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Dismissal for dishonesty, think twice!

Content provided by Sanlam. See Cobalt Solutions for Business Owners, for tailormade financial advice.


In the Labour Relations Act, schedule 8: section 2(2), recognizes three grounds on which a termination of employment might be legitimate. These are the conduct of the employee, the capacity of the employee and the operational requirements of the employer.  

Further in section 3(4) it states that it is generally not appropriate to dismiss an employee for a first offence, except if the misconduct is serious and of such gravity that it makes continued employment relationship intolerable. An example of serious misconduct is gross dishonesty.

It is common cause that the employment contract is premised on a relationship of trust between the employer and the employee. When an employee was found guilty of dishonesty, the sanction of dismissal would normally be justified irrespective of the degree of the dishonesty. This is because the trust relationship has been breached or broken down irretrievably.

Recently in Shoprite Checkers versus Commission for Conciliation, Mediation and Arbitration (CCMA) & others (2008) in the Labour Appeal Court the above approach was turned upside down and the court now directs employers to think differently when it come to sanctions for dishonesty.

In this matter, the employee was found guilty of eating food in the store. The employee was dismissed, but was reinstated by the CCMA because the sanction was too harsh. The employer's case in the Labour Appeal Court was that the sanction of dismissal was appropriate for the misconduct of which the employee was guilty.

However, unlike previous judgments, the court focused on the fact that the employee had 30 years' service and a clean disciplinary record. The court also weighed the cost of the food which could well have cost less that R20.00 against the employee's loss of income which amounted to more than R30 000.00

It seems therefore that unlike in the past, employers will have to take into account mitigating factors and the circumstances surrounding the matter as well as weighing up the loss incurred by the company against the loss to the employee facing dismissal.

Although most of us tend to be surprised by this direction, it would nonetheless be wise to now consider the issues as directed by the Labour Appeal Court. Hopefully it will ensure more fairness by assessing the person's action against his/her previous record with the company. We might agree that in some cases, losing your livelihood could be too high a price to pay in some circumstances.

Information provided by Kevin Hollenbach, Labour Relations Specialist

Copyright © Sanlam, 2014

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