Derivative Misconduct – Constitutional Court Ruling

Derivative Misconduct – Constitutional Court Ruling

Human Resources

The Constitutional Court recently handed down an unanimous judgement in the matter between NUMSA and Dunlop which dealt with the concept of derivative misconduct, providing clarity on this issue and the tests to be considered particularly where employees cannot be individually identified as being part of an incident. 

Employees, all members of NUMSA, embarked on a protected strike pursuant to a wage dispute. As the strike continued it became increasingly violent with many of the employees committing serious acts of misconduct. An interdict was sought and granted in an effort to deter the violence and misconduct, alas to no avail.

The employer subsequently dismissed all the striking employees pursuant to their alleged misconduct during the strike on the basis of derivative misconduct. Challenging the fairness of the dismissals, NUMSA brought the matter before an arbitrator at the CCMA, and the arbitrator in coming to his decision distinguished the dismissed employees into three different categories:

  • Those positively identified as committing violence;
  • Those identified as present when the violence took place but who did not physically participate; and
  • Those not positively and individually identified as being present when the violence was being committed.

The Arbitrator found that the first two groups had been fairly dismissed, but that the third group’s dismissal was substantively unfair and ordered their reinstatement. On review in the Labour Court (LC), the court set aside the Arbitration Award and found that the employees had been fairly dismissed. NUMSA then lodged an appeal before the Labour Appeal Court (LAC) where the LAC upheld the LC’s decision.

NUMSA then brought the matter before the Constitutional Court (CC) where the court considered the historical understanding of the concept of derivative misconduct as that of a common law duty on the employee to act in good faith and in the best interests of the employer (the reciprocal duty), while in return the employer has the general duty of fair dealing with its employees.

The court described the expected duty on the employee to disclose the misconduct of fellow employees; while the employer had the obligation to offer protection and guarantee the employee’s safety while doing so. The court found that the reciprocal duty argument had failed due to the absence of appropriate safety and protection by the employer once an employee came forward.

In determining derivative misconduct, the chain in determining whether an employee is guilty or not, is a lengthy one. In determining this one should consider that the most probable inference was that each employee was:

  • present when the violence was committed;
  • would have been able to identify those who committed the violent acts;
  • would have known that the employer needed that information from them;
  • with possession of that knowledge, failed to disclose the information to the employer; and
  • did not disclose the information because they were guilty.

The most probable inference in this case was found to be that only some of the employees were present and therefore to dismiss all in the absence of individual identification would not be justified.

Dunlop’s expectation of its employees to come forward with information regarding those who had committed acts of misconduct, coupled with its failure to ensure their safety and protection thereafter was ultimately what lead to its loss before the Constitutional Court. Furthermore, Dunlop’s case failed on the consideration of probable inference, and the court found that to dismiss all employees in the absence of individual identification would not be justified. The Arbitration Award therefore stood, and the third group of employees were ultimately reinstated.