In South Africa, dismissing an employee must be based on one of three fair reasons: misconduct, incapacity (arising from poor performance or ill health/injury), or operational requirements. Yet, the lines between these grounds can be blurred and employers may find it difficult to decide which ground is appropriate The distinction between the three reasons is important, given that the procedural fairness requirements differ for each reason.
This becomes even more challenging when the issue is collective” in nature. If the performance of an entire department is subpar, possibly due to the misconduct of all or some of the employees in the department, the principles of common purpose, team misconduct and derivative misconduct may come into play. However, these principles are not straightforward if misconduct cannot be established.
Employers may be able to justify the dismissals on the grounds of poor work performance. However, the provisions of the Code of Good Practice: Dismissals (“Code”) dealing with poor work performance appear to envisage a process involving an individual, and not necessarily groups of individuals. As some employers may know, the individual approach contained in the Code can often be time-consuming and laborious.
But could an employer use a “collective poor work performance” approach, or at least introduce some “collective elements” into the process that precedes possible dismissals?
In our view, there is potential to use this collective approach under certain circumstances. For example, this could involve a discussion of the department's performance and the reasons for the poor performance, offering training and counselling, and evaluating what aspects of employees' performance require improvement. Factors such as the nature of the employer's business and operations, the type of work performed by the employees, and whether the employees work in the same unit or at the same place, would determine the applicability of this approach.
However, South African courts have been suspicious of the principle of “collective misconduct suggesting that “collective poor work performance” would also face scrutiny. The courts may insist that the issue be dealt with on an individual basis.
Operational requirements
In appropriate circumstances, where employees' conduct or incapacity affect the employer's business operations to such an extent that the employer suffers loss or experiences a reduction in production, there may be room to treat the case as one based on operational requirements. The risks associated with this approach are illustrated in the decision in NEHAWU v Medicor (Pty) Ltd t/a Vergelegen Medi Clinic. In this case, the employer retrenched the employees of two of its departments on the basis of its operational requirements. Its stated reason was that it wanted to outsource the functions performed by the departments. The employees concerned challenged the fairness of their dismissals in the Labour Court. Upon consideration of the evidence, the court found that the true reason for the dismissals was the perceived poor work performance of the employees concerned and not the need to outsource these functions. It was therefore impermissible for the employer to justify the dismissals on the basis of its operational requirements. The court said the following –
“[62] The issue of fault does not generally arise in the context of retrenchments. Poor work performance cannot be relied upon as a legitimate reason to dismiss unless the applicable provisions in the LRA have been complied with; it cannot serve as a legitimate reason to dismiss for operational requirements in the absence of such compliance (Hedley v Papergraphics, supra). In such a case, the Code of Good Practice: Dismissals would require that the principles of natural justice and procedural fairness be adhered to. This would preclude an employer from dismissing an entire group of employees because it was impossible to identify the individuals responsible for the poor work performance. It would be impermissible to adopt an approach of collective guilt in such circumstances to justify such dismissals.
[63] In the instant case, even assuming that respondent was permitted to raise the issue of poor work performance, this would not justify the dismissals inasmuch as there was no compliance with the applicable requirements of the LRA for dismissal on that basis...” (own emphasis)
In this decision, the court found that the employer had concealed the true reason for the dismissal.
Nevertheless, an employer may be able to argue that it has tried to identify which employee or employees are responsible for the department's poor work performance, but that this has proved impossible. However, it still needs to rectify the problem and its only option is to dismiss all the employees on the basis of its operational requirements. In Chauke & Others v Lee Service Centre t/a Leeson Motors, the Labour Appeal Court was willing to accept that this argument could apply where it is clear that members of a department are guilty of misconduct but the identity of these employees cannot be established and the dismissal of the employees on the basis of operational requirements is necessary for the survival of the enterprise.
However, even if the employer could rely on its operational requirements, the consultation process that precedes the dismissals would likely be closely scrutinised by the Labour Court, especially concerning whether alternatives to dismissal could have been considered and adopted.
Conclusion
Employers facing collective poor work performance will have to tread carefully and explore the avenues of misconduct, poor performance and operational requirements. Employers should also consider whether the problem cannot be attributed to managers in the department and if so, take appropriate action against them, if necessary.
Reviewed by Peter le Roux, an Executive Consultant in ENS' Employment practice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.