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Uncertainty on orders for reinstatement clarified by the Labour Appeal Court

Danny Hodgson
Consultant at Klopper Attorneys Inc.

The primary remedy for an employee in respect of an unfair dismissal dispute is an order for reinstatement from the date of their dismissal. This remedy has retrospective effect to compensate the employee for any loss of income suffered because of their unfair dismissal. There has been some confusion on the legal effect of these retrospective reinstatement orders as many employees are of the view that a court order providing for reinstatement has the effect of automatically restoring the contractual employment relationship between the parties and granting them a contractual claim for arrear wages. This interpretation is however incorrect as was clarified in recent Labour Appeal Court decision of Kubeka and Others v Ni-Da Transport (Pty) Ltd [2021] 42 ILJ 499 (LAC).

In this case the Labour Appeal Court had to determine a contractual claim by the appellants in terms of section 77(3) of the Basic Conditions of Employment Act 75 of 1997 (BCEA) for back pay stemming from an order for reinstatement granted by the Labour Court in July 2013 which became finally enforceable after the exhaustion of the appeals process in November 2014. Murphy AJA, who wrote the LAC judgment, held that to determine whether the appellants had a contractual claim for back pay, it was firstly necessary to determine whether the employment contracts had been a restored due to the reinstatement order.

In determining whether the employees’ contracts had been restored the Court referred to the Constitutional Court’s decision in National Union of Mineworkers SA obo Fohlisa & others v Hendor Mining Supplies (A Division of Marschalk Beleggings (Pty) Ltd) [2017] 38 ILJ 1560 (CC). In that case the Constitutional Court held that a reinstatement order does not in and of itself reinstate the contract of employment and that it is rather an order directing the employee to tender their services and for the employer to accept those services. The employment relationship will therefore only be resuscitated once the employee has tendered their services and the employer has accepted the tender of those services. It follows that if the employee fails to tender their services or the employer refuses to accept the tender there is no restoration of the employment contract. An employee granted retrospective reinstatement is therefore not entitled to any of the contractual benefits of reinstatement, including back pay, without the contract being restored through actual reinstatement. To find otherwise would have the effect of converting a reinstatement order into a compensation award which would be inconsistent with the purpose of sections 193 and 194 of the Labour Relations Act 66 of 1995.  

The Labour Appeal Court in Kubeka accordingly found that the group of appellants whose contracts had not been resuscitated did not acquire a contractual right to back pay which could be claimed in terms of section 77(3) of the BCEA however the group of the re-employed appellants did have a contractual right to back pay which was enforceable in terms of section 77(3).

From this judgment it is now clear that once an employee receives an order granting them retrospective reinstatement, they should ensure that they tender their services within a reasonable time to their employer. Should their employer refuse to accept the tender of their services the appropriate remedy for the employee is to bring is a contempt of court application as the order for reinstatement is an order compelling the employer to do something as opposed to an order to pay something which would be enforced through a writ of execution. Once the employment relationship has been resuscitated, the employee will then be able to enforce their claim for back pay should their employer refuse to make payment.

Post Author: Danny Hodgson

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