Makatse v National Lotteries Commission (1406/18) [2021] ZAECELLC 12 (15 April 2021)

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[2021] ZAECELLC 12
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Makatse v National Lotteries Commission (1406/18) [2021] ZAECELLC 12 (15 April 2021)

IN THE HIGH COURT
OF SOUTH AFRICA
EASTERN CAPE
LOCAL DIVISION, EAST LONDON
CASE
NO. 1406/18
In the matter
between:
MZUKISI
MAKATSE

Plaintiff
and
NATIONAL
LOTTERIES COMMISSION

Defendant
JUDGMENT
STRETCH
J.:
[1]
On
1 March 2017 the parties entered into a written employment contract
by virtue of which the defendant effectively appointed the
plaintiff
as its Eastern Cape grant agreement officer. On 10 August 2017, the
defendant appointed the plaintiff as its Eastern Cape
monitoring and
evaluation officer under the terms and conditions of service which
the parties had agreed to on 1 March 2017 by virtue
of the aforesaid
contract of employment.
[1]
It
is contended on the plaintiff’s behalf that this was a permanent
appointment.
[2]
According to the plaintiff he received
email instructions from senior officials of the defendant based in
Pretoria (Ms Marais and
Mr Chuene) on 3 and 4 August 2017,
instructing him to effect payment approval for a grant of
R6 054 220,00 to the Thato
Community Crisis Centre
(“Thato”) for the Buyelekhaya annual music festival (“the
festival”). He refused to comply, alleging
that the payment was
irregular and that his immediate supervisor, Ms Hugow, had instructed
him not to approve the payment as the
project was being processed by
the defendant’s Gauteng provincial office.
[3]
On 4 August 2017 he was given a notice of
precautionary suspension, calling upon him to give reasons, by 7
August 2017, as to why
he should not be suspended due to alleged
complaints about his general attitude and behaviour and his overall
ability to carry out
his duties. He was also instructed to pack up
and vacate the workplace forthwith.
[4]
It is the plaintiff’s version that he
submitted his reasons on 7 August 2017, with due reference to the
aforementioned irregularities.
On 10 August 2017 he was notified in
writing that he was suspended on full pay, pending investigations and
a possible disciplinary
hearing.
[5]
On 15 August he referred a dispute of
unfair suspension to the Commission for Conciliation, Mediation and
Arbitration (“the CCMA”).
On 27 October 2017 the defendant
presented him with a charge sheet for a disciplinary hearing set down
for 13 November 2017 (“the
first hearing”). On that day the
hearing was postponed to 18 December 2017 due to the non-availability
of someone to chair it.
[6]
On 18 December the hearing proceeded and
was adjourned to 9 and 10 January and 9 February 2018. In the
interim, and on 2 February
2018, the plaintiff was notified to attend
another disciplinary hearing (“the second hearing”) on 14 and 15
February to answer
charges relating to media reports about the
alleged irregularities which he had raised.
[7]
The first hearing continued on 9 February
and was adjourned to 20 and 21 February for the submission of written
argument, and to 23
February for the presentation of oral
submissions. On 12 February,  the defendant summarily dismissed
the plaintiff in respect
of the charges which formed the subject
matter of the second hearing which was due to commence two days
later, effectively rendering
moot the finalisation of the first
hearing.
[8]
On 14 February the plaintiff referred an
unfair dismissal dispute to the CCMA, which he subsequently withdrew.
On 5 April 2018 the
parties agreed to settle the unfair suspension
dispute which had been referred to the CCMA on 15 August 2017.
[9]
The plaintiff contends that his summary
dismissal without the second hearing amounts to repudiation (which
repudiation he does not
wish to have reversed) and is an unlawful
breach of his employment contract with the defendant, the relevant
clauses of which read
as follows:
‘
3.
This Agreement is subject to the Basic Conditions of Employment Act
(Act No. 75 of 1997) (“the BCEA”) as amended, as well as
any
terms and conditions contained in this Agreement. Subject to section
4 of the BCEA, in the event of a conflict between the BCEA
and the
Agreement, the provisions of the BCEA shall take precedence.
5.1 Disputes arising
from the interpretation of any signed Agreement between the parties
shall be adjudicated by an independent third
party who shall be an
attorney or advocate with no less than 5 (five) years’ experience.
5.2 Should the
Employee commit an act of misconduct of a serious nature that
warrants a disciplinary hearing, the Employer shall convene
a
disciplinary hearing by appointing a suitably qualified person as a
prosecutor and chairperson respectively.
5.3 The person to be
appointed as a prosecutor and chairperson respectively, shall be an
attorney or advocate with no less than 5
(five) years’ experience.
5.4 A person
appointed as a prosecutor shall, within reasonable time after his/her
appointment as a prosecutor formulate and present
a charge sheet to
the Employee.
5.5 The charge sheet
shall contain the description of the alleged misconduct with
sufficient information to enable the Employee to
prepare for his
defence.
5.6 The charge sheet
shall also inform the Employee of the following rights:
5.6.1 The right to
submit a written reply to the prosecutor or give oral evidence at
the commencement of
the enquiry;
5.6.2 The right for
the Employee to represent himself, be represented by a fellow
Employee or legal representative of choice;
5.6.3 The right to
make opening statement, give evidence and either personally or
through the chosen representative, call witnesses,
submit any
documentation or exhibit, cross-examine any witnesses called by the
Employer, inspect any documentation and/or exhibit
and to make
closing argument.’
[10]
In seeking to quantify the damages which he
has suffered as a result of the alleged breach and repudiation, the
plaintiff avers that
he was earning R586 897,00 per annum when
he was dismissed, and that he would have continued to render
remunerated services
(inclusive of salary increments, annual bonuses
and other benefits) until he reached the pensionable age of 65.  It
is further
contended that the plaintiff has suffered emotional stress
and/or psychological trauma caused by the embarrassment and financial
hardship which he has endured as a result of his unlawful summary
dismissal. All in all, the plaintiff’s contractual and delictual
claim for damages against the defendant comes to R10 367 094,00
made up of general damages for breach of contract as well
as past and
future loss of earnings.
