The Code of Good Practice: The section dealing with Dismissals states that one of the requirements of a fair dismissal is that it must be the “appropriate” sanction. An arbitrator must make a value judgment regarding the fairness of the employer’s decision, considering all the relevant circumstances. When determining the gravity of the misconduct, the Code stipulates that dismissal as a sanction is generally reserved for more serious misconduct. The Code promotes progressive discipline and therefore distinguishes between single acts of misconduct that may justify the sanction of dismissal and those that may do so cumulatively. The Code identifies gross dishonesty as misconduct, where it is fair to dismiss for the first offence.

The question would therefore be, what constitutes dishonesty? In Nedbank Bank Ltd v Frank (2002) 23 ILJ 1243 (LAC), the Labour Appeal Court held that dishonesty entails “a lack of integrity or straightforwardness and, in particular, a willingness to steal, cheat, lie or act fraudulently”. The court also held that the term implies an intention on the part of the employee to act in a dishonest way. In Nedcor, the employees were dismissed for disconnecting an ATM machine so that the employer would not incur the client’s wrath. The court held that the motive, however foolish, did not amount to dishonesty in respect of the employer.

However, even if there is an intention to act in a dishonest way, when is it gross enough to justify dismissal? The distinction between dishonesty and telling a “white lie” became clear in the Labour Court ruling in Ehrke v Standard Bank of SA & others (2010) 31 ILJ 1397 (LC). The applicant in this matter was dismissed after he admitted to telling a lie in order to avoid having a complaint laid against him with his supervisors. The threat of the complaint alarmed and panicked the applicant, especially as he was already on a Performance Improvement Program. Dishonesty was listed as a dismissible offence in the Respondent’s disciplinary Code, and it was argued that the applicant’s actions, by deliberately giving untrue, misleading or wrong information constituted dishonesty gross enough to dismiss for, as stipulated in the disciplinary Code. At arbitration, the Commissioner found the dismissal to be fair.

However, the Labour Court ruled that the reasoning of the Commissioner in finding the dismissal fair was not sound and that the decision on the basis thereof is one a reasonable decision-maker could not reach. The lie told by the applicant was occasioned by the irrational fear and panic of having a complaint laid against him. The lie and the conduct on the part of the applicant did not prejudice the first Respondent in any way in real terms. The “little white lie” is defined as a lie that does not go to the heart of the trust relationship. In considering the circumstances in this matter, the applicant was not guilty of dishonesty but rather of telling a “white lie”. His actions were hardly that of a compulsive liar actuated by the dishonesty of such a nature that the trust relationship between him and his employer may be said to be destroyed in consequence of the lie.

In determining if a dishonest action of an employee is dismissible, all the circumstances should be considered. The question an employer should ask themselves is if the employee’s action goes to the heart of the trust relationship. If not, a dismissal for dishonesty as a first offence will likely not be considered a fair sanction.

Article by: Aletta Eksteen
Dispute Resolution Official – Cape Town