CAN AN EMPLOYEE INSTITUTE A CIVIL CLAIM FOR MALICIOUS PROSECUTION AGAINST THE EMPLOYER WHEN FOUND NOT GUILTY AT A DISCIPLINARY HEARING

Claims for ‘wrongful arrests’, ‘malicious prosecution’, ‘insult’ or ‘defamation’ are fairly common in civil law practice related to unsuccessful criminal prosecution and unheard of in labour related matters – until recently.

The common perception (on the part of both employees and employers) is that the Labour Relations Act 66 of 1997 (as amended) (the LRA) prescribes the way an employer should discipline its staff, and provided this is done in accordance with these provisions, the employer is acting within its rights. This may be true, but this right only extends to the actual disciplinary process, and the fairness thereof can be disputed and challenged at dispute resolution institutions and the labour courts in terms of the LRA.

As is already well established in case law, an employee may institute proceedings against the employer for ‘breach of contract’, (in which the lawfulness of the employer’s actions can be challenged) which proceedings could be instituted in the High Court, or a claim in terms of the Labour Relations Act 66 of 1995 (as amended), which proceedings (challenging the fairness of the employer’s actions) could be instituted in the Commission for Conciliation Mediation and Arbitration (CCMA), Bargaining Council and / or Labour Court. It must be noted that proceedings for example an alleged breach of contract and an alleged unfair dismissal dispute can be instituted simultaneously at the different institutions as inter alia established in Fedlife Assurance Ltd v Wolfaardt (2001) 12 BLLR 1301 (SCA). However, in these types of cases, the material issues in dispute related to breach of a contractual obligation and did not relate to ‘malicious prosecution’.

Opposing views

On the one hand, it can be argued (as is the norm), that a disciplinary hearing cannot be equate to criminal prosecution as it is a process prescribed in terms of the LRA, to establish facts about a specific employment related incident and to determine guilt on a balance of probability based on the established facts. The LRA furthermore fails to provide for any instances of ‘malicious prosecution’ in such instances and in fact prescribes that disciplinary hearing proceedings be concluded with minimal legal formalities. The LRA even provides for circumstances during which it would not be necessary to conduct a formal disciplinary hearing despite the stringent application of the audi alteram partem rule[1] in determining the procedural fairness of a disciplinary hearing.    

On the other hand, what if the employee is found not guilty of the allegation against him / her after a disciplinary hearing, or the charges were instituted on mere suspicion and is not based on any fact or corroborated evidence? What if disciplinary charges are being withdrawn before- or during a disciplinary hearing? What if remarks are made during an arbitration process which could be construed as ‘malicious’ and damaging to the character of the employee? Does it absolve the employer from civil liability merely because disciplinary proceedings and subsequent dispute resolution processes are prescribed in terms of the LRA and the LRA perceiving to be silent on ‘malicious prosecution’ per se?

Legislative provisions

It must be noted that the LRA is not silent on ‘malicious prosecution’! The LRA specifically provides for a Commissioner to find that a matter (i.e. arbitration proceedings) had been maliciously proceeded with at the CCMA. When the Commissioner reach such a conclusion, the opposing party may have the benefit of a cost order in its favour. However, does this extend to disciplinary proceedings and specifically disciplinary hearings?

There is nothing in terms of any legislative provisions to prevent employees from instituting civil claims against employers for damages arising from being defamed- or being caused damages during- and even after the employment relationship had terminated.

Disciplinary Charges

It must always be remembered that mere suspicion that an employee committed an offense, is not sufficient reason to institute disciplinary proceedings. For example, and from a retail perspective, it sometimes happens that an employee (or a customer) would put something in his/her pocket. Does this constitute theft or even attempted theft? The answer to this question is a categorical no. I cannot emphasize this enough. Should the employee and/or customer be arrested on the spot (regardless in which area of a store), it is almost guaranteed that the police would not criminally prosecute and/or the Director of Public Prosecutions would withdraw all charges. In the same manner and for the same reasons, disciplinary action should not mero matu be instituted against the employee. 

Although the reasons for this refusal to prosecute may seem ‘unfair’ to the retail or / employer, it is actually very simple:

In all criminal proceedings, the charge (i.e. theft) must be proven, whereas in labour related matters, guilt is determined on a balance of probability. There is a vast difference between these two concepts, which employers sometimes seems to be ignorant of or get confused with. Be that as it may, management / security cannot on their own decide (speculate) as to what the intention of the employee / customer was going to be with the item. Experienced retailers / security staff must have experienced incidents where a customer would put something on their person, only to find that the item was returned to the shelve / paid for when the person is searched on leaving the store. It is for this very reason that our courts had ruled in a number of instances that the customer has to leave the last pay point (opportunity to pay for the item) before the employee / customer can be approached. No accusations should also be made before the management / security had obtained all the facts. Just imagine accusing the customer of theft at the door and when searched, nothing is found! It happens that some security officers (or persons posing as such), becomes over-zealous. I have dealt with a number of cases where security officers would:

-         Directly and loudly accuse a customer of theft (in public) at the store entrance;

-         Accuse employees of theft whereas no theft existed, or in some instances, items even being planted on the employee due to a personal vendetta;

-         Distort the facts of a case merely because the security wanted an incident to look like theft so they can either achieve a target of arrests made and/or collect a reward. (Just as a by-the-way observation, for security staff to be set targets and given incentives only encourages these unscrupulous practices).

