The juridical basis of the statutory claim for compensation in unfair dismissal cases

Abstract

A highly efficient, mass dispute resolution system has been established in South Africa with the implementation of the Labour Relations Act 66 of 1995 (hereafter the LRA 1995 ) two decades ago. The remedies of reinstatement, re-employment and compensation lie at the heart of this system. The compensation claim in terms of the LRA 1995, on which this study focuses, is related to a history of preceding common-law and statutory legal development, including the development of labour law in comparable foreign jurisdictions. However, according to sections 193(1) and 194(1) of the LRA 1995, the determination of compensation is left to the blanket discretion of CCMA arbitrators who have to determine compensation for substantively and procedurally unfair dismissals on the basis of what they perceive to be just and equitable in all the circumstances of the individual case. Significantly, there are no further standards or frameworks to be found in the statute and it is not strange that questions are being asked, both in academic quarters and from the bench, about the consistency and accuracy of compensatory awards. This dissertation comprises an analysis of the common-law action for breach of contract in unlawful dismissal cases, the statutory claim for compensation for unfair dismissal in terms of the Labour Relations Act 28 of 1956, the statutory claim for compensation for unfair dismissal in terms of the LRA 1995 and similar common-law and statutory remedies in the labour law of the United Kingdom. The objective is to form an understanding of the nature of these remedies and how it relates to the process of determining compensation. On the basis of the preceding analysis, the need for legislative review of the compensation claim in terms of the LRA 1995 is then demonstrated. Pursuant to recent case law, the jurisdictional overlap between the statutory claim and the common-law action for breach of the employment contract in unfair dismissal cases is also addressed.