The Labour Court in Clicks Retailers (Pty) Ltd v Madikwe and Others (JR 1924/19) [2023] ZALCJHB 67 (14 March 2023) defines dereliction of duty as a misconduct in which an “employee willfully, wantonly or negligently failed to perform his or her duties, or performed them in a culpably inefficient manner”. For an employer to establish this form of misconduct, the employer must prove that the employer had clearly established the employee’s duties and responsibilities and further provide evidence demonstrating, on a balance of probabilities, that the employee intentionally neglected to fulfil those duties.
In an application brought before the Companies Tribunal of South Africa in the matter of Mtshali v Lefutso (CT00482ADJ2020) [2020] COMPTRI 9 (17 December 2020), the Tribunal had to determine whether the inability of the Applicant, to get hold of the Respondent points to the Respondent neglecting or being derelict in the performance of his functions as a director. In this application, the Applicant sought the removal of the Respondent as a director of a company in terms of Section 71(8) of the Companies Act 71 of 2008 (the Act), alleging that the Applicant has not been able to get hold of the Respondent. Thus, the Respondent’s conduct is hindering the operations of the business. Section 71(3)(b) of the Act provides that “if a company has more than two directors, and a shareholder or director has alleged that a director of the company has neglected, or been derelict in the performance of the functions of director, the board, other than the director concerned, must determine the matter by resolution, and may remove a director whom it has determined to be ineligible or disqualified, incapacitated, or negligent or derelict, as the case may be”. In this matter, the Tribunal acknowledged that the Act does not define which conduct constitutes the dereliction of duties. The Tribunal then relied on the case also decided by the Tribunal in the matter of Spineco Medical International (Pty) Ltd & Another v Webb, Companies Tribunal, Case Number: CT021NOV2014, 11 August 2015, as a precedent to determine whether the conduct of the Respondent constitutes dereliction of duty.
In the Spineco case, the Tribunal defined dereliction as “desertion or abandonment and, consequently, the involved conduct has a connotation of being deliberate, purposeful or even intentional about it, and that dereliction or being in derelict would require something more than negligence, at least as recklessness or even intent”. The Tribunal held that in determining whether an act or omission by a Respondent constitutes the dereliction of duties, consideration must be given to the specific circumstances of the misconduct. However, what is prevalent in the dereliction of duties, as demonstrated by the Tribunal, is that to prove dereliction of duties, the act or omission must pierce the veil of negligence in the performance of one’s duties. The misconduct must have a connotation of being deliberate, purposeful or even intentional. Ultimately, the application failed, as the Tribunal was not satisfied that the Applicant had established the duties of the Respondent and that the Respondent had wilfully failed to perform his duties.
In the case of Autozone v Dispute Resolution Centre of Motor Industry and Others [2019] 6 BLLR 551 (LAC), the Labour Appeal Court had to decide whether the employer was obligated to present evidence that the employee’s dereliction of duties had caused an irreparable breakdown of the trust relationship justifying the dismissal. It is generally accepted that when misconduct involves a deliberate act of deception, the employer is likely to lose trust in the employee. The misconduct itself reflects a level of dishonesty, rendering the employee untrustworthy and making it impossible or unreasonable to continue the employment relationship. The Court concluded that, given the circumstances, the employer was not required to provide evidence proving that the employment relationship had been irreparably damaged. The nature of the misconduct and the context in which it occurred were sufficient to support the conclusion that continuing the employment relationship had become intolerable. The Court reasoned that dishonest conduct, intentionally and deceitfully executed to the employer’s detriment, inevitably creates operational challenges. Consequently, the employer will likely find it difficult to trust such an employee. Therefore, the operational needs of the employer may sufficiently justify the dismissal.
To reduce the risk of dereliction of duty in the workplace, employers should ensure that employees clearly understand their roles, responsibilities, and the consequences of failing to meet expectations. Employers should also foster an environment where employees feel comfortable reporting issues or seeking guidance.
In conclusion, the dereliction of duties is a serious offence that harms the trust relationship between the employee and the employer. Employers who consider acting against employees for the dereliction of duties must prove that there were clearly defined duties and responsibilities and that the misconduct by an employee was intentional. Piercing this veil may prove to be difficult in the absence of clear duties, wilful dereliction thereof and clear adverse harm caused.
Article By Simphiwe Ndaba
Dispute Resolution Official at Consolidated Employers Organisation (CEO SA)