In terms of Section 194 of the Labour Relations Act, a Commissioner can award an Applicant compensation for an unfair dismissal where reinstatement is not appropriate.
In terms of Section 194, Commissioners have the power to award compensation of an amount of up to twelve (12) months’ salary where an employee is successful with an unfair dismissal matter.
In Dr. D.C Kemp t/a Centralmed v Rawlins (2009) 30 ILJ 2677 (LAC), the Labour Appeal Court held that when deciding whether compensation is, in fact, the appropriate remedy, the following factors should be considered: –
1) The nature of the reason for the dismissal;
2) Whether the unfairness of the dismissal is on substantive or procedural grounds or both;
3) With regards to procedural unfairness, the nature and extent of the deviation from the procedural requirements;
4) If the reason relates to misconduct, whether the employee was guilty or innocent; if he was guilty whether a dismissal was the appropriate sanction;
5) The consequences to the parties if compensation is awarded as well as the consequence if it is not;
6) The impact of any wrongdoing on the side of the employee on the employer or its business; and
7) Any conduct by either party that promotes or undermines any of the objectives of the LRA.
In Mohlakoana v CCMA and another  10 BLLR 1061 (LC), it was confirmed that a Commissioner is obliged to provide brief reasons for any remedy awarded and that merely stating that an amount is just and equitable is not sufficient to justify the amount of compensation awarded.
Furthermore, it is not a requirement for an employee to have suffered any patrimonial loss for a Commissioner to grant him or her compensation.
In Lakomski v TTS Tool Technic Systems (Pty) Ltd (2007) 28 ILJ 2775 (LC), it was held that whether an employee has suffered any patrimonial loss is, however, a factor that may be taken into account, together with other factors, such as how the employee was treated and what steps were taken by the employer to ensure it complied with the provisions of the LRA.
It is important to note that although the Labour Appeal Court confirmed that where an employee employed on a fixed-term contract was unfairly dismissed, the amount of compensation that can be awarded is limited to the remaining period of the contract, a Commissioner might take a different stance.
In Mvubu and Workers’College KZN (2018) 39 ILJ 949 (CCMA), the Commissioner expressed the view that a Commissioner is not restricted to awarding compensation that might result in an employee being awarded more than he would have received had he been paid up to the date of the expiry of his fixed-term contract.
Courts are not to interfere with the Commissioners discretion to determine just and equitable compensation for an unfair dismissal unless that discretion is not exercised judicially or exercised capriciously, or with bias, or based on the wrong principle or approach or not for a substantial reason.
Where compensation is awarded exclusively for procedural unfairness, Commissioners rarely awards an employee a large amount of compensation. The Labour Appeal Court in Johnson and Johnson (Pty) Ltd v Chemical Workers Industrial Union (1999) 20 ILJ 89 (LAC) found that no compensation was due to the employees, despite their dismissal being procedurally unfair.
The flip side may also ring true, depending on the merits of the case. To this end, the Labour Court has recently awarded employees with maximum compensation (12 months) for a gross procedural irregularity, despite there being sufficient justification for the dismissal.
Therefore, there is no hard and fast rule when it comes to the amount of compensation to be awarded by a Commissioner. Each case will be dealt with on its own merits, with relevant case law utilised as a guideline.
Article by: Ilze Erasmus
Dispute Resolution Official – Port Elizabeth