Most Read Contributor in South Africa, September 2016
The Commission for Conciliation, Mediation and Arbitration
("CCMA") has jurisdiction to hear
certain employment disputes where the employee involved works
outside of South Africa.
This was the finding of the Labour Appeal Court in the recent
case of Monare v South African Tourism and Others (JA45/14)
 ZALAC 47.
In this case, Tebogo Monare was employed on a fixed-term basis
as the finance and administration manager of South African Tourism
at its London office. Following his dismissal for misconduct in
September 2010, Mr Monare referred a dispute to the CCMA, which
issued an arbitration award in his favour and directed South
African Tourism to reinstate him. Aggrieved by this outcome, South
African Tourism applied to the Labour Court for the review and
setting aside of the arbitration award.
In the Labour Court, Van Niekerk J, in dealing with the issue of
extra-territorial jurisdiction of the CCMA, relied on the earlier
court decisions of Astral Operations Ltd v Parry (2008) 29 ILJ
2668 (LAC) and Genrec Mei (Pty) Ltd v Industrial Council
for the Iron, Steel, Engineering and Metallurgical Industry and
Others (1995) 16 ILJ 51 (A), in which it was held that the
territorial jurisdiction of the application of the Labour Relations
Act, 1995 had to be determined according to the locality of the
undertaking carried out by the company in which an employee was
employed. The Labour Court in the Monare matter reached
the conclusion that the CCMA didn't have jurisdiction to
determine Mr Monare's unfair dismissal dispute.
Van Niekerk J took into account a number of factors; namely, Mr
Monare was recruited in the United Kingdom
("UK"); his contract of employment was
concluded in the UK, with no right to return to South Africa to
continue employment in South Africa; he misconducted himself in the
UK; his disciplinary hearing was held in the UK; and he was given
notice of his dismissal in the UK.
The decision of the Labour Court was, however, overturned on
appeal to the Labour Appeal Court. The Labour Appeal Court found
that the Labour Court was incorrect in finding that South African
Tourism's UK office was a separate and independent undertaking
and, accordingly, that the locality of the undertaking of South
African Tourism was in London and therefore outside the territorial
jurisdiction of the CCMA and the Labour Court.
The Labour Appeal Court recognised the separateness and
independence of the undertakings in Astral and Genrec
Mei, but found that, in this case, the London office was not
separate and divorced from its undertaking in South Africa. Coppin
JA relied on section 13 of the Tourism Act, 2014, which authorises
South African Tourism to open and conduct offices abroad where
necessary and advisable for the effective and proper exercise of
its powers, performance of its functions and carrying out of its
Coppin JA concluded that South African Tourism's London
office and its South African undertaking were inextricably linked
and South African Tourism had a singular objective – to
promote tourism to South Africa – and it had chosen to do so
through the establishment of an office in London.
This judgment illustrates the need for caution when
setting up extra-territorial businesses, particularly when
these entities are functionally and operationally dependent on the
local office. This may mean that South African based employers may
be forced to deal with employment disputes referred to the CCMA
that arise outside of South Africa's borders. In some
instances, this could present a host of complications, especially
where foreign legislation may be relevant to the determination of
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