Employment law update – Employee claiming damages for infringement of constitutional rights

September 1st, 2023

In Letimile v Cape Town International Convention Centre Company SOC Ltd [2023] 7 BLLR 670 (LC), a disabled employee instituted a claim in the Labour Court (LC) under the Employment Equity Act 55 of 1998 for general damages from her employer, the Cape Town International Convention Centre Company SOC (CTICC). The employee claimed damages based on CTICC allegedly violating her constitutional rights to –

  • freedom of expression and association by prohibiting her from continuing to publish views on the sexual health of disabled women;
  • bodily integrity and privacy by demanding disclosure of her medical records; and
  • human dignity by intimidating, insulting, and humiliating her in its response to the publication of her views.

The CTICC raised an exception to the employee’s statement of claim on the basis that the employee had breached the principle of subsidiarity by relying directly on the Constitution rather than specific employment legislation put in place to give effect to constitutional rights (ie, the Labour Relations Act 66 of 1995 (LRA), the Employment Equity Act and applicable codes of good practice). The CTICC argued that the employee’s claim in the LC had to be confined to the relief afforded by applicable employment legislation and, accordingly, the employee’s statement of claim failed to disclose a valid cause of action.

The employee contended that the LC had jurisdiction to entertain her claim by virtue of s 157(2) of the LRA. Section 157(2) of the LRA provides that the LC has concurrent jurisdiction with the High Court in respect of any alleged or threatened violation of any fundamental right entrenched in the Bill of Rights and arising from, inter alia, employment and labour relations. The employee accordingly argued that the subsidiarity principle was of no relevance as she relied on s 157(2) of the LRA to establish her cause of action for damages.

The LC noted that the principle of subsidiarity means that where legislation gives effect to constitutional rights, the Constitution cannot be relied on directly. However, the application of the subsidiarity principle in relation to labour legislation is complex and the outer contours of the principle of subsidiarity have not yet been fully defined by our courts. Further, our courts are anxious to not close the door on potential, novel claims in circumstances where all the facts have not yet been placed before the court, such as in the present matter.

Nevertheless, the employee had not based her claim on the concept of subsidiarity. Rather the employee had tied her claim to s 157(2) of the LRA, which she contends allows her to seek general damages relying directly on fundamental rights contained in the Constitution. Considering the interpretation of s 157(2), the LC held that this section was enacted to extend the jurisdiction of the LC to disputes concerning the alleged violation of constitutional rights arising from employment and labour relations, rather than to restrict or extend the jurisdiction of the High Court.

The LC noted that the constitutional rights to privacy, bodily integrity and freedom of expression are not unknown quantities in the LC. Their infringement arises in cases under the umbrellas of sexual harassment, discrimination, and dismissal claims. The real issue at the heart of this exception was the question as to whether the reliance on constitutional rights, apart from that to equality and fair labour practices, can give rise to a discreet damages claim, over and above the damages claim allowed for under the Employment Equity Act.

In other words, the court will have to determine whether the employee’s rights were infringed as pleaded and if so, whether this would impact on the damages awarded under the Employment Equity Act or give rise to a separate and additional award of general damages as sought by the employee. How the court may determine the appropriate remedy should it find for the employee was not, however, the subject of the exception.

The LC accordingly found that the principle of subsidiarity did not apply in this case as the employee had relied on s 157(2) of the LRA to raise alleged violations of her fundamental rights.

The exception was dismissed.


Pension fund claiming arrear contributions for dismissed employees who were re-employed

In South African Municipal Workers’ Union National Provident Fund (Pty) Ltd v Dihlabeng Local Municipality and Others [2023] 7 BLLR 626 (SCA), several employees of Dihlabeng Local Municipality (the Municipality) engaged in an unprotected strike resulting in their subsequent dismissal on 31 July 2009. The affected employees challenged their dismissal and before the matter was heard, the Municipality and the affected employees entered into a settlement agreement in terms of which it was agreed, inter alia, that:

  • The dismissed employees were to be employed by the Municipality with effect from 8 October 2009, on condition that the employees received a final written warning for participating in an unprotected strike.
  • No salary, benefits, or compensation will be paid for the period that the employees were unemployed. Put differently, no retrospective salaries or benefits will be paid by the Municipality.
  • The employees’ previous years of service would be recognised by the Municipality as if the employees were employed continuously.

