Alpha Plant and Services (Pty) Ltd v Simmonds and Others (JA13/00) [2000] ZALAC 26 (12 December 2000)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Labour Appeal Court
SAFLII
>>
Databases
>>
South Africa: Labour Appeal Court
>>
2000
>>
[2000] ZALAC 26
|

|

Alpha Plant and Services (Pty) Ltd v Simmonds and Others (JA13/00) [2000] ZALAC 26; [2001] 3 BLLR 261 (LAC); (2001) 22 ILJ 359 (LAC) (12 December 2000)

IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
CASE
NO. JA 13/00
In
the matter between
ALPHA
PLANT AND SERVICES (PTY) LTD
Applicant
and
SIMMONDS
R
First Respondent
LUBBE GR

Second Respondent
LUBBE R

Third Respondent
J
U D G M E N T
DAVIS
AJA:
[121] I agree both with the order proposed by
my brother
Goldstein
and the reasoning employed in his
judgment. To the extent that the present case deals with a
controversial issue in our labour law,
I wish to set out my view of
the implications of this judgment.
[122] Section 193 (1) of the Labour Relations
Act 66 of 1995 (“LRA”) provides, inter alia, that “[i]f the
Labour Court ...finds
that a
dismissal
is unfair, the Court...
may –... (c) order the employer to pay compensation to the
employee
.”
Section 194(1) of the LRA headed “Limits on
compensation” provides that “[i]f a
dismissal
is unfair
only because the employer did not follow a fair procedure,
compensation must be equal to the
remuneration
that the
employee
would have been paid between the date of
dismissal
and the last day of the hearing of the arbitration or adjudication,
as the case may be, calculated at the
employee’s
rate of
remuneration
on the date of dismissal. Compensation may
however not be awarded in respect of any unreasonable period of delay
that was caused
by the
employee
in initiating or prosecuting a
claim.”
[123] The architecture of the LRA provides a
discretion to the court as to whether to order an employer to pay
compensation to the
employee in the case of an unfair dismissal.
Once a court has decided to exercise its discretion and so order the
payment of compensation
in a case where the dismissal has been found
to be unfair because the employer did not follow a fair procedure,
the court is mandated
to award an amount of compensation pursuant to
a formula set out in section 194 of the LRA.
[124] The relationship between the decision to
award compensation and the
quantum
thereof was
canvassed in
Johnson & Johnson (Pty) Ltd v Chemical Workers
Industrial Union
(1999) 20 ILJ 89 (LAC) where
Froneman DJP
said the following: “[40] If a dismissal is found to be unfair
solely for want of compliance with a proper procedure the Labour
Court, or an arbitrator appointed under the LRA, thus has a
discretion whether to award compensation or not. If compensation is
awarded it must be in accordance with the formula set out in s
194(1); nothing more, nothing less. The discretion
not
to
award compensation in the particular circumstances of a case must, of
course, also be exercised judicially.
[41] The compensation for the wrong in failing
to give effect to an employee’s right to a fair procedure is not
based on patrimonial
or actual loss. It is in the nature of a
solatium
for the loss of the right, and is punitive to the
extent that an employer (who breached the right) must pay a fixed
penalty for causing
that loss. In the normal course a legal wrong
done by one person to another deserves some form of redress. The
party who committed
the wrong is usually not allowed to benefit from
external factors which might have ameliorated the wrong in some way
or another.
So too, in this instance. The nature of an employee’s
right to compensation under s 194(1) also implies that the discretion
not
to award that compensation may be exercised in
circumstances where the employer has already provided the employee
with substantially
the same kind of redress (always taking into
account the provisions of s 194(1)), or where the employer’s
ability and willingness
to make that redress is frustrated by the
conduct of the employee”. [at paras 40-41].
[125] These
dicta
have been the subject
of a number of different interpretations. It would appear that the
desire to reinterpret
Johnson’s
case has been caused by the
perceived need to escape from what has been referred to as “the
rigidities in section 194”. See
for example
De Bruin v
Sunnyside Locksmith Suppliers (Pty) Ltd
[1999] BLLR 761
(LC) at
para 29.
In
Whall v Brandadd Marketing (Pty) Ltd
(1999) 20 ILJ 1314 (LC)
Grogan AJ
attempted to assume that
the provision gave greater flexibility to the decision to award
compensation in terms of section 194(1)
of the Act. Accordingly he
said at para [36]: “As s 194(1) prescribes a minimum, establishing
what fairness in this context requires
must entail comparing what the
court considers the employee should have received had there been no
statutory minimum with what the
employee must receive in terms of
that statutory minimum. If there is a substantial difference between
the two figures, the court
must decide whether denying compensation
will be more unfair to the applicant than granting the prescribed
compensation would be
to the respondent. The assessment of what the
employee should have received must, in turn, require the court to
examine factors
such as the actual patrimonial loss suffered by the
applicant in consequence of his or her dismissal, his or her length
of service
with the employer, his or her prospects of finding
alternative employment, the financial position of the employer, and
so on...”
[126] This analysis appears to favour an
appoach which has the effect that the discretion to award
compensation in terms of section
193 should take place after an
initial examination of the discrepancy between the amount of
compensation awarded in terms of the
formula as provided for in
section 194(1) and an award of compensation which would be granted if
no statutory formula was applicable
and hence were patrimonial loss
to be considered to be a key factor in the decision..
[127] In the present case there has been no
need to evaluate the amount of compensation in terms of section
194(1) with any comparator
based, in part, upon patrimonial loss. In
the present case counsel for the respondent did not rely on any
patrimonial loss which
her clients might have suffered. No
evidential basis was laid for such an approach. That however is not
the end of the matter.
In order to decide whether to award
compensation for such an unfair dismissal the court must exercise a
judicial discretion. I
agree fully with my brother
Goldstein
with regard to the relevant factors of which account must be taken in
order to arrive at a decision as to whether to award compensation.

