About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Labour Appeal Court
SAFLII
>>
Databases
>>
South Africa: Labour Appeal Court
>>
2006
>>
[2006] ZALAC 9
|
|
Omega Holding Ltd and Another v LI; B C S (JA43/03) [2006] ZALAC 9 (9 February 2006)
17
IN THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
Case No: JA43/03
In the matter between
OMEGA HOLDINGS LIMITED 1
ST
APPELLANT
SHANGAI INDUSTRIAL INVESTMENT
HOLDINGS CO LTD 2
ND
APPELLANT
and
LI; B C S RESPONDENT
___________________________________________________________
JUDGMENT
ZONDO JP
[1] The respondent was initially employed by the second
appellant but by agreement between the second appellant and the
respondent,
the latter was seconded to the first appellant. It seems
that he later concluded a contract of employment with the first
appellant.
This appears to have happened in 1999. In 2001 the
respondent was dismissed. It is not clear whether the reason for his
dismissal
was poor performance, misconduct or operational
requirements. However, for present purposes the reason for his
dismissal is irrelevant.
[2] A dispute arose between the respondent and the
appellants about the fairness of the respondent’s dismissal.
The respondent
referred the dispute to the Commission for
Conciliation, Mediation and Arbitration (“
the CCMA
”)
for conciliation. Attempts to resolve the dispute through
conciliation failed. Thereafter the respondent referred the dispute
to the Labour Court for adjudication. In his statement of claim the
respondent did not confine himself to the dismissal dispute
but also
included four claims sounding in money. I deal with each one of them
in turn here below.
ClAIM 1
[3] The respondent gave the particulars of this claim in
paragraphs 16.1 – 16.4 of his statement of claim. He alleged
that
the first appellant was obliged in terms of the contract of
employment between them embodied in annexures “A” and “B”
to the statement of claim to pay him in South African Rands on a
monthly basis “
an amount equivalent to 11K$ portion of the
package.
” He went on to allege that the first appellant had
by mistake used the respondent’s net salary instead of the
gross
salary when applying the US exchange rate and “
deducted
tax from the net amount in Rands”
instead of the gross
amount
.
He alleged that the effect thereof was that the
respondent had “
double tax deducted from his salary
”
with the result that “
the Rand portion of the [respondent]’s
salary was lower than it should have been (“the short
payment
”).
ClAIM 2
[4] The only allegation made with regard to the second
claim in the statement of claim is that
“(d)uring the
[respondent’s] employment with the 1
st
[appellant], the 1
st
[appellant] unlawfully
deducted an amount of R 19 571,08 from the [respondent’s]
salary payments
.”
CLAIM 3
[5] The third claim was for the payment of an amount of
R 50 000,00 being in respect of educational assistance allowance
which was
to be spent on the respondent’s son’s
education. The respondent alleged that the first appellant had been
contractually
obliged to pay to him such allowance but had failed to
do so.
CLAIM 4
[6] The fourth claim was against the second appellant.
The respondent alleged that the second appellant was contractually
“
obliged to pay to the [respondent] air passage for annual
leave
.” He alleged that such benefit had been “
excluded
from the notice pay that the 1
st
[appellant]
paid to the [respondent].”
He alleged that in the premises
the second appellant was liable to pay R11 000,00 in respect of such
item.
[7] In their response to the statement of claim, the
appellants objected to the jurisdiction of the Labour Court to
entertain the
claims sounding in money on the basis that such claims
were claims in terms of the Basic Conditions of Employment Act, NO 75
of
1997 (“
the Act
”) and that, since the
respondent was pursuing such claims in the same proceedings in which
he was pursuing an unfair dismissal
claim, he had been obliged to
refer the claims sounding in money to the CCMA for conciliation but,
as he had failed to do so, the
Labour Court had no jurisdiction to
entertain them.
[8] The appellants relied upon sec 74 of the Act for
their objection to the jurisdiction of the Labour Court. Section 74
reads as
follows:-
“74. Consolidation of proceedings.
