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Labour Law Feature

But what if an employer wants to retrench the poor performers and keep the star performers. Would the inclusion of performance appraisals be fair in the circumstances when selecting employees for retrenchment? The courts recently had the opportunity to revisit the issue in Louw v South African Breweries (Pty) Ltd [2016] ZALCJHB 156.

The employer in this instance included the performance appraisal of the employees in question and the employee was retrenched based on the performance appraisal as selection criterion. The employer argued that the inclusion of the performance rating was fair because the employee had not appealed against his performance assessment. In considering procedural fairness, the court found that the fact that the employee did not appeal against the performance rating was irrelevant as the employer was aware long before it formulated the selection criteria that the employee was unhappy with his performance rating. The court held that the employer should for this reason, not have included the employee’s performance rating into the selection criteria before allowing the employee an opportunity to be heard regarding his rating. This rendered the dismissal procedurally unfair.

There are many cases that support the contention that the inclusion of performance ratings is fair, however, basing a retrenchment on same is risky and should not be viewed with circumspection.