How much compensation can the CCMA award?

The Commission for Conciliation, Mediation and Arbitration (CCMA) can award compensation of up to 12 months' remuneration for an unfair dismissal, and up to 24 months' remuneration for an automatically unfair dismissal. Those are ceilings, not starting points. Within the cap the commissioner awards whatever is just and equitable in the circumstances, and in practice most awards sit well below the maximum. A purely procedural failure by an employer with an otherwise good reason to dismiss might attract a few weeks' pay. A dismissal with no fair reason at all, after long service, might attract many months.

This guide is part of our Discipline at work: warnings, hearings and dismissal, which links every guide on the topic.

Compensation is also not the only remedy, and it is not the primary one. The Labour Relations Act 66 of 1995 gives commissioners three options: reinstatement, re-employment and compensation. This guide explains all three, how the caps work, what pushes an award up or down, and what you may be owed on top of any award.

The three remedies

Reinstatement puts you back in your job as if you had never been dismissed, usually with back pay for the period you were out of work. It is the primary remedy where the dismissal was substantively unfair, meaning there was no fair reason. A commissioner must order it unless you do not want it, the working relationship has genuinely become intolerable, it is not reasonably practicable, or the dismissal was unfair only because of the procedure.

Re-employment puts you back with the employer, but not necessarily in the same job or on the same terms, and not necessarily from the date of dismissal.

Compensation is a sum of money for the unfairness of the dismissal. It is ordered where reinstatement or re-employment is not appropriate, or where you do not ask for your job back. It is not damages for your loss in the ordinary sense. You do not have to prove how much you lost, and you can receive compensation even if you found a new job the next day, although that fact may reduce the amount.

How the caps work

For an unfair dismissal the cap is 12 months' remuneration calculated at your rate of remuneration on the date of dismissal. For an automatically unfair dismissal, such as dismissal for pregnancy, union membership, a protected strike, discrimination, or refusing a demand about a matter of mutual interest, the cap is 24 months. Our guide to automatically unfair dismissal lists the reasons in section 187. Compensation for an unfair labour practice, such as an unfair suspension or demotion, is also capped at 12 months.

Remuneration is wider than basic salary. It includes the value of benefits such as medical aid and pension contributions, housing or car allowances, and regular commission or overtime, because those are payment for work. If you earned R15 000 basic plus R3 000 in benefits, the monthly figure used for the cap is closer to R18 000 than R15 000. Be ready to prove the benefits with payslips.

The cap applies to the award for the unfairness. It does not include the money the employer owes you regardless of the dispute, which is covered below.

What "just and equitable" means in practice

The Act does not give a formula. Commissioners weigh the circumstances of each case, and the factors that come up again and again include:

• The nature of the unfairness. A dismissal with no fair reason weighs far more heavily than one where the reason was sound but the hearing was flawed.
• The seriousness of the procedural failure. Skipping a hearing entirely is worse than a technical slip.
• Your length of service. Longer service tends to increase the award.
• Your own conduct. If you contributed to the situation, the award may be reduced.
• The employer's conduct. Bad faith, a sham hearing or a dismissal in defiance of advice weighs against the employer.
• Whether you have found other work, and how long you were unemployed.
• The employer's ability to pay, although this does not excuse unfairness.
• Whether reinstatement was available and you refused it without good reason.

A common pattern is that a dismissal that is unfair only in procedure attracts an award in the range of a few weeks to a few months, while a dismissal that is unfair in substance, where the employee did nothing wrong, attracts a larger figure. There are no published tables, and two commissioners can reasonably reach different numbers on similar facts.

What you may be owed on top

Compensation is separate from your contractual entitlements. Whatever the outcome of the unfairness dispute, the employer must pay:

• Notice pay if it dismissed you without notice and the dismissal was not for serious misconduct. Check the figure with the notice period calculator.
• Accrued leave for annual leave you had earned but not taken. See the leave payout calculator.
• Severance pay of at least one week's remuneration per completed year of service if the dismissal was a retrenchment. Use the retrenchment package calculator.
• Any unpaid salary, overtime or commission earned before the dismissal.

These are claims under the Basic Conditions of Employment Act 75 of 1997 or your contract. You can raise them at the CCMA in the same referral in many cases, or through the Department of Employment and Labour. Do not let a settlement of the unfairness dispute quietly swallow them. A settlement agreement should state whether it includes or excludes statutory money.

You should also apply for UIF as soon as you are dismissed. Claiming UIF does not affect your right to refer the dispute or to be awarded compensation. Estimate the benefit with the UIF benefits calculator.

