CCMA granted jurisdiction over employees based at South African businesses overseas

Dec 8, 2015 | 2015, News

The Labour Appeal Court (LAC) recently held that the Commission for Conciliation, Mediation and Arbitration (CCMA) has jurisdiction to hear employment disputes concerning employees who work outside South Africa.

In this matter, a fixed-term employee of the London office of South African Tourism was dismissed for misconduct. The employee, Mr Monare, then approached the CCMA which granted an arbitration award in his favour and ordered South African Tourism to reinstate him.

South African Tourism then applied to the Labour Court (LC) to review and set aside the arbitration award. South African Tourism argued that Mr Monare’s contract of employment had no ties to South Africa because he was recruited in the United Kingdom (UK), his contract was concluded in the UK and he had no right to return to South Africa to continue the employment. They also argued that the misconduct had occurred in the UK and that the disciplinary hearing and notice of dismissal all took place in the UK. Justice van Niekerk of the LC agreed and decided that the CCMA did not have jurisdiction to determine Mr Monare‚Äôs unfair dismissal dispute.

The matter then went on appeal to the LAC which determined that the South African Tourism office in London was not a separate and independent undertaking from its undertaking in South Africa. The LAC therefore overturned the LC’s decision and decided that the South African Tourism office in London was not outside the territorial jurisdiction of the CCMA and the LC. The LAC based its decision on the fact that the Tourism Act authorises South African Tourism to open and conduct offices abroad where necessary for the effective and proper exercise of its powers, performance of its functions and carrying out of its duties. The LAC argued that the South African Tourism offices in London and South Africa all aim to promote tourism in South Africa and are inextricably linked to one another.

Following this decision it would seem that businesses establishing offices overseas need to bear in mind that if an employment dispute arises, it may be referred to the CCMA if the business is functionally and operationally dependent on the South African office.

Read the judgment here: