The Supreme Court affirms the exclusive jurisdiction of the Labor Relations Authority

The Supreme Court recently issued an important judgment clarifying that the Labor Relations Authority (Authority) has exclusive jurisdiction over claims arising from a “work context “.

In so doing, it significantly altered the ambiguous distinctions previously applied by the High Court and the Court of Appeal in favor of the Authority’s exclusive jurisdiction.

The decision is informative for tort claims in an employment relationship and the appropriate forum for the resolution of disputes of any claims arising from employment.

It also indicates a broad definition of the “employment relationship problem”.

Background

The case concerned an employee (JVM) who resigned from his employer (TZB) and subsequently filed a personal grievance alleging intimidation and discrimination. As a result, FMV filed separate proceedings with the Authority and the High Court; the first was based on allegations of various violations of TZB’s obligations under the Labor Relations Act 2000 (the Act), and the latter in negligence for failing to provide a safe work environment.

Although the cause of action differed from proceeding to proceeding, FMV did attempt to argue the same case twice. At first instance, the High Court ruled that this was an abuse of process and that jurisdiction to hear the claim rested solely with the Authority.

The Court of Appeal broadly endorsed the High Court’s decision. The decision was then submitted to the Supreme Court for final decision.

Legal issue

The question before the Supreme Court was whether the Authority had exclusive jurisdiction to hear the claim. If this were the case, FMV would be barred from bringing an action in the High Court.

The answer depends on the interpretation of article 161 of the Law which gives the Authority exclusive competence to make decisions on “labor relations issues in general”. Section 161 lists examples of actions included in this jurisdiction, with a catch-all clause under Section 161 (1) (r) which gives the Authority jurisdiction over:

any other action (being an action which is not directly within the jurisdiction of the court) arising out of or related to the employment relationship or related to the interpretation of this law (other than an action based on a tort)

The part in brackets called “Exception in tort”

The questions before the Court were whether:

  • FMV’s claim was a “employment relationship problem»Giving exclusive competence to the Authority; and
  • If this is the case, if the request is nevertheless excluded from the jurisdiction of the Authority by the tort exception provided for in section 161 (1) (r) of the Act.

Meaning of “labor relationship problem”

The Court placed great emphasis on the legislative intent of Parliament when considering how the term “”employment relationship problemMust be interpreted.

On the recommendation of the select committee, Parliament intentionally changed the wording of the Employment Relations Bill 2000 to better capture the general policy intention that employment institutions have exclusive jurisdiction over employment matters.

In addition, the word “problemHas been used to denote a factual category, not a legal category such as property, tort or contract. Instead of “problem”Encompasses all of this in a class of its own. According to this interpretation, provided that “problem“Relates to the working relationship, and is in the context of the work, it will be a”employment relationship problemFor the purposes of the Act. In doing so, the Supreme Court distinguished and / or departed from earlier decisions of the High Court and the Court of Appeal which focused on traditional causes of action, the way a case was argued, an approach narrow contractual jurisdiction over employment and / or that the regulations resolving the dismissal from the job lay outside the employment relationship.

As FMV’s claim was based on a personal grievance, it fell squarely into the category of a labor relationship problem. The Authority therefore had exclusive jurisdiction to hear the request.

The next question was whether exclusive jurisdiction was nevertheless excluded by reason of the tort exception.

Application of the tort exception

The Court again examined the legislative intent of the Act and considered whether Parliament intended the tort exception to alter the Authority’s broad jurisdiction over labor relations matters.

The intention behind this was to keep costs to a minimum and to mitigate the obvious power disparity between the parties. Therefore, a general exclusion of tort liability would override this intention, especially given the frequency with which labor relations issues also give rise to tort claims.

The Court concluded that the exclusion of all tort claims from the exclusive jurisdiction of the Authority was too important a step to simply have been referred to in paragraph 161 (1) (r) without further clarification. . Therefore, the tort exception does not not apply in the present case and apply only to actions not listed in Article 161.

Simply put, if an action is listed in section 161 and is also a misdemeanor, the tort exception is not triggered and the Authority will have exclusive jurisdiction. The Supreme Court has suggested that parties should seek to narrow their problem down to one of the categories listed in section 161 rather than focusing on tort. In doing so, he suggested that most of the crimes that arise in the course of employment would generally fall within the framework of personal grievances.

Examples of the test applied

The Court usefully gives several examples of the jurisdictional test applied, which we have summarized below:

Situation

Jurisdiction

Reasoning

An employer accuses an employee of dishonesty and informs other employees of the accusation.

Authority

The employer’s comments take place in the context of the work.

Theft by an employee.

Authority

This is a violation of the duty of good faith that is part of the employment relationship.

However, separate criminal proceedings may also be initiated and do not affect the civil action.

A dispute over the quality of products purchased by an employee of the employer.

Other judicial body

The parties are in a working relationship, but this event occurs outside of the working context.

For example, the application of a trade restriction or a settlement agreement.

Authority

Compliance will generally be an employment relationship issue because the obligation was entered into during the employment relationship and in the work context.

Proceedings brought against an administrator by the employing company.

Authority and other judicial body

Allegations relating to the Director’s status as an employee fall within the competence of the Authority.

Other allegations may fall within the jurisdiction of the ordinary courts, for example for breach of duties of directors.

Future developments?

The Supreme Court admitted that there could still be cases of procedural uncertainty, and with that, additional expenses for the parties.

William Young J suggested, and the majority approved, the possibility of a default assignment of employment-related disputes to the Authority, with the power to refer appropriate cases to other judicial bodies. This would eliminate the need for parties to file proceedings in multiple institutions to preserve their position when jurisdiction is unclear.

It remains to be seen whether Parliament intends to take the Supreme Court’s recommendation into account. For now, this judgment shows that the Authority will retain exclusive jurisdiction for the vast majority of labor disputes with very limited exceptions.


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