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2021
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[2021] ZAECMHC 14
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Hlazo v OR Tambo District Municipality and Others (1175/2021) [2021] ZAECMHC 14 (4 May 2021)
IN THE HIGH COURT OF
SOUTH AFRICA
[EASTERN CAPE LOCAL
DIVISION: MTHATHA]
CASE NO. 1175/2021
In
the matter between:
OWEN
NGUBENDE HLAZO
Applicant
And
OR
TAMBO DISTRICT MUNICIPALITY
1
st
Respondent
MUNICIPAL COUNCIL, OR
TAMBO DISTRICT
MUNICIPALITY
2
nd
Respondent
EXECUTIVE MAYOR OF OR
TAMBO DISTRICT
MUNICIPALITY
3
rd
Respondent
DEPUTY EXECUTIVE
MAYOR, OR TAMBO DISTRICT
MUNICIPALITY
4
th
Respondent
JUDGMENT
JOLWANA
J
Introduction
[1] The applicant
approached this court by way of urgency seeking a declaratory relief
pertaining to the termination of his employment
contract as well as
his reinstatement to the position of the first respondent’s
municipal manager which he occupied prior
to the termination of his
employment contract. The applicant also seeks other ancillary
relief predicated upon the declaratory
relief.
Background
[2] On 02 May 2018 the
applicant and the first respondent which was therein represented by
its erstwhile Executive Mayor entered
into an employment contract.
There does not appear to have been any difficulties in this
employer/employee relationship until
about the 30 June 2020 when the
applicant was ultimately placed on precautionary suspension.
The reason for the applicant’s
suspension was because of
allegations of gross malfeasance involving an amount in excess of
R168 million. The applicant unsuccessfully
sought to challenge
his suspension at the Labour Court. The Labour Court did not
deal with the merits of his suspension on
the basis that it did not
have jurisdiction to entertain the matter and consequently dismissed
the application with costs.
[3] However, while the
matter was still pending before the Labour Court and before those
proceedings were concluded the first respondent
apparently received
legal advice to the effect that the applicant’s contract of
employment had expired on the 30 April 2020
by effluxion of time.
Based on that legal advice the council of the first respondent took a
resolution on the 21 October
2020 to terminate the applicant’s
employment contract. On 30 November 2020 the Deputy Executive
Mayor, acting during
the temporary absence of the Executive Mayor and
also having been duly authorised in the appropriate fashion to deal
with all matters
involving the applicant’s employment, penned a
letter dated 30 November 2020 to the applicant terminating the
applicant’s
employment contract (the termination letter).
[4] In the termination
letter the applicant was informed,
inter alia,
that the second
respondent had obtained a legal opinion that his contract of
employment was for a two-year period ending on the
30 April 2020.
He was also told that to the extent that the contract of employment
reflected the termination date as being
the 30 April 2023, it was
erroneous. This was the case, so it was said in the letter,
because section 57(6)(a) limits the
contract of a municipal manager
to a period not exceeding one year after the next municipal elections
and the term of office of
the succeeding council. He was
further informed that the effective date of termination was the 31
December 2020 by which
date he was required to return all municipal
property or assets in his possession. This is a very truncated
background to
this application. I will elaborate a little bit
more hereunder on some of the relevant factual material and
allegations as
I deal with the respective pertinent contentions of
the parties.
[5] In this application
which was launched on an urgent basis on the 12 March 2021 the
applicant seeks the following orders:
“
1.
Directing that the matter be heard as one of urgency in terms of Rule
6(12) of the Uniform Rules thereby dispensing with the
necessary
requirements and form for services and the
dies
as contemplated in the Uniform Rules.
2. Declaring that the
resolution taken by the second respondent purportedly on 19 February
2021 but which was only communicated
to the applicant on 9 March 2021
to be unconstitutional invalid and unlawful and it offends the
doctrine of legality.
3. In the alternative to
prayer 2 above, declaring that the purported termination of the
employment agreement which was concluded
between the applicant and
the first respondent (represented by the third respondent’s
predecessor) on 02 May 2018 to be unlawful.
4. Declaring that the
applicant’s employment agreement which was concluded between
the applicant and first respondent (represented
by the third
respondent’s predecessor) on 2 May 2018 still subsists and the
applicant is still the municipal manager of the
first respondent
until 30 April 2023.
5. In furtherance to
prayer 3 and 4 above, granting the applicant an order of specific
performance to be reinstated as the municipal
manager of the first
respondent in terms of the employment agreement that was concluded on
2 May 2018 with full benefits and responsibilities
as the municipal
manager.
6. Ordering the
respondents to pay the applicant’s salary for the month of
February 2021 and his subsequent monthly salaries
for the months of
March 2021 until and for as long as the employment agreement is still
in place.
7. Ordering any officials
of the first and second respondents (including the third and fourth
respondents) who oppose this application
to be ordered to pay the
costs of this application in their personal capacities on a scale of
attorney and own client, such costs
to include costs occasioned by
the employment of two counsel.
8. Further, and/or
alternative relief.”
The issues
[6] The respondents’
central contentions in opposition to the granting of the above relief
are that the application is not
urgent and that in any event the
applicant’s employment contract was validly terminated as it
was a two year contract.
While the papers are voluminous the
issues can be crystalized into only two main issues. The first
one is whether the applicant
was entitled to approach this Court on
an urgent basis. The second and main issue is whether the
employment contract between
the applicant and the first respondent
was for a two-year term ending on the 30 April 2020 or for a
five-year term ending on 30
April 2023.
Urgency
[7]
The termination of the applicant’s employment contract was
effected and communicated to him through a letter dated 30
November
2020, the termination letter which the applicant received on 01
December 2020 following a council resolution taken on
the 21 October
2020. It is unclear why the resolution to terminate the
employment contract having been taken on 21 October
2020, the
termination letter was only written more than a month later.
