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DISMISSAL OF SENIOR MANAGERS

[Monday, April 08, 2013 09:41:18]

Section 185(a) of the Labour Relations Act, 66 of 1995 (as amended) (“the LRA”) provides that every employee has the right not to be unfairly dismissed. Section 186(1)(a) defines dismissal inter alia as “an employer has terminated a contract of employment with or without notice”. Schedule 8 of the LRA requires an employer to adhere to two principles in dismissing an employee- procedural fairness and substantive fairness. The South African labour law has developed an extensive jurisprudence around these concepts. The law is constantly being redefined and developed to amend the legal landscape within which small business owners, managers and labour practitioners must apply the above principles. Sometimes however, the more the law changes, the more it stays the same.

Take the unreported Labour Court decision of Autozone v Pienaar N.O. and others [JR90/2011] In this case a regional manager of a national automotive replacement parts company was dismissed for failing to visit all of the branches under him on a regular basis. The frequency of the manager’s store visits came under scrutiny during a meeting with the national manager. This issue was discussed but not taken any further. The next day, just before the commencement of a meeting with the regions store managers, the manager was sent home and instructed to reply in writing to a letter in which his failure to visit the stores was addressed. The manager responded with a short explanation, in a letter to the national manager. Shortly thereafter, the manager was dismissed by way of a letter. No hearing was held.

The two principles referred to above, namely procedural and substantive fairness, was at issue at an arbitration after the manager referred an unfair dismissal dispute to the Motor Industry’s Bargaining Council. The company relied on the notion that senior managers need not be subjected to a hearing and on the principle enunciated in the case of Avril Elizabeth Home for the Mentally Handicapped v CCMA & others (2006) 27 ILJ 1644 (LC) which does not require an employer to embark on a formalistic hearing in order to provide the employee with an opportunity to be heard. The presiding arbitrator found the dismissal to be both substantively and procedurally unfair and ordered the company to pay the manager 6 months’ salary compensation. Not satisfied with the arbitration award, the company took the arbitrator on review in the Labour Court.

The Labour Court dismissed the review application on the following grounds:

1.         A fair procedure entails not only that an employee be afforded an opportunity to be informed of the charge against him but also that he be afforded an opportunity to be heard not only on the charge but also on mitigating factors;

2.         Referring to the case of JDG Trading (Pty)Ltd v Brunsdon (2000) 21 ILJ 501 (LAC), the Court found that the employer was not given notice of the contemplated action, i.e. dismissal and that the employee was therefore not afforded an opportunity to be properly heard before the decision to dismiss him was made.

3.         The employee was not afforded an opportunity to cross-examine any of the company’s witnesses before he was dismissed, because no disciplinary hearing was held. He was also not given an opportunity to present mitigating factors.

4.        The Court found that the dismissal of the manager in this case is as much for misconduct as it is for poor work performance. The Court found that the employer failed to show that the manager had contravened a rule as alleged.

5.         The Court further found that this was not a case where the employee could or should not have been afforded an opportunity to improve or rectify his performance.

Conclusion

An employer should not disregard the legal requirements of both procedural and substantive fairness before dismissing an employee. Even if an employer [whether a manager of a large company or the owner of a small business] is outraged at misconduct or poor performance of an employee [whether such employee is in a senior position or not], care should be taken to provide the employee with a proper opportunity to respond to the charges, to challenge the employer’s witnesses and to present mitigating factors, before a decision is taken to dismiss the employee. Although the law appears to have changed, it stays the same.

 

Rudi Kuhn-  labour law attorney, Pretoria

April 2013

 


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