The abrasive, confrontational employee – you’re fired?

An employment relationship is inherently unequal. The employer dishes out instructions, and the employee is duty-bound to follow those instructions (if they are lawful and reasonable), and in general to be respectful of the employer and her authority.

For that reason, our law recognises insolence and insubordination by an employee as misconduct that, if wilful and sufficiently serious, could justify dismissal after a single offence.

An employee can be both insolent and insubordinate, or merely insolent.

Insolence refers to rudeness and disrespect. An employee might make a snide, sarcastic comment, slam a door, or ignore you when speaking. The insolence can be directed towards a senior, equal or junior in the workplace.

Insubordination goes further, and refers to a deliberate, persistent and serious challenge to, or defiance of, an employer’s authority, whether through words or conduct. Insubordinate conduct may include refusal to carry out a lawful and reasonable instruction from an employer, but could also include such actions as a verbal or physical altercation with the employer that clearly challenges the employer’s authority. The insubordination can only be directed upward, to a senior in the workplace.

A couple of weeks back, a prospective client telephoned and related an alarming incident at her office: a member of staff had screamed and shouted at her, stormed out of the office, slamming the door, stormed back in, grabbed her handbag, and announced that she was leaving and would be back in the morning. The employer concerned implored: “I need to dismiss her, I cannot accept her back in the office. This is unacceptable – other employees witnessed this incident.”

On the face of it, the employee’s conduct was certainly insolent and possibly insubordinate. But would it be grounds for dismissal?

A similar case came before the Labour Appeal Court. That employee had an acknowledged abrasive style, loud voice, and sense of justice that compelled her to speak up when she felt her rights were being infringed upon. The relationship with the employer was deteriorating, as they were unhappy with her performance and with her abrasive manner with colleagues. The employer was concerned that she had allowed staff to use a work phone and run up a sizeable bill. The employer threatened to deduct the cost from her salary, and in fact did so.

The employee was aggrieved, and approached the employer to challenge the deduction, which had in fact been unlawful. The employer refused to discuss the matter with her, and turned his back on her when she tried to talk to him. The employee than raised her voice at him, telling him not to turn his back on her. The employer claimed in evidence that she had screamed and shouted at him, calling him unprofessional and “not an MD”, but this was disputed by the evidence of witnesses to the incident.

The employer charged the employee with insubordination and dismissed her.

At the CCMA, the commissioner agreed that the employee had been guilty of insubordination, and upheld her dismissal.

The employee took the matter on review to the Labour Court, who agreed with her that the CCMA award could not stand. The Labour Court’s decision is problematic, as it wrongly held that insubordination required a prior instruction. It ruled that the employee’s conduct was not insubordination but gross insolence, and that dismissal was too harsh a penalty. The employee did not want to be reinstated and was awarded 10 months’ salary as compensation.

On appeal by the employer to the Labour Appeal Court, the court rubbished the Labour Court’s finding that insubordination only arose from non-compliance with an instruction. But it agreed that the award was unreasonable and could not stand. Significantly, the employer’s conduct in unlawfully deducting money from the employee’s salary and then condescendingly refusing to discuss the matter with her, was found to have been serious provocation. In the circumstances, the seriousness of the employee’s conduct was reduced. It was found that she had been insolent but not insubordinate, as she had not persistently, wilfully and seriously challenged the employer’s authority – she had reacted in a knee jerk manner to provocation in the heat of the moment.

In the case of mere insolence or mere insubordination, not of a particularly gross nature, a prior warning was required before dismissal. The warning had to be given after the employee had enjoyed a full opportunity to be heard on the matter. There had been no prior warning in this case, although there had been allegations of past rude conduct, and so dismissal had been inappropriate. The finding of unfair dismissal and award of compensation were upheld.

And so, could the prospective client fire the employee who had shouted at her and stormed out of their meeting? The answer is more complex than it might first appear, and what preceded the incident is important. If the employee was responding to an intolerable provocation by the employer, then the seriousness of the offence may be mitigated, and a hearing may result in a warning.

