When Reinstatement is not the Answer
One of the most debated remedies for unfair dismissal in South African labour law is reinstatement. Employers often assume that where an employee has acted in a manner that destroys trust, reinstatement will not be ordered. Employees, on the other hand, frequently regard reinstatement as an automatic consequence of a finding that a dismissal was unfair.
A recent Labour Appeal Court (LAC) judgment – Golden Arrow Bus Services (Pty) Ltd v CCMA and Others (2025) – provides valuable guidance on this issue and serves as an important reminder that while reinstatement remains the primary remedy for unfair dismissal, it is not an absolute right.
The judgment highlights the circumstances in which a continued employment relationship may be considered intolerable, even where the employee succeeds in proving that the dismissal itself was substantively unfair.
The Facts
The employee, Mr Jacobs, occupied a senior management position within Golden Arrow Bus Services and was responsible for the implementation of a new smartcard ticketing system. Prior to the rollout of the system, Mr Jacobs proceeded on approved leave after assuring management that the project was ready for implementation. Unfortunately, the launch proved disastrous. Significant operational issues arose, including a shortage of cards and the disappearance of approximately 18,000 smartcards.
Upon his return to work, management sought to investigate what had gone wrong and expected Mr Jacobs to assist in identifying the causes of the failure. Instead, he refused to co-operate meaningfully with the investigation and expressed distrust towards members of management involved in the process.
Following disciplinary proceedings, Mr Jacobs was dismissed.
The matter was referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) where the commissioner found that the dismissal was substantively unfair. However, despite this finding, the commissioner declined to order reinstatement and instead awarded the employee the maximum compensation of 12 months’ remuneration.
The employee subsequently reviewed the award in the Labour Court, which disagreed with the commissioner and ordered retrospective reinstatement. Golden Arrow then appealed the decision to the LAC.
The Legal Framework
Section 193(2) of the Labour Relations Act provides that where a dismissal is found to be unfair, a commissioner or court must order reinstatement or re-employment unless one of the recognised exceptions exists. These exceptions include circumstances where:
- The employee does not wish to be reinstated;
- The circumstances surrounding the dismissal render the employment relationship intolerable;
- Reinstatement is not reasonably practicable; or
- The dismissal is unfair only because of procedural defects.
The law therefore starts from the position that reinstatement is the primary remedy. The critical question before the LAC in the Golden Arrow case was whether the facts demonstrated that a continued employment relationship had become intolerable.
The LAC’s Findings
The LAC overturned the Labour Court’s decision and restored the commissioner’s award. Importantly, the Court emphasised that the assessment of intolerability must be based on objective facts rather than mere assertions by an employer that trust has broken down.
However, the Court also recognised that trust is a fundamental component of the employment relationship, particularly where senior employees occupy positions requiring co-operation, accountability and confidence from management.
The evidence demonstrated that the employee had:
- Failed to cooperate with the employer’s investigation;
- Displayed a lack of accountability for the failed project;
- Made unsupported allegations against management;
- Expressed distrust towards those with whom he would be required to work going forward; and
- Conducted himself in a manner that made future co-operation highly unlikely.
The Court concluded that these factors created circumstances in which a viable employment relationship could no longer realistically exist. Although the dismissal itself was found to be unfair, reinstatement was not an appropriate remedy. Compensation therefore remained the appropriate relief.
Why This Judgment Matters
The decision is significant because it addresses a misconception frequently encountered in labour disputes i.e. that once misconduct is not proven, reinstatement automatically follows. This is not the position in law.
The LAC confirmed that the remedy inquiry is separate from the fairness inquiry. An employee may successfully challenge the fairness of a dismissal while still failing to secure reinstatement if objective evidence demonstrates that the employment relationship has become irreparably damaged. For employers, this distinction is critically important.
Practical Lessons for Employers
This case provides four key takeaways:
1. Trust relationship evidence matters: Employers often rely on generic statements that the trust relationship has broken down. Commissioners and courts have repeatedly indicated that this is insufficient. If an employer wishes to oppose reinstatement, it must present clear evidence demonstrating why continued employment would be intolerable. This may include evidence relating to the employee’s conduct after the incident, refusal to accept responsibility, dishonesty during investigations, breakdown in working relationships, seniority of the employee, and the operational impact of restoring the employee to the workplace. The Golden Arrow judgment illustrates that objective evidence remains essential.
- Senior employees are held to a higher standard: The Court placed considerable emphasis on the employee’s senior management role. Senior employees are expected to demonstrate accountability, co-operation and leadership. Where senior managers undermine investigations, refuse to co-operate, or openly express distrust towards colleagues and management, the resulting damage to the employment relationship may be more significant than in other workplace contexts. Employers should therefore ensure that disciplinary records clearly reflect the employee’s position, responsibilities, and the impact of their conduct on the business.
- Conduct after misconduct can be just as important: Many employers focus exclusively on the misconduct that gave rise to disciplinary action. This case demonstrates that an employee’s conduct after the event may be equally important. The Court was influenced not only by what had occurred during the failed project, but also by the employee’s subsequent attitude and unwillingness to engage constructively with management. Employers should carefully document an employee’s conduct during investigations, disciplinary proceedings, and dispute resolution processes.
- Reinstatement is not guaranteed: While reinstatement remains the primary remedy under the Labour Relations Act, it is not inevitable. The judgment confirms that commissioners retain a discretion to refuse reinstatement where the facts justify such a finding. Employers should not assume that losing a substantive fairness dispute automatically means that an employee will return to the workplace. Conversely, employees should not assume that success on the merits guarantees reinstatement.
Conclusion
The LAC’s decision in Golden Arrow Bus Services v CCMA and Others serves as a timely reminder that labour disputes do not end once fairness has been determined. The question of remedy remains a separate and often decisive enquiry.
While reinstatement continues to enjoy protected status as the primary remedy for unfair dismissal, it will not be ordered where objective evidence demonstrates that the employment relationship has become intolerable.
For employers, the judgment reinforces the importance of leading detailed evidence regarding the trust relationship and the practical realities of continued employment. For labour practitioners, it highlights the need to treat the remedy stage of a dispute with the same level of preparation and attention as the fairness enquiry itself.
Ultimately, the case confirms that fairness in labour law is not merely about whether a dismissal was justified. It is also about whether the employment relationship can realistically be restored once the dust has settled.
Written by Leila Ismail
