HIGH COURT OF LESOTHO
WHOLESALERS AND CATERING
UNION & 35 OTHERS APPLICANTS
TRADING LIMITED 1ST RESPONDENT
TRADING LIMITED 2ND RESPONDENT
by the Honourable Mr Justice WCM Maqutu on the 29th day of June 1999
are asking for an order:-
with the rules of service.
purported termination of the services of members of first applicant
by respondents dated 4th November 1998 unlawful
the said termination of the employment for first applicant's members
a violation of a recognition agreement between
respondents to reinstate applicants who have been retrenched.
respondents to pay costs of this application.
OF APPLICATION THAT ARE COMMON CAUSE
applicant is a trade union whose members are among others 2nd to
respondent is the elective employer of 2nd to 35th applicants and
the owner of a number of wholesales in which those applicants
employed. Second respondent does not exist, but the Recognition
Agreement assumes it exists.
is a recognition agreement dated 9th May 1995 between first
respondent (or the wholesales first respondent owns and manages)
the applicant. First respondent is Metcash Lesotho limited, a
company that respondent now says does not exist.
several wholesales were burnt first respondent informed applicants
that retrenchments were inevitable and negotiations
on the matter
is common cause that there were only 54 positions that would be
available and that first applicant was invited to make
According to first applicants deponent
"It is correct that management did indicate that LIFO principles
or criteria would be used, but what sparked controversy is
criteria being subjected to the so-called exigencies of the
terms of the recital of the Mobility and Flexibility Agreement
entered into between first applicant and first respondent entered
into on the 8th January 1998 "This Agreement is the result of
negotiations between the parties on the method which will
staff productivity excesses in Lesotho and avoid retrenchments".
It will be observed that for respondents Metcash Lesotho Limited
signed although such a company is now found not to exist.
(3 of the Recognition Agreement 9th May 1995 of which the said
Mobility and Flexibility agreement is the sequel puts parties
an obligation to negotiate on "conditions of employment and any
other matter in respect of which a duty to negotiate
the 4th November 1998, first respondent retrenched 2nd to 35th
applicants by writing them a letter of termination of employments
giving the following reasons:-
(i) Current destruction of the Maseru and Mafeteng branches in
(ii) Due to operational requirements their services were to be
terminated with effect from the 30th November 1998 and that the
reason for this termination is retrenchment.
(iii) In identifying employees that will be retrenched several
factors have been taken into account "Subject to skills
this selection has been base on length of service,
with employees having the shortest service being selected, before
longer service (LIFO).
(i) Terminal payments such as severance packages, one month notice
and payments in lieu of leave were made.
JURISDICTION OF THE COURT CHALLENGED
2.1 Mr Kennedy for the first respondent raised the preliminary
objection that this court had no jurisdiction in the matter because
it was a matter that in terms of the Labour Code should be tried by
the Labour Court. The reasons he advanced were the following:
common law all that was required was that an
be given one month's notice. (b) This dismissal was in terms of
Section 66(1)(C) of the Labour Code of 1992 was based,
"operational requirements of the undertaking, establishment or
service". (c) As this dismissal was being challenged
of its unfairness, it was a matter for the Labour Court from the very
beginning. Section 70(1) of the Labour Code.
of reinstatement and the question of compensation in lieu of
reinstatement were specifically questions that should be
by the Labour Court. Section 73 of the Labour Code.
this was a trade dispute it was a matter for the Labour Court to
enquire into and make a decision or award. Section 24(1)(C)
was also for the Labour Court "to interpret the terms of the
contract of employment...and collective agreements".
24(1)(e) of the Labour Code.
exclusive jurisdiction of the Labour Court in matters specified in
Section 24(1) of the Labour Code including trade disputes
left to it, if the
provisions of Section 25(1) of the Labour Code are complied with.
legslature in its wisdom created the Labour Court which by law
"shall be presided over by "persons qualified in
experience in labour relations". Section 23(2) of the Labour
Code, this Court should not interfere.
