PSES115-18/19WC
Text
ELRC442-21/22EC
Award Date:
29 March 2022
IN THE EDUCATION LABOUR RELATIONS COUNCIL HELD IN CRADOCK
Case No: ELRC442-21/22EC
In the matter between
FA Kayster Applicant
and
Department of Education: Eastern Cape Respondent
ARBITRATOR: Anthony Walter Howden
HEARD: 16 March 2022
DATE OF AWARD: 29 March 2022
SUMMARY: Labour Relations Act 66 of 1995 – Section 186(2) (a) - alleged unfair conduct relating to demotion.
ARBITRATION AWARD
DETAILS OF PROCEEDINGS AND REPRESENTATION
1. The dispute was scheduled for Arbitration in terms of Section 186 (2) (a) of the Labour Relations Act 66 of 1995 as amended (the LRA) read with Clause 7 of the ELRC Constitution: Dispute Resolution Procedures Annexure C (As amended 26 May 2021). The arbitration commenced on 28 January 2022 and was concluded on 16 March 2022 at the offices of the Department of Education - Eastern Cape in Cradock.
2. The Applicant, FA Kayster – Persal number 50467026, was present and was represented by Mr F Smit from Nolte Smit Attorneys.
3. The Respondent, Department of Education - Eastern Cape, was represented by Mr T Mlahleni from the Labour Relations Department.
4. On the day the parties requested that Heads of Argument/Closing Arguments be done in writing. It was agreed that the parties would submit written Heads of Argument/Closing Arguments simultaneously on 23 March 2022.
5. The Heads of Argument/Closing Arguments were received timeously and taken into consideration when drafting this award.
ISSUES IN DISPUTE
6. This matter came before the Council in terms of Section 186 (2) (a) of the Labour Relations Act 66 of 1995 (the LRA). I am required to determine whether or not the Respondent committed an Unfair Labour Practice by demoting the Applicant.
BACKGROUND TO THE DISPUTE
7. The Applicant was employed by the Respondent as a Principal (PL 4) at the Ellen Olivier Primary School in Middelburg.
8. At a disciplinary hearing held on 23 September 2021 the Applicant was found guilty of the charge:
Charge 1: It is alleged that you are guilty of misconduct in terms of Section 18 (1) (a) to the Employment of Educators Act, 1998 (as amended) which inter alia reads as follows:
An educator commits misconduct if he or she fails to comply with or contravenes this Act or any other statutes, regulations or legal obligation relating to education and the employment relationship in that during 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed or neglected to adhere to the provisions of Section 37 (4) of the South African Schools Act 84 of 1996 more particularly; you did not purchase netball equipment as stipulated in the national lottery contract agreement.
Charge 2: It is alleged that you are guilty of misconduct in terms of Section 18 (1) (a) to the Employment of Educators Act, 1998 (as amended) which inter alia reads as follows:
An educator commits misconduct if he or she fails to comply with or contravenes this Act or any other statutes, regulations or legal obligation relating to education and the employment relationship in that during 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed or neglected to adhere to the provisions of Paragraph 7 (7.1) (7.2) (7.3) (7.4) (7.6) of the asset management policy; more particularly you failed to report loss of the following assets:
- Acer computer (laptop) box with serial number IW75220516 and
- Mecer keypad with serial number KBKBP03101410BOO.
Charge 3: It is alleged that you are guilty of misconduct in terms of Section 16A (1) (a) of the South African Schools Act 84 of 1996 which inter alia reads as follows: The principal of a public school represents the Head of Department in the governing body when acting in an official capacity as contemplated in sections 23 (1) (b) and 24 (1) (j) in that during the 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed and/or neglected to take reasonable steps to safeguard school funds to the value of R23 361.83 and/or neglected to ensure that payments made were made with the required supporting documents in the amount of R23 361.83.
Charge 4: It is alleged that you are guilty of misconduct in terms of Section 37 (3) of the South African Schools Act 84 of 1996 which inter alia reads as follows: The governing body of a public school must open and maintain one banking account, but a governing body of a public school may, with the approval of the member of the executive council, invest surplus money in another account in that during the 2017/2018 financial year you failed and/or neglected to advise the governing body of Ellen Olivier Primary School that the school may only open a second bank account with the approval of the Member of the Executive Council by so doing allowing the school to maintain a second bank account without the approval of the Member of the Executive Council.
Charge 5: It is alleged that you are guilty of misconduct in terms of Section 38A (1) subject to subsection (2) of the South African Schools Act 84 of 1996 which inter alia reads: a governing body may not pay or give to a state employee employed in terms of the Employment of Educators Act 1998 (Act No 76 of 1998) or the Public Services Act 1994 (proclamation No 103 of 1994) any unauthorised – (a) remuneration (b) other financial benefits or (c) benefits in kind, more particularly that on 3 September 2015 you allowed a cheque payment of R750.00 to an educator E Jacobs, on 29 June 2017 you allowed a cheque payment of R1 350.00 to an educator W Douglas and on 30 June 2017 you allowed a cheque payment of R420.00 to an educator H Wilkshire.
9. The Applicant was demoted as a result of the disciplinary hearing on 1 July 2021 and was made a Head of Department (PL 2) at the same school. The Applicant is seeking reinstatement into his old position, namely Principal (PL 4), at the Ellen Olivier Primary School. At the time of concluding these proceedings the Respondent had not made an appointment in the Applicant’s position.
SURVEY OF EVIDENCE AND ARGUMENT
10. On the first day of these proceedings an unsigned Pre-Arbitration Meeting Minutes was submitted by the Applicant’s Representative. The parties held a Pre-Arbitration Meeting on the day and the following was submitted as common cause between the parties:
- That the Applicant was originally employed by the Respondent as a Post Level 1 Educator on 1 January 1991.
- That prior to the demotion the Applicant was employed as a Principal (PL 4) at the Ellen Olivier Primary School.
- That a disciplinary hearing was held on 23 September 2021 where the Applicant was found guilty of the charges as mentioned in paragraph (8) above.
- That the Applicant was demoted as a result of the disciplinary hearing on 1 July 2021 and was made a Head of Department (HoD) (PL 2) at the Ellen Olivier Primary School.
- That the Applicant pleaded guilty at the disciplinary hearing.
