Damelin (Pty) Ltd v Solidarity obo Parkinson (JA48/15) [2017] ZALAC 6 ; [2017] 7 BLLR 672; (2017) ILJ 872 (LAC)(10 January 2017) per Landman JA (Tlaletsi DJP and Coppin JA concurring)

The LAC disallowed the employer’s appeal from the review judgment of Bleazard AJ in the LC after granting the employer leave to appeal on 31/3/2015.

The LC set aside the award and reinstated the employee after finding that the employer had failed to prove a valid reason for dismissal.

Comment:

This matter again demonstrates the importance of separating the requirements of validity and fairness of a reason.  The senior manager was alleged to have failed to meet certain targets.  So what was the real reason and were the targets realistic?  Both the LC and the LAC found they were not.  So there was no valid reason and there was no need to consider fairness.  But if the employer had based the reason for dismissal on business needs (operational requirements) and embarked on a joint consensus-seeking process, the result may have been different.

LAC summary:

Dismissal for poor performances – employee dismissed for failing to meet stipulated target – court finding that period to meet target, after a warning, was too short or that target was incapable of being achieved.  Appeal dismissed with costs.

Excerpts from judgment

Introduction

[1]        Damelin (Pty) Ltd, the appellant or “Damelin”, appeals against a judgment of the Labour Court (Bleazard AJ) that reviewed and set aside an award made by Ms S Sithohle NO, a Commissioner acting under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA), the second and third respondents respectively, concerning Mr Steve W Parkinson (Parkinson) represented by Solidarity, the first respondent.  The appellant appeals with leave of the court a quo.

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Background

[3]        The appellant is a company carrying on business in the tertiary education sector.  It has several campuses throughout South Africa, including one at Boksburg.  Parkinson commenced employment as the general manager of the Boksburg campus, with effect from 3 January 2011.

[4]        Parkinson’s contract of employment specified in clause 4.3.3 that:

’The attainment of performance goals determined by the employer, from time to time shall be periodically evaluated by the employee’s supervisor, continued non-attainment of performance goals may result in the termination of employment.’

. . . . .

[16]      A disciplinary inquiry was convened for 9 May 2012.  Parkinson was charged with poor work performance relating to his failure to reach sales targets.  He was dismissed on 15 May 2012.

. . . . .

[24]      The commissioner considered the Code on Good Practice as regards Dismissal for poor work performance and found that Parkinson had been given more than a period of six months to improve his performance.  He had not communicated that his targets were not attainable.  Higher standards are expected of senior employees.  The letters were sufficient and did not need to be headed a formal warning.  Dismissal was the appropriate sanction.

[25]      Parkinson was dissatisfied with the award.  He applied to the court a quo to review and set aside the award.  The court a quo examined the appellant’s disciplinary procedure and code and inquired from Mr Nel, who appeared for the appellant in the court a quo, what the nature of its complaint vis-à-vis Parkinson was.  Mr Nel informed the court that the issue was one of misconduct and not poor performance.  The court considered that the appellant could not willy-nilly depart from the procedures specified in its code without notification.  The appellant’s letter of 25 January 2012 was ambiguous and was not a warning.  It was unreasonable for the commissioner to have reached this conclusion.  In any event, dismissal could only be considered as a fourth step.  The court a quo was of the opinion that the commissioner had allowed the appellant to ask leading questions of its witnesses in spite of objections to this approach.  The court a quo set aside the award and reinstated Parkinson.

Evaluation

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[27]      At the outset, it is necessary to state that this appeal must be decided on the characterisation of the dismissal as one for poor work performance and not as Mr Nel, who appeared for the appellant in the court a quo, was induced to concede in that court, that is was one of misconduct.

[28]      Secondly, Charles informed Parkinson on 1 February 2012 that he would be dismissed if he did not enrol the same number of first years by the end of that month as had been enrolled in 2011.  However, the evidence tendered at the arbitration by Damelin was focused on proving that Parkinson had not met a target of 420 first year enrolments.  The commissioner noted the reduced target in her award.  The basis of the dismissal, in view of the concession by Charles, can only be that Parkinson had continuously failed to meet a target of 168 first year enrolments.

[29]      Thirdly, the inquiry whether Parkinson was given a fair opportunity to meet the initial target and the reduced target depends to a great extent on whether the targets were fair ie reasonably achievable.

[30]      Mr Edy was asked by this Court whether the poor performance was related solely to not achieving the target or whether it implied that Parkinson had not put in the required effort to meet the reduced target.  Mr Edy replied that insufficient effort had been devoted and thus the target numbers eluded Mr Parkinson.  The Boksburg campus enrolled 161 first year students (ie 57 students less than in 2011).  A shortage in first-year students impacts adversely on the following years as there will be fewer roll-over students.

. . . . .

[35]      The fact that Charles reduced the target from 420 first year enrolments to 168 first year students is arguably an acceptance that the 420 target was completely unrealistic in the changed circumstances of the Boksburg campus.  But, as noted, Charles did not testify.

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[40]      In Palace Engineering (Pty) Ltd v Ngcobo and Others,  [2014] 6 BLLR 557 (2014) ILJ 1971 (LAC) it was said at para 24:

‘Although a senior employee is indeed expected to be able to assess whether he is performing according to standard and accordingly does not need the degree of regulation or training that lower skilled employees require in order to perform their functions, an employer is not absolved from providing such an employee with resources that are essential for the achievement of the required standard or set targets. . . . ’

[41]      Accepting that the letter of 25 January 2012 constituted a final warning, the period of some 27 days within which to achieve the reduced target set in that letter, given all that preceded it and taking into account that it was not achieved even with assistance afforded by Damelin head office goes to show that either the period was too short or that the target was incapable of being achieved.

[42]      In my view a reasonable commissioner would have found that Damelin had not acquitted the onus of showing that there was a fair reason to dismiss Parkinson and that dismissal was a fair sanction.