FORM AFILING SHEET FOR EAST LONDON CIRCUIT LOCAL DIVISION

JUDGMENT

PARTIES:

MXOLISI TSIKA Plaintiff

and

BUFFALO CITY MUNICIPALITY Defendant

• Case Number: 151/07

• High Court: EAST LONDON CIRCUIT LOCAL DIVISION

DATE HEARD: 19 November 2008

DATE DELIVERED: 03 December 2008

JUDGE(S): GROGAN A.J

LEGAL REPRESENTATIVES –

Appearances:1. For the Plaintiff(s): Adv D de la Harpe2. for the Defendant(s): Adv R Quinn SC

Instructing attorneys:

• Appellant(s): Cooper Conroy Bell & Richards (Mr Bell)• Respondent(s): Smith Tabata (Mr Conroy)

CASE INFORMATION -(i) Nature of proceedings : Civil Trial (ii) Topic: (iii) Key Words:

THE HIGH COURT OF SOUTH AFRICA(EAST LONDON CIRCUIT LOCAL DIVISION) REPORTABLE

CASE NO.: EL 51/07 ECD 151/07

In the matter between:

MXOLISI TSIKA Plaintiff

and

BUFFALO CITY MUNICIPALITY Defendant

JUDGMENT

GROGAN A.J.:

[1] This is the judgment and ruling on a point in limine brought by the

defendant in respect of both the plaintiff’s claim and its own

counterclaim, as detailed below.

BACKGROUND

[2] The plaintiff was formerly municipal manager of the defendant

municipality. His services in that capacity were terminated on 24 April

2006 after he was found guilty in absentia on a number of charges of

misconduct.

[3] The plaintiff now claims payment to him by the defendant of the sum of

R2 071 359, 23, with interest. According to the particulars of claim, this

sum is comprised of an amount of R271 359, 23, which the defendant

allegedly unlawfully deducted from two preservation fund policies into

which part of the plaintiff’s salary had been paid, and a further amount

of R1 800 000, 00, which he claims is owing to him by virtue of a

clause (2.3) in his contract of employment. That clause appears on the

face of it to entitle him to an ex gratia payment equivalent to 18 months

of his gross salary as at the date of termination.

[4] The defendant resists both claims. It avers that it owned the policies by

virtue of a cession agreement concluded with the plaintiff, and that

before it ceded them back to the plaintiff after his dismissal, an amount

was withdrawn to cover certain costs allegedly incurred as a result of or

connected with the plaintiff’s alleged misconduct, which include acts

and omissions additional to those for which he was dismissed. The

defendant’s response to the plaintiff’s claim for payment of an amount

equivalent to 18 months’ remuneration was that it was a “tacit

alternatively an implied term” of the relevant provision of the contract

that the payment would be made on termination “as a favour and

without admission of liability”, that such payment would be made only if

and when the defendant completed his five-year term as municipal

manager, and that it would not be paid if the plaintiff’s employment was

terminated for “serious misconduct”.

[5] The defendant was not content with merely opposing the plaintiff’s

claim. It has also filed a counterclaim in which it seeks: (i) rectification

of clause 2.3 of the employment contract if it is incapable of yielding the

implied or tacit terms for which it contends in the plea; (ii) payment to it

by the plaintiff of the sum of R1 039 919, 72, comprising various sums

allegedly incurred by the defendant in consequence of the plaintiff’s

alleged misconduct.

THE POINT IN LIMINE

[6] Some seven months after the close of pleadings, the defendant filed a

notice of intention to amend its plea by incorporating a special plea, the

essence of which is the averment that the plaintiff’s claims “rise (sic)

out of employment relations” and that his claims are “not justiciable in

the High Court”, which accordingly lacked jurisdiction to determine the

plaintiff’s claims. However, the special plea was withdrawn after the

plaintiff filed a notice of objection. That objection was based on the

averments that the special plea was bad in law and that it was not open

to the defendant to object to the jurisdiction of this Court after litis

contestatio had been reached.

[7] On the morning of the hearing of this matter, the defendant’s counsel,

Mr Quinn SC, handed me in chambers a copy of a notice of motion

signifying the defendant’s intention to apply for the Court to entertain a

point in limine and to determine whether it has jurisdiction to entertain

either the claim or the counterclaim. Annexed to the notice is an

affidavit by the defendant’s attorney of record stating inter alia:

“I submit that in the light of recent decision of the High Court, the

Supreme Court of Appeals (sic) and more particularly the

Constitutional Court in Chirwa v Transnet Limited & Others 2008

(3) BCLR 251 CC it is convenient and proper for this Honourable

Court to determine, before the leading of evidence, whether the

High Court has substantive jurisdiction to determine both the

Plaintiff’s claim in convention and the Defendant’s claim in

reconvention.”

[8] Mr De la Harpe, who appears for the plaintiff, persisted with the

contentions that, whether raised as a special plea or as a point in

limine, the submission that the Court lacks jurisdiction is without merit

and cannot properly be raised after litis contestatio has been reached.

Counsel were in agreement that the jurisdictional point should be

argued and that, whether or not the Court reserved judgment, the

matter could not proceed on the merits on that day. This judgment

accordingly deals solely with the jurisdictional challenge.

THE PARTIES’ SUBMISSIONS

[9] The thrust of Mr Quinn’s submission is that, in the light of Chirwa, all

matters which, as he put it, pertain predominantly to employment or

labour must now be dealt with under applicable labour legislation, over

which he contends the High Court lacks jurisdiction. Mr De la Harpe,

for his part, argues that Chirwa has no application in this matter

because the claim is for breach of contract simpliciter and for payment

of a sum of money of which the plaintiff avers he was unlawfully

deprived. Mr De la Harpe also submits that whether or not the claim in

reconvention falls within this Court’s jurisdiction is beside the point

because the defendant cannot non-suit the plaintiff by bringing a

counterclaim which may fall outside the Court’s jurisdiction. Finally, Mr

De la Harpe submits that the defendant cannot raise a jurisdictional

challenge after litis contestatio has been reached. I turn first to the final

point.

THE BELATED RAISING OF THE POINT IN LIMINE

[10] It may be unusual for a defendant to raise a jurisdictional point after

itself launching a counterclaim and expressly abandoning such a point.

However, I accept that this is understandable in the light of the

Constitutional Court’s judgment in Chirwa,[1] adverted to in the founding

affidavit filed for purposes of this in limine application, and the

aftermath of that judgment. Chirwa was handed down after the special

plea was withdrawn, and much ink has since been used in this Division

and others debating, not always harmoniously, the impact of that

judgment on the High Court’s jurisdiction in “labour” and “employment”

matters.[2]

[1] The judgment is also reported in [2008] 2 BLLR 97 and ((2008) 29 ILJ 73.[2] See Nakin v MEC, Department of Education, Eastern Cape Province & another (2008) 19 ILJ 1426, [2008] 5 BLLR 489 (Ck); Nonzamo Cleaning Services Co-operative v Appie & others (2008) 29 ILJ 2168; [2008] 9 BLLR 901 (Ck); Mkumatela v Nelson Mandela Metropolitan Municipality SECLD case no 2314/2006, unreported; Makambi v MEC for Education, Eastern Cape (2008) 5 SA 449 (SCA); De Villiers v Minister of Education,

[11] It is so, as Mr De la Harpe submits, that a litigant is not normally

entitled to challenge the jurisdiction of a court after close of pleadings.

