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Dismissal for dishonesty: not a foregone conclusion

Peter McDermott

Any dishonest conduct by employees can cause an employer to, figuratively, see red. It's common for such an employer to feel that dismissal of the dishonest employee is the only safe course of action because it's believed that a person capable of stealing will steal again or will steal more in future. South African courts seem to take this to heart.

In Metcash Training Ltd t/a Metro Cash and Carry v Fobb & Another (1998) 19 ILJ (LC), the judge held that:

  • "Theft is theft. It does not become less so because of the value of the item stolen. Trust is the core of the employment relationship. Dishonest conduct is a breach of that trust. Accordingly, dismissal is the appropriate sanction."

However, recent case law has seen a move away from this simplistic interpretation and a move towards a more balanced approach.

As Metcash made clear, trust is the core of the employment relationship. The question therefore becomes, taking into account the dishonesty, if the trust relationship truly becomes irreparable? This is where the merits of each case needs to be taken into account.

Did the employee occupy a position where he needed to be trusted?

Ask yourself if the position the employee occupied was one where trust was a key factor. For example, was the employee trusted to handle company funds routinely in an unsupervised fashion?

Even if it's concluded that the trust relationship was irreparably broken, you should go on to ask if there was an alternative corrective measure, short of dismissal, available. For example, could the employee be moved to a position where they have no opportunity to work with company funds?

Even if both these answers point toward dismissal, you must still consider if you've acted consistently. In other words, have you dismissed other people who've committed similar acts of dishonesty in the past? If not, you risk acting against your established culture by forcing a dismissal.

In the landmark case of Shoprite Checkers v CCMA & others (2008):

  • The Labour Appeal Court turned the established approach to dishonesty on its head:
    - "In this matter, the employee was found guilty of eating food in the store. The employee was dismissed but was reinstated by the CCMA because the sanction was too harsh. The employer's case in the Labour Appeal Court was that the sanction of dismissal was appropriate for the misconduct of which the employee was guilty.
    - "However, unlike previous judgments, the court focused on the fact that the employee had 30 years' service and a clean disciplinary record. The court also weighed the cost of the food - which could well have cost less than R20 - against the employee's loss of income which amounted to more than R30 000."

The courts now direct employers to think differently about sanctions for dishonesty

It becomes clear that the one must now look at the conduct of the employee in committing the dishonesty (the kind of dishonesty committed, such as theft or fraud) and the seriousness of the dishonesty. For example, does it qualify as serious or gross dishonesty? The employee's conduct in the aftermath of the dishonesty becomes important as well. For example, did the employee readily admit to the dishonesty? Did the employee show genuine remorse?

The Shoprite Checkers case makes it clear that the penalty for dishonesty can no longer be automatically assumed to be dismissal but requires a consideration of a combination of complex factors that will determine if the breach of trust merits dismissal.

Peter Mcdermott

Peter did a Bachelor of Technology (B.Tech), Human Resources Management and Services at Technikon Witwatersrand (1994-1998) and an Advanced Diploma – Labour Law, Law at University of Johannesburg (2001-2002).

He joined Labour Net in 1997 and was a consultant there until 2000, and has been a director and shareholder in Invictus Outsourcing Solutions since November 2001.

Peter has gained extensive knowledge and experience over the past 17 years in dealing with various Human Resources (HR) and Industrial Relations (IR) matters, including but not limited to :

  • Bargaining Council
  • Black Economic Empowerment (BEE)
  • CCMA
  • Contracts of Employment
  • Corporate Law
  • Disciplinary Procedures
  • Dismissals
  • Dispute Resolutions
  • Employment Equity (EE)
  • HR Policies and Procedures
  • Labour Court
  • Labour Relations
  • Negotiations
  • Performance Management
  • Personnel Management
  • Policies and Procedures
  • Retrenchments
  • Skills Development (SD)
  • Strikes
  • Talent Management
  • Trade Unions