WHEN & HOW A COMMISSIONER DETERMINES REINSTATEMENT OR COMPENSATION FOR AN UNFAIRLY DISMISSED EMPLOYEE

It's a question commonly asked, and one that cuts to the very heart of the remedies available in South African labour law for unfair dismissal: How does the Commission for Conciliation, Mediation and Arbitration (CCMA) truly navigate the choice between ordering an employer to pay compensation or to reinstate an unfairly dismissed employee? It’s not just a technicality; it’s a decision with profound implications for both parties, striving to balance justice for the employee with practical realities for the employer. While the Labour Relations Act (LRA) provides a clear hierarchy of remedies, the practical application by the CCMA involves a nuanced assessment of various factors, often leading to outcomes that can surprise the uninitiated.

At its core, the LRA stipulates that in cases of unfair dismissal, reinstatement is the primary remedy. This isn’t a suggestion; it’s a legal preference. Section 193(1) of the LRA unequivocally states that if a CCMA commissioner finds a dismissal to be unfair, they must order the employer to reinstate or re-employ the employee. The rationale behind this legislative preference is clear; it aims to put the employee back in the position they would have been in had the unfair dismissal not occurred. It seeks to undo the wrong as completely as possible, restoring the employment relationship and the employee's dignity and livelihood.

However, like many things in law, there are exceptions – and these exceptions are where the CCMA’s discretion truly comes into play. Section 193(2) of the LRA outlines specific instances where the CCMA may award compensation instead of reinstatement. These are critical junctures for the commissioner to weigh factors rigorously.

Let's delve into these exceptions, as they are the very considerations that guide the CCMA’s decision-making process:

1. The employee does not wish to be reinstated or re-employed: This is perhaps the most straightforward exception. If an employee, for whatever reason, genuinely indicates that they no longer wish to return to their former employment, the CCMA will respect that preference. This could be due to a complete breakdown of trust, finding alternative employment, or simply not wanting to be in that environment any longer. It's a fundamental aspect of self-determination.

• Xstrata South Africa (Pty) Ltd (Lydenburg Alloy Works) v NUM obo Masha & Others (JA 4/15) [2016] ZALAC 44:

  The Labour Appeal Court confirmed that reinstatement is the primary remedy for unfair dismissal unless one of the exceptions in section 193(2) applies. The court specifically noted that if the employee does not wish to be reinstated or re-employed, reinstatement cannot be ordered.

• Booi v Amathole District Municipality [2022] 1 BLLR 1 (CC):

  The Constitutional Court, cited in subsequent Labour Appeal Court judgments, confirmed that the burden is on the employer to show intolerability for reinstatement to be refused on that ground. However, where the employee does not wish to be reinstated, the court or arbitrator is not empowered to force reinstatement

2. The circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable: This is a much more complex and frequently debated factor. 'Intolerable' is a strong word, and it’s not just about workplace discomfort. It typically implies a severe and irreparable breakdown of the employment relationship, often stemming from extreme animosity, significant damage to trust, or instances where the nature of the misconduct (even if procedurally unfair) makes it impossible for the parties to work together. Imagine a scenario where an employee was dismissed for a serious, albeit procedurally flawed, act of dishonesty; even if the dismissal is found to be unfair on a technicality, forcing them back might create an unworkable situation, particularly in roles requiring high trust.

• Standard Bank of SA Ltd v Leslie & Others (2021) 42 ILJ 1080 (LAC):

  The Labour Appeal Court held that suspicion and suspicious behavior before and after an incident can be considered when assessing whether the continued employment relationship would be intolerable, even if the employee was not found guilty of misconduct. This confirms that all relevant circumstances must be considered in the intolerability analysis.

• VSB Construction t/a Techni-Civils CC v NUM obo Mngqola and Others (PA11/2018) [2021] ZALAC 21 (Labour Appeal Court):

  The Court stressed the importance of employers leading evidence to demonstrate exceptional circumstances caused by misconduct that make the continued employment relationship intolerable. Mere breach of trust is not always sufficient; the employer must prove the exceptional nature of the breakdown to avoid reinstatement

3. It is not reasonably practicable for the employer to reinstate or re-employ the employee: This exception often comes into play in cases where the employer’s business has undergone significant changes since the dismissal. For example, the position the employee held might no longer exist due to restructuring, retrenchment, or automation. The business might have closed down entirely, or its operational needs might have changed so fundamentally that there is genuinely no role for the employee. The burden of proof here lies with the employer to demonstrate that reinstatement is not just inconvenient, but unreasonably practicable.