However, the authorities on which he relies[3] are in my view

distinguishable from the present matter. All these judgments involved

matters where the courts in which the plea was raised had what has

been referred to as “material jurisdiction”.[4] Moreover, it appears to be

accepted that a jurisdictional challenge may be raised after litis

contestatio where the party raising it provides compelling reasons for

not doing so earlier.[5] In this case, the challenge goes beyond mere

territorial jurisdiction. The allegation is that the legislature has deprived

this Court of jurisdiction. I accept, as Mr Quinn submits, that a court

cannot assume jurisdiction of which the legislature has chosen to

deprive it, even with the parties’ consent or where the parties do not

place the court’s jurisdiction at issue. It is noteworthy, for example, that

in Nonzamo Cleaning Services[6] a full bench of this Division upheld a

jurisdictional challenge on appeal, even though the appellant had

Western Cape Province & another CPD case no. 18733/2007 dated 29 October 2008, unreported; Mbashe Local Municipality & another v Nyubuse (2008) 29 ILJ 2147 (E Mthatha Division); MEC, Department of Education, Eastern Cape Province & another v Bolani In re Bolani v MEC, Department of Education, Eastern Cape Province & another (2008) 29 ILJ 2160 (Tk); Police & Prisons Civil Rights Union & another v Minister of Safety & Security & others (2008) 29 ILJ 2185 (EC); Kotze v National Commissioner, SA Police Service & another (2008) 29 ILJ 1869 (T); Mlokoti v Amathole District Municipality & another EC case no. 18733 dated 6 November 2006, unreported. These are the only judgments I was able to locate in the time available.

[3] Inter alia Dusheiko v Milburn 1964 (4) SA 648 (A); William Spilhouse & Co (MB) (Pty) Ltd v Marx 1963 (4) SA 944 (CPD); Purser v Sales; Purser & another v Sales & another (2001) (3) SA 445 (SCA).[

[4] By Theron J in William Spilhaus at 1000H.[

[5] See judgment of Van Winsen J op cit at 999D-E.[6] Supra note 2.

abandoned that point and revived it only after Chirwa was handed

down.[7] However, in view of the conclusion I have reached in respect of

the jurisdictional point itself, it is unnecessary for me to make a firm

ruling in this regard. I therefore turn to that issue.

THE JURISDICTIONAL POINT

[12] In my view, the defendant’s submission oversimplifies jurisdictional

issues that Chirwa neither dealt with nor resolved. Likewise, I do not

believe that this matter can be decided solely on the basis of the

plaintiff’s submission that the jurisdictional point falls to be dismissed

merely because the cause of action does not flow from an existing

employment relationship. I am accordingly compelled to enter the

murky waters stirred up by the debate over Chirwa.

The Chirwa judgment

[13] Before so doing, I believe it necessary to restate the issues dealt with

in Chirwa. The only way to do this is to summarise the three separate

and compendious contributions which make up the judgment.

[

[7] At para. 9.

[14] Ms Chirwa was a senior employee of the Transnet Pension Fund. She

was charged with incompetence and “poor employee relations” after

falling out with her immediate superior. After she objected to that same

superior chairing the disciplinary hearing, she declined to attend and

was dismissed in absentia. Ms Chirwa then referred a dispute to the

Commission for Conciliation and Arbitration (“CCMA”) in terms of the

Labour Relations Act 66 of 1995 (“the LRA”). In terms of that Act, the

commissioner certified that the matter had not been resolved and

indicated that the dispute should be referred for arbitration. Instead of

doing so, Ms Chirwa approached the High Court for orders setting

aside the disciplinary proceedings on the grounds that the presiding

officer was biased and that she had not been afforded an opportunity to

obtain legal representation. The High Court found that the employer

had breached Ms Chirwa’s right to natural justice, declared her

dismissal a nullity, and ordered the employer to reinstate her.

[15] In Transnet Limited v Chirwa & others 2007 (2) SA 198 (SCA) a

divided Supreme Court of Appeal upheld the employer’s appeal against

the High Court’s judgment; two judges[8] on the basis that the dismissal

did not constitute administrative action, and one[9] on the basis that the

High Court lacked jurisdiction to entertain the matter.[10] Ms Chirwa then

applied for leave to appeal to the Constitutional Court, claiming that

[8] Mthiyana and Jafta JJA.

[9] Conradie JA.

[10] Mpati DJP ad Cameron JA held that the High Court had jurisdiction.

she was entitled to bring her action in the High Court under the PAJA

because her dismissal constituted unfair administrative action.

[16] In one of two judgments concurred in by the majority, Skweyiya J[11]

noted that Ms Chirwa’s principal contention was that the matter was

reviewable under the PAJA because Transnet had failed to comply with

the relevant provisions of the Code of Good Practice: Dismissal. That

being so, her case was based squarely on the provisions of section

188 of the LRA. For Skweyiya J, the main question was whether the

legislature had conferred exclusive jurisdiction to decide such issues

on the Labour Court and the other forums established under the

LRA.[12] The learned judge also noted that the question of jurisdiction

arose because dismissals of public servants seemed to involve two

constitutional rights – those relating to fair labour practices and those

relating to administrative justice. However, Skweyiya J held that the

purpose of administrative law is to regulate dealings between the

administration and members of the public, while the purpose of labour

law as embodied in the LRA is to provide a comprehensive dispute-

resolution system for employment and labour matters. By providing in

section 210 of the LRA that that Act prevails over all conflicting

legislation, save the Constitution, the legislature had made it plain that

the LRA is the pre-eminent legislation in labour matters. According to

the learned judge, section 157 of the LRA, which governs the [

[11] Moseneke DCJ; Madala; Ngcobo; Nkabinde; Sachs; Van der Westhuizen, JJ and Navsa AJ, concurring.[

[12] These are, apart from the CCMA, also accredited bargaining councils and statutory councils, and accredited agencies.

jurisdiction of the Labour Court, must be understood in this light. The

concurrent jurisdiction of the High Court and the Labour Court created

by section 157(2) was intended to extend the jurisdiction of the Labour

Court to employment matters involving constitutional rights.[13]

[17] Skweyiya J then noted that Ms Chirwa’s complaint was that her

employer had failed to comply with the mandatory provisions of the

LRA. By so pleading, she had relied on the provisions of that Act which

deal with unfair dismissals, but had yet sought to vindicate her rights

under the PAJA. However, Ms Chirwa’s claim that her dismissal was

not effected in accordance with a fair procedure was a matter falling

under section 191 of the LRA, which provides a procedure for the

resolution of such disputes, including conciliation, arbitration and

review by the Labour Court. The dispute was accordingly one over

which the Labour Court had exclusive jurisdiction, and in respect of

which the High Court accordingly lacked jurisdiction.

[18] In a separate majority judgment[14] Ngcobo J observed that he would

have dismissed the appeal on the basis that Ms Chirwa had switched

forums after electing to commence her action in the CCMA.[15]

However, given the importance of the matter the learned judge deemed

it desirable to consider two further issues: (i) the scope of section

157(2) of the LRA; (ii) whether Ms Chirwa had two causes of action, [13] This aspect of the judgment is explained in more detail at paras. 29-32 below.[14] In which Moseneke DCJ; Madala; Nkabinde; Sachs; Van der Westhuizen, JJ and Navsa AJ concurred.[

[15] Compare Xoli v PERMAC / ECMAC & others (2005) 16 ILJ 1969, [2005] 12 BLLR 1284 (SE).

one flowing from the LRA, the other from her constitutional right to just

administrative action. According to Ngcobo J, sections 157(1) and

157(2) of the LRA can be reconciled if regard is had to the primary

objectives of that Act. The LRA was intended to consolidate the

multiplicity of laws governing employment and labour disputes, to

eliminate overlapping and competing jurisdictions, to create a

comprehensive body of law to govern employment and labour issues,

and to establish specialised forums to interpret and apply those laws.

Section 157(2) was not intended to confirm the High Court’s continuing

jurisdiction in labour matters, but to confer limited constitutional

jurisdiction on the Labour Court. This was necessary under the interim

Constitution Act 200 of 1993 because, at that stage, constitutional

jurisdiction was not conferred on any courts other than the High Court.

