Court name
Supreme Court
Case number
SA 45 of 2012
Case name
Atlantic Chicken Company (Pty) Ltd v Mwandingi and Another
Media neutral citation
[2014] NASC 10
Judge
Damaseb AJA










IN
THE SUPREME COURT OF NAMIBIA





CASE
NO.: SA 45/2012





REPORTABLE





DATE:
15 JULY 2014





In
the matter between





ATLANTIC
CHICKEN COMPANY (PTY)
LTD
......................................Appellant





And





PHILIP
MWANDINGI
..................................................................First
respondent





VICKY
KAIMU
........................................................................Second
respondent





Coram:
SHIVUTE CJ, MAINGA JA and DAMASEB AJA





Heard:
28 March 2014


Delivered:
15 July 2014








APPEAL JUDGMENT







DAMASEB
AJA (SHIVUTE CJ and MAINGA JA concurring):


Introduction


[1]
This
is an appeal, with leave of the Labour Court, against the judgment
and order of that court, dismissing a review application under s 89
of the Labour Act[1] (the Act),
aimed at reviewing and setting aside the arbitration proceedings and
the award made under Arbitration No CR WK 866-10.






[2]
In his written heads of argument on behalf of the appellant, Mr
Maasdorp set out the crisp issue that fell for determination in the
review, and therefore the present appeal, as follows:






'Did
the arbitrator conduct the proceedings before him in a partial manner
and did his conduct prevent the appellant from having its case fully
and fairly determined?'







The
internal disciplinary proceedings


[3]
The factual matrix to the unsuccessful review, and the present
appeal, is largely common cause: the second respondent (whom I shall
hereafter refer to as the employee) was in the employ of the
appellant (the company) as a cashier from November 2000 until 19 July
2010, the latter being the date on which she was dismissed for fraud
by the company following an internal disciplinary hearing. The
employee unsuccessfully appealed against her dismissal to an
independent labour consultant engaged by the company to hear and
determine her appeal against her dismissal. The employee was not
satisfied with the outcome of the internal appeal process and lodged
a complaint with the Labour Commissioner in terms of ss 82 and 86 of
the Act. The third respondent (the arbitrator) was appointed by the
Labour Commissioner in terms of s 85(1)(5) of the Labour Act to
arbitrate the dispute. The arbitrator conducted the arbitration and
found the employee’s dismissal substantively and procedurally
unfair. He ordered the company to pay the employee 13 month’s
salary, which the company paid 'without prejudice'.







Common
cause facts


[4]
The employee was implicated in fraud arising from nine allegedly
fraudulent speedpoint transactions amounting to N$745,80 during the
period of 7 September 2009 to 22 December 2009. The chairperson of
the appeal hearing, who dismissed her appeal summarised the unlawful
conduct the employee was accused of in the following terms:






'The
cashier would ring up a false sale on the till as a speedpoint
transaction without a customer having bought the goods or being
present at all, i.e., no actual speedpoint transaction would have
been effected. The cashier would then remove the equivalent amount of
money as indicated for the bogus sale from the till for personal use.
At the end of the day when the cash up was made there would be no
shortage in cash as the sale would be recorded as a speedpoint sale
of which money would only be accruing to the company on a later date.
The fraud only came to light when shortages for the payment of
speedpoint transactions were detected by head office and queried with
the bank.'






[5]
That somebody had committed this fraudulent conduct was common cause.
 A PIN assigned to the employee to facilitate speedpoint
transactions at sale was used nine times in the fraudulent manner
described. It was common cause during the internal disciplinary
process and in proceedings before the arbitrator that the employee
was assigned a unique PIN to allow her to operate the till. It was
the PIN assigned to the employee that was used in perpetrating the
fraud. She was therefore, implicated in the fraud. She had denied any
wrongdoing but was found guilty in the internal disciplinary process.






The
evidence traversed in support of the review application


[6]
The applicant’s founding affidavit was deposed to by Mr Arnold
Tjikuzu who is the Windhoek area manager of the company. He deposed
that the arbitrator committed misconduct in relation to the duties of
an arbitrator and or committed gross irregularities in the conduct of
the arbitration proceedings. Mr Tjikuzu stated that during the period
of September 2009 the employee failed to submit speedpoint vouchers
amounting to N$745,80. Following an internal disciplinary process she
was found guilty of fraud allegedly committed on nine separate
occasions and causing the company damages in the amount of N$745,80.






[7]
The arbitration proceedings were conducted by the arbitrator on 19
August 2010. Mr Tjikuzu represented the company during the internal
disciplinary hearings, during the arbitration and also acted as the
company’s witness during the arbitration proceedings. According
to Mr Tjikuzu, during the arbitration proceedings, he was only
briefly cross-examined by the employee’s representative and
substantively cross-examined by the arbitrator. Mr Tjikuzu stated
that he attempted to cross-examine the employee after she testified
but was incessantly interrupted by the arbitrator. He further
testified that the arbitrator allowed his personal experiences to
cloud his judgment and in that way prejudging the case and denying
the company the opportunity to properly ventilate its case through
presenting evidence and fully challenging the employee’s
version through cross-examination.


