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[2001] ZASCA 91
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Fedlife Assurance Ltd v Wolfaardt (450/99) [2001] ZASCA 91; [2002] 2 All SA 295 (A); 2002 (1) SA 49 (SCA); (2001) 22 ILJ 2407 (SCA); [2001] 12 BLLR 1301 (SCA) (18 September 2001)
IN THE
SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Reportable
Case No: 450/99
In
the matter between:
FEDLIFE
ASSURANCE LIMITED
Appellant
and
HENDRIK
JOHANNES WOLFAARDT
Respondent
Coram: Howie,
Marais, Mpati, JJA, Nugent and Froneman, AJJA
Heard: 16
August 2001
Delivered: 18
September 2001
Damages
for repudiation of fixed-term employment contract – if not
whether such claim excluded by
Labour Relations Act No 66 of 1995
–
if not, whether Labour Court has exclusive jurisdiction in respect of
such a claim.
J U D G M
E N T
NUGENT, A J A
:
[1]
The
Labour Relations Act No. 66 of 1995
has created an
elaborate and in many respects innovative legal framework for the
regulation of the relationship between employers
and employees. In
some respects, however, the Act retains and builds upon concepts and
principles that were developed by the courts
when interpreting the
Labour Relations Act 28 of 1956 which it repealed.
[2]
The 1956 Act (after its amendment in 1979) created a
statutory remedy for the commission of what was referred to as an
“unfair
labour practice” which was soon interpreted by
the courts to include the unfair dismissal of an employee (Brassey:
Employment Law
Vol. 1 A1:47). The effect of that
interpretation was to recognise the existence of a right not to be
unfairly dismissed and such
a right is now expressly provided for in
s 185 of the 1995 Act.
[3]
The 1995 Act also establishes a Labour Court as a superior
court with “authority, inherent powers and standing, in
relation
to matters under its jurisdiction, equal to that which a
court of a provincial division of the (High) Court has in relation to
the matters under its jurisdiction” (s 151(2)). In some
matters the jurisdiction of the Labour Court is exclusive while in
others its jurisdiction is concurrent with that of the High Court.
We are concerned only with the Labour Court’s exclusive
jurisdiction which is conferred upon it by s 157(1) in the following
terms:
“
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.”
[4]
The issue in the present case purports to be whether the
respondent’s action against the appellant is a matter that
falls
within the exclusive jurisdiction of the Labour Court and is
thus excluded from the jurisdiction of the High Court. On closer
examination, however, the question goes further and calls upon us to
decide whether the respondent’s claim is legally cognisable
at
all.
[5]
The appeal arises from an action that was instituted by
the respondent against the appellant in the Witwatersrand Local
Division
of the High Court in which he claimed damages for breach of
contract. The claim is singular only in that the contract is one of
employment. In his particulars of claim the respondent alleged that
the contract was for a fixed term of five years commencing
on 1
December 1996 and that the appellant repudiated the contract by
purporting to terminate it with effect from 31 December 1998
on the
grounds that the respondent’s position had become redundant.
The respondent alleged that he had elected to accept
the appellant’s
repudiation (with the result that the contract came to an end) and he
claimed damages in consequence of the
breach.
[6]
The appellant filed a special plea the material portions
of which read as follows:
“2. In terms of
Section 157(1)
of the
Labour Relations Act No
66 of 1995
, the Labour Court has exclusive jurisdiction in respect of
all matters that must be determined by the Labour Court and all
matters
that in terms of any other law are to be determined by the
Labour Court.
3. The Labour Court in the premises has exclusive jurisdiction to
adjudicate dismissals occasioned by operational requirements
in terms
of
Section 191(5)
and
Section 189
of the
Labour Relations Act.
4. In
the premises the above Honourable Court does not have
jurisdiction to adjudicate the dispute between the parties by virtue
of the
fact that the Labour Court has exclusive jurisdiction to
adjudicate same.”
[7]
The respondent excepted to
the special plea on the grounds that it failed to disclose a defence.
The exception was upheld and
the special plea was set aside by
Odendaal AJ who considered himself bound by the decision in
Jacot-Guillarmod v Provincial Government, Gauteng, and Another
1999(3) SA 594 (T) which was on all fours with the present case. The
appellant now appeals to this court with leave granted by
the court
a
quo
.
