145 pieces of chicken and 63 kilograms of chips – the firing of a team of workers for stock losses at KFC

Two weeks ago, the Durban Labour Court handed down judgement in a bitter dispute between KFC and certain of its employees, which had dragged on for over 4 years. The employees worked the evening shift at a certain KFC branch, which was facing almost incredible levels of stock losses, valued at R80 000 to R120 000 per month. Increased security measures and warnings to staff that shrinkage had to be stopped and would not be tolerated, failed to fix the problem. During a single shift, 942 cans of drink disappeared. When 145 pieces of chicken and 63 kilograms of chips disappeared in the course of a single weekend, the employer had had enough.

The employer reasoned that, given the scale of the theft and the close proximity within which the staff worked, the only possible conclusion was that the entire team was complicit in the theft.The entire team working the evening shift that weekend denied any knowledge of the theft. They were all charged with theft, found guilty, and dismissed. The employer reported that stock losses ceased in the wake of the dismissals.

The dismissed workers approached the CCMA, alleging unfair dismissal, and received a sympathetic hearing. The arbitrator found that the employer should have proven the individual guilt of each team member. Having failed to do so, their dismissals were substantively unfair, and each worker was awarded six months’ salary as compensation.

KFC was dissatisfied and approached the Labour Court, seeking an order setting aside the arbitrator’s decision. KFC’s core argument was that the arbitrator had failed to correctly apply the principles of “team misconduct”, and as a result had falsely believed that proof of each individual employee’s involvement in the theft was necessary.

The Labour Court considered the applicable law, and noted that in a case of team misconduct, the team members have an indivisible responsibility for their collective conduct. The group as a whole is required to comply with rules and attain performance standards, with success dependent upon team effort. It found that the KFC workers were under a duty as a team to look after stock and ensure no losses. Without needing to prove individual involvement, the only reasonable inference was that every team member was either committing the theft of aware of it and failing to take steps to prevent it. As such, the misconduct was team misconduct, and it was entirely reasonable to dismiss the entire team of workers.

The Court found that the arbitrator’s decision was liable to be set aside on review, and ruled that the dismissals of the workers were fair. As a result, instead of receiving compensation from KFC for their dismissals, the employees were ordered to pay KFC’s legal costs in approaching the Court.