Can you dismiss employees who fail to identify who committed misconduct?
Derivative misconduct has been established where an employer does not prove that the employees knew the identity of the perpetrators but an inference is to be drawn that such employees were present during the direct misconduct and, through their silence, have committed derivative misconduct on the basis of the breach of trust between them and their employer.
The Labour Court, in Dunlop Mixing and Technical Services (Pty) Ltd and Others v NUMSA and Others (2016) 27 SALLR 27 (LC), considered the following important issues:
(a) With reference to the Labour Appeal Court judgment in Chauke and Others v Lee Service Centre t/a Leeson Motors (1998) 19 ILJ 1441 (LAC), is it a requirement that the employee has actual knowledge of the direct misconduct or, alternatively, is it sufficient that the employee ‘may reasonably be supposed to have such knowledge’?
(b) With reference to the Chauke judgment supra, what is the content of derivative misconduct?
(c) What is the viewpoint of the Labour Court in casu as to whether or not derivative misconduct has been established in the scenario where an employer does not prove that the employees knew the identity of the perpetrators, but that the inference is to be drawn that such employees were present during the direct misconduct and, through their silence, have committed derivative misconduct, on the basis of the breach of trust between employer and employee?
(d) With reference to the Labour Appeal Court judgment in FAWU v ABI (1994) 15 ILJ 1057 (LAC), what is the effect of the failure of employees to give evidence, either in the workplace hearings or external fora, regarding their being present during the commission of direct misconduct and their failure to explain why they did not disclose the relevant information to their employer?
(e) What is the viewpoint of the Labour Appeal Court, formulated in Western Platinum Refinery Ltd v Hlebela and Others (2015) 36 ILJ 2280 (LAC), as to whether or not a breach of the duty of good faith is established in the circumstances where an employee remains silent where the employer’s business interests are being improperly undermined?
(f) With reference to AA Onderlinge Assuransie Assosiasie Bpk v De Beer 1982 (2) SA 603 (A), what approach is to be adopted to determine whether or not an inference is the correct one?
This is an application by the applicants to review and set aside portion of the award handed down by the third respondent pursuant to an arbitration conducted into a dispute declared by the first respondent on behalf of certain of its members (‘the respondent employees’) arising from their dismissal by the applicants.
The applicants are all wholly-owned subsidiaries of Dunlop Industrial Products (Pty) Ltd and all carry on business at the factory situated at Induna Mills Road, Howick.
PERTINENT FACTS OF THE CASE
During August 2012, the applicants’ employees (‘the striking employees’), all of whom were members of the first respondent, embarked on protected industrial action ‘in furtherance of a wage dispute’.
During the course of the industrial action, the striking employees became involved in serious acts of misconduct all of which are described in detail in the third respondent’s (‘Commissioner of the CCMA’) award and the applicants’ evidence. The strike took place at the respondents’ premises in Induna Mills Road and commenced on 22 August 2012.
In his award, the third respondent described evidence relating to the striking employees’ conduct as ‘painting a picture of a dangerously volatile situation’ involving attacks on vehicles and ‘tantamount to placing the company’s premises under siege.’
The conduct of the striking employees was the subject of an interdict granted by the Labour Court on 22 August 2012, inter alia, restricting the striking employees from being within 50m of the access road to the applicants’ premises and interdicting the unlawful conduct.
It is apparent from the record of the arbitration that, despite the interdict, the misconduct continued unabated until the dismissals.
On 26 September 2012, the applicants terminated the striking employees’ employment for derivative misconduct.
The third respondent found the derivative misconduct arose from the failure of the striking employees to provide particulars to the applicants of the identities of the perpetrators of the ‘acts of violence intimidation and harassment committed from 22 August 2012 to 26 September 2012’.
At the conclusion of the arbitration, the third respondent found that those employees listed in paragraphs (a), (b) and (c) (the respondent employees) of the award had been unfairly dismissed and ordered the first, second and third applicants to respectively reinstate the respondent employees listed under each paragraph from the date of the award.