The present Constitution confers limited constitutional jurisdiction on

matters assigned by legislation to courts of status equivalent to the

High Court. The Labour Court has status equivalent to that of the High

Court. Ngcobo J concluded that it was clear from the Constitution that

the High Court lacks jurisdiction to determine matters assigned by the

LRA to the Labour Court. By extending the Labour Court’s jurisdiction

to enable it to deal with alleged violations in the employment context of

all rights entrenched in the Bill of Rights, section 157(2) enhances the

Labour Court’s ability to discharge its responsibility to develop a

coherent jurisprudence concerning employment and labour relations.

Section 157(2) was accordingly designed, not to confer jurisdiction on

the High Court to determine labour and employment disputes, but

rather to empower the Labour Court to deal with causes of action

founded on the provisions of the Bill of Rights arising from employment

and labour relations. [16] The learned judge also observed that the word

“concurrent” in section 157(2) is calculated to sow confusion, and could

well have been omitted.

[19] Ngcobo J also held that where employees allege non-compliance with

the LRA, they must seek their remedies under that Act. In such cases,

an employee may not avoid the dispute resolution procedures provided

for in the LRA by alleging the violation of a constitutional right.[17] To

permit this would be to frustrate the primary object of the LRA and to

allow astute litigants to bypass the Act. This would give rise to the kind

of forum shopping illustrated by the course of Ms Chirwa’s litigation.

Ngcobo J accordingly concluded that a dispute concerning alleged

non-compliance with the provisions of the LRA is a matter which, in

terms of the LRA, falls within the exclusive jurisdiction of the Labour

Court.

[20] As to whether Ms Chirwa had more than one cause of action – one

flowing from the LRA and the other flowing from the PAJA – Ngcobo J

noted that the mere fact that Transnet is a public body does not mean

that all its actions are administrative in nature, as contemplated by

section 33 of the Constitution. Ms Chirwa’s dispute with Transnet

[16] See further at paras. 29-32 below.[

[17] See para. 123 of his judgment, citing SANDU v Minister of Defence & others 2007 (5) SA 400 (CC).

concerned the fairness of the termination of her employment. Even

though dismissals in the public sector may involve the exercise of

public power, the source of the power to terminate Ms Chirwa’s

services was the employment contract. By dismissing her, the

employer had exercised contractual power. It followed that Ms Chirwa’s

dismissal did not constitute administrative action.

[21] The minority (per Langa CJ; Mokgoro and O’Regan JJ concurring)

held that the High Court had jurisdiction to entertain the matter

because the Constitutional Court had already so decided in Fredericks

& others v MEC for Education & Training, Eastern Cape & others 2002

(2) SA 693 (CC). The Chief Justice also pointed out that Ms Chirwa’s

application was framed in terms of the PAJA and that, read literally,

section 157(2) confers jurisdiction on the High Court to entertain such

claims. However, the minority agreed that Ms Chirwa’s dismissal was

an exercise of contractual power, and that the appeal had to fail on that

ground.

The aftermath of Chirwa

[22] I will not burden this judgment with an excursus on the various points

raised in the judicial debate over the scope and import of the Chirwa

judgment. Suffice it to state for present purposes that much of that

debate (including that in Makambi supra, the only contribution so far by

the SCA) has centered on the relationship between the Chirwa and

Fredericks judgments. On first reading, these judgments appear to

reach conflicting conclusions on a particular point,[18] namely, whether

the “concurrent jurisdiction” conferred on the High Court by section

157(2) of the LRA in respect of particular labour matters is ousted

when the dispute at issue must be referred for arbitration in terms of

the LRA. In Fredericks, the court decided that the High Court’s

jurisdiction is ousted only when in terms of section 157(1) a matter falls

within the exclusive jurisdiction of the Labour Court, but not when the

Act requires the dispute to be referred for arbitration. In Chirwa, the

majority found, at least implicitly, that it is of no moment that matters

must be referred for arbitration rather than adjudication by the Labour

Court, and that the High Court’s jurisdiction is ousted if the cause of

action falls within the scope of the LRA and the party initiating the

action has a remedy under that Act.[19]

[23] The relationship between Chirwa and Fredericks and their respective

weights as precedent has been discussed in most of the post-Chirwa

judgments cited above. However that issue does not arise in this

matter. This is because Fredericks does not provide direct authority for

the point now being considered.[20] The dispute in Fredericks concerned

[18] See Nakin, Mkumatela, Nonzamo & Makambi supra n 2. [19] In Nonzamo supra n. 2, the court concluded that the conflict on this point between Chirwa and Fredericks was so transparent that the former judgment must be held to have at least impliedly overruled the latter. However it seems that this finding does not survive the SCA judgment in Makambi, in which the SCA accepted that the Chirwa court distinguished Fredericks on another basis.[

[20] Fredericks concerned an application to the High Court under section 23 of the Constitution. The court found that the High Court had jurisdiction because the dispute concerned the application and interpretation of a collective agreement, an issue reserved by the LRA for arbitration by the CCMA (see section 24). According to Fredericks, the fact that a matter falls within the exclusive jurisdiction of the CCMA does not bring the

a matter which could have been referred for arbitration under the LRA.

As will appear below, the dispute in casu is not one which could have

been referred for arbitration. Whether Fredericks has been overruled or

merely distinguished by Chirwa therefore has no relevance to the

present matter.

[24] There is another feature common to all the cases in which Chirwa has

been raised, either successfully or unsuccessfully, to challenge the

jurisdiction of the High Court in labour and employment matters. This is

that all these cases (including De Villiers v Minister of Education,

Western Cape Province, upon which Mr Quinn relied almost

exclusively in argument), involved applications for review of the actions

of employers vis-à-vis their employees under the Constitution, the

PAJA, the common law, or all three. The same applies to Mbashe

Local Municipality & others v Nyubuse,[21] a copy of which was

forwarded to me by the defendant’s attorney after the matter was

argued. In that case, the respondent claimed payment of his salary,

which the appellant had withheld after he absented himself from work.

The action was based on an alleged breach of the respondent’s

“constitutional right to fair administrative action”. After noting that the

Constitutional Court had found in Chirwa that the dismissal at issue

constituted an exercise of contractual power, not an administrative act,

the court in Nyubuse found on appeal that the non-payment of the

matter within the terms of section 157(1) of the LRA, which confers exclusive jurisdiction on the Labour Court in certain matters, and because the CCMA is not a court of law. The unanimous court accordingly held that the High Court had jurisdiction.[21] Supra n. 2.

respondent’s salary “was directly linked to his poor work record and

akin to a dismissal”, and therefore did not constitute administrative

action subject to review. The main action was dismissed on that basis.

[25] In the present case, the plaintiff neither relies on the PAJA nor

requests the Court to invoke its inherent review jurisdiction. The plaintiff

approaches this Court by way of action with a claim for payment of

sums of money arising from an alleged breach of contract and the

defendant’s alleged unlawful appropriation of monies allegedly

belonging to him, and the defendant counterclaims for rectification of

the contract, if needs be, and for expenses incurred as a result of

alleged failure by the plaintiff to discharge contractual and statutory

obligations. This matter is therefore distinguishable from all the post-

Chirwa judgments to which I have been referred, and those additional

cases I have been able to find.

[26] None of these judgments accordingly provides direct authority for the

determination of this matter. But the question remains whether Chirwa

applies to actions in this Court for the recovery of damages.

Is Chirwa applicable in casu?

[27] In Chirwa, the conclusion that the High Court lacked jurisdiction rests

on two main findings. The first was that the matter fell within the

exclusive jurisdiction of the Labour Court, and thus within the terms of

section 157(1) of the LRA, and that the High Court’s jurisdiction was

excluded notwithstanding the fact that it apparently has concurrent

jurisdiction with the Labour Court by virtue of section 157(2) in respect

of “any alleged or threatened violation of any fundamental right

entrenched in Chapter 2 of the Constitution … and arising from [inter

alia] “employment and from labour relations”.[22] The second point on

which Chirwa was grounded was that the dismissal at issue did not

constitute administrative action, but was rather the exercise of a

contractual power. From these premises, the court reached the

conclusion that Ms Chirwa’s application was a “quintessential labour

matter”[23] of a type the legislature plainly intended to be resolved under

the dispute-resolution procedure created by the LRA.

