TN Asset Management v Mary Mbewe

### Preamble
IN THE LABOUR COURT OF ZIMBABWE
JUDGMENT NO. LC/H/10/2020
HARARE, 20 JANUARY 2016
CASE NO.
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IN THE LABOUR COURT OF ZIMBABWE      JUDGMENT NO. LC/H/10/2020

HARARE, 20 JANUARY 2016				   CASE NO. LC/H/816/15

AND 10 JANUARY 2020

In the matter between:-

TN ASSET MANAGEMENT				Appellant

And

MARY MBEWE						Respondent

Before Honourable B.T. Chivizhe, Judge

For Appellant		Mr P. Mutukwa (Legal Practitioner)

For Respondent		Mr P. Mutasa (ZIBAWU)

CHIVIZHE, J:

This is an appeal against an arbitral award handed down per Honourable B. Mudiwa, Arbitrator on 31st August 2015, which award directed Respondent’s reinstatement into her original position or in the event of her reinstatement being untenable payment of damages in lieu of reinstatement.

The material background facts are as follows. The Respondent was employed by the Appellant in the position of Compliance Manager. She was reporting to the Chief Executive Officer. Her duties were according to the job description to oversee the Compliance Program, functioning as an independent and objective body that reviews and evaluate Compliance issues/ concerns within the organization. Part of her duties also included ensuring the Board of directors, management and employees were acting in compliance with the Rules and Regulations of regulatory agencies, that company policies and procedures were being followed and that behaviours in the organisation meet the Company’s code of conduct.

On 22nd of October 2014 the Appellant levelled two charges against the Respondent i.e. breaches of section 4(a) and (f) of the National Code of conduct, Statutory Instrument 15 of 2006. Section 4 (a) refers to “any act of misconduct or omission inconsistent with the fulfilment of the express or implied conditions of your contract” whilst Section 4(f) relates to “gross incompetency and inefficiency in the performance of his or her work.” The Respondent was arraigned for a disciplinary hearing on the 26th of November 2014. The Hearing Officer on the 17th December returned a verdict of guilty on both charges. The Respondent was aggrieved and noted an appeal to the Appeals Officer on the 23rd December 2014. In her appeal she alleged, amongst other issues, that, the Hearings Officer had not determined the preliminary points raised before  him; he had disregarded issues raised in mitigation; he had also disregarded submissions and evidence placed before him, he had also misdirected himself in disregarding the Respondent’s duties as ‘ Compliance  related’ and that she was not responsible for reconciliation; he had also failed to consider that the delay by one day in submitting her input for the Board Pack did not warrant a dismissal penalty.

The Appellant opposed the appeal. In his determination handed down on 27th January 2015 the Appeals Officer dismissed the Respondent’s appeal and upheld the conviction plus the penalty imposed by the Hearing Officer. The Respondent still dissatisfied referred a claim of an unfair dismissal to the Labour Officer, who, upon failure to conciliate, referred the matter to compulsory arbitration on the basis of section 98 (10) of the Labour Act [Cap 28:01]. The terms of reference before the Arbitrator were two;

To determine whether or not the dismissal was unfair.

To determine the appropriate remedy.

The parties made both written and oral submissions before the Arbitrator. The Respondent made submissions similar to those as raised before the Appeals Officer. She submitted, amongst other things that, her duties did not involve reconciliation and preparation of Liquidity Position Reports and that there had been no Liquidity Position Report until 2014 when the title was assigned to the Back Office Manager. This according to her emphasized the lack of importance of the Report. She further submitted that due to Bank Managers mismatches in the Liquidity Position Report he was asked to hand over to accounting manager who was then performing the task at the time the matter was referred. She submitted that her job description (copy filed of record) did not involve preparation of Liquidity Position Report. She had only been involved following an email from the CEO on 21st August 2014 indicating that an update was required on the Liquidity Position Report. She had duly submitted the update on the 22nd August 2014. The Respondent further submitted that no incompetence had been established by the Appellant. Instead the Appellant ought to have followed the steps as outlined in Kwangari vs CBZ Bank decision before imposition of the Dismissal penalty.

