CIV/APN/181/98
IN THE HIGH COURT OF LESOTHO
In the matter between:-
JAMES A. INGRAM APPLICANT
and
TRAINING AND RURAL DEVELOPMENT
CONSULTANTS (PTY) LTD 1ST RESPONDENT
LOXTON VENN ASSOCIATES 2ND RESPONDENT
JUDGMENT
Delivered by the Honourable Mrs. Justice K.J. Guni on the 27th day of April 1999
The applicant in this matter, seeks the Review and setting aside of the decision of the Labour Court in Case No LC. 23/97. L.C. 23/97 was an application made by this applicant, to the Labour Court. In that application he sought to be reinstated to his position in the employment of INTER-SCIENCE SERVICES (PTY) LTD t/a LOXTON VENN and ASSOCIATES. This applicant had an Employment Agreement with INTER
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SCIENCE SERVICES (PTY) LTD (Annexure 'A' at Page 8 of the record). It was entered into in the Republic of South Africa. INTER-SCIENCE SERVICES (PTY) LTD is a South African company. It is registered in South Africa in accordance with South African law. It operates in South Africa needless to say that it must be operating in accordance with South African law. In terms of the said agreement between the parties the contract was to be performed at THABA-TSEKA in Lesotho -(clause 14 which deals with place where the duties are to be performed). The Employment agreement was signed on 13/04/95: Applicant commenced work as a centre supervisor at THABA-TSEKA on 1st March 1995 as appears on that Annexure ' A' [at page 8 of the record].
The dispute arose between the parties perhaps early 1996. Applicant herein was given notice to attend disciplinary hearing at the offices of L.V.A. MIDRAND on 4th July 1996. The disciplinary proceedings did take place. Applicant was found guilty of misconduct and his dismissal recommended. He appealed to the disciplinary appeals tribunal - whose decision
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applicant alleges has not been made known to him. All attempts to reach a settlement on the question of discipline have failed. Finally the applicant's contract was terminated. It is this termination of his contract which he challenges. This applicant came to Labour court to seek reinstatement or payment of compensation in the form of salary as from the date of the purported termination to the date when the contract comes to an end.
The point-in-limine was raised on behalf of respondents. It was an attack on the jurisdiction of the Labour court to entertain and determine the matter before it. It was submitted that Labour court lacked jurisdiction on the following grounds [as alleged on respondent's papers at page 188 of the record].
"4.2.1 The Applicant was at all relevant times employed by INTER-SCIENCE SERVICES (PTY) LTD, South African Company incorporated
in terms of the South African Companies Act, 1964 and domiciled in Gauteng Province, South Africa;
4.2.2 The Applicant was initially
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appointed with effect from 7 January 1991 by INTER-SCIENCE SERVICES (PTY) LTD and seconded to WESTERN DEVELOPMENT COMPANY. The Applicant was situated in Ovambo, Namibia.
4.2.3 The employment contract entered between the Applicant dated 17 March 1995 explicitly stipulates that INTER-SCIENCE SERVICES (PTY) LTD will be the Applicant's employer;
4.2.4 The Applicant was seconded to THABA-TSEKA, Lesotho. The Applicant reports to a Supervisor situated in South Africa.
4.2.5 The Applicant was dismissed through a disciplinary process held in South Africa.
4.3 It is therefore pleaded that the above Honourable Court has no jurisdiction to entertain this matter in that in fact and in law the South African law has application relating to the dispute."
Applicant is very happy to a very great extend with the judgment of the Labour Court except where that court held that it lacked jurisdiction on the ground
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that the parties have chosen South African law to be the proper law governing their contract. The question of the autonomy of the contracting parties in this jurisdiction to choose the proper law governing all aspects or some parts of their contract, is not an issue. What must be determined is the question of whether or not there was express or tacit choice of applicable law made by the parties. Most legal systems allow parties to choose the law, usually by means of a "choice of law clause" which governs their contract. This view is expressed in International Contracts 111 and International Contracts 1V in (1990) 20 by ELLISON KAHN.
There is no "choice of law" clause in the Employment Agreement between this applicant and his employer. The question of which law should be applied to determine the rights and obligations of the parties must be determined by the court which must then asign such law. The objection to the jurisdiction of The Labour Court in Lesotho is to the effect that the contract was entered into in South Africa and for all those other reasons, it was submitted that the law
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that must be applied is South African. Although the employer is in South Africa the contract was to be performed in Lesotho and the applicant was carrying out the terms of the said contract at THABA-TSEKA in Lesotho at the time the dispute which resulted in the termination of his contract arose.
