbitration to establish the guilt of the 12 applicants whose services were terminated by it." [26] In his submissions before me, Mr Franklin made much play of two aspects of this paragraph. The first is the sentence which states that "the inference which I am asked to draw in that regard from evidence which by its very nature is inconclusive is patently not one which excludes all other possible inferences which may be drawn from the facts upon which the company relies". If one reads this as referring to all other reasonable inferences, which seems to be the meaning that it most intelligibly must bear, then one has a standard of proof that equates with the standard applicable in criminal proceedings. Mr Bruinders, who appeared for the respondent, argued that it would be wrong to interpolate this paragraph in that way and that, given that it refers to standard that captures neither the civil nor the criminal standard but goes beyond and is more stringent than the criminal, the phrase in question should be treated a slip of the tongue. [27] Even if one approaches the matter on this basis, one is left with the fact that, in supporting the conclusion that he has articulated in the first sentence of this paragraph, the arbitrator is making reference to a standard that is inappropriate to the one that he is enjoined by the terms of reference to consider. On either basis, therefore, this statement demonstrates an application of a standard that is inapplicable and so

14 irregular. The arbitrator continues as follows: "It is possible that Mr Bekumzi's evidence, and hence the similar evidence which I am asked to assume that the other applicants would have presented had they testified, is not true but contains, in my view, no elements of fanciful or potential fiction which would justify its rejection on a balance of probabilities." [28] Now were it not for the expression "fanciful or potential fiction" one could safely conclude that this sentence demonstrates an understanding and appreciation of the nature of the test which the arbitrator is enjoined to apply. But once the expression, "fanciful or potential fiction" is included, it is hard to escape the conclusion that the arbitrator thought considerations just this side of fanciful or potential would suffice to justify a conclusion in favour of the respondents. [29] This is, as I have said, not the test enjoined by the terms of reference. The true question is whether the company has demonstrated that the facts of the case more certainly exhibit the guilt of the individual respondents than not. In the circumstances, Mr Bekumzi's evidence must be weighed on the probabilities, not against the elements of fanciful or potential fiction, to determine whether it successfully serves to rebut the prima facie circumstantial case that is raised by the companies evidence. The reference to "fanciful or potential fiction", in contrast, suggests once more that the arbitrator is concerned with the test akin to the one in the criminal case when he

15 considers what implications must be drawn from the evidence. [30] That being so, it appears to me that, and I find, that the arbitrator s award failed to exhibit a proper understanding of the implications of his terms of reference, which required of him an application of the test on the balance of probabilities, and came to a conclusion that was based on a misapprehension of his mandate. If the award is equivocal on the question of whether he appreciated his mandate or not, then the applicant, in my view, is nonetheless entitled, subject to what I will say in a moment, to succeed in the application for review. The applicant is entitled to be satisfied that the arbitrator consistently applied the appropriate standard in evaluating the evidence and if the award reveals that at times he appreciated it and at times he failed to do so, then the award nevertheless falls to be set aside on review. [31] Mr Bruinders argued that I have no power under the Arbitration Act to set the award aside. His argument, as I understood it, was that the error went not to jurisdiction but was a mere error of law in the course of the arbitrator s reasoning. In the alternative he argued that it went to jurisdiction only in the course of the reasoning and only so far as a component of the reasoning was concerned and that the ultimate decision was nonetheless consonant with the terms of reference. [32] It is unnecessary for me to consider what the implications would be were this a review arising out of arbitration in which there has been no direction as to the onus of

16 proof which was applicable. In this particular case the arbitrator was pertinently directed to answer the following question: "Wheher the evidence presented at the disciplinary hearing which resulted in the dismissal of the 12 individual applicants was sufficient to establish the commission of the offences on a preponderance of probabilities". It was part of his mandate, indeed the very essence of the direction to him, that he consider whether the evidence presented satisfied the test of a preponderance of probabilities. If he answered the question by an application by a standard other than the preponderance of probabilities, as I have concluded that he did, or if he at times applied that standard and at times did not, as in the alternative I have concluded that he did, then it seems to me that in coming to his conclusion he failed to answer the question that was addressed to him and that he was mandated to answer. This constitutes, in my view, an excess of jurisdiction, that is that he answered the wrong question. Instead of answering question A he answered question B and that justifies the conclusion that his error of law is one going to jurisdiction and thus productive of a review of his award. [23] In my view it is of no moment that the error that he made in coming to his conclusion was one that was concerned with only a component of his reasoning. If one has to be added to two in order to make three and, in assessing what one amounts to, the arbitrator should conclude that it is the equivalent of two, then the ultimate answer will be flawed just as surely as the reasoning on the component is

17 flawed. The principle, in short, is that, if a component of the reasoning essential to the conclusion is vitiated by a jurisdictional misdirection, the ultimate conclusion must be flawed as well. [24] Mr Franklin argued in his submissions that had the misdirection not been made, the outcome would necessarily have been in favour of the applicant. It was, in my view, unnecessary for him to go that far, as he acknowledged in the course of questioning from me. It would be enough that I cannot be satisfied that, had the arbitrator demonstrated a proper appreciation of his mandate, he would have come to the same conclusion. In other words, if I am left in doubt as to whether he would or would not have come to the same conclusion, then I must deduce that prejudice has potentially been suffered by the jurisdictional error that the arbitrator has committed and I must set the award aside. [25] So far as costs are concerned, it is common cause that costs should follow the event in so far as there has been opposition. [26] Accordingly I make the following order: 1 The award of the first respondent in the dispute between the applicant and the 2nd to 14th respondents dated 24 February 1998 is hereby reviewed and set aside;

18 2 The 2nd to 14th respondents must pay the costs of the application. ACTING JUDGE BRASSEY LABOUR COURT OF SOUTH AFRICA