Corporate entities, which have labour-intensive environments, are often the victims of significant stock losses or malicious acts. These result in significant and repeated financial loss to you, the employer. Because of large workforces and/or closely associated employees, it becomes difficult to identify and discipline the culprits. So what can you do? The answer lies in collective disciplinary action on the basis of ‘derivative misconduct’.
Where a company suffers from major stock losses or acts of sabotage committed by a collective group of employees, this misconduct will be recognised as a substantive ground for disciplining, and possibly even dismissing, that group of employees.
In proving substantive fairness, you need to show that if the following occurred, they would be held collectively responsible:
- The employees were warned and knew of the relevant rule, and
- If the sabotage or theft continued unabated.
What is collective disciplinary action?
The rationale for collective disciplinary action is based on the principle that the employees have all associated themselves with an act of misconduct and accordingly all act with a ‘common purpose’.
What is at the core of derivative misconduct?
It has been held that if an employee in a collective unit is asked to disclose, for example theft/damage, but he does not, you can reasonably conclude that the employee, or group of employees, participated in or supported this particular instance of misconduct.
What approach have the courts adopted?
According to the courts, if the employees have an innocent explanation for the misconduct, they should give this explanation to you. If they do not, the odds are against them and you should not trust them.
The courts have held that it is the responsibility of the employee to rebut the facts and allegations of sabotage/theft. If the employee does not do this, you now have conclusive evidence of the employee’s guilt.
You must prove that a dismissal is procedurally fair
The general rule is that you must give your employee the opportunity to be heard and this process must come before any disciplinary action you would take against the employee if you want this process to be procedurally fair.
It has been held that a dismissal for derivative misconduct will be procedurally fair if you have given him an opportunity to state his case and have ensured that the employee knows what charges have been laid against him.
According to the Labour Appeal Court (LAC), to satisfy the requirements for procedural fairness in cases of derivative misconduct you will also need to issue out an ultimatum. This document should include an invitation to employees to come forward and tell you any information relating to the collective misconduct and those involved.
When you charge employee with derivative misconduct, charge them each with their own individual act of misconduct, be it either failing to disclose, taking part or being an accomplice to the theft or damage. If you do not charge the employee, you might affect if their dismissal was substantively fair.
by Nicholas Preston
This article first appeared on HR Pulse.