However, nothing turns on that. In the termination
letter the
applicant was told of the reasons for the termination of his
employment contract. He was told that the council
of the first
respondent had taken a resolution on 21 October 2020 to terminate his
employment contract on the basis that it had
terminated on the 30
April 2020 by effluxion of time as provided for in clause 5.1
thereof. He was further told that reference
to the termination
date as being April 2023 in his employment contract was in
contravention of section 57(6) of the Municipal Systems
Act 1
[1]
.
[8]
Section 82 of the Municipal Structures Act
[2]
gives the tasks of appointing a municipal manager to a municipal
council. It follows, as a matter of logic, that it is a
municipal council that can terminate a municipal manager’s
contract. The letter of termination was written by no less
a
senior person than the Deputy Executive Mayor of the first
respondent. In the absence of the Mayor the Deputy Mayor is
the
most senior official in a municipality which, like the first
respondent, has a Deputy Mayor.
[9]
The position of a Deputy Mayor like that of a Mayor is created by
means of a statute. In terms of section 49(2) of the
Municipal
Structures Act
[3]
the
Deputy Mayor exercises all the powers and performs all the duties of
the Mayor in the absence of the Mayor. The
Mayor may also
delegate to the Deputy Mayor some of her or his powers even when she
or he is not absent.
[10]
I must point out immediately that there was a delay in approaching
this Court on an urgent basis. Because of the prevalence
and
often times the abuse of the urgency rules in this division I
consider it necessary to spend some time on this issue.
The
delay in launching these proceedings is difficult to understand for
many reasons including the fact that the applicant’s
urgent
application in the Labour Court in which he had challenged his
suspension was initially struck off the roll with costs on
the 30
July 2020
[4]
for lack of urgency
only three months before the termination letter was received.
The Labour Court per, Lallie J described
the basis on which that
urgent application was moved as self-created urgency. At
paragraph 14 of her judgment the learned
Judge of the Labour Court
concluded thus:
“
[14]
… The applicant has failed to prove urgency. He acted
unreasonably in bringing this urgent application based on
self-created urgency. The urgent roll was created specifically
for matters of litigants who seek urgent relief. The
applicant’s conduct constitutes unreasonableness as envisaged
in section 162 of the Labour Relations Act and justifies a
costs
order against him.”
[11] After reading the
judgment in his suspension challenge at the Labour Court it defies
logic for the applicant and/or his legal
representatives to have
ignored the termination letter and instead write endless letters
requesting the underlying council resolution.
The termination
letter gave the applicant the same cause of action as the resolution
of the 21 October 2020 which he was informed
in the termination
letter that it had been taken. In all the paragraphs in which
urgency is dealt with in the applicant’s
founding affidavit the
applicant unfathomably completely ignores the termination letter with
no explanation or even an attempt
to explain why he did not act on
it. Any reasonable person would have sprung into action on
receipt of a letter terminating
his employment unless he decided to
acquiesce to such termination. This is because the very reasons that
are cited for urgency
would have become relevant and equally ominous
as soon as he received the termination letter.
[12] A litigant is not,
in my view, entitled to ignore a termination letter and wait for the
council resolution which may be made
available long after the
termination letter is received if he chooses to approach court on an
urgent basis. The resolution
of the 21 October 2020 does not
appear to have changed the applicant’s cause of action from
what it was when the termination
letter was received. This begs
the question, why was it necessary to wait for the council resolution
from the 01 December
2020 to the 09 March 2021. On 9 March 2021
when the applicant received the resolution dated 19 February 2021 it
was not the
resolution referred to in the termination letter.
[13] Even reliance on the
resolution of the 19 February 2021 is equally unfathomable.
More worrying is the attitude that the
termination letter meant
nothing until the underlying resolution was received. This is
without any logical or legal basis
in my view. This was
extremely risky on the part of the applicant or his legal
representatives by any standard when it comes
to the issue of
urgency.
[14] In the founding
affidavit the applicant makes an indirect reference to the
termination letter and he says:
“
72.
On 19 February 2021 a certain Mr Basil Mase (Mr Mase) (who
purportedly signed a letter on behalf of the municipality as its
acting municipal manager) responded and he recorded that (sic) that
the employment agreement had terminated on 30 November 2020
and he
attached annexure “FA8” …”
[15] Annexure FA8 is the
termination letter dated 30 November 2020 which the applicant had
already received as far back as the 01
December 2020. On 01
March 2021 the applicant’s attorneys wrote a letter to the
respondents, addressed to the council
care of the third respondent.
In that letter the applicant’s attorneys confirmed receiving
the email of the 19
February 2021 to which the termination letter was
attached. They make certain arguments about the non-payment of
the applicant’s
salary for February 2021 and other issues were
also raised. They went further to give the respondents a period
of 30 days
within which to remedy the alleged breaches of contract in
not paying the applicant’s salary and of unilaterally amending
the fixed term of employment to terminate before April 2023.
[16] Even on the basis of
the applicant’s attorneys’ letter dated 01 March 2021 the
matter was never regarded as urgent
by the applicant or his legal
representatives hence the 30 day period afforded to the respondents
to remedy the alleged breach
of contract. It must have come as
a pleasant surprise when the applicant received the letter dated 08
March 2021 annexed
as FA1 to the founding affidavit written by the
Executive Mayor in which the following is said:
“
This
communique serves to kindly inform you that on Friday the 19 February
2021, the O.R. Tambo District Municipality convened its
council
meeting virtually and it resolved to terminate your contract with the
municipality. The resolution extract is attached
for ease of
reference.”
[17] For any person who
knew about the resolution of 21 October 2020 this letter is puzzling
if not misleading to say the least.
The resolution extract
attached to the Mayor’s letter and annexed as FA2 to the
founding affidavit reads:
“
RESOLUTION
EXTRACT OF A VIRTUAL SPECIAL COUNCIL MEETING HELD ON FRIDAY, 19
FEBRUARY 2021 AT 09:00
AGENDA ITEM: 7.1
REPORT TITLE:
JUDGMENT: O.N. HLAZO V O.R. TAMBO DISTRICT MUNICIPALITY & OTHERS
CASE NO. P58/20
The council resolved
:-
1.
