South African Maritime Safety Authority v McKenzie

• Jurisdiction: South Africa

South African Maritime Safety Authority v McKenzie
2010 (3) SA 601 (SCA)

2010 (3) SA p601

Citation	2010 (3) SA 601 (SCA)
Case No	017/09
Court	Supreme Court of Appeal
Judge	Mpati P, Nugent JA, Mhlantla JA, Leach AJA and Wallis AJA
Heard	November 18, 2009
Judgment	February 15, 2010
Counsel	MG Khoza SC (with MJ Ramaepadi) for the appellant.; B Malan (attorney) for the respondent.

Flynote : Sleutelwoorde D

Labour law — Contract of employment — Terms — Whether s 185 of LRA E introducing into all contracts of employment term that they cannot be terminated unfairly — This not the case — Labour Relations Act 66 of 1995, s 185.

Headnote : Kopnota

Respondent was formerly employed by the appellant as its chief internal auditor, F but was dismissed in a manner he alleged was procedurally and substantively unfair. After pursuing his remedies under the Labour Relations Act 66 of 1995 (the LRA) and reaching a settlement with the appellant, in terms of which he was paid an amount equivalent to one year's salary, he instituted this action, claiming that his contract of employment was subject to 'an explicit, alternatively implied, further alternatively tacit term . . . that the employment contract would not be terminated by the [appellant] or the G [respondent] without just cause'. Respondent alleged that this term had been breached in consequence of his having been dismissed 'in a procedurally and substantively unfair manner'. This, respondent contended, entitled him to claim damages, calculated on the basis that he would otherwise have continued working for the appellant until his retirement. The amount respondent claimed was R5,2 million. H

In the court a quo appellant filed several special pleas that were ultimately dismissed, along with its application for leave to appeal. The appellant's petition to the Supreme Court of Appeal for leave to appeal was set down for hearing, the parties being directed to be prepared to argue the merits of the appeal. Among the special pleas filed by the appellant was one nominally expressed as a challenge to the jurisdiction of the High Court to I consider the claim. In substance it was alleged that respondent's remedies for unfair dismissal were those provided for in the LRA and that the High Courts have no jurisdiction to grant such remedies.

Held, that, once more, as in other cases that had come before the court, the plea, so far as it purported to raise a jurisdictional challenge, was misdirected. As the Constitutional Court had reiterated, the question in such cases is J

2010 (3) SA p602

A whether the court has jurisdiction over the pleaded claim, and not whether it has jurisdiction over some other claim that has not been pleaded but could possibly arise from the same facts. In this case the particulars, of claim could not have made it clearer that the respondent's claim was for damages for breach of contract. Fedlife Assurance Ltd v Wolfaardt 2002 (1) SA 49 (SCA) ((2001) 22 ILJ 2407; [2002] 2 All SA 295) made it clear that B a claim for damages for breach of contract fell within the ordinary jurisdiction of the High Courts, albeit that the contract was one of employment. Tsika v Buffalo City Municipality 2009 (2) SA 628 (E) ([2009] 3 BLLR 272) had concluded, after reviewing subsequent decisions, that the position remained that the High Court and other civil courts retained their common-law jurisdiction to entertain claims for damages arising from C alleged breaches of contracts of employment. As was the case in Fedlife and in other cases purporting to raise similar challenges, the plea, properly construed, did not raise a jurisdictional challenge at all. In substance what was alleged in the plea was that the LRA was the exclusive source of remedies for unfair dismissal, with the result that the respondent had no contractual claim. That was not a challenge to the jurisdiction of the High D Court to consider the pleaded claim — it was a challenge to the validity of the pleaded claim. When properly construed, the contention on behalf of the appellant was that the right in terms of s 185 of the LRA, taken together with the remedies for a breach of that right contained in s 194, and the procedures prescribed for adjudicating disputes over unfair dismissals in s 191, constituted a complete statement of the extent of the rights in respect E of unfair dismissal. They were entirely statutory in origin and content and gave rise to no contractual obligation. Bearing in mind that the breach of contract was said to lie in the 'unfair dismissal' of the respondent, the allegation in the particulars of claim, that the contract could not be terminated 'without just cause', had to be taken to mean that it could not be terminated unfairly, and this was the basis of the case advanced by the F respondent. However, no support for the pleaded term could be found in the written contract and the allegation that it was expressly agreed could be rejected. In the alternative it was alleged that the term arose either by way of an implied term or as a tacit term. The application of the interfering bystander test in relation to the term pleaded on behalf of respondent was destructive of the contention that his employment contract was subject to G that term. (Paragraphs [7] - [12] at 608E/F - 610H.)

