Employers never imagine they could find themselves in a position where an employee has been arrested. In these situations the rights of the employee have to be balanced with the impact on the workplace and other employees.
Employees who have been arrested can have a negative impact on the Employer’s business. Generally, how an Employer will deal with the above situation will depend on how long the employee will be away from work, with what offence the employee has been criminally charged and whether that offence has any effect on the employee's work.
When an employee is arrested there are numerous reasons why an employer might want or need to terminate its employment relationship with the employee. These reasons may include:
- The employer feels fearful of having a convicted felon at its workplace especially if the crime relates to the workplace;
- The employer or other employees could be at risk if the convicted employee returns to work and has not been rehabilitated in prison;
- Employers do not wish the names of their business or organization to be associated with criminals, subject to a connection between the crime and the workplace.
A big mistake that Employers often make in these circumstances is that they automatically assume that the arrest or conviction of an employee gives the employer the right to terminate the employee’s services or to treat the situation as desertion. There have been numerous cases where the courts have shown that this is not the case.
In Visser vs Woolworths (2005, 11 BALR 1216) the employee was arrested on a charge of theft from a department store owned by a competitor of the employer. Before she was convicted, the employer dismissed her due to her arrest on the grounds that she had a number of subordinates who were supposed to look up to her and that she could no longer be trusted. The arbitrator recognised the employer’s right to dismiss an employee if the trust relationship has been irrevocably damaged. However, as the employer had failed to prove that the employee was guilty of theft and had not even attempted to do so, it could not show that the employee could not be trusted. The dismissal was found to be unfair and the employer was ordered to pay the employee the equivalent of eight months’ remuneration.
The above case is important as it shows that if an employer can prove that the arrest has destroyed the trust relationship, it may be justified in terminating the employment, but proving the destruction of trust is extremely difficult. Merely alleging damage to the trust relationship is not enough. To prove destruction of the employment relationship the employer needs to show why the employee’s actions would irreparably damage the trust between the parties in the context of the workplace. It also needs to be noted that merely saying the employee is responsible for the alleged criminal act just because the employee has been arrested or convicted is not enough, as the employee is innocent until proven guilty and the employee must still be allowed to state his/her case as he/she may still be able to challenge a guilty finding for many reasons for example poor legal representation. There has to be a link / nexus between the alleged criminal act and the workplace. In other words the employer must be able to show that the employee committed an act of misconduct at the workplace, such as theft or using company property to commit a criminal act in order to link it to a criminal charge or to damage caused to the company’s reputation.
The facts of Eskom Limited v Commission for Conciliation, Mediation and Arbitration and Others (JR2025/06)  ZALC 92 were summarized as follows in paragraph 3 of the judgment by the Labour Court:
The fourth respondent was employed by the applicant as a sales representative. In February 2004 he was arrested by the South African Police Services and was unable to work. The applicant became aware of his arrest in March 2004. The applicant terminated his contract of employment. His salary and benefits were also simultaneously terminated and the applicant appointed someone to replace him. The fourth respondent was denied bail and remained in custody for about 15 months. He was released from prison on 8 June 2005. On 24 June 2005 the applicant convened a confrontation meeting where he was given an opportunity to make representations. He contended that he was incarcerated which was a bar for him to communicate his whereabouts to the applicant within the stipulated period or within a reasonable time. The termination of his employment was confirmed on 4 July 2005.
The court explained the following about the Arbitration Award in paragraph 9 of the judgment:
The commissioner said that the issue before her was whether the dismissal of the fourth respondent was fair. A fundamental element of a contract of employment is that the employee tenders his services for remuneration at the employer’s business. If the employer fails to pay the employee this is considered a breach of the employment contract. If the employee fails to tender his services the contract of employment is breached. A supervening impossibility occurred. The question however is whether because of the supervening impossibility of performance a breach in the employment relationship occurred.
In paragraph 11, 12 and 13 of the judgment the court further explained:
The commissioner said that in terms of the common law and jurisprudence that if either party was unable to perform his obligations under the contract or was unable to perform his obligations for a period, which was unreasonable, as far as the employer is concerned, the other party was entitled to terminate the contract on the ground of such nonperformance. Jurisprudence indicated that where an employee was sentenced to a long period of imprisonment the employer could cancel the contract if the employee was afforded an opportunity of providing an explanation for his incarceration. This approach must be balanced with the current legislation and industrial relations practices. The Act encourages employers and employees to regulate their terms and conditions of employment.
The commissioner said that in this instance the applicant’s conditions of employment state that a contract of employment would terminate if the employee fails to report for seven consecutive calendar days. The clause also states, “.... unless physically prevented from doing so .....” creates an exception to the rule. The interpretation of this phrase suggests that if the employee was unable to report for duty because he was ill or in jail, this section would not apply. This meant that the fourth respondent did not abscond or terminate his services with the applicant. The evidence showed that the fourth respondent was incarcerated for 15 months and could not report for duty. It was apparent that the fourth respondent was physically prevented from reporting for work. This was a reasonable explanation for his absence considering that he was denied bail. It was impossible for him to perform his duties
The commissioner said that fifteen months was an unreasonable length of time for the applicant to hold the fourth respondent’s position open. She accepted that the operational requirements of the applicant necessitated that this position be filled. Although the applicant was entitled to fill the fourth respondent’s position, this did not have to result in the termination of the fourth respondent’s employment. The applicant could have employed someone on a fixed term contract until the situation was resolved, especially as they were aware of the whereabouts of the fourth respondent. The commissioner found that the dismissal of the fourth respondent was an inappropriate sanction.
