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[2019] ZASCA 114
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Lewarne v Fochem International (Pty) Ltd (1073/18) [2019] ZASCA 114; (2019) 40 ILJ 2473 (SCA); [2020] 1 BLLR 33 (SCA) (18 September 2019)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
reportable
Case
No: 1073/18
In
the matter between:
CHERYLL
LEWARNE APPELLANT
and
FOCHEM INTERNATIONAL
(PTY)
LTD RESPONDENT
Neutral
citation:
Lewarne
v Fochem International (Pty) Ltd
(1073/18)
[2019] ZASCA 114
(18 September 2019)
Coram:
Tshiqi, Wallis,
Zondi, Mocumie and Plasket JJA
Heard:
23 August 2019
Delivered:
18 September 2019
Summary:
Whether the Labour Court has exclusive jurisdiction in
matters
concerning
an employment contract –
sections 77(1)
and
77
(3) of the
Basic
Conditions
of
Employment Act 75 of 1997
apply –
section 77(3)
confers
concurrent jurisdiction to
the
Labour Court and civil courts.
ORDER
On
appeal from
:
Gauteng Division, of the High Court
Johannesburg (Thobane AJ) sitting as court of first instance):
1 The appeal is
upheld with costs.
2 The order of
the court
a quo
is set aside and substituted with the
following
order:
‘
(a) The
respondent’s point of law raised in terms of Rule 6(5)
(d)
(iii)
of the Uniform Rules of the Court is dismissed.
(b) The
respondent is ordered to make the following payments to the
applicant:
i A sum of
R325 000 (less deductions for UIF and PAYE);
ii Interest on
the above amount at the rate of 10.25% per annum a
tempore
morae
;
and
iii Costs of the
application.’
JUDGMENT
Tshiqi
JA (Wallis, Zondi, Mocumie and Plasket JJA concurring):
[1]
The narrow issue in this appeal is whether the Gauteng Division of
the High Court, Johannesburg, had the jurisdiction to determine
the
appellant’s application for an order for the payment of her
salary by the respondent, Fochem International (Pty) Limited,
her
employer at the time.
[2]
The appellant, Ms Cheryll Lewarne, was employed by the respondent as
a Financial Manager for approximately eight years and,
thereafter, as
a director at a gross monthly salary of R 75000. She was also
entitled to be paid a 13
th
cheque equal to one month’s
salary annually on or before 20 December. On December 2016, the
appellant was only paid an amount
of R50 000 as a 13
th
cheque. On 12 January 2017, her attorneys of record received a letter
from the respondent’s attorneys accusing the appellant
of
several acts of impropriety ranging from company credit card abuse,
unauthorised trade in and purchase of a motor vehicle at
company
expense, unlawful employment of her son, unauthorised increase of her
salary, failure to comply with a company directive
and incapacity
resulting from constant ill-health. The letter also placed the
appellant on suspension with immediate effect.
[3] Correspondence was
thereafter exchanged between the appellant’s attorneys and the
respondent's attorneys. On 24 January
2017, in response to a demand
from the appellant’s attorneys that the appellant be paid the
balance of her 13
th
cheque, the respondent's attorneys
wrote:
‘
My
client concedes that the employment contract provides that a 13
th
cheque is payable to your client on or before the 20
th
December of each year. However, neither this amount nor your client's
January 2017 salary is being paid to your client as such
amounts have
been deducted and appropriated towards your client's indebtedness to
my client (in excess of R300,000) arising from
your client's unlawful
personal expenditure on the company credit card. This is in
accordance with clause 12 of the employment
contract and the common
law principle of set-off. This will also apply to any further
payments which may become payable to your
client. Legal proceedings
will be instituted against your client in due course for the balance
owing in respect of the credit card
indebtedness.’
[4] On 5 May 2017, the
appellant launched an application in the high court for an order in
the following terms:
‘
1.
Payment to the applicant of
1.1.
The sum of R25 000,00;
1.2.
The sum of R300 000,00 less legal deductions of UIF and PAYE
(net remuneration amounting to R207 405,12, being the
total
remuneration for the months of January 2017, February 2017, March
2017 and April 2017;
1.3.
Such further remuneration as may have become payable as at the date
of the hearing of this application.
2.
Ordering the respondent to make payment to the [a]pplicant of
interest on the aforesaid
amounts
calculated at 10,25% per annum a tempore morae from the date that the
payments
fell
due to date of payment in full, both days inclusive.
3.
Ordering the respondent to make payment of the [a]pplicant's future
remuneration as and
when
it falls due.
4.
Ordering the [r]espondent to pay the costs of the application
.’
