Employers are quite rightly entitled to view employee dishonesty in a very serious light.  Regretfully, theft-related and dishonesty cases are quite common in the workplace.  In our experience, for example, half of the disciplinary cases in the hospitality industry ate theft-related.

In the Labour Appeal Court case in Nedcor Bank Ltd v Frank & others (2002) 23 ILJ 1243 (LAC), the Court warned that ‘dishonesty’ is not a loose term that could just be thrown at employees in any circumstances. The Labour Appeal Court held that dishonesty entails ‘a lack of integrity or straightforwardness and, in particular, a willingness to steal, cheat, lie or act fraudulently.

In another case, the Labour Court dealt with employee dishonesty in Massbuild (Pty) Ltd t/a Builder’ Warehouse v the CCMA & 2 others [JR1685.12].

The facts were quite straight forward.  The employee was routinely subjected to a search in a search cubicle, as is common practice in the retail industry.  During the course of conducting the search, in the presence of two security guards, the employee was found to have been in possession of an emergency cell phone charger in his bag, valued at approximately R100.00.

This charger was on sale at the store in question, and the employee had no proof of purchase. The employee subsequently failed a polygraph test.

The employee was the charged with having been in unauthorized possession of the cell phone charger, and he was dismissed after having been found guilty.

The employee referred an unfair dismissal claim to the CCMA.  At the arbitration hearing.  The CCMA commissioner held that the dismissal was procedurally and substantively unfair, and the employee was awarded six months compensation.  The employer took the matter on review to the Labour Court.

The Labour Court judge concluded that “the commissioner failed to apply his mind” to various “materially relevant facts”.

This included the fact that the employee had signed a statement confirming that the charger had been found inside his bag during the security search, even though during the arbitration hearing, he had denied that he had been caught in possession of the charger.  The employee had also admitted this during the original disciplinary hearing.

The Judge held that the commissioner’s finding that the charger had not been found to have been in the employee’s possession was unreasonable, and that this commissioner’s failure to consider material facts amounted to “having caused an unreasonable result in relation to guilt.

The Court set aside the arbitration award declaring the dismissal unfair, and awarding the employee six months compensation, and replaced it with an order that the dismissal of the employee was fair.

On the question of such unauthorised possession being deserving of dismissal, the Court held that “It is difficult to imagine how everyone could be given a chance to be found at least once in unauthorized possession of company property before resorting to dismissal.  Dismissal for a first instance of such misconduct was fair ..”.

In the matter between ABSA Bank Ltd v Naidu DA14/12 24/10/2014 (LAC), it was held that “dishonesty has a corroding effect to the trust which the employer is entitled is entitled to expect from its employees in its various operations”.

The Labour Appeal Court had the following to say about the effect of dishonesty by an employee on the employment relationship in Anglo American Farms t/a Boschendal Restaurant v Komjwayo (1992) 13 ILJ 573 (LAC) – “This trust which the employer places in the employee is basic to and forms the substratum of the relationship between them. A breach of this duty goes to the root of the contract of employment and of the relationship between employer and employee”.

It follows that dismissal is generally considered justified in all cases of serious dishonesty, not merely those in which employees enrich themselves materially at the expense of their employer.

In Theewaterskloof Municipality v SALGBC (WC) and others LC C966/2008, 14 May 2010, the Labour Court stated that the question of trustworthiness was seen to go beyond offences which are centrally dependent upon proof of outright dishonesty.  The Court continued that the general principle that conduct on the part of an employee which is incompatible with the trust and confidence necessary for the continuation of an employee relationship, will entitle the employer to bring it to an end, is a long established one.

In Toyota SA Motors (Pty) Ltd v Radebe and others [2000] 3 BLLR 243 (LAC), it was held that “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 dishonesty”.