Brief Summary

Labour — Public service — Employment contracts of foreign nationals — Applicants, Congolese medical doctors with refugee status, challenged the termination of their employment contracts by the Eastern Cape Department of Health, asserting that the contracts were valid despite the district manager's claim of lack of authority to appoint foreign nationals. The court found that the district manager acted ultra vires and declared the termination unlawful, setting aside the letters of appointment as invalid under the Public Service Act 103 of 1994, section 10(1)(a).

Comprehensive Summary

Summary of Judgment

1. Introduction

This judgment concerns an urgent application (followed by a final hearing) in which the applicants sought relief arising from the purported termination of their employment as medical officers in the Eastern Cape Department of Health. The matter proceeded as a main application by the applicants and a counter-application by the respondents, with the counter-application framed as a reactive legality challenge to the validity of the applicants’ appointments.

The parties were four applicants, Congolese nationals recognised as refugees in South Africa, employed as Medical Officer Grade 1 at Isilimela District Hospital in Port St Johns. The respondents were the Member of the Executive Council for Health, Eastern Cape Province, the Superintendent-General of the Department of Health, and the Chief Executive Officer of Isilimela District Hospital.

Procedurally, the applicants approached the High Court on 27 June 2023 on an urgent basis after receiving termination letters. That urgent appearance culminated in an interim order dated 23 June 2023 (with costs reserved), which permitted the applicants to remain employed month-to-month from 1 July 2023 pending final determination of the application and counter-application. The matter was then set down for final determination, with directions for amended notices and supplementary affidavits, and it was heard on 7 September 2023, with judgment delivered on 10 October 2023.

The general subject-matter of the dispute was the tenure and legality of employment of foreign nationals in the public service. In substance, the applicants contended they were permanent employees whose employment could not lawfully be terminated on the stated basis, while the respondents contended the purported “permanent” appointments were unlawful from inception because the applicants were neither South African citizens nor permanent residents, and because the appointing official acted beyond lawful authority.

2. Material Facts

The applicants were Congolese nationals who held degrees in Bachelor of Medicine and Surgery obtained in the Democratic Republic of Congo. It was common cause that they were not South African citizens and were not permanent residents. The court also accepted that, in terms of section 24(3)(a) of the Refugees Act 130 of 1998, each applicant held formal recognition of refugee status, with specified validity periods.

During June 2020, the Department of Health concluded employment arrangements with the applicants. The applicants represented themselves, and the Department was represented by the District Manager: OR Tambo (Ms Nomvume Ntshanga). The terms of employment were contained in letters of appointment, signed by the district manager and the applicants. The court treated the letters as embodying the relevant contracts and recorded that the letters’ foreword stated: “Your employment is of a permanent nature and is in terms of the Public Service Act, 1994.” The letters further regulated salary and benefits, disciplinary procedures, resignation notice, and leave. The court noted that the contracts were subject to the Public Service Act and departmental policies and procedures, and it was not seriously disputed that the contracts incorporated implied or tacit reference to section 17 of the Public Service Act concerning dismissal on specified grounds.

On 11 May 2023, the applicants received termination notices from the third respondent (the hospital CEO). These notices purported to terminate each applicant’s employment contract with effect from 30 June 2023 on the premise that the contracts were fixed-term contracts of three years, and they referred to the Policy on Recruitment of Foreign Health Professionals.

A further material fact relied upon by the court was the respondents’ account (through the Superintendent-General, Ms Rolene Wagner) concerning the PERSAL system. Ms Wagner stated that when the applicants’ particulars were loaded onto PERSAL, it was “detected” that the contracts were fixed-term and were loaded as such, and that the first page of the letters of appointment was altered during loading to reflect a contract/fixed-term nature rather than permanence. The court regarded this as significant and expressed concern about the respondents’ conduct, describing the alteration as suggestive of administrative self-help.

The court distinguished disputed from undisputed aspects concerning whether the applicants knew they were fixed-term employees. The respondents relied on “enquiry leave credits” printouts, allegedly provided to the applicants when they made leave enquiries, which reflected a contract termination date of 30 June 2023. The applicants did not directly engage those allegations. The court found it “unthinkable” that the applicants would not have accessed such printouts if they made leave enquiries, and it rejected the applicants’ denial as untenable and far-fetched on the papers.

The respondents’ counter-application (filed on 21 June 2023) sought to set aside the letters of appointment as unlawful, relying primarily on section 10(1)(a) of the Public Service Act and the National Policy on the Utilisation of Foreign Nationals to address Human Resources and Skills Needs in the Public Service. The court accepted that the applicants did not meet the statutory precondition for permanent appointment contemplated by section 10(1)(a), and that the policies contemplated that foreign nationals without permanent residence could only be employed temporarily and, in the health sector context, generally on fixed-term contracts not exceeding three years, subject to stated conditions (including possession of a valid refugee permit).