[8]
The only question that was considered in
Jacot-Guillarmod’s
case , and by the court
a quo
,
was whether an action for contractual damages arising from the
repudiation of a contract of employment was a matter that fell
within
the exclusive jurisdiction of the Labour Court as provided for in s
157(1) of the 1995 Act. However, the principal argument
that was
advanced before us went considerably further and was rather in the
nature of an exception to the particulars of claim.
The main
submission on behalf of the appellant was that an action of that
nature is no longer cognisable in our law and that
the employee
concerned (in this case the respondent) has no remedies other than
those provided for in Chapter VIII of the 1995
Act. If that is
indeed so then clearly those remedies are not enforceable in the High
Court.
[9]
Before turning to that argument it is helpful to briefly
summarise the rights and remedies that are provided for in Chapter
VIII
of the 1995 Act. The foundation of the chapter, which deals
with “Unfair Dismissals”, is s 185, which provides that
“every employee has the right not to be unfairly dismissed”.
The remaining sections expand upon the content of that
right and
prescribe the procedures and remedies for its enforcement.
[10]
An employee who claims to
have been unfairly dismissed may refer the dispute to a statutory
council or to the Commission for Conciliation
Mediation and
Arbitration (whichever is appropriate in the particular case) which
must attempt to resolve the dispute through conciliation
(s 191(1)
and (4)). If the dispute is not resolved through conciliation it
must be resolved by arbitration in some cases or it
may be referred
to the Labour Court for adjudication in other cases depending upon
the nature of the dismissal (s 191(5)). If
the Labour Court or the
arbitrator finds that the dismissal was unfair the employer may be
ordered to reinstate or to re-employ
the employee (such an order must
be made in certain cases) or to pay compensation (s 193(1)). Section
194 places limits on the
amount of compensation that may be awarded.
Where the dismissal was automatically unfair, as that term is used in
the 1995 Act,
or it was based upon the employer’s operational
requirements and is found to be unfair, the Labour Court may in
addition
make any other order that it considers appropriate in the
circumstances (s 193).
[11]
The principal argument
advanced on behalf of the appellant was that Chapter VIII of the 1995
Act codifies the rights and remedies
that are available to all
employees in our law arising from the termination of their
employment. In other words, so it was submitted,
the effect of the
1995 Act has been on the one hand to confer on employees the rights
and remedies provided for in Chapter VIII
in the event of dismissal
and on the other hand to deprive them of their common law remedies.
The chapter is thus said to be
not only comprehensive but also
exhaustive insofar as it provides for remedies upon dismissal.
Support for that construction of
the Act was sought in what was
referred to as its broad scheme rather than in any of its particular
provisions. It was submitted
that the material inroads made by the
legislature upon the right of employers to terminate contracts of
employment in accordance
with their terms must necessarily have been
intended to be balanced by the abrogation of employees’ rights
to enforce such
contracts at common law either by way of claiming
specific performance or by way of claiming damages.
[12]
In effect, according to
that submission, the common law right to enforce a fixed-term
contract of employment has been abolished
by the 1995 Act. Such a
contract must then take its place alongside any other employment
contract that may be terminated at the
employer’s will provided
the termination does not constitute an unfair dismissal as
contemplated by Chapter VII of the 1995
Act.
[13]
The clear purpose of the
legislature when it introduced a remedy against unfair dismissal in
1979 was to supplement the common
law rights of an employee whose
employment might be lawfully terminated at the will of the employer
(whether upon notice or summarily
for breach). It was to provide an
additional right to an employee whose employment might be terminated
lawfully but in circumstances
that were nevertheless unfair.
[14]
That position was perhaps
ameliorated with the adoption of the Interim Constitution in 1994
which guaranteed to every person the
right to fair labour practices
in s 27(1) and rendered invalid any law inconsistent with its terms
(which has been repeated in
the present Constitution). Thus it might
be that an implied right not to be unfairly dismissed was imported
into the common law
employment relationship by s 27(1) of the Interim
Constitution (and now by s 23(1) of the present Constitution) even
before the
1995 Act was enacted.
[
15
] However there can be no
suggestion that the constitutional dispensation deprived employees of
the common law right to enforce
the terms of a fixed-term contract of
employment. Thus irrespective of whether the 1995 Act was
declaratory of rights that had
their source in the Interim
Constitution or whether it created substantive rights itself, the
question is whether it simultaneously
deprived employees of their
pre-existing common law right to enforce such contracts, thereby
confining them to the remedies for
“unlawful dismissal”
as provided for in the 1995 Act.
