Whistle blowers are very important to efficient identification of policy breaches, misappropriation of assets and cash, illegal or illicit activities, waste, fraud, or abuse of business funds. It is rightfully a well-respected action and recognised as a brave action from the whistle blower. But just how important is this in an employment situation?

An employee has a duty to act in good faith towards their employer.

If they become aware of some misconduct that is prejudicial to the employer, they have a duty to report it.   Failure to do so is a breach of that duty and could seriously undermine the relationship of trust.

Where an employee withholds information, it is described in law as “derivative misconduct”. The Labour Court has laid down some guidelines to assessing whether derivative misconduct has occurred:

  • The employee must have actual knowledge of the misconduct.
  • The non-disclosure must be intentional.
  • The gravity of the non-disclosure is proportionate to the gravity of the primary misconduct (e.g. not disclosing late-coming is not as bad as not disclosing misappropriation of cash).
  • The ability of the employer to protect itself against the given wrongdoing may affect the gravity of the non-disclosure.
  • The employee’s rank may be taken into account when assessing the seriousness of non-disclosure.
  • Failure to disclose such information after a specific request to do so is an aggravating factor.
  • A sense of solidarity or sympathy towards the transgressor is not a defence.
  • An employee cannot be guilty of derivative misconduct for negligently failing to take steps to find out about the wrongdoing.

In the case of a strike in 2016, where certain employees failed and refused to notify the company of co-workers who had been involved in intimidation and damage to property, the failure was adjudged to be derivative misconduct. The dismissal of the non-informers along with the offenders was held by the Labour Appeal Court to be justified.

This may appear to be in conflict with the constitutional right to be silent. However, the Court, when ruling on derivative misconduct, stated “The right to remain silent is sacrosanct in criminal matters where accused persons are presumed innocent until found guilty. This is not a criminal investigation and the presumption of innocence does not apply”.

The Court went on to say that “…an employee bound implicitly by a duty of good faith towards the employer breaches that duty by remaining silent about knowledge possessed by the employee regarding the business interests of the employer being improperly undermined.”

The court added, “… the ‘essentials of trust and confidence’ demanded that they do more than simply remain silent. Their failure to come forward and provide an answer constituted derivative misconduct.”

With much to consider, each case is unique and requires its own analysis.

Feel free to reach out to our team if you have any questions regarding derivative misconduct and its possible application in your workplace, and we will gladly arrange for a consultation with our labour experts to advise you accordingly.

Disclaimer: Nothing in this blog post should be construed as constituting labour advice or a labour opinion. A consultation is always recommended to review the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the post, Accounting 4 does not accept any responsibility for consequences of decisions taken based on this blog post. Your labour matters remain your responsibility, and it remains your own responsibility to consult the relevant primary resources when taking a decision.



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