ELRC223-23/24KZN

Commissioner: VEESLA SONI
Case No.: ELRC 223-23/24KZN Date of Award: 22 July 2024

In the ARBITRATION between:

NATU OBO BHEKISISA ANTON MNGUNI APPLICANT
and

DEPARTMENT OF EDUCATION – KWAZULU NATAL RESPONDENT

Union/Applicant’s representative: Mr Njabulo Mtolo
NATU

Respondent’s representative: Mr Pregasen Appalraju
Respondent Department of Education

DETAILS OF HEARING AND REPRESENTATION

1. The dispute was referred to the Education Labour Relations Council (hereinafter referred to as the “ELRC”) in terms of Section 186 (2) of the Labour Relations Act, No. 66 of 1995 (hereinafter referred to as “The Act”). The matter was scheduled for arbitration on 20 February 2024, via zoom. The matter was part heard and was finalized on 14 June 2024.

2. The Applicant, Bhekisisa Anton Mnguni was represented by NATU, Mr Njabulo Mtolo. The Respondent was represented by Mr Pregasen Appalraju.

ISSUE TO BE DECIDED

3. The main issue in dispute was whether the Respondent committed an unfair labour practice, in respect of disciplinary action taken against the Applicant. The issue to be arbitrated was whether the sanction of demotion was fair and consistent.

BACKGROUND AND SURVEY OF EVIDENCE

4. The dispute relates to an unfair labour practice wherein the Applicant was charged for misconduct as follows:

CHARGE 1: As per Annexure "B" attached hereto, you wrongfully and unlawfully made cheque payments to yourself and others in the amounts exceeding the invoiced amounts due and payable for products and/or services purchased from the school cheque account, thereby committing an act of dishonesty in terms of section 18(1) (ee) of the act read with the School Funding Policy Implementation Manual for Public Schools, KZN.

CHARGE 2: As per Annexure C, attached hereto, at or near Gugulesizwe Secondary School, you wilfully and /or negligently mismanaged the finances of the aforesaid school in that you made irregular cheque payments to yourself and others, there without following due and proper procedure thereby contravening section 18(1)(b) of the act read with the School Funding Policy Implementation Manual for Public Schools, KZN.

CHARGE 3: On or about 28 February 2018, at or near Gugulesizwe Secondary School, you wrongfully and unlawfully failed to keep an approved budget with accompanying minutes of the parent's meeting, thereby violating section 18(1) (a) of the act read with section 38 of South African Schools Act 84 of 1996.

CHARGE 4: On or about 11 March 2018, at or near Guguleziwe Secondary School, you failed to comply with the legal obligation in that you came to the said school in breach of the conditions of your precautionary suspension, thereby contravening section 18 (1) (A) of the Act.

5. It was agreed that that the Applicant was appointed as a headmaster in 2017 at Guguleziwe High School. This was a PL4 level. It was common cause that the Applicant did not attend the formal training for the financial management of schools.

6. The Applicant was charged for four counts of misconduct and the hearing was finalised on 13 December 2021. The finding was taken on appeal, to the Appeal committee, who upheld the finding on 16 May 2023. The latter outcome was communicated to the Applicant on 26 May 2023. The sanction of demotion from level PL 4 to PL 1, was implemented.

7. In respect of charge 4: trespassing, the Applicant was sanctioned to a fine of R 6000-00 or 6 months’ imprisonment. This was confirmed on 30 June 2023. The criminal finding was taken on appeal and the outcome was still pending.

8. The Respondent had implemented the outcome after the appeal was dismissed. On 23 July 2023, the Applicant was demoted to a level 1, PL 1, educator and was placed at Robert Hlongwa High School.

