Department of Health (North West Province) v Thersia Strydom

The first respondent, Thersia Strydom, was a senior food services manager in charge of catering at two provincial hospitals in the North West Province. She and several subordinates (C. Lombard, R Smit, A Fourie and M Mtengenyale) were involved in a dishonest scheme to manipulate food expense records and statistics in conjunction with a catering service provider, Unique Services. The scheme inflated the value of food expenses, creating surplus funds which were used to purchase equipment for the hospitals and to provide perks to the participants, including cash handouts, a weekend at Sun City, and food. When the scheme was discovered, disciplinary action was taken against all involved. The subordinates were given final warnings and docked a month's pay. The first respondent was dismissed after a disciplinary enquiry. She had approximately 20 years of service, was unremorseful, and sought to justify the scheme on the basis that the budget did not provide for all necessary items. Her subordinates testified that she instructed them to participate in the scheme. The dismissal was confirmed by an arbitrator, but the Labour Court set aside the sanction on review and remitted the matter on the basis of inconsistency of discipline, and also ordered costs against the employer for dilatory conduct.

• Whether the arbitrator's award dismissing the first respondent fell within the band of reasonableness under the Sidumo test
• Whether the Labour Court was entitled to interfere with the arbitrator's decision on sanction
• Whether there was inconsistency in the discipline imposed on the first respondent compared to her subordinates
• Whether the costs order made by the Labour Court was appropriate in the circumstances

The appeal was upheld. The judgment of the Labour Court was set aside in its entirety. The arbitration award of 30 May 2010 (which confirmed the dismissal) was confirmed. There was no order as to costs in respect of the appeal.

A review court may only interfere with an arbitration award if it fails the Sidumo test - i.e., if the decision is one that no reasonable decision-maker could reach. The review court's role is not to substitute its own view on the merits or its own weighing of factors, but to determine whether the arbitrator's decision falls within the band of reasonableness. In disciplinary matters, differential treatment based on seniority combined with other relevant factors (such as being the coordinator of misconduct and instructing subordinates to participate) does not necessarily constitute inconsistency of discipline warranting interference. In the Labour Court, costs orders must be made according to the requirements of law and fairness under section 162 of the LRA, and should not be used to punish parties for conduct unrelated to the issues properly before the court.

The Court noted that the sluggish pace of the appellant's disciplinary process was a legitimate ground for rebuke, but was ultimately irrelevant to the real controversies in the case. The Court also observed that while creative use of budgets is not uncommon in organizations, this must be done with circumspection and does not allow employees to act arbitrarily, particularly when those employees are charged with upholding the integrity of the system. The Court expressed understanding that the first respondent would seek to defend the review judgment regardless of its lack of merit, which was the basis for not making a costs order against her on appeal.

This case reinforces the application of the Sidumo reasonableness test in reviewing arbitration awards. It confirms that review courts should not substitute their own views for those of arbitrators, but must apply the test of whether the decision is one that no reasonable decision-maker could reach. The case establishes that seniority, combined with other factors such as instructing subordinates to commit misconduct and coordination of a fraudulent scheme, can properly justify differential treatment in disciplinary sanctions. It also clarifies the approach to costs orders in the Labour Court following Zungu v Premier Kwazulu-Natal, emphasizing that costs orders should not be made on issues unrelated to the merits of the case before the court, and that the norm is not to make costs orders unless specific requirements are met.