The Appellant, in response challenged averments by the Respondent that as Liquidity Position Report was outstanding for 2 years and therefore it was immaterial and that it did not affect the smooth flow of business. On the contrary Appellant submissions was that the Liquidity Position Report was required it was a process of reconciliation which could only be arrived at after migrating and capturing all information to the new system. The Appellant disputed the assertion by Respondent that the Back Office Manager only started preparing the Liquidity Position Reports from July 2014. Appellant tendered in evidence other reports prepared by Back Office Manager and other documents. The Appellant further submitted that the Accountant had only been asked to assist Back Office Manager when he was facing challenges. That however did not remove the primary function from the Back Office Manager. The Appellant also pointed to the Respondent shortcomings which had resulted in misconduct charges being levelled such as the issue of her failure to address the issue of mismatches. Exhibits were placed before Arbitrator in support of this position. The Appellant also tendered evidence in form of the email advising her to work with others which highlighted her deficiencies in ensuring compliance issues were evaluated and resolved timely. The Appellant also highlighted various emails sent to Respondent to ensure the issue of mismatches was resolved as per her duties. She was for example given a deadline to complete all work before proceeding on leave (evidence of text message was also placed before the Arbitrator). A memorandum was drawn up on 3 October 2014 recalling her to come and complete her work. Upon her return she requested for a new deadline which again she failed to meet. The Appellant dismissed the assertion that Respondent needed to be oriented for her work as per Kwangari decision. She had actually been over 5 years on the job. The Appellant position was that Respondent had failed to perform as per her duties. The defence she had raised that the Liquidity Position Report was not balancing because of assets only served to emphasize her deficiencies. She was supposed to have been involved in the investigation and advice the CEO. The Appellant also dismissed the suggestion that the accountant had taken over compliance issues. The Appellant also emphasized on her habitual conduct of delay in filing her board pack. The Appellant also referred to a previous written warning issued to Respondent for failure to comply with a standing instrument (copy tendered as exhibit). On this and many other grounds the Appellant submitted that Respondent had been properly found guilty on the charges and the Dismissal Penalty was properly imposed in the circumstances.

The Arbitrator in his award initially analysed his role in the process. He stated as follows;

“The first term of reference that I will analyse I to determine whether or not the dismissal was fair. I will therefore analyse the substantive aspects of the dismissal, this refers to the reason for the dismissal basing on the merits of the case. The question is whether the conduct of the employee was so bad that the employer is justified in terminating the contract of employment. It is in my view that the determination of an appropriate sanction is a matter which is largely within the discretion of the employer. However, this discretion must be exercised fairly. I will, therefore not interfere with the sanction imposed by the employer unless the employer acted unfairly in imposing the sanction. This tribunal will determine whether or not the employee committed an offence sufficient to warrant dismissal. The question is whether in the circumstances of the case the sanction meted was reasonable. I will therefore analyse the fairness of the dismissal basing on the merits of the case.”

After analysing his role the Arbitrator thereafter addressed the issue of conviction on the charges as follows;

“The respondent submitted that the claimant has not been meeting deadlines as a compliance manager. Some emails have been availed to this tribunal as evidence. A perusal of most of the email however shows they were directed to two or more employees together with the claimant. The other email in which the claimant was cited also shows that the claimant would respond to the email giving her feedback. I observed that there was an incident in which the claimant did not meet deadline in sending her input to the board pack that was to be prepared by the managing Director. The claimant admitted a delay of one day in which she highlighted that the board investment Committee was to be done 7 days later and the claimant attended the meeting which went down well. It is my observation that this offence cannot warrant a dismissal penalty. The exercise of the right to dismiss should be done when an employee had clearly committed a serious offence. I noted that the most of the allegations levelled against the claimant were based on the input of the claimant together with other employee. It is clear from the allegations that there is no clear allegation that in my view requires dismissal penalty to be meted. The emails filed of record show clear exchange of information in which the chief executive officer was requesting certain information and encouraging employees to meet deadlines. This is normal situation in the business environment and in some conversation the Chief executive officer will acknowledge the response.

