Whether you’re an employee or an employer going through disciplinary action or dismissal, the process is unpleasant for everyone involved. At the end of the day, some relationships just don’t work out, as Remchannel’s Salary and Wage Survey released in May 2022 showed. 

When an employer-employee relationship does reach that point, it’s important to make sure that the process is fair and respectful and remains professional. It’s also important to follow the correct procedure in accordance with South Africa’s three main labour laws – the Basic Conditions of Employment Act, the Labour Relations Act and the Employment Equity Act – so that there’s no follow-up legal action down the line.

When can you dismiss an employee?

The Labour Relations Act 66 of 1995 recognises the following three reasons as grounds for fair dismissal:

1. Misconduct
Company guidelines should clearly outline what constitutes misconduct. These guidelines normally take the form of a workplace code of conduct or disciplinary code.

Without such a code, it will be impossible to prove that an employee had broken a workplace rule. In addition, the employee had to have been aware of the rule and the rule has to be lawful and reasonable.

Gross misconduct such as theft, violence and fraud could result in immediate dismissal, but a lesser offence may be disciplined with a warning, a series of warnings or a disciplinary hearing. In the case of lesser offences, for instance bullying, unexplained absences or arriving at work while under the influence of alcohol or drugs, dismissal may therefore be the last recourse. An employee who is dismissed is entitled to notice pay where applicable, a salary up to the last day worked, plus outstanding leave pay. 

2. Redundancy or retrenchment
During the Covid-19 pandemic, many SMEs had the unpleasant task of making certain positions redundant or retrenching staff to save costs and keep the business afloat.

Redundancy generally means doing away with a certain job. This can be the result of mechanisation or restructuring so that there are fewer positions and fewer employees are therefore needed.

Retrenchment is usually caused by financial hardship. If the business has lost a major client or the economy is going through a protracted downturn, it may become necessary to retrench workers to reduce its wage bill.

In both instances, you must be able to show that there is a valid reason for the dismissal and the process must be fair. The procedure must be clearly communicated from the outset and must include a robust consultation to reach an agreement between you, as the employer, and the employee.

Where to get free labour advice: the Commission for Conciliation, Mediation and Arbitration (CCMA) and Business Unity South Africa (Busa) offer free advice, guidelines and downloadable templates and forms at smelaboursupport.org.za

3. Incapacity (includes ill health, poor work performance and incompatibility)
An employee’s capability refers to their job skills, aptitude and state of health. All issues regarding someone’s performance have to be addressed with supportive steps before considering dismissal. For instance, ask the employee whether they need additional training or support.

If all attempts to rectify the situation fail, you will have fair grounds for dismissal based on the worker’s inability to do the work they were employed to do. When ill health or disability is involved, you will have to tread carefully so that your actions aren’t misconstrued as discrimination.

Other important considerations are:

Notice period: The Basic Conditions of Employment Act 75 of 1997 sets out minimum notice periods based on duration of employment. For example:

• One week, if the employee has been employed for six months or less;
• Two weeks, if the employee has been employed for more than six months but not more than one year;
• Four weeks, if the employee has been employed for one year or more.

These minimum periods may be increased by agreement in the employee’s contract of employment.

Union representation: If an employee belongs to a trade union, they are entitled to have a union representative or another employee to represent and support them during an enquiry. This is imperative during a redundancy or retrenchment consultation.

CCMA: If an employee believes they have been unfairly dismissed, they may refer their dispute to the CCMA for arbitration. If their case is successful, the employee could be reinstated and awarded a back-dated salary for up to 12 months.

Two legal documents all employers must have displayed in the workplace

• A summary of the Basic Conditions of Employment Act that sets out employees’ rights. It must be in the prescribed form and in the official language(s) spoken by your employees.
• A summary of the Employment Equity Act.

This article serves as a guideline only. Consult an HR practitioner for help with labour matters in your business.

Read the latest issue of Nine Yards, Old Mutual Corporate’s magazine for small-business owners, for more practical tips and business guidelines.