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[2019] ZALAC 70
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Archer v Public School-Pinelands High School and Others (CA12/18) [2019] ZALAC 70; (2020) 41 ILJ 610 (LAC); [2020] 3 BLLR 235 (LAC) (25 November 2019)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, CAPE TOWN
Reportable
Case
no: CA 12/18
In the matter between:
KERRY
EDWARD ARCHER
Appellant
and
THE
PUBLIC SCHOOL – PINELANDS HIGH SCHOOL
First Respondent
THE SCHOOL GOVERNING
BODY
OF
PINELAND HIGH SCHOOL
Second Respondent
WESTERN
CAPE EDUCATION DEPARTMENT
Third Respondent
Heard:
27 August 2019
Delivered:
25 November 2019
Summary: Whether
employee entitled to refer a breach of contract dispute after
unsuccessfully challenging his unfair dismissal claim
–
employer raising
res judicata
- court holding that employee
having both an unfair dismissal claim and a contractual claim arising
from the termination of his
employment contract. This entitled him to
pursue an unfair dismissal claim in the CCMA and an independent
contractual claim in
either the High Court or the Labour Court which
have concurrent jurisdiction to determine a contractual claim -
appeal upheld and
judgment of the Labour Court set aside-matter
remitted to the Labour Court to determine the merits.
Coram: Davis JA,
Murphy and Kathree-Setiloane AJJA
JUDGMENT
KATHREE-SETILOANE
AJA
[1]
This is an appeal against the judgment of the Labour Court
(Rabkin-Naicker J) holding
that the Labour Court lacked jurisdiction
to adjudicate the appellants’ claim.
In the CCMA
[2]
The appellant, Mr Kerry Archer (“the appellant”) referred
an unfair dismissal
dispute to the Commission for Conciliation,
Mediation and Arbitration (“the CCMA”) in which he
claimed that he was
dismissed by Pinelands High School (“first
respondent”), that his dismissal was procedurally and
substantively unfair
and that he should be reinstated alternatively
compensated.
[3]
At the arbitration hearing, the first respondent contended
in
limine
that the appellant had failed to join the second
respondent, the School Governing Body of Pinelands High School (“the
second
respondent”), in the arbitration proceedings. Having
heard argument, the arbitrator directed the second respondent to be
joined as a respondent in the arbitration proceedings.
[4]
At the conclusion of the hearing the arbitrator found that the
appellant had been
dismissed and that his dismissal was both
procedurally and substantively fair.
In the Labour Court
[5]
The appellant did not institute review proceedings against the
arbitrator’s
award. Instead, on 17 July 2017, he instituted
civil proceedings in the Labour Court against the first and second
respondents.
In these proceedings, he claimed that the first
respondent was his employer and he was unlawfully removed from his
place of employment
by the second respondent. He alleged in his
statement of claim that:
(a)
his removal from his place of employment by the second respondent was
unlawful because it
was not authorised by the first respondent;
(b)
although his dismissal came to the attention of his employer (the
first respondent) some-time
after his removal from his place of
employment, his employer took no action and implemented no steps
whatsoever to mitigate the
damage suffered by him as a result of the
unlawful conduct of the second respondent.
[6]
He claimed that:
(a)
his removal by the second respondent from his place of employment was
unlawful as the second
respondent was not his employer, and
(b)
the first respondent’s failure to reinstate him and/or to
remedy the unlawful actions
of the second respondent constitutes an
unlawful breach of the contract of employment.
[7]
The appellant, accordingly, claimed the following relief against the
first and second
respondents:
(a)
Rectification
of the actions of the first and second respondents by reinstatement
of the contract of employment.
(b)
Alternatively, payment of damages by the
first and second respondents in the maximum amount allowed under the
jurisdiction of the
Labour Court, the one paying the other to be
absolved.
[8]
The Labour Court dismissed the appellant’s claim for “want
of jurisdiction”.