[11]
On the pleadings, the defendant avers that
after his probation, the plaintiff was not appointed for a fixed
term, but for an indeterminate
period with a total annual
remuneration package of R544 431,74, with no additional
benefits. According to the defendant, the
decision to approve the
beneficiary funding for the grant to Thato for the festival was made
by the distribution agency at the defendant’s
head office, and that
there was nothing irregular about this.
[12]
In the premises, it is denied that the
plaintiff was instructed to
approve
the funding. All that happened, was, that in accordance with the
distribution agency’s prior approval of the music festival, Marais
and Chuene
instructed
the
plaintiff to administer the
processing
of the payment of the money for the
festival. In the circumstances the defendant contends that the
plaintiff’s task was to
verify
on
the computerised grant management system that all the necessary
documents, conditions, requirements and signed approvals were in
place for the festival project. Once this had been verified, the
plaintiff was to refer the already approved application via the
grant
management system to the finance department to process the payment.
[13]
It is the plaintiff, so it is argued, who
breached the employment agreement by unlawfully refusing to carry out
the instruction. In
particular, the defendant denies on the pleadings
that Hugow instructed the plaintiff not to approve a payment which
already had
the approval of the distribution agency.
[14]
It
is the defendant’s case that it was in fact the plaintiff who
repudiated his employment contract when he allegedly told one Fuzile
(a reporter from the Daily Dispatch newspaper) that “
he
had no intention of going back to Lotto
[2]
,
thereby expressing an unequivocal intention to no longer be bound by
his employment contract, which intention was communicated to
the
defendant via the newspaper. In the alternative, it is contended that
the plaintiff’s conduct, in making this statement, constituted
a
breach of a material and fundamental term of the contract which
entitled the defendant to cancel and summarily terminate the
contract.
[15]
As a second alternative, the defendant
pleads that the termination letter constituted lawful dismissal on
the grounds of misconduct,
in that the plaintiff’s actions
constituted such serious and material breaches of the employment
contract that they warranted his
summary dismissal. In the third
alternative, the defendant pleads that the employment contract has no
termination date and is an
indefinite contract for an indeterminate
period. The dismissal letter therefore merely draws the plaintiff’s
attention to the fact
that his employment has been terminated in
accordance with the plaintiff’s statutory two weeks’ notice
period as provided for
in s 37(1)(b) of the BCEA; alternatively, the
plaintiff’s contractually agreed two weeks’ notice period is
incorporated by reference
to clause 3 of the employment contract,
referred to above.
[16]
In the light of the provisions of the
employment contract, it is the defendant’s case that the plaintiff:
a.
refused to comply with a lawful instruction
from his superiors (Marais and Chuene) to process and administer a
grant payment in relation
to the festival;
b.
failed to protect the defendant’s
interests and to preserve its reputation by engaging with the media
with regard to the defendant’s
internal affairs, in flagrant
disregard of the defendant’s media and communication policy, by
conducting interviews for newspaper
articles during which he falsely
accused the defendant of corruption and mismanagement;
c.
failed to be honest with the defendant by
engaging with the media (without informing the defendant) about the
defendant’s internal
affairs as described above;
d.
during his suspension and whilst still in
the defendant’s employ (despite having been warned to refrain from
so doing), disclosed
confidential information to the public in
relation to the defendant’s business affairs, including beneficiary
grant information,
in contravention of regulation 8 of the 2001
regulations to the Lotteries Act 57 of 1977, which states the
following:
‘
Regulation
8(1):-
Subject to the
Constitution, the
Promotion of Access to Information Act 2 of 2000
,
the
Promotion of Administrative Justice Act 3 of 2000
, and the
Protected Disclosures Act 26 of 2000
, no person may in any way –
(a)
Disclose any information in connection with
any grant application or the grant itself;
(b)
Disclose the contents of the reports
contemplated in
regulation 6(1)
, or
(c)
Publish any information obtained in
contravention of paragraph (a) or (b); unless-
(i)
ordered to do so by a court of law;
(ii)
making a bona
fide confidential disclosure or publication to the Minister, the
Public Protector, Parliament or a committee designated
by Parliament,
a member of the South African Police Service or the National
Prosecuting Authority;
(iii)
the Juristic Person who made a grant
application and the board consent thereto in writing prior to that
disclosure or application;
or as provided for in these regulations.
(3)
Any person who contravenes sub
regulation (1) and (2) shall be guilty of an offence and liable to a
fine or imprisonment or both a
fine and imprisonment.’
e.
registered his own law firm on or
about 1 December 2017 under the name “Makatse Attorneys” in
circumstances where he failed to
disclose this fact to the defendant,
failed to obtain the defendant’s prior written consent and failed
to determine whether there
would be a possible conflict of interests
caused thereby.
[17]
The defendant avers that these defences
find support in the following clauses of the employment contract:
‘
6.3
The Employee shall comply with all reasonable and lawful orders and
instructions from the Provincial Manager: Eastern Cape Provincial
Office or the Employer.
6.6 The Employee
shall devote the whole of the Employee’s time and attention during
the Employee’s ordinary business hours, and
such reasonable amount
of additional time as may be necessary, having regard to the
exigencies of the business of the Employer, to
the business and
affairs of the Employer.
6.7 The Employee
shall use the Employee’s utmost endeavours to protect and promote
the business of the Employer and to preserve
its reputation and
goodwill.
6.8 The Employee
shall be faithful to the Employer in all dealings and transactions
whatsoever relating to its business interests.
6.10 The Employee
shall not during the Employee’s employment and thereafter in
perpetuity, regardless of the reason for termination
of the
Employee’s employment, communicate or divulge to any unauthorised
person any confidential matter or information relating
to the
business affairs of the Employer.
15.1 The Employee
shall not during the Employee’s employment by the Employer, without
the Employer’s prior written consent, for
reward, directly or
indirectly be engaged or employed by any business, trade, undertaking
or concern other than that of the Employer.
15.2 On commencement
of employment and thereafter on an annual basis the Employee shall be
required to make disclosure in writing
of any interest that
constitutes or could constitute a conflict of interest between the
Employee and the Employer.
