How much money will a court award an employee whose fixed term contract of employment has been unlawfully terminated?
A fixed term contract of employment refers to an employment contract that is for a limited duration only. In the matter of the South African Football Association v Kwena Mangope, the Labour Appeal Court reduced the damages which the Labour Appeal Court awarded to Mr Mangope from R1.7 million to R669 903.
Mr Mangope was employed by the South African Football Association as its Head of Security for 3 years mainly to ensure a safe Soccer World Cup in 2010. After 4 months of rendering services Mr Mangope’s employment was terminated without further ado for alleged poor performance.
Mr Magope approached the Labour Court, not claiming that he was unfairly dismissed, but claiming that his contract of employment was unlawfully terminated. The South African Football Association was unable to proof that Mr Mangope breached or repudiated his employment contract as it could not proof that Mr Mangope was not performing to satisfaction or even if his performance was poor, that it amounted to a breach of the contractual obligation to perform.
In assessing the amount of damages which the Labour Court awarded to Mr Mangope, the Labour Appeal Court stated that the perception that when a fixed term contract of employment is terminated prematurely and unlawfully, the employee would be entitled to be paid out for the remainder of the contract, is a misperception. The employee would still need to prove his actual damages which would be reduced by any benefits received by the employee during that time. The employee is also obliged to mitigate his loss, meaning if he can find employment, he should do so.
As to an employee’s future loss, this needs to be proved as well. It could be that the employee has no future loss being immediately employed at the same or an even higher salary. When it comes to future loss, the value of the future salary should be established before and after the breach. If the employee can proof that, but for the breach, he would for the remainder of the employment period, have earned his salary he would be entitled to that salary for the remainder of the period less any amounts that he reasonable might have earned. The court will look at the reasonable period it would take a person in the position of the employee to obtain similar employment. The court will also look at the fact that monies paid now would be of more worth than monies paid in future.
Mr Mangope could only proof damages of R669 903 and accordingly the Labour Appeal Court reduced the damages originally awarded to him to this amount.