Discovery Health Limited v CCMA & others [2008] 7 BLLR 633 (LC)

According to court records, a certain Lanzetta, an Argentinian national entered Mzansi on 21 January 2001 on a study visa issued by the Department of Home Affairs. The permit was valid until 15 January 2002. The said visa was subsequently extended to 31 December 2002. 

On 1 January 2003, Lanzetta obtained a temporary residence permit, valid for a period of three months. He also applied for a work permit, which he obtained on 8 May 2003, that allowed him to work until 31 March 2004. The work permit was later extended, to allow Lanzetta to work for Multi-Path Customer Solutions (Pty) Ltd only, until 31 December 2005. 

On 18 April 2005, Discovery Health offered Lanzetta employment, with effect from 1 May 2005, as a call centre agent. Lanzetta accepted the offer. It is unclear from the court papers whether Discovery Health is/was, in any way, linked to nor associated with Multi-Path. Furthermore, it is also unclear from the court papers which recruitment process was followed to employ Lanzetta. 

In his court papers, Lanzetta avers that during September 2005, he requested his then line manager to provide him with the necessary documentation to enable him to renew his work permit. He stated in the court papers that Discovery Health’s management gave him the necessary documents on 2 December 2005. He argued that it was the tardiness on the part of Discovery Health that resulted in his work permit to expire at the end of December 2005. 

Discovery Health contends, on the other hand, that when it came to the company’s attention that Lanzetta did not have a valid work permit, it then terminated Lanzetta’s employment.

Lanzetta then referred the matter to the CCMA, citing unfair dismissal. This first issue that had to be decided was whether CCMA had any jurisdiction to hear the matter. Discovery Health’s argument was that the CCMA did not have jurisdiction to hear the matter. Discovery Health’s contention was that only those persons who fall within the scope of the definition of an employee in terms of Section 213 of the LRA could seek protection that the LRA provides. 

Their argument was that the statutory definition contemplates that an “employee” is a person who is party to a valid contract of employment. And in their view, seeing that the contract entered into with Lanzetta, who they argued was no longer in possession of a valid work permit, was tainted with illegality and was therefore invalid.

Therefore, they argued that because Lanzetta was not an “employee”, and thus he could not lodge an unfair dismissal claim. Discovery Health contended that somehow, Lanzetta gave them an impression that he was legally permitted to work in the country, while, in their view, he was not. It was on that basis that they sought to argue that his contract was essentially null and void, and could not be enforceable. Although it is not stated, per se, in the court records, it appears from the historical account that Discovery Health’s argument was also linked to an allegation that Lanzetta had acted in contravention of the Immigration Act. 

I make this deduction because, based on the court records, while it is recorded that on 1 January 2003, Lanzetta obtained a temporary residence permit, valid for a period of three months, nowhere is it stated that this temporary residence permit was ever extended. Although this begs a pertinent question: How was Lanzetta’s work permit extended until 31 December 2005, if he was not in possession of a temporary residence permit?  

Lanzetta, on the other hand, argued that the statutory definition of “employee” contemplates the existence of an employment relationship that transcends a contract. 

The CCMA subsequently ruled that Lanzetta was, in fact, an employee of Discovery Health and that consequently, it had jurisdiction to hear the matter. 

The CCMA, in arriving at its decision, held that the definition of “employee” in the LRA contemplates an “employment relationship” that transcends a contract, and that while a contract of employment entered into with a foreign national who does not possess a valid work permit is invalid, the employment relationship is not. Discovery Health then took the matter up on review at the Labour Court. 

The Labour Court, in examining this matter, felt it had to look at the applicable  provisions of the Immigration Act, with specific reference to sections 38 (1) and 49(3). The court found that neither of the two declared that a contract of employment concluded without the necessary permit is void, nor does a person commit an offence by accepting work from or performing work for another without a valid work permit. 

The Labour Court opined that what the Immigration Act is limited to employing a person who is a foreign national, in violation of the Act. The court also relied on Section 39(2) of the Constitution that requires that when a court interprets legislation, it must “promote the spirit, purport and objects of the Bill of Rights”. 

The Labour Court cited among others, case of Numsa & others v Bader Bop (Pty) Ltd & another (2003) 24 ILJ 305 (CC), wherein the Constitutional Court emphasised that if a statute is capable of interpretation in a manner that does not limit fundamental rights, then that interpretation should be preferred. 

The Labour Court held that if Section 38(1) were to render a contract of employment concluded with a foreign national who does not possess a work permit void, it would not be difficult to imagine the unfair consequences that might flow from such a definition.  For example, certain employers would, while acknowledging the risks associated with their actions under Section 38, might employ a foreign nationals and at the end of the payment period, simply refuse to pay the remuneration due, on the basis of the invalidity of the contract. 

In addition, the court held that vulnerable employees would be deprived of a remedy in contract that would normally be provided for in terms of labour legislation and the constitution. The court asked: “What would stop unscrupulous employers from breaching Basic Conditions of Employment Act 75 of 1997 (“BCEA”), for example, by requiring the employee to work hours in excess of the statutory maximum and by denying her the required time off and rights to annual leave, sick leave and family responsibility leave?”

The court held a correct view that, while others may interpreted its judgment as defeating the ends and purposes of the Immigration Act, to concur with Discovery Health’s claim that this, and similar contract are invalid would, in essence, defeat the primary purpose of Section 23(1) of the Constitution, which is to give effect, through the medium of labour legislation, to the right to fair labour practices. 

Thus, the Labour Court finally held that the contract entered into between Lanzetta and Discovery Health on 1 May 2005 was valid, and remained so until its termination by Discovery Health on 5 January 2006. Therefore, Lanzetta was an “employee” as defined in the LRA, and the CCMA had jurisdiction to determine the unfair dismissal dispute referred to it.