Dismissal for Gross Dishonesty

LAC#020220: G4S Secure Solutions vs Ntloko (November 2016)

In Edcon vs Pillmer it was found that for an employer to dismiss, evidence should be lead when it is alluded that the trust relationship between the employer and employee had been tarnished. All relevant circumstances, such as the employee’s disciplinary record and length of service are relevant factors to take into consideration.

Given the LRA’s position that generally an employer should follow measures of progressive discipline before a decision to dismiss is taken, dismissals are also warranted for misconduct that is of a severe nature, even on the first instance. Gross Dishonesty is typically a form of misconduct whereby a dismissal on the first instance is justified. The employment relationship is based on trust and typically one can’t depend on a lengthy and clean disciplinary record if found guilty of Gross Dishonest conduct.

In G4S Secure Solutions vs Ntloko, the employee was dismissed after being a security guard for 14 years for being dishonest in his initial application. During his application, he was asked ‘Have you ever been convicted of a criminal offence?’ He indicated that he had not and was subsequently employed.

Fourteen years later the employee applied for a promotion. A criminal check was undertaken, which indicated that he indeed had two previous criminal convictions. One for rape in 1982, being 17 years old at the time. For this offence, he received six lashes. The employee was also convicted of assault in 1991 and received a fine of R200.

On the 1st of November 2010, the employee was notified to attend a disciplinary hearing and was subsequently charged for-

 “misrepresentation and/or dishonesty concerning an application for employment and/or breach of PSIRA Regulations code of conduct.”

 The employer has a disciplinary code, which states that:

“Dishonesty Concerning an Application for Employment – This offence occurs where information provided in support of an application for employment is subsequently found to be false, and such information has a material effect on the employer/employee trust relationship.”

Section 23 (1)(d) of the Private Security Industry Regulation Act 56 of 2001 (PSIRA Act), which only came into operation after the employee’s employment with the employer, provides that a person may be registered as a security service provider provided he or she ‘was not found guilty of an offence specified in the Schedule within a period of 10 years immediately before the submission of the application to the Authority.’

 At the disciplinary hearing, the employee’s defense was that he was not aware that he had a criminal record as he did not go to jail. The employee was found guilty of misconduct and was dismissed.

Being aggrieved with the outcome of the disciplinary hearing, the employee referred an unfair dismissal case to the CCMA. The Commissioner was not convinced that the employee misrepresented himself during his application as his defense of not being aware of having had a criminal offence was rather 'plausible.' In addition, the employee was found not to have breached the PSIRA code of conduct in that his convictions fell outside of the 10-year period prescribed by the PSIRA Act. The Commissioner took into consideration the employee’s 14 years’ good service, his clean disciplinary record and his national key point training. In the arbitration award the Commissioner found the dismissal of the employee to be substantively unfair.

On Review at the Labour Court, the Court found that the employee indeed committed Gross Dishonest Misconduct, however the view of the Court was that the employer put its focus of the employee having breached the PSIRA code at the core of it’s defense for dismissing the employee. The Court was not convinced that had the employee not breached the code that the employer would have dismissed the employee. In essence, the employer lead no evidence that the trust was broken and overly relied on the code. Given that the employee’s criminal offences fell outside the 10 -year window provided for by the PSIRA code of conduct, the Labour Court also found the dismissal to be substantively unfair.

On appeal at the Labour Appeal Court the Court found that the Commissioner’s finding that he was ‘not convinced that the employee contravened the rule’ or that the employee misrepresented himself, was not borne out by the evidence, as the employer’s disciplinary code makes it clear that such conduct was an offence.

The Appeal Court argued-

“In determining the fairness of a dismissal, each case is to be judged on its own merits. Item 3(4) of the Code of Good Practice recognizes that dismissal for a first offence is reserved for cases in which the misconduct is serious and of such gravity that it makes continued employment intolerable, with instances of such misconduct stated to include gross dishonesty. When deciding whether dismissal is appropriate, the Code requires consideration, in addition to the gravity of the misconduct, of personal circumstances including length of service and the employee’s previous disciplinary record, the nature of the job and the circumstances of the infringement itself. Other relevant considerations include the presence or absence of dishonesty and/or loss and whether remorse is shown.”

And also-

“The employment relationship by its nature obliges an employee to act honestly, in good faith and to protect the interests of the employer. The high premium placed on honesty in the workplace has led our courts repeatedly to find that the presence of dishonesty makes the restoration of trust, which is at the core of the employment relationship, unlikely. Dismissal for dishonest conduct has been found to be fair where continued employment is intolerable and dismissal is “a sensible operational response to risk management”. Obtaining employment on false pretenses whether by misrepresenting qualifications, skills, experience or prior work history has been found to justify dismissal, with it stated in Boss Logistics v Phopi and others that if this were not so, a sanction short of dismissal would only serve to reward dishonesty.”

The Court highlighted that a conviction for rape and assault is antithetical to employment in the position of a security guard given the nature of the position. The fact that the PSIRA Act bars the employment of a person in the security industry until 10 years has elapsed from the date of the criminal conviction, illustrates the seriousness criminal convictions are viewed in. An employer is entitled to full disclosure of all relevant information when a decision is made to employ a person and can expect an honest answer in response.

The Court agreed that a lengthy and clean record is a factor to consider, however that there are certain acts of misconduct which are of such serious nature that no length of service can save an employee who is guilty of them. Gross Dishonesty is such act of misconduct. The fact remained that the employee was employed under false pretenses and that he deliberately concealed the true state of affairs from the employer.

The Labour Appeal Court replaced the order of the Labour Court stating that the arbitration award is reviewed and set aside; and replaced with the order that the dismissal of the employee was substantively fair.

It is advisable for employers to ask for the assistance of a professional Labour Relations Specialist when facing employment law difficulties. Tobie Nel is the Senior Labour Relations Specialist for Ulwazi Labour Relations and has over 15 years’ experience in Labour Law. You can contact him, by phone: 0824479512 or visit:www.ihconsult.co.za/labour/