IS THERE A DUTY ON THE PART OF AN EMPLOYER TO REPORT CRIMINAL CONDUCT ON THE PART OF AN EMPLOYEE?

Monday, January 24, 2005
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IS THERE A DUTY ON THE PART OF AN EMPLOYER TO REPORT CRIMINAL CONDUCT ON THE PART OF AN EMPLOYEE?

 
 
 
Is there a duty on the part of an employer to report criminal conduct on the part of an employee?  Employers who have uncovered criminal conduct on the part of their employees may from time to time be faced with this question.  Many employers have a clear policy that criminal conduct will always be reported.  Other employers may, however, be tempted to agree not to lay criminal charges in exchange for the employee agreeing not to dispute the fairness of a dismissal or to repay the debt.  Some criminals may even have obtained a favourable settlement from their employer and escaped a criminal prosecution. 
 
A crime is unlawful, blameworthy conduct.  As a crime is invariably injurious of the public interest, public policy expects that the crime be reported.  Thereafter, it is for the police and prosecuting authorities to determine whether to proceed with a criminal charge.  That crime is an injury against the public at large is illustrated by the fact that once reported, the authorities may decide to proceed with the criminal charge even if the complainant begs them not to do so.  Although there was no legal obligation to report a crime, it has always been a common law offence to agree not to report a crime in return for a benefit.  In terms of our common law, the offence of compounding consists in unlawfully and intentionally agreeing, for reward, not to report or prosecute a crime other than one which is punishable by fine only.  The rationale for this is the protection of the administration of justice.  It is the function of the police and the courts to decide whether a crime has been committed and to adjudicate it and they should not be deprived of this function by private individuals.  Even though there was no obligation other than a moral one to report a crime, employers who were tempted to obtain a benefit in return for not reporting the crime, should not have done so in terms of our common law. 
 
The Prevention and Combating of Corrupt Activities Act (“the PCCA Act”) which came into force last year, introduced a positive duty to report certain criminal conduct.  The PCCA Act creates a general offence of corruption which in essence involves accepting or agreeing or offering to accept or give or offer any gratification to another person in order to act personally or by influencing the other person to act in a manner that amounts to the illegal dishonest exercise or performance of any power, duty, function, statutory, contractual or other legal obligation.  Unlike the previous anti-corruption legislation, the PCCA Act covers not only public officials but is applicable in the private sector as well.  It seeks to codify the offences of corruption and bribery and covers persons who influence another to act in a corrupt manner.  It also applies to a person who offers to perform a corrupt service for another, even if they are not in a position to deliver that service.  Amongst its provisions is one which makes it an offence for a person to directly or indirectly accept or offer any gratification to another person in order to improperly influence the procurement of any contract or the fixing of the price stipulated in the contract. 
 
The PCCA Act obliges any person who holds a “position of authority” who knows of or ought reasonably to have known or suspected that another person committed a corrupt activity or the offence of theft, fraud, extortion, forgery to report such knowledge or suspicion or cause such knowledge or suspicion to be reported to any police official if an amount of R100,000.00 or more is involved.  A failure to comply with this obligation is an offence punishable by a fine or imprisonment for a period not exceeding 10 years.  The PCCA Act defines a position of authority to include a partner in a partnership, a chief executive officer and any other person who is responsible for the overall management and control of the business of an employer.  This means a person who holds a position of authority, including a manger of a business, who knows or ought reasonably to know that any other person has committed a corrupt activity or theft, fraud, extortion or forgery, must report it.  A failure to do so could result in their facing the possibility of a 10 year jail sentence.  Significantly, a person in authority can face prosecution for a failure to report not only if they have actual knowledge but if they ought reasonably to have been aware of the corrupt activity or crime.  A manager who fails to act on a report of a whistle-blower, could be exposed to a prosecution if the evidence placed before them was such that they should reasonably have been aware of the corrupt activity or crime.