 

 

The enforcability of restraints of trade

Employing a key staff member can feel like risky business. They will get to know your clients, your systems, your “tricks of the trade”. All well and good: you want your staff to be well-liked by your customers, and knowledgeable and effective in their work. But what if, having accepted your training and support to become a true asset to your organisation, your employee leaves and goes to work for your competition? Can you include clauses in your employment contract to prevent this?

A well-known labour law consultancy certainly hoped so when they employed Mr DJ in 2014. His employment contract included extensive confidentiality and restraint of trade clauses, which the Labour Appeal Court adjudicated upon last week.

After about 15 months’ employment, DJ resigned to take up employment with an employer’s organisation who competed with the consultancy to offer similar services to similar clients. His employment contract restrained him in perpetuity from disclosing any client lists, trade secrets of other company information received from the consultancy during his employment. It went on to restrain him from having any interest in any other entity providing similar services to the consultancy, engaging in any similar transactions with any of the consultancy’s clients, or in any way poaching the consultancy’s staff, for a period of 3 years after his resignation, throughout two provinces of South Africa.

The consultancy immediately drew DJ’s attention to the above restraints, and alerted him to their view that he was about to breach his obligations by taking up employment with the employers’ organisation. DJ disagreed that the two organisations were in competition with one another, but nevertheless undertook not to contact any of the consultancy’s clients to attempt to lure their business away.

The consultancy was not satisfied, and launched urgent proceedings  to interdict DJ and the employers’ organisation concerned, from entering into an employment relationship. The consultancy expressed the fear that DJ would take unfair advantage of his knowledge of its clients, pricing and business strategies, and abuse the strong relationships he built up with its clients to lure them away. DJ denied having any special access to the consultancy’s business strategies, saying that he had learned these before starting work for it and that the information was in any event readily available on the internet. He aso denied having any special bond with any of the consultancy’s clients.

The Labour Court was not satisfied that there was special, confidential information in DJ’s possession which could be abused to the detriment of the consultancy. Neither was it satisfied that DJ had been shown to enjoy especially close relationships with the consultancy’s clients. The consultancy had not proven that it had any protectable interest, and to enforce the restraint would be unreasonable as against DJ and only have the effect of stifling competition.

The consultancy approached the Labour Appeal Court with an appeal against this decision. It complained that DJ had entered employment with it as a blank slate, and had only become a valuable asset worthy of being head-hunted by its competitors, as a result of the training and resources it had invested in him. It argued that it was unfair to allow such an employee, who had signed a restraint when accepting employment, to go over to a competitor who would reap the benefits of this investment.

The Appeal Court noted that restraints of trade are enforceable unless they are proven to be unreasonable. Their reasonableness is determined by balancing the need for parties to comply with their contractual promises and the right to freely exercise one’s trade or occupation. A restraint would only be reasonable if it protected an interest worthy of protection, such as confidential information and trade secrets, or customer and trade connections. For information to be confidential it had to be useful, restricted to a small number of people, and have economic value to the employer. Customer or trade connections could be protectable if they were of such a nature that the employee could induce such connections to follow him or her to a new employer. An interest in preventing competition was not in itself protectable.

The employer’s protectable interest had to outweigh the employee’s interest in being economically productive. It stated that an employee cannot be restrained from taking away and using his or her skills, experience and knowledge, even if these were acquired chiefly through the employer’s training of the employee. These skills were not the property of the employer.

The Appeal Court found that DJ had been a relatively junior employee and had lacked access to truly confidential information. The forms he used for his work were freely available on the internet. He had no access to sensitive financial information or business strategies.  DJ’s evidence was that he only handled the simplest of tasks for clients and that he had no ongoing relationships with any clients such that they felt an attachment to him. He had no role in recruiting clients at either organisation.

As no protectable interest had been proven, the Appeal Court noted that it was unnecessary to weigh up the interests of the parties. DJ was entitled to pursue his career unfettered by the clear language of the restraint he had concluded with the consultancy.

Restraints of trade remain contested territory, with the enforceability of restraints coming down to the circumstances of individual cases. In general, they are of most use in the case of absolutely key personnel only, and should not be concluded with employees simply to fetter their career path and keep them from joining the competition.