In the words of Halford Luccock, “No one can whistle a symphony. It takes an orchestra to play it.” The essence of any workplace involves individuals collaborating to achieve collective goals and shared objectives. At the end of the day, “teamwork makes the dream work” unless the “leader has a big dream and a bad team, then the vision becomes a nightmare.”
Well, this is the reality or nightmare of employers where a large number of employees have to be dismissed for engaging in misconduct, being complicit prior to or after the misconduct, or even deliberate non-disclosure when asked to assist employers in investigating perpetrators.
Employers, especially in retail, are often faced with the issue of stock shrinkage, which is the loss of stock not due to sales. Several factors contribute to stock shrinkage such as damaged stock that can no longer be sold, administrative errors, and sometimes employee theft.
Employers are aware that several factors contribute to stock shrinkage, sometimes beyond their control or even the control of employees; as such, some percentage of stock shrinkage can be acceptable. Stock losses can, however, reach unacceptable standards, necessitating action by employers to avoid adverse financial consequences.
In The South African Commercial Catering and Allied Workers Union and Others v Makgopela and Others (JA38/2021) ZALAC 8 [2023] Cashbuild (Pty) Ltd (“Cashbuild’) had an acceptable shrinkage percentage of 0.4% of sales. Unfortunately, employees had to be dismissed after this percentage was continuously exceeded, even after shrinkage workshops. The employees were charged with Collective Misconduct/Team Misconduct and subsequently dismissed.
Before the Labour Appeal Court, the employees contended, among others, that the commissioner committed an error of law as he mischaracterised the dispute as derivative misconduct. While both derivative and team misconduct fall under collective misconduct, there are some differences to be noted pertaining to each.
The Labour Appeal Court discussed the four forms of collective misconduct. However, this article is limited to team misconduct and derivative misconduct.
Team misconduct applies in cases where team members, as individual members of a team, fail to ensure that the team adheres to a rule or standard set by the employer. Individual responsibility cannot be determined, or is indivisible, and as such, all individuals in a team are charged with team misconduct.
On the other hand, derivative misconduct is premised on the derivative duty placed on employees to disclose information concerning misconduct that they are aware of to their employer. Their conscious election not to disclose the information constitutes a ground for dismissal.
The Labour Appeal Court, in finding that the dismissal of the employees was substantively unfair, considered that even though there was a rule in place aimed at preventing stock loss and that stock shrinkage was detected even after interventions in the form of workshops, Cashbuild failed to produce evidence of an investigation into the manner in which stock was lost. There was also no evidence to indicate in which part of the store the losses occurred.
Although several employees in different roles were dismissed, Cashbuild did not establish any proximity between employees that would have the effect of establishing some culpable participation of all the employees in the misconduct. Moreover, Cashbuild’s Divisional Manager did not follow up on the issues raised by employees in the shrinkage workshop.
The Labour Appeal Court, therefore, found that the proven facts did not support an inference that all employees participated in the misconduct.
Employers who seek to rely on any form of collective misconduct as a ground for dismissal must therefore ensure that proper investigations are undertaken to ensure the necessary evidence to prove the misconduct exists.
A lack of evidence necessary to establish the misconduct will render a dismissal substantively unfair.
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The content of this article is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive nor does it constitute legal or other professional advice. You should seek legal or other professional advice before acting or relying on any of the content.