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23 Jul 2019
BY Peter le Roux AND Matlhatsi Ntlhoro

Dismissing an employee for dishonesty during a disciplinary hearing or arbitration proceeding  

Dishonesty in the workplace can take various forms, including theft of the employer’s property (or that of fellow employees), fraudulent conduct, such as submitting incorrect time sheets, lying to managers and other unethical conduct. Below, we look at one form of dishonesty that has not received much attention in South African labour courts, namely, where an employee lies during the course of a disciplinary hearing (or a similar type of investigation) or arbitration proceeding.

The employee in the case of University of KwaZulu-Natal v Pillay and Others, Mr Pillay, was employed as the Chief Financial Officer of the University of KwaZulu-Natal (“UKZN”). Shortly after Mr Pillay received a Master’s degree in commerce from the university, the vice-chancellor of UKZN received information from an anonymous source alleging certain irregularities related to Mr Pillay being awarded the degree. An internal committee was established to investigate the matter. It reported that the allegation had been made that Mr Pillay had been involved in an intimate relationship with one of the examiners and that he had given the examiner an amount of ZAR80 000. Further developments led to a second investigation chaired by an independent chairperson. During the course of this second inquiry, Mr Pillay gave evidence and denied the allegations made against him. The second inquiry rejected this evidence and found that Mr Pillay had been involved in an intimate relationship with the examiner and had paid her the amount of ZAR80 000. In effect, the second inquiry found that Mr Pillay had lied to it.

Mr Pillay was then charged with the disciplinary offence of lying to the second inquiry. A disciplinary inquiry was held and Mr Pillay was found guilty of dishonesty and dismissed. Mr Pillay then referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (“CCMA”). The CCMA found the dismissal to be fair and that it was an appropriate sanction for the dishonest conduct.

On review, the Labour Court accepted the commissioner’s conclusion that the trust relationship had been irretrievably damaged and that dismissal was an appropriate and reasonable sanction. The issue as to whether the dismissal was procedurally unfair was eventually considered by the Labour Appeal Court and, during the course of its decision, the court also accepted that dismissal had been an appropriate disciplinary sanction.

In Mr Pillay’s case, the courts were dealing with the conduct of a very senior employee where the relationship of trust and confidence could easily be seen as being destroyed as a result of his dishonesty. The decision in Banking Insurance Finance & Allied Workers Union & another v Mutual & Federal Insurance Co Ltd dealt with the dismissal of a shop steward who, while representing an employee at a CCMA arbitration, had lied to the CCMA commissioner during the course of the arbitration. The shop steward had argued that the dismissal of the employee he was representing was procedurally unfair because the chairperson of the disciplinary inquiry had unreasonably failed to postpone the hearing. The hearing had in fact been postponed.

The shop steward claimed that his dismissal had been automatically unfair because he was dismissed for exercising his right as a shop steward to represent the union’s members. The Labour Court found that the dismissal was fair. On appeal, the Labour Appeal Court agreed with this approach. It pointed out that a court should be slow to confirm the dismissal of an employee whose conduct at a disciplinary inquiry or arbitration has, as a result of immaturity, inexperience, over-zealousness, exuberance, or an inability to maintain a certain detachment, fallen short of the standard that could reasonably have been expected. It also stated that an employee representing a fellow employee has the right, and indeed the duty, to do so fearlessly to the best of his or her ability. But the court went on to conclude that, in this case, the shop steward had been devious, unscrupulous and deceitful. It came to the conclusion that the shop steward’s dishonesty was inconsistent with his employment as an underwriting clerk in a position of trust. The dominant reason for his dismissal was his dishonest conduct and not the fact that he represented a union member at an arbitration proceeding.

Conclusion

On the facts of the case, the decision in Pillay was clearly self-evident – the dismissal of a senior employee who lied during the course of an inquiry was the appropriate sanction. In the case where a shop steward was dismissed for dishonesty while executing his duties, there was a thin line between the shop steward potentially being victimised for representing a member of a union and serving the employer honestly and faithfully as an employee. In essence, a shop steward served two masters. One was the duty to represent employees and the other was of being an honest employee towards the employer. Every employee has the right to participate in union activity, however with this right comes a responsibility in respect of the manner in which they participate. The two duties of a shop steward overlap and if a shop steward is caught abusing the one duty of representing employees by being deceitful and dishonest, he or she cannot cry victimisation upon their dismissal.

Matlhatsi Ntlhoro is a candidate attorney in ENSafrica's employment department. 

Reviewed by Peter le Roux, an executive consultant in ENSafrica’s employment department.