ELRC486-21/22GP

Case Number: ELRC486-21/22GP
Commissioner: Vusi Moyo
Date of Ruling: 22 November 2022

In the ARBITRATION between

Roger John APPLICANT

And

Gauteng Department of Education RESPONDENT


DETAILS OF HEARING AND REPRESENTATION

1. This is an arbitration award issued in terms of Section 138(7)(a) of the Labour Relations Act 66 of 1995 as amended (hereafter referred to as “LRA”).

2. The matter was set down for an arbitration process in terms of Section 191(5)(a) of the LRA. The arbitration hearing was held under the auspices of the ELRC over several days that culminated on the 31st of October 2022.

3. The Applicant was represented by Mr Ahmed Cachalia, an Attorney. The Respondent was represented by Mr Hassan Macheke, an Official of the Respondent. The proceedings were conducted in English. All submissions were both digitally and manually recorded.

ISSUE TO BE DECIDED

4. Whether the Applicant’s dismissal was both substantively and procedurally fair or not.


RELIEF SOUGHT

5. The Applicant sought reinstatement as a remedy for the alleged unfair dismissal in terms of Section 193 of the LRA.

BACKGROUND

6. Legal representation was not contested.

7. Two preliminary rulings were rendered for the same point in limine. Essentially the issue was declared as premature on both occasions. This preliminary issue is accordingly dealt with in this award.

8. At the time of dismissal, the Applicant was employed as a Principal at Opelwag Primary School, a public school. The Respondent is the Department of Education in Gauteng Province. Bundles of documents were exchanged by the parties and the authenticity and veracity of these documents was not disputed.

SURVEY OF EVIDENCE AND ARGUMENT

9. As noted above in paragraph 3, these proceedings were digitally recorded, what appears hereunder constitutes a summary of the evidence deduced by the parties in so far as is relevant for the purpose of this arbitration; it is by no means a comprehensive minute of what transpired in the course of these proceedings. Section 138(7)(a) of the LRA stipulates that within 14 days of conclusion of the arbitration proceedings the commissioner must issue an arbitration award with brief reasons. What follows underneath accordingly serves as my brief reasons:

10. The Applicant was found guilty and dismissed for seven counts of misconduct detailed as follows:

a) It is alleged that between the period of 1 January 2015 and 31 December 2017 or anytime incidental thereto, as the principal of the school, you allowed the school to operate two bank accounts without the approval of the HOD, in contravention of Section 37 (3) of SASA, whilst you knew or ought to have known that it was wrong to do so. You are therefore charged in terms of Section 18 (1) (a) of the Employment of Educators Act 76 of 1998 as amended.

b) It is alleged that between the period of January 2017 and December 2017 or anytime incidental thereto, the school failed to issue receipts for monies amounting to R284 440, 30 in contravention of item 2.3.10 of Circular 13 of 2000, whilst you knew or ought to have known that it was wrong to do so. You are therefore charged in terms of Section 18 (1) (a) of the Employment of Educators Act 76 of 1998 as amended.

c) It is alleged that during the financial year 2015 or any period incidental thereto, the school allowed EFT payments amounting to R248 663, 87 to be made from the school funds without source documents or invoices in contravention of item 2.3.17 of Circular 13 of 2000, whilst you knew or ought to have known that it was wrong to do so. You are therefore charged in terms of Section 18 (1) (a) of the Employment of Educators Act 76 of 1998 as amended.

d) It is alleged that during the financial year 2016 or any period incidental thereto, the school allowed EFT payments amounting to R421 548, 97 to be made from the school funds without source documents or invoices in contravention of item 2.3.17 of Circular 13 of 2000, whilst you knew or ought to have known that it was wrong to do so. You are therefore charged in terms of Section 18 (1) (a) of the Employment of Educators Act 76 of 1998 as amended.

