Dismissal disputes can be heard in the high court

Dismissal disputes can be heard in the high court
A-lonely-gavel

Roux (2007-08-16)

Employers need to be aware that employees may refer employment-related disputes to the High Courts, where considerations of equity play no part.

This caution comes from Samantha Davidson of Shepstone & Wylie Attorneys employment law department, following two recent decisions demonstrating the Supreme Court of Appeals (SCA) willingness to ‘erode’ the perceived exclusivity of the jurisdiction of the Labour Courts.

She explains that when the Labour Relations Act (LRA) became law on 11 November 1996, it created specialist Labour Courts equivalent to the High Courts. The Labour Court was defined as a court of law and equity and section 157 recorded that “the Labour Court has exclusive jurisdiction in respect of all matters that elsewhere in terms of this Act or in terms of any other law are to be determined by the Labour Court”. Initially, after the introduction of the Labour Relations Act, all employment related disputes were referred to the Labour Courts and it appeared that the High Courts would be only too happy to find that they did not have jurisdiction over employment issues in the private sector, which should more properly be dealt with by the specialist Labour Courts. This is not longer the position

In the case of Old Mutual Life Assurance Company S.A. Ltd vs Gumbi the SCA accepted that the High Court had jurisdiction to deal with a dispute regarding the alleged unlawful dismissal of Gumbi by Old Mutual. The SCA went on to confirm an employee’s common law rights to a pre-dismissal hearing.

In Boxer Superstores Mthatha and another vs Mbenya, the SCA was called upon to rule on whether or not the High Court would have jurisdiction to decide a claim relating to a dismissal. Mbenya had been dismissed by Boxer Superstores and waited 7 months before challenging her dismissal. Under the LRA, such a dispute would have to have been referred to the CCMA within 30 days of the date of dismissal. Mbenya decided to take her chances in the High Court, which has no such time restriction. She sought an order:

  • that her dismissal was ‘unlawful’ and of ‘no force’;
  • re-instating her to her former position ‘with the same salary and benefits’, alternatively an equivalent position with all the same benefits; and
  • awarding her back-pay.

The SCA held that certain conduct by an employer (such as dismissal) can give rise to claims under the LRA as well as contractual claims and claims under other rights of action (such as the common law). Provided the employee formulates his or her claim outside the LRA, the High Court has jurisdiction to determine that claim. Mbenya had formulated her claim on the basis that her dismissal was ‘unlawful’ as opposed to ‘unfair’ (which would be a claim arising under the LRA and in respect of which the CCMA or Labour Court had exclusive jurisdiction). The SCA ruled that the High Court had jurisdiction to grant Mbenya’s order that her dismissal was unlawful, but held that she was not entitled to retrospective re-instatement and backpay, because these were remedies available only under the LRA and In respect of which only the CCMA and Labour Court would have had jurisdiction.

Davidson says that the significance of this judgement for employers is two fold.

Firstly, employees may refer disputes to the High Courts outside of the time limits prescribed by the LRA. Secondly, employees may recover damages (beyond the limited compensation provided for in the LRA) for a breach of the employment contract and/or common law right to a pre-dismissal hearing.