This article was written by Jose Jorge, a director at Norton Rose Fulbright South Africa
A judgment this week by the Labour Court offers interesting findings regarding the practical application of the principles of invalid versus unfair dismissals. This should be a cautionary note for employers who overturn the findings of disciplinary chairpersons.
Mr James and Mr Barry1 were involved in the theft of watermelons from the farm of a customer of their employer. After a disciplinary inquiry they were summarily dismissed. On appeal the dismissal was overturned and replaced with a sanction of two weeks unpaid leave. They resumed employment only to be told two weeks later that the company was reinstituting the dismissals. James and Barry then referred an unfair dismissal dispute to the CCMA. The arbitrator found that the dismissals substantively fair but procedurally unfair. He awarded them R20 000 each.
Dissatisfied with the outcome, they went on review to the Labour Court. Despite having referred a dispute to the CCMA they now argued that their dismissals were invalid, because the arbitrator did not have jurisdiction to hear the matter and had acted ultra vires. They argued invalidity on the basis that the company had failed to comply with its disciplinary policy in that it did not allow for interference with the decision of the appeal chairperson. Based on this, the company had acted beyond the scope of its powers in doing so. The policy was furthermore a collective agreement incorporated into their employment contracts.
The Labour Court in its judgment applied the rationale of Edcon v Steenkamp2 where the Labour Appeal Court (LAC) had taken the unusual step of overturning two of its earlier judgments regarding invalid dismissals. The LAC found that contract law is an insufficient instrument to regulate the modern employment relationship. A wrongful termination, which may not constitute a lawful cancellation or rescission of the contract, is still a dismissal in terms of the LRA. The question of invalidity had to be resolved with reference to the provisions of the applicable statute, its purpose, and any remedies to redress the breach. The ideas of nullity, voidness and invalidity are inconsistent with the scheme of the LRA.
The Labour Court found that the dismissals were not invalid and that the dispute related to an alleged unfair dismissal. Accordingly, the arbitrator had jurisdiction to hear the matter and had reasonably exercised his discretion in awarding compensation. These findings were not reviewable and ultimately the application was dismissed with costs.