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[2010] ZAGPPHC 635
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Mpato v Cross Border Road Transport Agency (29767/2004) [2010] ZAGPPHC 635 (8 June 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT)
CASE NO.:
29767/2004
DATE: 8 JUNE 2010
NOT REPORTABLE
NOT OF INTEREST
TO OTHER JUDGES
In the matter
between:
GABRIEL
MPATO
.................................................................................................................
PLAINTIFF
And
THE
CROSS BORDER ROAD TRANSPORT
AGENCY
..............................................
DEFENDANT
JUDGMENT
WEBSTER J
1. The plaintiff
claims damages in the sum of R1 402 444.80 (One million four hundred
and two thousand four hundred and forty-four
rand and eighty cents)
in respect of loss of income, annual bonuses and accrued paid leave
suffered in consequence of an alleged
unlawful termination of his
contract of employment with the defendant which was "partly in
writing and partly oral".
2.
The defendant has raised i.a., two special pleas to the summons,
viz.,
(i)
that the plaintiff's claim had in terms of the provisions of section
11(d) read with
section 12
of the
Prescription Act no. 68 of 1969
become prescribed prior to the service of the summons on the
defendant; and, (ii) that the alleged oral contract of employment
relied upon contravened the provisions of section 36(5) of the Public
Finance Management Act no. 1 of 1999 ("the PFMA")
which
expressly stipulates that the employment contract of any accounting
officer must be in writing, which was not the position
in this case.
3.
According to the minute of the rule 37 conference, the parties agreed
that the defendant's special pleas be determined separately
in terms
of Rule 33(4) - (6) of the Uniform Rules of Court and that the other
issues be postponed
sine
die.
Such
an order was duly made.
4. Certain facts
were agreed upon by the parties for the purpose of adjudication of
the defendant's special pleas:
4.1 RE: PRESCIRPTION
(i) The date of
dismissal of the Plaintiff by the Defendant was 27 July 2001;
(ii) The dismissal
was referred to the CCMA in terms of
Section 191
of the
Labour
Relations Act 68 of 1995
to establish whether the dismissal was fair
or not;
(iii) The CCMA,
Commissioner Pearl Mbeka made an award in favour of the Plaintiff on
2 December 2002, reading as follows:
"I find that
the dismissal of the applicant w2as substantively and procedurally
unfair.
The applicant stated
that he did not seek reinstatement if he is entitled to relief in
this matter. I order that the applicant should
be compensated for
unfair dismissal as~ provided for in the Act. The respondent should
pay him an equivalent of 12 month's salary
viz, R400 000.00 (his
yearly salary) payable within fourteen days from the date of receipt
of this award.
This award should be
given effect within fourteen days from date of receipt of the award."
(iv) The Plaintiff's
summons was issued on 9 November 2004;
(v) Service of the
summons on the Defendant was effected on a date between 9 December
2004 and 17 December 2004.
4.2 FAILURE TO
COMPLY WITH PROVISIONS OF PFMA
(i) "9.1.1 That
the date of the Plaintiff's employment by the Defendant was 20
November 2000;"
(ii) "9.1.2
Annexure "A" to the Plaintiff's Particulars of Claim
constitutes the only written record of the terms
of the Plaintiff's
appointment by the Defendant and that no separate written employment
contract was drafted or signed by the parties
in regard thereto;"
(iii) "By
virtue of his appointment as Chief Executive Officer of the Defendant
he was the accounting officer of the Defendant
for the duration of
his employment by the Defendant."
Annexure
"A" referred to in 9.1.2
supra
is
a letter written by the defendant to the plaintiff: it is dated 20
November, 2000. It is addressed to the defendant and the author
was
the chairman of the defendant. It reads as follows:
"APPOINTMENT AS
CHIEF EXECUTIVE OFFICER
We have pleasure
confirming your appointment as the Chief Executive Officer of the
Cross-Border Road Transport Agency as from 20
November 2000. Your
remuneration will be R400 000.00 per annum on a "cost-to-agency"
basis.
All Basic Conditions
of Employment will apply unless otherwise stipulated in a separate
employment contract. This appointment may
be terminated after a 30
day notice period by either party.
On behalf of the
Board, we wish you well with this appointment and success with the
Agency."
5. PRESCRIPTION:
The defendant's
submission is that prescription commenced to run on 27 July, 2001
i.e. the date of his dismissal from employment.
It was submitted that
the plaintiff could not delay or postpone the commencement of
prescription by electing to exercise an election
whether to first
contest the fairness or otherwise of his dismissal in accordance with
the provisions of section 191 of the Labour
Relations Act no. 68 of
1995 ("the LRA") before electing to accept the termination
of his contract of employment and
instituting an action for damages.
