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THE ENFORCEABILITY OF ILLEGAL EMPLOYMENT CONTRACTS ACCORDING TO THE LABOUR APPEAL COURT: COMMENTS ON KYLIE V CCMA

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Author: KJ Selala THE ENFORCEABILITY OF ILLEGAL EMPLOYMENT CONTRACTS ACCORDING TO THE LABOUR APPEAL COURT: COMMENTS ON KYLIE V CCMA SA 383 (LAC) ISSN VOLUME 14 No 2 DOI: /pelj.v14i2.9
Author: KJ Selala THE ENFORCEABILITY OF ILLEGAL EMPLOYMENT CONTRACTS ACCORDING TO THE LABOUR APPEAL COURT: COMMENTS ON KYLIE V CCMA SA 383 (LAC) ISSN VOLUME 14 No 2 DOI: /pelj.v14i2.9 THE ENFORCEABILITY OF ILLEGAL EMPLOYMENT CONTRACTS ACCORDING TO THE LABOUR APPEAL COURT: COMMENTS ON KYLIE V CCMA SA 383 (LAC) KJ Selala * 1 Introduction On 28 May 2010, the Labour Appeal Court delivered a judgment in the case of Kylie v CCMA 1 regarding the jurisdiction of the CCMA to resolve a dispute of unfair dismissal involving a sex worker. Coincidentally, the judgment was handed down on the eve of the FIFA 2010 World Soccer competition, held in South Africa, 2 when a large contingent of sex workers were reportedly expected to descend on the shores of the Republic to ply their trade during the tournament. 3 Unsurprisingly, given the controversy attached to the issues, the judgment was well noted in the media and drew some quite interesting commentary in legal circles. 4 In the judgment delivered by Davis JA, with which Zondo JP and Jappie JA concurred, the Court overturned a previous judgment of the Labour Court, 5 where it was held that the CCMA ought to have refused to grant a relief to the employee because by doing so it would have been sanctioning or encouraging illegal activity. The Labour Appeal Court held that the CCMA did have the jurisdiction to resolve the dispute, regardless of the fact that sex work is an illegal activity. 6 In justifying the conclusion it reached the court premised its argument on section 23(1) of the Constitution, 7 which provides that everyone has a right to fair labour practices. The Court reasoned that the word everyone is a term of general import and unrestricted meaning and that it means what it conveys. 8 Of the main issues examined by the Court was if a person such as a sex worker was entitled to enjoy constitutional rights in general, and specifically * Kobolo J Selala. BIuris LLB LLM (UNIN). Lecturer, Faculty of Law, North-West University, Mafikeng Campus Kylie v CCMA SA 383 (LAC). The FIFA Soccer World Cup kicked off in Johannesburg on the 10 th of June Le Roux Kwinika 2010 nehandaradio.com; Skoch Le Roux Kylie v CCMA ILJ 1918 (LC). Kylie v CCMA SA 383 (LAC) para 61. Constitution of the Republic of South Africa, 1996 (hereafter the Constitution). Kylie v CCMA SA 383 (LAC) para / 226 those rights set out in section 23 of the Constitution. Relying on the minority judgment of O Regan and Sachs JJ in S v Jordan, 9 the Court held that the illegal activity of a sex worker does not per se prevent the sex worker from enjoying a range of constitutional rights, including the right to fair labour practices. The purpose of this case note is to analyse the judgment critically and to consider its implications for the future of labour litigation in South Africa. The correctness of the judgment, in particular, and especially insofar as it relates to the jurisdiction of the CCMA, or the Labour Court, to resolve disputes of the nature presented by the case, will be questioned. It will be argued that the Court erred in finding that the CCMA has the jurisdiction because jurisdiction is not only a question of interpretation but a matter of fact. It is either there or not. Jurisdiction, as will be shown, is predicated on the twin pillars of the court s authority over the litigating parties and the court s ability to grant an effective judgment. As the Constitutional Court has repeatedly stated, the courts are concerned with legality. 10 And, to suggest that the requirement of legality in the determination of jurisdiction is unconstitutional, as the judgment implies, would no doubt be in conflict with the same Constitution that the courts seek to uphold. In this analysis, therefore, the main question will be this: should the Constitution, as the supreme law, be interpreted as conferring on the courts and tribunals jurisdiction to enforce any transactions which are in conflict with the law? Inevitably, the Courts approach to the main issues raised by the appeal will be critically examined. Consequently, it will be argued that both the CCMA and the Labour Court s decisions were correct insofar as the jurisdictional ruling on the matter was concerned. 2 Factual background The appellant, a certain Ms Kylie, (hereinafter the employee) was employed in a massage parlour as a sex worker. Her employment was terminated without a proper hearing. She then referred a dispute of unfair dismissal to the CCMA for arbitration. In the light of the fact that the employee was a sex worker, the CCMA Commissioner ruled that she did not have jurisdiction to entertain the dispute because sex work is 9 10 S v Jordan SA 642 (CC). S v Jordan SA 642 (CC) para / 226 strictly prohibited by legislation. 