[16]
In considering whether
the 1995 Act should be construed to that effect it must be borne in
mind that it is presumed that the legislature
did not intend to
interfere with existing law and
a fortiori,
not to deprive
parties of existing remedies for wrongs done to them. A statute will
be construed as doing so only if that appears
expressly or by
necessary implication (
Stadsraad van Pretoria v Van Wyk
1973
(2) SA 779
(A) at 784 D-H). While the advent of the Constitution,
and s 39(2) in particular, has not had the effect of prohibiting
entirely
the use of the presumption against legislative alteration of
the existing law (whether common law or statute) when interpreting
a
statute which is less than clear, it nevertheless limits its field of
application. The same is true of the presumption against
the
deprivation of existing rights. To illustrate: where a statute is
ambiguous as to whether or not an existing law or right
has been
repealed, abolished or altered and the existing law or right is not
in harmony with “the spirit, purport and objects
of the Bill of
Rights” there would appear to be no justification for invoking
any such presumption. But where the existing
law or right is not
unharmonious the presumption will still find application. The
continued existence of the common law right
of employees to be fully
compensated for the damages they can prove they have suffered by
reason of an unlawful premature termination
by their employers of
fixed-term contracts of employment is not in conflict with the
spirit, purport and objects of the Bill of
Rights and it is
appropriate to invoke the presumption in the present case.
[17]
The 1995 Act does not expressly abrogate an employee’s
common law entitlement to enforce contractual rights and nor do I
think
that it does so by necessary implication. On the contrary
there are clear indications in the 1995 Act that the legislature had
no intention of doing so.
[18]
The clearest indication that it had no such intention is
s 186(b) which extends the meaning of “dismissal” to
include
the following circumstances:
“(A)n employee reasonably expected the employer to renew a
fixed term contract of employment on the same or similar terms
but
the employer offered to renew it on less favourable terms, or did not
renew it.”
It is significant that although the
legislature dealt specifically with fixed-term contracts in this
definition it did not include
the premature termination of such a
contract notwithstanding that such a termination would be manifestly
unfair. The reason for
that is plain: The common law right to
enforce such a term remained intact and it was thus not necessary to
declare a premature
termination to be an unfair dismissal. The very
reference to fixed-term contracts makes it clear that the legislature
recognized
their continued enforceability and any other construction
would render the definition absurd. By enacting s 186(b) the
legislature
intended to bestow upon an employee whose fixed-term
contract has run its course a new remedy designed to provide, in
addition
to the full performance of the employer’s contractual
obligations, compensation (albeit of an arbitrary amount) if the
employer
refuses to agree to renew the contract where there was a
reasonable expectation that such would occur. That being so, it
would
be strange indeed, and bereft of any rationality, for the
legislature to deny to the employee whose fixed term contract of five
years has been unlawfully terminated within days of appointment the
benefit of either specific performance of the contract or damages
for
its premature termination and to confine the employee to the limited
and entirely arbitrary compensation yielded by the application
of the
formula in s 194 of the 1995 Act. It is manifest that the result
would be that the former employee, although in far less
need than the
latter of a remedy, will have received more than is due at common
law, but that the latter may not recover as of
right even that which
was payable at common law and instead must rest content with
“compensation” which may be ludicrously
small in
comparison with the true loss. The absurdity does not end there.
If it were so that a plaintiff such as this is confined
to a claim
for “compensation” in terms of s 194, where the employer
proves that “the reason for dismissal is
a fair reason related
to the employee’s conduct or capacity or based on the
employer’s operational requirements”
and “that the
dismissal was effected in accordance with a fair procedure” the
plaintiff would not be entitled to any
compensation. That would be
the combined effect of s 188(1)(a) and (b); s 192; s 193 and s 194.
Such a result could never
have been the intention of the
legislature.
[19]
Moreover, s 195 makes it
clear that an order or award of compensation in consequence of an
unfair dismissal is “in addition
to and not a substitute for
any other amount to which the employee is entitled in terms of any
law, collective agreement or contract
of employment”. It was
submitted on behalf of the appellant that the “other amounts”
referred to in that section
are those amounts that might have accrued
to an employee at the time of the dismissal, such as accrued wages,
leave pay and the
like, and do not include damages for breach. I can
see no reason to restrict the plain words of the section in that
manner.
