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[2011] ZASCA 132
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Charlton v Parliament of the Republic of South Africa (680/2010) [2011] ZASCA 132; 2012 (1) SA 472 (SCA); [2011] 12 BLLR 1143 (SCA); (2011) 32 ILJ 2419 (SCA) (16 September 2011)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 680/2010
In the matter between:
HARRY MATHEW CHARLTON
….............................................................
A
ppellant
and
PARLIAMENT OF THE REPUBLIC OF
SOUTH AFRICA
..........................................................................................
Respondent
Neutral Citation:
Charlton
v Parliament of the Republic of South Africa
(680/2010)
[2011] ZASCA 132
(16
September 2011)
Coram:
BRAND, VAN HEERDEN,
MAYA, MHLANTLA JJA et MEER AJA
Heard:
23 August 2011
Delivered:
16 September 2011
Summary
:
Dismissal of
exception — principles governing appealability restated —
same
principles apply in Labour Court and Labour Appeal Court.
ORDER
On appeal from:
Labour
Appeal Court (Patel JA, Waglay ADJP and Tlaletsi AJA
sitting
as a court of appeal):
(a) The appeal is upheld with costs, including the costs of two
counsel, where applicable.
(b) The order of the Labour Appeal Court is set aside and replaced
with the following:
‘The appeal is struck from the roll with costs, including the
costs of two counsel.’
JUDGMENT
VAN HEERDEN
JA (BRAND, MAYA AND MHLANTLA JJA AND MEER AJA concurring)
This
appeal relates to several exceptions raised by the respondent,
Parliament of the Republic of South Africa (Parliament), to
the
appellant’s (Charlton’s) claim for unfair dismissal
under the Labour Relations Act 66 of 1995 (LRA). Charlton
was the
Chief Financial Officer to Parliament from 1 May 2002 (initially on
a three-year fixed term contract, permanently appointed
from 1 March
2004). He held this position until his purported dismissal on 13
January 2006, ostensibly on the grounds of work-related
misconduct.
He however insists that he was dismissed for being a whistleblower
in relation to fraud perpetrated by Members of
Parliament (Members)
in respect of claims for their travel benefits. His allegations
pertain to what has nationally and popularly
become known as the
‘Travelgate scandal’. These allegations, and the
background that follows, appear from his statement
of claim which,
by the nature of exception proceedings, we must accept as true.
In
about December 2002, Charlton informed the incumbent Secretary to
Parliament, Mr Mfenyana (Mfenyana), of the discovery within
the
Financial Management Office of an alleged improper travel benefits
claim by a Member of Parliament. With Mfenyana’s
approval,
Charlton investigated the matter further. In April 2003, Charlton
submitted a written report to Parliament (represented
by Mfenyana
and the Senior Presiding Officers of Parliament, namely the Speaker
of the National Assembly and the Chairperson
of the National Council
of Provinces) that there was prima facie evidence of fraud having
been perpetrated on Parliament by,
inter alia, certain travel
agents, in relation to travel entitlements of Members.
In the
course of Charlton’s investigations (carried out on the
authority of the above-mentioned Presiding Officers and including
a
forensic investigation by PricewaterhouseCoopers), Charlton formed
the view that the said fraud had been perpetrated on a very
large
scale, that Members had benefitted improperly from and/or were
implicated in the fraud and that a member of staff in the
Parliamentary Service was also implicated.
Charlton
remained actively involved in pursuing the matter and made a series
of detailed written and oral reports to the Secretary
of Parliament
and the Senior Presiding Officers, informing them of the processes
followed and the emerging details of the travel
fraud. The list of
current and past Members in respect of whom such information was
disclosed to Parliament numbered in the hundreds.
The South African
Police Service, the Scorpions and the National Prosecuting Authority
were also involved in the investigation.
According
to Charlton, during the period up to April 2004, he enjoyed the
support of Parliament in his pursuit and investigation
of the travel
fraud. As at 31 March 2004, the investigation had identified fraud
on Parliament in the amount of R13 million perpetrated
over a
15-month period.
After
the April 2004 elections, the previous Senior Presiding Officers
departed and Mr Dingani (Dingani) replaced Mfenyana as
Secretary.
