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Probation Period & Poor work performance

Employment Law , , ,

Even though appointing new employees on the provision of a probation period or having a probation clause in their contract, has become standard practise in South Africa, much mystery and uncertainty still seems to surround the issue of what a probation period actually means in terms of  the rights of both the employee and employer. The main issue that lands employers at the CCMA is that they mistakenly believe that hiring an employee under a probationary contract or having a probationary clause in the employment contract allows the employer to dismiss an employee at the completion or during the probation period, without any regard to the obligations imposed under the Labour Relations Act, but more specifically the Code of Good Practice: Dismissal (more specifically paragraph 8 and 9).

The reasoning behind a probationary period is to provide the employer with an opportunity to evaluate whether a new appointee is suitable to the position to which s/he has been appointed based on the employee’s performance and ability to carry out the responsibilities as is required by the position. This means that the probation period is only applicable to evaluate the employees’ work performance ability. A probation period may not be used as an easy escape to dismiss a newly appointed employee because the manager does not like him or her or because they do not fit into the business culture.

The misconception regarding probation periods usually touches on this point, with many employers believing that when a probation period is close to its end, they may simply inform an employee that their performance is not satisfactory and end their employment. A termination based on this presumption will be deemed both procedurally and substantively unfair.

It is important to keep in mind that when an employer decides not to permanently employ a new employee after their probation period, such a termination of employment effectively constitutes a dismissal due to poor work performance. For a poor work performance dismissal to be both procedurally and substantively fair, such a decision must be supported by records proving that all requirements of the Code of Good Practice: Dismissal (referred to above)  was met in order to afford the employee a fair opportunity to meet such expectations. These include:

  • Records of all training/coaching provided, including on-the-job training and informal mentoring sessions
  • Minutes of meetings with the employee
  • Solutions to address mistakes and poor work performance
  • Reasonable deadlines given for the improvement of poor work performance
  • The result of the measures taken to resolve the identified poor work performance

The employer will also need to prove that the procedure leading to the termination of the employment contract included an investigation to determine the reasons for the poor work performance and that alternative to remedy the situation, short of dismissal, was considered and implemented to resolve the problem. This means that the performance of the new employee needs to be monitored and recorded from the first day.

It is therefore important to remember when appointing a new employee that a probation period or probationary clause in the contract is not seen as a “trial period” by an employer. It should be deemed as being the induction/training period of the employee, integrating them into the new business. Employers should therefore remember to monitor the employee’s performance from the start. Also, make it clear from the start what is expected of the employee and how they can achieve it. The employer has a duty to assist the employee where reasonably possible to achieve the standard which is expected of them and to ensure that its standards are indeed reasonable and achievable.

While probation can be very beneficial to an employer when recruiting and building his or her team, it must only be used for the intended purpose. It is advised to consult a labour law expert when drawing up policy regarding probation to:

  • Design probationary policy and procedure in line with labour law
  • Establish the measures for monitoring and evaluating work performance
  • Set realistic performance standards to measure progress
  • Train managers on probation law and the implementation of the policy and procedure.

Dismissal for Poor Work Performance (PWP) while Employee is on probation (in a nutshell)

During the probation period the Employer should assess the Employee’s performance. In order to assess it must be clear what is expected of the employee. If it is not clear what is expected of the Employee, he/she should be informed, preferably in writing what is expected of him/her.

The Employee should also be given reasonable evaluation, instruction, training, guidance or counselling in order to allow the employee to render satisfactory service. It is advisable that the Employer keeps proof hereof. The Employee must also be given some time to have an opportunity to improve.

Should the Employer determine that the Employee’s performance is below standard, the Employer should advice the Employee of any aspects in which the Employer consider the Employee to be failing to meet the required standards. If the Employer believes that the Employee is incompetent, the Employer should advise the Employee of the respects in which he/she is not competent.

The Employer should also then allow the Employee to make representations (i.e. to respond, preferably in writing) to the allegations of incompetency that the Employer is making. After receiving the Employee’s representations, the Employer may then decide to either extend his probation period, or to dismiss. It is not necessary (while the Employee is on probation only) to hold a formal enquiry or “hearing”.

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The Perpetual Independent Contractor

Employment Law , , , ,

In South Africa a president has taken hold of the employment sector where employers engage the services of an employee without formalizing their relationship in a written contract, believing that in so doing they are circumventing the Labour Relations Act (LRA). This, they believe, makes their employees “Independent Contractors” and they are thus not liable for any protections and entitlements under the LRA.

It is important to note that in defining an “employee,” the act makes no mention of a “contractor” or anything other than an “employee.”

Section 1 of the LRA defines an “employee” as:

Any person, excluding an independent contractor, who works for another person, or for the State, and who receives, or is entitled to receive, any remuneration, and any other person, who in any manner, assists in carrying on or conducting the business of an employer.

Section 200A of the Act continues, stating that an employee is:

A person who works for, or renders services to, another person, is presumed, until the contrary is proved, to be an employee, regardless of the form of the contract, if any one or more of the following factors is present:

i. The way the person works is subject to the control or direction of another person,

ii. the person’s hours of work are subject to the control or direction of another person,

iii. in the case of a person who works for an organisation, the person is a part of that organisation,

iv. the person has worked for that other person for an average of at least 40 hours per month over the last three months,

v. the person is economically dependent on the other person for whom that person works or renders services,

vi. the person is provided with tools of trade or work equipment by the other person, or

vii. the person only works for or renders services to one person.

The independent contractor is not a contract of employment at all, rather it is a contract of work and can be defined as the hiring/letting of piece work in a mutual contract where the independent contractor undertakes to create, build or repair a material thing within a certain period in return for which the employer agrees to pay an agreed upon reward in return.

In South Africa, common law recognizes the distinction between a contract of service (where the party provides a service in subordination to the authority of the employer) and a contract for service (where the party provides a non-subordinated service only answerable to the service deliverables contracted).

South African courts are not bound by the terms or labels used by the parties used in establishing the service relationship. In other words, stipulating in the contract of service that a party to the agreement is an “independent contractor” when in reality the relationship is that of an employer-employee will not sway the courts to view the relationship as anything other than an employment relationship, as in the case where an employee works more than 24 hours in a month – even with a contract that states otherwise – will be seen as an appointed permanent employee.