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The distinction between performance and conduct
Extract from the Workinfo.com Course – Basic HR for Line Managers
The Labour Relations Act recognises
three grounds upon which a contract of employment may be terminated
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The conduct (usually the
misconduct) of an employee;
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The inability or incapacity of an
employee to do the job;
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The operational requirements of
the employer.
The Act further requires that an
employer must have
The Act sets different procedural
requirements for the different grounds for dismissal. It is
nevertheless important to point out that the grounds for dismissal
are not absolute and may not be easy to classify. Thus, an employee
who is absent from work for a prolonged period of time may be
dismissed on the grounds of misconduct if the absence is wilful or
contrary to instructions. Where the absence is due to illness,
dismissal may be justified on the basis of the incapacity of the
employee because of the operational requirements of the business, in
that the needs of the business requires that the job be done by a
person who is not absent from work on a regular basis. Indeed, it
can be argued that the ultimate ground for justifying all dismissals
is the operational requirements of the business. The reason why an
employee is dismissed for misconduct or the operational requirements
of the business is not so much that the employee has contravened the
disciplinary rule or cannot do the job, but rather that it is
contrary to the interests of the employer, that the employment
relationship continue.
Misconduct
The most common ground on which
employers seek to justify dismissal is that of the alleged
misconduct of the employee. In this instance the employee is
disciplined for conduct contravening a disciplinary rule imposed by
the employer or for committing a material breach of the contract.
Numerous decisions exist where it has been found that employees were
fairly dismissed, for a wide range of reasons such as insolence,
insubordination, theft and other forms of dishonesty, assault,
intimidation, threatening behaviour, intoxication and breaches of
the duty to act in good faith. In determining whether a dismissal
was fair, the courts and the arbitrators have considered a wide
variety of factors as relevant, for example, the nature of the
employer's conduct, the type of job performed, the consistency of
the employer's actions, the nature of the employer's business, the
employee's length of service and his disciplinary record, the
provisions of the employer's disciplinary code, the reasonableness
of the code and common law principles relating to the contract of
employment.
Underlying most of the decisions is
an acceptance of certain important principles which imbue the
jurisprudence developed by the Industrial Court and the Labour
Court. There is an acceptance of the principle that the employer
must act consistently in the application of discipline. It is also
accepted that the employee must have knowledge of the disciplinary
rules and sanctions applicable in the workplace, and that these
rules must be reasonable or fair, and that a fair procedure must be
followed prior to dismissal. The principles, framed in the form of
questions are the following:
-
Was a rule regulating conduct in the workplace, or of relevance
to the workplace, contravened?
-
Is the rule or reasonable or valid rule?
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Did the employee know of a rule or could he reasonably be
expected to know of it?
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Is or was the rule consistently applied by the employer?
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Was dismissal the appropriate sanction for the contravention of
the rule?
Incapacity
Incapacity, or as it is sometimes
termed, incapability, assumes one of two forms.
The first is where the employee is
incapable of doing the job for which he was employed because of some
lack of skill, knowledge, ability, or efficiency which is necessary
to meet the standards required by the employer. Dismissals in these
circumstances are referred to as dismissals for poor work
performance. The second form is assumed where the employee is
incapable of doing the job on account of illness or injury.
Incapacity is distinguished from
misconduct by the requirement that, in the latter case, some notion
of culpability on the part of the employee be established.
Incapacity dismissals involve behaviour or conduct which is not
intentional or which is not negligent. In this sense they are 'no
fault' dismissals.
Similarly, dismissals for incapacity
can be distinguished from dismissals for operational requirements.
While both are 'no fault' dismissals and it is entirely logical that
the operational requirements of the business are prejudiced by the
continued employment of incompetent or seriously ill employees, the
notion of incapacity is not one which is related to any need on the
part of the employer to restructure the business or to reorganise
work or the patterns of work in response to fluctuating market
conditions. Dismissal for operational requirements are effected by
reason of some external factor relating to the operation of the
employer's undertaking which results in the loss of employment,
rather than any inherent inability on the part of the employee to do
the job.
