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Should disciplinary codes and procedures form part of the employment contract, or not?

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Should disciplinary codes and procedures form part of the employment contract, or not?

8th June 2017

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Employers often take for granted the importance of having clearly defined disciplinary codes and procedures in place, especially smaller employers who have a small staff compliment. The employers of a larger staff compliment generally have a codified set of disciplinary codes and procedures in place.

This however does not mean that it is not necessary for employers of a small staff compliment to have a clear and defined disciplinary code of conduct or procedures, as disputes will nonetheless arise. If such procedures are in place, it will be important that both the employee and employer are completely aware of their respective rights, duties and responsibilities, including the processes that should be followed to either resolve disputes, or part ways.

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One thing that employers do need to consider very carefully, is whether to incorporate these codes and procedures into the employment contract, or have a separate document which is applicable to all employees. In Steven Motale v The Citizen 1978 (Pty) Ltd and Others LC the employee was suspended due to, amongst other things in the suspension letter, a breakdown in the trust relationship between the employee and employer.

Steven Motale v The Citizen 1978 (Pty) Ltd and Others LC

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Briefly, the facts of the matter:
In a letter pertaining to the suspension of the employee, the employer set out in some detail the allegations of misconduct committed by the employee that had led to his suspension and invited the employee to make representations and address all the allegations and contentions set out in the letter in writing, together with any mitigating factors.

The employee responded to this correspondence by calling for representations and submitted that he is innocent until proven guilty, and that he wished to exercise his right that the matter be determined by a disciplinary inquiry before an independent chairperson. The employer did not grant this request and alleged in a further letter that the legal and factual conclusions set out in the employee’s response was incorrect and that he in fact was being given a right to state his case. The case or issue to which the employer referred, was no longer based on allegations of misconduct relating to the disregard of the policy, but concluded that the trust relationship had broken down. It can only be assumed that the employer had concluded that the employee was guilty of the misconduct and based on this conclusion the only issue to be addressed, according to the employer, was the breakdown of trust.

The employee again wrote to the employer, indicating that he did not believe he was guilty of misconduct, and repeating his insistence on exercising his right to a formal disciplinary inquiry regarding his alleged misconduct, only to be met with the same response giving the date by when written submissions must be made. When the employee again repeated his request to be able to formally answer to the charges in the form of an inquiry, he was served with a notice of dismissal together with the employer’s finding that the employee was guilty of misconduct and that there was an irretrievable breakdown in the trust relationship.

Breach of employment contract
The employee brought an urgent application on two grounds, with the first being a violation of Section 16 of the Constitution of the Republic of South Africa Act No 108 of 1996; this being freedom of expression, and also the whole cause of the dispute between the employee and employer, with regard to an article that was published in The Citizen. The presiding judge, Judge Gush, however dismissed this first ground.  What is left to be considered is the second part of the relief sought by the applicant, regarding the employee’s application for an order declaring the termination of his employment and his suspension to be a breach of his employment contract, as read with the disciplinary code.

The reason being that the disciplinary codes and regulations forms part of the employment contract, and is not a separate amendable document. The suspension itself was not found to be a breach of his contract, however, the employer’s disciplinary code is contained in a document titled “Disciplinary Codes Procedures and Guidelines; The Citizen 1978 (Pty) LTD” that specifically provides that it forms part of the individual contract of employment of every employee. With regard to the dismissal and misconduct, the disciplinary code provides as follows:

“THE RIGHTS OF THE EMPLOYEE:
 the employee is entitled to hear the case against him and when subject to formal disciplinary action the rights include inter alia: the right to a clear explanation offence an opportunity to state their case the right to representation the right to share testimony against him in question the witnesses…”

The court held that the decision of the employer to terminate the employee’s employment contract was a breach of the employment contract as read with the employer’s disciplinary code procedure, further that the termination of the employee’s employment is set aside and that he was reinstated in the same position with the employer that he was in at the date of the termination of his contract. The employee was thus reinstated on suspension pending compliance by the employer with the contract of employment and its disciplinary code and procedure it had with the employer.

Conclusion
An employer should consider the effects of incorporating disciplinary codes and procedures into an employment contract or not. In Steven Motale v The Citizen 1978 (Pty) Ltd and Others LC, it was a matter of the employer not upholding its own contract it had with the employee. The facts of this case should not be used as an absolute measure to conclude that having the disciplinary codes and procedures incorporated into the employment contract is necessarily an ill-advised decision.

Employers, however, should be mindful when concluding employment contracts with prospective employees, and rather obtain legal advice to ensure that both parties’ rights are protected. The breach of contract in this matter and the common-law relief sought, forced the employee to approach the Labour Court, rather than the CCMA, as he would have done if the claim was based on unfair dismissal for example.

Written by André Nortjé, SchoemanLaw Inc

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