According to Charlton, from the time of Dingani’s appointment,
Parliament’s support for Charlton and for
the investigation
and pursuit of the travel fraud declined substantially. So, for
example, Charlton reported to Dingani that
another dimension to the
travel fraud (referred to by Charlton as ‘Type 3 fraud’)
had been identified, which would
involve an increase in Parliament’s
total likely claim from R16.5 million to R35.7 million, and which
would implicate prominent
current and former Members and/or office
bearers of Parliament. Charlton also furnished Dingani with detailed
lists of the Members
concerned. According to Charlton, Dingani
effectively frustrated the conduct of a proper investigation into
this Type 3 fraud,
inter alia, by not making the external resources
required for such investigation available to him.
A
further example (amongst many) given by Charlton was to the effect
that Dingani was allegedly placed in possession of prima
facie
evidence that certain Ministers and another high-ranking official
had improperly benefitted from travel facilities, but
failed to
cause such information to be further investigated, recommending only
that the persons involved repay the applicable
amounts.
In
summary, Charlton alleged that, from August 2004 to the date of his
dismissal on 13 January 2006, Parliament failed to take
appropriate
action in regard to the finalisation of the travel fraud issue. The
allocated budget and resources were inadequate
given the number of
transactions, and the number of Members potentially involved (the
names of whom had been furnished to Parliament
by Charlton) exceeded
by far the number charged or convicted.
On 18
November 2005, Parliament suspended Charlton from his employment
without any prior hearing. A disciplinary enquiry into
the various
charges of alleged misconduct against him was conducted between 12
and 21 December 2005. The disciplinary enquiry
recommended his
dismissal. On 13 January 2006, Dingani accepted this recommendation
and summarily dismissed Charlton.
Charlton challenged his dismissal. In his amended statement of claim
in the Labour Court (LC), he relied on five causes of action:
i) his dismissal was automatically unfair in terms of s 187(1)(
h)
of the LRA because he was dismissed for having made protected
disclosures as envisaged in the Protected Disclosures Act 26 of 2000
(PDA) – ‘the first cause of action’;
ii) his dismissal was automatically unfair in terms of the
introductory portion of s 187(1) of the LRA, read with s 5(2)
(c)
(v)
of the LRA, because he was dismissed for having made disclosures that
he was lawfully entitled or required to make in his capacity
as Chief
Financial Officer – ‘the second cause of action’;
iii) his dismissal was automatically unfair in terms of s 187(1)
(f)
of the LRA because he was dismissed for having made disclosures in
circumstances where his decision to make such disclosures was
a
manifestation of conscience – ‘the third cause of
action’;
iv) his dismissal was substantively unfair in terms of s
188(1)
(a)
(i), the charges against him being baseless –
‘the fourth cause of action’; and
v) his
dismissal was procedurally unfair in terms of s 188(1)
(b)
–
‘the fifth cause of action’.
In the
LC, Parliament excepted to Charlton’s statement of claim on
six grounds (identified as grounds A to F). Grounds B
to E were,
however, not pursued at the LC hearing, leaving only exceptions A
and F to be dealt with. Exception A related to the
first cause of
action, while exception F related to the LC’s alleged lack of
jurisdiction to entertain the fourth and fifth
causes of action. The
LC dismissed both exceptions in June 2007, but Parliament was
granted leave to appeal to the Labour Appeal
Court (LAC). In July
2010, the LAC upheld the exceptions previously dismissed by the LC
and made orders staying ‘the proceedings’
under s
158(2)
(a)
of the LRA
1
and referring ‘the dispute’ to the Commission for
Conciliation, Mediation and Arbitration (CCMA) for arbitration.
Hence this appeal by Charlton, which serves before us with special
leave granted by this court.
Exception A
The
basis for this exception taken by Parliament and persisted in before
us is as follows. Parliament submitted that, in order
to enjoy the
protection of the PDA, the disclosure by the employee concerned had
to relate to conduct by his or her employer
or by a co-employee. In
terms of s 187(1)
(h)
of the LRA, a dismissal is automatically
unfair if the reason for the dismissal is ‘a contravention of
the [PDA], by the
employer, on account of an employee having made a
protected disclosure defined in that Act’. Exception A was to
the effect
that Members are neither ‘employees’ nor
‘employers’ for purposes of the PDA; that Charlton did
not enjoy
protection under the PDA when he made disclosures about
their conduct; that his dismissal was accordingly not automatically
unfair
in terms of s 187(1)
(h)
of the LRA and hence that the
first claim disclosed no cause of action.