- That the Applicant had a clean disciplinary record spanning some 29 years of service.
- That the demotion was procedurally fair as far as the disciplinary hearing was concerned.
11. The issue in dispute is whether the Respondent committed an unfair labour practice by demoting the Applicant to an HoD (PL 2) position at the Ellen Olivier Primary School. More specifically did the Presiding Officer of the disciplinary hearing apply his mind to the evidence before him after the Applicant pleaded guilty and come to a reasonable decision.
12. Both parties submitted bundles of documents. Applicant - Bundle A. Respondent – Bundle B. None of the documents were in dispute and it was agreed that the documents’ contents were what it purported to be.
13. At the outset I must point out that this is a brief summary of the evidence which is relevant to the central issues and that I have taken all evidence submitted into account when making my decision.
The Applicant’s Submissions
14. The Applicant, after being sworn in, stated the following after questions were put to him by his representative:
- That at the disciplinary hearing he was represented by his union SADTU.
- That he had pleaded guilty to the charges after a plea bargain with the Respondent.
- That his representative had spoken to the Respondent in this regard without him present.
- That he just wanted to get it over due to the stress it caused and was told by his representative that he would get at the most a warning or a month suspension.
- That he would not have accepted had he known it was to be such a harsh sanction.
- That he could explain everything with regards to all the charges.
- That the presiding officer at the disciplinary hearing did not apply his mind to all the facts and he was never given an opportunity to explain himself to the presiding officer.
- Charge (1): That the school had received Lotto money of R300 000.00 for a netball court/cricket pitch and equipment.
- That the Department had not paid the Second Tranche payment that was due in December 2017, which was used for the running costs of the school.
- That the Second Tranche was paid in June 2018.
- That due to this non-payment of the Second Tranche in December 2017, the Lotto money laying in the same account was used to keep the school running at the time.
- That the school’s account even went into a Debit balance and debit orders were returned due to insufficient funds in the account.
- That he was unable to purchase the netball equipment due to the lack of funds.
- That when the Second Tranche did come in the new SGB members were unwilling to buy the netball equipment with these funds and were “unhappy” with the quality of the work.
- That the committee appointed for the Lotto Project had already received quotes for the netball equipment and these were given to the then SGB members.
- That he had involved the District Office to resolve the issue with the new SGB and even resorted to getting his union involved, however to no avail.
- Charge (2): That he was aware of the Asset Management Policy.
- That the laptop was not a laptop but a desktop which was not in working order and was left for show in the IT room as it was expanded with new computers.
- That the items were there with the last asset register check four month prior to the investigation and its disappearance was never reported to him. Only became aware the items were gone with the investigation.
- That all had access to the IT Room.
- Charges (3) and (4): That the payments were from the Debutant Account which was not a school account.
- That he was not a signatory on the account and the account was established prior to his arrival at the school by teachers/retired teachers for fund raising for the school, mostly from alumni.
- That the SGB had no say in the account.
- Charge (5): That the payments made to educators were made as a result of an internal policy for people retiring (According to a formula).
- That these payments were supposed to have been made from the Debutant account and not the school account.
- That it was an oversight and had accepted the requisition forms were correct at the time.
The Respondent’s Submissions
15. The Respondent’s first witness, B Kwepile – CES: ER/IR Department, after being sworn in stated the following after questions were put to him by his representative:
- That he was the Presiding Officer for the Applicant’s disciplinary hearing.
- That on the day of the disciplinary hearing the parties had spoken before the process commenced.
- That he was informed that the Applicant had indicated that he would like to plead guilty.
- That he had proceeded with the hearing and had read each charge to the Applicant who had indicated that he pleaded guilty to all the charges.
- That as the presiding officer you are then deprived of getting into the merits of the case and did not take the bundles into consideration.
- That he had allowed the parties to address him in “opening statements” and then moved on to the Mitigating and Aggravating factors to which he had applied his mind.
- That although the Respondent had requested dismissal he had felt demotion was a more appropriate sanction.
16. During cross-questioning the witness confirmed the following:
- That he had only looked at the Mitigating and Aggravating factors as the Applicant had pleaded guilty and it was not required to go through all the stages of a disciplinary hearing.
- That if you “sum up” the charges they revolve around embezzlement of funds and theft.
- That dishonesty was an element of the charges.
ANALYSIS OF THE EVIDENCE AND ARGUMENT
17. Section 186 (2) (a) of the LRA states:
“Unfair labour practice means an unfair act or omission that arises between an employer and an employee involving - unfair conduct by the employer relating to the promotion, demotion, probation (excluding disputes about dismissals for a reason relating to probation) or training of an employee or relating to the provision of benefits to an employee.”
18. The first issue raised by the Applicant concerning the day of the disciplinary hearing revolves around the fact that the Applicant felt that he was “thrown under the bus” by his trade union and indirectly by the Respondent.
19. The Applicant testified in evidence-in-chief that after a plea bargain took place between the union representative and the employer, the union representative had advised him to plead guilty as he would not receive anything more than a warning or possibly one month suspension.
20. The Respondent did not address this during cross-questioning, however in their Closing Arguments the Respondent had stated that there was no such agreement. According to the Respondent the parties had allegedly only agreed that the Applicant should plead guilty and the Presiding Officer would decide on the sanction.
21. It is noted that the union representative was not called or even subpoenaed as a witness to these proceedings to corroborate the Applicant’s statements. In Tshishonga v Minister of Justice and Constitutional Development and another (2007) 28 ILJ 196 (LC) it was held that the failure to call a witness is reasonable in certain circumstances, such as when the opposition fails to make out a prima facie case. However, an adverse inference must be drawn if a party fails to testify or place evidence of a witness who is available and able to elucidate the fact as this failure leads naturally to the inference that he fears that such evidence will expose facts unfavorable to him or may even damage his case.
22. It is also noted that the Applicant is a mature and educated person who consciously made a decision to be represented by his union as well as made a conscious decision to plead guilty.
23. The second issue raised by the Applicant and his representative was that the presiding officer had not applied his mind to the facts of the matter and merely made a decision based on the charges and the mitigating and aggravation factors.
24. It is trite that the LRA as well as Schedule 8 of the LRA does not prescribe how a disciplinary hearing must be structured, even more so when an employee pleads guilty to the charges.
