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[2011] ZALCCT 14
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Southern Sun Hotel Interests (Pty) Ltd IRO Southern Sun Waterfront Hotel v CCMA and Others (C255/09; C362/09) [2011] ZALCCT 14; (2011) 32 ILJ 2756 (LC) (21 June 2011)

IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT CAPE TOWN
Reportable
Of
interest to other judges
CASE
NO: C255/09; C362/09
IN
THE MATTER BETWEEN:
SOUTHERN
SUN HOTEL INTERESTS (PTY) LTD
I.R.O.
SOUTHERN SUN WATERFRONT HOTEL
…................................
APPLICANT
AND
CCMA
…........................................................................................
FIRST
RESPONDENT
C
DE KOCK N.O.
….................................................................
SECOND
RESPONDENT
SACCAWU
…...............................................................................
THIRD
RESPONDENT
LYNNE
ERNESTA
…...............................................................
FOURTH
RESPONDENT
DATE
OF HEARING:
26 MAY 2011
DATE
OF JUDGMENT:
21 JUNE 2011
JUDGMENT
STEENKAMP
J:
Introduction
Two
applications served before the court. The first (under case number
C255/2009) is an application to review and set aside a

jurisdictional ruling issued by the second respondent, Commissioner
Coenie de Kock. The second is an application for costs to
be awarded
against the CCMA (the first respondent) incurred in the interim
application to stay the arbitration proceedings pending
the outcome
of the review application.
The
parties agreed that the two applications should be heard together
and that this judgement should address both applications.
Background
The
fourth respondent, Ms Lynne Ernesta, is a foreign national hailing
from the Seychelles. She was employed by the applicant
(Southern
Sun) as a receptionist at its Waterfront Hotel in Cape Town. At the
time, she only had a study permit. That permit
expired on 30 May
2008.
When
the permit expired, Southern Sun told Ernesta that she could no
longer lawfully tender her services in terms of the Immigration

Act
1
.
She was told to obtain a valid employment permit. Southern Sun
continued to pay her until 31 July 2008, but says that was an

oversight. Its stance is that she was not entitled to any payment as
she could not lawfully tender her services. It stopped paying
her
from 11 August 2008. It did not accept her continued tender of her
services as it was of the view that the tender was unlawful.
By
18 September 2008, Ernesta had not succeeded in obtaining a valid
permit. Southern Sun instructed her to attend a disciplinary
enquiry
on 25 September 2008. Pursuant to that enquiry, Southern Sun
dismissed Ernesta on 7 October 2008 on the basis that she
was unable
to lawfully tender her services.
On
16 October 2008,
Ernesta
referred an unfair labour practice dispute to the CCMA in terms of
section 186(2) (b) of the Labour Relations Act
2
.
She
claimed that she had been unfairly suspended and, in terms of the
relief sought, asked that Southern Sun be ordered to pay
her the
salary due to her for the period of 11 August to 7 October 2008.
The
dispute was conciliated only on November 2008. The applicant
objected to the CCMA's jurisdiction to hear the dispute. The

application failed and the Commissioner issued a certificate on 14
November 2008 that the dispute remained unresolved. Ernesta’s