2.2 Mr Mosito for applicants answering the objection to jurisdiction
argued as follows:
is untenable to say the court has no jurisdiction because the
Constitution has given it unlimited jurisdiction.
Labour Court is a court of equity not a court of law.
court is being called upon to deal with lawfulness of dismissal not
to provide an equitable remedy.
before the Labour Court sure not civil or judicial proceedings.
of a recognition agreement is a point of law not equity.
were denied a hearing when Section 66(4) provided for an individual
right to be heard before
applicants were dismissed on grounds of capacity to perform their
duties. The condition of which their retention or dismissal revolved
was an issue of competence to perform their jobs because the
selection was "subject skills retention".
2.3 After hearing argument on the question of jurisdiction, this
court came to the conclusion that the balance of convenience called
for the determination of the issue of jurisdiction along with the
merits. The reason was that argument on jurisdiction sometimes
touched on the merits.
VIOLATING RECOGNITION AGREEMENTS
view I take is that a recognition agreement is simply a contract
albeit one that deals with how relations between master and
will be conducted. I noted that the contents of the Recognition
Agreement in many respects coincide with the Labour Code.
that Mr Mosito referred to in which the Labour Court declared
dismissals null and void because an employer had violated
Recognition Agreements were those decided by the Labour Court
exercising its jurisdiction according to law. E. Mda v National
University of Lesotho LC/14/94.
Union of Printing, Publishing & Allied Workers v Lesotho
Evangelical Church & Ano. LC/33/95.
Makoa v Highland Project Contractors & Others LC/33/95
cases were decided on the principle of substantial fairness "by
the Labour Court in a matter in which they had jurisdiction
of the Labour Code. Consequently the cases are not of assistance in
the case in which I have to decide unlawfulness in
terms of the
Labour Code, (c) Obstructing the legal machinery for dispute
resolution provided for "by the Labour Code and
Recognition Agreements or other special resolution which employer and
employee have agreed up can in some cases be
a question of legality
not fairness. See Lesotho Clothing and Allied Workers Union v S.G.M.
Industrial (Pty) Ltd. CIV/APN/218/98
courts should be ascute not to usurp the jurisdiction of inferior
courts and tribunals. If another court
has jurisdiction this court,
leave of court has to be sought before this court will hear the
matter. See Section 6 of the High
Court Act 1978. The Labour Court is
a specialist tribunal specifically created to introduce equity in the
realm of master and servant
where law has become rigid and
inflexible. It is not a court of law
"The Labour Court is a court of equity" as Steyn JA (as he
then was) said in Attorney General v Lesotho Teachers Trade
Ors 1966 LLR 16 at page 24. It seems to me that in the case of Labour
Court where this court is not constrained by
legislation, it should
resort to the common law to discourage forum shopping.
Independent Municipal and Allied Trade Union v Northern Pretoria
Metropolitan Substructure & Ors. (1999) 20 ILJ 1018 at
G Van Dijkhorst J said:
"Concurrent jurisdiction may give rise to forum shopping.... In
addition concurrent jurisdiction may lead to conflicting irresoluble
decisions of the labour Court and the High Court on the same issue."
danger should therefore put this court on guard. The review
jurisdiction of the High Court of Lesotho remains unimpaired in
respect of the Labour Court, but it cannot substitute its own
discretion or decision on fact for those of the Labour Court. All
High Court checks is whether the Labour Court acted legally or
followed the law.
in this case are based on operational requirements after the
destruction of places of work. The grievances of applicants
in retrenching first
respondent did not do enough to avoid dismissals. During negotiations
the dispute was that in terms of their agreements the respondent
not adequately addressing the question of relocating the employees in
terms of the Mobility and Flexibility Agreement and the
Agreement. Negotiations therefore broke down.
(for the employees) argued that the employer had acted unlawfully.
