When Does Misconduct Become “Gross”?
Recently, I was the Chairperson of a Disciplinary Hearing, and the question that the Accused’s Representative raised was “when does the specific misconduct (dishonesty) become gross in nature, and why?” I, of course, needed to answer this question, and thought it appropriate to write an article on the topic.
The Labour Relations Act (LRA), read together with the Code of Good Practice on Dismissal (2025), recognises dismissal as an appropriate sanction where an employee’s conduct constitutes gross misconduct. Although the LRA does not provide an exhaustive list of dismissible offences, it makes it clear that the gravity of the misconduct and the employee’s intention are central to determining whether dismissal is fair.
The real difficulty for employers is not identifying misconduct; it is determining when that misconduct crosses the threshold into “gross” misconduct, justifying termination rather than corrective discipline such as a warning or suspension.
Dishonesty and the Threshold for Dismissal:
In South African labour law, dishonesty becomes gross dishonesty when the conduct is “so egregious, fraudulent, or deceptive that it irreparably destroys the trust relationship, making continued employment intolerable. It is generally characterised by a deliberate, serious breach of honesty that justifies summary dismissal”.
This sounds very fancy and legalistic, but what does it actually mean?
“Dishonesty becomes gross dishonesty…”
Not every dishonest act automatically justifies dismissal. There is a difference between a minor untruth or poor judgment and a serious, intentional deception that undermines the employment relationship. Dishonesty becomes “gross” when it is SO serious that the employment relationship cannot reasonably continue.
“…so egregious, fraudulent, or deceptive…”
This refers to conduct that is:
- Egregious – Extremely bad or shocking in nature
- Fraudulent – Involving intentional misrepresentation for gain
- Deceptive – Intentionally misleading the employer
So we are not talking about mistakes or misunderstandings — we are talking about deliberate dishonesty.
“…irreparably destroys the trust relationship…”
In South African labour law, the employment relationship is built on trust and good faith, and if an employee commits serious dishonesty (for example, theft, falsifying documents, submitting fraudulent claims, lying during an investigation, etc.), the employer may argue that “I can no longer trust this person in this position.”
If trust is objectively destroyed — especially in positions involving money, confidential information, or authority — dismissal is often justified. “Irreparably” means the trust cannot reasonably be restored.
“…making continued employment intolerable.”
This means it would be unreasonable to expect the employer to continue employing the person. The test is not whether the employer is angry or disappointed; the test is whether a reasonable employer could continue the relationship.
If the answer is no, dismissal may be fair once due process has been followed.
“…deliberate, serious breach of honesty that justifies summary dismissal.”
This confirms two important elements:
- Deliberate – It must be intentional.
- Serious – It must materially impact the employment relationship.
Examples of Gross Dishonesty usually include, but are not limited to:
- Theft or fraud
- Falsifying qualifications or documents
- Manipulating time records
- Submitting false expense claims
- Lying during a disciplinary investigation
- Misrepresentation causing financial or reputational harm
Indicating you are late for work due to traffic, when you actually overslept, is hardly gross dishonesty, regardless of what the Disciplinary Code of the company may state.
However, even when the grossness can be established, the CCMA and Labour Court will still assess the:
- Value involved/ damages suffered
- Employee’s position and Length of service
- Disciplinary record and Disciplinary Code
- Whether trust can realistically (and objectively) be restored
In Simple Language – Dishonesty becomes “gross” when it is intentional and serious enough to permanently break the trust between employer and employee, so that keeping the employee is no longer reasonable or practicable.
Other Key Factors Defining Gross Dishonesty:
- Intentionality: It involves a conscious decision to lie, cheat, or steal, rather than mere negligence.
- Breach of Trust: The action severely damages the fiduciary duty (duty of good faith) that an employee owes the employer.
- Severity: Examples include theft, fraud, embezzlement, or serious misrepresentation that causes significant financial or reputational harm.
- Irreparability: The breach is so significant that it cannot be fixed, even if the employee has a clean disciplinary record.
Practical Guidance for Employers
Differentiate Between Misconduct and Gross Misconduct
Not every act of dishonesty warrants automatic termination. Employers must evaluate whether the conduct was intentional, materially serious, and destructive of the employment relationship. The reasoning behind the chosen sanction should be clearly recorded to demonstrate fairness, proportionality, and compliance with the LRA.
Adopt a Contextual and Evidence-Driven Approach
Disciplinary decisions must be grounded in evidence and assessed within the operational context in which the incident occurred. Chairpersons should be guided to consider the dishonesty and the reasons for same, the surrounding circumstances, and the employee’s intent before reaching a conclusion.
A holistic and reasoned approach not only aligns with evolving Labour Court jurisprudence but also significantly reduces the risk of a dismissal being overturned on review.
I hope this has given you a better insight into when Dishonesty becomes Gross Dishonesty, and everything that Chairpersons need to consider before dismissing somebody for it.
Should you have any questions or concerns regarding this topic, or anything else relating to HR and IR, please contact us so that we can see how best we can assist.
Off The Desk of
Gerhard Kotze’
Managing Member