The Labour Relations Act 66 of 1995 (LRA) – specifically section 213 – states that a business’ operational requirements are based on that company’s economic, technological or structural needs. These types of requirements could also be based on requisites which are similar to those mentioned in the previous sentence. The LRA also states that ‘incapacity’ can be owing to poor work performance or ill-health.

Many tend to get this distinction confused both employers as well as Commissioners at the Commission for Conciliation, Mediation and Arbitration (CCMA). The case of First National Bank v CCMA another (Case No JR147/2016) shows how easy this is to do.

Facts of the case

  • The Financial Advisory Intermediary Act 37 of 2002 (FAIS Act) came into effect in 2004. The FAIS Act requires all people who are “representatives of a financial advisor” to have passed certain regulatory exams.
  • In this case, an employee of First National Bank (FNB) sat the regulatory exam multiple times – 15 times in four years – however was unsuccessful at every attempt.
  • FNB attempted to find this employee another position in the company, which did not require her to have passed the FAIS exam. However, the positions that were found were not suitable.
  • The bank then held an incapacity hearing with the employee and summarily dismissed her based on her inability to do her job as she was unable to pass the exam.
  • The employee referred an unfair dismissal dispute to the CCMA. The Commissioner here ruled that the dismissal of the employee based on incapacity was incorrect as the employee’s (ill) health was not in question. If anything, she should have been dismissed based on the employer’s operational requirements as the FAIS Act had become so integral to the functioning of the business as to have become part of their operational requirements. The dismissal was thus ruled to be unfair.
  • The CCMA Commissioner’s decision was referred to the Labour Court (LC) who overturned this decision. It stated that the decision of FNB to dismiss the employee for incapacity was correct as she exhibited poor work performance. Consequently, there was no unfair labour practice.

It is essential to have a thorough knowledge of everything to do with labour law if you are a business owner or a manager. Talk to us – at Global Business Solutions – about how we can help you do this.