Paragraph 3 in the judgment of Samancor Tubatse Ferrochrome v Metal and Engineering Industries Bargaining Council (MEIBC) and Others  8 BLLR 824 (LAC) summarised the facts as follows:
The Appellant conducts business in the mining sector and is a division of a larger mining company. Fourth respondent was employed by appellant as a furnace operator, having commenced employment with appellant in August 1996. On 20 May 2006, fourth respondent was arrested on suspicion of having committed an armed robbery. He remained in custody and was absent from work for approximately 150 days. On 30 May 2006, fourth respondent was dismissed on the grounds of incapacity, in that he was physically unable to tender his services. A letter advising him of his dismissal was delivered to the police station at which he was being held on 6 June 2006.
Paragraph 7, 8, 9 and 11 stated that:
On review, Francis J agreed with second respondent’s finding:
“It is not clear what misconduct he was guilty of since he was not the cause of his incarceration. It was a factor beyond his control and could therefore not be said that he had been absent without permission. He was not the author of his own misfortune since he had a valid reason for his absence he had to be reinstated with loss of income.”
The letter purporting to dismiss fourth respondent dated 30 May 2006 provides the basis of the case against fourth respondent:
“Operational Incapacity Dismissal
You have failed to report for duty since the 20th May 2006 and you are therefore in breach of contract of employment as you are physically unable to tender your services required. Your service of employment is terminated with effect from 30 May 2006. A post dismissal hearing will be held on your return to work to establish if you have a valid reason for your absence:”
Both second respondent and the court a quo placed considerable emphasis on the scope of the term ‘incapacity’, that is it should be caused by ill health, injury or poor performance; thus the finding that the charge exceeded their defined scope of the definition of incapacity.
The approach is not entirely compatible with existing jurisprudence. Thus, in Jabariv v Telkom SA (Pty) Ltd (2006)27 ILJ 1854 (LAC) the court relying on Du Toit Labour Relations Law (4th ed) 402, found that incompatibility was a species of incapacity as it relates essentially to the subjective relationship of an employer and other coworkers within an employment environment regarding an employees’ inability or failure to maintain harmonious relationships with his peers. The implication of this judgment is that incapacity extends beyond the narrow confines of the term adopted both by the second respondent and the court a quo.
There is thus no justification for the limitations placed by the court a quo or second respondent upon the meaning of incapacity as adopted.
In this case, the appellant had no idea as to how long the incarceration would endure. Further, the skilled nature of fourth respondent’s position made it commercially necessary for the appellant to make an expeditious decision about fourth respondent’s future and the imperative to ensure that a similarly skilled person could assume the responsibilities.
In this case the court found that it was not reasonable to expect the appellant to have kept the position open and available for an indefinite period of time. The court further stated that the potential indefinite length of the absence from work of a person holding a position which could not easily be filled by temporary employee renders this case one of incapacity. The court found that it may have been impossible for the appellant to hold a pre-dismissal hearing while the fourth respondent was incarcerated, but merely providing the fourth respondent with a letter informing him in writing of the decision to dismiss him and the reasons for the dismissal while he was in prison did not constitute a fair opportunity for the fourth respondent to present his case. In the above case the court ruled that the dismissal was substantively fair but procedurally unfair.
While the aforementioned cases show that it is possible for employers to dismiss arrested/incarcerated employees, this can only be done if the employer understands the complex legal principles associated therewith.
These cases further illustrate that employers need to consider and prove the following when dismissing an arrested/incarcerated employee: that the trust relationship has broken down, that the employer employed temporary personnel to replace the arrested employee, alternatively that the position was not fit for temporary personnel, that due to the employees arrest he/she was incapacitated and thus could not render a service to the employer, that the employer could not be certain as to when the employee would return and it is also very important to show that the employee had a chance to state his/her case.
It could also be necessary to show the nexus between the arrest and the dismissal of the employee, in other words that the arrest destroyed the trust relationship or, that the employee would be absent for an extended period of time and so forth.
Employers could also consider amending their disciplinary codes to include that a criminal conviction warrants dismissal, after thorough investigations and a disciplinary hearing. Employers should also note that should an employee be released on bail or released after serving his/her sentence, the onus is on the employee to inform the employer of his/her release. Thereafter, the employer can schedule a hearing should it be necessary.
It is thus clear that this is a very complex part of our labour law and that the rules to determine how to handle such a situation have not been included in any legislation. Employers should always keep in mind that there must be a fair reason for a dismissal and that a fair process must be followed when dismissing an employee. All employees have to be given a chance to state their case; a letter informing the employee that he/she has been dismissed is not sufficient.
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Noelene Van Coller