The High Court, in Sime Darby Hudson & Knight (Pty) Ltd v Lerena (at 2413), considered an employee’s duty to act in good faith towards his employer and the general principles relating to the disgorgement of secret profits made by the employee. It confirmed that in order to succeed in its claim for a disgorgement of profits the employer has to establish that the employee owed it a fiduciary obligation; that in breach of that obligation the employee placed himself in a position where his duty and his personal interest were in conflict; and finally that the employee made a secret profit out of corporate opportunities belonging to the employer.

In Joni v Kei Fresh Produce Market (at 2405) the High Court confirmed that it is trite law that a fixed-term contract cannot, at common law, be terminated in the absence of a repudiation or a material breach by the other party, but that it can be terminated on notice if the contract contains a specific provision permitting termination on notice during the contractual period.

The Labour Appeal Court has reiterated that insubordination involves a persistent, wilful and serious challenge to, or defiance of the employer’s authority — a ‘calculated challenge’ to the employer’s authority, which is deliberate or intentional.  An employee’s wilful flouting of, or refusal to accept the reasonable and lawful instruction of the employer constitutes misconduct because it poses a deliberate and serious challenge to the employer’s authority, with the sanction of dismissal reserved for instances of gross insubordination (Malamlela v SA Local Government Bargaining Council & others at 2454).

In Malapalane v Glencore Operations SA (Pty) Ltd (Goedgevonden Colliery) & others (at 2467) the Labour Appeal Court found that, where a senior laboratory employee misrepresented the results of coal test which resulted in the employer mining company suffering enormous financial loss and reputational damage, it was not necessary to determine whether the employee had the intention to deceive, all that had to be shown was that the employee misrepresented to the company that the test results were correct and accurate. The court upheld the employee’s dismissal.

Where an employee responsible for checking the veracity of information in the payroll spreadsheet had altered the formula in the spreadsheet to benefit himself, the Labour Appeal Court found that the employee’s conduct was dismissible and upheld his dismissal (Nkomati Joint Venture v Commission for Conciliation, Mediation & Arbitration & others at 2484). 

An employee was dismissed for misappropriating company funds by using the company credit card for purchases in contravention of the company’s policy. A CCMA commissioner found the dismissal to be unfair. On review the Labour Court rejected the employee’s argument that he had not been disciplined for earlier similar transgressions and that the company had therefore acted inconsistently. It found that the overwhelming probabilities were that the employee took chances when he contravened the policy on earlier occasions, not that he bona fide believed that the policy was no longer applicable and that the company’s later conduct was an inconsistent application of its policy. The court upheld his dismissal (JDG Trading (Pty) Ltd t/a Supply Chain Services v Myhill NO & others at 2550). 

Three directors were dismissed after they made handwritten alterations to their employment contracts granting themselves increases is remuneration, backpay, performance bonuses and thirteenth cheques without board approval. A CCMA commissioner found that the directors had merely been negligent and not dishonest, and awarded them compensation for their unfair dismissal. On review, the Labour Court found that, only on a most credulous evaluation of the evidence, could the commissioner have concluded that the employees’ conduct was bona fide and not unlawful and dishonest. The directors were clearly guilty of dishonesty justifying their dismissal (Kidrogen (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & others at 2560).

An employee was found guilty of deliberately falsifying payroll information resulting in the overpayment of a shop steward. A bargaining council arbitrator found that the employee had merely been incompetent and that the employer should have treated the matter as one of poor performance and not misconduct. On review, the Labour Court found that the arbitrator had misdirected himself — in deciding the fairness of the dismissal the arbitrator had to assess the fairness in relation to the reason given by the employer. Moreover, the arbitrator had found that the mere fact that the employer had offered the employee demotion as an alternative to dismissal indicated that dismissal was not warranted. The court found that the arbitrator’s logic was fundamentally flawed in seeing the offer of demotion as necessarily meaning that the employee’s dismissal from his post as contract supervisor was not justified. Taken to its logical conclusion, the arbitrator’s approach would mean that no employer who offered an employee demotion as an alternative to dismissal would be allowed to defend the subsequent dismissal if the employee refused that alternative (Unitrans Supply Chain Solutions (Pty) Ltd v National Bargaining Council for the Road Freight & Logistics Industry & others at 2573).  

A senior employee of the Industrial Development Corporation, responsible for ensuring that due diligence was undertaken before films received financing from the IDC, failed to disclose a negative review of a film script and misrepresented that an international company had undertaken to purchase copies of the film. She was dismissed, but reinstated by a CCMA commissioner. The Labour Appeal Court found that a high fiduciary standard was required of an employee in the employee’s position. Her misrepresentation and failure to act in the best interest of the IDC had damaged the trust relationship, and her dismissal was fair (Roscher v Industrial Development Corporation & others at 2489).

When two employees responsible for ensuring safety at the mine at which they worked failed to perform their functions and this resulted in the death of a miner, the Labour Appeal Court confirmed that their dismissal was fair (National Union of Mineworkers & others v Sibanye Gold Ltd (Kloof Division) & others at 2476).