# FEDLIFE ASSURANCE LIMITED v HENDRIK JOHANNES WOLFAARDT: In a matter involving the right to claim damages for repudiation of fixed-term employment contract.

Case Number: 450-1999 (SCA)

Date of Award: 18 September 2001

The Supreme Court of Appeal was asked to decide whether the enactment of the Labour Relations Act, and in particular, the protections against unfair dismissal in Chapter VIII of the Act, effectively excluded a right to claim damages for repudiation of fixed-term employment contract.

The employee in this instance had been engaged in terms of a fixed term contract for a period of 5 years. The employer terminated the contract, for reasons related to its operational requirements, part way through the period of the contract. The employee sued the employer in the High Court for the remuneration he would have earned for the balance of the contract. The employer argued that he should have referred the dispute to the Labour Court, which has exclusive jurisdiction in retrenchment disputes.

The employee’s strategy was aimed at recovering more than the 12 months compensation to which he would be entitled if he succeeded in an unfair dismissal claim- his contractual claim was worth considerably more.

The Court held that Chapter VIII of the LRA did not exclude a claim based on an alleged breach by an employer of a contract of employment, and that the High Court had jurisdiction to entertain the claim.

Readers should note that section 77(3) of the Basic Conditions of Employment Act confers concurrent jurisdiction on the Labour Court with the civil courts in relation to matters concerning contracts of employment.

There would be no bar to an employee lodging a contractual claim for damages in the Labour Court in circumstances where the employer is alleged to have breached the terms of the contract.

The more interesting, but undecided issue raised by the judgment is whether an employee can claim both contractual damages and compensation for an unfair dismissal. In principle, there seem to be no reason why this should not be possible. Section 195 of the LRA makes it clear that compensation for an unfair dismissal is payable in addition to any other amount to which an employee is entitled in terms of any law, collective agreement or contract of employment.

# THE CHURCH OF THE PROVINCE OF SOUTHERN AFRICA DIOCESE OF CAPE TOWN and CCMA, Galant & Mathebula: In a case involving the definition of who is an employee – can a priest be an employee?

Date of judgment: 7 September 2001

Case Number: C619-2001 Labour Court

Is a priest an employee? The CCMA thought so when an ordained priest was found guilty of misconduct by an ecclesiastical tribunal and denied the right to hold office or perform any ministry for 5 years.

The Church sought a review of the award on the basis that the priest was not an employee as defined in the Labour Relations Act. It was argued that the priest is regarded as working for God, and that the relationship between the priest and the Church could not be regarded as one of employment. Although the priest was paid a stipend, the Church merely provided the framework for the priest’s work, within which the priest served God arising out of a calling do so.

The priest argued that the stipend paid to him was a salary, that this and other benefit were attached to his post that he was required to report to a superior, and that all of these were indication of the existence of a contract of employment.

At issue in the case was the existence or otherwise of a contact between the priest and the church. The Labour Court relied on recent English authority to the effect that the relationship between a church and a priest is not one of employment, but that the priest was the holder of an ecclesiastical office.

The Court of Appeals in the case referred to concluded that "One can say that a minister of religion serves God and serves his congregation, but does not serve an employer." The Labour Court held that that the priest was not an employee, and that he therefore had no right to claim unfair dismissal in terms of the Labour Relations act.

The critical issue that determined the existence or otherwise of an employment relationship in this instance was whether the parties had intended to enter into an employment contract. If not, the definition of "employee" in the LRA does not extend to the relationship that is established.

If the application of the definition of "employee" is to be determined by the intention of the parties, the potential for abuse is obvious. In those cases dealing with sham employment relationships in the form of COFESA type "independent contractual" agreements, there may be no subjective intention to establish an employment relationship, but the Labour Courts have never hesitated to intervene and expose the relationships for what they are.

The case raises the interesting notion of an "office" that might not constitute employment. In other jurisdictions, senior civil servants fall into this category. Perhaps this is the best way to deal with ministers of religion, rather than to look to the intention of the parties and to allow that intention to trump the application of a statutory definition. What about judges? Are they employees?