In
dealing with the exception, the LC held that Members are both
employees and employers for purposes of the PDA. It ruled that
the
disclosures made by Charlton thus constituted protected disclosures
under the PDA and that exception A fell to be dismissed.
2
As stated above, Parliament appealed to the LAC against the
dismissal of the exception. The LAC entertained the appeal. As
regards the appealability of the dismissal of the exception, the
LAC, relying on
Zweni v Minister of Law and Order
1993 (1) SA
523
(A), held as follows:
‘
Clearly the first exception
raised by Parliament does not go to jurisdiction but is instead an
attack on the respondent’s
[Charlton’s] cause of action .
. . The court
a quo
in
a
reasoned
judgment made a final
determination that Parliamentarians are both employers and employees
for the purpose of the PDA. This decision
is final in effect and not
susceptible to alteration by the court a quo and at least finally
disposes of this problem and will
not be revisited by the court a quo
. . . To that extent, this decision is appealable.’
3
The approach by the LAC is
fallacious. It failed to appreciate that it is established law that
the dismissal of an exception is
generally
not
appealable. The qualification to that general principle relates to
exceptions going to jurisdiction.
4
Section
166(1) of the LRA provides that any party to proceedings before the
LC may apply for leave to appeal to the LAC ‘against
any final
judgment or final order of the Labour Court’. There is no
specific provision dealing with exceptions in the Labour
Court
Rules, hence Rule 11(3) dictates that ‘the court may adopt any
procedure that it deems appropriate in the circumstances’.
It
is established practice that exceptions are dealt with in the Labour
Court and the Labour Appeal Court in the same manner
as in the High
Court.
In
terms of s 20(1) of the Supreme Court Act 59 of 1959, only
‘judgments’ and ‘orders’ (and not merely
‘rulings’) are appealable. In
Zweni
v Minister of Law and Order,
5
the test for what is meant by a ‘judgment’ or ‘order’
was expressed as follows: ‘first, the decision
must be final
in effect and not susceptible of alteration by the Court of first
instance; second, it must be definitive of the
rights of the
parties; and third, it must have the effect of disposing of at least
a substantial portion of the relief claimed
in the main
proceedings’.
Flowing from the first of
the three
Zweni
requirements,
it has been consistently held that, except in very limited
circumstances, the dismissal of an exception is not appealable.
This
is because the order is not final in effect: there is nothing to
prevent the aggrieved party from raising and arguing the
same issue
at the trial. In the words of Innes CJ in
Blaauwbosch
Diamonds Ltd v Union Government (Minister of Finance)
1915
AD 599
at 601:
‘
[O]ne
would say that an order dismissing an exception is not the final word
in the suit on that point that it may always be repaired
at the final
stage. All the Court does is to refuse to set aside the declaration;
the case proceeds; there is nothing to prevent
the same law points
being re-argued at the trial; and though the Court is hardly likely
to change its mind there is no legal obstacle
to its doing so upon a
consideration of fresh argument and further authority.’
More recently, in
Maize Board v Tiger Oats Ltd & others
2002 (5) SA 365
(SCA) para 14, this court (per Streicher JA)
expressed the principle thus:
‘
In
the light of this Court’s interpretation of s 20, the decisions
in
Blaauwbosch
,
Wellington
6
and
Kett
,
7
and the well-established principle that this Court will not readily
depart from its previous decisions, it now has to be accepted
that a
dismissal of an exception (save an exception to the jurisdiction of
the Court), presented and argued as nothing other than
an exception,
does not finally dispose of the issue raised by the exception and is
not appealable. Such acceptance would on the
present state of the law
and jurisprudence of this Court create certainty and accordingly be
in the best interests of litigating
parties.’
It
follows that leave to appeal against the dismissal of exception A
should not have been given by the LC and the LAC ought simply
to
have struck Parliament’s appeal in respect of exception A from
the roll. In this regard, Charlton’s appeal must
succeed.
Exception F
This
exception was to the effect that the fourth and fifth causes of
action (ie the
ordinary
unfair dismissal claims, as opposed
to the
automatically
unfair dismissal claims) had to be
resolved through arbitration in the CCMA and not through
adjudication in the LC.