15.3 In the event of
such a conflict of interest arising, the Employee hereby undertakes
to disclose such interest to the Employer
forthwith and seek written
approval in this regard.’
[18]
As
I have said, the plaintiff referred the issues of unfair suspension
and unfair dismissal arising from the above to the labour courts.
The
former issue was settled; the latter withdrawn. What has accordingly
been referred to this court for determination is the question
of
breach of contract only. In this regard, the defendant contends that
it was entitled to summarily dismiss the plaintiff because
it was he
who initiated the
lis
by repudiating the contract, and/or because he committed a series of
acts of misconduct which justified his summary dismissal. However,
even if it was not justified in taking this drastic step without
affording the plaintiff a hearing, it is contended that the plaintiff
is not entitled under the auspices of a claim for breach of contract,
to claim delictual damages in addition. This being the case,
so it is
argued, the plaintiff is only entitled, if successful, to the
equivalent of two weeks’ notice pay. To that end, the parties
agreed at the commencement of the trial to a separation of issues in
terms of
rule 33(4)
, with the merits and the nature of the
defendant’s liability to be dealt with up front and distinctly from
the issue of quantum.
[3]
[19]
A number of witnesses testified at the
protracted trial which ensued. Their testimony was lengthy and
detailed; in my view, often
to the point of exasperation. I found it
necessary to constantly remind the practitioners representing the
parties of what the issues
were. Having expressed this view, I intend
to traverse only the evidence which I found to be relevant to the
prosecution of and the
defence to a claim for breach of contract.
[20]
Within
limits, contracting parties are free to determine the nature and
content of the obligations that regulate their relationship.
They do
so by negotiating and agreeing upon the
terms
of
their contract – that is, the provisions which set out the nature
and the details of performances reciprocally owed by the parties.
The
mere fact that conduct constitutes a breach of contract does not
necessarily mean that the conduct is wrongful for the purpose
of
imposing delictual liability. The conduct must infringe a right of
the plaintiff that exists independently of the contract.
[4]
[21]
Ultimately, the plaintiff seeks an order
declaring the defendant’s summary termination of the contract to be
in breach thereof and
consequently unlawful, because, so the
plaintiff claims, the termination amounts to a repudiation of the
contract, which repudiation
the plaintiff nevertheless accepts. Thus,
to rely on cancellation in response to repudiation, the injured party
(that is the plaintiff)
must allege and prove:
a.
repudiation of a fundamental term of the
contract – that is, conduct that exhibits objectively a party’s
unequivocal intention
not to be bound by the contract. In other words
it is an intimation by or on behalf of the repudiating party by word
or by conduct
and
without lawful excuse
,
that all or some of the obligations arising from the agreement will
not be performed according to their tenor;
b.
an election by the injured party to
terminate;
c.
communication
of the election to the repudiating party.
[5]
[22]
Repudiation
is not a matter of intention. It is a matter of perception. The
perception is that of a reasonable person placed in the
position of
the aggrieved party. The test is whether such a notional reasonable
person would conclude that proper performance (in
accordance with the
agreement) will not be forthcoming. The inferred intention serves as
the criterion for determining the nature
of the threatened actual
breach.
[6]
[23]
As mentioned, it is the plaintiff’s case
that the summary termination of the employment contract without a
hearing is in breach
of clauses 3 and 5.1 to 5.6.3 of the contract.
The defendant admits that it terminated the contract on 12 February
2018 before finalising
the first disciplinary hearing and prior to
commencing the second. It claims that it did so lawfully in an act of
acceptance with
immediate effect of the plaintiff’s repudiation of
his employment contract on 10 February when the plaintiff expressed
his intention
to do so (as was reported in the Daily Dispatch
newspaper of that date), by saying that “
he
had no intention of going back to Lotto”.
This,
the defendant says, expressed an unequivocal intention to no longer
be bound by his employment contract which constituted a
repudiation
thereof; alternatively, a breach of a material and fundamental term
of the contract, which entitled the defendant to
cancel and summarily
terminate the contract. In the circumstances the plaintiff was
lawfully dismissed; alternatively, the termination
letter constituted
the bringing to the plaintiff’s attention of the termination of his
employment in accordance with the statutory
two week notice period as
provided for in the BCEA; alternatively, his contractually agreed to
notice period as reflected at clause
3 of the contract which states
that the agreement is subject to the BCEA where there is a conflict
between the BCEA and the contract,
or, by implication, where the
contract fails to provide for a notice period.
[24]
Accordingly, what this court has before it
on the pleadings, is the proverbial chicken and egg scenario. Both
parties rely on cancellation
in response to repudiation. The sequence
of events is, in the premises, of material significance.  On the
pleadings and on the
evidence for that matter, the plaintiff’s
refusal to obey what the defendant describes as a perfectly simple
and lawful instruction
from senior officials on 3 and 4 August 2017
seems to be the
fons et origo
of the dispute between the parties. I say this because it is common
cause that the plaintiff refused to comply. On 4 August 2017
the
respondent’s commissioner, Ms Mampane wrote a letter of
precautionary suspension to the plaintiff, who acknowledged receipt
on the same day. It reads (verbatim) as follows:
1.
The discussion between yourself, Mr Mzukisi
Makatse and Ms Sara Hugow on Friday 4 August 2017 has reference.
2.
With reference to this discussion, you have
now been made aware, that there are serious allegations in relation
to your conduct. These
allegations include frequent complaints
received from your colleagues in relation to your
general
attitude, behaviour and your
overall
ability to perform your duties.
3.
In light of the nature of these
allegations, we are of the view that these allegations are
serious
,
and we are to immediately commence an investigation into these
allegations. The purpose of the investigation is to establish the
veracity
of
the allegations and to determine whether disciplinary action, should
in the circumstances, be pursued against you.
4.
The NLC is of the view that your continued
presence in the workplace will be prejudicial to the investigation
and is considering placing
you on precautionary suspension pending
the finalisation of the investigation and any potential disciplinary
process.
5.
