The integrity of the disciplinary sanction

The recent decision of the Supreme Court of Appeal in Rustenburg Platinum Mines Ltd (Rustenburg Section) v CCMA & others (2006) 15 SCA 1.11.1 has attracted a fair amount of media attention. Rightly so, because it confirms an important principle as regards the disciplinary sanction. It also settles another issue — whether CCMA arbitration awards are reviewable in terms of the Promotion of Administrative Justice Act of 2000 (PAJA).

The facts

The employee, a patrolman in the employer’s protection services department was dismissed in 2000. The CCMA commissioner concluded that the dismissal was substantively unfair and reinstated the employee, subject to a written warning valid for six months. On review, the Labour Court and the Labour Appeal Court declined to review and set aside the CCMA commissioner’s award, and, with the leave of the Supreme Court of Appeal, the matter was then heard by this Court. Given the importance and standing of the Supreme Court of Appeal, considerable importance and weight should be attached to this judgment.

The employee had worked for a period of 14 years with a clean disciplinary record. He was employed at a facility separating high grade precious metals from lower grade concentrate. His main duty was access control and to protect the employer’s product, the precious metal. There was a theft problem and the employer instituted search procedures for all employees leaving the plant: each employee was to be searched, in private, in a cubicle, submitting to a close physical inspection and a metal detector scan. The employee was aware of these security measures — he had signed an acknowledgement that the security procedures had been read to him and that he understood them.

But losses continued, and the employer installed video surveillance, including video surveillance of the employee concerned. The video recordings showed that, of the 24 searches he was supposed to conduct, he conducted only one search properly in terms of the procedure. On eight employees he failed to conduct any search whatsoever and some persons were allowed to sign the register without any search.

The employer took disciplinary action against the employee and he was found guilty of negligence and failure to follow established and compulsory procedures. The employee was an experienced patrolman who had been placed in a high risk area — with the express purpose of safeguarding the employer’s most valuable product. His misconduct had created the possibility of theft or losses. But nothing was stolen during his shift (and the employer took this into account). The employer also took into account the employee’s length of unblemished service. Still, the chairperson of the disciplinary hearing felt that the misconduct went to the heart of the employee’s capacity, that it had destroyed the trust the employer had placed in him and that a future employment relationship had been rendered intolerable. On appeal, this decision was confirmed, and the point was made that the employee had not been charged with theft or dishonesty, but that the charges related to his negligence in not following the prescribed procedures.

The CCMA arbitrator’s decision and the Labour Court

The CCMA arbitrator concluded that the dismissal was procedurally fair but substantively unfair. The reasons given for this decision included that the employer had not suffered any losses and that the employee’s violation of the rule was unintentional or a mistake. The employee’s level of honesty was also taken into account. The arbitrator also stated that the type of offence the employee had committed did not go to the heart of the employment (trust) relationship between the employer and the employee.

The Labour Court saw the matter as more a case of poor performance than misconduct and the offence in question did not unequivocally demand dismissal as opposed to any other sanction. There was, at best, poor performance or laziness — this was not the type of misconduct which justified dismissal without a prior warning for a first offence after 15 years of unblemished employment. There was no evidence that theft had occurred during the employee’s shift and it was also significant that the employee was in fact doing the work of a more senior employee. If there is no dishonesty, the Court concluded, employees who do not perform their duties properly should not automatically incur the harsh sanction of dismissal. The Labour Court did not set aside the CCMA commissioner’s award.

In the Labour Appeal Court

The Labour Appeal Court was more critical of the commissioner’s approach and it rejected a number of his findings. It was unjustifiable, the Court said, to conclude that the employer had suffered no losses as a result of the employee’s malperformance. Nor was it clear what the commissioner meant when he said that the employee’s conduct was a mistake or unintentional. The Labour Appeal Court also found it “baffling: that the issue of dishonesty came into the picture at all — there was no allegation that the employee was been dishonest and this factor should not have been taken into consideration at all.

But still the Labour Appeal Court declined to set aside the commissioner’s award. If these three bad reasons were the only basis for his award, the award would have been reviewable as unjustifiable. The commissioner had, however, also relied on the Code of Good Practice: Dismissal (that it is not appropriate to dismiss the employee for a first offence unless the misconduct is serious enough to make continued employment intolerable). The commissioner had also relied on the employee’s length of service and his clean disciplinary record.

The Supreme Court of Appeal on the issue of review

What the Labour Appeal Court had in fact done, said the Supreme Court of Appeal, was to ask whether there were facts that could support the view that the commissioner, despite his errors, still “got it right”. In essence, the Labour Appeal Court had treated the matter as an appeal — and this was wrong. When it comes to review, the question is not whether the decision of the CCMA commissioner can be justified (or whether it is not so wrong as to make intervention doubtful) but whether the decision-maker (the CCMA commissioner) properly exercised the powers entrusted to him or her. In the case of a review, the focus is on the process, and on the way in which the CCMA commissioner came to the conclusion. Naturally, this can never be done without taking some account of the substantive merits of the decision being reviewed.

