All employees have a common-law obligation to their employers to promote and protect the interests of the employer, at all times. This includes informing management of any planned or actual acts of misconduct they have knowledge of. It could, for example, include knowledge of theft, pilferage and fraud.
That said, it’s widely known that employees are often ‘in the know’ when it comes to acts of misconduct committed by other employees, yet they don’t bring it to management’s attention. The reasons for not doing so are varied. An employee may consciously choose not to inform management of misconduct they are aware of, for fear of reprisals from the instigators. It is also quite possible that an employee will not divulge misconduct they are aware of, as they themselves have an axe to grind with the employer.
Regardless, employees have a positive duty to inform management of misconduct of which the employer may be unware; failure to do so is a material breach of such employee’s duty of good faith to their employer.
The CCMA and labour courts have dealt with derivative misconduct on numerous occasions. Earlier this year, the CCMA in Thabiso Ngakane v Wilmar (Pty) Ltd [GAJB9538-18] noted that “While a dismissal on the grounds of derivative misconduct has been sanctioned by the Labour Courts, the onus remains with the employer to prove that the employee was guilty of such misconduct. In that regard the employer would need to produce evidence that there was a reasonable probability that the employee had information that would assist the employer in identifying those guilty of misconduct, and had withheld such information”.
In yet another example, in NUMSA v Commissioner Leon Pillay & others [D02-17], the Labour Court described derivative misconduct as being “a case in which the employer wants to rely on misconduct that is not directly related to the employee’s own wrongdoing, but is based on the employee not providing information that is needed to identify other wrongdoers in circumstances where speaking up is required to maintain the trust relationship, that constitutes a quite distinct ground of misconduct, applicable in a context where not speaking up can destroy an employment relationship”.
The notion of derivative misconduct most recently came to a head in at the Constitutional Court which last month, on 28 June 2019, delivered judgment in the long-standing dispute involving NUMSA obo Khanyile Nkanezi & others v Dunlop & others [CCT202/18].
In short, a violent, protected strike commenced on 22 August 2019. Some perpetrators of violence could be positively identified, others could not. The CCMA Commissioner in the arbitration award noted that “The situation that prevailed in Induna Mills Road during the course of the strike was highly relevant to the derivative misconduct issue. If any of the applicants were present in the group of strikers who . . . [committed the acts of violence] they would either have been perpetrators of principal misconduct or be liable for derivative misconduct on the basis that they knew who the perpetrators of the misconduct were and failed to disclose that information to the respondent”.
In the final analysis, the existence, or otherwise, of derivative misconduct on the part of strikers who participated in the protected strike, but who could not be identified as perpetrators of violence, became the subject matter of a CCMA arbitration hearing, subsequent Labour Court and Labour Appeal Court cases, and ultimately a Constitutional Court matter.
The Concourt identified the source of the concept of derivative misconduct in highlighting that “ Although not mentioned by name as derivative misconduct, the roots of the doctrine lie in an obiter dictum (non-binding statement) by Nugent J in FAWU – In the field of the industrial relations, it may be that policy considerations require more of an employee than that he merely remained passive in circumstances like the present, and that his failure to assist in an investigation of this sort may in itself justify disciplinary action” [Food & Allied Workers Union v Amalgamated Beverage Industries Ltd  ZALAC 1].
When all is said, and done, the ‘takeaway’ from the Concourt judgment is that whilst a derivative duty to disclose exists “As we have seen, this duty was sourced in the contractual duty of good faith without any reference to an employer’s reciprocal good faith obligations. In accordance with the conclusion employees’ safety should have been guaranteed before expecting them to come forward and disclose information or exonerate themselves. That was not sufficiently done”.
In short, this means that derivative misconduct, in strike scenarios, and probably all others, requires employers to ensure that employees who disclose knowledge of misconduct on their colleagues, are safeguarded from harm. This is perplexing for employers, as it now suggests that employees have a valid defence to derivative misconduct allegations, which relies solely on fear of intimidation or harm, regardless of the circumstances.
We know that too severe a sanction in a disciplinary hearing amounts to substantive unfairness.
The dilemma facing employers in the selecting of a sanction, and more especially the sanction of dismissal, was highlighted in the recent (13 June 2019) Labour Appeal court judgment in Hosea Mushi v Exxaro Coal (Pty) Ltd Grootgeluk Coal Mine (Case number JA62/2018.