9. The Applicant’s case was that the demotion from PL 4 to PL 1 was too harsh compared to other matters.

10. The Respondent’s case was that the sanction was fair and justified. The matter went on appeal and the finding was confirmed. The Applicant was then found guilty in the criminal court in terms of charge 4.
FACTS AGREED UPON AND COMMON CAUSE

11. The Applicant pleaded guilty to the charges and the facts were admitted, as being common cause. This was confirmed on record. In other words, there was no dispute of fact in respect of any of the charges.

12. The only issue for determination was the harshness and inconsistency of the sanction. Both parties agreed they would submit written arguments in respect of the harshness and consistency of the sanction. As there was no dispute of fact this issue can be arbitrated by way of written arguments.

13. The Respondent complied with the agreed and extended time period and their argument was submitted on 24 June 2024. The Applicant failed to submit their argument. A further reminder was sent to the Applicant’s union on 26 June 2024, granting them an indulgence to file their argument by 4 pm on the said date. Mr Mtolo, the union representative for the Applicant requested a further opportunity to file his arguments by 27 June 2024, which was granted by myself on 26 June 2024. The submissions were made on 27 June 2024. I now proceed to finalize this award.

APPLICANT’S CASE

14. It was submitted by Mr Mtolo that the Applicant never consented to the demotion which was a prerequisite. Schedule 2, clause 8 of the Employment of Educators Act, subsection (2) “with the agreement of the educator, the presiding officer may impose a sanction of suspension without pay or demotion as an alternative to dismissal.” It was argued that the consent of the educator was mandatory before the sanction of demotion was imposed. In this instance there was no consent obtained for the Applicant when he was demoted.

15. The Applicant committed the misconduct at a time when he was the acting principal of the school and the disciplinary hearing took place after his appointment as the principal. At that time the Applicant was not afforded training in financial management. It was argued that the presiding officer failed to consider that the Applicant was in an acting position without receiving the mandatory training. He never underwent training in financial management and lacked such knowledge. He simply followed the same approach as his predecessor without knowing that it was wrong. It was submitted that the conduct of the Applicant emanated from ignorance rather than greed or malice.

16. It was submitted that one Mr Mwelase was found guilty of writing cheques to the SGB and was found guilty and sanctioned to a fine of R 10 000-00, with a final written warning. He too was an acting principal at the time of the misconduct. The sanction imposed for the Applicant was therefore inconsistent. Mr Mtolo referred to Labour Curt decisions where employees were demoted for financial mismanagement, and such demotions were one level down. The Applicant was treated far more harshly which was inconsistent to the other employees.

17. It was argued that there was no prejudice suffered by the school. The cheques that were issued were used to purchase supplies for the school. At no stage it was utilized for the Applicant’s personal use. In addition, cheques were no longer used as a form of payment. This resulted in the Applicant cashing same to purchase supplies.

18. The demotion to PL1, was four levels down, which was a lower than the position he was in prior to his promotion. The demotion affected his benefits, in his position as the principal, deputy principal and head of department. This would affect his pension as it would be calculated at level 1. The demotion was unjustifiable and unfair. It affected 13 years of service which had a direct financial consequence to the Applicant. His loss per annum amounted to approximately R 130 000-00.

19. It was requested that the sanction be set aside and remitted to the presiding officer alternatively be replaced with three months’ suspension without pay or demotion to a deputy principal.

RESPONDENT’S CASE
20. It was submitted by the Respondent that the Applicant was charged criminally in the Scottburgh Magistrate Court for trespassing into Gugulesizwe High School and removing school property, while on precautionary suspension. A guilty finding was handed down with a sentence of six months’ imprisonment or a fine of R 6000.00. He paid the fine. He claimed that he had appealed the court finding but no proof was submitted.

21. The Respondent submitted that the sanction was fair and justified given the fact that the Employer instituted disciplinary proceedings in accordance with the disciplinary code and procedures contained in Schedule 2 of the Employment of Educators Act (EEA). At that time the Applicant pleaded not guilty to all four charges but was found to be guilty of all charges. He was guilty of violating the financial prescripts, being the Norms and Standards Policy Manual and the South African Schools Act. He made cheques out to himself, wherein he was also the signatory and in some instances invoices were obtained after the cheques were made.