[28] The pivotal finding in the Chirwa majority judgments was, then, that

the jurisdiction of the High Court was excluded because the cause of

action (Ms Chirwa’s alleged procedurally unfair dismissal) fell within the

exclusive jurisdiction of the Labour Court and hence, by virtue of

section 157(1) of the LRA, outside the jurisdiction of the High Court.

The main point that divided the Court was the meaning to be attributed

to section 157(2).

[29] It is necessary to consider in a little more detail how the Chirwa

majority analysed section 157 of the LRA, the material sections of

which read (emphasis supplied):

[22] These provisions are quoted in full at para. 29 below.[23] The expression used by Conradie JA in Chirwa (SCA) at para. 30. His judgment was approved in toto by the Constitutional Court (see judgment of Skweyiya J at para. 36.

Jurisdiction of Labour Court.—(1) Subject to the Constitution

and section 173, and except where this Act provides otherwise,

the Labour Court has exclusive jurisdiction in respect of all

matters that elsewhere in terms of this Act or in terms of any

other law are to be determined by the Labour Court.

(2) The Labour Court has concurrent jurisdiction with the High

Court in respect of any alleged or threatened violation of any

fundamental right entrenched in Chapter 2 of the Constitution of

the Republic of South Africa, 1996, and arising from—

(a) employment and from labour relations;

(b) any dispute over the constitutionality of any executive or

administrative act or conduct, or any threatened

executive or administrative act or conduct, by the State in

its capacity as an employer; and

(c) the application of any law for the administration of which

the Minister is responsible.

[30] Prior to Chirwa, the courts were divided on whether the phrase

“concurrent jurisdiction” in sub-section (2) of section 157 means what it

says – i.e. that the Labour Court and the High Court each had

overlapping and equivalent jurisdiction to deal with the matters

specified therein[24] – or whether the phrase has a different meaning.[25]

[24] See, for example, Mbayaka & another v MEC for Welfare, Eastern Cape [2001] All SA 567 (Tk); Ndzamela v Eastern Cape Development Corporation Ltd [2003] 6 BLLR 619 (Tk); Runeli v Minister of Home Affairs 2000 (2) SA 314 (Tk); Mhlambi v Matjhabang Municipality & another 2003 (5) SA 89 (O); Ntabeni v MEC for Education, Eastern Cape 2002 (3) SA 103 (Tk); NAPTOSA & others v Minister of Education, Western Cape & others 2001 (2) SA 112 (C); Esak NO & another v Commission of Gender Equality 2001 (1) SA 1299 (W); Claase v Transnet Bpk en ‘n ander 1999 (3) SA 1012 (T).

[25] See inter alia Manyathi v MEC for Transport, KwaZulu-Natal & another 2002 (2) SA 262 (N); Bensingh v Minister of Education & Culture: Province of KwaZulu-Natal & others [2003] 6 BLLR 598 (D); Mgijima v Eastern Cape Appropriate Technology Unit & another 2000 (2) SA 291 (Tk); SA Police Union & another v National Commissioner of the SA Police Service & another 92005] 26 ILJ I 2403 (LC); Public Servants Association obo Haschke v MEC for Agriculture & others (2004) 25 ILJ 1750 (LC).

This issue was addressed in both majority judgments in Chirwa.

Skweyiya J observed:[26]

“The authorities that have attempted to grapple with this

provision have come to conflicting interpretations. Keeping in

mind the aim of the LRA to be a one-stop shop dispute

resolution structure in the employment sphere, it is not difficult to

see that the concurrent jurisdiction provided for in section 157(2)

of the LRA is meant to extend the jurisdiction of the Labour

Court to employment matters that implicate constitutional rights.”

[31] In his concurring judgment, Ngcobo J adopted a similar view of section

157(2). The learned Judge wrote:[27]

“Viewed in this context, the primary purpose of section 157(2)

was not so much to confer jurisdiction on the High Court to deal

with labour and employment relations disputes, but rather to

empower the Labour Court to deal with causes of action that are

founded on the provisions of the Bill of Rights but which arise

from employment and labour relations. The constitutional

authority of the Legislature to confer that power on the Labour

Court is found in section 169(a)(ii) of the Constitution. That

provision authorises Parliament to assign any constitutional

matter ‘to another court of a status similar to a High Court’ and

to deprive the High Court of the jurisdiction in respect of a matter

assigned to another court.”

[

[26] At para. 54, my underlining.[27] At para. 120, emphasis supplied.

[32] Read this way, section 157(2) is intended, not to confirm or retain the

High Court’s jurisdiction in the labour matters listed there, but to confer

on the Labour Court jurisdiction it would otherwise have lacked.

Is this an “LRA matter”?

[33] Mr Quinn submits that this matter belongs under section 157(1) of the

LRA. The difficulty I have with this submission is that, unlike in Ms

Chirwa’s case, there is no express provision in the LRA which would

give either the plaintiff or the defendant direct access to the Labour

Court to pursue their respective claims and counterclaim, or which

expressly empowers the Labour Court to grant the relief sought.[28]

[28] The disputes over which the Labour Court is expressly given jurisdiction are those over “automatically unfair” dismissals (s 191(5)(b)(i)); dismissals based on operational requirements, unprotected strikes and closed shop agreements (s 191(5)(b)(ii)–(iv)); dismissals falling within the jurisdiction of the CCMA which the CCMA director considers appropriate to refer to the court (s 191(6)); unfair labour practice disputes involving alleged discrimination or occupational detriment by the employer in contravention of section 3 of the Protected Disclosures Act 26 of 2000 for having made a protected disclosure (s 191(13)); the exercise of rights of freedom of association (s 7); disputes about freedom of association and victimisation (s 9(4)); appeals against awards concerning agency fees or the use of closed shop fees (s 24(7)); the failure or refusal to admit a registered union as party to a closed shop agreement (s 26(14)) read with (10) and (11); interpretation or application of parts A, C and F of chapter III of the LRA (s 63(4)); admission, winding up and cancellation of bargaining councils (ss 56(6) and 59 to 61); breach of picketing rules; (s 69(11)); interdicts and claims for compensation in respect of an unprocedural strike or lock-out (s 68); secondary strikes (s 66(5), (6) read with s 66(2)(c)) recovery of the value of payments in kind made to striking or locked-out workers s 67(3); interdicts and declaratory orders in respect of socio-economic protest action (s 77(2) read with s 77(4)); declaratory orders about the effect of arbitration awards on the fiduciary duties of employer representatives on social benefit schemes (s 86(8)); disputes between registered unions or employers’ organisations and their members about non-compliance with the organisation’s constitution (s 158(1)(e)); winding-up of trade unions and employers’ organisations by reason of voluntary dissolution, inability to function or insolvency (ss 103, 104); appeals against decisions of the Registrar of Labour Relations; (s 111(3)); cancellation of registration of a registered trade union because it is no longer independent (s 105). See Du Toit et al Labour Relations Law: a Comprehensive Guide (Lexis Nexis Butterworths 5 ed 2006) 156-7.

[34] The closest the LRA comes to conferring on employees the right to

claim contractual damages, as opposed to statutory compensation, is to

be found in section 195 of that Act. This provides:

“An order or award of compensation made in terms of this

Chapter is in addition to, and not a substitute for, any other

amount to which the employee is entitled in terms of any law,

collective agreement or contract of employment”.