e) It is alleged that during the financial year 2017 or any period incidental thereto, the school allowed EFT payments amounting to R484 415, 71 to be made from the school funds without source documents or invoices in contravention of item 2.3.17 of Circular 13 of 2000, whilst you knew or ought to have known that it was wrong to do so. You are therefore charged in terms of Section 18 (1) (a) of the Employment of Educators Act 76 of 1998 as amended.

f) It is alleged that during the financial year 2017 or any period incidental thereto, the school allowed cheque card payments amounting to R68 698, 32 to be made from the school funds without source documents or invoices in contravention of item 2.3.17 of Circular 13 of 2000, whilst you knew or ought to have known that it was wrong to do so. You are therefore charged in terms of Section 18 (1) (a) of the Employment of Educators Act 76 of 1998 as amended.

g) It is alleged that between the period 1 January 2015 and 31 December 2017 or anytime incidental thereto, the school appointed a service provider, Fakoe Trading Industries CC, for the construction of the school hall to the amount of R1 630 000, 00 without following proper procurement procedures in contravention of item 217 (1) of the Constitution, Act 108 of 1996. You are therefore charged in terms of Section 18 (1) (a) of the Employment of Educators Act 76 of 1998 as amended.

11. The Respondent adduced evidence through five witnesses under oath whereas the Applicant called two witnesses for his case. All evidence was captured verbatim on record.

12. Both parties adduced significant evidence and made comprehensive submissions on papers with key references made on the evidence tendered by all witnesses and their mutually destructive arguments. I have considered the salient points made by the opposing representatives.

13. In summary, the Applicant party maintained its original stance as a point in limine that the disciplinary action instituted against the Principal, Mr Roger John, is invalid, unlawful and misplaced as the charges were about financial (mis)management. This submission was supported by satisfactory case law and significant concessions during the arbitration process.

14. The Respondent party vehemently opposed these submissions and repeated that the Applicant was charged in terms of Section 18(1)(a) not Section 18(1)(b) of the Employment of Educators Act 76 of 1998 as amended. A concession was made that, “Although the charges are financial in nature, Mr Roger F John was charged for non-adherence of Legislations, Rules and Regulations of GDE.” This is a significant bone of contention between the parties.

15. The Respondent further acknowledged the cited case law and the responsibility of financial management as resting on the shoulders of the SGB, however the argument was not taken further to clarify key differences with the current matter save to state in closing, para 31, that:
It is trite law that each case shall be dealt with according to its own merits. The Applicant submitted the Schoonbee and Others v MEC for Education, Mpumalanga and MEC for Education, Free State v CS Van Der Walt to argue that the respondent should not have charged and dismiss the principal because financial management is the responsibility of the SGB. In the Schoonbee case, the MEC alleged that the principal and the Deputy Principal misappropriated the school funds. The court held that it is impossible to charge the principal and the Deputy Principal for the statutory function of the SGB, which is governance, which include financial management. In the CS Van Der Walt case, the court applied the stare decisis of the Schoonbee case. In the current case of the Applicant, Mr John was not charged for misappropriation of school funds but for not adhering to Circular 13 of 2000.

16. The submission above does not argue cogently on reasons that persuaded the Respondent to pursue the Principal instead of the SGB.

17. In its response on the point in limine, the Respondent recorded and summarized the evidence of its witnesses as follows:
a) Mr Koen stated that the role of the Principal is to advise the SGB.
b) Mr Makgabo said in order for the school to operate a second bank account, the SGB must make an application to the HOD or MEC.
c) Ms Oliphant, the then Deputy Principal, testified that the Applicant, Mr John informed them that the SGB is going to open a second bank account.

18. Mr Marakalla, the Presiding Officer of the disciplinary enquiry, conceded under cross examination that procurement and quotations fall under the responsibility of the SGB. He further admitted that the Applicant raised the issue of inconsistency of discipline as the Principal of Edenpark Primary School was not disciplined for similar activities. He admitted that he did not allow this evidence to be led at the disciplinary hearing. Evidence of Mr Sylvester, the Chairperson of the Applicant’s SGB at Opelwag Primary Schools, as well as Mr Jacobs, the Chairperson of Edenpark Primary School SGB, Ms Synclair and evidence of Mr Maepe were omitted from the disciplinary hearing outcome report. Mr Marakalla could not give a direct answer on why he recommended a dismissal of the Applicant in spite of the fact that the school received qualified financial audits by the Department of Education for the period in question. In conclusion, Mr Marakalla could also not point out a distinguishing feature between the Principal and the SGB.

