The article presents the power of labour courts to award compensation as a substitute for re-establishing employment contracts. The author indicates the legal institutions that allow the labour court to execute the competence mentioned above, contained in the provisions of labour law and the provisions of civil procedure. The article studies the premises that must occur to make the legal mechanism of awarding such compensation practical. As interpretation of such premises may vary, the author cites the judgement of the Supreme Court to show what they practically mean.