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Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. This newsletter contains an article on fixed term contracts. We also look at three new cases: the first deals with whether the High Court (in addition to the Labour Court) can also hear labour matters, particularly in the case of employees in the public service. The second deals with when circumstantial evidence can be relied upon in making a finding of fact. The third deals with length of service for the purposes of calculating severance pay.
This public newsletter is a free edited version of the Worklaw subscriber newsletter.
Can the High Court hear labour matters? What about public servants? An issue which has long divided courts and legal opinion concerns the jurisdiction of the Labour Court and the High Court to hear certain disputes involving employment and labour relations. After being considered by the SCA, this matter recently went on to the Constitutional Court. In Chirwa v Transnet Limited and Others (Case CCT 78/06; 28 November 2007) the dispute arose from the dismissal of an employee, after an enquiry held by her supervisor, on the grounds of inadequate performance, incompetence and poor employee relations. The employee first challenged her dismissal in the CCMA on the basis that it was procedurally unfair. After conciliation failed, she did not pursue the labour relations mechanisms further, but rather approached the High Court on the basis that the dismissal violated her constitutional right to just administrative action, as given effect to by the Promotion of Administrative Justice Act (PAJA).
The High Court applied the principles of natural justice and found that the dismissal was unfair and granted the order for her reinstatement. The employer, Transnet, appealed the order to the Supreme Court of Appeal. The majority of the court upheld the appeal on the basis that the dismissal of Ms Chirwa did not fall to be reviewed under the provisions of PAJA.
The employee then approached the Constitutional Court, relying on her right to procedurally fair administrative action. The claim was based on the proposition that since Transnet is an organ of state, the dismissal of its employee necessarily amounted to an exercise of public power, which is reviewable under sections 3 and 6 of PAJA. In the alternative, the employee relied on section 195 of the Constitution, which sets out the principles that must guide public administration in the carrying out of its functions. These include accountability, professional ethics, fairness and objectivity.
This case illustrates that a dismissal of a public sector employee may give rise to two causes of action, one under the labour law regime and the other under the administrative justice regime. Therefore, an additional issue before the Constitutional Court was whether the High Court has concurrent jurisdiction with the Labour Court in matters that arise out of an employment dispute, such as in the present case.
The Constitutional Court decided this matter on the basis of jurisdiction alone. It held that the employee’s claim was based on an allegation of an unfair dismissal for alleged poor work performance and should therefore have followed to the end the procedures and remedies under the LRA, which specifically regulate this type of labour dispute. The court found that the High Court did not have concurrent jurisdiction with the Labour Court in this matter. First, the employee had expressly relied on provisions of the LRA in formulating her claim in the lower courts as well as in this Court. Second, an applicant cannot be in a preferential position, having access to multiple forums, simply because of her or his status as a public sector employee.
The court found that it was unnecessary to decide the question whether the dismissal amounted to administrative action. If however, this determination needed to be made, there was consensus that the dismissal of the employee by Transnet did not amount to administrative action.
So what can we learn from the Chirwa case? The Constitutional Court seems to have clarified that if your cause of action is based on the Labour Relations Act (eg a claim for unfair dismissal), you can`t then jump ship and approach the High Court for relief. You must follow through by using the mechanisms available under the LRA - ie CCMA, bargaining councils, Labour Court etc. It based its views in this regard primarily on section 157(1) of the LRA, which it interpreted as saying that the High Court`s jurisdiction is ousted in respect of matters which the LRA says are to be determined by the Labour Court. What is interesting, is that it seems to accept that unfair dismissals are 'determinable by the Labour Court", because of the process provided in the LRA of conciliation and arbitration, followed by the possibility of review by the Labour Court.
But we must not forget that there has been a consistent approach in the Supreme Court of Appeal (SCA) to allow what are effectively labour disputes to be heard in a court other than the Labour Court. Our November 2007 newsletter deals with this, discussing the recent case of Boxer Superstores Mthatha and another v Mbenya (SCA Judgment:31 May 2007). It will be interesting to see what effect the Constitutional Court`s views in the Chirwa case have on the SCA`s approach as depicted in the Mbenya case. It would seem that as long as the cause of action in a case is not based on the LRA - eg a challenge by an employee to the lawfulness (as opposed to the fairness) of the employer`s actions - an applicant can still refer an employment dispute to the High Court (the Chirwa judgement stated that "the jurisdiction of the High Court is not ousted simply because the dispute is one that falls within the overall sphere of employment relations..."). The SCA did however warn in the Mbenya case that if an employee referred the dispute to the ordinary courts as opposed to the labour courts, this could limit the relief that the High Court might grant. The specific powers given to the labour courts under the LRA may not be available to other courts.
But the issues are still not clear. For example, the Mbenya case showed that the High Court has accepted that an employee has an implied contractual right to a pre-dismissal hearing ie a traditional element of 'fairness' has now been given the status of a contractual right. The dividing lines between lawfulness and fairness need to be further clarified.
When there is no direct evidence of some incident, under what circumstances can the chair of a disciplinary hearing or an arbitrator rely on circumstantial evidence? A circumstantial fact is one from which an inference may properly be drawn as to the existence, or non-existence, of a fact in issue. Circumstantial evidence is therefore any fact which tends to prove that the existence of a fact in issue is more probable, or less probable. It is relevant, together with any fact that tends to deny a reasonably probable alternative explanation to the existence, or non-existence, of a fact in issue.To be admissible, circumstantial evidence must be more than merely logically relevant: it must be sufficient to afford a reasonable inference as to a fact in issue. The correct use of circumstantial evidence arose in NUMSA & another v Kia Motors & others (2007) 28 ILJ 2283 (LC) where the Labour Court found that the arbitrator's conclusion was based on speculation, and was not supported by objective facts. The court stressed that when relying on circumstantial evidence, the inference sought to be drawn must be consistent with all the proved facts. If it is not, then the inference cannot be drawn. The true facts should be such that they exclude every reasonable inference from them save the one sought to be drawn. If they do not exclude other reasonable inferences, then there must be doubt whether the inference sought to be drawn is correct.
Length of service for the purposes of calculating severance pay
An employee, after the transfer of his employer's business as a going concern, agreed with his new employer to become a 'new employee'. When he was later retrenched a dispute arose as to the period of service to be taken into account when calculating his severance pay. In AST Holdings (Pty) Ltd v Roos (2007) 28 ILJ 1988 (LAC) the Labour Appeal Court held that, although nothing prevents the new employer and the employee from agreeing to vary or alter the employee's terms of employment, the date of the commencement of employment cannot be altered by agreement. Under s 197(2)(a) of the LRA the parties may alter the terms of the transferred contract, but they cannot escape the fact of its existence. Because an employee's continuity of employment is not a right or obligation, or a term of the employment contract, express provision was made in s 197(4) that the transfer of the employment contract would not interrupt that continuity. There is no provision in it, similar to s 197(2), which allows the parties to alter an employee's continuity of employment by agreement.
The effect of this judgment is to confirm that an agreement to forfeit a period of service with the old employer is unlawful and contrary to the express provisions of the LRA.
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December 2007 / January 2008