19. Mr Jerome Sylvester, testified under oath for the Applicant’s case. He was the Chairperson of the SGB for the period in question. He also chaired the Finance Committee of the SGB. He testified that Mr koen interviewed him but never reverted back to him with his findings. A request for these investigation findings was also made to the Respondent and this was declined. Mr Sylvester complained that the Department of Education never came to the SGB nor raised issues with them regarding neither school’s finances nor the second bank account. Mr Sylvester attested that, at all material times, the IDSO was aware of the second bank account and in fact, informed the SGB that there is nothing wrong with having it as long as they do not transact from it. In this respect, the second bank account was used as an investment account. When this became an issue, emails were sent to the MEC, DDG, HOD and so forth. No response was received on these emails. It was also highlighted that the second bank account is to date, still fully functional and used by the successive SGB.

20. Mr Sylvester outlined his authorizing responsibilities in the requisition and invoicing processes. He made it clear that the SGB authorizes payments, not the Principal. Fundamentally, he underlined that the Principal cannot transact without the approval of the SGB. Of the essence, he asserted that the charges should not have been proffered against the Applicant as they are about finances and the SGB is responsible for finances. Consequently, he argued that the Department of Education should have dealt directly with the SGB not the Principal.

21. With regards to the disciplinary hearing, Mr Sylvester testified that he was denied the opportunity to bring the required documents that formed the core of the charges against Mr John. These are documents in the form of invoices, receipts, quotations and requisitions. This evidence was already conceded to by the Presiding Officer of the disciplinary hearing, Mr Marakalla.

22. Mr Sylvester clarified under cross examination that the Principal serves an advisory role in the SGB. He maintained that the IDSO, Mr Vilakazi, gave the SGB permission to continue using a second bank account. He further challenged the inconsistency by declaring that Edenpark Primary also had a second bank account and their IDSO allowed it too. He thus asserted his view that the Department of Education was wrong in charging the Principal as he does not make decisions on finances but the SGB. He further challenged the Respondent in that no one came to the SGB to inform them that they were doing things wrong and should therefore implement corrective measures. Moreover, he attested that no training was provided to the SGB but the Respondent elected to charge the Principal for SGB functions. He challenged the Respondent to charge the SGB as a structure.

23. On Circular 13 of 2000, the SGB Chairperson named the IDSO and the Financial Director of the Department, Ms Zeureka Wisse, as the Officials that informed them that the circular is outdated and obsolete. He dared the Respondent’s representative to call them to testify at this arbitration. None was brought forward.

24. The Applicant’s second witness was Ms Romain Synclair. Her testimony was not of any assistance in this process as she was not employed by the Respondent over the period of the alleged misconduct.

ANALYSIS OF SUBMISSIONS

25. I find that the Chairperson of the disciplinary hearing was biased as he ignored vital evidence led against the Respondent. He further disallowed the submission of documentary evidence for no good reason. He elected to handle the internal disciplinary hearing in a rigid and legalistic manner. This was erroneous and unwarranted as cautioned by the Courts. In paragraph 18 of closing arguments, the Respondent’s representative stated that, “We take note that there is no legislation or regulation that precludes that documents can be exchanged at anytime in the disciplinary enquiry, but it was going to be prejudicial and unfair if the Presiding officer accepted documentation from the Applicant at the enquiry after the Respondent has already presented its case.” This was flawed as witnesses can be recalled as and when it becomes necessary to do so.

26. The brief evidence traversed above illuminates with certainty that there is no separation between the Principal and the SGB. More importantly, the SGB Chairperson was steadfast that the Principal served an advisory role and the SGB made decisions independently of the advice. The Presiding Officer confirmed that the Applicant was not dismissed for failing to provide advice nor advising fallaciously.

