Forum Shopping – the Constitutional Court (finally) settles the uncertainty

 The uncertainty of whether a litigant is required to approach the Labour Court or the High Court in respect of a contractual claim has been addressed in a number of cases including Gcaba v Minister for Safety and Security 2010 (1) BCLR 35 (CC), Chirwa v Transnet Limited 2008 (4) SA 367 (CC) and Fredericks v MEC for Education and Training Eastern Cape 2002 (2) BCLR 113 (CC). It seems both that litigants and the Courts still have difficulty in determining which Court has the necessary jurisdiction to determine such a claim.

In Baloyi v Public Protector and Others [2020] ZACC 27 the unanimous Constitutional Court settled this debate once and for all. The matter turned on one question: does section 157(1) read with section 157(2) of the Labour Relations Act 66 of 1995, as amended (“the LRA”) extend the Labour Court’s exclusive jurisdiction over an alleged unlawful termination of a fixed-term contract of employment?

Ms Louisah Baloyi (“Baloyi”) was the former Chief Operations Officer in the Office of the Public Protector. Baloyi was employed by the Office of the Public Protector on a five-year fixed-term contract with effect from 1 February 2019. The six-month probation period ended on 31 July 2019. On 8 October 2019, Baloyi received a letter from Mr Vussy Mahlangu, the Chief Executive Officer in the Office of the Public Protector requesting her to make representations on the confirmation of her employment contract. She did so. On 21 October 2019, Baloyi received a letter from Mr Mahlangu notifying her that her contract would terminate on 31 October 2020 because, allegedly, she was not ‘suitable’ for the role.

Baloyi launched urgent proceedings in the High Court, Pretoria, based primarily on unlawful breach of contract. Baloyi also sought a declaratory order that the decision to terminate her employment was unconstitutional, unlawful and invalid. She also sought a declaratory order that Public Protector, Ms Busisiwe Mkhwebane, failed to fulfil her constitutional obligations in relation to the termination of her employment contract.

The High Court dismissed Baloyi’s claim by finding that it did not have jurisdiction to determine the matter and that the matter must be decided by the Labour Court. The High Court relied heavily on scattered references to the LRA in documents related to Baloyi’s employment.

Baloyi applied for leave to appeal to the Supreme Court of Appeal on condition that she was not granted direct leave to appeal to the Constitutional Court. The Constitutional Court granted leave to appeal solely in respect of the jurisdictional challenge as the matter raised an issue which it has not expressly ruled on before.

The Constitutional Court commenced its investigation into the merits by quoting from Chirwa where it found that the jurisdiction of the High Court is not ousted merely because the dispute to be determined falls within the overall sphere of employment relations.

The Court rightly pointed out that a number of claims may arise from a certain cause of action. This does not mean that parties are required to pursue a particular claim under that cause of action simply because it is possible to do so. Accordingly, the Court confirmed the principle espoused in Makhanya v University of Zululand 2010 (3) SA 601 (SCA) that a party may approach a Court in respect of breach of contract when they are dismissed should they not seek to rely on their rights in terms of the LRA.

The Constitutional Court reiterated its finding in Steenkamp v Edcon Ltd 2016 (3) SA 251 (CC) in which Zondo J found that a claim based on a breach of the LRA obliges a litigant to utilise the dispute resolution mechanism of the LRA. The claim in this matter, however, was not founded in the LRA and was based on a contractual right that exists independently of the LRA. Accordingly, the Constitutional Court reiterated section 77(3) of the Basic Conditions of Employment Act 75 of 1997, as amended, which states that the High Court and the Labour Court have concurrent jurisdiction in respect of any dispute concerning a contract of employment.

The Constitutional Court found that Baloyi had expressly framed her claim as one outside of the LRA which was based purely in contract law. Accordingly, the Constitutional Court concluded that the High Court has jurisdiction to determine Baloyi’s dispute which was based in contract. The Court referred the matter back to the High Court, Pretoria, for a hearing de novo.

The Constitutional Court’s finding puts the issue of the High Court’s jurisdiction in respect of a contractual claim beyond any doubt. It is crucial that litigants properly consider which forum has jurisdiction to determine their dispute. Proper legal advice should be taken in order to prevent a situation where the forum does not have the necessary jurisdiction to determine the dispute. This would be a costly and embarrassing series of events which can be avoided.

Written by Courtney Wingfield and Neil Coetzer
of Cowan-Harper-Madikizela Attorneys

Courtney Wingfield of Cowan-Harper-Madikizela Attorneys
Neil Coetzer of Cowan-Harper-Madikizela Attorneys,