Cash, conduct, and consequences: Dismissal justified

In a decisive ruling, the Labour Court of South Africa set aside an arbitration award that had ordered the reinstatement of Mr Clive Speek, a cashier dismissed by Merafong City Local Municipality for unauthorised use of municipal funds. The Court found that the arbitrator had committed several irregularities and substituted the award with a finding that the dismissal was substantively fair.

Background

Mr Speek was employed as a cashier and had undergone extensive training. On 19 May 2017, a cash reconciliation revealed a shortfall of R1,220.00. When questioned, Mr Speek admitted to taking the money for personal reasons and refused to return it immediately, despite being instructed to do so by his supervisor.

Following a disciplinary hearing, he was found guilty of misconduct for contravening municipal policies and the Code of Conduct for Municipal Staff Members. He was dismissed in April 2018. Mr Speek challenged the dismissal through the South African Local Government Bargaining Council (SALGBC), where the arbitrator found the dismissal substantively unfair and ordered reinstatement with back pay.

The Municipality applied to the Labour Court to review and set aside the arbitration award.

Legal implications of the judgement

Misconduct involving public funds warrants dismissal

The Court reaffirmed that unauthorised use of municipal funds, even if repaid later, constitutes serious misconduct. The breach of trust and failure to follow established procedures justified dismissal.

Implication: Employees handling public money are held to the highest standards of honesty and transparency. Breaches can irreparably damage the employment relationship.

Arbitrators must confine themselves to the issues before them

The arbitrator was found to have considered irrelevant evidence, misconstrued the nature of the enquiry, and made findings not supported by the record. This amounted to a gross irregularity.

Implication: Arbitrators must focus strictly on the charges and evidence presented. Deviation from this can render their decisions reviewable and invalid.

Doctrine of peremption requires clear acquiescence

The union argued that the Municipality had accepted the arbitration award by allowing Mr Speek to resume duties. The Court rejected this, finding no unequivocal conduct indicating acceptance.

Implication: Employers must clearly communicate their intention to challenge arbitration awards. Temporary reinstatement or administrative errors do not necessarily amount to acquiescence.

Review courts may substitute awards

Given the strength of the evidence and the clarity of the misconduct, the Labour Court substituted the arbitration award rather than remitting the matter.

Implication: Where the record is complete and the facts are clear, courts may directly impose a new outcome, saving time and resources.

Key takeaways

For employers:

• Document misconduct thoroughly. Clear records and witness testimony were crucial in defending the dismissal.
• Act swiftly and consistently. The Municipality’s prompt legal action and refusal to pay back pay supported its case.
• Understand your disciplinary policies. Proper application of internal rules strengthens the legal defensibility of dismissals.

For employees:

• Follow procedures, even when correcting mistakes. Repaying money without following policy does not absolve misconduct.
• Honesty is non-negotiable in financial roles. Trust is central to continued employment in positions involving public funds.
• Legal representation must be diligent. Procedural missteps and weak arguments can undermine a case, even if the facts are disputed.

Final thoughts

This judgment reinforces the principle that misconduct involving public funds is a serious breach of trust, especially in local government. It also highlights the importance of procedural rigour in arbitration and review proceedings. For both employers and employees, the case is a reminder that fairness must be matched by compliance with rules and responsibilities.

For advice or more information, contact Riona Kalua, head of our Labour and Employment team.