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[2017] ZALCJHB 518
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Singhala v Ernst and Young Incorporated and Another (J2046/2017) [2017] ZALCJHB 518; [2019] 5 BLLR 494 (LC); (2019) 40 ILJ 1083 (LC) (12 September 2017)
IN
the labour court of South Africa, JOHANNESBURG
Reportable
case
no:
J2046/2017
In
the matter between:
SRIKANT
SINGHALA
Applicant
and
ERNST
AND YOUNG INCORPORATED
1
st
Respondent
SOUTH
AFRICAN INSTITUTE OF
CHARTERED
ACCOUNTANTS
2
nd
Respondent
Heard
:
07 September 2017
Delivered
:
12 September 2017
Summary:
An
urgent application where the applicant seeks an order declaring his
dismissal to be unlawful and null and void
ab
initio
.
Quare
:
Whether the Labour Court has jurisdiction to entertain the matter.
The principle established in
Steenkamp
and others v Edcon Ltd (NUMSA intervening)
[1]
considered and discussed. Whether the principle in
Solidarity
and others v SABC J1343/16 delivered on 26 July 2016 (LC)
that
the Labour Court retains jurisdiction on claims of invalid dismissal
is still good law and ought to be followed or not. Held:
(1) The
Labour Court lacks jurisdiction to entertain the applicant’s
application. (2) The applicant to pay the costs,
which includes
the costs of employing two counsel.
JUDGMENT
MOSHOANA J
Introduction
[1]
Is sharing blood relations with the Gupta family a licence to join
the
long queue of the unemployed masses of this country? Put it
differently, is blood relations with the Guptas a commercial
rationale
to terminate on a no fault basis? Or being dismissed simply
because one shares blood relations with a particular family plagued
by allegations of state capture, allegedly dressed as one for
operational reasons
, is justified in law. These are the
questions that may arrest the attention of this court in due course.
[2]
My attention in this judgment is to be detained by the question
whether
this court possesses jurisdiction, at this stage, to
entertain the applicant’s claim for unlawful dismissal. This is
an urgent
application in terms of which the applicant seeks an order
declaring that his dismissal is unlawful and void
ab initio
.
Consequentially, he is entitled to return to work and continue with
his contractual duties until 31 December 2019. An injunction
must
issue preventing the respondent to terminate the applicant’s
employment unlawfully.
Background
facts
[3]
Much as the facts spelled out in the
affidavits filed herein make interesting reading, it is unnecessary
to recount them in any
hyperbolical manner as it were, given the
narrow question to be answered by this court. A brief narrative will
suffice for the
purposes of this judgment.
[4]
On or about 23 May 2014, the applicant
submitted a graduate recruitment form to the first respondent for
vacation work / business
experience programme. Of importance and
relevance, the applicant disclosed in the application form the
following facts:
Alternative
contact person:
Atul Gupta.
Relationship-
Father
.
At
the end of the form, the applicant declared thus:
I
declare that the information given is correct and understand, in the
event of my being employed, that any deliberate misstatement
may
render my contract of service null and void. I further declare that I
have disclosed any and all information that is relevant
to this
application.
The
applicant signed the application form on 23 August 2014.
[5]
On or about 11 May 2015 the applicant
received a letter welcoming him to the first respondent. Around the
same time, the applicant
signed a fixed term contract of employment.
Thereby, he was appointed as a Trainee Accountant effective 1 January
2017 until 31
December 2019.
[6]
The applicant only commenced employment on
27 January 2017. He was on study leave until 26 January 2017. He
continued with the activities
attached to his employment until around
May 2017, when one of the directors advised him of a request from one
of the first respondent’s
clients to remove him from an audit.
The basis of the request was that the client discovered that the
applicant is the son of Atul
Gupta and a conflict of interest may
arise. At this time there were allegations of state capture engulfing
the Gupta family.
[7]
The applicant was removed from that
client’s tasks and allocated other tasks. In the meanwhile, the
allegations of state capture
gained momentum. The applicant’s
name was in one of the many “leaked emails”. Allegedly he
received the CV of
one Matjila via email and flew with the Honourable
Minister Zwane and others to Dubai. All of these developments
troubled the first
respondent. The first respondent was worried about
its reputation and did not wish to find itself in the same situation
as KPMG
– another accounting firm which was dealt a serious
blow due to relations with the Gupta family.
