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Be aware of labour law and your responsibilities
Ivan Israelstam
The LRA gives the Labour Court and Labour Appeal Court numerous and strong powers to make decisions relating to labour disputes.
Section 158 gives the Labour Court the power to make orders
- Granting urgent relief and interdicts
- Remedying wrongs and determining disputes
- Clarifying legal circumstances (declaratory orders)
- For compensation and damages
- For legal costs to be paid by the loser to the winner of a case
- Enforcing compliance with the provisions of the LRA
- Enforcing arbitration awards
- Condoning the late filing of disputes or documents with the court
- Reviewing decisions made or acts performed by the State
- Reviewing awards and rulings made by the CCMA and bargaining council arbitrators.
These orders may deal with various dispute types - including unfair dismissals for misconduct, poor performance, illness and operational requirements. In addition, the Basic Conditions of Employment Act (BCEA) gives the Labour Court the power to determine disputes relating to employment contracts. And the Employment Equity Act (EEA) empowers the Labour Court to make orders relating to unfair discrimination disputes.
The Labour Appeal Court, is senior to the Labour Court, and has higher powers. It can hear appeals against decisions made by that court. It also has the power, when required, to deal directly with matters normally dealt with by the Labour Court under the LRA. It is clear that, between them, these two courts have very substantial powers. And they are not normally reluctant to exercise their powers strongly even if it results in a very severe financial burden to the party on the receiving end.
For example, in Evans v Japanese School of Johannesburg, the Labour Court found that the employer had unfairly dismissed and unfairly discriminated against the employee. The court ordered the employer to pay compensation and damages totalling R377 000. Some years ago the Labour Court awarded a R1-million compensation amount against the Ministry of Labour.
While these courts have extensive powers, they do not seem to be sure of the exact extent thereof. There seems to be disagreement between the different courts as to the maximum amount they may award to unfairly treated employees.
To illustrate this point it is necessary to explain the difference between two types of awards the Labour Court may make - compensation awards and back-pay awards. Compensation awards are made where the unfairly dismissed employee is not reinstated. The court then awards the employee financial compensation for the loss of his/her job.
However, under the LRA the court is required, where feasible, to reinstate the employee rather than award compensation. When reinstatement is ordered the court usually requires the employer to pay the employee for the period between the dismissal and the date of the reinstatement order.
This is to make up for the employee's loss of earnings prior to reinstatement. The LRA specifically lays down the maximum amount that the court may award when the dismissed employee is not reinstated.
This limit is 24 months' remuneration in the case of an automatically unfair dismissal and 12 months' remuneration in all other unfair dismissal cases. However, the LRA is silent on a maximum limit on the amount of back-pay in tandem with a reinstatement order.
It has for a long time been assumed that the amount of the back-pay is only limited by the number of months between the date of dismissal and the date of the reinstatement. As recently as 2005 the Labour Appeal Court upheld this view. In Kroukam v SA Airlink, the Labour Appeal Court held that the amount of back-pay could be calculated back to the date of dismissal even if this exceeded the limits for compensation payments.
However, soon after this, in CWIU and Others v Latex Surgical Products, the Labour Appeal Court held that the amount of back-pay ordered must be subject to the same limits as are laid down for compensation orders.
Then, in Saccawu and others v Primserv ABC Recruitment, the Labour Court held that the amount of back-pay orders are not limited to the maximums set for compensation orders. This lack of agreement between different courts is not limited to this issue. It should further be noted that, in the Kroukam case, one of the three judges on the Labour Appeal Court bench disagreed with the majority finding.
It is most disturbing that there is such little agreement within the courts as to the law as this makes decisions for employers very unclear. In the light of this confusion, the only solution for employers is not to end up in the Labour Courts.
They can only achieve this by ensuring that, before they take any decision affecting employees, they get labour law and practical strategic advice from a reputable labour law expert.
- Ivan Israelstam is chief executive of Labour Law Management Consulting. He can be contacted on 011-888-7944 or at
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- Our appreciation to Ivan and The Star newspaper for permission to publish this article
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