Dismissed for refusing to dismiss
23 May 2012

The managing director of Petzetakis Africa (Pty) Ltd recently found herself in an unenviable position when she was instructed by the group CEO and chairman of the board to summarily dismiss two employees, without holding disciplinary hearings, or face dismissal. Her refusal to comply with the instructions resulted in the company dismissing her. The dismissal was found to be automatically unfair by the Labour Court in Michelle Harding v petzetakis Africa (Pty) Ltd in September 2011.

The respondent company was under some financial pressure at the time that the MD was instructed to dismiss two of its employees without affording them a disciplinary hearing. The MD was of the view that dismissing the employees in the manner requested would be in breach of the Labour Relations Act, 1995 (the LRA) and the Companies Act. In light of her fiduciary duties as a director and executive of the respondent, the MD refused to comply with the instructions, despite being placed under considerable pressure to comply. She was of the view that the instructions were unreasonable and unlawful.

Shortly before her employment contract was terminated the MD had a discussion with the group CEO. She contended that the group CEO attacked her about her alleged non-compliance with the limits of authority. The MD was able to demonstrate that she had acted in compliance with the limits of authority. This, she claimed, was the respondent trying to find a reason to justify the impending dismissal. Shortly thereafter a second meeting took place. The MD was told that her “time was up”. In the letter confirming her dismissal no reason for the termination was provided.

The MD claimed that her dismissal was automatically unfair in terms of section 187(1)(d) read with section 5(2)(c)(iv) of the LRA. Section 187(1)(d) provides that a dismissal is automatically unfair if the reason for dismissal is that the employee took action, or indicated an intention to take action, against the employer by exercising any right conferred by the LRA or participating in any proceedings in terms of the LRA. Section 5(2)(c)(iv) of the LRA prevents a person from prejudicing or threatening to prejudice an employee for failing or refusing to do something that an employer may not lawfully permit or require an employee to do.

The respondent contended that it dismissed the applicant for poor performance / or misconduct. At the trial it did not call any witnesses and thus did not expose its reasoning to scrutiny. The court found that the respondent’s reliance on poor performance and misconduct were attempts to justify the dismissal on valid grounds after the fact. It was found that the real reason for the dismissal was the refusal to comply with the instructions to summarily dismiss two employees.

The Labour Court held that it is required to determine the fairness of a dismissal based on the employer’s true reasons at the time of the dismissal.

It was also noted that the respondent was in the best position to lead evidence relating to the true reason for the dismissal but chose not to. A negative inference was drawn against the respondent in the circumstances.

The court rejected the respondent’s argument that the MD did not demonstrate that the dismissals would have been unlawful if she had acted on the instructions of the group CEO. It was held that at the very least the dismissals would have been procedurally unfair in terms of the LRA and the associated constitutional right to fair labour practices. The learned judge saw no reason why such action would not be unlawful if it entailed a breach of a statutory and constitutional right.

The respondent’s contention that the court must take a robust approach in assessing the procedural fairness of dismissal, because the MD was a senior employee held to a higher degree of accountability, was also rejected. The true reason was not indeed the employee’s performance, but rather her refusal to obey the instructions in question.

The court held that the MD had discharged the onus of proving that the reason for dismissal was automatically unfair. In determining the relief due to the employee the Court took into account the fact that the employee had been asked to do something which would have resulted in civil liability, and not criminal liability or the employee ignoring infringements of workplace safety requirements. These factors reduced the seriousness of the employer’s infringement.

This judgment serves as a warning to employers not to act in haste when dismissing employees. The court will scrutinise the employer’s real reasons for dismissing an employee. Although a challenge to a dismissal will be dealt with by the CCMA or Labour Court, as the case may be, as a new hearing, the court will not entertain new defences raised after the fact. Moreover, the rights of senior employees may not be ridden over roughshod.