27. The Respondent could also not produce evidence that it was the principal nor respective SGB that opened a second bank account without the requisite permission from the HOD or MEC. They simply continued the account they found in existence at the beginning of their term and subsequently handed it over to their successors at the end of their tenure.

28. In Schoombee and Others v MEC for Education, Mpumalanga and Another 2002 (4) SA 887 (T) it was held that the SGB is responsible for finances of a school. In line with the dictum, the SGB needs to account for its procurement, quotations and record keeping. These are just few examples from a myriad of others that prove the supremacy of the SGB in this matter. The Respondent cannot simply ignore the SGB and deal with the Applicant in isolation.

29. In paragraph 31 of its closing arguments, the Respondent argued that the Applicant was charged for failing to adhere to Circular 13 of 2000. In this regard, I found it absurd that the IDSO and the Finance director were not called to testify on their alleged permission granted to the SGB not to rigidly follow this circular. The SGB Chairperson’s version that the IDSO provided guidance on how they should implement the circular could not be appropriately disputed in his absence nor an equally destructive version. The submission that this was also approved by the Finance Director, Ms Zeureka Wisse, was also not contested. Moreover, she was also not called to refute the permission that she allegedly granted to the SGB.

30. A plain reading of the charges as well as the adduced evidence is clear that these are financial matters that should have been put to the door of the SGB not the Principal. The Respondent conceded in its response that the charges are financial in nature. An example was made of theft of funds which would not find application in this matter as the Applicant was not accused of any undue personal benefit but rather non-adherence to internal prescripts without any consideration of the role played by the SGB. Testimony from the SGB Chairperson was persuasive on this vital point.

31. In my view, this matter is symptomatic of a serious gap in policy making. It is an area that should be improved to bring the two bodies, the Department and the SGB, closer together to avoid unfortunate circumstances whereby individuals suffer the consequences in isolation for collective decisions/ errors/ shortcomings and/ or non-adherence. Clarity is needed to better inform and offer more precise guidance around matters where the SGB collective must account together as a unit and where individual actors must face the storm on their own. In this case, no evidence was led by the Respondent to show a clear line between the two. It was also not disputed that the SGB was never trained on hot to manage finances, handle receipts, donations, procurement, etc.

32. The Respondent’s evidence and charges are formulated in a manner that refuses to acknowledge neither existence nor role of SGB in the school’s financial management. In this regard, the Respondent has clearly failed to discharge its onus in terms of section 192 of the LRA to prove the fairness of the Applicant’s dismissal over holding the entire SGB to account. The Respondent bears the onus to prove the fairness of dismissal in terms of the Act and if that fails, the Applicant’s referral succeeds.

33. To date, the Respondent has not provided reason/s for not attending to these issues through the collective body of the SGB. There is also no evidence of the SGB being held to account nor to being afforded an audience to engage/ respond to these issues around the Principal as an ex-officio member of their forum. These are matters that should be responded to by the SGB. In this case, the reluctance to involve the SGB by the Respondent remains absurd and puzzling. This disinclination is unfair on the Applicant and is indicative of a rupture between the two bodies.

34. It was also not disputed that the SGB is clothed with powers to set its own procurement policy. In blatant incongruity, the Applicant was charged as an individual for a procurement policy adopted by the SGB as a collective. Moreover, he was charged in terms of the Constitution of the Republic of South Africa. I found this to be absurd as the SGB would have been the appropriate body to respond on its own policy, practice and the constitutionality or lack thereof. I am persuaded by the Applicant party that indeed the Respondent misdirected itself on this score.

35. In disciplining the Applicant for SGB affairs, the Respondent was truly “barking up the wrong tree” as articulated by Moseneke, J in the Schoonbee judgment (supra).

36. In its preliminary application papers (para 18 – 20), the applicant party argued that;
The Court judgments are very clear. Financial matters are the responsibility of the SGB and not the Principal. The function of the Principal is simply to advise the SGB. Notwithstanding any advice the Principal may give to the SGB, the SGB can take its own decisions. It is not the decision of the Principal.