For a full and proper investigation to take
place and due to the nature of the allegations, we are further of the
view that in order
to ensure the integrity of the investigation and
the intimidation of witnesses your suspension is in our view
necessary.
6.
You are hereby being provided with an
opportunity to make written submissions why you should not be
suspended. You are required to
let me have your written
representations by email, by no later than Monday 7 August 2017 at
12h00.
7.
We believe that it would be appropriate for
you to take time in which to properly prepare your written
submissions and you are therefore
not required to continue tendering
your services today and come into the office until a decision has
been taken with regard to your
suspension. This does not however
constitute a suspension as a sanction.
8.
Should you fail to provide your written
representations by the time set out above, the NLC will make a
decision whether to suspend
you, without the benefit of your
representations.
9.
A meeting will be arranged on Monday 7
August 2017 at 15h00 in order to advise you of the decision with
regard to your possible suspension.
Your
co-operation is acknowledged in advance.
[7]
[25]
A
defendant who is prima facie liable for damages resulting from a
breach of the contract and wishes to rely on a contractual provision
exonerating it from liability is, in effect, confessing and avoiding
and accordingly bears the onus of establishing this defence.
[8]
It seems that the aforementioned “letter of precautionary
suspension” was written as a result of the plaintiff’s refusal to
obey an instruction. Surprisingly however, it does not say so but
beats about the bush using threatening terms such as “serious
allegations” in combination with vague terms such as “general
attitude” and “overall ability” to perform duties. How the
writer concluded that the nature of allegations of a general attitude
about an overall ability to perform duties, are serious, is
anybody’s
guess. The entire tenor of the letter is vague and embarrassing. How
the writer intended to forthwith commence an investigation
into the
veracity of these unmentionable and mysterious allegations is in
itself, a mystery. I am not surprised that the plaintiff
was of the
view that he was unfairly suspended and that his referral of this
conduct to the CCMA was ultimately settled.
[26]
The plaintiff was finally suspended on 10
August and he referred the dispute to the CCMA on 15 August.  He
was eventually charged
with misconduct and notified to attend a
disciplinary hearing more than two months later, on 27 October 2017.
In a nutshell,
he was being charged with:
a.
Gross insubordination, in that on 3 August
2017 he refused to comply with instructions from Marais, Chuene and
Hugow to process payment
approval on the annual music festival
pro-active funding project.
b.
Gross insolence, in that he sent
disrespectful, condescending and rude emails to his superiors wherein
he copied senior NLC staff
and on one occasion the Department of
Trade and Industry. The examples cited are:
i.
On 2 August 2017 he wrote an email to
senior manager Moloko complaining about the staff restructuring
process and demanding documentation
explaining the rationale behind
the process and demanding the minutes referring to the restructuring
decision and the information
relied on, as well as complaining that
material terms of his employment contract had been unilaterally
altered in the absence of
consultation, and threatening to take legal
action if a proper consultative process was not followed.
ii.
On 7 August 2017 he sent an email to
national commissioner Mampane with a copy to staff members of the
Department of Trade and Industry,
making serious allegations against
senior NLC staff stating that his letter of provisional suspension
was founded on spurious reasons,
when the real reason was his refusal
to approve payment he considered to have been irregular.
iii.
In the same email he levelled serious
allegations of irregular activity such as the executive giving union
leaders highly paid jobs
without having advertised them in the spirit
of a fair and competitive process.
iv.
In the same email he also made serious
allegations against the NLC by alleging that it continues to fund
projects that are effectively
designed by agents whose purpose it is
to “rip off” rightful beneficiaries, instead of protecting
resources from being preyed
on by these unscrupulous agents.
v.
In forwarding a copy of the email to staff
members of the Department of Trade and Industry, he contravened the
defendant’s information
classification policy, in that information
regarding the NLC and its systems is classified in order to protect
the integrity, confidentiality
and the availability of the NLC
information and systems.
[27]
This disciplinary hearing had already
commenced when the plaintiff was slapped with a second hearing
accusing him of further acts
of serious misconduct which may be
summarised as the following:
a.
commenting on and/or divulging confidential
information about the NLC’s business affairs to a Sunday Times
reporter without having
been authorised to do so, which is in
contravention of the defendant’s media and public information
policy, in contravention of
the defendant’s ethics and conduct
policy,  in breach of his employment contract, and in violation
of the
Lotteries Act 57 of 1997
;
b.
grossly violating the regulations
pertaining to distributing agencies by disclosing information about a
grant / beneficiary;
c.
failing to disclose that he is a director
of  Makatse Attorneys, in breach of the conditions of his
employment contract and in
violation of the NLC’s ethics and
conduct policy.
[28]
On 12 February 2018, before the
second hearing could commence, and before the first one could be
finalised, the plaintiff was summarily
dismissed in writing. The
dismissal was with immediate effect. The termination letter
(verbatim) reads as follows:
‘
SUBJECT:
TERMINATION OF YOUR EMPLOYMENT CONTRACT
1.
I refer to the CCMA Arbitration Hearing
held at CCMA offices in East London on the 25
th
day of January 2018 under case number ECEL 3348-17 to which you are
an applicant party in the matter between yourself and NLC whereby
you
publically testified that you conducted an interview with a Sunday
Times journalist thus causing you to be in Breach of the Marketing
and Communications: Media and Public Information policy by disclosing
NLC’s confidential information to third parties without being
authorised to do so;
2.
Breached the Marketing and Communications:
Media and Public Information policy by failing in particular to
observe clauses 8.1 and
8.3.2 of the policy by disclosing
confidential information, in that when approached by the Sunday Times
and Daily Dispatch Newspaper
journalists, you commented on and/or
divulged confidential NLC information to third parties without being
authorised to do so;
3.
You have further failed to disclose that
you are directly or indirectly engaged with or employed by any
business, trade, undertaking
or concern other than that of the NLC,
in that you have not disclosed that you are a director of Makatse
Attorneys (see Annexure
A) and by doing so you have breached your
employment contract with specific reference to clause 15; and have
further violated the
NLC’s Ethics and Conduct Policy;
4.