A worked example

This example is illustrative. Sipho is a driver with eight years' service earning R12 000 a month plus a R1 500 provident fund contribution, so his remuneration is R13 500. He is dismissed for allegedly damaging a vehicle. There is a hearing, but the chairperson is the same manager who laid the charge, and Sipho is not allowed to call the mechanic who could have supported his version. The employer later concedes the damage was pre-existing.

At arbitration the commissioner finds the dismissal both substantively and procedurally unfair. Sipho asks for compensation rather than reinstatement because he has found another driving job at slightly lower pay after four months. The maximum award is 12 months of R13 500, which is R162 000. The commissioner considers his long service, the absence of any real misconduct, the flawed hearing, and the fact that he mitigated his loss by finding work, and awards eight months' remuneration, R108 000. The employer must also pay his notice pay and accrued leave separately, because those were owed anyway.

Had the same facts involved a fair reason but only a flawed hearing, the award might have been two or three months. Had Sipho been dismissed for joining a union, the cap would have been 24 months and the matter would likely have gone to the Labour Court.

What to do this week

1. Work out your monthly remuneration including benefits, from your payslips.
2. Decide what you want. Reinstatement, re-employment or compensation. You can ask for reinstatement and accept compensation later.
3. List the unfairness under two headings: reason and procedure.
4. List what you are owed anyway: notice, leave, severance, unpaid wages.
5. Keep a job-search record. Applications and interviews show you tried to mitigate your loss.
6. Refer within 30 days. See how to refer an unfair dismissal.
7. Apply for UIF now.

Documents to gather

Your contract, the last six payslips, any benefit statements, the dismissal letter, the charge sheet and hearing record, warnings or reviews, proof of job applications and any new job offer with its salary, and your own timeline. If you are claiming automatically unfair dismissal, add the documents that link the dismissal to the protected reason.

A realistic timeline

• Day 0 to 30. Dismissal and referral.
• About 30 days later. Conciliation. Settlements are negotiated against what an award might realistically be. The CCMA reported a settlement rate of 77% in 2024/25, although it does not define exactly which cases that figure covers; our page of CCMA statistics has the detail.
• Weeks to months later. Arbitration.
• About 14 days after the hearing. The award.
• Afterwards. If the employer does not pay, the award can be certified and enforced like a court order. If either side thinks the commissioner got it badly wrong, a review application to the Labour Court is possible within six weeks, which can add a year or more. See how long a CCMA case takes.

Common mistakes and what they cost

• Treating the cap as the expected outcome. Turning down a fair settlement because you expect 12 months usually costs time and often costs money.
• Forgetting benefits when calculating remuneration, which understates the cap.
• Letting a settlement absorb notice and leave pay. Insist that statutory money is dealt with separately.
• Not keeping a record of job applications. Without one it is harder to counter the argument that you did not try to mitigate.
• Asking only for compensation when reinstatement was realistic, which can reduce the award.

Your rights vs the employer's rights

You have the right to a remedy if your dismissal was unfair, to ask for reinstatement, to compensation within the cap where reinstatement is not appropriate, to your statutory entitlements regardless of the dispute, and to enforce an unpaid award. The employer has the right to defend the dismissal, to argue that reinstatement is impracticable, to point to your conduct or your new employment as reasons to reduce compensation, and to apply for review of an award it believes is legally wrong.

If you cannot afford an attorney

The CCMA is free. Phone 0861 16 16 16. Bargaining councils are free for the sectors they cover. Your union can represent you at no cost. The Department of Employment and Labour can help with unpaid statutory money. Legal Aid South Africa on 0800 110 110 applies a means test. Representation at CCMA arbitration for misconduct and incapacity dismissals is at the commissioner's discretion, so many people argue their own cases. Our page on what labour matters cost covers what an attorney charges if you decide you need one.

Frequently asked questions

People often ask whether compensation is taxed. Part of an award or settlement may be subject to tax, and the treatment depends on what the payment is for, so ask SARS or a tax practitioner before agreeing a figure. Our guide to how severance pay is taxed explains the separate rules for retrenchment packages. Others ask whether they can claim more than the cap in the Labour Court. For unfair dismissal claims under the Labour Relations Act the caps apply in the Labour Court as well. A third question is whether the employer must pay interest. Under section 143(2) of the Act, an award to pay money earns interest from the date of the award at the prescribed rate, unless the award says otherwise, and the CCMA can explain how to enforce it.