[35] While it may be that section 195 empowers the Labour Court or

statutory `arbitrators to award, in addition to statutory compensation,[29]

contractual damages to employees who have been unfairly

dismissed,[30] neither that court nor arbitrators appointed under the LRA

may do so unless the employee has referred the dispute under section

191(5). That can only be done when the employee disputes the fairness

of the dismissal or a labour practice.[31] In this matter, the plaintiff does

not dispute the fairness of his dismissal. He merely claims a sum of

money he alleges is owing to him as a consequence of the termination

of his employment or, to put it in contractual terms, in consequence of

the breach by the defendant of an obligation arising from his contract,

and a further sum he claims to have been unlawfully deducted from his

policies.

[29] As set out in section 194 of the LRA.[

[30] Fedlife supra at para. 18; Parry v Astral Operations (Pty) Ltd [2005] 10 BLLR 989 (LC) at para. 93 (overruled on appeal, but on different grounds): See n. 48 infra. See also Kroukam v SA Airlink (Pty) Ltd (2005) 26 ILJ 2153, [2005] 12 BLLR 1172 (LAC) at para.127.[

[31] Vide section 191(1).

[36] The same applies to the main counterclaim: there is no provision in the

LRA which permits employers to pursue claims against their employees

or former employees. Had the defendant sought to advance a claim for

recovery of damages against the plaintiff in the Labour Court, it would

have been non-suited on that ground. [32] While the defendant’s prayer

for rectification of the contract may fall within the jurisdiction of the

Labour Court,[33] that court cannot be approached for such relief under

the LRA. This is accordingly not a matter which, to borrow the

phraseology used by Farlam JA in Makambi,[34] falls on the LRA side of

the line of distinction drawn in the Chirwa case.

[37] It accordingly follows that, even if Chirwa is to be read as broadly as Mr

Quinn says it should be read, the finding in that judgment that where

employees can vindicate claims under the LRA, they must use the

forums created by that Act, and not the High Court, does not apply in

casu.

The effect of Chirwa on the interpretation of the Basic Conditions of

Employment Act 75 of 1997 (“the BCEA”)

[38] But that is not the end of the inquiry. Section 157(1) of the LRA gives

the Labour Court “exclusive jurisdiction in respect of all matters that

[32] See, for example, NEWU v CCMA & others [2007] 7 BLLR 623 (LAC).[33] See Annendale Building Materials (Pty) Ltd t/a Altocrete Brick Works & another v National Union of Mineworkers (2003) 24 ILJ 528 (LC) and further at paras. 44-45 below.[

[34] At para. 17.

elsewhere in terms of this Act or in terms of any other law are to be

determined by the Labour Court”. The next question, then, is whether

the Labour Court has exclusive jurisdiction to entertain the present

matter by virtue of any other law. In this matter, save for the common

law,[35] the only "other law” possibly applicable in this matter is the

BCEA.

[39] Although section 157(1) of the LRA refers to “any other law”, the

BCEA contains its own jurisdictional provision. It would be convenient

to quote section 77 of the BCEA in full at this point. It reads (emphasis

supplied):

“Jurisdiction of Labour Court.—(1) Subject to the Constitution

and the jurisdiction of the Labour Appeal Court, and except

where this Act provides otherwise, the Labour Court has

exclusive jurisdiction in respect of all matters in terms of this Act,

except in respect of an offence specified in sections 43, 44, 46,

48, 90 and 92.

(2) The Labour Court may review the performance or purported

performance of any function provided for in this Act or any act or

omission of any person in terms of this Act on any grounds that

are permissible in law.

(3) The Labour Court has concurrent jurisdiction with the civil

courts to hear and determine any matter concerning a contract

of employment, irrespective of whether any basic condition of

employment constitutes a term of that contract.

[35] The Labour Court, being a creature of statute, has no jurisdiction by virtue of the common law, even though it has status and inherent powers equivalent to that of the High Court over matters falling within its jurisdiction: LRA, section 151(2).

(4) Subsection (1) does not prevent any person relying upon a

provision of this Act to establish that a basic condition of

employment constitutes a term of a contract of employment in

any proceedings in a civil court or an arbitration held in terms of

an agreement.

(5) If proceedings concerning any matter contemplated in terms

of subsection (1) are instituted in a court that does not have

jurisdiction in respect of that matter, that court may at any stage

during proceedings refer that matter to the Labour Court.”

[40] The resemblance between sub-sections (1) and (3) of this section to

sub-sections (1) and (2) of section 157 of the LRA is obvious. Does this

mean that, on the authority of Chirwa, they must be interpreted in the

same way?

[41] In Chirwa, the majority reasoned essentially that, if a matter falls within

the exclusive jurisdiction of the Labour Court, the High Court cannot

claim concurrent jurisdiction by virtue of section 157(2). Section 157(1)

of the LRA gives the Labour Court exclusive jurisdiction “in respect of

all matters that elsewhere in terms of this Act or any other law are to be

determined by the Labour Court”. Section 77(1) of the BCEA, a less

happy example of legal drafting,[36] gives the Labour Court exclusive

jurisdiction “in respect of all matters in terms of this Act”. To avoid the

obvious absurdity to which meaningless statutory provisions give rise, I

assume this to be shorthand for the fuller version expressed in the

LRA.

[36] See the remarks of Van Dijkhorst AJA in University of the North v Franks & others [2002] 8 BLLR 701 (LAC) at para 28.

[42] In Chirwa, the majority appears to have extended the meaning of the

term ”Labour Court” to embrace the other dispute resolution forums

established by the LRA (i.e. the CCMA and bargaining councils), which

the unanimous Court declined to do in Fredericks. However, that

consideration does not apply in respect of the BCEA because, save for

two provisions (section 41, which relates to disputes over statutory

severance pay and section 80, which relates to victimisation for

exercising rights under the Act, neither of which is applicable in casu),

the CCMA and bargaining councils have no jurisdiction in respect of

matters arising under that Act.[37]

[43] Under the LRA, disputes to be adjudicated or arbitrated by the Labour

Court or statutory arbitration tribunals are clearly and specifically

identified.[38] The only matters specifically reserved in the BCEA for the

Labour Court are those concerning contraventions of the BCEA if they

are consolidated with dismissal disputes referred in terms of the

LRA,[39] disputes about the interpretation or application of Part C of

chapter 10 of the BCEA concerning victimisation,[40] and reviews of

functions performed under the Act.[41] For the rest, the BCEA sets out

minimum conditions of employment applicable to all employees and

[37] This is why I have observed above that Fredericks has no application in the present matter.[

[38] See note 23 above.[

[39] Section 74(2).[

[40] Section 80.[

[41] Section 77(2).

employers and provides a specific procedure for their enforcement,

beginning with compliance orders issued by the Department of Labour

and ending with their enforcement by order of the Labour Court.[42]

These are matters clearly falling within the Labour Court’s exclusive

jurisdiction.

[44] The only reference to that court’s role in contractual disputes to be

found in the BCEA is in section 77A(e). This provides that among the

“appropriate orders” the Labour Court may make, “subject to the

provisions of this Act”, are determinations

“that it considers reasonable on any matter concerning a

contract of employment in terms of section 77 (3), which

determination may include an order for specific performance, an

award of damages or an award of compensation.”

[45] I have no doubt that in terms of this provision the Labour Court would

have jurisdiction to entertain the plaintiff’s claim for payment of the

severance gratuity and assume, for purposes of the present

discussion, that it also has jurisdiction over the claim for payment of the

pension monies withheld by the defendant.[43] But does this mean that

the High Court’s jurisdiction is then axiomatically excluded?

[42] See section 63 to 73.[

[43] The plaintiff relies in this regard on section 34 of the BCEA, which inter alia prohibits deductions from employees’ remuneration, except on certain specified grounds and without affording the employee a hearing. Section 34A, which regulates contributions to benefit funds, contain no such prohibition on deductions. This suggests that the intention was to leave intact employees’ common law and other statutory remedies for the recovery of unlawful deductions.

