Poor work performance of senior managers

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According to the Labour Relations Act 66 of 1995. Schedule 8, Item 9:

Any person determining whether a dismissal for poor work performance is unfair should consider –

  • Whether or not the employee failed to meet a performance standard; and

  • If the employee did not meet a required performance standard whether or not-

  • The employee was aware, or could reasonably be expected to have been aware, of the required performance standard;

  • The employee was given a fair opportunity to meet the required performance standard; and (iii) Dismissal was an appropriate sanction for not meeting the required performance standard.

It is very clear from the above that the legislators did not differentiate, when drafting the section, as to how the poor work performance of senior managers must be dealt with as opposed to that of their junior counterparts or less skilled colleagues. The normal requirements for dismissal due to incapacity as a result of poor work performance include to appraise, warn and allow the employee an opportunity to improve performance. This stems from the principles of the law of contract which deal with breach of contract, according to which, the party that has breached the contract needs to be advised of such breach and afforded an opportunity to rectify such breach before the contract can be terminated.

However, case law, namely, the Somyo and New Forest Farming judgments have highlighted exceptions to the above procedure, when dealing with the poor performance of senior managers.

In the Somyo v Ross Poultry Breeders case, the court stated that an employer who is concerned about the poor performance of an employee is normally required to appraise the employee’s work performance; to warn the employee that if his work performance does not improve, he might be dismissed; and to allow the employee a reasonable opportunity to improve his performance.

The above requirements may not apply in two cases which were relevant also to the Somyo matter. The first is the manager or senior employee whose knowledge and experience qualify him to judge for himself whether he is meeting the standards set by the employer. The second is where “… the degree of professional skill which must be required is so high, and the potential consequences of the smallest departure from that high standard are so serious, that one failure to perform in accordance with those standards is enough to justify dismissal.”

The more recent case of New Forest Farming v Cachalia and others reiterated the findings of the court in Somyo v Ross Poultry Breeders. The case dealt with a farm manager who had been managing the farm for plus minus ten years, where the farm owner was permanently residing in Zambia. The farm owner had dismissed the farm manager for poor work performance in that the farm had only been self-sufficient for one out of the ten years that he had been managing the farm. In this case the court also dealt with the two exceptions to the “normal” requirements of dealing with incapacity due to poor work performance in senior managers, namely:

  • Where the employee manager or senior employee’s knowledge and experience qualify him to judge whether he is meeting standards set by the employer

  • Where the employee’s job requires such a high degree of skill that consequences of smallest departure therefrom are serious and justify dismissal

What the court said in the New Forest Farming case is that in certain circumstances it may not be necessary to warn an employee of the procedure or standard required when that employee knew or reasonably could be expected to know the standard required by the employer, providing an exception to the general rule.

In the 2014 judgement of RGC Engineering (Pty) Ltd v Byrch, the Labour court was of the view that this particular matter could not be said to have fallen within anyone of the exceptions contemplated in the Somyo v Ross Poultry Breeders case, with the result that there was no basis upon which the applicant could have dispensed with the pre-dismissal procedure required in cases of dismissal for poor work performance.

In this case, Byrch, hereinafter referred to as the respondent, was employed by RGC Engineering, hereinafter referred to as the applicant, as a sales person and the applicant further contended that he was the most senior sales person as he held the title product manager and was paid more than the other sales people. On evidence presented before the Commissioner it appeared that the only difference between general sales people and product managers was that general sales people sold the entire range of products, whereas product managers specialised in specific product sales.

The court did, however, find that substantively, there were factors that were not considered by the Commissioner when making the award, thus on that basis the matter was referred back to the Commission for Conciliation Mediation and Arbitration (CCMA) for hearing by a Senior Commissioner.

The above mentioned cases read together with the Schedule 8 Item 9 of the Labour Relations Act illustrate that although senior managers are held to higher standards, it is not in all cases of senior managers that we can justify a deviation from the requirement of appraising and providing an opportunity to improve before dismissing senior managers who are not performing.

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