Accordingly,
so the contention went, the LC lacked jurisdiction to entertain the
matter. As indicated above, as an exception to
the
Blaauwbosch
Diamonds
principle, appeals against the dismissal of such
exceptions are allowed.
8
The reason is fairly obvious – if the court lacks
jurisdiction, it cannot legitimately adjudicate the exception. In
this
case, however, in dealing with exception F, the LC did
not
in fact decide on the issue of jurisdiction. It held that:
‘
[I]f the dispute raises two
different reasons for the dismissal, the court can proceed with the
adjudication. What it would be required
to do is to find first if the
automatically unfair dismissal has been proved. If there is evidence
to establish an automatic unfair
dismissal, the question of
jurisdiction would no longer arise. If, on the other hand, the court
finds that there is no evidence
to establish an automatically unfair
dismissal, the question of the jurisdiction will still remain in
relation to the allegation
of unfair dismissal . . . .
This
court cannot simply dismiss the dispute based on unfair dismissal at
this stage when it is coupled with the allegation that
the same
dismissal is automatically unfair. The true reason has to be
established by evidence. It is only after hearing the evidence
that
the court would be in a better position to decide if the unfair
dismissal has to be referred to arbitration.’
9
The LC
in effect took the approach that s 158(2)
(a)
10
of the LRA should be applied as and when the need arose. It made no
decision at all on the issue of jurisdiction. It thus in
effect
declined to determine the issue at that stage. No doubt an appeal
will avail a party aggrieved by the decision, were it
still to be a
live issue at that time, once the matter has been finally
determined. The LAC thus clearly erred in holding that
‘the
[LC] in dismissing the exception made a finding that it had
jurisdiction. Hearing of evidence would make no difference
to this
finding.’
11
The LC made no such finding. Moreover, the hearing of evidence would
clearly make a difference, as from this would emerge whether
the
jurisdictional point on the ordinary unfair dismissal dispute would
arise at all. It follows that the raising of an exception
in this
regard was misconceived.
As
there was no final judgment or order on exception F, no appeal could
arise in relation thereto. Here too, the LAC ought to
have struck
the matter from the roll.
Order
In the light of the above, the following order is made:
(a) The appeal is upheld with costs, including the costs of two
counsel, where applicable.
(b) The order of the Labour Appeal Court is set aside and replaced
with the following:
‘
The appeal is struck from the roll with
costs, including the costs of two counsel.’
______________________
B J VAN HEERDEN
JUDGE OF APPEAL
APPEARANCES:
APPELLANT: M W JANISCH
Instructed by Herold Gie Attorneys, Cape Town
McIntyre & Van Der Post, Bloemfontein
RESPONDENT: J J GAUNTLETT SC (with him C J KAHANOWITZ SC)
Instructed by Chennels Albertyn Attorneys, Rondebosch
Honey Attorneys, Bloemfontein
1
Section
158(2)
(a)
provides that, if at any stage after a dispute has
been referred to the Labour Court, it becomes apparent that the
dispute ought
to have been referred to arbitration, the Court may
stay the proceedings and refer the dispute to arbitration.
2
Charlton
v Parliament of the RSA
(2007) 28
ILJ
2263 (LC).
3
Parliament
of the RSA v Charlton
(2010) 31
ILJ
2353 (LAC) para 5.
4
See
Moch v Nedtravel (Pty) Ltd t/a American Express Travel Service
1996 (3) SA 1
(A) at 10E-11B,
Maize Board v Tiger Oats Ltd &
another
2002 (5) SA 365
(SCA) paras 9 and 14;
Phillips v
National Director of Public Prosecutions
2003 (6) SA 447
(SCA)
para 19.
5
At
532J-533A.
6
Wellington
Court Shareblock v Johannesburg City Council; Agar Properties (Pty)
Ltd v Johannesburg City Council
1995 (3) SA 827
(A).
7
Kett
v Afro Adventures (Pty) Ltd & another
1997 (1) SA 62
(A).
8
See
above para 15 fn 4.
9
Charlton
v Parliament of the RSA
above fn 2 paras 67 – 68.
10
See
fn 1 above.
11
Parliament
of the RSA v Charlton
above fn 3 para 5.