[8]
Discussions
ensued aimed at an amicable termination of employment. After a
stalemate was reached, the first respondent commenced
a section 189
of the Labour Relations Act
[2]
(LRA) process. Various correspondences were exchanged around the
legitimacy or otherwise of the impending termination for operational
requirements. Ultimately on 23 August 2017, the applicant was
dismissed. Attempts were made to have the dismissal withdrawn. Those
drew blank. On 1 September 2017, the applicant launched the present
application. The first respondent opposed the relief sought
and
raised a point of jurisdiction. Since the point was dispositive of
the entire application, if upheld, I heard argument on this
point
only.
The
pleaded case
[9]
The applicant’s case as foreshadowed
in the founding papers can be summarised thus:
9.1
The only reason why the first respondent
dismissed him is because he is a member of the Gupta family.
Accordingly, that offends
the equality clause and the right not to be
unfairly discriminated at. His dignity as a human being has been
violated thereby.
9.2
In terms of section 157(2) of the LRA, the
Labour Court retains 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 arising from labour
relations.
9.3
The
discrimination on the basis of his family relationship or origin
constitutes an
automatically
unfair dismissal in terms of section 187 (1) (g) of the LRA.
[3]
9.4
The
first respondent did not have a
bona
fide
rationale to dismiss him
in
terms of section 189 of the LRA
.
That being the case and retrenchment being a sham, his dismissal is
unlawful and
inherently
unfair
[4]
.
[My own emphasis]
9.5
He
has been discriminated against within the contemplation of section 6
of the EEA
[5]
.
9.6
The
provisions of sections 17(4) and 18 (5) of the Skill Development
Act
[6]
has been breached thus
rendering his dismissal unlawful and
inherently
unfair
.
9.7
He disavowed reliance on any remedies provided for
in the LRA. He asserted that he rejects the unlawful termination of
his contract
of employment by the first respondent using a
disingenuous reason in breach of his constitutional rights and
accordingly he is
entitled to enforce his contract of employment.
Argument
[10]
Both representatives furnished the court with
concise heads of argument dealing with the question whether this
court has jurisdiction.
Mr Fourie, for the first respondent,
contended that on proper interpretation of the
Steenkamp
decision of the Constitutional Court, the Labour Court lacks
jurisdiction to entertain the so-called invalid or unlawful dismissal
claim. He relied heavily on the recent LAC judgments and judgments of
this court which I shall deal with later hereunder.
[11]
On the other hand, Mr Rossouw for the applicant
placed heavy reliance on the judgment of this court dubbed the
SABC8
.
Wherein my brother Justice Lagrange found that this court retains
jurisdiction under the rubric of section 157(2) of the LRA.
Both
submitted that costs should follow the results, which costs should
include the employment of two counsel according to Mr Fourie.
Evaluation
[12]
The
longstanding principle in motion proceedings is that an applicant
stands and falls by his or her founding papers. I do not by
any
stretch of imagination intend to unsettle this principle.
[7]
When asserting a clear right, the applicant placed reliance on
sections 187 and 189 of the LRA as well as section 6 of the
Employment
Equity Act
[8]
.(EEA)
He in addition sought reliance on sections 9 and 10 of the
Constitution. This in my view was a halfhearted attempt to bring
the
matter within the realm of section 157(2) of the LRA. It has long
been settled that where there is national legislation providing
remedies direct reliance on the bill of rights is inappropriate.
[13]
In
Chirwa
v Transnet Ltd and others
[9]
Ngcobo J said the following:
Where,
as here, an employee alleges non-compliance with provisions of the
LRA, the employee must seek the remedy in the LRA. The
employee
cannot
as the
applicant seeks to do avoid the dispute-resolution mechanisms
provided for in the LRA
by
alleging a violation of a constitutional right in the Bill of Rights
.
It could not have been the intention of the legislature to allow an
employee to raise what is essentially a labour dispute under
the LRA
as a constitutional issue under the provisions of section 157 (2). To
hold otherwise would frustrate the primary objects
of the LRA and
permit an astute litigant to bypass the dispute-resolution provisions
of the LRA…What is in essence a labour
dispute as envisaged in
the LRA should not be labelled a violation of a constitutional right
in the Bill of Rights simply because
the issues raised
could
also support a conclusion that the conduct of the employer amounts to
a violation of a right entrenched in the Constitution.
[10]
[14]
Similar
sentiments were echoed by Zondo J (as he then was) in
Steenkamp
.
