The employer has the right to set reasonable requirements in terms of output and the standard of work required of the employee. If the employee fails to attain the standards set by the employer, the employer is entitled to terminate the contract.
Termination for this reason is generally known as dismissal for incapacity.
Dismissals for incapacity relate the inherent inability on the part of the employee to do the job for which he or she was hired. Dismissals for incapacity are divided into two classes. Into the first class fall those dismissals effected because the employee lacks the skill, knowledge or efficiency to meet the employer’s standards. These dismissals are classified as dismissals for poor work performance. Into the second class of incapacity dismissals fall those in which employees are unable to do their work because of illness or injury. As in the case of dismissals for misconduct, dismissals for poor work performance must be for a fair reason and effected in accordance with a fair procedure ie such dismissals must be procedurally and substantively fair.
• The employee should have been aware, or could reasonably have been aware, or could reasonably have been expected to be aware, of the required performance standard;
• The employee was given a reasonable opportunity to meet the required standard;
• Dismissal was an appropriate sanction for not meeting the required standard.
These are the elements for the requirement of substantive fairness.
Awareness of the performance standard
Whether employees were actually aware of a performance standard is a question of fact. However, the code accepts that dismissal for poor work performance may be justified if the employees should reasonably have been aware, of the required performance standard. Relevant considerations include the manner in which the performance standard was conveyed to employees, the nature of the employee’s work and position, and any specific warrantees made by the employee regarding his or her experience, skill and qualifications. A performance standard can be conveyed to employees either by means of general directives, or by ad hoc measures such as warnings and counselling if the employee’s performance becomes deficient. The more warnings an employee has had, and the more guidance that has been given, the less likely it will be that the employee will be able to deny the existence of the standard.
Reasonable opportunity to improve
If employees display shortcomings in performing their duties, fairness requires that those employees should not only be informed that their performance is deficient, and in which respects, but also that the employees should be given an opportunity to improve. The procedure for dismissals for poor work performance requires that the employee should be counselled, monitored and offered assistance before the contract is terminated. Generally, an employer cannot justifiably conclude that dismissal is necessary if the employee could conceivably have met the required standard within a reasonable period.
Dismissal must be an action of last resort. Dismissal is clearly unnecessary if, given a reasonable opportunity and reasonable assistance, the employee can meet the required standard. Nor will dismissal be necessary if the employee could have moved to another position, even if this entails a demotion. In the case of dismissals for poor work performance employers must prove that dismissal is necessary because employees are unable to perform their particular duties.
This procedure is designed essentially to inform poor work performers of their deficiencies and to give them an opportunity to improve with proper assistance and guidance. Although a distinction is drawn between probationary employees and others, the procedure required in respect of all employees is similar. After probation, an employee may not be dismissed for poor work performance unless the employer has:
• Given the employee appropriate evaluation, instruction, training, guidance or counselling;
• After a reasonable period of time for improvement, the employee continues to perform unsatisfactorily.
• The procedure leading to dismissal should include an investigation to establish the reasons for the unsatisfactory performance and the employer should consider other ways, short of dismissal, to remedy the matter; and
• In the process, the employee should have the right to be heard and to be assisted by a trade union representative or fellow employee.
In short, a fair procedure requires the employee to:
• Carefully appraise the employee’s work performance;
• Counsel and assist the employee before taking further action;
• Monitor the employee’s performance after counselling;
• Warn the employee that he or she might possibly be dismissed if the employee’s performance does not improve;
• Grant the employee a reasonable opportunity to rectify his or her deficiencies ; and
• Give the employee an opportunity to state his or her case before taking the final decision.
Each of these requirements is considered below.
A proper appraisal of the employee’s work performance is essential for purposes of proving that the employee failed to attain the required performance standard.
An appraisal serves an important function; not only does it give the employer the chance to assess the employee’s performance, but also to discuss the problems that may have been identified with the employee. The employee’s capability must be objectively assessed in relation to such factors as changes in production techniques, new technology and other factors that might be retarding the employee’s performance. Irrespective of how employees might react to allegations of incompetence, an onus rests on them to co-operate with the employer during the assessment phase.
Employees must be warned before action is taken against them for poor work performance. A warning in this context means a clear indication that the employee’s performance does not meet the standard required by the employer, and clear notice that henceforth the employee’s performance will be monitored.
However, the courts recognise that in certain circumstances warnings or, for that matter, counselling and other preliminaries for defective performance are unnecessary. These are:
• Where the incapacity manifests itself in gross incompetence or unsuitability;
• Where the poor performance results in serious consequences;
• Where the employee is incapable of changing or unwilling to change;
• Where the employee is a senior manager.
The justification for departing from the general principles in these cases is as follows. An act or omission involving gross incompetence or unsuitability crosses the line between incapacity and misconduct. Where the act or omission has serious consequences, the employer cannot reasonably be expected to risk the possibility of a repetition. Unwillingness on the part of employees to co-operate with the employer indicates that the employment relationship has been destroyed, and that no purpose would be served by giving employees further opportunities to reform. Seniority of status indicates that the employees concerned ought to have been capable of judging the employer’s standards for themselves.
Counselling and assistance
Counselling entails discussing the matter with employees with a view to alerting them to their deficiencies, hearing the employees’ explanations, and seeking mutually acceptable solutions to the problems that may have been identified. The purpose of counselling is to motivate the employee to improve, and to alert the employer to remedial steps that may be necessary. Counselling is not a one-way process; the employee should also participate and, if possible, suggest ways in which the problem can be resolved. The extent of assistance in the form of additional tools or support, training or guidance that might be necessary should emerge from the counselling session.