A dispute concerning a contravention of this Act may
be instituted jointly with proceedings instituted by an employee
under Part
C of this Chapter.
If an employee institutes proceedings for unfair
dismissal, the Labour Court or the arbitrator hearing the matter may
also determine
any claim for an amount that is owing to that
employee in terms of this Act if-
the claim is referred in compliance with
section
191
of the
Labour Relations Act, 1995
;
the amount has not been owing to the employee for
longer than one year; and
no compliance order has been made and no other
legal proceedings have been instituted to recover the amount.
A dispute concerning any amount that is owing to an
employee as a result of a contravention of this Act may be initiated
jointly
with a dispute instituted by that employee over the
entitlement to severance pay in terms of section 41(6).”
[9]
Section 191
of the
Labour Relations Act provides
for
the referral of a dispute about the fairness of a dismissal to the
CCMA or a bargaining council, where there is a bargaining
council
with jurisdiction in respect of the dispute, for conciliation. It
also provides that, if thereafter, the dispute remains
unresolved, it
must be referred to either arbitration by the CCMA or by a bargaining
council having jurisdiction or to the Labour
Court for adjudication.
Accordingly, sec 74(2)(a) of the Act must be read to mean that a
claim such as is contemplated in sec 74(2)
must be referred to the
CCMA or a bargaining council, if there is one which has jurisdiction,
for conciliation.
[10] It is common cause that the claims sounding in
money which the respondent included in his statement of claim were
never referred
to conciliation. It was on the strength of this fact
that the appellants contended in effect that there had been no
compliance
with the condition prescribed in sec 74(2)(a) of the Act
and that, for that reason, the Labour Court lacked jurisdiction to
entertain
such claims. The appellants did not rely upon sec 74(2)(b)
and (c). Accordingly, those provisions will not be dealt with in this
judgment.
[11] It will be noted that in terms of sec 74(2) of the
Act the claim that the Labour Court is empowered to hear if the
conditions
set out in paragraphs (a) – (c) of subsection (2)
are met is a “
claim for an amount that is owing to that
employee in terms of this Act …”
It stands to reason
that, if a claim is for an amount that is owing to the employee but
is not owing to that employee in terms of
the Act, then the
conditions contained in paragraphs (a) to (c) of sec 74(2) will not
apply.
Proceedings in the Labour Court
[12] In the Labour Court the respondent’s legal
representative conceded that the respondent’s claims were
claims “
in terms of
” the Act but sought to argue
another point on which it is not necessary to elaborate because it
was not pursued on appeal.
Nevertheless, the Court a quo decided the
matter against the appellants precisely on the point in respect of
which the respondent
had made the concession favourable to the
appellants. It held that the respondent’s claims sounding in
money were not claims
“
in terms of
” the Act but
were claims in terms of the contract of employment. It, accordingly,
dismissed the appellants’ objection
to its jurisdiction. As the
fact that the Court a quo decided the matter on a point which had not
been argued was not one of the
grounds of appeal, I refrain from
expressing a view on whether the Court a quo was right to do so. The
Court a quo subsequently
granted the appellants leave to appeal to
this Court against its judgment. Hence, this appeal.
The appeal
[13] On appeal Counsel for the appellants persisted in
his contention that the respondent’s claims sounding in money
were
claims “
in terms of”
the Act as contemplated
by sec 74(2)(a). He submitted that, therefore, the respondent was
obliged to have referred the claims sounding
in money to conciliation
in terms of sec 74(2)(a) of the Act read with
sec 191
of the
Labour
Relations Act. Counsel
submitted that the respondent’s failure
to have done so deprived the Labour Court of the jurisdiction to hear
such claims.
Counsel for the respondent contended that the claims
were not claims “
in terms of
” the Act but were
contractual claims. It is necessary to consider each of the four
claims to determine whether each one of
them can in any way be said
to relate to an amount that is owing “
in terms of
”
the Act as provided for in sec 74(2). Put differently, the question
to ask is: Was each amount claimed by the respondent
“
an
amount owing to [the respondent] in terms of”
the Act? If
the amount is one owing in terms of the Act, then sec 74(2) applies.