3. Legal Issues

The central legal questions the court was required to determine were whether the applicants’ purported permanent appointments in the public service were lawful and valid in light of section 10(1)(a) of the Public Service Act, 1994, given that they were neither citizens nor permanent residents, and whether the appointing official acted ultra vires in issuing letters of appointment purporting to create permanent employment.

A closely related issue was whether, assuming the appointments were unlawful, the respondents were entitled to raise a reactive legality review via counter-application to set aside the appointments, and what the consequences were of the delay (approximately three years) between the conclusion of the contracts and the initiation of the counter-application. This required the court to engage with the doctrine that legality reviews must be brought without undue delay, and with the discretionary component of whether delay should be overlooked.

A further issue was whether estoppel could operate against the respondents to prevent them from denying the validity of the appointments, given the applicants’ reliance on the letters of appointment and their contention that they were induced to believe they were permanent employees.

In character, the dispute primarily concerned the application of law to fact (the legal consequences of undisputed facts about the applicants’ status and the statutory framework), together with a value judgment inherent in assessing undue delay and the remedial consequences under legality review. The court also made credibility-type evaluations on the papers in rejecting the applicants’ denial regarding their awareness of a fixed-term termination date reflected on leave printouts.

4. Court’s Reasoning

The court began from section 10(1)(a) of the Public Service Act, which provides that no person may be appointed permanently to any post in a department unless they are a South African citizen or permanent resident. The court treated this statutory requirement, together with the relevant policies, as establishing a clear legal framework: permanent appointment is precluded in the absence of citizenship or permanent residence, while policy instruments contemplate temporary/fixed-term employment of foreign nationals in defined circumstances.

Against that framework, the court assessed the applicants’ contention that breach of the Public Service Act did not necessarily render the contracts invalid, and that the Act contained reporting and disciplinary mechanisms (including reliance on section 16A) rather than nullity. The applicants relied on interpretive dicta, in particular from Steenkamp and Others v Edcon Ltd 2016 (3) SA 252 (CC), to argue that statutory non-compliance does not invariably result in invalidity and that legislative purpose and remedies must be considered. The court accepted the correctness of the general approach articulated in Steenkamp but held it inapplicable on these facts, distinguishing Steenkamp as a matter concerning non-compliance with retrenchment procedure under the Labour Relations Act rather than the lawful conclusion of public service appointments in breach of a statutory qualification for permanent appointment.

The applicants also relied on Discovery Health Limited v Commission for Conciliation, Mediation and Arbitration and Others [2008] ZALC 24, advancing the argument that employment protection principles can apply even where there are legal defects. The court distinguished Discovery Health on the basis that, in that matter, the employee had a work permit at the commencement of employment and there was no suggestion of lack of authority in concluding the contract; accordingly, a valid contract was found to have existed at inception. By contrast, in the present case, the statutory conditions of section 10(1)(a) were absent at the time the contracts were concluded, and the applicants’ attempt to treat the dispute as one premised on a valid employment relationship was therefore rejected as unsustainable.

The court located the analysis within the doctrine of legality as an incident of the rule of law under the Constitution, emphasising that public power must be exercised within the limits of lawful authority and that conduct inconsistent with legality is invalid. It reasoned that concluding employment contracts in the public service without meeting the statutory preconditions was an exercise of public power that was reviewable and susceptible to being set aside. The court further held that an organ of state resisting an unlawful claim could bring a counter-application to review and set aside the impugned conduct, which it characterised as a permissible reactive legality challenge.

On delay, the court acknowledged that legality reviews are not subject to the statutory 180-day period applicable to PAJA reviews, but must be brought without undue delay, calculated from when the reviewing party became aware or reasonably ought to have become aware of the impugned action. The court applied the two-stage enquiry: first, whether the delay was unreasonable (a factual enquiry with a value judgment), and second, whether the court should nevertheless exercise its discretion to overlook the delay and entertain the review.

Although the court criticised the respondents for lack of disclosure about when and how the irregularity was detected, and although it described the alteration of the letters during PERSAL loading as suggestive of impermissible self-help, it nevertheless found that there was no adequate explanation for the delay, which inhibited the factual enquiry and rendered the delay undue. However, the court held that even where delay is unreasonable and not satisfactorily explained, a court is still compelled to declare unlawful conduct unlawful, because constitutional democracy requires organs of state and officials to act within lawful bounds. The court treated the nature of the illegality as a crucial factor in determining relief, indicating that legality concerns remain central despite delay.

The court then dealt with estoppel. It recorded the applicants’ reliance on inducement and prejudice, and the respondents’ contention that ordinary financial commitments do not constitute the kind of prejudice required. The respondents also contended that the applicants knew or ought to have known, given the incorporation of the Act and departmental policies, and given the leave printouts reflecting a termination date. The court rejected the applicants’ denial about access to the printouts as far-fetched. In any event, the court held that estoppel could not be used to perpetuate a state of affairs prohibited by law, citing authority that estoppel is inoperable where it would sustain illegality in the public interest. On the court’s approach, the applicants’ ineligibility for permanent appointment and the unlawfulness of the appointing official’s conduct meant estoppel could not validate what the statute prohibited.

