Mr Ndlovu, a senior employee of Coca-cola (Pty) Ltd, was
retrenched on 31 December 2010 after the termination of a
distribution contract he had been seconded to manage. Ndlovu was
paid a generous severance package of about R1.3 million. Unhappy
with his retrenchment, Ndlovu referred an unfair dismissal dispute
to CCMA. Generally, a retrenchment dispute is adjudicated by the
Labour Court but if it involves a single employee it may be
arbitrated by the CCMA.
The Commissioner concluded that Ndlovu's retrenchment was
both procedurally and substantively unfair and ordered Coca-Cola to
reinstate him with full back-pay, which pay amounted to
approximately R530 000 at the date of the award. In closing
argument the company had raised the issue of severance pay which
had already been paid to the employee and which would fall to be
refunded should the employee be re-instated. Despite this fact the
Commissioner refrained from making any ruling regarding repayment
of the severance package.
Coca-cola brought a review application before the Labour Court,
among other things, complaining (incredibly if one considers the
simple principle of set-off which it was entitled to apply) that
the effect of the arbitration award was to allow Ndlovu to pocket
the severance package and also be paid back-pay from the date of
dismissal. The Labour Court (per Acting Judge Chetty) agreed with
the Commissioner's award that Ndlovu's retrenchment was
substantively unfair and the relief of retrospective reinstatement.
However, the court found that the Commissioner committed a
reviewable irregularity by not ordering Ndlovu to repay the
severance package. To that extent, the arbitration award fell to be
set aside and Ndlovu was ordered to repay the severance package.
However, a bitter pill to swallow for Coca-Cola is that after the
dust has settled regarding calculation of the amounts owed to each
other (severance package v back-pay) Coca-Cola must still pay to
Ndlovu a substantial amount of money. This is as a result of
accumulation of pack-pay pending the finalization of the review
application at Labour Court.
The importance of this judgment is a clear message to employees
who seek reinstatement after receiving severance pay – be
prepared to repay the severance pay because you can't have your
cake and eat it!
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Employees must understand the notice periods stipulated by law. When an employee gives notice of their resignation to an employer, they is advising the employer that they will cease to work for the employer from a certain date.
Nigeria is a federal constitutional republic located on the west coast of Africa. Modern Nigeria has its origins as a British colony through the 19th and 20th century until it achieved independence in 1960.
The jurisprudential basis is pithily expressed as staying in sync with the global position on employment relationship, easily summed up as "International Labour Standard" and "International Best Practice".
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