25. The Applicant’s Representative raised the following case law in his Closing Arguments: It is precisely for this reason and to avoid miscarriages of justice such as this, why the Labour Appeal Court has held as follows in Monare v South African Tourism (JS133 of 2016) [2019] ZALCJHB 205: Page 10 of 12:
[72] In the area of criminal law and procedure, where courts are constantly confronted with guilty pleas to serious criminal charges, special safeguards are provided that ensure that an accused person’s utterances of a plea of guilty is in fact a proper plea of guilty and an unequivocal admission of guilt. For example, in terms of section 112(1) (b) of the Criminal Procedure Act 51 of 1977, the presiding officer may have to question the accused person with reference to the alleged facts of the case in order to ascertain whether he or she admits the allegations in the charge to which he or she has pleaded guilty. Furthermore, courts are required not only to be convinced that an accused admits an allegation in the charge, but that the accused appreciates what that admission entails.
[73] Even though the disciplinary inquiry is not a criminal trial, it has certain features akin to such a trial. In a disciplinary hearing, for example, there is (a) charge(s) of misconduct to which an employee may either plead guilty or not guilty, which is similar to a plea to a criminal charge. Fairness and logic dictate that the same safeguards that apply in a criminal trial with regard to a plea of guilty, should also apply in disciplinary hearings where the employee faces dismissal.
26. It is common cause that the Applicant pleaded guilty to all the charges at the disciplinary hearing.
It is further common cause that the Applicant was asked specifically by the presiding officer, per charge, what was his plea. It is further common cause that the presiding officer had only asked the parties to address him in the form of Opening Statements/Mitigating factors/Aggravating factors and that he had not gone into the facts or merits of the matter on the day.
27. By design disciplinary hearings and arbitration hearing, due to the nature of labour disputes, should be dealt with speedily and with the minimum of legal formalities.
28. Although reasonably new case law, the LAC is expecting the presiding officers at disciplinary hearings to go a step further after the employee had responded with a plea of guilty.
29. If this had taken place at the Applicant’s disciplinary hearing, the outcome may have been somewhat different. As an example the presiding officer was not even aware of the fact that the Respondent had not paid over the second tranche at the time of the disciplinary hearing.
30. On the other side of the coin, the Applicant is a mature and educated person who participated throughout and willingly with the investigation, providing the Risk team with numerous written explanations of his actions or lack thereof.
31. Based on the balance of probability I find it difficult to believe that the Applicant was not fully aware of the importance of the charges laid against him as well as the possible consequences the charges may hold if found guilty when he consciously decided to plead guilty at his disciplinary hearing.
32. In Ronald Ratsibvumo and another v CCMA and others (J 239/16) LC (handed down on 27 October 2017) the court held that a plea of guilty in a disciplinary enquiry is not dispositive of need to consider guilt in arbitration proceedings.
33. It needs to be noted that as the Principal of the school, the Applicant was the Accounting Officer who ultimately was responsible for the efficient and proper running of the school in all areas.
34. Looking at the charges.
Charge 1: ....... in that during 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed or neglected to adhere to the provisions of Section 37 (4) of the South African Schools Act 84 of 1996 more particularly; you did not purchase netball equipment as stipulated in the national lottery contract agreement.
35. It is common cause that a substantial amount of the lottery money was paid out for the cricket pitch and the netball field.
36. The Applicant made the statement in evidence-in-chief that he was unable to complete the project/buy the netball equipment as there was no money in the account due to the Department not paying the second tranche payment in December 2017. The Applicant explained that as the Lotto money was in the school’s account it was used for the running expenses of the school to ensure the school’s survival.
37. It is evident from the submissions/bundles that quotations were sourced for the purchase of the netball equipment.
38. It is evident from the submissions made that the Department in fact did not pay the second tranche as expected in December 2017. This was supported by an e-mail from M Naude on 7 March 2018 (Bundle B page 120) as well as confirmed by the Respondent’s witness Haas (New SGB Chairperson) in cross-questioning.
39. It was further confirmed by the submissions of the parties that the school’s finances were in a precarious position at the time. The bank account in a Debit balance in April 2018 (Bundle B page 203), the Respondent’s witness Haas also confirmed in his evidence-in-chief that the school’s finances were in a “mess” and that there were no funds.
40. The Applicant made the statement that Debit Orders swallowed up all the Lotto money. I find this a bit difficult to believe as there are not that many debit orders and they are also not for such large amounts. On perusal of the few bank statements available, one can see a lot of cash withdrawals on a regular basis being made which also resulted in the balance of the account being depleted.
41. The Applicant was not charged for mismanagement of funds, so one can only assume these withdrawals were for operational requirements as stated by the Applicant, however he might have got these confused with “debit orders”.
42. It is common cause that the second tranche payment was received in June 2018. At this point the Applicant attempted to complete the purchases for the netball equipment, however the SGB who were appointed in 2018, were not willing to make the purchases from the funds paid by the Department.
43. This statement was confirmed by the Respondent’s witness Haas who stated that the SGB were not willing to proceed with the purchases until an investigation was done into the expenditure of the school, especially with regards to the Lotto money and how it was used to keep the school running.
44. It is evident that the Applicant and Haas do not have a good relationship, bordering on toxic, which further compounded the matter.
45. It is common cause that the SGB were the only signatories on the school account and that all decisions, financial or otherwise, needed to be approved by the SGB before things could be bought or done at the school. Thereby preventing the Applicant from making the required purchases when money became available again.
46. Even though the finances might not have been run according to the new SGB’s satisfaction when they took over, the Applicant however had attempted, from what can be seen, to keep the school running which ultimately is in the best interest of the children at the school.
47. Based on the above, the submissions of the parties and on the balance of probability, it is my finding that the Applicant was not guilty of charge (1) and demotion was not justified.
48. Charge (2): .... in that during 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed or neglected to adhere to the provisions of Paragraph 7 (7.1) (7.2) (7.3) (7.4) (7.6) of the asset management policy; more particularly you failed to report loss of the following assets:
- Acer computer (laptop) box with serial number IW75220516 and
- Mecer keypad with serial number KBKBP03101410BOO.
