Ignoring a CCMA Reinstatement Award - A Risky and Costly Mistake for Employers!

Ignoring a CCMA Reinstatement Award:

A Risky and Costly Mistake for Employers

By Andrew Butters

Managing Director of Pretty Much People

Few events in labour relations are as significant as receiving a CCMA arbitration award ordering the reinstatement of a dismissed employee. Yet many employers, frustrated by the outcome, make the costly mistake of believing they can simply ignore the award while deciding what to do next.

They cannot!

A CCMA arbitration award is legally binding and enforceable unless and until it is set aside by the Labour Court. An employer who disagrees with an award does not have the right to disregard it. The correct remedy is to challenge the award through the legal processes provided for in the Labour Relations Act.

Where an employer believes that a commissioner committed a reviewable irregularity, exceeded his or her powers, failed to properly apply the law, or reached a decision that no reasonable commissioner could have reached, the employer may institute review proceedings in the Labour Court in terms of Section 145 of the Labour Relations Act. Importantly, a review application must generally be filed within six weeks of the employer becoming aware of the award.

Many employers incorrectly assume that lodging a review application automatically suspends the operation of the award. It does not. In most instances, the employer must apply for a stay of enforcement or provide the security prescribed by the Labour Relations Act if it wishes to suspend enforcement pending the outcome of the review.

The consequences of simply ignoring a reinstatement award can be severe. The employee may apply to have the award certified and enforced. The Labour Court may issue orders compelling compliance, and an employer that deliberately refuses to comply may face contempt proceedings, legal costs, reputational damage, and potentially significant back-pay liabilities that continue to accumulate while the dispute remains unresolved.

The lesson for employers is simple: disagreeing with a CCMA award does not excuse compliance. Challenge the award through the Labour Court if grounds exist but never ignore it. The cost of inaction is often far greater than the cost of following the proper legal process.

Interested to hear more? contact: andrew@thehrhub.co.za