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Concourt sets aside compensation order

Johannesburg - The Constitutional Court on Tuesday overturned a Labour Court ruling granting over R1m to each of a number of workers dismissed from an electrical company.

F&J Electrical CC (F&J) had approached the Constitutional Court seeking a rescission of the Labour Court's order.

The Labour Court ruling had been based on affidavits saying the workers were retrenched after being deprived of their right to join a union of their choice.

In F&J's absence, the Labour Court awarded each of the affected former staff 24 months’ remuneration. Due to the union allegations, a far greater award was made against the company, resulting in an order for over R1m in compensation per employee.

F&J unsuccessfully applied for leave to appeal to both the Labour Court and the Labour Appeal Court.

In a unanimous judgment on Tuesday, Constitutional Court Judge Ray Zondo granted F&J leave to appeal and upheld the appeal.

In terms of the Labour Relations Act the employer was not required to show sufficient cause for failure to respond to a statement of claim. Rather, the employer only needed to indicate that the previous court order was erroneously sought or granted.

The Constitutional Court held that the Labour Court made errors in its initial order, including that it based its order on the former workers' affidavits, which were not served on F&J.

The evidence of the affidavits was also contrary to their assertions in a prior Commission for Conciliation, Mediation and Arbitration (CCMA) arbitration that they did not know the reason for their dismissals.

At the CCMA, F&J showed that the employees had been dismissed due to operational requirements.

Zondo pointed out that in the Labour Court F&J was unknowingly faced with the possibility, in terms of the Labour Relations Act, that it would have to pay double the usual amount of compensation if dismissal was found to be due to union membership.

The Constitutional Court also found that the Metal and Electrical Workers Union, which represented the former workers throughout, did not take the complaint to the Labour Court within the prescribed 90 days from the completion of the CCMA process.

As such, the Labour Court did not have jurisdiction to entertain the dismissal dispute and make the compensation order.

The Constitutional Court ordered the matter back to the Labour Court where F&J will be offered a chance to defend the dismissals.

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