If the amount is not or cannot be said to be an
amount owing to the
respondent in terms of the Act, then sec 74(2) does not apply.
[14] It seems to me that the provisions of sections 2, 4
and 5 of the Act are significant. Section 2 of the Act reads thus:-
“
2.
Purpose of this Act – The purpose of
this Act is to advance economic development and social justice by
fulfilling the primary
objects of this Act which are –
to give effect to and regulate the right to fair
labour practices conferred by section 23(1) of the Constitution –
by establishing and enforcing basic conditions
of employment; and
by regulating the variation of basic conditions
of employment;
to give effect to obligations incurred by the
Republic as a member state of the International Labour
Organisation
.” (Underlining supplied).
[15] A “
basic condition of employment
”
is defined in sec 1 of the Act as meaning “
a provision of
this Act or sectoral determination that stipulates a minimum term or
condition of employment.
”
Section 4 of the Act reads thus:
“4. Inclusion of provisions in contracts of
employment-
A basic condition of employment constitutes a term of
any contract of employment except to the extent that –
(a) any other law provides a term that is more
favourable to the employee;
(b) the basic condition of employment has been
replaced, varied, or excluded in accordance with the provisions of
this Act; or
(c) a term of the contract of employment is more
favourable to the employee than the basic condition of employment.”
Section 5 read thus:
“
5. This Act not affected by agreements. - This
Act or anything done under it takes precedence over any agreement,
whether entered
into before or after the commencement of this Act.”
[16] It is not unusual for a contract of employment to
contain no express provision dealing with a particular issue of
employment.
In such a case, if the Act does contain a provision on
such an issue, the provision in the Act becomes applicable and can be
enforced
by the employee. It is also possible that a contract of
employment may have a clause dealing with a certain issue and the Act
would
contain no provision dealing with such issue. In such a case
such provision in the contract would not be a basic condition of
employment
because the Act would not have a provision dealing with
it. In such a case there can be no difficulty whatsoever with a
proposition
that any claim for the enforcement of the provision of
the contract of employment concerned is a claim in terms of the
contract
and not in terms of the Act. Where both the contract and the
Act make provision for an issue in the same way and to the same
extent,
the question whether a claim in relation to such issue will
be a claim in terms of the contract or in terms of the Act or both
may present a difficulty.
Are the respondent’s claims in terms of the
Act?
[17] The question whether the respondent’s claims
are claims for amounts “
owing --- in terms of
” the
Act is not an easy one. Under the Basic Conditions of Employment Act
NO 3 of 1983 (“
the old Act
”) a similar question
arose in a number of cases when employees sued civilly for the
recovery of monies due to them by their
employers. In such cases the
problem with suing civilly for the recovery of such monies was that
sec 30(3) of the old Act required
the production of a
nolle
proequi
certificate before a civil court could hear such claims.
The relevant provision of the old Act referred to claims “
by
virtue of
” the provisions of that Act. The employee would
sue the employer for the recovery of such monies and the employer
would except
to the claim on the basis that such a claim was one “
by
virtue of
” the old Act and could, therefore, not be
instituted civilly unless a
nolle proequi
certificate had been
issued by the relevant Attorney-General.
[18] It seems to me that there are two answers to the
appellants’ contention. The first is that the respondent’s
claims
are not claims “
in terms”
of the Act. This
is because the Act deals with minimum terms and conditions of
employment and the respondent’s claims do
not relate to minimum
terms and conditions of employment. They relate either to the types
of claims that are not dealt with in
the Act or if they are types
which are dealt with in the Act, they are much better terms and
conditions than those provided for
in the Act and, therefore, fall
outside the Act. In this regard it must be noted that in terms of sec
4(c) of the Act, which has
already been quoted above, a basic
condition of employment does not constitute “
a term of any
contract of employment to the extent that a term of the contract of
employment is more favourable to the employee
than the basic
condition of employment.”
