Dismissal for incapacity

Guidelines for determining the fairness of a dismissal as well as the procedure to be followed in implementing a dismissal.

Source: Law Society of South Africa
1.          INTRODUCTION
Where an employee is not performing, or is not able to perform, his/her work according to appropriate or expected work standards the possibility of the employee being dismissed for incapacity arises. These types of dismissals are also known as “no fault” dismissals because the dismissal generally arises from circumstances for which the employee is not to blame. Where there is an element of culpability in the form of intention, or wilful negligence, the incident in question should probably be treated as a disciplinary offence. The Code of Good Practice in Chapter 8 of the Labour Relations Act 1995 (LRA), distinguishes between incapacity in the form of poor work performance and incapacity as a result of ill health or injury. In both cases the Code sets out guidelines for determining the fairness of a dismissal as well as the procedure to be followed in implementing a dismissal.
A situation of poor work performance arises where an employee does not meet the performance standards or level of competence required by an employer. The poor work performance is as a result of the employee not having the necessary skills or qualities to perform the tasks expected of him/her effectively.
2.1.                   Substantive fairness
There are two aspects of fairness in dealing with incapacity for poor work performance. Firstly, the employee should have failed to meet a performance standard (substantive fairness). Secondly, the employer should have followed a fair procedure in processing an incident of incapacity (procedural fairness).
2.1.1.                        First step: Is there poor work performance?
In establishing whether or not there is poor work performance the following questions need to be asked:
·         Did the employee fail to meet a performance standard in the workplace? If yes,
·         Was the employee aware, or could he/she reasonably have been expected to have been aware of the required standard?                  If yes,
·         Was the employee given a fair opportunity to meet the required standard?
If your answer to the above three questions is “yes”, you are likely to be dealing with a case of incapacity and will proceed to the next part of the inquiry.
2.1.2.                        Second step: Is dismissal the appropriate sanction for not meeting the required standard?
Once it has been established that an employee does not have the necessary capacity to perform his/her work efficiently, the employer is obliged to consider remedies short of dismissal to address the incapacity. Suitable alternative measures may include adapting the job description of the employee, or finding alternative employment for the employee which is more suited to his/her ability or temperament. It would be acceptable for an employer to adjust the employee’s salary to accommodate any change to his/her job description, should this be necessary.
The LRA does not impose a duty on an employer to create work for an incompetent employee. However, in keeping with the principle that incapacity arises through not fault of the employee, and that dismissal is a drastic act of finality for an employee, it does acknowledge that dismissal should be implemented as a last resort.
2.1.3.                        Employer’s duties
In dealing with poor work performance in the workplace, an employer should comply with the following guidelines set out in the Code:
·         An employer should ensure that his/her staff members are aware of required performance standards. Regular, formal work evaluations, performance appraisals or assessments would ensure not only that an employee is made aware of the standards expected of him/her, but it would also provide an employer with an objective framework against which to measure an employee’s performance.
·         An employer should investigate cases of poor work performance and establish the reasons for the poor performance.
·         Where it is required, an employer should provide employees with the necessary evaluation, instruction, training, guidance or counselling to render satisfactory performance. In evaluating an employee’s performance, or in the course of counselling an employee, an employer must ensure that the employee understands that he/she will be dismissed should his/her performance not improve.
·         After taking the necessary steps to assist an employee, an employee, an employer should allow the employee reasonable time within which to improve his/her performance (in the case of non-probationary employees)..
2.2.                   Procedural fairness
Once it has been established that an employee has failed to meet a required performance standard in the workplace, the employer has taken the necessary remedial action to mitigate as far as possible the causes of the incapacity, and after a reasonable time period the employee has not shown sufficient progress, certain procedural steps need to be followed before an employer can fairly dismiss an employee for incapacity. the primary procedural requirement is that an employee is given an opportunity to respond to the allegation of incapacity and make representations on possible alternatives to dismissal.
2.2.1.                        The hearing
An employer must give an employee an opportunity to state a case in defence to the allegation of incapacity. This will generally take the form of a hearing. The aim of the hearing is to allow an employee to make representations in response to the allegation. In most cases the hearing will take the form of a discussion between an employer and employee over the causes for the incapacity, the steps taken to try and remedy the poor performance, and the sanction which the employer intends to implement. It is to be distinguished from a disciplinary hearing in which an employee responds to a charge of misconduct, present evidence to rebut the charge and is ultimately found innocent or guilty of the charge.
The usual requirements for a fair hearing are:
·         That the employee is informed about what the employer intends to do about his/her alleged incapacity;
·         That the employee is given a reasonable notice to prepare a response;
·         That the employee is allowed to be represented in the hearing by a co-employee or trade union representative.
2.3.                   Probationary employees
A probationary employee is a newly hired employee whose formal appointment to a particular position will only be finalised once he/she has satisfactorily completed a probationary period in that position. The purpose of this probationary period is to ensure that the employee is suitable for the position before finalising his/her appointment.
