There are 3 distinct categories of dismissal.
For the benefit of those who might need a quick refresher, those categories are :
- misconduct – where one is concerned with the unacceptable behaviour of an employee eg. insubordination, theft, gross negligence, violence.
- incapacity ie. either that the person is not capable of satisfactorily performing a job, or they are incapable of performing the job for reasons of ill-health.
- dismissal for operational requirements which means requirements based on the economic, technological, structural or similar needs of an employer ( more commonly referred to as retrenchments), which is regulated by section 189 of the Labour Relations Act.
Each category has its own unique and distinctive rules, processes and procedures that apply. The question is then this – can an employer ever rely on category 3 for a category 1 issue? Put differently, can one retrench an employee who has acted violently ??
The obvious answer would be no – you cannot use the retrenchment route for a misconduct issue, but let’s explore 2 cases that had similar facts but yet vastly different outcomes.
In the 1st case, a few businesses of a company were operating at a substantial loss, and a new manager was appointed to address this. The employees resisted all attempts to improve production, and this resistance then became violent. An assassination attempt was made on the life of the new manager; several senior employees received death threats and shots were fired at the home of one employee.
As the company could not identify the persons involved in the assassination attempt and the threats it was unable to take disciplinary action; the company felt it was no longer possible to manage the business, and it decided to close the business based on its operational requirements. The union disputed that the reason for this decision fell within the definition of operational requirements ( retrenchments ) and that it was a misconduct issue and should have been dealt with as that.
The question for the Labour Court was thus whether the view of the company was correct, ie. given that it was unable to manage its business ( and because it was unable to take disciplinary action because the perpetrators could not be identified ) that this fell within the scope of operational requirements and that it could retrench staff.
The Labour Court held that the inability of the company to manage its business affected the economic viability of the enterprise, and accordingly that the need for stability was indeed an operational requirement, and that the retrenchment route could indeed be used despite the fact that it was misconduct in the form of violence that had caused the issue in the first place.
Let’s now look at the 2nd case ( which was decided a few years after the 1st case).
In the 2nd case, the union’s members embarked on a protected strike. During the strike, several non-striking employees and members of management were subjected to violent criminal acts — employees were threatened with death and were assaulted; homes were firebombed; cars were set alight; one employee who identified his attackers was shot and killed, and a conspiracy to assassinate a director was uncovered.
After the employees returned to work, a number of employees and shop stewards were suspended pending disciplinary enquiries into incidents of criminal conduct during the strike. One of the employees who had participated in serious criminal acts, came forward to assist the company, however on the morning of the disciplinary hearings the employee disappeared. As a result, the company decided to abandon the disciplinary hearings and instead proceeded with a s189 retrenchment process.
The company advised the trade union of the possible dismissal for operational requirements in terms of s189 of those employees who committed serious criminal acts during the strike. It was explained that the employees’ conduct made it impossible for the company to continue to employ them as there was a significant threat of further violence, and the company was unable to take disciplinary action against the employees as witnesses were too scared to give evidence.
The issue to be determined by the Labour Court was whether the company could resort to a retrenchment procedure in circumstances where it was unable to conduct disciplinary hearings.
The Labour Court commented that as long as the employer could prove that the dominant purpose of the retrenchment process was the economic viability of the enterprise, the employer would be entitled to go the s189 route, depending on the particular circumstances of the case, but that misconduct in itself could not constitute an operational requirement.
Turning to the facts of the case, the Labour Court was not persuaded that the conduct of the striking employees threatened or affected the economic viability of the company. Unlike in the 1st case, the dismissal of the employees on the basis of operational requirements was regarded as unfair, and 31 employees were reinstated with 5 year’s worth of back pay.
In both cases, the employer was unable to pursue disciplinary action and in both cases, the employer opted to follow the retrenchment route. In the 1st case the Labour Court found that the retrenchment route could be followed, but in the 2nd the Labour Court found that the retrenchment could not be followed.
So wherein does the difference then lie between one employer losing its case and the other winning? The answer – the winning employer obviously had better attorneys! ( kidding).
In the 1st case the employer’s reason for following the retrenchment route was that it was no longer possible to manage the business, which reason fell within the definition of what is regarded as an operational requirement, whereas in the 2nd case, it was found that there was no threat or impact on the economic viability of the employer and therefore the definition of an operational requirement was not met, and there was thus no reason to pursue the retrenchment route.
Even though the misconduct that gave rise to the retrenchment route being taken in both cases was the same, it was how the impact of this misconduct was interpreted in the context of the definition of an operational requirement, and the case that each respective employer actually presented, that was decisive.
The lesson to be learnt is that one should always obtain expert legal advice before embarking on a course of action to ensure that the chosen course is in fact the correct one.