Zeda Car Leasing (Pty) Ltd t/a Avis Fleet v Van Dyk

Incompatibility or incapacity a valid and fair reason to dismiss but when employer contemplated dismissal based on operational requirements it was unfair not to follow a meaningful joint-consensus-seeking process as required by s 189 of the LRA and compensation was reduced from 10 to 7 months.

‘Incompatibility involves the inability on the part of an employee to work in harmony either within the corporate culture of the business or with fellow employees. There has been some difference of opinion in the past about whether incompatibility is an operational requirements or an incapacity issue. The prevailing view is that incompatibility is a species of incapacity because it impacts on work performance. If an employee is unable to maintain an appropriate standard of relationship with his or her peers, subordinates and superiors, as reasonably required by the employer, such failure or inability may constitute a substantively fair reason for dismissal. Procedural fairness in incompatibility cases requires the employer to inform the employee of the conduct allegedly causing the disharmony, to identify the relationship affected by it and to propose remedial action to remove the incompatibility. The employee should be given a reasonable opportunity to consider the allegations and proposed action, to reply thereto and if appropriate to remove the cause for disharmony. The employer must then establish whether the employee is responsible for or has contributed substantially to irresolvable disharmony to the extent that the relationship of trust and confidence can no longer be maintained.” [para 39]

Essence

Incompatibility or incapacity compared by LAC but as employer opted for dismissal it failed to engage meaningfully and was punished with a reduced compensation order.

Decision

(JA53/18) [2020] ZALAC 4 ; 2020] 6 BLLR 549 ; (2020) ILJ 1360 (11 February 2020)

Order:

The appeal against the judgment of Nkutha-Nkontwana J in the LC dated 25 January 2018 succeeds to the limited extent reflected in this order.
The Labour Court’s order is set aside and substituted as follows:
“1. The dismissal of the applicant was procedurally unfair.
2. The applicant is awarded compensation in the amount of R 932 321,73.
3. The respondent is ordered to pay the costs of the application.”
The appellant is ordered to pay the costs of the appeal.

Judges

Murphy AJA (Sutherland JA and Kathree-Setiloane AJA concurring)

Heard: 12 November 2019
Delivered: 11 February 2020

Related books

Darcy du Toit et al Labour Relations Law: A Comprehensive Guide 6ed 925 pages (LexisNexis 2015) at 074, 161, 483, 484, 526, 529, 532

Darcy du Toit et al Labour Law Through The Cases – loose-leaf service updated 6 monthly (LexisNexis 2019) LRA 189, 193, 194.

Van Niekerk and Smit (Managing editors) et al [email protected] 4ed 612 pages (LexisNexis 2018) at

Reasons

“Awards of compensation, like awards of damages in civil matters, are by their nature matters of estimation and discretion, and hence appellate courts should hesitate to interfere with such awards which are necessarily “somewhat rough and ready”. An appellate court should not simply substitute its own award for that of the trial court. However, an appellate court will interfere where there has been an irregularity or misdirection such as considering irrelevant facts or ignoring relevant ones; or where the decision was based on totally inadequate facts resulting in there being no sound or reasonable basis for the award. Where there is a substantial variation or a striking disparity between the award made by the trial court and the award that the appeal court considers ought to have been made on its own assessment, the award will be unreasonable and the appeal court is entitled and obliged to interfere.” [para 52]

Quotations from judgment

Note: Footnotes omitted and emphasis added

 

Court summary

“Operational requirements- procedural unfairness – employer must follow a fair procedure in dismissing employee for operational requirements – failure to do so exposes the employer to pay a penalty in the form of a solatium – the determination of the quantum of compensation requires the court to apply a discretion taking into account the employee’s length of service- the anxiety suffered by the employee as a result of the employer’s action and the extent of the deviation from the procedure. Labour Court finding that employer failed to agree to selection method, upheld- court nevertheless reducing amount of compensation to 7 months’ remuneration and to the extent that Labour Court failed to consider employer’s payment above the legally required amount –Appeal partially upheld but costs awarded to employee.”