Using Retrenchment to deal with Incompatibility
Often employers are faced with conflicting persona in the workplace, with conflicting employees locked in a hierarchical struggle to achieve relevance or superiority. Personality traits has a far-reaching effect on harmonious relations, given the prevalence of psychometric testing to ascertain whether employees are a proper fit for the position they hold and the workplace environment they operate in. Conflicts between personalities can be detrimental and emotionally draining. Often these struggles for superiority lead to a lack of productivity, with the employer spending time and resources on endless conflict resolution.
In Zeda Car Leasing vs Susan van Dyk (2020) the employer was entangled in a conflict between two managers who found it impossible to work together. Due to the relentless conflict between the two, productivity was strained as employees continuously had to focus on covering for their own interest. Van Dyk commenced employment on 13 February 2006 and promoted to the capacity of General Manager: Gauteng Key Accounts.
Over time, a conflicting relationship developed between van Dyk and Friebe. In June 2015, van Dyk approached the Business Development Executive, Mr. Geldenhuys, with a complaint against Friebe. Mr. Geldenhuys decided to procure the services of an external facilitator to undertake a conflict resolution exercise between the two managers. In addition to the facilitations, Geldenhuys issued identical letters to both van Dyk and Friebe, asking questions about their relationship, with a focus on the parties to identify the root cause of their conflict as well as measures in improving the relationship between the two.
Van Dyk was dismissive of the situation, whereas Friebe provided a comprehensive account of the relationship, one lacking in trust, accountability, mutual respect, and poor communication. As a solution to the problem, Friebe proposed a change in structure in which either she or van Dyk moved into a different portfolio.
Following a meeting, Geldenhuys informed van Dyk that he was implementing certain structural changes. A few days later Geldenhuys held a meeting with both Friebe and van Dyk, informing them that he will be implementing structural changes in that one new General Manager position would be created that incorporated both divisions. Both candidates can apply, effectively making one employee’s position redundant. Following the meeting, Geldenhuys handed a letter to both employees, advising them of the creation of the new position and that the deadline for applications would be 25 September 2015. Friebe indicated interest in applying for the position, however van Dyk did not.
A few days later, van Dyk’s attorneys send a letter to the employer advising them of committing an unfair labour practise for failing to comply with the processes and requirement of the Labour Relations Act. In response, the employer issued van Dyk with a Section 189 (3) notice. In a discussion on alternatives, Geldenhuys informed van Dyk that she rejected making an application for the new position. In terms of the proposed method of selecting which employees to dismiss, Geldenhuys informed van Dyk that considering she did not apply for the position, that she would be the only person earmarked to be dismissed.
On the 8th of October 2015, the employer presented a letter to van Dyk including a severance package. The letter stated that the employer consulted with van Dyk in terms of Section 189 of the LRA, that various alternatives were considered, but rejected as inappropriate. The employer set a deadline for van Dyk to accept the offer of a severance package on the 12th of October 2015. On the 8th of October, however, the employer circulated a letter to all staff informing them that van Dyk would be leaving the company on the 12th of October. Van Dyk refused to accept the offer , with Human Resources subsequently informing her that her services was terminated based on the operational requirements of the employer.
Van Dyk filed a dispute to the CCMA for an automatic unfair dismissal in terms of Section 187 of the LRA, in the alternative, a dismissal that is procedurally unfair. The dispute eventually came to the Labour Court. In upholding the decision of the Labour Court, the Labour Appeal Court held that van Dyk failed to establish a case of unfair discrimination and dismissed the application in terms of Section 187, however, considering they also filed an application in terms of a procedurally unfair dismissal, the Appeal Court held:
“The Labour Court, however, found that the dismissal was procedurally unfair principally because it was presented as a fait accompli before proper consultation on the topics contemplated in section 189 of the LRA. Section 189 provides that when an employer contemplates dismissal on operational requirement grounds, it must engage in a “meaningful joint consensus seeking process” and attempt to reach consensus on: i) appropriate measures to avoid the dismissals, minimise the number of dismissals, change the timing of the dismissals and to mitigate the adverse effects; ii) the method for selecting the employees to be dismissed; and iii) severance pay. The consultation must precede a final decision on retrenchment in order not to forestall what might emerge in the consultation process.”
The employer endeavored to deal with the issue of conflict between the two employees by consolidating two positions into one position and pre-determined that one person would be dismissed. This is in contradiction to the purpose of Section 189 as an outcome of a Section 189 process cannot be pre-determined. The dismissal of van Dyk was a fait accompli. The Labour Appeal Court confirmed compensation to the amount of R932 321.73
Interestingly, the Appeal Court made a comment on the preferable approach that the employer should have followed in dealing with the underlying problem, which had to do with incompatibility in the workplace. The Court stated:
“Incompatibility involved the inability on the part of an employee to work in harmony either within the corporate culture of the business or with fellow employees. There has been some difference of opinion in the past about whether incompatibility is an operational requirements or an incapacity issue. The prevailing view is that incompatibility is a species of incapacity because it impacts on work performance. If an employee is unable to maintain an appropriate standard of relationship with his or her peers, subordinates and superiors, as reasonably required by the employer, such failure or inability may constitute a substantively fair reason for dismissal. Procedural fairness in incompatibility cases requires the employer to inform the employee of the conduct allegedly causing the disharmony, to identify the relationship affected by it and to propose remedial action to remove the incompatibility. The employee should be given a reasonable opportunity to consider the allegations and proposed action, to reply thereto and if appropriate to remove the cause for disharmony. The employer must then establish whether the employee is responsible for or has contributed substantially to irresolvable disharmony to the extent that the relationship of trust and confidence can no longer be maintained.”
What we learn from this case is that a decision-maker, must endeavor to identify the underlying nature of the dispute and apply the correct procedure. In this case, the substantive fairness was not brought into dispute, but only the procedural fairness as far as it relates to the Section 189 process, however, a more appropriate process would have been to follow an incompatibility process and identify whether the employee was incompatible with the organizational culture of the employer.
It is advisable for employers to ask for the assistance of a professional Labour Relations Specialist when facing employment law difficulties. Tobie Nel is the Managing Director for Effectus Harmony (Pty) Ltd and has over 15 years’ experience in Labour Law. You can contact him, by phone: 0824479512, by email: [email protected] or www.effectusharmony.co.za