DISHONESTY CAN DESTROY THE EMPLOYMENT RELATIONSHIP

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Every employment relationship is based on trust – the employer trusts the employee to work in the best interests of the organisation, whilst the employee trusts the employer to pay him for the work done in terms of his employment contract.
There is no place for dishonesty in this relationship.
A number of very clear principles that apply to all employment relationships appear from the case law.

UNDERSTANDING THE CONCEPT OF “DISHONESTY” AT THE WORKPLACE

In 2004 the Supreme Court of Appeal said in Ganes v Telecom Namibia Ltd:

“As an employee of the [company] and in the absence of an agreement to the contrary the [employee] owed the [company] a duty of good faith. This duty entailed that he was obliged not to work against the [company’s] interests; not to place himself in a position where his interests conflicted with those of the [company]; not to make a secret profit at the expense of the [company]; and not to receive from a third party a bribe, secret profit or commission in the course of or by means of his position as employee of the [company].”
Dishonesty is generally regarded as behaviour that is untrustworthy, deceitful or insincere and intended to mislead another person. In SAPPI Novoboard (Pty) Ltd v Bolleurs (1998) 19 ILJ 784 (LAC) at para 7, the court said:
“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.… The relationship between employer and employee has been described as a confidential one. The duty which an employee owes his employer is a fiduciary one ‘which involves an obligation not to work against his master’s interests’… 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’….”

SPECIFIC PRINCIPLE: GOOD FAITH AND THE EMPLOYMENT RELATIONSHIP
It is a basic principle that an employee owes the employer the utmost good faith. Basson J held in the matter of Stoop & Ano v Rand Water :

“[The employees] not only had the express duty to maintain the highest level of ethics and transparency but, as senior employees, they had a fiduciary duty to ensure total honesty and integrity when goods and services were procured.”

In Nedcor Bank Ltd v Frank & others [2002] 7 BLLR 600 (LAC), it was held that:
“Dishonesty entails a lack of integrity or straightforwardness and in particular, a willingness to steal, cheat, lie or act fraudulently … and it is normally used to describe an act where there has been some intent to deceive or cheat.”

In the matter of Standard Bank SA Limited v CCMA & others [1998] 6 BLLR 622 (LC) the court said:
“It was one of the fundamentals of the employment relationship that the employer should be able to place trust in the employee… A breach of this trust in the form of conduct involving dishonesty is one that goes to the heart of the employment relationship and is destructive of it.”

SPECIFIC PRINCIPLE: DON’T JUST DISMISS – LOOK AT THE FACTS AND DEGREE OF DISHONESTY
In De Beers Consolidated Mines Ltd v CCMA & others (2000) ILJ 1051 (LAC) at 1058I-J:

“the court further pointed out that “[t]he seriousness of dishonesty – i.e. whether it can be stigmatised as gross or not – depends not only, or even mainly, on the act of dishonesty itself but on the way in which it impacts on the employer’s business.”

The principle that each matter turns on its own facts and that there are degrees of dishonesty is now well established in our law. The Labour Appeal Court noted at para [52] in the matter of Absa v Naidu :
“She was clearly aware that her misconduct involved dishonesty and that, in terms of the appellant’s disciplinary code, summary dismissal was the appropriate sanction prescribed for such type of misconduct. Of course, it is accepted that not every misconduct offence involving dishonesty warrants a sanction of dismissal. There are varying degrees of dishonesty and, therefore, each case is to be determined on the basis of its own facts whether a decision to dismiss the offending employee is a reasonable one. Generally, a sanction of dismissal is justifiable and, indeed, warranted where the dishonesty involved is of a gross nature” (Emphasis added.)
At para [53] the LAC in Naidu further cited the dictum in De Beers Consolidated Mines Ltd v CCMA that:
“(…) the seriousness of dishonesty – i.e. whether it can be stigmatised as gross or not – depends not only, or even mainly, on the act of dishonesty itself but on the way in which it impacts on the employer’s business.”
Carl Mischke explained quite clearly why dishonesty destroys an employment relationship:
“Trust becomes an issue in dishonesty-related misconduct, such as theft, unauthorised possession, fraud or misrepresentation. In cases such as these, the employee’s truthfulness and honesty are placed in question, and, clearly, an employer would indeed be hard-pressed to place trust in an employee who is guilty of theft or fraud”.

SPECIFIC PRINCIPLE: MITIGATION WITHOUT REMORSE DOES NOT ASSIST IF THE EMPLOYEE DENIES WRONGDOING
In the matter of Hulett Aluminium (Pty) Ltd v Bargaining Council for the Metal Industry & others [2008] 3 BLLR 241 (LC) the employee persisted in her dishonesty by denying at her disciplinary hearing and the arbitration that she had participated in any wrongdoing (theft of scrap metal), the court on review inter alia held that:

[42] “(… ) the presence of dishonesty tilts the scales to an extent that even the
strongest of mitigating factors, like long service and a clear record of discipline are likely to have minimal impact on the sanction to be imposed…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.”

This principle was restated by the Labour Court in the matter of Absa Bank v CCMA and Others (JRÂ 1619/13) [2015] ZALCJHB 286 (8 September 2015) where the court said:

[23] (…) Yet she falsely claimed on the FAIS record of advice that Mrs Motimele had
signed. It was a blatant misrepresentation. It 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 (Emphasis added).

Specific principle: The employer cannot be expected to keep dishonest workers
It was held by the Labour Court in the matter of Kalik v Truworths (Gateway) & others [2008] 1 BLLR (LC) that an employment relationship that has

“….broken down as a result of an act of dishonesty can never be restored by whatever amount of mitigation. The underlying reason for this approach is that an employer cannot be expected to keep dishonest workers in his/her employ. The other reason for this is to send an unequivocal message to other employees that dishonesty will not be tolerated.”

CONCLUSION
It is apparent from the case law that dishonesty can result in dismissal.

Aequitate

Aequitate