Operational Requirements
Dismissal due to the operational
requirements of the employer is more explicitly linked to the needs
of the business. The relationship between the employer and employee
has been described as one which is 'mercantile to the core'. The
employer's right to promote its own interest in a competitive market
is a value both accepted and encouraged by the free enterprise
system. The law regulating dismissal extends recognition to that
value by regarding a dismissal on account of the operational
requirements of the business as legitimate. Clearly, the most
common example of a fair dismissal for this reason is that where an
employee has been dismissed because she or he has become redundant
as a result of factors such as a reorganisation or restructuring of
the business, or a downturn of the economic cycle. The courts have
accepted that the retrenchment of workers on this ground will be
fair. They have stated on numerous occasions, provided that the
economic or policy decisions underlying or leading to redundancy or
retrenchment are taken on bona fide grounds, and is not a result of
victimisation, such as an attempt to victimise union members, it
will not judge the merits of the economic or policy decision. While
the meaning of 'operational requirements' remains somewhat
imprecise, it may be argued that it broadly incorporates reasons for
termination of employment for economic, technological, structural or
similar reasons.
Technological reasons refer to the
introduction of new technology which affects work relationships by
either making existing jobs redundant or by requiring employees to
adapt to the new technology, even where this may necessitate a
change in their terms and conditions of employment. Structural
reasons, similarly, will incorporate a termination of employment in
circumstances where posts become redundant consequent on the
restructuring of the enterprise.
'Economic reasons' would appear to
mean reasons relating to the financial well-being of the
enterprise. While reasons of this nature may, and often will no
doubt be limited to technological or structural changes to the
business which have as there consequence the redundancy of the
employees, this is not always the case. Demands may be placed on
the business which require changes to the terms and conditions of
employment of the employees in order to ensure the continued
viability of the business, or its increased profitability.
Employees may be unable or unwilling to meet these demands. What
arises is the inevitable conflict between the consensual nature of
the contract of employment and the demands placed on employers, in a
competitive environment, to ensure maximum efficiency.
Other reasons of substantial form
which might justify termination on the basis of the employer's
operational requirements might include dismissals at the behest of
third parties, dismissals for incompatibility and dismissals
occasioned by a breakdown in trust under the head of operational
requirements.
There is often confusion between
poor work performance and misconduct. This confusion is usually due
to the fact that the end result of an employee performing below
standard and an employee contravening disciplinary rules and
standards may well be the same - the employee loses his job! It is
imperative that the two are separated because they belong to
different categories, relate to different issues and require
different handling.
1. Work Performance (Incapacity)
Work performance is about how the
employee fulfils his or her job requirements. The level of
performance is determined by an employee's knowledge, skills,
behaviours, qualifications, abilities. An employee who under
performs as a result of his/her lack of knowledge, skills,
behaviours, abilities, qualifications etc cannot be said to be
"guilty" of non performance. Any termination arising from non
performance is always a no-fault dismissal, unlike a situation where
the employee does not perform because he/she intentionally does not
perform or does so negligently. Such situations would be treated as
misconduct.
2. Ill-health (Incapacity)
Incapacity arising from ill-health or
disablement, mental or physical illnesses.
3. Misconduct
Conduct is about how the employee
behaves or conducts himself at work or in relation to the rules of
the Company and primarily relates to the employee's value system
(honesty, integrity, subordination, self control etc).
Misconduct arises out of an
employee's failure to abide by or adhere to the standards of conduct
expected of him by his Manager. Misconduct usually implies some form
of culpability (guilt) on the part of the employee which may be
either due to the employee's negligence (culpa) or intent (dolus).
Selected Case Law
Distinction between Conduct and
Capacity
Strict classification of disciplinary offences not a rigid rule
The classification by the LRA of dismissals into those related
to the employee’s conduct, those relating to the employee’s
“capacity”, and those relating to the employer’s operational
requirements is sometimes a recipe for confusion. If employers
classify the reason for the dismissal incorrectly, they are
bound to follow the wrong procedure, and will most probably end
up having to compensate the dismissed employee even if there was
good reason for the dismissal.
In SA Broadcasting Corporation v CCMA & others (Labour Court
case no. JR466/03, dated 30 December 2005, unreported) the judge
acknowledged that the “notional line” between the various
circumstances that may give rise to a fair dismissal is not
always easy to draw. The same conduct may sometimes fall into
different categories.
The judge’s solution to cases of this sort was eminently
practical: forget about form and to ask whether there was a fair
reason for the dismissal and whether it was in accordance with a
fair procedure.
The different procedures suggested in the Code of Good Practice:
Dismissal for cases of misconduct, poor work performance or
incapacity are not cast in stone. Procedures are merely
suggested according to the obvious differences between
situations in which employees can be blamed for their lapses and
those in which they are not at fault. In cases of genuine
incapacity, there is no point in asking an employee to “state
his or her case”. But where employees straddle the line between
misconduct and poor work performance, all that matters is that
they are given an opportunity to do so.