It was submitted further that all that the plaintiff had to do was a
"simple unilateral
act" of informing the defendant that he
accepted such dismissal and institute action for damages. It was
submitted further
that nothing prevented the plaintiff from
contesting his dismissal in terms of the LRA whilst enforcing his
contractual right to
claim damages as both remedies were available to
him simultaneously as the proceedings before the CCMA were for the
decision of
the "fairness" of dismissal and not the
"lawfulness" or otherwise of the dismissal.
6. NON-COMPLIANCE
WITH PFMA
It
was common cause as set out in the Addendum to the Pre-Trial Minute
that having been appointed the defendant's Chief Executive
Officer
the plaintiff was also the Accounting Officer of the defendant in
terms of the provisions of section 36(2) of the PFMA,
as set out
above. It is further common cause that the only written record of the
plaintiff's appointment with the defendant is
the letter quoted under
paragraph 4.2
{supra).
It
was submitted that Annexure "A" falls foul of section 36(5)
which reads:
"(5) The
employment contract of an accounting officer for the department,
trading entity or constitutional institution must
be in writing and,
where possible, include performance standards. The provisions of
section 38 to 42, as may be appropriate, are
regarded as forming part
of each such contract"
7. It was emphasized
that Annexure "A" is clearly not 'a contract of employment
signed by the parties' but a letter merely
confirming the plaintiff's
appointment and accordingly that the provisions of section 36(5) had
not been complied with.
8.
Mr Mashoane, for the plaintiff, submitted that the plaintiff's
employment with the defendant was subject to the "Basic
Conditions of Employment in terms of the relevant Labour
Legislation..." i.a. the
Labour Relations Act. He
submitted that
the plaintiff had been entitled to contest his dismissal, as he did,
through the CCMA which he did. He submitted
that for as long as the
matter was pending before the CCMA the running of prescription was
suspended and only commenced to run
when the award was made on 2
December, 2002. He referred to the case of Minister of Finance and
Others v Gore NO 2007(1) All SA
Law Reports at page 219 (Par. 25) and
submitted that the award constituted "...the smoking gun"
which entitled the plaintiff
to institute the action for damages, as
was the position in this case. He submitted further that the comnran
law right to sue was
vested in
section 195
of the
Labour Relations
Act. He
rounded his argument that a finding of unlawfulness was a
sine qua non
in
the action instituted by the plaintiff and that until the finding by
the CCMA prescription did not run.
9. On the issue of
non-compliance with the provisions of the PFMA he submitted that for
the Act to apply the defendant had to persuade
the court that the
defendant was, in terms of section 36(5) "...a department,
trading entity or constitutional institution".
He argued that
the relevant statutory provision was
section 29
of the
Basic
Conditions of Employment Act no. 75 of 1997
which was adequately met
by the contents of Annexure "A" to the Particulars of
Claim.
10. I revert to the
issue of prescription. It was common cause between the parties that
the applicable period of prescription in
this case is three (3)
years. There is no dispute that the action was instituted after the
expiry of three (3) years of the plaintiff's
dismissal from
employment.
11.
There is not much to be said in this matter for the simple reason
that the basis of the plaintiff's claim is identical to that
in the
recent case of South African Maritime Safety Authority v Fafie
Fortune Mckenzie (017/09)
[2010] ZASCA 2
handed down on 15 February,
2010.
12. In that case, as
in the present one, it was submitted that "...the right in terms
of
section 185
of the LRA, taken together with the remedies for a
breach of that right contained in
section 194
and the procedures
prescribed for adjudication over unfair dismissals in
section 191
,
constitutes a complete statement of the extent of the rights in
respect of unfair dismissal. They are entirely statutory in
origin-and
content and give rise to no contractual obligation.
Dealing with this
issue, Wallis AJA as he then was, dealt with it as follows:
"[14]
The fundamental difference between rights arising from a contract and
rights arising from statute is that the former
depend upon the actual
or imputed consent of the parties whilst the latter are imposed by
the legislature in order to give effect
to social policies
underpinning the legislation. The nature of the latter rights may
vary. They may be conferred by way of mandatory
injunctions, such as
the provision in the Truck Acts
1
in England, which have been carried over into South African
legislation dealing with employment, in terms of which an employee's
wages must be paid in cash in the currency of the country.
2
Alternatively they may prohibit or regulate conduct that might
otherwise be permissible such as the making of deductions from an
employee's remuneration.
3
Rights to safe working conditions
4
and to compensation for injuries at work
5
are protective in nature. All of this has limited the extent to which
employers and employees are free to determine the terms of
their
relationship.
6
In most instances the employee cannot waive such statutory rights
because it would be contrary to public policy to permit such
a
waiver
7
although the parties to the contract can stipulate for more
favourable rights to vest in the employee.