It sought support for this conclusion in the
decision of
James
and Another v Eskom Holdings SOC Ltd and Others (“James”).
[1]
In doing so, it reasoned as follows:
“
In
James…,
the
LAC dealt with a matter in which the two appellants, employees of
Eskom, referred an unfair dismissal dispute to the CCMA, where
the
commissioner found that their dismissal was substantively fair. On
review, the employees relied solely on breach of the applicable
collective agreement. They argued that, in terms of the collective
agreement, the decision of the appeal tribunal was final and
binding
and that the general manager’s decision to overturn the appeal
tribunal’s decision was invalid and unlawful.
They therefore
contended that there had been no valid dismissal and that the
commissioner consequently lacked jurisdiction to arbitrate
the
dispute. The Labour Court rejected this argument and upheld the
arbitration award. The employees appealed to this Court. It
stated as
follows:
‘
[20]
Section 186 of the LRA defines dismissal to mean, inter alia, that an
employer has terminated a contract of employment with
or without
notice. The ordinary meaning of ‘termination’ is to bring
to an end. In this case, the respondent has through
the action of the
general manager brought the contracts of employment of the appellants
to an end. It does not matter that
the general manager did so
contrary to the collective agreement. The appellants were in the
circumstances entitled to approach
the CCMA to challenge the fairness
of the conduct of the respondent as they did.
Having
done so, it is not open to them to abandon their arbitrated referred
dispute, and claim that they had not been dismissed.
Nothing
barred the appellants from approaching the CCMA for relief. It all
depended on how they pleaded their case to the CCMA.
Termination of
the contracts of employment of the appellants was a factual
phenomenon which they themselves found to constitute
a dismissal that
was unfair. In
Gcaba
the Constitutional Court warned that: ‘Once a litigant has
chosen a particular cause of action and system of remedies (for
example, the structures provided for by the LRA) she or he should not
be allowed to abandon that cause as soon as a negative decision
or
event is encountered.’
The [appellant] in this
case cannot, after successfully pursuing a case in the CCMA based on
the existence of an alleged unfair
dismissal, now approach this court
on the basis that the termination of his employment contract did not
constitute a dismissal
in law. Counsel for the respondents sought to
argue the jurisdictional point as a species of
res judicata
.
The Court
mero moto
finds that it does not have jurisdiction
to hear the matter on the authority above. If an employee were able
to pursue a new cause
of action as the [appellant] has sought to do,
the architecture of our employment law would be breached. In addition
our guiding
principle of speedy resolution of disputes would be
undermined. I make no order as to costs against the individual
applicant.”
[9]
The appeal lies against the decision of the Labour Court with the
leave of this Court.
The Appeal
[10]
The question for determination on appeal is whether the Labour Court
was correct in finding that
it lacked jurisdiction to determine the
contractual dispute before it.
[11]
The appellant contends that the Labour Court erred in concluding that
it lacked jurisdiction
to determine his contractual claim as
jurisdiction is to be determined from the pleadings, and his pleaded
case was clearly based
on breach of his contract of employment which,
in terms of section 77 of the Basic Conditions of Employment Act,
[2]
(“BCEA”) the Labour Court has jurisdiction over.
[12]
To the contrary, the first and second respondents submit that the
Labour Court was correct in
dismissing the appellant’s claim
for want of jurisdiction as it constituted forum shopping which must
be prevented. They
argue that the true nature of the appellant’s
claim is one of unfair dismissal which he pursued against the first
respondent
in the CCMA claiming reinstatement, alternatively maximum
compensation. And since his claim in the CCMA is essentially the same
as that in the Labour Court, the latter is precluded by the principle
of
res
judicata
.
In addition, they contend that having made an election to pursue his
unfair dismissal claim in the CCMA, the appellant is bound
by that
election and cannot approach a civil court or the Labour Court based
on an allegation that his purported termination was
unlawful. Lastly,
they argue that the Labour Court was correct on the principle
established in
Gcaba
[3]
that once a litigant has chosen a particular cause of action and
system of remedies provided for by the LRA, it is impermissible
to abandon that cause when a negative decision or event is
encountered. They accordingly ask that the appeal be upheld.
