In Nedcor Bank Ltd v Frank & others (2002) 23 ILJ 1243 (LAC), the Labour Appeal Court held that dishonesty entails a lack of integrity, particularly willingness to steal, cheat, lie or act fraudulently. The LAC warned that it should not be used as a loose term towards employees in any circumstances.
Item 3(4) of Schedule 8 of Labour Relations Act (LRA), Code of Good Practice: Dismissal states that it is not appropriate to dismiss an employee for a first offence, except if the misconduct is serious and of such gravity that it makes a continued employment relationship intolerable, subject to the rule that each case should be judged on its merits. The aforementioned also applies to gross dishonesty. Item 3(5) further states that when deciding whether to impose the penalty of dismissal, the employer should, in addition to the gravity of the misconduct, consider factors such as the employee’s circumstances (including the length of service, previous disciplinary record and personal circumstances). The nature of the job and the circumstances of the infringement itself, and, in terms of Item 3(6), how and whether the employer applies the penalty of dismissal consistently.
Dishonesty is generally seen as a serious offence, justifying dismissal on the first instance of the offence. Its nature renders the employment relationship intolerable due to broken trust between the parties. In Anglo American Farms t/a Boschendal Restaurant v Komjwayo (1992) 13 ILJ 573 (LAC), it was stated that “This trust which the employer places in the employee are 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 the relationship between employer and employee”.
However, this does not necessarily mean that the damage to the trust relationship renders the relationship irreparable or that the breach of trust automatically merits dismissal. Recently there has been a shift away from this view, specifically as the Code of Good Practice regarding Dismissals mentions gross dishonesty as justification for a dismissal of the first offence, rather than for all dishonesty, and due to the developments of two conflicting judgments in the Labour Court of Appeal.
In Shoprite Checkers (Pty) Ltd vs the CCMA (CLL Vol. 18 August 2008 case number JA 08/2004), the employee was dismissed for consuming the employer’s food without paying. The CCMA and Labour Court found the dismissal to be unfair. The Labour Appeal Court found the employee had a clean disciplinary record and had worked for the employer for nine years. However, the trust relationship had broken down, and the dismissal had been fair.
However, in Shoprite Checkers (Pty) Ltd vs the CCMA (CLL Vol. 18 August 2008 case number JA 46/05), the same employer was involved, and the employee was also dismissed for consuming the employer’s food without paying. The CMMA found the dismissal to be too harsh a sanction. The LAC found that the employee had 30 years of service and was a first offender. The court also weighed the cost of the food, which could well have cost less than R20.00, against the employee’s loss of income which amounted to more than R30 000.00 and agreed with the CCMA that the dismissal had been too harsh.
In Shoprite Checkers (Pty) Ltd v Tokiso Dispute Settlement and Others, (2015) 36 ILJ 2273 (LAC), it was held that a dismissal would only be fair if it is procedurally and substantively fair. The law does not allow an employer to adopt a zero-tolerance approach for all infractions, regardless of its appropriateness or proportionality to the offence.
In Anglo American Farms Boschendal Restaurant v Komjwayo, (1992) 13 ILJ 573 (LAC), the court held that the true test is not the value of the item stolen but whether the employee’s actions had the effect of rendering the employment relationship intolerable.
In De Beers Consolidated Mines Ltd v CCMA and Others (2000) ILJ 1051 (LAC), it was held that “the seriousness of dishonesty… depends not only, or even mainly, on the act of dishonesty itself but on the way in which it impacts on the employer’s business.”
In the light of the above cases, there is great importance in considering mitigating factors when deciding on dismissal as the appropriate sanction in cases of dishonesty, and it must be clearly shown why the aggravating factors outweigh the mitigating factors.
The following factors are important to consider in cases of dishonesty:
- Was the employee in a position where trust was a key factor;
- Were alternative measures short of dismissal available;
- Did the employee confessed and/or showed remorse;
- The harm/effect caused by the employee’s conduct;
- The effect of the dismissal on the employee;
- The employee’s service and disciplinary record;
- The totality of circumstances;
- Length of service by the employee;
- Amount/subject misappropriated by the employee;
- Whether the trust relationship can be repaired;
- Consistency of the employer.
From the above, it is evident that there are cases of dishonesty where dismissal is not necessarily the appropriate sanction for a first offence of dishonestly. Each case must be determined on its own merits, especially taking into consideration the effect of the employee’s misconduct on the employer’s business. The effect of the dismissal on the employee weighed against the damages caused by the misconduct of the employee and whether the trust relationship between employer and employee have genuinely been broken beyond repair or whether the circumstances of the case, taking into consideration all the necessary factors, is of such nature that the trust relationship can be repaired.
Should you require more information regarding dismissals, contact your SEESA Legal Advisor to assist your business, alternatively leave your contact details on SEESA’s website, and a professional legal advisor will contact you.
About the author:
Elsje-Marie van Zyl started her career at SEESA in 2020 and is currently working as a Labor, Consumer Protection and POPI Legal Advisor at SEESA’s Nelspruit office. She obtained her LLB degree at the University of Pretoria, where she also consulted at the Legal Aid Clinic. She completed her clerkship articles at a general litigation firm in Centurion and was subsequently admitted as an attorney.
Resources:
Nedcor Bank Ltd v Frank & others (2002) 23 ILJ 1243 (LAC),
Schedule 8 of Labour Relations Act, CODE OF GOOD PRACTICE: DISMISSAL
Anglo American Farms t/a Boschendal Restaurant v Komjwayo (1992) 13 ILJ 573 (LAC)
Shoprite Checkers (Pty) Ltd vs the CCMA (CLL Vol. 18 August 2008 case number JA 08/2004
Shoprite Checkers (Pty) Ltd vs the CCMA (CLL Vol. 18 August 2008 case number JA 46/05
De Beers Consolidated Mines Ltd v CCMA and Others (2000) ILJ 1051 (LAC)
Shoprite Checkers (Pty) Ltd v Tokiso Dispute Settlement and Others, (2015) 36 ILJ 2273 (LAC)