Aadil PatelCLIFFE DEKKER HOFMEYR

“Managing Senior Employees”

• “Local firms drag feet over outsize CEO pay packages”

-PWC 11 June 2012

• “SARU bosses awarded 107% bonus hike”-fin24.com 2 May 2013

• “Old Mutual CEO paid R33m in 2012”-fin24.com 5 April 2013

• “Executives paid too much – survey”-fin24.com 13 August 2012

CCMA warns of tough times ahead - Nerine Kahn

•“For the first time in its 17-year history, skilled professionals are referring cases to the CCMA”

•“The new trend developing in the labour market is the increasing number of cases being referred to the CCMA by professionals in the IT sector, banks and consultancies”

INTRODUCTION

•Senior Managerial Employees in a unique position• High earners• Specialist skill• Position of power

•Question: does the law cater for this uniqueness?• Less formal procedure• Misconduct, poor performance, operational requirements• Amendments to the LRA

LESS FORMAL PROCEDURE

•Avril Elizabeth Home for the Mentally Handicapped v CCMA•LC rejected the “criminal justice model” of procedural fairness

•National Bioinformatics Network Trust v Jacobson• Informal workplace procedures

•Nitrophoska (Pty) Ltd v CCMA • Applies even more strongly where senior managerial employees are involved

ABRIDGED PROCESS

•Ngutshane v Ariviakom (Pty) Ltd • where an employee’s misconduct is manifest, common cause or not in dispute, a

less formal process will suffice

•Young v Coega Development Corporation (Pty) Ltd • more flexible procedure acceptable in certain circumstances

MISCONDUCT

•Does one have to adhere to the requirements of the CGP: Dismissal meticulously?

•If not, why not?

•Is the seniority of an employee mitigating or aggravating in the determination of the appropriate sanction?

MISCONDUCT

•J D Group Ltd v De Beer• “A greater degree of trustworthiness is to be expected from a more senior

employee particularly if a greater measure of responsibility, such as the power to discipline, is entrusted to that position. The respondent's senior position must therefore be regarded as having aggravated his conduct”

•Palaborwa Mining Company Ltd v Cheetham & others• senior position and status is an aggravating factor insofar as the determination of

the appropriate sanction is concerned

POOR PERFORMANCE

•Can the employer set performance standards (and adjudicate attainment of those standards) within its discretion?

•Do the requirements for the assessment of poor performance apply to senior employees?

•If not, under what circumstances?

POOR PERFORMANCE

•Eskom v Mokoena• employer entitled to set standards and within employer’s discretion to assess

whether standards have been met

•New Forest Farming CC v Cachalia & others and Somyo v Ross Poultry Breeders (Pty) Ltd

• requirements do not apply to senior employees who can “ judge for themselves” or where smallest departure from degree of professional skill required could be catastrophic

POOR PERFORMANCE

•Unilong Freight Distributors (Pty) Ltd v Muller• more flexible and lenient approach to application of dismissal guidelines

•Boss Logistics v Phopi & Others• appointed on the basis of misrepresentations = no duty to counsel or assist • measure of instruction, counseling and guidance dependent on the level of

seniority as well as qualifications and experience

POOR PERFORMANCE

•Brodie v CCMA and others• Employee contended that failure to perform was as a result of lack of job

description and not being given any training, guidance or counseling• LC = job description not required for senior employee• LC = employer is unable to provide training, guidance or counseling where

employee is the expert and employed on the basis of those expertise• LC = employee failed to fulfill the very purpose for which she was employed• LC = this constitutes incapacity to fulfill obligations and duties that formed the

basis of the employment relationship

INCOMPATIBILITY

•How do we deal with cases where a manager or senior employee is simply incompatible with the employer’s organisation?

INCOMPATIBILITY

•Jabari v Telkom SA (Pty) Ltd• incompatibility = “a species of incapacity” relating to “employee’s inability to

maintain cordial and harmonious relationships with his peers”

•JDG Trading (Pty) Ltd t/a Price ’n Pride v Brunsdon• “in the interests of efficiency employer entitled to choose with as much freedom

as is compatible with the honest exercise of a discretion, who it wants at or near the helm of its enterprise”

OPERATIONAL REQUIREMENTS

•Does the law allow for a departure from strict adherence to the requirements of section 189 of the LRA insofar as senior employees are concerned?

OPERATIONAL REQUIREMENTS

•O'Doyle v All Circle Screenprint CC

•Watts v Fidelity Corporate Services (Pty) Ltd

• managerial employee not an ordinary employee - has knowledge of employer's business and often involved in attempts to save business

• Therefore no strict compliance with disclosure obligations necessary

PROPOSED AMENDMENTS TO THE LRA

•Section 188B LRA Bill 2012• Dismissal of employees earning above threshold deemed fair provided they are

given three months' notice and dismissal not automatically unfair

•Explanatory Memorandum

•Problems