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2023
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[2023] ZAFSHC 73
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Centlec (SOC) Ltd v Masepole and Others (A52/2022) [2023] ZAFSHC 73 (16 March 2023)
IN THE HIGH COURT
OF SOUTH AFRICA,
FREE STATE
DIVISION, BLOEMFONTEIN
Appeal No.: A52/2022
Reportable: YES/NO
Of Interest to other
Judges: YES/NO
Circulate
to Magistrates: YES/NO
In the appeal between: -
CENTLEC
(SOC)
LTD
Appellant
and
LEHLOHONOLO
D.
MASEPOLE
1
st
Respondent
KABELO
MPHIRIME
2
nd
Respondent
MOOKHO
M.
MOLEHE
3
rd
Respondent
TSHOLOFELO
MATHE
4
th
Respondent
CORAM:
C. J.
MUSI, JP
et
P.J. LOUBSER, J
et
M.
E. MAHLANGU, AJ
HEARD
ON:
06 MARCH 2023
JUDGMENT
BY:
C. J. MUSI, JP
DELIVERED
ON:
16 MARCH 2023
[1]
This appeal, which is with the leave of the Supreme Court of Appeal,
is against a
judgment of a single judge of this Division. The
question for consideration is whether the contracts concluded between
the appellant
and the individual respondents are valid.
[2]
The facts are as follows. The appellant, Centlec SOC (Centlec), is
wholly owned by
Mangaung Metropolitan Municipality (Mangaung). The
four respondents are permanently employed by Centlec as Human
Resources Officers.
The respondents are at post level 7.
[3]
During 2012 the fourth respondent obtained a set of policies,
including the purported
Rapid Progression Policy (incorrect policy)
from Mr Mopedi, Mangaung’s Human Resources Employment Manager.
It is common cause
that some of Mangaung’s policies, including
its Rapid Progression Policy (RPP), automatically applied to Centlec
employees.
The purpose of the RPP is to progress eligible employees
in qualifying posts to higher levels over a shorter period than the
general
annual movement to different grades and salary notches,
subject to certain conditions.
[4]
The respondents approached Centlec’s erstwhile Human Resources
Manager, Mrs.
Mkhawane, and requested her to consider them for
promotion in terms of the incorrect policy. They were assessed in
January 2015
and found eligible to be promoted to Senior Human
Resources Officers, post level 5. They were subsequently subjected to
another
assessment, in terms of the same policy, by the then Manager:
Performance Management who recommended to the CEO that they be
promoted
to post level 5. They were promoted.
[5]
The respondents were promoted on 9 January 2015 and each concluded a
new employment
contract with Centlec as a result of their respective
promotions. They state that they were each properly considered,
recommended
and approved for Rapid Progression to the post level 5
positions.
[6]
During August 2015, Centlec served the fourth respondent with a
notice to appear at
a disciplinary hearing. She was, amongst others,
charged with falsifying or manipulating Mangaung’s authentic
RPP. On 22
September 2015, she was found not guilty at the hearing
because it could not be established that she falsified the document.
The
Chairman made the following finding:
‘
During
the deliberations, and based on the evidence of the witness from the
employer, it was undisputedly established that the authentic/original
Rapid Progression Policy that was obtained from the Mangaung
Metropolitan Municipality by the accused employee, had undoubtedly
been tampered with rendering it a falsification of the authentic
document.
It could however not be
established who was responsible for this tampering with the authentic
document. It transpired during the
hearing that tampered and
falsified replacement pages were utilised to effect the progression
in rank of the accused employee.’
[7]
Having found her not guilty the Chairperson, however, went further
and recommended
that her ‘erroneous promotion… as a
result of the tampered/falsified pages alluded to above be
administratively and
retrospectively reversed and corrected from the
date on which it was effected…’. On 9 October 2015,
seemingly as a
result of the Chairperson’s recommendation,
Centlec’s CEO informed the respondents that their promotions
would immediately
be reversed. He wrote:
‘
Kindly
take note that it has recently come to the attention of CENTLEC that
you were erroneously promoted and advanced from your
previous post of
Personnel Officer to Senior Personnel Officer. This occurred due to a
fabricated Rapid Progression Policy in terms
of which the
requirements for elevation from your post to that of Senior Personnel
Officer were incorrect and thus you effectively
do not qualify to be
promoted/advanced because you do not meet the inherent requirements
for advancement.
Consequently, you are
hereby notified that CENTLEC intends to rectify the error and in so
doing you are required to revert to your
post of Personnel Officer.
This will be applied effective immediately and retrospectively from
the date on which the erroneous
promotion/advancement was effected.
