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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 deals with "what does precautionary suspension 'on full pay' mean?" We also discuss three new cases: The first case asks how specific disciplinary charges must be. The second case is a LAC judgment dealing with Hearsay evidence. The third case discusses fairness in relation to the dismissal of an employee in prison.

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


How specific must disciplinary charges be?

If an employee's misconduct is not accurately described in the charges brought against him/her, what are the consequences? Consider this recent LAC decision.

An employee was the team leader for Microsoft server administrators. His girlfriend asked him to assist with the installation of Microsoft Office software on her mother's personal computer. He sent two 'beta keys' and a volume licence key to her mother, which he had privately downloaded. This email was picked up by internal forensic investigators. When confronted, he checked with the desktop support personnel who confirmed that the key he had downloaded was, in fact, the volume licence key. He testified that he had not picked this up because the volume licence key did not appear on the KMS server where he had checked. After learning that he had sent a volume key, he informed the investigators of this.

Charges were laid against the employee covering theft, fraud, dishonesty, the unauthorised removal of material, being in breach of confidentiality agreements, divulging confidential information, and disregarding or breaching the bank's code of ethics. At the disciplinary hearing, the employee was found to have committed the offences although it was not established that he had acted intentionally. He was however dismissed for "gross negligence"

The employee referred a dispute to the CCMA. The commissioner found the dismissal was procedurally fair but substantively unfair because the employee had been found guilty of the offence of gross negligence - with which he had not been charged. Given that he had been charged with dishonesty, negligence was not a competent verdict. The commissioner did not canvass whether dismissal was an appropriate sanction for the negligence in question.

The Labour Court dismissed the employer's application for review, pointing out that the employee was charged with dishonesty. That was the allegation he prepared to meet and that was the allegation that the employer did not prove. The LC said that the arbitrator correctly found that the employer did not discharge the onus of proving intent, and thus could not prove the misconduct that it had alleged, making the dismissal unfair.

On appeal to the Labour Appeal Court in EOH Abantu (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (JA4/18) [2019] ZALAC 57 (15 August 2019), it was held that the commissioner's finding that it was not competent to sanction the employee for negligence was a material error of law and unreasonable, and the Labour Court erred in upholding it.

The LAC said that the charges must be specific enough for the employee to be able to answer them. It normally will be sufficient if the employee has adequate notice and information to ascertain what act of misconduct he is alleged to have committed. The categorisation by the employer of the alleged misconduct is of less importance. The LAC recognised that employers, not being skilled legal practitioners, sometimes define or restrict alleged misconduct too narrowly or incorrectly, citing the example of an employee being charged with theft and for the evidence at the disciplinary enquiry or arbitration to establish the offence of unauthorised possession or use of company property.

The lesson of this case is this: Provided a workplace standard has been contravened, which the employee knew (or reasonably should have known) could form the basis for discipline, and no significant prejudice flowed from the incorrect characterisation, an appropriate disciplinary sanction may be imposed. It will be enough if the employee is informed that the disciplinary enquiry arose out of the fact that on a certain date, time and place he is alleged to have acted wrongfully or in breach of applicable rules or standards.

The LAC rules on hearsay evidence

There is a tension between the requirement that an arbitrator must deal with a dispute "with the minimum of legal formalities" under s138(1) of LRA and, on the other hand, compliance with the formal law on hearsay evidence. S3 of the Law of Evidence Amendment Act (LEAA) essentially provides that hearsay evidence can only be used if that has been agreed or if it is "in the interests of justice" according to criteria defined under s3(1)(c), which include the nature of the proceedings, the reasons why the person from whom the evidence originates is not giving evidence, and any prejudice to parties caused by the admission of the hearsay.

This tension arguably also applies to some extent to internal disciplinary hearings because the evidence relied upon there could be assessed later at the CCMA. If a case is going to fail at arbitration due to a lack of evidence, it may have been better to apply the same standards in assessing that evidence at the internal hearing.

Hearsay evidence is regarded as 'weak' evidence precisely because it is 'second-hand' evidence. The person who saw or heard an event is unavailable to be cross-examined, so the hearsay evidence of a person who was told about the incident is relied upon. It is not difficult to see how unreliable hearsay evidence could be.

This is illustrated in a recent case where a shop steward employed by Exxaro in its human resources department was charged with misconduct related to allegedly selling jobs to members of the public. At the disciplinary hearing, the evidence of the employer's two main witnesses was essentially hearsay in that they had no first-hand knowledge of the alleged wrongdoing. They merely related what they had been told, or what they had heard from others. They also relied on affidavits allegedly made by the complainants. The reason given for the failure to call the two complainants was that they had been intimidated by the employee. He was found guilty of misconduct and was dismissed.

At arbitration at the CCMA Exxaro relied on the same hearsay evidence but at no stage during the proceedings, did the commissioner alert the parties that he intended to exclude the evidence. In his award, the commissioner stated that "the law of the land" was that hearsay evidence cannot be admitted against a person without his consent, especially where it is not corroborated by independent evidence, and that disciplinary enquiries are not exempted from applying the law of evidence. The commissioner excluded the hearsay evidence and concluded that once it was excluded, there remained no shred of evidence in support of the allegations against the employee. This dismissal was therefore not for a fair reason, and the employer was ordered to reinstate the employee.

