Beware the pitfalls of refusing reinstatement
4 February 2011
This case highlights some important aspects relating to unfair dismissals, and the remedies provided for in our labour legislation. These can be summarised as follows:
- An unfairly dismissed employee only has a right to be considered for remedial measures and has no automatic right to compensation or any other remedy;
- An employer has a right to right a wrong; accordingly, once an employer has seen the error of its ways, it is within that employer’s right to make a genuine offer of reinstatement to an employee to rem-edy the situation;
- Should an employee unreasonably refuse the offer or fail to show that the working relationship had broken down, and as a consequence cannot accept reinstatement, the employee runs the risk of not being awarded any compensation.
In February 1998, Dr Rawlins was dismissed from her employment as a doctor without due process being followed. Her employer, Dr Kemp, conceded that her dismissal was both procedurally and substantively unfair. Nor was she dismissed as a consequence of her pregnancy, but rather as a consequence of her employer, Dr Kemp’s, operational requirements.
Dr Rawlins had, subsequent to her dismissal, obtained employment at a higher salary than she had earned prior to her dismissal. It was not in dispute that Dr Kemp had on three different occasions during the conciliation and litigation process of-fered to reinstate Dr Rawlins as from the date on which she was due to return to work following her maternity leave, and Dr Rawlins had either ignored or categorically refused to accept the offer made.
Notwithstanding the offer of reinstatement and her improved earnings, the labour court awarded Dr Rawlins 12 months’ compensation. The labour court, in arriving at its decision, misdirected itself by placing undue emphasis on how Dr Rawlins was treated by Dr Kemp, and the award was clearly punitive in nature.
The only issue to consider was whether any compensation should have been awarded and, if so, whether the order of 12 months’ compensation was just. The Labour Appeal Court found by majority that no compensation should have been awarded at all, and set aside the labour court’s decision accordingly. The Labour Appeal Court advanced the fol-lowing reasons for its decision: an employee has no vested right to a remedy in terms of labour legislation; all that the employee has is a right to be considered for a remedy. An employer has a right to “right a wrong”.
An employer who had treated an employee unfairly is entitled to remedy that conduct by offering to reinstate the aggrieved employee. Should an employee unreasonably refuse to be reinstated, the employer has a good case in support of no order of compensation being made in favour of the employee.
The Labour Appeal Court did not accept that the relationship was irreparable between the doctors and rejected Dr Rawlins’s contention that she was unable to work with Dr Kemp in light of what had transpired between them. This was largely because Dr Rawlins worked at a satellite practice and would not come into regular contact with Dr Kemp, and furthermore, no objective grounds were ad-vanced as to why the relationship was broken. The court refused to accept only Dr Rawl-ins’s subjective perception of the working relationship.
On a further appeal, the Supreme Court of Appeal held that a court’s remedial powers are compensatory and not punitive in nature, and therefore the court was clearly misdirected when making such an order.
The Supreme Court of Appeal, in upholding the Labour Appeal Court’s decision, concurred with its findings and reiterated that the refusal of the repeated offers of reinstatement was unreasonable, and as a consequence thereof, the employee only had herself to blame for her financial loss.
Mohammed Chavoos is a director and Jocelyn Evans a candidate attorney at Deneys Reitz.
Norton Rose South Africa (incorporated as Deneys Reitz Inc) joined Norton Rose Group on 1 June 2011.