You
have on 20 March 2017, at 15h41 sent an email to an email address of
a
dawnb@dispatch.co.za
wherein you attached a political opinion piece written in your
personal capacity (see Annexure B). You have abused the employer’s
time and resources and further violated the NLC’s Ethics and
Conduct Policy;
5.
Breached your employment contract – in
that you have made available to third parties confidential
information relating to the business
affairs of the NLC, which is
contrary to Clause 17 of your contract of employment dated 1 March
2017;
a.
Grossly violated section 7F(1)(a)(c)(d) of
the Lotteries Act 57 of 1997 (as amended);
b.
Grossly violated the NLC’s Ethics and
Conduct Policy; and
c.
Grossly violated Section 8 (1) of the
Regulations Relating to Distributing Agencies as per Government
Gazette 7013 of 22 February
2001 – by disclosing information about
a grant or beneficiary;
6.
Your conduct caused a serious and imminent
risk to the reputation of NLC;
7.
The
employer had given you the platform to ventilate your issues in terms
of its policies but you chose to disrespect the policies
and
procedures at your disposal;
[9]
8.
It is upon the above captioned background
and your comment on the Daily Dispatch Newspaper article published on
Saturday, 10 February
2018 where you indicated that you “have no
intention of going back to Lotto” that I bring to your attention
the fact that the
employment between yourself and the National
Lotteries Commission is irretrievably broken down.
9.
In light of the above actions which
constitute serious misconduct you are therefore summarily dismissed
with immediate effect.
Your Faithfully,
Mr Philemon Letwaba
Acting Commissioner:
NLC
Date: 12/02/2018’
[29]
In a nutshell, these are the four grounds
upon which the defendant ultimately relied for its summary dismissal
of the plaintiff. As
I have mentioned, the defendant called a number
of witnesses to prove the allegations set forth in the above
termination letter,
in order to justify its summary dismissal of the
plaintiff without finalising the disciplinary hearings which were
designed, I would
imagine, to traverse the veracity of these very
allegations. Not only were these witnesses called, but also a number
of irrelevant
witnesses who testified on aspects totally unrelated to
these specified grounds for dismissal, inclusive of those called
during the
plaintiff’s case.
[30]
The plaintiff claims that the defendant
unlawfully terminated the contract by not affording him a
disciplinary hearing, and that this
amounts to repudiation. He does
not however claim specific performance. He has accepted the
repudiation, and is claiming damages
instead.
[31]
This being the position, the issue which
this court must decide is whether the defendant’s conduct, in
summarily dismissing the
plaintiff in the absence of a disciplinary
hearing, amounts to breach of contract. It is both unusual and
unfortunate that the contract
does not contain any breach and/or
cancellation clauses.
[32]
To my mind compliance with clause 5, which
refers to dispute resolution and disciplinary procedure, is not
peremptory. It is so that
it deals with the steps to be taken once
the employer is of the view that the employee has committed a serious
act of misconduct
which warrants a disciplinary hearing. It does not
however define a serious act of misconduct.
[33]
In the absence of such a definition, the
contract itself advises the parties to resort to the BCEA, which has
devoted an entire chapter
to termination of employment. The relevant
portion of s 37 thereof reads as follows:
‘
Notice
of termination of employment.
– (1)
Subject to section 38, a contract of employment terminable at the
instance of a party to the contract may be terminated only
on notice
of not less than –
…
(b)
two weeks, if the employee has been employed for more than six months
but not more than one year;
[10]
…
(6) Nothing in this
section affects the right  -
(a)
of a dismissed employee to dispute the lawfulness or fairness of the
dismissal in terms of Chapter VIII of the
Labour Relations Act, 1995
,
or any other law
[11]
; and
(b) of an employer
or an employee to terminate a contract of employment without notice
for any cause recognised by law.’
[34]
In the circumstances the enquiry into the
above is two-fold:
a.
Did the plaintiff commit one or more of the
acts referred to in the termination letter as “serious misconduct”?
b.
If so, did the plaintiff have a cause
recognised in law to terminate the employment contract without
notice?
Interviews with
the media
[35]
It is not in dispute that the plaintiff was
interviewed by the media in the form of inter alia the Sunday Times
and the Daily Dispatch
newspapers, and that he participated in these
interviews without obtaining the requisite authority to do so. The
defendant alleges
that this amounts to disclosure of confidential
information to third parties without having been authorised to do so,
in breach of
clauses 8.1 and 8.3.2 of the defendant’s media and
public information policy.
[36]
Whether the plaintiff was justified in
speaking to the media is, in my view, neither here nor there. Nor is
his defence that it was
the defendant who spoke to the media first.
Clause 8.3.2 of the defendant’s media and public information policy
is clear.
It states that staff members who are directly approached by
a member of the media should not attempt to answer questions
themselves.
Instead they should refer the journalist to the marketing
and communications manager for management of the response.
[37]
It
is common cause that the plaintiff did not do so. Clause 10 of the
policy clearly provides that employees who do not adhere thereto
shall be subjected to disciplinary measures in terms of the
disciplinary procedures of the NLC.
[12]
Non-disclosure of
other interests
[38]
It is further common cause that as at 6
February 2018 the plaintiff, a duly admitted attorney - was the sole
proprietor of the firm
Makatse Attorneys (a law firm which he
registered in December 2017, four months after his suspension), was a
registered member of
the Cape Law Society, was in possession of a
fidelity fund certificate for the year ending 31 December 2018, and
by virtue of the
aforegoing, was entitled to practise as an attorney.
It is not in dispute that the plaintiff failed to disclose his
interest in this
business concern to the defendant.
[39]
According
to the defendant, the plaintiff’s business concern is an
“incompatible activity” as defined in clause 15 of the employment
contract which states that the plaintiff shall not, during his
employment with the defendant, for reward, directly or indirectly
be
engaged with or employed by any business, trade, undertaking or
concern other than that of the defendant, without the defendant’s
prior written consent. The defendant further avers that this is in
gross violation of its ethics and conduct policy. Clause 7.1 of
the
policy states that employees shall avoid putting themselves in a
position that could lead to perceived or actual conflict of
interest.
