"Ex turpi causa non oritur actio" is a Latin maxim meaning that one engaged in an illegal activity cannot claim damages arising out of that activity. This rule has been an integral part of South African common law. When applied to contracts of employment, it used to mean that persons who enter into unlawful contracts of employment cannot avail themselves of the remedies provided by the Labour Relations Act (LRA).
The application of the ex turpi causa rule in instances where the legislature has declared an act illegal, but not expressly declaring the contract invalid, has caused some controversy. On one hand, the declaration of invalidity was said to be enough to render a contract void. On the other hand, if the legislature felt so strongly about the prohibition, the argument was that it would have expressly declared such contracts to be invalid.
This dispute has been settled by the Labour Court (the Court). In Discovery Health v Commission for Conciliation, Mediation and Arbitration and Others (2008) 29 ILJ 1480 (LC), the Court was faced with the issue whether a foreign national without a valid work permit was an employee in terms of the LRA.
Mr Lanzetta had a valid work permit at the commencement of the employment relationship at Discovery Health (Discovery). However, Lanzetta's work permit lapsed during the currency of his employment, partly due to the tardiness of his managers in furnishing him with the requisite documents. When the fact of the expiry of the work permit came to Discovery's attention, Lanzetta was dismissed without a hearing. Lanzetta referred a dispute about unfair dismissal to the CCMA. Discovery's line of argument was that the CCMA did not have jurisdiction as Lanzetta was not an "employee" as defined in section 213 of the LRA, given that his contract of employment was void ab initio by virtue of his illegal status.
Two key lessons are taken from the judgment of Van Niekerk AJ in Discovery. Firstly, an employment relationship is not dependent on a valid contract of employment.
Secondly, section 23 of the Constitution (which states that "e]veryone has the right to fair labour practices...") should be interpreted to mean exactly that: this right is afforded to everyone, not only those who were employed on valid contracts of employment.
The decision in Discovery was then followed by the decision of the Labour Appeal Court (LAC) in Kylie v the Commission for Conciliation, Mediation and Arbitration and Others  7 BLLR 705 (LAC). The LAC confirmed that, even if there is no valid contract of employment, this does not deprive the worker of rights under the LRA. This was held to be the case even where the work itself was illegal.
The latest in this line of cases is Southern Sun Hotel Interests (Pty) Ltd v CCMA and others (unreported case C255/09). In this case, Ms. Ernesta obtained employment from Southern Sun while on a study permit. She is neither a South African citizen nor does she have permanent residence in this country. On expiry of the study permit, the employee was told she could no longer render her services. She was instructed to obtain a work permit and suspended without pay. By September 2008, the employee had not procured a work permit. Pursuant to a disciplinary enquiry, she was dismissed on the basis that she was unable to lawfully tender her services.
During October 2008, the employee referred a dispute about an unfair labour practice to the CCMA. Southern Sun objected to the jurisdiction of the CCMA to deal with the matter on the basis that she was not an employee. The CCMA held that it had the jurisdiction to entertain the matter and Southern Sun took that ruling on review to the Court. The Court dismissed Southern Sun's review application on the basis that the CCMA was correct in following the authority of Discovery Health and Kylie.
Interestingly, in his jurisdictional ruling, the Commissioner held that there is scope to make the argument that the failure of the employer to assist an employee in normalising his or her status could amount to an unfair labour practice. The Court did not explore this aspect of the ruling.
Employers should appreciate that all their employees can take action against them for claims arising from the employment legislation, including unfair labour practice or unfair dismissal claims. The mere fact that the employee is not in possession of a valid work visa does not present a valid defense against claims of unfair employer conduct. Where the services of an employee without a valid work permit are terminated, it should still be for a valid reason and in line with a fair process.
Fiona Leppan and Mabasa Sibanda