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As if running a business in the challenging marketplace is not daunting enough, employers are continuously faced with employee acts of dishonesty, falsification of records and fraud or theft.
Examples of these employee acts include lies about having done certain tasks, incorrect sales activity reports and misrepresentation of qualifications.
Among other examples are falsification of time sheets or overtime claims and false travelling claims.
To effectively deal with these types of workplace misconduct, a more legalistic analysis and understanding is important.
In labour law, and also taking into consideration the common law obligations of an employee, a premium is placed on employee conduct that is necessary to protect the trust relationship on which the employment contract is founded.
Employee misconduct, such as dishonesty and fraudulent activities, is normally sufficiently damaging to the trust relationship to justify a substantively fair dismissal.
With specific reference to acts of employee dishonesty, a disciplinary charge of dishonesty requires proof that the accused employee acted with the “intent to deceive”.
In general, this may include the withholding of important information from an employer, misrepresentation or the making of a false statement, all with the intention of deceiving the employer.
On a more practical note, examples that should meet the dishonesty criteria could include:
l An employee using or misusing the company telephone and e-mail system and misrepresenting his/ her innocence.
l Sales staff making false representations to boost their performance or their commission.
l Misrepresentation of qualifications before being appointed, even if this misrepresentation is discovered some time later and even if the employee has rendered satisfactory performance.
l An employee having his/her car repaired at the employer’s expense.
In all these examples the intention to deceive the employer should be obvious.
Many acts of dishonesty border on fraud and could also be so defined in disciplinary charges.
A charge of fraud usually has more of a serious and legalistic overtone and it also constitutes a criminal offence which invariably justifies a dismissal.
As such, fraud in the workplace could be defined as the unlawful making of a misrepresentation with the intent to defraud, which causes prejudice or is potentially prejudicial to the employer.
In cases of workplace fraud, employers thus need not necessarily prove that it suffered actual loss; proving potential loss would be sufficient.
For example, where an employee has obtained a company credit card by false pretences, a dismissal could be justified, even if the employee did not use the card to effect an unauthorised/unlawful transaction.
Fraudulent conduct in the workplace could take many forms, as the undermentioned case law examples, where dismissals have been held to be justified, bear testimony:
l Creating documentation in order to conceal stock losses.
l An employee travelling for private purposes on the company’s account.
l The claiming of overtime pay for time not worked.
l Generating false sales documents to conceal fraudulent sales.
l A manager colluding with subordinates to sell company equipment for personal gain.
l Claiming that a company vehicle has been hijacked in order to conceal an accident.
l Fraudulently using the company petrol card.
Although it could also be categorised as dishonest and/or fraudulent activities, falsification of records is a favourite pastime for workplace fraudsters.
The most common instances of this type of fraud involve the falsification of medical certificates.
Not only are the dates entered on medical certificates tampered with, but, with skilful computer manipulation, entire medical certificates are falsified.
Other examples include the falsification of sales reports, call sheets, stock reports, expense claims, and so on. All of these acts are done with the intention of defrauding the company.
In the case of some complex white-collar offences, employers are frequently faced with the problem of having insufficient admissible evidence to prove, for example, fraud.
Employers are reminded to carefully analyse the evidence that is indeed available.
For example, a strong sentiment that an employee is guilty of fraud/theft may not be supported by the available evidence.
In such a case, employers could be required to rely on other charges, based on other types of misconduct, even of a slightly less serious nature, in order to obtain a guilty verdict.
For example, by charging an employee, as alternative charges to fraud, with theft, non-adherence to standard operating procedure, improper conduct, negligence, and so on, a guilty verdict is more likely.
l Pierre Marais is with the Labour Law Group. Call him at 011 679 5944. Back copies of articles can be obtained from Wanda at 011 679 5944.