Employee’s Duty to Disclose

Johanette Rheeder

Employers who have gone through the selection and appointment of new employees sometimes feel that they are caught up in a maize of questions which you may or may not ask of a prospective employee. You may not ask discriminatory questions or attack a person’s organisational rights in terms of the LRA. You may, for instance, not ask a lady whether she is pregnant unless the question relates to the inherent requirements of the job or is justifiable in light of medical facts, social policy or for pension and medical aid purposes. But some questions you may ask and if the employee purposefully deceive you or fail to disclose relevant information, you may discipline and in some cases even dismiss such an employee.

In Atkins / Datacentrix (Pty) Ltd (2009) 18 LC 8.29.3 and also reported in [2010] 4 BLLR 351 (LC) the employer alleged that the failure to disclose the intention to undergo a sex change during the employment process constituted a dishonest misrepresentation and wanted to dismiss the employee for dishonesty. The first question that should be asked is whether the employee has a duty to disclose this information? Therefore, is it relevant and will it make a difference in the decision to appoint? In this case, the Court found that the employer had offered the employment because it was impressed with his credentials, which had nothing to do with his sex change. The Court held that he was under no such duty to disclose. Because he was under no duty to disclose, there was no dishonesty.

The next question is whether the employee is dishonest in his statements or failure to disclose. This often goes hand in hand with the failure to disclose. However, it can be that the employee is not asked about a specific subject and the employee cannot reasonably be expected to know if it is relevant or has to be disclosed. Although the employee then failed to disclose the information, there is no dishonesty in the failure. An employee owes an employer a common law duty of good faith. This means that the employee is obliged to act in good faith towards the employer and also disclose anything to the employer that may have an effect on the employment relationship or the trust relationship between them.

In Poonen / JHI (2009) 18 CCMA 8.23.8, also reported in [2010] 2 BALR 209 (CCMA), the employee, an accountant, was dismissed after the employer learned that he had been dismissed by his previous employer and was facing criminal charges for fraud. The commissioner noted that the applicant had not only failed to disclose the reason why he had left his previous employment, but had also denied that he had been dismissed after being confronted. The commissioner found that employees are obliged to disclose to their employers any information that may affect the employment relationship. The employee had accordingly breached the duty of good faith and had compromised the trust relationship. The dismissal was accordingly fair.

Another element of this charge is that the employee refuses or refrains from disclosing to the employer that there is a conflict of interest between him and the employer. When drafting charges against such an employee, the employer must also ensure that he knows what he wants to charge the employee with. In Herholdt / Nedbank Group (2009) 18 CCMA 8.23.3, also reported in [2009] 5 BALR 473 (CCMA), the employee, a financial planner, was dismissed after a complaint that he had failed to inform the employer that he had been nominated as a beneficiary in the will of one of his aged clients, and that the will had thereafter been altered to leave the client’s entire estate to the employee’s life partner.

It was common cause that no express rule existed prohibiting financial planners from inheriting from clients. The essence of the charge against the employee was that he had consciously placed himself in a position of conflicting interests, and should have known that he had done so. The commissioner noted that he had been dismissed essentially for dishonesty, and not for a conflict of interest.  The commissioner found further that the respondent’s reliance during the arbitration proceedings was misplaced because he had not been expressly charged with dishonesty. The essence of the charge was that he had failed to disclose a conflict of interest. This had been disproved. The allegation that the employee had placed the employer’s licence at risk was also unfounded.

The commissioner accordingly found that the respondent had failed to prove the main elements of the charge against the employee, and that his dismissal was accordingly unfair. The employer was ordered to reinstate the applicant with retrospective effect.

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Johanette Rheeder attorneys

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