[13]
The question for determination is not a novel one. In 2009, the
Supreme Court of Appeal (“SCA”)
dealt with a similar
question in
Makhanya
v University of Zululand.
[4]
There,
Professor
Makhanya
instituted an action against the University of Zululand in the
KwaZulu-Natal Local Division of the High Court (Durban).
He
claimed that his dismissal amounted to a breach of contract and that
he was entitled to remuneration because he had continued
to tender
his services. However, prior to this, Professor Makhanya instituted
an unfair dismissal claim against the University
in the CCMA, which
was dismissed.
[14]
In a special plea, the University challenged the jurisdiction of the
High Court to determine
the contractual dispute on the basis that
because Professor Makhanya pursued a claim in the CCMA for
enforcement of his rights
under the Labour Relations Act
[5]
(“LRA”), the High Court had no power to consider his
claim for enforcement of his contractual right.
[6]
[15]
The SCA held in
Makhanya
that a dismissed employee has various alternative remedies. An
employee may lodge a claim to enforce or claim a breach of an
employment
contract and, in addition, lodge a claim under the LRA for
unfair dismissal. In other words, an employee has both a common law
contractual right to challenge a dismissal in the Labour Court as
well as an independent right under the LRA.
[7]
In relation to the question of the jurisdiction of the Labour Court
and the High Court to determine matters concerning a contract
of
employment, the SCA observed that:
‘
The
first case that came before this court that purported to raise a
jurisdictional challenge of this nature was
Fedlife.
Other
cases followed that also purported to raise such jurisdictional
challenges, which include
United
National Public Servants Association of SA v Digomo NO
,
Boxer
Superstores, Mthatha v Mbenya, Fredericks v MEC for Education
and Training, Eastern Cape,
and they continue with a regularity that is becoming alarming. Upon
proper analysis none of those cases was about jurisdiction
at
all. They were about whether the claimant had a good claim in
law.
All
those cases, as well as this case and
Chirwa
, have three
features in common. The first is that the claimant was an employee.
From that arises the second common feature, which
is that the
claimant had an LRA right. The third is that the claimant asserted
that he or she also had a right that arose outside
the terms of the
LRA. (I do not say that the claimant necessarily had the right that
was asserted. I say only that he or she asserted
that right.) That
right in each case was either the right at common law to exact
performance of a contract, or it was the constitutional
right to just
administrative action.
The
claim in each case arose from the termination of the contract of
employment. That fact had the potential to found a claim for
relief
for infringement of the LRA right. But it also had the potential to
found, in addition, a claim for relief for infringement
of the other
right that was asserted. Thus in every case the claimant had a
potential claim for enforcement of an LRA right (which
was
enforceable only in a Labour Forum). In every case the claimant also
had a potential claim for enforcement of a right that
fell outside
the LRA (enforceable either in the high court or in the Labour
Court).
It
follows from this that the claimant in each case was capable of
pursuing both claims in the Labour Court, either simultaneously
or in succession (because they were different claims). In one claim
the Labour Court (as one of the Labour Forums) would be asked
to
enforce an LRA right (falling within the exclusive power of the
Labour Forums). And in the other claim it would be asked to
enforce a
right falling outside the LRA (but within the concurrent jurisdiction
of the Labour Court). Similarly, the claimant would
have been capable
of bringing one claim (the claim to enforce an LRA right) in a Labour
Forum and to bring the other claim (for
enforcement of the right
arising outside the LRA) simultaneously, or sequentially, in the high
court.
None
of that should evoke surprise. It is the natural consequence of a
claimant asserting two claims, each of which is capable of
being
brought in a different forum. That two claims arising from common
facts might be asserted, whether separately or in the alternative,
is
not unusual. Whether the assertion will succeed is another matter,
but that is irrelevant to the jurisdictional question.’
