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Five disadvantages of using pre-dismissal arbitration

by , 20 February 2014
Are you thinking of using pre-dismissal arbitration to resolve a dispute? If so, make sure you're aware of the five drawbacks that come with them...

Pre-dismissal arbitration is when you ask the CCMA (or a bargaining council that's accredited) to hold an arbitration concerning your employee's conduct or capacity before the employee is dismissed.

We explained in this article that the arbitrator will decide whether dismissal or some other penalty or ruling is appropriate. And that this means your employee can't then refer the dispute to the CCMA alleging unfair dismissal or unfair labour practice if he's unhappy with the result of the hearing.

We also told you that the great thing about this process is it can help you resolve disputes quicker.

But because everything has pros and cons, we're now going to tell you about the disadvantages of using pre-dismissal arbitration.

649 New cases are referred to the CCMA every day. Only 72% of the cases are settled...
What happens to the rest?
Did you know a full 38% if all cases end up at arbitration, the Labour Court or in strikes or lock-outs? That's a massive 247 cases that leave employers, just like you, battling it out with an employee. 
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Revealed: Five drawbacks of pre-dismissal arbitration

#1: According to the Labour Law for Managers Loose Leaf Service, there's no compulsion on employees to participate. This means you'll need to persuade your employees that pre-dismissal arbitration is in their best interests.

#2: Managerial control of discipline and performance is removed from your hands. It may be inappropriate in certain cases to hand over the power to discipline employees to an outsider.

For instance, when it comes to an allegation of poor performance, an arbitrator with little knowledge or experience in the industry or sector may want to interfere with the performance standards you've set. He could suggest that the standards for monthly sales targets are unreasonably high.

#3: There's a possibility of inconsistent disciplinary and performance decisions being made. Different arbitrators could make very different decisions on very similar issues.

#4: In certain cases, especially where you're disciplining highly paid employees, the pre-dismissal arbitration may be more costly than internal disciplinary enquiries because of time delays.

Bear in mind that, you, as an employer remain liable for the salary of an employee charged with misconduct or incapacity until the issue is finalised.

#5: You only have one opportunity to present a case for dismissal – there's no appeal opportunity for either party.

So should you use pre-dismissal arbitration?

The Loose Leaf Service says overall its best you work pre-dismissal arbitration into your disciplinary procedure and employment contracts. You then reserve the right to use it when you think it's appropriate and to follow the usual internal disciplinary process when you believe that's more appropriate.

Be sure to check out this article. It contains the five best cases suited for having pre-dismissal arbitration.

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