Many employers fire poor performers prematurely while others wait too long before taking strong action. One key reason for unnecessary delays in firing bad performers is the employer’s fear of being taken to the CCMA and being forced to reinstate the employee and/or to pay big compensation amounts. Part of the solution to this nagging problem is for employers to understand on what basis the law judges dismissals for poor performance.

Item 9 of the Code of Good Practice: Dismissal in Schedule 8 of the Labour Relations Act (LRA) states that “Any person determining whether a dismissal for poor work performance is unfair should consider –

(a) whether or not the employee failed to meet a performance standard; and
(b) if the employee did not meet a required performance standard whether or not –

(i) the employee was aware, or could reasonably have been expected to be aware, of the required performance standard;
(ii) the employee was given a fair opportunity to meet the required performance standard; and
(iii) dismissal was an appropriate sanction for not meeting the required performance standard.”

Items 8(2) and 8(3) of the abovementioned code provide that:

“(2) …… an employee should not be dismissed for unsatisfactory performance unless the employer has-

(a) given the employee appropriate evaluation, instruction, guidance, training or counselling; and
(b) after a reasonable period of time for improvement, the employee continues to perform unsatisfactorily.

(3)     The procedure leading to dismissal should include an investigation to establish the reasons for the unsatisfactory performance and the employer should consider other ways, short of dismissal to remedy the matter.”

These guidelines make it clear that the employer does have the right to dismiss poor performers. However, this can only be acceptable if the employer can prove factually that it has, prior to the dismissal, complied with all the substantive and procedural requirements of the law. That is, the onus at the CCMA falls entirely on the employer to bring solid proof:

• that it followed the procedural guidelines quoted above; and also
• that, regardless of the procedure followed, the dismissal decision itself was appropriate under the circumstances.

In the case of White vs Medpro Pharmaceuticals (Pty) Ltd (2000, 10 BALR 1182) White, the employee was dismissed for consistently failing to meet her sales targets. The employer justified its dismissal decision by stating that achieving sales targets was a crucial requirement of the employee. Medpro also alleged that, had the employee made the targeted number of client calls, the sales targets would have been achieved. However, the employer brought no proof of its allegations and did not prove that its decision to dismiss was fair. The arbitrator held that the employer had the onus of proving that the performance standards set were applied in affair manner. As the employer failed to do so the arbitrator found the dismissal to be both procedurally and substantively unfair.

In Robinson vs Sun Couriers (2003, 1 BALR 97) the CCMA commissioner blamed the employer for the employee’s failure to meet the required sales targets and reinstated the unfairly dismissed employee. While the targets set may have been reasonable the arbitrator held that “It is not only the employee who is responsible for achieving the desired results.”

In Duff vs McGregor (Pty) Ltd (2004, 1 BALR 21) the arbitrator again blamed the employer for the employee’s poor sales performance because the employer could not prove that the targets set were appropriate and attainable. Again the dismissal for poor performance was found to be both substantively and procedurally unfair.

The above laws and findings make it crystal clear that every employer must:

• draw up attainable performance targets for each and every employee
• Induct every employee as to these targets
• Keep proof that the above has been done

The inability to set and enforce proper performance targets can be very costly for the employer. On the one hand, if the employee continually fails to perform properly because the employer has not taken corrective action then the employer’s sales or other targets will not be reached causing losses for the employer. On the other hand, if the employer does take corrective measures and employee is unfairly dismissed the business could be crippled by the cost of the reinstatement pay or compensation that the CCMA may force it to pay.

Employers therefore need to ensure that their managers undergo intensive training by a legal expert in the setting and enforcement of performance standards in the light of the extremely dangerous legal provisions waiting to pounce on unprepared employers.

To Book for our Durban seminar on 19 March 2015 on 'Avoiding Workplace Revolution' please contact Ronni on ronni@labourlawadvce.co.za or 0845217492.

Written by lvan lsraelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: ivan@labourlawadvice.co.za. Go to: www.labourlawadvice.co.za.

This article first appeared in The Star.