IN THE LABOUR COURT Of SOUTH AFRICA

HELD IN JOHANNESBURG    

Case no: J1120/97

In the matter between

	SHOE CRAFT (PTY) LTD 					Applicant 

and

	ADVOCATE MOAHLOLI NO 					First Respondent	          
	TUMELO ANDRIES MAKHALEMA 				Second Respondent
   
	FEDCRAW								Third Respondent

JUDGMENT

	Zondo J	

Introduction

	[1]	This is an application by Shoe Craft (Pty) Ltd (“the applicant”) for an order reviewing 

and setting aside an arbitration award which was handed down by the first respondent, 

a commissioner of  the Commission for Conciliation, Mediation and Arbitration 

(“CCMA”) on the 24th September  1997 in respect of a dismissal dispute between the 

applicant and the second respondent, a member of Fedcraw, a trade union and third 

respondent in this matter. The second and third respondents do not oppose this 

application.

Brief facts  

	[2]	The deponent to the applicant’s founding affidavit, namely Mr Gerrit Duvenhage, who 

as the human resources manager of the applicant, does not state in his founding affidavit 

the nature of the business in which the applicant is involved. From the applicants’s name 

it would seem that the applicant is involved in the shoe-making industry. The incident 

which gave rise to this dispute reveals that at least part of the applicant’s business is the 

selling of shoes.   A reading of the record of the arbitration proceedings before the first 

respondent reveals that the second respondent was employed by the applicant for the 

purposes of him performing the duties of another employee who had gone on maternity 

leave. Part of his duties was, it seems, to perform the duties of a cashier. His employment 

was only for the duration of the other employee’s maternity leave.

	[3]	On the day of the incident which gave rise to the dismissal of the second respondent, the 

second respondent “underrang”  shoes worth R25,99 for R19,99. The second respondent 

was subsequently called to a disciplinary enquiry where in terms of the notification of a 

disciplinary enquiry given to him the allegation he had to answer was:-“Underringing 

incorrect Till procedure in such manner that you possibly could create stockloss for 

that you are [sic] working in.”

	[4]	The second respondent was found guilty of underringing and was dismissed. A dispute 

arose about the fairness or otherwise of his dismissal. In arbitration proceedings 

conducted by the first respondent under the auspices of the CCMA, the first respondent 

found that the dismissal was unfair  and ordered the applicant to reinstate the second 

respondent, with effect from the date of dismissal and to give him a final warning 

backdated to 21 February 1997. It is against this award that the applicant’s present review 

application is directed.

The issues

	[5]	The applicant’s application is brought in terms of sec 145 (2) (ii) of the Act  which relates 

to gross irregularity or sec 152(1) (g) of the Act. In the latter case  the complaint is that 

the first respondent failed to apply his mind to the issues in the matter before him. The 

only basis on which the first respondent’s finding that the dismissal was unfair is 

challenged is that the action by the second respondent was fraudulent and prejudiced the 

applicant’s business operations. The applicant’s disciplinary code has the following under 

misrepresentation: “Deliberate misrepresentation of information whether verbally, 

in writing or recorded electronically or of stock or assets being manipulated in such 

a manner that a control function will be adversely affected. The deliberate under-

ringing of cash received is included in this definition.” (My underlining).    

	[6]	I asked Counsel for the applicant during argument what evidence there is in this matter that the applicant’s conduct was not one based on negligence as opposed to it being an act of dishonesty. He referred me to the body of the award made by the first respondent and submitted that, although the first respondent did not expressly make a finding to the effect that the second respondent’s act was one of dishonesty, he must have so found if one has regard to the contents  of the award. In the award the second respondent simply referred to the argument which was presented on behalf of the applicant to the effect that the under-ringing could not have been due to oversight or negligence but he gave no indication that he agreed with that contention. On the contrary it seems to me that he dealt with the matter on no other basis than simply that the second respondent rang R19,99 for shoes whose price was R25,99. Apparently this was caused by the fact that the second respondent was supposed to use call no 0312 but instead he pressed no 0313. The one call number apparently related to one pair of shoes while the other call number related to another pair of shoes.

