How do you determine a fair sanction? Dismissal as appropriate sanction in cases of dismissal for (mis)conduct*
Nicola Smit
BLC LLB LLD
Professor of Law, University of Johannesburg and Co-Director of CICLASS

OPSOMMING
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1 Introduction
1 1   Background

Edcon Ltd v Pillemer NO (Reddy)
In the rest of this paper the following issues will therefore be considered: i) The onus of proof in dismissal disputes; ii) when dismissal could be an appropriate sanction; iii) the final decision regarding whether or not dismissal was fair (ie whether it was in fact the appropriate sanction); and iv) how to approach the decision whether to impose dismissal as sanction or not.

Edcon was unhappy with the award and contended that the commissioner had not appreciated the extent of the employee's dishonesty. Edcon further contended that the commissioner had erred by having regard to hearsay evidence, and that the company had led sufficient evidence to prove a breakdown of the trust relationship and launched review proceedings in the Labour Court in terms of section 145 of the Act. The Labour Court declined to set the award aside and accordingly Edcon appealed to the Labour Appeal Court with that court's leave. The Labour Appeal Court dismissed the appeal, concluding that the award was unassailable.

On the merits, the court held that the only issue was whether the material before the commissioner was sufficient to prove that the trust relationship between the employee and the company had been destroyed. The court noted that the company's only witness had merely recounted developments in the investigation of the matter. He could not and did not testify on the effects of the employee's conduct on the trust relationship. Not only was the commissioner obliged to find that there was no evidence to conclude that the trust relationship had been destroyed, but she had also correctly taken into account the employee's years of service and clean disciplinary record. Accordingly, the appeal was dismissed.

2Onus

The employer has the burden of proof in the sense of a persuasive burden - it must place enough material and facts before the decision maker to persuade such person that the sanction of dismissal was fair. Schmidt and Rademeyer comment on the nature and function of the law of evidence and state:
The court's judgment as to whether something is reasonable ... is strictly speaking, also not capable of resolution by invoking a burden of proof. It would not be correct to say that one of the parties has to prove that a regulation is reasonable ... That is a matter for the court to decide in the lightof the facts set before it. But, of course, the facts influencing the court's decision could be placed in issue, and in that respect the burden of proof could become operative.

[ultimately, the commissioner's sense of fairness is what must prevail and not the employer's view. An impartial third party determination on whether or not a dismissal was fair is likely to promote labour peace.

[t]he concept of fairness, in this regard, applies to both the employer and the employee. It involves the balancing of competing and sometimes conflicting interests of the employer, on the one hand, and the employee on the other. The weight to be attached to those respective interests depends largely on the overall circumstances of each case.
, that the commissioner had not explained why he had found the employee(s) 
[1997] 5 BLLR 541
'The credibility of witnesses and probability or improbability of what they say should not be regarded as separate enquiries to be considered piecemeal. They are part of the single investigation into the acceptability or otherwise of the employer's version, an investigation where questions of demeanour and impression are measured against the content of the witnesses' evidence, where the importance of any discrepancies or contradictions are assessed and where a particular story is tested against facts which cannot be disputed and against the inherent probabilities that at the end of the day one can say with conviction that one version is more probable and should be accepted, not that therefore the other version is false and may be rejected with safety.'

[a] commissioner arrives at a decision which no reasonable decision maker could reach if the decision is unsupported by any evidence, or by evidence that is insufficient to reasonably justify a decision arrived at or where the decision maker ignores uncontradicted evidence.

A reasonable decision is reached when a commissioner, in performing his/her  functions as an arbitrator, applies the correct rules of evidence, and if there is to be a deviation it must not be of such a nature that it materially denies any party a fair hearing. It is also required of the commissioner to weigh all the relevant factors and circumstances of the case before him or her to ensure that his decision is reasonable ...

