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Nonzamo Cleaning Services Cooperative v Appie and Others (5227/203) [2008] ZAECHC 111; [2008] 9 BLLR 901 (Ck); 2009 (3) SA 276 (CkH) (10 July 2008)

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REPORTABLE

FORM A

FILING SHEET FOR EASTERN CAPE DIVISION JUDGMENT

PARTIES: The Nomzamo Cleaning Services Co-operative

vs

Ntomboxolo Appie and 10 others



  1. Case Number: 5227/03

  2. High Court: Bhisho

  3. Date heard: 29 February 2008

  1. Date delivered: 10 July 2008


JUDGE(S): A.R. Erasmus J, Schoeman J and Tshiki AJ


LEGAL REPRESENTATIVES –


Appearances:

  1. for the Applicant(s): Adv. J. Grogan

  2. for the Respondent(s):


Instructing attorneys:

  1. Applicant(s): Wheeldon Rushmere & Cole

  1. Respondent(s): Drake Flemmer & Orsmond Inc.




CASE INFORMATION -

  1. Nature of proceedings: Full Bench Appeal

  2. Topic: Jurisdiction

  3. Key Words:

Jurisdiction – Labour Relations Act 66 of 1995 (the LRA) – Exclusive jurisdiction of Labour Court in respect of matters determinable in terms of the LRA – High Court lacks jurisdiction – Constitutional law – Members of Co-operative its employees.


The respondents (applicants in the court a quo) were members of the appellant (the respondent) a worker co-operative registered in terms of the Co-operatives Act 91 of 1981 (since substituted by Act 14 of 2005). They were expelled from the co-operative resulting in their loss of employment. They sought the review of the decision to expel them and their reinstatement as members on the grounds that their expulsion was procedurally unfair. The application was successful in the court a quo. On appeal the appellant contended that the High Court lacked jurisdiction to hear and determine the application in that the Labour Court had exclusive jurisdiction.


Held, that although the relationship between the co-operative and its members was governed by the Act and the appellant’s statute, their relationship was that of employer and employee under a contract of employment.

Held, that accordingly the dispute fell to be determined in terms of the Labour Relations Act 66 of 1995 (the LRA).

Held, that the Labour Court had exclusive jurisdiction in regard to any matter to be determined under the LRA.

Held, that the High Court lacked jurisdiction in such matters.

Held, that Chirwa v Transnet Limited and 2 others [2007] ZACC 23; 2008 (3) BCLR 251 (CC) overruled Fredericks and others v MEC for Education and Training (EC) 2002 (2) SA 793 (CC) in regard to the question of the jurisdiction of the Labour Court vis-a-viz the High Court.

Held, that the finding and reasoning in Chirwa involved the following propositions –

(a) Any dispute determinable under the LRA is for purposes of s 157(1) a dispute to be determined exclusively by the Labour Court.

(b) For that purpose the LRA dispute resolution councils and the CCMA constitute the Labour Court.

(c) For the purposes of s 169(b) of the Constitution, the Labour Court so constituted is 'another court', and any matter 'to be determined' under the LRA is a matter assigned to that court by an Act of Parliament.

  1. The Labour Court in effect has exclusive jurisdiction in respect of any alleged or threatened violation of any fundamental right entrenched in chapter 2 of the Constitution arising from employment and labour relations, despite the fact that s 157(2) of the LRA states that the Labour Court has concurrent jurisdiction with the High Court in such matters.




REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(BHISHO)


Case no: 5227/203

Date heard: 29.2.2008

Date delivered: 10.7.2008


In the matter between:


THE NONZAMO CLEANING SERVICES

COOPERATIVE Appellant


vs


NTOMBOXOLO APPIE First respondent


FEZEKA MYEKI Second respondent


FREDAH NGCOKOVANA Third respondent


SIHANDIBA WICLIFF ZUMA Fourth respondent


NOMABUNGA ELBEGINA TSHONA Fifth respondent


NOMALAWU JAMES Sixth respondent


KHOLISWA MAKAPELA Seventh respondent


ESTERH NONZIMA VINGQI Eighth respondent


EMMIE NANGU Ninth respondent


LILLIAN STEMELE Tenth respondent


N CAKU-CAKU Eleventh respondent



JUDGMENT








A.R. ERASMUS J:



The issue


[1] This appeal brings into question the jurisdiction of the High Court vis-a-vis that of the Labour Court in a dispute arising from employment relations. The issue arises in the following circumstances.


[2] At the relevant times the appellant was a worker co-operative incorporated in terms of s 27 of the Co-operatives Act 91 of 1981 (since substituted by Act 14 of 2005). Its affairs were governed by the Act as well as by its statute registered in terms of the Act. Its declared objects were to provide contract cleaning services and to manage the rendering of the services by its members. (Where convenient I refer to the appellant as the 'the co-operative'.)


