1 November 2011

Derivative misconduct: dismissed for refusing to disclose

In CEPPWAWU obo Hlebela v Lonmin Precious Metals Refinery [2011] JOL 27447 (CCMA), the CCMA found that an employee's failure to disclose information that would assist the employer's investigation regarding its loss of approximately 200kg of platinum per month amounted to derivative misconduct.

In this case, having being alerted to the fact that some of its employees live extravagant lifestyles, the employer initiated a lifestyle audit and found that Mr Hlebela was leading an extravagant lifestyle that he would not have been able to maintain on his salary. The employer concluded that Mr Hlebela was somehow involved in the theft of its precious metals. The employer requested that Mr Hlebela make full disclosure of his assets but he refused to do so. He was therefore charged with having knowledge of the loss of precious metals but not disclosing information that could assist the employer in its investigations into the loss. Essentially, Mr Hlebela was dismissed for what is referred to as "derivative misconduct".

In cases where derivative misconduct is alleged, an employer must show that the employee knew or could have acquired knowledge of the misconduct and that the employee unreasonably failed to disclose this knowledge to the employer.

The Commissioner referred to literature on the topic which found that the dishonesty can include inter alia withholding information from the employer. The Commissioner therefore held that the employer's request for disclosure was eminently reasonable and that Mr Hlebela's silence justified an inference that he participated or supported the loss of the metals. Accordingly, his failure to disclose the requested information following the lifestyle audit amounted to derivative misconduct and his dismissal was found to be fair.

Evident from this case, in instances where there is no evidence against any specific employee, derivative misconduct may become relevant. An employee's reticence in disclosing helpful information may lead to the inference that the employee has something to hide. Therefore, an employer may be justified in instituting disciplinary proceedings derived from an employee's failure to offer reasonable assistance in detecting those actually responsible for misconduct and through his silence make himself guilty of a derivative violation of trust and confidence.

Pranisha Maharaj and Nabeelah Martin

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