These practices leave any employer wide open for civil claims from customers. What about employees?

Grounds for a claim for damages

In Mahlangu v Minister of Police (2017) BLLR 528 (GP), the High Court (Pretoria) stated at paragraph 10 of the judgment that:

 ‘The cause of action for a claim for damages caused by malicious legal proceedings is the actio iniuriarum[2]. In order to succeed with a claim for malicious prosecution, a claimant must allege and prove:

·        that the defendant set the law in motion (instigated or instituted the proceedings);

·        that the defendant acted without reasonable and probable cause;

·        that the defendant acted with "malice" (or animo injuriand[3]); and

·        that the prosecution has failed.’

In this case, Mr. Jabulani Mahlangu, employed by the South African Police Services, was criminally charged with assault with the intent to cause grievous bodily harm. The employee was suspended without remuneration for the period 25 March 2009 to 30 July 2009 as allowed in terms of the South African Police Service Discipline Regulations of 3 July 2006 (R643). The employee was also charged in terms of this disciplinary code. However, the criminal charges against the employee was withdrawn and subsequently the disciplinary charges as well.

Mr. Mahlangu then instituted a claim for damages for ‘malicious prosecution’ against his employer in the amount of R 625 000 for the ‘malicious disciplinary proceedings’. The employee in all probability did not institute a claim related to the criminal proceedings, given the judgement in inter alia Du Toit & Premier Foods vs Sebakeng Nelson and Another Case No: A997/13 (unreported?) out of the High Court (Pretoria).

In this case the employer argued that the right of instituting a claim for damages related to malicious prosecution does not extend to disciplinary hearings.

The court, as per DS Fourie J, however had found that a charge of committing a common law or statutory offence, impacts on the accused person’s reputation and dignity and that the employee must be protected from this kind of harm even if it derived from internal disciplinary proceedings. Fourie J however did make it clear that this judgment may[4] not necessarily apply to all disciplinary codes with mention to domestic codes of conduct which exists by agreement. It must be noted that the court omitted to explain what it meant with ‘by agreement’, and it can only be assumed that this ‘agreement’ the Court referred too, constitutes a collective agreement[5].

The judgment concluded that:

‘It is declared that the disciplinary proceedings[6] instituted against the plaintiff on 28 July 2009, as provided for in the South African Police Service Discipline Regulations of 3 July 2006 (R643), fall within the ambit of malicious proceedings as a cause of action’

Preventing such claims

There are various precautionary measures that can be taken to prevent these types of claims:

·        It is therefore always imperative that a proper investigation must be conducted prior to the institution of disciplinary proceedings during which evidence must be gathered and corroborated – even a determination made on a balance of probability must be based on facts;

 ·        The disciplinary charges instituted against the employee, best describes the employee’s alleged actual wrongdoing, based on facts gathered during the initial fact-finding investigation;

 ·        The disciplinary charge must be reflected in the disciplinary code. A brief description of the wrongdoing should follow the actual charge;

 ·        It is also important that the employer’s representative and its witnesses, then testifies in relation to the actual charges and do not deviate from it. It must always be remembered that the remarks made by the employer’s representative and the witnesses must be in relation to the actual wrongdoing for which the employee is charged. Personal comments and opinions should be avoided where it has no bearing on the actual charges;

 ·        Do not proceed with disciplinary action where there is no factual basis for it. Assumption, hearsay, or pure suspicion are not a basis to proceed with disciplinary action. The same would apply if the matter had been amicably resolved between the parties (i.e. grievance issues) and further disciplinary action is not required in terms of the grievance resolution process;

 ·        For an employer to instruct a manager to merely institute disciplinary proceedings against an employee would, in my opinion, be contradictory to the provisions of Schedule 4 of the LRA and most probably one of the most likely basis for a ‘malicious prosecution’ claim;

 ·        Do not conduct a disciplinary hearing unless it is a specific requirement in terms of the disciplinary code. Even the LRA suggests that a formal disciplinary hearing is not always required[7];

 ·        Ensure that security staff and management are well trained and familiar with specific procedures.

 I doubt that this case will result in a sudden increase in ‘malicious prosecution’ claims in failed disciplinary hearings. It must however be noted that this avenue is now available to employees.    

[1] Refers to the right to be heard or opportunity to respond to the allegations

[2] Wille's Principles of South African Law, 9th Ed, p 1192, and also Lederman v Moharal Investments (Pty) Ltd 1969 (1) SA 190 (A) at 196H

[3] Minister for Justice & Constitutional Development v Moleko [2008] 3 All SA 47 (SCA) par 8

[4] My emphasis

[5] Sections 23 to 26 of the LRA / Definition of ‘collective agreement’ Chapter One of the BCEA

[6] My emphasis

[7] Schedule 8 Item 4(1) of the LRA