Unilever South Africa (Pty) Ltd v Commission for Conciliation, Mediation and Arbitration and Others

In March 2017, Unilever retrenched packers who received severance packages. On 1 April 2017, these employees were offered fixed-term contracts with flexible working hours for a "Santa Clause Project" expected to end in June 2019. The employees did not sign the contracts but continued working under those terms, without benefits (medical aid, pension, education, and home loan schemes). On 16 April 2018, the union (third respondent) referred a dispute to the CCMA alleging the dispute arose on 12 April 2018, seeking that employees be considered permanent under section 198B of the LRA. The Commissioner found the employees were not on valid fixed-term contracts as section 198B requires written contracts stating reasons for limited duration. The Commissioner awarded that: (1) employees were deemed permanent from April 2017; (2) Unilever must assist employees to participate in benefits schemes; and (3) Unilever must pay rates not less favourable than permanent employees from April 2017. Unilever sought review on jurisdictional grounds.

• Whether the CCMA Commissioner had jurisdiction to hear the dispute when it was referred more than six months after the dispute arose without a condonation application as required by section 198D(3) of the LRA
• Whether the dispute constituted a 'continuing wrong' thereby avoiding time limit requirements
• Whether the Commissioner had jurisdiction to award substantive relief (benefits and back pay) under section 198B and 198D when only a declaratory order was sought
• The appropriate test for review on jurisdictional grounds

1. The arbitration award issued by the second respondent under case number GAEK3595-18 is reviewed and set aside. 2. The stay application under case number J3920/20 is dismissed. 3. The Variation Ruling under case number GAEK3595-18 is reviewed and set aside. 4. There is no order as to costs.

1. A dispute under section 198B of the LRA concerning whether employees should be deemed permanent arises on a specific date when the allegedly non-compliant contract is offered, and does not constitute a continuing wrong merely because its effects recur monthly. The six-month time limit in section 198D(3) would be rendered meaningless if all such disputes were treated as continuing wrongs. 2. Where a section 198B dispute is referred to the CCMA outside the six-month time limit prescribed in section 198D(3), and no application for condonation is made under section 198D(6), the CCMA has no jurisdiction to arbitrate the dispute. 3. Section 198D provides for declaratory relief regarding the status of employment relationships under sections 198A, 198B and 198C. A CCMA commissioner has no jurisdiction under section 198D to award substantive relief such as benefits and back pay when only declaratory relief was sought, no unfair labour practice dispute was referred, and no evidence of comparators was led. 4. On review of jurisdictional issues, the Labour Court applies a de novo standard and determines whether the CCMA was right or wrong in assuming jurisdiction, not whether the decision was reasonable.

The Court noted that section 198D creates a proactive dispute resolution process designed to obtain declaratory relief during the currency of employment to avoid employers relying on expiry of fixed terms to terminate employment. This process is distinct from unfair dismissal remedies under sections 193-194. The Court also observed (per Snyman AJ in Nama Khoi) that declaratory relief may be moot if the employment relationship has ended by the time it is decided. The Court emphasized that expeditious resolution of employment disputes is a primary consideration, and allowing employees to delay referral for a year "flies directly in the face" of this principle. The Court distinguished this case from PRASA, noting that PRASA dealt specifically with employees already declared permanent by the employer, and thus did not address whether back pay can be awarded to fixed-term employees who obtain a declaratory order.

This judgment clarifies important jurisdictional limitations on CCMA arbitrations under section 198D of the LRA. It establishes that: (1) disputes arising from sections 198A, 198B and 198C must comply with the six-month time limit in section 198D(3), and such disputes do not automatically constitute continuing wrongs merely because their effects recur monthly; (2) failure to apply for condonation for late referral deprives the CCMA of jurisdiction entirely; (3) section 198D dispute resolution is designed to be proactive, providing declaratory relief during the currency of employment, not compensatory relief; (4) commissioners cannot award substantive relief (benefits, back pay) under section 198D beyond declaratory orders when such relief was not sought and no evidence was led; and (5) the Labour Court applies a de novo standard of review on jurisdictional questions, determining whether the CCMA was right or wrong, not whether the decision was reasonable.