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EMPLOYER OPTIONS WHEN CRIMINAL AND CIVIL PROCEEDINGS ARE SIMULTANEOUS – DENNIS SIBUYI

1 January 2003
– 4 Minute Read

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Against a background of pervasive theft, fraud, bribery and corruption, employers losing large sums of money need to be acutely aware of the remedies available to them.
 
Immediate action in the form of suspending or dismissing the transgressing employee may only be the first step of many in a long and sometimes drawn-out process.
 
Once the employee has been suspended or dismissed, the legality or otherwise of the decision will be pronounced upon by the CCMA and/or the Labour Court should the employee challenge the employer.
 
A further dimension raises its head in the event of the employer laying criminal charges and/or instituting civil proceedings against the employee to recover monies lost as a result of theft, fraud, bribery or corruption.
 
Should the employer decide to lay criminal charges and institute civil proceedings simultaneously, the dispute clause mechanism contained in the employment contract that governs the relationship between the employer and employee applies. In most instances, the dispute clause obliges the employer to refer the dispute for arbitration.
 
The obvious reason for including an arbitration clause as a dispute mechanism in the employment contract is to ensure that the proceedings are fast-tracked and the dispute is adjudicated upon a lot sooner than in  the case of a normal court action.
 
However, the employer’s wish to have the dispute adjudicated upon as soon as possible in order to recover the monies lost may be frustrated where there are pending criminal charges against the employee.
 
Our courts have, as a matter of principle, accepted that an employee is entitled to demand a stay of arbitration proceedings where there are pending criminal charges against the same employee based on facts similar to those of the arbitration proceedings.
 
Procedurally, the employee:
 
·        Is entitled to request the arbitrator to stay the arbitration proceedings pending finalisation of the criminal proceedings;
·        Must show that the proceedings before the arbitrator stem from similar facts or evidence to be led in the pending criminal proceedings; and
·        Is required to convince the arbitrator that if the arbitration proceedings are not stayed, he will be prejudiced in the conduct of his defence in the pending criminal proceedings.
 
The employee will normally argue that in the course of the arbitration proceedings he may be obliged to answer incriminating questions that may compromise his defence in the criminal proceedings.
 
Once the employee has proved that the continuation of the arbitration proceedings will prejudice the conduct of his defence in the criminal proceedings, the arbitrator is obliged to stay the arbitration proceedings.
 
In the circumstances, the employer has no choice but to wait for finalisation of the criminal proceedings, which may take months or even years to complete, before he can continue with the arbitration proceedings.
 
Unfortunately, such consequence is unavoidable where criminal and civil proceedings are instituted simultaneously against the employee and the employee demands a stay of the arbitration proceedings.
 
Nor may the employer delay laying criminal charges solely to allow the arbitration proceedings to take their course in order to recover the monies lost, since employers have a statutory duty to report criminal offences in the workplace as soon as they occur.
 
The least the employer can do in such a situation is to assist in the prosecution of the employee in order to speed up the criminal proceedings.
 
The employer may assist in the prosecution of the employee by engaging attorneys on a watching brief in the criminal proceedings. To this end, the attorneys will urgently prepare the sworn statements of crucial witnesses and liaise with the investigating officer and the prosecutor.
 
In so doing, the employer can help expedite the criminal proceedings, thereby allowing for the rapid resumption of the crucial arbitration proceedings.
 
Dennis Sibuyi is a senior associate at Bowman Gilfillan.