It is accepted that the principle of derivative misconduct may be relied upon by employers where there is no direct evidence to charge employees for misconduct.

In the case of derivative misconduct, an employee is liable for a separate and quite distinct offence from the primary misconduct: the employee’s failure to offer reasonable assistance to an employer to disclose information about the perpetrators of the primary misconduct.

While this may seem like a straightforward concept, the recent case of National Transport Movement (“NTM”) and others v Passenger Rail Agency of South Africa (“PRASA”) illustrates that employers must take heed of the requirements for, and limitations that apply to, reliance on the principle of derivative misconduct to dismiss employees.

Understanding derivative misconduct 

The guidelines on the application of the principle of derivative misconduct were succinctly set out by the Labour Appeal Court (the “LAC”) in Western Platinum Refinery Ltd v Hlebela and others.

In this case, the LAC explained the notion of derivative misconduct as follows:-

“[dismissal of an employee is] derivatively justified in relation to the primary misconduct committed by unknown others, where an employee, innocent of actual perpetration of misconduct, consciously chooses not to disclose information known to that employee pertinent to the wrongdoing.”

This concept stems from the principle that an employee owes a duty of good faith to an employer and that this duty is breached if the employee fails to disclose information possessed by him or her regarding the business interests of the employer being improperly undermined.

The LAC then went on to summarise the elements of the offence as follows:

1. the information or knowledge that the employee fails to disclose must be “actual knowledge”;

2. non-disclosure must be deliberate;

3. the seriousness of the primary misconduct and the rank of the employee who fails to disclose, at most affects the gravity of the non-disclosure;

4. a request to disclose information need not be made for the duty to disclose to be triggered; but if a request is made and is refused, culpability is aggravated;

5. the employee need not have a common purpose with the perpetrator; and

6. an explanation for the non-disclosure does not stretch to a defence to the charge, but may be used in mitigation of culpability.

Lessons to be learnt from NTM and others v PRASA 

In this case, NTM’s members embarked on a strike in April 2013 to assert organisational rights. During the course of the strike, trains operated by divisions of PRASA were set alight and destroyed.

PRASA suspected that the train burnings were connected to the striking workers because of the comments made by NTM officials at union meetings that could be seen as inciting the burning of trains.

PRASA addressed a notice to striking employees inviting them to make written representations as to why they should not be dismissed. PRASA alleged that the striking employees were jointly and severally responsible for the torching of trains and train coaches.

NTM’s attorneys provided a collective response to the invitation and denied that NTM and its members were involved in the acts of burning the trains and that NTM and its members offered their assistance to identify the individuals responsible.

A committee of managers rejected representations from NTM’s attorneys on the basis that it did not provide PRASA with individual responses/explanations. The committee subsequently dismissed the striking employees who had not submitted individual responses and employees whose individual responses it considered unacceptable.

What followed was a referral of an automatically unfair dismissal dispute to the Labour Court. The Labour Court, relying on the ground of “derivative misconduct”, found that the dismissals were substantively and procedurally fair.

The Labour Court’s decision was, however, taken on appeal.

The LAC decision 

The LAC found that the reliance by the Labour Court on derivative misconduct was misplaced because its essential elements were not proven.

In particular, the LAC held that PRASA had failed to prove that the dismissed employees had had actual knowledge of the incidents, let alone that they had been involved; and that the notice sent to the employees inviting representations did not call upon employees to disclose evidence as to who the actual perpetrators were. Moreover, PRASA had done nothing to identify the culprits. How, then, could it blame the dismissed employees for not doing so?

The LAC also held that the termination letter which stated that the workers were dismissed “due to the sabotage of trains and train coaches by striking members of the National Transport Movement”, made it clear that the real reason for the dismissal was not the employees’ failure or refusal to disclose information about the perpetration of the train burnings, but rather their alleged involvement in the primary misconduct.

The LAC held that PRASA had attempted to use derivative misconduct for a purpose for which it wasn’t designed – to justify the dismissals after they had occurred.

PRASA was ordered to reinstate all 700 employees. 

Conclusion

While the concept of derivative misconduct is accepted as a valid ground for dismissal, the onus still rests on the employer to prove that employees are guilty of the main elements of the 

It is not enough to show that the employees might have knowledge relevant to the primary misconduct – it must be shown, on the balance of probabilities, that each and every one of them had such knowledge.

Furthermore, an appropriate way to discipline an employee for derivative misconduct would be to charge that employee with “a material breach of the duty of good faith”. The knowledge allegedly possessed must be detailed and it also must be alleged that there was culpable non-disclosure. 

This case also highlights the important distinction between collective misconduct and derivative misconduct. In the latter situation, the employee is not dismissed because he or she was part of a group, one or more of whose members committed the primary misconduct; the employee is dismissed because he or she failed to assist the employer in “bringing the guilty to book”.