11 The Commissioner argued that section 23 of the Constitution and the Labour Relations Act 12 (hereinafter the LRA) did not apply to workers who did not have a valid and enforceable contract, which was the situation in this instance, as the employee was engaged in an invalid contract. This decision of the Commissioner was then taken on review to the Labour Court. In the Labour Court, 13 the employee s argument was that the Commissioner committed a legal error in excluding workers who did not have a valid and therefore enforceable contract from the ambit of the LRA, because the LRA defines employees to include anyone who works for another person and accordingly the Act applies to all employment relationships irrespective of whether they are underpinned by enforceable contracts or not. 14 In the light of the approach taken in argument, the Labour Court sought to clarify at the outset what its judgment was about and which issues it does not decide. The Labour Court stated that its judgment does not decide (1) that a sex worker is an employee for the purposes of the LRA, just that neither the CCMA nor the Court should enforce the statutory right to a fair dismissal under the LRA; (2) that a sex worker is not entitled to protection under the Basic Conditions of Employment Act, occupational health legislation, workers compensation or unemployment insurance and; (3) the issue as to whether or not the definition of employee in the LRA applies to those in an employment relationship without a valid contract. 15 In the Court s opinion, the proper approach to the issues would not be to ask whether a sex worker was an employee within the ambit of the definition in the LRA or not. The correct approach, as the Court determined, would be to ask whether as a matter of public policy courts (and tribunals), by their actions, ought to sanction or encourage illegal conduct in the context of statutory and constitutional rights. 16 It is submitted that this approach was correct. Consequently, the Labour Court found that the CCMA Commissioner ought to have refused to grant the relief sought by the employee because by doing so the CCMA would have been sanctioning or Sexual Offences Act 23 of Labour Relations Act 66 of Kylie v CCMA ILJ 1918 (LC). Kylie v CCMA ILJ 1918 (LC) para 12. Kylie v CCMA ILJ 1918 (LC) para 4. Kylie v CCMA ILJ 1918 (LC) para / 226 encouraging prohibited commercial sex. 17 In effect, the Labour Court s judgment confirmed the CCMA s jurisdictional ruling on the matter. It is this decision of the Labour Court which gave rise to the judgment of the Labour Appeal Court under discussion. 3 The decision of the Labour Appeal Court Two main issues stood out for the determination by the Court. Firstly, the Court had to determine whether or not the CCMA Commissioner was correct in her jurisdictional ruling, and/or whether or not the Labour Court was correct in its approach and assessment of the law and consequently its judgment. Secondly, and depending on its finding against the judgment of the Labour Court, if a remedy avails to an employee involved in the kind of the employment relationship presented by the case. The Court commenced with an analysis of the Labour Court judgment. It noted that while the Labour Court conceded that Kylie was an employee for the purposes of the LRA, the Labour Court did not acknowledge her rights to relief or the enforceability of her rights in terms of the LRA simply because she was a sex worker and therefore, in the opinion of the Labour Court, not entitled to protection against unfair dismissal. 18 On the other hand, the Court also noted the submissions made on behalf of the employee. According to the employee, the Labour Court adopted a wrong approach in its judgment. Instead of commencing with the Constitution, that is, whether or not a person such as the employee enjoyed constitutional rights in general and specifically those entrenched in section 23(1), 19 the Labour Court, so it was submitted, started with the discussion on policy as divined from the law of contract. 20 Further to that, the employee argued that it should be only after the question of the application of the Constitution has been answered, and if in the favour of the employee, that the Court would be required to proceed to determine the Kylie v CCMA ILJ 1918 (LC) para 93. Although the Court s approach to the matter was different from the CCMA s, its decision nevertheless vindicated the position of the CCMA Commissioner regarding its jurisdictional ruling. In this case note it is contended that both the CCMA and the Labour Court s decisions were correct. Kylie v CCMA SA 383 (LAC) para 3. Section 23(1) of the Constitution provides that everyone has the right to fair labour practices. Kylie v CCMA SA 383 (LAC) para / 226 issues of remedy, and that it would be at this stage that the question of policy would come in. 21 This submission, seemingly, impressed the Court. The Court stated that since the dispute was predicated on the application of the LRA, it would be necessary to commence with the Constitution, to examine the application of section 23(1) to the facts of the dispute. 