Disciplinary issues within a company can quickly spiral into major risks if not handled correctly.
We have seen a surge in dismissals being set aside due to unfair procedures, resulting in costly financial Cost Orders, damage to brand reputation and significant stress for all parties involved. For CEOs, MDs and senior leaders, this poses a serious threat to the business. While Human Resources typically handles disciplinary matters, the consequences of poor management processes ultimately land on the shoulders of leadership.
Failure to align internal disciplinary processes with the principles of fairness can lead to legal battles that are unnecessary, drain resourcesharm your company’s public image and undermine trust within your workforce. With Courts and Legislation prioritising fairness over legality, leaders need to ensure their procedures are robust, transparent and consistently applied. If not, they could be exposing their companies to unnecessary risks.
As we approach the December holidays, it’s a perfect time for senior leadership to review their disciplinary processes and ensure they are aligned with these principles. Taking proactive steps now could safeguard your business from substantial losses down the line. Here’s why fairness matters and what every leader should know about their internal processes.
The Right to Fair Labour Practices
South Africa’s Constitution enshrines the right to fair labour practices and this is supported by the Labour Relations Act (LRA) 65 of 1995. The LRA emphasises fairness and equity over strict legality, meaning that when an employee brings a case of unfair labour practices to court, the central question is whether the employer acted fairly.
This fairness is further broken down into two essential concepts in labour law: substantive fairness and procedural fairness.
- Substantive fairness refers to whether the reason for the disciplinary action or dismissal is justified. Is there sufficient evidence of misconduct that warrants dismissal?
- Procedural fairness pertains to how the disciplinary action was carried out. Was the process fair and in line with legal and company guidelines?
Common Pitfalls in Disciplinary Procedures
Despite the existence of a clear Code of Good Practice within the LRA, many companies fall short in applying these principles during disciplinary actions. This code requires that before an employee is charged or dismissed, the employer must conduct an investigation to determine whether grounds for dismissal exist. Unfortunately, in my experience chairing disciplinary hearings, I often find that the charges lack substantive fairness due to the employer’s failure to investigate adequately.
This procedural oversight is more common than it should be. When the HR department rushes to discipline without fully investigating the matter, it sets the stage for a potentially unwarranted hearing. Such cases may later be overturned in court or arbitration, leading to financial losses, damaged employee morale and reputational harm to the business.
Why This Matters for CEOs
As the ultimate decision-makers, CEOs and MDs must be aware of the critical importance of fair disciplinary procedures. Not only is this knowledge crucial for avoiding costly litigation, but it also helps maintain a positive relationship between management and employees, which is vital for long-term business success. Every company’s success is closely linked to the quality of its relationships with its employees and the way disciplinary matters are handled plays a significant role in that dynamic.
Whether an employee’s misconduct is serious or minor, the right to a fair and correct disciplinary process is non-negotiable. A breakdown in this process can lead to damaging consequences that reverberate through the entire organisation.
Action Plan
With the December holidays fast approaching, now is an ideal time for CEOs and senior leadership to review their company’s internal disciplinary processes. Ask yourself whether your procedures align with the principles of fairness and whether your HR team is equipped to handle disciplinary matters in a way that mitigates risk.
Ensure that your company is not only compliant with the law but also upholding the values of fairness and equity. Taking the time to review your processes now could save you considerable financial and reputational costs in the future.
By prioritising fairness and following proper disciplinary procedures, you protect your company from legal challenges while fostering a respectful and positive work environment. This, in turn, builds a more resilient, engaged workforce, ultimately contributing to your company’s success.