Poor performance does not automatically merit dismissal

by Ivan Israelstam | Feb 10, 2020 | Jobs

BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].

If employees receive their pay they are obliged by law to do their jobs properly. Although the law allows employers, within reason, to decide what the proper standards of performance are, the employer will, if taken to the CCMA, be required to prove that:

• The employee knew what the required performance standard was
• The standard was realistically achievable
• The employee was given sufficient opportunity to achieve the standard
• It was the employee’s fault that he/she failed to achieve the standard.

We look at each of these four requirements:

1. DID THE EMPLOYEE KNOW WHAT THE PERFORMANCE STANDARD WAS?

   
   It would be unfair to fire an employee for failure to attain a target if the employer had, for example, failed to inform the employee that he/she was required to make 10 sales per month, reach 2 million rand turnover per year, make 40 appointments per month, build 25 houses per year, pack 100 boxes per month or make 3 widgets per hour.

2. WAS THE STANDARD ACHIEVABLE:

   
   For example, if other employees have been able to type letters without making mistakes the employee who keeps making errors despite having been counseled could be disciplined and possibly dismissed depending on the circumstances. However, the employer who is unable to prove the above would be in trouble at the CCMA.

   In the case of White vs Medpro Pharmaceutica (2000, 10 BALR 1182) the employee failed to meet her targets in nine out of ten months. The CCMA nevertheless found her dismissal to be unfair because the employer had set targets that were not achievable in the CCMA’s view.

3. HAS THE EMPLOYEE BEEN GIVEN SUFFICIENT OPPORTUNITY TO ACHIEVE THE STANDARD?

   
   The CCMA will have a problem with the employer where, for example, the employee was appointed on a 6 month probationary basis and is fired because his/her data capture work was not up to standard. The decision to impose a 6 month probation period suggests that the new employee will need more than 2 weeks to get up to speed.

4. WAS IT THE EMPLOYEE’S FAULT THAT THE PERFORMANCE STANDARD WAS NOT MET?

   
   Dismissal will probably be adjudged to be unfair if the reason for the poor performance was that:

• the employer had failed to provide the employee with manufacturing materials
• equipment was faulty
• required training had not been given
• the employer’s product was not in demand or
• some other reason beyond the employee’s control.

In UPSWU obo Mogodi vs Ikageng Cleaning Services (2007, 10 BALR 959) the employee was dismissed for poor work performance. However, the charges against the employee were very vague and brought in order to make a scapegoat of the employee. Therefore the employee was unable to prepare a proper defense and the employer failed to convince the arbitrator of her guilt. The employer was ordered to pay the employee 12 months’ remuneration in compensation.

Instead of fabricating charges and blaming the wrong employee employers need to:

• Investigate properly so as to identify where exactly the problem lies
• Set clearly achievable performance targets
• Adjust targets when changed circumstances dictate this
• Give employees a real chance to achieve the desired performance level
• Remove all obstructions to the achievement of the standards.

Employers should not dismiss under-performers without having attended to the above requirements and without having followed proper procedure. Where the employer is at all unsure as to whether it is within its rights to dismiss a poor performer it should first get advice from a reputable labour law expert.

To observe our experts debating hot labour law topics please click the Labour Law Debate item in the menu at Labour Law Management Consulting.

Beware cancelling concluded employment contracts

by Ivan Israelstam | Feb 3, 2020 | Jobs

BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].

The courts have found that the employee is protected by labour law from the moment the employment contract is concluded even if the employee has not yet started work; and even if the contract has only been orally agreed.

According to section 213 of the LRA an employee is:

1. “any person, excluding an independent contractor, who works for another person or for the state and who receives, or is entitled to receive, any remuneration; and
2. any other person who in any manner assists in carrying out or conducting the business of an employer…”

This definition seems strongly implies that the employer’s legal obligations begin on the day that the employee physically begins work. However, this is not necessarily so. For example, in the case of Wyeth SA (Pty) Ltd vs Manqele (People Dynamics, September 2003 page 39). Manqele was offered a position by the employer as a sales rep. The parties concluded a written contract of employment in terms of which he was to commence work on 1 April.

Prior to Manqele beginning work, he was advised that the employer was no longer prepared to employ him. In terms of the contract of employment, Manqele had been entitled to a company vehicle. The employer believed that Manqele had made a misrepresentation as to the status of the car he had chosen, and on this basis took the view that there was no contract, as the parties had not reached agreement as to the condition of the motor vehicle stipulated in the letter of appointment.

Manqele took the matter to the CCMA where the arbitrator ruled that Manqele had become an employee the moment he accepted Wyeth’s offer of employment. Wyeth took the arbitrator on review at the Labour Court on the grounds that the arbitrator had arrived at an “unjustifiable conclusion in ruling on the definition of an employee”.

