Unfair Dismissal Compensation: How Much Can You Really Get?

By Onah Attorneys Inc • Updated July 2026 • Legal information, not a substitute for advice on your specific matter.

‘Up to 12 months’ salary’ is the headline every dismissed employee hears — but what do commissioners actually award? The caps, the factors that move awards up and down, and the settlement market between them follow patterns any claimant can understand. Here is the honest picture, from someone who argues these cases, so you can value your claim before you fight it.

The legal caps

Ordinary unfair dismissal (misconduct, incapacity, operational requirements handled unfairly): compensation up to 12 months’ remuneration. Automatically unfair dismissal (pregnancy, discrimination, union activity, whistleblowing, exercising statutory rights): up to 24 months, claimed in the Labour Court. ‘Remuneration’ means the full package — basic, allowances, benefits — not just basic salary.

What commissioners actually award

Awards cluster well below the cap: procedural-only unfairness (valid reason, bad process) commonly draws 1–4 months; substantive unfairness (no valid reason) draws 6–12 months. Factors: the degree of unfairness, your length of service, your losses and mitigation efforts (did you seek work?), your own conduct, and the employer’s behaviour during the dispute. Reinstatement — the primary remedy in the LRA — is ordered where the relationship survives and you asked for it; it’s worth more than any compensation for long-service employees.

Automatically unfair: the 24-month tier

Dismissals for pregnancy, discrimination or whistleblowing attract both higher caps and judicial anger — awards of 12–24 months occur, plus possible damages under the Employment Equity Act for discrimination. These cases route to the Labour Court and reward early specialist handling; the pleadings frame everything.

The settlement market

Most matters settle at conciliation or before arbitration. Settlement benchmarks track award expectations discounted for risk and time: procedurally messy dismissals of short-service employees settle around 1–3 months; strong substantive cases of long-service employees settle at 4–8 months; employers also pay premiums for confidentiality, clean references and avoiding precedent. A realistic floor, set early, beats an inflated demand that stalls everything.

What kills claims

Missing the 30-day referral without condonable cause; resignation dressed as constructive dismissal without evidence of intolerability; signed mutual separation agreements accepted without duress; gross misconduct you actually committed (fairness challenges then hang on procedure alone); and unemployment self-inflicted by refusing reasonable alternative work. An honest merits assessment before you start saves months of doomed process.

Tax and payment mechanics

CCMA awards and settlements for loss of employment are taxed under the retrenchment tables (first R550,000 at 0% lifetime cumulative) when structured correctly via a tax directive — structure matters, and badly labelled settlements get taxed as salary. Unpaid awards are certified and enforced by sheriff like any judgment.

Frequently asked questions

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