National Union of Metalworkers of South Africa obo Khanyile Nganezi and Others v Dunlop Mixing and Technical Services (Pty) Limited and Others

On 22 August 2012, employees of Dunlop (first to third respondents) embarked on a protected strike. On the same day, violence erupted. An interdict was obtained but violence continued and escalated over a month, including setting fire to homes, damaging vehicles, stone-throwing, petrol bombing, blocking entrances, theft, and death threats. Dunlop sought NUMSA's help to identify perpetrators and prevent violence, which bore no fruit. On 26 September 2012, Dunlop dismissed all striking employees. The arbitrator distinguished three categories: (a) those positively identified as committing violence; (b) those identified as present during violence but not physically participating; and (c) those not positively and individually identified as present during violence. The arbitrator found no procedural unfairness and held dismissals of categories (a) and (b) substantively fair, but found category (c) dismissals substantively unfair and ordered reinstatement. Category (c) employees (the applicants) were dismissed on the basis of "derivative misconduct" - their alleged failure to disclose information about perpetrators or exonerate themselves.

• Whether the arbitrator's finding that the dismissal of employees not positively identified as present during violence was substantively unfair fell within the bounds of reasonableness
• The proper conception and scope of 'derivative misconduct' in South African labour law
• Whether employees owe a unilateral duty to disclose information about co-employees' misconduct during a protected strike
• Whether such a duty arises from fiduciary obligations or reciprocal contractual good faith obligations
• The interplay between the right to fair labour practices (section 23(1) of the Constitution) and the right to strike (section 23(2)(c)) in the context of violent strikes
• Whether an employer's reciprocal duty of good faith requires guaranteeing employee safety before expecting disclosure

Leave to appeal granted. Appeal succeeds. The orders of the Labour Court and Labour Appeal Court set aside. The application in the Labour Court is dismissed (reinstating the arbitrator's award). No order as to costs.

To impose a unilateral obligation on an employee to disclose information about co-employee misconduct during a protected strike would be akin to imposing a fiduciary duty. In the context of a strike, any duty to disclose based on contractual good faith cannot be unilateral - it must be accompanied by reciprocal employer obligations, particularly guaranteeing employee safety before expecting disclosure. The contractual duty of good faith should not, as a matter of law, be taken to imply the imposition of a unilateral fiduciary duty of disclosure on employees. Derivative misconduct should not be used as an easier means to effect dismissal rather than initially investigating individual participation in primary misconduct. Evidence (direct or circumstantial) that individual employees associated themselves with violence before, during, or after it occurred may be sufficient to establish complicity in the primary misconduct without requiring physical presence at the scene.

The Court made important observations about the distinction between fiduciary duties and contractual good faith duties in employment relationships generally. Froneman J noted that while fiduciary duties require acting solely in another's interests with strict liability, contractual good faith is reciprocal and requires only having regard to the other party's interests. The judgment observed that fair labour practices under the Constitution mean fair practices for both employee and employer. The Court commented on the prevalence of violent strikes and their detrimental effects on strikers, their families, small businesses, employers, the economy, and communities. The judgment noted that applying ubuntu and good faith principles in commercial contracts to redress unequal power relationships would, if appropriately applied in the employment context, operate in favor of subordinated employees rather than employers. The Court observed that circumstances would have to be truly exceptional for an employer's reciprocal good faith duty to be jettisoned in favor of only a unilateral employee duty to disclose.

This is the first Constitutional Court judgment addressing the doctrine of derivative misconduct in South African labour law. It provides authoritative guidance on the limits of employee disclosure obligations in the context of violent strikes. The judgment clarifies that: (1) derivative misconduct based on a duty to disclose cannot arise from a unilateral fiduciary duty but only from reciprocal contractual good faith; (2) in strike contexts, employer reciprocal duties (especially safety guarantees) are prerequisites to any employee disclosure obligation; (3) derivative misconduct should not be used to circumvent the difficulty of proving individual participation in collective misconduct; (4) various forms of association with violence (before, during, or after) can establish complicity in primary misconduct without requiring physical presence. The case significantly impacts the balance of power in collective bargaining by protecting worker solidarity while recognizing employer interests. It demonstrates constitutional fair labour practice applies to both employers and employees, and that the right to strike remains relevant even when violence occurs during protected strike action.