Theft and dismissal

In the realm of employment law and corporate governance, the Prevention and Combating of Corrupt Activities Act, 12 of 2004 (“PCCA”) holds significant importance, particularly when it comes to addressing employee misconduct involving theft, fraud, extortion, or forged documents. This legislation introduces a crucial dimension that employers must consider when contemplating the dismissal of an employee for theft.

When an employee is found guilty of theft of funds belonging to their employer, the standard protocol often involves a thorough investigation and appropriate disciplinary procedures. Depending on the severity of the offence, the employee may be dismissed in accordance with established guidelines as set out in Schedule 8 of the Labour Relations Act, 66 of 1995 (“LRA”). However, in cases involving significant monetary amounts, employers must now tread carefully due to the provisions as outlined in section 34(1) of the PCCA.

As of July 31, 2004, the PCCA instituted a reporting obligation on employers who are privy to knowledge, or even suspicion, of an employee’s involvement in theft, fraud, extortion, or uttering a forged document amounting to R100 000.00 or more. This mandate necessitates that employers report such knowledge or suspicion to the South African Police Service, even before a dismissal is considered. The scope of this requirement underscores the legislature’s commitment to combatting corrupt activities within the corporate and employment sector.

Failure to adhere to the reporting obligation imposed by the PCCA carries serious consequences for employers. Section 34(2) of the Act criminalizes an employer’s failure to report knowledge of employee’s misconduct, exposing them to potential fines or even imprisonment for up to 10 years. This underscores the gravity with which the South African legal system views the reporting obligation and the imperative for employers to exercise due diligence.

The PCCA underscores the significance of a holistic assessment of the circumstances surrounding an employee’s alleged theft. Employers must carefully consider factors such as the intent, the amount, and the nature of the misconduct. This deliberation helps determine an appropriate course of action, whether it be disciplinary measures or compliance with the reporting obligations. The principle of proportionality should guide employers in striking a balance between punishment and the pursuit of justice.

The PCCA represents a crucial framework for employers in South Africa to combat financial misconduct within their organisations. While the Act mandates reporting in cases of substantial theft or fraudulent activities, employers must also uphold fairness and due process during disciplinary proceedings. As employers navigate the intricacies of the Act, they are reminded of their dual responsibility to safeguard their interests and uphold the principles of justice and accountability.

Theft in the workplace is a serious misconduct that places additional pressure on a business in terms of profitability and sustainability. In most cases of theft, dismissal as a sanction is appropriate as the rule against theft is not only well known, but goes to the root of the employment relationship that binds an employee to act in good faith and to further the employer’s interests. This misconduct can negatively impact the employment relationship, rendering trust irreconcilable. Always follow the correct procedures with regards to labour matters, especially dismissal and general discipline in the workplace.