Cashbuild (Pty) Ltd, a national wholesaler and retail supplier, dismissed all of its employees at a particular branch after the employer suffered large amounts of stock losses. The matter dealt with collective workplace misconduct in which no individual employees were identified as having committed particular acts of misconduct and, therefore, all employees in the branch were dismissed. The Labour Appeal Court held that Cashbuild, the employer, failed to prove certain elements of collective workplace misconduct and, hence, the employees were not guilty of such. The court ordered that the employees be retrospectively reinstated with backpay.

South African Commercial Catering and Allied Workers Union and Others v Makgopela and Others (JA38/2021) [2023] ZALAC 8; [2023] 6 BLLR 509 (LAC); (2023) 44 ILJ 1229 (LAC) (14 March 2023)

Case summary

Cashbuild (Pty) Ltd, the employer, is a national wholesaler and retail supplier of hardware and building materials. After a stock-take in January 2016, stock losses were detected which exceeded Cashbuild’s acceptable shrinkage level of no more than 0.4% of sales. In February and March, further stock losses were detected and a “shrinkage workshop” was presented to employees. They were interviewed and given a questionnaire to complete in which they were asked to indicate the cause of stock losses. The employees cited staff shortages, the lack of a permanent controller, inadequate controls at the receiving section, and inoperative CCTV cameras.

A second “shrinkage workshop” took place and all of the employees were charged with collective/team misconduct after stock losses continued. After a disciplinary hearing took place, all employees were found guilty and were dismissed from their employment.

The court stated that the matter concerned collective workplace misconduct. Four different approaches to such cases are identifiable in our law: the doctrine of common purpose, team misconduct, derivative misconduct, and an approach requiring the actual culprits to be identified.

In this case, Cashbuild had relied on team misconduct in that the employees failed, as members of a team, to adhere to the rules to prevent and halt shrinkages.

It was common cause that the shrinkage had occurred. The issue was whether the employer had proved that the employees, as members of a team, culpably failed to ensure that the team complied with the rule, or attained the performance standard set by the employer to prevent shrinkage. The employer could have proved aforesaid by direct or circumstantial evidence, or by applying common purpose.

The employer had, however, failed to investigate how stock was disappearing from the large store, and the employees did not remain silent when asked to submit proposals to remedy the stock losses. The evidence indicated that employees performed diverse functions across the large area of the store, and that when they raised a number of concerns and made proposals for system improvements to prevent such losses, these were not acted upon by Cashbuild.

The court, therefore, held that the employees were not guilty of collective workplace misconduct and specifically team misconduct. The court further held that our law does not allow a determination of guilt simply by association. Where team misconduct is relied upon, there must exist either a factual basis, or sufficient grounds for inferring that all employees were indivisibly culpable as members of the team for failing to ensure compliance with a rule at the workplace.

The court ordered that the arbitration award be set aside, and that the employees be retrospectively reinstated with backpay. The court held that this matter illustrates the caution to be adopted when relying on collective misconduct as a basis for dismissal.

Submitted by Labour Guide