Code of Good Practice and Dismissals

CODE OF GOOD PRACTICE

DISMISSALS 

This code is not intended as a substitute for disciplinary codes and procedures where these are the subject of collective agreements.   The key principle is that employers and employees should treat one another with mutual respect. 

FAIR REASONS FOR DISMISSAL

A dismissal is unfair if it is not effected for a fair reason and in accordance with a fair procedure.   The Act recognises three grounds on which a termination of employment might be legitimate.   These are:-

1. The conduct of the employee;

2. The capacity of the employee;  and

3. The operational requirements of the employer’s business;

A dismissal is automatically unfair if the reason for the dismissal is one that amounts to an infringement of the fundamental rights of an employee, i.e. acts such as discrimination, intended or actual pregnancy, etc. 

In cases where dismissal is not automatically unfair the employer must show that the reason for dismissal is a reason related to the employee’s conduct or capacity, or is based on operational requirements.   If the employer fails to do that, or fails to prove that the dismissal was effected in accordance with fair procedure, the dismissal is unfair. 

DISCIPLINARY MEASURES SHORT OF DISMISSAL

Employers should adopt disciplinary rules to establish the standards of conduct by their employees. 

These rules should create certainty and consistency in the application of discipline.    This requires that standards of conduct are clear and made available to employees in a manner easily understood. 

Efforts should be made to correct employees’ behaviour through a system of graduated disciplinary measures such as counselling and warnings.   The employer has a discretion to decide on how many verbal warnings to issue before he initiates any formal disciplinary procedures. 

Generally, it is not appropriate to dismiss an employee for a first offence, except if the misconduct is serious and of such gravity that it makes the continued employment relationship intolerable. 

FAIR PROCEDURE

The employer must notify the employee in advance of the allegations against him, in a form and language that the employee understands.   Sufficient time must be given to prepare his defence.   The employee must be present at a formal enquiry/hearing.   He may be represented by a colleague, shop steward, or trade union representative and must be informed of his right to do so.   He must be allowed to call witnesses and if necessary the services of an interpreter may be utilised.   The employee may within 5 days appeal against any penalty imposed.

DISMISSAL AND INDUSTRIAL ACTION

Participation in an unprotected strike is misconduct, however, like any other misconduct, it does not always warrant dismissal.   The substantive fairness of the dismissal in these circumstances must be determined in light of the facts of the case. 

GUIDELINES IN CASES OF DISMISSAL FOR MISCONDUCT

Any person who is determining whether a dismissal for misconduct is unfair should consider:- 

1. Whether or not the employee contravened a rule or standard regulating conduct in, or of relevance to, the workplace;

2. If it was contravened, whether or not the rule or standard was reasonable or valid;

3. Whether the employee was aware, or should have been reasonably aware, of the rule or standard;

4. Whether the rule or standard has been consistently applied and dismissal is an appropriate sanction;

INCAPACITY : POOR WORK PERFORMANCE

A newly-hired employee may be placed on reasonable probation. 

Dismissal during probation should be preceded by an opportunity for the employee to state his case. 

After probation an employee should not be dismissed before proper evaluation, instruction, training, guidance and counselling and a reasonable period for improvement given. 

GUIDELINES IN CASES OF POOR WORK PERFORMANCE

In determining whether dismissal for poor work performance is unfair the following should be considered:- 

1. Did the employee fail to meet the performance standard?  If so,

2. Was the employee aware or should have been reasonably aware, of the required work standard?

3. Was the employee given a fair opportunity to meet the performance standard?

4. Whether dismissal was an appropriate sanction.

INCAPACITY : ILL-HEALTH OR INJURY

Incapacity on the grounds of ill-health or injury may be temporary or permanent. 

An employer should investigate the extent, and if the employee is likely to be absent for an unreasonably long time given the circumstances, investigate alternatives short of dismissal.   Any person determining whether a dismissal arising from ill-health or injury is unfair should consider:- 

1. Whether or not the employee is capable of performing the work;

2. If the employee is not capable –

   (a)      the extent to which he is unable to perform his duties;

   (b)      the extent to which his work circumstances might be adapted or to the extent the employee’s duties might be adapted;

3. The availability of suitable alternative work;

OPERATIONAL REQUIREMENTS 

1        The Labour Relations Act, 1995 (Act No.66 of 1995) (“the Act”) defines a dismissal based on the operational requirements of an employer as one that is based on the economic, technological, structural or similar needs of the employer.   It is difficult to define all the circumstances that might legitimately form the basis of a dismissal for this reason.   As a general rule, economic reasons are those that relate to the financial management of the enterprise.   Technological reasons refer to the introduction of new technology which affects work relationships either by making existing jobs redundant or by requiring employees to adapt to the new technology or a consequential restructuring of the workplace.   Structural reasons relate to the redundancy of posts consequent to a restructuring of the employer’s enterprise. 

