Everyone has the right to fair labour practice
5 August 2010

Everyone has the right to fair labour practices, including sex workers. The Labour Appeal Court (LAC) has confirmed in the “Kylie” judgment. This paper investigates the parallels of this decision and the 2008 decision of the Labour Court in Discovery Health Limited v CCMA & Others where it was held that although a contract of employment between a South African employer and a foreigner without a work permit may be illegal, the contract is not void and such foreigner would be entitled to all rights afforded to employees under labour legislation and the Constitution.

In the earlier matter, involving Discovery Health, the starting point was that the Court had to determine whether a foreign national who works for another person without a work permit is an “employee” as defined by the Labour Relations Act. The background to the matter was that the Discovery Health employed an Argentinean national named Lanzetta. He had always been lawfully resident in South Africa. Discovery Health contended that at the time that he was employed he represented to Discovery Health that he was legally permitted to work for the company which in fact he was not. When they became aware of the fact that he was not legally permitted to work for them, Discovery Health then terminated Lanzetta’s employment. No disciplinary hearing took place as contemplated by the Labour Relations Act before the termination of Lanzetta’s employment. His services were terminated merely by means of a letter dated 4 January 2006.

There is a convoluted history surrounding the circumstances of Lanzetta’s residence permits and work permits. Ultimately it appears that his work permit expired at the end of December 2005. After this came to their attention Discovery Health issued the letter to Lanzetta advising him that because his work visa had expired they no longer had a legal basis for his employment and his employment was terminated with immediate effect.

Discovery Health argued when the matter was conciliated that the CCMA did not have jurisdiction to consider the matter as only an employee as defined by Section 213 of the Labour Relations Act could claim the protection that the Act affords. Their argument in summary was that the statutory definition of an employee contemplates an employee who is a party to a valid contract of employment. Since the contract concluded with Lanzetta in this case was tainted with illegality (because the individual was not in possession of a valid work permit) they alleged that the contract was not valid and he was therefore not an employee. He could therefore not claim the right not to be unfairly dismissed.

The Commissioner having heard this argument ruled that Lanzetta was an employee and that the CCMA did have jurisdiction to determine the dispute. That jurisdictional ruling was then the subject of review before the Labour Court.

On review the court considered whether the definition of employee is by necessity founded in there being a valid common law contract of employment. If so this would mean that a person engaged to perform work in terms of an underlying contract that is invalid can never been an employee.

After investigating Sections 38(1) and 49(3) of the Immigration Act the Court held that neither directly declares that a contract of employment concluded without the necessary permit is void. For instance a person does not commit an offence by accepting work from or performing work for another without a valid work permit.

The Act simply attempts to prohibit the more limited act of employing a person who is a foreign national in violation of its provisions. The Court concluded that the Constitution is decisive on the question whether a contract is void even if only one party to the contract is exposed to a criminal penalty by referring to Section 39(2) of the Constitution which requires a Court when interpreting legislation to promote the spirit, purport and objects of the Bill of Rights.

The Court interpreted Section 31 of the Immigration Act on the basis that it could not have been intended to limit the Constitutional right to fair labour practices.

It would seem that the Court’s reasoning was that any interpretation which invalidates the contract of employment concluded in violation of the terms of Section 38(1) of the Immigration Act would be an interpretation that unjustifiably limits the right to fair labour practices.

This would leave the door open for an unscrupulous employer, prepared to face the criminal sanction under Section 38 of the Immigration Act, to employ a foreign national and to simply refuse to pay the remuneration due to the foreign national entitled to receive payment on the basis that the contract was invalid. In those circumstances, the employee would be without a remedy in contract.

By criminalising only the conduct of the employer who employees a foreign national without a valid permit, the legislator did not intend to render invalid the underlying contract. For that reason the contract between Discovery Health and Lanzetta was valid and remained so until it was terminated by Discovery Health. Lanzetta was accordingly an employee at the time that his contract of employment was terminated and the CCMA had jurisdiction to determine the dispute between him and Discovery Health. Incidentally the Court quoted liberally from the “Kylie” Labour Court Case in that judgment.

13. Kylie was dismissed from Brigitte’s, a massage parlour at which she worked, on 27 April 2006.

14. After her dismissal Kylie referred an alleged unfair dismissal dispute to the CCMA. When the matter was scheduled for conciliation, the Commissioner questioned the jurisdiction of the CCMA to deal with the matter in the light of the nature of the work which Kylie performed.

The Commissioner found that the CCMA did not have jurisdiction to hear the matter because Kylie’s work was unlawful. Kylie brought an application to the Labour Court to review the jurisdictional ruling and was unsuccessful. The basis of the Labour Court’s decision to dismiss the review application was the common law principle that courts ought not to sanction or encourage illegal activity.

The primary remedy where an employee has been substantively unfairly dismissed is an order reinstating the employee. The Labour Court’s finding was that an order of reinstatement would sanction illegal activity or constitute an order on the employer to commit a crime.

The LAC departed from the reasoning of the Labour Court insofar as the protection and scope of the rights in terms of Section 23 the Bill of Rights is involved. The LAC referred to the judgment in the criminal law case of S vs Jordaan which in summary held that although the very character of the work that a prostitute undertakes devalues the respect that the Constitution regards as inherent in the human body, that is not to say that as prostitutes they should be deprived of the right to be treated with respect.

Consequently the activity of a sex worker does not in itself prevent the sex worker from enjoying a range of constitutional rights. The LAC distinguished this factor from, for instance, foreign and child workers (who are prohibited from assuming certain forms of employment not because of the nature of the work that they do but as a result of who is required to do the work).

Having accepted that Section 23 of the Constitution affords protection to sex workers, the LAC proceeded to analyse the appropriate relief to be afforded to an unfairly dismissed sex worker.

The LAC agreed with the Labour Court that an order of reinstatement would be against public policy but that should not prohibit relief to sex workers entirely. There is still a discretion in terms of Section 193(2) read with Section 194 to order just and equitable compensation as consolation independent of the loss of illegal employment.

The jurisdictional ruling was accordingly reviewed and set aside and an order was issued that the CCMA has jurisdiction to determine the dispute between Kylie and Brigitte’s Massage Parlour.

A number of questions arise in relation to the scope of the judgment, some of which are dealt with in the judgment. For instance what consequences would there be on organisational rights of employees if workers performing an illegal activity are classified as employees.

Sex workers could then form and join trade unions. It is doubtful whether the union would be effective as it is likely that certain of its demands would be for participation in unlawful activities. The Registrar of Labour Relations may well be inclined not to register such a union because its sole purpose would be to further the commission of a crime.

Collective agreements between brothels and sex workers unions would simply be documentary proof of the commission of a crime and sex workers would effectively be without the right to strike as the underlying demand or dispute would almost always be unlawful.

The principles in the above two cases would be similarly problematic in the ridiculous example of a contract killer. If I had to “employ” a contract killer to murder someone and am not satisfied with the result and decide to terminate his services, he may well have an unfair dismissal dispute against me. Surely there is a difference between a contract that devalues respect for the body and a contract directly contrary to the right to life etc.

The Sexual Offences Act makes brothel-keeping a criminal offence and the Immigration Act makes it an offence to employ a foreign national without a work permit. People engaged in activities in violation of the provisions of those Acts are still regarded as employees and are entitled to the full protection of the South African Labour Legislation and the Constitution.

The Courts draw distinction however between access to courts on the one hand and the appropriate relief on the other hand. Whilst Lanzetta and Kylie may have access to the Courts as “employees”, they may not be entitled to compensation ultimately.