Recently, we have seen executives take advantage of their position of power and allow dishonesty to further their own interests. The case of Kidrogen (Pty) Ltd v CCMA & others (Case no: C 814/2016, 31 July 2018) illustrates this fact.

Three newly appointed executive officers received payments of R554 533, R463 107 and R357 831 respectively that were not due to them under their contracts of employment. Manual, dishonest, alterations had been made to their contracts of employment reflecting the additional amounts.

The first allegation against the employees was that they had “allowed manual alterations in their employment contracts to be made” which varied their total cost of employment in an unlawful and dishonest manner. They had been dismissed for such.

At arbitration the Commissioner concluded: “They were grossly negligent in signing for receiving payments” but “they were never charged for negligence” and, therefore, “the employer had to stand or fall by this charge of dishonesty” (para 19). The employees’ dismissal was therefore substantively unfair but, in the circumstances, reinstatement was inappropriate and no compensation was ordered. This was taken on review because it was already wrong.

The Labour Court, certain that the dishonest transactions “positively yelled out for an explanation about how the employees could possibly have believed they did not need board approval for them”. No reasonable arbitrator could have concluded that the employees were bona fide in accepting the payments they did, solely on the supposed say so of financial staff.

What this means is that “dishonest” conduct (and, by implication, other forms of misconduct), for the purposes of employment law, does not require proof of the same elements as in criminal law – that is, (a) commission of the act in question and (b) a guilty state of mind. In the present case that was, very clearly, the standard which the court applied.

The probability they knew that the dishonest payments were not due to them was greater than the probability that they did not. Accepting payments made on behalf of one’s employer – to which one is not entitled – can without too much difficulty be described as a breach of this duty.

Had the dismissal been based on this finding, it is unlikely that the CCMA would have found it appropriate to apply a rule of criminal law or that the present litigation would have been necessary.

Let Global Business Solutions help you with any dishonesty matters in your company

If you need any assistance with dishonest dealings in your company, please contact Justine Weddell and the team to assist. Follow this link to contact her.