[15]
A relevant feature of some legislation of this type is that it not
only confers rights but also provides a mechanism for the
enforcement
of those rights. Where that happens the question arises whether those
means are exclusive and provide the sole means
of enforcement or
whether it is open to the beneficiary of the right to use the
ordinary processes of the courts in order to enforce
them. Another
question that arises is whether the beneficiary of the right enjoys
not only the benefit of the right itself but
a/so a right to claim
damages if the right is infringed.
8
Our courts have frequently grappled with these questions and the
jurisprudence in that regard casts light upon the present problem.
[16] Where a
statute creates both a right and a means for enforcing that right the
position is that:
'We
must look at the provisions of the Act in question, its scope and its
object, and see whether it was intended when laying down
a special
remedy that that special remedy should exclude ordinary remedies. In
other words, we have no right to assume, merely
from the fact that a
special remedy is laid down in a statute as a remedy for a breach of
a right given under statute, that other
remedies are necessarily
excluded
.
i
If
on a proper interpretation of the statute in question the legislature
has confined a person harmed by a breach of the right conferred
therein to the statutory remedy then resort to other means of
enforcement is excluded.
ii
Accordingly both the scope of the right itself and the means of
enforcing that right are determined by the intention of the
legislature
as ascertained on a proper interpretation of the
legislation. It follows from the authorities mentioned in paragraph 7
of this
judgment that it is now clearly established that in order to
enforce the statutory right not to be unfairly dismissed as embodied
in section 185 of the LRA an injured party must have resort to the
tribunals established under the LRA, being either the CCMA or
in some
instances the Labour Court."
[Paragraphs 14-16 of
the judgment]
13.
Dealing with the question whether
"[20]...in
enacting in enacting section 185 of the LRA and the sections that
follow, intended not only to outlaw unfair dismissals
and provide
statutory remedies when they occur, but also intended to incorporate
into aii contracts of employment a term that they
could not be
terminated unfairly. That is necessarily the question inasmuch as Mr
McKenzie's contract of employment does not contain
any unusual
features that would serve to place it in an exceptional category
insofar as implication of this term from the LRA is
concerned."
14. Willis AJA went
on to say:
"[21] The
LRA was enacted in order to give effect to the labour rights now
guaranteed by section 24 of the Constitutiori' and
in particular the
right to fair labour practices. One of the most important rights
flowing from that constitutional guarantee is
the right not to be
unfairly dismissed embodied in sl85 of the LRA." Where an
employee claims that their dismissal is unfair,
whether substantively
or procedurally, or that they have been subjected to an unfair labour
practice the LRA establishes the mechanism
for resolving disputes
arising from that claim." In the case of an unfair dismissal it
also specifies the remedies that are
available to an aggrieved
employed
1
and, where that remedy consists of compensation,
establishes limits on the amount of such compensation." The
statutory mechanism
for resolving disputes over unfair dismissals is
by way of conciliation and if that fails arbitration before either
the CCMA or
the Labour Court.
[22] The
arrangements in these sections constitute a legislative scheme for
giving effect to the right not to be unfairly dismissed.
The scheme
is enacted as a package embodying the right itself together with
sections that explain what is a dismissal (sl86); identify
automatically unfair dismissals (sl87) and state the test for
determining when other dismissals are unfair (si 88); and prescribe
the procedures to be followed in relation to dismissals for
operational reasons (ssl89 and 189A). It then stipulates the
mechanism
for dealing with disputes over unfair dismissals (sl91);
deals with the onus of proof in proceedings concerning such disputes
(sl92)
and prescribes the remedies that flow from an unfair dismissal
(ssl93 and 194)."
15. In conclusion
Wallis AJA points out in para 58 that:
"[58] In the
present case the issue is whether Mr McKenzie's contract contains a
term implied by law as pleaded by him. That
is a question within this
Court's jurisdiction and in my view the answer is that it does not.
What creates difficulties is when
the merits of a claim are confused
with the jurisdiction to deal with it. Once it is shown that claims
such as the present one
or those in Chirwa and Gcaba are without
merit they will no longer be pursued in any court and one suspects
that the jurisdictional
quagmire will prove to be nothing more than a
muddy puddle that should have been avoided had the parties focussed
on the merits
of the claims rather than trying to avoid them by way
of jurisdictional challenges. In the present case there was nothing
wrong
in Mr McKenzie pursuing his claim in the High Court. However,
it is not a good claim and the only viable claim he could have
brought
based on those allegations had to be pursued, as indeed it
was, before the CCMA."
16. It is this
court's considered view that the plaintiff is clearly incorrect in
his submission that prescription only commenced
to run upon the
finding that the plaintiff's dismissal was substantially and
procedurally unfair i.e. on 2 December 2002. That
being so the point
of prescription was a good one and the special plea has to be upheld.
