Dishonesty in the workplace is not a new phenomenon and, in all likelihood, it will continue to be a problem faced by many employers. The court in Nedcor Bank Ltd v Frank & others
(2002) JOL 9727 (LAC) stated that “dishonesty entails a lack of integrity or straightforwardness and, in particular, a willingness to steal, cheat, lie or act fraudulently.” Dishonesty can take many different forms, including but not limited to, giving an employer false information, failing to disclose relevant information, theft, falsifying qualifications, falsifying documents, secretly competing with the employer, receiving bribes and fraud.[1] By way of further example, in Mothiba v Exxaro Coal (Pty) Ltd t /a  Grootgeluk Coal Mine (2021) 42 ILJ 1910 (LAC), an employee who had lied in an application for subsidised accommodation was found to have been dishonest and was dismissed. The pertinent questions that follow are whether all forms of dishonesty will warrant a dismissal, and if not, whether an employer can issue an employee with a warning for dishonest conduct.

The court in Mpele v Municipality Council of the Lesedi Local Municipality and Others (2018) 12 BLLR 1192 (LC) emphasised the position of the court in Mohlomi v Ventersdorp/Tlokwe Municipality and Others when it quoted that “the LRA creates a right to a fair dismissal and the right to a fair labour practice, and then provides for a prescribed dispute resolution process to give effect to such rights. At the heart of this dispute resolution process lies the notion of fairness as between both employer and employee.”

As explained in ABSA Bank Ltd v Naidu (2015) 1 BLLR 1 (LAC), item 7 of the Code of Good Practice: Dismissal (hereinafter “the Code of Good Practice”) provides that when determining whether a dismissal is fair or not, consideration should be had to whether the employee contravened a reasonable rule, whether the rule had been consistently applied and whether dismissal was an appropriate sanction. Interestingly, in this case the employee argued that they should not have been dismissed as another employee who was found guilty of misconduct of the same kind had merely been given a warning. However, the court explained that the element of consistency was but one of the factors to consider and that the parity principle must not be applied “willy-nilly”. Further, the court reasoned that the conduct of the employee who had merely received a warning was in fact not so similar to that of the employee who was dismissed. The court emphasised that there are varying degrees of dishonesty and that each must be treated according to its own facts and circumstances.

The court in Shoprite Checkers (Pty) Ltd v Commission For Conciliation, Mediation and Arbitration and Others (2008) 29 ILJ 2581 (LAC) echoed the sentiment laid out by the court in Standard Bank SA Limited v CCMA and others (1998) 6 BLLR 622, that one of the crucial elements of an employment relationship is that the employer should be able to place trust in the employee, and a breach of this trust caused by dishonest conduct goes to the very heart of the employment relationship and is destructive of it. Therefore, the issue of whether or not dishonest conduct warrants dismissal rests on the question of whether a continued employment relationship would be intolerable due to the breakdown of the foundational trust between an employer and their employee, caused by the employee’s dishonesty. Hence, the decision to dismiss will not merely rest on, for example, the amount of money stolen or the extent of non-disclosure, but will rather rest on the issue of trust. 

It should be noted that the Code of Good Practice explains that for the most part when it comes to misconduct, it will not be appropriate to take the route of dismissal when the employee is a first-time offender, unless the misconduct is serious and of such gravity that it makes the employment relationship too intolerable to continue in. The Code of Good Practice lists gross dishonesty as a form of serious misconduct. The court in Toyota South Africa Motors (Pty) Ltd v Radebe and Others (DA2/99) [1999] ZALAC 42 (3 December 1999) stated that “gross dishonesty must rank as one of the extreme cases of serious misconduct which an employee may make himself guilty of, and, which an employer may have to deal with, in a workplace” and that “the moment dishonesty is accepted in a particular case as being of such a serious degree as to be described as gross, then dismissal is an appropriate and fair sanction.” The court explained that gross dishonesty means “dishonesty of such a degree…as to be completely indefensible on any ground.” 

In addition to considering the gravity of the misconduct, the court in Theewaterskloof Municipality v SALGBC (Western Cape Division) & others (2010) JOL 25548 (LC) (hereinafter “the Theewaterskloof case”) restated the list of other factors to be considered, which were summarised by the court in Fidelity Cash Management Service v CCMA & others (2008) 29 ILJ 964 (LAC). These factors are (a) taking into account the totality of the circumstances; (b) considering the importance of the rule that has been breached; (c) considering the reason the employer imposed the sanction of dismissal, as the basis of the employee’s challenge to the dismissal must be account for; (d) considering the harm caused by the employee’s conduct; (e) considering whether additional training and instruction may result in the employee not repeating the misconduct; (f) considering the effect of dismissal on the employee; and (g) considering the employee’s service record. It should be noted that this is not an exhaustive list. The court later explained that various components should be placed in the scales. These components are an objective analysis of the particular facts of the case; adequate regard to the applicable statutory and policy framework; and adequate regard to the pertinent jurisprudence as developed by the courts. It is only once this has been done that it can be decided whether a dismissal was fair in any given instance. Consequentially, it follows that whether dishonesty will warrant a dismissal rests heavily on the individual facts of the case at hand, and it cannot categorically be said that all dishonest conduct will render the employment relationship intolerable and be cause for dismissal.

If dishonesty does not intolerably break down the trust between the employer and the employee, other steps may be taken against the employee. This is outlined in the Code of Good Practice, which explains that courts have endorsed progressive discipline and that efforts should be made to Therefore, there is scope for an employer to issue an employee who has acted dishonestly with a warning instead of dismissing them. However, as explained by the court in the Theewaterskloof case, progressive discipline is based on a corrective purpose and outcome. If no correction is likely to be obtained or if the employment relationship is in any event irretrievably broken down, the scope for progressive discipline will likewise fall away. One must have due regard to the facts of the case in order to determine whether graduated discipline should be applied.

The disciplinary action that an employer may take is largely in their discretion as, as per the Code of Good Practice, employers should adopt their own disciplinary rules and a level of consistency in the way they approach discipline. The nature of these rules will vary depending on the size and nature of the employer’s business.

Further, when it comes to regulated industries, such as financial services providers (“FSPs”), debarment procedures may come into play where a representative of an FSP has been dishonest. The Fit and Proper Requirements for FSPs, prescribed under the Financial Advisory and Intermediary Services Act 37 of 2002 (“FAIS Act”), require representatives to be (amongst other things) honest. Therefore, when a representative has been dishonest in so far as it relates to the representative rendering financial services, debarment procedures must be instituted against such a representative in addition to disciplinary action, such as warnings or dismissal. It should be noted that the debarment of a representative is separate to taking disciplinary action against an employee. However, where an employee who is also a representative has been dishonest, both debarment proceedings, as well as disciplinary proceedings may be instituted against them as dual, but separate, processes.

Ultimately, when it comes to dishonesty in the workplace, both employers and employees should take heed of the fact that such conduct can be a dismissible offence if the trust on which the employment relationship is based has broken down to such an extent that it renders the continuation of the relationship intolerable.