Thereafter, the employees were allocated new employee numbers and their leave cycles and increases commenced from 8 October 2009. They were also allowed to choose the pension fund to which the Municipality would pay their pension fund contributions. Eighteen of the employees, who were formerly members of the South African Municipal Workers’ Union National Provident Fund (SAMWU Fund), elected to become members of the Municipal Employees Pension Fund (MEPF) with effect from 8 October 2009.

Two years after the settlement agreement, these 18 employees approached the SAMWU Fund and requested payment of their withdrawal benefits arising from their dismissal on 31 July 2009. The SAMWU Fund refused to pay their benefits. Consequently, the affected employees referred a complaint to the Pension Funds Adjudicator (the Adjudicator), which complaint was dismissed on the basis that the employees had been reinstated by the Municipality and there had been no break in their service, as well as their membership with the SAMWU Fund.

Thereafter, the SAMWU Fund instituted a claim in the High Court in terms of s 13A of the Pension Funds Act 24 of 1956 for payment of alleged arrear pension fund contributions, as well as interest thereon, from the Municipality. The application was dismissed and leave to appeal was granted.

On appeal, the SAMWU Fund argued that on a proper interpretation of the settlement agreement, the affected employees had been reinstated and not re-employed. Further, that the matter was res judicata as the issue of re-employment or reinstatement had already been determined by the Adjudicator in a binding determination, and that the Municipality was estopped from contending otherwise. The Municipality, on the other hand, argued that the affected employees concerned had ceased to be members of the SAMWU Fund and had validly elected to change their retirement fund and to become members of the MEPF because of them being re-employed as opposed to being reinstated.

On the issue of res judicata, the Supreme Court of Appeal held that while the determination by the Adjudicator is deemed to be equivalent to a civil judgment, the dispute determined by the Adjudicator was not between the same parties. The Municipality was not party to the proceedings and was not given an opportunity to be heard. Further, the complaint before the Adjudicator was about the SAMWU Fund’s refusal to pay the employees their withdrawal benefits following their dismissal. In the High Court, however, the SAMWU Fund sought to enforce payment of arrear contributions by the Municipality. The Adjudicator did not decide this issue.

Turning to the issue of whether the Municipality was obliged to pay any arrear pension fund contributions to the SAMWU Fund, the court held that this was dependent on whether the employees had been reinstated or re-employed in terms of the settlement agreement. The SAMWU Fund contended that reinstatement restores the employment relationship, as if the employee was never dismissed. The employee need not be reinstated on identical terms and can be reinstated on different terms. Thus, the High Court erred in finding that the employees were re-employed and not reinstated.

The court held that reinstatement and re-employment have different legal consequences. Where employees are reinstated, they resume employment, and the original employment contract simply revives. Re-employment, on the other hand, entails new contracts of employment and the benefits arising from the past employment relationship are not extended to the new employment relationship.

When considering the text of the settlement agreement, the court noted that it was agreed between the parties that no salary, benefits or compensation, and no retrospective salaries/benefits, would be paid to the employees. When sensibly interpreted, it is understood to mean that the parties intended for re-employment instead of reinstatement. The acknowledgement of the employees’ previous years of service was simply a concession made by the Municipality for the purpose of calculating the employees’ leave and notch increases with respect to remuneration.

Thus, when considering the terms of the agreement, the context in which the agreement was concluded, and the conduct of the parties after its conclusion, it was clear that the intention of the parties was for the affected employees to be re-employed and not reinstated. Further, on the basis that no salaries nor benefits were paid for the period during which the employees were unemployed meant that no contributions would have been deducted for payment to the SAMWU Fund for that period. Accordingly, the SAMWU Fund was not entitled to enforce payment of such contributions against the Municipality.

In the circumstances, the court held that the High Court’s finding that the employees were re-employed and not reinstated was correct.

The appeal was dismissed with costs.

Nadine Mather BA LLB (cum laude) (Rhodes) is a legal practitioner at Bowmans in Johannesburg.

This article was first published in De Rebus in 2023 (Sep) DR 38.

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