Substantively unfair dismissal
The final section of the new CCMA Guidelines sets out the approach an arbitrator must adopt when he considers what remedies to give for unfair dismissal and how to allocate the costs of the court proceedings.
What actually is an arbitrator empowered to do?
An arbitrator is empowered, in terms of s193 of the Labour Relations Act, No 65 of 1995 (LRA), to direct an employer who has unfairly dismissed an employee to:
- Reinstate;
- Reemploy; or
- Pay
the employee a determined amount of compensation. The arbitrator must always provide a reason why he has made this award.
Reinstatement is the principal remedy for substantively unfair dismissals
This remedy provides for:
- A dismissed employee to be placed in the same position as he previously was in; and
- Restoring the contractual relationship that applied before dismissal.
If an employee is reinstated, he is placed in the same position as if he had not been dismissed.
7 key points that you must remember about the new guidelines
1. An arbitrator must direct that an employer reinstate an employee if it is found that he was substantively unfairly dismissed, unless:
- The employee does not want to be reinstated;
- A continued employment relationship is not possible; or
- It is not reasonably practicable to reinstate the employee.
2. If an employee does not want to be reinstated, the arbitrator must ensure that the employee has had an opportunity to state that:
- He does not want to be reinstated; and
- He has made this decision with full knowledge of his rights under the LRA.
Once the arbitrator is satisfied that the employee has made an informed decision, the arbitrator may not question the employee's decision.
3. If the employee states that he can no longer work for the employer, or that ‘a continued working relationship is intolerable’, evidence to support this must be presented during the arbitration.
4. If it is said that reinstatement is inappropriate, the onus is on the employer to present evidence to show that:
- This remedy is not feasible; or
- It would be too big a disruption or financial burden for the employer.
Important: Because another employee is appointed in the dismissed employee's position is not in itself a reason to deny the dismissed employee reinstatement.
5. When the arbitrator awards reinstatement, the question of ‘back pay’ for the period between the date of dismissal and the date on which the employee resumes work, must be addressed in his award.
6. Where reinstatement or re-employment is awarded, an arbitrator’s award must specify the date on which the reinstatement or re-employment becomes effective as well as the date on which the employee is expected to resume his duties.
7. Reinstatement or re-employment are considered inappropriate, an arbitrator can grant an order for compensation subject to:
- It being just and equitable in light of the circumstances of the case; and
- Not exceeding 12 months of the employee's remuneration.
When he determines compensation for substantively unfair dismissal, an arbitrator is obliged to consider, among others:
- The employee's remuneration and benefits at date of dismissal;
- If the employee has secured alternative employment;
- The employee's prospects for future employment;
- The employer's financial position; and
- Whether the dismissal was both procedurally and substantively unfair.
