Crosnier v Easigas (Pty) Ltd (J 2808/14) [2016] ZALCJHB 245; (2016) ILJ 1686 ; [2016] JOL 35547 (23 March 2016) per A van Niekerk J.

The labour court is not confined to resolving disputes relating only to unfairness.  It also has the power to determine disputes based on unlawfulness, provided they are related to employment contracts.  The labour court has a discretion regarding costs and it is not dependent on the nature of the claim.  Costs were awarded to the former employee who achieved a payment settlement on the ‘steps of the court building’.  But a punitive award of costs was not justified.

LC summary:

Costs – matter settled on first day of trial; only costs in dispute.  The discretion established by s 162 applies regardless of the nature of the action, in this case, a contractual claim referred in terms of s 77 (3) of the BCEA.  In latter instance, Labour Court does not sit as a civil court; it simply exercises a concurrent jurisdiction.  Also considered – whether High Court tariff should apply when claim falls within ambit of jurisdiction of Magistrates’ Court and on the facts, whether a punitive costs order is warranted. 

Excerpts without footnotes

Introduction

[1]        On 25 February 2016, the day on which this matter had been set down for trial, the parties settled their dispute, but for the issue of costs.  The dispute had been referred to this court in terms of s 77 (3) of the Basic Conditions of Employment Act, 75 of 1997 (BCEA).  It was agreed that the oral submissions made on the day could be supplemented by later written heads of argument.  I am grateful to both parties’ representatives for the thorough heads that they submitted.

[2]        In essence, the court must decide three things.

  • The first is whether in disputes about contracts of employment referred for adjudication in terms of s 77(3) the approach to ordering costs is that established by s 162 of the Labour Relations Act, 66 of 1995 (LRA), or whether the court ought more properly to apply the approach adopted in the civil courts, i.e. that in the absence of exceptional circumstances, costs should follow the result.  The same question has previously been cast another way – when the Labour Court exercises its jurisdiction to determine contractual disputes, does it sit as a civil court?
  • The second issue is whether, in a case (such as the present) where the Magistrates’ Court has concurrent jurisdiction, costs should necessarily be limited to those recoverable on the Magistrates’ Courts’ tariff.
  • Finally, the applicant seeks an order for costs on the scale as between attorney and client; the court must decide whether a punitive costs order is warranted.

. . . . .

Does s 162 apply?

[6]       The reference to ‘concurrent jurisdiction’ in s 77(3) of the BCEA means no more than that this court’s jurisdiction overlaps with that of the civil courts in a dispute that concerns an employment contract – it does not mean that this court sits as a civil court or is imbued with powers that extend beyond those conferred by the LRA.

In s 77(3) referrals, this court sits as the Labour Court, exercising its statutory jurisdiction (whether concurrent or otherwise) and imbued with all its statutory powers.

. . . . .

Applying s 162

[10]     Ultimately, s 162 requires the court to exercise a discretion, and to exercise it judicially, having regard to all of the relevant facts and circumstances.  For the reasons reflected above, I am persuaded that the requirements of the law and fairness are best satisfied by awarding the applicant his costs.

. . . . .

Which tariff should apply?

[16]     Although the monetary value of the applicant’s claim is such that he could have instituted proceedings in the Magistrate’s Court, it has a number of features that suggest that a referral to a specialist court was justified.  The claim turned to some extent at least on the contention that any right to withhold payment was based on a variation to the applicant’s terms and conditions of employment, a variation that the applicant contended was unilateral.  The terms of the dispute, as they were initially raised, also concerned the application of s 34 of the BCEA and the subsection that ought properly to be invoked in the present instance.  Further, the settlement agreement itself contemplated that either party could approach this court in the event of a dispute.

[17]      The applicable tariff therefore for the costs order which I intend to make is that ordinarily applied in this court, which is the High Court scale.

. . . . .

A punitive costs order?

[19]     Courts do not often make orders for costs on a punitive scale.  Orders of this nature are conventionally reserved for those instances where a claim is brought or defended frivolously or where a party has conducted itself in a mala fide way, where a claim or defence is entirely devoid of merit, or where the conduct of a representative warrants a punitive order.  The applicant has urged me to make a finding that the respondent has acted mala fide in defending the claim, and that a punitive costs order is justified on this basis.

I am not persuaded that on the papers alone a punitive costs order is warranted.