Can a dismissed employee sue his or her employer not only for unfair dismissal, but for breach of contract; or more? That was the issue considered by the Supreme Court of Appeal in the recently decided appeal matter of Edward Mbuyiselo Makhanya and the University of Zululand.

Makhanya, a professor, sued the University of Zululand for unfair dismissal by referring an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). His claim failed at arbitration. He then reviewed the award. Before the matter was heard by the Labour Court, he instituted an action against the university in the High Court, in which he alleged that he was employed by the university under a contract of employment, which the university had purported to cancel. This conduct, he alleged, amounted to a breach of the contract’s terms. Despite this, he tendered his services to the university. The university did not pay him his remuneration and other money to which the contract entitled him. He asked the High Court to order the university to do so.

The university challenged the High Court’s jurisdiction, arguing that because Makhanya had elected to pursue a claim for unfair dismissal in the CCMA, the High Court had no power to consider his claim for enforcement of his contractual claim. In essence, what the university was saying was that, because he had elected to proceed in the CCMA and the Labour Court, the High Court had no jurisdiction to consider the claim. The High Court upheld the university’s argument. Makhanya appealed against the ruling to the Supreme Court of Appeal. The appeal court held that his claim in the CCMA was a claim that the “employers will therefore have to consider carefully whether or not to terminate an employee’s employment” should not be dismissed unfairly, which was not the same as the claim he had brought to the High Court, namely a claim for the enforcement of a right emanating from the common law for specific performance of a contract, in this case, an employment contract.

The appeal court disagreed with the High Court and ruled that an employee may pursue a claim for the infringement of his or her rights under the Labour Relations Act in the labour courts, but may also pursue a claim for infringement of common law contractual rights in the High Court and the Labour Court, and, depending on the circumstances, may pursue a claim for infringement of his or her constitutional rights in the labour and high courts.

Employers will therefore have to consider carefully whether or not to terminate an employee’s employment, not only taking intoaccount the provision of the Labour Relations Act, but the principles of the common law of contract. Employers may also need to review their contracts of employment to ensure they set out under what circumstances they can be cancelled and to what degree they regulate, contractually, the process to be followed when they are cancelled. A failure to comply with the terms of the contract when dismissing an employee could lead to a claim for breach of contract (and damages) even if the dismissal might be fair under the legislation.