• DHL Supply Chain (Pty) Ltd and Others v National Bargaining Council for the Road Freight Industry and Others [2014] 9 BLLR 860 (LAC):

  The court held that reinstatement is the primary remedy unless the employer proves it would be intolerable or impracticable. The evaluation is objective and balances fairness between employer and employee, requiring evidence of unworkability of resumption.

• Sidumo and Another v Rustenburg Platinum Mines Ltd and Others 2007 (28) ILJ 2405 (CC):

  This Constitutional Court decision underpins the burden on employers to prove exceptions to reinstatement, including impracticability, with evidence.

• AFGEN (Pty) Ltd v Ziqubu (2019):

  The Labour Appeal Court considered impracticability due to operational changes and employee health issues, illustrating that reinstatement may be refused where it is genuinely not feasible.

4. The dismissal is unfair only because the employer did not follow a fair procedure: This is where many compensation awards stem from, particularly in smaller cases. If the substantive reason for dismissal was fair (e.g., the employee genuinely committed misconduct), but the employer failed to hold a proper disciplinary hearing or follow due process, the dismissal is procedurally unfair. In such instances, forcing reinstatement might be disproportionate to the 'wrong' committed by the employer. Instead, the CCMA often awards a lesser amount of compensation, usually capped at 12 months' remuneration, to remedy the procedural flaw rather than the substantive act.

• Labour Appeal Court, Sidumo v Rustenburg Platinum Mines Ltd (2007):

  This landmark case established that a dismissal can be substantively fair but procedurally unfair if the employer fails to follow a fair disciplinary process. The court held that procedural fairness is a separate requirement and failure to hold a proper disciplinary hearing can render a dismissal unfair even if misconduct was proven.

• Labour Appeal Court, National Union of Mineworkers v Commission for Conciliation, Mediation and Arbitration and Others (2002):

  The court confirmed that where dismissal is unfair solely because of procedural flaws, compensation is the appropriate remedy, typically capped at 12 months' remuneration. This reflects the principle that reinstatement may be disproportionate when the substantive reason is fair but procedure was flawed.

• Labour Court, Goodyear South Africa (2024):

  The court found dismissal unfair due to procedural unfairness where employees were denied representation in disciplinary hearings, even though the misconduct was serious. The unfair procedural conduct tainted the dismissal, justifying compensation rather than reinstatement

Beyond these statutory exceptions, commissioners often consider other, more informal, but deeply influential factors. The size and resources of the employer can play a role; for a small business, reinstating an employee might pose a greater financial or operational burden than for a large corporation. The nature of the employee's role, their level of seniority, and the impact their return might have on colleagues or the workplace dynamic can also be subtly assessed. The employee's conduct after dismissal, such as seeking alternative employment, can also be a minor consideration, though it doesn't directly influence the choice of remedy.

The amount of compensation, when awarded, is also a critical point of divergence. While reinstatement is about restoring the status quo, compensation is about providing a financial remedy. The LRA limits compensation for ordinary unfair dismissals to a maximum of 12 months' remuneration. However, for automatically unfair dismissals (e.g., dismissal for exercising trade union rights, or discrimination), the cap is significantly higher, up to 24 months' remuneration. The actual amount awarded within these caps depends on various factors, including the severity of the unfairness, the employee's length of service, their efforts to mitigate their loss (i.e., find new work), and the impact of the dismissal on them.

In essence, the CCMA adopts a pragmatic yet principled approach. The starting point is always reinstatement, reflecting the primary legislative intent. However, the exceptions provided in the LRA act as a crucial 'off-ramp' when reinstatement is genuinely inappropriate, undesirable, or impracticable. Commissioners listen intently to the arguments from both sides, scrutinising evidence related to the breakdown of the relationship, the viability of the position, and the procedural fairness (or lack thereof) of the dismissal. It’s a delicate balancing act, aiming to provide a just and equitable remedy that aligns with the spirit and letter of the law, while acknowledging the human and operational complexities of the workplace. So, while reinstatement is the preferred path, the CCMA's ultimate decision is a finely tuned response to the unique tapestry of facts presented in each and every case.

So when deciding between compensation or reinstatement for unfair dismissal, the CCMA considers factors such as the nature of the dismissal, the employee's request, the feasibility of reinstatement, and the relationship between the parties. The primary goal is to achieve a fair and just outcome, taking into account the specific circumstances of each case. Reinstatement is generally preferred if the employment relationship can be restored, but compensation may be more suitable in cases where the relationship is strained or reinstatement is impractical. Ultimately, the CCMA's decision aims to provide a remedy that is reasonable and justifiable in the circumstances.