Furthermore, in this regard it
needs to be borne in mind that the primary objects of the Act include
“to give effect to and regulate the right to fair labour
practices conferred by section 23 (1) of the Constitution-
by establishing and enforcing basic conditions of
employment; and
by regulating the variation of basic conditions of
employment”.
[19] In other words the Act is about the establishment
and enforcement of basic conditions of employment and the regulation
of the
variation of basic conditions of employment in order to give
effect to and regulate the right to fair labour practices conferred
by sec 23(1) of the Constitution. As already stated earlier, a basic
condition of employment is defined in sec 1 of the Act as
“
a
provision of this Act or a sectoral determination that stipulates a
minimum term or condition of employment”.
The respondent’s
claims sounding in money do not relate to any
“provision of
the Act”
or a sectoral determination
“that
stipulates a minimum term or condition of employment”.
The
claims are not about the enforcement of basic terms and conditions of
employment provided for in the Act. Accordingly, the
claims are not
claims of amounts owing to the respondent “
in terms of”
the Act. All of the respondent’s claims are based on alleged
breaches of the contract of employment between the parties and
not on
the contravention of any provision of the Act. On this ground alone
the appeal stands to be dismissed. The second answer
to the
appellants’ contention is dealt with below.
[20] Another ground upon which the appeal can also be
dismissed is one that is based on sec 77(3) of the Act. Section 77
(3) of
the Act provides:
“
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.”
[
21
]
The effect of sec 77 (3) is to confer
upon the Labour Court the same civil jurisdiction that the High Court
or any other civil court
has in respect of “
any matter
concerning contract of employment”.
Section 77 (3) goes on
to make it clear that that jurisdiction exists
“irrespective
of whether any basic condition of employment constitutes a term of
that contract”.
It seems to me that the purpose of the
provision beginning with the word “
irrespective”
was to leave no room for argument that such jurisdiction did not
cover a contract of employment that has a condition or term that
constitutes a basic condition of employment.
[22] In order to determine whether in a particular
matter the Labour Court has the jurisdiction which is conferred upon
it by section
77 (3), two questions need to be asked. The first is:
Is the matter at hand a
“matter concerning a contract of
employment”
? If the answer is no, then the Labour Court has
no jurisdiction conferred by sec 77(3) of the Act to deal with such
matter and
that is the end of the matter. If, however, the answer is
yes, the inquiry proceeds to the next question. The next question is:
does the High Court, or, any civil court for that matter, have
jurisdiction to hear and determine this matter? If the answer is
no,
the Labour Court has no jurisdiction based on sec 77(3) of the Act to
determine the matter. If no civil court would have had
jurisdiction
to determine the matter, the Labour Court would also not have
jurisdiction to deal with the matter. If the answer
is yes, the
Labour Court also has jurisdiction to deal with the matter. And its
jurisdiction in regard to such matter is exactly
the same as that
which the High Court would have to deal with such matter. In other
words no issue of jurisdiction which could
not be raised before the
High Court can be raised before the Labour Court.
[23] The purpose of section 77 (3) was to enable the
Labour Court to hear and determine any matter concerning a contract
of employment
which the High Court or any civil court has
jurisdiction to hear and determine. It sought to avoid the anomaly
that would have
arisen if there were matters concerning contracts of
employment which the High Court and the Magistrates’ courts
could hear
and determine which the Labour Court could not hear and
determine.
[24] Where the Labour Court is faced with a matter
concerning a contract of employment which the civil courts have
jurisdiction
to hear and determine, sec 74 does not preclude it from
hearing and determining it in the same way that a civil court such as
the
High Court would deal with it if it was before such a court.
