Misconduct, Poor Performance or Incapacity? How Employers Can Choose the Correct Process

Estimated reading time: 8 minutes

An employee repeatedly misses deadlines. Another ignores an important workplace instruction. A third is unable to perform their duties because of illness or injury.

Although these situations may have a similar effect on workplace productivity, they do not have the same legal cause. One may involve misconduct, another poor performance and another incapacity.

Employers must identify the real nature of the problem before deciding how to respond. Selecting the wrong process may turn a valid workplace concern into an unfair dismissal or unfair labour practice dispute.

Why Correct Classification Matters

Section 188 of the Labour Relations Act 66 of 1995 requires an employer to prove that a dismissal was based on a fair reason related to the employee’s conduct or capacity, or the employer’s operational requirements, and that a fair procedure was followed.

The 2025 Code of Good Practice: Dismissal provides further guidance on the different requirements for misconduct, poor performance and incapacity. These categories are not legally interchangeable.

Workplace matter	Main question	Appropriate response
Misconduct	Did the employee culpably breach a workplace rule?	Corrective or disciplinary action
Poor performance	Is the employee unable to meet a clear and achievable standard?	Guidance, support and an opportunity to improve
Incapacity	Is illness, injury or another factor preventing the employee from performing the job?	Investigation, consultation and consideration of alternatives

The starting point should be why the employee failed to comply, perform or attend work.

Misconduct: When an Employee Breaches a Rule

Misconduct generally involves blameworthy conduct, such as dishonesty, insubordination, harassment, unauthorised absence or failure to Misconduct generally involves blameworthy conduct, such as dishonesty, insubordination, harassment, unauthorised absence or failure to comply with a lawful and reasonable instruction.

A matter may involve misconduct where:

• a valid and reasonable workplace rule existed;
• the employee knew or should have known the rule;
• the employee was capable of complying; and
• the employee culpably breached the rule.

The important distinction is often whether the employee would not comply rather than could not comply.

For example, an employee who deliberately refuses an instruction may be committing misconduct. An employee who attempts the task but lacks the necessary competence may require performance management instead.

Once the matter has been identified as misconduct, the employer should follow a fair disciplinary process. SEESA’s guide on the correct disciplinary process in South Africa explains the investigation, notice, enquiry, evidence and sanction requirements in more detail.

Poor Performance: When an Employee Cannot Meet the Standard

Poor performance concerns the employee’s ability to meet the required work standard rather than deliberate wrongdoing.

Examples may include repeatedly missing reasonable targets, producing work of an unacceptable quality or lacking the competence needed to perform certain duties.

Before treating the matter as poor performance, the employer should establish whether:

• the required standard was clear and reasonably achievable;
• the employee knew or should have known the standard;
• the employee received appropriate guidance, instruction or support; and
• the employee was given a fair opportunity to improve.

The 2025 Code of Good Practice: Dismissal provides that, after probation, an employee should not ordinarily be dismissed for unsatisfactory performance unless the employer has provided appropriate evaluation, instruction, training, guidance or counselling and allowed a reasonable period for improvement. The employee must also receive an opportunity to respond before dismissal is considered.

Performance management should be a genuine attempt to help the employee improve. It should not be used merely to create documentation for a dismissal that has already been decided.

Incapacity: When an Employee Is Unable to Perform

Incapacity may arise where a physical or mental health condition, injury or another factor prevents the employee from performing the duties of the position.

Unlike misconduct, incapacity is generally not based on wrongdoing. The employer must investigate the employee’s ability to work, consult with the employee and consider whether continued employment can reasonably be maintained.

Relevant considerations may include:

• whether the incapacity is temporary or permanent;
• the nature and extent of the condition;
• the likely period of absence;
• the essential requirements of the position;
• whether duties or working conditions can be adapted; and
• whether suitable alternative work is available.

The 2025 Code requires employers to investigate possible alternatives short of dismissal. In cases of permanent incapacity, this may include adapting duties or working conditions or considering alternative employment.

Where a condition constitutes a disability, the Code of Good Practice on the Employment of Persons with Disabilitiesmay also require reasonable accommodation, unless this would impose unjustifiable hardship on the employer.

Reasonable accommodation may include adjusted working conditions, restructured duties, modified working hours, specialised support or adapted equipment. Disability-related information must also be treated confidentially.

When the Categories Overlap

Some workplace concerns are not immediately easy to classify.

Negligence or poor performance?

Negligence may amount to misconduct where an employee culpably fails to exercise the required level of care.

Repeated mistakes may, however, indicate poor performance where the employee genuinely tries but lacks the necessary skill or competence. The employer should consider the employee’s experience, training, knowledge and explanation before selecting a process.

Absence or incapacity?

An employee who is absent because of a genuine illness may require an incapacity process.

An employee who dishonestly claims to be ill, falsifies a medical certificate or deliberately ignores a valid reporting procedure may face disciplinary action.

The employer must identify whether the real concern is the employee’s inability to attend work or a blameworthy breach of a workplace rule.

Mental health or misconduct?

A mental health condition does not automatically excuse misconduct. However, employers should not ignore credible information suggesting that the condition affected the employee’s conduct or ability to work.

In Legal Aid South Africa v Jansen, the Labour Appeal Court found that the employee had not established an adequate causal link between his depression and the misconduct that led to his dismissal. The Court nevertheless confirmed that depression may be relevant to incapacity, culpability or the appropriate sanction, depending on the evidence.

For more guidance, read SEESA’s article on mental health dismissal in South Africa.

Substance use or dependency?

Reporting for duty under the influence or breaching a valid alcohol or substance rule may constitute misconduct.

Alcohol or drug dependency may, however, constitute incapacity. The 2025 Code of Good Practice recognises that counselling and rehabilitation may be appropriate measures for certain incapacity matters involving alcoholism or drug abuse.

A Practical Classification Process

When a workplace concern arises, employers should:

1. Identify exactly what the employee did, failed to do or appears unable to do.
2. Determine whether the issue concerns a workplace rule, performance standard or essential job function.
3. Investigate why the problem occurred.
4. Consider the employee’s explanation.
5. Check whether illness, disability, inadequate training or insufficient resources contributed.
6. Select the process that matches the facts.
7. Reassess the classification if new information emerges.
8. Record why the chosen process was considered appropriate.

Employers should not force a matter into a particular category merely because one process appears quicker or easier.

Before finalising a dismissal, the employer should also confirm that the reason is fair, the appropriate procedure was completed and the available workplace records support the decision. Read SEESA’s guide on Before Dismissing an Employee: 3 Checks for Employers for the detailed pre-dismissal review.

Conclusion

Misconduct, poor performance and incapacity may cause similar workplace difficulties, but they are not legally interchangeable.

Misconduct concerns a culpable breach of a workplace rule. Poor performance concerns whether the employee can meet a clear and achievable standard after receiving appropriate support. Incapacity concerns whether the employee can continue performing their duties and whether reasonable accommodation or alternatives are available.

The correct response begins with identifying the cause of the problem. Employers who investigate carefully and match the process to the facts are better positioned to act fairly and reduce the risk of a labour dispute.

Obtaining advice before commencing a serious workplace process can help employers choose the correct approach and reduce the risk of an avoidable dispute.

Visit SEESA Labour Law Services or contact SEESA for assistance.

This article provides general information and does not replace labour law advice based on the circumstances of a specific workplace matter.

Frequently Asked Questions:

SEESA’s labour law professionals can assist employers in reviewing proposed dismissals, identifying procedural or documentary gaps and determining whether further action is required before a decision is finalised.