[46] It seems to me that, following Chirwa, the answer depends on whether

the BCEA must be interpreted in such a way as to find that any matter

falling within the jurisdiction of the Labour Court automatically falls

outside the jurisdiction of the High Court. This depends in turn on

whether section 77 of the BCEA must be given the same interpretation

as the majority in Chirwa gave to section 157 of LRA.

[47] Can it be said that conferral on the Labour Court of power to

adjudicate matters concerning contracts of employment is sufficient to

bring such matters within its exclusive jurisdiction? While I am aware

that empowering provisions may have jurisdictional import, [44] I doubt

whether the interpretation in Chirwa of the relationship between

sections 157(1) and 157(2) of the LRA can simply be transposed to

section 77 of the LRA without first properly analysing the context and

purpose of the latter provision and isolating the differences between

sections 77 of the BCEA and 157 of the LRA.

[48] The first point to be noted is that section 77A(e), which gives the

Labour Court power to determine contractual matters, limits that power

to matters to be determined “in terms of section 77(3)”. On a literal

reading, this means that, to the extent that section 77A(e) may have

jurisdictional implications, the power it confers is “concurrent” with that

of the civil courts. Section 77A(e) therefore takes the matter no further.

[44] See the discussion of section 158 of the LRA in Brassey Commentary on the Labour Relations Act (Juta 1999) at A7 102 et seq. Also the remarks of Conradie JA in his minority judgment in Transnet Limited & others v Chirwa 2007 (2) SA 198, (2006) 27 ILJ 2294, [2007] 1 BLLR 10 (SCA) at para. 34. The Constitutional Court effectively adopted his approach on the jurisdictional issue: see the judgment of Skweyiya J at para. 36.

Another difference between the LRA and the BCEA is that the

provision conferring exclusive jurisdiction on the Labour Court in the

latter Act is expressly qualified by sub-section (4) of section 77, which

permits litigants in the civil courts to establish that “a basic condition of

employment constitutes a term of a contract of employment”. There

would seemingly be little point to that provision if a litigant who does so

in a civil court would be non-suited in consequence.

[49] Thirdly, the reasons given by the Constitutional Court for construing

the word “concurrent” in the manner it did in Chirwa do not seem to

apply to the interpretation of that word as it is used in the BCEA. I refer

in this regard particularly to the Court’s concern that, to give public

servants a choice between pursuing actions under the PAJA or the

LRA would place them in a “preferential position” vis-à-vis private

sector employees.[45] No such problem arises if disputes concerning

contracts of employment may be adjudicated by both the Labour

Courts and civil courts. Nor, I believe, does the Constitutional Court’s

desire to avoid conflicting jurisprudence apply in matters concerning

the interpretation or application of contracts of employment. Unlike

collective agreements,[46] the normal principles of interpreting any

contracts apply to the interpretation of contracts of employment. Those

principles are routinely applied by the civil courts.

[45] See judgment of Skweyiya J at para. 66. Although the problem of “forum shopping” might apply, this is not, in my view, a consideration that this Court can properly take into account interpreting section 77(3). [

[46] See North East Cape Forests v SA Agricultural & Plantation Workers Union & others (1997) 18 ILJ 971 (LAC).

[50] Fourthly, and perhaps most pertinently, if the legislature wished to give

the Labour Court exclusive jurisdiction in matters concerning contracts

of employment, it could simply have used the word “exclusive” before

“jurisdiction” in section 77(3) and omitted the phrase “with the civil

courts”. The Constitutional Court may have the authority to rely on

public policy issues and the need to avoid “forum shopping” to justify

giving the word “concurrent” an unusual meaning in section 157(2) of

the LRA. I doubt, however, whether this Court can properly rely on

such considerations to ignore the literal meaning of section 77(3) of the

BCEA. [47]

[51] Finally, I note that, albeit before Chirwa, the Labour Appeal Court, by

the judgments of which this Court is bound, itself dismissed a challenge

to the jurisdiction of the Labour Court to adjudicate a dispute involving

the interpretation of an employment contract with this observation:

“The dispute therefore concerns a contract of employment any

breach of which would vest the civil courts with jurisdiction to

adjudicate it and, as the statute provides, so does the Labour

Court concurrently have jurisdiction.”[48]

[

[47] See the remarks of Langa CJ in his minority judgment (at para. 174).[48] University of the North v Franks & others supra note 36 (my underlining). See also Langeveld v Vryburg Transitional Local Council (2001) 22 ILJ 1116) (LAC) at para. 48. The Labour Appeal Court still holds this view after Chirwa. See Astral Operations Ltd v Parry (Labour Appeal Court case no. CA8/05 dated 4 September 2008, unreported).

[52] I have considered the relevance, if any, of the finding in Chirwa that

the dismissal was an exercise of contractual power. However, the

import of that finding seems to have been that, being the exercise of a

right flowing from contract, the dismissal did not constitute an

administrative act, and for that reason was not reviewable under the

PAJA. Chirwa does not seem to yield the proposition that all matters

arising from the exercise by employers of their contractual powers

necessarily fall under labour legislation.

[53] In my view, the Constitutional Court’s interpretation of section 157(2)

of the LRA yields a precedent too tenuous to permit this Court

effectively to redraft section 77(3) of the BCEA by substituting the word

“exclusive” for the word “concurrent” in section 77(3) and by giving no

effect to the phrase “with the civil courts”. As Langa CJ pointed out in

Chirwa, a court cannot normally rely on policy considerations alone to

give a statutory provision a meaning removed from that suggested by

the ordinary meaning of the words in which it is expressed.[49] That can

only be done by legislative amendment.

Other binding authorities

[54] There is a further consideration which in my view militates against a

finding by this Court that the Labour Court has exclusive jurisdiction to

adjudicate all matters concerning contracts of employment. This is the

[49] See at para. 174 of his judgment, and also the remarks of Nugent JA in Makambi at paras. 37-39.

growing list of authorities to the contrary that have been handed down

by the Supreme Court of Appeal, starting with Fedlife Assurance Ltd v

Wolfaardt (2001) 22 ILJ 2407 (SCA). In that matter, the respondent had

claimed damages in the High Court resulting from the premature

termination of his fixed-term contract of service. The appellant claimed

that the High Court lacked jurisdiction because the matter could, and

should have been referred as an unfair dismissal dispute to the Labour

Court. The following passage is to be found in the majority judgment:[50]

“In my view Chapter VIII of the [LRA] is not exhaustive of the

rights and remedies that accrue to an employee upon the

termination of a contract of employment. Whether approached

from the perspective of the constitutional dispensation and the

common-law or merely from a construction of the 1995 Act itself

I do not think the respondent has been deprived of the common-

law right that he now seeks to enforce. A contract of

employment for a fixed term is enforceable in accordance with

its terms and an employer is liable for damages if it is breached

on ordinary principles of the common law.”

[55] Fedlife may arguably be distinguishable from the present matter on

two grounds. The first is that the cause of action in that matter arose

before the promulgation of the BCEA, and the issue was accordingly

whether the LRA ousted the High Court’s inherent jurisdiction to

entertain claims based on alleged breaches of employment contracts.

In my view, this does not render the ratio of Fedlife inapplicable in

casu. The second ground on which Fedlife may be distinguished is that [

[50] At para. 22.

it specifically concerned the premature termination of a fixed-term

contract of employment. However, the import of the judgment is that

employees have a choice between suing in the civil courts for damages

for breach of any contract of employment, whatever its terms, or

contesting the fairness of their employers’ acts or omissions in the

appropriate statutory forum. As I have already noted, before Fedlife

was decided, the Labour Appeal Court had already ruled that

employees claiming that their dismissals were unlawful, as opposed to

unfair, could seek relief in either the High Court or the Labour Court.[51]

[56] The Fedlife judgment has since been endorsed and extended by the

Supreme Court of Appeal in two recent (albeit pre-Chirwa) judgments,

Old Mutual Life Assurance Co SA Ltd v Gumbi 2007 (5) SA 552 (SCA)

and Boxer Superstores Mthatha & another v Mbenya 2007 (5) SCA

450 (SCA), both appeals from decisions of the High Court and both

decided after promulgation of the BCEA. The former and earlier case

did not involve a challenge to the High Court’s jurisdiction.[52] But,

relying on the principles developed by labour tribunals, the court ruled

that all common law contracts of employment now contain an implied

provision entitling the employee to a fair pre-dismissal procedure.

