Employment Claims – The Labour Court or the High Court?
Updated: Sep 8, 2020
Author: Imraan Mahomed
As employees increasingly turn to the civil courts in pursuing claims against employers, the Supreme Court of Appeal (SCA) has reaffirmed that both the civil courts and the Labour Court have jurisdiction in disputes related to employment contracts.
There have been a number of judgements in this regard leading up to this decision: While the Constitutional Court in November 2019 in Amalungelo Workers' Union and Others v Philip Morris South Africa (Pty) Limited and Another clipped the wings of the Department of Labour and Employment, the SCA in Lewarne v Fochem International (Pty) Ltd in September 2019 was asked to determine whether the Labour Court has exclusive jurisdiction in matters concerning a claim under a contract of employment. These claims arose in relation to sections 77(1) and 77(3) of the Basic Conditions of Employment Act (BCEA), dealing with the jurisdiction of the Labour Court.
Ms Lewarne was employed by Fochem International, earning a gross monthly salary of R75,000. According to her employment contract, she was entitled to a 13th cheque payable on or before 20 December each year. In December 2016, Ms Lewarne received only R50,000. The reason given by the employer was her alleged misconduct and abuse of the company credit card. Says Imraan Mahomed, director at law firm Lawtons Africa: “good reasons not to pay a bonus.”
Ms Lewarne instituted legal action in the High Court for an order that the employer pay her the sums of R25,000 (the outstanding pay for her bonus) and R300,000 (remuneration for January 2017 - April 2017).
The employer opposed the action and argued that the High Court lacked jurisdiction to determine the dispute as the claim related to alleged unlawful deductions from her remuneration, in terms of s34 of the BCEA. The employer argued that the Labour Court had exclusive jurisdiction to determine the matter under s77(1) of the BCEA.
The High Court upheld the employer’s point of law and dismissed Ms Lewarne’s claim. The SCA overturned the decision of the High Court and held that it had erred in finding that it did not have jurisdiction to adjudicate the claim. The SCA confirmed that s77 of the BCEA applies in instances where a dispute relates to or is connected to an employment contract.
The SCA found that the mainstay of the claim was for payment of money due under the employment contract. It was this action that was before the court and on which it had to decide whether it had the necessary jurisdiction. The SCA emphasised that it was not necessary for the High Court to place any reliance on Ms Lewarne’s reference to the employer’s reasons for withholding her remuneration. The fact that withholding remuneration was in contravention of s34 of the BCEA did not alter the essential nature of the claim, i.e. that it related to a breach of the employment contract. The claim was accordingly properly situated in the High Court.
Concludes Mohomed; “employers should be alive to the reality of the upsurge in employees who are now pursuing claims in the civil courts – the High Court, Magistrates Court and Small Claims Court. Both the civil and the Labour Courts have jurisdiction when an employee is faced with a dispute relating to an employment contract.
Lawtons Africa is a South African law firm. With roots that grew out of seeds sown in down-town Johannesburg in 1892, our history features various changes and different names. Our team of lawyers, including directors, consultants, associates and candidate attorneys is highly qualified, market-recognised and skilled. For further information, visit www.lawtonsafrica.com