Brief Summary

Labour Law — Unfair dismissal — Misrepresentation in employment application — Third respondent, a security guard, dismissed after 14 years for failing to disclose prior criminal convictions when applying for employment in 1996 — Arbitration found dismissal substantively unfair, awarding retrospective reinstatement — Labour Court upheld the finding of misconduct but deemed dismissal unfair, ordering reinstatement — On appeal, it was held that the third respondent's failure to disclose his criminal record constituted a breach of the employer's trust, making dismissal substantively fair — Appeal upheld, reinstating the dismissal with no order as to costs.

Comprehensive Summary

Summary of Judgment

Introduction

The matter was an appeal to the Labour Appeal Court of South Africa against a judgment and orders of the Labour Court (Lagrange J). The appeal concerned the substantive fairness of a dismissal for dishonesty/misrepresentation arising from a failure to disclose prior criminal convictions in an employment application.

The appellant was G4S Secure Solutions (SA) (Pty) Ltd (the employer). The first respondent was Commissioner Anthony Ruggiero N.O. (the arbitrator who issued the award under review). The second respondent was the Commission for Conciliation, Mediation and Arbitration (CCMA). The third respondent was Mr Thandabantu Ntloko (the employee).

In procedural terms, the employee was dismissed in November 2010 following a disciplinary hearing. He referred an unfair dismissal dispute to the CCMA, where the commissioner found the dismissal substantively unfair and awarded retrospective reinstatement (with limited retrospective compensation). The employer successfully challenged the commissioner’s reasoning in part in the Labour Court, which held that the employee had committed misconduct by failing to disclose his convictions, but nevertheless found dismissal unfair and ordered retrospective reinstatement. The employer then appealed to the Labour Appeal Court.

At the outset of the appeal hearing, the Labour Appeal Court reinstated the appeal and condoned the late filing of the appeal record. The appeal had been deemed withdrawn because the record was not filed within the periods provided in rules 5(17) and 5(19) of the Labour Appeal Court Rules, and no extension had been granted. The explanation accepted was that the record contained incorrect information requiring correction and refiling.

The general subject-matter of the dispute was whether dismissal was an appropriate sanction for the employee’s misrepresentation/dishonesty in the context of employment as a security guard, where trust and disclosure were central, and where the employer also invoked regulatory considerations under the Private Security Industry Regulation Act 56 of 2001.

Material Facts

It was common cause that when the employee applied for employment with the employer in 1996, he was asked in a written application: “Have you ever been convicted of a criminal offence?” The employee answered “no”, and the employer employed him as a security guard.

Fourteen years later, on 30 July 2010, the employee applied for promotion to the position of controller. A criminal record check then revealed two prior convictions: a conviction for rape in 1982 (when the employee was 17 years old, for which he received six lashes) and a conviction for assault with intent to do grievous bodily harm in 1991 (for which he paid a fine of R200).

On 1 November 2010, the employee was notified to attend a disciplinary hearing to answer allegations framed as misrepresentation and/or dishonesty concerning an application for employment and/or breach of PSIRA Regulations code of conduct. The employer’s disciplinary code defined dishonesty concerning an application for employment as false information supplied in support of an application, where the information has a material effect on the employer/employee trust relationship.

At the disciplinary hearing, the employee’s explanation for non-disclosure was that he did not know he had been convicted because he had not gone to jail. In relation to the rape conviction, he stated that he was 17, did not understand the law, and disputed the characterisation (“It was not rape”). In relation to the assault conviction, he described it as an incident where he defended a woman and later received a fine that his brother paid. It was also recorded that after returning to school and completing Grade 12, the employee trained and registered as a security officer, and that when he undertook National Key Point training in 2008 he was not advised that he had a criminal record.

The employee was found guilty at the disciplinary hearing and dismissed in November 2010. At arbitration, it was accepted that he had a clean disciplinary record over the period of employment. It was also recorded that the employee initially sought reinstatement at referral stage but, by the time of the arbitration referral, sought compensation.

The commissioner accepted the employee’s version that he was not aware he had a criminal record at the time of the 1996 application and found it “plausible” that he had not wilfully misrepresented the facts. The commissioner also found that the employee’s convictions fell outside the relevant 10-year period referred to in section 23(1)(d) of the PSIRA Act, and accordingly found no breach of the PSIRA code of conduct on that basis. On this approach, the commissioner found the dismissal substantively unfair and awarded reinstatement with limited retrospective effect (and assessed “two months compensation” as just and equitable, while declining broader retrospective compensation).

On review, the Labour Court rejected the commissioner’s conclusion that the employee could have been unaware of his convictions and held that the employee had indeed committed misconduct by failing to disclose his convictions. The Labour Court nonetheless agreed that the PSIRA Act did not bar the employee’s employment on the facts, and found dismissal unfair, ordering retrospective reinstatement (to 1 August 2011).

