The Labour Relations Act sets out limitations to the amount of compensation an employee can receive for being unfairly dismissed or for being the victim of an unfair labour practice.

The compensation limits for a dismissal will depend on whether the dismissal is classified as being "automatically unfair" or not.

Section 194 of the LRA prescribes that if an employee's dismissal is found to be procedurally unfair and/or substantively unfair, then the employee may be awarded up to 12 months' compensation.

But if a dismissal is found to be automatically unfair an employee is entitled to receive up to 24 months' compensation. In all instances compensation is equal to the employee's remuneration at the date of dismissal.

A dismissal will be classified as automatically unfair if it is due to one of eight reasons stipulated in the LRA. They are:

  • If the employee was dismissed for his or her participation or support of a protected strike or protest action.
  • If the employee was dismissed for refusing to do any work normally done by an employee who is participating in a protected strike.
  • If the employee was dismissed in order to force them to accept a demand relating to a matter of mutual interest between the employer and employee. A matter of mutual interest is any matter relating to employment between the employee and employer. It can relate to a right and can be resolved by resorting to industrial action or a lock-out.
  • If the employee took or intended to take action against the employer by invoking a right provided for in the LRA or participated in any LRA proceedings.
  • If the employee's dismissal was as a result of any reason relating to the employee's pregnancy or intended pregnancy.
  • If the employee was discriminated against due to their race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility.
  • If the dismissal is as a result of a transfer of a business from one entity to another.
  • If the dismissal is as a result of the employee making a protected disclosure in terms of the Protected Disclosures Act 2000, then the dismissal would be classified as automatically unfair.

A protected disclosure is a disclosure made by an employee who believes that the employer (or one of its employees) has or is attempting to conceal that they have: committed or are likely to commit a criminal offence; did not comply with a legal obligation; endangered a person's health or safety; damaged the environment; committed an unfair discrimination, or that a miscarriage of justice has occurred.

The disclosure must be made to specified people in order to qualify as a protected disclosure.

An employee who has been subjected to an unfair labour practice is entitled to be awarded up to a maximum of 12 months' compensation.

However, simply because the law stipulates that an employee may get 12 or 24 months' compensation does not guarantee that this is the award he will receive.

Generally the Commission for Conciliation Mediation and Arbitration and the Labour Court tend to be conservative in awarding compensation and it is not common for employees to receive the maximum compensation. Employees should therefore be realistic in their expectations of the amount of possible compensation.

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.