One of the essential aspects of an employment contract is that the employee must perform specified and/or implied duties for the employer. The employer has the sole discretion to determine the duties to be performed and the standard to which those duties should be completed. Should an employee fail to meet the standard of performance required from the employer, the employer may institute a process of performance management with the employee.

At first glance, performance management only addresses the issues relating to the employee’s lack of performance. However, suppose one considers the Labour Relations Act’s guidelines on dealing with Poor Work Performance, as well as court decisions dealing with dismissals for poor work performance. In that case, the enquiry into an employee’s lack of performance addresses several other issues.

For example, was the inadequate performance as a result of misconduct or fault on the part of the employee or was the standard set by the employer so unreasonable that no employee could have achieved the standard? When one considers these questions, it quickly becomes apparent that there are more issues at play than just evaluating an employee’s level of performance. These questions highlight just some of the factors that should be considered when deciding on the termination of an employee’s services because of unsatisfactory performance.

In ZA One t/a Naartjie Clothing v Goldman NO (2013) 34 ILJ 2347 (LC), the court formulated a test to determine whether poor work performance constitutes misconduct (employee fault) or incapacity (employee not at fault). It involves asking two (2) questions, firstly, did the employee try but could not? And secondly, could the employee do it but did not? If the answer to the first question is “yes”, the matter concerns incapacity because the employee attempted to reach the standard but failed. He did not act with willful intent not to perform or fail to perform with a reasonable standard of care. If the answer to the second question is “yes “, then the employee has misconducted himself and may be disciplined.

Once it has been established that the issue being dealt with is incapacity, the employer is required to commence an investigation as to why the employee’s performance is unsatisfactory. Although the reason may be because of a lack of effort on the part of the employee, the problems could also be attributed to extraneous circumstances, for example, lack of demand for a specific product or inadequate equipment, which contributes to the impaired performance.

For an employer to prove that a dismissal for poor work performance was fair, they will have to prove that the employee’s performance was deficient. This, however, can present its own challenges. The test used to determine an employee’s shortcomings needs to be an objective appraisal. The employer’s opinion alone is rarely sufficient to prove poor work performance was of such a poor standard that dismissal was justified.

As indicated above, the standard would need to be reasonable. The obvious starting point when considering reasonableness is to consider the contractual provisions. Has the employee agreed to a standard and accepted such standard as being reasonable? Although the agreement of a performance standard does not necessarily render the standard reasonable, it is a strong indicator that the standard is achievable, especially if the employee has expressly warranted that he can perform to the agreed standard to secure employment.

Following the contractual provisions, one should consider workplace practices and the level of performance of other employees within the workplace. Should other employees meet the same or similar performance standards, an employer does not need to be too sympathetic towards the non-performer.

Once the employer has determined that the standard of performance required is objectively reasonable, he should then consider the employee’s personal circumstances and whether these have affected the employee’s performance. If the employer identifies problematic personal circumstances, he should determine whether these can be addressed in an effort to improve the employee’s performance.

Ultimately, the poor work performance process is premised on an absence of fault by the employee, and assistance to attain or return to a satisfactory level of performance may be required from the employer. The process should be considered holistically, taking into account industry norms and comparable performance outputs achieved by employees performing similar duties. An ongoing evaluation of performance standards using key performance indicators should be implemented in all workplaces to ensure that the standards of performance expected from employers is being achieved by employees.

Article by: Stephen Kirsten
Provincial Manager – Cape Town