Knowing where to shop?

11 March 2021 · <a href="/users/fasken">1069</a>

“Does your case belong in this court?” This question, when posed by a Judge, has the potential to strike fear into the hearts of even the most seasoned practitioners. Practitioners and litigants who have not properly acquainted themselves with the relevant provisions of the Labour Relations Act (LRA), Basic Conditions of Employment Act (BCEA) and Constitution are often very confused as to the scope of matters over which the Labour Court carries exclusive jurisdiction and those in relation to which it has concurrent jurisdiction with the High Court.

The source of this quandary is that the Constitution grants the High Court jurisdiction to adjudicate on any matter but for those legislatively assigned to other courts. At the same time, the LRA states that the Labour Court has exclusive jurisdiction over the matters assigned to it under the LRA (save for those in respect of which it has concurrent jurisdiction with the High Court). According to the LRA, the matters over which the Labour Court and High Court have concurrent jurisdiction are those that involve, inter alia, any alleged or threatened violation of fundamental rights in the Constitution arising from employment and labour relations. Then, to rub salt in the wound of confusion, the BCEA states that the Labour Court has concurrent jurisdiction with the civil courts in respect of any matter concerning a contract of employment.

A series of Constitutional Court decisions reflect the extent of this uncertainty. For example, in Fredericks and others v MEC for Education and Training, Eastern Cape 2002 (2) SA 693(CC), the claimants brought an application in the High Court to review a decision of the Department of Education after the Department refused to approve severance packages. The High Court dismissed the review application on the basis that it lacked jurisdiction. However, on appeal, the Constitutional Court held that the High Court had concurrent jurisdiction with the Labour Court to hear such matters because the concurrent jurisdiction of the High Court and the Labour Court only falls away in relation to matters for which the LRA specifically bestows exclusive jurisdiction on the Labour Court.

On the other hand, in Chirwa v Transnet Limited 2008 (3) BCLR 251 (CC), the Constitutional Court agreed with the High Court and Supreme Court of Appeal that an unfair dismissal claim relating to an employee’s incapacity was a matter over which the High Court lacked jurisdiction because the claim was based in the LRA. Similarly, in Gcaba v Minister for Safety and Security 2010 (1) SA 238 (CC), the High Court found that it did not enjoy jurisdiction over a claim relating to promotion because the claim was brought under the LRA. While the Constitutional Court upheld the High Court’s finding, it did so for different reasons, specifically because the employee was employed in the public service and therefore the decision not to promote the employee constituted administrative action. Unfortunately, and for obvious reasons, these judgments have done little to cure the confusion surrounding the scope of the concurrent jurisdiction of the Labour Court and High Court.

A Point of Clarity

The recent decision of the Constitutional Court in Basani Baloyi v Public Protector and others [2020] ZACC 27 has however brought much needed clarity to this issue.

The facts of the matter were briefly as follows: On 1 February 2019, Ms Basani Baloyi began her tenure as the Chief Operations Officer (COO) for the Office of the Public Protector on a five year fixed term contract. The contract contained a six month probation period (ending on 31 July 2019) which could be extended by up to 12 months. The contract also stipulated that at the end of the probation period the Public Protector would be at liberty to either terminate Ms Baloyi’s employment or confirm her appointment if it was satisfied with the level of her performance.

On 8 October 2019, the Public Protector invited Ms Baloyi to make representations regarding the confirmation of her employment contract. Ms Baloyi submitted written representations and, on 21 October 2019, she received a letter from the Public Protector stating that it would be unable to confirm her permanent employment and, consequently, her contract would terminate on 31 October 2019. Ms Baloyi was informed that she was “not suitable for the role of COO taking into account her overall capability, skill, performance and general conduct in relation to the position.

Thereafter, Ms Baloyi brought an urgent application in the High Court challenging the termination of her employment. The basis of Ms Baloyi’s challenge in the High Court was that the termination of the employment contract was allegedly unlawful for two reasons: first, the termination was an alleged breach of contract; and, second, the termination constituted an exercise of public power that breached the principle of legality. Ms Baloyi further contended that the termination was unconstitutional because, by terminating Ms Baloyi’s employment in the above manner, the Public Protector, Adv Busisiwe Mkhwebane, had in her personal capacity breached her constitutional obligations under section 182(2) of the Constitution. Accordingly, Ms Baloyi challenged the lawfulness, validity and constitutionality of the Public Protector’s decision to dismiss her.

