Dismissal: Employer's Rights in South Africa

Dismissal in South Africa: What Rights Do Employers Have?

The dismissal process is a complex and sensitive issue affecting both employers and employees in South Africa. As the employment landscape changes, it’s essential for employers to understand their rights and responsibilities when dealing with termination.

South Africa’s labour laws protect employees from unfair dismissal while also recognising the legitimate rights of employers to manage their workforce efficiently. Knowing the legal framework surrounding dismissal and the rights of employers is crucial for creating a positive and productive work environment.

SB Lawyers is here to give you our expert rundown on all things dismissal and how best to navigate the various instances of it occurring in South Africa.

Dismissals: An Overview

In the times that we are living in and with the economic difficulties we are facing, the dismissal of employees is increasing, and for many, it is a reality. The question that arises most often is whether a dismissal is, in fact, fide (fair) or whether employers exploit the current economic climate to rid themselves of employees who, for some reason or another, have fallen into disfavour with an employer. An employer may, however, have valid reasons for dismissing an employee.

The Need For Legal Intervention

Employers often approach attorneys to assist with the dismissal process to ensure that a proper procedure is followed. A dismissal of an employee terminates the employment relationship, and the question that comes to mind is whether the dismissal was fair. What follows herein has a bearing on both the employee’s and employer’s rights in circumstances of dismissal.

The Labour Relations Act recognises basically three grounds on which employment may be terminated, namely, due to the (mis)conduct of the employee, the capacity of the employee and the operational requirement of the employer’s business, as referred to herein later.

The test to determine whether a dismissal is fair or unfair, notwithstanding the reason for the dismissal, is twofold. The first test to be applied is whether the employer followed a fair procedure in reaching the decision to dismiss. The second test is whether the dismissal of the employee was substantively fair – in other words, whether there were objective, fair reasons to dismiss.

Types of Dismissal in South Africa

In South Africa, dismissals can be categorised as fair and unfair. This section explores these dismissal types, providing employers with essential insights into the legal complexities of each.

Fair vs. Unfair Dismissals

When considering the reason for the dismissal and whether it was fair, consideration must be given to the grounds upon which the employment relationship can/may be terminated by the employer, as per the provisions of sections 187 and 188 of the Labour Relations Act.

Automatically Unfair Dismissals

The dismissal is automatically unfair if it falls within the categories listed in section 187(1) of the Labour Relations Act:

  • 1.1 The employee’s participation in a strike or a protected strike which complies with the Act;
  • 1.2 The employee refusing to work while participating in the strikes per 1.1
  • 1.3 The employee refusing to accept a demand in respect of any matter of mutual interest between the employee and the employer
  • 1.4 The Employee being pregnant, intended pregnancy or any reason related to pregnancy
  • 1.5 Based on unfair discrimination
  • 1.6 Transfer of business
  • 1.7 An employee making a protected disclosure. If an employee is dismissed for any of the reasons stated above, the dismissal may be found to be automatically unfair. An unfair automatic dismissal, possibly due to the severity of the categories above, is reserved for determination by the Labour Court and not the CCMA or a Bargaining Council.

Dismissal Based On Misconduct

Misconduct can take on many forms, but in essence, “misconduct” occurs when an employee commits a breach of a material term of their contract of employment or of a rule – which rule does not necessarily have to be stated in the employment contract, but came deemed/accepted as a rule that finds general application in the workplace.

No specific procedure is prescribed save for a fair disciplinary procedure to precede the dismissal of an employee. The rules of natural justice apply as to what constitutes a fair procedure, including but not limited to whether the employee was granted the opportunity to state their defence against the charge(s) brought against the employee.

In determining the substantive fairness, i.e. the reason for the dismissal, consideration must be given to article 7 of Schedule 8 of the Act, namely the Code of Good Practice: Dismissal, which sets out the questions to be considered in determining whether the dismissal based on misconduct, was fair. The provisions of Schedule 8 apply to both employers and employees in determining whether a dismissal is fair.

Dismissal Based On Incapacity

When the working capacity of an employee is in question, it may refer to a physical disability, rendering it impossible for the employee to render further work to the employer, or a mental/intellectual disability, which also may render it impossible for the employee to render additional services to the employer.

As in the case of misconduct, no specific procedure is set out in the Act. The Code of Good Practice Dismissal, however, sets different standards and different procedures to be followed by an employer dismissing an employee based on incapacity.

In circumstances of poor work performance, the employer must prove that:

  • 3.1 The employee has been/should have been/could reasonably have been aware of the required performance standard
  • 3.2 The employee was given a reasonable opportunity to meet the required standard
  • 3.3 The employee did not meet the required standard, and dismissal was the appropriate sanction. The issues of procedural and substantive fairness are intertwined. The procedure to be followed in cases of poor work performance is to inform an employee of their deficiencies and guide and assist the employee to improve so as to meet the required standard. It is important for an employer to evaluate the employee and give training and guidance/counselling.

Suppose an employee is dismissed under circumstances where it was alleged that the employee was incapacitated to render further services to the employer. Still, it is found that the employer failed its obligations towards the employee. In that case, it may render the dismissal unfair. Similarly, providing the employee with assistance, as referred to above, is necessary before embarking upon the dismissal of an employee. It may be easier for an employer to dismiss an employee when the facts clearly point towards a physical disability or a mental disease, rendering further employment impossible.

A more difficult situation arises where the employer alleges that the employee is incompatible with the work environment required for the effective operations of the employer. Incompatibility may have many forms, including but not limited to an employee who, due to a different upbringing and culture, does not fit within the general culture of the employer, causing disruption in the effective operations of the employer. Employers, therefore, need to tread carefully when dismissing an employee on grounds of incompatibility. On the other hand, employees must also tread carefully by not allowing their background, culture, upbringing, and personal beliefs to disrupt the employer’s operations.

