LABOUR LAW – APPEAL AGAINST ARBITRATION AWARD – SEVERANCE PACKAGE ito SECTION 35 OF THE LABOUR ACT, 11 OF 2007 – WHEN IS IT APPLICABLE? Heritage Private School v Mutizwa

The appellant is an academic institution.  The first respondent was employed by the appellant in 2007 as a music teacher and was later promoted to the position of school principal. On 7 May 2020, the first respondent was summarily dismissed on grounds of poor performance. At the time of her dismissal, the first respondent’s monthly remuneration was N$10 000. The arbitrator found inter alia that the dismissal was both substantively and procedurally unfair. The arbitrator awarded the first respondent, her monthly remuneration of N$10 000 for the period from March 2020 to 7 May 2020, severance pay for seven weeks, and compensation for loss of income for six months. The appellant appealed against the award. During the appeal hearing, the appellant abandoned all but one challenge to the arbitration award. The appellant took issue with the finding of the arbitrator as regards payment of the severance package and loss of income to the first respondent. The court thus confined itself to the issue of severance package and loss of income. In considering these issues, SCHIMMING–CHASE J held that:

1. In terms of section 86(15) of the Act, the arbitrator has the power to make an award of compensation for loss of income.
2. Section 35(1) of the Act provides that an employer must pay severance pay to an employee who has completed 12 months of continuous service if the employee is inter alia In terms of section 35(2), severance pay will not be applicable in instances of a fair dismissal on grounds of misconduct or poor work performance.
3. The appellant abandoned the appeal against the arbitrator’s finding that the appellant was employed at the appellant, and that her dismissal was procedurally and substantially unfair.
4. The amount of compensation awarded for loss of income was not only fair but reasonable and was justified in the circumstances.
5. The arbitrator’s award of severance pay is legislatively justified in terms of section 35 of the Act.

As a result, the appeal was dismissed with no order as to costs.