Ms Banda was employed in the office of the Minister in the Presidency. On 24 February 2022, she was suspended on full pay pending an investigation into allegations of misconduct.

The suspension was implemented under the Senior Management Service Handbook (Handbook), which permits precautionary suspension but requires that a disciplinary hearing be held within 60 days. The Ministry treated this period as calendar days and convened a hearing two days before the expiry of the 60-day period. At the disciplinary hearing, the chairperson ruled that the 60-day period referred to weekdays rather than calendar days and purported to extend the suspension beyond the initial period. Relying on this ruling, the Ministry failed to uplift the suspension once the 60-day period expired. By the time the disciplinary hearing concluded, Banda had been suspended for approximately eight months, with six months of the suspension found to be unfair.

Banda referred an unfair labour practice dispute to arbitration under section 186(2)(b) of the Labour Relations Act 66 of 1995 (LRA) relating to suspension. The arbitrator found that the 60-day period in the Handbook referred to calendar days; the suspension was prolonged and had become punitive; and the suspension therefore constituted an unfair labour practice. The Ministry was ordered to uplift the suspension, but no compensation was awarded. The arbitrator’s reasoning was that Banda was suspended on full pay, and the Ministry acted on the basis of an incorrect interpretation of the Handbook and was not malicious. The Labour Court, on review, refused to interfere, holding that the arbitrator had exercised a permissible discretion under section 194(4) of the LRA.

Finding

On appeal, the Labour Appeal Court (LAC) had to consider whether compensation should have been paid.

The LAC reaffirmed that the discretion to award compensation under section 194 of the LRA is a narrow one. While interference with the award of the arbitrator is limited, such discretion remains reviewable where an arbitrator applies the wrong legal principles or fails to consider material facts. The LAC held that a refusal to award compensation cannot stand where the arbitrator prioritises irrelevant considerations or ignores undisputed evidence of prejudice suffered by the employee. The LAC emphasised that compensation for an unfair labour practice is not payment for financial loss, but a solatium for the infringement of the employee’s right to fair labour practices. Compensation also serves a punitive and deterrent purpose.

The arbitrator placed decisive weight on Banda being on paid suspension and the absence of malice on the part of the employer. The arbitrator ignored evidence that the prolonged suspension caused Banda psychological harm, requiring professional treatment and medication, distress affecting her family life, and loss of career‑advancing opportunities while the suspension remained unresolved. This failure meant the arbitrator did not properly weigh the impact of the unfair suspension on the employee, resulting in a skewed and unreasonable exercise of his discretion. The LAC held that these considerations, while potentially relevant to the amount of compensation, could not justify a complete refusal to award compensation once unfairness had been established. The LAC ordered the Ministry to pay Banda one month’s compensations, together with costs of the appeal.

Key takeaways

• Suspensions should only be effected by an employer upon proper consideration. While a useful implement in the investigative toolkit, this case emphasises that a suspension which is unfair will ordinarily justify some form of compensation being paid to the employee, despite the employee being paid in full over the period of the suspension. Employers must guard against a suspension amounting to an unfair labour practice that attracts compensation. Not only is the employer paying the salary for no services rendered but also paying compensation for an unfair labour practice.
• Treat suspension as a time-bound, actively managed risk process, not an administrative step.
• HR/IR/Legal must actively monitor suspensions and (i) avoid unnecessary delays and (ii) escalate stalled investigations.