You must also show substantive fairness and procedural fairness when dismissing an employee:
Substantive fairness: This means you have a fair reason to dismiss. For example, dismissing on the grounds of performance and not because of gender.
Procedural fairness: This means you followed a fair, legal procedure before dismissing the employee. For example, you tried coaching a poor work performer instead of just firing him.
Let's look at the mistakes…
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Mistake #1: Taking disciplinary action against an employee for poor performance
For example, John's your sales manager and he's not meeting his agreed targets. He sets up meetings with clients but can never convince them to buy from him.
His quarterly reports are also incomplete and of a poor quality. You give him a written warning and a month later, a final written warning. Finally, when he still doesn't meet his sales targets, you hold a disciplinary hearing and dismiss him.
You'd probably lose at the CCMA because you didn't coach or train him to help him reach his targets, so this dismissal's procedurally unfair.
You had a valid reason to dismiss John. But you didn't follow the proper pre-dismissal procedure for poor work performance. You treated his failure to perform as a form of misconduct instead of first trying to performance manage him. This could mean the CCMA could order you to pay him up to 12 months' remuneration, calculated at his rate on the date of dismissal.
Mistake #2: Mistreating independent contractors
Don't think if you've entered into written a contract stating John'll work for you as a consultant, or independent contractor, that he won't be considered your employee. Always ensure you follow a fair procedure before terminating his contract. Otherwise, John might just have a claim against you!
A true independent contractor's a self-employed professional, e.g. an electrician, plumber, attorney or bookkeeper who renders services to a variety of clients, who won't have to close his business if he loses you as a client.
Is John an employee or an independent contractor? The Court will decide
If the Court decides John's your employee and not an independent contractor, it'll look like you terminated the contract merely on notice. You didn't follow the proper substantive and procedural fairness requirements, and the dismissal will be unfair!
You might have to reinstate him (with back-pay) or even pay him compensation of up to 12 months' remuneration (i.e. total costs to company and not just basic salary).
Be warned though, if your dismissal's automatically unfair (e.g. the dismissal's discriminatory), you could pay up to 24 months' remuneration!
Fact: The CCMA doesn't care why you dismissed an employee... It only wants to know if you dismissed him fairly
So… Your employee's guilty of misconduct. Let's say he took a company laptop home, without asking permission. It's a simple open and closed case of theft, isn't it?
Not so fast! You can't just say 'that's it, you're out of here' and think that's the end of that. No, you still have to hold a disciplinary hearing. You still have to give him a chance to defend his case, and explain why he did that.
You also have to prove that he did this. You have to spell it out for him and notify him you're going to discipline him. And you have to give him time to prepare his case.
And then there's even more to it… You have to have a disciplinary hearing so you can prove your case, and give him a chance to defend his…
Mistake #3: Entering into fixed-term employment contracts with permanent employees
Generally, you'll enter into a fixed-term or limited duration employment contract to complete a limited or specific task. You could also do this because the contract's for a limited or specific period only. So you should only enter into a fixed-term contract when you know it's for a specific job with a specified time period.
Even if you have a fixed-term contract, you risk being guilty of unfair dismissal
Don't create a reasonable expectation for the employee that you'll renew his fixed-term after it's expired. If this is the case, and you don't continue to employ him or if you offer to renew his contract on less favourable terms, you'll be guilty of an unfair dismissal.
If you already have an employee who's carrying out a permanent role on a fixed-term contract (e.g. probation), don't rely on the expiry of the contract to end the employment relationship if he hasn't performed satisfactorily.
Mistake #4: Acting inconsistently when disciplining employees
You have a very strong misconduct case against an employee, and you know you can dismiss him... But you treated another employee more leniently for the same offence. The CCMA or Bargaining Council may decide the dismissal's unfair.
For example, you catch Mary stealing petty cash. She claims she needed airtime. You dismiss her. At the CCMA hearing, Mary says you previously caught Lucy, another employee, stealing to pay off a gambling debt. You felt sorry for Lucy and gave her a final written warning instead of firing her. Neither Mary nor Lucy had a disciplinary record and both had been working for you for a few years.
The CCMA finds Mary's dismissal unfair because of the way you treated Lucy. You should've given Mary a final written warning, but you acted inconsistently.
You must be consistent and discipline employees who're guilty of similar misconduct, whether in the past or not, in the same way.