The introduction of the Labour Relations Act 66 (LRA) resulted to the establishment of the labour court in 1995 which lead to a massive confusion within the Labour Relations sector.
Before the enactment of the LRA, the only option available to dismissed employees was referral of an unlawful termination or a breach of contract case to the industrial court. The employee would then have to prove that their dismissal amounts to a breach of the employment contract. After 1995 the LRA introduced statutory arbitration, in terms of which an employee was now able to refer a dispute of unfair dismissal to the Commission for Conciliation, Mediation and Arbitration (CCMA).
In this process dismissal is automatically unfair and the employer has a duty to prove that this dismissal was fair.
The question is whether an unfairly dismissed employee can opt to refer a breach of contract to the labour court instead of an unfair dismissal referral to the CCMA. A confusion has been created by various conflicting judgements of the labour court which seem to find that an employee is only entitled to one remedy which is unfair dismissal. The constitutional court has now settled this dispute in the matter between Baloyi v Public Protector and Others 2022 (3) SA 321 (CC).
In this case the court found that contractual rights of dismissed employees exist independent of the LRA. At para 40 and 46 of the judgement the ConCourt found that: “An aggrieved dismissed employee can approach the labour court in terms of section 77(3) of the Basic Conditions of Employment Act to seek performance regarding his unlawful dismissal." The court furthers as follows: “In other words, the termination of a contract of employment has the potential to found a claim for relief for infringement of the LRA, and a claim for enforcement of a right that does not emanate from the LRA" (for example, a contractual right).
The court further went to endorse the dictum Supreme Court of Appeal in Makhanya (31) which squarely addressed a contractual cause of action in the employment context, as follows:
“The LRA creates certain rights for employees that include the right not to be unfairly dismissed and [not to be] subjected to unfair labour practices... Yet employees also have other rights, in common with other people generally, arising from the general law. One is the right that everyone has (a right emanating from the common law) to insist upon performance of a contract. When a claimant says that the claim arises from the infringement of the common-law right to enforce a contract, then that is the claim, as a fact, and the court must deal with it accordingly. When a claimant says that the claim is to enforce a right that is the claim that the court has before it, as a fact. When he or she says that the claim is to enforce a right derived from the Constitution, then, as a fact, that is the claim. That the claim might be a bad claim is beside the point.”(32)
It is quite clear from the above judgement that the LRA has not dealt away with the employees common law remedies to breach of contract. Under breach of contract as opposed to proving the unfairness of his dismissal with the CCMA, the employee would have to prove that the dismissal/termination of the employee’s employment agreement violated at least one of the terms of his employment agreement.
In my view breach of contract is the best available remedy to challenge a dismissal on the basis of following:
Under breach of contract an Employee can easily be reinstated merely for the violation of procedure whilst under unfair dismissal at the CCMA an employee can only be reinstated if his dismissal is substantively unfair. Procedural unfairness is not sufficient for reinstatement, whereas under breach of contract an employee can be reinstated for procedural unlawfulness /failure to follow procedure.
Secondly, a finding in favour of breach of contract is much faster and is not subject to review but only an appeal, which is not as protracted as the latter.
An Unfair Dismissal case is difficult to win especially when dealing with misconduct cases. Commissioners seem to have a bias towards employees in misconduct cases and therefore one would be better placed to approach the labour court.
The time period of referring unfair dismissal claims is thirty days, whereas breach of contract claims can be brought at anytime within three days from the date in which the cause of action arose as per the Prescription Act 68 of 1969. Dismissed employees often fall foul of referring unfair dismissal disputes within the prescribed 30 days as per the LRA.
Decisions made by the CCMA have in recent time been questionable and this is due to poor training of commissioners at the CCMA. The process at the CCMA is slow and can be protracted and even if the employee succeeds the employer can review the dispute effectively causing further delay.
Breach of contract is not only effective after a contract has been terminated but it can be used to ensure that the employer follows procedure in a dicplinary process and prevent arbitrary dismissal. The unfair dismissal remedy does not provide adequate protection for procedural unlawfulness.
An employee can be reinstated merely on the violation of procedure.
Whereas under unfair dismissal a procedural violation will entitle an employee to compensation only and not reinstatement. Under breach of contract the employee has the discretion to either refer the matter to the labour court/or the high court. The high court and the labour court have concurent jurisdiction on employee breach of contract disputes. The high court roll is not as congested as the labour court.
JULY 2024
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