THE REAL REASON FOR MISCONDUCT DISMISSALS

Misconduct in the employment environment does not start and end with the employer’s Disciplinary Code. Yet many employers and employees still insist on treating such a document as an absolute codification of all permissible disciplinary actions in the particular workplace. As do a startling number of arbitrators. 

[A more comprehensive version of this article with case law examples and discussions can be found here.]

Introduction

Employers could be forgiven for believing that a comprehensive Disciplinary Code and Procedure is everything they need for managing discipline in the workplace. The more detailed, categorised, and prescriptive, the safer they feel in terms of corporate compliance with labour law requirements. Inevitably, disciplinary proceedings in such an environment have ‘charge sheets’ with specific pre-formulated alternatives from the Code for managers to choose from (i.e. the closest fit to the actual facts) and a matrix of disciplinary penalties corresponding to whatever item the employee is found guilty of. Also inevitably, the issue of (in)consistency regularly arises – since identically framed charges which have corresponding penalties in terms of the Code, should have the same result, right?

It becomes a quagmire of technical points and disputes – both the employer and employees / their representatives insisting on their interpretation of the letter of the Code and fighting about the formulation of the charges and what had been proved. The sort of fight one would be expecting between a prosecutor and defence lawyer in a criminal court.

I would argue that this is not what is expected in the South African workplace environment today (see 'Formulating disciplinary charges' ) – and the courts agree, even if some arbitrators still do not.  Unfortunately, it is at the level of arbitration that most misconduct disputes end, since few employers have the resources to embark on a lengthy and costly review process. As long as (some) arbitrators therefore still insist on a tick-box approach, employers will find it difficult to risk moving forward or to convince their employees otherwise.

It is however necessary for employers and especially employees to understand why, regardless of the content of any disciplinary code and technical arguments, they may nevertheless be validly and fairly dismissed.

The employment relationship

The employment relationship is of a fiduciary nature – i.e. this means that employees owe their employer a duty of good faith and honesty and may not put themselves in a position where their own interests conflict with those of their employer or advantage themselves at the expense of the employer. As described by the Labour Appeal Court in SAPPI Novoboard (Pty) Ltd v Bolleurs (1998) 19 ILJ 784 (LAC): “It is an implied term of the contract of employment that the employee will act with good faith towards his employer and that he will serve his employer honestly and faithfully.….. If an employee does anything incompatible with the due or faithful discharge of his duty to his master, the latter has a right to dismiss him….”

Standards and rules

Schedule 8 item 3(1) requires all employers to adopt disciplinary rules that establish the standard of conduct required of their employees and communicate these to their employees - however, this obligation does not extend to drafting a ‘criminal code’ of sorts, tabulating all possible breaches of these rules. The Schedule also states that ‘some rules or standards may be so well established and known’ that it is not necessary to communicate them or write them up. Since the duty of good faith and diligence of the employee towards the employer is automatically implied in every employment relationship, any conduct of an employee which goes against this duty (whether there is a written rule or not), would therefore potentially constitute a breach for which an employee could be disciplined.

Misconduct

Schedule 8 mentions three grounds on which a termination of employment might be legitimate – including dismissal ‘for a reason relating to the conduct of the employee’. The reason for all conduct-related breaches, discipline or dismissals would ultimately resort under the misconduct banner. Howsoever these might be sub-categorised into different species of misconduct by an employer in their disciplinary code (insubordination / ‘negligence’ / absenteeism / assault / etc.), such labels should not create a limited number of criminal-style offences to be used as prescribed disciplinary charges. The standard of conduct which is really at issue, is that of diligence and good faith, and any conduct that goes against this, could potentially lead to a dismissal for misconduct.

It follows that not all acts of misconduct can be made to fit into one of the ‘boxes’ in a disciplinary code. Schedule 8 makes it clear that each case must be determined on its own merits and the ‘label’ or wording of a categorised offence in a disciplinary code can therefore not pre-determine what an appropriate penalty would be in all circumstances of breach of a specific rule, or be the basis for determining (in)consistency in the application of discipline.

Examples

Dishonesty and the intention to deceive

‘Honesty’ in the employment context is part of the employee’s duty of good faith and breach thereof does not necessarily require proof of the employee’s state of mind, but could be contravention of any standard of conduct that could reasonably have been expected of an employee acting in good faith.

An employee’s conduct and persistence in being right all through the disciplinary proceedings, showed that she lacked judgement and could not be trusted and relied upon to act appropriately in the best interests of her employer. Her stance revealed a notable lack of appreciation of her fiduciary duties and a lack of concern or insight about the possibility that her actions had significant potential to cause her employer reputational and financial prejudice.

