ARBITRATION GUIDELINES:
DETERMINING
COMPENSATION
The CCMA Guidelines: Misconduct
Arbitration
1.
This presentation cover s award compensation part of
the CCMA Guidelines: Misconduct Arbitrations
2.
Published by the CCMA in terms of section 115(2)(g) of
the Labour Relations Act, 66 of 1995, as amended.
3.
Promulgated in the Government Gazette of 2 September
2011 and came into effect as from the 1st of January
2012.
PURPOSE OF THE WORKSHOP
The purpose of the workshop is to reinforce the importance
of the Guidelines to Commissioners when arbitrating
misconduct matters in order to ensure that Commissioners
properly apply the Guidelines in the actual hearing and then
demonstrate this application when drafting arbitration awards
PURPOSE AND NATURE OF THE
GUIDELINES
Section 138 (6) of the LRA: A commissioner conducting an
arbitration must take into account –
Any code of good practice issued by NEDLAC and any
guidelines published by the CCMA that are relevant to the
matter being considered in the arbitration proceedings.
The purpose of the Guidelines is to promote consistent
decision-making in arbitrations dealing with misconduct
dismissal dispute, in particular, when determining:
substantive fairness, procedural fairness and appropriate
remedy.
HOW TO APPROACH REMEDIES
1.
When a dismissal is found to be unfair, the arbitrator must
determine an appropriate remedy.
2.
Section 193 of the LRA permits an arbitrator to direct an
employer who has unfairly dismissed an employee to reinstate, re-employ or compensate the employee.
3.
An arbitrator must provide reasons in an award for the
remedy that is awarded.
HOW TO APPROACH REMEDIES
4. An arbitrator who finds a dismissal to be substantively
unfair must order reinstatement or re-employment unless –
 the employee does not wish to be reinstated (this must
be an informed decision);
 a continued employment relationship would be
intolerable; or
 it is not reasonably practicable for the employer to
reinstate or re-employ the employee.
HOW TO APPROACH REMEDIES
5. Where an employer alleges that a continued employment
relationship would be intolerable, evidence must be presented
to demonstrate this on a balance of probabilities.
This evidence should establish that there are no reasonable
prospects of a good working relationship being restored. The
fact that another employee has been employed in the
dismissed employees’ place is not on its own a ground for not
reinstating the worker.
The conduct of an employee before or after the dismissal,
including during any disciplinary or arbitration proceedings, may
also be considered.
DETERMINING COMPENSATION
1.
An arbitrator is required to consider submissions from the
parties when determining the appropriate amount, if any, of
compensation to order.
2.
What important aspects should be considered by an
arbitrator when making a determination on compensation,
for both substantive and procedural unfair dismissal?
DETERMINING COMPENSATION
Compensation for substantively unfair dismissal
In determining compensation for a substantively unfair
dismissal, an arbitrator should consider the following:
- The employees’ remuneration and benefits at the time
of dismissal;
- The time that has lapsed since the dismissal;
- Whether the employee has secured alternative
employment and, if so, when and at what rate of
remuneration;
DETERMINING COMPENSATION
Compensation for substantively unfair dismissals
- What steps the employee has taken to attempt to mitigate
his or her loss by, for example, finding alternative
employment;
- The patrimonial (financial) loss suffered by the employee.
The absence of loss does not prevent an award of
compensation;
- The employees’ prospects of future employment;
- Whether the employee failed to use the opportunity to state
a case at a disciplinary investigation or enquiry;
DETERMINING COMPENSATION
Compensation for substantively unfair dismissal
- Whether the resolution of the dispute was unreasonably
delayed, and if so, whether the delay was caused by either
the employer or the employee (or either representative);
- Whether the dismissal was both substantively and
procedurally unfair;
- The extent of unfairness of the dismissal;
- Payments received by the employee from the employer,
other than the amounts due in terms of any law, collective
agreement or the contract of employment;
DETERMINING COMPENSATION
Compensation for substantively unfair dismissal –
- Whether the employee unreasonably refused an offer of
reinstatement ;
- Whether the employee unreasonably refused other attempts
by the employer to make substantial redress for the unfair
dismissal such as securing employment with another
employer or making an offer of employment;
- Whether the conduct leading to the employees’ dismissal
caused the employer loss and, if so, the extent of that loss:
and
- The employer’s financial position.
DETERMINING COMPENSATION
Compensation for procedurally unfair dismissals
An arbitrator who finds that a dismissal is procedurally
unfair must determine:
- Whether an award of compensation is appropriate in the
light of the severity of the procedural unfairness; and
- If it is, determine an amount of compensation that is just
and equitable in all the circumstances.
- The courts have held that compensation in these
circumstances is a solatium for the loss of the right to a
fair pre-dismissal procedure.
DETERMINING COMPENSATION
Compensation for procedurally unfair dismissals
- 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;
- 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.
DETERMINING COMPENSATION
Compensation for procedurally unfair dismissals
- As the determination of compensation for the procedural
unfairness is not based on the employees’ 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 arbitrator who finds that a dismissal is procedurally
unfair may charge the employer an arbitration fee,
irrespective of the finding on substantive fairness.
The End!
Thank you