The High Court (per Teffo J) considered the decisions of the Constitutional court in Chirwa and Gcaba, and found that Ms Baloyi had masked a labour dispute under the LRA as an alleged violation of constitutional rights simply because the issues raised could also support a conclusion that the conduct of the employer constituted a violation of a fundamental right. The High Court found that Ms Baloyi’s contentions of unlawful termination were based on the allegation that the termination was a breach of the Public Protector’s Probation Policy and a breach of a provision of the employment contract which stated that the employment relationship could be terminated at the end of the probation period in accordance with the prescripts of the LRA. On this basis, the High Court found that Ms Baloyi’s application ought to have been brought in the Labour Court and dismissed the application for lack of jurisdiction.

Ms Baloyi then took her matter on appeal directly to the Constitutional Court. The Constitutional Court, in a unanimous judgment per Theron J, acknowledged the distinction between Ms Baloyi’s case and the cases of Fredricks, Chirwa and Gcaba. In those cases, according to the Constitutional Court, the claimants had sought to enforce administrative law rights whereas Ms Baloyi was seeking to enforce contractual rights. This distinction set the entire tone of the judgment.

The Constitutional Court pointed out that while section 157 of the LRA confers exclusive jurisdiction on the Labour Court for the resolution of disputes specified in the LRA, section 157 does not confer general jurisdiction on the Labour Court in all matters that fall within the “overall sphere of employment relations.” The Constitutional Court further stated that section 77(3) of the BCEA echoes the sentiments in the LRA that the High Court enjoys concurrent jurisdiction in labour matters that do not fall within the exclusive jurisdiction of the Labour Court. Section 77(3) of the BCEA states that the Labour Court has concurrent jurisdiction with the civil courts to hear and determine any matter concerning a contract of employment irrespective of whether any basic condition of employment constitutes a term of that contract. The Constitutional Court emphasized that contracts of employment do not fall within the exclusive jurisdiction of the Labour Court which is further supported by section 77(4) which states that the exclusive jurisdiction of the Labour Court provided for in section 77 (1) does not prevent a claimant from relying on the BCEA to allege that a basic condition of employment constitutes a contractual term of employment in any proceedings in a civil court or arbitration.

With these principles in mind, the Constitutional Court reasoned that it is trite that the same set of facts may give rise to several different causes of action and that where a litigant is required to bring a certain cause of action before a specifically competent forum, it does not follow that they are bound to pursue a claim under that cause of action simply because it is possible to do so. In other words, just because Ms Baloyi had a claim that satisfied the definitional requirements of an unfair labour practice or unfair dismissal claim under the LRA, it did not follow that she was obliged to pursue those claims in the Labour court. The existence of those claims did not vitiate the enforcement of other rights such as breach of contract emanating from the same claim. The Constitutional Court thus confirmed the principle that a contractual claim arising from a breach of contract of employment falls within the ordinary jurisdiction of the High Court, despite the fact the contract is that of employment.

The Constitutional Court further clarified that the Labour Court enjoys exclusive jurisdiction where legislation mandates it; where the litigant asserts a right under the LRA; or the litigant relies on a cause of action based on a breach of an obligation contained in the LRA. Such claims seek the enforcement of statutorily prescribed remedies under the LRA which the Labour Court is enjoined to apply. On the other hand, the High Court will enjoy concurrent jurisdiction with the Labour Court where the relief pursued by the claimant is not prescribed under the LRA and is determined with reference to the pleadings only. The High Court is not a creature of statute (like the Labour Court) and is therefore not bound to remedies established in the LRA.

In light of the above, the Constitutional Court held that the High Court erred in finding that it did not have jurisdiction to hear Ms Baloyi’s application and remitted the matter to the High Court for a hearing on the merits of the claim.

Final remarks

The Constitutional Court’s decision in Baloyi is a helpful development in so far as it expresses a clear delineation between the Labour Court’s exclusive and concurrent jurisdiction with the High Court based on a litigant’s pleaded cause of action and the source of the specific relief sought. In our view, the Constitutional Court has established a clear and practical solution to a dilemma that has long plagued Judges, practitioners and litigants alike.

Tshepo Mokoana is an Associate at Fasken (South Africa). This article was overseen by Neil Searle, A Partner at Fasken.

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