Dismissing employees fairly is tricky, particularly in South Africa due employment being such a huge problem. More specifically, the lack of employment as the rate sits at 29.0%, the highest it has been in nearly 20 years. We wrote an article recently debating whether labour law is pushing employers to hire independent contractors but that is another story altogether. This article runs through the following topics on dismissing employees, and tries to make it simple to understand:
- What does Dismissal Mean?
- What is Correct, Fair, and Lawful Dismissal?
- When is Dismissal of an Employee Fair?
- Automatically Unfair Dismissals
- 4 other reasons to claim unfair dismissal in front of the CCMA
What does Dismissal Mean?
Dismissal is defined by business dictionary as the “termination of the contract of employment of an employee by his or her employer in a correct, fair, and lawful manner.”
What is Correct, Fair, and Lawful Dismissal?
In South Africa, this can be done in one of three ways; namely:
- Give the worker notice: This is where the employer gives the employee a fixed period of notice before they must leave (a week or more). They will be paid for the hours they work and any leave due.
- Give the worker notice pay: This is where the worker leaves immediately but is paid out for the equivalent of the notice period (ie. A weeks pay or more plus leave pay etc).
- Retrench the worker: The employer must pay the worker severance pay of a minimum of 1 weeks pay for every year the worker has been at the company plus all leave pay due or other benefits. This is notice pay.
When is Dismissal of an Employee Fair?
‘Fairness’ is determined in two ways, as set out in the LRA Code of Good Practice for Dismissals:
- Substantive fairness: in short, was it ‘fair’ to dismiss the employee for his/her actions based on the circumstances. Put yourself in the employee’s shoes. Substantive fairness can be for three reasons:
- Misconduct: Employee has done something seriously wrong
- Incapacity: Employee cannot perform the job due to disability or otherwise
- Retrenchment: Employer is cutting staff numbers due to a restructuring of company or work
- Procedural fairness: in short, did the employer follow the necessary procedures prior to dismissal of the employee
To read more about the nuances of Fair Dismissal please read The South African Labour Guide article on this matter
Automatically Unfair Dismissals
If the employer dismisses the employee for one of the following reasons it is automatically deemed unfair:
- Exercising any right given to the employees as laid out in the LRA (Labour Relations Act)
- Participating in lawful union activities
- Participating in a lawful strike
- Refusal to do the work of someone on a strike
- Any matter related to an employee’s pregnancy
- Refusal to accept a change in working conditions
- Reasons due to arbitrary discrimination (apart from retirement age & inherent job requirements)
- A reason related to the transfer of an employee, following a company merger
- A reason related to an employee disclosing information in terms of the “Disclosing Information Act”
4 Other Reasons to Claim Unfair Dismissal in Front of the CCMA
- A woman who has not been accepted back into her job after maternity leave
- A contractor who has had their contract suddenly cancelled or renewed on less favourable terms
- The employer has altered the work environment in such a way that it is intolerable causing the employee to resign
- The employer has transferred the contract to another employer on conditions that are less favourable causing the employee to terminate his contract
The purpose of this article is meant to summarise the issue of fair dismissal in a South African context. But law is always fraught with exceptions and nuances. The most complete advice will come from a labour lawyer who will have expert insight into the Labour Relations Act. Otherwise The South African Labour Guide is a plethora of information on labour law so we highly recommend reading their articles.