trade union, SACCAWU (the third respondent), referred the dispute to
arbitration on 20 November 2008.
After
an initial postponement, the matter was set down for arbitration on
3 February 2009. At the arbitration hearing, the applicant
again
objected to the CCMA's jurisdiction. The arbitrator ruled that the
CCMA does have jurisdiction to hear the dispute. It
is that ruling
that the applicant wishes to have reviewed and set aside.
At
the arbitration on 3 February 2009, the arbitrator requested the
parties to continue with the proceedings on the merits. He
advised
them that he would rule on the preliminary jurisdictional point at a
later stage. He added that:
“
The
parties were advised that, in the event that I should find that the
issue in dispute is not one provided for in section 186(2)(b)
of the
LRA, there will be no need for me to address the merits of the
dispute. In the event of a finding being reached that the
issues are
capable of being arbitrated, a determination would be made regarding
the fairness of the [employer’s] conduct
in suspending the
[employee].”
The
arbitration proceeded on that basis. Southern Sun was represented by
two attorneys, Ms C de Vries and Mr L Witten.
The
arbitrator issued his award on 6 February 2009 (although it appears
that it was only sent to the parties on 4 March 2009).
He found that
the CCMA did have jurisdiction; that the suspension of employees due
to their status as illegal foreigners can
be brought within the
confines of section 186(2) (b) of the LRA; and that “it could
possibly be argued” that Southern
Sun’s failure to
assist Ernesta in getting a work permit amounted to an unfair labour
practice. However, he considered
it in the interests of fairness to
both parties that the matter be rescheduled for another half a day’s
arbitration “...to
allow [Southern Sun] to lead evidence on
the contentious issues as are highlighted in this ruling”.
On
5 March 2009, the CCMA set the arbitration down for continuation on
29 April 2009. SACCAWU sought and was granted a postponement.
The
applicant delivered its review application on 15 April 2009.
On
4 May 2009, the CCMA set the arbitration down for continuation on 1
June 2009. The applicant wrote to SACCAWU, copying the
CCMA,
requesting it to agree to a postponement pending the finalisation of
the review. SACCAWU did not agree. On 25 May 2009,
the CCMA advised
the applicant that the arbitration would not be postponed. The
applicant then launched an urgent application
in the Labour Court to
stay the arbitration proceedings pending the finalisation of the
review. The applicant did not apply for
a postponement at the CCMA
in terms of CCMA rule 31.
The
application for a stay was granted on an unopposed basis, although
the CCMA was present at court on the date of the hearing,
29 May
2009. The applicant seeks costs against the CCMA on the basis that
the CCMA should have granted a postponement pending
the review and
that the applicant “was compelled to launch an urgent
application to stay the proceedings before the CCMA”.
I
will first consider the review application and then the application
for costs.
The
review application
(case number 255/ 2009).
Having
had regard to the judgment of the Labour Court in
Discovery
Health Limited v CCMA and others
3
,
the arbitrator noted that it is now beyond doubt that an "illegal
foreigner" (or undocumented immigrant) is an employee
for the
purposes of the LRA. He found that Ernesta still enjoyed the status
of an employee for purposes of the LRA and she was
still entitled to
the protection offered to employees in terms of the LRA, even though
she did not have a valid work permit.
The
second issue to be determined, based on the fact that Ernesta was an
employee for the purposes of the LRA, was whether or
not the
suspension of her contract of employment on 11 August 2008 could be
said to constitute a suspension as provided for in
section 186(2)
(b) of the LRA.
The
arbitrator had regard to the judgement in
Koka
v Director-General: Provincial Administration North West
Government
4
.
In
that judgement, the court considered suspension as an unfair labour
practice in terms of the now repealed Item 2(1) (c) of
Schedule 7 to
the LRA. The court cited with approval the remarks by Grogan
5
that,
whatever the reason, unilateral suspension of the contract of
employment by the employer does not relieve the employer of
its duty
to pay the employee.
The
arbitrator came to the conclusion that the suspension of employees
due to their status as illegal foreigners can be brought
within the
confines of section 186(2) (b) of the LRA and that the CCMA has the
jurisdiction to deal with the dispute.
It
is important to note that I need not consider whether the employee
had a good cause of action, in other words, whether the
decision of
Southern Sun to stop paying her does amount to an unfair labour
practice. I merely need to consider whether the decision
of the
arbitrator that the CCMA had jurisdiction to deal with the dispute
as pleaded, is open to review.
In
this regard,
I
consider the cautionary note sounded by the Supreme Court of Appeal
in
Makhanya
v University of Zululand
6
.
Nugent
JA said that it is not unusual for two rights to be asserted arising
from the same facts. A claimant could assert two claims,
each of
which is capable of being brought in a different forum. Whether the
decision will succeed is another matter, but that
is irrelevant to
the jurisdictional question.
7
He
made two further observations:
8
"The
first is that the claim that is before a court is a matter of fact.
When the claimant says that the claim arises from
the infringement of
the common law right to enforce a contract, then that is the claim,
as fact, and the court must deal with it
accordingly. When a claimant
says that the claim is to enforce a right that is created by the LRA,
then, that is the claim that
the court has before it, as a fact. When
he or she says that the claim is to enforce a right derived from the
Constitution, then,
as a fact, that is the claim. That the claim
might be a bad claim is beside the point."
In
the present case, the applicant argued that Ernesta could not
lawfully tender her services; and, therefore, she was not entitled

