Dishonesty and misrepresentation

Employment law places a high premium on honesty. The foundation of the employment relationship is trust and confidence. Where this foundation is damaged, the parties cannot be expected to continue with the employment relationship. The case of Mothiba v Exxaro Coal (Pty) Ltd t/a Grootgeluk Coal Mine considers the consequences of dishonesty and misrepresentation by an employee.

20 Sep 2021 4 min read Employment Law Alert Article

At a glance

  • The case of Mothiba v Exxaro Coal examines the consequences of dishonesty and misrepresentation by an employee in the employment relationship.
  • Mothiba, an employee at Grootgeluk Coal Mine, lied on an affidavit to obtain subsidized accommodation, claiming not to own property within a 50km radius of the mine when she actually did.
  • The courts upheld Mothiba's dismissal, emphasizing the importance of trust in the employment relationship and the irreparable damage caused by misrepresentation and dishonesty.

In 2008 Mothiba was employed at the Grootgeluk Coal Mine as a laboratory assistant. This is a relatively specialised position requiring an employee with the relevant level of education and experience.

Grootgeluk’s housing department offered subsidised accommodation for employees that lived far from the mine. Employees applying for the subsidy had to depose to an affidavit confirming that;

“I do not own any property within a 50km radius from the main gate of Exxaro Grootgeluk Coal”.

In December 2012, Mothiba applied for subsidised accommodation. She also signed the affidavit confirming that she did not own property within a 50km radius of the main gate.

In January 2015, Grootgeluk was tipped off that a number of its employees, including Mothiba, had improperly benefitted from the subsidy when they should not have. Grootgeluk investigated the matter and found that in Mothiba’s case she owned some open land within a 50km radius of the main gate when she made her application. This obviously meant that she had lied under oath to her employer in the affidavit that was part of her application for the subsidy.

Mothiba was subjected to a disciplinary hearing where she had to answer to allegations of dishonesty and non-disclosure or misrepresentation of relevant information. Mothiba was found guilty of the allegations and dismissed. Aggrieved by her dismissal, Mothiba referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA).

The CCMA delivered its award on 26 October 2015. The arbitrator found that Grootgeluk had failed to discharge the requisite onus of proving that the employee intentionally made a false declaration in the affidavit. His analysis of the evidence focussed on the phrase “I do not own any property within a 50km radius”. He found that the wording was ambiguous as it lacked clarity on whether it was referring to an empty stand or a stand that had been improved into a dwelling house.

Review application

Unhappy with the finding, Grootgeluk launched a review application in the Labour Court (LC). The application was brought on 4 December 2018, some three years later. It is not clear what led to the delay but the Labour Appeal Court (LAC) lamented the failure of the adjudicative system to fulfil its legislative mandate of ensuring the expeditious resolution of labour disputes. 

On review, the LC disagreed with the arbitrator. It found that the wording in the affidavit was unambiguous when it referred to “ownership of any property”. The court noted that Mothiba was not an illiterate employee. She was a laboratory assistant and therefore could be taken to understand the meaning of the words “ownership of any property”.

The court found it difficult to understand how the arbitrator could reasonably conclude that Mothiba had signed affidavit without applying her mind to what was recorded in it. It found that she could not have been “blissfully unaware” of what it contained nor could she have been unaware of the fact that by deposing to the affidavit she was making a representation that she held no interest in any property. The court set aside the arbitration award and held that Mothiba’s dismissal had been substantively fair.

Mothiba appealed to the LAC. The LAC gave short shrift to her appeal. It rejected her argument that the word “property” had to be given a narrow meaning, limiting it to properties that were ready for habitation as opposed to open land. The court found that Mothiba had offered no evidence that she had not reasonably understood the contents of the affidavit which she was required to sign. She was aware that the affidavit was in connection with a lease which would not have been extended to her if Grootgeluk knew that she had property within 50km of the main gate.

It found that the arbitrator had unreasonably, on his own volition, substituted his own opinion as to the words “ownership of property” rather than accepting the only reasonable construction of the words. He had no reason to delve into whether she had signed a disclosure about ownership of improved land with a dwelling as opposed to ownership of vacant land.

This case reiterates the premium placed on the relationship of trust in the employment context. Where an employee misrepresents the facts to their employer to benefit themselves, it will almost inevitably lead to an irretrievable breakdown in the trust relationship. Both the LC and the LAC were alive to this principle and saw through the legal sophistry raised by Mothiba and her legal team, cutting to the heart of the matter: whether the trust relationship had been damaged.

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