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1.3 Standards to determine the fairness of the employer’s conduct regarding dismissals

Guideline for employment problems / PREVENTING: 1.3 Standards to determine the fairness of the employer’s conduct regarding dismissals

Most plausible interventions

During the orientation process of the available literature, we identified the following intervention as most plausible for conflicts on unfair dismissal:

  • Applying standards to determine the fairness of the employer’s conduct regarding dismissals.
  • Not applying standards to determine the fairness of the employer’s conduct.

The available research on employment benefits disputes suggested applying standards of fairness to determine the employer’s conduct fairness for conflict prevention, management and resolution, and employee protection. We recommended that clear fairness guidelines be developed for benefits disputes.

This topic is based on the assumption that if fairness standards can resolve employment benefits disputes, it could also work with unfair dismissals and resolve disputes related to this issue. So, for unfair dismissal disputes, we assume that applying standards of fairness could also prevent, manage and resolve disputes related to dismissals and protect the employee from any abuse of his/her employer. So, for the purpose of the PICO question, we compare applying standards to determine the fairness of the employer’s conduct relating to dismissals with not applying standards.

PICO question

For parties to an unfair dismissal dispute, is applying standards to determine the fairness of the employer’s conduct relating to dismissal more effective than not applying standards, for the conflict prevention, management, resolution and employee protection?

Search strategy

The databases used are: HeinOnline, Westlaw, Wiley Online Library, JSTOR, Taylor & Francis, and ResearchGate.

For this PICO question, keywords used in the search strategy are: employment, labour, disputes, conflicts, dismissal, unfair, fair, solutions, standards, procedures, practices, employee, employer.

Assessment and grading of evidence

The main sources of evidence used for this particular subject are:

When considering fairness standards, authors distinguish substantive fairness from procedural fairness.

Standards of substantive fairness

  • Firstly, N.Kewaj explains that there must be a fair reason for any decision regarding the dismissal (the author mentions in particular the business or operational requirements of an organization that may constitute a fair reason). Section 188 of the Labour Relations Act in South Africa states that a dismissal is unjust if the employer cannot prove that the dismissal was made for just cause and in accordance with a fair process.
  • According to the author, a second factor must be taken into account when judging the fairness of the employer's conduct: the consistency of the decision; inconsistent treatment indicates injustice.
  • Thirdly, all of the circumstances that come into play, from both the employer and employee’s perspective, must be assessed when determining fairness. Indeed, K.Newaj explained that a range of circumstances applicable to both parties involved, the employer and the employee, must be considered in order to determine the fairness of the employer’s conduct and decision.

Standards of procedural fairness

When considering procedural fairness, authors distinguish procedures for dismissal based on operational requirements from procedures for dismissal based on employee misconduct.

In terms of operational requirement dismissals

Dismissals for operational requirements are recognized by the International Labour Organisation Convention. What do we mean by operational requirements? “The Labour Relations Act [in South Africa] describes operational requirements as requirements based on the economic, technological, structural or related needs of an employer. The employer’s needs in case of operational requirement dismissal must be separated from the other reasons for dismissal, such as misconduct and incapacity (…) For substantive fairness of a dismissal for operational requirements, the employer must prove that the said reason is one based on operational requirements of the business. The employer must be able to prove that the reason for the dismissal falls within the statutory definition of operational requirements. Employers are not allowed to use retrenchment to dismiss employees who they believe to have performed unsatisfactorily. This means that employers are not entitled to retrench for ulterior reasons, than those of operational requirements.”[1]

The Code of Good Practice on Dismissal for Operational Requirements in the Labour Relations Act (LRA), mentioned by Asanda Camagu, describes economic reasons “as those related to the financial running of the business. Technological grounds relate to the creation of new technology that influence work relationships either by making existing jobs redundant or by requiring employees to adjust to the new technology or a major restructuring of the workplace. Structural reasons relate to the dismissal as an aftermath to a restructuring of the employer’s organisation”[2].

Asanda Camagu explains that the LRA [in South Africa] distinguishes between large and small dismissals and each is regulated separately. Article 189 deals with small-scale dismissals, whereas Article 189A deals with large-scale dismissals. Section 189A of the LRA applies to an employer with more than 50 employees if the employer intends to dismiss based on operational requirements. The employer should consider dismissals as follows:

  • 10 employees, if the employer employs up to 200 employees,
  • 20 employees if the employer employs more than 200 employees,
  • 30 employees, if the employer employs more than 300 employees,
  • 40 employees if the employer employs more than 400 employees,
  • 50 employees if the employer employs more than 500 employees.

