De Beers Consolidated Mines v CCMA (JA68/99) [2000] ZALAC 10; [2000] 9 BLLR 995; (2000) ILJ 1051 (LAC) (3 March 2000) per Conradie JA [Zondo AJP dissenting and Willis JA concurring on different grounds]

The Labour Appeal Court allowed the appeal and set aside an award that reinstated two employees.  Zondo AJP regarded long service as a mitigating factor and dissented.

‘Dismissal is not an expression of moral outrage; much less is it an act of vengeance.  It is, or should be, a sensible operational response to risk management in the particular enterprise. That is why supermarket shelf packers who steal small items are routinely dismissed. Their dismissal has little to do with society’s moral opprobrium of a minor theft; it has everything to do with the operational requirements of the employer’s enterprise’.

Conradie JA found that the employees were not dismissed to punish them but because De Beers was no longer prepared to run the risk of employing them once they had been shown to be dishonest.  Long service is not entirely irrelevant as it assists in determining whether an employee is likely to repeat a misdemeanour.

Employees with long and faithful service have shown that they do not have a propensity for offending.  That historical experience may persuade an employer to accept the risk of continuing to employ them after it is known that they are not as honest as had been thought.  So long service may be a weighty consideration.

‘But the risk factor is paramount.  If, despite the prima facie impression of reliability arising from long service, it appears that in all the circumstances, particularly the required degree of trust and the employee’s lack of commitment to reform, continued employment of the offender will be operationally too risky, he will be dismissed’.

Judgment of Johan Conradie JA

[17] The commissioner characterised the misconduct as serious. Despite that, she concluded that the relationship of trust between the appellant and the employees had not broken down. Where an employee has committed a serious fraud one might reasonably conclude that the relationship of trust between him or her and the employer has been destroyed. When the employer then asserts that this has in fact happened, it would be startling to hear a commissioner proclaim that, despite what one might expect and despite what the employer says in fact occurred, the relationship of trust had not been broken down.

Of course, a commissioner is not bound to agree with an employer’s assessment of the damage done to the relationship of trust between it and a delinquent employee, but in the case of a fraud, and particularly a serious fraud, only unusual circumstances would warrant a conclusion that it could be mended.

[18] The facts here are not unusual. They are recited by my brother Willis. The frauds by the two employees were committed in the course of a routine activity which they were expected to perform frequently. When the vital question of recidivism is considered, it is relevant to note that neither employee expressed the slightest remorse. At their disciplinary enquiry each put up a defence which was manifestly dishonest.

The appellant took the attitude, and I think quite correctly, that this was a further indication that they could no longer be trusted. The commissioner did not say why she thought that their further dishonesty during the disciplinary enquiry was not gravely inimical to the already damaged trust relationship.

[19] What makes the commissioner’s finding that the trust relationship had not broken down more startling is that there was uncontested evidence before her that, in the position which the employees occupied, the appellant had to repose a high degree of trust in them. For the most part they worked unsupervised. They carried cargo across international frontiers. From time to time they carried diamondiferous gravel and ore samples.

If any of these were lost, months of exploration might have to be repeated at enormous cost to the appellant. The potential loss from misplaced trust in the honesty of an employee was far greater than that which could have been feared by the employer in Toyota South Africa Motors (Pty) Ltd v Douglas Radebe and others  [2000] 3 BLLR 243; (2000) ILJ 340 (LAC) delivered on 3.12.99).

[20] The commissioner next opined that the fraud (which she had earlier found to be serious) was not really all that serious because it was committed outside the employees’ ‘core functions’.

She thought that their ‘core function’ was to manipulate the controls of heavy transport vehicles and not to complete overtime returns.

This is not correct, but assuming it to be, the notion of a ‘core function’ can have no utility unless it is used to ascertain whether an employee’s functions are such that a repetition of the ‘offence’ in question is to be feared or not.

The core function of a cashier is to handle money, so that an employer might, leaving other factors aside, reasonably fear a repetition of theft on her part.

The core function of an office cleaner is not to handle money, yet, if she were caught stealing, it would be fatuous to argue in her favour that that was not her core function. Her core function does not matter. The risk of continuing to employ her, does.

[21] Closely allied to the notion of the employees’ core function not comprising the completion of log books, was the idea that the fact that the fraud could have been detected was also somehow mitigatory.

The notion is bizarre. If consistently applied, it would mean that the better an employer’s detection system is, the less the prospects of dismissing those caught by the system would be.