2        Dismissals for operational requirements have been categorised as “no fault” dismissals.   In other words, it is not the employee who is responsible for the termination of employment.   Because retrenchment is a “no fault” dismissal and because of its human cost, the Labour Relations Act places particular obligations on an employer, most of which are directed toward ensuring that all possible alternatives to dismissal are explored and that the employees to be dismissed are treated fairly. 

3        The obligations placed on an employer are both procedural and substantive.   The purpose of consultation is to enable the parties, in the form of a joint problem-solving exercise, to strive for consensus if that is possible.   The matters on which consultation is necessary are listed in section 189(2).   This section requires the parties to attempt to reach consensus on, amongst other things, appropriate measures to avoid dismissals.   In order for this to be effective, the consultation process must commence as soon as a reduction of the workforce, through retrenchments or redundancies, is contemplated by the employer, so that possible alternatives can be explored.   The employer should in all good faith keep an open mind throughout and seriously consider proposals put forward. 

4        The Act also provides for the disclosure by the employer of information on matters relevant to the consultation.   Although the matters on which information for the purposes of consultation is required are specified in section 189(3), the list in that section is not a closed one.   If considerations other than those that are listed are relevant to the proposed dismissal or the development of alternative proposals, they should be disclosed to the consulting party.   In the event of a disagreement about what information is to be disclosed any party may refer the dispute to the CCMA in terms of section 16(6) of the Act. 

5        The period over which consultation should extend is not defined in the Act.   The circumstances surrounding the consultation process are relevant to a determination of a reasonable period.   Proper consultation will include:- 

(a)  The opportunity to meet and report back to employees;

(b)  The opportunity to meet with the employer;  and

(c)  The request, receipt and consideration of information.

6        The more urgent the need by the business to respond to the factors giving rise to any contemplated termination of employment, the more truncated the consultation process might be.   Urgency may not, however, be induced by the failure to commence the consultation process as soon as a reduction of the workforce was likely.   On the other hand, the parties who are entitled to be consulted must meet, as soon, and as frequently, as may be reasonably practicable during the consultation process.

7        If one or more employees are to be selected for dismissal from a number of employees, the Act requires that the criteria for their selection must be either agreed with the consulting parties or, if no criteria have been agreed, be fair and objective criteria. 

8        Criteria that infringe a fundamental right protected by the Act when they are applied, can never be fair.   These include selection on the basis of union membership or activity, pregnancy, or some other unfair discriminatory ground.   Criteria that are neutral on the face of it should be carefully examined to ensure that when they are applied, they do not have a discriminatory effect.   For example, to select only part-time workers for retrenchment might discriminate against women, since women are predominantly employed in part-time work. 

9        Selection criteria that are generally accepted to be fair include length of service, skills and qualifications.   Generally the test for fair and objective criteria will be satisfied by the use of the “last in, first out” (LIFO) principle.   There may be instances where the LIFO principle or other criteria need to be adapted.   The LIFO principle, for example, should not operate so as to undermine an agreed affirmative action program.   Exceptions may also include the retention of employees based on criteria mentioned above which are fundamental to the successful operation of the business.   These exceptions should, however, be treated with caution. 

10       Employees dismissed for reasons based on the employer’s operational requirements are entitled to severance pay of at least one week’s remuneration for each completed year of continuous service with the employer, unless the employer is exempted from the provisions of section 196.   This minimum requirement does not relieve an employer from attempting to reach consensus on severance pay during the period of consultation.   The right of the trade union, through collective bargaining, to seek an improvement on the statutory minimum severance pay is not limited or reduced in any way. 

11       If an employee either accepted or unreasonably refused to accept an offer of alternative employment, the employee’s right to severance pay is forfeited.   Reasonableness is determined by a consideration of the reasonableness of the offer of alternative employment and the reasonableness of the employee’s refusal.   In the first case, objective factors such as remuneration, status and job security are relevant.   In the second case, the employee’s personal circumstances play a greater role. 

12      (1)  Employees dismissed for reasons based on the employer’s operational requirements should be given preference if the employer again hires employees

with comparable qualifications, subject to: 

(a)     The employee, after having been asked by the employer, having expressed within a reasonable time from the date of dismissal a desire to be rehired.

(b)      A time limit on preferential rehiring.   The time limit must be reasonable and must be the subject of consultation. 

(2)     If the above conditions are met, the employer must take reasonable steps to inform the employee, including notification to the representative trade union, of the offer of re-employment.