Concourt provides guidelines on an employer’s duty of good faith in derivative misconduct cases

Concourt provides guidelines on an employer’s duty of good faith in derivative misconduct cases

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 [1994] 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.

Labour Court Reiterates the Value of Polygraph Tests

Labour Court Reiterates the Value of Polygraph Tests

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.

Circumstantial evidence if persuasive, can prove guilt

Circumstantial evidence if persuasive, can prove guilt

Circumstantial evidence is used to prove guilt when there were no eye witnesses.  No-one observed the misconduct, yet there are facts regarding the circumstances in which the misconduct occurred, which points to a most probable guilty person.

If you like, circumstantial evidence is indirect evidence, which can be distinguished from direct, eye witness evidence.  In Principles of Evidence (Schwikkard and van der Merwe: 2005), circumstantial evidence is said to furnish “indirect proof”, with the court, which in disciplinary hearings would include chairpersons, being “required to draw inferences” which “must comply with certain rules of logic.   Schwikkard and van der Merwe also tell us that “In civil proceedings, the inference sought to be drawn must also be consistent with all the proved facts”.

Circumstantial evidence can, and often is, used fairly in disciplinary hearings, to prove guilt on a balance of probabilities, as is required.  It follows that circumstantial evidence is also entirely admissible in arbitration hearings.  This is typically, amongst other things, premised on section 138(1) of the Labour Relations Act, which states that “The commissioner may conduct the arbitration in a manner that the commissioner considers appropriate in order to determine the dispute fairly and quickly, but must deal with the substantial merits of the dispute with the minimum of legal formalities”.

That’s not to say that circumstantial evidence is unquestionably admissible.  Our case law provides ample evidence of the manner in which circumstantial evidence will be admitted, and considered to be compelling in proving an employee’s guilt on grounds of misconduct.

Quite how circumstantial evidence is to be assessed in cases, was summarised in S v Reddy and Others 1996 (2) SACR, which held that ““In assessing circumstantial evidence, one needs to be careful not to approach such evidence upon a piece-meal basis and to subject each individual piece of evidence to a consideration whether it excludes the reasonable possibility that the explanation given by an accused is true. The evidence needs to be considered in its totality. It is only then that one can apply the oft quoted dictum in R v Blom 1939 AD 188 at 202-203, where reference is made to two cardinal rules of logic which cannot be ignored. These are, firstly, that the inference sought to be drawn must be consistent with all the proved facts and, secondly, the proved facts should be such “that they exclude every reasonable inference from them save the one sought to be drawn”.

The approach to be adopted when an inference is sought to be drawn from other facts was summarised in Cooper and Another NNO v Merchant Trade Finance Ltd [2000 (3) SA 1009 (SCA)].  Zulman JA observed that “It is not incumbent upon the party who bears the onus of proving an absence of an intention to prefer to eliminate by evidence all possible reasons for the making of the disposition other than an intention to prefer. This is so because the Court, in drawing inferences from the proved facts, acts on a preponderance of probability. The inference of an intention to prefer is one which is, on a balance of probabilities, the most probable, although not necessarily the only inference to be drawn. In a criminal case, one of the “two cardinal rules of logic” referred to by Watermeyer JA in R v Blom is that the proved facts should be such that they exclude every reasonable inference from them save the one to be drawn. If they do not exclude other reasonable inferences then there must be a doubt whether the inference sought to be drawn is correct. This rule is not applicable in a civil case. If the facts permit of more than one inference, the Court must select the most “plausible” or probable inference. If this favours the litigant on whom the onus rests he is entitled to judgment. If, on the other hand, an inference in favour of both parties is equally possible, the litigant will not have discharged the onus of proof.”

Distell Ltd vs CCMA (2014) 35 ILJ 2176 (LC) reminds us that “The danger with circumstantial evidence on the other hand, is that in addition to the possibility that a witness may be lying or mistaken, the evidence may be capable of more than one logical explanation …….. thus circumstantial evidence may, at first blush, appear to be much more compelling than it really is, largely because the trier of fact does not have sufficient knowledge or understanding of the particular field to be able to question the evidence and its potency or because the trier of fact does not understand how to make sense of it”.