[8]
Mr Tjikuzu alleged that in the course of his evidence in chief qua
witness for the company during the arbitration proceedings, he
presented a document involving one
transaction (in the amount of N$68,80) as evidence of the manner in
which the employee perpetrated the fraud and that he intended to
produce 'several similar bundles' in order to prove the total amount
of N$745,80 and the dates on which the separate acts of fraud were
committed. At that point, according to Mr Tjikuzu, the arbitrator
directed that the one document was enough. This, he alleged, resulted
in him being prevented by the arbitrator from fully presenting the
case of the company.


Mr
Tjikuzu stated that but for the direction of the arbitrator that he
need not produce all the evidence relating to the fraudulent
transactions, he intended to prove seven fraudulent transactions.






[9]
He alleged further that this conduct by the arbitrator constituted a
gross irregularity as it was relied on by the arbitrator subsequently
for the conclusion that the company failed to prove the alleged fraud
of N$745,80 or that the employee was responsible for the fraud. Mr
Tjikuzu further alleged that had the evidence been allowed by the
arbitrator, it would have established that on each of the occasions
that the fraud was committed, using the employee’s PIN, she was
present at work as a cashier. Mr Tjikuzu further alleged that if the
documentary evidence was led without interference by the arbitrator,
it would have established on a balance of probabilities that the
employee was guilty of the fraud she was charged with in the internal
disciplinary proceedings, regard being had to the fact, he alleged,
that on the days that the employee was absent, no similar act of
fraud occurred in relation to the PIN assigned to her. It is further
the appellant’s case that, if this evidence was allowed, it
would have undermined the employee’s defence that someone who
had access to her PIN perpetrated the fraud. The denial of the
opportunity to lead this evidence, Tjikuzu alleged, prejudiced the
company.






[10]
Mr Tjikuzu also alleged that he was prevented by the arbitrator from
challenging the employee in cross-examination on her version that she
had informed the area manager of the fact that her PIN was known by
other employees. As Mr Tjikuzu stated in his founding affidavit:


'After
the first respondent intervened and stopped my cross examination of
the second respondent on the issue of the pin code, he informed the
hearing that the pin issue, according to him, was dealt with. He
commented that if the pin was known to more than one person, it was
no longer a secret. He made a comment to the effect that he is the
only one that is aware of the pin of his bank card, and if this is
known to others then it is no longer a secret.'






This
assertion is buttressed with the following extract from the record:






'FOR
RESPONDENT[2]: Didn’t you
feel that it was a threatening situation to your employment, your
work?


APPLICANT[3]:
N$5-00?


FOR
RESPONDENT: No, for people to operate on your till without your
concern?


FOR
APPLICANT[4]: Objection, the
question has already been answered. She accepted once to pay and then
she complained to the manager. The procedure is that she complains to
the manager and they take it up with you.


CHAIRPERSON:
Ya, it’s fine. But you already did not deny that the manager
knows the PIN.


FOR
RESPONDENT: Ya.


CHAIRPERSON:
The pin was not a secret.


FOR
RESPONDENT: Ya.


CHAIRPERSON:
So it was actually a system problem, it’s not just an incident.


FOR
RESPONDENT: Mm.


CHAIRPERSON:
Like we already agreed to that.


.
. . .


'FOR
RESPONDENT: Coming to that, the manager assigned her, the manager has
got the code because he needs to assign the cashier for her to
operate on a till.


CHAIRPERSON:
ya.


FOR
RESPONDENT: That’s why the code is not that she only knows the
code herself, because the manager needs to assign her for her to
be able to operate on a till
. Without the manager assigning her
she won’t be able to operate on a till.' (My underlining)






[11]
Mr Tjikuzu also alleged that the arbitrator, prior to the conclusion
of the matter (i.e. before he entertained the parties’
submissions), commented that the company’s faulty systems were
responsible for what had happened. The allegation is supported by
extracts from the record reflecting exchanges between the arbitrator
and Mr Tjikuzu. I propose to refer to only a few typical ones:






'FOR
RESPONDENT: …One question that I posed in the initial hearing,
I asked her: if N$100-00 is lost in your cash register, who is
responsible for it? She answered me and said she is responsible.


CHAIRPERSON:
But the question you are asking is wrong: you cannot put the
responsibility on her. The mistake is in the system. Like I said, my
ATM card, the bank manager gives me the code but it comes in a closed
envelope, you understand.


FOR
RESPONDENT: Mm-hm.


