Lucas Moeketsi Molehe v Public Health and Social Development Sectoral Bargaining Council and Others

The applicant was employed by the Department of Social Development Free State Province as a social auxiliary worker since 1980. On 14 September 2011, he was convicted and sentenced to 4 years direct imprisonment for charges of bribery and corruption involving soliciting money from clients in the community who needed health and social services from the state. He was incarcerated from 14 September 2011 until 2 July 2012 when he was released. On 14 March 2012, while still incarcerated, the third respondent (employer) issued him with a written notice terminating his services on the basis of incapacity (inability to work due to imprisonment). No disciplinary hearing was held by the employer. The applicant referred an unfair dismissal dispute to arbitration. The arbitrator found the dismissal was procedurally unfair (for failing to hold a disciplinary hearing) but substantively fair (due to extended incapacity from imprisonment), and awarded the applicant 3 months compensation totaling R58,900.50. The applicant then brought a review application seeking to overturn the finding of substantive fairness and be reinstated.

• Whether an arbitrator's finding of substantive fairness can stand when the employer did not lead viva voce evidence at arbitration
• Whether dismissal for incapacity arising from imprisonment following a criminal conviction for work-related offenses (bribery and corruption of clients) is substantively fair
• Whether rigid application of labour law principles should override the facts and circumstances of each particular case
• Whether the distinction between criminal and disciplinary proceedings prevents reliance on criminal convictions in assessing fairness of dismissal

The review application was dismissed with costs.

The binding legal principle established is that in determining whether a dismissal is substantively fair, courts and arbitrators must avoid rigid application of labour law principles and must always take into account the facts and circumstances of the particular case. While there is a general distinction between criminal and disciplinary proceedings, where criminal charges are directly related to an employee's work conduct and involve betrayal of trust with the very people the employee is meant to serve, dismissal on grounds of incapacity arising from imprisonment for such offenses will be substantively fair. An employee's own evidence at arbitration confirming the basis for dismissal can support a finding of substantive fairness even where the employer does not lead viva voce evidence.

The Court made obiter observations about the arbitrator's remarkable notion that the employer should have arranged with the Department of Correctional Services to hold a disciplinary hearing in prison, noting this aspect only because there was no counter-review on the procedural fairness finding. The Court also commented that it was 'utterly astounding' that the applicant sought reinstatement after being found guilty beyond reasonable doubt of bribery and corruption of his clients, though this reflects the Court's assessment of the merits rather than a separate legal principle.

This case is significant in South African labour law for establishing that: (1) rigid application of labour law principles (such as the requirement for employer evidence or the distinction between criminal and disciplinary proceedings) must be avoided in favor of considering the specific facts and circumstances of each case; (2) where an employee's own evidence confirms substantive fairness of dismissal, lack of employer evidence does not necessarily render an arbitration award reviewable; (3) criminal convictions for offenses directly related to an employee's work duties and involving betrayal of trust with clients/beneficiaries can constitute grounds for substantively fair dismissal on incapacity grounds arising from imprisonment; (4) the principle that incapacity outside an employee's control may still justify fair dismissal is reaffirmed, particularly where the conduct leading to incapacity involves serious misconduct related to employment duties; and (5) exceptional circumstances, including the egregious nature of conduct and futility of review grounds, may justify costs orders in labour matters.