to any remuneration. It also argued that her claim was actually one
for remuneration under the Basic of Conditions of Employment
Act
9
and
therefore the CCMA did not have jurisdiction.
It
appears to me that, in advancing this argument, the applicant made
exactly the mistake that Nugent JA cautions against. The
question is
not whether Ernesta has a good claim in the terms in which she
couched it, i.e. as an unfair labour practice; the
question is
whether the CCMA had jurisdiction to consider that claim. Likewise,
it matters not that she may have been better
advised to have brought
a claim for remuneration to this court under section 77 of the BCEA;
the question is whether the CCMA
had jurisdiction to deal with the
dispute that was referred to it.
The
same point was made by Wallis AJA in
South
African Maritime Safety Authority v McKenzie
10
:
“
Once
more, as in other cases that have come before this court, the plea,
so far as it purports to raise a jurisdictional challenge,
is
misdirected. As the Constitutional Court has reiterated in
Gcaba
v Minister of Safety and Security and Others,
11
the
question in such cases is whether the court has jurisdiction over the
pleaded claim, and not whether it has jurisdiction over
some other
claim that has not been pleaded, but could possibly arise from the
same facts. In this case the particulars of claim
could not have made
it clearer that Mr McKenzie’s claim is for damages for breach
of contract.”
Mr
la
Grange
,
for the applicant, sought to review the jurisdictional ruling on the
grounds of unreasonableness, as enunciated in
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
12
.
That is not the correct approach in jurisdictional matters. As Zondo
JP pointed out in
Fidelity
Cash Management Service v CCMA & others
"
If
the CCMA had no jurisdiction in a matter, the question of the
reasonableness of its decision would not arise."
13
It
is therefore not clear what the applicant’s ground of review
is. In its founding affidavit attached to the notice of
motion, Mr
Lonie submitted that the ruling was "ultra vires, not
reasonable and rational and that no reasonable decision
maker in the
position of commissioner De Kock could have reached such a
decision."
Even
on a broad reading of these review grounds, I can find no reason to
review the arbitrator's decision on jurisdiction. Whether
or not
Ernesta has a good claim is not for me to decide; however, the
arbitrator's ruling on jurisdiction is not open to review.
It
is inexplicable that the applicant attacks the views of the
arbitratror and the CCMA on jurisdiction in such intemperate terms.

The arbitrator, quite unsurprisingly and appropriately, considered
himself bound by this court’s view in
Discovery
Health.
The
applicant’s attorneys must also have been well aware of the
findings of the Labour Appeal Court in
Kylie
v CCMA
14
.
In
that case, it was held that even where the work itself is illegal –
and not only the contract of employment, as in
Discovery
Health
and
in the case of Ernesta – the CCMA retains jurisdiction. It may
be useful to refer to some of the relevant passages in
Kylie:
“
[21]
The question arises thus as to whether section 23 affords protection
to a sex worker. In
NEHAWU
v University of Cape Town & others
(2003) 24
ILJ
95 (CC) at paragraph 40 [also reported at
2003 (2) BCLR 154
(CC) –
Ed], the Constitutional Court emphasised that the focus of section
23(1) of the Constitution was on the ‘relationship
between the
worker and the employer and the continuation of that relationship on
terms that are fair to both.’ That approach
followed upon the
judgment in
SANDU
v Minister of Defence & another
(1999) 20 ILJ 2265 (CC) at paragraphs 28–30 [also reported at
[1999] ZACC 7
;
1999 (6) BCLR 615
(CC) – Ed]. Even if a person is not employed
under a contract of employment, that does not deny the ‘employee’

all constitutional protection. This conclusion is reached despite the
fact they ‘may not be employees in the full contractual
sense
of the word’ but because their employment ‘in many
respects mirrors those of people employed under a contract
of
employment.’
...
[27]
Professor Rochelle le Roux expresses the point as follows:
‘
[It
is] also important to bear in mind the fact that the unfair labour
practice jurisdiction was introduced to counter the arbitrariness
of
lawfulness, in particular, termination by lawful notice. Furthermore,
as suggested earlier, it is conceivable that a labour
practice may
well impact on the position of either prospective or retired
employees. For these reasons, and in absence of an internal