Legal Issues

The central questions before the Labour Appeal Court were whether the Labour Court erred in finding that the employee’s dismissal was not for a fair reason, and whether the Labour Court erred in finding that reinstatement was the appropriate remedy.

The dispute required the court to evaluate both the application of legal standards to established facts and the value judgment inherent in determining the appropriateness of dismissal as a sanction for misconduct. Although there was an earlier review question (whether the commissioner’s award was one that a reasonable decision-maker could reach on the material), the appeal focused on the consequences after misconduct was established, namely whether dismissal was substantively fair in light of all relevant circumstances.

An associated issue was the role and relevance of the Private Security Industry Regulation Act 56 of 2001, given that it post-dated the commencement of employment and contained a 10-year look-back requirement for registration. The courts had to distinguish between regulatory compliance considerations and the employer’s misconduct case grounded in dishonesty and the trust relationship.

Court’s Reasoning

The Labour Appeal Court endorsed the Labour Court’s criticism of the commissioner’s reasoning on whether the employee was unaware of his convictions. The appeal court held that, on the employee’s own versions (both at the disciplinary hearing and at arbitration), he knew he had committed offences for which he was punished. On that basis, when asked directly whether he had ever been convicted of a criminal offence, the employee knew that he had been convicted. The court considered it immaterial whether the employee understood the technical status of his record as a “criminal record”; the question asked was about convictions, and the employee’s knowledge of being punished for those offences meant he was aware of the convictions.

Given that the employer’s disciplinary code expressly treated false information in an employment application as an offence where it materially affected the trust relationship, the court held that the commissioner’s conclusion that there was no contravention of the rule and no misrepresentation was not borne out by the evidence. The court accepted that the commissioner’s finding of substantive unfairness founded on the absence of any breach of a rule was not a decision a reasonable decision-maker could reach on the material.

Having accepted that misconduct was established, the Labour Appeal Court turned to the substantive fairness of dismissal. It emphasised that the Labour Relations Act 66 of 1995 requires consideration of all relevant circumstances and does not require deference to the employer’s decision merely because it is the employer’s sanction choice. The court approached the matter through the framework of the Code of Good Practice: Dismissal, including the recognition that dismissal for a first offence may be appropriate where misconduct is serious and of such gravity that it renders continued employment intolerable, with gross dishonesty identified as an instance where dismissal may be justified.

The Labour Appeal Court disagreed with the Labour Court’s approach to sanction to the extent that it treated the employer’s apparent focus on PSIRA compliance as determinative. While the appeal court agreed that the employer’s reliance on the PSIRA Act was misplaced because the convictions fell outside the 10-year period and the Act did not exist when employment commenced, it held that this did not negate the seriousness of the misconduct as dishonesty inducing employment. The court treated the non-disclosure as a material misrepresentation in a context where the employer was entitled, as an operational imperative, to rely on full disclosure from prospective security personnel.

The court placed weight on the nature of the employee’s role in the security industry and reasoned that convictions for rape and assault were antithetical to employment as a security guard. It treated the statutory framework as illustrating the seriousness with which criminal infractions are viewed in the industry, even though PSIRA did not directly bar the employee in this case. It further emphasised that where an employer asks an express question about convictions, the employer is entitled to an honest answer.

Mitigating considerations were acknowledged. The employee had 14 years of service and a clean disciplinary record, and the damage was confined to the fact that employment may not have been offered had disclosure been made. The court nonetheless regarded the misconduct as fundamentally dishonest, and noted that the employee did not show remorse when confronted; instead, he advanced explanations that shifted over time, first asserting he did not know convictions existed because he was not imprisoned, and later asserting belief that older records had been “scrapped”.

In assessing fairness, the court relied on authority recognising the premium placed on honesty in employment and the connection between dishonesty and the erosion of trust, including the proposition that dismissal for dishonest conduct may be a sensible operational response to risk management. It also applied the principle that certain serious acts of misconduct, particularly gross dishonesty, may justify dismissal notwithstanding long service.

The court concluded that, even without direct evidence of a breakdown of trust and notwithstanding the employer’s mistaken reliance on PSIRA compliance, the sanction of dismissal was fair because the employee obtained employment on false pretences, concealed the truth for an extended period, and displayed an absence of remorse once confronted. The court added that treating the lapse of time as excusing the dishonesty would send the wrong message.

In considering remedy, the court noted the relevance of the “real dispute between the parties” and referred to the statutory limitation in section 193(2) of the Labour Relations Act 66 of 1995, including the circumstance where an employee does not wish to be reinstated. It observed that the employee, in his referral to arbitration, sought compensation rather than reinstatement. On the court’s approach, and given its conclusion on substantive fairness, reinstatement was not warranted.