The facts of the case were quite straight forward, with the background perhaps best summed up in the judgment – “The appellant had been employed by the respondent, Exxaro Coal (Pty) Ltd, at Grootegeluk Coal Mine for 24 years when he was dismissed. On 10 March 2015 at around 22h50, he was on duty driving an oversized coal haul truck, the wheel size of which exceeded the height of two adults. He reported to his foreman that the shovel operator was loading the truck in an unsafe manner. The foreman instructed the appellant to continue loading and undertook to observe the loading process. Shortly thereafter the foreman informed the appellant via radio that he would board the truck at the loading area. The appellant refused to let the foreman board the truck at this area. As the foreman walked towards the loading area the appellant moved the truck forward causing the foreman to have to move out of the way.
At the ensuing disciplinary hearing, the appellant admitted that he had behaved improperly, but not that he had undermined the authority or threatened the life of the supervisor. The disciplinary code, which was stated to be a guideline, provided for a final written warning for misconduct of the nature committed. The appellant was nevertheless dismissed from his employment on 29 April 2015, for having refused to obey an instruction of a foreman, unsafe acts committed while driving the truck and improper behaviour in operating the truck after the foreman was proceeding towards it”.
So there you have it. Unfair said the employee, who referred an unfair dismissal claim at the CCMA where “the parties agreed that the misconduct committed was not in dispute and that the issues for determination by the arbitrator were the appropriateness of the sanction and the issue of consistency since the foreman had not been disciplined”.
I short, the arbitrator agreed, with the arbitration award stating that “‘The three charges are mutated of one another. The number of the charges by mutating them does not make the act to be more severe than it would ordinarily be. In any event, there is no dispute about the fact that it is not a dismissible offence at first instance. The respondent is not correct when it argues that it has a zero-tolerance attitude towards an offence of this nature.’
In finding the sanction of dismissal imposed on the appellant to be inappropriate, the arbitrator had regard to the fact that the appellant had not been charged with gross insubordination, there were no aggravating circumstances present to prove that progressive discipline was inappropriate, the appellant had a long period of service, a clean service record and had shown remorse for his conduct. The dismissal was found to be unfair and the appellant was reinstated retrospectively into his employment with the respondent, with no loss of remuneration and back pay awarded in the amount of R77 398.72. A final written warning was imposed on the respondent operative from the date of his reinstatement, to expire on a date as prescribed by the respondent’s disciplinary code”.
A Labour Court review, however, disagreed with the Commissioner, and held that “The Court took the view that it did not matter that the misconduct committed by the appellant had not been termed “gross” insubordination and that since the appellant had admitted endangering the life of the foreman, it was inconceivable that dismissal was not a fair sanction. The award of the arbitrator was therefore set aside on review on the basis that it was so unreasonable that no other reasonable arbitrator could have come to the same conclusion. The award was substituted with an order that the dismissal of the appellant was fair, with no order as to costs made”.
The Labour Appeal Court, in turn, disagreed with the Labour Court, holding that “While health and safety issues, particularly in the mining industry, is of paramount concern, no evidence was put up to show that the foreman’s life was endangered as a result of the appellant’s conduct. The appellant admitted that he had erred in his conduct and showed remorse for it. The arbitrator’s finding that the three charges related to the same misconduct did not amount to an irregularity in the conduct of proceedings when regard is had to nature of the misconduct, which the parties had agreed to be common cause. In addition, the failure to charge the appellant with “gross” misconduct did not alter the nature or degree of the misconduct committed on the facts of this matter. Nevertheless, the arbitrator had regard to the material before him in the manner he was required. This included that the respondent had a clean disciplinary record, long service and the disciplinary code recommended a final written warning for the type of misconduct committed. Endorsing the concept of corrective or progressive discipline, the arbitrator arrived at the conclusion that the imposition of the sanction of dismissal was too harsh”.
Our labour relations consultancy is in its 25th year, and this has inclined our team to reminisce over our journey, and prompted me to recall the trends and developments over time. Labour relations is seldom viewed dispassionately. It is a field which spans a multitude of collective and individual workplace interactions and experiences, from constructive relationship building initiatives to often sizzling adversarialism.
My graduation from UCT in the early 1980’s coincided almost exactly with the dawn of the present-day employment law, and labour relations regime which prevails today. This itself may sound strange, especially if one recalls that apartheid was still at its height, and the release of nelson Mandela, and the dawn of a new democratic South Africa was over a decade away. Even so, as early as the mid 1980’s, the concept of fairness in discipline and dismissal was already becoming prominent, as espoused by UNISA’s Professor Nic Wiehahn, a colourful character who was also renowned from his colourful neckties at the time.