Clause 7.3 states that employees shall disclose any business or other
interest that is likely to create a conflict of interest.
Clause 7.4
states that all business or other interests that are likely to create
a potential conflict of interest shall be disclosed,
including all
business interests, direct or indirect, in any other entity or
business venture, membership to trade, business or other
economic
activities. Clause 7.7 states that the employer may institute
disciplinary proceedings against any person who fails or refuses
to
comply with or who contravenes clause 7.
[13]
In terms of clause 7.8, the employer may, after considering whether
such conflict or circumstances is likely to compromise the employee’s
impartiality, inform the employee of its decision which may include
but is not limited to instituting a disciplinary enquiry to probe
such conflict,
or
dismissing the employee from employment in accordance with relevant
NLC policies and applicable legislation.
[40]
The plaintiff explained that he registered
this interest after Hugow had testified at his disciplinary hearing
that there had been
an irretrievable breakdown in the trust
relationship between the plaintiff and the defendant, and that it
would be preferable that
he not be permitted to return. This was also
reflected in an opinion (dated 25 August) given by attorneys whom the
defendant had
employed.  His purpose was to provide a form of
potential income, in the event of the termination of his services. He
was aware
that policy and his employment contract dictated that he
had to obtain the prior approval of the defendant, but did not do so
because
he was on suspension and not permitted to return to the
workplace. He later admitted that he could have obtained consent by
simply
mailing or emailing the defendant.
[41]
Much was made about whether he made his
services available as a private lawyer in exchange for remuneration
thereafter. To my mind,
this is irrelevant. The defendant’s ethics
and conduct policy and its contract of employment with the plaintiff
make it clear that
this is a registrable interest which the plaintiff
ought to have disclosed, and which he failed to do.  The fact
that he was
on suspension at the time is no excuse.
Abuse of time and
resources
[42]
It is alleged (and not disputed) that on 20
March 2017, during working hours, the plaintiff transmitted a
political opinion piece
of which he was the author.  In so
doing, so it is contended, the plaintiff failed to devote the whole
of his time and attention
during ordinary business hours, to the
defendant’s business and affairs, thus contravening clause 8 of the
defendant’s ethics
and conduct policy, which discourages employees
from pursuing outside interests which might create or appear to
create excessive
demand upon their time, attention and energy, and
which would deprive the NLC of their best efforts on the job or give
rise to distractions
which interfere or appear to interfere with the
independent exercise of judgment in the NLC’s best interests.
Employees who
do not adhere to this policy shall be subjected
to disciplinary measures in terms of the NLC’s disciplinary
procedures.
[43]
The plaintiff, when he testified on this
aspect, went into detail about how he does publish opinion pieces on
different media platforms
like the City Press, the Daily Dispatch and
Politicsweb, but that he does not get paid for these articles. Once
again, the plaintiff
is missing the point. The accusation is a simple
one, viz that the plaintiff used the defendant’s time and resources
to email work-unrelated
matter. This is not in dispute. The fact that
other employees were also making personal use of the employer’s
time and facilities
(as raised by the plaintiff in evidence), is once
again, neither here nor there.
Disclosing
information about a grant or beneficiary
[44]
It is alleged that the plaintiff breached
his employment contract by making available to third parties
confidential information relating
to the business affairs of the NLC
(viz by disclosing information about a grant or a beneficiary) in
contravention of clause 17 of
his contract of employment as well as
in violation of “
s 2F(1)(a)(c)(d)
of the Lotteries Act”, the
ethics and conduct policy, and
s 8(1)
of the regulations relating to
distribution agencies, thereby causing “a serious and imminent
risk” to the defendant’s reputation.
These violations appear to
relate inter alia to his contribution to the publication of three
newspaper articles: the first in the
Sunday Times of 28 January 2018,
the second in the Mail & Guardian of 9 February 2018, and the
third in the Daily (Saturday)
Dispatch of 10 February 2018. The
following information was published in the Sunday Times:
‘
Tens
of millions of rands of lottery funds intended for good causes are
moving through the hands of “Lottopreneurs” who have cashed
in on
a change in the law: The 2015 amendment allows non-profit
organisations to act as “conduits” to new or small organisations
unable to meet stringent criteria for grants. The change also allows
the National Lotteries Commission to be more proactive and channel
funding to institutions when it believes there is an urgent need,
such as drought or disaster relief.
Annual reports from
the commission only name the conduits, making it impossible to
ascertain how many organisations have been funded
this way – or to
trace the grants they received.
In one case
discovered during an investigation by the Sunday Times a rural
private school in Limpopo has received almost R30-million
while
acting as a conduit. …
In a third example,
the Buyel’Ekhaya Pan African Festival – an annual event in the
Eastern Cape – was awarded R6-million late
last year. It is unclear
how the grant was channelled, as Buyel’Ekhaya was not eligible for
funds in 2016.
Mzukisi
Makatse, provincial monitoring and evaluation officer at the
commission, has been suspended for “insubordination” after
he
refused to approve the grant because, he said, it did not meet
requirements.
’
[14]
[45]
The plaintiff testified that he did not
understand what he was being accused of as he was only commenting on
information which had
already been released by the defendant’s
senior officials to the public. In commenting on paragraph 6 of the
termination letter,
which states that his conduct “caused a serious
and imminent risk to the reputation of NLC” he said the following:
‘
Well,
as I said, without any substantiation of all these allegations and
without any – I mean without an opportunity to have answer
to these
allegations, it cannot really be proven that I had caused harm to the
reputation of the National Lotteries Commission.”
[46]
This reply demonstrates that the plaintiff
has, once again, missed the point. He admitted during
cross-examination that he made internal
emails between him and the
defendant available to the media. These emails contained direct
information relating to a grant and a
beneficiary. He admitted having
participated in an interview with the Daily Dispatch reporter, and
having shown him internal documentation.
Indeed, he admitted having
been the source of the information referring to internal
administrative processes and a grant and a beneficiary,
published in
the Daily Dispatch newspaper of 10 February 2018, which reads thus:
Lotto dissenter
gets boot over Buyel’Ekhaya ‘funding’
‘
A
Lotto dissenter who refused to approve a funding application for
Buyel’Ekhaya Music Festival and an unknown charity organisation
was
suspended from his job.
