A WORK-PERMIT IS NOT A REQUIREMENT FOR EMPLOYEE STATUS

• Contracts of employment are valid irrespective of whether the employee is not in possession of a valid work permit or not.
• Employment in contravention of the statutory requirement of a valid work permit is still an offence in terms of the Immigration Act.
• An “employment relationship” is established notwithstanding the fact that the actual contract is illegal in terms of the Immigration Act.
• As a result, a dismissed employee has full recourse to the CCMA and Labour Courts although they might be an illegal alien.

Precautionary measures for the employer:

• Employers are advised to conduct audits to identify employees who do not have valid SA citizenships or valid work permits.
• Employers are to be wary that there is a growing tendency by job seekers to submit fraudulent identification documentation, work permits and cv’s.
• Employers are to demand authentication, and record the right to validate job applications.

Disciplinary action: what recourse does the employer have if the work permit is not valid?

• Disciplinary action on the basis of misconduct should be taken against employees who have intentionally misled the employer to act on the mis-representation that the employer was in possession of a valid work permit.
• Disciplinary action on the grounds of incapacity would be the correct procedures to follow in the event that an employee is not in possession of a valid work permit. All statutory procedures in relation hereto must be observed by the acting employer.
• Employees should be required to submit valid identification papers and work permit within a specified time period, failing which the employment could be terminated on grounds of incapacity.
• Employers are reminded that properly constituted hearings will have to be convened for the above reasons and applicable procedures followed.
• Future employment and all new appointments should be strictly in compliance with the above.

Case Study:

A summary of the Labour Court judgment in Discovery Health v The CCMA and others JR 2877.06:

“the statutory definition of “employee” is not a sidecar to the motorcycle of the common law contract of employment, the commissioner had simply to ask, when applying the statutory definition of “employee” whether Lanzetta worked for Discovery Health and whether he received or was entitled to receive remuneration. The answer to both these questions is clearly yes. Therefore, for the purposes of determining the CCMA's jurisdiction to accept Lanzetta's referral of a dispute, Lanzetta was an employee and Discovery Health employed him” as per acting judge Andre van Niekerk in the recent labour court judgement in Discovery Health v The CCMA and others
JR 2877/06,

Acting judge Van Niekerk held that despite the fact that an employee did not have a valid work permit to work for an institution (Discovery Health) the applicant (Lanzetta) was an “employee” as defined in s 213 of the Labour Relations Act, act 66 of 1995; and entitled to refer a dispute concerning his unfair dismissal to the CCMA for arbitration. The CCMA consequently had jurisdiction to arbitrate the unfair dismissal dispute referred by a foreign national who worked for “another person” without a work permit issued to him under the Immigration Act.

Discovery Health took the subject CCMA arbitration ruling, on review, stating that the CCMA did not have jurisdiction to arbitrate the referral as only an “employee” as defined by s 213 of the Labour Relations Act, act 66 of 1995 (LRA) may claim the protections that the Act affords. Discovry Health argued that the statutory definition contemplates that an “employee” is a party to a valid contract of employment. Since the contract of employment concluded with the foreign national (Lanzetta) who was not in possession of a valid work permit was tainted with illegality, the contract was not valid and the foreigner was therefore not an “employee” as defined in the LRA. As Lanzetta was not an “employee” Discovery Health submitted, he could consequently not claim the right not to be unfairly dismissed, and the CCMA had no jurisdiction to arbitrate his dispute with Discovery Health.

In the subject arbitration ruling that the CCMA had the jurisdiction to determine the unfair dismissal dispute, as the applicant was an employee the commissioner (Mr. E.L.E. Myhill) relied in part on an article titled "Can Unauthorized Workers be recognised as Employees for the Purposes of the LRA?” by Craig Boschwhose view it is that the concept of an employment relationship was an appropriate vehicle to extend the protections of the LRA to what Bosch termed 'unauthorised workers'. The Commissioner concluded: "While it seems to me to be obvious that an employer cannot be required to continue the employment of an illegal foreigner or a foreigner whose specific work permit does not permit the employer to employ him that does not mean that the protections afforded to employees by the Act cannot apply to such foreigners prior to decisions being made in this regard."

On agreement, this ruling was taken for the subject reviewing application. (JR 2877/06)

The labour court concluded that the contract between Discovery Health and the applicant wasnot void, which required the Court to remit the matter to the CCMA for an arbitration hearing on the merits of the applicant’s claim.

The basis of the ruling a quo, that the jurisdiction existed because of “an employment relationship that transcends contract” as per commissioner Myhill was fully considered by the court.

The court referred also to The Constitutional Court’s ruling in South African National Defence Union v Minister of Defence 1999 (4) SA 469 (CC) defining the previously narrow term “worker” to extend beyond a contract of employment. In terms of this case members of the permanent military force were allowed in terms of this extension to form and join trade unions, irrespective of the Defence Act’s prohibition. The Defence Force argued that its members “enlisted” in the armed forces, and since the absence of a contract of employment as ordinarily understood, between members and the Defence Force, the members were not “workers” for the purpose of s 23 of the Constitution, and therefore not entitled to the provisions of the Constitution. The court concluded thatin many respects, the relationship between members of the permanent force and the Defence Force is akin to an employment relationship. The Constitutional Court held that “It would seem to follow that when s 23(2) speaks of “worker”, it should be interpreted to include members of the armed forces, even though the relationship they have with the Defence Force is unusual and not identical to an ordinary employment relationship”. The Constitutional Court further indicated that the protection against unfair labour practices established by s 23(1) of the Constitution is not dependent on a contract of employment. Protection extends potentially to other contracts, relationships and arrangements between persons.

The Labour Court in Discovery Health considered further provisions in the international law and the ILO and returned to national law. The court quoted Rumbles v Kwa- Bat Marketing (2003) 24 ILJ 1587 (LC) in which the Labour Court adopted the approach that a contractual relationship is not definitive as to whether a person was an “employee” as defined, and that the Court must examine the true nature of the relationship between the parties. In White v Pan Palladium SA (Ply) Ltd (2006) 27 ILJ 2721 (LC) the Court held that the definition of “employee” in s 213 of the LRA was not dependent solely on the conclusion of a contract recognized at common law as valid and enforceable. The Court stated that: “Someone who works for another, assists that other inhis business and receives remuneration may, under the statutory definition, qualify as an employee even if the parties inter se have not yet agreed on all the relevant terms of the agreement by which they wish to regulate their contractual relationship”

Caution

To ensure that Identity Documents, work permits (including the duration thereof) or asylum seeker permits are valid, obtain written proof from the Department of Home Affairs that the document is valid. The pervasiveness of fraudulent Identity Documents renders reliance solely on the possession of an ID document almost meaningless.