Misconduct Cannot Be Justified by a Superior’s Instruction: Lessons from Mbuyane v Standard Bank
In the recent Labour Court judgment of Mbuyane v Standard Bank of South Africa Ltd, the court reaffirmed a critical principle in South African labour law: An employee cannot justify dishonest conduct on the basis of having followed a superior’s instruction. This case serves as a cautionary tale for HR professionals and labour law practitioners about the limits of obedience in the workplace and the importance of individual accountability.
Mr. Banele Innocent Mbuyane, a treasury custodian at Standard Bank, was dismissed for dishonesty after submitting a false cash balance report for the period of 21-22 October 2019. The discrepancy was discovered during a surprise inspection on 23 October 2019. Mbuyane’s supervisor, Ms. Nkosi, was also dismissed for her role in the incident.
The misrepresentation involved coinage received from the bank’s cash delivery service, SBV. Upon discovering a shortfall in one of the coin bags, Mbuyane reported it to Nkosi. However, Nkosi instructed him to record the full amount originally ordered, thereby falsifying the balance sheet. Mbuyane complied, claiming he feared insubordination and lacked formal training in treasury custodianship.
During arbitration, the arbitrator found that Mbuyane knowingly participated in creating a false record, he failed to report the unlawful instruction to higher management, and his conduct breached the trust relationship and violated the bank’s core values of integrity and ethical conduct.
The Labour Court upheld the arbitrator’s decision, emphasising that:
- Obedience to a superior does not excuse unlawful conduct.
- Employees have a positive duty to refuse unlawful instructions, especially when those instructions involve dishonesty.
- The existence of an informal practice (i.e. retaining short coin bags until replacement without recording the shortfall) did not legitimise the misrepresentation, particularly as it lacked management approval.
This case reinforces several important principles in South African labour law:
- Individual Accountability: Employees are personally responsible for their actions, even when acting under instruction. The defence of “just following orders” does not absolve one from misconduct, especially where dishonesty is involved.
- Unlawful Instructions Must Be Refused: The Labour Court reiterated that employees must not comply with instructions that contravene company policy or legal standards. Doing so can result in dismissal, regardless of rank or training.
- Trust Relationship Is Paramount: Dishonesty undermines the trust essential to the employment relationship. Even in the absence of fraudulent intent, misrepresentation of facts – particularly in financial roles – can justify dismissal.
- Review vs. Appeal: The court clarified that a review is not an appeal. The test is whether the arbitrator’s decision was one that a reasonable decision-maker could reach. In this case, the court found the arbitrator’s conclusions to be reasonable.
Implications for HR and labour law practitioners include recognising the importance of:
- Training and Policy Awareness: Employers must ensure that employees are aware of policies and procedures, especially in roles involving financial accountability. However, lack of training does not excuse dishonesty.
- Encouraging Whistleblowing: Organisations should foster a culture where employees feel safe to report unlawful instructions and other misconduct without fear of reprisal.
- Disciplinary Clarity: HR professionals should ensure that disciplinary codes clearly state that following unlawful instructions is not a defence to misconduct.
- Managerial Accountability: Supervisors must be held to the same standards as subordinates. In this case, both the employee and the supervisor were dismissed, reinforcing the principle of equal accountability.