Regarding the employees being dismissed for operational requirements reasons, the author recommends to employers the use of agreed or fair and objective criteria. If this requirement and these criteria are not applied and met, there could be negative consequences for the company. Section 189 of the LRA gives other guidelines to employers considering dismissing one or more employees for reasons based on operational requirements: “…the employer must consult the appropriate trade union, relevant employees and or forums. During this consultation, the employer and the consulting parties must embark on a meaningful joint consensus-seeking process and endeavour to reach an agreement. The employer must also give notice before the consultation, requesting the consulting party to consult with it and the employer must also divulge in writing all the applicable information for consultation.”[3].

Indeed, K.Newaj also emphasized the need for a consultative process to resolve dismissal disputes. Some form of consultation is required to encourage and engage each party in a joint consensus-building process on the issues concerned; this consultation is essential because it requires engagement and communication with the employee. The author even proposes guidelines to follow to carry out a fair consultation process in the context of a conflict for unfair dismissal. According to K.Newaj, the steps are as follows:

  • First, the employer has a duty to inform the employee of the planned action and the rationale for it. The employer must inform the employee through a meeting or written correspondence.
  • Secondly, the employer must allow the employee to make representations at the consultation meeting. This is the most fundamental element of procedural fairness since the employee must have had the opportunity to present his or her case before a decision is made.
  • Thirdly, the employer is required to give due consideration to the representations made by the employee, when making the final decision, as the purpose of the consultation process is to reach consensus. If the employer disagrees with the employee’s representations, the employer must provide the reasons for the disagreement;
  • Fourthly, the employer must communicate the final decision to the employee (preferably in writing).

In terms of misconduct dismissals

What do we mean by “misconduct”? “Misconduct is considered to be unacceptable or improper behaviour of an employee. Not all misconduct will justify the sanction of a dismissal, on serious misconduct will.”[4]

K.Newaj refers to the Code of Good Practice on Dismissal which contains guidelines to be followed to ensure to employer and employee a fair dismissal process in case of misconduct. In particular, the Code requires the employer to verify the existence of just grounds to accuse an employee of misconduct. Thereafter, the employer has a duty to inform the employee of the allegations of wrongdoing against him or her, and the employee must have an opportunity to respond to the allegations against him or her.

In this regard, the employee must have a reasonable time to prepare a response and is entitled to be assisted by a union representative or a co-worker. Following this investigation, the employer must communicate its decision to the employee. The author notes that while procedural fairness in dismissals for misconduct does not explicitly refer to the consultation process, some form of consultation is required as it requires engagement and communication with the employee.

A.Camagu explains that it is also important to examine, beforehand, possible alternatives to dismissal: “employers must before embarking on the retrenchment process, first consider alternatives (…) The LRA enjoins an employer who is intending to retrench not only to consider alternatives to dismissal but to provide reasons for rejecting each of the alternatives. Failure to do so will render the retrenchment process substantively unfair”[5].

New Zealand Justification Test

New Zealand allows employees to file personal claims when they feel the employer’s actions put them at a disadvantage. Our interest here is to know the principles that can be used in formulating fairness requirements for dismissals disputes. “For the purposes of section 103(1)(a) and (b), the questions of whether a dismissal or an action was justifiable must be determined, on an objective basis, by considering whether the employer’s actions and how the employer acted, were what a fair and reasonable employer ‘would’ have done in all the circumstances at the time the dismissal or action occurred.”[6]

The goal of the legislators was to develop a test that would assess the justifiability of the employer’s actions as objectively as possible. So, the special feature of this test was to assess the justifiability of the employer’s actions by determining what a hypothetical employer would have done, even by substituting the hypothetical actions of that employer with the action of the actual employer. The test applied is whether the employer’s actions and the manner in which the employer acted were what a fair and reasonable employer could have done in all the circumstances at the time of the action. “Even though the wording of the justification test did not refer to substantive and procedural fairness, these standards of fairness were implicit in the test.”[7]

As explained by the author, the test states that adjudicators must determine whether, given the resources available to the employer, he/she sufficiently investigated the allegations against the employee before dismissing or taking action against him/her. If the employer has expressed its concerns to the employee before dismissing or taking action against him/her; if the employer has given the employee a reasonable opportunity to respond to the charges before dismissing or taking action against him/her; and whether the employer has actually considered the employee’s explanations for the allegations before dismissing or taking action against him/her. In assessing these factors, K. Newaj concludes that it is essentially a matter of advising the employee, giving the employee an opportunity to respond, and considering the employee’s explanations in making a decision. The test allows arbitrators to consider any other factors they consider appropriate.