[20]
I can see no reason why
the legislature should have sought to produce that result. A right
not to be unfairly dismissed finds
its application pre-eminently in
circumstances in which the employee has no contractual security of
employment. While it is understandable
that the legislature wished
to enhance the security of that class of employees I can see no
reason why it should have exacted a
prejudicial
quid pro quo
from another class of employees entirely in order to do so. In my
view there is simply no logical or conceptual connection between
the
rights that have been afforded on the one hand and those that are
said to have been abolished on the other.
[21]
We were much pressed with the contention that, although
the respondent plainly intended to plead a common law claim for
damages
arising from the unlawful premature repudiation of the fixed
term contract and studiously abstained from reliance upon an “unfair
labour practice” and making a claim for “compensation”
within the meaning of the 1995 Act, but also pleaded the
employer’s
professed reason for the repudiation as being its operational
requirements, he was confined to the remedies set
forth in s 194 of
the Act. Counsel for appellant submitted that whether or not
respondent intended that was irrelevant; he could
not escape being
confined to s 194 by the manner in which he chose to plead his claim.
Khumalo v Potgieter
2001 (3) SA 63
(SCA) was said to be
authority for the submission. In my view it is not. It appears
plainly from the judgment in that case that
it was common cause that
“the appellant’s claimed entitlement to continued
occupation of a portion of the farm in question
is based
solely
[my emphasis] on the Act”. (At 66 B.) There was no other
basis in law for the claim. As the Court said at 67E:
“In order to
succeed with prayer 1, the appellant had to found her case on the
provisions of the Act. This is what she in
fact did, even though she
did not expressly refer to the terms of the Act.”
In the present case a clearly
identifiable and recognisable common law claim for damages has been
pleaded. The disclosure of the
employer’s professed reason for
repudiating the contract was mere surplusage and did not signal a
resort to a claim under
Chapter VIII.
[22]
In my view Chapter VIII
of the 1995 Act is not exhaustive of the rights and remedies that
accrue to an employee upon the termination
of a contract of
employment. Whether approached from the perspective of the
constitutional dispensation and the common law or
merely from a
construction of the 1995 Act itself I do not think the respondent has
been deprived of the common law right that
he now seeks to enforce.
A contract of employment for a fixed term is enforceable in
accordance with its terms and an employer
is liable for damages if it
is breached on ordinary principles of the common law.
[23]
There remains the
question whether the respondent’s action for contractual
damages is nevertheless a matter that falls within
the exclusive
jurisdiction of the Labour Court in terms of s 157(1). The
appellant’s counsel submitted in the alternative
that it does.
[24]
If an employee, as here,
accepts repudiation and cancels, the Labour Court would not order
reinstatement or re-employment (see
s 193 (2)). That would leave
compensation under s 194. S 194(1) allows punitive compensation only
and s 194 (2) is limited to
a year’s remuneration. Having
deliberately set those restrictions, it seems difficult, if not
impossible, to infer that
the legislation intended (notwithstanding
the apparently limitless scope of s 158 (1)(a)(vi) and s 193 (3))
that the 1995 Act itself
should nevertheless provide the employee
with the full balance of the common law damages as well. Absent such
intention, s 195
must surely contemplate that for such balance
(recovery of which it, in terms, allows) an employee is free to sue
in the civil
courts. No doubt
s 77
(3) of the
Basic Conditions of
Employment Act 75 of 1997
subsequently conferred concurrent
jurisdiction on the Labour Court but that is not what is in issue in
the present case.
[25]
Furthermore
s 157(1)
does
not purport to confer exclusive jurisdiction upon the Labour Court
generally in relation to matters concerning the relationship
between
employer and employee. Some of the implications were recently
discussed by Zondo, JP in
Langeveldt v Vryburg Transitional Local
Council and Others
[2001] 5 BLLR 501
(LAC). Its exclusive
jurisdiction arises only in respect of “matters that elsewhere
in terms of this Act or in terms of
any law are to be determined by
the Labour Court”. Various provisions of the 1995 Act
identify particular disputes or issues
that may arise between
employers and employees and provide for such disputes and issues to
be referred to the Labour Court for
resolution, usually after
attempts at conciliation have failed (see for example sections 9,
24(7), 26, 59, 63(4), 66(3), 68(1),
69 etc). In my view those are
the “matters” that are contemplated by s 157(1) and to
which the Labour Court’s
exclusive jurisdiction is confined
(though there may be some debate in particular cases as to their
ambit: See for example
Mondi Paper (A Division of Mondi Ltd) v
Paper Printing Wood & Allied Workers’ Union & Others
(1997) 11 ILJ 84 (D);
Coin Security Group (Pty) Ltd v SA
National Union for Security Officers and Other Workers & Others
1998 (1) SA 685
(C)).