CHAIRPERSON:
So if I come tomorrow at my ATM . . . even yesterday I was at the
bank and I saw somebody complaining about her card apparently has
been used and she never used it. But the PIN was given to you in a
closed envelope, so you might have been negligent. Maybe if I give my
PIN to my girlfriend and she sneaks to the ATM and draws money, the
bank will say it is me, you understand.


FOR
RESPONDENT: Mm-hm.


CHAIRPERSON:
But if the manager in the bank knows my pin I cannot be held
accountable. I will say no, maybe the bank manager used my PIN. Why
should I share my PIN with somebody else? That’s the principle.
I’m not blaming anybody. I’m just trying to pinpoint it
would seem it is a weakness in the system.


.
. . .


CHAIRPERSON:
To my knowledge . . . you know, our gate here is actually coded and
we have several offices inside here. And when I come in I have my
code, which is my secret. I cannot give it to somebody else, now
suppose I come in overnight maybe to collect something, in my office
I have a key but to pass that entrance I will have to put in my code.
Now suppose Monday we come and something is missing, the system will
be able to say ‘look it is Mwandingi who passed this door’.
But I keep my code to myself. But the moment I give my code to
somebody else that person can come in and use my code and then I will
still be responsible. But now there are two ways to give that code.
One way is maybe I send somebody in my office


[interruption]
. . . .






[12]
Mr Tjikuzu stated on behalf of the company that the stance by the
arbitrator that the employee’s PIN was known to the manager and
that for that reason the fraud was the result of a ‘system
problem’ was evidence that he had prejudged the matter.


The
view taken by the arbitrator, Mr Tjikuzu contended, although open to
him in considering whether or not the company proved its case,
demonstrated that he precluded himself from considering that the
employee’s defence was not plausible if regard be had to the
fact that the employee was present on all the dates the individual
fraudulent acts were committed and that no such fraud occurred when
she was not on duty. According to Mr Tjikuzu, the arbitrator’s
stance also precluded him from reaching the possible inference
that the employee’s guilt was proved in light of her
failure to report any shortages in her till.






[13]
Mr Tjikuzu alleged that the arbitrator’s bias against the
company was obvious from his finding, contrary to the weight of the
evidence, that the chairperson of the internal disciplinary hearing
was biased by reason only of the fact that the chairperson was an
employee of the company. Mr Tjikuzu alleged that the record of the
internal disciplinary process amply demonstrates that the employee
received a fair hearing, implying that the arbitrator’s finding
otherwise was only explicable on the basis that he harboured an
impermissible bias towards the company.






[14]
Mr Tjikuzu stated in his founding affidavit that these salient
incidents attributable to the arbitrator amounted to a 'substantial
miscarriage of justice' and demonstrate that the arbitrator was 'not
impartial and neutral' in the conduct of the arbitration. That, it is
said, undermined and negated the applicant’s rights to a fair
trial and violated the applicant’s rights under the Labour Act
and Articles 12(1)
(a)[5]
and or 18[6] of the
Constitution.






[15]
In his supplementary affidavit, Mr Tjikuzu amplified the review
grounds advanced in the founding papers adding, in the first place,
that in the conduct of the arbitration, the arbitrator descended into
the arena by 'effectively' cross-examining Mr Tjikuzu, taking on the
role of leading the evidence of the second respondent, impermissibly
relying on his personal experience in the adjudication of the matter
and in that way clouding his mind.






[16]
As is by now apparent, the appellant impugns the arbitrator’s
conduct of the arbitration on the following bases: that he improperly
descended into the arena by interfering with the appellant’s
presentation of its case, cross-examining the appellant’s
witness and taking the lead in the leading of the employee’s
case; shielding the employee from legitimate cross-examination which
may well have undermined her defence; that he was biased against the
company and favoured the employee by his discriminating against the
company in the conduct of the arbitration; that he did not have an
open mind as a tribunal ought to have, in that he allowed his
personal experiences to override his duty of fairness as an
arbitrator.







The
arbitrator was not impartial


[17]
The company’s review ground under this heading is premised on
the following: although both parties were represented during the
arbitration, the arbitrator actively led the case for the employee.
The arbitrator is accused of conducting the cross-examination of the
company’s only witness and representative at the hearing
although the employee was represented by someone. In particular, the
allegation is made that except for two questions asked to the
company’s representative by the employee’s
representative, the raft of the cross-examination of the company
witness was conducted by the arbitrator. Even while the company
representative was testifying, he was regularly interrupted by the
arbitrator and the employee invited by the arbitrator to deal with
contentious matters during the course of the company’s
evidence. On this version, instead of the employee awaiting her turn
after the company’s evidence was finalised, she was asked, by
the arbitrator, to comment on the evidence Mr Tjikuzu was tendering.