The CCMA Commissioner identified three categories of employees, namely:
• those whom the applicants had established had been involved in direct acts of misconduct and who had been fairly dismissed;
• those whom the applicants had identified as being present during the direct misconduct, but who failed to provide the applicants with the identities of the perpetrators, and were guilty of derivative misconduct serious enough to justify their dismissal; and
• those who had not been identified as being present during the direct misconduct, who were not guilty of derivative misconduct and should not have been dismissed.
The applicants only sought to review that portion of the arbitration award relating to the third category of employees.
The applicants applied to review and set aside paragraphs (a), (b) and (c) of the third respondent’s award and for the award to be corrected by determining that the dismissal of those employees was fair (‘the 65 respondent employees’).
FINDINGS OF THE LABOUR COURT
Detail of the arbitrator’s finding:
1. Whether employees were present during the direct misconduct and therefore obliged to disclose
The review was confined to the third respondent’s finding that the distinguishing factor between those employees fairly dismissed for derivative misconduct and those found to have been unfairly dismissed for derivative misconduct was simply whether or not the applicants’ had discharged the onus of establishing that those employees listed in paragraphs (a), (b) and (c) of the award were present during the commission of the ‘acts of violence, intimidation and harassment’ (the ‘direct or principle misconduct’) and therefore obliged to provide the applicants with the ‘particulars of the identities of the perpetrators’.
2. Employees dismissed for failure to provide the identities of the perpetrators
The third respondent, in addition, held that the derivative misconduct for which the employees were dismissed:
‘was misconduct relating to an alleged failure on their part to provide the [applicants] with particulars of the identities of the perpetrators of acts of violence, intimidation and harassment committed from 22 August 2012 to 26 September 2012’
The essence of the applicants’ ground of review was directed at the third respondent’s conclusion that the applicants had not discharged the onus of establishing that respondent employees, who were not specifically identified as having been present during the ‘direct misconduct’, were accordingly not guilty of derivative misconduct.
In their evidence, the applicants’ witnesses amplified and explained the basis of their averment that the respondent employees, despite not being identified, were guilty of derivative misconduct and, therefore, fairly dismissed as it could be inferred that they were present during the acts of misconduct.
The applicants’ evidence went further than simply relying on the respondent employees’ failure to provide ‘particulars of the identities of the perpetrators’.
In their pleadings, and during the evidence, the applicants averred that the respondent employees were guilty of derivative misconduct in that they committed a breach of the trust relationship by failing to come forward and either:
• exonerating themselves by explaining they were not present during the ‘picketing’ and ‘direct or principle misconduct’ or could not identify the perpetrators; or
• identifying the perpetrators.
The applicants averred that it was
‘illogical and unreasonable [for the third respondent] to hold that such respondents were entitled to decide not to testify because there was no evidence against them’.
The applicants averred that, accordingly, the decision of the third respondent was not one which could be reasonably reached on the evidence and other material placed before him.
Nature and extent of derivative misconduct
Crucial to the enquiry is, firstly, a careful consideration of the nature and extent of the derivative misconduct.
I. Approach of the CCMA
It is not unreasonable to infer, not only from the applicants’ evidence but from the evidence of the respondents at the arbitration, that all the striking employees were engaged in and participated in the strike and, accordingly, in the absence of any explanation, were present.
CCMA: CEPPWAWU judgment (LAC): employer is required to prove commission of misconduct
The third respondent, in considering whether the applicants had established that the employees were guilty of derivative misconduct, started by referring to the matter of CEPPWAWU v NBCCI and Others  2 BLLR 137 (LAC), where the court held that:
‘…In cases of collective misconduct an employer can only act against those employees it can prove to have committed the misconduct complained of.’
CCMA: nature of derivative misconduct the employees were dismissed for – failure to provide identities of employees directly involved
It is important to repeat the third respondent’s finding regarding the nature of the derivative misconduct for which the employees were dismissed.
