Austin-Day v ABSA Bank Ltd and Others (PA02/2020) [2022] ZALAC 6 (8 March 2022)
- To substantiate allegations of misconduct, an employer needs to provide evidence that proves the employee is guilty of the specific allegations made.
- An arbitration award is final and binding, and the CCMA cannot revisit the process of resolving a dispute which it had already resolved through arbitration.
A bank branch manager was charged and dismissed for misconduct involving dishonesty and failure to comply with the bank's policies and procedures in the execution of her duties. She had been employed at the bank for 33 years and had an unblemished record, and had been a branch manager for 15 years.
The disciplinary charges resulted from her deciding to deposit R100 of her own money into 10 inactive accounts, opened by 10 different customers, that were under her control at her branch. She deposited R10 into each of those accounts, without the knowledge or consent of the account holders. The effect of this was that those inactive accounts were then recorded as activated accounts in the branch's books, and constituted sales in terms of the branch's performance. Each of the bank's branches has sales targets, which are recorded when an account is activated.
When the bank's area head manager made a routine visit to the branch, she voluntarily informed him about these deposits, which resulted in the bank's forensics department investigating the matter. In its report, forensics confirmed that they could not detect any fraudulent conduct and made a recommendation that remedial action be taken. Further investigations were conducted into the bank's policies and procedures, and the operations consultant recommended disciplinary action against her. She was then charged with 2 counts of alleged misconduct:
- acting dishonestly in executing her duties by making irregular cash deposits into customer accounts;
- Failing to adhere to Company policies and procedures in executing her duties.
The arbitrator found that the branch manager has not acted dishonestly as charged, and that her dismissal was unfair. He said the second charge was irrelevant as it was clear she had been dismissed for dishonesty and not because she breached the bank's procedures. But even if she had, dismissal for this second charge would not have been a fair sanction. The arbitrator ordered her reinstatement as branch manager.
The LC set aside the arbitrator's award and found the dismissal to be fair. The LC confined itself to the first charge (dishonesty) and said the arbitrator had ignored evidence before him, by concentrating on how the misconduct was perpetrated rather than on the reasons for it. The LC found that the award was unreasonable.
Dissatisfied with the LC's judgment, the bank manager took the matter on appeal to the LAC. In respect of the dishonesty charge, the LAC disputed the bank's contention that the bank manager stood to gain from her actions, and that she wanted to deceive the bank by boosting her branch sales. There was no evidence that she stood to gain any kind of reward through the 10 accounts. The LAC accepted she had voluntarily and freely mentioned her conduct to the bank's area head manager and to her staff, in the excitement of having thought of something which, to her, appeared like a good idea and innovative, with the hope of motivating staff performance. It appears she thought this was a good way of trying to motivate account holders to use their accounts.
The list of accounts into which she deposited the money were supplied to her by one of her staff, and she acted openly and with the knowledge of her staff. She had freely left a paper trail in respect of the deposits, entering her name and ID number on the deposit slips. Had she intended to be dishonest, she could easily have deposited the money anonymously at an ATM.
In respect of the breach of procedures charge, the LAC said there was no specific clause of any specific policy or procedure that could be convincingly pointed out that she had breached. But even if it were to be accepted that she breached the bank's procedures and applicable legislation, the LAC found that this did not justify a sanction of dismissal under the particular circumstances. Forensics had not found she acted fraudulently, and her unblemished record of 33 years mitigated against dismissal.
The LAC took note that she was contrite and realised she had made an error of judgment in acting as she did. There was no evidence that the bank suffered any prejudice by her actions, and the LAC commented that the bank should have contacted the holders of the accounts in question, to advise them that their accounts had been accessed by a private person and activated, and for that reason had to be de-activated, or that they may open new accounts, or "something to that effect". Instead, the LAC said, the bank did none of that, "but happily enjoyed the benefit of what they considered to be dishonest conduct".
The LAC granted the appeal against the LC judgment, which effectively confirmed the arbitrator's unfair dismissal award.
