7 October 2019 by and Employment Alert

Where to go: High court or labour court?

In the recent judgment in Lewarne v Fochem International (Pty) Ltd (1073/18) [2019] ZASCA 114 (18 September 2019), the Supreme Court of Appeal was tasked with determining whether the Labour Court has exclusive jurisdiction in matters concerning an employment contract in terms of sections 77(1) and 77(3) of the Basic Conditions of Employment Act, No 75 of 1997 (BCEA).

Ms Lewarne was employed by Fochem International, as its Financial Manager for eight years and was promoted to Director earning a gross salary of R75,000 per month. According to her employment contract, she was entitled to a 13th cheque equal to one month’s salary payable on or before 20 December each year. In December 2016, Ms Lewarne only received R50,000, the reason given by the employer was her alleged misconduct and abuse of the company credit card.

Ms Lewarne proceeded by launching an application in the High Court for an order that the employer pay her the sum of R25,000 (being the outstanding pay for her bonus) and the sum of R300,000 less legal fee deductions. Lochem International opposed the application by filing a notice in terms of which it averred that Ms Lewarne’s application be dismissed on a point of law on the basis that the High Court lacked jurisdiction to determine the dispute. In support of the point of law raised, the employer alleged that on a proper reading of Ms Lewarne’s founding affidavit, her pleaded case was essentially that the employer had made certain unlawful deductions from her remuneration and that for this contention she relied on the provisions of s34 the BCEA. The Labour Court therefore had exclusive jurisdiction to adjudicate the matter in terms of s77(1) of the BCEA.

The High Court upheld the employer’s point of law and dismissed Ms Lewarne’s application. The Supreme Court of Appeal overturned the decision of the High Court and held that it erred in finding that it did not have jurisdiction to adjudicate Ms Lewarne’s claim. The court confirmed that s77 of the BCEA applies in instances where a dispute relates to or is connected to an employment contract.

The court found that the crux of Ms Lewarne’s claim was for payment of money due to her in terms of her 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 court emphasised that it was not necessary for the High Court to place any reliance on Ms Lewarne’s reference to the employer’s professed 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 Ms Lewarne’s application.

The essence of this judgment is that it reaffirms the position that when one is faced with a dispute relating to an employment contract, both the civil and the Labour Courts have jurisdiction to adjudicate such claims. The practicalities of this decision however, stand to be tested. Before deciding to litigate an employment contract dispute in the High Court, one must bear in mind the volume of cases the High Courts (excluding the Labour Court) are inundated with as well as the length of time it takes for a matter to be heard. By way of example, in the Johannesburg High Court, a matter can be allocated a date as far as 2023 but in the Labour Courts, matters are allocated dates for hearing in 2020 or 2021. It therefore seems like a more time efficient strategy to proceed through the Labour Court instead of the civil courts.

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