Adverting to a number of earlier judgments[53] as well as to Gumbi, the

court observed in Boxer Superstores:[54]

[51] Langeveld v Vryburg Transitional Local Council & others supra n. 48 at para. 47. [52] The point having been abandoned on appeal.[

[53] See para. 59 below.[

[54] At para. 6, footnote omitted, emphasis supplied.

“In these cases, the exclusive jurisdiction of the Labour Court

does not preclude the employee’s recourse to the High Court.

This case pushes the boundary a little further. The novel

question it raises is whether an employee may sue in the High

Court for relief on the basis that the disciplinary proceedings and

the dismissal were ‘unlawful’, without alleging any loss apart

from salary. In my view, the answer can only be: ‘Yes’. This

Court has recently held that the common law contract of

employment has been developed in accordance with the

Constitution to include the right to a pre-dismissal hearing (Old

Mutual Life Assurance Co SA Ltd v Gumbi). This means that

every employee now has a common law contractual claim – not

merely a statutory unfair labour practice right – to a pre-

dismissal hearing. Contractual claims are cognisable in the High

Court. The fact that they may also be cognisable in the Labour

Court, through that court’s unfair labour practice jurisdiction,

does not detract from the High Court’s jurisdiction.”

[57] If Mr Quinn’s argument is to be accepted, I would have to find that

Boxer Superstores has been overruled by Chirwa. While there may be

room for arguing that it may have been impliedly overruled,[55] a close

scrutiny of the majority judgments in Chirwa indicates the contrary.

[58] Skweyiya J from quoted Fedlife with apparent approval in this passage

of his judgment (at para. 60):

“It is apparent from the provisions of section 157(1) that it does

not confer ‘exclusive jurisdiction upon the Labour Court

generally in relation to matters concerning the relationship

between employer and employee’. It seems implicit from the

[55] See Employment Law (2008) 24 (2) 14-20.

provisions of this section that the jurisdiction of the High Court is

not ousted simply because a dispute is one that falls within the

overall sphere of employment relations.”

[59] In his judgment, Ngcobo J quoted in extenso from Boxer

Superstores,[56] in which Cameron JA set out certain “well established”

propositions regarding how the exclusive jurisdiction of the Labour

Court had been, in his words, “carefully circumscribed”.[57] These were

enumerated as follows in the SCA judgment:[58]

“(i) [S]ection 157 does not purport to confer exclusive

jurisdiction on the Labour Court generally in relation to

matters concerning the relationship between the

employer and employee (Fedlife Assurance Ltd v

Wolfaardt), and since the LRA affords the Labour Court

no general jurisdiction in employment matters, the

jurisdiction of the High Court is not ousted by section

157(1) simply because a dispute is one that falls within

the overall sphere of employment relations (Fredericks &

others v MEC for Education and Training, Eastern Cape

& others);

(ii) the LRA’s remedies against conduct that may constitute

an unfair labour practice are not exhaustive of the

remedies that might be available to employees in the

course of the employment relationship – particular

conduct may not only constitute an unfair labour practice

(against which the LRA gives a specific remedy), but may

give rise to other rights of action: provided the employee’s

[

[56] At para. 90 of his judgment.[57] At para. 5 of that judgment.[

[58] Ibid, footnotes omitted, and references supplied.

claim as formulated does not purport to be one that falls

within the exclusive jurisdiction of the Labour Court, the

High Court has jurisdiction even if the claim could also

have been formulated as an unfair labour practice

(United National Public Servants Association of SA v

Digomo NO & others);[59]

(iii) an employee may therefore sue in the High Court for a

dismissal that constitutes a breach of contract giving rise

to a claim for damages (as in Fedlife);

(iv) similarly, an employee may sue in the High Court for

damages for a dismissal in breach of the employer’s own

disciplinary code which forms part of the contract of

employment between the parties (Denel (Edms) Bpk v

Vorster).”[60]

[60] After considering these propositions and juxtaposing the contrary

views expressed in Jones & another v Telkom SA Ltd & others [2006]

5 BLLR 513 (T) (at 515E-H) Ngcobo J commented:[61]

“However, in Boxer Superstores, the Supreme Court of Appeal

expressed a different view. There it was contended that what

matters is not the form of the employee’s complaint but the

substance of the complaint. The Supreme Court of Appeal held

that the focus on the substance of the dispute leaves out of

account the fact that jurisdictional limitations often involve

questions of form. It noted that the employee in that case

‘formulated her claim carefully to exclude any recourse to

fairness, relying solely on contractual unlawfulness’. This

[

[59] United National Public Servants Association of SA v Digomo NO & others [2005] 12 BLLR 1169 ((2005) 26 ILJ 1957) (SCA).[60] 25 ILJ 659 (SCA).

[61] At para. 95, footnotes omitted and underlining supplied.

illustrates the difficulty of relying on form rather than substance

to which I alluded earlier. This would enable an astute litigant

simply to by-pass the whole conciliation and dispute resolution

machinery created by the LRA and rob the Labour Courts of

their need to exist. But is this what the Legislature intended

when it enacted the provisions of section 157(2)?”

[61] This passage may reflect scant enthusiasm for the approach adopted

in Boxer Superstores. But although Ngcobo J went on to answer in the

negative the rhetorical question with which it concludes, at no stage in

his judgment did the learned Judge expressly state that all the

propositions enunciated in Boxer Superstores were wrong or that they

have been overtaken. The judgment of Ngcobo J deals solely with

whether the dismissal of a public servant constitutes administrative

action and is thus open to review (to which the answer is no), and

whether dismissed public servants have two causes of action, one

under the PAJA and the other under the LRA (again no) – both issues

which, as indicated above, have no direct relevance to the present

matter. It may be inferred from the judgment of Ngcobo J that

proposition (ii) has been overruled to the extent that an employee may

no longer formulate a claim under the PAJA where the cause of action

is covered by the LRA. It can also be inferred that the learned Judge is

of the view that the same applies to claims for damages for breach of

contract by dismissed employees. However, the passage in which that

view is expressed is obiter. In my view, that dictum cannot serve as a

basis upon which this Court can properly disregard three judgments of

the Supreme Court of Appeal which each confirms that the High Court

retains jurisdiction to entertain disputes in which dismissed employees

choose to sue for breach of contract.[62] And, it seems to me, those

authorities are all the more apposite, and the authority of Chirwa more

remote, in a case such as this, when the employee does not challenge

the lawfulness of the dismissal, but merely claims an amount he avers

is owing in terms of the contract, irrespective of the lawfulness or

fairness of the dismissal. I am accordingly unable to infer from Chirwa

that that Fedlife, Boxer Superstores and Gumbi have been overruled. If

those judgments are indeed wrong, only the Constitutional Court can

so decide. This Court is bound by those judgments.

[62] I merely add that a full bench of this division took the same view in

Nonzamo Cleaning Services,[63] in which it was held that the High Court

lacked jurisdiction to entertain a claim for reinstatement by expelled

members of a co-operative. The ratio of that judgment was that the

matter fell within the exclusive jurisdiction of the Labour Court because

the members were employees of the co-operative and because their

complaint related to the fairness of their dismissal. Having reached the

conclusion that, on the authority of Chirwa, the High Court lacked

jurisdiction, the court applied the law to the respondent’s claim and

ruled inter alia:[64]

[62] As an aside, the concern expressed by Ngcobo J that the approach in Boxer Superstores creates the danger of litigants bypassing conciliation does not apply to matters brought under the BCEA. That Act does not provide for conciliation of contractual disputes.[

[63] Supra n. 2.

