Employees be Warned! A Conflict of Interest Can Get You Dismissed

“Honesty is the best policy” (Benjamin Franklin)“Honesty is the best policy” (Benjamin Franklin)

Employees have a general duty to act loyally, honestly and in their employers’ best interests, and amongst other things that entails avoiding any possible conflicts of interest.

A recent Labour Court decision confirms that any breach of this duty risks dismissal.

A long-service municipal employee dismissed

• An employee with a 29 year service record failed to disclose to his employer several possible conflicts of interest relating to businesses (which were official “vendors” to the municipality) run by his wife and brother respectively.

• The employee was bound by his employer’s “Private Work and Declaration of Interests” policy, the practical effect of which was that “he could not give jobs to friends and family” and had to declare any possible conflicts of interest as they arose.

• Because the employee and his wife were married in community of property, he benefitted directly from his (and his wife’s) failure to disclose a potential conflict when the wife’s business applied to become a vendor to the employer.

It was irrelevant, held the Court, whether he did or did not actually influence the municipality in assigning work to his wife’s business. What counted was whether his failure to disclose possible conflicts of interest amounted to dishonesty, and that required the answers to three questions:

• Was there a rule about conflict of interest?

• If so, did the employee knowingly breach it? And

• If he breached it, was this breach serious enough to warrant dismissal?

In the end result, the Court confirmed the dismissal, holding that the employee was guilty of “serious misconduct amounting to gross dishonesty”, that “his long service does not diminish the gravity of the misconduct” and that “the sanction of dismissal was fair in those circumstances”.