ARB Electrical Wholesalers (Pty) Ltd v Hibbert (DA3/13) [2015] ZALAC 34; [2015] 11 BLLR 1081 (LAC) (21 August 2015) per Waglay JP [Ndlovu and Coppin JJA concurring]

Comment:

As will appear from the following extracts the Labour Appeal Court has now approved the analysis of Davis JA in the Tshishonga case.  It should also be noted that in para [15] of that judgment it is clear that compensation should not be based on the remuneration as such.  The LRA simply sets the limits when determining the maximum amount that can be awarded.

“[15]   In summary, once it has been found that an employee has been subjected to occupational detriment on account of having made a protected disclosure, a court must determine what compensation is just and equitable in the circumstances, which amount is capped at 12 months remuneration.  

In the present case the judge in the court a quo appeared to conflate the award of compensation with an amount of remuneration.  As already noted section 194(4) of the LRA employs remuneration purely as a means of capping the amount of the award so ordered.  By contrast, the court a quo employed remuneration as the basis for the quantification of the award.  

Accordingly the Court a quo erred in its interpretation of s194(4) of the LRA and this court is thus at large to determine the appropriate amount of compensation. [Emphasis added]”

Read Remuneration not the basis for determining compensation for further comment.

Extracts for judgment by Waglay JP

“[24]   The determination of the quantum of compensation is limited to what is “just and equitable”.  The determination of what is “just and equitable” compensation in terms of the LRA is a difficult horse to ride. There are conflicting decisions regarding whether compensation should be analogous to compensation for a breach of contract or for a delictual claim.  In my view, and as I said earlier, because compensation awarded constitutes a solatium for the humiliation that the employee has suffered at the hands of the employer and not strictly a payment for a wrongful dismissal, compensation awarded in unfair dismissal or unfair labour practice matters is more comparable to a delictual award for non-patrimonial loss.

While a delictual action (ie action injuriarum) for non-patrimonial loss is fashioned as a claim for damages, it is no more than a claim for a solatium because it is not dependent upon patrimonial loss actually suffered by the claimant.

Hence, awards made under a delictual claim for non-patimonial loss may serve as a guide in the assessment of just and equitable compensation under the LRA.

In Minister of Justice & Constitutional Development v Tshishonga (Tshishonga) [2009] 9 BLLR 862 (LAC) and the cases cited therein, this Court in an award of solatium referred to the delictual claim made under the actio iniuriarum for guidance in what would constitute just and equitable compensation for non-patrimonial loss in the context of an unfair labour practice.  It stated that since compensation serves to rectify an attack on one’s dignity, the relevant factors in determining the quantum of compensation in these cases included but were not limited to:

‘…the nature and seriousness of the iniuria, the circumstances in which the infringement took place, the behaviour of the defendant (especially whether the motive was honourable or malicious), the extent of the plaintiff’s humiliation or distress, the abuse of the relationship between the parties, and the attitude of the defendant after the iniuria had taken place…[at para 18].’

[25]   The above dictum should serve as an appropriate guideline in determining what is just and equitable compensation that can be awarded under s194(3) of the LRA.”