It is my view that the determination of an appropriate sanction is a matter which is largely within the discretion of the employer. However, this discretion must be exercised fairly. I will, therefore interfere with the sanction imposed by the employer when I am satisfied that the employer acted unfairly in imposing he sanction. The allegations which the claimant has been dismissed for, clearly revolves around allegations of failure to his job properly as a Compliance manager. The Respondent failed to provide sufficient evidence to clearly show that there was gross incompetence on part of the claimant neither was her conduct inconsistent with her contract of employment. I also find it not proper to still make a decision to dismiss in the absence of such evidence.”

Having reached the conclusion that conviction on both charges was not correctly arrived at he then addressed the issue of penalty in the following terms;

“The employer did not act reasonably and within the confines of the four corners of the law by imposing the penalty of dismissal. The employer is only entitled to dismiss an employee who is in substantial breach of the employment contract. I am therefore convinced to safely arrive to the considered conclusion that the dismissal of the employee was not fair on substantive ground and the charge for gross incompetence or inefficiency in the performance of his or her work has not been proved. The proven charge of delay to submit her input to the board pack by one day does not in my view warrants dismissal. There is clearly no prejudice suffered in the respondent s operation as there was still seven days to go for the Board investment meeting which was again confirmed to have went on very well.”

He thereafter drew up an award in which he found that the Respondent’s dismissal was unlawful; Respondent had to be reinstated to her original position without any loss of salary and benefits from the date of unlawful dismissal. In the event that reinstatement was no longer tenable either of the parties could approach the Arbitrator for quantification of the damages.

THE APPEAL

The Appellant was aggrieved and noted the present appeal. The grounds on which the appeal is noted are as follows;

“GROUNDS OF APPEAL

The Arbitrator grossly erred on the law in arriving at a finding that the misconduct of the employee was trivial and did not justify the penalty of dismissal.

The Arbitrator erred and grossly misdirected himself on the law by failing to appreciate the legal duties and importance of a board of directors and that the misconduct had been committed in aggravated circumstances which justified the penalty of dismissal.

The arbitrator grossly erred on the law in finding that the misconduct of the employee (gross incompetence) did not go to the very root of the employment relationship.

The Arbitrator grossly misdirected himself on the facts by making a factual conclusion relating to the incompetence of the employee which was inconsistent with the proven facts and available documentary evidence and this gross misdirection on the facts amounts to a serious misdirection at law.

The Arbitrator grossly misdirected himself on the law by interfering with the decision of the employer and exercising a discretion he did not have when no legally valid basis existed for doing so.”

The appeal is opposed by the Respondent. The Respondent in response to the grounds of appeal submitted that the Arbitrator had made a correct decision in regards the conviction which finding was based on the evidence placed before him. He had also correctly assessed the facts and found that the Dismissal penalty was not warranted in the circumstances. The Respondent having assumed the duties of a Compliance Officer barely seven (7) months before her dismissal the Arbitrator was correct in finding that the dismissal penalty was not warranted. The Appellant ought to have followed the steps as alluded to Kwangari decision. Moreover the Appellant had failed to prove that the offences went to the root of the employment contract.

The issues which fall for determination in this mater are three;

Whether the Arbitrator erred by interfering with the findings made by the employer that Respondent was guilty of gross incompetence.

Whether the Arbitrator erred by finding that the misconduct of gross incompetence did not go to the root of the employment contract.

Whether the Arbitrator misdirected himself in interfering with the penalty.

