Lewarne v Fochem International (Pty) Ltd

Ms Cheryll Lewarne was employed by Fochem International (Pty) Ltd as a Financial Manager for approximately eight years and then as a director at a gross monthly salary of R75,000, with entitlement to a 13th cheque annually. In December 2016, she only received R50,000 as a 13th cheque. On 12 January 2017, she was suspended by the respondent who accused her of various acts of impropriety including credit card abuse, unauthorised motor vehicle purchase, unlawful employment of her son, unauthorised salary increase, and incapacity due to ill-health. The respondent's attorneys indicated that neither the balance of the 13th cheque nor her January 2017 salary would be paid as they were appropriating these amounts towards alleged credit card indebtedness exceeding R300,000 in terms of clause 12 of the employment contract and the common law principle of set-off. On 5 May 2017, the appellant launched an application in the Gauteng High Court for payment of R25,000 (balance of 13th cheque) and R300,000 (four months' salary) plus interest and future remuneration. The respondent raised a point of law under Rule 6(5)(d)(iii), arguing the High Court lacked jurisdiction as the dispute fell within the exclusive jurisdiction of the Labour Court under section 77(1) of the Basic Conditions of Employment Act 75 of 1997 (BCEA).

• Whether the High Court had jurisdiction to determine a claim for payment of salary arising from an employment contract
• Whether section 77(1) of the BCEA conferred exclusive jurisdiction on the Labour Court in respect of the dispute
• Whether section 77(3) of the BCEA conferred concurrent jurisdiction on the High Court and Labour Court in matters concerning employment contracts
• The proper approach to determining jurisdiction when a court's jurisdiction is challenged

The appeal was upheld with costs. The High Court order was set aside and substituted with an order: (a) dismissing the respondent's point of law raised in terms of Rule 6(5)(d)(iii); (b) ordering the respondent to pay the applicant: (i) R325,000 (less deductions for UIF and PAYE); (ii) interest at 10.25% per annum a tempore morae; and (iii) costs of the application.

Section 77(1) of the BCEA confers only residual exclusive jurisdiction on the Labour Court to deal with those matters that the BCEA specifically requires to be dealt with by that court. Section 77(3) of the BCEA confers concurrent jurisdiction on the Labour Court and civil courts to hear and determine any matter concerning a contract of employment. When a court's jurisdiction is challenged, the court should base its conclusion on the applicant's pleadings as they contain the legal basis of the claim under which the applicant has chosen to invoke the court's competence. Where a dispute arises from and relates to a contract of employment and is for payment of money due under that contract, the civil courts have jurisdiction under section 77(3) of the BCEA. References in pleadings to provisions of the BCEA that amount to mere surplusage or summary of facts do not alter the essential nature of a contractual claim and do not deprive civil courts of jurisdiction.

The Court observed that the High Court erred in relying on the minority judgment in Fedlife Assurance Ltd v Wolfaardt, thereby ignoring the well-established principle of stare decisis. The Court noted that in the absence of an answering affidavit attacking the merits of the application, the appellant was entitled to succeed on the relief sought in its prayers. The Court remarked that the minority judgment in Fedlife had first classified the dispute as an unfair dismissal before concluding it fell within the Labour Court's jurisdiction, which was not the correct approach to the present case.

This case clarifies the jurisdictional boundaries between civil courts and the Labour Court in South Africa regarding employment-related disputes. It confirms that civil courts have concurrent jurisdiction under section 77(3) of the BCEA to hear matters concerning employment contracts, even where facts may touch on provisions of the BCEA. The judgment reinforces the principle that courts must determine jurisdiction based on the essential nature of the claim as pleaded, not on incidental references to labour legislation. It also emphasizes the importance of adhering to the doctrine of stare decisis and following binding majority judgments rather than minority opinions. The case provides important guidance on the limited scope of the Labour Court's exclusive jurisdiction under section 77(1) of the BCEA.