G4S Secure Solutions (SA) (Pty) Ltd v Ruggiero NO (CA2/2015) [2016] ZALAC 55 ; (2017) ILJ 881 ; [2016] JOL 37028 (25 November 2016) per Savage AJA (Waglay JP and Landman JA concurring)

The LAC allowed the employer’s appeal and set aside the award.  Although it was not stated in so many words it was held on the facts there was a valid reason to dismiss.  But the award regarding the unfairness of the dismissal was held to be one that could not reasonably have been made by the arbiter.  The security guard was dismissed after 14 years service and a ‘clean’ disciplinary record.  When he applied for employment in 1996 he did not disclose his prior criminal convictions for rape and assault whilst still a youth.  The arbiter found the dismissal substantively unfair and awarded retrospective reinstatement.

Although Lagrange J the LC reviewed and set aside the award, retrospective reinstatement was still awarded.  The LAC overturned that decision, holding that the serious nature of the misconduct engaged in 14 years earlier meant that it was not unfair to dismiss, without any payment instead of notice nor any  severance pay.

Comment:

One could be forgiven for believing that the award was one that fell within the range of reasonableness and should not have been set aside.  The decision is sure to gladden the hearts of many employers but that does not mean it should be followed willy-nilly.  All the relevant circumstances have to be considered on a case by case basis.  Surely there was some doubt as to whether the non-disclosure was gross misconduct?  In the absence of a material breach of contract the security guard should not have been deprived of reasonable notice pay, and arguably even severance pay, as envisaged in ILO Convention of 1982.

The employment relationship by its nature obliges an employee to act honestly, in good faith and to protect the interests of the employer.  The high premium placed on honesty in the workplace has led our courts repeatedly to find that the presence of dishonesty makes the restoration of trust, which is at the core of the employment relationship, unlikely.  Dismissal for dishonest conduct has been found to be fair where continued employment is intolerable and dismissal is “a sensible operational response to risk management”.  Obtaining employment on false pretences whether by misrepresenting qualifications, skills, experience or prior work history has been found to justify dismissal, with it stated in Boss Logistics v Phopi and others that if this were not so, a sanction short of dismissal would only serve to reward dishonesty’. [para 26 without footnotes]

Du Toit et al Labour Relations Law: A Comprehensive Guide 6th ed (LexisNexis 2015) at page 462

Further excerpts without footnotes

Factual background

[1]   The relevant facts in this matter are common cause. When the third respondent applied for employment with the appellant in 1996, he was asked in a written application for employment: “Have you ever been convicted of a criminal offence?” He indicated that he had not and the appellant employed him as a security guard.

[2]   Fourteen years later, on 30 July 2010, the third respondent applied for promotion to the position of controller with the appellant. A criminal record check was undertaken.  It indicated that he had two previous criminal convictions: one for rape in 1982 for which he, being 17 years old at the time, received six lashes; and the second for assault with intent to do grievous bodily harm in 1991 for which he paid a fine of R200.

[3]   On 1 November 2010, the third respondent was notified to attend a disciplinary hearing to answer to an allegation of –

‘misrepresentation and/or dishonesty concerning an application for employment and/or breach of PSIRA Regulations code of conduct’.

[6]   The employer’s disciplinary code states that:

Dishonesty Concerning An Application For Employment – This offence occurs where information provided in support of an application for employment is subsequently found to be false, and such information has a material effect on the employer/employee trust relationship.’

[7]   Section 23(1)(d) of the Private Security Industry Regulation Act 56 of 2001 (PSIRA Act), the operation of which post-dated the third respondent’s employment with the appellant, provides that a person may be registered as a security service provider provided he or she

“was not found guilty of an offence specified in the Schedule within a period of 10 years immediately before the submission of the application to the Authority”.

. . . . .

[11]   At the conclusion of the disciplinary hearing, the third respondent was found guilty of misconduct and was in November 2010 dismissed from his employment with the appellant.

. . . . .

Judgment of Labour Court

[16]   The appellant sought the review of the arbitration award by the Labour Court taking issue with the arbitration award on the basis that the decision reached was not one that a reasonable commissioner could have made on the material before him.

The Labour Court found it “difficult to understand how the arbitrator could reasonably have concluded that [the third respondent] was unaware of the status of his criminal record and could have denied having any criminal conviction”.  The Court found that the third respondent had committed misconduct in failing to disclose his criminal convictions and that the commissioner’s finding was not reasonably justified on the evidence.  The Court agreed with the commissioner that the third respondent had not acted in breach of the PSIRA Act in that the last conviction predated the 10-year period prior to the commencement of the Act.

[17]   Turning to sanction, the Labour Court found that the apparent breach of the PSIRA Act had been the appellant’s primary concern. The Court had regard to the third respondent’s clean disciplinary record, good work history and the fact that the “trust issues arising from the misrepresentation do not appear to have been [the appellant’s] principal concern despite the fact that [the third respondent] was guilty of dishonesty”.  It found that it was reasonable to conclude that the appellant would not have dismissed the third respondent had it believed his employment would not be contrary to the PSIRA Act.