‘I accordingly find that [the employees] were dismissed for derivative misconduct relating to an alleged failure on their part to provide the [applicants] with particulars of the identities of the perpetrators of acts of violence, intimidation and harassment committed from 22 August 2012 to 26 September 2012.’
CCMA: onus – knowledge of the perpetrators and failure to disclose
The third respondent concluded that the applicant bore the onus of
‘proving on a balance of probabilities that the [employees] knew who the perpetrators of the principal misconduct were and that they failed to disclose such information to the [applicants]’.
LC’s response: derivative misconduct in casu – in addition: a breach of trust arising from failure to come forward to identify the perpetrators or exonerate themselves
This conclusion ignored the fact that the derivative misconduct the applicants relied upon related, in addition, to failing to identify the perpetrators and to a breach of trust arising from the failure to come forward, either to identify the perpetrators or exonerate themselves.
CCMA: relied on Chauke judgment (LAC)
When dealing with derivative misconduct, the third respondent relied on the matter of Chauke and Others v Lee Service Centre t/a Leeson Motors (1998) 19 ILJ 1441 (LAC) and, in particular, the following:
‘ …Two lines of justification for a fair dismissal may be postulated. The first is that the worker in the group which includes a perpetrator may be under a duty to assist management in bringing the guilty to book. Where a worker has or may reasonably be supposed to have information concerning the guilty, his failure to come forward with information may itself amount to misconduct. The relationship between employer and employee is in its essentials one of trust and confidence, and, even at common law, conduct clearly inconsistent with that essential warranted termination of service. Failure to assist an employer in bringing the guilty to book violates this duty and may itself justify dismissal…
 This approach involves a derived justification, stemming from an employee’s failure to offer reasonable assistance in the detection of those actually responsible for 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.’
LC’s response: CCMA’s approach ignores the inference that the employees were present and guilty of derivative misconduct by remaining silent
The third respondent’s conclusion that the derivative misconduct was simply confined to proving ‘… that the [employees] knew who the perpetrators of the principal misconduct were and that they failed to disclose such information to the [applicants]’ ignores not only the applicants’ evidence regarding the breach of trust but the inference that the respondent employees were present and accordingly guilty of derivative misconduct by remaining silent.
In the award, the third respondent then proceeded to consider the onus on the applicant in proving the derivative misconduct.
CCMA: onus – RSA Geological Services (LC)
In this regard, the third respondent relied on the decision in RSA Geological Services v Grogan NO and Others (2008) 29 ILJ 406 (LC) and, in particular:
‘The employer must prove on a balance of probabilities that the employees knew or must have known about the principle misconduct and elected without justification not to disclose what they knew.’
In analysing the evidence, it is apparent that the third respondent, in determining whether the applicants had discharged the onus, lost sight in the final analysis of that aspect of the derivative misconduct for which the employees were found guilty and dismissed.
The third respondent failed to consider, firstly, whether a reasonable inference could be drawn that the respondent employees were present and, secondly, if such an inference could be drawn whether the failure of the employees to come forward and provide either an explanation exonerating themselves or providing the names of the perpetrators constituted derivative misconduct.
II. LC’s approach dealing with derivative misconduct: on a balance of probabilities employees knew who the perpetrators were and failed to disclose identities or exonerate themselves
The third respondent, having determined that the derivative misconduct was only a ‘failure on their part to provide the [applicants] with particulars of the identities of the perpetrators of acts of violence, intimidation and harassment committed from 22 August 2012 to 26 September 2012’, appears to have proceeded on the premise that the only misconduct the applicants were required to prove on a balance of probabilities was that the employees knew who the perpetrators of the principal misconduct were and that they failed to disclose such information to the applicants.
