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Located in a collective bargaining regulatory process, the employment contract is, at its most basic understanding, a reciprocal and legally formulated document, binding the employee and employer to a structured employment deal. It remains one of the most contested contractual arrangements under law, with the moral clause given a much lesser area of attention as an ethics risk mitigating control measure in the transactional arrangement. Structurally, the content of the employment contract either infers, through the good faith principle, or clearly expresses, conduct guidance. In the latter instance, the clause has a pre-emptive focus, accompanied by a defined script on consequences in the event of a breach of outlined organisational or work value standards. At a minimum, the contractual expectation is for the employee to maintain acceptable conduct and behaviour in and outside of the workplace, while requiring the employer to ensure good human resource governance practices. The rationale is to articulate moral competence as fundamental to the advancement of mutual workplace obligations. Similarly, the moral clause must be accentuated as a prime factor in upholding shared values.
Literature asserts that the applicability and appropriateness of the moral clause present differently in the various employment contracts, as well as an area of research. The contrast between the promotion of the various codes of good labour practices and instances of contractual disputes elucidates this reasoning. For example, unfair dismissals constitute 52% of referrals to the Commission for Conciliation, Mediation and Arbitration (CCMA), with the highest referring employment sector being the private security industry (CCMA (www.ccma.org.za, accessed 24-5-2024)). Of the 4 307 cases appraised in the Labour Court in the 2021/2022 financial year, 2 580 were finalised. It presents a slight increase from the period of 2020/2021 (Annual Judiciary Report 2021/22 (www.judiciary.org.za, accessed 24-5-2024)). Personnel practice-related disputes in the public service accounted for 231 of the 430 complaints registered in 2022/2023, with other ethics violations, such as non-disclosure of financial interests also a sustained challenge (Public Service Commission ‘Annual Report 2022/23’ (www.gov.za, accessed 24-5-2024)). In matters of misconduct, empirical evidence suggests that even as the diverse professional settings of South Africa’s labour force are characterised by appropriate legal and ethical standards, reputation-damaging behaviour and conduct, perceived or factual, continue to emerge. Most evident, in recent times, are increased cases involving fraudulent qualifications used in securing formal employment, with challenges in human resource management detecting instruments, the added reality (Public Service Commission ‘Report on the performance of national departments: Adherence to the constitutional values and principles governing public administration’ (www.psc.gov.za, accessed 25-4-2024)). Combined, such incidents escalate the focus on what additional measures, if any, could be implemented to strengthen available integrity instruments in the workplace while, equally, facilitating improved and heightened ethics awareness across the human resource management value chain of the employment environment. Consequently, stakeholder calls for institutions to self-correct and reflect in increased regulatory instructions on matters of moral conduct. Still, the disjuncture between personal and institutional accountability in balancing the promotion and management of ethical standards in the workplace is self-evident.
A moral clause, also regarded as a good conduct clause, remains characterised as a unilateral contractual provision that gives the employer the unilateral right to terminate a contract or take punitive action against the employee where any breach of the contract stipulations occurs. A breach may involve unethical behaviour or conduct that negatively affects institutional reputation and/or integrity, (Patricia Sanchez Abril and Nicholas Greene ‘Contracting correctness: A rubric for analysing morality clauses’ (2017) 74 Washington and Lee Law Review (https://scholarlycommons.law.wlu.edu, accessed 25-4-2024)) or, the reputation of the employee, as advanced through case law Munthali v Passenger Rail Agency of South Africa (PRASA) [2021] 5 BLLR 507 (LC). At best, the moral clause places misconduct as the primary area of focus. The Education Laws Amendment Act 53 of 2000 defines misconduct as conduct resulting from a failure to comply with, or contravenes this Act or any other law, regulation, or legal obligation relating to education and the employment relationship. In support is s 11(1)(e) of the Employment of Educators Act 76 of 1998, which provides for misconduct as a dismissible offence.
As a theoretical construct, its genesis is located in the sports and entertainment industry with one of the most referenced legal cases in the United States of America dating back to 1921 (Caroline Epstein ‘Morals clauses: Past, present and future’ (2015) 5 Journal of Intellectual Property and Entertainment Law (https://jipel.law.nyu.edu, accessed 23-5-2024)). The evolution of the moral clause beyond its original adoption and application is now a significant feature in employment contracts. Its use in the public sector is characterised as mandatory morality (Marka B Fleming, Amanda Harmon-Cooley and Gwendolyn Mcfadden-Wade ‘Morals clauses for educators in secondary and postsecondary schools: Legal applications and constitutional concerns’ (2009) 1 Brigham Young University Education and Law Journal (https://digitalcommons.law.byu.edu, accessed 23-5-2024)). Mandatory morality derives from the associated normative values in public service, as expressed under s 195(1) of the Constitution. Key among these principles is the obligation to promote and maintain high standards of professional ethics, along with the efficient, economic and effective use of resources. Equally, good human resource management and career development practices must be cultivated.
Moral clauses may be expressed, implied, or be categorised as reputational impact, reverse or reciprocal moral clause. In the case of public service, the standard moral clause is defined as either expressed or implied. An expressed moral clause, as outlined in the contract of a municipal manager or chief financial officer at the local government level, allocates unethical behaviour or misconduct to matters of unauthorised absence from work exceeding 15 consecutive days, or undue influence. These constitute grounds for employment termination (Ephraim Mogale Local Municipality ‘Fixed term contract of employment for the Manager: Budget and Treasury Office’ (www.ephraimmogalelm.gov.za, accessed 26-4-2024)). A statement denoted to the employee not bringing the name of the employer into disrepute, constitutes an implied clause (Ivan Israelstam ‘Misconduct outside work tricky to deal with’ (https://labourguide.co.za, accessed 27-5-2024)).