[5]
The application was opposed by the respondent which elected not to
file an opposing affidavit but delivered a notice in terms
of Rule
6(5)
(d)
(iii)
of the Uniform Rules of Court, in terms of which the respondent
prayed for an order that the appellant’s application
be
dismissed on a point of law on the basis that the high court lacked
jurisdiction to determine the dispute. In support of the
point of law
raised, the respondent alleged that on a proper reading of the
appellant's founding affidavit, her pleaded case was
essentially that
the respondent had made certain unlawful deductions from her
remuneration and that for this contention she relied
on the
provisions of s 34 of the Basic Conditions of Employment Act 75 of
1997 (the BCEA) as amended. For this reason, so submitted
the
respondent, the Labour Court had exclusive jurisdiction to adjudicate
the claim in terms of the provisions of s 77(1) of the
BCEA. The high
court upheld the point of law, and dismissed the application with
costs. The appeal is before this court, with the
leave of the high
court. The issue to be determined is whether the high court was
correct in its finding that it did not have the
necessary
jurisdiction to hear the application.
[6] Both the provisions
of s 77(1) and (3) of the BCEA are relevant to the determination of
the jurisdiction of the high court in
this dispute. Section 77 in
relevant parts provides:
‘
(1)
Subject to the Constitution and the jurisdiction of the Labour Appeal
Court and except where this Act provides otherwise, the
Labour Court
has exclusive jurisdiction in respect of all matters in terms of this
Act.
(2)
. . .
(3)
The Labour Court has concurrent jurisdiction with the civil courts to
hear and determine any mater concerning a contract of
employment,
irrespective of whether any basic condition of employment constitutes
a term of that contract.’
[7]
When a court’s jurisdiction is challenged, the court should
base its conclusion on the applicant’s pleadings, as
they
contain the legal basis of the claim under which the applicant had
chosen to invoke the court’s competence.
[1]
In a string of cases, the Labour Court and the Labour Appeal Court
have
refined the parameters of the Labour Court’s exclusive
jurisdiction in terms of s 77(1) of the BCEA and have
held that the provisions of s 77(1) do no more than confer a residual
exclusive jurisdiction on the Labour Court to deal with those
matters
that the BCEA requires to be dealt with by the court.
[2]
[8]
Generally in instances where the dispute relates to, is linked to, or
is connected with an employment contract, s 77(3) of the
BCEA which
confers concurrent jurisdiction on the civil courts and the Labour
Courts applies. In the present matter, the appellant’s
action
arose
out of and related to the contract of employment between her and the
respondent. It
was
for payment of money due to her in terms of her employment contract.
It
was this action that was before the court and on which it had to
decide whether it had the necessary jurisdiction
.
It
was thus not necessary for the court to place any reliance on the
appellant’s reference, in her founding affidavit, to
the
respondent’s professed reasons for withholding her
remuneration, and the fact that that was in contravention of
s
34 of the BCEA
.
These allegations were simply a summary of relevant facts but they
did not alter the essential nature of the appellant’s
action.
They amounted to what this court termed, in
Fedlife
Assurance Ltd v Wolfaardt
[3]
as ‘mere surplusage’.
[9]
Apart from the failure to grasp the nature of the action before it,
the high court supported its conclusion that it did not
have
jurisdiction, by erroneously relying on the minority judgment in
Fedlife Assurance.
It
ignored the majority judgment, which, after having found that a
clearly identifiable and recognisable common law claim for damages
had been pleaded, concluded that the Labour Court did not have
exclusive jurisdiction to adjudicate such a dispute. In placing
its
reliance on a minority judgment, the high court ignored the
well-established principle of
stare
decisis
. In placing reliance on the
minority judgment, the high court also overlooked the fact that the
minority judgment first classified
the dispute as an unfair dismissal
and then concluded that it fell within the jurisdiction of the Labour
Court.
[10]
For all these reasons the high court erred in finding that it did not
have jurisdiction, and, in the absence of an answering
affidavit,
attacking the merits of the application, the appellant is entitled to
succeed on the relief sought in its prayers. I
therefore make the
following order:
1 The appeal is
upheld with costs.
2 The order of
the court
a quo
is set aside and substituted with the
following order:
‘
(a) The
respondent’s point of law raised in terms of Rule 6(5)
(d)
(iii)
of the Uniform Rules of the Court is dismissed.
(b) The
respondent is ordered to make the following payments to the
applicant:
i A sum of
R325 000 (less deductions for UIF and PAYE);
ii Interest on
the above amount at the rate of 10.25% per annum a
tempore morae
;
and
iii Costs of the
application.’
_______________
Z L L Tshiqi
Judge
of Appeal
APPEARANCES:
For
Appellant: H M Viljoen
Instructed
by: Lloyd Kieser Inc, Johannesburg
Webbers
Attorneys, Bloemfontein
For
Respondent: L M Malan (with him N R Naidoo)
Instructed
by: Edward Nathan Sonnenbergs, Johannesburg
Symington
& De Kok, Bloemfontein
[1]
See
Gcaba
v Minister for Safety and Security & others
[2009] ZACC 26
;
2010 (1) SA 238
(CC);
[2009] 12 BLLR 1145
(CC) para
75.
[2]
See
Ephraim
v Bull Brand Foods (Pty) Ltd
(2010)
31 ILJ 951 (LC) para 4;
Makume
v Hakinen Transport CC
(2011) 32 ILJ 928 (LC) paras 5, 15-16 and 22.
[3]
Fedlife
Assurance Ltd v Wolfaardt
2002
(1) SA 49
(SCA) para 21.