EOH Abantu (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others

The appellant provided payroll administration services. The third respondent, Danney, was employed by the appellant since September 2010 as a team leader for Microsoft server administrators, rendering services to Wesbank. Wesbank had purchased software activation keys (500 for Windows 7 Professional and 5000 for Windows Office 2010) for use by its employees, and prohibited third parties from using these licences. On 10 August 2011, Danney sent a volume licence key (belonging to Wesbank) to his girlfriend's mother for installation on her personal computer. He claimed he thought he was sending a beta key (which are freely available) that he had previously sent on 20 June 2011. The key did not work because the mother's computer lacked the requisite volume licence media. Wesbank's forensic investigators discovered the email. When initially asked if he had sent out a Wesbank key, Danney said he had not, but later checked and confirmed he had sent the volume licence key. He was suspended on 14 September 2011. A disciplinary hearing was held on 19 September 2011 where he was charged with dishonesty, theft, fraud, breach of confidentiality and breach of the code of ethics. The chairperson found he had committed the offences but not intentionally, and dismissed him for gross negligence on 29 September 2011.

• Whether it was competent for a disciplinary chairperson to find an employee guilty of negligence when charged with dishonesty
• Whether an employee must be specifically charged with negligence for a finding of negligence to be competent
• Whether the dismissal was substantively fair when the element of dishonesty was not proved but negligence was established
• The extent to which technical precision in formulating disciplinary charges is required
• Whether the employee was prejudiced by the categorisation of the charge

The appeal was upheld. The award of the second respondent (the CCMA commissioner) dated 13 April 2012 was reviewed and set aside. The dismissal of the third respondent was declared to have been both substantively and procedurally fair. The compensation award of R600,000 was set aside.

There is no requirement that competent verdicts on disciplinary charges should be mentioned in the charge sheet, subject to the general principle that the employee should not be prejudiced. Prejudice normally will only arise where the employee has been denied knowledge of the case he had to meet. It is sufficient if the employee has adequate notice and information to ascertain what act of misconduct he is alleged to have committed. The categorisation by the employer of the alleged misconduct is of less importance. Provided a workplace standard has been contravened, which the employee knew (or reasonably should have known) could form the basis for discipline, and no significant prejudice flowed from the incorrect characterisation, an appropriate disciplinary sanction may be imposed. An employee charged with dishonesty can be found guilty of negligence where the factual allegations in the charge are proved and the employee would not have conducted his defence differently had negligence been explicitly charged.

The court observed that employers embarking on disciplinary proceedings, not being skilled legal practitioners, sometimes define or restrict the alleged misconduct too narrowly or incorrectly. The court noted that it is not uncommon for an employee to be charged with theft and for the evidence to establish unauthorised possession or use of company property instead. The court commented that Danney's denial of negligence when put to him in arbitration compounded his folly and showed a lack of appreciation of the reputational harm his conduct might have caused to the appellant. The court also remarked that the fact the activation keys could not be used without certain media was irrelevant as the potential for reputational harm and breach of licensing conditions remained. The court noted favourably the principle from Myers that employers cannot be expected to frame charge sheets as one would in criminal matters, emphasising the importance is to set out allegations so the employee knows the case to answer.

This case provides important guidance on the formulation of disciplinary charges in South African labour law. It establishes that courts and arbitrators must not adopt an overly formalistic or technical approach to disciplinary charges. The case confirms that employers need not be legally precise in categorising misconduct, and that competent verdicts need not be explicitly mentioned in charge sheets. The key principle is whether the employee had adequate notice of the alleged conduct and was able to meet the case against him without prejudice. The case also clarifies the standard of care expected of senior employees handling valuable intellectual property and reinforces that loss of trust can justify dismissal even where dishonesty is not proved but negligence is established.