Given the mutually inclusive character of the employment contract, these clauses have, in terms of primary intent, progressed to assume an understanding of ensuring the reputation and/or integrity of both partners. In the case of the reverse moral clause, the intention is to protect the employee against unethical practices by the employer (Porcher L Taylor III, Fernando M Pinguelo and Timothy D Cedrone ‘The reverse-morals clause: The unique way to save talent’s reputation and money in a new era of corporate crimes and scandals’ (2010) 28 Cardozo Arts and Entertainment Law Journal (https://scholarship.richmond.edu, accessed 23-5-2024)). An example of the reverse moral clause deduced from Malebo v Minister for State Security (GP) (unreported case no 2214/2017, 23-8-2021) (Cochrane AJ), is that the justification for the withdrawal of the applicant’s security clearance, in 1998, arose from his perceived sickness, depression and underperformance. The reinstatement of the security clearance only concluded in 2000. However, the applicant’s sustained request from 1999 to 2016 for an explanation of the actions taken resulted in the court finding in his favour by also stating that the employer’s ethical responsibility resided in the duty to provide reasons for the actions taken.
The reciprocal moral clause, in turn, provides for the protection of the interests of both parties to a contract by placing similar ethical obligations on both parties (Joseph G Vernon ‘Is it time for athletes to demand reciprocal morals clauses in their endorsement deals?’ (www.millercanfield.com, accessed 23-5-2024)). Overall, the legal importance of both latter clauses is presented through case law, especially as their appropriateness is located in the application of the good faith principle (Francois Du Bois ‘Developing good faith: Equality, autonomy and fidelity to the bargain’ (2022) 12 Constitutional Court Review (www.saflii.org, accessed 27-5-2024)). The latter principle imposes an undertaking on both employee and employer to observe the utmost good faith in their dealings with each other and refrain from doing anything that might prejudice or detract from the rights, assets, or interests of each other (Ephraim Mogale Local Municipality (op cit)).
As a legal standard, enforceability stems from employment and contract law, respectively. The inclusion of prohibited behaviour in a contract designates the accountability role to the signatory as binding. From an ethical perspective, the moral agent, in particular, assumes importance. Specifically, the employee signifies a natural person with the capacity to understand and respond to ethical reasoning and as such, can distinguish right from wrong. The moral agent description equally applies to the public service institution as an employer. This is due to the characterisation of having a decision-making body that can deliberate on and take informed decisions on ethical matters (Toni Erskine ‘Assigning responsibilities to institutional moral agents: The case of states and quasi-states’ (2001) 15(2) Ethics and International Affairs 67).
As a benchmark standard, the case law in Government Pensions Administration Agency v POPCRU (SASAWU) obo Maimela and Others (LC) (unreported case no JR2015/18, 17-5-2022) (Moshoana J) directs that the dismissal for dishonesty was appropriately based on the irregular and unethical conduct, and contraventions of the ethics codes of the state. A similar pronouncement in Schwartz v SASOL Polymers and Others (2017) 38 ILJ 915 (LAC) concluded that a breach of the employer’s ethics code constituted serious dishonesty. The case of Masetlha v President of the Republic of South Africa and Another 2008 (1) SA 566 (CC), establishes the grounds for presenting it as the constitutional validity test of the moral clause. Specifically, as the termination of the applicant’s employment contract, concluded on the breach of trust.
Best practice informs us that a moral clause may become difficult to enforce if not clearly defined. Included in the latter opinion, is that shifts in workplace social norms advance the argument (Abril and Greene (op cit)). Of importance is that any inadequately formulated clause coupled with the absence of a universally adopted approach in similar work environments or occupational groups, may impede its legal enforcement. A perusal of the employment contracts and performance agreements of different public service career groups (a magistrate, municipal managers, chief financial officers, and chief information officer at different local municipalities) highlights that the text is not always standard, with some more descriptive on the expected ethical behaviour and conduct, as well as categorisation of ethics violations. Even where moral competence presents as a core competency, the different weightings attached to the diverse senior management professional bands at the local government level infers a possible low-priority focus.
Legislative guidelines obligate that any misconduct that compromises defined workplace moral standards requires the management of the associated process with due regard for assessing whether:
While the use of the term ‘moral clause’ is not apparent in the context of South African law of contract, generally, employment contracts do include text or terms that constitute a good behaviour clause. The divergence accrues to the extent to which human resource practices inculcate the importance of the matter, more so where moral competence remains a fundamental stakeholder expectation.
Dr Lincoln Cave DTech in Public Management (TUT) MA Security Studies (UP) PGDip Legal Principles Compliance (UJ) Dip Corporate Forensic Investigator (Damelin) is a public servant and writes in his professional accreditation as a Certified Ethics Officer. Dr Cave is also a Senior Associate of the Ethics Institute of South Africa, an Associate Member of the Institute of Commercial Forensic Practitioners, a member of the Institute of Directors South Africa, as well as a member of the Institute of Management Consultants and Master Coaches of South Africa.
This article was first published in De Rebus in 2024 (Oct) DR 26.