Wording of the charge / allegations

Unlike in criminal proceedings where it is said that “the description of any statutory offence in the words of the law creating the offence, or in similar words, shall be sufficient”, a misconduct charge does not necessarily have to be strictly framed in accordance with the wording of the relevant acts of misconduct as listed in the employer’s disciplinary code. It would be sufficient that the wording of the alleged misconduct conformed, with sufficient clarity so as to be understood by the employee, to the substance and import of any one or more of the relevant offences/rules.

Seniority / position of authority

Seniority and the position of the employee influences his/her fiduciary responsibilities – e.g. the degree of freedom an employee has to make and execute business decisions; or the extent to which the employer relies on the employee’s expertise and judgement in conducting its business; and the extent of the employee’s position of trust. Generally, the more senior the employee, the more serious the misconduct – and a more severe penalty can be justified for someone in a managerial capacity in comparison to his/her subordinate who might have committed the same misconduct, without it being regarded as inconsistent.

It is clear, therefore, that strict proof of the elements of a formulated offence and applying the corresponding penalty from a disciplinary code, is not what disciplinary action and misconduct dismissals in the workplace are about and it is not what Schedule 8 requires. There is a definite operational backdrop and inherent common law obligations, which go far beyond a list of offences in such a code. Similarly, the appropriate sanction should be determined for each individual breach, with this context in mind. The fact that the same wording is used in the formulation of charges against two different employees, does not mean that the circumstances of the two incidents are the same and should attract the same sanction.  

Deciding on the appropriate penalty

In deciding on a balanced sanction, consideration must be given to the infraction / offence, the circumstances of the employee as well as the interests of the employer and the other employees. The seriousness of misconduct in the employment context depends therefore not only on the actions of the employee itself, but on the way in which it impacts on the employer’s business and its other employees. This not only pertains to risk, but also to the message an employer sends to its employees regarding misconduct of this nature.

Many of the factors that should be considered, have been pointed out by the courts over the years. In particular, the lack of acknowledgement or remorse has been accepted as a definitive factor when considering penalty:

In Hulett Aluminium (Pty) Ltd v Bargaining Council for the Metal Industry & others [2008] 3 BLLR 241 (LC) the court held that “...whatever the amount of mitigation, the relationship is unlikely to be restored once dishonesty has been established in particular in a case where the employee shows no remorse.”

In Absa Bank v CCMA and Others [2015] ZALCJHB the court stated that the employee’s blatant misrepresentation “.....put the bank at risk and was a breach of the employee’s fiduciary duties. She showed no remorse and even at the arbitration maintained her false version of events. In those circumstances, the employment relationship had irretrievably broken down.”

It is abundantly clear that a chairperson at a disciplinary hearing has a lot more to consider than simply perusing the items in the employer’s disciplinary code. Crucially, the employer must place relevant issues such as these before any arbitrator deciding if the employer’s decision to dismiss an employee had been fair. It demonstrates that the decision maker has applied his/her mind to the circumstances of the particular case and it enables the arbitrator to do the same.

Conclusion

The real purpose and role of discipline in the workplace, and the true reasons for misconduct dismissals, are not understood by many managers, HR practitioners and union officials – especially if they had been schooled in discipline by way of institutional practice only (which is largely procedural). 

Many disciplinary/arbitration training workshops also just focus on litigation skills or the procedural side of misconduct proceedings, without explaining the broader context.

Commissioners still forcing employers into settlements because the relevant “charge” had not been spelt out in a matrix-like disciplinary code, are equally missing the point, but although many misconceived arbitration awards have been set aside by the courts with the reasons repeatedly explained, this is still happening far too often.

Mostly, however, I find that employees themselves have very little understanding or appreciation of the trust relationship and the duties they owe their employer. They want to get stuck on technicalities around disciplinary issues and refuse to acknowledge any wrongdoing until the bitter end. It becomes especially concerning when an employee’s dogged and singular insistence on being right in the face of overwhelming indications to the contrary, only serves to reveal an utter lack of judgement, unreliability and no chance of a salvageable trust relationship. The risk of continued employment becomes glaringly apparent and dismissal an unavoidable result. A technical argument that the employer’s disciplinary code does not ‘permit’ dismissal for a first offence in such circumstances, will be entirely irrelevant.      

As per the Labour Appeal Court in De Beers Consolidated Mines Ltd v CCMA & others (2000) ILJ 1051 (LAC), dismissal would be justified if continued employment of the offender will be operationally too risky. “Dismissal is not an expression of moral outrage; much less is it an act of vengeance. It is, or should be, a sensible operational response to risk management in the particular enterprise.  That is why supermarket shelf packers who steal small items are routinely dismissed. Their dismissal has little to do with society's moral opprobrium of a minor theft; it has everything to do with the operational requirements of the employer's enterprise.”

? Judith Griessel

www.griesselconsulting.co.za

June 2019