limitation clause, it is suggested that labour practices in section
23(1) ought to be approached dispassionately and be given a
broad
construction. An act of terminating employment, the structuring of
working hours, or discipline at work remain labour practices,

irrespective of whether they are done in the context of legal or
illegal work.’
[See
R le Roux “The meaning of ‘worker’ and the road
towards diversification: Reflecting on Discovery, SITA and
‘Kylie’”
2009 (30)
ILJ
49 at 58.]
...
[38]
I return to the key question: what discretion do the courts have in
the determination of a remedy, in this case for an alleged
unfair
dismissal of a sex worker. Mr Trengove correctly noted that, while
South African law eschewed the recognition of an illegal
contract and
the obligations and rights that flowed therefrom, in this case the
appellant’s contention was that, even if
there was no valid
contract, there was an employment relationship and in terms of that
relationship, the appellant fell within
the scope of the LRA. ”
After
referring to the case of
Hoffman
Plastics Inc v NLRA
15
;
and specifically the minority judgment of Justice Breyer, the LAC
came to the following conclusion:
“
[55]
Accordingly, while the remedial issues must be tailored to meet the
specific context of this case, the objects and provisions
of the Act,
the illegality of the work performed, there is for the reasons
articulated above, nothing which indicates that no form
of protection
in terms of section 193 of the LRA should be available to someone
such as the appellant who was unfairly treated
within the context of
the provisions of LRA.
[56]
When it comes to the question of remedy, each case will have to be
decided in terms of the facts thereof. Manifestly, not all
persons
who are in an employment relationship which is prohibited by law will
enjoy a remedy in terms of the LRA. In so deciding,
a tribunal or
court is engaged with the weighing of principles; on the one hand the
ex turpi causa
rule which prohibits enforcement
of illegal contracts and on the other public policy sourced in the
values of the Constitution,
which, in this context, promotes a
society based on freedom, equality and dignity and hence care,
compassion and respect for all
members of the community. The
ex
turpi causa
rule is,
as is evident from its implementation by the courts, a principle of
law for it guides rather than dictates a single result.
The public
policy considerations mentioned in this judgment have developed from
those set out almost 75 years ago in
Jajbhay
v Cassim
, but which
now find definitive guidance in the Constitution (
Barkhuizen
v Napier
2007 (7) BCLR
671
(CC)) must be weighed against the principle of
ex
turpi causa
to
determine the outcome.”
16
Given
the clear guidance of the courts in
Discovery Health
and
Kylie
, the applicant’s glib assertion that Ernesta
could not lawfully tender her services (because she did not have a
valid work
permit); that the applicant therefore did not need to pay
her; and that the CCMA did not have jurisdiction, is far from
“trite”
or “plain”, as Mr
la Grange
claimed in his heads of argument. That was the main ground of
review; and it was on that basis that the applicant felt “compelled”

to approach the court on an urgent basis to stay the continuation of
the arbitration proceedings, to cite the CCMA as first respondent

and to seek costs against it.
The
application for review of the jurisdictional ruling is dismissed.
The costs application must now be considered against that

background.
The
costs application (case number C 362/2009)
The
applicant seeks an order for costs against the CCMA in the urgent
application that it brought to stay the arbitration proceedings
on
29 May 2009. It does so on the basis that it was "compelled to
launch an interim application to stay the arbitration
pending the
finalisation of the review by dint of the CCMA’s unilateral
refusal to accommodate the applicants request first
to have the
CCMA's jurisdiction determined by higher authority (in the review
application)."
The
applicant argues that it is "inexplicable" why the CCMA
would set the matter down for a continued arbitration when,

