The Labour Law for Managers Loose Leaf Service explains that the term derivative misconduct refers to the dismissal of a group of employees who won't help you (the employer) identify people who committed misconduct. When they don't help, they associate themselves with the perpetrators and violate the relationship of trust.
In terms of labour law, your employees have a duty to help you identify perpetrators of misconduct in the workplace. If they fail to do this, they break the trust relationship and you can dismiss them.
To justify your dismissal, you must prove on a balance of probabilities that:
Employees in your workplace committed the principal misconduct;
You're unable to identify the culprits;
Your employees either participated in or knew about the misconduct.
Despite an opportunity to do so, the group of employees failed or refused to help you identify perpetrators of the misconduct.
Once you prove all these factors on a balance of probabilities, the group of employees must show they didn't participate or know about the misconduct. If they can't, you can assume they either participated in the principal misconduct or were associated with it and you can dismiss based on the breach of the trust relationship.
It's that simple.
Now that you know what derivative misconduct is, implement discipline fairly and in line with the law.