“The difference between the Labour Court and the Labour Appeal Court was thus within a decidedly narrow compass – the Labour Court felt that the rejection of the offer of reinstatement was reasonable and the Labour Appeal Court felt that it was not. In each case the court concerned was called upon to make a value judgment on the same facts. And we are asked by the parties to do no more than to say whether we agree with the value judgment of the one court or the other”.
“ … this court will not lightly interfere with the decisions of the specialist tribunal that has been established to hear appeals in labour disputes”.
Employers will be encouraged by the judgment yesterday in the Supreme Court of Appeal (SCA), in the matter of Rawlins v Kemp (SCA483/09) [2010] ZASCA 102. The SCA disallowed an appeal by Dr Rawlins against a judgment of the Labour Appeal Court (LAC) – see Rawlins v Kemp [2009] 11 BLLR (LAC) per Zondo JP and Waglay JA, with Willis JA dissenting.
Facts
“[4] Briefly, the claim arose as follows. Dr Kemp is a medical practitioner in private practice in Bloemfontein. In 1997 he purchased a second practice – what he called a ‘satellite’ practice. With effect from 1 February 1997 he employed Dr Rawlins to run the satellite practice at a net salary of R10 000 per month. The satellite practice was financially separated from his own practice, it was conducted from separate premises, and Dr Rawlins was left to exercise her medical skills without interference.
[5] In about June 1997 Dr Rawlins informed Dr Kemp that she was pregnant. They agreed that she would take maternity leave for two months with effect from 1 February 1998. She would be paid for two weeks of her maternity leave and the balance would be taken as unpaid leave. Shortly before her leave commenced Dr Kemp suggested to Dr Rawlins that she should take the opportunity to look for alternative employment in view of the financial difficulty of the practice. According to Dr Kemp he hoped to find a more junior doctor who would be willing to run the satellite practice at a lower salary.
[6] Dr Rawlins took the suggestion to mean that she was being dismissed. She informed her husband who immediately telephoned Dr Kemp and demanded a letter advising Dr Rawlins that she had been dismissed. There was some acrimony between the parties at that time but the detail is not important. Suffice it to say that although Dr Kemp maintained that he had not intended to dismiss Dr Rawlins he nonetheless, unaccountably, furnished Dr Rawlins with a letter informing her that she was dismissed with effect from the end of February 1998 on account of the financial difficulties of the practice”.
Unreasonable refusal to accept immediate offer of reinstatement
“[8] Counsel for Dr Kemp told us frankly that we can accept that Dr Kemp behaved poorly towards Dr Rawlins at the time that he dismissed her and no doubt she was entitled to feel aggrieved. But within a month, on 12 March 1998, Dr Kemp acted sensibly when, on the advice of his attorney, he offered to reinstate Dr Rawlins, alternatively, to pay her one month’s salary in lieu of notice, severance pay of one week’s salary for each completed year of service, and unspecified compensation for the period 1 February 1998 to 12 March 1998. It was accepted by counsel for Dr Rawlins that the offer of reinstatement was made genuinely and in good faith. At first there was no response to the offer but it was repeated in the course of attempts at conciliation on 17 March 1998 and was summarily rejected”.
Compensation for unfair termination restricted to financial loss
Nugent JA, with the unanimous approval of the other 4 judges of appeal, held, in para [2] that:
“In a long line of cases courts have held that compensation for unfair dismissal is limited to financial loss (even then it need not compensate for that loss in full)’.
A number of earlier decisions are referred to by Nugent JA including Le Monde Luggage CC t/a Pakwells Petje v Dunn NO [2007] 10 BLLR 909; (2007) 28 ILJ 2238 (LAC) per Davis JA at para 30:
“The compensation which must be made to the wronged party is a payment to offset the financial loss which has resulted from a wrongful act. The primary enquiry for a court is to determine the extent of that loss, taking into account the nature of the unfair dismissal and hence the scope of the wrongful act on the part of the employer. This court has been careful to ensure that the purpose of the compensation is to make good the employees loss and not to punish the employer”.
Proper exercise of judicial discretion relating to compensation
In para [17] the SCA referred to the following statement in Dudley v City of Cape Town [2004] 7 BLLR 623 (CC):
“[t]he LAC is a specialised appellate Court that functions in the area of labour law. Both the LAC and the Labour Court were established to administer labour legislation. They are charged with the responsibility for overseeing the ongoing interpretation and application of labour laws and the development of labour jurisprudence”.
Value judgment and development of jurisprudence
Nugent JA had the following to say in para [18]:
“That applies particularly where the decision of the Labour Appeal Court is the product of a value judgment that is arrived at in its continuing development of its own jurisprudence. Whatever view we might have taken on the matter it seems to me that we would be remiss if we were not to defer to that court’s value judgment in a matter of this kind. In any event I agree with the conclusion of the majority. No doubt Dr Rawlins genuinely felt that there had been a breach of trust. But these are two professional people who might be expected to resolve any acrimony that might earlier have existed. No objective grounds were advanced why any perceived breach of trust between them was not capable of being restored. Dr Rawlins chose not even to explore that possibility but rejected it out of hand. That is not how labour relations should be conducted and I agree that the rejection of the repeated offers of reinstatement was unreasonable and she has only herself to blame for her financial loss”.