[3] The appellant’s statute provided for the expulsion of a member in specified circumstances. The decision had to be taken by special resolution passed in accordance with s 130 of the Co-operatives Act at a general meeting. It was a prerequisite in terms of the statute that the member be given prior written notice of the board’s intention to recommend to its members that he or she be expelled. The notice had to contain particulars of '(a) the reasons for the proposed expulsion with reference to the non-compliance with a specific provision of the statute; and (b) a time when, and place where the member could appear in person before the Board or to which he or she could send a written statement setting out his or her objections to the proposed expulsion'. These provisions of the statute gave effect to the prescripts of s 64 of the 1981 Act for the expulsion of members.


[4] The annual general meeting of the appellant of 28 August 2003 was completely disrupted by the unruly behaviour of a group of members allegedly including the respondents. A meeting of the members was then scheduled for 10 September 2003 for the purposes of passing a special resolution for the expulsion of the respondents. The respondents did not attend the meeting, which was postponed to the 6 October 2003. At that meeting a decision was taken to dismiss the respondents and to terminate their memberships. A special general meeting was called for 9 October 2003 at which a special resolution was passed to confirm the dismissal and expulsion of the respondents. There is a factual dispute as to whether the respondents received the various notices sent by the appellant to advise them of the meetings and to inform them of the charges against them.


[5] The respondents thereupon instituted application proceedings for an order in the following terms:

'1. Reviewing, setting aside or correcting the decision taken by the respondent in terms of which it was determined that the Applicants’ membership of the Respondent be terminated.

2. Directing that the Respondent reinstate the Applicants’ membership of the Respondent on such terms and conditions as the above Honourable Court may deem fit.

3. Alternatively to paragraph 2 above, directing that the Respondent commence a disciplinary hearing with due regard to the provisions of the Cooperatives Act 91 of 1981 as read with the Respondent’s Statute.'


In the founding affidavit the first respondent, speaking for all the respondents, denied certain of the allegations relating to the disruption of the meeting of 28 August 2003, but admitted that at a point she and the other respondents broke into singing. The thrust of their complaints was directed more at the procedural aspects of their expulsion.



[6] In dealing with the various meetings, Hole AJ found in the court a quo that the respondents had not been afforded proper notice nor granted a proper hearing by the appellant, also that the expulsions had not been effected on a valid special resolution. He concluded:

'In all the circumstances, whatever the conduct of the applicants may have been at the meeting of 28 August 2003, the calling of the special general meeting was not in accordance with the Act nor the statute of the respondent. The proceedings of the meeting of 9 October 2003 were a travesty of natural justice and palpably flawed. No resolution taken at that meeting can have any pretence of legality.'


The court accordingly ordered that the decision of the board of 6 October 2003 and the resolution of the special general meeting of 9 October 2003 be set aside and that the membership of the respondents be reinstated. The appellant was however granted leave to appeal to the Full Bench.


[7] The issue of the High Court’s jurisdiction arose in the court a quo. In the founding affidavit the first respondent submitted that as members of the co-operative, the respondents were not employees as defined in the Labour Relations Act 66 of 1995 (the 'LRA') and accordingly were not entitled to the protection afforded by that Act. In the opposing affidavit the chairman of the appellant raised the point in limine that the relief sought by the respondents was a claim in terms of the LRA and that accordingly the court had no jurisdiction to hear and decide the claim. In dismissing the contention Hole AJ referred to the fact that under the appellant’s statute a member was defined inter alia as a person who was willing and able to be employed by the co-operative; consequently, he said, the fact that the respondents were employed by the co-operative was incidental to them being members of the body. In any event, he added, the appellant dealt with the alleged recalcitrant conduct of the respondents in terms of its statute rather than dealing with them as employees.


[8] The learned judge erred in his reasons for dismissing the objection. In terms of s 213 of the LRA, an 'Employee' means any person who works for another person and who receives or is entitled to receive any remuneration. Clearly, the sole purpose of the respondents’ membership of the co-operative was to obtain employment in order to receive remuneration. Their membership was the means whereby they achieved that purpose. The co-operative had no purpose other than providing remunerative employment for its members. It would negotiate with third parties for work to be done by its members. It would receive payment from the third party and in turn remunerate its members. The members worked for the co-operative, not for the third party. Furthermore, the statute declared that the members of the co-operative were persons who were willing and able to be employed by the worker co-operative and to whom the co-operative was able to offer employment. The relationship between the appellant and its members was essentially that of employer and employee. That relationship was governed by the Co-operatives Act and the appellant’s statute. The relationship was nevertheless contractual, established upon a member acquiring membership of the co-operative. The respondents’ cause of action was based on the appellant’s alleged breach of their contract of employment. I would note at this stage that despite the statutory foundation of the appellant, the co-operative was not an organ of state. This means that the provisions of the Promotion of Administrative Justice Act 3 of 200 ('PAJA') is not applicable to these proceedings.