49. The Applicant confirmed in evidence-in-chief that he was familiar with the Asset Management Policy (AMP).
50. The Applicant further stated that he was not aware of the fact that the items were missing and only became aware of this when the investigation brought it up. The Applicant further stated that the items were obsolete and only used in the IT room as show pieces.
51. The Applicant further confirmed that with the last asset register check the items were still in the IT room, however the room was not locked and accessible to everybody at the school.
52. A Mr Plaatjies (Bundle A page 36) confirmed the fact that the items were obsolete and were in a room which was accessible to everyone.
53. A question that could be asked due to the fact that the Applicant was aware of the AMP, is why did the Applicant not remove these items from the asset register due to them being obsolete, as all AMP’s make provision for this possibility.
54. The Applicant stated that the school expanded with new computers in the IT room as time went by. A second question would be why would an IT room with such valuable assets be left unattended or unmonitored and be so accessible to just anyone.
55. It is evident from the above, the submissions of the parties as well as based on the balance of probability that the Applicant was not aware of the fact that these items were no longer in the IT room as these items could in fact have been removed at any time and by anyone. It is therefore my finding that the Applicant is not guilty of charge (2), as the Applicant cannot be expected to be 100 percent aware of every small thing at the school, although the Applicant still bears the responsibility to report missing items when it is found to be missing. The demotion was therefore not justified.
56. Charges (3) and (4) will be dealt with together.
Charge (3): ....... in that during the 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed and/or neglected to take reasonable steps to safeguard school funds to the value of R23 361.83 and/or neglected to ensure that payments made were made with the required supporting documents in the amount of R23 361.83.
Charge (4) in that during the 2017/2018 financial year you failed and/or neglected to advice the governing body of Ellen Olivier Primary School that the school may only open a second bank account with the approval of the Member of the Executive Council by so doing allowing the school to maintain a second bank account without the approval of the Member of the Executive Council.
57. It is common cause that there was a second account, the Debutant account.
58. The Applicant stated that this account was separate from the school and opened before his arrival at the school by retired teachers and was run by teachers/retired teachers exclusively for fund raising at the school.
59. The Applicant further stated that the SGB had no say in this account as it was run separately from the school, that he was not a signatory on the account and the (Alumni) account was run with specific guidelines.
60. According to the bundle of the Respondent the name of the account is “EOP Debutante Fonds”.
Although the initials of the school reflects in the name it is evident that this is not a school account, which should reflect the name of the actual school for which it was opened.
61. According to the submissions made by the Applicant the only funds in the account were received from fund raising events and donations from the school’s Alumni. There is no evidence that any money received from the Department (Government Funds) were transferred into this account.
62. Even though the SGB had no say or powers with regards to this account, confirmed by Haas in cross-questioning, the money was ultimately used for the upliftment of the school. As per the guidelines issued for the use of the money. (SGB appointments/maintenance etc).
63. The account was not in the schools name. The funds in the account were not paid to the school by the Department, but raised independently from the Department. The account was run by teachers and retired teachers independently from the school account.
64. Based on the above, the submissions of the parties and based on the balance of probability, it is my finding that the Applicant was not guilty of charges (3) and (4) due to the fact that the “EOP Debutante Fonds” account was not money/funding for which the Applicant was liable to report to the Respondent for in terms of the Public Management Finance Act No 1 of 2013 (as amended).
65. Charge (5):...... in terms of Section 38A (1) subject to subsection (2) of the South African Schools Act 84 of 1996 which inter alia reads: “a governing body may not pay or give to a state employee employed in terms of the Employment of Educators Act 1998 (Act No 76 of 1998) or the Public Services Act 1994 (proclamation No 103 of 1994) any unauthorised – (a) remuneration (b) other financial benefits or (c) benefits in kind, more particularly that on 3 September 2015 you allowed a cheque payment of R750.00 to an educator E Jacobs, on 29 June 2017 you allowed a cheque payment of R1 350.00 to an educator W Douglas and on 30 June 2017 you allowed a cheque payment of R420.00 to an educator H Wilkshire.
66. The Applicant has confirmed that these payments were supposed to have been made from the Debutant account and not the school account as it was for an internal policy the school had to give retiring educators something when they left the school.
67. The Applicant has conceded that it was an oversight as he had accepted that the requisition forms were correct and it was an honest mistake.
68. Even though the Applicant has not benefited from these transactions, it still remains a very serious issue as it entails the mismanagement of public funds/poor financial management at a government school.
69. This happened on three occasions. Once in 2015 and twice in 2017, basically a day apart. As the Accounting Officer, especially when you only have the authority to sign the requisition forms, you are required to do your job diligently to ensure that funds are utilized within the prescribed norms.
70. To submit that “we are a team” is unacceptable under the circumstances and just an attempt to shift the blame.
71. Based on the above, the submissions of the parties and on the balance of probability, it is my finding that the Applicant is guilty of charge (5).
72. Taking the above into consideration, the Applicant’s clean disciplinary record spanning some 29 years, it is my finding that the sanction of demotion was not justified and a Final Written Warning and/or a one month unpaid suspension would have sufficed at the time.
73. It is therefore my finding that the Respondent has committed an Unfair Labour Practice by demoting the Applicant from Principal (PL 4) to HoD (PL 2) on 1 July 2021. It is further my finding that the Applicant must be reinstated to his former position retrospectively and issued with a Final Written Warning valid for 12 months, backdated to 1 July 2021.
74. I therefore make the following award:
AWARD
75. The Respondent , Department of Education – Eastern Cape, committed an Unfair Labour Practice when they demoted the Applicant, FA Kayster– Persal number 50467026, from Principal (PL 4) to an HoD (PL 2) position on 1 July 2021.
76. The Respondent, Department of Education – Eastern Cape, is instructed to reinstate the Applicant, FA Kayster– Persal number 50467026, to his former position as Principal (PL 4) at Ellen Olivier Primary School retrospectively as from 1 July 2021 with all the relevant benefits to which he is entitled as if he were never demoted.
77. The Respondent, Department of Education – Eastern Cape, is instructed to implement paragraph (76) above with all the relevant back pay by 31 May 2022.
78. The Applicant, FA Kayster – Persal number 50467026,is issued with a Final Written Warning valid for twelve (12) months and backdated to 1 July 2021.
79. The Applicant, FA Kayster– Persal number 50467026, is to report to his former position within ten (10) days of receiving this award.