[26]
The only provisions
relied upon in the present case in support of the submission that the
respondent’s action is such a “matter”
were the
provisions of Chapter VIII. Section 191 provides that “a
dispute about the fairness of a dismissal” may
be referred to
the appropriate body for conciliation. If it is not resolved it may
thereafter be referred to the Labour Court
for adjudication if the
dismissal was based on the employer’s operational requirements.
[27]
Whether a particular
dispute falls within the terms of s 191 depends upon what is in
dispute, and the fact that an unlawful dismissal
might also be unfair
(at least as a matter of ordinary language) is irrelevant to that
enquiry. A dispute falls within the terms
of the section only if the
“fairness” of the dismissal is the subject of the
employee’s complaint. Where it
is not, and the subject in
dispute is the lawfulness of the dismissal, then the fact that it
might also be, and probably is, unfair,
is quite coincidental for
that is not what the employee’s complaint is about. The
dispute in the present case is not about
the fairness of the
termination of the respondent’s contract but about its
unlawfulness and for that reason alone it does
not fall within the
terms of the section (even assuming that the termination constituted
a “dismissal” as defined in
Chapter VIII). In those
circumstances the respondent’s action is not a “matter”
that is required to be adjudicated
by the Labour Court as
contemplated by s 167 (1) and the special plea was correctly set
aside.
[28]
The appeal is dismissed
with costs which are to include the costs occasioned by the
employment of two counsel.
_______________
R W
Nugent, AJA
Howie JA)
Marais JA)
Mpati JA) concur
FRONEMAN
AJA
[1]
I have read the judgment of Nugent AJA. To my regret I am unable to
agree with some of the reasoning and its eventual result. I
shall
attempt to set out my reasons for coming to that conclusion as
succinctly as I am able to.
[2]
One of the primary objects of the Labour Relations Act 66 of 1995
(the Act) is to give effect to and regulate the fundamental labour
rights conferred by the Constitution (section 1(a)). Another is to
promote the effective resolution of labour disputes (section
1(d)(iv)). The Act’s provisions must be interpreted to give
effect to its primary objects and in compliance with the Constitution
(sections 3(a) and 3(b)). The Constitution is thus a good place to
start any enquiry on the interpretation and application of
the Act.
The Constitution is also a good place to start when one looks at the
common law contract of employment. The general reason
for this is
that we have only one system of law and, in the final analysis, the
Constitution always determines the nature and ambit
of that law
(
Pharmaceutical Manufacturers Association of SA: In re Ex parte
President of the RSA
2000(2) SA 674 (CC) para [44] at 696B-C).
This remains the case even when it is found that the common law is
not affected by our
new constitutional dispensation: such a
conclusion derives its validity from the very fact that the
Constitution allows that kind
of autonomy. Perhaps that is stating
the obvious, but it is still relatively early on in our attempt at a
constitutional democracy
and lest we too easily assume that kind of
autonomy without constitutional sanction, I think it may help to
reiterate the central
importance of the Constitution in that regard.
Once it becomes the common understanding of our law it may no longer
be necessary
to do so.
[3]
Prior to the acceptance and enactment of the Constitution, our law
maintained a rigid distinction between a common law contract
of
employment, which was said to have nothing to do with fairness, and a
statutory labour dispensation, which had much to do with
fairness. In
commenting on the inquiry under the unfair labour practice
jurisdiction of the old industrial court under the provisions
of the
previous Labour Relations Act 28 of 1956 (the old Act), Nienaber JA
stated the following in
National Union of Metalworkers of SA v
Vetsak Co-operative Ltd
1996(4) SA 577 (AD) at 592F-H :
“
The
most one can do is to reiterate that there are two sides to the
inquiry whether the dismissal of a striking employee is an unfair
labour practice, the one legal, the other equitable. The first aspect
is whether the employer was entitled, as a matter of common
law, to
terminate the contractual relationship between them – and that
would depend, in the first place, on the seriousness
of its breach by
the employee. The second aspect is whether the dismissal was fair –
and that would depend on the facts of
the case. There is no sure
correspondence between unlawfulness and fairness. While an unlawful
dismissal would probably always
be regarded as unfair (it is
difficult to conceive of circumstances in which it would not), a
lawful dismissal will not for that
reason alone be fair….”
