Employment law update – Compensation for substantively unfair dismissal where reinstatement is not appropriate

November 1st, 2019

In United National Transport Union obo Schrenk v Levy NO and Others [2019] 9 BLLR 970 (LC), an employee was dismissed after relaying an idiom that compared his subordinates to baboons. The employee’s defence was that the employees did not understand an Afrikaans idiom. The commissioner found that the use of the idiom was inappropriate but accepted the employee’s explanation for the use of the idiom and found the dismissal to be substantively unfair. The commissioner found that it would not be practical to reinstate the employee into the workplace and he was, therefore, awarded one months’ remuneration as compensation. When determining whether or not to reinstate the employee the commissioner considered the fact that the employee was already on a final warning for using crude and insulting language, which had resulted in him going for training for people management. This training did not appear to have resulted in a change in his conduct as he had continued to be disrespectful to his colleagues and there had been a number of complaints about his treatment of staff. The employee also seemed to suggest that the employment relationship had broken down as he had said that he had felt betrayed.

The employee took the matter on review as he was of the view that the compensation was unreasonable. The Labour Court held that a number of factors need to be taken into account to determine the quantum of the compensation. In this case, the dismissal was procedurally unfair, as well as substantively unfair as the employee was not found guilty of the charge for which he was dismissed. Furthermore, he had very long service at the employer. The award was accordingly set aside and replaced with an order for compensation equal to six months’ remuneration.

Resignation without notice

In Naidoo and Another v Standard Bank of SA Ltd and Another [2019] 9 BLLR 934 (LC), the Labour Court (LC) was required to consider when resignation by an employee without notice takes effect. In this case, the employees were issued with disciplinary charges relating to financial misconduct and immediately resigned. The employees alleged that they resigned with immediate effect because they did not have faith in the disciplinary process and a finding of guilt would have had significant reputational and financial consequences for the employees. The employer advised the employees that they were bound by a 28 days’ notice period and that the disciplinary process would continue during the notice period. The employees then approached the court for an urgent interdict to interdict the disciplinary process.

The LC considered the fact that resignation is a unilateral act and found that when the resignation takes effect depends on the type of resignation. In this regard, a resignation on notice would take effect at the end of the notice period. A resignation without notice is a contractual breach, which would entitle the employer to either seek specific performance and hold the employees to the contracts or to accept the repudiation and sue for damages. Thus, it was held that the employer should have approached the court for specific performance of the contract but failed to do so.

The LC considered the different case law regarding whether an employer still has the authority to discipline an employee after resignation without notice and concluded that the employer loses its disciplinary authority unless it approaches the court for specific performance and such order is granted. It was held that the employer did not have authority to discipline the employees after their resignations and the employer was accordingly interdicted from continuing with the disciplinary proceedings.

Monique Jefferson BA (Wits) LLB (Rhodes) is a legal practitioner at DLA Piper in Johannesburg.

This article was first published in De Rebus in 2019 (Nov) DR 33.