Probation, poor performance and dismissal – a bitter trio

This question was considered by the Labour Appeal Court (LAC) in the matter of Ubuntu Education Fund v Paulsen NO and others.

Ms S was employed, subject to a six-month probationary period, by the Ubuntu Education Fund (UEF) as a supply chain coordinator. She was unable to achieve four Key Performance Areas (KPA’s) required by virtue of her appointment. A temporary administrator was hired to do the procurement whilst Ms S familiarised herself with the administration systems. She was informed, at a meeting of the Fund, of the concerns about her performance. At a further meeting, she was also given assistance to improve. Performance appraisals revealed that Ms S was on average the worst performer in the company by a significant margin. A Poor Work Performance (PWP) hearing was convened, and she was subsequently dismissed for poor work performance.

She referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). The Commissioner held that her dismissal was substantively unfair on the basis that she had become a permanent employee when her probation ended, and this indicated that the UEF was satisfied with her performance. The Labour Court refused to set aside the award on the ground of unreasonableness as it accepted that she was no longer a probationary employee and that the commissioner had dealt properly with the evidence.

Interestingly, the LAC took a different view as the Labour Court and held that an inference that the UEF impliedly confirmed Ms S’s permanent employment is neither plausible nor consistent with the proven facts. Accordingly, the Commissioner and the Labour Court erred in concluding that she was automatically confirmed as a permanent employee, despite the expiry of the probationary period.

Item 8 of the Code of Good Practice: Dismissal entitles employers to require new employees to serve a probationary period before the appointment of the employee is confirmed. Her contract of employment provided that the employee will be assessed during the probation period “for confirmation of his suitability” for permanent employment.

The purpose of a probationary period is not only to assess whether the employee has the technical skills or ability to do the job but also to ascertain whether the employee is a suitable employee in a wider sense. Aspects of demeanour, diligence, compatibility and character are considered under the ambit of “fit”. An employee on probation is entitled to substantive and procedural fairness, but a lower standard of substantive fairness is permitted in terms of Item 8(1)(j) of the Code of Good Practice. Reasons for dismissal may be less compelling than would be the case in dismissal effected after the completion of the probationary period.

The LAC found that when the probation period came to an end, the UEF was engaged in an ongoing review and evaluation process as reflected in the minutes of meetings. This process was not completed until the PWP hearing. The LAC remarked that it would have been unfair in the circumstances not to have extended the probationary period. Although not formally extended, the LAC held that the probationary period was extended impliedly or by quasi mutual assent during which time Ms S was given a last opportunity to improve. She understood this in that at her PWP hearing she asked for her probationary period to be extended for another six months.

What about alternative employment? In this case, the UEF was a non-profit organisation with limited resources. It could not be expected to amend the requirements of an advertised position to accommodate the limitations of a probationary employee who proves unsuitable. Dismissal was the appropriate sanction in this circumstance.

This judgment highlights the importance of assessment and guidance during a probationary period, how as a matter of fairness the completion of the review and evaluation process must be done even if it surpasses the time for the probationary period and that where an employee continues working post expiry of the probationary period, this does not necessarily mean the employee is now a permanent employee.