Many retailers face a difficult problem where they suffer from shrinkage of  large volumes of stock but are unable to pinpoint the perpetrator or perpetrators who should be held accountable and where necessary, disciplined .

The Labour Court in True Blue Foods (Pty) Ltd t/a Kentucky Fried Chicken (KFC) v CCMA and others (D441/11) [2014] ZALCD 70  recently overturned the decision of  the CCMA , holding that the dismissal of a group of employees was in fact fair. KFC was faced with "astonishing" amounts of chicken that seemed  to grow legs and walk of out the Sarnia branch. In the span of three days some 245 pieces of chicken and 62.72 kgs of chips disappeared. The massive stock loss had been experienced in the store for a number of years .Despite management warning of a "zero tolerance" attitude ,improving security measures such as CCTV cameras,  introducing new computer systems and changing the supervising staff the employees appetite for chicken would not be curtailed. All  the employees on a shift that had been identified as peak theft time were  given the opportunity to "come clean" and when no one did they were all suspended and subsequently dismissed on the basis of "team liability" after fair procedure.

Given the large volumes of missing stock and the manner in which the operations were arranged (all employees worked in close quarter with each other) KFC contended that it was literally impossible that all the team members would not have been aware of what was going on. The court quoted the judgment in FEDCRAW v Snip Trading (Pty) ltd 2001 7 BALR 669 which stated that in cases of team misconduct, the employer dismisses a group of workers because responsibility for the collective conduct of the group is indivisible and each has culpably failed to ensure that the group complies with a rule. In keeping with the doctrine of team misconduct there is no need to prove individual guilt, it was enough that each employee was a member of a team which was obliged to ensure no further stock loss.

The approach of the FEDCRAW case was confirmed in the 2010 Labour Appeal Court decision of Foschini Group v Maidi and Others where it was found fair to dismiss 5 employees for team misconduct for the failure to secure assets of the company after substantial stock losses in excess of 28% of the stock in store. In the Foschini case the employees worked in a small store, and as they were unable to give an explanation for the stock losses, it was found that the only possible inference was that they were guilty. The fairness of dismissals based on "team liability" will turn on the facts of each case and employers are cautioned to seek legal advice before adopting this approach.