[18]
It is also alleged that the company representative and witness was
required to give evidence under oath but that the employee was not
required to take the oath. The arbitrator, not the employee’s
representative, then assisted the employee in leading her evidence
without any oath or admonition. Incongruously, the employee’s
representative at the arbitration hearing was allowed to answer
questions on behalf of the employee as regards the procedural
unfairness of the proceedings. When he provided those answers the
employee’s representative was not sworn in or admonished.







The
respondent’s case


[19]
As I understand the second respondent’s case, she does not
dispute the actions, conduct and utterances of the arbitrator by
reference to the record. Her case, rather, is that such actions,
conduct and utterances do not lend themselves to the inference of a
gross irregularity which the applicant asks to be withdrawn. It
becomes unnecessary, therefore, to traverse in detail the facts
detailed in the affidavits. I am satisfied, in the manner the case
was argued before us, that the present is not a case that calls for
the resolution of disputed facts but rather one which involves
deciding whether the common cause facts justify the conclusion of
gross irregularity which the appellant wants to be drawn.






[20]
For completeness, I am satisfied that the applicant has laid
sufficient evidential basis for the inferences he urges to be drawn
that:






(a)
the arbitrator descended into the arena;







(b)
the arbitrator interfered with the company’s cross-examination
of the employee; and







(c)
the arbitrator had prejudged the case and incessantly and improperly
interrupted the company’s representative in his presentation of
the company’s case.






[21]
The question I must now consider is whether this conduct of the
arbitrator amounts to a gross irregularity and whether it prejudiced
the appellant to the extent that it did not have a fair hearing.



The proceedings in
the Labour Court


[22]
The company took the arbitrator’s award on review to the Labour
Court on the ground that the arbitrator did not act fairly during the
arbitration proceedings; that he was not independent and had
prejudged the case; and that he was biased in favour of the employee.



The conclusions
reached by the Labour Court


[23]
The Labour Court was satisfied that the arbitrator’s conduct
was beyond reproach. It rejected all the grounds upon which the
appellant sought to review and set aside the proceedings conducted by
the arbitrator. The Labour Court was satisfied in particular that the
appellant failed to establish good grounds why the review must
succeed.







Grounds
of appeal


[24]
Although the appellant’s grounds of appeal are extensive and to
a large extent overlap, the gravamen of its complaint against the
Labour Court’s judgment is that the court a quo
misdirected itself in finding that the arbitrator did not commit a
gross irregularity in the conduct of the arbitration, in light of the
arbitrator’s alleged obvious bias towards the employee and the
denial of the company’s procedural rights which had the result
that the company did not receive a fair hearing.






[25]
To recap, the main grounds on which the arbitrator’s conduct is
assailed are that he:






(a)
did not act even-handed or independently;







(b)
pre-judged the issues that fell for his impartial adjudication;











(c)
descended into the arena and in the process evinced bias against the
company and in favour of the employee.








Issues in dispute


[26]
The employee strenuously denied that she committed the fraud. She
suggested that her PIN was known to several people in the company and
that any number of them could have used the PIN assigned to her. It
was incumbent on the company therefore, to provide sufficient
evidence that showed that it was more probable than not that the
employee committed the fraud.







The
standard of proof


[27]
The company had to prove on a balance of probabilities that the
employee committed the nine acts of fraud. The applicable standard is
the civil standard of proof. That standard would be met if it could
be shown that it was more likely than not that the employee committed
the fraud. This court approved in
M
Pupkewitz
& Sons (Pty) Ltd t/a Pupkewitz Megabuild v Kurtz
[7]
the
Govan
v Skidmore[8]-
test
in civil proceedings to the effect that in finding facts and making
inferences in a civil case it is permissible for the court to find a
case proved upon a mere preponderance of probability. In so doing the
court need not find that every other reasonable doubt is excluded. A
civil court is entitled in finding facts or making inferences to
balance the probabilities and ‘select a conclusion which seems
to be the more natural, or plausible conclusion from amongst several
conceivable ones, even though that conclusion be not the only
reasonable one'.






[28]
All items of evidence which would assist in discharging the burden
resting on the company were therefore, relevant and were open to the
company to introduce in evidence. In this regard, the following was
material evidence: whether or not the employee was on duty as a
cashier on the days the fraud was committed; how many people had
access to the employee’s unique PIN; the number of times that
the PIN was used and the employee’s whereabouts at the time;
whether or not any fraud occurred with the use of her PIN on the days
she was not on duty; whether or not she reported any cash shortfalls
in her till; and whether or not she raised any concern about the
alleged over-exposure of the PIN assigned to her.






Respondent’s
submissions on appeal


[29]
Taking the cue from the finding of the Labour Court, Mr Elago, for
the employee, forcefully argued that an arbitrator, as trier of fact,
has the right ‘to get it wrong’ and that the court must
not review and set aside arbitration proceedings merely on the ground
that the arbitrator was wrong and that it must only interfere if the
arbitrator acted with malice or dishonesty. It is implied in this
submission that the arbitrator’s conduct of the arbitration was
not entirely proper. Mr Elago made clear during argument that it
certainly was not of sufficient gravity as to justify a finding of
gross irregularity.


