Court name
Supreme Court of Zimbabwe
Case number
SC 125 of 2004
Civil Appeal 361 of 2003

Standard Chartered Bank Zimbabwe Ltd. v Chapuka (361/03) (SC 125 of 2004, Civil Appeal 361 of 2003) [2005] ZWSC 125 (26 January 2005);

Law report citations
Media neutral citation
[2005] ZWSC 125







REPORTABLE
(94)



Judgment No. SC. 125/04



Civil Appeal No. 361/03











STANDARD CHARTERED BANK ZIMBABWE LIMITED







v MICHAEL CHAPUKA








SUPREME
COURT OF ZIMBABWE


CHIDYAUSIKU
CJ, ZIYAMBI JA & MALABA JA


HARARE,
OCTOBER 5, 2004 & JANUARY 27, 2005








T Biti,
for the appellant





R T
Maganga
, for the respondent







MALABA JA:







This appeal is against part of the judgment of the then Labour
Relations Tribunal (“the Tribunal”) setting aside the

dismissal of the respondent (“Chapuka”) from employment
with the appellant (“Standard Chartered”) and
substituting the penalty of “FINAL WRITTEN WARNING” on a
conviction of misconduct inconsistent with the fulfilment of
the
express or implied conditions of his contract of employment in
contravention of s 11(1) of Category “D”

offences under the Employment Code of Conduct for the Banking
Undertaking, Statutory Instrument 201 of 1995 (“the Code”).







The facts on which the appeal turns are these. Chapuka, who was
employed by Standard Chartered, a financial institution, as
a support
service manager at its branch in Bindura, was in 1999 granted a loan
under a scheme to assist employees to build their
own dwelling
houses. The loan was granted in terms of a contract which required
that payment of the money be made through “bank
cheques”
drawn by Standard Chartered on its branch at Africa Unity Square in
Harare in favour of suppliers of building materials
or contractors.







On 26 August 1999 Chapuka submitted a written request to the
Credit Department at Standard Chartered's Africa Unity Square
Branch,
which had the responsibility of administering the housing loan
scheme, for two bank cheques in the amounts of $17 496.37
and
$15 638.38 drawn in favour of Valley Farm Services and D.S.T.
respectively for the purchase of building materials.







The two cheques were drawn in favour of the named payees and given
to Chapuka. They bore two signatures of officials authorised
to
issue the cheques on behalf of Standard Chartered. Each cheque was
crossed and endorsed “account payee only”.
Once the
cheques were in his custody, it became Chapuka’s duty to
preserve them in their complete and regular form and
deliver them to
the intended payees in that state.







In breach of the obligation to preserve the instruments in their
integrity, Chapuka altered them in material parts by deleting
the
names of the payees, by putting lines across them and substituting
his wife’s name as payee. He did not deliver the
cheques to
the intended payees. He signed for the alterations and got a teller
who was his subordinate to counter-sign so as
to create the
impression that the alterations had the authority of Standard
Chartered. To induce the unsuspecting teller to put
his signature
on the altered cheques, Chapuka misrepresented to him that the
cheques had been drawn in favour of the original payees
by mistake
and the alterations had been authorised by the Credit Department at
Africa Unity Square Branch of Standard Chartered.







The forged cheques were deposited by Chapuka into his wife’s
account. An amount of $32 000 was immediately withdrawn

therefrom and deposited by Chapuka into his own personal account,
leaving a balance of $2 099.75 in his wife’s account.
He
deposited the $32 000 into his account without having sought and
obtained authority from the branch manager.







To guard against its employees misappropriating depositors’
funds and depositing them into their own accounts, the bank had
a
standing order requiring that all deposits by employees into personal
accounts should receive the authority of branch managers.







On discovering Chapuka’s conduct, the branch manager charged
him with conduct inconsistent with the fulfilment of the express
or
implied conditions of his contract of employment. On 21 September
1999 Chapuka appeared before a hearing officer to answer
the charge,
the particulars of which were that Chapuka had –







“1. Altered bank cheques without authority/falsified bank
records.







