BY lvan lsraelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 8887944 or 0828522973 or on e-mail address: This email address is being protected from spambots. You need JavaScript enabled to view it.. Web address:

It is often due to the vagaries of the law that employers lose dismissal cases on the grounds of failing to follow procedure at the CCMA or in labour Court. The inability of some HR professionals to make sense of the law of fair disciplinary procedure can be very costly for employers.

Making sense of South African labour law is a very big challenge for anyone because, while the Labour Relations Act (LRA) and the Basic Conditions of Employment Act (BCEA) obviously contain numerous provisions explaining the legal duties of employers, these statutes are inexact and confusing in many areas.

For example, the LRA and BCEA both list seven factors that render a worker an employee covered by labour law rather than an independent contractor (someone who works for himself/herself). While the statutes do provide these guidelines, the weight given to each of the relevant factors and the final decision is in the hands of each arbitrator. Different arbitrators, faced with the exact same set of facts are likely to arrive at a different view depending on their backgrounds, orientation and training. This is especially so where there are strong factors in favour of both decisions. For example, where the worker is totally reliant on the work provider for income and tools of trade but also works totally independently without supervision and without set working hours arbitrators are likely to differ in their decision as to whether the worker is an employee or not.

The LRA is also extremely unclear what is meant by ...

“sufficient time” in item 6 of schedule 8 of the LRA. That is, the employer is required to give “sufficient time” to strikers not complying with the Act before dismissing them.

According to sections 193 and 194 of the LRA the awards and orders that can be made against the employer for unfair dismissal are as follows:

o The LRA requires the CCMA or Labour Court to reinstate the employee. This means that the firm must give the employee his/her job back and to pay the employee all remuneration calculated back to the date of the dismissal. The employer must also reinstate all the employee’s benefits retrospectively.

o The LRA also permits the CCMA or Labour Court to order re-employment instead of reinstatement. This means that, while the security company must give the employee his/her job back, this will not be with back pay.

o Even if the firm does not have to take the employee back at all it may still have to pay compensation up to a maximum of 12 months’ remuneration calculated at the employee’s newest rate of remuneration.

o If the dismissal is deemed to be automatically unfair the maximum compensation that may be awarded is 24 months’ remuneration.

o Such compensation is payable in addition to all other payments due to the employee. These could include notice pay, leave pay and even payment for the unexpired portion of the employee’s contract. The Labour Court and CCMA have the powers to make such additional awards by virtue of section 195 of the LRA and section 74(1) of the BCEA. Furthermore, the Labour Court has jurisdiction, in terms of section 77(3) of the BCEA to determine any matter relating to a contract of employment.

More and more lawyers and consultants are therefore advising employers to offer reinstatement to dismissed employees where the employee disputes the dismissal procedure. That is, the employer’s legal experts are advising employers to reinstate the employee before the matter gets as far as court or arbitration so as to avoid these heavy penalties being imposed by the CCMA or Labour Court.

For some time this reinstatement tactic was relatively effective. The firm, after realising it has made a mistake in the dismissal procedure, takes the employee back, or declares the dismissal null and void, so cancelling out the procedural error. Then the firm fires the employee again, but this time uses the correct procedure.

However, the use of this tactic is becoming more and more risky for employers. For example, in the case of Unitrans Zululand (Pty) Ltd vs Cebekhulu (as reported in People Dynamics, October 2003) the Labour Appeal Court was faced with such a decision. The employer retrenched Cebekhulu but, realising that the retrenchment procedure was faulty, withdrew the retrenchment and restarted consultation procedures. The Court found that these new consultations were “merely an attempt to paper of the cracks” of the botched procedure followed during the first set of consultations.

According to the People Dynamic’s report the Court found that the employer’s decision to “begin consultations afresh” was made in bad faith “only when it was advised that it had not complied with the LRA”. The Court therefore decided that the reinstatement of the employee could not correct the botched retrenchment procedure and awarded costs against the employer.

It is therefore not a safe option for HR professionals to implement retrenchments inexpertly and then hope to correct the error using the reinstatement tactic. The only route to follow is to obtain expert advice before dismissing employees for any reason and to make sure that you are getting the advice from a genuine labour law expert with solid experience with retrenchments.