It was also the time at which the so-called emerging Black unions began to increase in prominence, and display competent and powerful leadership, with Cyril Ramaphosa’s National Union of Mineworkers leading the way. Organised labour was still none the less highly oppressed by the P W Botha Nationalist government. At the time, and quite understandably, organised labour would put employers under enormous pressure to send a ‘telegram’ to the Minister of Police, to demand the release of union officials who had been detained without prosecution, for simply being union officials.
Over time, the then ‘Personnel Department’ morphed into being referred to in various ways, including the ‘Human Resources Department’, the ‘Human Capital Department’ and more recently, “People and Culture’, all of which are labels to describe the team within an organisation charged with various responsibilities including staff administration, training and development, recruitment and selection, employee wellness, and of course, labour relations.
In our view, the trade union landscape his significantly changed over time. There is no doubt that the evolution of COSATU in the mid-1990’s brought greater cohesion to the realm of organised labour. Alignment with the ANC added impetus to COSATU’s breadth of influence. But it didn’t last. Even though union membership in the Public sector remains high, the split within COSATU, resulting in the formation of rival union federation SAFTU, it has negated the role of trade unions in the Private sector, which currently has about one in eight employees being union members. Overall, only about twenty five percent of employees are union members.
Another consequence of the split in COSATU is the increase in numbers of trade unions, of a lesser size. This in turn has led to an increase in union rivalry, and by and large, generally less effective trade unionism.
Trade unions have, from the very beginning, suffered from a glut in competent leadership, due primarily to the fact that competent trade union leaders are frequently fast-tracked into governmental positions.
No analysis of the SA labour relations landscape would be complete without a look at the CCMA, and bargaining Council dispute resolution centres.
The CCMA is probably approaching nine hundred labour disputes being referred to it every working day. About seventy five percent of those cases are ‘resolved’ or ‘conciliated’, either because one or both parties are fearful of losing at arbitration, or the employer is willing to pay the ex-employee a settlement sum so as to avoid the nuisance factor associated with arbitration.
The introduction of minimum wage legislation and the recent appointment of the CCMA to address the non-payment of salaries, will probably see one thousand labour disputes being referred every working day, in the not too distant future.
Employers still lose nearly fifty percent of all arbitration hearings. This percentage is almost certainly skewed by the SMME sector who fare far more poorly than larger, more sophisticated employers. We remain of the sincere view that there is no reason why employers should have poor outcomes at the CCMA, if they apply the fundamentals of our discipline and dismissal protocols.
Perhaps the biggest challenge facing employers in the labour relations space is that they frequently don’t know what they don’t know. This results in often fatal flaws being made in, for example discipline cases, which cannot then subsequently be reversed. It must still be borne in mind that approximately eighty percent of all labour disputes are discipline related, and competence in managing discipline, misconduct cases, requires close attention and training.
And finally, increasing employment law continues to decrease labour flexibility. Some would also argue that our employment law regime is over regulated, and too job security, than job creation focussed; you can go ahead and put our firm in that camp.
Our courts have rendered contradictory judgments regarding whether, or not, employers are allowed to schedule disciplinary hearings after an employee has resigned. In the Public sector, due to a prevailing collective agreement, the position is quite clear, an employee may resign at any time prior to a disciplinary hearing being finalised, at which time the disciplinary hearing stops. This enables, wrongly in our view, employees to avoid possible sanction for misconduct, serious or not.
But that’s the Public sector. The position in the private sector has been less clear. On 24 May 2019, the Labour Court, in Tristyn Naidoo & Sedayshum Naidu v Standard Bank SA (Ltd) & 1 other (Case number J1177/19) was once again required to answer this question.
In this instance, the applicant’s challenged the jurisdiction of the respondent “to continue with the disciplinary hearing post their resignation” and to interdict the respondent from proceeding with their scheduled disciplinary hearing post their resignation.
Both applicants had been employed as equities traders up until their resignation. On 4 March 2019, the applicants were issued with notices of precautionary suspension, which noted that “the nature of the allegations against the applicants was serious and that if proven, could impact on the trust relationship between them” and the respondent. After having attended various meetings with forensic investigators, the applicants were issued with notices to attend a disciplinary hearing on 16 and 22 May 2019. Two allegations of “gross misconduct”, and one of “dishonesty” were levelled against the two applicants. The applicants tendered their letters of resignation the same day “with immediate effect”.
Later that day, the applicants received identical correspondence from the employer’s Head of Human Resources, amongst other things, stated that “the Bank is not amenable to accepting your immediate resignation and will still hold you to your 28 days’ notice period as contractually obligated and will be continuing with our internal process. The disciplinary enquiry will therefore proceed as scheduled ..”.
