ALL employees have a common-law obligation to their employers to promote and protect the interests of the employer at all times.
This includes informing management of any planned or actual acts of misconduct they have knowledge of. It could include knowledge of theft, pilferage and fraud. That said, it is widely known that employees are often in the know when it comes to acts of misconduct committed by other employees, yet they don’t bring it to management’s attention.
The reasons for not doing so are varied. An employee may consciously choose not to inform management of misconduct they are aware of for fear of reprisals from the instigators. It is also quite possible that an employee will not report misconduct they are aware of because they themselves have an axe to grind with the employer.Regardless, employees have a positive duty to inform management of misconduct that the employer may be unware of. Failure to do so is a material breach of the employee’s duty of good faith to their employer.
The Commission for Conciliation, Mediation and Arbitration (CCMA) and Labour courts have dealt with derivative misconduct on numerous occasions. Earlier this year, the CCMA in Thabiso Ngakane v Wilmar (Pty) Ltd (GAJB9538-18) noted that: “While a dismissal on the grounds of derivative misconduct has been sanctioned by the Labour courts, the onus remains with the employer to prove that the employee was guilty of such misconduct. In that regard, the employer would need to produce evidence that there was a reasonable probability that the employee had information that would assist the employer in identifying those guilty of misconduct, (but) had withheld such information”.
In another example, in Numsa v Commissioner Leon Pillay & others (D02-17), the Labour Court described derivative misconduct as being “a case in which the employer wants to rely on misconduct that is not directly related to the employee’s own wrongdoing, but is based on the employee not providing information that is needed to identify other wrongdoers in circumstances where speaking up is required to maintain the trust relationship that constitutes a quite distinct ground of misconduct applicable in a context where not speaking up can destroy an employment relationship”. The notion of derivative misconduct most recently came to a head in at the Constitutional Court which on June 28, 2019 delivered judgment in the long-standing dispute involving Numsa obo Khanyile Nkanyezi & others v Dunlop & others (CCT202/18).
In short, there was a violent, protected strike on August 22, 2012. Some perpetrators of violence could be identified positively, but others could not. The CCMA commissioner in the arbitration award noted that: “The situation that prevailed in Induna Mills Road during the course of the strike was highly relevant to the derivative misconduct issue. If any of the applicants were present in the group of strikers who . . . (committed the acts of violence), they would either have been perpetrators of principal misconduct or be liable for derivative misconduct on the basis that they knew who the perpetrators of the misconduct were and failed to disclose that information to the respondent”.
In the final analysis, the existence, or otherwise, of derivative misconduct on the part of strikers who participated in the protected strike but who could not be identified as perpetrators of violence became the subject matter of a CCMA arbitration hearing, subsequent Labour Court and Labour Appeal Court cases, and ultimately a Concourt matter. The Concourt identified the source of the concept of derivative misconduct by highlighting that: “Although not mentioned by name as derivative misconduct, the roots of the doctrine lie in an obiter dictum (non-binding statement) by Nugent J in Fawu – In the field of the industrial relations, it may be that policy considerations require more of an employee than that he merely remained passive in circumstances like the present and that his failure to assist in an investigation of this sort may in itself justify disciplinary action”. Food & Allied Workers Union v Amalgamated Beverage Industries Ltd (1994] ZALAC 1).
After all is said and done, the “takeaway” from the Concourt judgment is that while a derivative duty to disclose exists “As we have seen, this duty was sourced in the contractual duty of good faith without any reference to an employer’s reciprocal good faith obligations. In accordance with the conclusion employees’ safety should have been guaranteed before expecting them to come forward and disclose information or exonerate themselves.
That was not done sufficiently”. In short, it means that derivative misconduct, in strike scenarios, and probably all others, requires employers to ensure that employees who disclose knowledge of misconduct on their colleagues are safeguarded from harm. That is perplexing for employers, because it now suggests that employees have a valid defence to derivative misconduct allegations that relies solely on fear of intimidation or harm, regardless of the circumstances.
Tony Healy is a labour law expert at labour law consultancy Tony Healy & Associates.