The fact that an employee lives or works abroad does not, in and of itself, remove the jurisdiction of South African labour institutions. This is Cliffe Dekker Hofmeyr’s perspective on the significance of a recent Labour Court judgment that ruled on the jurisdiction of a bargaining council in a case involving a South African who worked in the United States.
Questions surrounding jurisdiction in labour disputes involving employees working abroad for domestic employers have become complex and critical as some businesses and entities move towards an increasingly globalised workforce, say legal experts in CDH’s employment law practice.
They say South African labour law has grappled with the issue of whether domestic dispute resolution forums, such as bargaining councils or the Commission for Conciliation, Mediation and Arbitration (CCMA), retain jurisdiction where an employee is domiciled or performs his duties abroad but remains employed by a South African entity or entered an employment agreement in South Africa or through a South African entity.
Background to the case
Reena Naidoo, the applicant, was in 1995 posted to the South African Permanent Mission to the United Nations in New York City. At the time of her recruitment, Naidoo was living in the US and was accordingly considered to be “locally recruited personnel” (LRP). As a result of her domicile, the Department of International Relations and Co-operation (DIRCO), the third respondent, contended her employment fell under the Foreign Service Administrative Code rather than the Public Service Act.
In September 2021, Naidoo received a termination letter from the Permanent Representative, because her position would be abolished.
Naidoo referred an unfair dismissal dispute to the General Public Service Sector Bargaining Council (GPSSBC), the second respondent, and sought reinstatement. Her application for referral was filed two days late, prompting an application for condonation.
DIRCO opposed the application on the ground of Naidoo’s status as an LRP. It argued the employment contracts of the LRP were concluded in terms of the local law and were regulated by the Foreign Service Code, asserting that New York law, not South African law, governed Naidoo’s employment.
The Commissioner ruled that the GPSSBC could not hear Naidoo’s case because she was employed by the Mission and not by a government department within the council’s jurisdiction.
Naidoo took her case to the Labour Court, filing an application to review and set aside the Commissioner’s ruling.
Establishing the jurisdiction of the CCMA
Judge Reynaud Daniels observed that the Commissioner suggested it was common cause that Naidoo worked for the Mission, which she viewed as distinct from a government department. Yet, he pointed out, “it was not common cause that the applicant was employed by the Mission. The applicant had always maintained that she was engaged by DIRCO, and the Mission was a branch of DIRCO.”
It was common cause that the Bargaining Council’s registered scope extends nationally and, subject to few exceptions, includes all government departments at both national level and provincial level. As a national department, DIRCO is specifically included in the scope of the council.
Judge Daniels clarified how jurisdictional disputes differ from typical arbitration reviews. Although the Constitutional Court’s “Sidumo test” asks whether a commissioner’s decision is reasonable, jurisdictional questions demand a stricter standard: correctness.
He applied the principles established by the Labour Appeal Court in South African Rugby Players Association and Others v SA Rugby (Pty) Ltd & Others: “The CCMA may not grant itself jurisdiction which it does not have. Nor may it deprive itself of jurisdiction by making a wrong finding that it lacks jurisdiction which it actually has.” The CCMA and bargaining councils, as statutory bodies, cannot independently determine their own jurisdiction with finality – that power is reserved for the Labour Court.
Critically, he relied on sections 3(1)(b), 3(3), and 5(2) of the Foreign Service Act, which positions DIRCO as the overseer of South Africa’s diplomatic network, including missions such as the one in New York. Section 5(2) requires the Permanent Representative to act under the authority of DIRCO’s Director-General, while section 3(2) defines Mission staff as part of the foreign service, employed by DIRCO or other national departments.
Judge Daniels observed: “At face value, section 3(2) seems to confirm that the staff of the Mission are employees of DIRCO.” This statutory link challenged the idea that the Mission operated on its own.
The evidence before the court reinforced this connection: the Mission runs on a DIRCO-set budget, follows DIRCO’s directives, and abolished Naidoo’s position at DIRCO’s behest. Her appointment by the Mission came through authority delegated by DIRCO, further tying her employment to the department.
The ‘undertaking’ test
South African law often wrestles with jurisdiction when employees work abroad. The court said the key to the “jurisdictional puzzle” lies in whether the foreign workplace is part of the same “undertaking” as the South African entity. If it is independent, local laws might apply; if it is inseparable, South African jurisdiction holds.
In this case, the Mission’s reliance on DIRCO – financially, operationally, and administratively –showed it was not a standalone entity but an extension of DIRCO. The court concluded it was “inextricably linked” to DIRCO, aligning Naidoo’s case with the GPSSBC’s jurisdiction.
DIRCO suggested Naidoo’s employment fell under New York law, but the court found no basis for this. The Foreign Service Administrative Code did not apply to her, nor did it show she chose local law. As the judgment stated, “There is no indication from the Administrative Code, or elsewhere, that the applicant chose to have her employment contract governed by local law.”
Accordingly, the Labour Court held that the Bargaining Council did possess jurisdiction to adjudicate Naidoo’s dispute. The matter was remitted to the Bargaining Council to be heard before a different commissioner for consideration of the condonation application.
Significance of the judgment
CDH said the judgment provides guidance on the jurisdiction of South African labour forums in cases involving employees working abroad. It confirms that the mere fact of international domicile or physical workplace location does not, in and of itself, oust the jurisdiction of South African labour institutions.
“Where the employment relationship remains rooted in a South African public entity – and where South African law governs the contract – domestic dispute resolution mechanisms retain jurisdiction. However, given the statutory limitations of the CCMA and bargaining councils, it remains the Labour Court’s prerogative to make a final ruling on jurisdiction.”
CDH said the decision provides greater legal certainty for employees and employers engaged in cross-border public service roles, ensuring access to justice irrespective of geographic posting.