When
does mishandling of arbitration constitute gross irregularity?


[30]
Section 89(4) of the Act bestows a right on a party to a dispute who
alleges a 'defect' in an arbitration proceeding under Chapter 8, Part
C of the Act, to seek the review and setting aside of an award
flowing from such a proceeding. Section 89(5) in turn limits a
reviewable defect to 'misconduct' committed in relation to the duties
of an arbitrator; 'a gross irregularity' committed in the conduct of
the arbitration proceedings, and in the event of excess of
jurisdiction. It also allows for review and setting aside if the
award was improperly obtained.






[31]
It needs to be pointed out that the duty to act independently and
impartially is imposed by statute.[9]
Mr Elago, for the employee, submitted that an arbitrator has the
'right to get it wrong' and that, to succeed, the appellant had to
prove dishonesty and improper motive. This submission must be
approached with great care. On the one hand, the courts must be loath
to second-guess an arbitrator’s handling of arbitration under
the Act, lest doing so provides fodder for all manner of
unmeritorious applications to courts to set aside arbitration awards
and thus defeating the legislative intent that arbitrations be
conducted summarily, with minimum formalities and minimum delay. On
the other hand, is the equally important consideration that justice
must not become a chimera by allowing arbitrators to act arbitrarily
and oppressively.






[32]
It is trite that an arbitrator is entrusted with the foremost task of
determining the facts. In terms of s 89(1)(
a)
of the Act, a party to a dispute may appeal to the Labour Court
against an arbitrator’s award ‘on a question of law
alone’.[10] The same
principle applied even under s 21(1) of the old Labour Act 6 of 1992.
It follows that on questions of fact, the arbitrator is the final
arbiter and it is not open to the Labour Court on appeal to depart
from a finding of fact by an arbitrator. [11]






[33]
Given that the law reposes so much authority in an arbitrator as the
trier of fact, that imposes a special duty on the arbitrator to allow
the ventilation by the parties of all the material and relevant
facts. Conduct by an arbitrator which frustrates a party in
ventilating all material and relevant evidence, especially where the
party bears the risk of non-persuasion, will amount to a gross
irregularity, unless it is patently obvious that the irregularity did
not have a material effect on the outcome of the proceedings.






[34]
The proper approach to be taken when the conduct of an arbitrator is
impugned on the basis that it constitutes 'a gross irregularity', is
that set out by Muller J in
Roads
Contractor Company v Nambahu and Others[12].

In that case, the following conduct by the arbitrator was found to
constitute a gross irregularity within the meaning of ss 89(4) and
98(5)(a)(
i)
and (
ii)
of the Act:






'(a)
exhibiting pre-conceived ideas and pre-judging issues;







(b)
incessantly intervening while witnesses testified and asking
questions which went beyond seeking identifications: As the learned
judge observed, the arbitrator became 'the most active questioner'.


[35]
The arbitrator's conduct with which the court was concerned in the
Roads Contractor Company case is on all fours with the conduct
of the arbitrator in the case before us. The ratio for the court’s
conclusion that the arbitrator in the Roads Contractor matter
failed to be neutral and independent, was succinctly set out by
Muller J in the following terms:






'The
arbitrator clearly revealed his attitude and anybody reading the
record would have the perception that the arbitrator had
pre-conceived ideas and pre-judged the issue. . . . Furthermore, the
whole procedure and the way that the hearing was conducted, made it
impossible for any witness to testify, because the arbitrator
constantly and nearly after each and every sentence in the evidence
of a witness, intervened and asked questions which were not only
based on assistance or clarification. The arbitrator not only
interfered in the evidence and cross-examination of witnesses, but he
seemed the most active questioner.'[13]






[36]
The learned judge then goes on to give very useful guidelines to
arbitrators in para 31 of the judgment. In particular, he states:


'The
arbitrator should always remain independent and impartial and he/she
cannot allow that any party gain the perception that he/she is not a
neutral and impartial adjudicator. In this regard the arbitrator:







(a)
does not descend into the arena;







(b)
does not cross-examine any witness;






(c)
only ask questions for clarification or to provide guidance;






(d)
does not interrupt or stop cross-examination, unless it is clear that
the questions being asked in cross-examination are repetitive, have
already been answered, or do not have any relevance;







(e)
never
give any indication how he or she feels about the evidence or give
any indication how he or she may decide . . . . .'[14]






[37]
It sets too high a standard to hold, as suggested by counsel for the
employee, that an irregularity must be accompanied by malice or
dishonesty in order to be reviewable. There is a line of authority
which holds that arbitrator 'misconduct' connotes malice and
dishonesty.[15] We do not need
to decide what constitutes misconduct in the present appeal because
the matter falls for determination on the alternative ground of gross
irregularity. What is clear though is that a 'gross irregularity'
need not involve malice, bribery or dishonesty. The language deployed
in s 89 does not justify such interpretation or finding.