This raised two issues:
1. Distinction between proving that the employees knew who the perpetrators were and under duty to come forward
• Firstly, there is a clear distinction between proving on a balance of probabilities that the employees knew who the perpetrators were and failed to come forward and disclose this information as was found by the third respondent to be the onus resting on the applicants and considering whether, as was postulated in the Leeson Motors matter, the respondent employees were under a duty, consistent with the ‘essential … trust and confidence’ of an employment relationship to come forward with an explanation; and
2. Was there a duty on the employees to do more than remain silent?
• Secondly, the third respondent did not consider whether the evidence of the applicants’ witnesses was sufficient to require the respondent employees to do more than simply remain silent.
FAWU v ABI (LAC)
In Leeson Motors, the court, referring to the decision in FAWU v ABI (1994) 15 ILJ 1057 (LAC), said the following:
‘In FAWU v ABI, the court held that, on an application of the evidentiary principles of failure by any of the workers concerned give evidence either in the workplace hearings or in the Industrial Court justified the inference that all those present at the workplace on that day either participated in the assault and the support to it. There were other inferences compatible with the evidence. But the inference of involvement was most likely since ‘this is pre-eminently a case in which, at one or more of the appellants had innocent explanation, they would have tended it, and in my view that failure to do so must be weighed in the balance against them.’
In analysing the evidence and considering the various incidents, the third respondent appeared to concentrate only on the simple issue of whether the applicants were able to identify who was present or not.
CCMA failed to consider whether an inference could be drawn
This approach was inexorably linked to the third respondent’s failure to consider whether it could be inferred that the respondent employees were present and ‘through their silence make themselves guilty of a derivative violation of trust and confidence’.
The third respondent, despite referring to the inference to be drawn from the evidence, only relied on a consideration of whether the employees were identified by the witnesses and did not appear to consider whether the evidence adduced by the applicants was sufficient to create an inference that the respondent employees were all on strike and present.
The third respondent found that the parties were subject to a picketing rules agreement, that it was proved by the evidence of the first respondent’s Mr Sibisi that it had been conveyed to the respondent employees that the applicants required information regarding the perpetrators of the misconduct and that they should provide such information.
The third respondent also found that the defence raised and relied upon by the respondents at the time of the misconduct and the arbitration was to deny the misconduct. The witnesses who gave evidence on behalf of the respondents simply denied any misconduct, breach of the strike and picketing rules or the interdict.
It is trite that the arbitration was a hearing de novo. The respondent employees had been afforded an opportunity to come forward before they were dismissed. This opportunity was again available to them at the arbitration.
In the face of the extensive evidence relating to the presence of the striking employees and of the serious misconduct, the first respondent and the employees elected deliberately not to give evidence or an explanation (besides Duma and Grantham, whose evidence was simply to the effect that no misconduct had taken place, which evidence was rejected by the third respondent).
The right to remain silent is sacrosanct in criminal matters where accused persons are presumed innocent until found guilty. This was not a criminal investigation and the presumption of innocence does not apply.
The issue in question in this matter was whether the respondent employees were entitled, despite the nature of the employment relationship, to passively remain silent in the face of an opportunity to assist in the investigation. The courts have repeatedly stressed the nature and essence of the employment relationship which is based on trust and good faith.
The response by the respondent employees in this matter, particularly taking into account the evidence adduced by the applicants, to simply remain silent was a breach of that trust.
The question that arises is whether the evidence adduced by the applicants was sufficient to create the inference that the employees were present during the misconduct and that, in turn, placed a burden upon the employees to exonerate themselves or identify the perpetrators of the misconduct. It was never suggested by the employees that they were not present during the direct misconduct that took place during the strike.
In FAWU v ABI (1994) 15 ILJ 1057, the Labour Appeal Court held the following:
‘In argument before us it was accepted by the appellants’ counsel that if it was found that each of the appellants had associated themselves with the assault in one or other of the forms alleged by the respondent, the dismissal was justified.
It was submitted by the appellant’s counsel that the onus of establishing this was upon the respondent, and that the onus was to be discharged as a matter of probability. I have assumed for purposes of this appeal that that submission is correct.