The Court noted that had the appellant’s witnesses testified that in light of the misrepresentation, the third respondent would have been unable to trust him, irrespective of whether the PSIRA Act was breached, a different conclusion might have been warranted.  In the result, the Court a quo reinstated the third respondent into his employment with the appellant retrospective to 1 August 2011.

. . . . .

[23]   With the third respondent having been found to have committed the misconduct alleged, it fell to the Labour Court to determine whether his dismissal was fair. In doing so, the Labour Relations Act 66 of 1995 (LRA) does not compel deference to the decision of the employer but requires rather a consideration of “all relevant circumstances”.  [1]

[24]   The Labour Court’s finding that the third respondent’s dismissal was unfair was predicated on what it considered to have been the primary concern of the appellant, namely that the provisions of the PSIRA Act had been breached. The Court noted that the appellant did not contend that any trust issues had arisen from the third respondent’s misconduct.  This led the Court to find that it was reasonable to conclude that the third respondent would not have been dismissed but for the appellant’s view that employing him was contrary to the provisions of the PSIRA Act.

[25]   In determining the fairness of a dismissal, each case is to be judged on its own merits. Item 3(4) of the Code of Good Practice recognises that dismissal for a first offence is reserved for cases in which the misconduct is serious and of such gravity that it makes continued employment intolerable, with instances of such misconduct stated to include gross dishonesty.  When deciding whether dismissal is appropriate, the Code requires consideration, in addition to the gravity of the misconduct, of personal circumstances including length of service and the employee’s previous disciplinary record, the nature of the job and the circumstances of the infringement itself.[2] Other relevant considerations include the presence or absence of dishonesty and/or loss and whether remorse is shown.  [3]

[26]   The employment relationship by its nature obliges an employee to act honestly, in good faith and to protect the interests of the employer.[4] The high premium placed on honesty in the workplace has led our courts repeatedly to find that the presence of dishonesty makes the restoration of trust, which is at the core of the employment relationship, unlikely.[5] Dismissal for dishonest conduct has been found to be fair where continued employment is intolerable and dismissal is “a sensible operational response to risk management”.[6] Obtaining employment on false pretences whether by misrepresenting qualifications, skills, experience or prior work history has been found to justify dismissal,[7] with it stated in Boss Logistics v Phopi and others[8] that if this were not so, a sanction short of dismissal would only serve to reward dishonesty.

. . . . .

[28]   It is so that the third respondent’s years of service and clean disciplinary record provided mitigation and, as stated in Edcon Ltd v Pillemer NO and Others,[1] were “an important consideration in determining the appropriateness of…dismissal”.[2] However, as was stated by this Court in Toyota SA Motors (Pty) Ltd v Radebe and Others:[3]

‘…Although a long period of service of an employee will usually be a mitigating factor where such employee is guilty of misconduct, the point must be made that there are certain acts of misconduct which are of such a serious nature that no length of service can save an employee who is guilty of them from dismissal.  To my mind one such clear act of misconduct is gross dishonesty…’[4]

[29]   It is so that there existed no risk of repetition by the third respondent of the offence in its precise form and that the damage suffered was limited to his employment in circumstances in which the appellant may otherwise not have employed him. However, the fact remained that the third respondent was employed on false pretenses in circumstances in which he had deliberately concealed the true state of affairs from the appellant.  His conduct was dishonest and constituted a serious breach of the appellant’s disciplinary code.  When confronted with evidence of his misconduct, the third respondent did not express any remorse but blamed his dishonesty first on his lack of knowledge that his offences amounted to convictions and then later on his belief that after 1994 his criminal record no longer existed.

[30]   Having regard to all of these relevant factors, and in spite of the absence of direct evidence showing the breakdown in the trust relationship and the appellant’s misplaced reliance on the provisions of PSIRA, I am satisfied that the sanction of dismissal imposed by the appellant on the third respondent was fair. The false misrepresentation made by the third respondent was blatantly dishonest in circumstances in which the appellant is entitled as an operational imperative to rely on honesty and full disclosure by its potential employees.

It induced employment and when discovered was met with an absence of remorse on the part of the third respondent.  The fact that a lengthy period had elapsed since the misrepresentation, during which time the third respondent had rendered long service without disciplinary infraction, while a relevant consideration, does not compel a different result.  This is so in that the fact that dishonesty has been concealed for an extended period does not in itself negate the seriousness of the misconduct or justify its different treatment.  To find differently would send the wrong message.

[31] In spite of the LRA’s emphasis on progressive discipline, given the nature of the misconduct committed and the absence of any remorse shown and having regard to considerations of fairness, the appellant was entitled to cancel the employment contract and dismiss the third respondent.