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OBLIGATION TO DISCLOSE INFORMATION TO PROSPECTIVE EMPLOYER

[Tuesday, March 10, 2020 12:16:43]

Introduction

There are a number of misconceptions when it comes to an employee’s obligation to disclose past employment history to his/her current or prospective employer. The Basic Conditions of Employment Act of 1997 provides, in section 42, that an employer must furnish an employee, on termination of employment, with a certificate of service stating certain details, including the employee's name, the employer’s name and address, the dates of commencement and termination of employment, the employee’s job title and remuneration at the date of termination, and only if the employee so requests, the reason for termination of employment. But what must the employee say?

 

When does a duty to disclose, arise?

Even if an employee is dismissed for gross misconduct such as dishonesty, theft or fraud, the employee is still entitled to a certificate of service, which will obviously omit the reason for termination of employment if the employee was dismissed for misconduct. Invariably, a prospective employer will elicit the reasons for the employee’s departure from the previous employer. It is incumbent on the employee to be honest and to disclose the reasons for leaving his/her previous employer. If the employer does not enquire about the reasons for the termination of the employee’s previous employment, a duty to disclose may not arise. There may however be instances where an employee must disclose the circumstances of his/her departure from the previous employer. When an employer specifically enquires about the circumstances under which the employee left his/her previous employer, a duty arises for the employee to disclose. This is exactly what happened in the case of Intercape Ferreira Mainliner (Pty) Ltd v McWade & others (2020) 41 ILJ 208 (LC).

 

The facts of Intercape, the CCMA’s award and the Labour Court’s decision

In this case, the employee was appointed as a general manager at Intercape. After he had been appointed, it came to light that the employee had withheld certain information regarding the circumstances under which he left his previous employer. Briefly, the employee’s former employer had suspended him and accused him of  bribery, corruption and using the company’s assets without permission. The employee and the company then reached a settlement before a disciplinary hearing was held. During the interview process with Intercape, the employee withheld the details of termination of the previous employer and simply stated that his reason for leaving was ‘new owners’, ‘Zim economy’, and later, that there was ‘a difference of opinion’ on ethical standards. Following his dismissal from Intercape, he referred an unfair dismissal to the CCMA. The CCMA held in his favour and awarded him R672 500 (the equivalent of 5 months’ salary) in compensation. On review, the Labour Court found that the award of the commissioner (who acted as an arbitrator in the CCMA dispute), was both incorrect and unreasonable and had to be reviewed and set aside. Van Niekerk J summarized the arbitrator’s decision as follows (at par 16 of the judgment):

‘the arbitrator failed to ask the right question — the enquiry before her was whether in all the circumstances the employee was obliged to disclose the facts surrounding the mutually agreed termination of his employment with Cargo Carriers. … The facts surrounding the employee’s termination of employment by Cargo Carriers are patently material, and their disclosure was required. The applicant’s failure to make disclosure constituted an act of misconduct sufficiently serious to warrant his dismissal.’

 

The Galestoe principle of disclosure, which applies to senior employees

In deciding the Intercape case, the Labour Court (at par 11) followed the judgment of the Labour Court in Galesitoe v Commission for Conciliation, Mediation & Arbitration & others [2017] 7 BLLR 690 (LC), where Lagrange J held at par 32:

‘Accordingly, it is not unreasonable to ensure that a person applying for the senior level of post in question would have realised that the nature of his relationship with his former employer was a material consideration for his prospective new employer and could affect his employment prospects.’

 

Conclusion

Prospective employers have the right to be informed of important information which would affect their decision to employ someone. Employees have an obligation to disclose such information. This is especially important when the employee is applying for a senior position.

 

Rudolf Kuhn-  labour law attorney, Pretoria, January 2020


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