STOP PRESS : DISMISSAL CAN BE EXPENSIVE – RETROSPECTIVE REINSTATEMENT
Republican Press (Pty) Ltd v CEPPWAWU & Gumede and others
On 27 September 2007, the Supreme Court of Appeal handed down a judgment that has important implications for unfair dismissal disputes.
The company had retrenched about 150 workers in September 1999. The union contested the fairness of their dismissal and claimed reinstatement. On 3 November 1999, the conciliation failed and in February 2000, a statement of claim was filed in the Labour Court. For various reasons, the matter only came to trial in September 2005. The Labour Court found that 28 of the employees had been unfairly selected for retrenchment and reinstated them, about 6 years after their dismissal.
The employer was refused leave to appeal to the Labour Appeal Court. In an appeal to the Supreme Court of Appeal, the Court held that it was entitled, in terms of the Constitution, to hear an appeal on the merits of the case. At issue was a previous decision by the Labour Appeal Court in CWIU v Latex Surgical Products (Pty) Ltd. In that case, the Labour Appeal Court held that when an order of reinstatement is made, it is not competent to order the retrospective operation of that order for a period in excess of 12 months. In other words, relying on the Latex case, the employer argued that any order of reinstatement could only be made retrospective for a maximum period of one year.
The Supreme Court of Appeal disagreed and held that the Latex case was wrongly decided. The Court noted that an order for reinstatement effectively restores the former contract and any amount payable to the worker under that contract becomes due on those ground alone. A proper reading of the LRA did not limit the remedy of retrospective reinstatement as suggested in the Latex judgment. Although the drafters of the Act had no doubt assumed that labour disputes would be expeditiously brought before the Courts, that assumption was not relevant. On that basis, the 6 year retrospective reinstatement ordered by the Labour Court was legally competent.
However, it did not necessarily follow that the order made by the Labour Court was proper. In the present case, the failure by the union to pursue the claim expeditiously (the major reason for the delay in the case being finalised) was sufficient in itself for the Court to find that it was not reasonably practicable for an order of reinstatement to be granted. The proper remedy was one of compensation.
The appeal succeeded, the reinstatement orders were set aside and the company was ordered to pay compensation of 12 months’ remuneration to each of the applicants.
The judgment highlights three important points:
There is no 12 month limit on the retrospective application of reinstatement orders, as previously held by the Labour Appeal Court. A reinstatement order may be made retrospective to the date of dismissal, however long before the dismissal was effected.
Where there is a lengthy delay in the adjudication process, reinstatement becomes a less appropriate remedy, especially where dismissed employees or their representatives are responsible for the delay. In these circumstances, a Court ought to award compensation only.
Finally, the case confirms a trend in which the Supreme Court of Appeal is clearly asserting its authority in labour disputes.
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"The Court noted that an order for reinstatement effectively restores the former contract and any amount payable to the worker under that contract becomes due on those ground alone. A proper reading of the LRA did not limit the remedy of retrospective reinstatement as suggested in the Latex judgment"
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