The test for dismissal – breach of the trust relationship

Johanette Rheeder

Procedural errors often occur when an employer decides to charge an employee and the charges are not well thought through and tested against the evidence or the complainant fails to correctly apply the evidentiary burden of proof. Many employers have a comprehensive disciplinary code and procedure which provides for a whole array of different transgressions and proposed sanctions. If is often a daunting task to decide which charge in the disciplinary code and procedure fit the transgression. It is however, a very crucial and necessary exercise to perform, as the employer will be stuck with these charges right through the life of the disciplinary action and possible arbitration thereafter. 

This is when, if the complainant does not apply his mind, charges are split and employees end up with a host of charges, and when they are scrutinized only amounts to charging the employee twice or even more times for the same offence.  

Another practice frequently used by employers is to use over arching charges such as: "conduct in breach of the trust relationship". Breach of the trust relationship is the test to be applied to determine whether the employee should be dismissed or not. If there is no evidence of such a breach, then the employer cannot dismiss and should apply corrective action.  

In Edcon Ltd / Pillemer NO & others,[1] the employee was the beneficial user of a company vehicle, courtesy of Edcon's car scheme policy ("the policy"). The car was involved in a collision with another vehicle whilst driven by the employee's son. She was not in the car at the time. In terms of the policy, she was obliged to report the accident to Edcon, the SAP and the relevant insurance company within 24 hours and not carry out repairs to the Corolla without the approval of the insurance company. Fearing that the company will find out about the fact that her son was driving, the employee did none of the above and arranged with her husband to repair the car at his panel beating shop at their own cost. As things go, Edcon found out about this. She also did not disclose to the manager that the car had been in a collision, he only discovered this when he contacted the service personnel. 

On being confronted the employee initially denied that the car had been involved in a collision, but later admitted the occurrence, stating that the collision had occurred whilst she was driving it. When the manager spoke to the investigator, she repeated her lie that she was the driver when the collision took place, she did tell him though, that she had given the car to her husband to repair at his panel beating shop. Naidoo recommended the employee's suspension on full pay pending finalisation of his investigation. At his request for a further statement, she then changed her version, this time stating that the collision had occurred whilst her son was driving, but that she was a passenger. Only at the third time did she come clean and her final statement was when she told the truth with an offer that he son was driving and that she was not in the vehicle and she offered to repay the costs associated with the required repairs. The son had also, in the mean time, made a statement to Naidoo confirming that he was driving the car and that he was alone when the collision occurred. It is common cause that in terms of the policy, the son was entitled to drive the car as he was in possession of a valid driver's licence. 

In due course Edcon convened a disciplinary enquiry. The charge levelled against her was: 

"failure to be honest and act with integrity in that you committed an act, which has affected the trust relationship between the company and the employee in that on 8 June 2003 to 8 October 2003: You failed to report an accident of a company vehicle . . . which your son was driving on the day of the accident (8 June 2003) and this resulted in a breach of trust between yourself and the company." 

The employee pleaded guilty to the charge at the commencement of the enquiry, stating that her ignorance of the policy rule that her son was entitled to drive the Corolla had driven her to be deceitful as an attempt to protect him. She was found guilty and dismissed from her employment. The decision to dismiss her appears to have been motivated by the chairperson's view that she had behaved without integrity and honesty, values regarded highly by Edcon. Although considered, the chairperson regarded Reddy's unblemished record and character as not sufficiently mitigation for her conduct. 

The matter went to the CCMA, Labour Court, Labour Appeal Court and to the Supreme Court of Appeal. In the preceding courts the matter was dismissed based on the fact that there was not enough evidence presented to prove a breach in the trust relationship. 

The Supreme Court of Appeal found that the arbitration is not reviewable as the employer did not prove the charge: being a breach in the trust relationship.  

It found that: What becomes immediately apparent is that Naidoo's evidence did not, and could not, deal with the impact of (the employee), Reddy's conduct on the trust relationship. Neither did Naidoo testify that her conduct had destroyed the trust relationship. This was the domain of those managers to whom Reddy reported. They are the persons who could shed light on the issue and none testified. 

If the employee is charged with a breach of trust relationship, the employer bears the burden of proof to show through evidence, - not allegations – that the trust has been broken down. The employee had more than 20 years of service with a clean record and a manager actually testified that the trust relationship was not broken irretrievably at previous proceedings. 

Although, in this particular case, the employee was charged with a breach of the trust relationship, employers should take note of the fact that in cases of dismissible offences, the burden of proof is still on the employer to show that the trust relationship has broken down irretrievably; otherwise the chairperson cannot dismiss the employee and must apply progressive discipline. What is also clear from this case is that this allegation must be proven, and a mere statement to that effect by the initiator does not constitute proof. An employee from the employer with authority over the employee must come and explain why the employee cannot be trusted anymore.  

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• Johanette Rheeder Attorneys in association with Gildenhuys Lessing Malatji Attorneys

• www.glmi.co.za