[38]
It is, I accept, not every irregularity committed by an arbitrator
that meets the standard of a gross irregularity, but it is essential
that the irregularity causes prejudice.[16]
It must be an irregularity that constitutes a negation of a fair
trial. That approach accords with
dicta
from
South Africa and Namibia[17]
as regards what constitutes a gross irregularity in the conduct of
arbitration.[18] An arbitrator
commits a gross irregularity within the meaning of s 89(5) if his or
her conduct denies a party a fair hearing. Such conduct may consist
in the breach of the well-trodden tenets of natural justice (
audi
alterem partem

or being judge in one’s own cause)[19]
or, as stated in Halsbury’s:[20]






'
. . . such a mishandling of the arbitration as is likely to amount to
some substantial injustice . . . or appear to be unfair.'










[39]
The fact that the arbitrator has discretion to determine the
procedure of an arbitration in terms of s 86(7) of the Act does not
justify an arbitrator completely disregarding the legitimate
expectation of parties to be allowed procedural rights which are
commonly associated with a hearing before a ‘tribunal’ as
envisaged in Art 12 of the Constitution. It is trite that arbitration
is a tribunal contemplated in Art 12.[21]
To call witnesses, to present evidence and to challenge the evidence
of the opposing party – all within reason (i.e. without the
hearing being converted into a full-blown prolonged adversarial
contest) – are procedural rights which should be accorded to
the parties, unless there is a cogent reason, which must be apparent
from the record, to depart therefrom or the parties either waive
their rights or agree otherwise. The discretion to determine
procedure is certainly not a warrant for an arbitrator to act
arbitrarily or oppressively towards the parties.






[40]
It is common cause that in the present matter the arbitrator
interposed Mr Tjikuzu’s evidence qua witness for the
company and in the process sought to elicit from the employee her
version of events on what constituted a material dispute between the
parties. That much is apparent from the following extract from the
record when the interruption occurred while Mr Tjikuzu was
testifying:






'Now
he is saying this specific . . . you know what happened, you were
there, this specific transaction is not reflected here. I want you or
your representative to look at it. What do you say? Because those are
some of the bases. We cannot look at everything, but he made a spot
check'[22].






[41]
It is equally common cause that the arbitrator extensively
cross-examined the company’s witness under oath although, when
it was the turn of the employee to testify, she was neither
admonished or asked to testify under oath. It is indisputable that
the arbitrator assisted the employee in leading her evidence in chief
and rendering the presence of the employee’s representative
unnecessary. Similarly, it remains undisputed that the arbitrator
adopted a procedure which allowed the employee’s representative
to answer questions on the employee’s behalf, and without, for
good measure, being sworn in or admonished.






[42]
Mr Elago, for the employee, argued before us that although such
conduct may draw criticism, it was excusable because the arbitrator
enjoys discretion under s 86(7) to 'conduct the arbitration in a
manner that the arbitrator considers appropriate in order to
determine the dispute fairly and quickly; and must deal with the
substantial merits of the dispute with the minimum of legal
formalities’. I gained the distinct impression from Mr Elago’s
submissions (both oral and written) that he is of the view that even
if the conduct of the arbitrator was not beyond reproach in all
respects, it was not proved by the appellant that the arbitrator
'failed to deal with the substantial merits of the dispute'. He
submitted that the arbitrator’s conduct could not be faulted as
it was not shown to be mala fide or dishonest.






[43]
Mr Elago’s submission loses sight of the fact that justice has
both a substantive and procedural dimension, and hence the adage (in
the words of Lord Hewat CJ) in R v Sussex Justices, Ex Parte
McCarthy:






'.
. . it is not merely of some importance but is of fundamental
importance that justice should not only be done, but should
manifestly and undoubtedly be seen to be done'.






The
law to the facts


[44]
Based on what I have set out as the proper test for the application
of ss 89(4) and 89(5) of the Labour Act, it is difficult to sustain
the Labour Court’s conclusion that the arbitrator did not
commit a gross irregularity in the conduct of the arbitration
proceeding now before us.  It is not one isolated act of gross
irregularity we are here concerned with, but the sum total of his
actions which not only evince a pre-judging of issues and clear bias
in favour of one party, but his preventing the company’s
representative from ventilating issues and eliciting potentially
relevant facts as the representative saw best and necessary, and not
in the way that pleased the arbitrator.[23]
Although the arbitrator enjoys discretion and latitude in determining
the procedure of the arbitration, he holds no license to dictate to
parties which witness is called and which evidence is to be led. That
remains the prerogative of the parties, subject to the arbitrator’s
power to conduct an orderly arbitration, to disallow inadmissible
evidence, and to prevent prolix cross-examination and unnecessary
badgering of witnesses.