[22] The commissioner also misunderstood the significance of the employees’ long service. Long service is no more than material from which an inference can be drawn regarding the employee’s probable future reliability.

Long service does not lessen the gravity of the misconduct or serve to avoid the appropriate sanction for it.

A senior employee cannot, without fear of dismissal, steal more than a junior employee. The standards for everyone are the same. Long service is not as such mitigatory.

Mitigation, as that term is understood in the criminal law, has no place in employment law.

Dismissal is not an expression of moral outrage; much less is it an act of vengeance. It is, or should be, a sensible operational response to risk management in the particular enterprise. That is why supermarket shelf packers who steal small items are routinely dismissed. Their dismissal has little to do with society’s moral opprobrium of a minor theft; it has everything to do with the operational requirements of the employer’s enterprise.

[23] It is precisely because dismissal for misconduct is rooted in operational requirements and not in the need for punishment that I consider that the following dicta of Zondo AJP in Toyota (supra) must be interpreted in context.

He said this:

‘I hold that the first respondent’s length of service in the circumstances of this case was of no relevance and could not provide, and should not have provided, any mitigation for misconduct of such a serious nature as gross dishonesty.

I am not saying that there can be no sufficient mitigating factors in cases of dishonesty nor am I saying dismissal is always an appropriate sanction for misconduct involving dishonesty.

In my judgment the moment dishonesty in a particular case is of such a serious degree as to be described as gross, then dismissal is an appropriate and fair sanction.’

I draw attention to the phrase ‘in a particular case’. The seriousness of dishonesty – i.e. whether it can be stigmatised as gross or not – depends not only, or even mainly, on the act of dishonesty itself but on the way in which it impacts on the employer’s business.

[24] The employees in casu were not dismissed in order to punish them. They were dismissed because the employer was not prepared to run the risk of employing them any longer once they had been shown to be dishonest.

Long service is, of course, not entirely irrelevant It is relevant in determining whether an employee is likely to repeat his misdemeanour.

An employee who has long and faithfully served his employer has shown that he has little propensity for ‘offending’.

That historical experience may persuade an employer to accept the risk of continuing to employ him now that it is known that he is not as honest as had been thought.

Depending on the circumstances, long service may be a weighty consideration. But the risk factor is paramount. If, despite the prima facie impression of reliability arising from long service, it appears that in all the circumstances, particularly the required degree of trust and the employee’s lack of commitment to reform, continued employment of the ‘offender’ will be operationally too risky, he will be dismissed.

[25] This brings me to remorse.

It would in my view be difficult for an employer to re-employ an employee who has shown no remorse.

Acknowledgement of wrong doing is the first step towards rehabilitation. In the absence of a recommitment to the employer’s workplace values, an employee cannot hope to re-establish the trust which he himself has broken.

Where, as in this case, an employee, over and above having committed an act of dishonesty, falsely denies having done so, an employer would, particularly where a high degree of trust is reposed in an employee, be legitimately entitled to say to itself that the risk of continuing to employ the offender is unacceptably great.

[26] In the circumstances of this case I consider it to have been irrational for the commissioner to have found

    • that the employees did not commit the dishonesty within the scope of their core functions,
    • that their long service availed them, or
    • that they were entitled to profit from the fact that their dishonesty might readily have been detected by the employer.

She misunderstood the concept of a core function and the role of long service in mitigation. She gave no thought to the moral opprobrium attaching to employees who knew that their fraud could, by an analysis of the print-outs of a device attached to one of the trucks, readily be detected, and nevertheless committed it.

[27] In the circumstances of this case, I consider that it was irrational to have relied on the employees’ long service for having found their dismissal unfair.

In my judgment the commissioner has ‘ignored or misapplied legal principles to an extent that is inappropriate or unreasonable.’

(See Standard Bank of South Africa Ltd v CCMA & others [1998] 6 BLLR 622, (1998) 19 ILJ 903 (LC) per Karel Tip AJ)

By doing so, she failed to make a rational connection between the material available to her and the conclusion which she reached.

(Carephone (Pty) Ltd v Marcus NO & others [1998] 11 BLLR 1093; (1998) 19 ILJ 1425 (LAC) at para [24] per Johan Froneman DJP).

The award should therefore have been set aside by the court a quo.

The appeal succeeds with costs. The order of the court a quo is set aside and replaced by an order reading –

‘the arbitrator’s award is set aside with costs’.