National
Lotteries Commission (NLC) employee Mzukisi Makatse, who says he
exposed the alleged fronting in a Buyel’Ekhaya Music Festival
funding application, claims he was given the boot after he called for
action to be taken.
He
was suspended by NLC commissioner Thabang Mampane a day after he
reported his concerns to his provincial manager in the Eastern
Cape.
Makatse
said he was suspended for “asking all the right questions” about
the non-profit organisation (NPO) Thato Community Crisis
Centre’s
application, which stated that the R6-million Thato wanted from Lotto
would be paid over to the Buyel’Ekhaya festival.
Makatse
said that on August 3 last year, he was tasked by NLC provincial
head, Sarah Hugow and ELsabe Marais to authorise the approval
of
payment for a project involving the Buyel’Ekhaya festival, held
annually in the Eastern Cape.
Speaking
to the Saturday Dispatch, Makatse said all the funding applications
and processing for the event were done in Gauteng, which
jarred.
“
The
grant agreement allocation letter and quality control was all done in
Gauteng,  not in the Eastern Cape as it was supposed
to,” he
said.
“
Payment
is the end of the process after all those other steps were done.
“
There
was no way I would agree to approving payment for a project done by
someone else in Gauteng instead of the Eastern Cape.”
He
felt he was being forced to approve an illegal payment.
“
I
declined to give such an illegal approval but I learned that my
refusal didn’t go well with some of my colleagues including those
in our head office,” he said.
The
next day, August 4, Mampane sent him a notice of precautionary
suspension.
The
Saturday Dispatch has seen the letter, which accused him of “gross
insubordination in that you acted in flagrant disregard of
the
authority of your employer by defying the lawful instructions of your
superiors … You refused to carry out the instruction
to process
payment approval on a pro-active funding project, Buyel’Ekhaya
Annual Music Festival.”
On
August 7, Makatse said he was suspended on what he felt were spurious
reasons. “I have no doubt that one of the real reasons
for my
suspension is my refusal to approve payment I consider irregular. The
Buyel’Ekhaya application was fronting,” said Makatse.
He
has taken the NLC to the CCMA in East London.
The
NLC confirmed that he is on suspension.
“
For
the record, we can confirm that he is on suspension with full pay and
benefits, However, we have reliably learnt that he is a
practising
attorney, registered with the Cape Law Society and has been appearing
in court attending to matters.
“
This
is in violation of his employment contract with the National
Lotteries Commission and the Ethics and Conduct Policy of the NLC.
“
Furthermore,
we have reliably learnt that he in fact writes for your publication
as well.
“
We
view this in a serious light and as an act of theft from the
Commission as it is illegal for NLC employees to take up double
employment.”
Makatse
said the NLC knew he had opened up his law firm after his suspension,
and had no intentions of going back to Lotto.’
[15]
[47]
The Mail & Guardian article records the
following:
‘
A
National Lotteries Commission official in the Eastern Cape, Mzukisi
Makatse, refused to process the funding. In emails, Makatse
states
that he cannot sign off a project flagged in Gauteng.
“
This
means whoever did all these processes must do payment approval
because they know for sure it’s a project to be paid. It can’t
come to me at the end of the process for payment. I will never be
able to account for such a decision”, the email reads.
[16]
[48]
It is clear from the above that the
plaintiff persisted in making confidential information public,
despite having been warned in writing
by the defendant to desist. The
following letter, written by the defendant’s senior legal officer
and dated 7 February 2018, is
of relevance:
‘
Dear
Mr Makatse,
1.
You would have now received the charge
sheet and bundle of documents served upon you on Friday, 02 February
2018 relating to the disciplinary
enquiry that is scheduled for 14
and 15 February 2018;
2.
We wish to remind you that you are
obligated to comply with the terms and conditions of your employment
contract as well as the NLC’s
policies,
Lotteries Act and
Regulations;
3.
You are hereby instructed to desist from
making any further comments and/or disclosing confidential
information relating to the NLC,
its beneficiaries and staff to any
third party.
4.
You are further instructed to ensure your
compliance with our policies specifically the Marketing and
Communications: Media and Public
Information Policy as well as the
NLC’s Ethics and Conduct Policy. Should you be contacted by any
third party requesting information
relating to the NLC, its
beneficiaries or staff, you are required to ensure you follow the
NLC’s protocol and comply with the aforementioned
policies
accordingly.’
[49]
It
goes without saying that the defendant made its best endeavours to
process the plaintiff in terms of disciplinary action, and that
it in
fact commenced these proceedings in good faith, formulating and
presenting the plaintiff with disciplinary charge sheets, commencing
with the first hearing and setting down the second. Despite this, the
plaintiff, by his own admission, preferred to ventilate his
issues
via the media platform, rather than embrace the disciplinary platform
which the defendant had provided for him to “ventilate”
his
issues “in terms of its policies”.
[17]
[50]
It is contended on the defendant’s
behalf that each of the aforementioned acts of misconduct are of a
sufficiently serious nature
to individually warrant the plaintiff’s
summary dismissal, regard being had to his duty of good faith and to
act at all times in
the interests of the employer.  It is
further contended that when these various acts of misconduct are
cumulatively considered,
the position could not be clearer.  The
plaintiff’s conduct in making public pronouncements in the media,
in flagrant disregard
of a written warning and after having been
served with a disciplinary charge sheet relating to these very
activities, was in gross
violation of his duty of good faith, and
was, in my view, counter-productive, if he genuinely wished to have
the full
audi alteram
benefit
of the disciplinary enquires, which he now relies on as his only
ground for bolstering his claim for breach of contract.
[51]
Furthermore, as succinctly demonstrated by
the defendant’s counsel, causation is a necessary element in any
damages claim. If this
court accepts that the plaintiff’s
misconduct was sufficient to warrant his dismissal at common law,
then it must follow that the
plaintiff’s damages claim must fail.
