Employees can be fairly dismissed due to an act of derivative misconduct – where an employee is aware that a serious offence such as fraud or theft was committed by another employee and does not inform the employer.
In the practical reality of working life, employees traditionally have excuses for their non-disclosure such as not wanting to get involved, being afraid or intimidated.
All of this notwithstanding, the Labour Appeal Court (LAC) determined that an employee’s “primary – and indeed his only – duty is to serve his employer faithfully and not to benefit himself or any other person at the employer’s expense”.
Withholding vital information or not identifying a theft culprit would thus seriously contravene this obligation, as well as damage trust and violate the employer’s confidence and good faith.
Case law shows that not disclosing another employee’s wrongdoings is sufficient reason for a substantively fair dismissal.
Too often employers incorrectly charge employees with fraud or dishonesty when they were not directly involved with, for example, the theft or fraud.
Often the employee’s involvement merely relates to being aware of the misconduct, or of who committed the misconduct.
In a reported arbitration award of Satawu obo Makhema and Thubakgoale v Jedidja Couriers (2005) 9 BALR 942 (NBCRFI), the arbitrator used case law to provide legal substantiation for his decision, and dealt with a number of overlapping concepts which need to be distinguished, especially where the accused employee was not physically involved in the execution of the misconduct.
These concepts take cognisance of the evidence available in order to prove charges such as fraud, collective or team responsibility (not collective guilt), the principle of common purpose and derivative misconduct.
In a nutshell, the Jedidja matter has the following salient features:
l Employee A forgot to clock out on a particular day then phoned the company and spoke to employee B, a superior, and explained the situation.
l It is in dispute whether A asked B to clock out for A, but, in any event, B did clock out for A.
l Employee A’s dismissal was determined to be fair due to his contravening the company’s clocking system rules.
l Employee B was also dismissed and did not contest the fairness of his dismissal.
l However, employee C, one of the applicants in this case and junior to B, was dismissed for fraud in that he failed to report the illegal clocking out on behalf of A by B.
l C’s defence was that he did not report the incident to management as he assumed that B, the superior, would do so.
l Another employee was also aware of what happened, but he was not disciplined at all.
In his consideration of the overlapping concepts, the arbitrator determined as follows:
l As far as the issue of collective or team responsibility is concerned, it was the arbitrator’s view that the same concept should be used in different circumstances to this. Namely, it should be used where a group of people are contractually bound to a group responsibility such as to reduce/diminish stock losses, especially where the culprit cannot be identified.
l As for common purpose , this requires of the guilty employee or, as in the Jedidja case, the employees (A, B and C) to actively associate them with the offence in question. In this case the arbitrator could not find evidence to indicate any such active association by employee C, due to his not reporting the incident.
The arbitrator determined that the prevailing circumstances did not justify finding C guilty. Notwithstanding the fact that C did not report the incident, the arbitrator accepted C’s explanation that he did not report the offence as he believed that employee B, the supervisor, would do so.
As such, the arbitrator determined that the doctrine of derivative misconduct should only be used where it is necessary for an employer to enforce a conduct rule as the perpetrator cannot be identified and there is “an active lack of co-operation from employees who are aware of the situation”.
The arbitrator also determined that where there is a transgression and the transgressors have been identified, it should not be expected of each and every employee who knew of the incident to report it to management, failing which, to face dismissal.
Employers are frequently faced with serious misconduct-related offences and, in order to prove them, they require the assistance of other employees to give evidence at a disciplinary hearing.
In many instances employees refuse to get involved. Perhaps employers should be disciplining these reluctant employees for not assisting their employers. Employees’ obligations are not limited to reporting serious offences, but also to assisting employers in pursuing discipline for the serious offences.
l Pierre Marais is with the Labour Law Group. Contact him on 011 679 5944. Get back copies of articles from Wanda at 011 679 5944.
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