[45]
How does one explain or justify the arbitrator’s placing one
party under oath and not the other? The reason is not apparent from
the record. Similarly, how does one justify his interposing the
evidence of the company and eliciting that of the employee when she
still had her turn to testify? On what basis did the arbitrator allow
the employee’s representative to answer questions on her behalf
on contentious issues without the representative being asked to take
the oath or being admonished? The record is also silent on why the
arbitrator became the active cross-examiner of the appellant’s
witness and the leader of the employee’s evidence. The record
supports the appellant’s allegation that there is no
justification for the arbitrator’s conclusion that the
chairperson of the internal disciplinary procedure was biased against
the employee. In fact, it is common practice for internal
disciplinary proceedings to be conducted by an employee. The view
taken by the arbitrator is, therefore, one of several instances of
conduct attributable to the arbitrators which strengthen the
appellant’s case that the arbitrator had pre-judged the matter.






[46]
Particularly telling is the arbitrator denying the company’s
representative the opportunity to lead evidence about the number of
times the employee was on duty when the alleged fraudulent
transactions took place. The company’s version is that had Mr
Tjikuzu been allowed to lead into evidence the documents he was
prevented from introducing, the employee’s version that someone
other than herself used her PIN number would have been the less
probable version. The company’s case is that the evidence of
the multiplicity of incidents would have had the result that the
trier of fact would find that it had established the employee’s
guilt on a balance of probabilities. This reasoning is hard to fault,
especially if one considers, contrary to what appears to have been
the Labour Court’s tacit assumption, that the employee’s
defence that the PIN was capable of being used by any number of
people was not common cause or admitted by the company. The
conclusion that the introduction of the excluded evidence could well
have had a different result on the outcome of the arbitration makes
the arbitrator’s exclusion of the evidence material and,
therefore, an irregularity. That amounts to a trial prejudice. That
is what the Labour Court ought to have found.






[47]
The reasoning of the arbitrator during the conduct of the arbitration
that the disclosure of the employee’s PIN was comparable to the
disclosure of an ATM PIN code is a logical fallacy: just because it
is not proper for the bank to bear knowledge of an account holder’s
personal ATM PIN code, or an employee’s access PIN to the
employer’s premises[24]
is restricted, does not justify an inference, as drawn by the
arbitrator, that the PIN assigned to a cashier by an employer
(running a fast-food outlet) to facilitate speedpoint transactions
should be known only to the employee and not by the management. There
is a perfectly good reason why the bank may not bear knowledge of a
bank account holder’s ATM PIN number: the funds in a bank
account is the property of the account holder and only he or she has
the absolute right to transact on the account. Equally, there is good
reason why the company, on whose behalf the employee facilitated the
speedpoint transactions, was entitled to know (through its managers
and supervisors of the employee) which employee was assigned which
PIN number. How else could they possibly detect fraud or carry out
investigations to determine the identity of a fraudster?






[48]
To equate one’s personal ATM PIN number to a PIN number
assigned to an employee to facilitate transactions between the
customer and the company (the employee’s employer), and on that
basis rule as inadmissible a line of cross-examination designed to
elicit concessions from the employee that she failed in her duty to
report the over exposure of her PIN number, is most irregular. That
is so because, contrary to the view taken by the arbitrator in
interrupting Mr Tjikuzu’s cross-examination of the employee,
the company (through its management) has the right to know the PIN
code assigned to its employees. How else could the managers detect
fraud or any other improper use? As Mr Tjikuzu correctly, but in
vain, sought to convey to the arbitrator 'the manager needs to assign
her for her to be able to operate on the till. Without the manager
assigning her she won’t be able to operate on the till'. The
leap from 'the managers knew the employee’s PIN' to 'therefore
the employee cannot be guilty of fraud because anyone else could have
done it' was a prejudging of the case by the arbitrator and thus
denying the company the right to a fair hearing.






[49]
That the employee’s PIN was so widely known that anyone could
have used it to commit the fraud, was the employee’s case. That
case was not accepted or conceded by the company and it was entitled
to challenge it through evidence of its own undermining the inference
and, through appropriate cross examination, showing that the
employee’s version was improbable. The arbitrator could then
have determined which of the two versions was more probable. It was
impermissible for him though to foreclose his mind to a potentially
probable version by reference to what he had predetermined as the
probabilities based on his personal, albeit doubtful, view of how
things work.






[50]
A party is entitled to lead all available evidence that it considers
will support the inferences it will ask the trier of fact to have
drawn. The actions and conduct of the arbitrator denied the company
that opportunity.






