Unfair Dismissal

Reinstatement is the primary remedy for an unfair dismissal, however, compensation may be awarded and in most cases is awarded as it is preferable by both employer and employee. The point of this article is to set out a general overview on the law of dismissals in an attempt to avoid the risks of facing these kinds of claims.


The Labour Relations Act 66 of 1995 (“the LRA”) specifically provides that “Every employee has the right not to be unfairly dismissed”. For a dismissal to be fair an employer must have a fair reason to dismiss and must follow a fair procedure in giving effect to the dismissal. Generally, there are only three legitimate reasons for dismissal of an employee, namely:

• Misconduct;
• Incapacity due to poor work performance or ill health or injury; and
• The operational requirements of the employer (retrenchment).

The procedural fairness requirements differ in respect of each of the reasons referred to above but as a general proposition, an employee’s services cannot simply be terminated simply by giving notice in terms of the contract of employment.


The Code of Good Practice: Dismissal at Schedule 8 of the LRA (‘the Code’) provides detailed guidance regarding the procedural requirements for a fair dismissal for misconduct. In brief, the employer must conduct a proper disciplinary process prior to any dismissal for misconduct. In addition to the aforegoing, an employer must also comply with its own internal disciplinary policy/procedure, (if any).

Incapacity – Poor work performance

An employee should not be dismissed for unsatisfactory performance, unless the employer has:

• Given the employee appropriate evaluation, instruction, training, guidance or counselling; and
• After a reasonable period of time for improvement, the employee continues to perform unsatisfactorily.

Although these requirements are to some extent self-explanatory, it follows that an employer should first conduct an investigation to establish the reasons for the unsatisfactory performance and consider alternate remedial ways before dismissal.

Incapacity – Ill health or injury

Incapacity on the grounds of ill health or injury might be temporary or permanent:
• If an employee is temporarily unable to work because of genuine ill health or injury, the employer should investigate the extent of the incapacity or the injury.
• If the employee is likely to be absent for a time that is unreasonably long in the circumstances, the employer should investigate all the possible alternatives short of dismissal.


‘Operational requirements’ are defined as ‘requirements based on economic, technological, structural or similar needs’.
This process is regulated as it were by section 189 of the LRA and, in essence, requires a bona fide, process of consultation before an employer makes a decision to terminate an employee’s services on the basis of the employer’s operational requirements. Section 189(2) of the LRA expressly provides that the consulting parties must ‘engage in a meaningful joint consensus-seeking process’.
This is a useful summary of our dismissal law but is not intended to constitute legal advice which is subject to particular facts, circumstances and the law at the time. Any liability that would or could arise from or of the contents hereof is hereby excluded.

Nailah van der Schyff

Contact: The Woodstock Lawyers

(021) 448 5110