APPLICATION OF THE DOCTRINES OF RES JUDICATA AND LIS PENDENS November 2020

By REABETSWE MAMPANE , Published in Employment Law - Feature

The differences between the doctrines of res judicata and lis pendens may seem obvious at first glance. In the context of litigation, we understand the former to mean that an aggrieved party has the proverbial "one bite of the cherry"; in other words, once their matter has been litigated to its conclusion through the relevant forums, the matter cannot thereafter be litigated again. We understand lis pendens to mean that a matter is still being litigated and has not yet reached its conclusion. Again, the distinction appears to be straightforward; however, the Labour Appeal Court recently had to determine the distinction and application of these two stages of litigation in the case of Feni v CCMA [2020] 10 BLLR 1001 (LAC) (Feni case), and, in particular, the purpose of these doctrines in ensuring the expeditious resolution of disputes in labour litigation.

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In this matter, the aggrieved appellant had lodged two separate disputes regarding the same dismissal at the Commission for Conciliation, Mediation and Arbitration (CCMA), with the grounds of the first referral classifying the dismissal as an automatically unfair dismissal, but the grounds of the second referral classifying it as an unfair dismissal.

The ground on which the appellant was dismissed was that of incompatibility. Before the appellant's dismissal, he had received a letter from the respondent employer detailing the behaviour that led to the allegation of incompatibility against him, and the appellant was requested to make representations as to why he should not be dismissed on this ground.

With no representations in response to the employer's letter, a letter titled "Notice of Dismissal" was issued to the appellant. The letter stated that the appellant was "dismissed with immediate effect on the grounds of incompatibility" as he had failed to provide representations or indicate an intention to do so when requested.

Aggrieved by this letter, the appellant referred an automatically unfair dismissal dispute to the CCMA, on the basis of "making protected disclosures and for exercising my rights" (the First Referral). The conciliation of the First Referral remained unresolved, a certificate of non-resolution was issued, and the matter was referred to the Labour Court as it concerned an alleged automatic unfair dismissal based on making a protected disclosure.

The day after the certificate of non-resolution, in terms of the First Referral, was issued, the appellant again referred a dispute to the CCMA, stating that the dispute was a "dismissal" for "unknown reasons"; the facts of which were summarised as "dismissed when there was no hearing, no charges referred and no fault of my own" (the Second Referral).

At this stage, it is important to note that there was no disagreement or misunderstanding, and that both the First and Second Referrals were based on the same act of dismissal – the letter titled "Notice of Dismissal" issued by the respondent employer to the appellant. Therefore, the appellant had based both alleged unfair dismissal referrals on the same act of dismissal.

At the conciliation proceedings of the Second Referral, the respondent employer raised a point in limine, challenging the CCMA's jurisdiction to conciliate the Second Referral. It argued that because both the First and Second Referrals were based on the same dismissal, and as the CCMA had already issued a certificate of non-resolution in respect of the First Referral, in terms of which it was to be referred to the Labour Court as it concerned an alleged automatic unfair dismissal based on making a protected disclosure, the CCMA did not have the jurisdiction to conciliate the Second Referral.

The CCMA upheld the point in limine, stating that the disputes in the two referrals were the same in nature as they pertained to the appellant's dismissal. As a certificate of non-resolution had been issued in terms of the First Referral referring it to the Labour Court for adjudication, the CCMA was functus officio and, therefore, lacked the necessary jurisdiction to arbitrate the matter.

The appellant took the CCMA's award on review to the Labour Court where it was held that the CCMA did not have jurisdiction to arbitrate the Second Referral, and dismissed the appellant's application on the basis that it would be impermissible in law for the appellant to be afforded two separate hearings for the same dismissal. The appellant then approached the Labour Appeal Court to have the Labour Court's ruling overturned.

The Labour Appeal Court had to determine whether the doctrines of res judicata or lis pendens were applicable in this matter. In answering this question, Davis JA considered several sources, including the common law definitions of these doctrines and case law dealing with them.

The respondent employer argued that the doctrine of res judicata was applicable in respect of the Second Referral, as the dismissal on which it was based had already been dealt with by the CCMA when it conciliated the First Referral and issued the certificate of non-resolution stating that the matter be referred to the Labour Court. The respondent employer contended that this constituted a jurisdictional decision and could not be retaken.

Referring to the common law and case law of the Supreme Court of Appeal, Davis JA determined that the test for the doctrine of res judicata is whether the parties to the disputes are the same and whether the same issue arises, i.e. "whether an issue of fact or law was an essential element of the judgment on which reliance is placed".

Davis JA applied this test to the matter before it and held that a decision on jurisdiction does not constitute res judicata, as this was not the legal reason for the core dispute between the parties, which concerned the fairness of the appellant's dismissal.

The Labour Appeal Court then turned to the doctrine of lis pendens, and it was noted that both it and the doctrine of res judicata shared similarities; particularly, the underlying principle of the finality of litigation.

