Fraudulent medical certificates warrant dismissal every day of the week

Fraudulent medical certificates warrant dismissal every day of the week

Make no mistake, a sizeable percentage of medical certificates, colloquially known as sick notes, presented to employers daily, are fraudulent.

Many employers will relate to the scourge of Monday and Friday “sick leave-itis”, which is a major contributor to sick leave typically being in excess of 15% on a daily basis.  This is a significant labour cost for employers.

It has been estimated by Occupational Care South Africa that approximately 40% of all employees claiming sick leave, are not physically ill, and that  South African businesses are losing as much as 17% of their payroll every year due to absenteeism.  This punishes already cash-flow strapped employers unfairly.

In the Labour Court case of BP Southern Africa v The National Council for the Chemical Industry & others (Case number JR2000.12), the employee had been dismissed for unauthorised absence from work and the submission of fraudulent medical certificates to the company. After a period of absence from work, the employee reported for duty and presented three copies of medical certificates issued by three different practitioners.

The first medical certificate, covering the first few days of the employee’s absence from work, declared the employee unfit to perform his duties due to cystitis.  The second period of absence was supported by a medical certificate from another medical practitioner, who booked the employee off work for migraines and depression.  The third leg of period of absence was supported by a medical certificate from a third medical practitioner, who booked the employee off sick for bronchitis.

The Judgment noted that on presenting the three medical certificates from three different medical practitioners covering the period of absence “an Occupational Health Consultant for the company also testified that he had assessed the copies of medical certificates submitted by (the employee), and had thereafter contacted the practitioners that had issued them. Dr Matjekane’s rooms had no evidence of (the employee’s) attendance at all, whilst Dr Bikitsha became abusive when contacted. Dr Adam on the other hand indicated that (the employee) had problems with alcohol abuse. Dr Manjra had concluded that (the employee) had an alcohol problem and that HR should intervene. (The employee) was then referred to a Psychiatrist who after consultations on 7 February 2012, concluded that he was not mentally ill and was fit to resume work”.

At the CCMA arbitration hearing, the Commissioner held that “It was clear that the three medical certificates submitted by (the employee) did not reflect his true medical condition and the real reason for his absence between 9 and 20 January 2012, and accordingly his absence was unauthorised”, and that the employee “presented false medical certificates to BP well knowing that they were false and therefore did so with fraudulent intent, causing potential prejudice to BP”.

It was however apparent that the employee had an alcohol dependency problem.

The CCMA arbitration award held that, notwithstanding the identified fraudulent medical certificates “the sanction of dismissal was unfair as it gave BP an opportunity to get rid of (the employee) instead of following the more cumbersome route of rehabilitation”.

The employer sought to review this finding at the Labour Court.

The Labour Court held that “there is no hesitation in concluding that the Commissioner went on a frolic of his own, and completely misconstrued the nature of the enquiry before him based on the reason for the dismissal and evidence led in that regard. On his own, he had raised the issue whether the core of the dispute was not a matter of incapacity due to alcohol abuse and whether (the employee) should not undergo rehabilitation treatment for alcohol abuse. This was indeed irregular, in that, 25.5.1 It was never BP’s case nor that of (the employee) that the dismissal was related to alcohol abuse and incapacity, and that BP used the two charges that led to a dismissal as a smokescreen. Any such conclusions could only have been reached if pleaded by (the employee), and also if ultimately proven on the facts;  25.5.2 There was no evidence led by (the employee) that his alcohol problems had led to his alleged incapacity, or the reason for his absence, until probed and prompted by the Commissioner; 25.5.3 Only after being prompted by the Commissioner did (the employee) indicate that he was a heavy drinker, which revelation was not only opportunistic, but also evidence BP had not been aware of, or which it was afforded an opportunity to rebut; 25.5.4 There was evidence that (the employee) had been counselled before in regard to his absenteeism and bad attendance record; 25.5.5 The copies of fraudulent medical certificates submitted by (the employee), even if they were to be accepted, had not indicated that he had alcohol problems or was incapacitated, and the Commissioner had accepted that they were fraudulent.