To
note the judgment of the Labour Court Case matter OWEN NGUBENDE HLAZO
v O.R. TAMBO DISTRICT MUNICIPALITY; DEPUTY EXECUTIVE MAYOR;
SPEAKER
CASE NO. P58/20.
2.
That
Mr O.N. Hlazo should be removed from the system as he is no longer an
employee of O.R Tambo District Municipality.
3.
That
the Executive Mayor is mandated to formally write to Mr O.N. Hlazo
affirming the termination of his employment contract.”
[18] The resolution
extract is under the hand of the acting council secretary and the
acting council speaker. Two things become
very apparent even
from a cursory reading of the resolution extract. First,
contrary to the covering letter penned by the
Executive Mayor the
resolution extract does not even pretend to be a resolution to
terminate the employment contract. Second,
it notes the Labour
Court judgment in the suspension case. Third, it contains a
resolution to remove the applicant from the
system on the basis that
he was no longer an employee of the first respondent. This must
surely be a reference to the system
through which employee salaries
are paid. Fourth, the extract gives a mandate to the third
respondent to formally write to
the applicant affirming the
termination of his employment contract. It is very strange that
instead of writing a letter to the
applicant as indicated in the
extract, the Mayor wrote a letter referred to above in which she
incorrectly said that the council
meeting of the 19 February 2021
resolved to terminate the applicant’s contract with the
municipality which was simply not
the case. The Mayor must have, for
some reason, misunderstood the clear contents of the resolution
extract.
[19] The applicant
lurched on to the letter dated 08 March 2021 from the Mayor and
misinterpreted the extract dated 19 February
2021 attached thereto in
a clearly misguided attempt to found urgency. In the process
the termination letter was completely
ignored. It would
in any event not have assisted the applicant to make a case for
urgency on it at that late stage
as he had been aware of it as far
back as the 01 December 2020 hence he clearly deliberately avoided it
in the papers. The
applicant possibly failed to institute
urgent proceedings shortly after receiving the termination letter on
the advice of his legal
representatives as he was already legally
represented. That was very unfortunate as the urgency for this
application was
clearly at the time the termination letter was
received and not when the resolution extract of the council meeting
of the 19 February
2021 was received on 09 March 2021 which in any
event was not a resolution to terminate the contract of employment.
At best
it was a resolution affirming the one taken on the 21 October
2020.
[20] It must be accepted
that misguided as that legal advice was, it was given
bona fide
,
as it would make no sense for the applicant’s attorneys to have
ignored the termination letter when it must have been known
to all
concerned that it would inevitably result in the non-payment of their
client’s salary. They nevertheless, on
01 March 2021,
wrote a letter to the respondents giving them 30 days to rectify the
alleged breach. Thereafter, on the 11
March 2021, long before
the 30 day period expired, started urgent consultations for this
application which was issued on 12 March
2021. Nothing on the
facts before me had happened between the 01 December 2020 when the
termination letter was received and
the 09 March 2021 when the
resolution extract of the meeting of the 19 February 2021 was
received to alter the status of the resolution
of the 21 October 2020
and the termination letter. If anything at all, it was the fact
that the applicant’s February
2021 salary had not been paid.
It must have been known to the applicant and his legal
representatives that the termination
of his employment would soon
lead to the non-payment of his salary. It surely could not have
come as a surprise.
[21]
In
Luna
Meubel
[5]
Coetzee J dealt with the problems still besetting this division today
more than 40 years ago and expressed the following sentiments
with
which I am in respectful agreement:
“
Practitioners
should carefully analyse the facts of each case to determine, for the
purposes of setting the case down for hearing,
whether a greater or
lesser degree of relaxation of the Rules and of the ordinarily
practice of the Court is required. The
degree of relaxation
should not be greater than the exigency of the case demands. It
must be commensurate therewith.
Mere lip service to the
requirements of Rule 6(12)(b) will not do and an applicant must make
out a case in the founding affidavit
to justify the particular extent
of the departure from the norm, which is involved in the time and day
for which the matter be
set down.”
[22] There was every
reason to strike this application off the urgent roll with costs as
nothing of substance happened between the
01 December 2020 and the 12
March 2021 when these proceedings were instituted on an urgent
basis. The reliance on the misreading
of the resolution of the
19 February 2021 which came to the attention of the applicant on the
9 March 2021 was misplaced.
The third respondent’s
strange and misleading covering letter which suggested that the
resolution to terminate the employment
contract was taken on 19
February 2021 when it should have been known to her and the applicant
that the resolution to terminate
his employment contract was taken on
21 October 2020 were all red herrings. None of that justified
the applicant rushing
to this court on an urgent basis more than
three months after being aware of the termination of his employment
contract.
Judicial discretion
when urgency is not established.
[23] What should the
court do when an applicant has failed to make a case for urgency?
This is a vexed issue which largely
depends on the facts and
the circumstances of each case. I think that all relevant
considerations must be taken into account
in the court’s
judicious exercise of its discretion. It surely cannot be
correct to say that lack of urgency must necessarily
and almost
instinctively result in the matter being struck off the urgent roll.
Doing so would not be in the interests of
justice which must be
paramount in any determination that is made by the court. All
the papers had been filed in this matter
save for the respondents’
heads of argument for which I gave leave to be filed later. I had
read all the papers and there
was no real impediment or practical
reason why the matter could not be heard to a finish. The
respondents, despite being
rushed to court on as urgent basis, were
commendably ready to deal with the matter to a finish.