Dismissals Due To Incapacity: Specific Cases

In circumstances of incapacity due to ill health or impairment, which arose during the scope of the employee’s employment, the following considerations apply:

  • (i)The employee should receive counselling
  • (ii)The medical condition of the employee and the consequences/impact it has on their duties must be discussed with the employee
  • (iii) Consideration must be given to the possibility of the employee exercising their duties vis-à-vis their injury/impairment
  • (iv) The prognosis of the employee
  • (v)Considering alternatives in the workplace and the possibility of adapting the working conditions
  • (vi)Providing the employee with an opportunity to contest the employer’s conclusion on further employment

Whatever the reason for an employer to allege an employee’s incapacity, it must be seen that a fair procedure in determining the alleged inability (which includes incompatibility) has been followed. Counselling also plays an important role and may find application for a period of time, depending on the circumstances.

Although both dismissals based on misconduct and dismissal based on incapacity generally require a fair procedure in determining the need for dismissal, no specific procedures are set out by the Act, save for a fair procedure to be followed in accordance with the provisions of the Code of Good Conduct: Dismissal and the interpretation thereof by the Labour Court judgments and CCMA/Bargaining Council ruling.

Dismissal Based On The Operational Requirements of The Employer

Dismissals based on operational requirements should be clearly distinguished from dismissals based on misconduct or incapacity. It can be stated that dismissals based on misconduct or incapacity occur when the reason for such originates from the conduct of the employee – whether in the form of misconduct or in the form of incapacity.

Dismissal, based on the operational requirements of an employer, occurs at the instance of the employer under circumstances where there may be no form of misconduct or incapacity. The Act permits dismissal due to the operational requirements of the employer. The term “operational requirements” is not defined or specific, and it may mean any operational requirement, such as changes in the economic climate, but also technical changes in the workplace. Technical changes in the workplace may include a change in the employer’s operations or even the necessity for substituting employees with technical equipment, which can render the same result as an employee.

A good example is the motor manufacturing industry, where manufacturing robots have, to a certain extent, already replaced the need for the human workforce. The process for dismissal based on operational requirements (which is normally referred to as “retrenchment”) is regulated by section 189 of the Act. Section 189 of the Act is more prescriptive and specific with regard to the procedure to be followed by an employer if compared to the general requirement of a fair procedure to be followed under circumstances of misconduct or incapacity.

Section 189 of the Act requires an employer to give a formal notice of the anticipated dismissal to the employee and for certain information to be contained in the notice. Section 189, furthermore, requires a bona fide and consensus-seeking consulting process before an employer may decide to dismiss an employee(s). For reasons unknown, there is a technical differentiation in the referral of disputes of unfair dismissal based on operational requirements. If only one employee has been affected by an operational requirement-dismissal, such an employee may refer the dispute for arbitration by the CCMA or a Bargaining Council. When or more employees were affected, the Labour Court must hear the dispute.

Employer Rights in the Dismissal Process

In South Africa, employer rights in the dismissal process are governed by the country’s labour laws, particularly the Labour Relations Act of 1995. Employers have the right to dismiss employees for valid reasons such as poor performance, misconduct, incapacity, or operational requirements. However, these rights are subject to specific procedural and substantive requirements outlined in the Labour Relations Act.

Employers are obligated to follow fair and transparent procedures when initiating dismissals, which include providing employees with written notice of the intended dismissal, conducting an investigation, allowing the employee to respond, and considering alternatives to dismissal.

Furthermore, employers have the right to dismiss employees for reasons related to the business’s operational needs, provided they follow the applicable legal consultation and notice requirements.

While employers possess the right to manage their workforce efficiently, South African labour laws emphasise the importance of balancing these rights with employees’ rights to fairness and due process in the event of dismissal.

Balancing Employer Rights with Employee Protections

The harmonious coexistence of employer rights and employee protections is paramount within the framework of South African labour laws.

While employers possess the autonomy to manage their businesses effectively, these rights are carefully balanced with safeguards to ensure fair treatment of employees. The Labour Relations Act underscores the significance of equitable workplace practices by mandating transparent procedures for dismissals, promotions, and other employment decisions.

This includes affording employees the right to respond to allegations, access to representation, and a structured process that considers alternatives to dismissal. Additionally, the Labour Relations Act upholds the right of employees to organise, bargain collectively, and participate in workplace matters, fostering a culture of shared decision-making.

By striking this equilibrium between employer autonomy and employee safeguards, South Africa’s labour laws aim to create a working environment that promotes social justice, economic stability, and respect for everyone involved. This aims to protect the rights and interests of both the employer and the employee, creating a fair balance between employer rights and employee protections.

A Trusted Opinion

As businesses adapt to changing economic landscapes, understanding the legal landscape surrounding dismissals in the South African context is crucial. The country’s labour laws recognise the rights of employers to manage their workforce effectively while simultaneously upholding the principles of fairness, due process, and employee representation.

Whilst there are various grounds for dismissal, each is subject to specific evaluation criteria and entails a range of processes to be followed. The ultimate goal is to ensure that dismissals are procedurally fair and substantively justifiable. This intricate balance safeguards the interests of both employers and employees, fostering a work environment that fosters productivity, collaboration, and social responsibility.

SB Lawyers can assist our clients with matters of this nature and so much more. If you are seeking legal advice and representation, contact us to get the process started today. To learn more about our services and the practice in general, explore our website.

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