Remote work raises law regime poser
• Labour regime ultimately not a function of geography but a question of jurisdiction
According to WFH Research (2023), in 2019 an average of 7% of paid workdays were worked remotely. This figure soared to 28% by September 2023. In that same year, a total of 13% of full-time employees were fully remote, 57% were full-time on-site and 30% were in a hybrid working arrangement. Although fulltime employees numbered slightly more than remote/ hybrid employees, the difference is negligible.
With the Covid-19 pandemic forcing companies to remote work to survive, employees had the freedom to work wherever they liked so long as they had a stable internet connection and a webcam. And many took advantage of this, temporarily relocating to places that they had always wanted to visit.
However, the question was if they were sitting on a beach in Portugal, working for their SA company, which labour law regime would govern them. The Portuguese? Or still the South African?
In a published LLM thesis, titled The Territoriality of South Africa’s Employment Legislation and the Jurisdiction of the Labour Court in Cross-Border Employment: A Comparative Analysis, Rinaldi (2021) makes the point that the manner in which cross-border employment relationships are conducted is incongruent with the dynamic way in which the nature of work is rapidly evolving. Ultimately, how these relationships are handled depends on the spatial scope of SA’s employment laws.
In other words, the handling of employment relationships, including the rights and obligations of employers and employees, is not determined by the geographical boundaries defined in South African employment laws. The jurisdictional reach of South African labour laws dictates how employment relationships are regulated and governed.
In addition, when dealing with matters such as this are the principles of private international law which would include, among others, the location of parties and the currency the employee is paid in.
WHAT PRECEDENT HAS BEEN SET DOWN?
In Parry v Astral Operations Ltd (LC190/04, C190/04) [2005] ZALC 15; [2005] 10 BLLR 989 (LC); [2005] JOL 14962 (LC); (2005) 26 ILJ 1479 (LC) (June 21 2005), a former employee (the respondent) sued their previous employer (the appellant) in the labour court (LC), claiming various amounts of money owing to him after his employment had ended. The employer also filed a counterclaim but later withdrew it.
The employee’s claims were categorised into four:
Claim A: The employee said he had been unfairly dismissed without the proper procedures being followed. He sought payment in the amount of R530,131.31 alleging breach of contract.
Claim B: The employee sought payment for the following: salary, notice pay, leave pay, relocation allowance and severance pay for specific periods. The employee claimed payment of these amounts under section 77(3) of the Basic Conditions of Employment Act (BCEA).
Claim C: The employee sought compensation equivalent to 12 months’ pay for unfair dismissal under the Labour Relations Act (LRA).
Claim D: This was an alternative claim to the claim under C, based on an alleged violation of fair labour practices according to the Constitution.
In deciding the matter, the court had to decide what the appropriate jurisdiction is. The court went into a lengthy exposition of the law and concluded that: “Applying the ‘officious bystander’ test there can be no doubt that the only law applicable to the employment relationship in the minds of the parties at the time of contracting was South African.
The court went further to indicate “If I am wrong in finding that the parties tacitly or impliedly exercised a choice of law, then the same factors that I have identified as indicators of an implied choice of law are also strong factors connecting the contract, the disputes, the parties and their rights to SA”.
The court concluded that the applicable law is South African and ordered the employer to pay the employee amounts in line with the claims brought.
After this the appellant made an application to the LC for leave to appeal to this court against some of the orders. The court granted leave to appeal against some of its orders and refused leave in respect of others. The respondent also sought leave to cross-appeal and leave was granted.
The employer argued that the LC did not have jurisdiction over the case because the location in which the employee was carrying out his duties was not in SA (his work location was in Malawi) and therefore the LRA and Basic Conditions of Employment Act (BCEA) did not apply. The employee disagreed, saying that these laws did apply and the LC had jurisdiction.
The matter was appealed to the Labour Appeal Court (LAC).
Counsel for the appellant submitted that the LC had no jurisdiction. In support of this he referred to the presumption in SA law that “(i)n the absence of an intention clearly expressed or to be inferred either from its language or from the object, subject-matter or history of the enactment … Parliament does not design its statutes to operate on its subjects beyond the territorial limits” of the country. In support hereof he referred to Maxwell: “Interpretation of Statutes”, 8th ed at p127 as approved in Bishop and others v Contrath & Another 1947(2) SA 800 (T) at 804.
The LAC in Astral Operations Ltd v Parry (CA 8/05) [2008] ZALAC 29; (2008) 29 ILJ 2668 (LAC) (September 4 2008), found that parties are able to choose whatever law as the law that must be applied in resolving a dispute between themselves arising out of some agreement between them. That law may be invoked by a court in a foreign jurisdiction to adjudicate a dispute. In this case a Malawian court could have applied South African law including the BCEA and the act in adjudicating the respondent’s claims against the appellant.
This being said, the court also found that some of the respondent’s claims were based on the contract of employment and not on the BCEA or the act. This would give rise to the argument that,
based on the provisions of sec 77(3) of the BCEA, the LC has the same jurisdiction as the high court in respect of any matter concerning a contract of employment and that, even if the BCEA and the act did not apply, the LC would have jurisdiction to deal with such claims in the same way as the high court would have had jurisdiction.
The LAC said that whether South African labour laws apply to a case depends on whether the employer’s business at which the employee works is in SA or not. Even if an employer has operations both inside and outside SA, what matters is where the specific part of the business the employee works for is located. If it is in SA, then South African labour laws apply. If it is not, then South African labour laws do not apply.
The final ruling handed down by the LAC was as follows:
● The appeal was upheld, ● The cross-appeal was dismissed;
● There was to be no order as to costs on appeal and cross-appeal. “(a) The LAC concluded it had no jurisdiction to entertain the applicant’s claims and there was no order of costs.”
This case clearly illustrates the intricacies one faces when having multijurisdictional businesses and/or services rendered across different jurisdictions. Principles of private international law must be taken into account in assessing which law is of application and locality often proves to be the factor that sways the courts.
MANY ADVANTAGE TOOK OF THIS, TEMPORARILY RELOCATING TO PLACES THAT THEY HAD ALWAYS WANTED TO VISIT
THIS CASE CLEARLY ILLUSTRATES THE INTRICACIES ONE FACES WHEN HAVING MULTIJURISDICTIONAL BUSINESSES
THE JURISDICTIONAL REACH OF SOUTH AFRICAN LABOUR LAWS DICTATES HOW EMPLOYMENT RELATIONSHIPS ARE REGULATED AND GOVERNED