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Labour Relations Act, 1995 (Act No. 66 of 1995)

Commission for Conciliation, Mediation and Arbitration

Guidelines on Misconduct Arbitration

F: How to Approach Remedies

Compensation for procedurally unfair dismissals

 

(136) An arbitrator who finds that a dismissal is procedurally unfair must determine—
(136.1) whether an award of compensation is appropriate in the light of the severity of the procedural unfairness;
(136.2) if it is, determine an amount of compensation that is just and equitable in all the circumstances.

 

(137) The courts have held that compensation in these circumstances is a solatium62 for the loss of the right to a fair pre-dismissal procedure. It is punitive of the employer to the extent that the employer who has breached the right must pay a penalty for doing so.63

 

(138) In order to determine the appropriate amount of compensation for a procedurally unfair dismissal, the arbitrator must take into account the extent or severity of the procedural irregularity together with the anxiety or hurt experienced by the employee as a result of the unfairness.

 

(139) An arbitrator may find that a dismissal is procedurally unfair but award no compensation because the procedural irregularity was minor and did not prejudice or inconvenience the employee. When assessing the extent of the procedural irregularity, arbitrators may consider the employer's conduct prior to, and in the course of, dismissing the employee.

 

(140) As the determination of compensation for procedural unfairness is not based on the employee's actual financial losses, it is not relevant whether the employee has found alternative employment or mitigated the losses caused by the dismissal in any other way.  An employee's length of service may be relevant in determining the extent of the anxiety or hurt suffered by the employee.

 

(141) An arbitrator who finds that a dismissal is procedurally unfair may charge the employer an arbitration fee. This may be done irrespective of the finding on substantive fairness.64

 

 

62 Compensation for injured feelings as distinct from financial loss or physical suffering.
63 Johnson & Johnson (Pty) Ltd v Chemical Workers Industrial Union (LAC) at para 41.
64 Section 140(2) of the LRA. The amount of the arbitration fee is published by the CCMA in an information sheet which is available from the CCMA and is downloadable on the CCMA website at http://www.ccma.org.za/