according to the applicant, the arbitrator "unreasonably,
irrationally and grossly irregularly" held that the CCMA
had
jurisdiction; and that his failure to postpone the arbitration
pending the review application "verges on the incredulous.
It
suggests the grossest of illegality and even a lack of bona fides."
The applicant even accuses the CCMA of “flagrantly
improper
behaviour”.
This
intemperate language is hardly warranted. The applicant was not
compelled to bring an urgent application. What it should
have done,
is to have applied for a postponement in terms of the rules of the
CCMA. It does not explain why it did not make use
of this simple
procedure prescribed by the rules.
CCMA
rule 23 provides as follows:
“
23. How
to postpone an arbitration.—(1) An arbitration may be
postponed—
(a)
by agreement between the parties in terms of subrule (2); or
(b)
by application and on notice to the other parties in terms of subrule
(3).
(2)  The
Commission must postpone an arbitration without the parties appearing
if—
(a)
all the parties to the dispute agree in writing to the postponement;
and
(b)
the written agreement for the postponement is received by the
Commission more than seven days prior to the scheduled date of
the
arbitration.
(3)  if
the conditions of subrule (2) are not met, any party may apply in
terms of rule 31 to postpone an arbitration
by delivering an
application to the other parties to the dispute and filing a copy
with the Commission before the scheduled date
of the arbitration.
(4)  After
considering the written application, the Commission may—
(a)
without convening a hearing, postpone the matter; or
(b)
convene a hearing to determine whether to postpone the matter.”
And
rule 31 provides that an application must be brought on notice to all
parties.
The
applicant complains that SACCAWU requested and was granted a
postponement on 25 November 2008 without a formal application.
That
is so. But on 3 April 2009, SACCAWU again requested a postponement
that was refused. At no stage was the applicant told
that it could
ignore the CCMA rules; nor did SACCAWU agree to a postponement,
which would have brought CCMA rule 23(2) into play.
When
the applicant brought the application, the arbitration was
part-heard. The arbitrator had already dealt with the merits of
the
dispute. He merely wanted to set it down for another half a day to
provide the applicant with an opportunity to lead further
evidence.
It would have made absolute sense, bearing in mind the purpose of
the CCMA to resolve disputes expeditiously, to finalise
the matter.
Had the arbitrator found against the applicant on the merits –
which is by no means certain – the applicant
could have
delivered a review application in the normal course. As this court
has stated numerous times in the past, piecemeal
litigation should
be discouraged.
In
the urgent application, the applicant sought a costs order against
the CCMA, regardless of whether it opposed the application.
It
required the question of costs in that application to be argued
together with the main review application. The CCMA thus had
little
option but to incur the legal costs of arguing the costs aspect.
As
I have stated above, the applicant could have attended the
part-heard arbitration in order to finalise the matter and, had
it
been dissatisfied, taken it on review. Alternatively, it could have
applied to the arbitrator already hearing the matter to
postpone the
hearing pending the outcome of a review against his jurisdictional
ruling. Had the arbitrator refused, the CCMA
would have been
functus
officio
.
The applicant could then have applied to the Labour Court to review
and set aside the arbitrator's refusal to postpone. Instead,
the
applicant launched an urgent application in this court – and
sought costs against the CCMA – in circumstances
where it had
not followed the procedure prescribed by the CCMA rules.
17
I
agree with the sentiments expressed in
Trustees
for the time being of the National Bioinformatics Network Trust v
Jacobson and Others
18
regarding
the practice of seeking the court to intervene in part heard CCMA
proceedings by way of interdict:
"There
are at least two reasons why the limited basis for intervention in
criminal and civil proceedings ought to extend to
uncompleted
arbitration proceedings conducted under the auspices of the CCMA, and
why this court ought to be slow to intervene
in those proceedings.
The first is a policy related reason – for this court routinely
to intervene in uncompleted arbitration
proceedings would undermine
the informal nature of the system of dispute resolution established
by the Act. The second (related)
reason is that to permit
applications for review on a piecemeal basis would frustrate
expeditious resolution of labour disputes.
In other words, in general
terms, justice would be advanced rather than frustrated by permitting
CCMA arbitration proceedings to
run the course without intervention
by this court.”
As
the court pointed out in
Bioinformatics,
this
conclusion was recently underscored by the Constitutional Court in
Commercial
Workers Union of SA v Tao Ying Metal Industries and Others.
19
As
a matter of policy, the established practice is not to seek costs
against a tribunal. The English courts have held that an
exception
to that practice would be where there was “a flagrant instance
of improper behaviour” on the part of the
tribunal or inferior
court.
20
The
CCMA in this case did not act in that manner.
Even
if a public official acts in error in the course of his duties, but
absent
mala
fides
,
it would be highly unusual to award costs against that official. In
Fleming
v Fleming en ‘n Ander
21
the
court had this to say:
“
Die
algemene reël ... is dat ‘n kostebevel nie toegestaan word
teen ‘n openbare amptenaar wat in die foutiewe maar
bona
fide
-uitoefening
van sy ampspligte opgetree het nie. Dit is egter nie ‘n
onbuigsame reël wat in alle gevalle geld sodat die
Hof se
diskresie aan bande gelê word nie.”
The
behaviour of the CCMA in the current case cannot be equated with
that of the second respondent in
Fleming
’s case. In
that case the following occurred:
“
Tweede
respondent het deurgaans in die verkeerde stadpunt volhard dat
permitnr 4/125/06 geldiglik aan die eerste respondent uitgereik
is
... Die verwarring wat uit hierdie standpunt gespruit het, was na my
mening die direkte oorsaak van die geskil en die daaropvolgende

