Ethics are at the cornerstone of many professions as well as employment relationships. In this regard, it is a trite legal principle that a relationship of honesty is at the root of every employment relationship. For some employment relationships, a single and minor act of dishonesty may result in a breakdown of the employment relationship. This is usually the case in the retail / manufacturing sector whereas in some industries, the gravity and frequency of the dishonesty is important in determining whether there has been a breakdown of the employment relationship.

The importance of a Code of Conduct in a work environment cannot be overstated. It establishes and stipulates morally acceptable behaviour in an organization. A Code of Conduct creates certainty, uniformity and entrenches ethical conduct into the moral fibre of an organisation. If implemented consistently, it should guide employees in decision making, internal and external inter-personal relations and how to handle conflict.

The King Code on Corporate Governance IV places the responsibility of establishing an ethical culture with the Board of Directors. One of the key functions of the Board is to ensure that the existence of an ethical culture. In facilitating an ethical culture, The King Code recommends that the Board must establish structures which will manage ethics in the company; ensure that a company has an ethics policy and a code of conduct and ensure that there are adequate and effective mechanisms to monitor and assess the effectiveness of ethics management in the company.

Ethics may be distinguished from morality in that where morals are subjective/personal values, ethics are rules provided by an external source such as the Code of Conduct. Some of common ethical values include honesty, integrity, accountability and diligence. Ethical standards in the workplace are the rules of conduct recognised in respect of a particular class of human actions or a particular group or culture and are therefore not influenced by individual facts. At the root of ethical conduct is the ability to distinguish between right and wrong. Companies guide employees in this regard by formulating values and principles in Code of Conduct, which form the core values of the organization.

The importance of establishing fundamental ethical principals in a workplace cannot be overstated. Management is responsible for setting the standard of ethical behaviour in the workplace.  A Code of Conduct may be used by an employer to adopt and communicate a zero-tolerance approach to acts of dishonesty, sexual harassment and racism. This will enable an employer to enforce disciplinary actions against employees who commit acts which are not aligned to the ethical standard of the organisation.

In Shoprite Checkers v Tokiso Dispute Settlement and Others [2015] 9 BLLR 887 (LAC) the employer had adopted a zero-tolerance policy to certain offences, one of which was the possession of stock, which the employee was charged with. The court disapproved of the fact that there was no evidence that the zero-tolerance policy was known to employees. In addition, it found that the employer’s professed zero tolerance approach was in fact contrary to the contents of the code of conduct – which mentioned that the specified offence (which the employee was dismissed for), may lead to a disciplinary sanction including dismissal. It did not provide that it would certainly lead to dismissal and thus did not communicate the zero tolerance policy professed by the employer. This reasoning accords with the procedural and substantive assessment of a dismissal in terms of the Labour Relations Act 66 of 1995.

This case highlights two issues, firstly that companies would need to ensure that their Code of Conduct and other conduct regulating policies are made widely available to employees. Secondly, that all the policies of the company, and particularly the Codes of Conduct and Disciplinary Rules, need to be aligned as well as consistent in principal and application.

The enactment of legislation such as the Protected Disclosures Act 26 of 2000 (“PDA”) which is aimed at encourages employees to report unethical conduct without fear by providing, amongst other protections, anonymity and protection against victimisation. The PDA is wide in its application because it protects employees against disclosures made, inter alia where such disclosures are made against their employer. The PDA will be extremely beneficial in encouraging ethical culture in the workplace, and staff should be encouraged to report examples of unethical behaviour in the organisation without fear of reprisals.

Unethical behaviour, if not adequately regulated and monitored, tends to breed a highly unethical workplace environment. South Africa has seen a moral degradation with unethical conduct, often perpetuated by senior management. The framework in which unethical staff and management is viewed requires a considerable shift which necessitates the assessment of unethical staff to form part of the risk assessment of a business. Unethical acts of corruption, greed and dishonesty have been proven to be detrimental to the sustainability of an organization.

Under the circumstances, there has become an urgent need for companies to no longer rely on the prerogative of employees to act ethically, but to develop and implement standards which will make ethical conduct in the workplace mandatory.

Author
Laura Sedibe (Candidate Attorney)