[4]
In
my view the Constitution has a material impact on that particular
conceptual distinction between the proper domain of contract
and that
of the statute, namely that the former has little to do with
fairness, whilst only the latter has (I must emphasize that
I am
dealing only with the contract of employment and labour legislation –
what effect the Constitution may have on the law
of contract
generally, or other legislation, is not relevant for present
purposes). Section 23(1) of the Constitution
1
provides that everyone has the right to fair labour practices. It
seems to me almost uncontestable that one of the most important
manifestations of the right to fair labour practices that developed
in labour relations in this country was the right not to be
unfairly
dismissed. Had the Act not been enacted with the express object to
give effect to the constitutional right to fair labour
practices
(amongst others), the courts would have been obliged, in my view, to
develop the common law to give expression to this
constitutional
right in terms of section 39(2) of the Constitution. To the extent
that the Act might not fully give effect to and
regulate that right,
that obligation on ordinary civil courts remains (compare Grogan,
Workplace Law,
6
th
ed, at 13-15;
Key Delta v
Mariner
[1998] 6 BLLR 647
(E) at 651G-J
; Naptosa v Minister of
Education, Western Cape Government
2001(4) BCLR 388 (C) at
396B-C). It is my view of the effect of the Constitution on our
common law of employment that compels
me to a different conclusion
than that of Nugent AJA in this matter.
[5]
The
facts that one has to accept for the purposes of determining the
exception to the special plea are these:
The respondent
entered into a contract of employment with the appellant for a fixed
period of five years. Prior to the expiry of
the five-year period the
appellant purported to terminate the contract on the basis that the
respondent’s position had become
redundant. The respondent
construed this as a fundamental breach of contract, in the form of an
unlawful anticipatory repudiation,
and purported to accept the
repudiation, thereby bringing the contract to an end. He contends
that his claim, as formulated in
the particulars of claim, has
nothing to do with, and does not rely on, any unfair dismissal, and
that therefore the provisions
of the Act relating to dismissals in
general and unfair dismissals in particular are inapplicable. In
this I think he errs.
[6]
At
this stage it may be appropriate to refer to the provisions of the
Act that are material and relevant, apart from those general
provisions concerning the Act’s primary objects and how it
should be interpreted that I have already referred to.
[7]
Section 185 provides that every employee has the right not to be
unfairly dismissed. Section 186(a) of the Act defines a dismissal
for
the purposes of the Act’s application. Dismissal includes the
fact that “an employer has terminated a contract
of employment
with or without notice”(section 186(a)), as well as when “an
employee terminated a contract of employment
with or without notice
because the employer made continued employment intolerable for the
employee” (section 186(e)). An
employee is defined in section
213 as “any person, excluding an independent contractor, who
works for another person or for
the State and who receives, or who is
entitled to receive, any remuneration”. Sections 187 to 189
make provision for, respectively,
automatically unfair dismissals,
other unfair dismissals, and dismissals based on operational
requirements. Section 190 makes specific
provision for the date when
a dismissal is considered to come into effect. Of particular
importance is section 191(1) which prescribes
the procedure
“[i]f
there is a dispute about the unfairness of a dismissal…”
. Section 192 deals with the onus in such procedures whilst sections
193 and 194 prescribe the remedies for unfair dismissals and
the
limits on the compensation that may be awarded in regard thereto.
Finally, section 195 provides that
“[a]n order or award of
compensation made in terms of this Chapter is in addition to, and not
a substitute for, any other
amount to which an employee is entitled
in terms of any law, collective agreement or contract of employment”
.
[8]
In
my view there can be little doubt that the facts set out in para. 5
above clearly bring the respondent within the definition
of
“employee” in section 213 of the Act, and the termination
of his employment within the definition of “dismissal”
in
section 186. The crucial initial question is thus whether the dispute
about the termination of his contract is a dispute “about
the
fairness of a dismissal” under section 191(1) or not. If it is
not, the appeal must fail. If it is, further issues need
to be
considered, namely whether the fact of his fixed-term contract
entitles him to “any other amount” under section
195,
besides the statutory compensation he may be entitled to, and, if so,
which is the correct forum to determine that issue.
[9]
It
is important, at this stage, to emphasize that what is in issue here
is narrow and very particular: namely whether the dispute
resulting
in the dismissal of an employee, following upon an unlawful
repudiation of the employment contract by his employer, is
a “dispute
about the fairness of a dismissal” under section 191 of the
Act. The Act does not purport to confer jurisdiction
on the dispute
resolution agencies created by it in general terms. Its structure “is
rather to identify particular disputes,
or issues, which may arise,
and to provide for those particular disputes or issues…”
(per Nugent J in
Eskom Ltd v NUM
(2000) 22 ILJ 618 (W) at 621
C-D
.
