Our case law authority has, for some time, recognized that the pre-dismissal procedures required to be applied in cases of poor work performance dismissals for ordinary employees, do not apply to quite the same degree when dealing with senior managerial or executive dismissals for poor work performance.
Schedule 8 of the Labour Relations Act (Code of Good Practice: Dismissal), at section 9, provides “guidelines in cases of dismissal for poor work performance”. These guidelines apply to, for want of a better term, ordinary employees, and stipulate that when the fairness of a dismissal for poor work performance is being assessed, it should consider “(a) whether or not the employee failed to meet a performance standard, and (b) if the employee did not meet a required performance standard, whether or not (i) the employee was aware, or could reasonably be expected to have been aware, of the required performance standard; (ii) the employee was given a fair opportunity to meet the required performance standard; and (iii) dismissal was an appropriate sanction for not meeting the required performance standard”.
A number of judgments are worth visiting in regard the manner in which executive level dismissal cases should be approached. The first is that of Somyo P v Ross Polutry Breeders (Pty) Ltd (GA9/97). This case related to the dismissal of the manager of a chicken farm for various allegations relating to poor work performance. This landmark judgment noted that “an employer who is concerned about the poor performance of an employee is normally required to appraise the employees work performance; to warn the employee that if his work performance does not improve, he might be dismissed; and to allow the employee a reasonable opportunity to improve his performance… those requirements may not apply in two cases… the first is the manager or senior employee whose knowledge and experience qualify him to judge for himself whether he is meeting the standard set by the employer… and second, where.. the degree of professional skill must be required is so high, and the potential consequences of the smallest departure from that higher standard are so serious, that one failure to perform in accordance with those standards is enough to justify dismissal.
The judgment more especially noted that the manager “was not an ordinary employee”. In this regard, the Labour Court was drawing a distinction between the manner in which senior managerial dismissals for poor work performance, deviates from the procedure required to be followed in cases of ordinary employees.
The landmark judgment most frequently referred to in cases of senior managerial dismissals for poor work performance, is the Labour Appeal Court case of HPN Brereton v Bateman Industrial Corporation Ltd & Others (Case number: GA80/99). Amongst other things, this judgment made reference to an English case, namely that of E C Cook v Thomas Linnell & Sons (1997) IRLP132 in which an employment appeal tribunal, in the head note of the judgment, stated that “the appellant had been fairly dismissed from his post as manager of the respondent’s food depot on grounds of the employer’s genuine loss of confidence in his ability. Although employees must act reasonably when they are moving from a particular post an employee whom they consider to be unsatisfactory, it is important that the operation of unfair dismissal legislation should not impede employer’s unreasonably in the efficient management of their business. The quality of management is an imponderable which it may be difficult to assess precisely. Therefore, when responsible employers have genuinely come to the conclusion over a reasonable period of time that a manager is incompetent, that is some evidence that he is incompetent, although it is necessary to look to see whether there is any other supporting evidence. The heading continues that when poor work performance is evident in an area “it is reasonable for employers who have no confidence in their manager to come to the conclusion that he shares some responsibility for it”.
The Brereton LAC judgment drew attention to the fact that “the first question to be considered is whether it is incumbent upon his employer to warn him that his performance is falling short of the standard required of him (the employee) and so afford an opportunity to rectify the position before steps are taken to terminate (the employees) employment. It has been recognized by the courts that in respect of this requirement, the position of a senior manager differs from that of an ordinary employee. Because of his situation and the overall view of the business which he enjoys as a result thereof, he will ordinarily be aware of the shortcomings in his performance and the adverse consequences to the business resulting there from. He will likewise himself appreciate the necessity to remedy the situation without it being drawn to his attention by another. It will be pointless to insist upon his being warned of a situation of which he must already be fully aware.
The judgment continues that “the second situation recognized by the courts in which the necessity for a warning may be dispensed with is where the poor performance of the officer concerned is so gross, and its consequence is so serious, that it will be unfair to require the employer to suffer any further delay in terminating his employment”.