ARBITRATION GUIDELINES DETERMINING COMPENSATION The CCMA Guidelines Misconduct

ARBITRATION GUIDELINES: DETERMINING COMPENSATION

The CCMA Guidelines: Misconduct Arbitration 1. This presentation cover s award compensation part of the CCMA Guidelines: Misconduct Arbitrations 2. Published by the CCMA in terms of section 115(2)(g) of the Labour Relations Act, 66 of 1995, as amended. 3. Promulgated in the Government Gazette of 2 September 2011 and came into effect as from the 1 st of January 2012.

PURPOSE OF THE WORKSHOP The purpose of the workshop is to reinforce the importance of the Guidelines to Commissioners when arbitrating misconduct matters in order to ensure that Commissioners properly apply the Guidelines in the actual hearing and then demonstrate this application when drafting arbitration awards

PURPOSE AND NATURE OF THE GUIDELINES Section 138 (6) of the LRA: A commissioner conducting an arbitration must take into account – Any code of good practice issued by NEDLAC and any guidelines published by the CCMA that are relevant to the matter being considered in the arbitration proceedings. The purpose of the Guidelines is to promote consistent decision-making in arbitrations dealing with misconduct dismissal dispute, in particular, when determining: substantive fairness, procedural fairness and appropriate remedy.

HOW TO APPROACH REMEDIES 1. When a dismissal is found to be unfair, the arbitrator must determine an appropriate remedy. 2. Section 193 of the LRA permits an arbitrator to direct an employer who has unfairly dismissed an employee to re-instate, re-employ or compensate the employee. 3. An arbitrator must provide reasons in an award for the remedy that is awarded.

HOW TO APPROACH REMEDIES 4. An arbitrator who finds a dismissal to be substantively unfair must order reinstatement or re-employment unless – § the employee does not wish to be reinstated (this must be an informed decision); § a continued employment relationship would be intolerable; or § it is not reasonably practicable for the employer to reinstate or re-employ the employee.

HOW TO APPROACH REMEDIES 5. Where an employer alleges that a continued employment relationship would be intolerable, evidence must be presented to demonstrate this on a balance of probabilities. This evidence should establish that there are no reasonable prospects of a good working relationship being restored. The fact that another employee has been employed in the dismissed employees’ place is not on its own a ground for not reinstating the worker. The conduct of an employee before or after the dismissal, including during any disciplinary or arbitration proceedings, may also be considered.

DETERMINING COMPENSATION 1. An arbitrator is required to consider submissions from the parties when determining the appropriate amount, if any, of compensation to order. 2. What important aspects should be considered by an arbitrator when making a determination on compensation, for both substantive and procedural unfair dismissal?

DETERMINING COMPENSATION Compensation for substantively unfair dismissal In determining compensation for a substantively unfair dismissal, an arbitrator should consider the following: - The employees’ remuneration and benefits at the time of dismissal; - The time that has lapsed since the dismissal; - Whether the employee has secured alternative employment and, if so, when and at what rate of remuneration;

DETERMINING COMPENSATION Compensation for substantively unfair dismissals - What steps the employee has taken to attempt to mitigate his or her loss by, for example, finding alternative employment; - The patrimonial (financial) loss suffered by the employee. The absence of loss does not prevent an award of compensation; - The employees’ prospects of future employment; - Whether the employee failed to use the opportunity to state a case at a disciplinary investigation or enquiry;

DETERMINING COMPENSATION Compensation for substantively unfair dismissal - Whether the resolution of the dispute was unreasonably delayed, and if so, whether the delay was caused by either the employer or the employee (or either representative); - Whether the dismissal was both substantively and procedurally unfair; - The extent of unfairness of the dismissal; - Payments received by the employee from the employer, other than the amounts due in terms of any law, collective agreement or the contract of employment;

DETERMINING COMPENSATION Compensation for substantively unfair dismissal – - Whether the employee unreasonably refused an offer of reinstatement ; - Whether the employee unreasonably refused other attempts by the employer to make substantial redress for the unfair dismissal such as securing employment with another employer or making an offer of employment; - Whether the conduct leading to the employees’ dismissal caused the employer loss and, if so, the extent of that loss: and

DETERMINING COMPENSATION Compensation for procedurally unfair dismissals An arbitrator who finds that a dismissal is procedurally unfair must determine: - Whether an award of compensation is appropriate in the light of the severity of the procedural unfairness; and - If it is, determine an amount of compensation that is just and equitable in all the circumstances. - The courts have held that compensation in these circumstances is a solatium for the loss

DETERMINING COMPENSATION Compensation for procedurally unfair dismissals - In order to determine the appropriate amount of compensation for a procedurally unfair dismissal, the arbitrator must take into account the extent or severity of the procedural irregularity together with the anxiety or hurt experienced by the employee as a result of the unfairness; - An arbitrator may find that a dismissal is procedurally unfair but award no compensation because the procedural irregularity was minor and did not prejudice or inconvenience the employee.

DETERMINING COMPENSATION Compensation for procedurally unfair dismissals - As the determination of compensation for the procedural unfairness is not based on the employees’ actual financial losses, it is not relevant whether the employee has found alternative employment or mitigated the losses caused by the dismissal in any other way. - An arbitrator who finds that a dismissal is procedurally unfair may charge the employer an arbitration fee, irrespective of the finding on substantive fairness.