Depending on the circumstances of each particular case, hearsay evidence may accordingly be admitted by an arbitrator in the proceedings held before him or her under the auspices of the CCMA.
The court decided that the commissioner relied on such evidence in keeping with the provisions of section 3(1)(c) of the Law of Evidence Amendment Act. As the commissioner did apply his mind to the issue of the hearsay evidence which had been presented and recognised that he was vested with the discretion in the interests of justice whether or not to accept such hearsay evidence the commissioner did not act unreasonably.Myburgh submits that an analysis of Labour Court decisions indicates
the following:
In summary, a commissioner's finding on the facts will be unreasonable if it is: (i) unsupported by any evidence; (ii) based on speculation by the commissioner; (iii) entirely disconnected from the evidence; (iv) supported by evidence that is insufficient reasonably to justify the decision; or (v) made in ignorance of evidence that was not contradicted.
3 Who Decides whether the Dismissal was an Appropriate Sanction and therefore Fair?

There is nothing in the constitutional and statutory scheme that suggests that, in determining the fairness of a dismissal, a commissioner must approach the matter from the perspective of the employer. All the indications are to the contrary. A plain reading of all the relevant provisions compels the conclusion that the commissioner is to determine the dismissal dispute as an impartial adjudicator.

the decision of the arbitrator as to the fairness or unfairness of the employer's decisions is not reached with reference to the evidential material that was before the employer at the time of its decision but on the basis of all the evidential material before the arbitrator. To that extent the proceedings are a hearing de novo.
The test that a commissioner must employ when impartially considering the fairness of a dismissal dispute therefore requires that the commissioner must take into account the totality of circumstances. Put differently, rather than to defer to the decision of the employer thecommissioner must consider all relevant circumstances. However, the court also stated that a commissioner "is not given the power to consider afresh what he or she would do, but simply to decide whether what the employer did was fair". Therefore as long as the decision is one that a reasonable decision maker could make a court won't interfere.

It will ensure that, more than before, and in line with the objectives of the Act and particularly the primary objective of the effective resolution of disputes, awards of the CCMA will be final and binding as long as it cannot be said that such a decision or award is one that a reasonable decision maker could not have made in the circumstances of the case. It will not be often .. ,

4 When Could a Dismissal be Appropriate and
Fair?
4 1   Introduction
The Code of Good Practice: Dismissal states that whether or not a dismissal is for a fair reason is determined by the facts of the case, and
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the appropriateness of dismissal as a penalty. The code proceeds to state that the courts have endorsed the concept of corrective or progressive discipline, meaning that the purpose of discipline is viewed as a means for employees to know and understand what standards are required of them. The code then suggests that "[d]ismissal should be reserved for cases of serious misconduct or repeated offences".
A reading of item 3 of the code seems to suggest that "serious" misconduct will be conduct which is of such gravity that it makes a continued employment relationship intolerable. Examples of such conduct (with the proviso that each case should be judged on its own merits) include gross dishonesty, wilful damage to employer property, wilful endangering the safety of others, physical assault and gross insubordination.

vii.   The long-service record of the employee.
It therefore appears that an employer must firstly indicate that the misconduct in question is serious and grave to the extent that it makes the employment relationship intolerable. In addition to this the employer must then proceed to show that it had considered all relevant factors and that dismissal was still considered to be the appropriate sanction.

3 2  Serious Misconduct of such Gravity to Make a Continued Employment Relationship Intolerable

to be just and faithful to the company, that is to say, . conduct . in its service with diligence, integrity and single-mindedness and generally in such a way as to show that the confidence intended by the contract [ie the contract of employment] could be safely reposed in them.

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was gross insubordination. In this matter, Spoelstra J stated that in the absence of facts "showing that this relationship was not detrimentally affected by the conduct of the employee it is unreasonable to compel either of the parties to continue with the relationship". This approach is out of step with the onus in dismissal disputes as now regulated in section 192 of the LRA. However, it is submitted that the substantive finding remains valid, ie where the trust relationship has been breached it will normally be considered a material breach of an essential term that may justify dismissal. Another matter from the same year considered trust as a tacit contractual term.

the continuation of their relationship can be expected to become intolerable, at least for the employer. Thenceforth he will, as it were, have to be continually looking over his shoulder to see wether this employee is being honest.
Importantly, the court held "the correct test to apply . to be whether or not respondent's actions had the effect of rendering the continuation of the relationship of employer and employee intolerable."

