The LC confirmed that the law confers at least two possible causes of legal action when an employee’s contract of employment is terminated.  The LC has the jurisdiction and power to resolve both legal claims.  The BCEA confers jurisdiction for breaches of contract and the LRA confers jurisdiction on the CCMA and the LC based on unfairness.  A claim based on breach of contract does not flow from the LRA and is not subsumed in the concept of unfairness.  One of the important distinctions is that only a claim based on unfairness must be referred to prior conciliation in terms of the LRA.  In the result the LC held that the employee had failed to prove any breach of contract and refused the application for specific performance of her contract.

M v Nelson Mandela Bay Metropolitan Municipality (J1197/16) [2016] ZALCJHB 414; [2016] 12 BLLR 1228 (LC) (23 September 2016) per Van Niekerk J.

Excerpts without footnotes

[1]        This is an application brought on a semi-urgent basis in which the applicant seeks declaratory orders to the effect that the summary termination of her employment contract be declared unlawful and of no effect, that the disciplinary proceedings initiated against her and which served before the second respondent constitute a nullity and that there be an order of specific performance of the applicant’s contract by reinstating her retrospectively from 1 June 2016, the date on which the applicant contends that the first respondent repudiated her contract.  The application is opposed by the first respondent.

[2]        The claim is brought as one in terms of s 77(3) of the Basic Conditions of Employment Act, 75 of 1997 (BCEA).  That section confers jurisdiction on this court, concurrently with the civil courts, to hear and determine matters concerning contracts of employment.

. . . . .

[13]      As I have indicated above, the applicant’s claim is that she had a contractual entitlement to a disciplinary hearing (at least in accordance with the principles laid down in the LRA) prior to any valid termination of the employment contract and that she was in any event entitled to one month’s notice of termination  of her contract.

[14]      The applicant specifically does not request this court to make findings as to whether a properly conducted enquiry could sustain the charges brought against her or whether those charges, even if they are proven, would sustain the sanction of dismissal.  She accepts that if this application were to succeed, the first respondent would be entitled to reinstate the charges against her.  In other words, the applicant insists on specific performance of the contract only to the extent that she asserts her right to a fair disciplinary hearing.

[15]      Mr Grogan, who appeared for the first respondent, submitted that the court ought not to deal with the present dispute under its jurisdiction in terms of the BCEA, because claims by dismissed employees based on alleged breaches of contract must necessarily be contested under the LRA. 

The submission, as I understood it, contemplates that the right not to be unfairly dismissed is protected by a single comprehensive statute (the LRA) and where, as in the present instance, an employee brings what is in reality an unfair dismissal dispute under the guise of a contractual claim, that dispute should not be entertained because to do so would conflict with the LRA’s statutory dispute resolution procedure.

[16]      The applicant on the other hand, concedes that the common law of contract makes no provision for a hearing before termination of employment, but relies on the express term (clause 15.2) that establishes such a right.  The applicant also contends that she is not precluded by the statutory protection against unfair dismissal from enforcing a contractual right to fair procedure. 

Mr Watt-Pringle SC, who appeared for the applicant, relied on Fedlife Assurance Ltd v Wolfaardt  2002 (1) SA 49 (SCA).  In that matter, the court said the following:

However, there can be no suggestion that the constitutional dispensation deprived employees of the common law right to enforce the terms of the fixed term contract of employment.  Thus irrespective of whether the 1995 Act was declaratory of rights that had this source in the interim Constitution or whether it created substantive rights itself, the question is whether it simultaneously deprived employees of the pre-existing common law right to enforce such contracts, thereby confirming them to the remedies for ‘unlawful dismissal’ as provided for in the 1995 act… The 1995 act does not expressly abrogate an employee’s common law entitlement to enforce contractual rights and nor do I think that it does so by necessary implication.  On the contrary there are clear indications that in the 1995 act that the legislature had no intention of doing so.

And further:

When a particular dispute falls within the terms of s one and one depends upon what is in dispute, and the fact that an unlawful dismissal might also be unfair (at least as a matter of ordinary language) is irrelevant to that enquiry.  The dispute falls within the terms of the section only if the ‘fairness’ of the dismissal is the subject of employees complaint.  Word is not, the subject in dispute is the lawfulness of the dismissal, then the fact that it might also be, and probably is, unfair, is quite coincidental for that is not what the employees complaint is about.

[17]      I do not understand the law to have changed since Fedlife, certainly not to the extent of depriving a dismissed employee of any contractual rights where the employee elects to enforce those rights either as an alternative or in addition to any claim for unfair dismissal that may be available under the LRA.  This much was made clear by the SCA in the later decision of Boxer Superstores Mbatha and another v Mbenya 2007 (5) SA 450 (SCA)).  The situation is different where an employee employed by the state seeks to rely on an administrative law remedy.  Here, the courts have held that when a party alleges that the employer has failed to comply with the LRA, a remedy must be sought under that Act; the employee may not clothe the dispute as one that concerns the application or enforcement of an administrative law right (see Chirwa v Transet Ltd and others [2008] 2 BLLR 97 (CC)).

In the present instance, the applicant does not seek a remedy that is available to her under the LRA.  Her complaint is that the respondents have breached her contractual rights, and it is those rights that she seeks to enforce.

I do not understand the more recent decision by the Constitutional Court in Steenkamp and others v Edcon Ltd (2016) 37 ILJ 564(CC) to have changed that position.  In that case, the affected employees brought their claim directly under the LRA; their cause of action was one based directly on a breach of an LRA obligation.  The fact that the content of her contractual right to a fair hearing is defined by reference to what is provided by the LRA does not necessarily require the applicant to invoke an LRA remedy, nor does it deprive her of a contractual right – the issue is one of the nature and content of the contractual right.  In short, the reference to the LRA in the present instance is one of definition.  Clause 15.2 does no more than define the scope of the contractual right to a fair hearing.

[18]      The issue to be decided therefore is the scope of a right to fair procedure defined by the phrase ‘as well as in accordance with the LRA?’.  Further, to the extent that it becomes necessary, the court must determine whether there has been a breach of that rights [sic] and if so, whether the applicant is entitled to the remedy of specific performance.

[19]      The applicant submits that whatever the precise nature of the contractual right to a fair hearing, the procedure adopted by the second respondent did not comply with the terms on which the employee was summoned to a disciplinary hearing, that the hearing was a ‘hatchet job’, and that the second respondent’s failure to recuse himself once his conduct established a reasonable apprehension of bias rendered the entire process a nullity.

. . . . .

[25]      This is not the first time that the a disciplinary process involving the submission of written representations has received judicial sanction (see, for example, Broadcasting Electronic Media and Allied Workers Union & others v SA Broadcasting Corporation & others (J 2239/2015)).  In my view, the procedure adopted by the second respondent constituted compliance with the code of good practice and thus did not constitute a breach of the applicant’s contract of employment.  The application therefore stands to be dismissed.