Practice code dismissal: Failure to comply

2 Comments

1. 

   Graham Giles on April 4, 2012 at 10:05 pm

   Apart from a reason related to conduct, or based on operational requirements, employees can also challenge decisions by employers to dismiss them when the reason relates to capability or capacity in the form of injury or ill-health. Employers must follow the procedures set out in the Code of Good Practice: Dismissal (schedule 8 to the Labour Relations Act of 1995) and must prove that the reason to dismiss is lawful, valid and fair.

   It will be lawful if the employee receives reasonable notice of termination, or payment instead of notice. It will be valid if the reason genuinely relates to capability. With regard to fairness generally this is what the LAC stated in a recent judgment:

   “[7] I must mention that I have no doubt in my mind that permanent incapacity arising from ill-health or injury is recognised as a legitimate reason for terminating an employment relationship and thus an employer is not obliged to retain an employee who is permanently incapacitated if such employee’s working circumstances or duties cannot be adapted. A dismissal would, under such circumstances be fair, provided that it was predicated on a proper investigation into the extent of the incapacity, as well as a consideration of possible alternatives to dismissal.”

   Strangely our law does not provide for any right to severance pay in such circumstances. An employee only acquires such a right when the employer’s reason is based on operational requirements (see section 41 of the BCEA). If the ILO Convention of 1982 applied the employee would only be deprived of such a right if there was gross or serious misconduct on the part of the employee.

   On 13 February 2012 in the matter of IMATU obo Strydom v Witzenburg Municipality [2012] JOL 28586 (LAC) the Labour Appeal Court upheld an appeal against the judgment of the Labour Court. The Labour Court had upheld an award in which it was found that the employee had been fairly dismissed.

   In the final result this meant that the employee had been unfairly dismissed, both substantively and procedurally, and was awarded compensation equal to 12 months remuneration.

   Here are some extracts from the judgment of the LAC:

   Background

   “[3] The employee previously held the position of “Town Clerk” until December 2000. After a merger of several municipalities to form the first respondent, the employee occupied the position of Senior Administration Officer while acting as its Municipal Manager. Between May 2004 and January 2005, he was absent from the workplace due to illness for about eight months, during which period he was booked off sick on the grounds of a mental condition, viz, “major depression disorder with symptoms of post traumatic stress disorder”. Throughout this period of absence, the employer did not initiate any enquiry into the employee’s absence on account of ill-health. During January 2005 the employee applied for ill-health retirement benefits, a procedure commonly referred to as “medical boarding”, from his pension scheme, which was underwritten by Metropolitan Insurance Company (“Metropolitan”). Although the employer was aware of the employee’s application for medical boarding, it took no steps whatsoever for a further four months. It was only after the employer received Metropolitan’s notification of its repudiation of the employee’s claim that the employer directed two letters to the employee.

   The first letter enquired as to the employee’s intended date of resumption of duties in light of Metropolitan’s attitude to his claim. Curiously, on the same day, the employer directed another letter to the employee notifying him about an enquiry that was to be held into his incapacity. The enquiry was subsequently held during July 2005. The enquiry found that the employee was incapacitated from performing his functions with the employer on a permanent basis. The employee referred an unfair dismissal dispute to the second respondent and, in his referral for arbitration, alleged that the incapacity enquiry was incomplete as he had indicated that he wanted to obtain a report from another psychiatrist but was not permitted to do so. The relief sought by the employee was that of reinstatement, alternatively compensation.

   The commissioner found that the dismissal was procedurally and substantively fair. The employee unsuccessfully launched an application for a review of the award and now approaches this Court on appeal.”

   Issues in the appeal

   “[6] It is trite that the code of good practice is binding on commissioners . . . . My reading of items 10 and 11 gives me the impression that an incapacity enquiry is mainly aimed at assessing whether the employee is capable of performing his or her duties, be it in the position he or she occupied before the enquiry or in any suitable alternative position. I am of the view that the conclusion as to the employee’s capability or otherwise can only be reached once a proper assessment of the employee’s condition has been made. Importantly, if the assessment reveals that the employee is permanently incapacitated, the enquiry does not end there, the employer must then establish whether it cannot adapt the employee’s work circumstances so as to accommodate the incapacity, or adapt the employee’s duties, or provide him with alternative work if same is available.

   [7] I must mention that I have no doubt in my mind that permanent incapacity arising from ill-health or injury is recognised as a legitimate reason for terminating an employment relationship and thus an employer is not obliged to retain an employee who is permanently incapacitated if such employee’s working circumstances or duties cannot be adapted. A dismissal would, under such circumstances be fair, provided that it was predicated on a proper investigation into the extent of the incapacity, as well as a consideration of possible alternatives to dismissal.

   [8] The afore-mentioned obligations of the employer as set out in items 10 and 11 of Schedule 8 to the LRA are inter-related with similar obligations in the Employment Equity Act 55 of 1998. In their work Employment Equity Law 2001: 7-3 to 7-4, JL Pretorius et al submit that the duty of reasonable accommodation of employees by employers is not confined to the Employment Equity Act but “is a duty that is implied in the concept of unfair discrimination in a general sense” and “is one of the judicial and legislative tools for realising substantive equality”. I agree with this submission. Surely non-compliance with such an important constitutional imperative would not only impact on procedural fairness but on the substantive fairness of the dismissal as well?

   [9] I am of the view that the provisions of items 10 and 11 are inextricably tied and thus non-compliance therewith would render a dismissal both procedurally and substantively unfair. . . . “

   The arbitration

   [14] The arbitration was held from 15–26 June 2006. Documentary evidence was handed up and each party called one witness. It is settled law that an arbitration hearing is a hearing de novo. . . . .

   This principle was recently re-affirmed by the Constitutional Court in the case of Sidumo, supra, at paragraph [18] and also at paragraph [59] where the following was stated:

   ‘. . . This determination [whether a disputed dismissal was fair] and the assessment of fairness is not limited to what occurred in the disciplinary hearing.’”

   “[15] On the understanding of what an arbitration hearing entails, one would have expected that the commissioner would listen to evidence afresh and then make a determination as to the fairness or otherwise of the employee’s dismissal. Instead of doing so, the commissioner sought to confine himself only to the evidence that was available as at the time of the enquiry notwithstanding the fact that new evidence was adduced before him, both documentary and oral. The latter approach was wrong as it equated an arbitration hearing with an appeal hearing of some sort, quite far removed from the principle enunciated in the afore-mentioned cases.”

   “[29] I am satisfied that the decision of the commissioner was not one that a reasonable decision-maker could have reached under the circumstances and ought to have been set aside by the court a quo and substituted with an order that the dismissal of the employee was both substantively and procedurally unfair. The court a quo therefore erred in coming to the opposite conclusion. In view of this finding, which is dispositive of the matter, I do not deem it necessary to address myself to the aspect pertaining to the errors made by the court a quo in its summation of the evidence adduced at the arbitration hearing, which allegedly led it to make fundamental errors of fact.”

2. 

   Graham Giles on April 5, 2012 at 11:42 am

   Although it has not yet been possible to read the recent judgment in Abdullah v Kouga Municipality P01/12 it appears from reports that the Labour Court held that in terminating a fixed-term contract and relying solely on a breakdown of the relationship, but without identifying any valid reason for the breakdown attributable to the employee, the employer had acted unfairly and possibly unlawfully. An order for specific performance was denied but compensation was awarded.

   When the judgment becomes available it may be necessary to add to this brief comment.

   It is understood the decision will be reported in 2012] 5 BLLR.