FAIR AND EQUITABLE – OBJECTIVELY SPEAKING

In a previous article, we focused on reinstatement as a remedy for unfair dismissal. We were directed to section 193 of the Labour Relations Act 66 of 1995 (LRA) that codified the remedies when an employee is unfairly dismissed namely “… the Court or the arbitrator may – …order the employer to reinstate the employee from any date not earlier than the date of dismissal; …order the employer to re-employ the employee, either in the work in which the employee was employed before the dismissal or in other reasonably suitable work on any terms and from any date not earlier than the date of dismissal; or …order the employer to pay compensation to the employee.” (Own Emphasis)

There are three remedies available – reinstatement, re-employment or compensation. Let’s unpack the financial compensation remedy.

Maximum Compensation Codified:

Compensation is not unlimited. I sometimes stand amazed by the demands of members when they are dismissed and there are merits to pursue an unfair dismissal dispute. The majority of members with limited months or years of employment demands two years’ compensation when in an arbitration and some, in a labour court dispute, demands 10 years’ compensation.

The Act is clear in section 194 on the limitation on compensation, the key words ‘just and equitable.’ In short, compensation for employees whose dismissal is found to be:

• unfair either procedurally or substantively must be just and equitable in all the circumstance, but not be more than the equivalent of 12 months’ remuneration calculated at the employee’s rate of remuneration on the date of dismissal.
• automatically unfair must be just and equitable in all the circumstances, but not more than the equivalent of 24 months’ remuneration calculated at the employee’s rate of remuneration on the date of dismissal.
• unfair labour practice must be just and equitable in all the circumstances, but not more than the equivalent of 12 months’ remuneration.

Just and Equitable

The Act does not define ‘just and equitable’, but we can fairly and briefly consider the two words ‘just’ and ‘equitable’. Frank Callaway said “The expression ‘just and equitable’ may be regarded as an example of statutory hendiadys, the reference to equity being not by way of an additional test but for the purpose of ensuring that the justice to be applied will be equitable justice, ‘the justice of the individual case’. Accordingly, justice and equity are referred to herein as one criterion, not two criteria.” (Winding Up on the Just and Equitable Ground)

Financial compensation awarded to an unfairly dismissed employee is to provide a measure of solace, that is to “give comfort to in grief or misfortune”. It is important to understand that it is compensation that is awarded and not damages unless there was a breach of contract.

Solatium

The Labour Appeal Court in ARB Electrical Wholesalers (Pty) Ltd v Hibbert N.D [2015] (LAC) explained compensation in terms of labour legislation as follows: “It is not strictly speaking a payment for the loss of a job or the unfair labour practice but in fact a monetary relief for the injured feeling and humiliation that the employee suffered at the hands of the employer. The solatium must be seen as a monetary offering or pacifier to satisfy the hurt feeling of the employee while at the same time penalising the employer.” (Own Emphasis)

The Labour Appeal Court also confirmed in Minister for Justice and Constitutional Development v Tshishonga [2009] 9 BLLR 862 (LAC) some factors that should be considered in reaching a just and equitable compensation award namely the extent of the dismissed employee’s humiliation, the relationship between the dismissed employee and the employer and the nature and seriousness of the injustice. It is important to note that this is not a closed list and each case will be considered on its own merits and circumstances, on the arbitrator or adjudicator’s discretion.

Conclusion

Your proven unfair dismissal will never be undone as the hurt and financial impact will never be remedied as a whole, but your recourse is a way of being compensated for the humiliation, hurt and unfair conduct of the employer. Reinstatement is always the preferred outcome, but if the circumstances does not favour reinstatement, you are entitled to compensation that is just and equitable.

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