Employment Law: Are recovering losses and issuing warnings in disciplinary proceedings “double jeopardy”?

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In taking disciplinary action against an employee, various factors need to be considered in order to ascertain the appropriateness of the sanction to impose against the employee for their actions. The general principle is that corrective discipline should be applied where it is possible to correct the employee’s behaviour. An employee can generally be rehabilitated where remorse is shown, the actions of the employee were not intentional or malicious, and where the trust relationship has not completely broken down. The issuing of warnings in these instances would serve to prevent any future transgressions by the employee.

There are however often cases where the actions of the accused employee have caused the company damage or loss. Examples include incidents like negligence where a cashier is short upon cashing up, or where a driver damages a company vehicle through reckless driving. In any such instance, a calculable monetary value can be ascribed to the damages caused.

Labournet’s Adri Louw examines he question of what an employer is then to do where money was lost, but dismissal would still not be justified under the specific circumstances of the incident?

Employers, and more so employees, are often convinced that issuing the employee with a warning as well as deducting or recovering the money for damages caused by the employee, would constitute double jeopardy. In essence it seems as though the employee is being punished twice for the same offence. If this were true, the employer would need to decide either to recover damages from the employee, or to issue him with a warning. This approach is however detrimental to the employer whichever way you look at it.

If only damages are recovered, the employee does not receive a warning on file, which would make it difficult for the employer to progressively discipline the employee should they transgress again in future. The impression is then also created that the employee can continue to be negligent and cause damages, as long as they are willing to pay the company back after the fact.

In the other scenario, where only a warning is issued, the company is deprived of the opportunity to recover the loss incurred, which can have a severe financial impact on the company over time.

Thankfully, it does not constitute double jeopardy to take both sets of actions against the employee, as the issue of discipline and the company’s right to recover damages are two completely separate issues. The deduction for damages is not part of disciplinary action, but rather a civil claim created through common law which the employer has a right to enforce.

This view was confirmed in the case of Solidarity obo Mohammed / Air Traffic and Navigation Services Ltd [2011] JOL 27921 (CCMA). In this case an employee was ordered to reimburse the company an amount of R7 000 incurred due to a transaction of R4m which had negligently been paid to the wrong beneficiary. The R7 000 was incurred by the company to correct the employee’s mistake. The employee was also issued with a final written warning for his negligence. The employee had approached the CCMA claiming double jeopardy, stating that receiving the warning as well as being ordered to reimburse the company was unfair. It was ruled that –

It is a right to reclaim fruitless spending of other people’s money. The principle is that the applicant should be given the opportunity to comment on the deduction before it is made and the deduction can only be to the extent of the loss or damage suffered by the company.

The employer has a right to be reimbursed for damages incurred as a result of an employee’s negligence or misconduct. There are however very clear guidelines set out by the Act to ensure that such deductions are legal, fair and equitable. The following conditions must be met:

  •  The loss or damage must have occurred in the course of employment and due to the fault of the employee;
  • The employer must follow a fair procedure and give the employee a reasonable opportunity to show why the deductions should not be made;
  • The total amount of the debt may not exceed the actual amount of the loss or damage; and
  • The total deductions from the employee’s remuneration may not exceed one-quarter (25%) of the employee’s remuneration in money.

It is however advisable for employers to introduce a clause in the contract of employment allowing the company to recover any monies due to them as a result of the employee’s negligence or misconduct. This creates a contractual claim which can then also be enforced civilly should the employer be unable to recover the funds from the employee.

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