Outcome and Relief

The Labour Appeal Court upheld the appeal and set aside the Labour Court’s order. It substituted the Labour Court’s order with an order that the arbitration award was reviewed and set aside and replaced by a finding that the employee’s dismissal was substantively fair.

No costs order was made. The Labour Appeal Court held that a costs order would be neither just nor fair.

Cases Cited

Sidumo and Another v Rustenburg Platinum Mines Ltd and Others [2007] 12 BLLR 1097 (CC); 2008 (2) SA 24 (CC); (2007) 28 ILJ 2405 (CC); [2007] ZACC 22; 2008 (2) BCLR 158 (CC).

Gcwensha v CCMA and Others [2006] 3 BLLR 234 (LAC).

Irvin & Johnson (1999) 20 ILJ 2302 (LAC).

Sappi Novoboard (Pty) Ltd v Bolleurs (1998) 19 ILJ 784 (LAC).

CSIR v Fijen [1996] 6 BLLR 685 (AD).

Murray v Minister of Defence [2008] ZASCA 44; [2008] 3 All SA 66 (SCA); [2008] 6 BLLR 513 (SCA); 2009 (3) SA 130 (SCA); 2008 (11) BCLR 1175 (SCA); (2008) 29 ILJ 1369 (SCA).

Miyambo v CCMA and Others [2010] 10 BLLR 1017 (LAC); (2010) 31 ILJ 2031 (LAC).

Hulett Aluminium (Pty) Ltd v Bargaining Council for the Metal Industry [2008] 3 BLLR 241 (LC).

De Beers Consolidated Mines Ltd v CCMA and Others [2000] 9 BLLR 995 (LAC).

Auret v Eskom Pension & Provident Fund (1995) 16 ILJ 462 (LC).

Hoch v Mustek Electronics (Pty) Ltd (2000) 21 ILJ 365 (LC).

Boss Logistics v Phopi and Others [2010] 5 BLLR 525 (LC).

Edcon Ltd v Pillemer NO and Others [2010] 1 BLLR 1 (SCA).

Toyota SA Motors (Pty) Ltd v Radebe and Others [2000] 3 BLLR 243 (LAC).

CUSA v Tao Ying Metal Industries and Others [2009] 1 BLLR 1 (CC).

Legislation Cited

Labour Relations Act 66 of 1995, including section 193(2).

Private Security Industry Regulation Act 56 of 2001, including section 23(1)(d).

Code of Good Practice: Dismissal (Schedule 8 to the Labour Relations Act 66 of 1995), including item 3(4) and item 3(5).

Rules of Court Cited

Labour Appeal Court Rules, rule 5(17).

Labour Appeal Court Rules, rule 5(19).

Held

The Labour Appeal Court held that the employee’s failure to disclose his prior convictions when directly asked in his 1996 employment application constituted dishonesty and misconduct of a serious nature. The commissioner’s conclusion that the employee did not contravene the rule and did not misrepresent himself was not supported on the evidence.

The court held further that, notwithstanding the employee’s lengthy service and clean disciplinary record, and notwithstanding the employer’s misplaced reliance on the Private Security Industry Regulation Act 56 of 2001, dismissal was a fair sanction given the gravity of the dishonesty, the security-industry context requiring trust and disclosure, and the absence of remorse.

The appeal was upheld, the Labour Court order was set aside, and the arbitration award was replaced with an order that the dismissal was substantively fair. No order as to costs was made.

LEGAL PRINCIPLES

The judgment applied the principle that the determination of the fairness of dismissal requires a consideration of all relevant circumstances, and that the statutory approach does not require deference to an employer’s sanction decision without such an evaluative assessment.

It reaffirmed the approach in the Code of Good Practice: Dismissal that dismissal for a first offence may be appropriate where misconduct is serious and of such gravity that continued employment is intolerable, including in cases of gross dishonesty, and that the assessment must take account of the gravity of misconduct alongside personal circumstances such as length of service and disciplinary record, as well as the nature of the job and circumstances of the infringement.

The judgment applied the principle that honesty is central to the employment relationship, and that dishonest conduct—particularly where it induces employment through false pretences—may justify dismissal because it undermines the trust relationship and may constitute a rational operational response to risk management. It also applied the principle that long service, while mitigating, does not necessarily prevent dismissal for serious dishonesty.

Finally, the judgment proceeded on the basis that statutory provisions such as section 193(2) of the Labour Relations Act 66 of 1995 constrain reinstatement in specified circumstances, and it took into account the remedy position reflected by the employee’s own stance in the arbitration process as part of assessing the appropriate relief within the real dispute between the parties.

G4S Secure Solutions (SA) (Pty) Ltd v Ruggiero N.O. and Others (CA2/2015) [2016] ZALAC 55; (2017) 38 ILJ 881 (LAC) (25 November 2016)