[8]
[9]
[16]
On application of these principles to the decision on appeal, the
appellant has both an unfair
dismissal claim and a contractual claim
arising from the termination of his employment contract. This
entitled him to pursue a
claim in the CCMA and an independent
contractual claim in either the High Court or the Labour Court which
have concurrent jurisdiction
to determine a contractual claim in
terms of section
77
of the BCEA which provides that 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.”
The appellant elected to pursue his contractual
claim in the Labour Court.
In
relation to this election, the
SCA
in
Makhanya
observed as follows:
‘
…
.[I]t
is true that a litigant who has a single claim that is enforceable in
two courts that have concurrent jurisdiction must necessarily
make an
election as to which court to use. In that respect the law
specifically allows for ‘forum shopping’ by allowing
the
litigant that choice. But it is altogether different when a litigant
has two distinct claims, one of which may only be enforced
in one
court, and the other of which may be enforced in another court, which
is how the court below applied it in this case.’
[10]
[17]
Despite the adverse finding in the CCMA, the appellant was entitled
to pursue his contractual
claim in the Labour Court as it has a
different cause of action from his unfair dismissal claim under the
LRA.
By virtue of
this, it is immaterial that the CCMA dismissed the appellant’s
unfair dismissal claim, and that that decision
was not taken on
review to the Labour Court. Even if it was, the appellant would have
still been entitled to pursue his contractual
claim in the Labour
Court, because it was a completely different claim from the one that
was dismissed in the CCMA.
[18]
The upshot of this is that the appellant was not precluded by the
principle of
res judicata
from pursuing his two claims in different fora. This is because the
claim that was before the Labour Court, and the one that was
pursued
in the CCMA were not the same claims. The one is for payment of
damages arising from a purported breach of contract by
the first and
second respondents, and the other is for compensation arising from an
unfair dismissal as envisaged under the LRA.
The
two claims do not have the same cause of action.
The
pleadings bear this out.
[19]
It follows from this that the Labour Court erred in concluding that
it lacked jurisdiction to
determine the appellant’s contractual
claim because an employee cannot, after unsuccessfully pursuing a
case in the CCMA
based on the existence of an alleged unfair
dismissal, approach the Labour Court on the basis that the
termination of his employment
contract did not constitute a dismissal
in law.
[20]
The Labour Court furthermore erred by concluding that its conclusion
was supported by the decision
of this Court in
James
and Another v Eskom Holdings SOC and Others.
[11]
The decision in
James
is
not authority for the principle that the Labour Court lacks
jurisdiction to hear a contractual claim arising from the termination
of the employment relationship after receiving an adverse award from
the CCMA in his unfair dismissal dispute. In
James
,
this Court had two primary concerns. The first was whether the
employees concerned were “dismissed” within the
definition
of a “dismissal” as provided for in the LRA.
It found that the evidence before the arbitrator demonstrated as much
and that the CCMA, therefore, had jurisdiction to determine the
dispute. The second was that employees should not be permitted to
pursue a case on review which is inconsistent with the case that was
pursued in the arbitration.
[21]
James
is, therefore, completely unrelated to the current case,
where the issue for determination is whether an employee is permitted
to pursue a claim in contract arising from the termination of the
employment relationship after being unsuccessful in his unfair
dismissal claim in the CCMA.
[22]
The Labour Court furthermore went astray in
concluding that “the architecture of our employment law would
be breached if the
appellant were allowed to pursue a new cause of
action in the Labour Court after his unfair dismissal claim was
dismissed by the
CCMA”. As indicated above, the LRA has not
extinguished remedies available to employees from their contracts of
employment.
This much is clear from section 77(3) of the BCEA, the
impact of which is that employees are (in addition to pursuing their
rights
in terms of the LRA) free to pursue claims in the High Court
or Labour Court arising from their contracts of employment.
