The concept of trust has always been considered to be a key ingredient of an employment relationship. As such, it generally has been accepted that when the trust in the employment relationship is broken, this often means the end of the relationship as well. Proceeding from this basic premise, our Courts have over time come to regard any dishonest conduct as invariably destructive of the employment relationship.

However, in the last few years cases such as Sidumo vs Rustenburg Platinum Mines and subsequently Edcon Limited vs Pillermer NO & Others, opened up a debate as to whether dismissal is always the appropriate sanction where an employee is found to be dishonest. In the Edcon case, for example, the employee had purposefully concealed damage to a company car in spite of an express policy provision requiring her to report any damage to the vehicle to the company as well as to the police. To exacerbate matters, the employee had in addition to this, initially denied that the car had been involved in an accident and at a further point in time conceded that it had been involved in an accident but stated that she had been driving the vehicle when it had in fact been her son who had done so. The Arbitrator, in considering the matter found that the company had not placed sufficient evidence before her to prove that the trust relationship between the employee and the company had been destroyed. The Arbitrator then went on to take into account the employee’s years of service, clean disciplinary record and found that the trust relationship with the company had not been destroyed. The employee was then reinstated by the Arbitrator to her position with the company. The Supreme Court of Appeal upheld the Arbitrator’s reinstatement of the employee and accepted her reasoning in the matter. In addition to seriously placing into question as to whether dishonesty is necessarily destructive of the employment relationship, the impression created by this case was that an Arbitrator had an unfettered discretion as to determining what an appropriate sanction is and could, at whim, simply set aside employer’s decisions to dismiss by having regard to factors that the Arbitrator considered relevant, such as a clean disciplinary record, long service, etcetra.

Recently, the Labour Court has in two cases, both of which co-incidentally involved senior Municipal employees, clarified the role that trust plays in an employment relationship particularly where an employee acts dishonestly. The Labour Court at the same time sought to highlight the limits imposed by the Labour Relations Act on an Arbitrators’ powers to interfere with an employer’s decision to dismiss and substitute this with an appropriate sanction. The first case, namely that of The City of Cape Town vs South African Local Government Bargaining Council, involved a senior employee who had been dismissed for having an invalid driver’s licence. Ms Ncamana had obtained her licence by presenting a fake Namibian license to the South African Licensing Authorities some nine years previously. She was dismissed by the Cape Town Municipality for this dishonesty which admittedly had been committed outside the workplace. When she referred the matter to the South African Local Government Bargaining Council, the Bargaining Council appointed Arbitrator found that dismissal too harsh a sanction as the fraud had been committed outside of the workplace and felt that it would been more appropriate if the City of Cape Town had considered a sanction short of dismissal. The Arbitrator also commented that as the misconduct had taken place nine years ago it could not be said that it could have destroyed the trust relationship in its present state.

On review, the Labour Court disagreed and commented that when determining the appropriateness of a sanction, Arbitrators must not merely rubberstamp an employer’s decision but by the same token, as the Court observed, Arbitrators are not at large to simply decide afresh what sanction to impose and on whim, substitute the employer’s sanction with one that he/she would have imposed. The Court stated that the Arbitrator must determine whether the employer’s sanction is fair and this assessment must be based upon a consideration of all of the evidence and competing interest of the parties, not least of which is the impact that the conduct would have on the employment relationship.  

The Court in arriving at its judgement focused on the conduct of the employee and found that trust is an important element of the employment relationship whether the employee is employed in private business or within the public sector. It found that it was immaterial that the misconduct had occurred some time ago as the employee held a position of trust, had been dishonest and had, in fact, committed a criminal offence. The Court commented that the Municipality was entitled to expect an employee in that position to act honestly even though this was off-duty misconduct.  

In a subsequent case involving Thee Waterskloof Municipality vs South African Local Government Municipality (Western Cape Division) & Others, the Labour Court was called upon to determine whether a Municipal Manager was fairly dismissed for receiving a transport allowance (which he knew he was not entitled to), spending the money and then offering to repay it in derisory month instalments of R10-00 per month. The Court noted that the employee had not been dishonest in the conventional sense as he did not try and conceal the fact that he had received the money and had spent it. The Court, however, remarked that outright dishonesty is only one manifestation of the broader principle on which the employment relationship rests. That principle, the Court stated, was one of trustworthiness. As such, the Court found that the Municipality was fairly entitled to expect the employee at the level of a manager to act in its best interests and to promote its operational requirements. The employee’s conduct in receiving money that he was not entitled to and spending this money, was inconsistent with the trust that has to be maintained within an employment relationship. To make matters worse, the Municipality had not simply dismissed the employee but had offered him an opportunity to repay the money at an acceptable rate. However, the employee had come up with a ridiculous repayment offer of R10-00 per month and had then resorted to outright defiance and resistance to repay the money at a reasonable rate. The Court found that this constituted lack of remorse which expressed itself as defiance, an outright rejection of the employer’s authority and a complete disregard of its operational requirements. The Court concluded that the employment relationship had been compromised because the employee had opportunistically seized on the Municipality’s mistake to indulge in a spending spree with money he knew was not due to him and this was then exacerbated by his refusal to repay his employer for its obvious mistake.  

In reaching this decision, the Court pointed out that an Arbitrator is not given power to decide afresh what he/she would consider to be an appropriate sanction but must simply decide “whether what the employer did was fair”. While this does not mean that an Arbitrator must defer to the decision of the employer, the Arbitrator is required only to decide whether the employer’s decision to dismiss is fair.  

These two cases have, to some extent, re-affirmed a number of age old principles in our law, namely the fact that trust is an important ingredient of the employment relationship, that Arbitrators are not at large to simply set aside an employer’s decision to dismiss but must look carefully at that decision and assess whether the decision is fair or not, and that offences involving dishonesty are generally destructive toan employment relationship.