Published:  2016-01-18 Views:  1644
Author:  WatchDog
Published in:  Suggestion/Aanbeveling
(Un)fair Dismissal For Small Business

(Un)Fair Dismissal for small Business

You may need to let go of an employee and you have heard stories about getting into a legal battle with the CCMA. So how do you go about doing things correctly? Legally there are ONLY two conditions for a dismissal; fair or unfair. The only qualifying considerations according to the Labour Act are that there are only three grounds to do so.

  1. Conduct of the employee
  2. Capacity of the employee (ability to do the job)
  3. Operational requirements of business (retrenchment)

Procedure is everything! And the most important issue to keep in mind is that even if you do have legal reasons for any of the three above; if you do not follow the procedure, you will end up at the CCMA. So though you had a valid cause to dismiss an employee but did not adhere to the manner it was handled then it will be deemed unfair and you lose.

Firstly, let’s look at what a dismissal actually is as it is obviously not the same as someone resigning voluntary. Every employee has the right not to be unfairly dismissed and the onus always rests on the Employer to prove that the procedure was followed correctly and the grounds were valid. If you fire an employee due to your own discrimination or because he/she is associated with a union; you lose. Incidences of bribes, corruption and unethical business dealings are taken very seriously and the interesting fact is that whistle-blowers are protected under the Labour Act; so if an employee reports on you regarding illegal business actions, it’s allowed.

As for the three (3) grounds of a fair dismissal;

Conduct of the employee

  1. a conflict of interest (to engage with a business that conflicts with the employer's business);

  2. gross dishonesty such as theft, fraud, or lying;

  3. damage to the employer's property;

  4. endangering the safety of other employees;

  5. the use of drugs or alcohol on duty;

  6. refusing to obey the employer's lawful instructions;

  7. racist language; and

  8. Participating in an unprotected strike.

  9. The fair reason for the dismissal:  there was a lawful rule or standard of conduct that existed at work, it was consistently applied by the employer, the employee was aware of the rule or conduct, and it was contravened by the employee.

  10. The fair procedure includes: the employer did an investigation into the misconduct, the employee was informed of the misconduct in a language s/he understood, the employee responded with assistance and sufficient time to prepare and defended the allegation, and on dismissal s/he was given reasons for the dismissal and was reminded of his/her rights in a dispute resolution procedure.

Incapacity (where an employee was incapable of doing the work for which s/he was employed)

  1. Poor Work Performance

  2. The fair reason for the dismissal: the employee was aware of performance standards, and failed to achieve these standards despite being given an opportunity to meet to them.

  3. The fair procedure includes: that the employee was given an opportunity to improve his/her poor work performance.

  4. There can be no dismissal if the employee was transferred to a less physically, intellectually or emotionally demanding position.

  5. Ill-health or Injury

  6. The fair reason for the dismissal: the employee was unable to perform the work due to ill-health or injury and the absence from work was unreasonably long.

  7. The fair procedure includes: that the employer investigated the disability, the employee's work circumstances could not be adapted to accommodate the disability, there was no other suitable work available, and a pre-termination hearing was given to the employee to defend his/her case.

Operational Requirements (retrenchment or redundancy)

  1. Dismissals for operational requirements are called "no fault" dismissals.

  2. The fair reason for the dismissal: will depend on the facts of each case. For example: due to a drop in demand for the company's services or products, the introduction of new technology, financial management, or reorganisation of the employer.

  3. The fair procedure includes: a written notice inviting employees to a consultation with a facilitator such as a representative from a trade union, negotiation on measures to avoid a dismissal, a written disclosure of all relevant information, allowing employees an opportunity to make a representation, a selection criteria to decide who gets dismissed, and severance pay.

    The Labour Law favours the employee so before you as the Employer take action against an employee; ensure you adhere to the following checklists:

    Disciplinary hearing;

    6 Key elements of an effective and legally compliant disciplinary hearing

  • Investigate and prepare your case thoroughly before the hearing.
  • Choose an unbiased and skilled chairperson.
  • Ensure the accused is given every chance to prepare and defend his case.
  • Base the outcome on facts.
  • Ensure the penalty is appropriate to the offence.
  • Record the hearing so you can prove you complied with the law.

5 Vital elements of substantive fairness

Warning: The dismissal should pass (and you must prove) all of the following tests to ensure substantive fairness:

  1. The accused employee did commit the misconduct.

  2. The employee knew or should've known that the conduct was an infringement of your rules.

  3. The rule or standard was valid or reasonable.

  4. The rule was consistently applied.

  5. The misconduct was serious enough to merit the harsh penalty of dismissal

4 Factors that determine fair retrenchment

  1. Whether you had a sufficient reason for the retrenchment

  2. Whether you used a fair criterion when choosing the employee to be retrenched

  3. Whether you consulted fully and in good faith with the employee or his trade union before making the retrenchment decision

  4. Whether you disclosed to the employee or union all the information to be used for purposes of consulting on retrenchment


  • RESIGNATION: a notice period is given by the employee to his/her employer:
  • one week's notice if the employee is employed for 6 months or less;
  • two weeks' notice if the employee is employed between 6 months to 12 months; and
  • four weeks' notice if the employee is employed for 12 months or more.
  • COMPENSATION: a payment of money to reduce the employee's loss.
  • REMUNERATION: payment such as a salary, medical aid or transport etc.
  • "NO FAULT" DISMISSALS: it is not the employee who is responsible for the termination of the employment. One or more employees may be selected from a group of employees for dismissal based on fair criteria such as length of service, skills and qualifications, or the LIFO principle (last in, first out).
  • SEVERANCE PAY: payment of money for dismissal on operational requirement


Legal Wise

Labour Law Handbook


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