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Awards and penalties at the CCMA – what can go wrong…

Awards and penalties at the CCMA

May 11, 2022 | Articles, Business owners tips and advice

Awards and penalties – South Africa’s labour environment is highly regulated, which makes it very important (and challenging) for employers to comply with labour legislation on an ongoing basis. Non-compliance poses a serious business risk to any employer with a possible huge financial impact that could have been prevented.

Awards and penalties

The Labour Relations Act (LRA) gives the Commission for Conciliation, Mediation and Arbitration (CCMA) the power to take action against employers who commit an unfair labour practice or dismiss an employee unfairly.  Once the applicant has referred a dispute to the CCMA, it will be set down for conciliation and a commissioner will be appointed to adjudicate the dispute. If conciliation fails, the matter will be set down for arbitration. Once the arbitration hearing has been concluded, the commissioner will issue awards within 14 days.

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Awards and penalties that an employer can face may include the following:

  • Reinstatement:

    The employer must take the employee back with retrospective effect to the date of dismissal. In such circumstances, the employer would have to give the employee back pay from the date of dismissal up until the reinstatement award was made.

  • Re-employment:
    The employer is required to take the employee back with effect from the date of the award. In some cases, it may be an earlier date.

  • Compensation:
    The CCMA can award up to 12 months’ compensation to a successful employee. One month’s compensation will be equal to that specific employee’s monthly remuneration.  If the compensation amount awarded to the employee has not been paid on or before the prescribed date, the employee can exercise his/her right to enforce the award. This means that the employee will proceed to certify the award in terms of section 143 of the LRA and it may be enforced as if it were an order of the Labour Court in respect of which a writ has been issued. The employee can now instruct a sheriff to attach the moveable goods of the employer.
If an employer fails to attend the arbitration proceedings without a valid reason, the proceedings will continue in their absence and a default award will be issued against their name.
If it is found that it is an automatically unfair dismissal (for example based on pregnancy), the CCMA can award up to 24 months’ compensation.

What can go wrong, ending with awards and penalties?

An employer should never ignore any documentation received directly from the CCMA, or a CCMA referral form received from a dismissed employee. Within a few weeks of receiving such a referral form, the CCMA will provide the employer with a set down date. If the employer does not receive a set down date, it is advisable to contact the CCMA in order to follow up on the set down date. The matter will be set down for Con/Arb. This means that the arbitration will commence immediately after the conciliation. In most cases, the employer may object to Con/Arb, which means that the CCMA will split the proceedings to be heard on separate occasions.
CCMA processes can be intimidating and it is a good idea to get expert advice. An employer can be represented by any employee/director of the business, or by an office bearer/official of an employers’ organisation that is registered with the Department of Employment and Labour.

What does the commissioner consider when calculating compensation?

Compensation is not about the actual loss suffered, but rather about the nature and seriousness of the injustice. The commissioner can exercise discretion and will always consider the following:
  • What is just and equitable in the circumstances.
  • Was the dismissal substantively fair.
  • Was the dismissal procedurally fair.
  • What are the merits of each case together with its own unique circumstances, the relationship of the parties and their attitude after the dismissal.

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