“… arbitrators should hesitate to interfere with employer’s decisions on whether probationary employees have attained the required performance standard, or with the standards themselves” (extract from judgment below)
Our laws allow employers to hire new employees on a probationary basis,
and doing so can give both parties time to assess how good the “fit”
actually is and whether the employee should become a permanent one.
Employers must however avoid falling into the trap of thinking that they can dismiss a probationary employee at will; on the contrary they must ensure both “substantive” and “procedural” fairness at all stages of the process.
But how do you ensure fairness?
The Labour Relations Act’s “Code of Good Practice: Dismissal” provides important guidelines in this regard (note that what is set out below is of necessity only a summary so be sure to take full legal advice on how the Code’s detailed requirements will apply to your specific case) –
- It entitles employers to require new employees to serve a
probationary period “before the appointment of the employee is
confirmed”. It must be for a “reasonable duration”.
- The employer must use the period of probation to assess
performance. What does that mean? Per the Labour Appeal Court (LAC) in
the recent decision discussed below “…the purpose of a probationary
period is not only to assess whether the employee has the technical
skills or ability to do the job. It also serves the purpose of
ascertaining whether the employee is a suitable employee in a wider
sense. This allows consideration of matters of “fit” – aspects of
demeanour, diligence, compatibility and character”.
- The employer must give the employee reasonable assistance, training and guidance.
- An employer is entitled to extend the probationary period in order to complete any performance appraisal.
- Importantly, a lower standard of substantive fairness applies
during the probation period than would be the case with permanent
employment: “Any person making a decision about the fairness of a
dismissal of an employee for poor work performance during or on expiry
of the probationary period ought to accept reasons for dismissal that
may be less compelling than would be the case in dismissals effected
after the completion of the probationary period.”
That provision, held the LAC, “is a clear indicator that arbitrators should hesitate to interfere with employer’s decisions on whether probationary employees have attained the required performance standard, or with the standards themselves”.
Let’s have a look at that LAC decision as it provides a good example of these principles in action…
Dismissed for poor work performance
- A non-profit organisation employed a supply chain coordinator
under an employment contract which required a 6 month probationary
period to give the employer time to assess the employee for suitability
for permanent employment.
- Concerns over the employee’s performance arose during her
probationary period, she was consistently made aware (in eight
performance meetings and appraisals over a three month period) that her
performance was not up to standard, and eventually a hearing concluded
that she “lacked the understanding and ability to carry out her assigned
tasks despite having been given assistance and a reasonable opportunity
- When she was dismissed for poor work performance she referred
her dismissal to the CCMA (Commission for Conciliation, Mediation and
Arbitration). The commissioner held her dismissal to have been unfair
and ordered her reinstatement retrospectively to the date of dismissal.
The Labour Court declined to reverse this decision.
- Importantly, the commissioner had concluded that the employee
automatically became a permanent employee when her probation ended (her
actual dismissal took place only after expiry of the probationary
period) and that this indicated that her employer was satisfied with her
performance and that she had satisfactorily completed her probation
period. Moreover, held the commissioner, the employer had not properly
considered sanctions or remedies other than dismissal and the employee
should have been retrained and her responsibilities adjusted.
- Not so, held the LAC on appeal. When the probation period came
to an end the employer was engaged in an ongoing review and evaluation
process and by inference intended to extend the probation period until
the review and evaluation process was completed. The lower standard of
fairness accordingly applied and the evidence revealed “a performance
problem that sufficiently justified the [employer]’s decision, after
extensive evaluation, counselling and guidance, not to confirm [the
employee]’s suitability for permanent appointment.” As an NPO with
limited resources, the employer had no obligation to re-write the
employee’s job description.
- The dismissal was accordingly fair and the CCMA’s reinstatement award set aside.
A final thought – as always, our labour laws being so complex and the penalties for getting them wrong so severe, take specific legal advice on your particular matter!