[24]
Faced with a similar situation as I was in this matter Brooks AJ (as
he then was) in
Windsor
Hotel
[6]
,
expressed himself on some of the practical considerations as follows:
“
[10]
The first respondent also warn[ed] against permitting the fact that a
complete set of affidavits and accompanying heads of
argument have
been placed before this Court to cloud the issue whether the
applicant’s modification of the rules on the grounds
of urgency
was unacceptable. Caledon Street Restaurants CC v Monica
D’Aveira, unreported judgment of Kroon J, ECD Case
No. 2656/97,
page 10, lines 16-21. The warning is salutary. However, I
am of the respectful view that the very practical
considerations of
factors such as the incurring of unnecessarily duplicated case
preparation and presentation procedures, with
their concomitant
increase in already substantial legal costs, and the undesirable
duplication of the requirement of the attention
and preparation of
more than one court within a judicial system that is at times
overburdened, must be weighed against any apparent
prejudice to a
respondent who has been brought to court on a truncated time frame.
Indeed, such respondent is equally exposed
to the risk of the
undesirable duplications identified. Subject, of course,
to limitations of capacity beyond the control
of all concerned, the
legitimate demands of society developing in the urbane after-glow of
the initiation of our relatively young
constitutional democracy must
include an expectation that access to justice will not be impeded
unnecessarily by an over-formalistic
approach to adjectival
considerations surrounding the resolution of disputes amongst its
members.”
[25] To strike the matter
off the roll when the parties are ready and willing to be heard and
when the court is ready to hear the
matter would unnecessarily delay
the delivery of justice in a matter that is otherwise ready but for
lack of urgency. All
these considerations are within the realm
of the court’s discretion whose main preoccupation should be
the interests of justice.
There is no reason why the
displeasure of the court cannot, in an appropriate case, be shown
through an appropriate costs award
against a party that abuses
urgency rules and procedures. Courts are the arbiters of
justice and court rules are there to
enable easy access to justice by
providing a facilitation mechanism and not a stumbling block to the
speedy resolution of disputes.
However, litigants especially
applicants must know that courts will not hesitate to strike off the
roll a purportedly urgent application
where it is clear that urgency
rules are being abused.
The termination of the
employment contract.
[26] The employment
contract which is the main subject of this application was entered
into between the applicant and the first
respondent on 02 May 2018.
There is only one clause thereof which is a bone of contention and
about whose interpretation
the parties are light years apart.
This is clause 5.1 and it reads:
“
5.1
Notwithstanding the date of signature hereof, this contract of
employment shall be valid for a period of two years commencing
on 1
st
day of May 2018 and terminating on the last day of April 2023.”
[27]
The apparent contradiction in the above mentioned provision is
summarised very succinctly in the respondents’ heads of
argument in the following manner:
Is
the reference to two years an error, or is it the year 2023
[7]
.
It is to the answer to this question that the resolution of the
lis
between the parties depends. Regrettably the respondents have
not, either in the papers or in their heads of argument, made
any
meaningful submissions on how a dispute of this nature should be
resolved. They have averred a bare denial of the interpretation
contended for by the applicant and maintained that because the
contract indicates that it is a two-year contract therefore it is
a
two-year contract. This overly simplistic approach does not
account for the further provision in the same clause that the
contract shall terminate on the last day of April 2023, in fact it
ignores it.
[28] It is generally
incorrect and impermissible to interprete a clause in a document
separately from the rest of the provisions
of the same document and
to the exclusion of everything else. Even worse in this case,
it is part of the same sentence that
the respondents base their
contentions on as if the rest of the same sentence does not exist.
This is incorrect for many
reasons and I mention a few of them
below. Clause 19 of the contract reads:
“
This
contract terminates automatically on the date referred to in
sub-clause 5.1 unless the parties before the date agree to renew
or
extend the contract. A renewal or extension of the contract may
be on the same or different terms as determined by Council.”
[29] Whatever one thinks
of clause 5.1 and whatever interpretation one gives to the reference
to two years therein, that is clearly
a reference to the duration of
the contract and not a termination date. There is only one
termination date which also appears
in clause 5.1 and in the same
sentence and that is the last day of April 2023. That is not to
say that that date must be
the date agreed upon as the correct date
and that it was not an error to reflect it as such without more.
The point I am
making is that the termination date as stated cannot
simply be ignored in favour of or preference for the duration of two
years.
What the respondents have not done is to make any
averments in the answering affidavit on why the termination date as
reflected
is incorrect and in fact an error. There are no
submissions that it has always been the understanding between the
respondents
and the applicant that they were entering into a two-year
employment contract. No averments are made by the respondents
on
why the reference to two years in clause 5.1 is correct as against
the termination date which is the end of April 2023.
[30] The respondents have
not gainsaid in any cogent way the applicant’s averments made
in the founding affidavit,
inter alia
, that he received his
monthly salary in the normal way even in November 2020 on 25 November
which he says was five days before
he received the termination
letter. Even for December 2020 and January 2021 which was long
after he had received the termination
letter he received his monthly
salaries. The respondents do not deal with these averments at
all nor do they, anywhere in
their answering affidavit, explain the
circumstances in which they continued paying the applicant’s
salary even after they
had received and accepted legal advice that
the contract of employment of the applicant had expired and had in
fact resolved to
terminate it. It is important to remember that
on 21 October 2020 a council resolution for the termination of the
contract
was taken. In other words a council resolution having
been taken long after the 30 April 2020 and the termination letter
effecting it having been sent to the applicant the salary continued
to be paid until and for January 2021. This is not explained
at
all by the respondents. I find all of this to be inconsistent
with the respondents’ submission that the correct
termination
date is the 30 April 2020.
The interpretation of
the contract.
