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Discover the real cost of automatically unfair dismissal

by , 07 February 2014
If there was a list of big no-no's regarding labour issues, automatically unfair dismissal would top that list. Labour law makes it very clear that you can't do this. If you cross the line, this is how you'll pay...

Do you want to know how you'll have to pay if a dismissal is automatically unfair? If so, here's your answer…

If you dismiss an employee and the reason is automatically unfair, you may be ordered to do the following:

  • Reinstate your employee to his position within your company; and
  • Pay compensation equal to a maximum of 24 months' remuneration. This will be calculated at your employee's rate of remuneration at the time of dismissal.

If you're unsure as to when dismissal will be regarded as automatically unfair, check out this article.


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The Labour Law for Managers Loose Leaf Service recommends you bear the following in mind when considering whether dismissing an employee could be an automatically unfair dismissal:

  • Stop and think: What is the real reason for the dismissal?
  • Is it one of the reasons set out in Section 187 of the Labour Relations Act?
  • If so, it is likely to be an automatically unfair dismissal. (This means serious consequences for you including possible reinstatement and up to 24 months' compensation).

That said, this doesn't mean you can't dismiss your employee on the basis of his conduct, capacity or your operational requirements if the circumstances warrant it.

Important: Follow a fair procedure and make sure you're dismissing your employee for valid reasons.

Remember, dismissal must be procedurally and substantively fair.

There you have it. Now that you know the real cost of automatically unfair dismissal, make sure you comply with the LRA. Also check out this article. It contains two types of automatically unfair dismissals you must avoid.

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