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Selected CCMA Cases

# FEDLIFE ASSURANCE LIMITED v HENDRIK JOHANNES WOLFAARDT

Case Number: 450-1999 (SCA)

Date of Award: 18 September 2001

CAN A FIXED TERM EMPLOYEE BE UNFAIRLY DISMISSED?

Comment: The Supreme Court of Appeal was asked to decide whether the enactment of the Labour Relations Act, and in particular, the protections against unfair dismissal in Chapter VIII of the Act, effectively excluded a right to claim damages for repudiation of fixed-term employment contract.

The employee in this instance had been engaged in terms of a fixed term contract for a period of 5 years. The employer terminated the contract, for reasons related to its operational requirements, part way through the period of the contract. The employee sued the employer in the High Court for the remuneration he would have earned for the balance of the contract. The employer argued that he should have referred the dispute to the Labour Court, which has exclusive jurisdiction in retrenchment disputes.

The employee’s strategy was aimed at recovering more than the 12 months compensation to which he would be entitled if he succeeded in an unfair dismissal claim- his contractual claim was worth considerably more. The Court held that Chapter VIII of the LRA did not exclude a claim based on an alleged breach by an employer of a contract of employment, and that the High Court had jurisdiction to entertain the claim.

Readers should note that section 77(3) of the Basic Conditions of Employment Act confers concurrent jurisdiction on the Labour Court with the civil courts in relation to matters concerning contracts of employment. There would be no bar to an employee lodging a contractual claim for damages in the Labour Court in circumstances where the employer is alleged to have breached the terms of the contract.

The more interesting but undecided issue raised by the judgment is whether an employee can claim both contractual damages and compensation for an unfair dismissal. In principle, there seem to be no reason why this should not be possible. Section 195 of the LRA makes it clear that compensation for an unfair dismissal is payable in addition to any other amount to which an employee is entitled in terms of any law, collective agreement or contract of employment.

# THE DEPARTMENT OF JUSTICE and CCMA, Maritz, PSA, Nortier & Duminy

Date of Award: 20010907
Case Number: c718-2000 Labour Court

MERIT VS AFFIRMATIVE ACTION APPOINTMENTS

Two employees of the Department of Justice (Nortier and Duminy) applied for two vacancies which would have entailed a promotion had they been successful. Their applications were however not successful and the Minister of Justice appointed a black male and a black female to the two positions.

Nortier and Duminy referred a dispute to the CCMA on the basis that the Department’s decision amounted to an unfair labour practice regarding their promotions. The CCMA found in favour of the two employees and directed the Department to afford them "protective promotion" (which essentially amounts to an undertaking by the employer to promote an employee who is nevertheless retained in the post of lower grading pending a post of suitable grading becoming available).

The Department reviewed the award on inter alia the basis that the CCMA did not have jurisdiction to determine the dispute as it related to an appointment rather than a promotion. The Department also challenged the CCMA’s jurisdiction on the basis that the alleged dispute in fact pertained to alleged unfair discrimination and should have been adjudicated by the Labour Court.

The Court confirmed that an award might be set aside as a result of a material error of law by the Commissioner, or a failure to properly characterise the nature of the dispute before the CCMA. The Court observed that there may be circumstances which two possible causes of action are present, each of which would lead to a different forum having jurisdiction. In these circumstances the following principles should apply:

The Applicant is the master of the dispute and has the right to choose the cause of action and grounds upon which it relies.

The Commissioner must determine what the main issue to be decided is and whether the matter is one to be determined by arbitration in the CCMA. Although the ipsa dixit of the Applicant may be the decisive factor, the Commissioner may be required to look at the objective situation to determine what the real issue before the CCMA is.

The mere presence of issues that usually fall to be determined by the Labour Court does not automatically preclude the CCMA’s jursidiction. The CCMA may be required to decide issues usually reserved for the Labour Court where it is peripheral or incidental to the main dispute before it.

Where there are elements of both classes of dispute, jurisdiction will be determined with reference to the usual twofold test for causation.

The Court also held that the Commissioner exceeded his powers by awarding the employees protective promotion. The award of the Commissioner was accordingly set aside and substituted with a finding that the employee’s referral be dismissed.

# Landmark CCMA Awards

>> Charles Shareef Mbaya and Medina Meats – Mohammed Suliman MP325 –01

UNFAIR DIMISSAL: PROCEDURAL AND SUBSTANTIVE UNFAIRNESS

The employee in this matter took three weeks leave to attend to family problems in Malawi. His employer gave him a further 7 days to finalise matters. While at home, the employee’s sister fell ill and had to be hospitalised.

The employee accordingly contacted the employer’s wife and informed her that he would have to extend his stay. Approximately two months after the employee left for Malawi he arrived back at work. Shortly after the employee’s return to work, his employer informed him that he had spoken to his son and that they could not agree on the employee’s continued employment. The Employee left and returned 7 days later at which point he was told that that the employer no longer wished to employ him and had already appointed someone in his place.

The CCMA found that the employee’s dismissal was both procedurally and substantively unfair. As far as procedure was concerned, the employer had not investigated the reasons for the employee’s extended absence nor did he afford him an opportunity to state a case in response. The dismissal was found to be substantively unfair on the basis that the employer ought to have known that the employee’s extended period of absence was due to problems at home and the employee had left a message with the employer’s wife to his effect. The employer was accordingly ordered to pay the employee eight month’s salary.

>> Daryn Wade Avenant and Mesh Gear Manufacturers KN 57755

UNFAIR DISMISSAL: WHEN DOES PERFORMANCE NO LONGER CARRY ANY WEIGHT?

In this case the employee was appointed as a machine operator. His appointment was initially subject to a three-month probationary period but prior to the expiry of the probationary period he signed a three-month fixed term contract. Shortly before the expiry of the fixed term contract, the employee was advised that his contract would not be renewed.

On the employee’s version, he was in fact told that he was unfairly dismissed one week prior to the expiry of the contract and that he had a reasonable expectation of a permanent appointment.

According to the employer, the employee’s constant failure to work overtime on Saturdays prompted the employer’s decision not to renew the fixed term contract and that these concerns had constantly been conveyed to the employee. The employee could accordingly not have had a reasonable expectation of renewal.

As far as the allegation of premature termination was concerned, the employee conceded that he was given the option to leave immediately or to remain until the end of the contract and that he chose the latter option.

The CCMA found in favour of the employer, party on the basis that it exercised a prerogative not to renew the contract, there was no expectation of renewal on the part of the applicant and there had been no clear undertaking that the applicant would be permanently employed. The Applicant had accordingly failed to prove a dismissal.

EDITORS NOTE: It is suggested that the commissioner ignored an important element of this dispute namely the dubious practice of engaging employees on a fixed term contract basis in lieu of a probationary period, or an extension of a probationary period. The employee’s contract was clearly not renewed for performance-based reasons. Given the fact that the further evaluation of the employee’s performance was the real reason behind entering into the fixed term contract in the first place, the commissioner may have overlooked the real nature of the contractual relationship.

Gary Watkins

Gary Watkins

Managing Director

BA LLB

C: +27 (0)82 416 7712

T: +27 (0)10 035 4185 (Office)

F: +27 (0)86 689 7862

Website: www.workinfo.com
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