The key learning from this judgment for employers, is to be clear that the alleged charges against an employee are based on the facts of the case. While she acknowledged she had acted foolishly and had made an error of judgment, she clearly had not acted dishonestly - which was the main charge against her.
Had the bank focussed on her lack of judgment from what could reasonably be expected from a branch manager (possibly incapacity: poor work performance?), leading to a breakdown in the trust relationship, we think the outcome of this case may have been different. Demotion to a less senior position may then have been an option. We would be surprised if any bank would be prepared to employ someone at the level of a bank manager, who used her judgment and thought it would be okay to privately deposit her funds into private accounts without the holders' knowledge or consent.
We also take issue with the LAC's conclusion that the bank had suffered no prejudice by her actions. Had the bank done what the LAC suggested and informed the account holders of what had happened, the possibility of the bank suffering substantial reputational damage, we think, would have been significant. We are also confused by the LAC's conclusion that the bank "happily enjoyed the benefit" of what they considered to be dishonest conduct - we wonder what evidence existed to support this finding? It will be interesting to see whether the bank takes this matter on appeal to the SCA.
This judgment also raises an interesting side point on the CCMA's jurisdiction. When the arbitrator's award was first referred on review to the Labour Court, the parties by consent asked the Court to refer the matter back to the CCMA for a further hearing before the same commissioner in respect of the second charge (failing to comply with the bank's policies and procedures). Consequently, the parties returned to arbitration and held a further hearing confined to what was termed the 'second charge'. The commissioner issued a supplementary award, again making a finding of unfair dismissal, which also formed part of the arbitration award which the bank then sought to review and set aside.
When the matter was referred back to the Labour Court, the judge presiding correctly refused to entertain the supplementary award on the ground that the first arbitration award was final and binding. The review then proceeded in respect of the first award, which as described above, was found by the Labour Court in favour of the bank, although this was subsequently overturned by the LAC on appeal.
The learning from this point in limine is that the CCMA cannot revisit the process of resolving a dispute which it had already resolved through arbitration, other than as a recission application under s144 of the LRA.
Extract from the judgment:
(Kubushi AJA)
[4] On the date set for the hearing of the review application, the parties' legal representatives approached the judge allocated to hear the matter with a draft consent order, which was curiously made an order of the court, the effect of which was that the matter was remitted to the CCMA for a further hearing before the same commissioner in respect of the "second charge". The review application was otherwise postponed indefinitely. Consequently, the parties returned to arbitration and held a further hearing confined to what was termed the second charge, in the consent order. Subsequent thereto, the commissioner issued a supplementary award, which also formed part of the arbitration award which the bank sought to review and set aside.
[5] When the matter was referred back to the court a quo, the judge presiding, correctly refused to entertain the supplementary award on the ground that the first arbitration award was final and binding and the CCMA could not revisit the process of resolving a dispute which it had already resolved, and had issued an arbitration award, in respect thereof. This aspect is not challenged on appeal and I, in that sense, find it not necessary to deal any further with the said supplementary award, in this judgment.
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[29] The Bank's submission that the appellant wanted to deceive the bank by boosting her branches sales and that she was in trouble with her performance, holds no water. I am more inclined to be supportive of the argument raised by the appellant in the heads of argument.
[32] There is nothing on record that indicates that the appellant stood to gain any kind of reward on account of adding ten accounts. There was no performance bonus or other kind of incentive that was within reach at the time that could be achieved by the artificial addition of the ten savings account.
[33] Without any shred of evidence that suggest that the appellant was dishonest in her conduct, as I have already indicated here above, the acceptance of the appellant's explanation, in my view, was reasonable.