[31]
On the basis of the respondents’ conduct in continuing to pay
or allowing the applicant’s salary to be paid long
after the 30
April 2020 when, according to the respondents the contract expired,
even after the October 2020 resolution to terminate
it and after the
30 November 2020 when the termination letter was written up until
January 2021, the applicant contends that all
that conduct supports
his case that his contract was for a five year term. He relies
on
Comwezi
[8]
on his heads of argument. In
Comwezi
Wallis JA said:
“
It
was suggested that for us to place reliance on this is impermissible
in the light of the exposition of the law in
Natal
Joint Municipality Pension Fund v Endumeni Municipality
,
supra. However, that is incorrect. In the past, where
there was perceived ambiguity in a contract, the courts held
that the
subsequent conduct of the parties in implementing their agreement was
a factor that could be taken into account in preferring
one
interpretation to another. Now that regard is had to all
relevant context, irrespective of whether there is a perceived
ambiguity, there is no reason not to look at the conduct of the
parties in implementing the agreement. Where it is clear
that
they have both taken the same approach to its implementation, and
hence the meaning of the provision in dispute, their conduct
provides
clear evidence of how reasonable business people situated as they
were and knowing what they knew, would construe the
disputed
provision. It is therefore relevant to an objective
determination of the meaning of the words they have used and
the
selection of the appropriate meaning from among those postulated by
the parties. This does not mean that, if the parties
have
implemented their agreement in a manner that is inconsistent with any
possible meaning of the language used, the court can
use their
conduct to give that language an otherwise impermissible meaning.
In that situation their conduct may be relevant
to a claim for
rectification of the agreement or may found an estoppel, but it does
not affect the proper construction of the provision
under
consideration.”
[32] In the heads of
argument filed on behalf of the respondents
Comwezi
is
completely ignored. There is no submission that it is
distinguishable to this matter or that it is somehow inapplicable.
In any event what the Supreme Court of Appeal said in
Comwezi
is
very much on all fours with the facts in this matter. It can
never be permissible for a party to postulate a particular
interpretation in complete disregard to what was understood by it and
how or why it conducted itself in a particular manner in
implementing
the contract. In fact its conduct cannot be divorced from its
own understanding that it postulates unless there
is a plausible
explanation for the contrariwise conduct.
[33] In an attempt to try
to understand what was the common understanding between the parties
especially shortly before or after
the contract was concluded I asked
during the hearing of this application if a letter of appointment was
written to the applicant
as neither of the parties referred to it in
the papers. It transpired that in fact a letter of appointment
had been written
to the applicant under the hand of the former
Executive Mayor of the first respondent. That letter was handed
up to the Court
by agreement between the parties. It is dated
29 March 2018 which was just over a month before the contract was
concluded.
In the letter of appointment the former Executive
Mayor wrote:
“
Dear
Mr Hlazo
APPOINTMENT AS A
MUNICIPAL MANAGER (05 YEAR FIXED-TERM CONTRACT)
I have pleasure in
informing you that, following your interview for the above –
mentioned post, you were found suitable for
appointment on a fixed
term performance based contract of employment and that the Council in
its meeting of 28
th
of March 2018 approved your
appointment as a municipal manager. Your employment contract
will commence on the assumption
of duty date and end one year after
the expiry of the term of current Council which is 31
st
August 2022.
You will be reporting to
the Honourable Executive Mayor.”
[34] There are other
matters dealt with in the other paragraphs of the letter which are
not relevant for current purposes.
At the end the letter is
signed by the former Executive Mayor and there is a provision for the
applicant to fill in his names and
identity number which he did.
It is signed by the applicant in the space provided for that purpose
in April 2018 although
the exact date is illegible. However,
that date is of no moment and in any event neither the letter nor its
contents are
in dispute. In fact both the letter and its
contents are common cause hence the unconditional agreement that is
should be
handed up notwithstanding the fact that it was not annexed
or referred to in any of the affidavits.
[35] The only contention
made on behalf of the respondents in the heads of argument is that
while it does state that the appointment
was to terminate one year
after the expiry of the current council’s term of office being
the 31 August 2022 it does not say
that it is for a five year
period. The difficulty with this submission is, firstly, that
it ignores the heading which is
immediately before the paragraph
under discussion. It is worth quoting the heading itself about
which nothing has been said.
It says, “
APPOINTMENT
AS A MUNICIPAL MANAGER (05 YEAR FIXED-TERM CONTRACT)
”.
This letter must have been written shortly after the interview even
though it is far from clear how long after the
interview. It
preceded the contract which was concluded on 02 May 2018 and in its
heading it makes it clear that the applicant’s
employment was
on a five year fixed term contract. Secondly, the respondents
proffer no explanation for the reference therein
to the 31 August
2022, a date that is more than two years after the 30 April 2020 that
they contend for.
[36] The contract of
employment must surely be read together with the letter of
appointment and not in isolation especially where
there is an
ambiguity. This is important because the former Executive Mayor
of the first respondent who signed both the employment
contract and
the letter of appointment made it clear in the letter of appointment
that the contract was for a period of five years.
She clearly
applied her mind to the contents of the letter and was aware that the
intended term of the contract was for a period
of five years.
This explains why she commendably brought to the attention of the
applicant the provisions of section 57(6)
of the Municipal Systems
Act which are binding to both parties.
[37] I find it bizarre
for the respondents to rely on the reference to the duration of the
contract being reflected as two years
in clause 5.1 of the contract
in the circumstances. The reference to the duration of two
years was, in my view, an obvious
typographical error with the
parties having clearly understood from inception that the applicant
was being employed on a five year
fixed term contract which would not
exceed the current council’s term of office by more than one
year. It is common
cause that the current council’s term
of office will end later this year.
Section 57(6) of the
Municipal Systems Act.
[38] Section 57(6)
provides that:
“
The
employment contract for a municipal manager must –
(a)
be
for a fixed term of employment up to a maximum of five years, not
exceeding a period ending one year after the election of the
next
council of the municipality;
(b)
include
a provision for cancellation of the contract in the case of
non-compliance with the employment contract or, where applicable,
the
performance agreement;
(c)
stipulate
the term of the renewal of the employment contract, but only by
agreement between the parties;
(d)
reflect
the values and principles referred to in section 50, the Code of
Conduct set out in Schedule 2, and the management standards
and
practices contained in section 51”
[39]
The interpretation of section 57(6) has been the subject of some
debate, even controversy for many years from different
angles or aspects of it. However, they were laid to rest
recently in
Mawonga
[9]
in which the Supreme Court of Appeal clarified the legal position as
follows:
“
The
relevant provisions in s 57(6) may appear to be in conflict: the
employment contract is for a fixed term up to a maximum of
five
years, yet the contract may stipulate the terms of renewal. The
high court read these provisions to means that the contract
is for a
maximum period of five years, but subject to renewal as stipulated in
the contract. That resolution of the apparent
conflict is
unpersuasive. First, the legislature has determined that the
contract must be for fixed term that cannot exceed
five years.
