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ARTICLE 5

When an employer dismisses an employee, such employee may challenge the said dismissal on the basis of unlawfulness or on the basis of unfairness.  If the employee challenges the dismissal not on the basis of fairness but on the basis of the unlawful conduct of the employer and is successful in the labour court, it is important for such employee, if he or she was employed on a fixed-term contract, to fully understand the basis upon which damages will be awarded to such employee.

This article clearly indicates that, in such circumstances, the damages awarded to such employee do not necessarily amount to the salary owed to such employee for the balance of the unexpired period of the fixed-term contract. 

IN THE SCENARIO WHERE AN EMPLOYEE PROVES THAT AN EMPLOYER UNLAWFULLY DISMISSED SUCH EMPLOYEE AND THE EMPLOYEE WAS EMPLOYED ON A FIXED-TERM CONTRACT, THE FOLLOWING IS THE BASIS FOR THE PRINCIPLE THAT THE DAMAGES TO BE AWARDED TO SUCH EMPLOYEE DO NOT NECESSARILY AMOUNT TO THE SALARY OWED TO SUCH EMPLOYEE FOR THE BALANCE OF THE UNEXPIRED PERIOD OF THE FIXED-TERM CONTRACT 

With reference to the approach adopted by the constitutional court, in Billiton Aluminium SA Ltd t/a Hillside Aluminium v Khanjile and Others,[1] and followed in KwaZulu-Natal Tourism Authority and Others v Wasa,[2] the following considerations are of relevance: 

1.       evidence of the loss must be presented, even if it is of uncertain predictability and exactitude; 

2.       the court may not embark on conjecture or guesswork in assessing damages, even if there are inadequate factual bases in the evidence presented;

3.       provision must be made for the contingency or probability that anticipated future loss may in fact not happen, at least in its entirety, because an employee may obtain another job or income;

4.       evidence is required as to a reasonable period it would take a person in the position of the applicant in casu (the employee whose services have unlawfully been terminated) to obtain analogous employment; and 

5.       the amount awarded as damages for future loss must be discounted to its current value.

When applying the aforesaid approach to a scenario where it is highly probable that the expectancy of the future salary would have been realised had it not been for the unlawful breach by the employer, the calculations in respect of damages should be as follows: [3] 

(a)      the starting point is the salary for the unexpired period; 

(b)      less amounts which reasonably might be earned (potential collateral and mitigated amounts); 

(c)      adjusted, firstly, by a contingency for the possibility of the entire loss not being realised; and

(d)      adjusted, secondly, by a contingency for the advantage of the expectancy being accelerated or received earlier than would have been.


[1]          (2010) 31 ILJ 273 (CC)

[2]          (2016) 37 ILJ 2581 (LAC); [2016] 11 BLLR 1135 (LAC); (2016) 27 SALLR 19 (LAC)

[3]          See further, South African Football Association v Kwena Darius Mangope (2013) 34 ILJ 311 (LAC)

© SALLR 2018