[9] The challenge of the court’s jurisdiction was referred to in the grounds of appeal (where it was stated that the point was abandoned during argument of the matter). The issue however gained in significance consequent upon decisions of the courts delivered thereafter. (I deal with these in the course of the judgment.) The question of the High Court’s jurisdiction was in this court fully argued by Mr. Grogan, counsel for the appellant. He dealt with the issue in successive heads of argument presented seriatim as judgments relative to the matter were delivered after the appeal was lodged. There was no appearance on behalf of the respondents. Counsel accepted that the appellant nevertheless had to make out a proper case in order to succeed in the appeal.


The statutory law

[10] The courts in the Republic of South Africa derive their jurisdiction from Chapter 8 (ss 165-180) of the Constitution (The Constitution of the Republic of South Africa Act 108 of 1996). Section 165(1) vests the judicial authority of the Republic in the courts. Section 166 identifies various courts, inter alia the High Courts (para (c)) and 'any other court established or recognised in terms of an Act of Parliament, including any court of a status similar to the High Courts (para (e)). Section 19(1)(a) of the Supreme Court Act 59 of 1959 (now the High Court) declares that a 'provincial division shall have jurisdiction over all persons residing or being in and in relation to all causes arising … within its area of jurisdiction and all other matters of which it may according to law take cognisance … '. This wide jurisdiction is delimited by s 169 of the Constitution which declares that a High Court may decide –


'(a) any constitutional matter except a matter that –

(i) only the Constitutional Court may decide; or

(ii) is assigned by an Act of Parliament to another court of a status

similar to a High Court; and

(b) any other matter not assigned to another court by an Act of Parliament.'


[11] The Labour Court is a creature of the LRA from which it derives its status and jurisdiction. In terms of s 151(2) it is 'a superior court that has authority, inherent powers and standing, in relation to matters under its jurisdiction, equal to that which a court of a provincial division of the [High] Court has in relation to the matters under its jurisdiction'. It is therefore a court of equal status to the High Court. The essential question that arises on the point in limine is whether the respondents’ cause of action involved a matter, constitutional or other, assigned by the LRA to the Labour Court. The answer to the question lies in the provisions of the LRA viewed in the light of the Constitution. In the context of s 169 of the Constitution 'assign' has the meaning of vesting exclusive jurisdiction in the designated court in respect of the particular matter.


[12] In terms of its s 1, the primary object of the LRA is 'to give effect to and regulate the fundamental rights conferred by [s 23] of the Constitution'. That provision, which is part of the Bill of Rights declares in ss (1) that everyone has the right to fair labour practices. For present purpose the area of operation of the LRA lies in s 185 which declares that every employee has the right not to be '(a) unfairly dismissed; and (b) subjected to unfair labour practice'. In terms of s 191(1), if there is a dispute about the fairness of a dismissal or about an unfair labour practice, the employee may refer the dispute to either a bargaining or a statutory council, or to the Commission for Consultation Mediation and Arbitration (the 'CCMA'), depending on which is appropriate in the particular circumstances. The council and the CCMA are enjoined to attempt to resolve the dispute through conciliation (ss (4) of s 191). If the council or the commission certifies that the dispute remains unresolved, it must either arbitrate the dispute (ss (5)(a)) or refer the dispute to the Labour Court for adjudication (ss (5)(b)). The Labour Court has overall powers of review of those proceedings (s 158(g)). It is to be noted that in this procedural structure the Labour Court is not a court of first instance. It can be accessed directly only through ss 59, 66, 68, 77(2), 103-105, 141(4) and (5) and 142(3); but none of these relate to the dispute resolution process in terms of the LRA.


[13] The specific provision of the LRA relating to the nature and extent of the Labour Court’s jurisdiction, namely s 157, must be considered against this background. It reads:

'(1) Subject to the Constitution and section 173, and except where this Act provides otherwise, 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.

(2) The Labour Court has concurrent jurisdiction with the High Court in respect of any alleged or threatened violation of any fundamental right entrenched in Chapter 2 of the Constitution of the Republic of South Africa, 1996, and arising from—

(a) employment and from labour relations;

(b) any dispute over the constitutionality of any executive or administrative act or conduct, or any threatened executive or administrative act or conduct, by the State in its capacity as an employer; and

(c) the application of any law for the administration of which the Minister is responsible.'




[14] This enigmatic provision has given rise to considerable judicial interpretation, not always in consistent agreement. I find it necessary however to deal only with three decisions of the highest courts and one delivered recently in the Eastern Cape Division.