K.Newaj concludes that “there are a number of similarities between New Zealand’s justification and the test employed in South African labour law for misconduct dismissals (…) Essentially the justification test confirms the justifiability of employing standards of both substantive and procedural fairness (…) New Zealand’s justifiability test endorses substantive fairness in assessing personal grievance cases (…) New Zealand’s justifiability test endorses the use of procedural fairness in assessing personal grievances. It essentially requires that the employee be given an opportunity to make representations prior to a decision being taken.”[8]

Quality of evidence and research gap

According to our research method, we grade the evidence comparing applying standards to determine the fairness of the employer’s conduct relating to dismissals with applying no standards, for conflict prevention, management and resolution and employee protection, as high. The resources available are of high quality and consist of recent medium-sized/large empirical research (mainly thesis and scholarly articles in internationally reputable periodicals on law). The research team has upgraded the evidence as it provides recommendations and guidelines.

Identify research gap

Few resources address this topic. First, much of the most relevant research relates to South Africa, given its experience in the prevention, resolution and management of conflict in the workplace. Moreover, most of the available work deals with the issue of equity in the workplace generally from the point of view of dismissal cases, but not with equity in the provision of benefits. K.Newaj, on whom we relied largely, is one of the few authors to address the issue of equity in relation to the provision of benefits. We found his study interesting because it drew a parallel between the treatment of dismissal cases and those relating to benefits by comparing the experience of South Africa with New Zealand. Although we relied largely on this one author, the author’s arguments are largely sufficient as they provide evidence, recommendations and guidelines to be followed in implementing the principle of fairness in the provision of benefits.

Recommendation

Desirable outcomes

Applying standards to determine the fairness of the employer’s conduct relating to dismissal
Not applying standards to determine the fairness of the employer’s conduct
By applying fairness standards, the employer’s final decision is based on reliable and proven facts. Applying procedural fairness does not involve the employer in making discretionary decisions, reducing the risk of abuse from the employer in any decision related to the employee’s employment. So it guarantees the employee protection against unfair choices related to his/her employment.
Our research has shown that the absence or deviation from an employer’s fairness standards do not necessarily render such practice or deviation unfair. So an employer’s practice or deviation from standards could be fair even if he/she is not applying defined standards or deviates from defined standards. Furthermore, if the employee initiates legal action against the employer for unfair dismissal, the jurisdiction will not render judgement on what the employer should or could have done, or what a fair practice should or could be; it will render judgement on the fairness or unfairness of the committed act.
Fairness standards at the workplace also ensure respect, dignity, and trust between employers and employees. Social psychology studies show that fairness at the workplace contributes to employees’ feeling safe and engaged in the work they produce.
Moreover, “the mere fact that a procedure is an agreed one does not, however, make it fair.. By the same token, the fact that an agreed procedure was not followed does not in itself mean that the procedure actually followed was unfair.”[9]

Undesirable outcomes

Applying standards to determine the fairness of the employer’s conduct relating to dismissal
Not applying standards to determine the fairness of the employer’s conduct
Most employers are not skilled in procedural and substantive fairness, including rules of evidence, to perform their functions fairly and effectively. For example, in disciplinary dismissal, the employer has to verify the existence of just grounds to accuse an employee of misconduct by investigating the allegations of wrongdoing made against the employer; employers are not skilled and experienced in questioning techniques. Information and evidence are not easy to obtain. So employers might lack communication and questioning techniques that are necessary to obtain information and evidence. These techniques are important during the investigative stage before the charge is laid against the employee.
Not applying fairness standards means that an employer could dismiss an employee on the grounds of unfair reasons and processes. In other words, dismissal could be considered unjust because the employer does not have the duty to prove that it was made for just cause and in accordance with a fair process.
Research also shows the difficulty of elaborating fairness standards that cover every conceivable act of misconduct committed between employers and employees. Codifying every single act that may constitute misconduct would not be easy.
Moreover, without procedural fairness, an employee is generally not given the opportunity to respond to the claims made against him/her; this is the most fundamental element of procedural fairness since the employee must have had the opportunity to present his or her case before a decision is made.

Balance of Outcomes

Taken together, the available research suggests that standards to determine the fairness of the employer’s conduct relating to dismissal ensure that the employer’s final decision is based on reliable and proven facts and prevents any abuse against the employee. So, it guarantees the employee protection against unfair decisions related to his/her employment and contributes to a positive, safe, respectful and trustful work environment. However, most employers are not skilled in the elements of procedural and substantive fairness, including rules of evidence, to perform their functions fairly and effectively; and research also highlights the difficulty of elaborating fairness standards that cover and codify every single act of misconduct for example.

