Recent Labour Appeal Court judgment – Miyambo v CCMA (PPC Ltd) ; [2010] 10 BLLR 1017; [2010] JOL 25840 (LAC) per Patel JA (McCall & Hendricks AJJA concurring).

“It is appropriate to pause and reflect on the role that trust plays in the employment relationship.   Business risk is predominantly based on the trustworthiness of company employees.   The accumulation of individual breaches of trust has significant economic repercussions.   A successful business enterprise operates on the basis of trust”.

“In De Beers Consolidated Mines Ltd v CCMA & others [2000] 9 BLLR 995 (LAC) at paragraph [22], the court, per Conradie JA, held the following regarding risk management:

‘Dismissal is not an expression of moral outrage; much less is it an act of vengeance.   It is, or should be, a sensible operational response to risk management in the particular enterprise.   That is why supermarket shelf packers who steal small items are routinely dismissed.   Their dismissal has little to do with society’s moral opprobrium of a minor theft; it has everything to do with the operational requirements of the employer’s enterprise’.”

The facts [paras [2] and [3]

“Miyambo was employed by the Company on 30 April 1982 and had at the time of his dismissal a clean record.   On 12 October 2007, whilst Miyambo was on the night shift duty, he found scrap metal which had been thrown into a skip.   He was at all material times aware that the scrap metal was not going to be thrown away but rather that it would be sold by the Company.   Miyambo decided to help himself to the scrap metal with the aim of fixing his stove.   After he had finished his duty a security guard, who was on duty at the Company’s pedestrian gate, found a few pieces of scrap metal in Miyambo’s bag during a routine search.   According to Company policy, a clearance permit or “pass-out” is required for the removal of company property.   This fact was well known to Miyambo because he had on previous occasions obtained the permission of the Company when he removed property belonging to the company.

Miyambo could not produce the necessary pass-out allowing him to remove the scrap metal.   On 16 October he was suspended from his duties and handed a notice to attend a disciplinary enquiry.   Miyambo was at a subsequent disciplinary enquiry charged with theft of scrap metal and found guilty.   A recommendation of dismissal was made by the chairperson of the disciplinary enquiry and the Company adopted the recommendation and dismissed Miyambo.   His subsequent appeal was unsuccessful”.

To cut a long story short the CCMA reinstated him but Jammy AJ in the Labour court reviewed and set aside the award, holding that the conclusions drawn by the commissioner were not rational because they were irreconcilable with the factual findings.   The LAC disallowed the former employee’s appeal and effectively upheld the employer’s termination of employment because PPC has proved that after following a fair procedure there was a valid and fair reason to terminate employment related to the employee’s conduct.

In para [13] Patel JA sets out the approach to be adopted on the role that trust plays in the employment relationship (see the extracts above).   Patel JA refers to a number of judgments in support of his decision that dismissal has everything to do with operational requirements.

This is important because there is a general misconception that the expression “operational requirements” only applies to termination of employment when the reason is based on operational requirements, as stated in section 189 of the LRA.

In terms of section 213 of the LRA “operational requirements” means “requirements based on the economic, technological, structural or similar needs of an employer”.

As is clear from that definition and the approach adopted by the LAC in the above judgments termination of employment has everything to do with risk management in all aspects of the employer’s business.