These are cumulative requirements. Second, can s 57(6) be interpreted
to permit the parties to an unbounded power
of renewal? So for
example, if the parties agreed to a renewal that was of indeterminate
duration, subject only to termination
for breach or retirement, would
that fall within the permissible bounds of contractual competence?
Such a permissive construction
would allow the significance of s
57(6) to lose its limiting force because the contract would de facto
be neither of fixed term,
nor of five years. Third, if the
competence to agree to a renewal is to be read subject to the
stipulations of s 57(6)(a),
a coherent interpretation can be
achieved. That is so because the parties may conclude a fixed
term agreement for a period
of less than five years, with an option
to renew that does not violate the five year maximum. Such an
interpretation reconciles
s 57(6) (a) and (c) whereas the contrary
position renders s 57 (6)(a) subject to circumvention in ways that
would undermine its
central purpose.”
[40] What this means is
that while the contract of employment was agreed to be for a fixed
term of five years, it is impermissible
for it to exceed the new
council’s term of office by more than one year. In effect
the applicant is not entitled to
remain in his job to April 2023.
His contract of employment, as a matter of law, cannot endure for
longer than one year after
the end of this current council’s
term of office even if the period of five years has not elapsed.
This was made clear
to the applicant in the letter of appointment by
the former Executive Mayor. In light of all of this I find that
it was unlawful
for the applicant’s contract to be terminated
before it had run its course on the basis of it having expired on 30
April
2020. This is of cause subject to section 57(6) of the
Municipal Systems Act as I have explained above. In the
circumstances
the contract of employment of the applicant therefore
was unlawfully terminated.
The amendment to the
notice of motion.
[41] I have already
alluded to the confounding approach of ignoring the termination
letter which clearly communicated to the applicant
that there was a
council resolution of the 21 October 2020 which terminated his
employment contract. In that way the resolution
was treated as
if it did not exist which is bizarre at best. The fact of the
matter is that the resolution existed and the
applicant was told that
it existed by the Deputy Executive Mayor in the termination letter.
The applicant has had to introduce,
through his replying affidavit,
an amendment to the notice of motion so as to deal with the council
resolution of the 21 October
2020. This, purportedly, on the
basis that the said resolution was furnished for the first time to
the applicant by being
attached to the answering affidavit. The
respondents oppose the amendment and contend that the amendment did
not comply with
Rule 28 of the Uniform Rules of Court. Rule 28
subrules 1 and 2 read:
“
(1)
Any party desiring to amend any pleading or document other than a
sworn statement, filed in connection with any proceedings,
shall
notify all other parties of his intention to amend and shall furnish
particulars of the amendment.
(2) The notice referred
to in subrule (1) shall state that unless written objection to the
proposed amendment is delivered within
10 days of delivery of the
notice, the amendment will be effected.”
[42] It might very well
be the case that rule 28 was not complied with. However, to the
extent that there was non-compliance
that non-compliance did not
affect the merits of the respondents’ case and therefore that
submission does not take the matter
any further. It has been
said on countless occasions in this division and elsewhere that rules
are for the court and the
court is not for the rules. The
reality is that the applicant’s employment was unlawfully
terminated as I have already
found. Contrary to what the
applicant initially postulated it is the resolution of the 21 October
2020 and not the resolution
of the 19 February 2021 that brought
about the said termination of the contract. The amendment to
the notice of motion must,
in my view, be allowed in the interests of
justice. The technical argument that the amendment must be
refused and thus the
resolution of the 21 October 2020 to remain
effective is tantamount to splitting the hairs and does not resolve
the dispute between
the parties. Pedanticism should not be
allowed to stand in the way of arriving at a speedy resolution of the
dispute between
the parties which, quintessentially, is about whether
or not the termination of the contract of employment of the applicant
was
lawful.
Should the applicant
be re-instated?
[43] The respondents have
dedicated copious amounts of time in their answering affidavit
arguing against the reinstatement of the
applicant even if I find
that his contract was unlawfully terminated. This
is based on the reports of financial
mismanagement, corruption and
theft of municipal funds amounting to about R168 million allegedly
received from various committees
of the council, anonymous reports
from members of the public and the audit report obtained by the
respondents. Indeed the
picture painted in the answering
affidavit, if established, is egregious and atrocious. If the
applicant played any role
in that or allowed any of that to happen
under his watch, the respondents were and are entitled to take
decisive action against
the applicant. To that end it is
commendable that the respondents suspended him and also served him
with disciplinary charges
and also went on to lay criminal charges
with this country’s law enforcement agencies against him.
[44] On the basis of
these allegations the respondents argue that there is a breakdown of
trust in the relationship between the
first respondent and the
applicant and therefore reinstatement would not be an appropriate
relief. It must be emphasised
that the first respondent is an
organ of state and not an individual, something that the respondents
do not deal with. Even
if it was an individual, allegations of
the breakdown of trust without substantiation would not suffice.
As pointed out in
the applicant’s letter of employment, he
reports to the Executive Mayor and in her absence, to the Deputy
Executive Mayor.
The respondents’ allegations of the
breakdown of trust are generalized and lack specificity. For
instance, there is
no affidavit by the Executive Mayor to whom the
applicant reports expressing her views on this trust relationship
breakdown.
The Deputy Executive Mayor who deposed to the
answering affidavit for the respondents is also loudly silent about
how the trust
relationship breakdown manifested itself after the
allegations of financial mismanagement, corruption and theft of
municipal funds
came to the fore. The Deputy Executive
Mayor has not laid any factual basis for the breakdown of trust even
between
himself and the applicant or any other relevant official of
the respondents. Most importantly, there is no indication of
how the working environment would become untenable if the applicant
were to be reinstated.