This is so because the real and proximate cause of the plaintiff’s
dismissal is not the
defendant’s failure to complete the
disciplinary process, but rather the fact of the plaintiff’s
persistent and continued misconduct.
Differently stated, the
plaintiff has not shown that the failure to finalise the disciplinary
hearings caused his loss, rather than
his own misconduct.  The
necessary element of causation which links the loss to the cause of
the alleged damage is simply absent.
I agree. I also agree with the
defendant’s submission that, had the plaintiff sought
re-instatement based on the defendant’s
alleged breach of contract
in failing to hold an enquiry, the position may have been different,
because the problem of causation,
whereby the loss suffered must be
linked to the contractual breach, would not arise in those
circumstances.
[52]
Absence of causation is a complete defence
on the merits of the plaintiff’s damages claim. This being the
case, it is not necessary
to traverse the other defences (which
admittedly have their own merits) raised by the defendant.
The principles of
natural justice and public policy
[53]
The
plaintiff claims that the defendant breached the contract between the
parties when it summarily terminated the contract without
concluding
the disciplinary hearings. The defendant has denied this and in
particular has shown, successfully in my view, that the
termination
letter constituted the lawful dismissal of the plaintiff on
inter
alia
grounds
of his continuous misconduct. The defendant has, to my mind, shown
that these acts of misconduct (the commission of which
are not
seriously disputed) cumulatively constitute a material breach of the
employment contract which is sufficiently serious to
warrant summary
dismissal.  As I have been at pains to point out, the BCEA
provides for summary dismissal. The employment contract
itself
provides that it is subject to the BCEA. There is nothing
extraordinary or unconstitutional about summary dismissal
in
appropriate circumstances.  This is not a situation where the
defendant has failed to act in accordance with the principles
of
natural justice or in a manner which offends public policy as
suggested by the plaintiff. Nor is this a case where the employment
contract itself is contended to be contra bones mores.
[18]
This is a simple case where the defendant, as the employer, has
exercised its discretion, which it is entitled to do. It is
only when
the exercise of the employer’s discretion is arbitrary and in
conflict with the provisions of a  perfectly fair
contract, that
the employee is entitled to complain. It is not the plaintiff’s
case that the terms of the contract are unfair and
contrary to the
Constitution. It is the plaintiff’s case that the defendant failed
to comply with the terms and conditions thereof.
I have already found
that this is not the case.
[54]
In the premises the plaintiff’s claim is
dismissed with costs.
_______________________
I.T. STRETCH
JUDGE OF THE HIGH
COURT
For
the plaintiff: Mr Simoyi
Instructed
by Bakumeni Attorneys
KING
WILLIAMS TOWN
Tel.
071 835 5666
Email:
bakumeniattorneys@gmail.com
Ref.
M/05/CIV/BAKUMENI
Care
of: Gode Attorneys
EAST
LONDON
Email:
sipho@yahoo.com
For
the defendant: M. Antrobus SC and L. Peter
Instructed
by Ndobela Lamola Incorporated
PRETORIA
Tel.
012-346 6710
Email:
Kgomotoso@nlinc.co.za
/
katekani@nlinc.co.za
Care
of: Bate Chubb and Dickson Attorneys
EAST
LONDON
Tel.
043-701 4500
Email:
Lindeka@batechubb.co.za
Dates
heard: 19 to 23 October 2020
Filing
of plaintiff’s written argument: 13 November 2020 and 4 December
2020
Filing
of defendant’s written argument: 25 January 2021
Transcript
filed: 27 January 2021
Date
handed down by way of email transmission to the local attorneys: 15
April 2021
[1]
This
was pursuant to a restructuring of the defendant in terms of which a
board decision was taken to discontinue the position of
grant
agreement officer and to substitute it with the post of monitoring
and evaluation officer with effect from 1 August 2017.
[2]
As
reported in the Daily Dispatch of 10 February 2018
[3]
The
separation at the commencement of the trial was both practical and
convenient, the purpose thereof being, that if I were to
find that
the plaintiff was entitled to notice pay at the end of the trial on
the merits, the quantum of two weeks’ severance
pay was capable of
easy and accurate determination without the necessity of a
protracted trial.
[4]
Dale
Hutchison et al: The Law of Contract in South Africa: Oxford
University Press 2ed 2014 at 8-9.
Holtzhausen
v Absa Bank Ltd
2008
(5) SA 630
(SCA) at 633-4.
[5]
See
Schlinkmann
v Van der Walt
1947
(2) SA 900
(E) page 919;
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd
2001
(2) SA 284 (SCA)
[6]
Datacolor
above
para. 16;
Braun
Medical (Pty) Ltd v Ambasaam CC
2015
(3) SA 22 (SCA)
[7]
Emphasis
added by the use of italics
[8]
See
Strijdom
Park Extension 6 (Pty) Ltd v Abcon (Pty) Ltd
1998
(4) SA 844 (SCA)
[9]
Emphasis
added
[10]
Which
applies to the plaintiff, who was employed on 1 March 2017 and
received his letter of termination on 12 February 2018.
[11]
An
avenue which the plaintiff pursued and then elected to abandon.
[12]
Which
steps the defendant took in good faith on 5 February 2018 by giving
the plaintiff notice to attend the second disciplinary
hearing.
[13]
Which
is exactly what the defendant did on 5 February 2018 when it
notified the plaintiff of the second disciplinary enquiry.
[14]
Emphasis
added.
[15]
In
relation to this article, the plaintiff testified that the only
problem he had therewith is that he did not tell the reporter
that
he had no intention of returning to the NLC. All he said was, given
the treatment he had received from the defendant and the
utterances
made by Hugow to the effect that the employer no longer wanted him
as part of the organisation, it was clear that he
would “get the
boot” ie that he would be dismissed by the defendant “and not go
back”.
[16]
During
evidence the plaintiff admitted having furnished the reporter with
these
emails.
[17]
As
pointed out by the defendant in paragraph 7 of its termination
letter referred to above.
[18]
See
the plaintiff’s misplaced reliance on cases such as
Administrator
of Transvaal and Others v Zenzile and Others
1991
(1) SA 21
(AD)