Employers Beware: Dismissal for Poor Performance Could Backfire

It is reasonable to want to dismiss an employee for not performing on the job, or failing to meet a specific target. However, Employers should ensure that the targets they set are actually achievable for the employee. If not, they could be found at fault for dismissing an employee who failed to achieve unreasonable targets.Damelin (Pty) Ltd vs Parkinson

In a recent judgement, delivered in January 2017, tertiary education company Damelin (Pty) Ltd, hired Parkinson as the general manager of the Boksburg campus. Parkinson’s employment contract stated that, ‟continued nonattainment of performance goals may result in the termination of employment.”

When Parkinson took up his position in January 2011, the campus had 352 enrolled students of which 168 were first-year students. His target for 2012, which was the national target, was to enrol 420 first year students by February 2012. Andrew Pienaar, the national sales director, estimated that there were 15 000 grade 12 learners in the catchment area of the Boksburg campus. Parkinson queried the target, saying that his team contacted all the schools in the area and there were only 12 735 grade 12 learners in his area. He claimed that unrealistic numbers give rise to unrealistic targets, and that it was like being set up to fail.

The actual enrolment of first-year students for the Boksburg campus for 2012 was 117 first year students. In 2011, the figure had been 168. Parkinson had not met the target. A disciplinary inquiry was convened. Parkinson was charged with poor work performance relating to his failure to reach sales targets and was dismissed.

Unhappy with his dismissal, Parkinson and his union went to the CCMA. The commissioner determined that the dismissal was the appropriate sanction. Still dissatisfied, Parkinson then went to court. The court determined that dismissal could only be considered as a fourth step in terms of Damelin’s disciplinary code. The court set aside the award and reinstated Parkinson saying that the informal letters written to Parkinson could not be considered warnings, and that he was not given an appropriate amount of time to reach his targets.

Conclusion

Employers should remember that problems relating to an employee’s performance should, generally speaking, not be dealt with as misconduct but as incapacity which necessitates a different process than misconduct. Setting unrealistic expectations on employees could set them up for failure. In these circumstances, dismissal would not be appropriate. It is therefore important that employers ensure the standards they set for their employees are achievable within a reasonable amount of time. Employers should also first assist their employees where performance is not of the required standard before dismissal can be considered.

Reference: Case no: JA 48/15

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