Panellist: Anthony Walter Howden
ELRC
Case No: ELRC442-21/22EC
In the matter between
FA Kayster Applicant
and
Department of Education: Eastern Cape Respondent
ARBITRATOR: Anthony Walter Howden
HEARD: 16 March 2022
DATE OF AWARD: 29 March 2022
SUMMARY: Labour Relations Act 66 of 1995 – Section 186(2) (a) - alleged unfair conduct relating to demotion.
ARBITRATION AWARD
DETAILS OF PROCEEDINGS AND REPRESENTATION
1. The dispute was scheduled for Arbitration in terms of Section 186 (2) (a) of the Labour Relations Act 66 of 1995 as amended (the LRA) read with Clause 7 of the ELRC Constitution: Dispute Resolution Procedures Annexure C (As amended 26 May 2021). The arbitration commenced on 28 January 2022 and was concluded on 16 March 2022 at the offices of the Department of Education - Eastern Cape in Cradock.
2. The Applicant, FA Kayster – Persal number 50467026, was present and was represented by Mr F Smit from Nolte Smit Attorneys.
3. The Respondent, Department of Education - Eastern Cape, was represented by Mr T Mlahleni from the Labour Relations Department.
4. On the day the parties requested that Heads of Argument/Closing Arguments be done in writing. It was agreed that the parties would submit written Heads of Argument/Closing Arguments simultaneously on 23 March 2022.
5. The Heads of Argument/Closing Arguments were received timeously and taken into consideration when drafting this award.
ISSUES IN DISPUTE
6. This matter came before the Council in terms of Section 186 (2) (a) of the Labour Relations Act 66 of 1995 (the LRA). I am required to determine whether or not the Respondent committed an Unfair Labour Practice by demoting the Applicant.
BACKGROUND TO THE DISPUTE
7. The Applicant was employed by the Respondent as a Principal (PL 4) at the Ellen Olivier Primary School in Middelburg.
8. At a disciplinary hearing held on 23 September 2021 the Applicant was found guilty of the charge:
Charge 1: It is alleged that you are guilty of misconduct in terms of Section 18 (1) (a) to the Employment of Educators Act, 1998 (as amended) which inter alia reads as follows:
An educator commits misconduct if he or she fails to comply with or contravenes this Act or any other statutes, regulations or legal obligation relating to education and the employment relationship in that during 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed or neglected to adhere to the provisions of Section 37 (4) of the South African Schools Act 84 of 1996 more particularly; you did not purchase netball equipment as stipulated in the national lottery contract agreement.
Charge 2: It is alleged that you are guilty of misconduct in terms of Section 18 (1) (a) to the Employment of Educators Act, 1998 (as amended) which inter alia reads as follows:
An educator commits misconduct if he or she fails to comply with or contravenes this Act or any other statutes, regulations or legal obligation relating to education and the employment relationship in that during 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed or neglected to adhere to the provisions of Paragraph 7 (7.1) (7.2) (7.3) (7.4) (7.6) of the asset management policy; more particularly you failed to report loss of the following assets:
- Acer computer (laptop) box with serial number IW75220516 and
- Mecer keypad with serial number KBKBP03101410BOO.
Charge 3: It is alleged that you are guilty of misconduct in terms of Section 16A (1) (a) of the South African Schools Act 84 of 1996 which inter alia reads as follows: The principal of a public school represents the Head of Department in the governing body when acting in an official capacity as contemplated in sections 23 (1) (b) and 24 (1) (j) in that during the 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed and/or neglected to take reasonable steps to safeguard school funds to the value of R23 361.83 and/or neglected to ensure that payments made were made with the required supporting documents in the amount of R23 361.83.
Charge 4: It is alleged that you are guilty of misconduct in terms of Section 37 (3) of the South African Schools Act 84 of 1996 which inter alia reads as follows: The governing body of a public school must open and maintain one banking account, but a governing body of a public school may, with the approval of the member of the executive council, invest surplus money in another account in that during the 2017/2018 financial year you failed and/or neglected to advise the governing body of Ellen Olivier Primary School that the school may only open a second bank account with the approval of the Member of the Executive Council by so doing allowing the school to maintain a second bank account without the approval of the Member of the Executive Council.
Charge 5: It is alleged that you are guilty of misconduct in terms of Section 38A (1) subject to subsection (2) of the South African Schools Act 84 of 1996 which inter alia reads: a governing body may not pay or give to a state employee employed in terms of the Employment of Educators Act 1998 (Act No 76 of 1998) or the Public Services Act 1994 (proclamation No 103 of 1994) any unauthorised – (a) remuneration (b) other financial benefits or (c) benefits in kind, more particularly that on 3 September 2015 you allowed a cheque payment of R750.00 to an educator E Jacobs, on 29 June 2017 you allowed a cheque payment of R1 350.00 to an educator W Douglas and on 30 June 2017 you allowed a cheque payment of R420.00 to an educator H Wilkshire.
9. The Applicant was demoted as a result of the disciplinary hearing on 1 July 2021 and was made a Head of Department (PL 2) at the same school. The Applicant is seeking reinstatement into his old position, namely Principal (PL 4), at the Ellen Olivier Primary School. At the time of concluding these proceedings the Respondent had not made an appointment in the Applicant’s position.
SURVEY OF EVIDENCE AND ARGUMENT
10. On the first day of these proceedings an unsigned Pre-Arbitration Meeting Minutes was submitted by the Applicant’s Representative. The parties held a Pre-Arbitration Meeting on the day and the following was submitted as common cause between the parties:
- That the Applicant was originally employed by the Respondent as a Post Level 1 Educator on 1 January 1991.
- That prior to the demotion the Applicant was employed as a Principal (PL 4) at the Ellen Olivier Primary School.
- That a disciplinary hearing was held on 23 September 2021 where the Applicant was found guilty of the charges as mentioned in paragraph (8) above.
- That the Applicant was demoted as a result of the disciplinary hearing on 1 July 2021 and was made a Head of Department (HoD) (PL 2) at the Ellen Olivier Primary School.
- That the Applicant pleaded guilty at the disciplinary hearing.
- That the Applicant had a clean disciplinary record spanning some 29 years of service.
- That the demotion was procedurally fair as far as the disciplinary hearing was concerned.
