Public Newsletter


Worklaw is a subscription based labour law service developed by leading South African labour lawyers and arbitrators. Worklaw gives you all you need to manage labour law at the workplace. Go to

Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. This month's subscriber newsletter contains an article which asks whether it is always necessary to lead evidence about the breakdown in trust, given a recent LAC decision that appears to contradict the previous approach to this topic by the SCA. We also look at three new cases: The first case looks at the point at which employee behaviour in refusing a transfer constitutes insubordination. The second case considers the role of prior warnings in a disciplinary enquiry. The third case looks at the point at which an employee's moonlighting becomes a problem.

This public newsletter is a free edited version of the subscriber newsletter.


Refusing a transfer: the borderlines of insubordination

The employment relationship has changed drastically since the days of 'master and servant' law. Trade union membership, robust collective bargaining, the right to strike, protection for whistle-blowing and the freedom of expression are just some of the ways in which the law today has been re-moulded. The days of punishing the 'cheeky' employee have been replaced by a norm which promotes rational consultation and protection from victimisation. So what is the scope of the common law notion of 'insubordination'?

Consider the facts of this recent case: The employee held the position of Director of the Alexandra Renewal Project ("the ARP") which was funded by national government. The aim of the ARP was to develop Alexandra Township with emphasis placed on high density housing. The ARP had been an ongoing project since 2001. The employee and the municipality concluded a contract of employment which regulated the municipality's right to give effect to a transfer.

The contract stipulated the employee's normal place of work and went on to state that "the City may, however, require the employee to work at such other places within the City's boundary / jurisdiction and within the Republic of South Africa, whether on a temporary or permanent basis, as the City may from time to time require,....."

Tensions arose between the municipality and members of the Alexandra community, led by the ANC Youth League. Death threats were made, leading to a reasonable apprehension of harm to the employee. The municipality believed it was duty bound to take all reasonable steps to eradicate or mitigate the potential for such harm. The municipality sought to transfer the employee to a different position in its organisation. The municipality was aware of its onerous obligations to maintain a safe working environment in accordance with the objectives and spirit of the Occupational Health and Safety Act, 85 of 1993.

The employee refused the transfer and was subsequently disciplined for gross insubordination as a consequence of the failure to carry out reasonable and lawful instructions.

The arbitrator found against the municipality and determined that the employee was not guilty of gross insubordination. The Municipality then took the matter on review to the Labour Court in City of Johannesburg v Swanepoel N.O. and Others (JR2316/12) [2016] ZALCJHB 80 (26 February 2016). The Labour Court endorsed the traditional understanding of insubordination in the workplace as the wilful and serious refusal by an employee to obey a lawful and reasonable instruction, or where the conduct of an employee poses a deliberate (wilful) and serious challenge to an employers' authority.

In this case the LC gave weight to the long period over which the employee persisted in his refusal and the attempts of the municipality to respond to a safety imperative. The employee 'repeatedly and defiantly refused', preventing the employer from being able to carry out and comply with its statutory duty of care. The Court concluded that the employee was guilty of insubordination justifying dismissal.

Apart from its main finding that dismissal was justified on grounds of gross insubordination, the Court's other comments about the fairness of transfers are interesting. It commented that if the transfer turned out to be unreasonable and unfair, the employee would have had other options such as the lodging of an internal grievance or an unfair labour practice dispute. Whilst the Court acknowledged that the LRA provides no express remedy for employees who are unfairly transferred, it noted that the LAC has brought such actions within the bounds of the LRA. Employers are required to ensure that any transfer must accord with the provisions of sections 186(1)(e) and (2)(a) of the LRA - ie the transfer must not render the employment relationship intolerable entitling the employee to terminate employment (constructive dismissal); and it must not constitute a demotion that could qualify as an unfair labour practice.

In this particular case, the transfer served a public interest given the very sensitive and unique dynamics that were interwoven with the employee's duties and functions.

The role of disciplinary warnings

The LRA through the Dismissal Code of Good Practice conceives of discipline as being 'progressive', moving from informal consultation to written warnings to a final written warning prior to dismissal, when appropriate. There is no statutory provision that deals with what the duration of a disciplinary warning should be, nor is there a provision that deals with what the effect is in law of the lapsing of a disciplinary warning. The recent LAC judgment in Dorrainn Bailiff Investments (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JR86/2011, JA8/2015) [2016] ZALAC 20 (26 May 2016) considered these issues.

The employer, a retail pharmacy, delivered medication to the residences of its clients. The employee was employed as a driver from 2003 until his dismissal in 2010. He referred an unfair dismissal dispute to the CCMA. At arbitration the Commissioner found that his dismissal was unfair and ordered the employer to pay him compensation in the amount of R34 098, which translated into six month's salary. The employer launched an unsuccessful review application. Dissatisfied with the outcome of the review application, the employer then appealed to the LAC. The event that gave rise to his dismissal involved the extreme verbal abuse of the employer (swearing at a manager over the phone using the 'F' word), and in dismissing him, previous warnings were taken into account.