[i]t is an entirely reasonable stance for an employer to adopt that it wishes to terminate its relationship with the employee who has breached the trust reposed in her and who acted dishonestly. Dismissal was the appropriate sanction.

[t]he determination of an appropriate sanction is a matter which is largely within the discretion of the employer. However, this discretion must be exercised fairly. A court should, therefore, not lightly interfere with the sanction imposed by the employer unless the employer acted unfairly in imposing the sanction. The question is not whether the court would have imposed the sanction imposed by the employer, but whether in the circumstances of the case the sanction was reasonable.

[a]n employer is not required to retain a person in employment if the evidence discloses that a continued employment relationship had been irreparably damaged and that the more senior the position, the greater the need for high levels of trust relationship.

The court noted that the commissioner had found that the respondent employees had committed serious misconduct but then held that the commissioner had erred by finding that the relationship of trust had not broken down. The respondent employees had attempted to defend themselves by lying. The appellant had correctly concluded that this was a further reason not to trust them. Furthermore the appellant reposed a high degree of trust in the respondent employees who were responsible for valuable consignments. The court held further that the commissioner had misunderstood the significance of the respondent employees' relatively long periods of services. The court held that unless a commissioner is able to make a positive finding that a dismissal is unfair, he or she lacks the power to order reinstatement. The approach of the court was that the onus rests on an employer to prove the facts upon which it relies for a dismissal and once these facts have been proven the commissioner decides whether the dismissal is unfair. The court held that in deciding whether a dismissal is fair, the prevailing norms of society must be taken into account. The appeal was upheld.

As to whether the arbitrator's decision amounted to a gross irregularity, the court noted that the irregularities may be patent or latent. Patent irregularities are defects in the way in which the proceedings are conducted and latent irregularities are defects that are ascertainable only from the reasons given by the administrative functionary. Theft and fraud have always constituted grounds for dismissal of employees because of the breach in the trust relationship between employer and employee. However there is no invariable rule that offences involving dishonesty should incur the supreme penalty of dismissal.

From the arbitration award and record, it was evident that in the period prior to Shoko's dismissal the applicant had experienced significant stock losses as a result of theft perpetrated by employees. The disciplinary code classifies theft as a dismissible offence, but explicitly states that each case has to be considered on its merits. The applicant had spent considerable time and effort readdressing its policy relating to stock loss problems and had opted for a firmer policy regarding theft and unauthorised possession of company property. The applicant describedits policy in this regard as a "zero-tolerance" approach and in order to effect such approach had effected certain changes and in particular notifying its employees through various notices posted at different places throughout its premises that unauthorised removal of company property will result in a disciplinary action possibly leading to dismissal.
The court found that the second respondent had erred in substituting her own standard for that of the employer's. She failed to recognise that the employer's conduct fell within the range of reasonable options in the circumstances, and, albeit on the harsh side, dismissal as a sanction fell within the band of reasonableness in this instance and accordingly that no rational objective basis existed in terms of which the second respondent was justified in not endorsing the employer's sanction. The award of the second respondent was set aside.

would go so far as to say that there is no prospect that a reasonable decision maker - including a CCMA commissioner - could, on the facts of this case,
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find that dismissal was a fair sanction.

4 4  Factors to be Considered and Evidence to be Led

4 4 1   Progressive Discipline and the Harm Caused by the Misconduct

In as much as I have found that the Applicant's conduct was dishonest I do not find that it is of such a serious nature that it is deemed to have affected the trust relationship between him and the Respondent beyond repair. Whilst I may not prescribe to the Respondent the type of sanctions to give to employees I believe that the procedures should act as a guideline. As correctly submitted by Mr Grudlingh, in this instance, the Applicant was untruthful in handing in an assignment, which related to a training programme organised by the Respondent. He should have been put on terms and advised of the consequences of him and not fulfilling the training modules designed for his advancement. ... An appropriate sanction would be a written warning.

