Article 34/2023

The constitutional court, in McGregor v Public Health and Social Development Sectoral Bargaining Council and Others (2021) 32 SALLR 33 (CC), identified the different discretions applicable when an arbitrator, firstly, makes the decision to award compensation and, secondly, determines the amount of compensation – not to be confused with the amount of back pay which was covered in articles 32/2023 and 33/2023.

What are the principles to be extracted from this judgment of the constitutional court that would be applicable during arbitrations and court proceedings when dealing with the issue of compensation?


With reference to, inter alia, Rawlins v Kemp t/a Centralmed (2010) 31 ILJ 2325 (SCA); [2012] 1 BLLR 9 (SCA), the constitutional court had the following to say in respect of the discretion to be exercised when considering compensation:

the application of s193(1)(c) of the LRA

  • an application of this statutory provision finds application as to the arbitrator’s or court’s decision to award compensation, and not determining the amount of compensation
  • this entails the exercise of a judicial discretion – entailing that the reviewing or appeal body’s power to interfere is not limited and that it can come to its own decision on the merits
  • whether or not such judicial discretion has been correctly exercised entails an application of the
    reasonable decision-maker test

(see, further, Campbell v Simmers (2016) 37 ILJ 116 (LAC))

an application of s194 of the LRA

  • an application of this section is required to determine the amount of compensation
  • this entails the exercise of a narrow discretion, meaning that the reviewing or appeal body will only interfere on limited grounds with such amount
  • such limited grounds of interference have been identified by the constitutional court in National Coalition of Gay and Lesbian Equality v Minister of Home Affairs 2000 (2) SA 1 (CC) as to include the following:
    • the discretion was not exercised judicially
    • the decision-maker was influenced by wrong principles
    • the decision-maker was misdirected on the facts
    • the decision was not one that could reasonably have been made with reference to the relevant facts and applicable principles

With reference to Potgieter v Samancor Chrome Ltd t/a Tubatse Ferrochrome (2022) 33 SALLR 190 (LC) and Van Rensburg and Others v Department of Justice and Correctional Services and Others (2022) 33 SALLR 280 (LC); (2022) 43 ILJ 2110 (LC).

In what instances does the jurisdiction of the supreme court of appeal trump the jurisdiction of the labour appeal court?

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.