“Perspective will come in retrospect”- Melody Beattie
Should an employee be dissatisfied with his dismissal, he may refer an unfair dismissal dispute to the Dispute Resolution Centre (DRC) of MIBCO.
The reality of the dispute resolution process is lengthy, often taking several months to conclude, leaving employees in an impoverished state from the date of dismissal, with no form of income. As a result of the impoverishment suffered, an employee may seek reinstatement with back pay and/or compensation as a measure of relief for the unfair dismissal.
The dispute resolution process has been described in detail, in this article; today we discuss compensation in the form of back pay, should an award be granted in your favour.
What is the appropriate relief?
Due to their different circumstances, employees may be of the view that the appropriate relief should be reinstatement with full back pay. There is an expectation that the appropriate relief should be made to run retrospectively and/or compensation imposed to enrich the employee for being unfairly dismissed. The Labour Relations Act 66 of 1995 (LRA) clarifies what is considered the appropriate relief, where a dismissal is found to be unfair.
Available remedies for unfair dismissal
Section 193(1) of the LRA states that where an Arbitrator finds that a dismissal is unfair, the arbitrator may either order the employer to reinstate the employee, or re-employ the employee, or order the employer to pay compensation to the employee. Section 194(1) of the LRA provides that the compensation awarded to an employee whose dismissal is found to be unfair, must be just and equitable in all the circumstances.
The remedy of reinstatement or re-employment or compensation as contemplated in section 193 and 194 of the LRA is, however, silent on back pay. Interestingly, back pay, does not constitute compensation as contemplated in section 193(1)(c).
In Steenkamp & Others v Edcon Limited 2006 (3) BCLR 311 (CC), the Constitutional Court found that the Arbitrator has a discretion whether to order reinstatement, with or without back pay, and, if reinstatement is the appropriate remedy, to determine the period of the retrospectivity of the order. An order for the reinstatement of an unfairly dismissed employee, must take into account all of the facts and circumstances of the case, and the interests of the employer and employee.
In light of the above case law, the appropriate relief ordered by the arbitrator may be made to run either retrospectively or not. It remains the arbitrator’s discretion to impose a retrospective force to the reinstatement.
The Constitutional Court further clarified in the Steenkamp case above that, “unless the [unfairly dismissed] employee has been granted an order of reinstatement with retrospective effect to the date of dismissal, he is not regarded as having been in the employer’s employ between the date of the dismissal and the date of the grant of the order of reinstatement.”
In Equity Aviation Services (Pty) Ltd v CCMA  12 BLLR 1129 (CC), the court stated that if the arbitrator orders the reinstatement of the employee, the order will operate from the date it is made, unless the arbitrator decides to order the employee’s reinstatement to be retrospective. The latter entails that the amount of back pay to be awarded, is entirely dependent upon the arbitrator’s exercise of discretion
In essence, if back pay is considered, the arbitrator is required to make it clear in the award that the reinstatement is to be fully retrospective. The result of such an award would entail the employer to pay the employee all remuneration accrued between the date of dismissal and date of the reinstatement. Back pay after reinstatement, if granted, is ought to neither impoverish nor enrich a dismissed employee, but ought to restore the employee to the position he or she would have been in had it not been for the unfair dismissal.
An order of reinstatement does not automatically imply that the order to effect back pay is retrospective. The rationale behind the LRA’s provisions and the above provided case law, is clear in that to become entitled to back pay the arbitrator must first reinstate the employee and clearly indicate that the reinstatement is of a retrospective effect. There is no automatic right to back pay where an order of reinstatement is made, unless clearly so ordered by the arbitrator.
MISA – Just a phone call or an e-mail away!
Kindly utilise the following e-mail addresses and links for assistance:
Legal/Labour-related enquiries Legal@ms.org.za
Legal Reception 011 4763920 / 0718809682
MISA Benefit claim-related enquiries Claims@misa.org.za
Any other enquiries Info@ms.org.za
Mobile App https://onelink.to/w9a7ku