The case law

[15] In FedLife Insurance Ltd v Wolfaardt 2002(1) SA 49 (SCA) an ex-employee claimed damages in the High Court from his ex-employer for breach of a fixed-term contract of employment. The defendant raised a special plea that the Labour Court had exclusive jurisdiction by virtue of s 157(1) of the LRA. An exception to the plea on the grounds that it failed to disclose a defence was upheld. The appeal against the ruling was dismissed in the Supreme Court of Appeal. Nugent AJA, who delivered the judgment of the court, stated that the LRA did not expressly abrogate an employee’s common law entitlement to enforce his contractual rights and nor did he think that it did so by necessary implication. He declared that s 157(1) did not purport to confer exclusive jurisdiction upon the Labour Court generally in relation to matters concerning the relationship between employer and employee. A dispute falls within the terms of s 191 only if the 'fairness' of the dismissal is the subject of the employee’s complaint. Where it is not, and the subject of the dispute is the lawfulness of the dismissal, then the fact that it might also be unfair, is quite coincidental for that is not what the employee’s complaint is about. The dispute in the case before the court was not about the fairness of the termination of the employee’s contract but about its unlawfulness and for that reason alone, so he held, the dispute did not fall within the terms of s 157(1) and was therefore not a 'matter' that required to be adjudicated by the Labour Court as contemplated by the section. This distinction between unlawful and unfair dismissal or practice becomes relevant when I come to apply the law to the facts of the present case later in the judgment.


[16] In Fredericks and others v MEC for Education and Training, E C 2002 (2) SA 793 (CC) the applicants challenged the respondent’s refusal of their application for voluntary retrenchment as violating their right to equality and administrative justice. A Full Bench of the High Court held that it did not have jurisdiction in the matter, on the basis that on a proper construction of the LRA its competence to consider the claim had been ousted by the relevant provisions of that Act. O’Regan J, who wrote the unanimous judgment of the court, first considered, and rejected, the contention that s 24 of the LRA ousted the jurisdiction of the High Court to determine disputes about collective agreements. (That question is not relevant here.) The second question that arose was whether the jurisdiction of the High Court had been ousted by the LRA by virtue of s 157. O’Regan J interpreted s 157(1) in the light of s 169 of the Constitution. She held, with approval of the comment by Nugent AJA in Fedlife, that the overall scheme of the LRA did not confer a general jurisdiction on the Labour Court to deal with all disputes arising from employment. Instead, she pointed out, the LRA provides for a careful and complex division of responsibilities between bargaining councils, the CCMA and the Labour Court and the Labour Court of Appeal. It is important to note, she said, that, generally, the Act requires that disputes be first subjected to conciliation or mediation process before being referred to the Labour Court for adjudication. She pointed out that the High Court’s jurisdiction will only be ousted in respect of matters that 'are to be determined' by the Labour Court in terms of the LRA. On the dictionary definition of the word 'determine', a matter to be determined by the Labour Court in terms of s 157(1) means a matter that in terms of the LRA is to be decided or settled by that court. O’Regan J clearly had in mind the Labour Court as such, in contradistinction to the conciliation and arbitration forums of the LRA. As regard constitutional matters, she commented that whatever else its import, s 157(2) cannot be interpreted as ousting the jurisdiction of the High Court since it expressly provides for a concurrent jurisdiction.


[17] The respondents in bringing their application in the High Court acted, I presume, on the understanding that the law was settled by Fredericks in regard to the jurisdiction of the High Court in employment matters. That apparent certainty however turned out to be illusory in the light of the judgments delivered in Chirwa vs Transnet Ltd and two others 2008 (3) BCLR (CC). It becomes necessary to consider those judgments in some detail.

[18] Skweyiya J fully set out the factual background to the matter. For present purposes it can be summarised as follows. Ms Chirwa was dismissed from the service of Transnet Pension Fund, a business unit of Transnet Ltd. She referred the dispute arising from the dismissal to the CCMA in terms of s 191(1)(a)(ii) of the LRA. When conciliation failed to resolve the dispute she did not pursue the matter further under the LRA, but instead approached the Johannesburg High Court where she sought the review and correction, or setting aside, of the decision to dismiss her. Her complaint in the High Court was that the disciplinary proceedings were fundamentally flawed on two grounds: firstly that her main accuser had acted as complainant, witness and presiding officer during the disciplinary enquiry that resulted in her dismissal and secondly that she had not been afforded the opportunity to obtain legal representation. Skweyiya J stated that it was clear that Ms. Chirwa’s claim was based on unfair dismissal under the provisions of s 188 of the LRA read with items 8 and 9 of the code contained in the schedules to the Act. The explanation offered by Ms. Chirwa for approaching the High Court instead of the Labour Court was that she had two causes of action available to her, one under the LRA and the other flowing from s 33 of the Constitution which guarantees everyone the right to administrative action which is lawful, reasonable and procedurally fair, read with the provisions of the Promotion of Administrative Justice Act 30 of 2000 ('PAJA'). She had, she explained, 'for practical considerations' opted to approach the High Court in the exercise of her constitutional right of access to the courts (s 34 of the Constitution).


[19] At the outset of his reasoning Skweyiya J stated:

'The central question in this matter is whether Parliament conferred the jurisdiction to determine the applicant’s case upon the Labour Court and the other mechanisms established by the LRA, in such a manner that it either expressly or by necessary implication excluded the jurisdiction of the High Court.'


He then proceeded to deal with the progress of the matter through the courts. When the application succeeded in the High Court, Transnet appealed to the Supreme Court of Appeal where it raised the issues (a) whether Ms Chirwa’s dismissal was a matter which fell within the exclusive jurisdiction of the Labour Court in terms of section 157(1) of the LRA, and (b) whether the dismissal constituted administrative action as defined in PAJA.