[11]
From the founding papers, it is clear that the applicant alleges
breaches of sections 187 and 189 of the LRA together with section
6
of the EEA. It matters not that the applicant astutely disavowed the
remedies in the LRA or EEA, those remedies are available
to the
applicant as a matter of law. It does not require a rocket scientist
to observe that the applicant’s case is one that
is justiciable
in the LRA. To my mind, it is inappropriate for a litigant to shut
the door of the LRA-by disavowing its remedies
and hope that such a
stunt is sufficient to oust the law. The law is that the LRA is one
of the legislations enacted to promote
and uphold the right in
section 23
[12]
of the
Constitution. Flowing from the Constitution, every employee has a
right not to be unfairly dismissed.
[13]
[15]
Regard
being had to the provisions of section 23, it is clear that the
Constitution sought to protect all the workers of South Africa
using
fairness as a yardstick. It could not have escaped the drafters of
the Constitution that another right to protect is the
right to be
dismissed lawfully. It will make no sense for the Constitution to
protect fair labour practice and at the same time
protect the
so-called unlawful or invalid dismissals. The LRA defines what a
dismissal is.
[14]
It can be
observed from the definition that threads of fairness are built in.
For an example, it must be based on fairness to protect
reasonable
expectation to be retained as a permanent employee. All of this
points to the Constitutional right to fair labour practices.
[16]
In an unlawful and or invalid dismissal terrain, which to my mind is
not consistent with
the constitutional rights, a dismissal dissipates
in the simplest of ways. Whilst in the fairness terrain dismissal as
an act does
not dissipate but may fail to pass the muster of
fairness. To my mind this is what the constitutional democracy
anticipates.
[17]
To
my mind when seeking to determine the jurisdiction of the Labour
Court, the starting point should always be section 157(1).
[15]
It is therefore inappropriate, in my view, to quickly jump to section
157(2) before judging whether the LRA provides some rights
and
remedies to which the Labour Court can exercise jurisdiction. In
terms of the LRA disputes regarding automatically unfair dismissals
are justiciable in this court. The prerequisite for jurisdiction is
the referral to conciliation. Absent such referral, this court
lacks
jurisdiction. Similarly, section 10 of the EEA requires disputes
about discrimination to be referred to conciliation.
[18]
As
far back as 2001, the LAC in
Langevelt
v Vryburg Transitional Council and others
[16]
said the following:
[49] …An example
of a case in which a dismissal is challenged on the basis that it is
inconsistent with the Constitution
would be one
where it is
alleged that the reason for dismissal is unfair discrimination
…In
such a case the complaint would be that such a dismissal is
inconsistent with the provisions of s 9(1), (3) and (4) of
the
Constitution.
[50] A dismissal the
unfairness of which is based on grounds that is inconsistent with s
9(1) …of the Constitution can be
said to constitute an
automatically unfair dismissal as defined in s187…of the Act.
Such a dismissal dispute may be referred
to the CCMA… for
conciliation. If attempts at conciliation fails, the employee may
refer it to the Labour Court for adjudication.
[My emphasis]
[19]
Having
said all the above, Zondo J (as he then was) in that matter came to
the conclusion that the respondent
had
no authority
to dismiss and the dismissal was unlawful, invalid and of no effect
in law and fell to be set aside.
[17]
There the Court was applying the
ultra
vires
principle. I do admit that applying the principles of administrative
law, where applicable, an action
ultra
vires
is no action. In an employment sphere, it would be unconstitutional
to hold that a private employer like the first respondent is
not
entitled to effect a dismissal in certain instances. An employer in a
private sector for that matter is constraint to effect
a dismissal in
a fair manner. How can a private employer be told that a dismissal
that fits the definition of section 186 - termination
with or without
notice - is no dismissal in law?
[20]
Nonetheless
Steenkamp
clearly resolved that invalid dismissals and a declaratory order that
a dismissal is invalid and of no force and effect falls outside
the
contemplation of the LRA. Such an order cannot be granted in a case
based on the breach of an obligation under the LRA concerning
a
dismissal
[18]
.
[21]
The
conclusion in
Steenkamp
is simply to the effect that if a party wishes to claim invalid or
unlawful dismissal, the LRA is not the legislation to look up
to. It
must be remembered that the Constitutional Court stated that the
automatically unfair dismissal category covers as it were
all
egregious reasons like employees being dismissed on the grounds of
race, gender, etc.