In respect of the CCMA commissioner’s reasoning, the Supreme Court of Appeal concluded that the outcome (the award) was not rationally connected to the commissioner’s reasons as a whole — these reasons were, for the most part, bad reasons, and bad reasons cannot provide a rational connection to a sustainable outcome. Put differently, if the reasons for the decision are bad, the outcome cannot be sustained. Once the bad reasons play a significant role in the outcome, it is impossible to say that these bad reasons provide a rational connection to the outcome.

The issue of the application of PAJA is a complicated one, and, for purposes of this editorial, only the barest outline will be included. The Supreme Court began its analysis on this issue by looking at the provisions of the Labour Relations Act (LRA) as regards review (section 145 of the LRA). It then added that PAJA, by necessary implication, extends the grounds of review at the disposal of parties appearing before the CCMA in arbitrations. In interpreting the LRA (and the impact of PAJA), the Constitution requires Courts to promote the spirit, purpose and objects of the Bill of Rights.

This in turn means that when we interpret the LRA, one must give “appropriate recognition” to the right to administrative justice in terms of section 33 of the Constitution and the legislation that gives effect to that right (PAJA). The overriding factor in determining the effect of PAJA on the LRA is the constitutional setting within which PAJA was enacted — PAJA was enacted because there was a constitutional obligation to give legislative effect to the constitutional right to just administrative action.

The LRA is a specialised statute — it was enacted to give effect to the labour rights in the Constitution to regulate various matters within the labour relations field. Both the Constitution, the Court held, which required Parliament to give general legislative effect to the right to administrative justice and the legislation enacted in light of that right (PAJA) supersedes the LRA’s specialised enactment.

The employer’s discretion to impose a sanction

The Supreme Court of Appeal placed considerable emphasis on the fact that the primary discretion for imposing a disciplinary sanction belongs to the employer. A CCMA commissioner does not have the discretion to impose a sanction in the case of workplace incapacity or misconduct. The only duty a CCMA commissioner has is to determine whether the employer’s sanction is fair.

The Supreme Court of Appeal approvingly cited Nampak Corrugated Wadeville v Khoza (1999) 8 LAC 8.22.1 and summarised the approach of the Labour Appeal Court in that case as follows:

•

The discretion to dismiss lies primarily with the employer.

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This discretion must be exercised fairly, and

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Interference by a commissioner or a Court should not be lightly contemplated.

Then referring to another decision of the Labour Appeal Court (County Fair Foods (Pty) Ltd v CCMA & others 1999) 8 LAC 1.11.46) the Supreme Court of Appeal added two more principles:

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CCMA commissioners should use their powers to intervene in the sanction imposed by the employer with caution, and

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They must show the employer’s sanction a measure of deference.

In the present case, the Supreme Court of Appeal added, the Labour Appeal Court failed to insist that the decision to impose a sanction (and to decide on the nature of the sanction) is first and foremost the employer’s decision — a decision to be overturned only with caution. What the Labour Appeal Court had done was to confer the discretion on the commissioner instead. Instead of demanding that commissioners exercise greater caution when intervening in the employer’s decision and to show some respect for the employer’s decision, the Labour Appeal Court had, in effect, protected the interference by commissioners by taking a very narrow view of the criteria for review.

When it comes to determining the fairness of a dismissal, it is not necessary for the commissioner to be persuaded that dismissal is the only fair sanction. What the Labour Relations Act requires is that the employer make out a case that the sanction is fair (that the decision the employer took falls within the range of decisions that may be described as fair). The fact that a commissioner may think that a different sanction would also be fair (or fairer, or even more than fair) does not justify setting aside the employer’s sanction.

In respect of this issue, the Supreme Court of Appeal summarises its approach as follows:

(a)

“The review criterion relevant to this case is whether the decision is rationally connected with the information before the commissioner and with the reasons given for it.

(b)

In applying this criterion the question is whether there is a rational objective basis justifying the connection the commissioner made between the available material and the conclusion.

(c)

Commissioners must exercise caution when determining whether a workplace sanction imposed by an employer is fair. There must be a measure of deference to the employer’s sanction, because under the LRA it is primarily the function of the employer to decide on the proper sanction.

(d)

In determining whether a dismissal is fair, a commissioner need not be persuaded that dismissal is the only fair sanction. The statute requires only that the employer establish that it is a fair sanction. The fact that the commissioner may think that a different sanction would also be fair does not justify setting aside the employer’s sanction.”

Importance

There can be no doubt as to the importance of this decision, and it is essential reading, especially so for commissioners and arbitrators. The employer’s decision to dismiss must be shown a considerable amount of respect — that is the essence of the Supreme Court of Appeal’s decision. Only in exceptional cases should a commissioner or arbitrator intervene in that decision.

This editorial has barely scratched the surface of the Supreme Court of Appeal’s decision. There are a number of other aspects that have been mentioned in passing or which have not been dealt with in this editorial. No doubt, we’ll be returning to this decision time and time again as it impacts on CCMA arbitrations and how commissioners deal with the disciplinary sanction imposed by the employer.