Loyiso and 28 others v Amethst (Pty) Ltd and others (JS961/12)  ZALCJHB 460 (10 March 2016) per Molahlehi J.
The Labour Court refused the application and upheld the argument that the Labour Court did not have the necessary jurisdiction to decide the matter. #A and another company employed a number of persons who were then ‘deployed’ to Baoki, a joint unincorporated consortium, specifically created to bid for a provincial government contract. The two companies were jointly liable for any claim caused by the premature termination of employment and any action instituted against Baoki. The other company ‘outsourced’ its responsibilities to EHS. On 3 November 2008 Baoki was awarded a contract to provide certain services. EHS concluded written five year fixed-term employment contracts with a number of employees. But Baoki’s contract was not honoured by the provincial government and EHS suffered financial difficulties and terminated the employment contracts based on operational requirements. #A’s offer to pay the affected employees was rejected by certain employees who then instituted action against #A and the others based on an unlawful breach of contract.
Two issues arose:
- was there a contractual relationship between the #A and the applicants; and
- should the ‘corporate veil’ of Baoki be lifted.
The first issue related to the jurisdiction of the Labour Court to decide the claim of the former employees based on an alleged breach of contract. The Labour Court rejected the contention that there was a contract with #A even though there could have been an employment relationship in terms of the LRA. But that required a claim based on unfairness and no such dispute was ever referred to the CCMA, and only the CCMA would have had jurisdiction. The Labour Court also refused to lift the corporate veil.