That is, Wyeth argued in the Labour Court that Manqele did not become an employee merely because of the employment contract. This argument is supported by an earlier Labour Court finding in the case of Whitehead vs Woolworths (Pty) Ltd (1999 20 ILJ 2133). In that case the Court found, according to the report, that a person who is party to a contract of employment but who has not yet commenced employment is not an employee for the purposes of the LRA.

However, despite the Woolworths case finding the Court, in the Manqele case found that, as a party to a valid and binding contract of employment, Manqele was an employee for the purposes of the LRA. The employer later took the matter further to the Labour Appeal Court (In Wyeth SA (Pty) Ltd vs Manqele & others 2005, 6 BLLR 523) but lost yet again. The Court upheld the earlier decisions by the CCMA and Labour Court that Manqele had achieved legal employee status the moment his employment contract was signed.

This decision poses a number of concerns for employers.

• Firstly, the fact that two different benches of Labour Appeal Court judges (Woolworths on the one hand and Wyeth on the other) made two such diametrically opposed decisions on a matter as fundamental as this one creates major uncertainty as regards the law.
• Secondly, employers are now clueless as to whether they are or are not entitled to cancel employment contracts prior to commencement of work.
• Thirdly, where the parties have agreed in principle that the employee will get the job it is now not clear whether a disagreement on the terms of the employment does or does not delay the legal validity of the contract of employment.

In the light of these dangers employers should:

• Avoid entering into employment agreements until all the terms and conditions have been dealt with thoroughly
• Ensure that, before offering anybody a job, there are no obstacles to allowing the candidate to take up the position
• Make it clear that the discussion of the terms and conditions of a contract in no way constitutes an offer of employment.
• Never employ, contract with or cancel the employment contract of any person without involving a labour law expert experienced in dealing with these tricky issues.

To observe our experts debating hot labour law topics please click the Labour Law Debate item in the menu at Labour Law Management Consulting.

Potential retrenchees entitled to representation

by Ivan Israelstam | Jan 27, 2020 | Jobs

BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].

When an employer contemplates retrenching employees it must have a good reason for going through with such an idea. Reasons for retrenchment that are not acceptable include the employer’s personal dislike of the employee, a desire to replace the employee with a family member, the employee’s misconduct, poor performance, population group, state of pregnancy or trade union affiliation. Acceptable reasons for retrenchment may, depending on circumstances, include financial problems of the employer, lack of work, technological changes or restructuring of the business.

In addition to requiring a good reason for retrenching, the law also requires the employer to consult with the potential retrenches or with their representatives before deciding to retrench. The primary purpose of such consultations is to give the parties the opportunity to find ways of avoiding the contemplated retrenchments. Another important function of the consultation process is to enable the employees and their representatives to to check whether the reasons for retrenchment given by the employer are genuine and valid. This should prevent employers who want, for example, to get rid of an undesirable employee, from using financial problems as a false pretext for retrenchment.

Section 189(1) of the Labour Relations Act (LRA) gives potential retrenchees the right to be represented in such retrenchment consultations. This is because lay employees are often out of their depth in terms of understanding retrenchment law, of understanding their rights, of picking up underhand tactics of employers and of effective consultation and negotiation skills.
Despite the fact that the law gives potential retrenches the right to such representation employers often refuse to allow the employees to bring external representatives to the consultation meetings. This can happen for a variety of reasons including:

• The employer is aware that its reason for wanting to retrench is not legally acceptable. The employer is therefore nervous that the representative will be able to detect the its impure motives
• The need to retrench is extremely urgent as the employer’s business is in immediate danger of going insolvent. The employer may then be concerned that the involvement of employee representatives could cause the process to be dragged out for too long and result in the demise of the business.
• The employer may be concerned that the employee representative may be able to identify alternatives to retrenchment that the employer would rather not implement.
• The employer may not be aware that the employees have the right to be represented.

However, whatever the employer’s motive for trying to prevent employee representation, this tactic is likely to land the employer in hot water. This is because, if the employer breaches the provisions of the LRA allowing such representation, the courts or CCMA will punish the employer. Section 189(1) provides that potential employees are entitled to be represented by their workplace forum or trade union. Where the affected employees are not members of such organisations they are entitled to be represented by representatives nominated by the employees for purposes of retrenchment consultations.

Many employers do allow trade union representation at retrenchment consultations but few allow non-unionised employees to bring lawyers, consultants or other external representatives. The most common reason given for this is that the matter is an internal and private one and that therefore only internal representatives should be allowed. However, section 189(1) of the LRA does not confine such representation to internal parties. On the contrary, the section allows external representation in the form of trade union officials. So why should non-unionised employees be barred from bringing external representatives? This issue is a contentious one with many employers still intent on barring external representation. In the light of the above this is a risky approach.

