Moonlighting – To tell or not to tell – That’s the question

In the current economic climate, it is not uncommon to hear of colleagues who are supplementing their monthly income through moonlighting. Maybe you are moonlighting and do not see the possible harm or risks of your actions because, so you might think, you are not in competition with your employer.

Remember the MISA article in October 2020 where we highlight your duty of good faith to your employer and the question asked in a May 2021 article titled ‘Can your side hustle get you fired’? It will be good to familiarize yourself again with the content of these articles as it might just be the turning point in saving your employment.

Competing with Your Employer –The Unwritten Principle

John Grogan, Dismissal (JUTA 2002), confirmed that ‘a contract of employment is regarded as a contract uberrimae fidei – of the utmost good faith. Employees act in bad faith if they compete with the business of their employers, or obtain extra work from other employers when conflicts of interest may arise” [Own emphasis]

It is an unwritten, yet confirmed, requirement that competition by employees with their employers is forbidden. This principle was confirmed going back as far as 1971 in Premier Medical & Industrial v Winkler & Another 1971 (3) SA 866 (T) where the court held that an employee must devote his/her time, energy and skills to further the interest of the employer’s business.  Grogan reiterated that ‘for a dismissal based on “moonlighting” to be fair, there must be proof of a rule against performing outside work and that the employee was aware of that rule’. You must therefore ensure that you know the terms and conditions contained in your employment contract. The catch is that even when your contract is silent on the issue of moonlighting, the MIBCO Main Collective Agreement specifically prohibits “outwork” in clause 9.1, which in essence is moonlighting.

No Real Competition – Further Development

In a recent Labour Appeal Court Judgment, Bakenrug Meat (Pty) Ltd t/a Joostenberg Meat v CCMA and Others (LAC) (CA8/2020, 18-1-2022), the principle discussed above has been extended to include moonlighting without competing with your employer to ‘bad faith’ conduct resulting in fair dismissal.

The employee in this dispute was employed as a sales representative by the employer on 28 October 2013. The employer conducts a business which produces and then sells a range of meat products. On 10 October 2016, the employee was dismissed, after having been found guilty of a charge of dishonesty because she failed to inform the employer that she operated a business of her own which marketed dried meat products and thus had failed to give full attention to marketing the meat products produced by the employer.

Aggrieved by the dismissal, the employee referred an unfair dismissal dispute to the CCMA. The Arbitrator upheld the dismissal, concluding that the employee’s conduct, in deciding not to disclose to her employer the fact that she operated a formal business marketing dried meat products, was dishonest. The arbitrator said: “The fact that the employer may not have marketed biltong prior to September 2016 is also not an acceptable excuse for the applicant to operate a formal business, marketing meat products without telling the respondent.”

Not pleased, the employee took the award on review to the Labour Court(LC). The LC attached a lot of weight to the employee’s version, namely that the private business operated on weekends only. Cele J held that there was ‘no nexus between her performance for the third respondent (appellant) and the running of the side-line business.’ The LC set aside the Award and held that the dismissal was unfair.

The employer, not in agreement with the judgment, applied to the Labour Appeal Court (LAC) for leave to appeal the judgment. Leave to appeal was granted and the LAC, in going through the facts of the dispute, disagreed with the LC’s view in that there was no duty on an employee to inform an employer about a potential conflict of interest. The LC was of the view that it is not a dismissible offence when an employee does not inform his/her employer of the moonlighting when there was no competition with the employer’s business.

The LAC went on to say the following: ‘The conclusion reached by the second respondent that “employees act in bad faith if conflict of interest may arise even though no real competition actually results” is unassailable.’

Having said that, the LAC endorsed the Arbitrator’s finding and held that the conclusion reached, that the employee had acted in a dishonest and unacceptable manner even in the absence of direct competition between the employee and the employer’s business, was reasonable. The LAC granted the appeal and inveterate that the dismissal was substantively fair.

Conclusion

The fact remains is that there is a duty on each one of us of utmost good faith to our employer.  Good faith includes the duty to disclose to your employer any outside interest regardless whether there is actual or potential conflict with that of your employer. Open communication and transparency is paramount.

MISA – Just a phone call or an e-mail away!

(Article by Joshua Nattar & Tiekie Mocke)

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