2. Instructed a subordinate to carry out an improper transaction.







3. Deposited cheques meant for the benefit of a bank employee into
the wife’s account.







4. Deposited $32 000 into a personal account without authority.







5. Left a balance of $2 099.75 in the wife’s account when
she was not entitled to it.”







Chapuka did not deny committing all these acts. He said he wanted
to have access to the money so that he could buy the cheapest

building materials in the market. As the facts were not in dispute,
the hearing officer had no difficulty in holding that the
misconduct
which Chapuka admittedly committed was inconsistent with the
fulfilment of the express or implied conditions of his
contract of
employment. The hearing officer also held that the misconduct by
Chapuka involved a breach of trust and its degree
of seriousness
justified dismissal from employment, as it struck at the root of the
confidential relationship between the parties.
Chapuka was
accordingly dismissed.







Chapuka appealed unsuccessfully to the grievance and disciplinary
committee and then to the appeals board of the National Employment

Council for the Banking Undertaking. In holding that the misconduct
justified Chapuka’s dismissal, the chairman of the
appeals
board, writing for all its members, on 17 December 1999, said:







“The facts of the case were clear and the Appeals Board were
in complete consensus that the evidence clearly showed that

Mr Chapuka was guilty of the charges laid against him. They
agreed that he had abused his position in the bank to misdirect
money
that was to have paid for a house. The bank would never have lent
him the money if they were not sure that the house itself
would act
as security. Mr Chapuka knew this and deliberately flouted the
regulations. They all felt that Mr Chapuka
had abused a
position of trust.”







So the appeals board’s view of the facts constituting the
misconduct committed by Chapuka was that it was not trivial and

inadvertent but serious and deliberate.







The determination that the misconduct Chapuka was convicted of
having committed gave Standard Chartered the power and authority
to
dismiss Chapuka from employment, as it constituted a serious breach
of trust and confidence on which the relationship of employer
and
employee was based, was not challenged on appeal to the Tribunal.
Chapuka’ ground of appeal was that he had been wrongly
charged.
His contention was that he should have been charged with “failure
to comply with standing instructions”
in contravention of s 8
of Category “B” offences under the Code.







The Tribunal confirmed the determination by the appeals board that
Chapuka had committed conduct which was inconsistent with
the
fulfilment of the express or implied conditions of his contract of
employment, effectively holding against him on the ground
on which
the appeal turned.







Without it having been raised as a question for determination by
Chapuka, the Tribunal nonetheless considered the correctness or

otherwise of the decision by the appeals board that the misconduct
Chapuka had been found to have committed gave Standard Chartered
the
right to dismiss him from employment. The inference it drew from
some of the facts was that the dismissal was not justified.
It
said:







“It is not disputed that the appellant’s conduct was
improper. However, it must be borne in mind that the intention

behind the (appellant’s conduct) was not to defraud the
respondent. When the respondent wrote a cheque (sic) in
favour of the creditors it was effectively doing so on the
appellant’s behalf. Thus what money was being paid to the

creditors effectively belonged to the appellant. What the appellant
did, did not prejudice the bank.”







The dismissal was then set aside and substituted with the penalty of
a “FINAL WRITTEN WARNING”. The Tribunal said
that in
substituting dismissal with the less severe penalty of a “FINAL
WRITTEN WARNING” it acted in terms of s 91
of the Labour
Relations Act [Chapter 28:01] (“the Act”).







The decision was attacked on appeal to this Court on two grounds.
The first was that s 91 of the Act did not authorise
the
Tribunal to substitute its own determination for a determination on a
matter not appealed against. The second was that as
its decision
could only be made upon consideration of the correctness of the
dismissal of Chapuka as a question of fact, no such
question had been
raised in the grounds of appeal for the Tribunal to consider. Even
if the question had been raised, the determination
would have been
reached only if the Tribunal was satisfied in regard the question
that the decision of the appeals board was one
no reasonable tribunal
could have made.







