1. Introduction

 

The perennial debate as to whether an employer is entitled to disregard the outcome of its own internal disciplinary process and substitute it with its own decision has once again occupied the courts in the Republic of South Africa. The recent decision in Nkuna v Eskom Rotek Industries [2026] ZAGPJHC has added a further dimension to the debate.

 

The Nkuna matter was determined by the South Gauteng High Court and, while the judgment dealt with the question of jurisdiction between the Labour Court and the High Court, it also raised an important issue concerning the extent to which an employer may interfere with, or substitute the outcome of an internal disciplinary hearing.

 

We do not, for present purposes, intend to engage with the jurisdictional question. Our focus is the more fundamental question: when, if ever, is an employer entitled to substitute the decision of a disciplinary hearing chairperson?

 

2. The facts in Nkuna

 

The material facts in Nkuna were relatively straightforward. The employee was found guilty of misconduct and the chairperson of the disciplinary hearing determined dismissal as the appropriate sanction. The employee thereafter noted an appeal. The chairperson of the appeal hearing overturned both the finding of guilt and the sanction imposed and reinstated Nkuna.

 

The employer was dissatisfied with the outcome of the appeal. It took the view that the decision was susceptible to review and was unfair for a number of reasons. It refused to reinstate Nkuna. The employee was consequently called upon to show cause why the sanction should not be varied.

 

The employee contested the employer’s entitlement to interfere with the outcome of the disciplinary process. Notwithstanding her objection, the employer proceeded to substitute the outcome and ultimately dismissed her. The question before the Court was therefore a simple one: did the employer have the power, in terms of its disciplinary, to substitute the outcome of the disciplinary process?

 

3. The SARS trilogy and the importance of the disciplinary code

 

The issue is not entirely novel in South African labour jurisprudence. It formed part of the trilogy of cases involving the South African Revenue Service, including the cases of Kruger and Chatrooghoon.

 

Those decisions established an important principle: whether an employer is entitled to interfere with or substitute the outcome of a disciplinary hearing depends, in the first instance, upon the wording     of the disciplinary code.

 

In the SARS matters, the courts concluded that the relevant disciplinary code did not confer upon the employer the power to vary or substitute the sanction imposed by the disciplinary hearing chairperson. They therefore set aside the “new sanctions”

 

The significance of these cases, therefore, lies not merely in the particular sanctions imposed, but in the recognition that an employer is bound by the disciplinary code that it has itself established. Where the code makes the decision of the chairperson final, the employer cannot simply unilaterally arrogate to itself a power which the disciplinary code does not confer.

 

4. The decision in Nkuna

 

In Nkuna, the Court again approached the issue by examining the wording of the applicable disciplinary code. Of particular significance was the use of the word “final” in describing the decision of the appeal hearing chairperson. The Court held that the language of the code did not permit the employer to substitute the decision reached through the disciplinary process.

 

The importance of the judgment is therefore broader than the particular facts of the case. It reinforces the proposition that the employer’s power to interfere with a disciplinary outcome is determined, at least in substantial part, by the contractual and procedural framework governing the disciplinary process.

 

An employer cannot conduct a disciplinary process under one set of rules and, once dissatisfied with its outcome, simply create an additional power for itself to reverse that outcome.

 

5. Can the employer simply convene a second disciplinary hearing?

 

The employer in Nkuna sought to overcome the difficulty by contending, in substance, that what occurred constituted a second     disciplinary process.

 

That argument raises a separate question. The South African courts have historically recognised, in appropriate circumstances, that an employer may be entitled to institute a second disciplinary inquiry.

In BMW v Van der Walt, the court recognised that the holding of a second disciplinary inquiry is not necessarily impermissible merely because an earlier disciplinary process has already taken place. The critical question is whether the circumstances justify a second inquiry.

 

That principle, however, does not mean that an employer has an unrestricted right to disregard the outcome of the first inquiry whenever it considers the decision unsatisfactory.

 

There is an important distinction between the power to institute a second disciplinary inquiry where the law and the circumstances justify it, such as was found in Eswatini Railway v Lokotfwako and the power simply to substitute an existing disciplinary outcome with the employer’s preferred outcome.

 

The two concepts should not be conflated.

 

6. The position in Eswatini

 

The controversy is equally relevant in Eswatini, where the law does not yet appear to have settled the question conclusively.

 

In the Eswatini Electricity Company v Mbongseni Dlamini matter, the Court appears to have accepted the proposition that where an employer is confronted with an egregious decision by a disciplinary hearing chairperson, it may, provided that proper procedure is followed and the employee is afforded an opportunity to be heard, intervene and substitute the outcome.

 

That approach, however, must be considered alongside the subsequent decision in Fakudze v Eswatini Revenue Service, where the Court took a different view of the employer’s power to interfere with the outcome of an internal disciplinary process.

 

The apparent divergence in these decisions demonstrates that the question remains unsettled and that the precise terms of the applicable disciplinary code, together with the circumstances in which the employer seeks to interfere with the outcome, remain critical.

 

7. The importance of drafting disciplinary codes

 

The developing jurisprudence carries an important practical lesson for employers.

 

The drafting of a disciplinary code is not a mere administrative exercise. It determines, in significant respects, the architecture of the disciplinary relationship between the employer and its employees. Employers who wish to retain the power to review, vary or substitute a disciplinary outcome should say so expressly in their disciplinary codes.

 

Conversely, where a disciplinary code provides that the decision of the chairperson is “final”, the employer may find itself bound by that decision, even where it considers the decision to be manifestly wrong, unduly lenient or otherwise unacceptable.

 

An employer should therefore carefully consider whether it intends the disciplinary hearing chairperson to have the final say or whether it wishes to retain a defined power of review.

 

8. Conclusion

 

The lesson from Nkuna, read together with the earlier South African authorities, is that an employer should not assume that because it employs the employee, it necessarily retains the power to overturn the      decision of the person it appointed to chair a disciplinary hearing.

 

The starting point must always be the governing disciplinary code. Where the code confers a final decision-making power upon the chairperson, the employer may be precluded from substituting that decision merely because it disagrees with it.

 

Where, however, the disciplinary code expressly reserves a power of review or substitution to the employer, the position may be materially different—provided, of course, that the power is exercised within the confines of the code, the contract of employment and the requirements of procedural fairness.

 

The practical takeaway for employers is therefore simple: if the intention is to retain the power to issue the final sanction, the disciplinary code should say so expressly. Employers should be cautious about declaring the chairperson’s decision “final” if they    intend to reserve to themselves a subsequent power to review or substitute that decision.

 

Ultimately, the question is not simply whether an employer is unhappy with a disciplinary outcome. The more fundamental question is whether the employer has reserved to itself the legal power to do something about it

 

Should you require further elucidation on the subject you may contact the writer.