The Constitutional Court considered the origin, development and application of the concept of derivative misconduct in the matter of NUMSA obo Khanyile Nganezi and Others v Dunlop Mixing and Technical Services (Pty) Limited and Others(2019) ZACC 25. This judgement is most instructive in that it not only provides guidelines on the factors to be considered when relying on derivative misconduct, but also emphasises that reliance on derivative misconduct should not be to the exclusion of exploring and proving, directly or indirectly, employees’ participation in, or association with, primary misconduct.

On 22 August 2012, the employees of Dunlop Mixing and Technical Services Proprietary Limited (Dunlop) embarked a protected strike. As is unfortunately often the case, the strike was immediately accompanied by violence and despite Dunlop obtaining an urgent interdict to stop the violence, the violence continued and escalated over the following month. Negotiations between Dunlop and the employees’ trade union, NUMSA, also did not stop the violence. Dunlop called upon NUMSA to assist it in identifying those employees who were responsible for the violence, but not NUMSA did not respond. Dunlop ultimately dismissed all its employees on 26 September 2012.

NUMSA challenged the dismissal of its members at the CCMA. The arbitrator distinguished between three categories of employees namely, those who were positively identified as committing violence, those who were identified as present when the violence took place, but did not physically participate, and those who were not positively and individually identified as being present when violence was being committed. The arbitrator reinstated those employees who were not positively identified as being present when violence was being committed. Dunlop challenged the reinstatement of those employees by way of review proceedings in the Labour Court, relying on the principle of derivative misconduct. The Labour Court granted the review. NUMSA appealed to the Labour Appeal Court (LAC) to overturn the Labour Court’s order but this appeal was dismissed.

In considering the litigation preceding the appeal to the Constitutional Court, the court carefully considered the grounds upon which the arbitrator as well as the Labour and LAC relied upon for their decisions. Considerable emphasis was placed on the presence of the employees during the violent episodes in these tribunals. The Labour Court overturned the arbitrator’s decision on the basis that the arbitrator acted unreasonably in finding that there was no evidence that the applicants were present during the violent episodes and in so doing, the arbitrator ignored the circumstantial evidence and inferential reasoning that should have followed from it. The Labour Court held that their derivative misconduct consisted of a failure to inform the employer of the identity of the perpetrators of violence or exonerating themselves by explaining that they were not present and could not identify the perpetrators. This conduct was held to be a breach of the employees’ duty of good faith. The Labour Appeal Court upheld the Labour Court’s decision and approach.

The Constitutional Court debunked the notion that reliance, whether directly or indirectly, and by inferential reasoning of the presence of employees is required in establishing a link to the misconduct of other employees. Instead, the Constitutional Court found that presence at the scene is not required but prior or subsequent knowledge of the violence and the necessary intention relation thereto is required.

The Constitutional Court also considered the basis upon which derivative misconduct imputes guilt to those who were not involved in the primary misconduct. The basis upon which derivative misconduct has been justified in earlier decisions of the Labour Court and LAC was based on the breach of a fiduciary duty or good faith obligation towards the employer. The Constitutional Court held that fiduciary duties are not implied by law into all employment relationships. Similarly, the contractual duty of good faith does not as a matter of law imply the imposition of a unilateral obligation on employees to disclose information of misconduct of their co-employees to the employers. The court held that since the contractual obligation of good faith is a contested one, it must, at the very least, be of reciprocal nature. The court further held that inferring the duty of disclosure on the basis of good faith can never be unilateral and such a duty to disclose must be accompanied by reciprocal, concomitant duty on the part of the employer to protect the employees’ individual rights including fair labour practices and the right to effective collective bargaining.

This judgement cautions against relying upon derivative misconduct as an easy way of imputing guilt in respect of employees where there is no clear and direct evidence of any misconduct. That being said, it is still possible to rely on derivative misconduct where all avenues of establishing guilt is not possible provided satisfactory guarantees are given to those required to speak up.