[34] The bank's contention that the appellant disclosed her conduct when it was on the verge of being discovered, is without merit. There is no evidence on record that indicates as such. However, the common cause evidence is that the bank did not routinely audit accounts that had become activated. There is also no dispute that the appellant voluntarily and freely mentioned her conduct to Mr Vallentyn and to her staff, in the excitement of having thought of something which, to her, appeared like a good idea and innovative with the hope of motivating their performance. If anything it appears that the appellant thought this was a good way of trying to motivate the account holders to use the accounts. In fact, one of the 10 accounts opened did get the result the appellant had hoped for, the account was then utilised. The findings of the commissioner in this regard is thus patently reasonable. it would have been inconceivable that she would have voluntarily made the disclosures to Mr Vallentyn if the intention was to deceive.
[35] She, in addition, left, freely so, a paper trail in respect of the deposits by entering her name and identity number on the deposit slips. She had an alternative means of depositing the amounts anonymously at the ATM, but she opted not to do so; she could still have entered a false name and identity number on the deposit slips, this also she did not do.
[36] There is undisputed evidence that she wanted to motivate her staff. This is indicated by her undisputed evidence that she voluntarily shared what she had done, freely with her staff. The evidence is further that the list of accounts into which she deposited the R10.00's was supplied to her by one of her staff members. She thus acted openly and to the knowledge of the staff at the branch.
[37] Even though, the commissioner made an error in finding that the appellant conceded in hindsight that her actions were foolish, it is quite clear from the record that the evidence of the appellant is that she acted with lack of judgment. This error by the commissioner cannot come to the assistance of the bank in any way. It cannot be said that due to such error the dismissal of the appellant was fair. To the contrary, the concession by the appellant as correctly captured in the record, goes to show contrition on the part of the appellant which is a further indication that she did not act with the intention to be dishonest.
[38] Moreover, even if it were to be accepted that the appellant breached any one of the policies, procedures and applicable legislation of the bank by her conduct, this does not justify a sanction of dismissal under the particular circumstances of this matter. Besides, on the evidence as it stands, there is no specific clause of any specific policy and procedure that could be convincingly pointed out that was breached by the appellant.
[39] There is no evidence that the appellant acted in bad faith or that by her actions, she exposed the bank to any material risk.
[40] On the other hand, as the commissioner found, the bank, as the custodian of its own policies and the legislation relied upon, should have contacted the nine clients, who did not operate the accounts, stating that their accounts had been accessed by a private person and activated and for that reason had to be de-activated, or that they may open new accounts, or something to that effect. This it did not do. Similarly, the tenth person, who as I have stated earlier, after his or her account was activated, started operating on the account, should have been informed that the account had been irregularly activated by a private person and that the account must now be de-activated, and if he or she still wanted to do business with the bank to re-open the account. But, the bank did none of that, but happily enjoyed the benefit of what they considered to be "dishonest conduct".
[41] If there was any misconduct, it was not serious enough to warrant dismissal. The evidence on record is that when Mr Vallentyn and forensics learnt about this unfortunate incident, they did not give an indication that this was a serious transgression. It must have not been serious, for if it was so, forensics would have immediately, indicated as such to the appellant, and besides, forensics found no evidence of fraudulent conduct on the part of the appellant. It merely recommended remedial action after its investigation.
[42] The appellant's unblemished record of thirty-three years of service also speaks for itself and militates against the sanction of dismissal. The further unchallenged evidence that the appellant will never do it again and the fact that she conceded in evidence that in hindsight she realised that she made an error of judgment, also confirms in her favour that dismissal was unwarranted.
[43] The prejudice argued orally before this court by the Bank's counsel could not be substantiated. There is hardly any evidence on record of any prejudice suffered either by the bank or by the customers whose bank accounts were used. The prejudice contended for by the bank's counsel that the appellant's conduct would open the bank to money laundering activities is without merit. At the level and scale of money that is involved in this matter, the allegations of money laundering are outrageous and farfetched and require no further comment.
[44] The further contention that the customers, whose accounts were accessed without their knowledge, would be prejudiced by the bank charges which would be accumulated in the accounts without their knowledge and consent, is also meritless. On its own version, the Bank confirmed that when the bank charges that accumulated after the accounts have been activated, are not paid, the amounts are eventually written off after a period of time.
[45] These, in my view, are findings that a reasonable arbitrator would readily make.