Article 36/2023

Articles 34/2023 and 35/2023 dealt with the general approach in dealing with compensation where a dismissal is substantively unfair or, alternatively, substantively and procedurally unfair.

However, it appears that the calculation of compensation, if the unfair dismissal took place on the basis of operational requirements, may be treated slightly differently.

What are the relevant principles that practitioners should be aware of when executing dismissals for operational requirements with reference to this deviation?


  • In Johnson & Johnson v CWIU (1999) 20 ILJ 89 (LAC), the labour appeal court indicated that, when calculating compensation, the actual loss or patrimonial loss is irrelevant and the award of compensation is indeed a solatium taking into account, inter alia, the employee’s hurt in this regard
  • however, despite the above approach, the labour appeal court, in Total SA (Pty) Ltd v Meyer (2021) 32 SALLR 40 (LAC), in applying Kemp t/a Centralmed v Rawlins (2009) 30 ILJ 2677 (LAC), indicated the following:
    • the extent of financial loss suffered by an employee when a dismissal has taken place for operational requirements should be taken into account when calculating compensation (applying this principle to the facts in casu, the labour appeal court held (in Total SA) that severance pay received by the employee in excess of the BCEA should be taken into account in calculating compensation)

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.