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Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. This newsletter contains an article which looks at the law relating to 'Searching & testing employees'. We also discuss three new cases: The first case considers whether dismissal is a fair sanction for a deliberate disregard for a workplace rule. The second case deals with the requirements for an interdict. The third case covers misrepresentation about unnecessary qualifications.

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


Disregard for a known workplace rule

Many cases grapple with the extent of the severity of the misconduct in question and whether it is serious enough to justify dismissal. Test yourself - is dismissal too severe a sanction in the circumstances below?

The employee worked as a technician in Cape Town City's Housing Maintenance Unit. The City alleged that he had failed to declare his personal interest or a conflict of interest in three entities that provided services to the City, namely RFH Interior & Exterior Works cc (RFH); RH Interior & Exterior Decorators (RH); and Jay Dee Construction (Jay Dee). Jay Dee belongs to the employee's wife, to whom he is married in community of property. It is a registered vendor to the City. RFH was registered in the name of the employee and his brother. He testified that he had resigned his membership. RH is owned by his brother and is a registered vendor to the City, having traded with the City to the value of more than R285 000 over a period of more than two years.

Following a complaint on its hotline, the City conducted a forensic investigation and called the employee to a disciplinary hearing to face six allegations of gross dishonesty. They all related to his failure to declare his personal interest or a potential conflict of interest in the three entities discussed above. He was dismissed.

Dismissal fair or not? At arbitration, the arbitrator, having found that the employee did commit the misconduct, considered the appropriate sanction to be applied. She found that "dishonesty implies deception which entails wilful misrepresentation of the truth, with the intention to cheat and induce a belief that the misrepresented fact is indeed the truth". She continued:

"I find that whilst there was a rule (he knew about the disclosure requirement), he did not knowingly or with intention break the rule. He made a half-hearted attempt to comply with the rule and then he left it, having been told that it would take time. There was no gross dishonesty. There was no material evidence of what the effect of the non-compliance with the rule was. Dismissal was not the appropriate sanction."

The arbitrator ordered the City to reinstate the employee and to pay him one year's back pay. On review in the Labour Court in City of Cape Town v SALGBC and Others (C353/16) [2017] ZALCCT 35 (2 August 2017), the City argued that the arbitrator committed an error of law as well as other reviewable irregularities. The court agreed and found that the dismissal was fair. The LC found that where an arbitrator accepts the employee knew of the existence of a rule requiring disclosure of a conflict of interest and failed to comply, to then find that dismissal was not a fair sanction, especially where public funds are involved, is not a decision that a reasonable arbitrator could have reached.

This case confirms that an arbitrator's award has to be logical: once it is accepted that there is a rule, that the employee knows about the rule, and is deceptive in not complying with the rule, then a consequence of that dishonesty is - invariably - dismissal. This case also illustrates the importance of carefully framing charges arising from misconduct, and to avoid including unnecessary wording that makes the charge more difficult to prove.

When an interdict will not be granted

An interdict is often used as a mechanism to gain a strategic advantage in a broader dispute, and courts have to be sure that it is appropriate to grant any order sought.

Firstly a refresher on interdicts generally: An interdict is normally an urgent court order to enforce a right, usually brought by way of application proceedings (a faster and cheaper way to get a court order). It is possible to obtain a prohibitory interdict - which prevents the party from doing something - and a mandatory interdict - which requires the party to do something.

There are 5 obstacles to persuading a court that it should grant an interdict:

  1. The matter is sufficiently urgent.
  2. There is a prima facie right derived from contract, statute or the common law (A mere interest doesn't constitute a right).
  3. A reasonable apprehension of irreparable harm exists, if the interdict is not granted.
  4. There is no alternative satisfactory remedy available to the applicant.
  5. The balance of convenience is in favour of granting the relief - this is in the court's discretion, often taking into account the applicant's prospects of success on whether or not it is likely that the applicant will ultimately be able to show a clear right; as well as any potential prejudice to third parties.