I shall proceed to address the points seratim

WHETHER THE ARBITRATOR ERRED BY INTERFERING WITH THE FINDINGS MADE BY THE EMPLOYER THAT RESPONDENT WAS GUILTY OF GROSS INCOMPETENCE

The Appellant submission was that the Arbitrator erred in interfering with findings made by the Appeals Board Hearing Officer that Respondent was guilty of the charge of gross incompetence levelled against her. He had failed to consider the overwhelming evidence that had been placed before the tribunals a quo and before him. The evidence pointed to Respondent’s failure to thoroughly execute her duties as Compliance Officer. The Respondent had also chosen to go on leave in circumstances where she had outstanding backlog; evidence was also led which was uncontroverted that she had at one time submitted unconfirmed/unverified information to the Chief Executive Officer. The Appellant submission was on this basis the award clearly could not be upheld.

The Respondent submission was that the Arbitrator after assessing the facts and evidence in the record correctly arrived at the decision that there was no gross incompetence. He had found that in regards to the evidence of emails Respondent had responded to the emails in giving feedback to the Chief Executive Officer. There had been no evidence of incompetence led. The Arbitrator had correctly also found that Respondent had also not acted inconsistent with her contract in particular reference to the issue of the delayed board pack. The Arbitrator was further correct in finding that no prejudice had been suffered by Appellant as the pack was delayed by 2 days. The Arbitrator was also correct in finding that the facts of the matter did not reveal a serious offence. The Respondent prayer was for the dismissal of the appeal.

The terms of reference before the Arbitrator were to determine whether or not the Appellant had unfairly dismissed the Respondent and to therefore award an appropriate remedy. Essentially this meant that the Arbitrator had to determine on the basis of the record whether the Appellant was correct in finding Respondent guilty on the charges and whether the penalty of dismissal was appropriate in view of the evidence placed in the record. It was not the Arbitrator’s duty to determine whether the Appellant committed the offence(s) or not. See Fraser Muyaka vs Bak Logistics (Pvt) Ltd SC 39/17(citation) the Arbitrator’s role in such circumstances.

The Arbitrator in this case clearly misconceived his role to be that assessing the evidence to determine whether or not Respondent was guilty of the offence(s) and whether the penalty of dismissal was properly imposed in the circumstances.

Apart from misconceiving his role the Arbitrator also clearly erred in failing to assess the evidence as was required of him to determine whether the finding by Appellant that Respondent was grossly incompetent or acted inconsistently with the express/ implied terms of contract was correct. The Arbitrator arrived at a conclusion that “the Respondent failed to provide sufficient evidence to clearly show that there was gross incompetence on part of the Respondent neither was her conduct inconsistent with her contract of employment. I also find it not proper to still make a decision to dismiss in the absence of such evidence. “. It is clear that in arriving at this conclusion the Arbitrator had not properly assessed the evidence in the record. He needed to have analysed the nature of evidence presented before the hearing a quo and then indicate how the evidence was insufficient to prove the particular charge levelled.

The record of proceedings in any event is replete with evidence led by the Appellant to establish both charges. The charges levelled was of gross incompetence which was defined as “the lack of skill or ability to do a job or a task as it should be done” see Fraser Muyaka vs Bak Logistics (Pvt) Ltd SC 39/17. The Appellant had led oral evidence from the Chief Executive Officer who was Respondent’s Supervisor. His evidence was that she had at one point submitted unverified information to him. Evidence had also been tendered in the form of emails, reports that tended to point to Respondent’s grave short comings. The evidence showed that deadlines were being issued to Respondent but she did not meet them. In regards to the second charge Respondent had also personally admitted to a delay in filing the board report by 2 days. The Arbitrator in his award seemed to zero in on this one aspect of her conduct and reached a wrong conclusion that as there was no prejudice suffered the issue was trivial. The Arbitrator clearly erred. He was required to assess whether this conduct on the part of Respondent amounted to an act inconsistent with her implied/ express terms of employment and whether on all the basis of evidence led by the employer she was correctly found guilty on the charges. The court’s finding is that based on the evidence led before the disciplinary officer referred to supra the Respondent was properly found guilty on the first as well as the second charge. It was not in dispute that she was employed as a compliance officer. There was ample evidence led however to show that she had failed to timeously execute her duties, that she had submitted unverified work to her Supervisor. Part of her duties also included timeous submission of input for the board pack. She herself admitted to the delay but seemed to downplay the issue by stating that delay by one day did not warrant her dismissal. This she could not do. On the basis of facts/evidence in the record it was not proper for the Arbitrator to have interfered with the findings of fact by the tribunal a quo in the absence of any misdirection.

