This is the fifth, and final, article in a series of articles meant to advise litigants who may have to arbitrate before the CCMA after 1 January 2012, in the face of the new "Guidelines on Misconduct Arbitrations" ("the Guidelines") which were published by the CCMA during September 2011 and which became effective on 1 January 2012.

The purpose of this article is to examine those sections of the Guidelines which advise arbitrators on how to determine an appropriate remedy in arbitration proceedings relating to misconduct (once it has been determined that the dismissal in question was, in fact, unfair).

Arbitrators must determine an appropriate remedy within the scope of section 193 of the Labour Relations Act 66 of 1995 ("the LRA") and are obliged, in terms of the Guidelines, to provide reasons for the chosen remedy in an arbitration award.

section 193 of the LRA

Section 193 of the LRA provides for remedies directing the employer to do the following:

  • to reinstate the employee from any date not earlier than the date of dismissal;
  • to re-employ the employee; or
  • to pay compensation to the employee.


Reinstatement means that the employer is ordered to allow the employee to retrospectively return to work, as if the dismissal had never occurred in the first place.

The effect of retrospectivity is that the employer will be liable to pay any back pay due to the employee from the date of the reinstatement.

If made fully retrospective, the remedy of reinstatement restores the circumstances as they were prior to dismissal – as if the employee's service had never been interrupted. The employee must be placed back in the same position and the contractual relationship continues as it did previously.


Re-employment, by contrast, lacks the retrospective element of reinstatement, and means that the employee will return to work at a future date referred to in the arbitration award. The intervening period of dismissal is, therefore, accepted by the arbitrator, and the employee is not entitled to any back pay for that period.

The Guidelines state that re-employment is, generally, an appropriate remedy where an employee was dismissed on grounds of incapacity or operational requirements. To the extent that there may also be cases of dismissal for misconduct where re-employment may be a suitable remedy, the Guidelines specify that re-employment may be appropriate in the following circumstances:

  • where the dismissal constituted a failure by the employer to re-employ the employee for alleged misconduct (rather than dismiss for misconduct);
  • where the factual evidence indicates that the employee should be employed on different terms and conditions to those that were in place when he was dismissed; and
  • where circumstances prevent the employer from reinstating the employee in his or her previous position and where it should, therefore, be ordered that the employee should be re-employed in other reasonably suitable work. "Reasonably suitable work" should be determined with reference to, inter alia, the skills and experience required and a comparison of the remuneration, benefits and status attached to the new position, when compared to the old position.

An arbitrator is required to specifically stipulate the terms and conditions of the re-employment in the arbitration award, and is therefore given a broad discretion to craft this remedy. The order must specify to what extent the terms and conditions are changed (or remain unchanged) and specify the benefits to which the employee is entitled for the period between dismissal and re-employment (if any).

orders of reinstatement or re-employment

Certain aspects concerning such orders must be specifically dealt with in the arbitration award.

The date on which the employee must report for work with the employer should be recorded in the award.

the effective date of reinstatement or re-employment

Reinstatement or re-employment may be made effective from either the date of dismissal (i.e. a fully retrospective order), or any date subsequent to the dismissal.

The Guidelines provide that an order which is not fully retrospective would be appropriate, for example, if the employee unduly delayed the commencement or continuation of the dispute resolution proceedings. The employee should, accordingly, not be allowed to profit, at the employer's expense, from his own delay.

The Guidelines allow arbitrators to make an award of reinstatement or re-employment effective from a date more than twelve (12) months prior to the date of the relevant arbitration award.

It is important to note that if an order of reinstatement or re-employment is not fully retrospective, any remuneration and benefits for the period between the dismissal and the date of reinstatement or re-employment, are forfeited by the employee. Accordingly, it is important that the arbitrator have due regard to the above considerations, when deciding whether or not it is appropriate to make such an order.

The Guidelines further provide that an order of reinstatement or re-employment may be subject to a lesser sanction, such as a warning, in appropriate cases. In these circumstances, the arbitrator must consider any applicable disciplinary code and must specify the effective period of the sanction. Such an order may arise where the arbitrator finds that the employee did, in fact, commit misconduct, but where the misconduct should not have resulted in his or her dismissal.

"back pay"

Even if an arbitrator finds a dismissal to also be procedurally unfair, an order of compensation may not be made in addition to an order of reinstatement or re-employment.

An order for reinstatement or re-employment may, however, include an order that the employer must pay an applicable amount of "back pay" to the employee, relating to the period between the dismissal and the date on which the employee returns to work. Such payment must be distinguished from an order for compensation.

The specific amount of back pay should be stipulated in the award, in order to avoid uncertainty and further disputes arising. Referring to back pay merely in terms of a certain number of months' remuneration should, therefore, be avoided by arbitrators.

where reinstatement and re-employment are not appropriate remedies

If an arbitrator finds that a dismissal was substantively unfair, he must direct the employer to either reinstate or re-employ the employee, unless one of the following circumstances apply.

the employee does not wish to be reinstated or re-employed

An employee may elect to not seek reinstatement or re-employment and must be given an opportunity during the arbitration hearing to state whether or not these remedies are being sought. An arbitrator should not interrogate an employee's decision not to seek these remedies, apart from ensuring that the employee is making an informed decision - i.e. with the full knowledge of the employee's rights under the LRA.

a continued employment relationship would be intolerable

In this regard, an employer would have to demonstrate, by way of evidence and on a balance of probabilities, that there are no reasonable prospects of a good working relationship being restored between the parties, due to the circumstances surrounding the dismissal or due to what has subsequently taken place between the parties. This evidence may include, for example, the negative conduct of the employee leading up to and/or after the dismissal. It may also be the employer's case that the employee's return may result in significant disruptions at the workplace, thereby rendering a continued employment relationship intolerable.

it is not reasonably practicable for the employer to reinstate or re-employ the employee

This relates to practical reasons which do not necessarily relate to the employment relationship itself. An employee may have been employed as a certified crane operator prior to his dismissal, for example, but the company has in the interim sold all its cranes, thus rendering impracticable the employment of a crane operator.

