Section 27(3) of the Employment Code Act No. 3 of 2019 (the “Employment Code”) permits an employer to terminate an employment contract of an employee upon giving a minimum of 24 hours’ notice if, after an assessment, it is determined that the employee is not suitable for the job.
In practice, employers have often interpreted Section 27(3) of the Employment Code literally when assessing an employee’s suitability.
Mandatory Procedural Requirements for Terminating Employment Due to Unsuccessful Probation: Insights from the Saviours Mundia Case
16 January 2025
During the probation period, it is common for employers to unilaterally evaluate an employee’s performance. If found unsuitable, they provide notice of the unsuccessful probation and terminate the employment contract upon giving 24 hours’ notice.
The High Court, in the recent decision of Saviours Mundia v Consolidated Farming Limited – Comp/IRCLK/442/2019 (the “Saviours Mundia Case”), provided detailed guidance on the procedure to follow when terminating an employee for unsuccessful probation.
This article outlines the steps an employer must comply with before deciding to terminate an employee for unsuccessful probation, based on the guidance from the Saviours Mundia case.
Facts of the Case
The facts of the case are that Saviours Mundia (the “Complainant”) filed a complaint against his former employer, Consolidated Farming Limited (the “Respondent”), on the grounds that he was employed as a Centre Pivot Management Supervisor under a 6-month written employment contract commencing on 23 May 2019 and expiring on 24 November 2019.
In his complaint, the Complainant alleged that the Respondent dismissed him on 25 July 2019 due to unsuccessful probation without assessing him, failing to provide the assessment results, or giving him 24 hours’ notice, contrary to Sections 27(2) and (7) of the Employment Code. The Complainant further alleged that this breach violated the rules of natural justice.
Reliefs Sought by the Complainant
Consequently, the Complainant sought the following reliefs from the High Court:
- Notice pay;
- Damages for breach of contract (unpaid total sum of the contract);
- Allowances conferred by law;
- Costs and interest at the prevailing banking rate;
- Any other reliefs deemed fit by the Court.
Respondent’s Defense
The Respondent denied the Complainant’s assertions, arguing that:
- The employee was not entitled to notice pay;
- The employee was given a fair opportunity to meet the required standards;
- The employee was not entitled to any claims made as they were frivolous and vexatious.
Issues for Determination
Arising from the facts of the case, the Court identified several issues to determine, including:
- Whether or not the Respondent followed the statutory procedural requirements for termination due to unsuccessful probation;
- Whether the employee was given an opportunity to meet the required standards;
- Whether the employee was afforded an opportunity to be heard prior to dismissal;
- Whether dismissal was the correct remedy for the alleged poor performance.
Decision of the Court
The Court held that an employment contract must explicitly provide for probation; otherwise, the employee is considered confirmed from the start of their employment. Furthermore, if a probation clause exists, the employer is obligated to comply with the requirements set out in Section 27 of the Employment Code.
The Court emphasized that Section 27 outlines mandatory steps for terminating an employee due to unsuccessful probation, including assessing the employee and communicating the results of the assessment before the end of the probationary period.
The Court highlighted that employers must inform employees of performance standards at the beginning of probation, evaluate their suitability for confirmation against these standards, and provide a reasonable opportunity to improve during the probationary period. Additionally, the probation period can be extended if further assessment is necessary.
The Court concluded that an employer can only dismiss an employee for unsuccessful probation or extend the probation period if:
- The employee has been assessed;
- The assessment results have been communicated;
- The employee has been given an opportunity to be heard.
If the employer fails to conduct or communicate the performance appraisal by the end of the probationary period, the employee is deemed confirmed.
Conclusion
In summary, before terminating an employment contract on the grounds of unsuccessful probation, an employer must undertake a four-stage inquiry, ensuring that:
- The employee was aware of the performance standards expected;
- The employee was given a fair opportunity to meet those standards;
- The employee was given an opportunity to be heard;
- Dismissal was the appropriate remedy for poor performance.
It is important to note that the Saviours Mundia decision, as a High Court ruling, is not binding on other High Court judges or superior courts and may be overturned if appealed.
Nevertheless, the case provides current guidance for employers regarding termination procedures for unsuccessful probation.
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Read the original publication at May & Co.
