Unlawful Dismissal Remedy: Compensation

The legal remedies available to an unlawfully dismissed employee for the loss that he suffers are Reinstatement, Reengagement, or Compensation. Both Reinstatement and Reengagement require the employer to re-employ the wronged employee in some capacity. Compensation, however, requires the employer to indemnify the dismissed employee financially for the sustained loss.

Generally, Reinstatement and Reengagement rarely turn out to be workable in practice. The reason is because the relationship between the employee and the employer is usually left so badly damaged by the process of litigation that it is impossible for them to be able work with each other again. Consequently, unlawfully dismissed employees rarely ever opt for them and, in instances where they do, courts rarely ever order employers to take employees back into their employment. Hence, Compensation is usually the only practicable option.

The purpose of Compensation is to put the employee back in the financial position that he would have been in if the unlawful dismissal had never occurred. Hence, the amount of Compensation that a court may award cannot be greater than the loss suffered. Any amount in excess of the intended purpose of Compensation would be tantamount to a penalty upon the employer and a profit for the employee. Neither of those is permitted. Compensation is not punitive upon the employer.

The remedy of Compensation is accompanied by a legal duty upon the employee to take reasonable steps to mitigate his loss, that is, to avoid suffering loss, for example, by getting another job elsewhere. The employee needs only to take reasonable steps in order to discharge the duty successfully; he does not need to take extraordinary steps, and is not expected to act with perfect knowledge or an ideal wisdom.

On the one hand, if the employee fails to act reasonably to curtail loss, then he is not entitled to recover the loss he suffers. The law safeguards the employer from the employee's unreasonable and negligent conduct. Accordingly, the employer faces paying a reduced level of compensation, that is, the amount that the employee failed to mitigate even though he had acted as expected. Furthermore, where the employee mitigates his loss successfully, the employer is entitled to the benefit of the mitigation. That is, the employer faces paying the reduced level of loss that remains following the mitigation. Hence, the law in relation to mitigation works to the benefit of the employer by providing a means to avoid paying compensation, and to the detriment of the wronged employee.

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