Just when we thought we had fully grasped the meaning and implications of a reinstatement order, the recently delivered Labour Appeal Court (LAC) judgment of Coca Cola SABCO (Pty) Ltd v Harold van Wyk, has put a spanner in the works! It has always been understood that when an employee has won a reinstatement order at a CCMA/Bargaining Council or Labour Court (LC) and the employer appeals unsuccessfully, the employer is immediately liable for the employee’s back pay from the date of the award to the date of implementation thereof (‘the intervening period’). In the famous Sidumo case the Constitutional Court decided the matter 7 years after the employee was dismissed and the employer was held liable for the 7 years’ back pay. In the Coca Cola judgment the LAC has ruled, however, that the employee’s entitlement to back pay for the intervening period is not automatic. All the employee has is a contractual claim based on the employment contract which must be pursued through the civil or labour courts.
In this case the employee obtained a retrospective reinstatement award in August 2004. The employer’s review application was eventually dismissed by the LC in November 2007 and in July 2008 the LAC refused leave to appeal. The employee obtained a writ of execution against the employer’s movable property including the back pay but the employer objected. The LC ruled in favour of the employee but it required the back pay to be quantified by way of an affidavit. The employer then appealed to the LAC which, on 5 May 2015, upheld the appeal. It held that the employer would become entitled to recover back pay for the intervening period only after the employee has successfully instituted a contractual claim proving the existence of an employment contract and that the employee had rendered services in terms thereof. The employer is entitled to normal defences to a contractual claim and in this case it is likely that the employer could successfully plead prescription.
This judgment prolongs the final resolution of labour disputes by imposing an additional contractual lawsuit on an employee. The judgment also appears to fly against the obvious reason behind the latest amendment to the Labour Relations Act which requires an employer wanting to review a reinstatement award, to lodge financial security equivalent to an employee’s 24 months’ salary to secure the back pay for the intervening period if the employer loses the review application.
The legislature could not have intended that an employee would have to institute another lawsuit to recover the back pay so this judgment will probably not survive the Constitutional Court’s scrutiny.
This article has been written by Bongani Mgaga, a Director in the Employment Law Department at Garlicke & Bousfield Inc
For more information contact Bongani on telephone : +27 31 570 5368, cell : 083 637 1831, email : firstname.lastname@example.org
NOTE: This information should not be regarded as legal advice and is merely provided for information purposes on various aspects of employment law.