Where there is a conflict of laws there are established and accepted principles which must be followed. One of such principles has been annunciated by De Villiers JA in Standard Bank of S.A. LTD v Efroiken and Newman 1924 AD 171 in the most straightforward and simple terms at page 188 as follows:-
"The business sense of all business men has come to this conclusion, that if a contract is made in one country and is to be
carried out between the parties in another country, either in whole or part, unless there appear something to the contrary, it is to be concluded that the parties must have intended that it should be carried out in accordance
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with the law of that other country otherwise a very strange state of affairs would arise, for it is hardly conceivable that persons should enter into a contract to be carried out in a country contrary to the laws of that other country".
There is no specific clause in the employment Agreement between the parties, which deals specifically with the choice of law. The clause on which The Labour Court relied when concluding that South African Law must be applied, does not directly deal with the question of law that is to govern the whole contract. It governs only certain aspects of the contract if they can be found. That clause reads as follows:-
"24. If any condition are inconsistent with or contrary to any South African Rule of Law or Act presently in existence or
promulgated from time to time, such Rule of Law or Act shall prevail."
To me this clause seems to deal solely with the
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conditions contained in the Agreement of Employment. It is somehow speculative. It contemplates a search for conditions which are contrary to the Rule of Law or Act. The parties wanted to be seen to be complying with the law of the land where the contract was being made. Any condition that is contrary to South African Rule of Law or Act must fail while that Rule of Law or Act prevails. According to Mr. Mosito's argument there is a prerequisite that there be a finding of a specific condition that is contrary to South African Rule of Law or Act. The South African law was to be applied in the search. Once such condition is found -that is where the South African law can be applied. That is not what the Labour Court was asked to determine in the matter before it. The conditions of employment are not being questioned or challenged in any way. If anything reliance was being placed on those conditions and terms of the agreement by the parties.
There is no need for the application of South African Rule of Law or Act. Having found that the parties did not include a specific clause - dealing with the whole
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Employment Agreement between them, the court has a duty to assign such a governing law. "Central Rule generally followed in assigning the appropriate law is that the loci contractus governs unless the contract is to be performed elsewhere, in which case, lex loci solutions is applied." This point has been clearly stated in PRIVATE INTERNATIONAL LAW
THE MODERN ROMAN-DUTCH LAW including the JURISDICTION OF THE SUPREME COURT. Third Edition - CF Forsyth. See also Standard Bank of SA Ltd v Efroiken and Newman 1924 AD 171 at 185 by De Villiers JA.
In terms of Employment Agreement it was to be performed in Lesotho. [Clause 14 of the Employment Agreement Annexure 'A']. Applicant has been working in Lesotho in accordance with that agreement. The dispute which arose and resulted with the disciplinary hearing at Midrand in Republic of South Africa concerned the applicant's performance of his duties at THABA-TSEKA here in Lesotho where the contract was being performed. The law that was to apply is that of Lesotho. Labour Code Order No.24 of 1992. Section 242 (2) The section provides thus:-
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"In any case where both the Laws of Lesotho and the laws of another State could be applied in regard to the rights or entitlements of employees, their survivors or heirs, a court shall be bound to apply the laws of Lesotho."
This application before the Labour court is not a search for a condition that is contrary to South African Rule of Law. It is the matter for determination of the rights and entitlements of the parties to the contract. The question to be asked is - was what was done to this applicant in conformity with their agreement and most of all, in accordance with the laws of this Kingdom? No condition in the employment agreement between the parties, is alleged to be contrary to any Rules of Law of South Africa or Act. What falls for determination are the rights or entitlements of the employee, this applicant.
The Employment Agreement between these two parties seems to have close connections with both systems of law. That is South Africa where the
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contract was entered into and Dissciplinary proceedings conducted and also The Kingdom of Lesotho where the contract was to be performed. But nevertheless only one of the two systems can be applied in this instance. The system that has the closest and real connection with the contract. That contract had to be performed in accordance with the laws of Lesotho as the place where the duties of the employee, this applicant were to be performed in terms of their agreement of employment. GUGGENHEIM V ROSENBAUM (2) 1961 (4) SA 15 (W). That is the system that has the closest and real connection with the contract. The only inference, that can be drawn from the provisions of the agreement in the absence of specific clause dealing with the choice of law, as regards the question of which law should govern their Agreement, is that the law of the land of that country where the contract is carried out, must apply. The law of the land cannot be excluded from application by the contracting parties. People who commit certain acts which affect individuals in this country
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must answer for those actions to the laws of this country. The Labour Court had jurisdiction to hear the matter and determine the parties rights and entitlements as required of it by section 242 of Act No. 24 of 1992 by applying the laws of this Kingdom.
As a result, the decision of Labour Court in L.C. 23/97 is reviewed and set aside. It is ordered that The Labour Court must hear the merits of the application and determine it accordingly.
K.J. GUNI
JUDGE
27th April 1999
For applicant: Mr. Mosito
For respondent: Mr. Buys