Both the Labour Court and the High Courts have grappled
with the jurisdictional problems relating to these issues and the
result
is not harmonious (an exhaustive reference to the cases is to
be found in
Langeveldt v Vryburg Transitional Local Council &
Others
[2001] 5 BLLR 501
(LAC) at 510-522)).
[10]
Is
the present dispute a dispute about an unfair dismissal? It certainly
appears to me to be the case. In ordinary terms, untrammelled
by
legal interpretation, it seems unfair that one party to a bargain
should be allowed to go back on his word by dismissing someone
before
the promised time for the termination of his contract of employment
arrives. Nienaber JA gave expression to that underlying
sentiment
when, in
NUMSA v Vetsak Co-operative Ltd
, above [3], he noted
that it is difficult to conceive of circumstances where an unlawful
dismissal would not also be unfair. I
have already indicated that in
my view the right not to be unfairly dismissed is a particular
concretized form of the constitutional
right to fair labour
practices. If that premise is correct then one can only argue that
the present dispute is not one about an
unfair dismissal if the
provisions of the Act do not comprehensively deal with this
constitutional right
and
if the right not to be unfairly
dismissed does not form part, in any way, of the common law contract
of employment. In my view
that is not the case in either instance.
[11]
The express provisions of the Act relating to dismissals are
wide-ranging and comprehensive in nature. The scheme of the Act
in
relation thereto starts with the primary objects already referred to,
namely to give effect to and regulate the constitutional
labour
rights and to promote the effective resolution of labour disputes.
The first section of chapter 8 of the Act gives expression
to one of
these fundamental rights by providing that every employee has the
right not to be unfairly dismissed (section 185). The
definition of
“dismissal” of an employee goes beyond the mere
termination of employment to include those instances
where a
reasonable expectation of further employment exists (section 186(b))
and instances of constructive dismissal(section 186(e)),
of which the
acceptance by an employee of an unlawful repudiation of the contract
by the employer is but an example (
Jooste v Transnet Ltd
(1995)
16 ILJ 629 (LAC) at 636-638)
.
The further sections then
regulate how dismissal disputes are to be resolved and set out the
remedies available in those disputes.
Included amongst them is the
right to enforce a bargain which entitles an employee to any amount
greater than the statutory compensation
allowed for under the Act
(section 195).
[12]
It
is true that the Act does not define what an “unfair”
dismissal is, but that is understandable given the many
forms that
unfairness can take and the jurisprudence that has already
crystallized on this issue under the unfair labour practice
provisions of the old Act. It is also true that the Act has
drastically interfered with a number of aspects of the common law
contract of employment – a fact readily acknowledged by Mr.
Gauntlett, who, together with Mr. Halgryn, appeared for the
appellant.
The result, he argued, is that in some instances the
position of employees is enhanced and in others the position of
employers.
There may be a debate about who, on balance, is better off
in the end, but if there is complaint in that regard the
constitutionality
of the restrictions must be tested under section 36
of the Constitution ( compare
Naptosa v Minister of Education,
above, [4], at 395 E-F ). Generally speaking, however, employees
have gained much that they did not previously have. Their primary
remedy now is reinstatement, which must be ordered unless specified
conditions exist (sections 193(1)(c) and 193(2)). It is in
this
context, so Mr. Gauntlett submitted, that the statutory remedies,
including the limits set to the amount of compensation in
section 194
of the Act, must be viewed.
[13]
Neither side, however, referred to the provisions of section 195 in
their written heads of argument. Its terms offer further
support, in
my view, of the Act’s purpose to deal comprehensively in
Chapter 8 with all dismissals from employment of employees
under the
Act (but it does not help the appellant’s contention that
compensation under section 194 is all that the respondent
is entitled
to). It may be an objectionable feature of the statute if it deprives
employees, on dismissal, of the right to enforce
bargained terms in
their contracts of employment that would put them in a better
financial position than that which the statute
itself provides for.
Section 195 ensures that this may not occur (compare the similar
approach in section 4 of the Basic Conditions
of Employment Act 75 of
1997 (the BCE Act) ).
