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Article 7/2025

What is the difference between compensation (in terms of s193(1)(c) and s194(1) of the LRA) and back pay?

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The constitutional court, in Booi v Amathole District Municipality (2022) 32 SALLR 51 (CC), made it clear that compensation and back pay are two very different remedies and, in this regard, furthermore, indicated the following:

  • compensation is to be awarded if the dismissal is found to be unfair because:
    • the employer did not prove that the reason for the dismissal was a fair reason relating to the employee’s conduct or capacity, or the employer’s operational requirements (i e the dismissal being substantively unfair), or
    • the dismissal is procedurally unfair, or
    • the dismissal is both substantively and procedurally unfair
  • compensation awarded must be just and equitable in all circumstances
  • however, it may not be more than 12 months’ remuneration calculated at the employee’s rate of remuneration on the date of dismissal and, in the case of an automatically unfair dismissal, may not be more than 24 months’ remuneration so calculated on the date of dismissal
  • however, in respect of back pay, there is no such capping in terms of s194(1), read together with s194(3), of the LRA and, in this regard, the following principles are applicable:
    • back pay is not to be calculated from a date earlier than the dismissal date
    • the amount of back pay is to be determined with reference to the amount of money that the employee was ‘out of pocket’ during the period of employment – entailing, if the employee did not suffer such loss, there should not be any back pay
    • the amount of back pay must also be just and equitable

See, further, Union for Police and Security Corrections Organisation v SA Custodial Management (2021) 42 ILJ 2371 (CC)

July 20, 2026

Precautionary suspensions

In the public sector, the Senior Management Service Handbook (SMS Handbook) directly addresses precautionary suspensions and the 60-day time limit.

Clause 2.7(2)(c) of the SMS Handbook provides that ‘If a member is suspended or transferred as a precautionary measure, the employer must hold a disciplinary hearing within 60 days. The chair of the hearing must then decide on any further postponement.’

Regulation 6 of the Local Government: Disciplinary Regulations Senior Managers, 2010 (Regulations) provides for the precautionary suspension of senior municipal employees and Regulation 6(6)(a) provides: ‘If a senior is suspended, a disciplinary hearing must commence within three months after the date of suspension, failing which the suspension will automatically lapse.’

What are the principles governing a determination of the question as to whether or not a senior municipal employee’s suspension automatically lapses in terms of the aforesaid Regulation 6(6)(a)?

Obviously, the answers to the aforesaid question are very relevant in the private sector where, firstly, a collective agreement regulates a similar process or, alternatively, such contractual rights have been created between the parties, to be enforced in terms of s77(3) of the BCEA.

July 13, 2026

In the previous article, we dealt with the consequences of a plant level collective agreement with a definite beginning and end date. We indicated to you that, in line with s23(2) of the LRA, and an analysis of the relevant case law, that, once such a collective agreement reaches its expiry date, it expires and is no longer of any force or effect. In this article, we deal with the scenario where a plant level collective agreement is concluded for an indefinite period and the employer gave notice to terminate same.

What are the consequences when a party to a plant level collective agreement, concluded for an indefinite time period, gives notice to terminate such collective agreement?

July 6, 2026

In terms of s23(2), a collective agreement binds, for the whole period of the collective agreement, every person so bound in terms of s23(1)(c) (the members of a registered trade union and the employers who are members of a registered employers’ organisation who are a party to the collective agreement, if the collective agreement regulates the terms and conditions of employment, or the conduct of the employers and employees) who was a member at the time it became binding, or who becomes a member after it became binding (irrespective of whether or not that person continues to be a member of such trade union or employers’ organisation for the duration of the collective agreement).

What is the relevant case law development as to a plant level collective agreement that has an expiry date, i e does such collective agreement continue to be of force and effect after such expiry date?