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In South African labour law, poor performance is a legitimate reason for disciplinary action, including dismissal. However, the employer must follow a fair and legal process to address the poor performance. Here are some key aspects:

1. Performance management: Employers must have a performance management system in place to identify and address poor performance.
2. Verbal and written warnings: Employers must issue verbal and written warnings to employees, specifying the performance issues and required improvements.
3. Performance improvement plan: Employers must develop a performance improvement plan with clear goals, timelines, and support for the employee.
4. Disciplinary action: If performance doesn't improve, employers can take disciplinary action, including dismissal.
5. Procedural fairness: Employers must follow a fair and legal process, including a disciplinary hearing, before dismissing an employee for poor performance.
6. Substantive fairness: Employers must prove that the dismissal was substantively fair, meaning the employee was given a reasonable opportunity to improve and the dismissal was an appropriate sanction.

Tax Avoidance v Tax Evasion?

Tax avoidance stems from efficient tax planning and structuring one’s affairs in the most tax-friendly manner to reduce your tax burden by avoiding or paying less tax.

Tax evasion, on the other hand, refers to illegally minimising or avoiding certain tax liabilities in their entirety. Tax evasion typically involves a person engaging in fraudulent activities, and such activities include providing information that is false and incorrect in an attempt to mislead SARS. Tax evasion is a criminal offence and is punishable by way of a fine or imprisonment.

Navigating legal complexities with precision and expertise.

Contact us on [email protected] if you need assistance with:
• Compliance for small businesses
• Tax and Commercial law
• Labour Law and Dispute resolution

What a lovely review! Thank you for your kind words.

Sometimes it's better to do business over a decent breakfast. Can you recommend your favourite breakfast spot?

One of GE Inc's branches are based in the beautiful town, Hermanus.

Contact us on [email protected] if you need assistance with:
- Compliance for small businesses
- Tax and Commercial law
- Labour Law and Dispute resolution

Tax law: We have a specialized department that can service you and provide advice on income tax, capital gains tax, customs and excise duties, VAT and estate duty.

We further provide advice on the implications of transactions as well as assistance with tax planning and structuring.

Commercial law: Starting a new business or need help to restructure your current one? We are here to ensure you are compliant in all aspects.

Labour Law: Like all relationships, employment relationships can break down beyond repair but.... before we get there, let's try repair if for you.

Meet Eugenio, our in house private equity and tax expert. Eugenio specializes in complex business and tax structures and also holds 2 degrees in law. He also has over ten years experience in corporate commercial law.

More about him:
Favourite drink: many many cups of coffee ☕️ ☕☕☕
Favourite cuisine: Mediterranean 🍅
Favourite Hobby: Building PC's 👷‍♂️
Favourite trip away: Egypt 🇪🇬

You can reach him on [email protected]

Meet Michelle. Our labour law expert. She holds two degrees in law and has over ten years experience in handling contentious labour disputes.

Here is more about her:
Favourite drink: Milky Tea 🍵
Favourtie cuisine: Japanese 🍱
Favourite hobby: Cooking in my new kitchen 🥢
Favourite trip away: Rome 🇮🇹

You can reach her on [email protected]

We wish to congratulate Shani Bartlett on her admission as an Attorney. Shani started her articles with us in 2019 and has now been promoted to an Associate at our firm. Well done Shani on your achievement and we wish you all the success in your career.

“Power of Attorney” is a phrase that you hear often in a wide variety of contexts. In many instances companies will require the assistance of a representative during its dealings, this will be accomplished using a Power of Attorney. In other instances, individuals may grant a third party a Power of Attorney to manage certain aspects of their financial affairs. Understanding what a Power of Attorney is and how it affects you after certain major life events is critical.

A Power of Attorney is a document that sets out the scope of the agent’s authority to act on the principal’s behalf. These can be used for a specific matter for example registering a company (“a special power of attorney”) or for a broader set of matters (“a general power of attorney”). By virtue of signing a Power of Attorney, all acts which are performed by the agent within its mandate are regarded as the acts of the principal.

Generally, there are no formalities for concluding a Power of Attorney and they may be given orally or in writing. However, if the act which the principal requires the agent to perform has certain prescribed formalities, for example disposing of land, then the Power of Attorney will need to comply with the same formalities, for example being in writing.

In instances where the Power of Attorney is found to be invalid the act performed by the agent will be null and void and in some instances the agent will be held personally liable for his actions.

In South Africa it is common practice to use Power of Attorneys to manage the estates of the elderly. Often times persons who have loved ones whose mental capacity has been impaired, or who’s mental capacity will become impaired in the near future, will also attempt to make use of a Power of Attorney. However, it is not possible to sign a Power of Attorney if someone becomes mentally incapacitated. Once a person becomes mentally incapacitated any Power of Attorney signed by him will cease and it will become necessary to approach a competent court to appoint what is called a curator or administrator to manage their affairs.

For more information on concluding a valid Power of Attorney contact our offices today to arrange for a consultation with one of our attorneys.

Can employees be dismissed for going to work with Covid-19? The Labour Court (LC) recently had to answer this question in Eskort Limited v Stuurman Mogotsi and Others (JR1644/20) [2021] ZALCJHB 53 (28 March 2021). In this matter, the employee was tested for Covid-19 on the 5th of August 2020 and was waiting for his result. After receiving his positive result however, the employee continued to work on the 7th, the 9th and the 10th of August.

The employer charged the employee with gross misconduct in that he failed to disclose to the employer that he had undergone testing for Covid-19 and gross negligence in that he continued working and failed to self-isolate after testing positive for Covid-19. The employee had challenged the dismissal at the Commission for Conciliation, Mediation and Arbitration (CCMA).

