24 January 2022 by and Employment Law Alert

Abuse of a confidentiality agreement

During the Jacobs v KwaZulu-Natal Treasury [2021] DA7-20 (LAC) case, the question of how much protection a confidentiality agreement affords an employer, was brought to the spotlight by the Labour Appeal Court (LAC).

The case involves an employee who was a panel member during a recruitment and selection process. The employee had signed a confidentiality agreement, undertaking not to disclose any matters raised in any part of the interview process, and acknowledging that she could be subjected to disciplinary action for breaching the confidentiality agreement. A breach was defined as the employee “disclosing, either verbally or in writing or by any other means, any matters raised in any part of the shortlisting/interviews”. Years after the process had been completed, and as part of arbitration proceedings, the employee deposed to an affidavit relating to the process. The employee did not secure the employer’s consent before making the disclosure in the affidavit, and the employer alleged that in doing so the employee had breached the confidentiality agreement and thus was dismissed.

The employee deposed to the affidavit after being approached by a trade union representative (representing another employee in a dispute) who requested that she submit evidence relating to the selection process for the purposes of arbitration proceedings. The affidavit recorded that the minutes of the recruitment and selection panel had been amended and that they “did not really reflect what took place during the interviews”. While the panel recommended that a Ms van der Merwe be appointed, when Parthab, the secretary of the selection panel, sent the minutes to the employee for signature, the minutes recorded that a Ms Jamile was the recommended candidate.  The employee initially refused to sign the minutes but reluctantly did so after the chairperson of the selection panel informed her that it was the chairperson’s prerogative to change the minutes.

The employee challenged the fairness of her dismissal. The arbitrator found that the employee had lied, that the contents of her affidavit were false, and that the employee did not obtain the employer’s permission prior to submitting the information contained in the affidavit. On this basis, the arbitrator found that the employee’s dismissal was procedurally and substantively fair.  

The employee then launched review proceedings. The Labour Court refused to review and set aside the award, to which the employee appealed. Before the LAC, the main issue for determination was the truthfulness of the employee’s affidavit and whether the minutes had been changed. The LAC reasoned that if the employee’s affidavit was truthful the issue surrounding confidentiality would not arise.

The LAC found that Parthab, one of the employer’s witnesses, confirmed that the minutes had been changed.This evidence was crucial as he was the secretary of the selection committee and had been responsible for drafting the minutes. As such, he would have known if the minutes had been amended. The LAC found that on the evidence and based on the concessions made it was common cause that the minutes had been amended. Having found that the affidavit was truthful the LAC held that in the circumstances the employee had not breached the confidentiality agreement and that “It would be a great travesty of justice if this court were to make a finding that … she [the employee] breached the confidentiality agreement when she disclosed the irregularities and/or dishonesty that were committed by members of the selection panel at a hearing related to what transpired at the selection panel”.

This judgment highlights that an employer cannot invoke a confidentiality agreement to conceal wrongdoings in the workplace and that an employee who has signed a confidentiality agreement is not required to obtain the employer’s permission to reveal wrongdoings if the employee is required to make such revelations in legal proceedings.  As the LAC noted, an employee cannot be silenced in instances of wrongdoing - “If permission is to be obtained first, any dishonest conduct will never see the light of day”.

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