The general rule is that probationary employee are as entitled as permanent employees to protection against unfair dismissal. In other words, there has to be fair reason fir dismissing a probationary employee and fair procedures should be followed in effecting the dismissal.
The Code provides that any person making a decision about the fairness of a dismissal of an employee for poor work performance during or on expiring of the probationary period, ought to accept reasons for dismissal that may be less compelling than would be the case in dismissals effected after the completion of the probationary period.
For more guidelines relating to probationary employees, see Item 8 of the Code of Good Practice in Chapter 8 of the LRA.
2.4.                   Incompatibility
The guidelines for incapacity as a result of poor work performance will also apply in cases where an employee is not suited to his/her work because of his/her disposition or character. This occurs in situations where an employee does not fit in with his/her work environment and relates poorly to his/her colleagues or clients – in other words where an employee is incompatible with his/her work environment and, as a result creates an unhappy or hostile working environment.
2.4.1.                        Substantive and procedural fairness
In order for there to be a fair reason for a dismissal based on incompatibility, a valid situation of incompatibility must exist. In order to establish whether such a situation exists, an employer must
·         Investigate the circumstances giving rise to the incompatibility;
·         Advise the employee what conduct causes the disharmony;
·         Clarify who has been upset by his/her conduct; and
·         Suggest remedial action to remove the incompatibility;
·         Warn the employee that unless the situation improves he/she may well be dismissed; and
·         Allow the employee an opportunity to consider the allegations and improve the situation.
Fair procedure requires that an employee who is alleged to be incompatible is given an opportunity to state his/her case and make representations on what measures can be taken to avoid dismissal. In practice, the substantive and procedural requirements will be closely connected, as the employer’s investigation into the matter will, of necessity, involve some sort of “hearing” or discussion.
2.4.2.                        Employer’s duty
An employer is required to take steps to ensure that the framework or structure for healthy and constructive working relationships is maintained. Most often once-off situations of conflict are processed through a grievance procedure. A formal grievance procedure can ensure that personality clashes are directed through formal procedures, and that the emotion of such clashes is neutralised by setting objective and reasonable rules of behaviour.
It cannot be said that an employee who lodges a grievance, or is the subject of a grievance, is necessarily incompatible. Nor can it be said that an employee who reacts to an intolerable work environment created by an employer, or to the unreasonable or unlawful demands of an employer, is incompatible. Incompatibility describes a more fundamental and substantial inability of an employee to “get on” with his/her colleagues, rather than once-off conflict.
Dismissal of an employee who is not able to perform his/her functions due to ill health or injury will be fair, provided that there is a fair reason for the dismissal (substantive fairness) and fair procedures are followed in implementing the dismissal.
3.1.                   Substantive fairness
Any person determining whether a dismissal arising from ill health or injury was unfair must consider:
·         Whether or not the employee is able to perform the work for which he/she has been employed; and
·         If he/she is not able to perform the work for which he/she has been employed,
(i)           the extent to which the employee is able to perform at least some work;
(ii)          the extent to which the employee’s work circumstances might be adapted to accommodate the injury/disability. Where it is not possible to adapt the employee’s work environment, consideration must be given to the extent to which the employee’s job description can be adapted;
(iii)         the availability of suitable alternative work.
The degree of incapacity if relevant to the fairness of any dismissal. The Code distinguishes between temporary and permanent incapacity.
3.1.1.                        Temporary incapacity
The general rule is that it is inappropriate to dismiss an employee who is temporarily incapacitated. There are two exceptions to this general rule: the first exception is where, the temporary nature of the incapacity notwithstanding, the employee is likely to be absent for a time that is unreasonably long in the circumstances; and the second exception is where the employee is periodically and persistently away from work for short intervals. In the latter two instances dismissal may be justified.
What amounts to “unreasonably long in the circumstances” depends on the nature of the work which the employee performs, the size of the enterprise, the nature of the injury, the period of the absence and the possibility of securing a temporary replacement for the ill or injured employee. An unreasonably long absence may be treated as a permanent incapacity.
3.1.2.                        Permanent incapacity
The employer should investigate to what extent he/she is able to secure alternative employment for the employee, or adapt the duties or work environment of the employee to accommodate his/her disability.
3.1.3.                        Cause of the incapacity
Different causes of incapacity may require different kinds of remedial actin short of dismissal. For example, where incapacity is due to alcoholism or drug abuse, counselling and rehabilitation may be the appropriate alternatives for an employer to consider.
Where an employee has been injured at work, or is incapacitated by a work related illness, the employer has a stricter duty to accommodate the employee’s illness.
3.2.                   Procedural fairness
The substantive and procedural aspects of a “no-fault” dismissal are closely connected. The first requirement is to establish whether an employee’s incapacity is temporary or permanent, and to consider alternatives to dismissal.