22. It was submitted that the Applicant violated Section 38 of SASA by not submitting the school budget to the Department, thus failed to obtain financial compliance. He paid travel and reimbursement costs without prior approval in writing by SGB. He breached his precautionary suspension by entering the school premises after he was suspended.

23. The Applicant committed serious offences including mismanaging school finances, breaching precautionary suspension and procurement protocols, and taking school records unlawfully. These actions have resulted in a loss of trust by the employer and have damaged the employment relationship. The Presiding Officer imposed the sanction, as contemplated in Section 18(3) of the EEA and considered the seriousness of the matter in that the Applicant was the Accounting Officer which position demanded responsibility and accountability, but unlawfully made cheques to himself and showed no remorse. The Applicant’s conduct was dishonest in that he breached his precautionary suspension and falsely denied it. More so he retrieved SGB documents without their consent while on suspension.

24. In light of the above it was submitted that the demotion from PL4 to PL1 was fair, reasonable and justified, since even a dismissal could have been warranted. The Respondent consistently applied a sanction of dismissal for financial mismanagement and that sanction of demotion was favorable to the Applicant.

25. The appeal committee found the demotion to be corrective and not a punitive in nature, noting he retained his job. Furthermore, they found that the disciplinary action was applied fairly, consistently, and reasonably.

26. It was submitted that there were cases, and two examples were provided wherein employees found guilty for financial misconduct were dismissed, namely Ms NG Sisihi and Ms HN Dlamini. The Applicant in actual fact received a milder sanction.

27. The principle of consistent treatment of employees is referred to as the “parity principle”. Grogan (Dismissal (2010) at 151) stipulated those employees who participated in the same or similar wrongdoing, with no distinguishing factors from one case to another, should be penalised the same. This principle was not applicable in this instance, for reasons already explained. The presiding officer considered the gravity of the misconduct, the nature of the work performed, the circumstances under which the infraction occurred, his deliberate breach of his suspension, his unlawful taking of documents, lack of remorse, his personal circumstances and length of service.

28. In SACCAWU and Others v Irvin & Johnson (Pty) Ltd (1999) 20 ILJ 2302 (LAC), it was held that “parity” was simply a general principle of fairness and that it should not be applied rigidly. “If a chairperson conscientiously and honestly but incorrectly exercised his or her discretion in a particular case in a particular way, it would not mean that there was unfairness.” Based on the gravity of the offence, the more likely an employer will consider a more serious and appropriate sanction. It was argued that the courts have found repeatedly that serious acts of misconduct, would render factors such as length of service and a clean disciplinary record irrelevant in determining the appropriate sanction to be applied as the Courts placed significant importance on honesty in the workplace.

29. The next issue addressed by the Respondent was whether the demotion from PL4 to PL 1 and not to PL3 or PL2, was deemed appropriate It was submitted that the Applicant was in a managerial position for more than 10 years before he was charged. During that time, he attended several workshops and meetings which focused on financial school management thus acquiring the knowledge, skills and expertise for the post of Deputy Principal. Despite these opportunities, upon his promotion to Principal, he acted negligently and dishonestly. Employees in post levels PL3 and PL2 were members of the School Management Team (SMT) which entailed a level of responsibility for financial management and control. The employer clearly wanted to remove him from any further involvement in financial management and control duties. As Deputy Principal (PL3) and Departmental Head (PL2), they acted on behalf of the Principal and attend workshops, seminars, meetings and so forth. The Applicant lost the trust of his employer to manage the responsibilities attached to PL3 and PL2 posts.