Quoting Wallis J in the case of Caesarstone Sdot-Yam v World of Marble and Granite 2000 CC and others 2013 (6) SA 499, Davis JA stated: "(the doctrine of lis pendens) is that there should be a limit to the extent to which the same issue is litigated between the same parties and that it is desirable that there be finality in litigation. The courts are also concerned to avoid a situation where different courts pronounce on the same issue with the risk they may reach different conclusions." Davis JA also added that a plea of lis pendens "involves an intervention by the court to stay one or other of the proceedings because it is prima facie vexatious to bring two actions in respect of the same subject matter".

On this basis, the Labour Appeal Court determined that the question that needed to be answered in this case was whether the doctrine of lis pendens should be invoked. To determine this, Davis JA considered in detail the Constitutional Court judgment of Association of Mine Workers and Construction Union and others v Ngululu Bulk Carriers (Pty) Ltd (in liquidation) and others 2020 (7) BCLR 779 (CC) (Ngululu case).

In the Ngululu case, the union referred an unfair dismissal dispute to a bargaining council following the dismissal of some 476 workers for their participation in an unprotected strike. A certificate of non-resolution was issued when the conciliation process was unsuccessful. Whilst the unfair dismissal dispute was being arbitrated, some of the dismissed employees were re-employed, none of whom were members of the union. The union referred another dispute to the bargaining council in terms of s186(1)(d) of the Labour Relations Act (66 of 1995) as amended (LRA), in terms of which it was argued that the respondent employer had undergone a selective reemployment process, and this constituted an unfair dismissal. The respondent employer unsuccessfully challenged the bargaining council's jurisdiction to arbitrate the alleged unfair dismissal dispute based on selective re-employment, and a certificate of non-resolution was issued in terms of that conciliation also.

On review, the respondent employer challenged the bargaining council's ruling that it had jurisdiction to arbitrate the second referral and the validity of the certificate of non-resolution. The union, meanwhile, referred an automatically unfair dismissal dispute to the Labour Court in terms of the first referral, contending that the workers were dismissed because of their affiliation with the union. In defending this, the respondent employer raised two points in limine: firstly, that the Labour Court did not have jurisdiction to adjudicate the matter as the union had reclassified it as an automatically unfair dismissal which had not been referred to the bargaining council for conciliation; and secondly, the doctrine of lis pendens, in that those same issues were already under review in an application pending before the Labour Court. The Labour Court upheld these points in limine.

At the Constitutional Court, the respondent employer's points in limine were rejected, and the Labour Court's judgment was overturned. The Constitutional Court held that the Labour Court had erred in characterising the automatically unfair dismissal dispute referred by the union to the Labour Court, which was based on the certificate of non-resolution from the bargaining council in the unfair dismissal dispute, as separate from that unfair dismissal dispute. Essentially, what is referred to as conciliation is the unfairness of the dismissal, not the reasons for the dismissal. Regarding the application of the lis pendens doctrine, the Constitutional Court stated that there were two separate causes of action in that case: one based on the unprotected strike and the other based on selective re-employment.

Referring back to the Feni case at hand, Davis JA reiterated that both the First and Second Referrals were based on the same dismissal and, therefore, one cause of action. The Feni case is, therefore, distinguishable from the Ngululu case on this basis.

Following the emphasis of the unfairness of the dismissal, rather than the reasons for the dismissal being referred for conciliation, the Labour Appeal Court in Feni highlighted the difficulties that would be presented should the Second Referral be allowed to be conciliated; particularly, that the aggrieved party would be in a position to continuously make separate referrals to the CCMA based on different reasons for the same dispute, even after previous referrals had already been unsuccessfully conciliated and were before the Labour Court pending determination, it is possible that a situation may arise where the dismissal would concurrently be arbitrated at the CCMA. This would not accord with the expeditious resolution of a single claim of dismissal – as is the policy of the LRA.

Davis JA further stated that the appellant is not prejudiced by the Second Referral not being conciliated at the CCMA as the LRA provides, in terms of s158(2), that the Labour Court may refer the matter to arbitration or, if the parties agree, act as an arbitrator and only make an order that a commissioner or arbitrator could make, in the event that it becomes apparent that a dispute ought to have been referred to arbitration. The appellant is, therefore, in a position to apply for the grounds of unfair dismissal, on which his Second Referral is based, to be included in his claim in terms of the First Referral at the Labour Court hearing, and the Labour Court could then decide to act as an arbitrator in respect of the Second Referral and determine the dispute accordingly.

The appeal was consequently dismissed with costs.

The Feni case highlights one of the most important underlying principles of labour litigation, namely the expeditious resolution of disputes, and how this is demonstrated through the application of the doctrines of res judicata and lis pendens. Labour litigators are reminded to consider thoroughly the grounds upon which dismissal disputes are based, and at which stage of the litigious process they intend to bring these grounds. Furthermore, it is important to remember that it is the unfairness of the dismissal, rather than the reasons for the dismissal that is referred for conciliation. Finally, labour litigators are reminded of the application of the doctrines of res judicata and lis pendens, namely that:

  • the matter involves the same parties and an issue of fact or law that is an essential element of the judgment on which reliance is placed for res judicata to apply; and
  • there must be one cause of action, being the same act of dismissal in allegedly unfair dismissal disputes, for lis pendens to apply.

Mampane is an Associate, Shepstone & Wylie.