The second requirement is to give an employee an opportunity to state a case in response to the employer’s investigation and recommendations. In doing so, he/she may be represented by a trade union representative or co-employee.
3.3.                   Employer’s duties
·         Investigate the extent and cause of the injury or incapacity.
·         Establish the likely length of the employee’s absence from work (in order to determine whether it will be “unreasonably long”).
·         Investigate whether the employee’s work environment can reasonably be adapted to accommodate the incapacity.
·         Provide assistance to enable the employee to perform his/her duties, or part thereof, where it is reasonable and possible to do so.
·         If necessary, accommodate the employee in alternative suitable work, even if it means that the employee’s status and remuneration is altered accordingly. In order to determine, however, whether the alternative work offered to the employee is “suitable”, regard must be had to the employee’s current ability, skills or qualifications and previous status. It would, for example, not necessarily be regarded as “suitable” to offer the job of tea maker to an employee who was formerly employed in a high status position and who suffered a nervous breakdown as a result of work-related stress.
An employer’s duties are prescribed within the context of what is financially reasonable and possible for the employer in the circumstances, after an assessment of what is required to accommodate the employee has been made. An employer is, however, required to investigate all alternatives short of dismissal.
3.4.                   Overlap between misconduct and incapacity
Incapacity dismissals are regarded as “no fault” dismissals because there is generally no intention on the part of an employee to contravene a behavioural standard in the workplace. Where an employee is perfectly able to perform in accordance with the required performance standard, but fails to do so for a reason unrelated to capacity, it may be more appropriate to treat the incident as one of misconduct.
In terms of the LRA an employer has the burden of proving the fairness of a dismissal. If he/she relies on misconduct he/she is required to prove that substantive grounds for misconduct existed. Failure to discharge this onus renders the dismissal unfair.
Where an employee thinks that his/her dismissal is substantively and/or procedurally unfair, he/she is entitled to challenge the dismissal by referring the dispute in writing to the Commission for Conciliation, Mediation and Arbitration (CCMA) within 30 days of the dismissal. The CCMA will attempt to resolve the dispute through conciliation.
If the CCMA certifies that the dispute remains unresolved, or if 30 days have lapsed since the referral of the dispute without it being resolved, the employee may refer the dispute to the CCMA for arbitration.
5.          FLOWCHART
The flowchart on the next page, may be used as a general guideline and checklist for the handling of incapacity in the workplace.
6.          SOURCES
1.              The Code of Good Practice: Dismissal, Schedule 8, Labour Relations Act, No. 66 of 1995.
2.              A Practical Guide To Unfair Dismissal Law In South Africa by Rossouw and Conradie, Butterworths 1999.
3.              Workplace Law by John Grogan, 7th Edition 2003, Juta Law.


Normally no fault of employee
e.g. -Incompetence – lack of skill or knowledge -Incompatibility –carelessness – Inaccuracies – incomplete work – poor social skills – Failure to comply with reasonable standards
e.g. – Intermittent illness – physical incapacity – long term illness – alcohol or drug addiction – serious or contagious disease – injury – mental illness – continuous or intermittent absenteeism due to illness.
Whether there was any material breach of the required work standards; if so consider –
Whether the employee was aware or could reasonably be aware, of the required work standards
The fairness and legitimacy of the required work standards
The degree of sub-standard performance
The opportunity given to meet the standards
Factors to consider before deciding to terminate
·         Prospects for future improvement
·         Training
·         Demotion or transfer
A probationer must be given sufficient instructions or counselling
If a probationer fails to meet the requirements – he may be dismissed without a formal enquiry
Procedure for a full time employee
·         Appropriate instructions
·         Warnings
·         Investigations to establish reasons
·         Establish steps to achieve standards
·         Right of representation in any pre-dismissal process
Whether or not the employee is capable of performing the work for which he or she was employed, and if not –
·         The extent to which he or she is able to perform that work
·         The extent to which the employee’s duties may be adapted
·         The availability of any suitable alternative work
Conduct an investigation to establish the extent of the incapacity and the prognosis
Investigation of alternatives to dismissal if the employee is unable to perform or will be absent for a reasonably long period
Relevant factors to be considered
·         The nature of the job
·         The period of absence and seriousness of the illness
·         The possibility of securing a temporary replacement
·         The employee’s right to be heard and represented
Incapacity or poor work performance identified and investigated
Review of standards
Identify sub-standard work performance vs. standards and measurement criteria
Identify reasons for poor work performance
Agree action plan and short term objectives
Provide assistance and if necessary, training and mentoring programme
Set review dates to monitor progress
Further counselling and formal warning if poor work performance continues
Convene enquiry if poor performance continues – review counselling process and future prospects
If no prospects of improvement – consider alternatives e.g. transfer, demotion
Termination if no suitable alternatives exists.


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