17. With regard to
the second special plea, Mr Mashoane's submission that section 36(5)
of PFMA does not apply to the defendant
is devoid of any merit. The
fundamental question is not whether the defendant is "...a
department, trading entity or constitutional
institution", for
the provisions of this section to apply.
18. The defendant
was created in accordance with the Cross-Border Road Transport Agency
Act no. 4 of 1998 (the Road Transport Agency
Act) i.e. prior to the
enactment of PFMA. Its purpose, according to the pre-amble is:
"...
To provide for
co-operative and co-ordinated provision of advice, regulation,
facilitation and law enforcement in respect of cross-border
road
transport by the public and private sectors; to that end, to provide
for the establishment of the Cross-Border Road Transport
Agency; to
repeal certain laws; and to provide for matters connected therewith.
Preamble
SINCE there is a
need to improve the unimpeded flow by road of freight and passengers
in the region, to liberalise market access
progressively in respect
of cross-border freight road transport, to introduce regulated
competition in respect of cross-border
passenger road transport and
to reduce operational constraints for the cross-border road transport
industry as a whole;
AND SINCE there
is a need to enhance and strengthen the capacity of the public sector
in support of its strategic planning, enabling
and monitoring
functions;
AND
SINCE there is a commitment to empower the cross-border road
transport industry to maximise business
op
portunities
and to regulate themselves "incrementally to improve safety,
security, reliability, quality and efficiency of services;”
19.
According to the definition in the PFMA
"'trading
entity'
means
an entity operating within the administration of a department for the
provision of sale of goods or services, and established-
(a) in the case of a
national department, with the approval of the National Treasury; or
(b) in the case of a
provincial department, with the approval of the relevant provincial
treasury acting within a prescribed framework;"
20.
There can be no doubt that the defendant provides a service on a
national basis, as stipulated in the definition of trading
entity
{supra).
21. In terms of
section 14 of the Cross-Border Road Transport Agency Act the Chief
Executive Officer is appointed by the Minister
of Transport (section
14(l)(a)).
22. The Chief
Executive Officer, in accordance with the provisions of section 14(b)
of the Road Transport Agency Act "...holds
office on such terms
and conditions including those relating to remuneration and
allowances as the Minister, after considering
the recommendations of
the Board and in consultation with the Minister of Finance, may
determine in writing."
23. The plaintiff's
appointment as Chief Executive Officer must be in writing and so must
his appointment in terms of section 36(5)
in his capacity as the
"Amounting Officer". Annexure "A" cannot, by any
stretch of imagination be deemed to
set out the "...terms and
conditions..." as envisaged in the sections referred to above.
24.
Any doubt that may linger with regard to the applicability of section
36(5) of PFMA is dispelled by the fact that the respondent
is
expressly mentioned in Schedule 3 of PFMA as being a "public
entity".
25. The obvious
consequence of the aforesaid is that even if the first point of
prescription had not been upheld the plaintiff would
have failed to
surmount the second point and the defendant would have been entitled
to the dismissal of the action on this point
alone.
26. The result
therefore is that the special pleas raised by the defendant are
clearly good in law.
27.
The following order
is accordingly granted:
1. The special
pleas raised by the defendant are upheld.
2. The
plaintiff's action is dismissed with costs.
G.
WEBSTER
JUDGE
IN THE HIGH COURT
1
The Truck Act 1831 ; Truck Amendment Act 1887 and the Truck Act
1896.
2
Now
embodied in
section 32(1)
of the
Basic Conditions of Employment Act
75 of 1997
. Hereafter the BCEA
3
Section
34
of the BCEA.
4
Under
the
Occupational Health and Safety Act 85 of 1993
.
5
Under the Compensation for Occupational Injuries and Diseases Act
130 of 1993
6
R
v
Canqan
and others
1956
(3) SA 366
(E) at 367H-368A:
National
Automobile and Allied Workers Union (now known as National Union of
Metalworkers of South Africa)
v
Borg-
Warner SA (Pty) Ltd
1994
(3) SA I 5 (A) at 23B-D.
7
Ritch
and Bhyat
v
Union
Government (Minister of Justice)
1912
AD 719
at 734-5;
South
African Cooperative Citrus Exchange Ltd
v
Director-General:
Trade and Industry and another
[1997] ZASCA 6
;
1997
(3) SA 236
(SCA) at 242H-243 D and 244D-E
8
The
right to an interdict is generally recognised.
Madrassa
Anjuman Islamia
v
Johannesburg
Municipality
1917
AD 718.
i
Coetzee
v
Fick
and another
1926
T.P.D. 213
at 216 approved in
Da
Silva and another
v
Coutinho
1971
(3) SA 123
(A) at 135.
ii
Callinicos
v
Burman
1963
(1) SA 489
(A) at 497H - 498A