Not snitching may get you stitches too: The Constitutional Court decides on duty to rat on fellow employees

Derivative misconduct stems from an employee’s failure to offer reasonable assistance to the employer in the detection of those responsible for misconduct. In other words, it is seen as the failure of an employee to adhere to his/her duty to act in the best interests of the employer.

8 Jul 2019 4 min read Employment Alert Article

Many employers have relied on this principle to discipline employees during strike action where employees responsible for the misconduct could not necessarily be individually identified, but at the same time, where employees’ fail, when requested, to come forward in assisting the employer to identify those who were responsible, Thereby ultimately associating themselves with the perpetrators by their failure to dissociate.

There have been, until now, many varying decisions regarding the notion of derivative misconduct. The Constitutional Court in NUMSA obo Khanyile Ngannezi and Others v Dunlop Mixing and Technical Services (Pty) Ltd and Others (2018) finally put the debate around this concept to bed when it sought to articulate and grapple with the concept in coming to definitive and precedential clarity on the notion.

In the Dunlop case, employees, all of whom were members of the applicant trade union, NUMSA, embarked on a protected strike pursuant of a wage dispute. As the strike continued it became increasingly violent with many of the employees committing serious acts of misconduct. An interdict was sought and granted in an effort to deter the violence and misconduct, alas to no avail.

The employer subsequently dismissed the striking employees pursuant to their alleged misconduct during the strike, and on the basis of derivative misconduct.

Challenging the fairness of the dismissals, NUMSA brought the matter before an arbitrator at the CCMA, and the arbitrator in coming to his decision distinguished the dismissed employees into three different categories:

  1. Those positively identified as committing violence;
  2. Those identified as present when the violence took place but who did not physically participate;
  3. Those not positively and individually identified as being present when the violence was being committed.

The Arbitrator found that the first two groups had been fairly dismissed, but that the third group’s dismissal was substantively unfair and ordered for their reinstatement.

On review by Dunlop, and in the LC, the court held that the employees’ derivative misconduct consisted in the failure to come forward and either identify the perpetrators or exonerate themselves by disassociating themselves and confirming that they were not present and therefore could not be identified as the perpetrators. The LC therefore set aside the Arbitration Award and found that the employees had been fairly dismissed. NUMSA then lodged an appeal before the LAC wherein the LAC upheld the LC’s decision in finding.

NUMSA, still unhappy with the outcome, brought the matter before the Constitutional Court (CC) where the court considered the historical understanding of the concept of derivative misconduct as that of a common law duty on the employee to act in good faith and in the best interests of the employer, while in return the employer has the general duty of fair dealing with its employees.

The court described the reciprocal duty to be that of the expected duty on the employee to disclose the misconduct of fellow employees; while the employer had the obligation to offer protection and guarantee the employees safety while doing so.

The court sought to esatblish whether the above reciprocal good faith obligation, based on the facts in this case, was in fact reciprocal, or if it was merely a unilateral obligation of fiduciary duty, imposed on the employee by a body that is in a position of power in relation to that same employee. The court found that the reciprocal duty argument had failed due to the absence of the provision of guaranteed safety and protection by the employer once an employee came forward.

The CC went further to highlight that a right balance should be sought between the duties of good faith expected of both the employer and the employee, reciprocally. Where an employer fails to appreciate that there are many ways for an employee to participate in and associate themselves with the primary misconduct, it increases the risk of using the notion of derivative misconduct as a means for easier dismissal. Evidence that employees in some way associated themselves with the violence, even by way of having knowledge thereof, either before or after it commenced, may be sufficient to establish complicity in the misconduct.

In determining derivative misconduct by way of the LACs reasoning being that of inferential reasoning, the chain in determining whether an employee is guilty or not, is a lengthy one. In determining same one should consider that the most probable inference was that each employee was:

  1. present when the violence was committed;
  2. would have been able to identify those who committed the violent acts;
  3. would have known that Dunlop needed that information from them;
  4. with possession of that knowledge, failed to disclose the information to Dunlop;
  5. did not disclose the information because they were guilty.

The most probable inference in this case was found to be that only some of the employees were present and therefore to dismiss all in the absence of individual identification would not be justified.

Dunlop’s expectation of its employees to come forward with information regarding those who had committed acts of misconduct, coupled with its failure to ensure their safety and protection thereafter was ultimately what lead to its demise before the Constitutional Court. Furthermore Dunlop’s case failed on the consideration of probable inference, and the court found that to dismiss all employees in the absence of individual identification would not be justified, and therefore the employer’s case also failed on these facts. The Arbitration Award therefore stood, and the third group of employees were ultimately reinstated.  

Ultimately it would be for the employer to satisfy the court with regard to the manner in which it provides protection and security to an employee upon whom it expects a duty to disclose.

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