Employment law update – Labour Court’s jurisdiction in respect of contractual disputes

September 1st, 2022

NEHAWU and Others v UNISA and Another (LC) (unreported case no J569/22, 21-6-2022) (Nukutha-Nkontwana J)

The employees wore two caps: They were all elected shop stewards within the structure of the applicant trade union, as well as employees of the University of South Africa (Unisa).

On 19 April 2022, Unisa served the employees with a notice of immediate suspension wherein they were given until 22 April 2022, to provide reasons why their employment should not be summarily terminated. Unisa’s stance stemmed from allegations that the employees incited fellow employees to embark on an unprotected strike during which time, employees disrupted graduation ceremonies and the university’s academic programmes. In addition, Unisa took the view that such conduct brought its name into disrepute.

On 6 May 2022, the employees were all served with a notice of termination.

On 18 May 2022, the union on behalf of the employees launched an urgent application, in terms of s 77(3) of the Basic Conditions of Employment Act 75 of 1997 (the BCEA), at the Labour Court (LC) seeking an order –

  • declaring the dismissals of the employees invalid and of no force and effect;
  • interdicting the employer from terminating the employment contracts without first following the employer’s disciplinary code and recognition agreement with the union; or
  • alternatively, reinstating the employees pending a determination of an unfair suspension disputed referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) or an internal disciplinary process or an unfair dismissal dispute which would be referred to the CCMA.

The respondent raised two preliminary points, namely –

  • the first dealing with urgency; and
  • the second pertaining to the court’s jurisdiction to hear the matter.

The union launched its claim on 18 May 2022, some ten days after its members’ employment contracts had been terminated. In its founding affidavit the union argued that it had no easy access to legal representatives. The court rejected this argument on grounds that the union was not a novice union.

The union further argued that it would not obtain substantial redress in due course (which in turn supported grounds for urgency) simply because the employer’s argument was unlawful. The court, in relying on binding authority, rejected the notion that an alleged unlawful breach of an employment contract, automatically gives rise to urgency.

Lastly, on the issue of urgency, the union argued that pursuant to the financial hardship its members would face if the matter was not disposed of by way of urgency; was an additional factor, which warranted the court to dispense with the normal rules and deal with the matter on an urgent basis. The court noted that the general principle is that financial hardship does not induce urgency – the exception being, if the applicant can demonstrate exceptional circumstances that arise out of the financial hardship, such as losing one’s home. On the papers before it, the union failed to show any exceptional circumstances that would justify the court to hear the matter on an urgent basis.

Having found that the matter ought to be struck off the role for lack of urgency, the court nevertheless entertained the employer’s second point in limine regarding jurisdiction.

Unisa argued that the union’s case was essentially one wherein they challenged the fairness of their members’ dismissals. While the union stated in its founding affidavit that the matter was launched within s 77(3) of the BCEA, the union failed to edify the court how the disciplinary code should be read into the employment contract as a term and condition of employment.

The court agreed with the employer’s argument on this score and went further to state the fact that it had no jurisdiction to hear a claim wherein it is alleged that a dismissal is unlawful or invalid.

However, even if the code ought to have been read into the employee’s respective contracts – a further hurdle for the union was that the contracts had already been terminated by the time the application was heard and, therefore, not susceptible to a contractual challenge.

In addressing this point further, the court referred with approval to the matter of SAMWU v Tswaing Local Municipality and Others (LC) (unreported case no J1230/20, 17-11-2020) (Moshoana J) where the LC in that matter stated:

‘In my view where a contract of employment is terminated or cancelled, whether lawfully or unlawfully, fairly or unfairly, the jurisdiction of this court under section 77(3) cannot be invoked. In this regard, I am fortified by the language employed by the legislature. The word “concerning” is used as a preposition in a present continuous tense. If the legislature had in mind a matter involving a terminated contract, it could have used a verb like “concerned” … . Therefore, in my view, at the time the Labour Court hears and determines a matter, the contract must be still extant. My view obtains further substance and fortification from the phrase “irrespective of whether any basic condition of employment constitutes a term of that contract.” Clearly a contractual dispute arises on the basis of the terms of an existing contract. Where a contract has been terminated or cancelled, its terms are no longer binding on the parties. In short a cancelled contract is incapable of being enforced unless the right to cancel is placed in dispute … . Contractually, the Municipality is entitled to terminate by simply giving one-week notice. If that is done, there can be no speak of breach and/or repudiation which will entitle the applicant to some contractual remedies. At its discretion the Municipality may terminate without notice and/or may hold a disciplinary hearing. In Nyathi v Special Investigating Unit [[2011] 12 BLLR 1211 (LC)], this court per Basson J stated the following:

“In principle therefore, an employer has the right contractually to terminate the contract. Whether the termination will also be fair is entirely a different question and not relevant in these proceedings. Where a contract is terminated unlawfully it will usually also constitute an unfair termination. The reverse is, however not always true.”’

Applying the same principle on the facts before it, the court held that it lacked jurisdiction to hear the contractual dispute on the basis that the contracts were already terminated.

The court furthermore rejected the union’s argument that the contractual claim emanated from the employees’ constitutional right to fair labour practice. In doing so, the court applied the trite principle that an applicant cannot circumvent enabling legislation and rely directly on the constitution, unless the applicant makes out a case that the provision in the enabling statute is unconstitutional.

In a final attempt to argue the court’s jurisdiction, the union put forward authority to justify the fact that the LC has jurisdiction in terms of s 158(1)(a)(iv) of the Labour Relations Act 66 of 1995 to declare a dismissal unlawful.

Referring to Steenkamp and Others v Edcon Ltd (National Union of Metalworkers of SA Intervening) (2016) 37 ILJ 564 (CC), the court rejected the notion that it had such power and authority.

The union then sought to ask for an interim order of reinstatement pending the finalisation of the CCMA disputes it had or would be referring. Adopting the approach set out in the Labour Appeal Court (LAC) decision of De Beer v Minister of Safety and Security/Police and Another [2013] 10 BLLR 953 (LAC) (wherein the LAC held that in light of the nature of the remedy of reinstatement, it is not possible to grant interim reinstatement without dealing with crucial aspects of the dismissal itself, albeit indirectly and furthermore a court cannot reinstate an employee unless the dispute is brought before it in terms of s 191 of the LRA); the court held:

‘Given the fact that reinstatement is intrinsically final, it cannot be granted on interim basis. The LAC made it clear in De Beer that the Labour Court is debarred from pronouncing on the fairness of the dismissal when there has been no compliance with the jurisdictional requirements provided for in section 191 of the LRA.’

The application was dismissed with no order as to costs.

Moksha Naidoo BA (Wits) LLB (UKZN) is a legal practitioner holding chambers at the Johannesburg Bar (Sandton), as well as the KwaZulu-Natal Bar (Durban).

This article was first published in De Rebus in 2022 (Sept) DR 33.