Courts are obliged to check all these factors, as is shown in the recent case of Nyambi and Others v H C Shaik Investment CC and Another (J1471/17) [2017] ZALCJHB 260 (5 July 2017). In this case, the applicants were employees who brought an urgent application to prevent the unilateral alteration of their terms and conditions of employment, pending the outcome of a dispute about their employment status which had been referred to arbitration (at the time of the application, an arbitration award was pending). At the heart of this dispute was whether the employees of a service provider (the first respondent) had become employees of Nampak (the second respondent). The respondents denied this and said the commercial relationship between them was simply governed by a "service level agreement" ('SLA') and not by a 'TES' (labour broking) agreement.

The employees were engaged in various tasks checking the quality of bottles produced by Nampak, work intimately connected with Nampak's operations. The service provider that employed the applicants denied that it was providing labour broking services to Nampak. The service provider had given notice to the employees of proposed changes to their hours of work and other working conditions with effect from 1 July 2017, which led to the urgent interdict proceedings being launched on 27 June 2017.

The purpose of the interdict application was to preserve the employees' ability to engage in protected strike action against their true employer (or employers) in terms of sections 64 (4) and (5) of the LRA, over the proposed changes to their working conditions. Until they learned the outcome of those arbitration proceedings about who their employer was, they were unsure whether they could exercise the right to engage in a protected strike in which other employees of Nampak could participate. By obtaining the interdict, the applicants would be able to prevent the respondents from implementing any of the changes until they were in a position to know what the ambit of potential primary strike action under section 64 (4) was.

The Labour Court, in considering the requirements for an interdict, was satisfied that there was a right to be protected, but did not agree that there was no alternative satisfactory remedy. The court did not see why a primary strike could not proceed against the first respondent (the service provider who was on paper the employer) and a secondary strike against Nampak. In recognising this other option, the LC was emphasising that where there is a suitable alternative remedy, a court will not grant an urgent interdict. It was not necessary to wait for the pending arbitration award on who the legal employer was, in order to exercise the right to strike under section 64(4) of the LRA.

Misrepresenting qualifications not required for the job

In 2009, when the employee was employed by the company as financial manager and company secretary, he was turning 82, well beyond the company's ordinary retirement age of 65. In 2013, whilst continuing as financial manager, he was removed as company secretary; this was motivated on the basis of BEE considerations. In due course the employee was offered the position of assistant company secretary on a fixed-term contract running from 1 August 2013 to 31 January 2014, (and a subsequent offer of a permanent position of assistant company secretary), but he refused these offers, which appeared to have been an attempt at effectively retiring the employee. In the course of these negotiations it was discovered that the employee was not a chartered accountant and that he did not have a B Comm or a MBA degree, as represented on his CV.

The employee was then charged with gross dishonesty, because on his CV submitted to the employer in 2009 in his original employment application, he indicated that he was qualified as a chartered accountant and he confirmed this in his interview with the employer's interview panel.

Following a disciplinary inquiry at which he was found guilty, the employee was dismissed. An unfair dismissal dispute was referred to arbitration and the commissioner determined that the employee's dismissal was substantively unfair and awarded him six months' compensation amounting to in excess of R300 000. The commissioner was of the view that had the employee accepted the offer of a company assistant secretary there would be no need for the company to dig into his CV as a means to get rid of him. The commissioner also seems to have been of the view that the representations in question by the employee in his CV were not material in securing the position of financial manager, and, in any event, that he had equivalent qualifications.

The company sought to set aside this award on review. The Labour Court in LTE Consulting (Pty) Ltd v Commission for Conciliation, Meditation and Arbitration and Others (JR1289/14) [2017] ZALCJHB 291 (8 August 2017) considered all the commissioner's reasons to be unreasonable. The commissioner's central finding that the dismissal was a sham designed to effectively secure the employee's retirement was rejected by the LC, which concluded that the employee's misconduct was very serious and deserving of dismissal.

Regarding the commissioner's finding that the employee's misrepresentation about his chartered accountant qualifications was not material, because this was not a requirement for the post, this was also rejected by the LC as it missed the point. There was also no justifiable basis for this conclusion on the evidence led, as clearly the employee's qualifications had played a part in him securing the position.

The Labour Court upheld the employee's dismissal. It is clear from the judgment that even if a particular qualification is not an express requirement for a job, to represent that you do have that qualification is a grossly dishonest misrepresentation, justifying dismissal.


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Bruce Robertson
September 2017
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