While Mr Kennedy (for the employers) argued that what
Mr Mosito was
in fact arguing was an issue of fairness. Consequently the merits of
this dispute by law should be determined by
the Labour Court. Mr
Kennedy referred this court to National Education Health and Allied
Workers Union v University of Forthare
(1998)19 ILJ 121 where the
Labour Court dealt with the merits of such a retrenchment dispute,
namely whether the employer was open
to persuasion on alternatives
and thereby determine whether or not the retrenchment was unfair.
issues that this court has to decide are not only those of
unlawfulness and fairness. They include a dispute of fact. The
says he has acted fairly and in conformity with the
agreements. The workers say the employer has not done so. This is a
dispute that cannot be resolved on the papers. Full evidence
has to be heard by a
competent jurisdiction on the issue of fairness of retrenchments.
66(1)(c) of the Labour Code provides
"An employee shall not be dismissed, whether adequate notice is
given, unless there is a valid reason...which is based on
requirements of the undertaking, establishment or service."
an employee is dismissed for operational requirements of service,
that is lawful. The crisp question for determination is whether
not 2nd to 35th applicants were dismissed for operational
requirements of the business or service?
is not disputed that the Mafeteng and Maseru businesses had been
destroyed. Therefore the employees in those business establishments
had no where to work unless they could be deployed in other business
establishments. Fifty four employees could be absorbed.
thirty-four applicants could not be absorbed, therefore they were
to what Mr Mosito argued annexure "D" was not the only
document this court could refer to. Proceedings of the
1998 respondent annexure "JVE 4" were relevant because
they are referred to in Annexure "D".
This is particularly
so because the contents of paragraph 50 of first respondent's
affidavit were admitted by applicant in paragraph
10.3 of their
Replying Affidavits. In the admitted paragraph 50 of the first
respondent's deponent, first respondent says:-
"Management had previously, and subsequently, requested first
applicant to furnish it with ideas and alternatives but applicant
not wish to be drawn into such discussions. Consequently the first
applicant was handed a list of positions which existed at
proposed branches when
reconstructed. It was explained, that there would be positions for
fifty four (54) employees and management indicated that it believed
LIFO to be the correct way".
main deponent for the applicants in answer to what first respondent
"10.2 I concede that respondents management indicated they would
build one store per town.... This discussion or consultation
more pertinent to Maseru where there are two stores. The implication
that two stores are now to be transformed into one
store for purposes
of the future operations. This will logically mean that for purposes
of retrenchment the people employed in
the former two stores had to
be considered as belonging to one store.
10 3 I also admit contents of paragraph 50 herein which touches at
the heart of the present application. It is correct that respondent
management did indicate that LIFO principles or criteria would be
used, but what sparked off the controversy is LIFO criteria being
subjected to the so-called needs or exigencies of business...."
are questioning respondent's imposition of the retrenchment package
over their objections. This behaviour created what
is a trade
dispute. In terms of Section 3 of the Labour Code a "trade
dispute means any dispute or difference between an
their organisations and the employees or their
organisations,...connected". This is what the Labour Code was
respondent's annexure "JVE 4" states that in fact several
meetings were held to deal with this issue of retrenchments.
meeting of the 23rd October 1998 was the final one. What the outcome
was is not in dispute in as much as no agreement was
Applicants blame the respondents and respondents blame applicants.