Louw AJ in the Van der Walt matter (Applicants Bundle Page 121 Par 2) quotes Schoonbee and indicates the following:-

“It is true that the principal, according to the relevant provision is an ex officio member of the governing body, non constat that he is now vested with authority and powers to administer the financial affairs of the school. To some extent he might be able to make an input because he is a member of the SGB, non constat that his views will carry the day if there is a difference of opinion. If the SGB differs from his views and passes a resolution, then, of course, the views of the SGB will carry the day and it is then those views and the policy that is laid down by the SGB, which will have to be implemented, inter alia, also by the principal to the extent that the principal is required by the SGB to implement its policy and resolutions”.

The Court also states “where there is an SGB in existence the financial management of school funds and monies fall within the domain of the SGB. Only if one approaches it on the basis and from that perspective, then one can easily deal with situations where there might be a difference of opinion of the functionaries, namely the SGB and principal, in the management of the school funds and school property.”

37. I therefore uphold the Applicant’s point in limine that it was unlawful to charge the Principal for SGB functions. In its heads of argument, the Applicant furthermore maintained that in spite of the case law, the Respondent still failed to prove the misconduct allegedly committed by the Applicant. I arrived at the same conclusion for these reasons: On the first charge, it was not disputed that the emails sent to the MEC, HOD and others were never responded to. In addition, this second bank account was approved by both IDSO and Finance Director.

38. On the second charge, the Respondent could not articulate how the amount of R284 440, 30 was arrived at in order to focus at the actual and specific transactions and to afford the Applicant a fair opportunity to respond to each transaction and whether or not a receipt was issued for such transaction. It did not help that files were also taken from the school without a record thereof by the investigator, Mr Koen. This was a common thread for the rest of the charges in terms of source documents and the lack of a detailed breakdown of how the amounts stated in the charges were arrived at. Mr Sylvester avowed that Fakoe Trading was appointed by the SGB. He traversed reasons of appointing this service provider over and above competing quotations from other companies. This was clearly not of the Principal’s own doing.

39. Due to this unlawful disciplinary action, Mr Roger John who has served the Department of Education for more than 31 years has unfortunately found himself unemployed. It appears that this extremely long service was not even considered as a formidable mitigating factor prior to his unfair dismissal. Evidence of progressive discipline application was also not adduced.

40. The alleged inconsistency at Edenpark Primary School was also not addressed by the Respondent’s witnesses. The Presiding Officer was also biased as he ignored contradictory evidence tendered by the Applicants witnesses at the disciplinary hearing and he removed their testimony from his outcome report. In the premise,

41. In casu, the Applicant asked for reinstatement as a remedy for the unfair dismissal. I could find no reason why this relief would be inappropriate. Having been dismissed on the 27th of August 2021, Mr John would have been out of work for 15 months at date of reinstatement. His monthly salary was set at R63 139, 94. Backpay is therefore calculated at the monthly rate over a 15 months period. I hereby tender the award as follows:

AWARD

42. The disciplinary action taken against the Applicant, Mr Roger John, by the Respondent, Gauteng Department of Health, is declared as invalid, unlawful and misplaced. For this reason, the dismissal was both procedurally and substantively unfair.

43. I therefore order the Respondent to reinstate the Applicant on the same terms and conditions that existed prior to this unfair dismissal. The Applicant must report for duty at the Respondent’s premises on the 28th of November 2022.

44. I also order the Respondent to pay the Applicant R947 099, 10 in back-pay by no later than the 15th of December 2022. In case of non-payment, this amount shall begin to accrue interest from the 16th of December 2022 in terms of Section 143 (2) of the Labour Relations Act 66 of 1995 as amended, read with the Prescribed Rate of Interest Act, 1975 (Act No. 55 of 1975).

45. I make no order as to costs.

Dated and signed on the 22nd of November 2022.


Vusi Moyo
ELRC Commissioner