Conduct vs Capacity – What’s the difference?

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The Labour Relations Act, 66 of 1995 (LRA) allows employers to terminate employees for reasons related to their conduct or capacity provided that the dismissal was affected in accordance with the fair procedures prescribed in Schedule 8 (Code of good practice) of the LRA. As the procedures in the code of good practice relating to terminations due to capacity and conduct differ from each other materially, it is essential to ensure the proper categorization of the matter which will determine the correct course of action to be taken against an employee.

Many employers find themselves dismissing employees for the wrong reasons, this is usually due to the employer or manager’s failure to correctly differentiate between misconduct and incapacity due to poor work performance, and then subsequently following the incorrect procedures prior to dismissal. These errors are not only costly to the employer but highlight shortcomings of appropriately and effectively managing the performance of employees, which ultimately serves the commercial goals of employers.

When a matter relates to an employee who has the inability or cannot meet the required standard, this is a capacity issue. The employee is willing and trying hard, but despite the employer giving them training and guidance, they are still struggling to perform. This should be dealt with through performance improvement or incapacity procedures.

When a matter relates to and employee who can meet the required standard, but does not, this is a conduct issue. This means that the employee has the necessary skills and training to perform their role, but they are, for example, negligent, dishonest, refuse to carry out duties or follow reasonable instructions. These types of issues should be dealt with through disciplinary procedures.

The above parallel comparison was considered in the matter of ZA One (Pty) Ltd t/a Naartjie Clothing v Goldman No and Others (2013) 34 ILJ 2347 (LC) where the Court stated: ‘… what is then the difference then between negligence (misconduct) and poor work performance? The distinction can be found in the concept of willfulness or deliberateness. In the case of negligence, it must be present, whilst in the case of poor performance, it must be absent. …’, then added:

‘… the distinction between poor performance and misconduct (negligence) can be established by the asking of two simple questions when it has been established that an employee indeed failed. The first question is ‘Did the employee try but could not?‘ and the second question is ‘Could the employee do it, but did not?’ If the first question is answered in the affirmative, then it has to be poor performance, because an employee that honestly (for the want of a better word) seeks to achieve what is expected of him or her but is unable to do so is incapacitated and would not behave wilfully or indifferently or fail to apply the necessary care. If the second question is answered in the affirmative, then it has to be misconduct, as this would be a situation where the employee is fully able to do what is required not to fail, and such failure could therefore only be because of indifference or wilfulness or a failure to take care. …’

Snyman AJ summarizes the mixing of substance and procedure for matters of conduct and capacity in Midas Group Komatipoort v NUMSA and Others (JR1585/14) [2018] ZALCJHB 83 by stating that employees can not be “charged” for poor work performance only to be dismissed following a disciplinary process and applying the considerations for misconduct. Snyman AJ added that opposed to being found “guilty” and sanctioned as is the case for misconduct, the process for incapacity for poor work performance has other objectives, such as being to identify the poor performance, establish what is required to resolve it, providing the employee with assistance to resolve it, and then allowing the employee a reasonable opportunity to achieve what is required.

What is clear from the above is that employers embarking on addressing legitimate disputes for misconduct or incapacity face scrutiny on all aspects of the process. It is advised that any employers embarking on such processes consult with their allocated LabourNet consultant prior to implementing such actions.

For more information on the above topic, please contact the LabourNet Helpdesk at

0861 LABNET (0861 522638).

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