Reasonable opportunity to improve
How much time employees should be given to overcome shortcomings depends on the circumstances. Relevant factors include the nature of the job, the employee’s length of service, past performance, and the employer’s practice in this regard. The test for whether an employee has been given a reasonable opportunity to improve is objective.
A final warning in this context bears the same meaning and serves the same purpose as a final warning to alert the employee that one further lapse will result in dismissal. In the incapacity context, the final warning should indicate to employees that according to the latest assessment their performance is still lacking; it should also indicate in which respect performance is deficient, and inform the employee that a hearing will follow a further slip.
The hearing that forms the final stage of the incapacity procedure should take the same form as a hearing for a case of misconduct, even though it is strictly speaking not ‘disciplinary’ in nature. To signify the special nature of these proceedings, they are often termed ‘incapacity inquiries’. The purpose of these inquiries is to establish whether the employee is capable of attaining an acceptable standard of work. An employee attending an incapacity inquiry is also entitled to other procedural rights, such as the right to be represented, to cross – examine, to present argument, and to be heard impartially.
Consideration of alternatives
In cases involving poor work performance, the extent of attempts made by the employer to assist the employee is critical to evaluating whether dismissal is the appropriate solution. If the employer has attempted all reasonable possible alternatives, dismissal will be accepted as the only remaining option. The only further issue might then be whether the employer should retain the employee in service in a different position. However, it remains for the employer to demonstrate that the possibility of alternatives was at least considered, and that there were no suitable positions available.
General guidelines for dealing with employees who are unable to perform their work due to illness or injury.
1. Incapacity on the grounds of ill-health or injury may be temporary or permanent. If an employee is temporarily unable to work in these circumstances, the employer should investigate the extent of the incapacity or the injury. If the employee is likely to be absent for a time that is unreasonably long in the circumstances, the employer should investigate all the possible alternatives short of dismissal. When alternatives are considered, relevant factors might include the nature of the job, the period of absence, the seriousness of the illness or injury and the possibility of securing a temporary replacement for the ill or injured employee. In case of permanent incapacity, the employer should ascertain the possibility of securing alternative employment, or adapting the duties or work circumstances of the employee to accommodate the employee’s disability.
2. In the process of the investigation referred to in subsection (1) the employee should be allowed the opportunity to state a case in response to the allegation of incapacity and be assisted by a trade union representative or fellow employee.
3. The degree of incapacity is relevant to the fairness of any dismissal. The cause of the incapacity may also be relevant. In the case of certain kinds of incapacity, for example alcoholism or drug abuse, counseling and rehabilitation may be appropriate steps for an employer to consider.
4. Particular consideration should be given to employees who are injured at work or who are incapacitated by work related illness.
The following principles have emerged from South African case law involving dismissals for incapacity, arising out of illness or injury:
• The employer must ascertain whether the employee is capable of performing the work for which he or she was employed;
• If employees are unable to fully perform their normal duties, the extent of their incapacity, and its likely duration, must be established;
• The employer is then obliged to investigate whether the employee’s duties can be adapted to accommodate the disability;
• If employees cannot be placed in their former position, their employers must ascertain whether alternative work can be found for them, even if at reduced remuneration.
Only once these steps are taken, will dismissal of an injured or sick employee be deemed substantively fair.
The nature of the incapacity
The incapacity hearing must arise from ill health or injury.
Ascertaining whether the employee is capable of doing the job
The employer is required to determine the nature and severity of the employee’s incapacity and the employee’s prognosis. Management’s duty is to properly acquaint itself with the employee’s medical condition. Whatever the cause of the incapacity, the onus rests on the employer to prove that the employee is in fact incapacitated. Employers are entitle to request employees to undergo medical examinations, but cannot compel them to do so. Testing for HIV/AIDS, for example, is expressly forbidden except with the consent of the Labour Court. If employees refuse to undergo a medical examination, their employers must take their decision on the available evidence. Medical incapacity can also be proved by testing whether the employee is in fact capable of performing the tasks attached to his job.
The seriousness of the incapacity
How serious must employee’s illness or injury be before their employers can justifiably dismiss them? The code draws a distinction between temporary absences due to illness or injury and those that endure for a time that is ‘unreasonably long’ in the circumstances. Dismissal is in principle permissible in case of repeated absences, even if they are for medical reasons covered by medical certificates. However, in such cases employees must still be counselled and consulted. When an employee’s absence can be deemed ‘unreasonable long’ depends on the circumstances. These include the importance of the employee’s job, the length employee’s service, the ease with which the employee can be replaced, the financial capacity of the employer to make arrangements to replace the absent employee, the prospects of recovery, and the effect of the employee’s absence on other employees.
Alternative / adapted employment
Possible alternatives to dismissal include adapting employee’s current duties so that they are able to perform them in spite of their disabilities, providing employees with reasonable assistance and/or equipment to help them cope with those duties, or finding employees alternative work with which they can cope notwithstanding the disability. If the latter course is adopted, it is acceptable to reduce the employee’s remuneration to that normally attached to the alternative position.
When termination is fair
In summary, then, it will be fair to dismiss employees for incapacity if:
• The employees have been counselled, and their medical conditions and the problems arising from it have been discussed with them;
• The employees’ medical conditions make it impossible for the employees to perform their normal duties;
• The employees’ prognosis are poor;
• The employees have had a fair opportunity to contest the employer’s conclusion about their medical conditions and prognoses;
• The employees’ working conditions cannot be adapted, or alternative work is not available.
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