Section 74 could not have been intended to encourage litigants to go
to the civil courts rather than the Labour Court in regard to matters
that concern contracts of employment. To construe sec 74
to mean
that, if a litigant brings to the Labour Court a matter concerning a
contract of employment which he could also have taken
to the High
Court, he will be faced with hurdles that he would not face if he had
taken the matter to the High Court would be to
say that the effect of
the Act is to encourage litigants to take such matters to the High
Court and Magistrate’s court rather
than to the Labour Court.
It would be difficult to find any justification in the provisions of
the Act for such a drastic conclusion,
particularly because the
Labour Court is a specialist superior court whose Judges have
experience and expertise in labour and employment
matters. In my
view the purpose of sec 77 (3) was to facilitate the hearing of such
matters by the Labour Court even though they
could also be heard by
the High Court and other civil courts. In my judgement that the
Labour Court has concurrent jurisdiction
with the High Court in
respect of such matters means that the jurisdiction that the Labour
Court exercises in such matters is exactly
the same as the
jurisdiction that the High Court has in respect of such matters.
Accordingly, one should be extremely slow to adopt
a construction of
the Act that will or may mean that there are more jurisdictional
requirements that a litigant must satisfy if
he brings such a matter
to the Labour Court than he has to meet if he brings the same matter
to the High Court because such a construction
of the Act will make
nonsense of the whole idea that the two Courts have concurrent
jurisdiction in such matters. I can find no
justification in the Act
to adopt such a construction of the Act. Such a construction of sec
74(2) would be in conflict with or
inconsistent with sec 77(3).
[25] In my view the provision of sec 74(2) of the Act
must be read to refer to claims in respect of which the civil courts
would
not have jurisdiction. If it is construed in that manner, it is
reconcilable with section 77(3). In such a case the position would
be
that, if a money claim that is brought before the Labour Court
together with an unfair dismissal dispute is a claim in respect
of
which the civil courts have no jurisdiction and it concerns a
contract of employment but the Labour Court has jurisdiction in
terms
of the Act, sec 74 (2) would apply. However, if the claim is a matter
concerning a contract of employment and the civil courts
have
jurisdiction to determine it, sec 74 (2) does not apply and the
Labour Court has jurisdiction to determine it. Claims sounding
in
money in respect of which the civil courts would not have
jurisdiction would include claims covered by the exclusive
jurisdiction
conferred on the Labour Court by sec 77 (1) of the Act.
Section 77 (1) provides thus:
“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”.
[26] Some of the money claims in respect of which the
Labour Court would have exclusive jurisdiction and in respect of
which the
civil courts would, therefore, have no jurisdiction would
be claims for payment of an annual leave pay provided for in sec 21,
leave pay provided for in sec 23 as well as payments for pay provided
for in sec 18 (2) and (3) of the Act where the contract of
employment
does not contain any provision for annual leave, sick pay and holiday
pay. The High Court would have no jurisdiction
in respect of
such claims because there would be no contractual basis for them and
they would be based on the Act and the Act confers
exclusive
jurisdiction on such matters on the Labour Court.
[27] The claims in issue in this matter are all claims
in respect of which the High Court would have jurisdiction and they
are all
matters concerning a contract of employment as contemplated
in sec 77 (3) of the Act. Accordingly, sec 74 (2) does not apply to
them and the Labour Court has concurrent jurisdiction with the High
Court and any other civil court, for that matter, which is
conferred
upon it by sec 77 (3) to deal with such claims. Accordingly, on this
ground, too, the appeal stands to be dismissed.
With regard to costs
I can see no reason why costs should not follow the result in a
matter such as this one.
[28] In the premises I make the following order:
1. The appeal is dismissed with costs, such costs to be
paid by the appellants jointly and severally, the one paying, the
other
to be absolved.
ZONDO JP
I agree.
DAVIS AJA
I agree.
JAPPIE AJA
Appearances:
For the appellant: Adv. L. Halgryn
Instructed by: Joubert Attorneys
For the respondent: Adv G. Hardy
Instructed by: Allardyce & Partners Attorneys
Date of judgment: 9 February 2006