On 8 March 2022, the Labour Appeal Court handed down judgment in regard to a matter concerning dishonesty in the workplace.

The employee was a branch manager at a bank, and had been employed by the bank for 33 years and she had an unblemished record. The employee had been charged and dismissed for misconduct, which was alleged to involve dishonesty and the employee’s alleged failure to comply with the bank’s policies and procedures.

The employee decided that she would deposit R100.00 of her own money into ten inactive accounts, opened by ten different customers, that were under her control at her branch. An amount of R10.00 was deposited in each account. The deposits were made without the knowledge and/or consent of the account-holders. The effect of this was that the accounts, which were inactive, were then recorded as active, and then constituted sales in terms of the branch’s performance. One of these accounts was, subsequently, operated by the account holder who then deposited further moneys into the account.

During a routine visit to the employee’s branch by the area head manager of the bank, the employee voluntarily informed him about her deposits. An investigation then followed, and the employee was required to attend a disciplinary hearing, where the employee was found guilty of dishonesty and dismissed.

The employee referred an unfair dismissal dispute to the CCMA where the Commissioner found the dismissal to be unfair, and ordered that the employee be reinstated.

Aggrieved by the decision of the CCMA, the bank filed a review application in the Labour Court to review and set aside the award issued by the commissioner.

The Labour Court found that the commissioner failed to arrive at a conclusion that a reasonable decision-maker would have reached, namely, and reviewed and set aside the award and replaced it with an order that the dismissal was fair.

The matter then came before the Labour Appeal Court (“LAC”).

The bank’s submission that the employee wanted to deceive the bank by boosting her branches sales and that she was in trouble with her performance was rejected because the employee’s performance was fine.

The LAC further found that the employee did not stand to gain any kind of reward on account of adding ten accounts as there was no performance bonus or other kind of incentive that could be achieved by the artificial addition of the ten savings account.

The LAC also accepted that the employee had voluntarily and freely mentioned her conduct to the area manager as well as to her staff, in the excitement of having thought of something which, to her, appeared like a good idea and that this was an innovative way of motivating staff as the employee thought this was a good way of getting the account holders to use their accounts. In fact, one of the accounts opened did get the result the appellant had hoped for, in that the account was then indeed utilised. By making the disclosures she did in fact indicated that there was no intention to deceive.

In addition, the employee left a paper trail in respect of the deposits by entering her name and identity number on the deposit slips, when she could have deposited the amounts anonymously at an ATM, and then used a false name and identity number on the deposit slips, which she also did not do.

The LAC’s view of the employee conceding in hindsight that her actions were foolish, showed contrition on the part of the employee and further indicated that she did not act with the intention to be dishonest.

It was also noted that the bank had not contacted the nine clients, who did not operate the accounts, stating that their accounts had been accessed by a private person and activated and for that reason had to be de-activated, nor did they contact the person who started operating the account that their account had been irregularly activated and that the account had to be de-activated, and if he or she still wanted to do business with the bank, to then re-open the account.

The LAC also found that an unblemished record of thirty-three years of service militated against the sanction of dismissal. The employee’s further evidence that the she would not act like that again, and conceded in hindsight that she had made an error of judgment, also confirmed that dismissal was unwarranted.

Having considered that the employee had freely left a paper trail of her conduct, that she did not stand to gain any reward, that she wanted to motivate her staff, and that she voluntarily shared what she had done, and that there was no evidence that she acted in bad faith or that by her actions, she exposed the bank to any material risk, the LAC upheld the employee’s appeal and found (as did the CCMA) that the employee’s dismissal was unfair, and ordered that the employee be reinstated.

Although one’s initial reaction to dishonesty in the workplace is that a dismissal must be inevitable, this case is yet another example of how matters should be thoroughly investigated and all aspects carefully considered with the assistance of a labour law specialist before proceeding with disciplinary action against an employee.

Article written by Craig Berkowitz

Specialist Labour lawyer and Acting Judge in the Labour Court of South Africa

Craig can be contacted on 083 453 1822 or by email at cblaw@netactive.co.za