[64] At para. 42, emphasis supplied.

“The respondents base their cause of action on the alleged

unfair procedure adopted by the appellant in their expulsion from

the co-operative, thereby terminating their employment. This

brings their dispute within the ambit of section 191(1) read with

section 185 of the LRA, and the authority of Chirwa places it

beyond the jurisdiction of the High Court. However, the grounds

of review (see paragraph 5.1.4 thereof), as amplified by the

averments of the first respondent, suggest that the respondents

rely also on wrongful dismissal in breach of their contract of

employment found in the provisions of the Co-operatives Act

and the appellant’s statute. On the authority of Fedlife , the High

Court would have jurisdiction in such a dispute. This raises the

unhappy spectre that the respondents’ claim falls partly within

the jurisdiction of the Labour Court and partly within that of the

High Court.”

[63] The Court dispelled that spectre by finding that in substance the

employees’ cause of action fell within section 191(1) of the LRA.

Disregarding the counterclaim, no such unhappy spectre arises in this

case. The plaintiff’s main claim rests squarely on his contract, and his

second claim arises from the alleged unlawfulness of the deduction of

a sum of money. I have accepted, without deciding, that the Labour

Court probably has jurisdiction over the second claim,[65] but have held

that this Court has jurisdiction over both. The cause of action is not

therefore split between two courts, each with exclusive jurisdiction over

parts thereof. As it happens, the defendant’s counterclaim, which

standing alone falls outside the jurisdiction of the Labour Court, serves

[65] See paragraph 45 n. 43 above.

to confirm that this Court is the appropriate forum to determine the

present dispute.

Statutory arbitration

[64] There is a further aspect of this matter upon which Mr Quinn relies. He

contends that if this Court were to determine the merits of the claim in

convention it would be drawn into judging whether the plaintiff was

indeed guilty of misconduct, a task which he contends is reserved for a

statutory arbitrator. There are several answers to this submission. First,

the plaintiff could avoid that issue by not placing it in dispute, and could

still pursue his claim that the contract has been breached.[66] But even

if, as the papers indicate, the plaintiff is not prepared to make that

concession and it is indeed necessary to determine whether the

plaintiff was guilty of misconduct, I cannot accept that this Court would

be straying into the exclusive domain of statutory arbitration by

determining facts collateral to the breach of contract claim. This would

be akin to arguing that this Court cannot adjudicate a defamation action

instituted by an employee against his employer for levelling allegedly

false and mala fide accusations of misconduct against him if the

employer were to raise the defence of truth and public benefit. Such an

argument could self-evidently never prevail. This Court has already

accepted that it must inquire into the fairness of a dismissal in the

[66] See Fedlife at para. 21: “In the present case a clearly identifiable and recognisable common-law claim for damages has been pleaded. The disclosure of the employer’s professed reason for repudiating the contract is mere surplusage and did not signal a resort to a claim under Chapter VIII [of the LRA].”

context of a contractual dispute if the contract requires the employer to

follow the prescripts of the LRA before dismissing an employee (see

Carter v Value Truck Rental (Pty) Ltd (2005) 26 ILJ 711, [2005] 1 BLLR

88 (SE)). I am not persuaded that that judgment has been overruled by

Chirwa. In any event, for so long as it remains a binding authority Old

Mutual Life Assurance Co SA Ltd v Gumbi[67] confirms that all common

law contracts of employment contain an implied term that employees

are entitled to a fair hearing before being dismissed. A necessary

corollary is that civil courts entertaining contractual claims by

employees may determine the procedural fairness of dismissals and,

by further implication, whether there was a fair reason for a

dismissal.[68] Still less can I accept that the plaintiff should be non-suited

because the defendant relies on allegations of misconduct in the

counterclaim. Finally, even if the dispute is of a kind reserved for

arbitration under the LRA, the statute provides that the jurisdiction of

the Labour Court is excluded, not that of the High Court.[69]

[65] Furthermore, and in any event, I reiterate that the present claim does

not concern the fairness of the plaintiff’s dismissal. It concerns, rather,

his legal entitlement to post-dismissal benefits and to an amount of

money he claims should have been released to him after his dismissal.

The counterclaim is simply for damages.

[67] Supra para. 56.

[68] Otherwise, there would be little point to establishing whether there was a fair procedure.[

[69] See section 157(5), which reads: “Except as provided in section 158 (2), the Labour Court does not have jurisdiction to adjudicate an unresolved dispute if this Act requires the dispute to be resolved through arbitration.” The meaning and import of this provision was not considered in Chirwa.

Summary of the state of the law after Chirwa

[66] I conclude, then, that the law as it now stands on the jurisdiction of the

High Court in labour and employment matters can be summarised as

follows:

(iv) All matters in which the cause of action is covered by the LRA

and for which the LRA provides a remedy fall within the

exclusive jurisdiction of the Labour Court and hence outside the

jurisdiction of this Court.

(v) Employees of statutory institutions may not bring actions in this

Court under the PAJA or by way of application for common law

review in respect of matters covered by the LRA.

(vi) Employees may not bypass the LRA dispute resolution

procedure and approach the High Court with claims based on

their constitutional right to fair labour practices.

(vii) This Court and other civil courts retain their common law

jurisdiction to entertain claims for damages arising from alleged

breaches of contracts of employment and the acts or omission

of either party after the termination of employment, and the

Labour Court has concurrent jurisdiction to determine such

matters.

APPLICATION OF THE LAW TO THE CLAIM AND COUNTERCLAIM

[67] The plaintiff’s main claim arises from an alleged breach of contract by

the defendant. He has approached this Court by way of action. There is

no suggestion in the pleadings that the plaintiff disputes the fairness or

unlawfulness of his dismissal or that either claim is in anyway

connected thereto. This is accordingly not an “LRA matter” over which

the Labour Court has exclusive jurisdiction in terms of section 157(1) of

that Act, but is a matter which falls under the BCEA and/or the common

law. That Act confirms the jurisdiction of the civil courts, and this Court,

to entertain the claim.

[68] The only reliance placed by the plaintiff on labour legislation is a claim

that the deductions from his policies constitute a contravention of

section 34 of the BCEA. Although the amounts paid into the policies

over time were deducted from the plaintiff’s salary, it is debatable

whether the accumulated capital can be regarded as remuneration, as

contemplated by that provision.[70] If it does not, this Court is

empowered by virtue of its inherent jurisdiction to entertain that claim; if

it does, this Court has jurisdiction to adjudicate that dispute by virtue of

section 77(3) of the BCEA.

[70] See note 43 above.

[69] The plaintiff’s entitlement to approach this Court is not affected by the

counterclaim. But even if it were affected, the counterclaim certainly

does not fall within the jurisdiction, let alone the exclusive jurisdiction,

of the Labour Court. It follows that the plaintiff’s causes of action and

the counterclaim fall entirely within the jurisdiction of this Court.

CONCLUSION

[70] For the above reasons I find, and rule, that this Court has jurisdiction

to entertain both the claim and the counterclaim. It follows that the

defendant’s point in limine must fail.

COSTS

[71] Counsel agreed that the costs of the in limine application should follow

the result.

ORDER

[72] The following order is accordingly issued:

3. The defendant’s point in limine is dismissed.

4. This Court is declared to have jurisdiction to determine both the

claim in convention and the claim in reconvention.

5. The defendant is to pay the costs of the in limine application and

any wasted costs occasioned thereby.

______________________________J G GROGANACTING JUDGE OF THE HIGH COURT

Date argued: 19 November 2008

Date delivered: 03 December 2008

APPEARANCES

For plaintiff: Adv D de la HarpeInstructed by Cooper Conroy Bell & Richards (Mr Bell)

For defendant: Adv R Quinn SCInstructed by Smith Tabata (Mr Conroy)