Back pay not limited to 12 months

An employee who is unfairly dismissed may, in terms of section 193 of the Labour Relations Act, be entitled to any of the following remedies:

An employee who is unfairly dismissed may, in terms of section 193 of the Labour Relations Act, be entitled to any of the following remedies:

Firstly: to be reinstated from any date after the date of dismissal;

Secondly: to be re-employed with work in which he/she was employed or in other reasonable suitable work; or thirdly, to be paid compensation.

In this article my focus is on the reinstatement of an employee and whether such reinstatement, or re-hiring, may be limited to 12 months.

In the matter of CWIU and Others versus Latex Surgical Products, the Labour Appeal Court found that it could not order retrospective operation of a reinstatement order in excess of 12 months in an ordinary unfair dismissal.

The court relied on section 194 of the Act, which according to the court, "caps the amount of compensation to 12 months".

The court interpreted section 194 to mean that although it could make an order of retrospective reinstatement, that reinstatement could not exceed 12 months irrespective of the date of when the dismissal occurred.

In simple terms, if an employee was dismissed on January 2, 2000 and the matter was adjudicated and finalised by the court on March 2, 2007 in favour of the employee and the court ordered that the employee be reinstated, then the employee could only be paid for 12 months despite having been out of work for five years.

Since last week the above position has been somewhat overruled by the Supreme Court of Appeal.

In the matter of Republican Press (Pty) Ltd and CEPPWAWU and Gumede the Supreme Court of Appeal held that if the court orders reinstatement of an employee, section 194 should not be relied on as it deals with compensation.

The view of the Supreme Court of Appeal is that the reinstatement of an employee revives the contract from the date of dismissal.

However, the court did not make a decision on this point.

The effect of the Supreme Court of Appeal's decision is that no more will the Labour Court follow the Latex's decision on section 194 to limit the reinstatement of an employee to 12 months.

The Supreme Court of Appeal makes it very clear that reinstatement and compensation in terms of section 194 are two different remedies and therefore there is no reason for the court to read into section 194 what is not stated.

As a result of this decision an employee may be paid for more than 12 months when the order to reinstate has been made in his or her favour.

- Sandile July is a director at Werksmans Attorneys.

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