1 May 2025
In a recent judgment by the Labour Court, a case was heard involving the dismissal of an employee who was accused of participating in an unlawful money-lending scheme at work.
The case brought to light important considerations surrounding employee conduct, company policies, and legal compliance with national credit laws. This blog post explores the case, key takeaways, and how our company can help businesses navigate complex labour law issues such as unfair dismissals and misconduct in the workplace.
Case Background
The case began when a report was submitted alleging that an illegal money-lending operation was taking place within the workplace. An investigation followed, uncovering that employees were involved in lending money to colleagues at high interest rates. Initially, the accused employee was not directly implicated in the investigation, but further testimony during a disciplinary hearing suggested his involvement in the scheme.
The employee was dismissed after being charged with violating company policies, specifically those related to unlawful financial activities and disruption to the workplace. He argued that he had been involved in a legitimate savings scheme, rather than a money-lending operation, but the disciplinary panel found his defence unconvincing.
The Commissioner’s Ruling
The disciplinary panel, after reviewing the evidence, upheld the employee’s dismissal for several key reasons:
The Defence of a Savings Scheme: The employee maintained that he had been part of a savings scheme (often referred to as a "stokvel") and not an illegal lending operation. However, the panel found that the activities in which the employee participated had evolved into a formal money-lending arrangement, particularly as interest was charged on loans, which is illegal without proper registration under national credit laws.
Legal Violations: The company’s policies were in line with the National Credit Act, which requires that any entity involved in lending money at interest rates be registered with the National Credit Regulator (NCR). Since the scheme was not registered, the financial transactions were deemed unlawful.
Disruption to the Workplace: Evidence presented showed that the money-lending activities had caused workplace disruptions, including reports of intimidation and stress among employees involved in the scheme. The employee’s participation in the scheme, even if indirect, was seen as contributing to a toxic work environment.
Grounds for Review
The employee sought to have the dismissal overturned, arguing that the disciplinary decision relied on inadmissible evidence and that his participation in the savings scheme was not illegal under national law.
However, the Labour Court found no merit in these claims:
Admissibility of Evidence: The court confirmed that the evidence used to convict the employee was not based on hearsay, but rather on the employee’s own admissions during the disciplinary process. The court ruled that the employee’s testimony about his involvement in the scheme was sufficient to justify the decision.
Legal Compliance: The court also upheld the original decision, noting that the employee’s actions had caused disruption and violated legal standards. Despite the employee’s argument that he was part of a savings scheme, the court found that charging interest and lending money to third parties made the activity a money-lending scheme that violated the National Credit Act.
Key Takeaways for Employers
This case highlights several critical points for employers to consider in managing employee conduct, particularly in relation to financial activities within the workplace:
Clear Disciplinary Policies: Employers should ensure that their disciplinary policies clearly address misconduct related to illegal activities, including financial misconduct. A well-defined policy can help prevent misunderstandings and provide clear guidelines for handling such issues.
Thorough Investigations: When allegations of misconduct arise, employers must conduct a thorough investigation to gather all relevant evidence. This ensures that disciplinary actions are based on facts rather than assumptions.
Legal Compliance: Companies should be aware of relevant legal frameworks, such as the National Credit Act, and ensure that employees comply with these laws. This includes monitoring any workplace activities involving money-lending or financial transactions.
Managing Workplace Disruptions: Financial misconduct can cause serious disruptions to the work environment. Employers should act promptly to address any situation that creates a toxic or disruptive atmosphere, especially when it involves the well-being of employees.
How G&T Labour Solutions Can Assist
At G&T Labour Solutions, we understand the complexities of labour law and the importance of adhering to legal standards in all employee-related matters. Whether you are dealing with a case similar to the one outlined above, or facing a labour dispute, we can help. Our services include:
Chairperson Hearings: We assist employers with chairing disciplinary hearings, ensuring a fair process that complies with legal requirements and minimizes the risk of costly disputes.
CCMA Representation: Should a case progress to the CCMA or Labour Court, we provide expert representation to safeguard your company’s interests.
Training and Legal Advice: We offer legal advice to help businesses stay compliant with labour laws and avoid potential issues related to employee misconduct.
Drafting of policy documents: We offer the documentations specifically adapted to the nature and industry of the employer’s business.
Disciplinary codes: We offer legal advice as well as disciplinary codes such as HIV policy, smoke policy etc.
If your company is facing a labour-related issue, such as potential misconduct or the need for policy updates, contact G&T Labour Solutions for expert guidance and support.
