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# FEDLIFE ASSURANCE LIMITED v HENDRIK JOHANNES WOLFAARDT: In a matter involving the right to claim damages for repudiation of fixed-term employment contract.

Case Number: 450-1999 (SCA)

Date of Award: 18 September 2001

The Supreme Court of Appeal was asked to decide whether the enactment of the Labour Relations Act, and in particular, the protections against unfair dismissal in Chapter VIII of the Act, effectively excluded a right to claim damages for repudiation of fixed-term employment contract.

The employee in this instance had been engaged in terms of a fixed term contract for a period of 5 years. The employer terminated the contract, for reasons related to its operational requirements, part way through the period of the contract. The employee sued the employer in the High Court for the remuneration he would have earned for the balance of the contract. The employer argued that he should have referred the dispute to the Labour Court, which has exclusive jurisdiction in retrenchment disputes.

The employee’s strategy was aimed at recovering more than the 12 months compensation to which he would be entitled if he succeeded in an unfair dismissal claim- his contractual claim was worth considerably more.

The Court held that Chapter VIII of the LRA did not exclude a claim based on an alleged breach by an employer of a contract of employment, and that the High Court had jurisdiction to entertain the claim.

Readers should note that section 77(3) of the Basic Conditions of Employment Act confers concurrent jurisdiction on the Labour Court with the civil courts in relation to matters concerning contracts of employment.

There would be no bar to an employee lodging a contractual claim for damages in the Labour Court in circumstances where the employer is alleged to have breached the terms of the contract.

The more interesting, but undecided issue raised by the judgment is whether an employee can claim both contractual damages and compensation for an unfair dismissal. In principle, there seem to be no reason why this should not be possible. Section 195 of the LRA makes it clear that compensation for an unfair dismissal is payable in addition to any other amount to which an employee is entitled in terms of any law, collective agreement or contract of employment.

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Gary Watkins

Gary Watkins

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