Aadil Patel CLIFFE DEKKER HOFMEYR “Managing Senior Employees”

“Local firms drag feet over outsize CEO pay packages” -PWC 11 June 2012 “SARU bosses awarded 107% bonus hike” -fin24.com 2 May 2013 “Old Mutual CEO paid R33m in 2012” -fin24.com 5 April 2013 “Executives paid too much – survey” -fin24.com 13 August 2012

CCMA warns of tough times ahead - Nerine Kahn “For the first time in its 17-year history, skilled professionals are referring cases to the CCMA” “The new trend developing in the labour market is the increasing number of cases being referred to the CCMA by professionals in the IT sector, banks and consultancies”

INTRODUCTION Senior Managerial Employees in a unique position High earners Specialist skill Position of power Question: does the law cater for this uniqueness? Less formal procedure Misconduct, poor performance, operational requirements Amendments to the LRA

LESS FORMAL PROCEDURE Avril Elizabeth Home for the Mentally Handicapped v CCMA LC rejected the “criminal justice model” of procedural fairness National Bioinformatics Network Trust v Jacobson Informal workplace procedures Nitrophoska (Pty) Ltd v CCMA Applies even more strongly where senior managerial employees are involved

ABRIDGED PROCESS Ngutshane v Ariviakom (Pty) Ltd where an employee’s misconduct is manifest, common cause or not in dispute, a less formal process will suffice Young v Coega Development Corporation (Pty) Ltd more flexible procedure acceptable in certain circumstances

MISCONDUCT Does one have to adhere to the requirements of the CGP: Dismissal meticulously? If not, why not? Is the seniority of an employee mitigating or aggravating in the determination of the appropriate sanction?

MISCONDUCT J D Group Ltd v De Beer “A greater degree of trustworthiness is to be expected from a more senior employee particularly if a greater measure of responsibility, such as the power to discipline, is entrusted to that position. The respondent's senior position must therefore be regarded as having aggravated his conduct” Palaborwa Mining Company Ltd v Cheetham & others senior position and status is an aggravating factor insofar as the determination of the appropriate sanction is concerned

POOR PERFORMANCE Can the employer set performance standards (and adjudicate attainment of those standards) within its discretion? Do the requirements for the assessment of poor performance apply to senior employees? If not, under what circumstances?

POOR PERFORMANCE Eskom v Mokoena employer entitled to set standards and within employer’s discretion to assess whether standards have been met New Forest Farming CC v Cachalia & others and Somyo v Ross Poultry Breeders (Pty) Ltd requirements do not apply to senior employees who can “ judge for themselves” or where smallest departure from degree of professional skill required could be catastrophic

POOR PERFORMANCE Unilong Freight Distributors (Pty) Ltd v Muller more flexible and lenient approach to application of dismissal guidelines Boss Logistics v Phopi & Others appointed on the basis of misrepresentations = no duty to counsel or assist measure of instruction, counseling and guidance dependent on the level of seniority as well as qualifications and experience

POOR PERFORMANCE Brodie v CCMA and others Employee contended that failure to perform was as a result of lack of job description and not being given any training, guidance or counseling LC = job description not required for senior employee LC = employer is unable to provide training, guidance or counseling where employee is the expert and employed on the basis of those expertise LC = employee failed to fulfill the very purpose for which she was employed LC = this constitutes incapacity to fulfill obligations and duties that formed the basis of the employment relationship

INCOMPATIBILITY How do we deal with cases where a manager or senior employee is simply incompatible with the employer’s organisation?

INCOMPATIBILITY Jabari v Telkom SA (Pty) Ltd incompatibility = “a species of incapacity” relating to “employee’s inability to maintain cordial and harmonious relationships with his peers” JDG Trading (Pty) Ltd t/a Price ’n Pride v Brunsdon “in the interests of efficiency employer entitled to choose with as much freedom as is compatible with the honest exercise of a discretion, who it wants at or near the helm of its enterprise”

OPERATIONAL REQUIREMENTS Does the law allow for a departure from strict adherence to the requirements of section 189 of the LRA insofar as senior employees are concerned?

OPERATIONAL REQUIREMENTS O'Doyle v All Circle Screenprint CC Watts v Fidelity Corporate Services (Pty) Ltd managerial employee not an ordinary employee - has knowledge of employer's business and often involved in attempts to save business Therefore no strict compliance with disclosure obligations necessary

PROPOSED AMENDMENTS TO THE LRA Section 188B LRA Bill 2012 Dismissal of employees earning above threshold deemed fair provided they are given three months' notice and dismissal not automatically unfair Explanatory Memorandum Problems