- February 20, 2023
- |Concise Law Reports (CLR), Labour Law
Whereas the appellant appealed against and award of the arbitrator, but abandoned all but one challenge to the arbitration award – the payment of the severance package and loss of income to the first respondent, the court confined itself to the issue of severance package and loss of income. In considering these issues, SCHIMMING–CHASE J stated that:
‘[17] Section 86(15) of the Labour Act empowers the arbitrator to make an appropriate arbitration award, including an award of compensation.
[18] As an overriding principle, it is to be borne in mind that unless the arbitrator’s decision is asserted to be perverse, an appellant court will be assiduous to avoid interfering with the decision of the arbitration for the reason that on the facts it would have reached a different decision on the record. That is not open to the appellate court. The test is whether the decision that the arbitrator has reached is one that no reasonable decision maker could have reached (Gramatham v Norcross SA (Pty) Ltd v Tile Africa (LCA 62/2013) [2017] NALCMD 27 (14 August 2017) par [45]).
[19] In considering the amount of compensation payable in the circumstances, various factors are taken into consideration as the reason for the dismissal, namely the conduct of the parties during the occurrence of the dispute, evidence of any loss occasioned to the employee due to the dismissal, as well as evidence of the likely impact of the compensation order on the employee (Chevron Engineering v Nakambule 2004 (3) SA 495 (SCA) par [31] and the authorities collected there).
[20] In M Pupkewitz & Sons v Kankara 1997 NR 70 (LC), Mtambanengwe J (as he then was) held that in calculating the amount of compensation that was payable to an employee who had been dismissed unfairly, regard should be had to the actual loss suffered, or the amount that the dismissed employee would have been paid had he not been dismissed.
[21] The compensation is thus payment of the value, estimated in money, of something lost which consists of (1) an amount equal to the remuneration that the employer ought to have paid the employee had he not been dismissed or suffered other unfair disciplinary measure or some other labour injustice; and (2) an amount equal to any loss suffered by the employee because of the dismissal or other disciplinary action or other labour injustice.
[22] In determining the amount of compensation, the courts have taken into account the principle that compensation must not be calculated in a manner to punish an employer, or at enriching a claimant because it is awarded on the principle of restitutio in integrum.
[23] In Novanam Ltd v Rinquest 2015 (2) Nr 447 (LC) at par [23], Ueitele J held that in general, compensation calculated on a period between the dismissal of the respondent and the hearing of the complaint was reasonable and fair.
[24] In Pep Stores Namibia Ltd v Iyambo and Others 2001 NR 211 (LC) 222-223, it was held that where an arbitrator awards compensation that is equal to the amount of remuneration that would have been paid to the employee had she not been dismissed, it may not be necessary for the employee to lead evidence to establish the amount involved. The amount should be within the employer’s domain, but if the amount includes compensation for loss of certain benefits, for example medical benefits, then the employee must establish by evidence what the losses entail.
[25] In terms of s 86(15) of the Act, the arbitrator is empowered to make an appropriate arbitration award, including an award for compensation. The arbitration hearing was conducted on 26 February 2021. That is nine months after the date of dismissal. I do not regard it unfair that the arbitrator awarded compensation for loss of income for six months. That was reasonable, particularly considering that the first respondent was summarily and unfairly dismissed. But for the unfair dismissal, the first respondent would have been entitled to N$10 000 per month for however long she would have been employed by the appellant. Therefore, N$60000 as compensation for loss of income, is not only fair, but also reasonable, if regard is had to all the circumstances of the case. I will therefore not interfere with the arbitration award insofar as compensation for loss of income is concerned.
[26] Section 35 of the Labour Act further regulates severance pay in labour relations. Section 35(1) provides inter alia that an employer must pay severance pay to an employee who has completed 12 months of continuous service, if the employee is dismissed. Severance pay must be in an amount equal to at least one week’s remuneration for each year of continuous service with the employer. Section 35(2) provides that the provisions of ss (1) do not apply to a fair dismissal on grounds of misconduct or poor work performance.
[27] In this matter before me, it is no longer disputed that the dismissal was unfair. Therefore the appellant’s contention that severance pay is not due, is misconceived.
[28] The first respondent was employed by the appellant from 2012 to 7 May 2020. The seven weeks awarded for severance pay is justified on the evidence that was placed before the arbitrator.
[29] In addition, as regards the appellant’s assertion that there was no evidence before the arbitrator to make an award in terms of s 35, this too, is misconceived.
[30] Considering the terms of Table 1 as set out in s 10(3) of the Labour Act, it can be accepted from the evidence before the arbitrator that the first respondent’s monthly remuneration of N$10,000 was set by month. Therefore, in order to calculate the weekly rate, one would have to divide the monthly rate of N$10 000 by 4.333 which gives the amount of N$2 307, 87. The multiplication of that amount by seven weeks is N$16 155,09. Effectively, all the evidence necessary to make an award in terms of s 35 of the Act was before the arbitrator, and was unchallenged for that matter. For this reason, the challenge against the arbitration award insofar as it relates to severance pay is also unmeritorious.’
Heritage Private School v Mutizwa (HC-MD-LAB-APP-AAA-2021-00032) [2023] NALCMD 10 (20 February 2023)