The conflicting evidence conundrum

The conflicting evidence conundrum

Chairpersons in disciplinary hearings are frequently faced with conflicting evidence or testimonies from two witnesses describing the same event.  For example, an employee may testify that they were not sleeping on duty, whilst a manager may testify that they were.  Both witnesses testify with zeal and conviction, but one is telling the truth, and the other isn’t.  But how can this be determined?

This conundrum is faced by chairpersons in workplace disciplinary and appeal hearing, by Commissioners in CCMA and Bargaining Council arbitrations, and by judges in the labour courts.

Case law has much to say about resolving this dilemma in arbitration awards and labour courts judgments, invariably being referred to as the challenge faced by adjudicators of hearings, when faced with conflicting versions.

The point of departure is the understanding that, in disciplinary hearings, the employer has the burden of proof, which simply means that the employer has the obligation to prove, on a balance of probabilities, that the employee is guilty of the allegation in question.  It can also be described as the employer’s duty to prove that the employee is “probably’ guilty.  This principle is also important when faced with conflicting versions, or evidence.

The bottom line is that the adjudicator, or chairperson, must decide which of the two conflicting versions of the same event or observation, is most probable.

Our courts have addressed how one is to deal with cases in which there are two irreconcilable versions.  In Stellenbosch Farmers’ Winery Group Limited and Another v Martell Et Cie and Others 2003 (1) SA 11 (SCA) at page 13 paragraph 5, the test is formulated as one in which “The technique generally employed by courts in resolving factual disputes of this nature may conveniently be summarised as follows.  To come to a conclusion on the dispute issues a court must make findings on (a) the credibility of the various factual witnesses; (b) their reliability; and (c) the probabilities.  As to (a), the court’s finding on the credibility of a particular witness will depend on its impression about the veracity of the witness.  That in turn will depend on a variety of subsidiary factors, not necessarily in order of importance, such as (i) the witness’ candor and demeanour in the witness-box, (ii) his bias, latent and blatant, (iii) internal contradictions in his evidence, (iv) external contradictions with what was pleaded or put on his behalf, or with established fact or with his own extracurial statements or actions, (v) the probability or improbability of particular aspects on his version, (vi) the calibre and cogency of his performance compared to that of other witnesses testifying about the same incident or events.” 

 In Masilela v Leonard Dingler (Pty) Ltd (2004) 25 ILJ 544 (LC) it was stated that:  “The credibility of the witnesses and the probability and improbability of what they say should not be regarded as separate enquiries to be considered piecemeal. They are part of a single investigation into the acceptability or otherwise of the respondent’s version”.

Yet further guidance was provided in Sasol Mining (Pty) Ltd v Ngqeleni NO and Others (2011) 32 ILJ 723 (LC), in which it was held that “The commissioner was obliged at least to make some attempt to assess the credibility of each of the witnesses and to make some observation on their demeanour. He ought also to have considered the prospects of any partiality, prejudice or self-interest on their part, and determined the credit to be given to the testimony of each witness by reason of its inherent probability or improbability. He ought then to have considered the probability or improbability of each party’s version. The commissioner manifestly failed to resolve the factual dispute before him on this basis” and that “the arbitrator failed to have any regard to the credibility and reliability of any of the witnesses, nor did he have regard to the inherent probabilities of the competing versions before him. That failure, and the fact that the award clearly may have been different had the commissioner properly acquitted himself, renders the award reviewable on account of a gross irregularity committed by the commissioner in the conduct of the arbitration proceedings”

To put it plainly, when a disciplinary hearing chairperson is faced with two conflicting versions, it is important to weigh the evidence that is tendered, with a view to arriving at a version that is most probable.

So there you have it.  When it’s one person’s word against another, one version can be preferred over the other, when there are sound reasons to do so.

The Assign Concourt TES Judgment tested at the CCMA

Just over a year ago the Concourt handed down judgment in the Assign Services (Pty) Ltd v Numsa and Others (case number CCT194/17) case.  This judgment dealt with the question of who has an employment relationship with a labour broker employee, deployed at the client of a labour broker for in excess of three months.  The Assign Concourt judgment concluded that the so-called “dual employment interpretation is the correct one” meaning that after three months, the client of the labour broker, referred to as a temporary employment service (TES) in the Labour Relations Act, is the only employer for the purpose of the Labour Relations Act, whilst the labour broker remains the employer for the purposes of the Basic Conditions of Employment Act.