Incompatibility
The CCMA set out in Stephen Christopher
Jardine v Tongaat Hulett Sugar LTD (KN12659-01) summarized some of
these factors, notably those factors to be taken into account to
establish dismissal for incompatibility. In so doing, this award
provides some guidance on factors to be considered when determining
incompatibility.
What, then must an employer do to establish that a dismissal is
justified on the basis of incompatibility? The following guidance is
given from cases and other authorities:
(1) The starting point is that an employer is entitled to insist
on reasonably harmonious interpersonal relationships within its
business (Erasmus v BB Bread Ltd (1987) 8 ILJ 537 (IC) 544C). Just
as the employer has an obligation not to destroy or damage the
relationship of confidence and trust, so too there is an implied
term that the employee must not act in a way which results in
disharmony and a breakdown in the relationship (Council of
Scientific & Industrial Research v Fijen [1996] 6 BLLR 685 (AD)
691).
(2) Incompatibility has been defined as 'the inability on the
part of an employee to work in harmony either within the "corporate
culture" of the business or with fellow employees'. (Le Roux and van
Niekerk in The South African Law of Unfair Dismissal (1994) 285-6)
(3) The essence of incompatibility has been seen to be an
irremediable breakdown in the working relationship caused through
personality differences, an inability to work together in harmony,
friction between employees, a discordance in approaches and so on (Lubke
v Protective Packaging (Pty) Ltd (1994) 15 ILJ 422 (IC)).
(4) Incompatibility can be a nebulous concept and the effect of
incompatibility often cannot be explained and articulated in clear
and objective terms (Subrumuny and Amalgamated Beverages Ltd (2000)
21 ILJ 2780 (Arb) 2789G-H).
(5) Assessing compatibility of managerial interaction necessarily
involves the exercise of a subjective judgment. For this reason
there must at least be some other evidence besides the opinion of
the employer to establish incompatibility. However the formulation
of compatibility must, for business and economic reasons, be left to
the employer to decide. "It is not for a Court to second guess these
decisions to decide upon the appropriate cause of action de nova.
Nevertheless an Adjudicator should at least ensure that the
employer's standards are attainable. Provided the employer acts in
good faith and has reasonable and supportable grounds for concluding
that the employment relationship cannot be continued, interference
is unwarranted. In determining whether a dismissal is unfair one
must be guided by the principal that reasonable people may differ as
to what is appropriate under the circumstances". (Subrumuny and
Amalgamated Beverages Ltd (2000) 21 ILJ 2780 (Arb) 2789G- 2790A)
(6) The golden rule is that prior to reaching a decision to
dismiss, an employer must make some "sensible, practical and genuine
efforts to effect an improvement in interpersonal relations when
dealing with a manager whose work is otherwise perfectly
satisfactory" (Lubke v Protective Packaging (Pty) Ltd (1994) 15 ILJ
422 (IC) 429D-E; Hapwood v Spanjaard Ltd [1996] 2 BLLR 187 (IC)
196-7). The offending employee has to be advised what conduct
allegedly causes disharmony, who is upset by the conduct, and what
remedial action is suggested to remove the cause of the disharmony.
A reasonable period must be allowed for the employee to make amends.
(7) Odd or eccentric behaviour of an employee, even if he or she
happens to be a manager or a senior executive, cannot, per se, give
rise to a ground for dismissal. Mild or harmless eccentricity should
of course be distinguished from extreme forms of unacceptable
behaviour. Dismissal may be appropriate only where the employee's
eccentric behaviour is of such a gross nature that it causes
consternation and disruption in the work-place, and then only after
he or she has been properly counselled or warned (Joslin v Olivetti
Systems & Networks Africa (Pty) Ltd (1993) 14 ILJ 227 (IC) 230 F-J).
(8) In order to justify dismissal, incompatibility must be
entirely or substantially attributable to the employee. (McDuling
and MIF (1998) 7. CCMA 8.3.1; Visagie & Andere v Prestige
Skoonmaakdienste (EDMS) Beperk (1995) 16 ILJ 421).
(9) The incompatibility that causes the breakdown in a working
relationship must be irremediable (Wright v St Mary's Hospital
(1992) 13 ILJ 987 (IC) 1004A). Dismissal is regarded as a last
resort (Hapwood v Spanjaard Ltd [1996] 2 BLLR 187 (IC) 198C-D).
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