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What to do when transferred employees aren't compatible with your business

by , 18 September 2013
Incompatibility is defined as the inability on the part of an employee to work in harmony either within the corporate culture of the business or with fellow employees. This is very common after mergers or acquisitions. But is incompatibility grounds for dismissal?

Incompatibility in the workplace can be difficult to prove. This is because the Labour Relations Act (LRA) doesn't specifically recognise incompatibility as a valid reason for dismissal.

After all, it doesn't easily fit into one of the three recognised categories (misconduct, incapacity or operational requirements of the employer).

So what do you do when transferred employees aren't compatible with your business? Are you stuck with them for good?

The Labour Law for Managers Loose Leaf Service explains that when a transfer of the whole or a part of any business, trade, undertaking or service (unless otherwise agreed),the new employer is automatically substituted in the place of the old employer for all contracts of employment in existence immediately before the date of transfer.

This means all the rights and obligations between the old employer and the transferred employee continue as if they had been there all along.

It often happens that, after the transfer of a business, the new employer is plagued with a situation where the newly acquired employees appear not to be compatible with their business.

If you plan to terminate the employee's services on the basis of operational requirements due to incompatibility in these circumstances – the issue of joint and several liability in the first 12 months after the transfer date becomes relevant.

This case study explains the incompatibility situation well

The Labour Law for Managers Loose Leaf Service explains that in the case of SSM Manufacturing v I Snell (1997), the arbitrator held that the new owners' dismissal of the transferred manager for reasons based on incompatibility, disloyalty and insubordination was unfair.

The arbitrator held that it would have been reasonable for the new owners, to:

  • Develop appropriate systems and procedures in consultation with the manufacturing staff;
  • Provide information and training on these systems and on new expectations or changed modus operandi (method of operation); and
  • Allow for a period of a few months during which the manufacturing operation could adapt to the clearly defined set of new requirements.

You also need to watch out for the provisions of section 187(1) (g) of the LRA. This prohibits a dismissal where the reason for dismissal is a transfer or a reason related to a transfer in terms of section 197.

In other words, you'll have to make sure your reason is clearly based on a valid reason that arose after the transfer and isn't connected to the transfer.

The bottom line: While the LRA doesn't recognise incompatibility as a valid reason for dismissal. In certain circumstances, provided you follow the correct procedures and depending on the circumstances, you can dismiss an employee for reasons based on incompatibility.



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