A recent CCMA arbitration award (dated 22 March 2019) addressed aspects of the Concourt judgment in that the Applicants made application to be deemed indefinite employees of the client of the labour broker, at which they had been deployed for in excess of three months, and furthermore sought “to receive the same benefits as employees of the client” performing the same or similar work.  It was not in dispute that the three applicants were employed by the labour broker, two of which were employed as fork lift drivers, and the third as an acceptance clerk.  It was furthermore not disputed that the three labour broker employees had been deployed at their client for in excess of three months.  Indeed, the client of the labour broker also conceded that it was the applicant’s employer for purposes of the Labour Relations Act.

This case dealt with section 198A (3)(b)(i) and (ii) as well as section 198A (5) of the Labour Relations Act.  It was noteworthy in this case that it was undisputed that all forklift drivers deployed at the labour brokers premises, were employed by the labour broker, as the client did not employ any forklift drivers themselves directly.  In motivating their claim for permanent employment with the client, their application to receive the same benefits as employees of the client’s employees performing the same or similar work, the applicants argued that even though the client did not employ any forklift drivers themselves, they were of the opinion that “the position of cargo controller is sufficiently similar to theirs and thereof the position of cargo controller ought to be regarded as the comparator”.  In simple language, the forklift driver Applicants were of the view that even though the client did not employ forklift drivers per se, the position of forklift driver could be equated with that of a cargo controller, a position which did exist within the ranks of the client.

As far as the acceptance clerk applicant was concerned, “there was no evidence that (the employer) employs any acceptance clerks, and therefore no position of comparator was placed” before the Commission.

By virtue of the fact that the applicants had between 2 to 5 year’s service, in other words in excess of three months, it was apparent that the applicants did not perform a temporary service, and therefore the deeming provision in terms of section 198A (3)(b) of the Labour Relations Act, was applicable.  Indeed, “all parties conceded to this”.  This meant of course that the client was deemed to be the employer.  The next thing to address was whether the position of forklift driver could be equated with that of a cargo controller, a position which did exist in the organogram of the client.  The Commissioner held that “whilst some of the duties do seem to overlap, the evidence supports the conclusion that the two jobs are different in many respects.  The job of cargo controller carries more responsibilities and additional tasks which the forklift drivers do not perform”.  The award continued that “forklift drivers do not operate in the same full capacity of cargo controllers”.  For this reason, it was held that “on an assessment of the evidence, I find that the two positions are not the same or sufficiently similar to warrant a conclusion that the applicant’s must be treated on the whole not less favorably than cargo controllers employed by the client”.  For this reason, it was held therefore that section 198A (5) of the Labour Relations Act should not be invoked.

“In respect of the acceptance clerk, no comparator was placed before me.  It was established as common cause that Swissport does not employ any other acceptance clerks.  A deemed employee must be treated on the whole no less favorably than an employee of the client performing the same or similar work.  In the circumstances as there were no comparators employed by the client, the Applicant’s cannot succeed in this claim”.

The award therefore reinforces the notion that when drawing a comparison between the work of a deployed labour broker worker, and that of an employee employed at the client, the obligation to treat deemed employees no less favorably that their purported counterparts employed by the client, only arises in circumstances where they are doing the same or similar work.  Insofar as there is no comparator, or the work is not sufficiently the same or similar, the obligation to treat the placed labour broker employee (the deemed employee), no less favourably, is not required.  This award reaffirms the notion that section 198A (3) of the Labour Relations Act, read together with the Assign Concourt judgment, reaffirms the notion that the deeming provision results in the client becoming the employer of the placed labour broker employee after three months of employment, for purposes of the Labour Relations Act only.  For this reason, the award provided that “the Applicants are deemed to be employed on an indefinite basis in terms of section 198A (3)(b)(i) and (ii) of the LRA by Swissport SA (Pty) Ltd (the client) which is their employer for the purposes of the LRA”.

