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Dishonesty has traditionally been seen as a serious offence and one that could render an employment relationship intolerable. This is because dishonesty damages the ability of the employer to trust the employee.

The Code of Good Practice: Dismissal imposes a number of requirements on an employer who is contemplating dismissing an employee for misconduct. The employer should first consider factors such as the employee’s length of service and previous disciplinary record.

The misconduct must be serious and of such gravity that it makes a continued employment relationship intolerable.

An employee should only be dismissed for an infringement if they have been found guilty of gross misconduct, for example, wilful damage to the property of the employer, wilful endangering of the safety of others and physical assault on the employer, a fellow employee or a client. Gross insubordination and gross dishonesty will normally merit dismissal.

In the past, if an employee has stolen from the employer, judges and arbitrators have accepted that such dishonesty, by its very nature, has rendered continued employment intolerable. However, there has been a noticeable shift away from this view. It has been pointed out that the code recommends dismissal for “gross” dishonesty rather than for all dishonesty and that therefore, not all acts of dishonesty make the employment relationship intolerable or merit dismissal.

Adding to the complexity of the debate is that the concept of trust is tricky to define. I would suggest that, in a labour law context, the employee’s duty of trustworthiness means that the employer has the right to expect the employee always to behave honestly without having to be monitored. The courts have frequently supported this view and have therefore upheld employers’ decisions to dismiss.

In a case of Shoprite Checkers vs the CCMA the employee was dismissed for consuming the employer’s food without paying. Both the CCMA and labour court found the dismissal to be unfair.

The uncertainty makes it dangerous for employers to continue to rely on what used to be tried-and-trusted legal principles when dismissing employees

The employer went to the labour appeal court, which found that the employee had a clean disciplinary record and had worked for the employer for nine years. However, the employee had acted in flagrant violation of the employer’s rules. The trust relationship had broken down, which rendered the dismissal fair.

In the case of Shoprite Checkers vs the CCMA (CLL Vol 18 August 2008) the circumstances were amazingly similar to the one discussed above in that the same employer was involved and the employee was also dismissed for consuming the employer’s food without paying. However, in this case the labour appeal court found that the employee had 30 years’ service and was a first offender. The court, therefore agreed with the CCMA that the dismissal had been too harsh. It is unclear whether it was the stronger mitigating circumstances of the second case that made the difference or whether the  judges sitting in the two cases interpreted the law differently.

The uncertainty makes it dangerous for employers to continue to rely on what used to be tried-and-trusted legal principles when dismissing employees. Instead, employers need now to take note of mitigating circumstances but show clearly why they are outweighed by other factors.

Employers must also ensure that they are able to justify the dismissal by proving that the employee’s conduct rendered a continued employment relationship intolerable, that is the employer needs to convince the arbitrator that the employee’s conduct did not merely damage the working relationship, but destroyed it.

This is not easy because many employers do not have an in-depth understanding of what arbitrators see as “intolerable” or as a destruction of trust. Employers are therefore advised to consult a reputable labour law expert before deciding to dismiss an employee.

• Israelstam is CEO of Labour Law Management Consulting.

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