Where an employee has been unfairly dismissed, the court may
order that the employer reinstate the employee retrospectively with
back pay. The rationale behind such an order is to place the
employee in the position he or she would have been in save for the
The question then is whether the back pay is inclusive of any
other employee benefits, financial or otherwise, provided for in
the employment contract or company policy.
In the case of E Ndlovu v Coca-Cola SA (Pty) Ltd the Labour
Court had found that the employee was unfairly dismissed and
ordered the employer to reinstate the employee and pay 'arrear
salary' between the date of dismissal and the date of
reinstatement. The employer paid the employee but he contended that
the arrear salary fell short of amounts to which he was entitled
namely annual increases and incentive bonuses. The employer
contended that it had complied with the court order by paying the
employee the arrear salary calculated on the salary the employee
was earning at the time of the dismissal.
The matter was taken to private arbitration where the arbitrator
had to determine whether the phrase 'arrear salary' meant
an amount calculated on the salary the employee was earning at the
time of dismissal, as contended by the employer, or whether it
incorporated annual increases and incentive bonuses as claimed by
The employer also argued that annual salary increases and
incentive bonuses were discretionary in nature and that to allow
the employee these benefits as entitlements would create a new
The arbitrator held that upon reinstatement, the employment
contract continues as if it had never been interrupted. This meant
that unless a reinstatement award is qualified, a reinstated
employee is entitled to remuneration and benefits he or she would
have received had the employee been available to work during the
period between the unfair dismissal and the reinstatement, which is
a continuation of the original contract. The forced absence of the
employee is not an automatic exclusion from any benefits to which
an employee is entitled in terms of the employment contract or
Finally, the arbitrator also considered whether he could find,
without evidence, that the employee would have been entitled to the
annual salary increases and incentive bonuses. The employer had not
questioned the employee's performance or conduct prior to his
dismissal and the arbitrator ruled that the employer could not
simply plead that it was unable to assess the employee because
there was no performance from the employee to assess.
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.
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