[20] He considered the majority judgments on the jurisdiction issue handed down in the Supreme Court of Appeal. Conradie JA delivered a dissenting judgment in which he found that since the advent of the LRA, dismissals in the public domain were no longer to be dealt as administrative acts. He reasoned that the legislative intent evident from the LRA was to subject an unfair dismissal dispute of any employee falling within its scope to the dispute resolution mechanism established by the LRA. In addition, he held that even if the applicant had a cause of action under PAJA, she was nevertheless limited to relief under the LRA. He concluded that the complaint which arose from procedurally unfair dismissal for poor work performance was a 'quintessential LRA matter, for which relief under PAJA was not intended to be available'. Skweyiya J stated unequivocally: 'I agree with this conclusion.' Skweyiya J fully endorsed the judgment of Conradie JA whose views formed an integral part of his reasoning.




[21] Skweyiya J declared that in his view the existence of a purpose-built employment framework in the form of the LRA and associated legislation implied that labour processes and forums should take precedence over non-purpose-built processes and forums in situations involving employment-related matters. He said that litigation under the LRA should be seen as the more appropriate route to pursue. Thus, where an alternative cause of action could be sustained in a matter arising out of an employment relationship in which the employee’s alleged unfair dismissal or an unfair labour practice by the employer was in issue, it was in the first instance through the mechanism established by the LRA that the employee should pursue his or her claim. He emphasized the advantages of LRA procedures over judicial review. He pointed out that the purpose of labour law as embodied in the LRA was to provide a comprehensive system of dispute resolution mechanisms, forums and remedies that were tailored to deal with all aspects of employment. It was envisaged as a one-stop shop for all labour-related disputes, he said.


[22] Skweyiya J referred to the Explanatory Memorandum on the Labour Relations Bill (the Memorandum) which described the LRA mechanisms as a product of an extensive process of negotiation between all the affected stakeholders. One of the express aims of the bill was to address the 'lack of an overall and integrated legislative framework for regulating labour relations', which arose as a result of the multiplicity of laws governing different sectors. The object of the bill was to eradicate the 'inconsistency, unnecessary complexity, duplication of resources and jurisdictional confusion' caused by the multiplicity of laws by proposing a single statute that was to apply to the whole economy whilst accommodating the special features of its different sectors.


[23] Skweyiya J pointed to s 210 of the LRA which provides that in a case of conflict between the Act and the provisions of any other law save the Constitution, the provisions of the LRA will prevail. The section, he stated, heralds the LRA as the pre-eminent legislation in labour matters. It was in this context, he stated, that s 157 of the LRA and its consequences had to be analysed.


[24] He pointed out that Ms Chirwa’s claim was that her dismissal was not effected in accordance with fair procedure. This was a dispute envisaged by s 191 of the LRA, which provided the procedure for its resolution: including conciliation or arbitration, under the review by the Labour Court. He reasoned that the dispute concerning the dismissal for poor work, which was covered by the LRA and for which specific dispute resolution procedures had been created, was therefore a matter that, under the LRA, had to be determined exclusively by the Labour Court. Accordingly, it was his finding that 'the High Court had no concurrent jurisdiction with the Labour Court to decide this matter'.


[25] Skweyiya J added that Ms. Chirwa was in his view 'not at liberty to regulate the finely-tuned dispute resolution structures established by the LRA'. If this were allowed, he said, a dual system of law would fester in cases of dismissal of employees, one applicable in civil courts and the other applicable in the forums and mechanisms established by the LRA. He found that Ms. Chirwa was not afforded an election to proceed by way of the LRA or PAJA. She could not be in a preferential position simply because of her status as public sector employee. Skweyiya J thus answered 'the central question' posed by him initially (para [20] above) in the affirmative.


[26] Skweyiya J ruled that the High Court had no jurisdiction to hear and decide the matter. He accordingly ordered that the appeal be dismissed.


[27] Ngcobo J concurred in the order proposed by Skweyiya J. He however wrote a separate judgment regarding what he termed 'two troublesome issues' that Skweyiya J had not addressed. The one being the scope of the operation of the provisions of s 157(1) and (2), and the other which flows from the first, the characterisation of dismissal as administrative action. '(T)he fundamental problem' for him was how to reconcile the provisions of ss (1) and (2) of s 157. The dispute resolution scheme of the LRA is all-embracing and leaves no room for intervention from another court, he said. The Labour Court and the Labour Appeal Court are specialised courts which function in a specialised area of law. Through their skills and experience judges of the Labour Court and the Labour Court of Appeal are better able than judges of the High Court to ensure the development of a coherent labour and employment relation jurisprudence. The provisions of ss (1) and (2) of s 157 therefore had to be construed purposively in a manner that gave full effect to each without undermining the purpose of either.


