Be wary of incorporating disciplinary codes and procedures into employment contracts

A few days after the employee was suspended, the employer addressed a second letter to the employee formulating the alleged misconduct committed by the employee and calling him to make representations in respect thereto.

In response, the employee wrote a letter to the effect that he regarded himself innocent until proven guilty and that he wished to exercise his right to have the matter determined through a disciplinary enquiry before an independent chairperson as prescribed by the employer’s own disciplinary code and procedure. The employee was insistent that in terms of his employment contract, he was entitled to have a disciplinary enquiry in accordance with the employer’s disciplinary code since that code was incorporated into his employment contract. The code entitled the employee to have his dispute heard where witnesses could be called and cross-examined. 

The employer responded with a third letter stating that the employee’s letter was factually incorrect. In this letter, it appeared as though the employer was no longer relying on the allegation of misconduct on the part of the employee, but rather on the fact that the employment relationship has broken down between the parties. It was apparent from this letter that the employer had already decided that the employee was guilty of misconduct, but what was left to be determined was the impact of the misconduct on the employment relationship, namely the breakdown of trust.

The employer insisted that the employment relationship had been broken and gave the employee a deadline to make written submissions as to why he thought the employment relationship had not broken down. The employee refused to make written submissions and insisted on his right to be heard at a disciplinary inquiry. The employer served the employee with a notice of dismissal after he failed to present written submissions. The employee approached the Labour Court on an urgent basis and sought an order declaring his suspension null and void and declaring the termination of his employment a breach of his employment contract. The employer argued that the termination of the employment relationship was not based on misconduct, but rather based on the employer’s view that the employment relationship had broken down, while the employer argued that it was not obliged to follow the disciplinary code but to dismiss the employee summarily. The Court held that it was clear that in the absence of an enquiry the employer had already decided that the employee was guilty of misconduct resulting in the break of the trust relationship between the parties. The Court held that it appears as though the employer has conveniently ignored the fact that what led to the alleged breakdown of trust relationship was the alleged misconduct of the employee and that the employee disputed being guilty of misconduct and requested a hearing which requests the employer ignored and unjustifiably considered the employment relationship irretrievably broken. The employer, the Court held, denied the employee his contractual right to have his misconduct dispute heard at an enquiry.

The Court concluded that the disciplinary code was incorporated into the contract of employment which mandated that disciplinary enquiries be held in cases of alleged misconduct, and in this case it was clear that the employer failed to comply with the disciplinary code when it terminated the employee’s contract without affording him an opportunity to be heard at a disciplinary enquiry. The Court concluded that this constituted a breach of the employee’s employment contract entitling the employee to be reinstated. The Court ordered the employer to comply with its disciplinary code.

This case confirms the position that employers must follow their disciplinary code and procedures, particularly where they form part of an employee’s employment contract. A failure to do so may result in a breach of the employment contract which may have significant financial implications for the employer.