There was no direct evidence linking any of the appellants to any particular act in relation to the assault, and the respondent’s case was based on inference alone. None of the appellants gave evidence, either in the court a quo or in the course of the disciplinary hearing. The attitude adopted by the appellants throughout was that it was for the respondent to establish their complicity, and that no case had been made out against any of them which called for a reply.
The extent to which a party’s failure to give evidence may properly give rise to an inference against him has received considerable attention from the courts. What emerges from the decided cases is that his failure to do so cannot by itself constitute proof of what is alleged against him. Nevertheless the evidence against him, though not conclusive, may be such that an explanation would be expected if one was available. In such cases his failure to provide an explanation may be placed in the balance against him.
In the field of industrial relations, it may be that policy considerations require more of an employee than that he merely remain passive in circumstances like the present, and that his failure to assist in an investigation of this sort may in itself justify disciplinary action.’
More recently the issue of derivative misconduct was considered by the Labour Appeal Court in the matter of Western Platinum Refinery Ltd v Hlebela and Others (2015) 36 ILJ 2280 (LAC), where Sutherland JA, after considering the judgment in Chauke and Others v Lee Service Centre t/a Leeson Motors, stated the following:
‘The effect of these dicta is to elucidate the principle that an employee bound implicitly by a duty of good faith towards the employer breaches that duty by remaining silent about knowledge possessed by the employee regarding the business interests of the employer being improperly undermined. And controversially, and on general principle, a breach of the duty of good faith can justify dismissal. Nondisclosure of knowledge relevant to misconduct committed by fellow employees is an instance of a breach of the duty of good faith. Importantly the critical point made by both FAWU and Leeson Motors is that a dismissal of an employee is derivatively justified in relation to the primary misconduct committed by unknown others, where an employee, innocent of actual perpetration of misconduct, consciously chooses not to disclose information known to that employee pertinent to the wrongdoing.’
The issue is whether, on the evidence, the inference could be drawn that the employees in this matter were present when the direct misconduct was committed and the Labour Court found this to be the case.
In the ABI judgment (supra), the court, when considering the inference to be drawn, said the following:
‘The inference which the respondent seeks to draw from the evidence is that all the appellants were present at the time the assault took place, and either actively participated in the assault or at least supported and encouraged the actual perpetrators. It is a cardinal rule of logic when reasoning by inference that the inference sought to be drawn must be consistent with all the proved facts. If it is not, the inference cannot be drawn (R v Blom 1939 AD 188 at 202-3). In my view all the evidence in the present case is consistent with that inference…
The fact that the evidence is consistent with the inference sought to be drawn does not of course mean that it is necessarily the correct inference. A court must select that inference which is the more plausible or natural one from those that present themselves (AA Onderlinge Assuransie Assosiasie Bpk v De Beer 1982 (2) SA 603 (A)). In the present case however no alternative inferences have been advanced which have a foundation in the evidence. It was suggested in argument that one or more of the appellants may have been absent, or may have been unwittingly caught up in the events. This, however, is no more than speculation, as there is no evidence to suggest that this is what occurred. In my view this is pre-eminently a case in which, had one or more of the appellants had an innocent explanation, they would have tendered it, and in my view their failure to do so must be weighed in the balance against them.’
Labour Court’s conclusion
The Labour Court was satisfied that the only reasonable and plausible inference that could be drawn from the evidence was that the respondent employees were present during the strike and, accordingly, during the misconduct. If they weren’t present or had no information regarding the perpetrators they would have said so. They, despite the opportunities afforded them, had not.
Order of the Labour Court
In the circumstances and for the reasons set out above, the Labour Court made the following order:
• paragraphs (a), (b) and (c) of the third respondents award were reviewed and corrected by the deletion of paragraphs (a), (b) and (c) and substituted with an order that the dismissals of those persons whose names appeared in paragraphs (a), (b) and (c) were substantively and procedurally fair;
• there was no order as to costs.
Dr Brian van Zyl is a Director of labour law firm Van Zyl Rudd and Associates, www.vanzylrudd.co.za.
This article appeared in the May 2018 issue of HR Future magazine.