Having reached the conclusion that the letters of appointment and contracts were unlawful, the court determined that the appropriate remedy was to uphold the counter-application and set aside the letters of appointment as unlawful and invalid, while dismissing the applicants’ main application seeking declaratory and reinstatement relief premised on permanence.

In its costs reasoning, the court separated three components. It held that the applicants were entitled to the costs of the urgent interim proceedings because they were substantially successful in obtaining interim relief, including costs of two counsel where employed. It applied the general rule that costs follow the result to the final outcome of the main application, awarding costs against the applicants. However, despite the respondents’ success in the counter-application, the court expressed displeasure at the respondents’ conduct and lack of transparency and therefore deprived them of a costs order on the counter-application, directing each party to pay their own costs in that component.

5. Outcome and Relief

The court dismissed the applicants’ main application and awarded costs against the applicants in relation to that application. The court nevertheless awarded the applicants their costs relating to the urgent proceedings on 23 June 2023, including the costs of two counsel where employed.

The respondents’ counter-application was upheld. The court declared that the letters of appointment issued by the district manager on 1 July 2020 were in breach of section 10(1)(a) of the Public Service Act, 1994 (Proclamation 103 of 1994) and in contravention of the National Policy on the Utilisation of Foreign Nationals to address Human Resources and Skills Needs in the Public Service. It further held that the district manager acted ultra vires in issuing the letters of appointment, and the letters were set aside as unlawful and invalid.

On costs in the counter-application, the court ordered that each party pay their own costs.

Cases Cited

Standard Bank v Estate Van Rhyn 1925 AD 266.

Pottie v Kotze 1954 (3) SA 719 (A).

Steenkamp and Others v Edcon Ltd 2016 (3) SA 252 (CC).

Discovery Health Limited v Commission for Conciliation, Mediation and Arbitration and Others [2008] ZALC 24.

Govan Mbeki Municipality v New Integrated Credit Solutions (Pty) Ltd [2021] ZASCA 34.

Altech Radio Holdings (Pty) Ltd & Others v Tshwane City [2020] ZASCA 122; 2021 (3) SA 25 (SCA).

Khumalo and Another v MEC for Education KwaZulu-Natal 2014 (5) SA 579 (CC).

State Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd 2018 (2) SA 23 (CC).

Department of Transport and Others v Tasima (Pty) Ltd 2017 (2) SA 622 (CC).

MEC for Health Eastern Cape and Another v Kirland Investments (Pty) Ltd t/a Eye & Laser Institute 2014 (3) SA 481 (CC).

Buffalo City Municipality v Asla Construction (Pty) Ltd [2019] ZACC 15.

Provincial Government of the Eastern Cape v Contractprops 25 [2001] 4 All SA 273 (A).

Legislation Cited

Refugees Act 130 of 1998.

Public Service Act, 1994 (Proclamation 103 of 1994).

Labour Relations Act 66 of 1995.

Constitution of the Republic of South Africa, 1996 (section 2).

Promotion of Administrative Justice Act 3 of 2000.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that the applicants, as foreign nationals who were neither South African citizens nor permanent residents, did not satisfy the statutory qualification for permanent appointment under section 10(1)(a) of the Public Service Act. The purported permanent letters of appointment issued by the district manager therefore constituted an unlawful exercise of public power and were reviewable and liable to be set aside under the principle of legality.

The court further held that the respondents were entitled to raise a reactive legality challenge by counter-application, and that although there was an undue delay and inadequate explanation, the court remained compelled to declare unlawful public conduct unlawful. The court also held that estoppel could not operate to validate or perpetuate a state of affairs prohibited by law.

LEGAL PRINCIPLES

The judgment applied the principle that, under section 10(1)(a) of the Public Service Act, permanent appointment in the public service is statutorily precluded unless the appointee is a South African citizen or permanent resident, and that departmental policies reinforce temporary/fixed-term employment of foreign nationals in the public service context.

It reaffirmed that the doctrine of legality (as an incident of the rule of law) requires public officials to act within lawful powers, and that public power exercised contrary to statute is inconsistent with the Constitution and invalid, rendering the conduct reviewable and susceptible to being set aside. It further accepted that an organ of state may bring a reactive legality review to resist the continuation of unlawful conduct, including by counter-application.

On delay, the judgment applied the principle that legality reviews must be instituted without undue delay, assessed through a two-stage enquiry (unreasonableness and discretion to overlook). The court endorsed that even where delay is undue and not properly explained, courts may still be compelled to declare unlawful conduct unlawful, while tailoring relief with regard to the nature of illegality and the circumstances.

On estoppel, the judgment applied the settled principle that estoppel cannot be used to perpetuate illegality or validate a state of affairs prohibited by law, particularly where doing so would conflict with public interest and statutory requirements governing the exercise of public power.

Ndjibu and Others v Member of the Executive Council for Health, Eastern Cape Province and Others (331/2023) [2023] ZAECBHC 33 (10 October 2023)