[51]
Accepting, as I must, that the use of the PIN by others in the way
alleged by the employee is disputed by the company, I agree with Mr
Maasdorp’s submission, that if evidence was led about the
number of times that the fraud was perpetrated while the employee was
on duty, coupled with an implausible explanation why she had not
reported a cash shortfall or the over-exposure of her PIN, it would
have significantly undermined the employee’s version that any
number of people would have perpetrated the fraud. The uncontested
evidence that it was the PIN assigned to the employee which was used
in the fraud, together with the fact that it only happened while she
was on duty, would decidedly have added to the probabilities that the
employee perpetrated the fraud. If the company’s representative
was allowed to lead the evidence of the occasions on which she was on
duty when the fraud occurred, it may well have led to the inference,
applying the standard of balance of probabilities, that the employee
defrauded the company. Therein lies the unfairness in the way the
arbitrator conducted the arbitration hearing. Had the Labour Court
approached the matter in that way, it would, and properly so, have
found that the arbitrator committed a gross irregularity in the
conduct of the arbitration.


[52]
Even if there was justice in substance in the conclusion reached by
the arbitrator, which in the case before us is by no means a
certainty, the uncontested, if cumulative acts of 'mishandling' of
the hearing by the arbitrator leaves one with a sense that justice
was not 'manifestly and undoubtedly seen to be done'.






[53]
I come to the conclusion, therefore, that the appellant had
established that the arbitrator committed a gross irregularity in the
manner he conducted the arbitration and that the Labour Court should
have reached that result. I am satisfied that the appeal must
succeed. The parties were in agreement that, in the event of the
appeal being successful, the matter be remitted to the Labour
Commissioner to appoint another arbitrator to deal with the matter
according to law. The power of the court to make such an order
derives from s 98(10)(b) of the Labour Act. I propose
therefore to make such an order. The appellant has not sought a costs
order and no such order will be made.






Order


[54]
In the result:






1.
The appeal succeeds and the order of the Labour Court is set aside
and substituted for the following order:







1.1
The application for review succeeds;







1.2
The award in arbitration No CR WK 866-10 is set aside;







1.3
The matter is referred back to the Labour Commissioner to appoint a
new arbitrator to conduct the arbitration de novo and to deal
with the matter according to law.






1.4
No order as to costs is made.






DAMASEB
AJA






SHIVUTE
CJ






MAINGA
JA


APPEARANCES






APPELLANT:


RESPONDENT:


Mr
R L Maasdorp






Instructed
by Köpplinger Boltman Legal Practitioners










Mr
P S T Elago






Instructed
by Tjombe-Elago Law Firm Inc.



[1]
Act No 11 of 2007.




[2]
Which is a reference to the
company.




[3]
Which is a reference to the employee, second respondent.




[4]
A reference to the employee’s representative.




[5]
Which guarantees all persons a fair hearing by an independent,
impartial and competent Court or Tribunal.




[6]
Requiring administrative officials to act fairly and reasonably and
comply with the requirements imposed on them by common law and
legislation.




[7]
2008 (2) NR 775 (SC) at 790D-E.




[8]
1952 (1) SA 732 (N) at 734A-D.




[9]
Labour Act, s 85(6).




[10]
House
and Home v Madjiedt

2013 (2) NR 333.




[11]
Compare,
Visagie
v Namibia Development Corporation

1999 NR 219 (HC) at 224, approving
Betha
and Others v BTR Sarmcol,
A
Division
of BTR Dunlop Ltd

1998 (3) SA 349 (SCA) at 405F-406A; 1997 NR 102 (HC) at 105D-E.




[12]
2011
(2) NR 707 (LC).




[13]
Ibid at 711G-I.




[14]
Ibid at 724H-J and 725A.




[15]
Dickenson
& Brown v Fisher’s Executors

1915 AD 166 at 176;
Total
Support Management (Pty) Ltd and
Another
v Diversified Health Systems (SA) (Pty) Ltd and
Another
2002 (4) SA 661 (SCA). See also, Parker,
Labour
Law in Namibia
,
UNAM Press at 211 -212




[16]
Jockey
Club of South Africa and
Others
v Feldman

1942 AD 340 at 359.




[17]
Strauss
v NIMT and
Others
(LC 94/2012) [2013] 38 (06 November 2013) at 18, para 35
www.saflii.org.




[18]
Sidumo
and Another v Rustenburg Platinum Mines Ltd & Others

(2007)
28 RJ 2405 (CC) at 2490C-E




[19]
Parker,
op
cit

at 212-213.




[20]
Halsbury,
Vol. 2 4 ed, para 649.




[21]
Purity
Manganese v Katzao

2012
(1) NR 233 (LC) at 240, para 21C-E,  and
Roads
Contractor Company, supra

at 724, para 31F-G; Labour Act, section 85 (1).




[22]
That is the arbitrator to the employee.




[23]
De
Vos v Marguard & Co

1916
CPD 551–554.




[24]
Which is even less convincing reasoning, for how else would the
employer know whose access code was used, unless someone at the work
place knows which access
PIN
has been issued to which employee?