	[7]	Although during the arbitration proceedings the applicant’s representative cross-examined the second respondent with the aim of showing that there could have been no negligence or oversight in this incident but that this was deliberate, the evidence is not to the effect that the second respondent received R25,99 from the customer for shoes worth R19,99 and kept the difference for himself nor does the evidence show that in charging R19,99 for shoes whose price was R25,99, the second respondent was seeking to pass some benefit to the customer. If he had intended to pass the benefit to the customer, there would have had to be evidence to show why he so intended. If the customer was a friend or relative of his or if the two of them had an arrangement of some sort, any allegation that the second respondent’s action was an act of dishonesty or a fraudulent act would be understandable. But in this case there is not an iota of evidence along those lines. In fact the notification of a disciplinary enquiry did not, as one would have expected, having regard to the last sentence of the clause dealing with misrepresentation in the disciplinary code,  make any reference to the effect that the allegation the second respondent was called upon to answer included a suggestion that he did what he did deliberately or in any way fraudulently or dishonestly. If the company intended to deal with the matter at the enquiry on the basis that the second respondent’s conduct was an act of dishonesty or fraud, that much would have and should have been made clear from the notification of a disciplinary enquiry.  Not only did the first respondent make no finding that the second respondent’s action was fraudulent but also there was no evidence before him which would have justified such a finding. In those circumstances he committed no irregularity by finding that, although the second respondent was guilty of misconduct, dismissal was not an appropriate sanction, having regard to the fact that this was the second respondent’s first offence and the fact that the amount involved was only R6,00. In fact the evidence did not indicate whether this was discovered while the customer was in the shop and was rectified or whether the customer had left and the error could no longer be rectified. 

	[8]	The next question is the first respondent’s decision to the effect that the second respondent be reinstated with effect from the date of his dismissal and that he be given a final warning “backdated to 21 February 1997.” The basis of the applicant’s attack of the award in this regard is that the employee was only employed for the duration of another employee’s maternity leave which would expire on the 31st March 1997. The effect of the award is that an employee whose employment contract would have come to an end or did come to an end on the 31st March 1997 is reinstated with full back-pay. This means that, whereas the applicant’s obligation to pay him wages would have come to an end or came to an end, on the 31st March 1997, that obligation is altered to be one for much longer than that and the employee gets paid wages for a period for which he would not have been entitled to wages had he not have been dismissed. In other words the award places the second respondent in a far more favourable position financially than would have been the case had he not been dismissed and had both parties fulfilled their contractual obligations. The first respondent says nothing in his award about the fact that the contract of employment  was for a limited period and would have ended or did end ex contractu on 31 March 1997. I think the applicant’s complaint that the first respondent did not apply his mind to this issue is fully justified. This was not a case in which reinstatement was appropriate. Compensation was the appropriate relief. Accordingly the applicant should have been ordered to pay to the second respondent the wages he would have earned if he had worked the balance period of his contract.

	[9]	I think it would serve little, if any, purpose to refer this matter back to the first respondent or the CCMA for the issue of compensation. Indeed I think common sense dictates that this Court should itself make the order for compensation that it considers fair and reasonable. Accordingly the  order I make is the following:-
1.	The applicant’s application to review and set aside the first respondent’s finding that the second respondent’s dismissal by the applicant was unfair is refused.
2.	The first respondent’s award that the applicant reinstates the second respondent is hereby reviewed and set aside.
3.	The applicant is ordered to pay to the second respondent within seven (7) days of this judgment such wages as the second respondent would have earned for the period from the date of his dismissal to the 31st March 1997; in so far as the applicant may have paid the second respondent notice pay, such amount of notice pay may be taken into account so as to ensure that the second respondent is not doubly paid for any period.
4.	No order is made as to costs. 

                                             
RMM Zondo
Judge of the Labour Court of South Africa

Date of hearing: 10 March 1998
Date of Judgment: 31 March 1998
Appearing for the applicant : Mr Haycock
Instructed by: MacRoberts De Villiers Lunnon & Tindall
No appearance for the 1st, 2nd and 3rd respondents