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In South African labour law, distinguishing between poor work performance and misconduct is crucial to ensuring fairness in dismissal proceedings. Although both may justify termination, they fall under different categories in the Labour Relations Act (LRA) and require distinct procedures. The below is a basic understanding of what the difference is between the two.

Poor Work Performance: Incapacity

Poor work performance is classified as a form of incapacity. It arises when an employee fails to meet performance standards due to lack of skill, competence, or ability, rather than deliberate fault. Employers are obliged to set clear performance standards, provide training, guidance, and reasonable opportunities for improvement. Only if the employee fails to improve after support has been provided may dismissal be considered.

Item 9 of the Code of Good Practice on Dismissal provides as follows:

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

(a) whether or not the Employee failed to meet a performance standard; and

(b) if the Employee did not meet a required performance standard whether or not-

(i) the Employee was aware, or could reasonably be expected to have been aware, of the required performance standard;

(ii) 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.

In Standard Bank of South Africa v CCMA and Others (1998), a case where the employer consistently failed to heed recommendations from medical professionals to properly assess and accommodate an employee after a work-related injury the Labour Court emphasised that incapacity dismissals must be preceded by counselling and assistance and should not be punitive in nature. Dismissal in such cases is effected with notice, reflecting the rehabilitative rather than disciplinary character of the process.

An employer, in contemplating such a dismissal must look at whether the employee was assessed and assisted by way of methods such as performance reviews and documented interventions. Employers must demonstrate genuine attempts to assist the employee before resorting to dismissal.

Unilong Freight Distribution (Pty) Ltd v Muller (1998) confirmed that if employees display shortcomings in the performance of their duties, fairness requires that those employees should not only be informed that their performance is deficient and in what respects, but also that the employees should be given an opportunity to improve.

Misconduct: Fault-Based Conduct

Misconduct, by contrast, is fault-based and relates to breaches of workplace rules, policies, or standards. Examples include theft, insubordination, absenteeism without cause, or breaches of safety regulations. Misconduct is treated as a disciplinary matter, requiring investigation and a fair hearing.

Misconduct involves blameworthy conduct and breach of established and reasonable rules within the workplace. Dismissal may be appropriate where trust is irreparably broken. Progressive discipline, such as warnings, is generally applied unless the misconduct is serious enough to justify dismissal.

The case of Sidumo v Rustenburg Platinum Mines Ltd (2007) is also instructive. The Constitutional Court held that dismissal for misconduct must be both substantively and procedurally fair, and that commissioners at the CCMA must balance the gravity of the misconduct against mitigating factors such as length of service and prior disciplinary record.

Procedural Differences

The procedures for dealing with incapacity and misconduct differ significantly. Poor performance (incapacity) requires counselling, performance improvement plans, training, and reasonable time for improvement whereas misconduct requires a disciplinary enquiry, evidence presentation, and adherence to the audi alteram partem principle (the right to be heard).

Failure to follow the correct procedure can render a dismissal unfair, even if the underlying reason might otherwise justify termination.

Risks of Misclassification

The same workplace issue – poor results – can fall into different categories depending on the underlying cause:

• An employee consistently failing to meet sales targets despite training and support is a case of incapacity.
• An employee falsifying sales figures to conceal under-performance is a case of misconduct.

The risks of treating poor performance as misconduct, or vice versa, are significant. Doing so can result in findings of unfair dismissal at the Commission for Conciliation, Mediation and Arbitration (CCMA), with employers potentially facing adverse arbitration awards as well as potential reputational damage if they fail to distinguish between incapacity and misconduct issues.

Though there may be an overlap between aspects of performance and misconduct, the two should be kept distinct.

In Somyo v Ross Poultry Breeders (2000), the Labour Appeal Court outlined the process for dismissal relating to poor work performance and specifically outlined that where a senior managerial employee was aware of what was required of him and had experience in that regard as well as had been aware of the consequences of failing to carry out those duties could be disciplined and consequently dismissed for such actions.

Conflating genuine incapacity with misconduct could render the dismissal unfair. Having a discussion regarding overall performance does not necessarily equate to ‘warning’ an employee or corrective discipline in the context of misconduct. It has been further confirmed that dismissal is a measure of last resort and becomes necessary, if, after the employee is given a reasonable opportunity and assistance, the employee failed to meet the standard of performance.  In Midas Group Komatipoort v NUMSA and other (handed down on 14 February 2018) the Court dealt with the difference between misconduct and incapacity.

The Court referred with permission to the distinction drawn in ZA One (Pty) Ltd t/a Naartjie Clothing v Goldman NO and others (2013):

‘… what is then the difference between negligence (misconduct) and poor work performance? The distinction can be found in the concept of wilfulness or deliberateness. In the case of negligence, it must be present, whilst in the case of poor performance, it must be absent. …’

An employee cannot therefore be ‘charged’ for poor performance, taken through a disciplinary hearing and dismissed. The objective of a poor performance discussion to assist and get the employee to an acceptable performance standard.

Employer Obligations and Employee Rights

Employers must act with precision in categorising the issue. Misclassification undermines workplace morale and exposes employers to legal risk. Employees, on the other hand, benefit from being correctly categorised: Incapacity preserves dignity by recognising inability rather than fault and allows for intervention that is constructive rather than punitive, whilst misconduct findings carry financial and reputational consequences.

South African labour law thus protects employees from unfair stigmatisation, ensuring that dismissal is a last resort. Internationally, similar distinctions exist. In the UK, poor performance is addressed under capability procedures, while misconduct is handled through disciplinary processes.

South Africa’s approach aligns with global best practice but is uniquely shaped by constitutional principles of fairness and dignity as entrenched in Section 23(1) of the Constitution which outlines that all people have a right to fair labour practices.

A Distinction Worth Making

Poor work performance and misconduct are distinct concepts in South African labour law. Poor performance is about incapacity and one’s inability to meet an established and communicated standard of performance, while misconduct is about fault and a breach of a rule. Employers must carefully apply the correct procedures under the LRA’s Code of Good Practice to avoid unfair dismissal claims. This distinction not only protects employees but also promotes fairness, accountability, and trust in the workplace.

By respecting this distinction, workplaces can build resilience and integrity – values essential in South Africa’s evolving labour landscape.