Please note that all
salaries, bonuses, allowances and any other benefits which you
erroneously received or accrued will be calculated
and deducted from
your salary over a period of months to be discussed with you.
To avoid doubt, it is
confirmed that with effect from the 23
rd
of September
2015, you will revert to your position of Personnel Officer on the
remuneration package for the incumbent occupying
this position.
Should you have any
queries, please do not to hesitate to contact writer.’
[8]
In order to give effect to its decision Centlec invited the
respondents to indicate
how much should be deducted from their
respective salaries. The first and second respondents refused the
invitation. The third
and fourth respondents accepted it. Centlec
proceeded to deduct R1000 per month from the first and second
respondents and R500
per month from the third and fourth respondents.
Dissatisfied with Centlec’s decision, which they view as a
demotion, they
referred a dispute to the South African Local
Government Bargaining Council (SALGBC). They claimed that Centlec
unilaterally changed
their employment contracts by revoking their
respective promotions. They subsequently withdrew the dispute at the
SALGBC and launched
these proceedings.
[9]
In the court
a quo
The respondents contended that the decision
to put them back at level 7 was an unlawful demotion and in breach of
their employment
contracts, because they did not consent to the
unilateral change of their employment conditions.
[10]
The appellant contended that the claim is bad in law because, at
common law, the employer could
unilaterally demote an employee. It
argued that the respondents have a right not to be unfairly demoted
and should therefore have
utilised the Labour Relations Act
[1]
and referred an unfair labour practice dispute to the SALGBC.
[2]
Additionally they contended that no valid agreement was reached
because both parties laboured under the common incorrect assumption
of a present fact – common mistake.
[11]
The court
a quo
found that the respondents did not admit that
the RPP was tampered with or falsified. It also found that there was
a complete lack
of evidence regarding: (i) whether the respondents
provided the incorrect policy; (ii) whether the recommendations were
based on
the wrong policy; (iii) whether Centlec would not have
promoted the respondents based on the correct policy and (iv) whether
the
contracts were not entered into due to Centlec’s own fault
by not establishing whether they are dealing with the correct policy.
[12]
Centlec’s case was based on a common mistake. The respondents
did not dispute that there
were two different policy documents. In
fact, their case was that the documents were ‘on the whole,
essentially the same’.
They stated that ‘we have formed
the view that the allegedly tampered or falsified excerpt of the
policy was more probably
an earlier version or draft of the excerpt
now put forward by the respondent (appellant) as the authentic
version of the policy’.
[13]
In its answering affidavit Centlec stated that:
‘
A disciplinary
enquiry chairperson came to the finding that there was simply no
evidence to link her (fourth respondent) to the
forged document. But
the fact that the document was forged is beyond doubt – and
even the fourth applicant (fourth respondent)
accepted this.’
[14]
The respondents did not file a replying affidavit to dispute what was
stated in the answering
affidavit. The assertion that the fourth
respondent accepted that the RPP was forged stands unchallenged.
[15]
The respondents attached both documents to their founding affidavit.
In the incorrect one it
is stated that a personnel officer with an
appropriate qualification
or equivalent
would qualify for rapid progression. In the authentic policy it is
stated that a personnel officer with an
appropriate B.Degree
or equivalent
would qualify for rapid progression. The
respondents adduced the testimony of the disciplinary enquiry and
attached the chairperson’s
findings. They did not take issue
with the finding that the document was tampered with or falsified.
They expressly took issue
with the recommendation that he made and
pointed out that the recommendations were ultra vires because he only
had to determine
the guilt or innocence of the fourth respondent.
[16]
It was the respondent’s case that the fourth respondent
obtained the incorrect policy from
Mr Mopedi and that their
assessments were done based on that document. In the letters, dated 9
October 2015, addressed to the respective
respondents Centlec clearly
states that the erroneous promotions were due to a fabricated Rapid
Progression Policy. There was no
dispute about the incorrect document
being used to promote the respondents.
[17]
The court
a
quo
found that Centlec’s error was not an iustus error. It was
careless by not checking whether the fourth respondent gave it
the
incorrect policy. Centlec’s case was not about a unilateral
mistake or a iustus error, but a common mistake. Questions
of
blameworthiness or negligence does not arise when common mistake is
at issue.
[3]
Centlec accepted
that the respondents genuinely believed that Mr Mopedi gave the
fourth respondent the authentic RPP.
[18]
In
Osman
v Standard Bank
it was said that ‘what is required in order to render a
contract void is a common assumption which turns out to be
unfounded’.
