4 July 2022 by , and Employment Law Alert

Dishonesty vs negligence: The limits of an employee’s duty of honesty and good faith

In South African Society of Bank Officials (SASBO) and Another v The Standard Bank of South Africa Ltd and Others JA32/2021, the Labour Appeal Court (LAC) heard an appeal by SAASBO against a judgment of the Labour Court (LC) dealing with the dismissal of a bank employee for the falsification of bank records – knowingly reflecting a balancing position on the bank’s information system when that was not the case.

The employee was employed by Standard Bank (the bank) as a foreign exchange consultant. Part of her job functions included possessing and counting copious amounts of cash and loading it into various automatic teller machines (ATMs). Once the cash was loaded into the ATMs, the employee was required to input the various amounts loaded into the ATMs into the bank’s system to reflect the movement of that cash from her safe into the ATMs, thereby keeping accurate records of the movement of the bank’s cash – balancing her safe daily.

In the period between 17 and 20 February 2017, the employee discovered that her safe did not balance. As a solution, she recorded a balanced position for the day – force-balancing her safe by knowingly recording an inaccurate amount into the bank’s system. She was discovered, and was subsequently suspended and disciplined, which resulted in her dismissal.

After the Commission for Conciliation, Mediation and Arbitration arbitration that ensued, the Commissioner found that she had not been guilty of dishonesty but mere negligence in that what she had done was not to falsify, but rather to rectify her original error. Accordingly, the Commissioner concluded that she had not been proved guilty of dishonesty or falsification, and awarded her full retrospective reinstatement.

On review, the LC held that the Commissioner committed a material irregularity in failing to separate the employee’s conduct on days preceding her wrongdoing from the misconduct itself. It held that since it was common cause that the employee had counted the cash and upon finding that the safe did not balance, she had knowingly recorded a false balanced position, she was clearly guilty of the charges preferred against her by the bank. Accordingly, it set aside the award and substituted it with an order that the employee’s dismissal was fair.

On appeal by SASBO, the Labour Appeal Court (LAC) held that dishonesty is a generic term embracing all forms of conduct involving deception, and that deceitfulness manifests itself in various ways. The LAC reiterated the trite principle of South Africa’s labour law that the fiduciary duty that employees generally owe to their employers often renders any dishonest conduct on their part dismissible. As to the duties of commissioners, the LAC held:

The trier of fact [the Commissioner] is expected, in the context of discipline in the workplace, to deal with the wrong committed by an employee even if the charge may have been inelegantly phrased provided that the employee is not significantly prejudiced by the incorrect labelling of the charge…”

The LAC then held that, on the evidence before the Commissioner, the falsification, rather than mere negligence in incorrectly capturing figures into the bank’s system, was established on a balance of probabilities. Accordingly, the LAC upheld the judgment of the LC, and dismissed the appeal.

This case bears significant importance for dealing with dismissals for dishonesty or falsification, and in considering the duties resting on commissioners in arbitration proceedings conducted in terms of section 138 of the LRA. In short, a commissioner is enjoined to consider the substance, rather than the form, of the dispute between the employer and the dismissed employee. A commissioner is to remain mindful not to be bogged down by technicalities when considering the charges levelled against an employee – the drafting precision is not to be equated to that applicable in the criminal courts. Moreover, the case re-emphasises the duty of utmost good faith that employees generally owe to their employers.

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