In the case of South African Airways v Van Vuuren, the distinction between “compensation” and “damages” was deliberated in the judgment of the Labour Appeal Court. It was clear that the two words were often used interchangeably because of their meanings being ambiguous. This would naturally affect the discretion of the court in awarding claims for damages and compensation.

Section 50(1) of the Employment Equity Act, No 55 of 1998 (EEA) invests the Labour Court with the power to make any appropriate order, including an order for compensation and damages, in any circumstances envisaged in the EEA. Section 50(2) refers in detail to claims of unfair discrimination and empowers the Labour Court likewise.

It was held that the confusion arose when considering the term compensation as used in section 193 of the Labour Relations Act; it includes both patrimonial and non-patrimonial loss, thus failing to draw a distinction between damages and compensation for the same kind of loss or injury. The confusion seemed to jeopardise the discretion that needed to be exercised. The EEA, on the other hand, clearly distinguishes between the two meanings. According to the judge, “In the EEA, ‘damages’ refer to an actual or potential monetary loss (patrimonial loss) and ‘compensation’ refers to the award of an amount as a solatium (non-patrimonial loss). It is conceivable that cases of unfair discrimination may involve actual or patrimonial loss for the claimant, as well as injured feelings or non-patrimonial loss.”

“When considering an Aquilian action, in order for damages to be awarded, the claimant must prove the actual loss suffered. The action is used to restore the claimant to the position he would have been in, had he not suffered the damage. Compensation however, is solatium given in order to appease the wounded or infringed feelings of the claimant.”

The court has a discretion, in instances, to award both damages and compensation, which award must be appropriately fitting, just and equitable. Damages therefore are intended to restore the complainant to the position he would have been in but for the unfair discrimination; compensation is intended as solatium for the complainant’s diminished dignity or infringed or injured feelings.

The complainant in this matter claimed R100 000 for damages; however, he was awarded an amount of R1, 4 million, of which only R50 000 was awarded for damages.

It would appear that a court considering the granting of an award of damages and compensation for unfair discrimination must distinguish between the two concepts and calculate the award accordingly.

Author: Annika Labuschagne