[19]
.
[22]
The applicant before me astutely attempted
constitutional violation, that violation, in my view, is one
contemplated in the special
category of automatically unfair
dismissals. In fact, the applicant was unable to astutely hide that
because in the papers replete
reference to unfairness and breach of
some sections of the LRA is apparent. Just on the applicant’s
own papers, his claim
arises from the LRA and as such he is confined
to the remedies in the LRA despite his disavowal thereof. The LRA
door is not left
ajar for him but it is wide open. I for one do not
understand the luxury to disavow remedies available in law. I do not
think that
a party has that luxury. What I can live with is a choice
of remedies as opposed to disavowal. Disavowal does not only breed
forum
shopping but lawlessness too.
[23]
My brother Lagrange J in the
SABC8
case asked a question whether the Labour Court has no jurisdiction to
provide such remedies. It is not all together clear to me
which
remedies was my brother referring to. However, my understanding of
the statement in the
Steenkamp
judgment is that the legislature did not make provision for unlawful
and invalid dismissal instead it made provision for unfair
dismissals
and automatically unfair dismissals and provided remedies for such
only. To my mind the judgment suggested that invalid
and unlawful
dismissals are foreign in the LRA. It was not a situation of
acknowledging invalid and unlawful dismissals but providing
no remedy
for such a category. If I am correct in my interpretation therefore
there is no such category in the LRA and equally
no remedies in the
LRA. Accordingly, the question of jurisdiction to provide
non-existent LRA remedies should not arise at all.
It does seem that
my brother accepted that breach of a constitutional right would earn
an employee jurisdiction to challenge a
dismissal. To my mind an act
of dismissing an employee cannot on its own violate a constitutional
right. However, if the reason
for dismissing an employee is one
prohibited by the law, such a dismissal does not cease to exist
factually as it were but may
be declared to be unfair in an instance.
Such must, as Zondo J (as he then was) found, be an automatically
unfair dismissal.
[24]
Ngcobo
J has already sounded a warning in
Chirwa
.
Steenkamp
has already concluded that egregious reasons fall under the category
of automatically unfair dismissal. Zondo J (as he then was)
went to
the extent of saying that most if not all of the reasons for
dismissal that render a dismissal automatically unfair as
contemplated in section 187 are the reasons that would render a
dismissal unlawful and invalid
[20]
.
To my mind nothing is left within the employment context that could
be labelled as invalid or unlawful dismissal within the framework
of
the Constitution. An unlawful dismissal is simply an automatically
unfair dismissal and nothing else. I do accept that in certain
instances dismissal in breach of contractual rights may be set aside
only to ensure compliance with the contractual rights. It
must be
noted that a dismissal not consistent with the disciplinary
contractual rules or policy may well be procedurally unfair.
[25]
I
venture to suggest that setting aside such dismissals-breach of
contract under section 77(3) should be a temporary measure until
compliance. Instead, to my mind, the proper approach should be to set
aside a dismissal as opposed to declaring that it is unlawful
or
invalid. If that were to be an approach, the issue of remedies
(specific performance or damages) will not even arise. Perhaps
what I
have in mind is the old section 143
[21]
status
qou ante
type of a relief. Something along the lines of section 189A (13)
perhaps.
[26]
I
am unable to agree that section 157(2) creates space and or
jurisdiction in dismissal cases. The LRA has provided sufficiently
for dismissals in all the categories including the invalid or
unlawful dismissal. In my view employment and labour relations in
the
section must be referring to other matters to the exclusion of a
dismissal. In any event the pleadings in this matter direct
me to the
LRA and nothing else. Recently in
Zungu
v Premier, Province of Kwazulu Natal and another
[22]
it was held that the starting point to determine jurisdiction
is allegations in the affidavits
[23]
.
[27]
Quiet
recently this court in
NUM
and another v Impala Platinum Ltd and others
[24]
somewhat confirmed that in the light of
Steenkamp
lawfulness of a suspension is infused in the fairness jurisdiction
and is not a separate claim justiciable in this court. I agree
with
this. This conclusion to my mind is consistent with the
constitutional imperatives I attempted to extrapolate above.
[28]
Lastly,
Steenkamp
did not just simply conclude that the legislature chose unfair and
automatically unfair dismissal over invalid and unlawful dismissal.