During 2007 he was found guilty of using the company vehicle for private purposes without permission and transporting passengers without permission, and given a final warning valid for 12 months. During 2009 he was found guilty of leaving his place of employment without permission, arriving late at work 16 times in 18 days, and failing to collect a script for a patient. He requested to be given a final chance. He was given a final written warning on condition that there was an immediate and substantial improvement in his performance and attitude. Also during 2009 he was found guilty of misconduct for failing to pay back money loaned to him, and given another final warning. This last final warning was still valid at the time of the latest incident involving the verbal abuse of the employer. The employer made it clear that it took all previous warnings, including the lapsed warnings, into account in deciding to dismiss the employee.

Regarding the latest incident, the Commissioner at arbitration found that the employee was guilty of gross misconduct but regarded dismissal as too serious a sanction, given that at the time the employer had withheld his monthly salary, which had caused him severe financial duress and embarrassment and triggered his unacceptable conduct. Despite the valid final warning on record, the arbitrator found that the employee's conduct "viewed holistically" did not justify dismissal and that the sanction of dismissal was too harsh.

On review, the LC found that the Commissioner had considered the "totality of relevant factors" and the circumstances under which the outburst was made, and rejected the review application. The LAC on appeal took a different view, and found that the Commissioner had failed to give proper weight to all the previous transgressions, only considering the last valid final warning, whereas the employer at the time of giving that last final warning had made it clear that his "entire disciplinary record" would be used against him in the event of any further transgressions.

For these reasons the LAC found that the dismissal was substantively and procedurally fair. The LAC made reference to a previous judgment that confirmed that whilst there is no statutory provision dealing with the duration of warnings or the effect of lapsed warnings, the employer is able through contractual provisions or established practice to determine how such matters should be approached. In this case the employer had made it clear that the employee's entire disciplinary record would be taken into account, which included past lapsed warnings.

This case should be read in combination with Transnet Freight Rail v Transnet Bargaining Council and others (LC Case no.: C644/2009 Date of judgment: 4 March 2011) which held that previous expired warnings could be considered to show a consistently deplorable employment record. An employer is always entitled to look at the cumulative effect of an employee's misconduct.

The learning from this judgment is that employers should clearly spell out in their policies and procedures how long warnings apply for, what the status is of expired warnings, and under what circumstances they will be taken into account in the event of any future transgressions. Their failure to do so may mean that lapsed warnings may not be taken into account in considering the cumulative effect of an employee's misconduct.

Moonlighting: when is this allowed?

It is an on-going problem: employees, using their insider knowledge and skills, set up a business in competition with the employer or to provide a preferred service to the employer. These practices may be corrupt, dishonest and ultimately cause conflict. But is this always the case? Consider these facts:

The employee (an accountant) and his line manager registered a close corporation, Godiva Financial Services. They also lived in the same house. It was alleged that the employee did not obtain permission to run the company from the company director. The employee's case was that he obtained verbal permission from his line manager. Godiva was dormant and never did any business in competition with the employer. Godiva was described as a financial service provider whereas the employer is a logistics company.

When he was dismissed, the employee referred a dispute to the CCMA. The Commissioner found that there was nothing in the employment contract or code of conduct that stated that written permission to conduct extraneous business was needed and that it must be obtained from the director or executive. It merely stated that no external employment or work may be undertaken without the employer's prior consent. He however found that the employee, given his position as an accountant, ought to have known that getting permission from a senior employee who is also a member of Godiva would not be in the best interests of the employer. Despite this, the Commissioner found that the sanction of dismissal was too harsh and the employee was reinstated subject to a final written warning valid for 6 months.

On review at the Labour Court the employer did not attack the Commissioner's finding in relation to the nature of the misconduct but only challenged the remedy of reinstatement. The LC found that the Commissioner, in essence, undertook the required assessment and balanced the interest of employment, justice and the need for the efficient operation of the employer's business and decided on a sanction short of dismissal. The LC was of the view that the Commissioner's decision was one that a reasonable decision-maker could make.

On appeal to the LAC in Barloworld Logistics v Ledwaba N.O. and Others (JA119/14) [2016] ZALAC 17 (11 May 2016), the Court agreed with the LC's assessment and dismissed the appeal. The LAC said that where there is no dishonesty or conflict of interest involved, the involvement of an employee in an outside business will not be grounds for dismissal. The Court said the breakdown of the trust relationship is not solely dependent on what the employer says. Irrespective of the employers' testimony in this regard, the CCMA is still required to enquire whether that is indeed so.


Worklaw is a comprehensive labour law advice and information service, developed by some of South Africa`s most experienced labour arbitrators. Worklaw subscribers get free advice from experienced arbitrators via e-mail, can research the law and leading cases, are updated monthly on new cases, trends etc, and can use excellent training material, to name a few of these services. Subscribers are invited to an annual labour law workshop covering the key cases and trends from the past year.

Contact us for more information:
Telephone: 031-561 5004
Fax: 031- 561 6906

Bruce Robertson
June 2016
Copyright: Worklaw