Misuse of the employer’s property

The employer’s property forms an integral part of the business infrastructure and any loss, damage, misuse and waste thereof is a serious misconduct that places additional pressure, as unnecessary expenses, on a business in terms of profitability and sustainability. Most cases referred to the Commission for Conciliation, Mediation and Arbitration (“CCMA”) are due to unfair dismissal, of which most cases are related to misconduct that lead to dismissal.

In general, arbitration awards in the employee’s favour, can be directly linked to the employer not following the correct procedure and can the CCMA make an award for up to 12 months of the employee’s salary. In case of loss of and/or damage to the employer’s property, the employer should act in terms of labour law with respect to the employer-employee relationship. The employer also has the option to act in terms of criminal law and report the incident to the police, although this is not a prerequisite to take disciplinary action with respect to the employer-employee relationship.

An employer cannot dismiss an employee under any circumstances, even with valid reason, without holding a disciplinary hearing to ensure that a fair procedure is followed and that there is substantive reason (proof) for the employee to be dismissed.

The definition of the employer’s property refers to both physical and intellectual assets. Typical physical assets include the workplace premises, buildings, equipment, machinery, diesel, products, stationary, company cars, cell phones, internet, working hours, etc. Typical intellectual assets include company secrets, trademarks, patents, confidential information, etc. It is vital for employees to recognize the employer’s property and the responsibility in utilising it in the employer’s interest. Every employee, irrespective of responsibility, duties or position, controls some form of the employer’s property on a daily basis. Businesses suffer enormous financial losses due to employees that misuse or damage the employer’s property, whether due to negligence or with intent.

It is important to differentiate between offences due to negligence (failure to take proper care) or with intent (deliberate misuse for personal gain), as it has a definite impact on the seriousness of the offence. The seriousness of the offence is also influenced by the employee’s type of work and responsibilities, (possible) consequences of the offence and the impact of the offence on the employee-employer trust relationship.


Steps to follow:

We advise employers to follow these steps to identify misconduct referring to loss, damage, misuse and waste of the employer’s property:

  • Investigate
    During the investigation the employer must establish whether the employee misused, damaged, or lost any of the employer’s property. The employer should also gather evidence in this regard and determine the seriousness of the offence, including (possible) consequences.
  • Consult with the employee
    When consulting with the employee, the employer should determine if the offence was due to the employee’s negligence or with intent. It is important to give the employee the opportunity to present more information and explain the situation from his/her point of view.
  • Determine the sanction
    The sanction is determined by the seriousness of the offence. To establish if the sanction is fair, the employer must consider the facts of the case as every case has its own merits. It is important to note that the employer must prove on a balance of probability that the employee is guilty before imposing any sanction.
  • Take disciplinary action
    A disciplinary code is vital to ensure that there are clear rules in the workplace, with appropriate sanctions, for employees to follow. When these rules are broken the employer can apply progressive discipline (warnings) or in cases of severe misconduct proceed directly to a disciplinary hearing. The employer must take note to keep detailed records of employees’ misconduct and sanctions applied.

Be proactive:

We strongly advise employers to implement proactive measures to combat misconduct referring to loss, damage, misuse and waste of the employer’s property by following these guidelines:

  • Use labour legislation to your benefit in drafting your employment contracts by including proactive clauses that require the employee’s permission:
    • Cameras in the workplace / searching of personal belongings: These clauses are vital to manage theft and/or misconduct in the workplace. If this clause is set out in the employment contract and the employer suspects theft and/or misconduct, he/she can immediately install cameras in the workplace and/or search employees’ personal belongings without then trying to obtain the employee’s consent which can possibly alert the offender.
    • Deductions: An employer cannot deduct any money form an employee’s salary without the employee’s written consent unless the deduction is required or permitted in terms of law (UIF and PAYE), collective agreement, court order or arbitration award. Additional deductions that can be made with the employee’s consent include housing, failure to give statutory notice, training costs, rations, etc. If this clause is set out in the employment contract the employer can immediately make these deductions as they arise without then trying to get the employee’s consent.
  • Ensure that your disciplinary code is relevant and up to date regarding offences and appropriate sanctions. Also ensure that all employees are aware of what the disciplinary code entails.
  • Encourage employees to report dishonest conduct of co-workers. Every employee has the duty to act in good faith in the interest of the employer and report any misconduct by co-workers. When an employee is not guilty of an offence, but was aware of the misconduct and did not report it to the employer, the employee violated the trust relationship and can the employer take disciplinary action against such an employee.
  • Ensure that every employee has a detailed job description to clarify his/her duties and the employer’s expectations.

Labour risk is a huge business risk. To ensure the sustainability and profitability of your business, labour risk needs to be managed in a pro-active manner. The employer must therefore have clear rules and guidelines in the workplace and ensure that every employee is aware of these rules. Clear rules and guidelines ensure that friction and misunderstandings are kept to a minimum, which in turn promotes not only productivity but also a positive working environment.



Stay ahead with our comprehensive compliance questionnaire. We’ll help pinpoint any gaps, ensuring you operate within legal guidelines.