30. The Applicant could not be trusted with the duties and responsibilities attached to Post level 3 and Post level 2. Due to the breakdown of the employment relationship as a Senior Manager, it was inappropriate to demote him to PL3 or PL2. The decision to demote to PL1 was not arbitrary or capricious. The applicant’s personal circumstances; his service; his unblemished disciplinary record, his lack of remorse; the nature of his job position, position and circumstances under which the misconduct was committed, allowed for progressive and corrective discipline to be instituted, rather than dismissal.

31. It was submitted that the demotion from PL 4 to PL1 was fair and appropriate because:
• The misconduct committed by the applicant was very serious in nature.
• The applicant held a position of trust that he abused.
• The applicant has 22 years of service, which included 10 years in a
managerial position thus should have known better.
• The applicant did not show any sign of remorse.
• The applicant knew or was reasonably aware of the financial
management rules and protocols.
• The loss of trust in him as a Manager and accounting officer negatively
impacted on the employment relationship.
• The employer was justified in expecting the highest level of trust from its
employees, particularly those entrusted with public funds, as was the
case with the applicant.
• As Principal and ex-officio member of the School Governing Body, he held a position of trust and respect, which he tarnished, thus prejudicing the good name and reputation of the school and Department of Education.

32. The demotion of the Applicant was a sanction short of dismissal in a misconduct dispute. There are no prescriptions concerning the extent to which an employee may be demoted. The severity of the misconduct and the lack of remorse guided the employer to the extent the employee should be demoted.


ANALYSIS OF EVIDENCE

33. The matter was referred as an unfair Labour Practice: In terms of section 186(2) (b) of the Labour Relations Act:
S186 (2) (b) of the Labour Relations Act provides: 'Unfair Labour Practice' means any unfair act or omission that arises between an Employer and Employee involving, (b) the unfair suspension of an employee or any other disciplinary action short of dismissal in respect of an employee’.

34. The Applicant herein therefore bore the onus to establish that the Respondent committed an unfair labour practice. In this matter disciplinary action had been taken. The Applicant was charged and was found guilty of four charges, listed above. The Applicant accepted the finding of guilt but challenged the sanction, on the basis that it was too harsh and inconsistent. It was the finding of the Respondent as well as the Appeals committee, that the Applicant be demoted to a PL1. I am now tasked to decide as to whether that sanction was fair.

35. I briefly want to set out the background and history of this arbitration. This matter was scheduled for arbitration on several occasions, being 20 February 2024, 23 April 2024, 16 May 2024 and 14 June 2024. The matter was postponed by the council on 16 May 2024. At the outset it was submitted by the Applicant party that the only issue for determination was the issue of the harshness of the sanction. This was placed on record. On 23 April 2024 a concern arose as to whether there was indeed a dispute of fact and the matter stood down for argument and evidence on inconsistency. On 14 June 2024 it was once again confirmed by the Applicant and his representative that there was no dispute of fact and the only issue for determination was the harshness and consistency of the sanction imposed by the Respondent.

36. There were no substantive challenges aside from the fairness of the sanction. It was requested by the Applicant that submissions be made in writing, and same was granted. The arguments were to delivered by 21 June 2024. On 21 June 2024 I received an affidavit from Mr Mtolo stating that there was a dispute of fact and requested a new date for evidence. I notified the council, via email, that the request was not only denied but also opposed by the Respondent. There was an agreed set of facts and the matter must proceed on that basis. Arguments were then submitted and is now considered herein.

37. In assessing what arguments I have before me, bearing in mind that the facts were common cause, I refer to Gcaba v Minister for Safety & Security & others (2010) 31 ILJ 296 (CC), in which it was held that the overall test in an unfair labour practice dispute was one of fairness. The first issue was one of consistency, whether he Respondent treated other employees, faced with the same or similar charges in the same manner. The second issue was whether the sanction imposed, which was a demotion from PL 4 to PL 1 was fair and justified.

38. The Commissioner was required to have regard to the conspectus of the material presented, including but not limited to the nature and seriousness of the misconduct, the importance of the rule, the extent of similarity between the employee’s misconduct and other incidents of a similar nature, the consistent application of the rule, the harm caused by the Employees conduct and relevant mitigating factors.

