By Melanie Kirsten Hart, Partner, Labour, Employment & Human Rights, Fasken Martineau
In MECS Africa (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration & Others (2014) 35 ILJ 745 (LC), the Labour Court was tasked to consider a jurisdictional ruling in which the Commission for Conciliation, Mediation & Arbitration (“CCMA”) had found that it had jurisdiction over an alleged unfair dismissal dispute, where the employee had been working in Africa.
Mr. Pauw entered into a fixed-term contract of employment with MECS-SA. In terms of this agreement, Mr. Pauw would provide his services to a client of MECS-SA, a mining company in the Democratic Republic of the Congo (“DRC”), and MECS-SA would pay him a salary. As Mr. Pauw could only obtain a permit to work in the DRC if he was employed by a local company, he entered into a similar contract with MECS-DRC, a subsidiary of MECS Holdings. When Mr. Pauw returned to South Africa a few months later, MECS-SA terminated his services. He referred an unfair dismissal dispute to the CCMA against MECS-SA.
At the CCMA proceedings, MECS-SA raised a preliminary point claiming that the CCMA lacked jurisdiction to hear the dispute.
MECS-SA based its argument on Astral Operations Ltd v Parry (2008) 29 ILJ 2668 (LAC) where the Labour Appeal Court (“LAC”) held that the determining factor in cases such as this is ‘the locality of the employer’s undertaking in which the employee worked’. The LAC held further that the Labour Relations Act and the Basic Conditions of Employment Act only applied within South Africa’s borders. Accordingly, the Labour Court only had jurisdiction over employment disputes that arose within South Africa’s borders.
MECS-SA argued that the locality of the undertaking in which Mr. Pauw worked was in the DRC and therefore the CCMA lacked jurisdiction.
Pauw argued that MECS-SA was a temporary employment service (also known as a TES or a labour broker) and, as such, the locality of the TES’s undertaking was in South Africa.
The CCMA commissioner found that the locality of MECS-SA’s labour broking undertaking was in South Africa, and ruled that the CCMA had jurisdiction. MECS-SA approached the Labour Court to review the ruling.
The Court held that section 198 of the LRA stipulates that an employee is employed by the TES and not by the client of the TES. The place where a TES conducts business is clearly ‘the place where it recruits and procures labour’ and not the place where its clients have operations. The correct interpretation of Astral is that the CCMA has jurisdiction to hear disputes referred to it by employees of a South African TES, even if those employees are placed with clients outside South Africa’s borders.
The Court accordingly found that the locality of MECS-SA’s undertaking in which Mr Pauw performed in terms of his contract was in South Africa and, therefore, that the CCMA had jurisdiction to hear his dispute.
Significantly, this matter was heard before section 198A of the LRA came into force on January 2015. Section 198A provides that where an employee of a temporary employment service performs work for a client for a period longer than three months the employee is, for the purpose of the Labour Relations Act, deemed to be an employee of the client.
In the matter between Assign Services (Pty) Ltd and Krost Shelving & Racking (Pty) Ltd, the CCMA found that the deeming provision means that the client is, for the purposes of the LRA, the sole employer of the employee. Applying this principle to the case under discussion, Mr. Pauw would likely have found to have been the employee of the client in the DRC and the CCMA would have had no jurisdiction over the alleged dispute.
For more information, please contact Melanie Kirsten Hart at email@example.com
This article first appeared in the Labour, Employment and Human Rights: Fasken Martineau Bulletin.
Article published with the kind courtesy of Fasken Martineau www.fasken.com