If you can’t pinpoint the culprits be careful of firing the lot!

BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].

Employers frequently know for certain that serious misconduct has occurred but are unable to prove which employee or employees are responsible. This can occur in a variety of circumstances. For example:

  • Stock may go missing from a warehouse or retail store where any of a number of employees had access to the stock and opportunity to remove it
  • Damage may have been caused to business machinery in a workshop used by numerous employees
  • Confidential information may have been leaked
  • There may be cash shortages in tills or other cash storage points
  • Computers or other equipment may have gone missing
  • Production or other materials may have been wasted or unnecessarily discarded.

Employers are often tempted in such cases to discipline everyone who could possibly have been involved in such misconduct. This buckshot approach by employers may be motivated by a number of factors including the thinking that:

  • if we fire the lot we will be sure to get rid of the culprit
  • everyone was probably involved
  • even if many of the employees were not directly responsible they probably knew about the misconduct and failed to report it to management
  • some case law has given the impression that such group dismissals may be justified. This impression has been given by two important cases; those involving Snip Trading and Score Supermarkets.

In the case of NUSFRAW obo Gomez & others vs Score Supermarkets (2003, 8 BALR 925) a group of managers were dismissed as a result of stock losses amounting to six million rand. While there was no proof that these managers had stolen the missing stock they were held responsible for the losses and disputed their dismissals at the CCMA. The arbitrator found that the markedly poor management of the business by the dismissed employees (and others) had led to the losses and that this justified the dismissal.

Again in the case of FEDCRAW vs Snip Trading (Pty) Ltd the arbitrator ruled in favour of group dismissals. Here, the employer had a policy which held every employee responsible for stock losses. When stock disappeared several employees were fired despite the fact that the employer had not specifically proved that any one of these employees were guilty of the stock losses. The arbitrator found that the concept of group responsibility was fair under the circumstances as the employer’s interests had to be taken into account.

The outcomes of these two cases have misled a number of employers into believing that group dismissals are fair. However, this will not always be the case. It will depend on the extent to which the employees specifically have responsibility for prevention of losses and have the means of preventing losses. It will also depend on the viewpoint of each individual arbitrator. In the case of FEDCRAW obo Mthimunye vs Rewmoor Investments 543 (Pty) Ltd (2008, 2 BALR 142) the entire staff working the retail store were dismissed after the employer suffered serious stock losses. The CCMA found that:

  • The notion of collective guilt was repugnant
  • Despite the existence of a clause in each employee’s contract to the effect that prevention of stock losses formed part of their conditions of employment, the employer had failed to prove that the dismissed employees were responsible for the stock losses.

As a result all the employees were reinstated with full back pay. The apparent lack of consistency in case law and the powerful laws protecting employees from unfair dismissal sound a strong warning to employers not to act against employees before they fully understand their legal rights. The correct actions of the employer will differ from case to case depending on a number of legal subtleties and interpretations.

To get a free viewing of our ongoing Labour Law Debate go to Labour Law Management Consulting and click the Labour Law Debate item in the menu.

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