39. The Applicant committed serious offences including mismanaging school finances, breaching precautionary suspension and procurement protocols, and taking school records unlawfully. Undoubtedly his conduct resulted in a loss of trust by the Respondent and school and damaged the employment relationship. The Presiding Officer imposed the sanction based on the seriousness of the matter in that the Applicant was the Accounting Officer. His position demanded responsibility and accountability, but he unlawfully made cheques to himself and showed no remorse. The Applicant’s conduct was dishonest in that he breached his precautionary suspension and falsely denied it. More so he retrieved SGB documents without their consent while on suspension. This type of misconduct was serious and it tarnished the employment relationship.

40. It was submitted by Mr Mtolo that the consent of the educator was mandatory before the sanction of demotion was imposed as per the section 8 of the Employment of Educators Act. In this regard I find that section 8 (1) of the Act stands applicable, as the presiding officer had the discretion to impose a sanction taking into account the nature and seriousness of the offence. As such the finding of demotion was a legitimate finding in terms of the above section.

41. It was argued by Mr Mtolo that the misconduct was committed at the time the Applicant was in an acting position. It was common cause that he did not receive the necessary training in financial management. This is not a mitigating factor as the Applicant was in a managerial position for 10 years. Negligence and dishonesty cannot be mitigated on grounds of lack of training. Common sense dictated the appropriate conduct. I am not convinced that the Applicant committed such misconduct as he was ignorant. I find such an argument fallacious. Honesty and integrity are the cornerstone of any employment relationship which did not require training, but simply a moral application.

42. I turn to the issue of Inconsistency: The LAC in Bidserv Industrial Products ( Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JA73/15) [2017] ZALAC 4; (2017) 38 ILJ 860 (LAC) held that:
‘This court sounded a warning on approaching the question of inconsistency in the application of discipline willy-nilly without any measure of caution. Inconsistency is a factor to be taken into account in the determination of the fairness of the dismissal but by no means decisive of the outcome on the determination of reasonableness and fairness of the decision to dismiss. A generalised allegation of inconsistency is not sufficient. A concrete allegation identifying who the persons are who were treated differently and the basis upon which they ought not to have been treated differently or that no distinction should have been made must be set out clearly.’

43. Consistency in determining the appropriate sanction is a fundamental rule of a fair labour practice. The Code of Good Practice contained in Schedule 8 of the LRA reiterates the common law principle that each case must be judged on its merits. In determining the sanction, the chairperson of the disciplinary hearing must consider aggravating and mitigating circumstances, as done in this instance. In SACCAWU and Others v Irvin & Johnson (Pty) Ltd (1999) 20 ILJ 1957(LAC), Conradie JA found that, “The best that one can hope for is reasonable consistency.” Some inconsistency is the price to be paid for flexibility, which requires the exercise of discretion in each individual case. The Applicant was found guilty of four charges, three counts relating to financial mismanagement and one for breach of his precautionary suspension and retrieving documents unlawfully. At arbitration he conceded that he was correctly found guilty of the misconduct but averred that the sanction imposed was too harsh.

44. In County Fair Foods (Pty) Ltd v CCMA & others (1999) 20 ILJ 1701(LAC), the labour Appeal Court found that “It remains part of the law that it lies in the first place within the province of the employer to set standards of conduct to be observed by its employees and to determine the sanction with which non-compliance will be visited. Interference therewith is only justified in the case of unreasonableness and unfairness.”

45. The Applicant claimed that Mwelase was charged for financial mismanagement and was subjected to a fine and final written warning. There was reference to case law where educators were demoted for similar charges to one level down. In this regard I must mention that each case is decided upon its own facts and circumstances. The Applicant faced four serious charges of misconduct which carried a more stringent sanction. In all the cases presented it was clear that disciplinary action was enforced in cases of financial mismanagement but the sanction differed based on the number of charges, the seriousness of the transgression and the mitigating and aggravating factors.