[14]
The judge in the court below characterized the issue to be decided in
broad and general terms as “whether or not the ordinary
civil
courts, having regard to the LRA, retained their jurisdiction to
adjudicate common law contractual breaches of agreements
of
employment”. From what I have already stated it should be clear
that I consider the issue to be much narrower and more
specific. He
also set store by the fact that there was no express exclusion in the
Act of the common law claim to damages and that
the presumption
against taking away existing rights operated against an
interpretation that the Act impliedly did so. In my view
these
considerations are misplaced. The Act does not purport to change the
pre-constitutional common law by expressly mentioning
each and every
aspect of it that it wishes to change. It deals with specific issues
and states expressly what the law now is in
regard to those issues.
To determine to what extent the common law was changed by that one
has to compare these express provisions
with what the common law was
and determine the extent of the changes wrought by the Act. The
presumption against taking away existing
rights also presupposes a
common law contract of employment free of the spirit and values
underlying constitutionalised labour
rights (The use of common law
presumptions in such a context may prove problematical –
compare J R de Ville,
Constitutional & Statutory
Interpretation
, Cape Town, 2000, at 62-69). . I would imagine
that our law of employment, infused with these values, would make
provision both
for a system that guarantees that employees may be
entitled to claim as their financial due that which they bargained
for, over
and above basic statutory entitlements, as well as for a
right not to be unfairly dismissed. I happen to think that this is
what
the Act (and the BCE Act in a different context) achieves,
albeit perhaps not to the fullest extent possible. However, even if
I am wrong in viewing the Act as dealing comprehensively with these
issues, I am of the view that the common law contract of employment
must then give some form of expression to that fundamental right not
to be unfairly dismissed. As soon as the common law does
give some
expression to that right, I have the same kind of difficulty as
Nienaber JA had in
National Union of Metalworkers of SA v Vetsak
Co-operative Ltd
, above [3], namely to conceive how an unlawful
dismissal would not also be an unfair dismissal. And if such a
dismissal is unfair
any dispute about it falls squarely within the
opening words of section 191(1) of the Act. In short, one of the
demands of the
Constitution on our common law of employment is that
it includes a right to a fair dismissal. Dismissal upon an unlawful
breach
of contract by an employer is an unfair dismissal. And the
Act deals fully with the consequences of an unfair dismissal.
[15]
The respondent’s claim is capable of being seen as a claim
for a monetary benefit that he bargained for and is entitled to
under
section 195 of the Act in addition to the compensation that may be
awarded under section 194, namely as damages in lieu of
specific
performance (compare De Wet and Van Wyk,
Kontraktereg en
Handelsreg,
5
th
ed, 208-212). For present purposes it
is not necessary to decide whether his claim comfortably fits within
the traditional formulation
of that kind of claim under the common
law of contract, or whether some adaptation will be necessary to
enable it to be so accommodated,
but only to determine which forum is
competent to determine that issue.
[16]
Once it is accepted that this particular dispute is one about the
fairness of a dismissal it follows that it must be dealt with
in
accordance with the procedure set out in section 191 of the Act, a
procedure which in one way or another ends up with the Labour
Court
(and on appeal, the Labour Appeal Court) having the final say. The
Labour Court has the competence to award damages (section
158(1)(a)(vi) ), if that is what is called for under section 195 of
the Act. The present case thus becomes a matter to be determined
by
the Labour Court in terms of the Act and also, by virtue of the
provisions of section 157(1) of the Act, a matter to be determined
exclusively by that court.
[17]
Mr. Pretorius, who appeared for the respondent with Mr. Antonie
sought to avoid this conclusion by relying on section 77(3) of
the
BCE Act . That section 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
an agreement.
This, he submitted, gives the High Court concurrent jurisdiction with
the Labour Court to determine this matter.
In my view the submission
is unsound. The High Court does not need the BCE Act to give it
jurisdiction in a matter concerning a
contract of employment. It has
that residual competence in any event, although it may be attenuated
by statutory provisions such
as section 157(1) of the Act. What
section 77(3) does is to give the same residual concurrent competence
to the Labour Court, something
that court does not enjoy without
specific statutory authority.
[18]
In
my view, therefore, the exception to the special plea should have
been dismissed. I would allow the appeal with costs, including
the
costs of two counsel, and substitute the order in the court below
with the following:
“The
exception is dismissed. The defendant’s special plea is upheld,
and the plaintiff’s claim dismissed, with
costs”.
___________________
FRONEMAN
AJA
1
Section 27(1) of the interim Constitution Act 200 of 1993 had
similar provisions.