The principle of an employee being bound implicitly by a duty of good faith towards his employer is breached when that employee remains silent about knowledge that he possesses regarding the business interests of the employer being improperly undermined. A breach of the duty of good faith can justify dismissal. Non-disclosure of knowledge relevant to misconduct committed by fellow employees is an instance of a breach of the duty of good faith. Importantly a dismissal of an employee is derivatively justified in relation to the primary misconduct committed by unknown others, where an employee, innocent of actual perpetration of misconduct, consciously chooses not to disclose information known to that employee pertinent to the wrongdoing.

What is Derivative Misconduct?

Derivative misconduct refers to a situation where an employee who has knowledge of wrongdoing towards his or her employer subsequently fails to disclose such knowledge to their employer. In failing to make such a disclosure, the employee breaches the duty of faith owed to his or her employer and may be disciplined for such misconduct.


Derivative misconduct requires that the employees come forward and identify the perpetrators for the employer so that he can take steps to protect his business.

If the employees do not come forward to identify the perpetrators of the misconduct then they themselves are guilty of misconduct. This is known as derived, or derivative, misconduct.

The duty to disclose is triggered automatically when the employee knows or ought reasonably to know who the perpetrators are and fails to volunteer this information to the employer. Where a specific request for information has been made, and the employee ignores it, culpability is increased.  It is also more blameworthy for a senior employee to refuse to provide information regarding a junior employee who has committed misconduct.

Employees have no general right to remain silent, and nor do they have the right to be presumed innocent until proven guilty. The right to remain silent and to be presumed innocent have no application in the employment context.


Employees will make themselves guilty of derivative misconduct when they chose to remain silent in the face of their employer’s requests to them to provide information. This is regarded as sufficiently serious misconduct as to warrant the ultimate sanction, dismissal.

Under which circumstances can an employee be held liable for acts of misconduct committed by members of a group to which he/she is a member?

  1. If the employee is one of the persons in the group who actually committed the acts of misconduct;
  2. If the employee did not actually commit the misconduct, but associated himself with the acts of misconduct or associated himself with the common goal of the group concerned (common purpose); or
  3. The employee’s guilt is based on the fact that the employee did not co-operate with the employer in that the employee failed to identify those employee/s who were guilty of the “primary misconduct” in circumstances where he/she was able to do so.

It is imperative to note that when employees are charged with derivative misconduct, they should each be charged with their own individual act of misconduct, be it either failing to disclose, taking part, or being an accomplice to the theft or damage.

A failure to charge the employee/s in this manner may have an impact on the substantive fairness of their dismissals.

The issue of derivative misconduct is complex and employers should exercise caution when instituting disciplinary action against an employee on that basis. Derivative misconduct is prevalent in instances of violence or damage to property during industrial action and theft of stock or equipment.

For further information you can contact Bernard Reisner:
W. Tel: 021 423 3959
Fax: 021 423 2105
Cell: 082 433 3959