Section 25(1) of the Labour Code states that the
Labour Court shall
have jurisdiction "including but not limited to trade
in their own way seemed to have sought
to "avoid retrenchment" within the recital of the Mobility
and Flexibility Agreement of 8th January 1998 and to apply
the UFO in
respect of retrenchment with Clause 28 of the Mobility and
Flexibility Agreement. Applicants challenge this as they
transfer were an option in this case. The merits of this dispute sure
a "trade dispute" which should be ventillated
in the Labour
Court in terms of Section 26(1) of the Labour Code.
seems to me that this cause falls within Section 66(1)(C) in as much
as retrenchments had to follow the reduced business operations
followed the destruction of the business of respondents and the
reconstruction of fewer businesses than before. Whether
properly applied to retrenchments is an issue of fairness. If there
is a complaint and reinstatement is not possible,
it is a question
of an award of an appropriate relief by the Labour Court in terms of
Section 24 (1)(I) read with Section 73
of the Labour Code not the
interpretation of recognition agreements and the contract of
employment are questions that have been clearly been put with
Section 24(1)(c) of the Labour Code. They are questions
unambiguously put within the jurisdiction of the Labour Court.
case of Attorney General v Lesotho Teachers Trade Union & Ors.
1991-1996 LLB, 16 at page 24 Steyn JA (as he then was)
"In essence the Labour Court is a court of equity enjoined to
keep the case of justice between the conflicting demands of
and employee. Disputes that come before it are not "civil
proceedings" as provided for in Section 2 of the High
or the Constitution."
Principles of South African Law 7th Edition pages 15 and 16 defines
equity in the following words:
"Equity is a collection of principles, based on Natural Law on
conceptions of ideal justice;. .national law was far from perfect;
that to apply it strictly would in many cases lead to injustice....
In Roman law.. .a body of principles was developed by the Praetors in
order to counteract the harshness and subtlety of existing
law as inherited from the Cape of Good Hope there is no separate
system of law known as equity. The principles of fairness,
reasonableness and justice which are applied in our courts are in
essence partly the equity which Roman law had in mind and English
unsuccessfully . attempted. Consequently in Kurt v Transvaalsche Bank
1907 TS 765 at page 774 Innes CJ said:-
"Using equity in its broad sense, we are always desirous to
administer equity; but we can only do so in accordance with the
principles of the Roman Dutch law. If we cannot do so in accordance
with those principles, we cannot do so at all."
in Kent v Transvaalsche Bank (supra at page 774 therefore had to
"The court has again and again had to point out that it does not
administer a system of equity as distinct from a system of
English had a separate court to administer a system of equity which
was the Chancery Division. This was not a success consequently
English abandoned it. Nevertheless the legislature in this country
found that due process of law which typifies our civil proceedings
tedious, laborious and fraught with delays, consequently with the
does not always in the end deliver the judicial product that promotes
or regulate employment and matters incidental thereto
It is for this purpose of having fairness between employer and
employee that the Labour Court was established.
For striving to
reasonably do justice between master and servant without
technicalities and complications the Labour Court is a
equity. The ordinary courts are courts of law, apply the law in a
manner in which equitable principles are built in. Unfortunately
courts of law are sometimes hampered by precedent which sometimes
leads to equitable results until courts modify the precedents
legislature intervenes. This makes civil proceedings complex and
court stated the equitable jurisdiction given to the Labour Court is
broader than what this court would exercise under the
common law when
dealing with such cases. In the Labour Court both employers and
employees are represented in the panel that hears
a labour case. The
court has been given broad discretionary powers as knowledgeable
labour representatives and employers sit in
judgment as part of the
panel in terms of Section 23 of the Labour Code. They bring into the
Labour Court an expertise that common
law courts do not possess.
court has in the past made the following observation about the
Court in Lesotho Clothing and Allied Workers Union & Others v
C.G.M. Industrial (Pty) Ltd. CIV/APN/218/98 (unreported):
"It will be observed that what Section 24(1)(I) caters for is
much broader than absence of a hearing which is unlawful....
Employers are not expected to break the law, but it is recognised
that they might act lawfully and yet within the culture of master
servant be found to have acted unfairly."
of contract is actionable because it is a wrong, but that does not
put it within the realm of illegality per se.
this court has no jurisdiction to deal with the merits of this case.
Consequently this court refuses to make the declaration
application is dismissed with costs.
applicants : Mr KE Mosito
respondents : Mr Kennedy
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