So, we also found that an employer’s practice or deviation from standards could be fair even if he/she is not applying defined standards or deviates from defined standards. Indeed, the absence or deviation from an employer’s fairness standards does not necessarily render such practice or deviation unfair. However, not applying fairness standards means that an employee could be dismissed by an employer on the grounds of unfair reasons and processes. Moreover, without procedural fairness, an employee is generally not given the opportunity to respond to the claims made against him/her, which is the most fundamental element of procedural fairness. Thus, applying standards to determine the fairness of the employer’s conduct relating to the unfair dismissal is preferred.

Recommendation

Taking into account the balance of outcomes, the benefits for parties to an unfair dismissal dispute and the quality and consistency of the evidence, we make the following recommendation: For parties to an unfair dismissal dispute, applying standards to determine the fairness of the employer’s conduct relating to dismissal is more effective than not applying standards for conflict prevention, management and resolution and employee protection.

Thus, we recommend that clear fairness guidelines be developed for dismissal disputes.

Technical remarks

What are the steps to follow for a fair dismissal?

Standards of substantive fairness

  • There must be a fair reason for any decision regarding the dismissal. A dismissal is unjust if the employer cannot prove that the dismissal was made for just cause and in accordance with a fair process.
  • The decision must show consistency (inconsistent treatment is a factor that indicates an injustice).
  • All of the circumstances that come into play, from both the employer and employee’s perspective, must be assessed when determining fairness. A range of circumstances applicable to both parties involved, the employer and the employee, must be considered in order to assess the fairness of the employer’s conduct and decision.

Standards of procedural fairness

For operational requirement dismissals

  • Firstly, the employer has a duty to inform the employee of the planned action and the rationale for it. The employer must inform the employee through a meeting or written correspondence.
  • Secondly, the employer must allow the employee to make representations at the consultation meeting. This is the most fundamental element of procedural fairness since the employee must have had the opportunity to present his or her case before a decision is made.
  • Thirdly, the employer is required to give due consideration to the representations made by the employee, when making the final decision, as the purpose of the consultation process is to reach consensus. If the employer disagrees with the employee’s representations, the employer must provide the reasons for the disagreement.
  • Fourthly, the employer must communicate the final decision to the employee (preferably in writing).

For misconduct dismissals

  • The employer has to verify the existence of just grounds to accuse an employee of misconduct.
  • Thereafter, the employer has a duty to inform the employee of the allegations of wrongdoing against him or her.
  • The employee must have an opportunity to respond to the allegations against him or her. In this regard, the employee must have a reasonable time to prepare a response and is entitled to be assisted by a union representative or a co-worker.
  • Following this investigation, the employer must communicate its decision to the employee.

[1] A.Camagu, “Substantive fairness in dismissals for operational requirements cases”, 2012, p.4.

[2] A.Camagu, Op.cit. p.10.

[3] A.Camagu, Op.cit., p. 6.

[4] Unfair Dismissals & Labour Practice – QuickLaw Guide | LegalWise: https://www.legalwise.co.za/help-yourself/quicklaw-guides/dismissals

[5] A.Camagu, Op.cit., p. 42.

[6] K.Newaj, “An appraisal of the provision of benefits as an unfair labour practice in South African labour law”, June 2019, p.181.

[7] K.Newaj, “An appraisal of the provision of benefits as an unfair labour practice in South African labour law”, June 2019, p.182.

[8] K.Newaj, “An appraisal of the provision of benefits as an unfair labour practice in South African labour law”, June 2019, p.186-188.

[9] How Workplace Fairness Affects Employee Commitment | How Workplace Fairness Affects Employee Commitment (oreilly.com).

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Table of Contents

1. Recommendations on PREVENTING
1.1 Clear definition of employee benefits in the terms and conditions of the contract
1.2 Fairness standards for benefits provided to employees by the employer
1.3 Standards to determine the fairness of the employer’s conduct regarding dismissals
1.4 Grievance procedure related to dismissals at the workplace
1.5 Applying the Alternative Dispute Resolution mechanisms (ADR) according to the ladder of ADR activities

2.1 Multi-employer bargaining
2.2 Applying non-adversarial tripartite social dialogue
2.3 Integrative negotiation to resolve disputes
2.4 Mediation-arbitration
2.5 Organisational-ombudsman
2.6 Evaporating cloud technique to resolve disputes
2.7 Open door policy

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