[28] Ngcobo J found that, viewed in its historical context, the primary purpose of s 157(2) was, not to confer jurisdiction on the High Court to deal with labour and employment related disputes, but rather to empower the Labour Court to deal with causes of action that are founded on the provisions of the Bill of Rights but which arise from labour and employment relations. He expressed the view that given this manifest purpose of s 157(2), its use of the word 'concurrent' was unfortunate. This could give rise to forum shopping with its unfortunate consequences. He stated that while s 157(2) remains on the statute book, it must be construed in the light of the primary objectives of the LRA. The first is to establish a comprehensive framework of law governing the labour and employment relations between employers and employees in all sectors; the other is to establish the Labour Court and the Labour Appeal Court as superior courts with exclusive jurisdiction to decide matters arising from the LRA. In his view, the only way to reconcile the provisions of s 157(2) and harmonise them with those of s 157(1) and the primary objectives of the LRA is to give s 157(2) a narrow meaning. The application of s 157(2) had to be confined, he held, to those instances, if any, where a party relies directly on the provisions of the Bill of Rights. He added that this was subject to the constitutional principle that where legislation is enacted to give effect to a constitutional right, a litigant may not bypass the legislation and rely directly on the constitution without challenging that legislation as falling short of the constitutional standard.




[29] Ngcobo J added that it could not have been the intention of the legislature to allow an employee to raise what was essentially a labour dispute under the LRA as a constitutional issue under the provisions of s 157(2). This would frustrate the primary objects of the LRA and permit an astute litigant to bypass the dispute resolution process of the LRA. Ms. Chirwa’s claim concerning her dismissal for poor work performance was therefore a matter that had to be determined exclusively by the Labour Court. Accordingly, it was his finding that the High Court had no concurrent jurisdiction with the Labour Court to decide the matter.


[30] Langa CJ delivered a dissenting judgment, concurred in by two of the judges. He observed by way of introduction that while the question of the Constitutional Court’s jurisdiction was whether the case raised a 'constitutional matter', the question before the court was whether the claim had been assigned by law to the Labour Court. He referred to the two schools of thought on the proper approach to the interpretation of s 157(1) and (2) of the LRA. The one adopts the reading of the section that claims to give effect to the purpose of the LRA to have labour disputes adjudicated solely within the structures it created. The other adopts a more literal approach to the section, viz that only those matters explicitly assigned to the Labour Court by the LRA are excluded from the High Court’s jurisdiction. This debate, so he stated, had however been decided in Fredericks, where O’Regan J, writing for the court, endorsed the latter approach. He pointed out that O’Regan J held that the CCMA is not a court of equal status to the High Court. He further mentioned that she concluded that s 157(1) must in so far as it concerns constitutional matters, be read to refer only to matters assigned for initial consideration by the Labour Court. He considered the judgments of Skweyiya J and Ngcobo J to be in conflict with Fredericks. Langa CJ, further, cautioned that the court should not substitute its preferred policy choices for those of the legislator. The effect of the approach of Skweyiya J, he stated, was to adopt an interpretation of ss 157(1) and (2) inconsistent with the previous decisions of the Constitutional Court and inconsistent with the clear language of those provisions.



[31] Within three months of the judgment in Chirwa the question of the High Court’s jurisdiction in a labour related matter arose again, in the matter of Nakin v The MEC, Dept of Education, Eastern Cape Province and another 2008 (6) BCLR 643 (Ck). It concerned a dispute between a school principal and the Department of Education. The applicant claimed that the department had failed to pay him salary due to him. He sought orders reviewing the respondent’s conduct under PAJA and directing it to give effect to its undertaking to pay him the salary. At the hearing of the application it was contended on behalf of the respondents that the court lacked jurisdiction to entertain the dispute because it concerned a 'salary adjustment and other benefits' and accordingly fell within the ambit of the LRA. Froneman J, before whom the application served, considered the jurisdiction of the High Court in labour and employment related matters in the light of Fedlife, Fredericks and certain other decisions. He stated that on the basis of those judgments there could be little doubt that the High Court had jurisdiction to determine the matter. He then considered the effect of Chirwa. He concluded that that decision may have disturbed a settled state of affairs, but it did not have the effect of overruling the existing state of the law. He found Chirwa to be in direct contradiction to the binding reasons for the decision in Fredericks. He pointed out that both Fredericks and Chirwa dealt with situations where the direct dispute resolution procedures in terms of provisions of the LRA were, firstly conciliation and, failing that, arbitration. Fredericks however held that the High Court’s constitutional jurisdiction could not be excluded by conferring jurisdiction on conciliation and arbitration bodies (such as the CCMA) that do not hold equivalent High Court status.


[32] Froneman J held that Fredericks still applied in the matter before him. He considered it inappropriate and inadmissible for a judge of the High Court to infer that a previous decision of the highest court on constitutional matters might have been overruled by a later decision of that court, especially when that fact is not acknowledged openly by the court making the later decision. As a matter of precedent, he said, the issues resurrected in Chirwa had been laid to rest a number of years previously, on sound jurisprudential grounds. He held, on the authority of Fredericks, that he had jurisdiction to hear and decide the issue whether the applicant had a claim under PAJA.