The applicants replied to this by stating that “it is trite in law that my resignation is a unilateral termination of the employment contract and is therefore not subject to Standard Bank’s acceptance or approval. In light of the fact that this is an effective termination of the employment relationship, Standard Bank cannot proceed against any person who is no longer an employee of the company”.
The applicants then approached the Labour Court, which was required to determine whether “the applicant’s immediate resignation had the effect of immediately terminating the employment relationship and whether Standard Bank has the right to hold the applicants to their notice periods and if so, whether it can proceed with the disciplinary enquiries against them despite their resignation with immediate effect”.
In reviewing the effect of resignation in case law, the Court began by referring to Sihlali v SA Broadcasting Corporation Ltd (2010) 31 ILJ 1477 (LC), which held that resignation is a unilateral termination of a contract of employment by the employee. This view was reiterated in Toyota SA Motors (Pty) Ltd v CCMA & others (2016) 37 ILJ 313 (CC), which held that “Where an employee resigns from the employ of his employer and does so voluntarily, the employer may not discipline that employee after the resignation has taken effect. That is because, once the resignation has taken effect, the employee is no longer an employee of that employer and that employer does not have jurisdiction over the employee any more”.
The Labour Court held that Standard Bank “has no power to discipline the first and second applicant’s subsequent to their resignation with immediate effect, and Standard Bank was interdicted from continuing with the disciplinary enquiries.
The Court acknowledged that the applicants were in breach of their contracts of employment. However, the remedy available to the ‘employer’ is to either “hold the employee to the contract and seek an order of specific performance requiring the employee to serve the period of notice. Alternatively, the employer may accept the employee’s repudiation, cancel the contract and claim damages”.
The judgment noted, in essence, that holding disciplinary hearings after an immediate resignation, was a form of employer “self-help .. and this Court can’t sanction” such self-help.
So, there we have it, in cases of immediate resignation, an employee does not work out their notice period, and the resignation takes effect immediately.
Over time, there has, to some degree, been conflicting law regarding the extent of the admissibility of polygraph test results in disciplinary hearings. More especially, this has related to whether an employer can rely solely on a failed polygraph test to prove the guilt of an employee on the balance of probabilities.
Employers are all too frequently of the mistaken impression that a failed polygraph test is quite enough to prove guilt; not so say our courts.
The recent Labour Court matter of Mustek v Tsabadi and others (case no. JR 2732/2010: Judgment day 2 March 2013) reiterates and reconfirms the extent to which polygraph test results may be utilised to prove guilt in disciplinary hearings.
In this case, eight laptop computers went missing from the employer’s premises. The employer elected to administer polygraph tests in regards all employees who had access to the area from which the laptop computers had gone missing. Four of the sixty-seven employees tested failed for the polygraph test, and were dismissed based on this evidence alone.
Judgment in this case emphasised certain important factors to be taken into consideration regarding the admissibility and extent to which polygraph test results may be utilised in disciplinary hearings. The Court held that “our Courts have approached the use of polygraph tests with much circumspection, and it is now accepted that the result of a properly conducted polygraph is evidence in corroboration of the employer’s evidence and may be taken into account as a factor in assessing the credibility of a witness and in assessing the probabilities”.
It became apparent that in a separate arbitration hearing at the CCMA, another commissioner had in fact condoned the admissibility of the polygraph tests alone, and admitted this as sufficient evidence to prove guilt on the balance of probabilities. In the Labour Court judgment, the judge however noted that commissioners are not bound to follow awards of fellow commissioners, even if two separate arbitration hearings are faced with the same facts.
More especially, it was held that “it is factious to suggest that one commissioner should complacently endorse the finding of another commissioner were the two matters have their origins in the same incident. The rationale for the first commissioner’s decision has to be analysed. There can be any number of reasons why that commissioner arrived at the conclusion he did. To argue that a commissioner is bound by the findings of another commissioner is repugnant to the rules of precedent”.
The judgment continued that in essence, polygraph test results are indeed admissible, in disciplinary hearings, only insofar as they corroborate or support more direct evidence. It is quite clear that our law has established a now well established precedent that if the only evidence leveled against an employee is a failed polygraph test, it will never be sufficient proof in its own right to prove that the employee is guilty on the balance of probability. That is not to say of course that polygraph test results are inadmissible. On the contrary, they are. However, insofar as polygraph tests ought to be admitted in a disciplinary hearing, and indeed an arbitration hearing, such failed polygraph test results are only of value to the extent that, and insofar as they do, support more direct evidence introduced during the disciplinary or arbitration hearing.
When all is said, and done, polygraph test results have value as corroborating evidence only, and will never be sufficient as free standing evidence, to prove a case on a balance of probabilities.