[45] There is little to
no basis that has, on the papers before me, been laid down on which I
must exercise my discretion against
reinstatement. The
respondents are at large and are in fact obliged to institute
disciplinary processes in which there will
be an opportunity for a
public hearing for the allegations of financial mismanagement,
corruption and theft to be laid bare for
all to see. In that
disciplinary process the applicant will be given a fair opportunity
to explain his conduct or his role
in the loss of municipal funds.
It is not clear why the respondents avoided a transparent
disciplinary process and chose
a clearly premature and unlawful
termination of the contract route. If there is substance to
these serious allegations and
I hasten to add that there may very
well be substance, it seems to me that the lawful way to establish
that is through a fair and
transparent disciplinary hearing.
This will be in line with yet another constitutional principle of
accountability to the
public at large about which there can be no
debate.
[46] Since June 2020 when
the applicant was suspended the disciplinary proceedings would have,
no doubt, been concluded by now.
The applicant makes it clear
in his affidavits that he wants to be subjected to a disciplinary
process and that it was at the instance
of the respondents that that
has not happened. He was served with the charge sheet on the 30
September 2020. It is
unclear why the respondents elected to
terminate the contract instead of going ahead with a disciplinary
hearing which would also
have an added benefit of accounting to the
public about what happened to public funds and why service delivery
which was intended
to be achieved with those funds has been
scuppered. If the applicant is responsible it goes without
saying that he must account
for the loss of public funds. The
institutional failures that allowed him to commit such nefarious
deeds must be identified
and corrected. This surely must be in
the interests of the respondents as well instead of the applicant
quietly disappearing
without accounting for his alleged malfeasance.
[47]
In
Haynes
[10]
De Villiers AJA, exactly seventy years ago, stated the law which,
with respect, is still good law and is still applicable even
to date
on specific performance. This is even more so if regard is had
to the constitutionally entrenched rights of workers
who often find
themselves in a precarious position, an issue I will touch on below.
The learned Acting Judge of Appeal stated
the law thus:
“
It
is, however, equally settled law with us that although the Court will
as far as possible give effect to a plaintiff’s choice
to claim
specific performance it has a discretion in a fitting case to refuse
to decree specific performance and leave the plaintiff
to claim and
prove his
id
quod
interest.
The discretion which a Court enjoys although it must be exercised
judicially is not confined to specific types of cases nor
is it
circumscribed by rigid rules. Each case must be judged in the
light of its own circumstances. As examples of
the grounds on
which the Courts have exercised their discretion in refusing to order
specific performance, although performance
was not impossible, may be
mentioned: (a) where damages would adequately compensate the
plaintiff; (b) where it would be difficult
for the Court to enforce
its decree; (c) where the thing claimed can readily be bought
anywhere; (d) where specific performance
entails the rendering of
services of a personal nature. To these may be added examples
given by Wessels on Contract (vol
2, sec. 3119) of good and
sufficient grounds for refusing the decree, (e) where it would
operate unreasonably hardly on the defendant,
or where the agreement
giving rise to the claim is unreasonable, or where the degree would
produce injustices, or would be inequitable
under the circumstances.”
[48] No attempt has been
made by the respondents to make factual averments on which this Court
may, in the exercise of its discretion,
be persuaded that to order
specific performance would be inequitable. Courts do not
exercise their discretion in a vacuum.
It was up to the
respondents to gainsay the applicant’s averments and to make a
case for this Court in the exercise of its
discretion, not to order
specific performance. This is so because an employee is
generally entitled to remain in his job
and to be allowed to do it
without hindrance in a conducive working environment. Where he
has committed serious misdemeanours
or malfeasance as it is alleged
in the instant matter he must be taken through a disciplinary
process. The respondents ought
to have done more than merely
making a submission that the relationship of trust is broken without
any factual basis instead relying
on yet to be proved charges of
corruption and theft and criminal charges that are hopefully being
investigated by the police.
[49]
In
Masetlha
[11]
,
Moseneke CJ expressed the following sentiments which are, in my view,
instructive:
“
As
we have seen earlier the President had the requisite power to make
the decision to dismiss the applicant or to amend his term
of office
so as to end it. I can find no cause to hold that the exercise
of that power is not in accordance with the law.
This does not
however mean that a contract of employment between Mr Masetlha and
the government comes to naught. The question
is what the legal
consequences are of the underlying contract.
Although it is clear that
there has been a breakdown in trust, that alone is not a sufficient
ground to justify a unilateral termination
of a contract of
employment. It must however be said that the irretrievable
breach of trust will be relevant for purposes
of remedy. The
ordinary remedies for breach of contract are either reinstatement or
full payment of benefits for the remaining
period of the contract.
In my view, even if the contract of employment were terminated
unlawfully, Mr Masetlha would not
be entitled to reinstatement as a
matter of contract. Reinstatement is a discretionary remedy in
employment law which should
not be awarded here because of the
special relationship of trust that should exist between the head of
the Agency and the President.”
[50] It is far from clear
how the relationship of trust has broken down between the applicant
and the Executive Mayor or even the
Deputy Executive Mayor.
Nothing is said in the answering affidavit about the manifestations
of the broken trust relationship
and how it would be detrimental to a
conducive working environment. It seems to me that if the
applicant is reinstated the
disciplinary process remains available
for the respondents to resume and conclude speedily as the charge
sheet has already been
prepared and served on the applicant. In
fact in the respondents’ heads of argument it has been
submitted that if the
applicant is reinstated he might be suspended
again. If that happens it would surely be part of the
disciplinary procedures
which the respondents are entitled to follow
within the framework of the law. What the disciplinary process
concludes on
these serious allegations of financial mismanagement,
corruption and theft is a matter which only that process can
determine.
It may even result in the contract being terminated
as provided for in clause 5.2.
The requirements for a
final relief.
[51] I have already
concluded that the correct interpretation of clause 5.1 of the
contract is the one contended for by the applicant
and therefore the
contract was unlawfully terminated. It follows that a clear
right to the instatement of the applicant to
his position as the
municipal manager of the first respondent has been established.