Conclusion on the law

[33] Are we free to follow Nakin, or are we – as counsel submits we are – bound by Chirwa to the complete derogation of Fredericks on the question of the High Court’s jurisdiction in labour and employment matters? This will depend on whether Chirwa overruled Fredericks, either expressly or by clear implication, on the law determinative of the High Court’s jurisdiction in the present matter. In the absence of express indication, a judgment will overrule an earlier decision of the court if the two judgments are mutually irreconcilable. And the court will be assumed to intend to overrule the earlier judgment if it delivers its judgment with knowledge of the conflict. Needless to say the judgments will not be in conflict if the one is distinguishable from the other on the relevant issue.


[34] The first step in deciding that question is to identify the full import of the decision of the court in Chirwa. This involves having regard to the conclusion reached in both the majority judgments and the reasons underlying those findings. It is to be noted that the judgment of Skweyiya J was concurred in by seven of the judges of the court and that of Ngcobo J by six of those judges. Ngcobo J concurred in the judgment of Skweyiya J, but Skewyiya J did not signify concurrence in the judgment of Ngcobo J. None of the concurring judges expressed any reservations about either of the judgments, nor did Skweyiya J or Ngcobo J express any disagreement with the reasoning of the other. We must therefore find consonance in the two judgments. The minority judgment of Langa CJ is also relevant in so far as it reflects on the import of the two majority judgments.


[35] In summary, both Skweyiya J and Ngcobo J went to great length to emphasise that it is the purpose of the LRA to deal with all employment related matters involving allegations of unfairness and that the LRA mechanisms are best suited to deal with such disputes. They held that s 157 proactively interpreted, assigns exclusive jurisdiction to the Labour Court in matters falling within the ambit of the LRA. On their binding reasoning for their findings the following propositions are integral to the judgment of the court:

(a) Any dispute determinable under s 191 read with s 185 of the LRA is for purposes of s 157(1) a dispute to be determined exclusively by the Labour Court.

(b) For that purpose the LRA dispute resolution councils and the CCMA constitute 'the Labour Court'.

(c) For the purposes of s 169(b) of the Constitution, the Labour Court so constituted is 'another court'.

(d) Any matter 'to be determined' under the LRA is a matter assigned to such 'court' by an Act of Parliament.

(e) The Labour Court in effect has exclusive jurisdiction in respect of any alleged or threatened violation of any fundamental right entrenched in chapter 2 of the Constitution arising from employment and labour relations, despite the fact that s 157(2) of the LRA states that the Labour Court has concurrent jurisdiction with the High Court in such matters.


[36] On a narrow interpretation of his judgment, Skweyiya J held simply that where a complainant in an employment dispute about her dismissal commenced proceedings under the LRA, she had to continue on that course, and that in such circumstances, the High Court lacked jurisdiction subsequently to entertain the dispute. On this construction of his reasoning, the decision in effect turned on election and his extensive commentary on the law would be surplusage. However, reading the judgment as a whole, that commentary constitutes the effective rationale for the conclusion reached by him in the matter. The Constitutional Court is the highest court in all constitutional matters. Its comments are read – and are intended to be read – as authoritative. The extensive and purposeful discussion by Skweyiya J of the status and function of the Labour Court is not simply obiter dictum but authoritative pronouncement on the law. Nice distinctions and narrow exceptions have a lesser significance in that court than do declarations of broad principle. Deciding a jurisdictional question of major import, such as the present, by distinguishing a conflicting earlier decision on the facts or on the characterisation of the cause of action, leads to uncertainty and the piecemeal determination of the wider issue. Prospective litigants are entitled to certainty on questions of jurisdiction.


[37] Skweyiya J sought to distinguish Fredericks on the grounds that the applicants there expressly disavowed any reliance on s 23 of the Constitution, which entrenches the right to fair labour practice. Nor did the claimants, he said, rely on the fair labour practice provisions of the LRA or any other provision of the LRA. However, both Skweyiya J and Ngcobo J had regard to the substance of Ms. Chirwa’s claim in considering the jurisdictional question. The basis upon which Skweyiya J would distinguish Fredericks falls outside the real rationale for his conclusions and has no bearing on his interpretation of s 157 of the LRA.


[38] The finding in Chirwa that for the purposes of s 157(1) the Labour Court is constituted of the councils of the LRA and the CCMA is crucial to the court’s finding on the exclusive jurisdiction of that 'court' under that section. Equally, the finding in Fredericks that the LRA does not confer jurisdictional status similar to that of the High Court on the councils of the LRA and the CCMA is crucial to the court’s ruling that the jurisdiction of the High Court is not ousted by s 157(1). On that point alone the two cases are in clear and diametric conflict with each other. They also conflict in regard to the jurisdiction of the High Court on constitutional matters under s 157(2) of the LRA. Clearly, each case would have been differently decided on the reasoning adopted in the other. Our finding will therefore depend on which of the two decisions we apply.


