Recently, when going through my list of previous articles I was shocked to see that I have yet to write directly on, and advise on critical issues of dismissal or termination of employment initiated by the employer. Employer terminations are such a common basis for trade disputes, and there are still many misconceptions on this topic, including employer’s right to terminate “at will”.
In this jurisdiction an employer can terminate an employment contact for only three reasons: the incapacity of an employee to perform his or her job; the employee has become surplus to the needs of the company and is redundant; and finally, for just cause. Further, the Industrial Court, consistent with the provisions of the Industrial Relations Act, has also deemed that workers should be afforded a certain degree of job security and have a proprietary right in their jobs. An employee should not be unfairly dismissed.
Proper dismissals cannot simply come from the gut, or on a whim, but the reasons must be clearly stated and such decisions should be able to be properly supported and substantiated. I always advise my clients that they should ensure that every dismissal decision should be defensible before our Industrial Court.
The practices of good industrial relations dictate that employers are expected to act fairly and reasonably at all times, which is to say, they are expected to observe the principles of natural justice; to engage in good-faith consultation and to observe agreements and statements of policy. With that in mind, there are measures of employment protection to remedy bad practices which are afforded to the employee by way of legislation, court rulings, collective agreements and the terms and conditions of an employment contract. This goes as far as to include regulations for hiring and protections offered by the industrial relations, the equal opportunity as well as the maternity protection acts.
Dismissals due to incapacity are based on the worker’s inability to perform the job function that he was hired to do. This could be due to his physical inability caused by injury or illness. Incapacity can in some cases occur when the technology or methods/processes have become so advanced that the employee is no longer able to function effectively in that position, in spite of training and there is no other position available for suitable alternative employment.
Termination due to redundancy is the only “no cause/fault” reason. When this type of termination happens, it is usually because of changing market conditions and/or reorganisation which in essence is no fault of the worker. This is the only form of termination which is guided by legislation in the country. It is titled the Retrenchment and Severance Benefit Act. This act details the prescribed procedure when treating with redundancies which lead to retrenchment.
This legislation, however, has several gaps which over time have been filled by judgments of the Industrial Court. The combined effect of both the statute and existing jurisprudence mandate good-faith consultation with workers contemplated for retrenchment and includes such requirements to provide formal individual notice to the workers and to the labour minister if more than five are being retrenched. It also sets out the calculation which should be used when determining severance benefit payments. Further, the employer is obligated to have a sound business efficacy rational for the redundancies, evidence of a search for alternative positions and an objective method for the selection of workers to be retrenched.
A termination for “just cause” can either be based on performance issues or employee conduct. Accordingly, in all such instances, except in extenuating circumstances, the employer must apply the principles of natural justice and good industrial relations practices before effecting a dismissal for cause. These principles include: the right to know the allegations; the right to be heard; the right to be represented; the right to know your accuser; the right of appeal. Those principles speak to reasonableness and fairness in dealings with, consultations and feedback as to the backbone of the action.
Trade dispute No 116 of 1996 between the Oilfield Workers Trade Union and Petrotrin is a good place to seek guidance on what the court expects. It speaks to providing the employee with the particularities of any allegation or concerns of the employer with respect to the employee’s performance or conduct. The worker must be afforded the opportunity to defend himself/herself against the allegations and then the employer is expected to examine the explanation fairly and arrive at a reasonable conclusion.
When it comes particularly to performance issues, the court prefers to see that employees were given opportunities for improvement in the form of progressive discipline. These steps would usually include verbal warnings, then written warnings then suspension before dismissal can occur.
The term “summary dismissal” is often misunderstood. Its true legal meaning is the termination of an employment contract without notice. It is often confused with the term of “instant dismissal”. The fact that an employer has a right to terminate for just cause without giving notice, or effecting payment in lieu of notice, is not a licence to effect an instant dismissal as all allegations must be properly investigated. Since most acts of misconduct serve to breach the trust and confidence vital in the maintenance of an employment relationship, summary dismissal will be often justified.
There are many judgments of the Industrial Court which award dismissed workers compensation for wrongful termination because employers fail to follow due process.
My final advice therefore is that employers should exercise patience, and always use correct procedures.