Understanding Derivative Misconduct
Derivative misconduct occurs when an employee is aware of misconduct by their colleagues but chooses not to disclose it to their employer. This non-disclosure breaches the duty of good faith that underpins the employment relationship. It is important to understand that derivative misconduct is not a separate form of misconduct; rather, it is linked to the primary misconduct that the employee fails to report. An employee cannot be found guilty of derivative misconduct if they negligently failed to take steps to become aware of the primary misconduct.

Case Study: Tshabangu vs. Mgwezi Brand Manufacturer
The concept of derivative misconduct was recently examined by the Metal and Engineering Industries Bargaining Council in the case of Tshabangu vs. Mgwezi Brand Manufacturer (2022). The case revolved around an unfair dismissal dispute where the employee, Tshabangu, challenged the fairness of his dismissal for dishonesty.

The employer discovered that a group of employees had been stealing and selling company goods, amounting to an estimated value of R75,000 over a year. Tshabangu was among the employees implicated and was issued a notice for a disciplinary hearing. While eleven employees admitted guilt and entered into mutual separation agreements, Tshabangu denied involvement in the theft but admitted to being aware of it. Colleagues accused him of receiving a portion of the stolen goods’ proceeds, and he acknowledged knowing that their actions were wrong and would lead to disciplinary action if discovered.

Distinguishing Derivative Misconduct from Dishonesty
The Commissioner in the case found that Tshabangu was not accused of derivative misconduct but of dishonesty for breaching his duty of good faith by not disclosing the misconduct and for his involvement in the theft. The charge of dishonesty was based on Tshabangu’s failure to disclose his colleagues’ misconduct to his employer, rather than the misconduct itself. Due to the vague nature of the dishonesty allegation, the Commissioner did not need to consider whether Tshabangu was guilty of derivative misconduct.

The Commissioner concluded that Tshabangu’s dismissal was substantively fair because he not only failed to disclose the theft but was also involved in it. This involvement negated the need to categorize his actions as derivative misconduct. The case highlights the thin line between derivative misconduct and dishonesty, emphasizing the importance of clear allegations in disciplinary hearings.

Implications for Employers
Employers must be cautious when characterizing allegations of misconduct for disciplinary hearings. The Tshabangu case illustrates that even if an employee’s dismissal is based on their failure to disclose colleagues’ misconduct, it can still be considered substantively fair if the employee was aware of the wrongdoing.

In conclusion, silence is not always golden in the workplace. Non-disclosure of information harmful to an employer’s interests can undermine the trust relationship and lead to dismissal. Employees must understand their duty of good faith and the consequences of breaching it, while employers should ensure clarity and precision in misconduct allegations to uphold substantive fairness in disciplinary actions.