Looking for a new job while still employed? This Labour Court ruling could surprise you
Both the CCMA and the Labour Court described a company's misconduct charges against a former employee as “trumped-up”.
Image: File
A Labour Court ruling has reinforced that South African employees cannot be fired simply for looking for another job, even if that job is with a competitor.
In a recent judgment, the Labour Court in Johannesburg found that Lucchini South Africa unfairly dismissed its Safety, Health, Risk and Quality manager, Vishen Mahabeer, after less than six months of employment.
Lucchini South Africa took the Commission for Conciliation, Mediation, and Arbitration (CCMA) to court to overturn its finding that Mahabeer was fired unfairly. Both the CCMA and the court described Lucchini’s misconduct charges as “trumped-up”.
The charges included claims that he secretly negotiated a job with a direct competitor while still employed, and tried to pressure the company by raising the value of its intellectual property during settlement talks.
Mahabeer was also charged with failing to disclose his job negotiations during retrenchment consultations, refusing to hand over a work laptop password after being suspended, and dishonestly claiming a R20,000 relocation allowance despite allegedly not relocating.
The CCMA ruling under challenge found the dismissal substantively unfair and ordered Lucchini to pay Mahabeer 12 months’ compensation.
While the Labour Court reduced the award to six months’ salary, it upheld the finding that the dismissal itself was unfair.
Central to the judgment was the court’s finding that Mahabeer was legally entitled to seek alternative employment, even with a competitor, while still employed.
The court held that a clause in Mahabeer’s employment contract purporting to prohibit him from taking steps to work for a competing business during his employment was unenforceable and contrary to public policy.
“Mahabeer did nothing wrong other than seek greener pastures, which he was legally permitted to do, and he lost his job for doing what the law allows,” the court found.
It rejected Lucchini’s argument that his conduct created a conflict of interest or amounted to dishonesty during a retrenchment process earlier in 2021. The judge found he had no obligation to disclose that he was exploring other job opportunities.
“Had Mahabeer disclosed that he was negotiating his employment with Cast Products, the jobs of employees affected by the retrenchments would have been saved, as Mahabeer would have been dismissed for misconduct,” the judge said.
The court also dismissed claims that Mahabeer attempted to extort the company by mentioning the value of its intellectual property during negotiations over a mutual separation agreement.
It ruled that raising such issues in settlement discussions was not misconduct.
On the charge of insubordination, the court found Mahabeer’s refusal to provide a laptop password after being suspended did not amount to gross misconduct. The company was still able to access the device through its IT service provider.
The court further rejected allegations that Mahabeer acted dishonestly in relation to the relocation allowance.
There was no requirement that he purchase property or enter into a long-term lease, only that he live in Gauteng for work purposes.
“The relocation allowance was intended for Mahabeer to purchase new furniture, and his account that he bought a large TV with the allowance was not disputed,” the ruling said.
The judge also noted that Mahabeer commenced work in January 2021 but was only charged with ‘not relocating’ in June, after he announced his intention to resign and join Cast Products.
In reducing the compensation award from 12 months to six months, the court found the CCMA commissioner had erred in recording that Mahabeer was unemployed at the time of arbitration
Mahabeer had, in fact, secured new employment within three months of his dismissal.
However, the court held that compensation for an unfair dismissal is not limited to actual financial loss and may also reflect non-financial harm such as humiliation.
“Litigants are reminded that the ultimate test is whether the outcome arrived at by the commissioner was one that no reasonable commissioner could have reached, unless a commissioner misconceives the nature of the inquiry, which distorts the outcome,” said the judge.
The court ordered Lucchini South Africa to pay Mahabeer’s legal costs, finding he had been forced to defend a review application that largely sought to appeal the CCMA award rather than identify genuine reviewable irregularities.
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