Getting clarity: The difference between compensation, damages and back-pay ROCHELLE LE ROUX

Section 193(1) (1) If the Labour Court or an arbitrator appointed in terms of this Act finds that a dismissal is unfair, the Court or the arbitrator may- (a) order the employer to reinstate the employee from any date not earlier than the date of dismissal; (b) order the employer to re-employ the employee, either in the work in which the employee was employed before the dismissal or in other reasonably suitable work on any terms and from any date not earlier than the date of dismissal; or (c) order the employer to pay compensation to the employee.

Section 193(2) (2) The Labour Court or the arbitrator must require the employer to reinstate or re-employ the employee unless- (a) the employee does not wish to be reinstated or re-employed; (b) the circumstances surrounding the dismissal are such that a continued employment relationship would be intolerable; (c) it is not reasonably practicable for the employer to reinstate or re-employ the employee; or (d) the dismissal is unfair only because the employer did not follow a fair procedure.

Section 194 (1) The compensation awarded to an employee whose dismissal is found to be unfair either because the employer did not prove that the reason for dismissal was a fair reason relating to the employee's conduct or capacity or the employer's operational requirements or the employer did not follow a fair procedure, or both, must be just and equitable in all the circumstances, but may not be more than the equivalent of 12 months' remuneration calculated at the employee's rate of remuneration on the date of dismissal.

Section 194 (3) and (4) (3) The compensation awarded to an employee whose dismissal is automatically unfair must be just and equitable in all the circumstances, but not more than the equivalent of 24 months' remuneration calculated at the employee's rate of remuneration on the date of dismissal; (4) The compensation awarded to an employee in respect of an unfair labour practice must be just and equitable in all the circumstances, but not more than the equivalent of 12 months remuneration.

The ‘old’ Section 194 (1) If a dismissal is unfair only because the employer did not follow a fair procedure, compensation must equal 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 the adjudication, as the case may be, calculated at the employer'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.

This paper... What is the meaning of compensation in terms of the LRA? What is the meaning of compensation in terms of the EEA? Should compensation be punitive? Can both compensation and reinstatement be ordered? Is back-pay compensation? Can reinstatement be ordered retrospectively

Summary 1.Compensation in terms of the LRA is intended to redress patrimonial and non-patrimonial losses. 2.Back-pay due when an order of reinstatement is made is not compensation – it becomes due because the contract is restored.

Summary... 3.When reinstatement is ordered, there is no limit on the retrospectivity of the order, but the passage of time may mean that the matter is falling into one of the exceptions listed in section 193(2) which entitles the court or arbitrator to exercise discretion not to order specific performance. 4.Ordinarily reinstatement will operate from the award of the CCMA, unless the commissioner in his discretion determines that it should be retrospective.

Compensation, damages and the EEA Compensation = Non-patrimonial losses? Damages = Patrimonial losses? What about the damages under the LRA? Collateral source rule?