46. In light of the test for inconsistency, bearing in mind the seriousness of the misconduct, the Applicant received a favourable sanction. He could have been dismissed given the Respondent’s consistent application of dismissal as a sanction for financial mismanagement. It is the mitigating factors that influenced a lighter sanction of demotion. In this regard I find no grounds of any inconsistency and I must reject such a contention.

47. In respect of the harshness of the sanction: In Sidumo v Rustenburg Platinum Ltd (2007) 12 BLLR 1097 (CC); 2007 28 ILJ 2405 (CC); 2008 2 SA 24 (CC)) the Constitutional Court made clear that:
“In terms of the LRA, a commissioner has to determine whether a dismissal is fair or not. 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. In arriving at a decision a commissioner is not required to defer to the decision of the employer. What is required is that he or she must consider all relevant circumstances.”

48. In undertaking this task, the arbitrator was required to have regard to the material presented at arbitration. This included the nature and seriousness of the misconduct, the importance of the rule, the extent of similarity between the employee’s misconduct and other incidents of a similar nature, the consistent application of the rule by the appellant, the harm caused by the employee’s conduct, his knowledge of and training about the rule, the reason the employer imposed a sanction of dismissal, the basis of the challenge to the dismissal, the employee’s disciplinary record and relevant mitigating factors.

49. In this regard, there was no dispute of fact. I have also considered that the honesty and integrity of employees employed by the State is of the utmost importance not only for the Country but also in ensuring the legitimacy and credibility of State institutions. I find that the sanction imposed was not only fair but it took into account the mitigating facts of the Applicant. It is not the duty of the arbitrator to decide on sanction afresh but rather to determine if the decision of the employer was fair and justified.

50. I have considered the submissions by the Respondent that the Applicant was in a managerial position for more than 10 years before he was charged. He attended several workshops and meetings which focused on financial school management and acquired the necessary knowledge and skills. Despite this training he acted negligently and dishonestly. It was submitted that employees in post levels PL3 and PL2 were members of the School Management Team (SMT) that demanded responsibility of financial management and control. The misconduct committed by the Applicant involved financial mismanagement and abuse. By demoting the Applicant to a level; PL3 or PL2, would have placed him in the same position of financial access, which the employer wanted to remove. The Applicant lost the trust of his employer to manage the responsibilities attached to PL3 and PL2 posts, hence his demotion to PL1, was justified. The decision to demote to PL1 was not arbitrary or whimsical. His personal circumstances, service, disciplinary record, the nature of his job position and circumstances under which the misconduct was committed, allowed for progressive and corrective discipline.

51. I have considered the argument by the Applicant that the school did not suffered any financial prejudice and the funds were utilised to purchase supplies for the school. In this regard the Applicant was fortunate to remain in employment. Ordinarily such misconduct would carry a more stringent approach, such as dismissal.

52. I refer to Gcwensha v CCMA and others (2006) 3 BLLR 234 (LAC) the LC stated that "An employer is always entitled to take into account the cumulative effect of misconduct. To hold otherwise would be to open an employer to the duty to continue employing a worker who regularly commits a series of transgressions at suitable intervals, falling outside the periods of applicability of final written warnings”. This reinforces the principle of trust and the cumulative effect of the Applicant’s conduct. A more holistic approach is required and the Applicant’s conduct cannot be considered in isolation of all circumstances. As such, I find that given the seriousness of the charges the sanction was justified.

Award
I make the following award:

53. The Respondent, the Department of Education, KwaZulu Natal, did not commit an unfair labour practice against the applicant, Bhekisisa Anton Mnguni, when it sanctioned him to a demotion from a PL 4 position to a PL 1 position.

54. The application is dismissed



ELRC Commissioner : VEESLA SONI
Date : 22 JULY 2024