[23]
Equally, section 195 of the LRA provides that an award of
compensation made in terms of Chapter
VIII of the LRA is in addition
to, and not a substitute for, any other amount which the employee is
entitled to in terms of any
law, collective agreement or contract of
employment. An award of compensation made in terms of the LRA is for
an unfair dismissal
or an unfair labour practice. As this may be less
than the amount that the employee can claim for breach of contract,
the employee
may, in addition to having being awarded compensation
under the LRA, claim additional compensation which he or she may be
entitled
to in terms of any law, collective agreement or contract of
employment. Section 195 of the LRA recognises that claims for unfair
dismissal and unfair labour practice are distinct from claims for the
enforcement of contracts of employment, and that employees
may claim
both compensation for unfair conduct and damages for breach of
contract, if applicable.
[12]
[24]
Lastly, the Labour Court’s reliance on
Gcaba
v Minister of Safety and Security and Others
,
[13]
is also misplaced. This is because the Constitutional Court
acknowledged in
Gcaba
that the LRA has not extinguished common law remedies available to
empl
oyees
arising from their contracts of employment, when it made the
following observations:
[14]
‘
Furthermore,
the LRA does not intend to destroy causes of action or remedies and
section 157 should not be interpreted to do so.
Where a remedy lies
in the High Court, section 157(2) cannot be read to mean that it no
longer lies there and should not be read
to mean as much. Where the
judgment of Ngcobo J in
Chirwa
speaks
of a court for labour and employment disputes, it refers to labour-
and employment-related disputes for which the LRA creates
specific
remedies. It does not mean that all other remedies which might lie in
other courts like the High Court and Equality Court,
can no longer be
adjudicated by those courts. If only the Labour Court could deal with
disputes arising out of all employment relations,
remedies would be
wiped out, because the Labour Court (being a creature of statute with
only selected remedies and powers) does
not have the power to deal
with the common law or other statutory remedies.’
[25]
To sum up, the
appellant’s
pursuit of his unfair dismissal claim in the CCMA did not extinguish
his claim for enforcement of his contractual
rights in terms of his
contract of employment which the Labour Court has the power to
enforce. That the appellant had pursued a
separate claim in the CCMA
to enforce his LRA right not to be unfairly dismissed, and that that
claim had been decided against
the appellant, is simply irrelevant -
a fortiori
because it is a different claim with a different cause of action from
the appellant’s contractual claim.
[26]
For these reasons, the appeal must succeed.
Costs
[27]
I consider it to be fair and just not to order costs against the
first and second respondents.
Order
[28]
In the result, I make the following order:
1
The appeal is upheld.
2
The order of the Labour Court is set aside.
3
The matter is remitted to the Labour Court for determination of the
merits.
4
There is no order as to costs
_________________________
F.
Kathree-Setiloane AJA
DM
Davis JA and J Murphy AJA concur in the judgment of Kathree-Setiloane
AJA
APPEARANCES:
FOR THE APPELLANT:
CS
Bosch
Instructed by Bob von
Witt Attorney
FOR THE FIRST RESPONDENT:
SC
Kirk-Cohen SC
FOR THE SECOND
RESPONDENT:
P Kantor
Instructed by Dorrington
Jessop Inc
[1]
(
2017)
38 ILJ 2269 (LAC).
[2]
75
of 1997.
[3]
2010
(1) SA 238 (CC).
[4]
Makhanya
v University of Zululand
(2009)
30 ILJ 1539.
[5]
No.
66 of 1995.
[6]
Makhanya
at
para 19.
[7]
Makhanya
at
paras 11-13 and 18.
[8]
Makhanya
paras
35-39.
[9]
Footnotes
omitted.
[10]
Makhanya
para
61.
[11]
(2017)
38 ILJ 2269 (LAC).
[12]
John
Grogan, Dismissal, 3
rd
Edition at p. 739.
[13]
Gcaba
at
para 73.
[14]
See
also
Mogothle
v Premier of the North West Province and Another
[2009] 4 BLLR 331
(LC).