WHETHER THE ARBITRATOR ERRED BY FINDING THAT THE MISCONDUCT OF GROSS INCOMPETENCE DID NOT GO TO THE ROOT OF THE EMPLOYMENT CONTRACT.

The offences levelled against the Respondent were two i.e. Breach of section (4a) and section 4(f) of National Code of Conduct. She was found guilty of both. The Arbitrator in his award set aside both conviction and penalty on the charge of gross incompetence on the basis that the evidence tendered in the terms of emails was insufficient to justify conviction. He further made a finding that there was no serious offence committed warranting the imposition of dismissal penalty. The Arbitrator clearly erred and misdirected himself in regards the issue of the penalty to be imposed. The law is settled that, in determining the issue of penalty where a misconduct has been established, it is within the employer’s discretion to impose the dismissal penalty where the misconduct goes to the root of employment.

The law is also settled that the seriousness of an act of misconduct is determined by the employer and not by an appellate tribunal. See Zimbabwe Platinum Mines (Pvt) Ltd vs Godide SC 2 /16 where it was held;

“Clearly the court a quo erred in interfering with the employer’s exercise of discretion. The court ought to have asked itself whether the employer had properly taken a serious view of the matter and whether there was sufficient evidence to support the conviction on the preferred charges. Unfortunately the court a quo did not ask itself these pertinent questions and proceeded to determine the matter on an issue which was not even premised on the grounds of appeal before it. The law is clear that once an employer takes a serious view of the matter and the aggravated nature of the misconduct, it is irrelevant that the code does not provide for dismissal as a penalty” See Circle Cement vs Nyawasha SC 60/03.

The Arbitrator in casu ought to have considered whether the employer was correct in determining that the misconduct in this case went to the root of employment.

This meant that the Arbitrator had to look beyond the single issue of prejudice that he had zeroed on. He had to consider the Respondent’s position in the Company. There is no doubt that from the record of proceedings the Respondent had repeatedly failed to meet prescribed deadlines in the performance of her work. She had also on several occasions had to be reminded to deliver on her core duties. It was also clear that she occupied a strategic position in the organization as a Compliance Manager and any shortcomings on her part would impact on the company as a whole. Her conduct therefore clearly went to the root of the relationship between employee/employer in the circumstances it was within the employers discretion to terminate her employment contract. The fact that she was a first offender was immaterial. The court was aptly referred by Appellant to the case of Toyota Zimbabwe vs Posi SC 55/2007.

It is also the position of the law that the Arbitrator, sitting as he were as an appellate authority could only interfere with the issue of penalty where there was evidence of a misdirection or unreasonableness. See Mashonaland Turf Club vs Mutangadura 2012 (1) ZLR 183 (S) No such evidence having been placed before him there was clearly no basis for the Arbitrator interfering with the penalty imposed by the employer in this case.

The appeal must therefore succeed. Accordingly, it is ordered as follows;

The appeal be and is hereby allowed with costs.

The arbitral award handed down by Honorable B. Mudiwa on 31st August 2015 be and is hereby set aside.

The determination by the Appeals Officer dated 27 January 2015 is reinstated.

Musengi & Sigauke, appellant’s legal practitioners