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Unfairly dismissed Reinstated Employee v Permanent replacement employee
07 September 2020  | Charl Theunissen

It is common that when an employee has been dismissed and the employee is still in the process of challenging the dismissal, the employer then continues to fill the vacancy. In such a case, the contract between the replacement employee and the employer must be carefully drafted. There seems to be no issue when the contract stipulates, for example, that the replacement is temporary. Issues arise when the replacement employee is employed permanently. What happens to this permanently employed replacement employee when the dismissed employee wins their unfair dismissal and becomes entitled to reinstatement? 

According to s193(2) of the LRA, if it is found that an employee was found to have been (substantively) unfairly dismissed, the Labour Court (LC) or the arbitrator, must make an order that the employee be reinstated, unless:

1. The employee does not wish to be reinstated;
2. A continued employment relationship would be intolerable;
3. It is not reasonably practicable for the employer to reinstate the employee; oro
4. The dismissal is unfair only because the employer did not follow a fair procedure.

The employer cannot simply say that they are not going to reinstate the employee on the basis that they have employed someone else. In Mashaba v SA Football Association, the court held that “the right which the LRA provides is the right of an employee to be reinstated if their dismissal is found to be substantively unfair and provided none of the subsections are applicable. An order of reinstatement pays no heed to other contractual arrangements that might have come into existence between the employer and a replacement. That is of no concern to the arbitrator or the court and the employer is left to its own devices to sort out the mess it finds itself in, having employed someone and then being ordered to re-engage someone in the same position.”

Once there is an order of reinstatement, the dismissed employee and the employer can begin negotiations, to either compensate the employee or create an alternative position for them. However, if the dismissed employee wants to be reinstated in their previous position before dismissal, what will happen to the permanent replacement employee?

In Mashaba, the court goes on to say that “if the employer does not take suitable steps in its contract with the replacement, it ought to realise that it runs the risk that it will be faced with the possibility of terminating that relationship or of trying to re-negotiate the replacement’s contract if the former is reinstated”.

The Commission for Conciliation, Mediation and Arbitration Guidelines on Misconduct Arbitration provides that “The fact that another employee has been appointed in place of the unfairly dismissed employee is not in itself a reason to deny reinstatement, as the reinstatement of an unfairly dismissed employee may constitute a ground for terminating the employment of the newly appointed employee on the grounds of the employer’s operational requirements”. This guideline suggests retrenchment as the solution for the employer.

Retrenchment of replacement employees

Retrenchment will not be an easy way out for the employer. The replacement employee must be satisfied that the process of retrenchment has been properly followed.  

Section 189 of the LRA provides for a process of consultation with the employee potentially facing retrenchment based on operational requirements. With regard to consultation, in Johnson & Johnson (Pty) Ltd v Chemical Workers Industrial Union, the court stated that “the ultimate purpose of s189 is thus to achieve a joint consensus-seeking process. In this manner, the section expressly recognises the employer’s right to dismiss for operational reasons, but then only if a fair process aimed at achieving consensus has failed.” Such consultations may not yield a favourable outcome for the employee.

The permanent replacement employee may end up being unemployed if the retrenchment process appears to be justifiable or the Employment contract fails to make provision for this instance. It is, therefore, imperative that employers cater for this in the employment contract where there is still a pending unfair dismissal proceeding. It is best to consult an attorney when faced with this situation to advise on the best possible way forward.

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