Employment law update – Dismissal for incapacity

May 1st, 2019

In Solidarity and Another v Armaments Corporation of South Africa (SOC) Ltd and Others [2019] 3 BLLR 248 (LAC), the South African National Defence refused to renew the employee’s security clearance without giving reasons. Armscor then terminated the employee’s service after 30 years because the employment contract and the Defence Act 42 of 2002 required all employees to have a security clearance. The employee challenged his termination by writing a letter to Armscor stating that he had not been provided with reasons for the refusal. Furthermore, he had not been afforded an opportunity to state his case and no pre-dismissal process had been followed with him.  The employee also lodged an urgent revision of his security clearance but this remained pending.

The employee referred the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA) where it was found that the dismissal was substantively and procedurally unfair. The CCMA ordered reinstatement and nine months’ backpay as no process had been followed with the employee and Armscor should have considered a sanction short of dismissal.

On review, the Labour Court (LC) found that the dismissal was substantively fair as the employee’s security clearance had been revoked in its entirety so he could not be accommodated elsewhere. The LC was of the view that it would be unreasonable to expect Armscor to keep a high earning employee in employment pending the outcome of the security clearance review process. The LC agreed that the dismissal was procedurally unfair as no process was followed with him. The reinstatement order was accordingly replaced with an order for eight months’ compensation.

On appeal the Labour Appeal Court (LAC) had to determine whether the failure to have a security clearance rendered the employee’s employment impossible due to incapacity. The LAC found that it was impossible to determine the fairness of the dismissal, while the grounds for the refusal of the security clearance were unknown. The dismissal was accordingly found to be substantively unfair as the incapacity would only be permanent if the outcome of the security clearance review process revealed that his security clearance was still denied.  Furthermore, Armcsor had not been consistent as it had retained two employees without security clearances in the past. The LAC, however, held that an order of reinstatement was not reasonably practicable or legally competent and found that compensation equal to 12 months’ remuneration was appropriate.

Monique Jefferson BA (Wits) LLB (Rhodes) is a legal practitioner at DLA Piper in Johannesburg.

This article was first published in De Rebus in 2019 (May) DR 26.