11. The issue in dispute is whether the Respondent committed an unfair labour practice by demoting the Applicant to an HoD (PL 2) position at the Ellen Olivier Primary School. More specifically did the Presiding Officer of the disciplinary hearing apply his mind to the evidence before him after the Applicant pleaded guilty and come to a reasonable decision.
12. Both parties submitted bundles of documents. Applicant - Bundle A. Respondent – Bundle B. None of the documents were in dispute and it was agreed that the documents’ contents were what it purported to be.
13. At the outset I must point out that this is a brief summary of the evidence which is relevant to the central issues and that I have taken all evidence submitted into account when making my decision.
The Applicant’s Submissions
14. The Applicant, after being sworn in, stated the following after questions were put to him by his representative:
- That at the disciplinary hearing he was represented by his union SADTU.
- That he had pleaded guilty to the charges after a plea bargain with the Respondent.
- That his representative had spoken to the Respondent in this regard without him present.
- That he just wanted to get it over due to the stress it caused and was told by his representative that he would get at the most a warning or a month suspension.
- That he would not have accepted had he known it was to be such a harsh sanction.
- That he could explain everything with regards to all the charges.
- That the presiding officer at the disciplinary hearing did not apply his mind to all the facts and he was never given an opportunity to explain himself to the presiding officer.
- Charge (1): That the school had received Lotto money of R300 000.00 for a netball court/cricket pitch and equipment.
- That the Department had not paid the Second Tranche payment that was due in December 2017, which was used for the running costs of the school.
- That the Second Tranche was paid in June 2018.
- That due to this non-payment of the Second Tranche in December 2017, the Lotto money laying in the same account was used to keep the school running at the time.
- That the school’s account even went into a Debit balance and debit orders were returned due to insufficient funds in the account.
- That he was unable to purchase the netball equipment due to the lack of funds.
- That when the Second Tranche did come in the new SGB members were unwilling to buy the netball equipment with these funds and were “unhappy” with the quality of the work.
- That the committee appointed for the Lotto Project had already received quotes for the netball equipment and these were given to the then SGB members.
- That he had involved the District Office to resolve the issue with the new SGB and even resorted to getting his union involved, however to no avail.
- Charge (2): That he was aware of the Asset Management Policy.
- That the laptop was not a laptop but a desktop which was not in working order and was left for show in the IT room as it was expanded with new computers.
- That the items were there with the last asset register check four month prior to the investigation and its disappearance was never reported to him. Only became aware the items were gone with the investigation.
- That all had access to the IT Room.
- Charges (3) and (4): That the payments were from the Debutant Account which was not a school account.
- That he was not a signatory on the account and the account was established prior to his arrival at the school by teachers/retired teachers for fund raising for the school, mostly from alumni.
- That the SGB had no say in the account.
- Charge (5): That the payments made to educators were made as a result of an internal policy for people retiring (According to a formula).
- That these payments were supposed to have been made from the Debutant account and not the school account.
- That it was an oversight and had accepted the requisition forms were correct at the time.
The Respondent’s Submissions
15. The Respondent’s first witness, B Kwepile – CES: ER/IR Department, after being sworn in stated the following after questions were put to him by his representative:
- That he was the Presiding Officer for the Applicant’s disciplinary hearing.
- That on the day of the disciplinary hearing the parties had spoken before the process commenced.
- That he was informed that the Applicant had indicated that he would like to plead guilty.
- That he had proceeded with the hearing and had read each charge to the Applicant who had indicated that he pleaded guilty to all the charges.
- That as the presiding officer you are then deprived of getting into the merits of the case and did not take the bundles into consideration.
- That he had allowed the parties to address him in “opening statements” and then moved on to the Mitigating and Aggravating factors to which he had applied his mind.
- That although the Respondent had requested dismissal he had felt demotion was a more appropriate sanction.
16. During cross-questioning the witness confirmed the following:
- That he had only looked at the Mitigating and Aggravating factors as the Applicant had pleaded guilty and it was not required to go through all the stages of a disciplinary hearing.
- That if you “sum up” the charges they revolve around embezzlement of funds and theft.
- That dishonesty was an element of the charges.
ANALYSIS OF THE EVIDENCE AND ARGUMENT
17. Section 186 (2) (a) of the LRA states:
“Unfair labour practice means an unfair act or omission that arises between an employer and an employee involving - unfair conduct by the employer relating to the promotion, demotion, probation (excluding disputes about dismissals for a reason relating to probation) or training of an employee or relating to the provision of benefits to an employee.”
18. The first issue raised by the Applicant concerning the day of the disciplinary hearing revolves around the fact that the Applicant felt that he was “thrown under the bus” by his trade union and indirectly by the Respondent.
19. The Applicant testified in evidence-in-chief that after a plea bargain took place between the union representative and the employer, the union representative had advised him to plead guilty as he would not receive anything more than a warning or possibly one month suspension.
20. The Respondent did not address this during cross-questioning, however in their Closing Arguments the Respondent had stated that there was no such agreement. According to the Respondent the parties had allegedly only agreed that the Applicant should plead guilty and the Presiding Officer would decide on the sanction.
21. It is noted that the union representative was not called or even subpoenaed as a witness to these proceedings to corroborate the Applicant’s statements. In Tshishonga v Minister of Justice and Constitutional Development and another (2007) 28 ILJ 196 (LC) it was held that the failure to call a witness is reasonable in certain circumstances, such as when the opposition fails to make out a prima facie case. However, an adverse inference must be drawn if a party fails to testify or place evidence of a witness who is available and able to elucidate the fact as this failure leads naturally to the inference that he fears that such evidence will expose facts unfavorable to him or may even damage his case.
22. It is also noted that the Applicant is a mature and educated person who consciously made a decision to be represented by his union as well as made a conscious decision to plead guilty.
23. The second issue raised by the Applicant and his representative was that the presiding officer had not applied his mind to the facts of the matter and merely made a decision based on the charges and the mitigating and aggravation factors.
24. It is trite that the LRA as well as Schedule 8 of the LRA does not prescribe how a disciplinary hearing must be structured, even more so when an employee pleads guilty to the charges.
