Judicature: A compensation framework for (procedurally) unfair dismissals in employment contracts

• Date: 20 September 2021
• DOI: https://doi.org/10.47348/TSAR/2021/i4a9
• Citation: 2021 TSAR 843
• Pages: 843-858
• Published date: 20 September 2021
• Author: Van Staden, M.

https://doi.org /10.47348/ TSAR /2021/i4a 9

A COMPENSATION FRA MEWORK FOR (PROCEDURA LLY) UNFAIR DISMISSALS 843

[ISSN 0257 – 7747] TSAR 2021 . 4

A COMPENSATION FRAMEWORK FOR (PROCEDURALLY) UNFAIR

DISMISSALS IN EMPLOYMENT CONTRACTS

McGregor v Public Health and Social Develop ment Sectoral Bargaining Council

(CCT 270/20) 2021 ZACC 14 (17 June 2021)

SAMEVATTING

’N VERGOEDINGSRAAMWERK VIR (PROSEDUREEL) ONBILLIKE ONTSLAG IN

DIENSKONTRAKTE

Die konstitusion ele hof het onlangs die vergoeding ver minder aan ’n oortre der van seksuele teisteri ng

wat buitenspor ige vergoeding vir klein pros edurele gebreke toegeken is. Die saak i llustreer die wyse

waarop vergoed ing toegeken en aangepa s kan word in die geval van prose dureel onbillike ontslag. Tog

bly die konstitusio nele hof se redenasie om die toekenn ing van ses maande na twe e maande aan te pas

vaag. Art ikel 194 van die Wet op Arbeidsverhoudi nge vereis slegs dat vergoedi ng “regverdig en billi k”

moet wees. Hierdie b egrip word egter nie in d ie Wet op Arbeidsverhoudinge oms kryf nie en daa r word

aangevoer dat d ie konsep teenstryd ig deur ons howe gebruik is.

2021 TSAR 843

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https://doi.org /10.47348/ TSAR /2021/i4a 9

TSAR 2021 . 4 [ISS N 0257 – 7747]

844 VAN STADEN AND VAN ECK

In die besprek ing oorweeg die outeur s die regsbeginsels van Su id-Afrika, die Verenigde Kon inkryk

en Australië i n die hantering va n vergoeding vir ’n onbilli ke ontslag, waar die ontsla g slegs prosedureel

onbillik is en wa ar die werkneme r aan ernst ige wangedrag sk uldig is. In die bes preking word besi n

of sodanige vergoed ing objektief bepaalbaa r is en die faktore word oorwe eg wat die waarde van so ’n

toekenni ng sou beïnvloed.

Die kern van die d iensverhouding is d ie dienskontra k. Die bespreki ng ondersoek ook die

vergoedingst oekenning te en diegene wat norma alweg ingevolge die kontra k toegeken sou word.

Faktore wat in die Veren igde Koninkryk en Aust ralië gevind word, verv at in terminologie soos “ fout”

en “ekonomiese verlies”, is soo rtgelyk aan deliktuele ei se en is nie noodwendig toepasli k in die Suid-

Afrika anse konteks nie , veral omdat die Wet op Arbe idsverhoudinge die b enadering t ot vergoeding

vir prosedu reel onbillike ontslag verand er het. Desnieteensta ande kan ekonomiese verlies i n die Suid-

Afrika anse konteks st eeds ’n faktor wees wat d ie vergoeding wat to egeken word as gevolg van ’n

prosedureel on billike ontslag kan beïnvlo ed.

Die outeurs kom tot d ie gevolgtrekk ing dat die afsk uwelike aard van d ie wangedrag va n ’n werknemer,

in ’n bepaalde geval die we rknemer op geen vergoedi ng hoegenaamd geregtig beho ort te maak nie, of

slegs aanspra ak op ’n aansienli k verminde rde vergoeding k an gee. Die outeur s vind ook dat, i n navolging

van die reg van die Verenigde Ko ninkr yk en Australië, e n as ’n logiese uitvloeisel va n die konstitusion ele

hof se uitspraa k, die beginsel va n bydraende sk uld uitgebrei moet word na ge valle van wesenli k onbillike

ontslag. Hieru it kom ’n raamwerk na vore in die besprek ing vir die bepali ng van vergoeding in gevalle

van prosedur eel onbillike ontslag.

1 Introduction

In McG regor v Public Health and Social Development Sectoral Bargaining

Council the constitutional cou rt recently reduced the compensation paid to a

sexual hara ssment perpetrator who had been awarded exorbitant comp ensation for

minor procedural aws in his dismissal ((CCT 270/20) 2021 ZACC 14 (17 June

2021)). This discussion specically considers legal principles of South Afr ica, the

United Kingdom and Australia in dealing with the matter of compensation for an

unfair dismissal where the dismissal was for a subst antially fair reason but not in

accordance with a fair procedure. The discu ssion also briey considers whether

such compensation awards are object ively determinable and the factor s that would

inuence the monetary value of such an award. The discussion concludes t hat,

due to the abhorrent nature of an employee’s misconduct, the employee should be

entitled to no compensation whatsoever or to severely reduced compensation. The

discussion also nds that the principle of contributor y fault should be extended to

instances of substa ntively unfair d ismissals.

Section 193(1)(c) of the Labour Relations Act 66 of 1995 provides that “[i[f the

Labour Cou rt or an arbitr ator appointed in te rms of this Act nds that a dism issal

is unfair, the Cour t or the arbitrator may order the employer to pay compensation

to the employee”. Section 193(2)(d) of the Labour Relations Act makes it clear that

re-instatement or re-employment is not appropriate if “t he dismissal is unfai r only

because the employer did not follow a fair procedure”. According to section 194(1)

of the Labour Relations Act:

“[t]he compensation awarde d to an employee whose dismissal is fou nd to be unfair either becau se

the employer did not prove tha t the reason for dismissal w as a fair reason relatin g to the employee’s

conduct or capacit y or the employer’s operational req uirements or the employer d id not follow a fair

procedure, or b oth, must be just and equitable i n all the circumstance s, but may not be more than

the equivalent of 12 month s’ remuneration calculat ed at the employee’s rate of remuneration on th e

date of dismiss al”.

It should be noted from the outset that, h istorically, the courts were not entitled to

award excessive compensation. Prior to amendments to the La bour Relations Act

in 2002, employees whose dismissals were on ly procedurally unfair were entitled

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