22 In its analysis the Court noted that section 23(1) provides everyone the right to fair labour practices and that the word everyone is a term of general import and unrestricted meaning - it means what it conveys. 23 The Court then made reference to the minority judgment of the Constitutional Court in S v Jordan. 24 In the latter case O Regan and Sachs JJs had held that prostitutes are not stripped of rights to be treated with dignity simply because the nature of the work they undertake devalues the respect that the Constitution regards as inherent in the human body. 25 The Court then turned to confront the key question, that is, whether section 23 affords protection to a sex worker. In its judgment the court found that it does. In support of this conclusion reference was made to a few cases, among others, NEHAWU v UCT 26 ; SANDU v Minister of Defence 27 ; State Information Technology Agency (Pty) Limited v CCMA 28 ; and Denel (Pty) Ltd v Gerber. 29 With reference to NEHAWU v UCT the Court observed the Constitutional Court s emphasis that the focus of section 23(1) of the Constitution was on the relationship between the worker and the employer and the continuation of that relationship on terms that are fair to both. 30 The Court further noted that in SANDU v Minister of Defence the Constitutional Court considered the question as to whether members of the armed forces constituted workers for the purposes of section 23(2) 31 of the Constitution. With reference to the latter case the Labour Appeal Court found that even if a person is not employed under a contract of employment, that does not deny Kylie v CCMA SA 383 (LAC) para 14. Kylie v CCMA SA 383 (LAC) para 15. Kylie v CCMA SA 383 (LAC) para 16. S v Jordan SA 642 (CC). S v Jordan SA 642 (CC) para 20. NEHAWU v University of Cape Town ILJ 95 (CC). SANDU v Minister of Defence SA 482 (CC). State Information Technology Agency (Pty) Ltd v CCMA ILJ 2234 (LAC). Denel (Pty) Ltd v Gerber ILJ 1256 (LAC). NEHAWU v University of Cape Town ILJ 95 (CC) para 40. That section provides that every worker has the right- (a) to form and join a trade union; (b) to participate in the activities and programmes of a trade union; and (c) to strike. 211 / 226 the employee all constitutional protection. 32 Based on the State Information Technology (Pty) Limited v CCMA and the Denel (Pty) Ltd v Gerber cases, the court summarised its approach thus: In summary, as sex workers cannot be stripped of the right to be treated with dignity by their clients, it must follow that, in their other relationship namely with their employers, the same protection should hold. Once it is recognised that they must be treated with dignity not only by their customers but by their employers, section 23 of the Constitution, which, at its core, protects the dignity of those in an employment relationship should also be of application. 33 Having decided that the sex worker meets the threshold requirement for constitutional protection, that is, being the beneficiary of the applicable constitutional rights, 34 the Court turned to examine the question of relief. The Court noted that compensation for a substantively unfair dismissal would be inappropriate in the present kind of case. By contrast, however, the Court held that monetary compensation for a procedurally unfair dismissal would appear to be applicable in the appropriate case where the services rendered by the employee are classified as illegal. For this, the Court reasoned that this kind of compensation is independent of the loss of illegal employment and is treated as a solatium for the loss by an employee of her right to a fair procedure. 35 Regarding the future application of the LRA to cases of a similar nature the Court stated that for the reasons given in its judgment, cases involving employment relationships which are in breach of legislation, such as the present dispute, should proceed through the constitutional threshold but not all will enjoy the defining weight of public policy so as to justify the granting of a remedy SANDU v Minister of Defence SA 482 (CC) para 21. Kylie v CCMA SA 383 (LAC) para 26. Kylie v CCMA SA 383 (LAC) paras Kylie v CCMA SA 383 (LAC) para 53. Kylie v CCMA SA 383 (LAC) para / 226 4 Analysis of and comment on Kylie v CCMA SA 383 (LAC) 4.1 The Court s approach to the issues The judgment, in my opinion, is problematic and quite erroneous on various levels. First, it is not readily ascertainable from the judgment what the main issues are. In its judgment the Court commenced with the background on the facts of the case, the submissions made by the parties both in the CCMA and the Labour Court, and the analysis of the Labour Court s judgment. 