The respondents have conceded, correctly
so that there is a
reasonable apprehension of harm. I therefore need not dwell
much on these two requirements. What
the respondents also raise
is the contentious issue of an alternative remedy which they contend
exists in the form of a claim for
damages. The respondents have
not said much to gainsay what the applicant avers in his affidavits
on why a possible claim
for damages would not be appropriate.
[52]
There is a bigger issue involved which in my view is also a
constitutional issue. The starting point in the broader
understanding of an employment/employee relationship is that both
employers and employees have their rights protected in the Bill
of
Rights especially if regard is had to sections 22 and 23 of the
Constitution both of which are implicated in this case in my
respectful opinion. However, there is even a bigger issue
provided for in section 2 of the Constitution
[12]
.
Section 2 reads:
“
This
Constitution is the supreme law of the Republic; law or conduct
inconsistent with it is invalid and the obligations imposed
by it
must be fulfilled.”
[53] The view that I hold
is that the conduct of unlawfully terminating an employment contract
is one of the species of the conduct
proscribed in section 2 of the
Constitution. I cannot understand how a conduct proscribed by
the Constitution can be allowed
to stand save in extremely
exceptional circumstances. The other problem with an approach
that says that there may be a claim
for damages is that it would
create a situation in which an employee could lose everything he has
acquired, the home, the comfort
he enjoyed because of his salary.
He can have his children expelled from schools or places in which
they are accommodated
while schooling. It escapes me how a
claim for damages could possibly make good such untold suffering
which would be a direct
result of an unlawful conduct of the employer
which is the unlawful termination of the employment contract in the
instant matter.
[54] I do not understand
our constitutional and legislative framework and value system to be
countenancing illegality or even loss
that is a direct consequence of
unlawfulness where it can be prevented. There are rights to
dignity to which employees, like
all citizens, are entitled to
enjoy. The indignity of losing everything and the damage it
would cause to the very fabric
of the family is unimaginable and
where it is preventable it should be prevented. The suggestion
that some claim for damages,
even if it were to be ultimately
successful, could undo such suffering and loss is cold solace
especially when the indignity and
suffering are caused by unlawful
conduct that is easily preventable. The constitutional
dispensation which we are all proud
of would be meaningless if the
rights of those who are weaker in our society such as employees are
illegally trampled upon and
told to go and claim damages down the
line. Even the payment of damages where successful would
obviously be at great costs
to the fiscus and therefore not be in the
interests of anyone. In light of all the above the applicant
must succeed in his
application. The applicant’s
submission that the costs of this application must be paid by the
Deputy Executive Mayor
in his personal capacity is without basis as
the Deputy Executive Mayor did not oppose this application on a
frolic of his own
but did so in compliance with and in furtherance of
council resolutions. Those who do their job in carrying out a
mandate
properly given and who execute it lawfully should not be
punished for doing their job. There is nothing in the conduct
of
the Deputy Executive Mayor deserving of censure through a personal
costs order in the execution of his mandate and responsibilities.
[55] In the result the
following order shall issue:
1. It is hereby declared
that any council resolution terminating the employment agreement
which was concluded between the applicant
and first respondent on 2
May 2018 is declared to be unlawful and is hereby set aside.
2. It is further declared
that the applicant’s employment contract which was concluded
between the applicant and first respondent
on 2 May 2018 still
subsists and the applicant is still the municipal manager of the
first respondent until one year after the
expiry of the current
council’s term of office or until it is lawfully terminated.
3. The applicant is
granted an order of specific performance to be reinstated as the
municipal manager of the first respondent in
terms of the employment
agreement that was concluded on 2 May 2018 with full benefits and
responsibilities as the municipal manager.
4. The respondents are
ordered to pay the applicant’s salary for the month of February
2021 and his subsequent monthly salaries
for the months of March 2021
until and for as long as the employment agreement is still in place.
5.
The first respondent is ordered to pay the costs of this application
such costs to include costs of two counsel.
__________________________
M.S. JOLWANA
JUDGE
OF THE HIGH COURT
Appearance
Counsel for the
Applicant: E. MOKUTU SC with X. STEMELA
Instructed by: MALEMBE
MOTAUNG MTEMBU INC. c/o T.L. LUZIPHO ATTORNEYS
MTHATHA
Counsel for the
Respondent: N.J. MULLINS SC with L. KROON and O. MAKIWANE
Instructed by: MVUZO
NOTYESI INC.
MTHATHA
Date heard: 30 March 2021
Delivered
on: 04 May 2021
[1]
Local Government: Municipal
Systems Act 32 of 2000
.
[2]
Local Government:
Municipal
Structures Act 117 of 1998:
[3]
Section 49(2) provides: The
deputy manager exercises the powers and performs the duties of the
mayor if the mayor is absent or
not available or if the office of
the mayor is vacant. The mayor may delegate duties to the
deputy mayor.
[4]
Hlazo v OR Tambo District
Municipality and Others
case
No: P58/20 (30 July 2020)
[5]
Luna Meubel Vervaardigers
v Makin and Another
1977
(4) SA (W.L.D.) 135 at 137 E-G
[6]
Windsor Hotel (Pty) Ltd v New
Windsor Properties (Pty) Ltd and Others (1820/2013) [2013] ZAECMHC
14 (7 August 2013)
[7]
My underlining
[8]
Comwezi Security Services
(Pty) Ltd and Another v Cape Empowerment Trust Ltd
(759/
2011)
[2012] ZASCA 126
(21 September 2012) para 15.
[9]
Mawonga and Another v
Walter Sisulu Municipality and Others
2021
(1) SA 377
(SCA) at para 24
[10]
Haynes v King Williams
Town Municipality
1951
(2) SA 371
AD at para 378 F-L
[11]
Masetlha v President of
the Republic of South Africa and Another
[2007] ZACC 20
;
2008
(1) SA 566
CC at para 87-88
[12]
Constitution of the Republic
of South Africa, 1996