In a judgment* handed down on 6 May 2020, the Constitutional Court (CC) confirmed that the Labour Court has jurisdiction to adjudicate an automatically unfair dismissal dispute where the underlying dispute referred to conciliation at the CCMA was classified and dealt with as an unfair dismissal dispute and not as an automatically unfair dismissal dispute.
In 2016, employees of Ngululu Bulk Carriers (Pty) Ltd (Ngululu) embarked on unprotected strike action which resulted in the dismissal of 476 employees (dismissed employees). Many of the dismissed employees were members of the Association of Mineworkers and Construction Union (AMCU) (AMCU members). AMCU referred an unfair dismissal dispute to the bargaining council which was conciliated and remained unresolved.
In the meantime, Ngululu re-employed some of the dismissed employees (none of which were AMCU members). AMCU considered the selective re-employment by Ngululu to be a further dismissal and, again, referred an unfair dismissal dispute to the same bargaining council which dispute, after dismissing a jurisdictional point raised by Ngululu at conciliation, also remained unresolved.Unhappy with the bargaining council's dismissal of its jurisdictional point, Ngululu challenged the ruling and the validity of the certificate of outcome through review proceedings in the Labour Court.
AMCU also approached the Labour Court by initiating action proceedings for automatic unfair dismissals. AMCU alleged that its members were dismissed based on their union affiliation and as such, their dismissals were automatically unfair.
Ngululu successfully defended the action in the Labour Court by raising two preliminary points -
- In relation to the first dismissal; that the Labour Court lacked jurisdiction to adjudicate the dispute as an automatically unfair dismissal was not referred to conciliation;
- In relation to the second dismissal,
lis alibi pendens (same action pending in other proceedings) as it contended that the issues raised in relation to the second dismissal were the subject matter of its review application which was pending before the Labour Court. AMCU sought to appeal the Labour Court's judgment. The Labour Appeal Court refused leave to appeal and AMCU then approached the Constitutional Court.
The CC was tasked with considering two legal questions:
- Whether the Labour Court had the jurisdiction to adjudicate the automatically unfair dismissal cause of action where the dispute that was referred to conciliation was an unfair dismissal dispute?
- Whether a plea of
lis alibipendens was to be accepted?
On the first question, the CC held that the Labour Court indeed had jurisdiction to adjudicate the automatically unfair dismissal claim. The CC considered section 191 of the LRA which requires dismissed employees to refer disputes about
"the fairness of a dismissal to conciliation" and if conciliation fails and the employee alleges that the reason for the dismissal is one listed in section 191(5)(b) of the LRA (automatically unfair, operational requirements, participation in an unprotected strike and the employees' refusal to join, refused membership or expulsion form a trade union or closed shop agreement), the employee may elect to refer the dispute to, either the relevant bargaining council for arbitration or for adjudication to the Labour Court.
The CC emphasised that
what is referred to conciliation is the dispute and not the cause of action or claims which may arise from the dispute. It was made plain that the reason for the dismissal is always known by the employer prior to conciliation and it is often only at this juncture where employees understand the true reason for the dismissal.
The CC rejected the Labour Court's view that:
"a referral to conciliation of an unfair dismissal dispute does not include an automatically unfair dismissal dispute" and therefore in terms of section 157(4) of the LRA the Labour Court may refuse to adjudicate the dispute if it was not conciliated.
The CC quoted the
Intervalve judgment** which held that:
"Section 157(4)(a) confers upon the Labour Court the power to refuse to determine a dispute if it is not satisfied that an attempt has been made to resolve the dispute through conciliation. Section 157(4)(b) then provides that a certificate issued by a commissioner that a dispute remains unresolved is sufficient proof that an attempt has been made to resolve that dispute through conciliation."
The Labour Court did not consider the fact that what is referred to conciliation is the unfairness of the dispute, be it automatic or not, and not the reason for a dismissal. This was confirmed by the Labour Appeal Court in the
Driveline judgment*** where it was held that there is no doubt that 'operational requirements' or 'automatically unfair' are merely reasons for the dismissal and do not constitute a dispute on their own. This is evident from a proper reading of section 187(1) of the LRA which makes it clear that whether a dismissal is automatic or not, depends on the reason. This interpretation was confirmed by the Constitutional Court in
The Labour Court failed to consider these judgments when it decided that it did not have the jurisdiction to adjudicate the dispute.
On the second question, the CC held that the Labour Court failed to recognise that not all of the elements of a defence of
lis alibi pendens were present in Ngululu's case as it only showed that the parties to the two disputes before the Labour Court were the same but failed to show that the pending litigation was based on the same cause of action and in respect of the same subject matter. Ngululu's review application pending before the Labour Court was a review on the jurisdictional ruling made by the bargaining council and not on the fairness of the employees' dismissal.
The appeal was upheld and the case was remitted to the Labour Court for determination of the merits of the case.
It is now clear, on a proper interpretation of sections 157(4), 191 and 187(1) of the LRA, what is referred to conciliation is the dispute and not the cause of action (or any claims which may stem from the dispute). The cause of action will determine whether the dismissal falls within the definition of an automatically unfair dismissal. The Labour Court may not refuse to adjudicate an unfair dismissal dispute referred to it where the underlying cause of action fits the definition of an automatically unfair dismissal.