37 Since the matter was an appeal against the decision of the Labour Court regarding its jurisdictional ruling, it was expected of the Labour Appeal Court to introduce, right at the beginning of its judgment, the main issues and the legal questions to be decided. Instead, the Labour Appeal Court cluttered the issue of jurisdiction with the question of the sex worker s entitlement to constitutional rights, such that the latter consideration overshadowed the main issue, which is jurisdiction. It is submitted that this approach contributed immensely to the Court s losing focus on what the main issue for determination in the appeal was. 38 Secondly, the approach of the Court on the question of jurisdiction is, with respect, erroneous. As will be argued here below, instead of placing a heavy reliance on the rights of the person as an employee, the Court should have considered equally the nature of the dispute and the circumstances surrounding it to determine whether or not the dispute was enforceable in the courts. Linked to the Court s approach to the case is the order granted. The Court s order, it is submitted, is confusing and to some extent impracticable. An extensive argument in support of this contention is made below. It is important to emphasise that this case hinged predominantly on jurisdiction, hence the order granted by the Court. In its approach, the Court preferred to decide the issues from the constitutional rights perspective. What the Court seemingly failed to do, though, was to put the dispute in a clearer perspective from the onset. Nevertheless, the Court proceeded on the basis that section 23 of the Constitution Kylie v CCMA SA 383 (LAC) paras There is absolutely no doubt that the main issue before the Court was jurisdiction. The other aspect, namely the protection of the constitutional rights, was simply an ancillary matter. 213 / 226 was the premise from which all issues related to the dispute could be addressed. In this regard the Court stated that since the dispute was predicated on the application of the LRA, it is necessary to commence with the source of the LRA, that is, to engage in an examination the application of section 23(1) to the present dispute. 39 The Court accepted that the word everyone in section 23(1) of the Constitution is a term of general import and unrestricted meaning, and that it conveys what it means. 40 In the Court s reasoning, it would not matter if the employee was a criminal or involved in any other form of criminal activity as employment: the right to fair labour practice is available to everyone including a sex worker. This reasoning of the Court seems attractive but cannot be accepted entirely without qualification. As a matter of logical construction, it is submitted, the right to fair labour practices is not available to everyone in the strictest literal sense, but applies exclusively to those persons who are involved in an employment relationship. 41 It is distinct from other rights such as the right to life, the right to dignity, and the right to equality, all of which depend for their existence simply on the fact of one s being human. The latter rights are actually fundamental human rights which accord to every human being by reason of being alive. In contrast, the right to fair labour practices is available only to persons who are involved in an employment relationship. It is submitted that the Court s extensive examination of this concept was unnecessary because the status of the employee was not an issue in dispute in this case. All that was required or expected of the Court was to confirm, as the Court correctly did, that the employee was an employee for the purposes of the LRA and the Constitution. 42 Surprisingly, the Court then proceeded to determine if the employee was entitled to relief. 43 It is submitted, with respect, that this was a step prematurely taken by the Court. Instead of proceeding to consider the question of relief, the Court should have proceeded to consider the nature of the employment contract or relationship to Kylie v CCMA SA 383 (LAC) para 15. Kylie v CCMA SA 383 (LAC) para 16. NEHAWU v University of Cape Town ILJ 95 (CC) para 40; SANDU v Minister of Defence SA 482 (CC) 481 para 22; Hannah v Government of the Republic of Namibia SA 940 (NmLC). Kylie v CCMA SA 383 (LAC) para 28. Kylie v CCMA SA 383 (LAC) para / 226 determine whether or not it was legally enforceable. That examination, it is argued, was meticulously done by Cheadle J in the Labour Court. 44 As will be shown below, it is not only the Court s power to hear a party that determines jurisdiction but most importantly the Court s power to give an effective judgment which is the key. 4.2 The test for jurisdiction In Ewing McDonald & Co Ltd v M & M Products Co 45 the Appellate Division, as it was then known, defined the term jurisdiction as the power vested in a Court by law to adjudicate upon, determine and dispose of a matter. In the determination of jurisdiction, the requirement of legality is therefore the overriding consideration. As Ngcobo J correctly noted in S v Jordan, 46 the Constitution is concerned with legality and not desirability. Furthermore, as Professor Theophilopoulos has quite correctly observed, jurisdiction is predicated on the twin pillars of the court s capacity to take cognizance of a ca
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