In the case of Masinga v Almar Investments (Pty) Ltd (J564/23) [2024] ZALCJHB 381 (8 October 2024), the Labour Court examined an important issue regarding an employee’s entitlement to back pay following reinstatement. The case sets a critical precedent for situations where an employee, despite being reinstated, is instructed by their employer to stay home and not return to work pending further litigation (review). This judgment clarifies the legal consequences of reinstatement and the employer’s obligation to pay wages during periods when an employee is instructed not to work, or at the least, to keep those amounts aside, pending the outcome of the review. This serves as a reminder that employers cannot withhold wages during periods of reinstatement, even if the employee is not actively performing duties, provided they have tendered their services.

Case Background

The applicant employee, Mr Masinga, was dismissed on 3 July 2019. He successfully challenged his dismissal before the CCMA, which ordered his reinstatement with retrospective effect. He was instructed to report for duty on 6 January 2020, but upon arrival, the employer’s representative told him to return home until further notice. This instruction effectively kept Masinga out of the workplace, even though he was ready and willing to resume his duties.

Subsequently, the employer sought to review the arbitration award, but the Labour Court dismissed the review application in August 2022. Masinga was finally allowed to return to work on 1 September 2022, but a dispute arose over whether he was entitled to payment for the period between January 2020 and August 2022 – a time when he tendered services, but the employer instructed him not to work due to the pending review application.

Masinga sought payment for this period, asserting that he had tendered his services, but the employer refused them. The employer raised multiple defences, including claims that the case had been settled, that the COVID-19 pandemic constituted a supervening impossibility of performance, and that the employee failed to tender services, excusing them from payment during that time.

  • Settlement Defence

The employer argued that the matter had been settled through correspondence between the parties. The employer referred to an unsigned settlement agreement, and communications allegedly indicated an agreement had been reached. However, the Court found that there was no meeting of the minds between the parties, particularly regarding the tax implications of the settlement amount. Masinga’s acceptance of the settlement was conditional upon understanding the tax liability, which was not finalised, thereby invalidating the claim that a binding settlement existed.

  • COVID-19 as a Supervening Impossibility

The employer also argued that the COVID-19 pandemic constituted a supervening impossibility, excusing them from their obligation to pay Masinga during the period when the pandemic disrupted operations. While the Court acknowledged the impact of COVID-19, it rejected this defence because Almar Investments failed to provide sufficient evidence to show how the pandemic specifically prevented them from paying Masinga. The employer did not demonstrate whether other employees were similarly affected, nor did they show how long this alleged impossibility lasted.

  • Failure to Tender Services

Another defence raised by the employer was that Masinga had not continuously tendered his services during the period in question. The Court rejected this argument, as Masinga had clearly stated that he reported for duty on 6 January 2020, as directed, but was instructed to go home. The employer did not dispute this in their answering affidavit, merely noting the fact, which amounted to an admission. The Court found that Masinga had indeed tendered his services, and it was the employer’s refusal to accept those services that prevented him from working.

The Court’s Decision

The Labour Court ruled in Masinga’s favour, ordering Almar Investments to pay him R931 997.80, which comprised outstanding remuneration and interest, inclusive of the entire period between January 2020 and August 2022. The Court found that once an employee tenders their services, the employer is obligated to pay them, regardless of whether they allow the employee to work or not. The judgment reinforced the principle that an employer’s decision to send an employee home, despite the employee’s willingness to work, does not absolve the employer of the responsibility to pay their salary. Further, Almar Investments’ decision to pursue a review did not suspend their obligation to comply with the CCMA’s reinstatement award, and although the employer attempted to use the COVID-19 pandemic as a defence, the Court required clear evidence to substantiate this claim. The mere existence of the pandemic was not enough to prove that the employer was unable to pay Masinga’s wages.

Legal Principles at Play

  1. Firstly, it reaffirms the common law right to be paid a salary when an employee has tendered their services, even if the employer chooses not to utilise them. This aligns with the principle established in HOSPERSA v MEC for Health: Gauteng Provincial Government, which holds that an employer cannot unilaterally suspend or refuse an employee’s services without continuing to pay them unless contractually agreed otherwise.
  2. Secondly, the case highlights the importance of reinstatement as a primary remedy in unfair dismissal disputes. Reinstatement not only restores the employee to their previous position but also entitles them to the wages they would have earned had the dismissal not occurred. Employers cannot escape their financial obligations by delaying employees’ return to work.
  3. Finally, the Court addressed the issue of supervening impossibility, a principle in contract law where performance is excused due to an event outside of the parties’ control (such as the COVID-19 pandemic). However, the Court emphasised that employers must provide clear evidence to substantiate such claims.

Why This Case Matters to Employers

This case serves as a crucial reminder for employers that once an employee is reinstated with back pay following an arbitration or Court ruling, they are entitled to be paid for the period in which they were instructed not to work, as long as they tendered their services. Employers should not assume that instructing employees to stay home excuses them from their obligation to pay wages, particularly if they are ready and willing to work. This is not to be confused with the no work – no pay principle.

The judgment also highlights the risks of prolonging litigation through review applications. Employers must consider the potential financial implications of delaying compliance with reinstatement orders, as back pay and interest accumulate during this period. The judgment further emphasises that settlement agreements must be clear, agreed upon by both parties and formalised. Employers should avoid vague or conditional agreements, which can lead to further disputes and prolonged legal battles.

Article By Carl Ranger

Head of Training at Consolidated Employers Organisation (CEO SA)