Derivative misconduct considered: Suspicion unfair reason

Western Platinum Refinery Ltd v Hlebela (JA32/2014) [2015] ZALAC 20; [2015] 9 BLLR 940; (2015) 36 ILJ 2280 (LAC) (3 June 2015) per Sutherland JA [Landman JA and Mngqubisa-Thusi AJA concurring]

The Labour Appeal Court correctly allowed the cross-appeal and reinstated an employee who had only been awarded compensation by the CCMA. There was no proof that the employee had been dishonest. This meant the dismissal itself was substantively unfair. There no valid reason related to conduct or anything else, other than a suspicion of possible dishonesty, so it could never have been lawful or fair to dismiss. In the absence of any valid reason to dismiss the employee was entitled to reinstatement, being the primary remedy when a dismissal is substantively unfair. In passing Sutherland JA considered ‘derivative misconduct’ and the duty of good faith. It was contended that employees are obliged to disclose to management knowledge of wrongdoing by other employees. The LAC indicated how it thought employers should deal with averments of non-disclosure of actual knowledge of wrongdoing. But issue must be taken with the approach that suggests that employers must ‘charge’ employees with a culpable breach of a duty of good faith and disclose the actual knowledge relied upon. Only factual averments or allegations are required not ‘charges’.

We could be forgiven for believing that after all the serious efforts made by some members of the Labour Court there would be an appreciation in the LAC itself that any procedures that smack of sounding like criminal processes are totally inappropriate and should be avoided at all costs. Not only the ILO Convention but also our LRA only requires a valid and fair reason to dismiss and it must simply be related to conduct. Fault is not a requirement so why must employees be ‘charged’ and be found ‘guilty’ ? Fault is obviously a relevant but not an essential factor in considering the reason for dismissal. It is only a fundamental breach of contract that deprives an employee of the right to notice in terms of the BCEA and the common law. To charge employees as if they were engaged in some form of criminal activity and then find them ‘guilty’ goes against everything that the rule of law requires. It impugns the dignity and worth of employees. Only the State has the right to ‘charge’ anyone with conduct that is alleged to be criminal.

3 Comments

GilesFiles on June 19, 2015 at 4:16 pm

Prof Darcy du Toit’s ‘Derivative misconduct’ (and the importance of factual clarity) was published by IR Network [subscription required] today and here are a few extracts.

In general, dishonesty by an employee is a ground for dismissal. In general, too, excessive legalism is not expected in disciplinary proceedings and, indeed, is frowned upon. But there are limits to the robustness with which an employer may infer dishonesty on the part of an employee of whom it is suspicious. Those limits were demonstrated in the recent judgment of the Labour Appeal Court in Western Platinum Refinery Ltd v Hlebela (Case No JA 32/2014) [2015] ZALAC 20 (3 June 2015).
. . . .
The court concluded that “there simply was no case made against him” and that the award upholding Mr Hlebela’s dismissal was “one to which no reasonable arbitrator could have come upon a proper appreciation of the evidence adduced” (para 31).

The Labour Court’s finding of “mendacity” on Mr Hlebela’s part was also rejected. It was based on his response to two questions in one – a source of ambiguity that law students are taught to avoid – as to whether (a) he owned Ceba Construction CC and (b) he had additional sources of income. Having quoted the record, Sutherland JA commented:

“The taking of the evidence in this matter was significantly muddied by what seems to be poor and inept interpretation, constant interjections from the arbitrator and abundant repetitions of questions which sowed confusion about what was being asked, and what supposed question was being supposedly answered. The cited passage is a splendid example of the mess that resulted” (para 34).

It is the duty of arbitrators, the court pointed out, “to oversee the taking of evidence in a manner that avoids this sort of morass. A disciplined exchange of questions and answers is essential to produce an intelligible body of evidence that accurately records what witnesses mean to say and from which inferences can safely be drawn” (para 37).

Much the same can be said of disciplinary inquiries. This is not about legalism or courtroom procedure; it is simply about getting clarity.

GilesFiles on July 30, 2015 at 11:32 am

Comment by PAK le Roux in (2015) 24:12 Contemporary Labour Law 114 at 118 [subscription required]

This decision is an important one for employers who are experiencing increasing levels of theft and other forms of dishonesty in their workplace. Firstly, it accepts unequivocally that the concept of derivative misconduct is applicable to disciplinary matters. Secondly, it provides guidelines as to how it should be applied in practice. Of particular importance is that the duty to disclose arises even if the employer did not know of the misconduct and did not request disclosure.

GilesFiles on August 6, 2015 at 9:39 am

Reported with headnote:
[2015] 9 BLLR 940 (LAC)
Dismissal – “Derivative misconduct” – Requirements stated – Employee charged with failing to disclose knowledge of theft but employer failing to prove actual knowledge – Dismissal unfair.

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Derivative misconduct considered: Suspicion unfair reason

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