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OCTOBER 2006 PUBLIC NEWSLETTER


Worklaw is a subscription based labour law service developed by leading South African labour lawyers and arbitrators. Worklaw gives you all you need to manage labour law at the workplace. Go to www.worklaw.co.za

Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. This newsletter contains an article about whether the CCMA must defer to the sanction chosen by the employer.  We also look at a very recent case dealing with whether a dismissed employee of a state organ (whether it be a municipality, state department or Transnet) can opt to avoid the LRA and proceed directly to the High Court.

This public newsletter is a free edited version of the Worklaw subscriber newsletter.

LATEST CASES

Is a dismissal by the state an ‘administrative act’, entitling the dismissed employee to seek relief in the High Court? One of the confusions in employment law is the overlap between labour law, constitutional law and administrative law. When an employee of a state organ (whether it is a municipality or Transnet) is allegedly unfairly dismissed, must this be treated simply in terms of the LRA, OR - is it a violation of the constitutional right to fair labour practices? - is it a violation of the right to fair administrative action in terms of the Promotion of Administrative Justice Act (PAJA)?

This came before the Supreme Court of Appeal in the recent case of Transnet Limited v PNN Chirwa [2006] SCA 131 (RSA). What is unsettling is that the SCA issued 3 judgments, giving a 3-2 spilt in favour of the view that dismissal, being a matter of contract, is not an administrative act and so falls outside PAJA.  The case should accordingly have been dealt with by the Labour Court in terms of the LRA.

This was an appeal from the judgment of the Johannesburg High Court where the decision by Transnet to dismiss an employee was set side. The High Court had found that it did have jurisdiction, on the basis that the termination of a contract of a publicsector employee was an exercise of public power which is subject to the principles of natural justice and administrative law. The Court had ordered reinstatement.

At the internal disciplinary hearing the employee had refused to participate in the proceedings mainly because she objected to the fact of who was presiding. Her reason for doing so was that this person could not act as the complainant, witness and presiding officer at the same time. Despite her objection the chairperson proceeded with the enquiry, at the conclusion of which the employee was dismissed. His argument was that as her manager and supervisor, he was not only entitled, but indeed the most suitable person, to do so, in that no one else would be able to assess the applicant’s work.

The employee challenged her dismissal on the basis that it violated her right to administrative action that was lawful, reasonable and procedurally fair as enshrined in s 33 of the Constitution. The High Court decided the matter on the principles that the termination of a contract of a publicsector employee was an exercise of public power which is subject to the principles of natural justice and administrative law.

On appeal two issues were raised. The first is whether the dismissal was a matter which fell to be determined exclusively by the Labour Court in terms of s 157(1) of the LRA. The second was whether the dismissal of the employee constituted an administrative action as defined in s 1 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA).

The employee alleged that the termination of her services constituted a violation of her right to administrative action that is lawful, reasonable and procedurally fair as enshrined in s 33 of the Constitution. She thus raised a constitutional issue justiciable in the High Court. The High Court derives its power to deal with such a matter from s 169 of the Constitution. The Labour Court on the contrary has ‘concurrent jurisdiction’ with the High Court in respect of any violation of a constitutional right. It does not have general jurisdiction on labour matters where a constitutional dispute is raised.

The applicant could therefore institute proceedings in either the Labour Court or the High Court. That she deliberately exercised her option, was clear from her founding affidavit where she says:

‘I have been advised that I have, available to me, more than one cause of action; one flowing from the Bill of Rights as enshrined in the Constitution of this country as read with the provisions of PAJA. For practical considerations and in the exercise of my constitutional right of access to the courts I have elected to base my cause of action on the Constitution and the PAJA and to approach the above named Honourable Court for appropriate relief.’

The majority decision of the SCA upheld these principles:

1. Conduct only amounts to administrative action if it is the exercise of public power or the performance of a public function in terms of any legislation. The nature of the power or function is paramount, the identity of the functionary exercising the power or performing the function is secondary.
2. Where the nature of the conduct involved is the termination of a contract of employment, it is based on contract and does not involve the exercise of any public power or performance of a public function in terms of some legislation.
3. Ordinarily the employment contract has no public law element to it and it is not governed by administrative law.
4. Where it cannot be shown that the dismissal was an administrative action as defined in PAJA or that any of her rights under s 33 of the Constitution were violated, the matter must be dealt with in terms of the LRA ie by the Labour Court.

This judgment – because of the 3-2 spilt in the judges - is probably not the last word on the matter, which is unsettling for public service employees. What is further unsettling, as discussed In the article which appears in this month`s subscriber newsletter, is that it will be seen that PAJA was however held to apply to CCMA commissioners when they arbitrate.

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Bruce Robertson
October 2006
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