The Assign Concourt TES Judgment tested at the CCMA

The Assign Concourt TES Judgment tested at the CCMA

Just over a year ago the Concourt handed down judgment in the Assign Services (Pty) Ltd v Numsa and Others (case number CCT194/17) case.  This judgment dealt with the question of who has an employment relationship with a labour broker employee, deployed at the client of a labour broker for in excess of three months.  The Assign Concourt judgment concluded that the so-called “dual employment interpretation is the correct one” meaning that after three months, the client of the labour broker, referred to as a temporary employment service (TES) in the Labour Relations Act, is the only employer for the purpose of the Labour Relations Act, whilst the labour broker remains the employer for the purposes of the Basic Conditions of Employment Act.

A recent CCMA arbitration award (dated 22 March 2019) addressed aspects of the Concourt judgment in that the Applicants made application to be deemed indefinite employees of the client of the labour broker, at which they had been deployed for in excess of three months, and furthermore sought “to receive the same benefits as employees of the client” performing the same or similar work.  It was not in dispute that the three applicants were employed by the labour broker, two of which were employed as fork lift drivers, and the third as an acceptance clerk.  It was furthermore not disputed that the three labour broker employees had been deployed at their client for in excess of three months.  Indeed, the client of the labour broker also conceded that it was the applicant’s employer for purposes of the Labour Relations Act.

This case dealt with section 198A (3)(b)(i) and (ii) as well as section 198A (5) of the Labour Relations Act.  It was noteworthy in this case that it was undisputed that all forklift drivers deployed at the labour brokers premises, were employed by the labour broker, as the client did not employ any forklift drivers themselves directly.  In motivating their claim for permanent employment with the client, their application to receive the same benefits as employees of the client’s employees performing the same or similar work, the applicants argued that even though the client did not employ any forklift drivers themselves, they were of the opinion that “the position of cargo controller is sufficiently similar to theirs and thereof the position of cargo controller ought to be regarded as the comparator”.  In simple language, the forklift driver Applicants were of the view that even though the client did not employ forklift drivers per se, the position of forklift driver could be equated with that of a cargo controller, a position which did exist within the ranks of the client.

As far as the acceptance clerk applicant was concerned, “there was no evidence that (the employer) employs any acceptance clerks, and therefore no position of comparator was placed” before the Commission.

By virtue of the fact that the applicants had between 2 to 5 year’s service, in other words in excess of three months, it was apparent that the applicants did not perform a temporary service, and therefore the deeming provision in terms of section 198A (3)(b) of the Labour Relations Act, was applicable.  Indeed, “all parties conceded to this”.  This meant of course that the client was deemed to be the employer.  The next thing to address was whether the position of forklift driver could be equated with that of a cargo controller, a position which did exist in the organogram of the client.  The Commissioner held that “whilst some of the duties do seem to overlap, the evidence supports the conclusion that the two jobs are different in many respects.  The job of cargo controller carries more responsibilities and additional tasks which the forklift drivers do not perform”.  The award continued that “forklift drivers do not operate in the same full capacity of cargo controllers”.  For this reason, it was held that “on an assessment of the evidence, I find that the two positions are not the same or sufficiently similar to warrant a conclusion that the applicant’s must be treated on the whole not less favorably than cargo controllers employed by the client”.  For this reason, it was held therefore that section 198A (5) of the Labour Relations Act should not be invoked.

“In respect of the acceptance clerk, no comparator was placed before me.  It was established as common cause that Swissport does not employ any other acceptance clerks.  A deemed employee must be treated on the whole no less favorably than an employee of the client performing the same or similar work.  In the circumstances as there were no comparators employed by the client, the Applicant’s cannot succeed in this claim”.

The award therefore reinforces the notion that when drawing a comparison between the work of a deployed labour broker worker, and that of an employee employed at the client, the obligation to treat deemed employees no less favorably that their purported counterparts employed by the client, only arises in circumstances where they are doing the same or similar work.  Insofar as there is no comparator, or the work is not sufficiently the same or similar, the obligation to treat the placed labour broker employee (the deemed employee), no less favourably, is not required.  This award reaffirms the notion that section 198A (3) of the Labour Relations Act, read together with the Assign Concourt judgment, reaffirms the notion that the deeming provision results in the client becoming the employer of the placed labour broker employee after three months of employment, for purposes of the Labour Relations Act only.  For this reason, the award provided that “the Applicants are deemed to be employed on an indefinite basis in terms of section 198A (3)(b)(i) and (ii) of the LRA by Swissport SA (Pty) Ltd (the client) which is their employer for the purposes of the LRA”.