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Investigating employee misconduct

February 2017

South Africa

Employees have a right to a hearing prior to any disciplinary sanction being imposed upon them.

This article examines whether an employer can be sued for defamation, by an employee for comments made during an investigation conducted prior to an internal disciplinary enquiry.

Depending on the complexity and extent of the alleged misconduct, employers at times resort to contracting the services of specialist investigators and forensic auditors to assist in the internal investigation. It is during the investigation that the employer gathers information/evidence which is necessary to be produced at any subsequent disciplinary hearing.
 
It is during this process that employees and other individuals who may have any relevant information are interviewed by the investigating team/s. During these interviews, comments may be made by the investigators which are defamatory or injurious of the good name of the person/s interviewed.
 
The Johannesburg High Court (as it was at the time) in the matter of Dercksen v Webb and Others was called upon to consider, the liability of an employer for comments made by an external investigator (appointed by the employer), during the course of the internal investigation. The facts of the matter, very briefly, were the following:
  • D was dismissed from his employment after having been accused of theft of equipment belonging to his employer valued in the region of some ZAR3 million. 
  • The employer hired the services of an investigator F. 
  • During the investigation F accused D, of having committed the theft or at the least having attempted to commit theft. This allegation was made in a boardroom. This significance of the boardroom will become apparent from the judgment.
  • Following this interview in the boardroom and in front of another employee the investigator, in the workshop, again sought to question D. This time D refused to answer questions and directed the investigator to his attorneys. The investigator is reported to have responded that D only secured the assistance of an attorney as he was guilty of theft. 
  • D was eventually charged at a disciplinary enquiry and dismissed, in his absence. D did not attend the internal enquiry. 
Subsequent to his dismissal D sued his employer Cabletech Extrusions (Pty) Ltd, its managing director W (who had solicited the assistance of the investigator) and the investigator F for defamation and injury to his good name. 

The utterances, it was accepted were made during the course of the investigation and were insulting in nature. Despite this having been found, the court held that in the particular circumstances, as a matter of policy in the employment relationship, an employer must be able to call upon an employee and question him about "missing" or "stolen" items where the employee can reasonably shed light on the matter. This constitutes an obligation of good faith on the part of an employee.

The court went on to find that the initial meeting, in the boardroom, was privileged. This is significant as the law provides that privilege exists as a defence to a claim of defamation.  In other words, where privilege is established the claim of defamation is defeated. In this case the boardroom meeting was clothed in privilege. 

Privilege is best explained in a legal work of Neethling, to exist where someone has a right or duty to make specific defamatory assertions (ie F) and the person to whom the assertion is published (ie D) has a corresponding right or duty to learn of such assertion. 

D also sought to have the court find that his former employer was vicariously liable for the actions of the investigator F. Generally, an employer is liable for the wrongful actions of its employees. However, over time our law has developed to provide that vicarious liability is extended to relationships (other than employment) such as principal and agent or employer and independent contractor depending on the degree of care, the circumstances, demand from the employer, in relation to the oversight of the contractor's work. 

On the facts the court concluded that Cabletech Extrusions (Pty) Ltd was not vicariously liable for the utterances made by the investigator to D. The court eventually awarded damages of ZAR20 000 payable by F to D in relation to the comments made by F in the workshop. 

This case demonstrates that both the employer and its investigators should exercise caution during the course of an investigation, to avoid being successfully sued for any alleged defamatory remarks made during the course of an investigation. Also of significance is the veil of privilege extended by the court to the boardroom meeting between the investigator and the employee. This should provide investigators with some measure of comfort.

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