Pecton Outsourcing Solutions CC v Pillemer NO and Others (D1256/13) [2015] ZALCD 66; [2016] 2 BLLR 186 (LC); (2016) 37 ILJ 693 (LC) (12 November 2015)

Pecton Outsourcing Solutions CC v Pillemer NO and Others (D1256/13) [2015] ZALCD 66; [2016] 2 BLLR 186 (LC); (2016) 37 ILJ 693 (LC) (12 November 2015)

The court found that the automatic termination clause in the respondents' fixed-term contracts was unenforceable as it impermissibly contracted out of their rights under the LRA, specifically the right not to be unfairly dismissed. The termination of employment was for operational requirements, triggered by the loss of the applicant's sole client, Unilever. This reason is typically associated with dismissal, and the clause deprived employees of statutory protections such as severance pay and procedural fairness. The CCMA lacked jurisdiction to determine the fairness of mass dismissals for operational requirements, as such disputes must be adjudicated by the Labour Court. The arbitration...

Citation
[2015] ZALCD 66
Parties
Applicant: Pecton Outsourcing Solutions CC; Respondent: Pillemer, B N.O.; Respondent: CCMA; Respondent: Thulasizwe Shozi & 205 Others
Court
Labour Court Durban
Jurisdiction
South Africa
Judgment Date
12 November 2015
Case Number
D1256/13
Procedural Posture
Review Application / Judgment on Review of CCMA Award
Outcome
The arbitration award issued by the first respondent is reviewed and set aside due to lack of jurisdiction. The individual respondents may refer their dismissal for adjudication before the Labour Court. No order as to costs.
Judges
Whitcher
Legal Topics
Automatic Termination Clause, Unfair Dismissal, Operational Requirements, Ccma Jurisdiction, Section 5 Lra, Fixed Term Contracts
Labour Law Civil Procedure Automatic Termination Clause Unfair Dismissal Operational Requirements Ccma Jurisdiction Section 5 Lra Fixed Term Contracts

Case Brief

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Parties

Pecton Outsourcing Solutions CC

Applicant

Pillemer, B N.O.

Respondent

CCMA

Respondent

Thulasizwe Shozi & 205 Others

Respondent

Procedural Posture

Review Application / Judgment on Review of CCMA Award

Legal Issues

  1. 1 Whether the termination of employment contracts by operation of an automatic termination clause constitutes a dismissal under the LRA.
  2. 2 Whether the CCMA had jurisdiction to determine the fairness of the mass dismissal for operational requirements.
  3. 3 Whether the automatic termination clause in the fixed-term contracts impermissibly contracted out of employees' rights under the LRA.

Ratio Decidendi

The court found that the automatic termination clause in the respondents' fixed-term contracts was unenforceable as it impermissibly contracted out of their rights under the LRA, specifically the right not to be unfairly dismissed. The termination of employment was for operational requirements, triggered by the loss of the applicant's sole client, Unilever. This reason is typically associated with dismissal, and the clause deprived employees of statutory protections such as severance pay and procedural fairness. The CCMA lacked jurisdiction to determine the fairness of mass dismissals for operational requirements, as such disputes must be adjudicated by the Labour Court. The arbitration...

Court Disposition

The arbitration award issued by the first respondent is reviewed and set aside due to lack of jurisdiction. The individual respondents may refer their dismissal for adjudication before the Labour Court. No order as to costs.

Orders

  • The arbitration award issued by the first respondent is reviewed and set aside on the basis that the first respondent lacked jurisdiction to hear a retrenchment dispute.
  • The individual respondents may refer their dismissal for adjudication before the Labour Court.