The court held that in the present case there was no reason why the court should interfere with the conclusion reached by the commissioner regarding the finding that the sanction was too harsh and that it is apparent from the reading of the award that the commissioner in arriving at her decision took into account the seriousness of the failure by respondent to submit his assignment. This however did not in her view affect the core of the trust relationship. In conclusion, the court found that there is no basis upon which the court can fault the commissioner in arriving at the conclusion that the sanction of dismissal was unfair. However, the powers and authority of the commissioner in the circumstances of the present case was limited to the terms of the contract of employment agreed to by the parties and by extending the contract of employment beyond the fixed term agreed to by the parties, the commissioner exceeded her powers.

4 4 2   Long Service

[l]ong service is no more than material from which an inference can be drawn regarding the employee's probable future reliability. Long service does not lessen the gravity of the misconduct or serve to avoid the appropriate sanction for it. A senior employee cannot, without fear of dismissal, steal more than a junior employee. The standards for everyone are the same. Long service is not as such mitigatory. Mitigation, as that term is understood in the criminal law, has no place in employment law. Dismissal is not an expression of moral outrage; much less is it an act of vengeance. It is, or should be, asensible operational response to risk management in the particular enterprise. That is why supermarket shelf packers who steal small items are routinely dismissed. Their dismissal has little to do with society's moral opprobrium of a minor theft; it has everything to do with the operational requirements of the employer's enterprise.

Although a long period of service of an employee will usually be a mitigating factor where such employee is guilty of misconduct, the point must be made that there are certain acts of misconduct which are of such a serious nature that no length of service can save an employee who is guilty of them from dismissal. To my mind one such clear act of misconduct is gross dishonesty. It appears to me that the commissioner did not appreciate this fundamental point. I hold that the first respondent's length of service in the circumstances of this case was of no relevance and could not provide, and should not have provided, any mitigation for misconduct of such a serious nature as gross dishonesty. I am not saying that there can be no sufficient mitigating factors in cases of dishonesty nor am I saying dismissal is always an appropriate sanction for misconduct involving dishonesty. In my judgment the moment dishonesty is accepted in a particular case as being of such a serious degree as to be described as gross, then dismissal is an appropriate and fair sanction.
4 4 3  Disciplinary Record

Regarding substantive fairness the applicant claimed that his words had been taken out of context, that there had been no contravention of a rule and no evidence that he had committed the offences charged. The commissioner found that the employee had failed in his duty to show respect to the production manager, and was guilty of insolence, disrespect and impudence. The applicant's words and actions were wilful and deliberate, and there was no evidence that the production managerhad provoked the applicant. Taking into account that the applicant had four previous disciplinary actions on record the sanction of dismissal was not unfair.
4 4 4   Consistency
In some decisions dismissals were set aside where misconduct, though serious did not warrant dismissal where an employer had reinstated other employees dismissed for the same offence. Consistency in disciplining is thus an important element of showing that a dismissal was "fair".
4 4 5  Admitting Wrongdoing and Showing Remorse

"[i]t would in my view be unfair for this court to expect the applicant to take back the employee when she has persisted with her denials and has not shown any remorse. An acknowledgement of wrongdoing on the part of the employee would have gone a long way in indicating the potential and possibility of rehabilitation including an assurance that similar misconduct would not be repeated in the future."

... the third respondent was placed in a position of trust and responsibility. He was basically the source from which all the information was obtained by the appellant as to how the staff was to be remunerated in terms of the number of hours of work actually performed .... This role ... constituted a crucial and fundamental operational requirement in the appellant's business.

5 Concluding Remarks

In essence this is what the Code of Good Conduct requires - an employer must indicate that the misconduct is of such a nature to make the relationship intolerable. This cannot be done simply by alleging the breakdown of the trust relationship, the employer must put enough material before a decision maker to persuade such person that having regard of the totality of circumstances (including factors relating to the employee and the employer) the sanction of dismissal was appropriate and fair. The employer must satisfy the onus that dismissal was fair and the decision maker reviewing that decision must be satisfied that having regard of the facts of the case the dismissal was indeed fair. In this context, fairness must require a consideration of factors pertaining to both the employer and employee.