25. The Applicant’s Representative raised the following case law in his Closing Arguments: It is precisely for this reason and to avoid miscarriages of justice such as this, why the Labour Appeal Court has held as follows in Monare v South African Tourism (JS133 of 2016) [2019] ZALCJHB 205: Page 10 of 12:
[72] In the area of criminal law and procedure, where courts are constantly confronted with guilty pleas to serious criminal charges, special safeguards are provided that ensure that an accused person’s utterances of a plea of guilty is in fact a proper plea of guilty and an unequivocal admission of guilt. For example, in terms of section 112(1) (b) of the Criminal Procedure Act 51 of 1977, the presiding officer may have to question the accused person with reference to the alleged facts of the case in order to ascertain whether he or she admits the allegations in the charge to which he or she has pleaded guilty. Furthermore, courts are required not only to be convinced that an accused admits an allegation in the charge, but that the accused appreciates what that admission entails.
[73] Even though the disciplinary inquiry is not a criminal trial, it has certain features akin to such a trial. In a disciplinary hearing, for example, there is (a) charge(s) of misconduct to which an employee may either plead guilty or not guilty, which is similar to a plea to a criminal charge. Fairness and logic dictate that the same safeguards that apply in a criminal trial with regard to a plea of guilty, should also apply in disciplinary hearings where the employee faces dismissal.
26. It is common cause that the Applicant pleaded guilty to all the charges at the disciplinary hearing.
It is further common cause that the Applicant was asked specifically by the presiding officer, per charge, what was his plea. It is further common cause that the presiding officer had only asked the parties to address him in the form of Opening Statements/Mitigating factors/Aggravating factors and that he had not gone into the facts or merits of the matter on the day.
27. By design disciplinary hearings and arbitration hearing, due to the nature of labour disputes, should be dealt with speedily and with the minimum of legal formalities.
28. Although reasonably new case law, the LAC is expecting the presiding officers at disciplinary hearings to go a step further after the employee had responded with a plea of guilty.
29. If this had taken place at the Applicant’s disciplinary hearing, the outcome may have been somewhat different. As an example the presiding officer was not even aware of the fact that the Respondent had not paid over the second tranche at the time of the disciplinary hearing.
30. On the other side of the coin, the Applicant is a mature and educated person who participated throughout and willingly with the investigation, providing the Risk team with numerous written explanations of his actions or lack thereof.
31. Based on the balance of probability I find it difficult to believe that the Applicant was not fully aware of the importance of the charges laid against him as well as the possible consequences the charges may hold if found guilty when he consciously decided to plead guilty at his disciplinary hearing.
32. In Ronald Ratsibvumo and another v CCMA and others (J 239/16) LC (handed down on 27 October 2017) the court held that a plea of guilty in a disciplinary enquiry is not dispositive of need to consider guilt in arbitration proceedings.
33. It needs to be noted that as the Principal of the school, the Applicant was the Accounting Officer who ultimately was responsible for the efficient and proper running of the school in all areas.
34. Looking at the charges.
Charge 1: ....... in that during 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed or neglected to adhere to the provisions of Section 37 (4) of the South African Schools Act 84 of 1996 more particularly; you did not purchase netball equipment as stipulated in the national lottery contract agreement.
35. It is common cause that a substantial amount of the lottery money was paid out for the cricket pitch and the netball field.
36. The Applicant made the statement in evidence-in-chief that he was unable to complete the project/buy the netball equipment as there was no money in the account due to the Department not paying the second tranche payment in December 2017. The Applicant explained that as the Lotto money was in the school’s account it was used for the running expenses of the school to ensure the school’s survival.
37. It is evident from the submissions/bundles that quotations were sourced for the purchase of the netball equipment.
38. It is evident from the submissions made that the Department in fact did not pay the second tranche as expected in December 2017. This was supported by an e-mail from M Naude on 7 March 2018 (Bundle B page 120) as well as confirmed by the Respondent’s witness Haas (New SGB Chairperson) in cross-questioning.
39. It was further confirmed by the submissions of the parties that the school’s finances were in a precarious position at the time. The bank account in a Debit balance in April 2018 (Bundle B page 203), the Respondent’s witness Haas also confirmed in his evidence-in-chief that the school’s finances were in a “mess” and that there were no funds.
40. The Applicant made the statement that Debit Orders swallowed up all the Lotto money. I find this a bit difficult to believe as there are not that many debit orders and they are also not for such large amounts. On perusal of the few bank statements available, one can see a lot of cash withdrawals on a regular basis being made which also resulted in the balance of the account being depleted.
41. The Applicant was not charged for mismanagement of funds, so one can only assume these withdrawals were for operational requirements as stated by the Applicant, however he might have got these confused with “debit orders”.
42. It is common cause that the second tranche payment was received in June 2018. At this point the Applicant attempted to complete the purchases for the netball equipment, however the SGB who were appointed in 2018, were not willing to make the purchases from the funds paid by the Department.
43. This statement was confirmed by the Respondent’s witness Haas who stated that the SGB were not willing to proceed with the purchases until an investigation was done into the expenditure of the school, especially with regards to the Lotto money and how it was used to keep the school running.
44. It is evident that the Applicant and Haas do not have a good relationship, bordering on toxic, which further compounded the matter.
45. It is common cause that the SGB were the only signatories on the school account and that all decisions, financial or otherwise, needed to be approved by the SGB before things could be bought or done at the school. Thereby preventing the Applicant from making the required purchases when money became available again.
46. Even though the finances might not have been run according to the new SGB’s satisfaction when they took over, the Applicant however had attempted, from what can be seen, to keep the school running which ultimately is in the best interest of the children at the school.
47. Based on the above, the submissions of the parties and on the balance of probability, it is my finding that the Applicant was not guilty of charge (1) and demotion was not justified.
48. Charge (2): .... in that during 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed or neglected to adhere to the provisions of Paragraph 7 (7.1) (7.2) (7.3) (7.4) (7.6) of the asset management policy; more particularly you failed to report loss of the following assets:
- Acer computer (laptop) box with serial number IW75220516 and
- Mecer keypad with serial number KBKBP03101410BOO.
49. The Applicant confirmed in evidence-in-chief that he was familiar with the Asset Management Policy (AMP).
50. The Applicant further stated that he was not aware of the fact that the items were missing and only became aware of this when the investigation brought it up. The Applicant further stated that the items were obsolete and only used in the IT room as show pieces.