In the case of Workers Labour Consultants obo Petros Khoza & others vs Zero Appliances cc (1999, 11 BLLR 1225) the retrenched employees took the employer to Labour Court on a number of grounds. Included in their grounds was the employer’s refusal to allow their external labour consultant to represent them at retrenchment consultations. The Court found this to be unfair and ordered the employer to pay each employee the equivalent of 12 months remuneration in compensation.

As the law appears to be clear in allowing employees external representation employers should comply with the law. They should then deal with their concerns of being outmanoeuvred by such employee representatives by hiring their own labour law expert to represent the employer.

To observe our experts debating hot labour law topics please click the Labour Law Debate item in the menu at Labour Law Management Consulting.

Faulty suspensions can hang employers

by Ivan Israelstam | Jan 6, 2020 | Jobs

BY Ivan Israelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on 011 888 7944 or 082 852 2973 or on e-mail address: [email protected].

Employers regularly suspend employees from duty. This is done in a variety of circumstances for numerous reasons that may include:

1. One form of suspension is a temporary lay-off of employees due to operational circumstances. For example, an employer may find itself with little or no work for its employees but may be unable to afford to pay its employees indefinitely without revenue coming in. The employer may, in such circumstances, give the employees a section 189 notification of possible retrenchment. Then, during the retrenchment consultations, either party may suggest temporary lay offs as an alternative to retrenchment. This might be implemented where the employees agree to the lay offs and there is some hope of more work and revenue being acquired in the future. In such circumstances the employees would not be paid but would still be employees of the employer.
2. Employers must be careful not to hire new employees in place of employees who have been laid off as this would indicate that there had been no good reason for the lay offs and the employer could well be forced to pay the employees for the lay off period. Where there is a large number of workers or where the lay off period is a long one this payment could come to an extremely high amount.
3. The employer’s intention behind a suspension may be to make the employee’s working circumstances so uncomfortable that he/she resigns. This motive is both illegitimate and dangerous. Employees sometimes resign on being suspended and charge the employer at CCMA with constructive dismissal. However, the employee will not easily succeed with such a charge because such an employee is obliged to go through the disciplinary process rather than resign. Should the employee claim at arbitration that the suspension was a sham on the employer’s part the employer must be given the opportunity to show that it had good reason to suspend the employee and that there was some basis for the suspicion of misconduct.
4. The employer may need to investigate serious allegations made against the employee. Where the employee is in a position of official or unofficial power the suspension may be necessary in order to ensure that her/his presence at the workplace will not interfere with the investigation. This is a legitimate reason for suspension but the employee must be on full pay during the suspension period. The employer must be sure not to breach a contractual right of the employee otherwise a civil suit could result. For example, where the employment contract or another contract provides that the employer must provide the employee with training and the suspension materially interferes with such training this could constitute a breach of contract.
5. The employer may have a need to avert the danger of the employee repeating the alleged offence. For example, if the employee is suspected of assaulting a colleague, a suspension may be merited to avert the possibility of a repeat assault. Again, the employee must be on full pay during the suspension period and the danger in question must be real.
6. Punishment of the employee by the employer. Here, the employee is normally suspended without pay. However, such suspensions are often illegitimate. This is because:
   • Cutting an employee’s pay may breach the provisions of the Basic Conditions of Employment Act (BCEA)
   • The employer may have no fair reason for punishing the employee and withholding his/her pay. Such suspensions are too often implemented while the employer is in a fit of rage.

The dangers for the employer are that the employee could challenge the fairness of the suspension itself or could take the eviction as a dismissal and take the employer to CCMA or bargaining council on this basis.

Suspension without pay may, in certain circumstances be legitimate. This might be, for example, where the employee already has a final warning for the same type of offence but the employer does not necessarily wish to dismiss the employee. The employer may then give the employee a choice of dismissal or an agreed suspension without pay for a limited period (preferably not more than two weeks).

In the case of Mabitsela vs SAPS (2004, 8 BALR 969) the employee, a policeman, was suspended without pay pending a charge of murder. The police regulations do allow for such suspensions to be without pay. However, Mabitsela claimed at the bargaining council that his suspension was unfair because he had been on unpaid suspension for five months. The arbitrator found that the suspension itself was fair but that it had been unfair to implement the suspension without pay.

This case shows that, even where regulations allow employers to suspend employees without pay this may still be found to be unfair under the circumstances. If a suspected murderer can win such a case it would be even easier for employees who have committed lesser offences to win their cases.

The issue of when suspensions are fair and appropriate is not clear cut and employers are warned not to implement suspensions until they have obtained advice from a reputable labour law expert.

To observe our experts debating hot labour law topics please click the Labour Law Debate item in the menu at Labour Law Management Consulting.