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Constitutional Court Finding: The High Court and the Labour Court have Concurrent Jurisdiction on the Unlawful Termination of Employment Contracts

14 December 2020
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In a unanimous judgment handed down on 4 December 2020, in the matter of Baloyi v Public Protector and Others (CCT03/20) [2020] ZACC 27, the Constitutional Court held that the High Court and Labour Court have concurrent jurisdiction to hear matters concerning an allegedly unlawful termination of a contract of employment.

The facts

On 1 February 2019, Ms Baloyi was employed by the Office of the Public Protector (Public Protector) as the Chief Operations Officer on a five year fixed-term contract. In terms of the contract, Ms Baloyi would be on probation for six months until 31 July 2019. The Office of the Public Protector would be allowed to terminate the contract if it was dissatisfied with her standard of performance.

Ms Baloyi’s probationary period came and went without incident. However, on 8 October 2019, some two months thereafter, Vussy Mahlangu (Mr Mahlangu), the Chief Executive Officer of the Public Protector, addressed a letter to Ms Baloyi inviting her to make representations on the confirmation of her permanent employment with the Public Protector. Ms Baloyi did so in writing. On 21 October 2019, Ms Baloyi received a further letter from Mr Mahlangu stating that the Public Protector was unable to confirm her permanent employment and that her contract would be terminated on 31 October 2019.

Ms Baloyi approached the High Court on an urgent basis, alleging that the termination of her employment contract was, among other things, unlawful. She sought an order from the High Court declaring that the decision to terminate her employment contract was unconstitutional, unlawful, invalid and of no force and effect, and that the decision be set aside.

Ms Baloyi’s application in the High Court was unsuccessful. The High Court found that it did not have jurisdiction to hear the matter and that Ms Baloyi ought to have approached the Labour Court for relief. In the High Court’s view, Ms Baloyi had made allegations that raised a labour dispute as contemplated by the Labour Relations Act 66 of 1995, as amended (LRA), and the employment contract itself pointed to the LRA as the vehicle by which to vindicate her rights. She had accordingly chosen the incorrect forum in which to institute her dispute.

Pursuant to this, Ms Baloyi appealed directly to the Constitutional Court, and the Constitutional Court held that the crisp question was whether or not the High Court had erred in finding that it lacked jurisdiction to entertain Ms Baloyi’s claim. The Constitutional Court declined to entertain Ms Baloyi’s dispute on its merits on the basis that the merits had not yet been ventilated before a lower court.

The law

In considering the appeal, the Constitutional Court noted that the High Court has exclusive jurisdiction to adjudicate any matter, except those that, among others, have been assigned by legislation to another court with a status similar to that of the High Court. In considering this, the Court noted the following:

  • Section 157(1) of the LRA provides for the exclusive jurisdiction of the Labour Court in all matters that are to be determined by the Labour Court. However, the section does not afford the Labour Court general jurisdiction in employment matters. Accordingly, the High Court’s jurisdiction would not be ousted by section 157(1) of the LRA simply because a dispute is one that falls within the overall sphere of employment relations.
  • Section 157(2)(a) of the LRA provides that the Labour Court and the High Court have concurrent jurisdiction in any alleged or threatened violation of any fundamental right entrenched in the Constitution and arising from employment and from labour relations.
  • Additionally, section 77(3) of the Basic Conditions of Employment Act 75 of 1997, as amended (BCEA) provides that the Labour Court has concurrent jurisdiction with the civil courts to hear and determine any matter concerning a contract of employment, irrespective of whether any basic condition of employment constitutes a term of that contract.

The jurisdictional challenge that the Court was accordingly required to consider was whether or not section 157(1) and (2) of the LRA had the effect of extending the Labour Court’s exclusive jurisdiction over an alleged unlawful termination of a fixed-term employment contract. In order to determine whether the High Court had jurisdiction to adjudicate Ms Baloyi’s claim,
it was necessary to determine whether the claim was of such a nature that, in terms of the LRA or the BCEA, it was required to be determined exclusively by the Labour Court. The Court confirmed that an assessment of jurisdiction of a court must be based on an applicant’s pleadings, as opposed to the merits of the case.

The court’s findings

  • The Court found that Ms Baloyi’s cause of action flowed from contract, public and constitutional law. On the contractual front, Ms Baloyi argued that the contract was terminated out of time, long after the probationary period had ended. Furthermore, the contract had provided that her employment would be deemed to have been confirmed in the event that the employer neither confirmed, nor terminated the contract at the end of the stipulated period.
  • The High Court had made a holistic assessment of whether the dispute was located within the compass of labour law. Instead, the High Court was required to determine whether the specific causes of action relied on by Ms Baloyi fell within the jurisdiction of the High Court or the Labour Court.
  • The Constitutional Court confirmed that the same set of facts may give rise to several different causes of action. In the labour context, where a dismissal dispute may give rise to more than one cause of action, a litigant must choose the cause of action she wishes to pursue and prepare her pleadings accordingly. Had Ms Baloyi sought to pursue an unfair dismissal claim, she would have been obliged to approach the Commission for Conciliation, Mediation and Arbitration or the Labour Court in accordance with section 157(1) of the LRA. However, just because it was open to Ms Baloyi to pursue an unfair dismissal claim, it did not mean that she was required to.
  • The termination of a contract of employment has the potential to found a claim for relief for the infringement of the LRA and a claim for enforcement of a contractual right that does not emanate from the LRA. The exclusive jurisdiction of the Labour Court is engaged in circumstances where legislation mandates it, where a litigant asserts a right under the LRA, or relies on a cause of action based on a breach of an obligation contained in the LRA.
  • Consequently, the mere fact that a dispute is located in the realm of labour and employment does not exclude the jurisdiction of the High Court because contractual rights exist independently of the LRA. Section 23 of the Constitution does not deprive employees of a common law right to enforce the terms of a fixed-term contract of employment. Furthermore, the LRA does not confine employees to the remedies for unfair dismissals provided in the LRA.

This case serves to confirm that the manner in which a plaintiff chooses to frame a cause of action will determine whether or not the High Court and the Labour Court have concurrent (or in the latter instance, exclusive) jurisdiction over a dispute. In circumstances where a plaintiff alleges that a contract of employment has been terminated unlawfully and/or breached by an employer, it will be open for her/him to approach the High Court or the Labour Court for relief.