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Dismissal of an Entire Store’s Staff

In a recent case before the Commission for Conciliation, Mediation and Arbitration (CCMA), the matter of Shabalala and others / Blue Falcon 11 (Pty) Ltd t/a Studio 88 - (2024) 33 CCMA came under scrutiny. The case centered on the dismissal of nine employees following the discovery of significant stock loss at the store where they were employed.

The nine applicants faced summary dismissal after their employer uncovered substantial stock losses within the store premises. They contended that they were unfairly subjected to a collective hearing, alleging a lack of communication regarding the employer's policy and highlighting the absence of security measures such as CCTV cameras and metal detectors as contributing factors to the shrinkage. Conversely, the respondent argued that its disciplinary procedure for addressing stock loss had been diligently followed and that the applicants collectively bore responsibility for the inventory shortfall.

The decision ultimately upheld the employer's action, citing substantive fairness in the face of collective responsibility for the losses.

The Commissioner, in rendering the decision, drew parallels to a precedent set by the Labour Appeal Court in the case of Foschini Group v. Maidi and Others [2010] 7 BLLR 689 (LAC). In the Foschini case, the court upheld the dismissal of an entire store staff for failing to safeguard company assets, emphasizing each employee's accountability in maintaining performance standards set by the employer.

The Commissioner ruled that the dismissals were procedurally and substantively fair, aligning with established legal principles regarding collective accountability in cases of misconduct leading to significant losses for the employer.

In addition, Professor Grogan on the notion of “collective guilt” has stated that “If employees in a small store are unable to give an explanation for stock losses in that store to the effect that it was beyond their control, the only possible inference is that they are guilty.” 

These decisions underscore the importance of upholding performance standards and accountability within the workplace. Employers are justified in taking firm action when faced with substantial breaches of trust or negligence that result in financial harm. It also highlights the significance of consistent enforcement of company policies and the expectation of employees to adhere to them.

This ruling serves as a reminder to both employers and employees of the critical importance of adherence to workplace policies and the consequences of failing to meet expected standards of conduct.


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