The onus is on the employer to illustrate that, for example, reinstating or re-employing the employee would impose a disproportionate financial burden on the employer. The arbitrator should, however, consider whether it would be fair to order re-employment in other reasonably suitable work, where re-employment in the employee's previous position may have become impracticable.


If it has been demonstrated that reinstatement and re-employment are not appropriate remedies, then the arbitrator must direct the employer to compensate the employee (i.e. in terms of money).

The maximum amount of compensation which may be awarded to an employee (in an ordinary misconduct matter) is twelve (12) months of the employee's remuneration as at the date of dismissal. The arbitrator must determine a just and equitable amount with reference to all relevant circumstances relevant to both the employer and the employee, based on the evidence presented by both parties. If the parties do not present sufficient evidence in this regard, the arbitrator should request them to do so.

An arbitrator must determine the amount of compensation by having regard to the extent of the employee's financial loss and the nature of the dismissal. Although compensation is not intended as a means of punishing the employer, the Guidelines do provide that a compensation award may be used as an expression of the arbitrator's displeasure at a "seriously unfair dismissal". The primary aim of compensation is to place the employee in the same financial position had he not been dismissed.

determining the amount of compensation

The Guidelines stipulate numerous considerations which are relevant to determining the amount of compensation in cases of substantively unfair dismissals, which the parties must substantiate by way of evidence, and which include the following:

  • the employee's remuneration and benefits at the time of dismissal;
  • alternative employment and other steps taken by the employee to mitigate his or her loss;
  • actual financial loss suffered by the employee;
  • the employee's financial position;
  • prospects of future employment, with regard to age, experience and qualifications; and
  • whether the employee unreasonably refused an offer of reinstatement.

Compensation for a dismissal which was only procedurally unfair (i.e. it was not also substantively unfair) is not based on the employee's actual financial loss and, therefore, alternative employment and mitigation of loss is irrelevant. In this regard, arbitrators must consider the following:

  • whether the severity of the procedural unfairness justifies a compensation order in the first place;
  • the employer's conduct prior to and in the course of dismissing the employee;
  • the extent of anxiety or hurt which the employee experienced as a result of the unfairness, which may involve considering the employee's length of service;
  • compensation as a means to make up for the loss of the right to a fair pre-dismissal procedure; and
  • the amount of compensation which would be just and equitable in the circumstances.

If a dismissal is found to be procedurally unfair (irrespective of the finding on substantive fairness), the arbitrator may also charge the employer an arbitration fee. This is not often done in practice.

costs awards

Section 138(10) of the LRA grants an arbitrator a discretion to include a costs order in the arbitration award, should this be required by law and fairness in the circumstances.

If a genuine dispute exists, irrespective of the strength of its merits, an arbitrator should, generally, not award costs. Conversely, if a party or its representative has processed the dispute in a frivolous or vexatious manner, or has acted dishonestly, reprehensibly or unreasonably, a costs order may be justified.

A costs order may relate to the cost of legal representation, but may also include an award for the actual costs incurred by an unrepresented party (such as transport costs to and from the CCMA, for example). Arbitrators may not order parties to pay the costs incurred by the CCMA in respect of the arbitration.

amounts payable in terms of section 74 of the basic conditions of employment act 75 of 1997 ("the BCEA")

If the employer owes the employee an amount of money in terms of the BCEA (such as unpaid salary, overtime or leave pay) at the time of the determination of the arbitration award, and such amount has not been owning to the employee for longer than a year prior to the dismissal, the arbitrator may also determine these claims, insofar as the claims were stated in the 7.11 (conciliation) or 7.13 (arbitration) referral forms.

However, if the employee has instituted other legal proceedings or obtained a compliance order to recover the amount owing, the arbitrator would then not have jurisdiction to determine the claim.


Arbitrators are obliged to take the Guidelines into account and, accordingly, parties are advised to be mindful of the Guidelines in relation to the manner in which an arbitrator determines an appropriate remedy, pursuant to an arbitration hearing relating to misconduct and a finding that the dismissal in question was unfair.

An arbitrator's powers to determine an appropriate remedy are limited; firstly, by the specific remedies available in terms of section 193 of the LRA and, secondly, by the principles contained in the Guidelines relevant to determining which of the available remedies should be appropriate in a particular matter. This necessitates a thorough consideration of all the relevant facts surrounding the dismissal, in order to determine whether the factual circumstances call for a reinstatement, re-employment or compensation order. Litigants are advised to be aware of the detailed guidelines in this regard, given that an arbitrator is required to apply his mind to that end and justify his reasoning.

By assessing the conduct of the arbitrator in determining an appropriate remedy with reference to the Guidelines, a party may be able to more easily prove that the arbitrator exceeded his powers, committed misconduct in relation to his duties and/or committed a gross irregularity in the conduct of the proceedings. In terms of Section 145 of the LRA, such grounds might constitute a defect in the arbitration proceedings, rendering the arbitration award reviewable, insofar as the remedy is concerned.

With this in mind, the Guidelines should serve as an essential and practical yardstick against which to measure the determination of appropriate remedies by arbitrators, after 1 January 2012.

*This is the fifth, and final, article in a series of articles on the new CCMA Guidelines for Misconduct Arbitrations. For the first article please see this article, for the second see this article, for the third see this article and for the fourth see this article.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.