Only after a careful examination of these factors, can a court
exercise its discretion as to whether in principle compensation
should be awarded. Thereafter the
quantum
of the
compensation must be determined in terms of section 194.
[128] In exercising a judicial discretion to
award compensation in the present case, the manner in which the
company sought to deal
with each of the respondents, namely with a
measure of concern and consideration as well as the relatively short
period of employment
in which each of the respondents was employed by
the company, are critical factors in the determination as to whether
to exercise
a discretion to award any compensation.
[129] Mr Wilke, who appeared on behalf of
appellant, invited the court to reconsider the approach adopted in
Johnson’s
case,
supra
. He submitted that a less
rigid approach to the formula set out in section 194(1) should be
adopted. This is an invitation which
must be refused. Section
194(1) is couched in peremptory terms. Once a court has exercised
its discretion in terms of section 193(1)(c)
to order the employer
to pay compensation to the employee within the context of an unfair
dismissal pursuant to the adoption of
an unfair procedure, it must
apply the formula in respect of the amount of compensation which it
so awards. There is no basis to
be found in the wording of section
194(1) to justify the conclusion to which
Grogan AJ
arrived in
Whall’s
case, supra at para [36], namely that a decision in
terms of this section involves “establishing what fairness in this
context requires
[which] must entail comparing what the court
considers the employee should have received had there been no
statutory minimum with
what the employee must receive in terms of
that statutory minimum.”
[130] Section 194(1) appears to have been
designed to remove the need for any evidence as to the nature of the
loss suffered by the
employee arising out of an employer’s decision
to dismiss such an employee in circumstances where the latter has
followed an unfair
procedure. If the court were to follow the
approach adopted by
Grogan AJ
in
Whall’s
case,
supra
it would, of necessity, involve an examination of evidence as to
the nature of patrimonial and other loss suffered by an employee
prior to the court determining the
quantum
of such
compensation.
[131]
Van Niekerk AJ
observed in
De
Bruin v Sunnyside Locksmith Suppliers (Pty) Ltd
,
supra
that section 194 was “drafted with some obvious assumptions
about the expeditiousness of the new statutory dispute resolution
mechanisms
in mind” (at para 31). The section may well have been
drafted on the assumption that the period between the date of
dismissal and
the last day of the hearing of the arbitration or
adjudication would be relatively short given the expeditious purpose
of the new
system of dispute resolution introduced by the LRA.
Viewed in this context the purpose of the section was to introduce a
mandatory
amount of compensation which would be fair in such cases.
The fact that the operation of the LRA has not brought about the
degree
of expeditious dispute resolution upon which the section was
initially predicated may well require a legislative change in order
to render section 194(1) more flexible. The problem however cannot
be solved by an interpretation which is at war with the very
purpose
of the section as presently constituted.
_______________
DAVIS AJA
Date of Judgment: 12 December 2000