51. The Applicant further confirmed that with the last asset register check the items were still in the IT room, however the room was not locked and accessible to everybody at the school.
52. A Mr Plaatjies (Bundle A page 36) confirmed the fact that the items were obsolete and were in a room which was accessible to everyone.
53. A question that could be asked due to the fact that the Applicant was aware of the AMP, is why did the Applicant not remove these items from the asset register due to them being obsolete, as all AMP’s make provision for this possibility.
54. The Applicant stated that the school expanded with new computers in the IT room as time went by. A second question would be why would an IT room with such valuable assets be left unattended or unmonitored and be so accessible to just anyone.
55. It is evident from the above, the submissions of the parties as well as based on the balance of probability that the Applicant was not aware of the fact that these items were no longer in the IT room as these items could in fact have been removed at any time and by anyone. It is therefore my finding that the Applicant is not guilty of charge (2), as the Applicant cannot be expected to be 100 percent aware of every small thing at the school, although the Applicant still bears the responsibility to report missing items when it is found to be missing. The demotion was therefore not justified.
56. Charges (3) and (4) will be dealt with together.
Charge (3): ....... in that during the 2017/2018 financial year as the Principal at Ellen Olivier Primary School you failed and/or neglected to take reasonable steps to safeguard school funds to the value of R23 361.83 and/or neglected to ensure that payments made were made with the required supporting documents in the amount of R23 361.83.
Charge (4) in that during the 2017/2018 financial year you failed and/or neglected to advice the governing body of Ellen Olivier Primary School that the school may only open a second bank account with the approval of the Member of the Executive Council by so doing allowing the school to maintain a second bank account without the approval of the Member of the Executive Council.
57. It is common cause that there was a second account, the Debutant account.
58. The Applicant stated that this account was separate from the school and opened before his arrival at the school by retired teachers and was run by teachers/retired teachers exclusively for fund raising at the school.
59. The Applicant further stated that the SGB had no say in this account as it was run separately from the school, that he was not a signatory on the account and the (Alumni) account was run with specific guidelines.
60. According to the bundle of the Respondent the name of the account is “EOP Debutante Fonds”.
Although the initials of the school reflects in the name it is evident that this is not a school account, which should reflect the name of the actual school for which it was opened.
61. According to the submissions made by the Applicant the only funds in the account were received from fund raising events and donations from the school’s Alumni. There is no evidence that any money received from the Department (Government Funds) were transferred into this account.
62. Even though the SGB had no say or powers with regards to this account, confirmed by Haas in cross-questioning, the money was ultimately used for the upliftment of the school. As per the guidelines issued for the use of the money. (SGB appointments/maintenance etc).
63. The account was not in the schools name. The funds in the account were not paid to the school by the Department, but raised independently from the Department. The account was run by teachers and retired teachers independently from the school account.
64. Based on the above, the submissions of the parties and based on the balance of probability, it is my finding that the Applicant was not guilty of charges (3) and (4) due to the fact that the “EOP Debutante Fonds” account was not money/funding for which the Applicant was liable to report to the Respondent for in terms of the Public Management Finance Act No 1 of 2013 (as amended).
65. Charge (5):...... in terms of Section 38A (1) subject to subsection (2) of the South African Schools Act 84 of 1996 which inter alia reads: “a governing body may not pay or give to a state employee employed in terms of the Employment of Educators Act 1998 (Act No 76 of 1998) or the Public Services Act 1994 (proclamation No 103 of 1994) any unauthorised – (a) remuneration (b) other financial benefits or (c) benefits in kind, more particularly that on 3 September 2015 you allowed a cheque payment of R750.00 to an educator E Jacobs, on 29 June 2017 you allowed a cheque payment of R1 350.00 to an educator W Douglas and on 30 June 2017 you allowed a cheque payment of R420.00 to an educator H Wilkshire.
66. The Applicant has confirmed that these payments were supposed to have been made from the Debutant account and not the school account as it was for an internal policy the school had to give retiring educators something when they left the school.
67. The Applicant has conceded that it was an oversight as he had accepted that the requisition forms were correct and it was an honest mistake.
68. Even though the Applicant has not benefited from these transactions, it still remains a very serious issue as it entails the mismanagement of public funds/poor financial management at a government school.
69. This happened on three occasions. Once in 2015 and twice in 2017, basically a day apart. As the Accounting Officer, especially when you only have the authority to sign the requisition forms, you are required to do your job diligently to ensure that funds are utilized within the prescribed norms.
70. To submit that “we are a team” is unacceptable under the circumstances and just an attempt to shift the blame.
71. Based on the above, the submissions of the parties and on the balance of probability, it is my finding that the Applicant is guilty of charge (5).
72. Taking the above into consideration, the Applicant’s clean disciplinary record spanning some 29 years, it is my finding that the sanction of demotion was not justified and a Final Written Warning and/or a one month unpaid suspension would have sufficed at the time.
73. It is therefore my finding that the Respondent has committed an Unfair Labour Practice by demoting the Applicant from Principal (PL 4) to HoD (PL 2) on 1 July 2021. It is further my finding that the Applicant must be reinstated to his former position retrospectively and issued with a Final Written Warning valid for 12 months, backdated to 1 July 2021.
74. I therefore make the following award:
AWARD
75. The Respondent , Department of Education – Eastern Cape, committed an Unfair Labour Practice when they demoted the Applicant, FA Kayster– Persal number 50467026, from Principal (PL 4) to an HoD (PL 2) position on 1 July 2021.
76. The Respondent, Department of Education – Eastern Cape, is instructed to reinstate the Applicant, FA Kayster– Persal number 50467026, to his former position as Principal (PL 4) at Ellen Olivier Primary School retrospectively as from 1 July 2021 with all the relevant benefits to which he is entitled as if he were never demoted.
77. The Respondent, Department of Education – Eastern Cape, is instructed to implement paragraph (76) above with all the relevant back pay by 31 May 2022.
78. The Applicant, FA Kayster – Persal number 50467026,is issued with a Final Written Warning valid for twelve (12) months and backdated to 1 July 2021.
79. The Applicant, FA Kayster– Persal number 50467026, is to report to his former position within ten (10) days of receiving this award.
Panellist: Anthony Walter Howden
ELRC