FAIRNESS AND THE IMPRISONED EMPLOYEE

08 Jul 2010

Wessel van Zyl LabourNet Bloemfontein There are two important factors to consider when dismissing an employee. The first is to make sure the dismissal is procedurally fair i.e. through a disciplinary inquiry or investigation, and the second being to ensure that it is substantively fair i.e. there was a fair reason for dismissal. Furthermore one should always differentiate between misconduct and incapacity as the processes differ between the two and could lead to procedural irregularities. When an employee is imprisoned it creates a problem both procedurally and substantively for the employer and makes it difficult to conduct an investigation or a disciplinary inquiry whilst the employee is imprisoned. The following case law explains the difficulties and problems one can expect to face when found in a similar situation. Samancor Tubatse Ferrochrome v MEIBC & others (LAC JA 57/08, judgment 12 March 2010)m The facts: The employer conducts business in the mining sector and is a division of a larger mining company. An employee was employed as a furnace operator in the mining sector, having commenced employment in August 1996. On 20 May 2006, the employee was arrested on suspicion of having committed an armed robbery. He remained in custody and was absent from work for +/- 150 days. On 30 May 2006, the employee was dismissed on the grounds of incapacity, in that he was physically unable to tender his services. A letter advising him of his dismissal was delivered to the police station at which he was being held on 6 June 2006. On 2 November 2006 a post-dismissal hearing was held by the employer, following the employee's release from custody. It confirmed that the employee had advised the employer by way of a telephone call of his arrest on the day on which he was arrested. The following day the employee's sister informed the employer of his arrest. At the hearing it was found that the employer could not have been expected to put in place a temporary arrangement for such a period of time which would have allowed the employee's position to be kept open for him. The position he held was an important one within the framework of the employer's organisation. The criminal case against the employee was still pending at the time of the post-dismissal hearing. This was a second instance within a six month period that the employee had been arrested and had thus been absent from work. Accordingly, the dismissal of the employee was upheld at the post dismissal hearing. The employee then referred the matter to arbitration where it was found that the dismissal was substantively unfair because proper account had not been taken that the employee had no control over the circumstances and duration of his absence. Furthermore, on 30 May 2006, when the employer made his decision to dismiss the employee, no opportunity was given to the latter to present his case. Accordingly, the dismissal was also procedurally unfair. For these reasons, the employer was ordered to reinstate the employee. The Labour Appeal Court The matter was taken on appeal to the Labour Appeal Court and judgment was handed down on 12 March 2010. What is significant about the judgment is that the imprisonment of the employee, causing him to be unable to work, was classified as incapacity. The court supported the view that incapacity may be permanent or temporary and may have either a partial or a complete impact on the employee's ability to perform the job. The Code of Good Conduct: Dismissal conceives of incapacity as ill-health or injury but it can take other forms. Imprisonment and military call-up, for instance, incapacitate the employee from performing his obligations under the contract. The dismissal of an employee in pursuance of a closed shop is for incapacity; so is one that results from a legal prohibition on employment. Having classified the matter as one of incapacity, the court went on to say that before dismissing an employee for incapacity caused through imprisonment, an employer needs to consider the reasons for the incapacity, the extent of the incapacity, whether it is permanent or temporary, and whether any alternatives to dismissal do exist. The company informed the employee of his dismissal in a letter: "Operational Incapacity Dismissal You have failed to report for duty since the 20th May 2006 and you are therefore in breach of contract of employment as you are physically unable to tender your services required. Your service of employment is terminated with effect from 30 May 2006. A post dismissal hearing will be held on your return to work to establish if you have a valid reason for your absence:" The court held that merely providing the employee with a letter informing him in writing of the decision to dismiss him and the reasons for the dismissal while he was in prison, did not constitute a fair opportunity for him to present his case. When the matter came before the post-dismissal hearing, the same person who presided over the initial hearing again presided. The decision to dismiss had already been made previously. In the court's view, the post dismissal hearing appeared to be nothing more than an expo facto rationalisation of the earlier decision. In the circumstances, the court held that the employee was not accorded the standard of fairness which is required in a dismissal hearing. Accordingly, section 194 of the Labour Relations Act 66 of 1995 (LRA) applies. The maximum compensation which can be awarded to the employee in such a case is the equivalent of twelve months remuneration calculated at the employee's rate of remuneration and the date of dismissal. In the circumstances of this case, particularly given the difficulties of dealing with a person who was incarcerated for some six months, the discretion afforded to a court to determine what is 'just and equitable' in terms of sections 194(3) of the LRA must be exercised. Compensation based upon the employee's remuneration for a period of six months calculated at the employee's rate of remuneration at the date of dismissal is a just and equitable award for the breach of the right of procedural fairness which was owed to fourth respondent. As a result the following order was made: The appeal was upheld. The dismissal of the employee was declared to be substantively fair. The dismissal of the employee was found to be procedurally unfair. An amount of compensation in the equivalent of six months remuneration calculated at the rate of remuneration on the date of dismissal was awarded to the employee. In conclusion we should consider the following when dealing with the imprisonment of an employee: When an employee cannot work because s/he is imprisoned, this is a form of incapacity. Fair dismissal for this kind of incapacity will depend on the reasons for the incapacity, the extent of the incapacity, whether it is permanent or temporary, and whether any alternatives to dismissal do exist. Procedural fairness involves the employee being given a fair opportunity to put her/his case before any decision is taken to terminate the employment contract. Contact your LabourNet consultant who can assist in giving advice on what the most appropriate strategy would be to deal with an employee that has been imprisoned. 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