Article 11/2021

Labour Edge

On what basis did the supreme court of appeal recently, in Theron v Premier of the Western Cape Province and Others (2019) 30 SALLR 192 (SCA), adopt the approach that, when interpreting contracts, statutory provisions, etc, a unitary exercise should be undertaken considering the text, context and purpose to achieve a sensible meaning?

  1. The supreme court of appeal referred to the principles dealing with the interpretation of contracts. It is clear that interpretation is a unitary exercise. It starts with the text to be interpreted, and considers it within the contract as a whole, and in context.  As put most pithily by Unterhalter AJ, in Betterbridge (Pty) Ltd v Masilo and Others NNO 2015 (2) SA 396 (GNP), at paragraph [8] (referring to the decision of this court in Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA)), ‘the interpretation of language, including statutory language, is a unitary endeavour requiring the consideration of text, context and purpose’.
  2. Most recently, the supreme court of appeal, in The City of Tshwane Metropolitan Municipality v Blair Atholl Homeowners Association 2019 (3) SA 398 (SCA), at paragraph [59], referred to the English approach set out by Lord Hodge in Wood v Capita Insurance Ltd [2017] UKSC 24, at paragraph 10:‘The court’s task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It has long been accepted that this is not a literalist exercise focused solely on a parsing of the wording of the particular clause but that the court must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning. In Prenn v Simmonds [1971] 1 WLR 1381 (1383H-1385D) and in Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 (997), Lord Wilberforce affirmed the potential relevance to the task of interpreting the parties’ contract of the factual background known to the parties at or before the date of the contract, excluding evidence of the prior negotiations.’
  3. Navsa ADP continued, in City of Tshwane, (at paragraph [61]):‘It is fair to say that this court has navigated away from a narrow peering at words in an agreement and has repeatedly stated that words in a document must not be considered in isolation. It has repeatedly been emphatic that a restrictive consideration of words without regard to context has to be avoided. It is also correct that the distinction between context and background circumstances has been jettisoned. This court, in Natal Joint Municipal Pension Fund v Endumeni Municipality … stated that the purpose of the provision being interpreted is also encompassed in the enquiry. The words have to be interpreted sensibly and not have an un-business-like result. These factors have to be considered holistically, akin to the unitary approach.’

With reference to Potgieter v Samancor Chrome Ltd t/a Tubatse Ferrochrome (2022) 33 SALLR 190 (LC) and Van Rensburg and Others v Department of Justice and Correctional Services and Others (2022) 33 SALLR 280 (LC); (2022) 43 ILJ 2110 (LC).

In what instances does the jurisdiction of the supreme court of appeal trump the jurisdiction of the labour appeal court?

Where an employer prematurely terminates a fixed-term contract and the employee challenges such termination as being unlawful and claims damages and not specific performance, the labour court has up to now ordered damages even though same is an unliquidated claim for damages.