Employment law update – Competent verdict – employee charged for dishonesty yet dismissed for negligence

November 1st, 2019
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EOH ABANTU (Pty) Ltd v Commission for Conciliation Mediation and Arbitration and Others (LAC) (unreported case no JA4/18, 15-8-2019) (Murphey AJA with Waglay JP and Savage AJA concurring).

Under what circumstances, if any, can an employee at an internal disciplinary hearing be found guilty of a charge which was never put to them?

The employee in this matter was charged with dishonesty, theft, fraud and unauthorised removal of property.

The employer alleged that while working at its client’s premises, the employee intentionally gave a third party, intellectual property belonging to its client. The intellectual property in question was a Microsoft software licence product activation key. At the hearing the employee admitted to e-mailing an activation key to his girlfriend’s mother to assist her installing Microsoft onto her computer but denied doing so intentionally. The employee explained that he thought he was e-mailing his girlfriend’s mother an activation key, which he privately downloaded, and which was not the property of the employer – hence he did not act dishonestly or fraudulently.

The employee was found to have committed the offences, however, the chairperson of the disciplinary inquiry did not find any dishonesty on the part of the employee. In the absence of an intent to defraud or steal, the chairperson found the employee guilty of gross negligence pursuant to which he was dismissed.

Unhappy with his dismissal the employee referred a dispute to the Commission for Conciliation Mediation and Arbitration. The second respondent arbitrator found the dismissal substantively unfair on the ground that the employee was dismissed for gross negligence when in fact he was charged for theft, dishonesty and fraud. Simply put, the arbitrator found the employee’s dismissal unfair once he was dismissed for a misconduct which he was never charged for.

On review the Labour Court (LC) dismissed the employer’s application to set aside the award. The court held:

‘[I]n this case, the employee was charged with dishonesty. That is the case he went to meet and that is the case that the employer could not prove. The arbitrator correctly found that the employer did not discharge the onus of proving intent, and thus could not prove the misconduct that it had alleged. That is why the dismissal was unfair.’

On appeal the employer argued that the employee was aware of the conduct described in the charges and that dishonesty was but one of the elements he was accused of. Therefore, according to the employer, the employee knew what charge he had to meet, that being unauthorised appropriation of the client’s property.

The Labour Appeal Court (LAC) firstly observed that a key element of fairness is that an employee is made aware of the charge they have to meet and generally an employer cannot change the charge or introduce additional charges once the hearing commences if in doing so, the employee would be unduly prejudiced. However, the LAC likewise remarked that courts and arbitrators should not adopt a rigid or technical approach. In striking a balance, the LAC held:

‘Employers embarking on disciplinary proceedings, not being skilled legal practitioners, sometimes define or restrict the alleged misconduct too narrowly or incorrectly. For example, it is not uncommon for an employee to be charged with theft and for the evidence at the disciplinary enquiry or arbitration to establish the offence of unauthorised possession or use of company property. The principle in such cases is that provided a workplace standard has been contravened, which the employee knew (or reasonably should have known) could form the basis for discipline, and no significant prejudice flowed from the incorrect characterisation, an appropriate disciplinary sanction may be imposed. It will be enough if the employee is informed that the disciplinary enquiry arose out of the fact that on a certain date, time and place he is alleged to have acted wrongfully or in breach of applicable rules or standards.

In short, there is no requirement that competent verdicts on disciplinary charges should be mentioned in the charge sheet – subject though to the general principle that the employee should not be prejudiced’.

As to the test for deciding whether an employee would be prejudiced if they were found guilty of a charge not put to them, the LAC stated:

‘Prejudice normally will only arise where the employee has been denied knowledge of the case he had to meet. Prejudice is absent if the record shows that had the employee been alerted to the possibility of a competent verdict on a disciplinary charge he would not have conducted his defence any differently or would not have had any other defence’.

The LAC found that the arbitrator, in finding that it was not competent to sanction the employee for negligence, committed a material error in law, which the LC ought to have set aside.

Adopting and applying the correct approach to the facts of the case, the LAC found that the employee was indeed negligent by e-mailing a licence key, belonging to his employer’s client, to a third party. Despite the argument by the employee that if he had been charged with negligence, he would have presented a different case at the internal hearing, the LAC was guided by the fact that the employee was unable to explain how his case, in particular what evidence he would have introduced, would have differed had he been charged with negligence. On the facts, the employee’s own version made him guilty of negligence.

Considering the fact that the employee’s length of service with the employer was less than one year, together with the fact that he held a senior position; the court found dismissal an appropriate sanction.

The LAC upheld the appeal and substituted the LC’s finding with an order that the arbitrator’s award be set aside and replaced with a finding that the employee’s dismissal was both substantively and procedurally fair. No order as to costs was made.

Moksha Naidoo BA (Wits) LLB (UKZN) is a legal practitioner holding chambers at the Johannesburg Bar (Sandton), as well as the KwaZulu-Natal Bar (Durban).

This article was first published in De Rebus in 2019 (Nov) DR 34.