I have found it unnecessary to consider the validity of the first
ground of appeal because I am satisfied that the determination
that
the misconduct committed by Chapuka did not give Standard Chartered
the right to dismiss him from employment was clearly wrong.
My
reasons are the following –







Conduct which is found to be inconsistent or incompatible with the
fulfilment of the express or implied conditions of a contract
of
employment goes to the root of the relationship between an employer
and an employee, giving the former a prima facie right to
dismiss the latter. In Clouston & Co Ltd v Corry [1906]
AC 122 LORD JAMES OF HEREFORD remarked by way of a dictum at
p 129:







“Now the sufficiency of justification depends upon the extent
of misconduct. There is no fixed rule of law defining the
degree of
misconduct which will justify dismissal. Of course, there may be
misconduct in a servant which will not justify the
termination of the
contract of service by one of the parties to it against the will of
the other. On the other hand, misconduct inconsistent with the
fulfilment of the express or implied conditions of service will
justify dismissal
.” (the underlining is mine for
emphasis)







In Sinclair v Neighbour [1967] 2 QB 279 SELLERS LJ held
at 287 that to be conferred with the power and authority to dismiss a
manager found guilty
of taking money out of the till and leaving an
“I.O.U.” note when he knew that if he had asked he would
not have been
given the money:



“… it was sufficient for the employer if he could, in
all the circumstances, regard what the manager did as being
something
seriously inconsistent – incompatible – with his duty as
the manager in the business in which he was engaged.”







In Tobacco Sales Floors Ltd v Chimwala 1987 (2) ZLR 210 (S)
McNALLY  JA approved of the dictum by LORD JAMES OF
HEREFORD in the case of Clouston & Co Ltd v Corry supra
before going on at 218H-219A to say the following:







“I consider that the seriousness of the misconduct is to be
measured by whether it is ‘inconsistent with the fulfilment
of
the express or implied conditions of his contract’. If it is,
then it is serious enough prima facie to warrant summary
dismissal. Then it is up to the employee to show that his
misconduct, though technically inconsistent with
the fulfilment of
the conditions of his contract, was so trivial, so inadvertent, so
aberrant or otherwise so excusable, that the
remedy of summary
dismissal was not warranted.”







In this case it was held on the facts by the Tribunal that the
misconduct Chapuka had been convicted of having committed was

inconsistent with the fulfilment of the express or implied conditions
of his contract. He did not show that the misconduct was
“so
trivial, so inadvertent, so aberrant or otherwise so excusable, that
the remedy of” dismissal was not warranted.







In Mine Workers’ Union v Brodrick 1948 (4) SA 959 (A)
GREENBERG JA held at p 978 that a wrongful and unauthorised
alteration by its Secretary General of
a resolution made by the
executive committee of the appellant amounted to misconduct which
justified summary termination by the
appellant of the relationship of
employer and employee.







It is clear from the cases that even if the question of the
correctness of the decision by the appeals board that Standard
Chartered
was justified in dismissing Chapuka from employment for the
misconduct had been raised as a ground of appeal, the Tribunal would

have had to be satisfied that the decision was on all the facts
clearly wrong.







In my judgment, what was said by the Tribunal about the effect of
the misconduct committed by Chapuka against Standard Chartered
would
not have been sufficient to justify interference with the judgment of
the appeals board. The relevance of the statement
by the Tribunal
that the intention of Chapuka in committing the misconduct was not to
defraud Standard Chartered and that no prejudice
was suffered by
Standard Chartered as a result of his acts is open to doubt, because
the alleged intention of a fraudulent employee
cannot be taken as a
standard with which to determine whether an employer acted reasonably
in taking the view that the misconduct
was so serious in nature as to
justify dismissal. The unlawful intention would have been one of
the circumstances which put the
employee in the position in which he
considered the pursuit of personal interest more important than the
honest discharge of his
duties to the employer.







The relationship between Standard Chartered and Chapuka was one based
upon trust and confidence. It is sufficient that in dismissing

Chapuka from employment Standard Chartered felt that as a result of
his own acts of misconduct it could not continue in future
to repose
in him the trust and confidence that he would perform his duties as a
senior member of staff with a high degree of honesty.
It was also
sufficient that any reasonable employer in the position of Standard
Chartered could on the facts have dismissed Chapuka
for what he did.







The appeal is allowed with costs. The decision of the Tribunal is
set aside and substituted with the following –







“The appeal against the decision of the appeals board of the
National Employment Council for the Banking Undertaking upholding
the
dismissal of the respondent from employment is dismissed with costs.”



















CHIDYAUSIKU CJ: I agree.



















ZIYAMBI JA: I agree.



















Honey & Blanckenberg, appellant's legal practitioners



Muzenda & Maganga, respondent's legal practitioners