[4]
In Wilson
Bayly Holmes
[5]
, which was cited
with approval in
Van
Reenen Steel v Smith
,
[6]
the Court surveyed South African and a foreign decision and concluded
that:
‘
a common mistake
relating to the existence of a particular state of affairs will not
render the contract void unless it can be said
that the parties
expressly or tacitly agreed that the validity of the contract was
conditional upon the existence of that state
of affairs.’
[7]
[19]
In
Van
Reenen Steel v Smith
Harms JA stated that the correctness of the conclusion reached in
Wilson Bayly Holmes can be tested by asking whether Centlec would
have concluded the agreement had it known the true facts.
[8]
In
this case one can also ask whether the respondents would have
requested to be assessed had they known that the policy was
incorrect.
[20]
Centlec states that the agreement to promote the respondents was due
to the incorrect policy.
The is no reason to doubt this assertion. By
way of example, the second to fourth respondents do not have a
B.Degree or its equivalent.
The first respondent has a B.Degree. It
is unclear whether it is an appropriate degree. The correct policy
clearly states that
an appropriate B.Degree or its equivalent is a
requirement for Rapid Progression. The only sensible conclusion is
that the utilization
of the correct policy was a condition of the
promotions. Absent that, I find that there was a common mistake.
[21]
Centlec treated the contract as void based on the common mistake. In
Dickenson Motors, Schreinder
J.A. said:
‘
In Huddersfield
Banking Company Ltd. v Henry Lister & Son Ltd.,
1895 (2) Ch. 273
,
Lindley, L.J., states the proposition,
“
that an agreement
founded upon a common mistake, which mistake is impliedly treated as
a condition which must exist in order to
bring the agreement into
operation, can be set aside, formally if necessary, or treated as set
aside and as invalid without any
process or proceedings to do
so.”’
[9]
[22]
Schreinder J.A. opined that the above proposition expresses a
principle which is inherent in
all developed systems of law.
[10]
[23]
Centlec could therefore treat the ‘agreement’ as set
aside and as invalid based on
the common mistake that the correct
policy was used whereas an incorrect policy was used. It rectified an
invalid contract. The
correction had the effect of a demotion but it
was done lawfully. The consent of the respondents was not needed to
treat the ‘agreement’
as void and to effect the
correction. It is not necessary to decide whether, at common law, it
is a breach of an employee’s
contract if the employee is
demoted without consent.
[11]
[24]
This is a dispute between an employer and its employees, there is an
ongoing relationship between
the parties. I have decided not to make
an order as to costs.
[25]
I therefore make the following order:
1.
The appeal is upheld with no order as to costs.
2.
The order of the court
a quo
is set aside and replaced with
the following:
3.
The application is dismissed.
4.
No costs order is made.
C.J. MUSI, JP
I
concur.
P.J. LOUBSER, J
I
concur.
M.E. MAHLANGU, AJ
Appearances:
For the
Applicant:
Adv. S. Grobler SC
Instructed by Phatshoane
Henney Attorneys
Bloemfontein
For the
Respondents:
Adv. A.I.B. Lechwano
Instructed by Motaung
Attorneys
Bloemfontein
[1]
Act 66 of 1995.
[2]
(2)
“Unfair labour practice” means any unfair act or
omission that arises between an employer and an
employee
involving—
(
a
)
unfair conduct by the employer
relating to the promotion, demotion, probation (excluding
disputes
about dismissals for a reason relating to probation) or training
of an
employee
or relating to the provision of benefits to an
employee
; …
[3]
Dickson Motors (Pty) Ltd v Oberholzer
1952 (1) SA 443
(A) AT 450D-E.
[4]
Osman v Standard Bank National Credit Corporation Ltd-
1985 (2) SA
378
(CPD) at 386E.
[5]
Wilson Bayly Holmes (Pty) Ltd v Maeyane and Others 1995 (4) 340 (T).
[6]
Van Reenen Steel (Pty) Ltd v Smith NO and Another
2002 (4) SA 264
(SCA) para 13.
[7]
Supra at 344I.
[8]
Supra at para 13.
[9]
Supra at 450C-E.
[10]
Ibid 450E.
[11]
It has been decided that it is a breach of the employment contract
which gives rise to contractual remedies. See Monyela &
Others v
Bruce Jacobs t/a LV Construction [1998] 19 ILJ 75 (LC) at 82 E-G;
Nxele v Chief Deputy Commisioner, Corporate Services,
Department of
Correctional Services and Others (CA 9/06)
[2008] ZALAC 28
; (2008)
29 ILJ 2708 (LAC) para 89; Van Wyk v Albany Bakeries Limited (JR
1658/01)
[2003] ZALC 107
(26 Septenber 2003) para 13.