The appellant union, acting on behalf of its member Mr MD Morwe (employee), launched an urgent application out the Labour Court (LC) seeking an order that –
In the notice of motion, as well as in the founding affidavit, the employee disavowed any reliance of the Labour Relations Act 66 of 1995 (LRA) and stated the application was brought within the provisions of his employment contract.
The thrust of the employee’s argument was that he had a right to be subjected to a disciplinary inquiry, hearing prior to the termination of his employment contract.
The LC dismissed the application, on grounds that it lacked jurisdiction. The court found that its jurisdiction to hear a contractual dispute in terms of s 77(3), was limited to instances where the employment contract was alive at the time the application was launched. In this case, it was common cause the employee had been dismissed, axiomatic to which, his employment contract had ended.
In its reasoning, the LC held:
‘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”. The dictionary meaning of the word “concerning” is “regarding; touching; in reference or in relation to; or about”. 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 sustenance and fortification from the phrase “irrespective of whether any basic condition of employment constitutes a term of that 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.”’
Turning to specific performance in terms of s 77A(e), the LC was willing to accept its stance on jurisdiction, as recorded above, was incorrect and that the court did indeed have jurisdiction to entertain the claim. Notwithstanding this assumption, the LC found that the right to procedural fairness (in casu a disciplinary inquiry) fell squarely within the confines of the LRA and thus had no place in a contractual dispute.
On appeal, the Labour Appeal Court (LAC) found the LC’s approach on jurisdiction, was incorrect. The LAC held that that s 77(3) does two things. It firstly confers the LC’s concurrent jurisdiction with the High Court and secondly, it limits the scope of the concurrency to matters concerning an employment contract.
Elaborating on the text used in s 77(3) the LAC held:
‘What this must mean is that whatever a civil court could hear “concerning a contract of employment” is what the Labour Court could hear. The word “concerning” and the use of the present tense does not point towards the scope of jurisdiction being only in respect of contracts which it is common cause are extant. A controversy about whether or not a contract has been cancelled validly or has been breached remains a dispute “concerning a contract of employment”. This is the ordinary grammatical meaning of the phrase and, perhaps more importantly, from the perspective of a purposive interpretation, any other understanding would result in an absurdity. The notion that the civil courts can hear matters about the disputed validity of the termination of a contract and the concurrent jurisdiction of the Labour Court did not extend to that category of dispute would make a mockery of concurrency.”’
Thus, according to the LAC, an employment contract that has been terminated, does not in itself, present a bar for employees approaching the LC in terms of s 77(3).
Following this conclusion, the LAC held that the LC did have jurisdiction to hear the employee’s claim.
Turning to the issue of specific performance, in terms of s 77A(e), the question before the LAC was whether the employee had a contractual right to disciplinary inquiry.
In an attempt to establish this right, the employer relied on clause 5.5 of his employment contract.
The relevant clause reads:
‘5.5 The Council will be entitled to terminate your employment without notice in compliance with the relevant labour legislation, as amended, and in terms of the Human Resources Policies and Procedure Manual, which may include a disciplinary hearing, if you –
5.5.1 commit any serious or persistent breach of any of the provisions of this agreement;
5.5.2 are guilty of any serious misconduct or deliberate neglect in the discharge of your duties under this agreement;
5.5.3 are guilty of any other conduct which will justify summary dismissal at common law’ (my italics).
As a general starting point, the LAC observed that a clause in an employment contract, which expressly yields to the LRA, and its norms is merely a ‘decorative surplusage’. This so, on the understanding that one cannot contract out the obligations of the LRA.
In terms of clause 5.5, the word ‘may’ cannot be interpreted as the employee having a right to a disciplinary inquiry. From a policy point of view, the LAC went further to say there is no obligation on a court to strain to find that the procedures and remedies under the LRA are incorporated into an employment contract.
The LAC found merit in the LC conclusion that procedural fairness should not be read as an implied or tacit term, into an employment contract, as was the finding by the Supreme Court of Appeal in certain judgments. However, this does not leave the door closed for a term being incorporated into an employment contract which specifically sets out the procedural requirement, which must be adhered to prior to termination. However, on the facts before it, clause 5.5 did not lend itself to the notion that a disciplinary inquiry was mandatory, but rather an inquiry was permissive.
The LAC resolved that clause 19.3 of the employment contract did not likewise come to the aid of the employee. In terms of that clause, any disciplinary action, which is held must be done in terms of the procedures of the disciplinary code. This clause did not create a right to a hearing, but rather it created a right to a hearing, as set out in the disciplinary code, only after the employer has decided to hold a disciplinary inquiry.
While the remedy of specific performance is discretionary – the fall out between the employee and municipality, as described on the papers, meant that specific performance would not be an appropriate remedy even if the employee was able to establish a right to a disciplinary inquiry. The alternate remedy ought to have been damages, which the employee never sought on the papers.
The appeal was dismissed with 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 2023 (Jan/Feb) DR 50.