When the matter was before the CCMA the commissioner found that the employee should have received a written warning rather than having been dismissed and thus reinstated the employee. The CCMA said that although the employee acted in a manner that was “extremely irresponsible”, the employer’s disciplinary code and procedure stated that the appropriate sanction for gross negligence was a final written warning.

The employer then took the matter on review to the LC. The LC found upheld the dismissal and found that the employee had put the lives of his colleagues at risk by ignoring various health and safety protocols and procedures put in place by the employer. The LC found that disciplinary codes and procedures are not prescriptive but rather that these should be interpreted as guidelines. This is especially true when determining an appropriate sanction.

The LC held that the employer had acted fairly in its dismissal of the employee. The LC further commented that employers need to consider whether their Covid-19 health and safety protocols are being followed by employees and that they are taken seriously.

The judgment stated that the facts of this case are extraordinary: “They are indicative of the need for more to be done at both the workplace and in our communities, in ensuring that employers, employees, and the general populace are sensitised to the realities of this pandemic, and to further reinforce the obligations of employers and employees in the face of, or event of an exposure to Covid-19.”

For more information on how Covid-19 affects your workplace contact our offices today to arrange for a consultation with our expert labour attorney.

Eskort Limited v Stuurman Mogotsi and Others (JR1644/20) [2021] ZALCJHB 53 (28 March 2021) ESKORT LIMITED Applicant

Does an employee's immediate resignation automatically terminate the employment relationship? If not, can an employer proceed with a disciplinary enquiry against the employee despite their immediate resignation? The Labour Appeal Court recently addressed this issue in Standard Bank of South Africa Limited v Nombulelo Cynthia Chiloane (Case No. JA85/18) [2020] ZALAC (5 November 2020), where it made clear that if an employee resigns with immediate effect in breach of their notice period, the employer is entitled to reject such repudiation and enforce the applicable notice period.

In this case, the Labour Court was called to declare null and void the dismissal of an employee who had been charged with misconduct. However, the employee in question resigned with immediate effect before the disciplinary hearing took place. The employer, however, enforced the applicable notice period and proceeded with the disciplinary hearing in her absence, where she was found guilty of the misconduct allegations made against her and was dismissed.

The Labour Appeal Court held that the employment relationship is governed by either contract or legislation or both. Where an employee and an employer do not agree to a notice period for the termination of the employment relationship, the Basic Conditions of Employment Act, 1997 (“BCEA”) provides for a notice period. Therefore, unless the other party to the employment contract waives the notice period, the notice period has to be complied with either in terms of the contract or the BCEA.

The Labour Appeal Court held that a notice period remains valid and binding unless waived by the innocent party. The court emphasised that a resignation not in compliance with notice periods does not validly terminate the employment contract unilaterally.

Resignations with immediate effect do not unilaterally terminate the employment relationship unless the employer agrees to it. Where an employer seeks to discipline an employee, who has resigned with immediate effect, they may do so provided that such disciplinary proceedings are held and concluded within the employee's notice period.

Employment contracts often contain restraint of trade clauses to protect the interest of employers. Unfortunately, many of these clauses are often found unenforceable by our courts as they fail to meet a variety of requirements that the courts have applied throughout the years. The following factors are taken into account when determining whether a restraint of trade clause is enforceable:
1. The employer must have an interest that deserves protection;
2. The interest of the employer should be threatened by a recent departure of an employee;
3. The interest of the employer must be weighed against the interest of an employee not to be economically inactive;
4. The general principle of reasonableness (i.e. whether a less restrictive measure could be used to achieve the same purpose as the restraint imposed).

The most important factor that the court considers is reasonableness. Once the court has established that the employer has an interest which deserves protection and that the interest is threatened by the employee’s departure the enforceability of the restraint will generally turn on whether it is reasonable.

Recently the court in Oomph Out of Home Media (Pty) Ltd v Brien and another (2021) JOL 49492 (GJ) the High Court was required to determine the enforceability of a restraint of trade during the Covid-19 pandemic.

In the above matter the employee was employed by Oomph Out of Home Media (Pty) Ltd during March 2015 and became both a director and shareholder of the company. Naturally the employee was subject to a restraint of trade agreement in addition to a shareholder’s agreement. According to the restraint of trade agreement the employee was prohibited from either joining a competitor of the employer or pursuing any customers of the employer for a period of 18 months after termination of his employment. Under the shareholders agreement the employee was prohibited from disclosing any confidential information and trade secrets of the employer.

In February 2020 the employee resigned as employee and director. He, however, remained a shareholder. Following his resignation, the employee joined Provantage (Pty) Ltd, a direct competitor of the employer and proceeded to contact the employer’s customers. While the employee did not deny his actions in this regard, he alleged that the restraint was unreasonable as it prevented him from earning an income. In addition, the employee alleged that the employer had failed to act consistently in the enforcement of restraint of trade agreements with other employees.

The High Court found that the employee was in fact in breach of the restraint of trade. However, it found that the restraint was unreasonable and therefore unenforceable. In coming to this conclusion, the court placed a great deal of emphasis on the circumstances prevailing at the time when the employer sought to enforce the restraint, particularly in the context of the pandemic.

The court found that in view of the devastating effect of Covid-19 on the economy and the fact that it has led to the closure of many businesses and retrenchments it is unreasonable and contrary to public policy to enforce the restraint of trade agreement.

Employers should be aware of the adverse effect of this judgement on the protection of employer’s proprietary interest and confidential information during the pandemic. For more information on the effects that this matter may have on your existing restraints of trade contact our labour law expert today at [email protected] to arrange for a consultation.