[39] Where a court overrules its own earlier decision on the law it is customary to do so expressly and to indicate the reasons for its findings. In the absence of express statement in either of the majority judgments in Chirwa that Fredericks is overruled, one must examine those judgments and the circumstances in which they were delivered in order to determine whether the court intended by implication to overrule the earlier decision. Skweyiya J distinguished the judgment in Fredericks, but on a basis not material to the conflict in the judgments. And Ngcobo J does not refer to Fredericks. Neither Skweyiya J nor Ngcobo J refer to the judgment of the Chief Justice. Skweyiya J and Ngcobo J, as well as the other judges who concurred in their judgments, must however have been aware of the comments of the Chief Justice regarding the clear conflict between their judgments and Fredericks. They nevertheless proceeded to deliver their judgments. It must be accepted therefore that they intended to overrule Fredericks to the extent that their judgments are in conflict with that of O’Regan J. It follows that this court is obliged to apply the law as stated in Chirwa. That was the course followed by the full court of the Transkei High Court in Mbashe Local Municipality and others v Mazisi Zingisani Nyubuse, an unreported judgment delivered on 30 May 2008 in case no CA24/08.



Application of conclusion to the respondents’ claim

[40] The majority judgments in Chirwa do not however extend the exclusive jurisdiction of the Labour Court to wrongful dismissal, or indeed to any wrongful act within a contract of employment. Such acts fall outside the ambit of the LRA being neither unfair dismissal nor unfair labour practice. Fedlife therefore remains intact on the issue.


[41] This has significance in applying Chirwa to the facts of the case before the court. The respondents’ 'GROUNDS OF REVIEW' were stated by the first respondent:

'5.1 Having regard to what has been more fully set out above, I respectfully submit that the respondent has misdirected itself and perpetrated one or more reviewable irregularities, more particularly in that the respondent failed to and/or erred in (sic):

      1. give me or the other Applicants notice of the hearing and failed to advise me or the other applicants in detail of the allegations levelled against us;

      2. require evidence to be lead (sic) at an enquiry in substantiation of any of the allegations levelled at me or the other applicants and not affording us an opportunity to ask questions in relation to such allegations;

      3. allow me or the other Applicants an opportunity to produce evidence to refute the allegations against us and to show cause why we should not be expelled;

      4. the respondent has failed to follow the peremptory provisions of the Act regarding expulsion of members from a co-operative.

    1. The respondent has failed to observe the fundamental principles

of natural justice to the prejudice of the Applicants. Had we been

allowed such rights, I have no doubt that we would have been

acquitted of any wrong doing.'


[42] The respondents base their cause of action on the alleged unfair procedure adopted by the appellant in their expulsion from the co-operative, thereby terminating their employment. This brings their dispute within the ambit of s 191(1) read with s 185 of the LRA, and on the authority of Chirwa places it beyond the jurisdiction of the High Court. However, the grounds of review (see para 5.1.4 thereof), as amplified by the averments of the first respondent, suggest that the respondents rely also on wrongful dismissal in breach of their contract of employment found in the provisions of the Co-operatives Act and the appellant’s statute. On the authority of Fedlife, the High Court would have jurisdiction in such a dispute. This raises the unhappy spectre that the respondents’ claim falls partly within the jurisdiction of the Labour Court and partly within that of the High Court.


[43] The respondent’s grounds of review must however be viewed as a whole within the structure of the application. They seek the review and setting aside of the decision of the appellant to terminate their membership of the co-operative, followed by their reinstatement. This relief falls within the dispute resolution procedure of the LRA for unfair dismissal. Such relief is however inappropriate on a claim based on wrongful breach of contract. The relief sought by the applicant therefore indicates that in substance their cause of action is one falling wholly within s 191(1) of the LRA.


[44] Furthermore, the relevant provisions of the Co-operatives Act and the appellant’s statute are designed to ensure fairness in the expulsion process. In the circumstances it seems to me that the reference to the breach of the peremptory provisions of the Act in the respondents’ grounds of review (para 5.1.4) is not intended to found a substantive cause of action of wrongful dismissal, but serves merely to re-inforce the respondents’ claim that the procedure followed by the appellant in their expulsion was unfair.


[45] It follows that on the authority of Chirwa the whole of the respondents’ cause of action falls within the purview of the Labour Court to the exclusion of the jurisdiction of the High Court.


[46] In the result, the appeal succeeds with costs and the order of the court

a quo is set aside and the following order is substituted therefor:

  1. The applicants’ claim is dismissed.

  2. The applicants are ordered to pay the costs of the application jointly and severally, the one paying the other to be absolved.



_________________________

A.R. ERASMUS

JUDGE OF THE HIGH COURT



DATE: _________________












Schoeman J:


I agree.






________________________

I. SCHOEMAN

JUDGE OF THE HIGH COURT




Tshiki AJ:



I agree.






________________________________

P. W. TSHIKI

ACTING JUDGE OF THE HIGH COURT