The death of derivative misconduct

September 1st, 2019

National Union of Metalworkers of South Africa obo Nganezi and Others v Dunlop Mixing and Technical Services (Pty) Ltd and Others (CC) (unreported case no CCT202/18, 28-6-2019) (Froneman J (Mogoeng CJ, Cameron J, Jafta J, Khampepe J, Ledwaba AJ, Madlanga J, Nicholls AJ and Theron J concurring))

As with many protected strikes in South Africa (SA), the industrial action in which the employees of Dunlop participated during August and September 2012 became one which was marked by violence. The violence started on the first day of the strike and, notwithstanding that the employer obtained an interdict from the Labour Court (LC) to bring it to a halt, it escalated over a period of a month. In that time, several vehicles belonging to staff and visitors were damaged, a petrol bomb was thrown, as were stones, death threats were recorded on a billboard, the homes of two managerial employees were set alight, and the workplace entrances were blockaded.

Ultimately, a number of the striking employees were dismissed: Some on the basis of having been the perpetrators of the acts of violence in question, the others on the basis of what has come to be termed ‘derivative misconduct.’

‘Derivative misconduct’ has developed in our case law as a type of misconduct distinct from the primary misconduct in question, generally relied on by employers in circumstances in which the actual perpetrators of the primary misconduct cannot be identified. The concept of ‘derivative misconduct’ was articulated in Chauke and Others v Lee Service Centre CC t/a Leeson Motors (1998) 19 ILJ 1441 (LAC) at para 33: ‘This approach involves a derived justification, stemming from an employee’s failure to offer reasonable assistance in the detection of those actually responsible for the misconduct. Though the dismissal is designed to target the perpetrators of the original misconduct, the justification is wide enough to encompass those innocent of it, but who through their silence make themselves guilty of a derivative violation of trust and confidence.’

The substantive and procedural fairness of the dismissal of the striking employees was challenged by their trade union, National Union of Metalworkers of South Africa (NUMSA), on their behalf through the Commission for Conciliation, Mediation and Arbitration’s (CCMA) dispute resolution mechanisms. The arbitrator, when considering the issue of the substantive fairness of the dismissals, identified three categories of employees, namely –

  • those who had been positively identified as having been perpetrators of the violence;
  • those who were identified as having been present at the scenes of the violence but who were not identifiable as having committed any violent act; and
  • those who were not identified as having either been present at the scenes of the violence, nor participant therein.

The arbitrator found that dismissal of the former two categories of employees had been substantively fair but found there to have been no substantively fair reason for the dismissal of the last mentioned category. These employees were awarded reinstatement.

On review to the LC by the employer the arbitrator’s award of reinstatement was set aside. The Labour Appeal Court equally dismissed NUMSA’s appeal against that decision.

On appeal to the Constitutional Court (CC) by NUMSA, the court was required to determine the reasonableness of the arbitrator’s decision that the dismissal of the third category of employees had been substantively unfair. In a unanimous judgment handed down on 28 June the CC concurred with the arbitrator and substituted the order of the LC with an order dismissing the review application.

In arriving at its decision, the CC considered whether there was in fact a duty on the part of employees to disclose information pertaining to the misconduct of other employees to their employer. The court distinguished between fiduciary duties, which entail a unilateral obligation to act in the beneficiaries’ interest, and the contractual duty of good faith, which is reciprocal in nature and requires no more than that the contracting parties have regard to the interests of the other. The court concluded that our law does not imply fiduciary duties into all employment relationships. The duty generally arising in an employment relationship is a reciprocal contractual duty of good faith, which itself does not impose an obligation on any employee to disclose information of misconduct of their fellow employees to their employer, in the absence of any reciprocal obligation on the part of an employer itself to give something to the employees in return (such as guarantees for their safety).

The CC pointed out that there are many ways in which employees can both directly and indirectly participate in or associate themselves with whatever primary misconduct has occurred. Evidence of such association or participation may be sufficient to establish complicity in the primary misconduct. On the facts of the matter before it, the CC did not find that the employees who had been awarded reinstatement could all have been identifiable as having been present at the scenes of the violence and accordingly, to dismiss all of them would not be justified.

The CC now having put an end to the notion of ‘derivative misconduct’, an employer wishing to sustain a dismissal based on collective misconduct is required to demonstrate by way of either direct or compelling circumstantial evidence that the employees in question directly or indirectly associated with or participated in the misconduct in question.

Kelsey Allen BProc LLB (Unisa) is a legal practitioner in Durban.

This article was first published in De Rebus in 2019 (Sept) DR 23.