Held, further, that this left, as the foundation for the pleaded allegation, only the possibility of an implied term properly so called. Such a term could either be said to flow from the provisions of s 185 of the LRA dealing with unfair dismissal or could lie in a development of the common law in accordance with s 39(2) of the Constitution. In argument the appellant based his case H on the first of these. (Paragraph [13] at 611B - C.)

Held, further, that when it was argued that a statutory provision not only created statutory rights and remedies but also impliedly introduced terms into certain types of contract, the enquiry commenced by examining the statutory provision in order to determine whether it was intended that its provisions or some part of them should be incorporated in contracts of that class. In the I present context that involved asking whether the legislature, in enacting s 185 of the LRA and the sections that followed, intended not only to outlaw unfair dismissals and provide statutory remedies when they occurred, but also intended to incorporate all contracts of employment a term that they could not be terminated unfairly. (Paragraph [20] at 614C - E.)

Held, further, that in the statutory formulation of the scheme it was nowhere said J that it had any contractual implications. This stood in sharp contrast to the

2010 (3) SA p603

provisions of s 23(3) of the LRA which provided that '(w)here applicable, a A collective agreement varie(d) any contract of employment between an employee and employer who (were) both bound by the collective agreement'. A similar approach to the incorporation of provisions in a statute into a contract of employment was to be found in s 4 of the Basic Conditions of Employment Act 75 of 1997, and the same approach could be found in statutes in England that expressly embodied provisions to be B incorporated into contracts of various types. Such instances were quintessential examples of cases where a term was implied into a contract by operation of law by virtue of the terms of a statute as indicated in Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A). However the respondent could not rely upon that approach because s 185 of the LRA and the remaining sections that dealt with unfair C dismissals did not contain any such express provision incorporating them into contracts of employment. The argument on his behalf was therefore that the incorporation was to be implied from the terms of the relevant provisions of the LRA read in the light of the Constitution. (Paragraphs [23] - [25] at 615D - 616D/E.)

Held, further, that the immediate difficulty facing the respondent in advancing D this argument was that where the LRA intended to alter the terms of a contract it said so, as it did in s 23(3). Its silence in the context of s 185 was a factor that counted strongly against his contention. An even greater difficulty emerged when the attempt was made to identify what was to be incorporated into the contract of employment and what part of the statutory E scheme was to be excluded. The manner in which respondent's case had been pleaded suggested that the only provision from the statute that had been incorporated in the contract was the provision in s 185, that established the right not to be unfairly dismissed. Although not an issue in the case, the same logic would result in the incorporation, from the same section, of the right not to be subjected to unfair labour practices. However, in the provisions that followed, both of these rights were hedged about with F qualifications and the impact of these had to be addressed. (Paragraph [26] at 616E - G.)

Held, further, that, if what was incorporated was simply a general right not to be subjected to unfair labour practices, without the incorporation of the accompanying statutory provisions, of which the definition was the most G important, then the incorporation went further than the statute from which it was derived. That was logically impermissible when dealing with incorporation by implication. If what was incorporated was limited to the statutory notion of an unfair labour practice, with all its limitations, then incorporation served no purpose, as the employee would gain no advantage from it. That was a powerful indication that no such incorporation was H intended. (Paragraph [27] at 617B - C.)

Held, further, that the same logic applied in relation to the incorporation of a prohibition on unfair dismissals from the LRA...