On review the Labour Court concluded that it could not be said that the commissioner's decision was one which a reasonable decision-maker could not make, and upheld the award.

On appeal at the LAC in Exxaro Coal (Pty) Ltd v Chipana and Others (JA161/17) [2019] ZALAC 52 (27 June 2019), the LAC found that the arbitrator had not correctly stated "the law of the land" in relation to hearsay evidence, and that the LC had erred in not reviewing the award. The appeal was upheld and the matter remitted back to the CCMA to be heard before another commissioner, due to the commissioner having misunderstood the law on hearsay evidence.

The LAC was critical of the commissioner in only making it known to the parties in his award, that the hearsay evidence was to be excluded, stating that it was unfair to both parties to only disclose this ruling at this late stage, and in breach of an arbitrator's duty to determine a dispute fairly and quickly under s138(1) of the LRA. The LAC noted that the commissioner should have dealt with the admissibility of the hearsay at the time it was led.

The LAC made it clear that s138(1), in giving a commissioner a discretion to conduct an arbitration in a manner she/he considers appropriate to determine a dispute fairly and quickly and with a minimum of legal formalities, does not imply that the commissioner may arbitrarily receive or exclude hearsay. Whilst recognising that, strictly speaking, the discretion afforded a commissioner under s138(1) meant that s3 of the EEA did not have to be applied, a "prudent commissioner" would be wise to apply s3(1)(c) as a practical means of ensuring hearsay was dealt with fairly.

The LAC outlined 6 safeguards to apply when dealing with hearsay evidence:
  1. Section 3(1)(c) of the LEAA is not a licence for the wholesale admission of hearsay evidence in proceedings;
  2. In applying the section, the commissioner must be careful to ensure that fairness is not compromised;
  3. A commissioner should be alert to hearsay evidence being introduced, and should not just remain passive when that evidence is led;
  4. A party must as early as possible in the proceedings make known its intention to rely on hearsay evidence so that the other party is able to reasonably appreciate the evidence he/she is facing. A commissioner should at the outset require parties to indicate an intention to rely on hearsay;
  5. A commissioner must explain to the parties the significance of the provisions of s3 of the LEAA, or of any alternative, fair standard and procedure adopted by the commissioner to consider the admission of the hearsay;
  6. A commissioner must timeously rule on the admission of any hearsay evidence: the ruling should not be made for the first time at the end of the arbitration, or in the closing argument, or in the award.
We think these are sensible guidelines in assessing hearsay evidence, even to be applied by chairpersons in disciplinary hearings. In practical terms parties should draw the commissioner's/chairperson's attention at an early stage that hearsay evidence will be used, but if they don't, the presiding officer should draw the hearsay nature of any evidence to the parties' attention as soon as possible.

Dismissal of an employee in prison

What is a fair dismissal where an employee has been sentenced to a term in prison? Is the criminal conviction automatically a substantively fair reason to dismiss? What constitutes procedural fairness in these circumstances?

These issues arose in the recent case of Molehe v Public Health and Social Development Sectoral Bargaining Council and Others (167/2014) [2019] ZALCCT 19 (2 August 2019). An employee was sentenced to direct imprisonment for 4 years for charges of bribery and corruption relating to his work. Without any disciplinary hearing the employer issued him with a written notice stating that his services were terminated on the basis of incapacity.

The failure to hold an enquiry resulted in an arbitrator finding that the dismissal was procedurally unfair and awarding three months' compensation. The employee was not satisfied with this outcome and instituted review proceedings in the Labour Court, arguing that his dismissal should also be found to be substantively unfair.

The LC confirmed that while ordinary principles of contract permit a contracting party to terminate the contract if the other party becomes unable to perform, that is not the end of the matter in the case of employment. The question that still remains is whether it is fair in the circumstances for the employer to exercise that election. The LC held that the facts and circumstances leading to the employee's absence from work, on his own evidence, justified his dismissal. Even though the employer had not led any evidence, the employee had admitted in evidence at arbitration that he had been found guilty in the criminal court of bribery and corruption. On this basis, the LC found the employee's dismissal to have been substantively fair.

There was no counter review by the employer challenging the arbitrator's finding that the dismissal was procedurally unfair, but the LC hinted that it may have overturned that finding if it had been required to deal with that aspect as well.

ARTICLE: What does precautionary suspension 'on full pay' mean?

By Prof Alan Rycroft

The Constitutional Court in Long v SA Breweries recently ruled that where a suspension is precautionary and on full pay pending a disciplinary enquiry, there is no requirement that the employee be given an opportunity to make representations before being suspended.

As a result of a Worklaw Helpline Query and the recent Labour Court judgment in PSA obo Mhlongo v General Public Service Sectoral Bargaining Council & Others, we recently began to think deeper about the implication of being suspended 'on full pay': eg is a suspended employee entitled to remuneration that s/he would have earned through overtime and allowances, but could not because of the suspension?

Read more (note - only available to Worklaw subscribers)


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Bruce Robertson
September 2019
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