Where an employer prematurely terminates a fixed-term contract and the employee challenges such termination as being unlawful and claims damages and not specific performance, the labour court has up to now ordered damages even though same is an unliquidated claim for damages. Is this the correct approach or, alternatively, should such claim be determined during a trial?
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- In Fedlife Assurance Ltd v Wolfaardt 2002 (1) SA 49 (SCA), it was held that, in motion proceedings:
- ‘‘[16] … The continued existence of the common-law right of employees to be fully compensated for the damages they can prove they have suffered by reason of an unlawful premature termination by their employers of fixed term contracts of employment is not in conflict with the spirit, purport and objects of the Bill of Rights and it is appropriate to invoke the presumption in the present case’ (see also Black and Others v Joseph 1931 AD 132, at 150).
- In similar vein, in Erasmus v Davis 1969 (2) SA 1 (A), it was held that, when claiming damages, the best evidence available to substantiate a claim for damages must be produced to enable an accurate assessment of same – when an employee fails to produce available evidence for the proper assessment of loss, the court cannot embark on awarding an arbitrary approximation of damages.
- Taking the above into account, it is apparent that, in the civil courts, a claim for unliquidated damages for breach of contract by means of application proceedings is not permissible – Roy Greyling v George Randell High School (2023) 34 SALLR 82 (LC); [2023] 5 BLLR 412 (LC).
- Thus, in the civil courts, unless damages have been liquidated by agreement or by a court, they are unliquidated damages to be determined by means of trial proceedings (Kleynhans v Van der Westhuizen NO 1970 (2) SA 742 (A). Despite the above, it is apparent that the labour and labour appeal courts follow a different approach and award damages in the above regard in motion proceedings – e g KwaZulu-Natal Tourism Authority v Wasa [2016] 11 BLLR 1135 (LAC) and South African Football Association v Mangope (2013) 34 ILJ 311 (LAC).
- With reference to the George Randell High School judgment, it is submitted that the approach of the supreme court of appeal should prevail over the approach of the labour appeal court and that the labour appeal court (as well as the labour court) should refer the issue of the quantum of damages to trial, seeing that, inter alia:
- the calculation of contractual damages is never a mere arithmetic approach – it is indeed a value judgment in the computation of such quantum
- reasonable efforts to mitigate the damages exist and must be canvassed during the trial
- the amount of damages cannot be determined until the debate has been exhausted before a court hearing evidence