The Court went to great lengths to explain why the legislature’s
choice should be understood. After careful excursion of
the old LRA
and the authorities that dealt with it, the Court concluded thus:
[118]
I think that the rationale for the policy to exclude unlawful or
invalid dismissals under the LRA was that
through the LRA the
legislature sought to create a dispensation that will be fair to both
employers and employees…
[29]
Therefore, in my judgment, I conclude that there
is no room for unlawful dismissal claims even under the rubric of
section 157(2)
of the LRA. Similarly, an employee should not be
allowed to tuck in what effectively is an automatically unfair
dismissal under
the wing of ‘arising from employment and from
labour relations’. Accordingly, I part ways with my brother in
so far
as he may be suggesting at paragraph 48 of the
SABC8
judgment that section 157 (2) creates room to challenge the so-called
unlawful dismissals in this court. To my mind the Labour
Court being
a creature of the LRA lacks jurisdiction to entertain claims of
unlawful dismissals. An employee like the applicant
before me must
pursue the remedies as per the LRA. This disavowal business should
not be encouraged by this court. As pointed out
above should be
resisted as it brings to the fore a state of lawlessness.
[30]
I
now turn to the issue of the Skills Development Act
[25]
(SDA). The applicant’s case is simply that the dismissal is
invalid as it offends the provisions of the sections in the SDA.
This
argument mirrors the unlawful dismissal argument I have dealt with
above. Worse off, this one cannot even be tucked under
section
157(2). Mr Rossouw conceded that a learnership agreement within the
contemplation of the SDA is a tripartite agreement
and has not been
produced in court. For section 17 to obtain there must a tripartite
learnership agreement.
[31]
The
first respondent’s contention is simply that what was in place
was a fixed term employment contract. Nonetheless, even
if I were to
accept that there was a learnership agreement in order to bring the
applicant within the scope of section 17, the
jurisdiction of this
court will still be ousted by section 19
[26]
of the SDA.
[32]
Turning to the issue of costs, both parties
argued that costs should follow the results. I find no reason why I
should be averse
to such an argument.
Order
[33]
In the results, I make the following order:
1 The
application is dismissed for want of jurisdiction.
2
The
applicant to pay the costs of this application including the costs of
two counsel.
_______________________
GN Moshoana
Judge
of the Labour Court of South Africa
Appearances
For the
Applicant:
Adv Rossouw
Instructed
by:
Cavanagh and Richards, Centurion
For the
Respondents: Adv G
Fourie with Adv Z Ngwenya
Instructed
by:
Brian Bleazard Attorneys Saxonworld.
[1]
[2016] 37 ILJ 564 (CC)
[2]
Act
66 of 1995 as amended.
[3]
Para 136 of the Founding Affidavit-But over and above same, because
1
st
Respondent clearly discriminated me on the basis of my family
relationship or origin,
it
constitutes an automatic unfair dismissal in terms of
section 187(1)
(g) of the
Labour Relations Act No 66 of 1995
.
This in itself, is submitted, is sufficient to establish a clear
right. [My underlining and emphasis}
[4]
Para137 of the FA.
[5]
Para 139 of the FA.
[6]
Act 97 of 1998.
[7]
Pilane
and another v Pilane and another
2013 (4) BCLR 431 (CC)
[8]
Act
55 of 1998.
[9]
[2008] 29 ILJ 73 (CC) at para 124.
[10]
Chirwa
at paras 18 and 124
[11]
At para 140.
[12]
Section 23(1) - Everyone has the right to fair labour practice.
[13]
Section 185 of the LRA- Every employee has the right not to be
unfairly dismissed.
[14]
Section 186 of the LRA.
[15]
(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.
[16]
[2001] 22 ILJ 1116 (LAC)
[17]
At para 76.
[18]
Steenkamp
at para 36
[19]
At para 108-109 A-E
[20]
At
para 109.
[21]
The 1956 Act.
[22]
[2017]
9 BLLR 949 (LAC)
[23]
Zungu
.at
para 18
[24]
Case number JR413/17 delivered on 10 March 2017
[25]
Act
97 of 1998.
[26]
Disputes
about learnership
19 (1) For the purposes
of this section a dispute means a dispute about-
(a)…
(b)…
(c) the termination of-
(i) a learnership
agreement; or
(ii) a contract of
employment of a learner.
(2) Any party to a
dispute may in writing refer the dispute to the CCMA...
(5)
If the dispute remains unresolved, any party may request that the
dispute be resolved through
arbitration
as soon as possible