1 July 2008

Common law meaning of 'employee' extended beyond a contract of employment

In Discovery Health Limited v CCMA (case number JR 2877/06), German Lanzetta, an Argentinean national who was employed by Discovery Health, referred an unfair dismissal dispute to the CCMA when Discovery Health terminated his employment.

Discovery Health contended that Lanzetta was not an employee as envisaged by the Labour Relations Act, 1995 (the LRA) because he was not in possession of a valid work permit at the time he was appointed. In other words, the contract of employment concluded between the parties was not valid and therefore, Lanzetta was not an employee as defined in the LRA.

The parties agreed that the CCMA would firstly decide whether it had jurisdiction to arbitrate the dispute because Discovery Health claimed that Lanzetta was not an employee in terms of the LRA. The CCMA held that Lanzetta was an employee and that it had jurisdiction to determine whether or not his dismissal was unfair. It was this decision which Discovery Health took on review to the Labour Court.

The Labour Court dealt with two issues. Firstly, the Court considered whether the contract of employment concluded between Discovery Health and Lanzetta was invalid because Lanzetta did not have a work permit issued under the Immigration Act, 2002 that entitled him to work for Discovery Health and secondly, whether the definition of employee depends on the existence of a valid contract of employment.

After considering Section 49(3) of the Immigration Act, the Court stated that by criminalizing only the conduct of an employer who employs a foreign national without a valid permit and by failing to rule out a contract of employment concluded, the legislature did not intend to render invalid the contract in question. The Court held that the contract concluded between the parties was valid and remained so until its termination by Discovery Health. Lanzetta was therefore an 'employee' as defined in the LRA and the CCMA indeed had jurisdiction to determine the unfair dismissal dispute referred to it.

Turning to the second issue, the Court held that by taking into account the provisions of section 23(1) of the Constitution, the purpose, nature and extent of relevant international standards and the more recent interpretations of the definition of 'employee' by the Labour Court, the definition of 'employee' in Section 213 of the LRA was not rooted in a contract of employment. Therefore, a person who renders work in terms of a contract may be an 'employee' for the purposes of the definition, irrespective of whether he or she may have a valid work permit.

The case highlights the fact that even though a contract may be invalid at common law, if a contract of employment as defined in the LRA comes into existence, the protection afforded by the LRA will be available to employees.

Tim Mills, Director in the Employment Law practice, and Rudy Chetty, Associate, Cliffe Dekker Hofmeyr.

The information and material published on this website is provided for general purposes only and does not constitute legal advice.

We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter.

We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages.

Please refer to the full terms and conditions on the website.

Copyright © 2022 Cliffe Dekker Hofmeyr. All rights reserved. For permission to reproduce an article or publication, please contact us cliffedekkerhofmeyr@cdhlegal.com