litigasie tussen die appellante en die eerste respondent.”
22
The
general rule that costs will not be ordered against a judicial
officer should, in my view, apply equally to a tribunal such
as the
CCMA. The exceptions to that rule, as expressed above and in
Regional
Magistrate Du Preez v Walker
23
,
are that the officer has chosen to “make himself a party to
the merits of the proceedings” that have been instituted
to
correct his action or where his decision was “actuated by
malice”. Neither exception applies in this case.
I
conclude that there is no reason why the CCMA should be held liable
for the applicant’s costs in the application to stay.
The
applicant cannot hold the CCMA responsible for its own non-adherence
to the CCMA rules. What it should have done, had it
not been
prepared to run the course of the arbitration, was to have applied
for a postponement in the proper form. Had that application
been
refused, and provided there were grounds to render such a refusal
reviewable, the applicant could have taken that decision
on review.
The
costs of this application
It
remains for me to consider the costs of this application. The CCMA
was compelled to incur legal costs to argue the question
whether it
should be held liable for the costs of the urgent application on 29
May 2009. Given my views on the costs application
and the review of
the jurisdictional ruling, expressed above, those costs were
unnecessarily incurred. The indemnity principle
applies
24
and
the applicant should pay the CCMA’s costs necessitated by
today’s hearing.
Order
The
application for review in case number C 255/09 is dismissed, with no
order as to costs.
The
application for costs against the CCMA in case number C 362/09 is
dismissed.
The
applicant is ordered to pay the costs of the CCMA (the first
respondent) in case number C 362/09, including the costs of senior

counsel.
_______________________
ANTON
STEENKAMP
Judge
of the Labour Court
Cape
Town
For
the applicants: Adv WG la Grange
Instructed
by Edward Nathan Sonnenbergs
For
the first respondent: Adv Colin Kahanovitz SC
Instructed
by Herold Gie
1
Act
13 of 2002.
2
Act
66 of 1995.
3
[2008] ZALC 24
;
[2008]
7 BLLR 633
(LC).
4
[1997]
7 BLLR 874
(LC).
5
Grogan
Workplace Law
1
st
ed (Juta, 1996) at 86-7 as cited above n: 4 at
882 G-I.
6
2010
(1) SA 62
(SCA).
7
Id
at p
ara 39.
8
Id
at p
ara 71.
9
Act
75 of 1997.
10
2010
(3) SA 601
(SCA) at para 7.
11
2010
(1) SA 238
(CC).
12
(2007)
28 ILJ 2405 (CC).
13
(2008)
29
ILJ
964
(LAC) at para 101.
14
[2010]
7 BLLR 705
(LAC);
2010 (4) SA 838
(LAC) at paras 21-7 and 38.
15
[2002] USSC 762
;
535
US 137
(2002).
16
Above
n: 15 at para 55-6.
17
Notably,
the applicant’s legal representatives also failed to comply
with the Practice Directive of 2010 of this court when
this
application was heard.
18
(2009)
30
ILJ
2513
(LC) at paras 3 and4.
19
(2008)
29 ILJ
2461 (CC) at paras 62-5 (per Ngcobo
J).
20
R
v The Birmingham Deputy Coroner
[2004] EWCA Civ 207
;
[2004]
3 All ER 543
at 47.
21
1989
(2) SA 253
(A) at 262 C-D.
22
Id
at 262 G-H.
23
1976
(4) SA 849
(A).
24
As
recently set out by Wallis J in
Thusi v Minister of Home
Affairs
2011 (2) SA 561
(KZP) at 611.