25.5.6 (The employee) was not decisive as to whether he sought assistance or not in relation to his alleged alcohol abuse problems. On his version, he had not signed the consent forms to volunteer for rehabilitation, and even if it had dawned on him that he should have volunteered for rehabilitation, BP had already decided to take steps against him on the basis of his dishonest conduct; 25.5.7 The Commissioner ultimately during the course of the proceedings had realised that the details surrounding alcohol abuse and alleged incapacity were not placed before him, and he had nevertheless continued to make his ultimate findings on those issues.

25.5.8 Despite having concluded that copies of the medical certificates were fraudulent, and thus (the employee) was on unauthorised absence, the Commissioner nevertheless continued to conclude, and without any basis, that his absence was due to being incapacitated to do his work due to alcohol abuse”.

Retention agreements are hand-outs with handcuffs

Retention agreements are hand-outs with handcuffs

The recent Labour Appeal court judgment delivered on 26 February 2019, in Solidarity OBO Scholtz v Gijima Holdings (Pty) Ltd [Case number JA131/2017] dealt with the subject of employee loyalty incentive scheme agreements, whereby an employee agrees to remain in the employ of the employer in return for him or her being paid a retention bonus by the employer to do so.

In this case, the agreement was entitled Employment Loyalty Incentive Scheme Agreement (ELISA).  It is not unusual for employers to enter into such agreements with employees from time to time, to ensure that they remain in the employ of the employer for a specified length of time.  This typically ensures continuity of service by an employee, and amongst other things, gives the employer peace of mind that the employee will not leave them in the lurch by resigning before the completion of the period for which the retention bonus has been paid.

The facts of the case were, by and large, not in dispute.  The ELISA entered into by the employer and the employee, incorporated a clause which read that “Where the beneficiary terminates its employ with the company after the effective date and before the expiry of the initial period of 12(twelve) months, (the “initial Period”), the beneficiary shall repay the full amount received by the beneficiary in terms of A.5.1 of annexure A”.

The Labour Appeal Court judgment noted in this regard that “Apparent from Clause 7 above is that a beneficiary of the scheme, having received a benefit in advance, before the commencement of the relevant retention cycle, would be required to remain in the employ of the respondent for a period of 12 months in respect of each retention bonus already paid.”

The judgment continued that retention bonus agreements of this nature were not a new phenomenon, and that, for example, they had been dealt with in Bonfiglioli SA (Pty) Ltd v Panaino (2015) 36 ILJ 947 (LAC), which noted that “A retention bonus, as the phrase suggests, is paid in order to retain the services of an employee for a specified period. Payment of the retention bonus is contingent upon the employee entering into an agreement with the employer to complete a specific period of service with the employer. The bonus can be paid after the expiration of the period, during the period or at the beginning of the period, depending on the agreement between the parties. The purpose of a retention bonus is, inter alia, to avoid instability caused by employees, especially senior employees, who would constantly search for greener pastures; to retain institutional memory and to promote a seamless continuity of operations.”

In another judgment,  Renaissance BJM Securities (Pty) Ltd v Group (2016) 37 ILJ 646 (LAC), retention agreements were deemed to be akin to hand-cuffs – “Retention agreements are therefore hand-outs with handcuffs or cheques with chains. The employee is given money and in return, he/she must give up his/her freedom to leave the employ of the employer. It curtails the employee’s right to jump ship even when the ship is being steered straight in the direction of an iceberg.”

In this case, the employer notified the employee, and indeed other employees who had signed similar agreements, that the agreement would not be continued beyond its initial three-year term.  The employee objected to this.

None the less, the employer paid the employee the third, and final, retention bonus for year three of the agreement.  Approximately one month later, the employee tendered his resignation.

The employer deemed this to amount to a breach of the retention agreement, and dealt with this by deducting the Rand value of the bonus from the payments due to the employee on termination.

The Labour Court subsequently held that the employer was entitled to make this deduction, and the employee then sought to appeal this judgment at the Labour Appeal Court.

The Labour Appeal Court upheld the Labour Court judgment, finding that “Clause 7.1 of the ELISA makes it plain that where a beneficiary terminates his/her employ with the company, after the effective date and before the expiry of the retention period of 12 months, he/she shall repay the full amount received in terms of A.5.1 of the annexure A to the agreement.”