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Where employees don’t do what is expected of them, the employer is often faced with a practical dilemma: Do I treat this as misconduct or incapacity? The concern is that, if the employer misdiagnoses the cause of the problem and dismisses the employee, he or she might be reinstated or be awarded compensation. How can the employer get it right from the outset?

The legal basis

In terms of the LRA an employer is permitted to dismiss an employee if it has a valid reason to do so and has followed a fair process before doing so. Valid reasons are ones connected to the employee’s conduct, or capacity, or based on the employer’s operational requirements. The latter are often referred to as ‘no fault’ dismissals, meaning that the reasons for dismissal are not due to anything on the part of the employee, but are related solely to the business needs of the employer.

The Code of Good Practice: Dismissal (Schedule 8 to the LRA) provides a set of guidelines to be followed by the employer before dismissing an employee for misconduct, ill health, poor performance and, by extension, also incompatibility.

Distinguishing between misconduct and incapacity

It is important for employers to distinguish between misconduct and, in particular, poor performance and incompatibility. Failure to do so could lead to a finding that an employer has acted in a substantively, or procedurally, unfair manner, or both. For present purposes the difference between conduct and capacity situations may be described as follows: misconduct arises when an employee is able to comply with a workplace rule, doesn’t do so and is at fault. Fault takes one of two forms, i.e. intent or neglect (carelessness). Theft, refusal to obey a reasonable instruction and assault are examples of intentional misconduct. Forgetting to do something, carelessness or failing to take reasonable precautions (e.g. causing a vehicle accident) are examples of negligent behaviour (sometimes referred to as dereliction of duty).

Intentional misconduct would generally be more serious than situations involving negligence. This is confirmed by the Code of Good Practice: Dismissal which provides the following as examples of misconduct that would typically justify dismissal: gross dishonesty; wilful damage to the property of the employer; wilful endangering of the safety of others; physical assault on the employer, a fellow employee, client or customer and gross insubordination.

Poor performance (due to incapacity), on the other hand, arises when an employee is willing to do what is required, but is unable to do so because of, e.g. a lack of skill, training or ability. Because of the absence of fault on the employee’s part, under-performing employees cannot be subject to disciplinary steps, but require counseling over a period of time in an attempt to improve his or her level of performance before dismissal may be considered.

As a rule of thumb, one could say that misconduct involves a situation where an employee’s behaviour suggests: ‘I can do what’s expected but I won’t, or don’t care’. In the case of incapacity involving poor performance, on the other hand, the message is: ‘I’d like to do what’s expected, but I can’t’.

What if the case is not clear-cut?

Situations may arise where the distinction is difficult to draw. For example, an employee regularly arrives late for work. On the face of it, this constitutes misconduct. On closer inspection, however, the employer discovers that the employee is entirely dependent on public transport that is notoriously unreliable. If there is a rule that employees must inform their employer if they run late and she fails to comply with it, that in itself would constitute misconduct to be addressed by a series of warnings, which could ultimately result in dismissal. However, assuming that she informs her employer as required - yet she continues to arrive late on a regular basis - how should the employer deal with it?

If the employer’s investigations show that her lateness is not due to her fault and that she has no other means of getting to work, she cannot be accused of misconduct as the situation is not her fault – it’s beyond her control. Yet this does not mean that the employer cannot do anything. It should see the situation as one involving incapacity, i.e. the employee’s inability to meet one of the requirements of her job. What is required in this instance is a discussion with the employee to look at ways of accommodating her while ensuring that the employer’s needs are also met. This could include a more flexible work schedule for her, requiring her to work in lost time, agreeing that her lost hours would be deducted from her salary, transfer to a section where her lateness does not present a major problem, etc.


If it is not possible for the employee’s behaviour to be clearly classified as either conduct or capacity-related, it would be advisable to treat the situation as one involving incapacity. Should further investigations reveal that the problem in fact involves fault on the employee’s part, the employer can switch to a disciplinary (misconduct) process.

Barney Jordaan for


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