Brief Summary

Contract — Breach of employment contract — Plaintiff claimed damages from Tshwane University of Technology for alleged breach of contract following dismissal for financial misconduct — Court found no breach of contract as plaintiff did not dispute the guilty finding and waived his right to appeal — Plaintiff's claim dismissed with costs, as procedural breaches did not result in damages due to the serious nature of the misconduct.

Comprehensive Summary

Summary of Judgment

1. Introduction

This judgment concerns an application for leave to appeal brought in the High Court of South Africa, Gauteng Division, Pretoria. The application followed an earlier judgment in which the court dismissed a contractual damages claim arising from the termination of an employment relationship.

The plaintiff/applicant, Mr Charles van den Berg, had instituted action against the defendant/respondent, Tshwane University of Technology (TUT), claiming damages in the amount of R8 126 735.00 (alternatively R10 241 336.00) allegedly suffered due to breach of contract by his former employer. The trial court dismissed the action with costs, finding that the plaintiff had not proved breach of contract in respect of the pleaded complaints that remained in dispute at the end of the evidence.

The leave to appeal application was pursued on a limited basis. The applicant contended that the court erred in concluding that TUT had not breached the employment contract by denying him a right of internal appeal, particularly because the court found that he had waived/abandoned that right in circumstances where waiver had not been pleaded. The subject-matter of the dispute was therefore not the fairness of dismissal in labour-law terms, but whether the applicant could establish contractual liability in damages based on alleged procedural breaches associated with disciplinary proceedings culminating in dismissal.

2. Material Facts

The applicant was dismissed on 5 August 2009 after being found guilty at a disciplinary hearing that proceeded in his absence. The charges related to several financial irregularities associated with the Hartebeeshoek training facility used for practical training by the Department of Horticulture. The judgment records that the guilty finding stood and had not been successfully challenged in any forum.

In the High Court action, the applicant confined his damages claim to alleged procedural breaches of his employment contract during the disciplinary process. The dispute in the action was thus not directed at whether he was guilty of the underlying misconduct; rather, it focused on whether TUT failed to comply with certain contractual procedural requirements, and whether any such failure could found a claim for damages.

In relation to the internal appeal issue specifically, the court’s findings in the leave to appeal judgment proceeded from the factual premise that there was no evidence that the applicant (or those representing him) had disputed the instruction that TUT did not have an appeal process in place or that no right of internal appeal existed. The court also relied on the fact that the applicant had been legally represented throughout the disciplinary process, yet he did not pursue contractual enforcement through section 77(3) of the Basic Conditions of Employment Act 75 of 1997, which the court described as providing a remedy in the form of specific performance, including compelling the convening of an appeal hearing.

Chronologically, after dismissal, the applicant elected to refer an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA), alleging that the dismissal was substantively and procedurally unfair. The judgment records that the unfair dismissal dispute was heard by the CCMA on 2 October 2009, and that CCMA arbitration is a de novo hearing of the issues.

3. Legal Issues

The application raised two interlinked legal questions.

The first was whether the trial court’s conclusion that the applicant had waived/abandoned his right to an internal appeal (and that TUT therefore did not breach the contract by not affording an appeal) could stand where waiver was not expressly pleaded. This issue concerned primarily the application of legal principles to the established facts, including the inferences the court considered permissible from the applicant’s conduct and litigation choices.

The second was whether there were reasonable prospects of success on appeal, applying the statutory threshold for leave to appeal under section 17(1)(a)(i) of the Superior Courts Act 10 of 2013. This required a value judgment by the court about the likely success of an appeal on the limited ground advanced, in light of the case’s contractual framework, causation and damages requirements, and the context of serious misconduct.

4. Court’s Reasoning

The court located the dispute within its proper contractual and remedial context. It stressed that, although an employee may pursue common-law contractual damages for alleged procedural breaches, such claims must be assessed against the surrounding facts, including the nature of the misconduct and whether the alleged procedural non-compliance was material or causative of loss. The court reiterated that employees owe duties of good faith, and that misconduct involving dishonesty or financial mismanagement typically destroys the trust relationship, entitling an employer at common law to terminate employment.

Central to the reasoning was the Labour Appeal Court’s approach in SA Football Association v Mangope (2013) 34 ILJ 311 (LAC). The High Court adopted the principle that procedural breaches in a contract of employment, even if established, are not necessarily material at common law and will be “of no contractual consequence unless it results in damages”, particularly where the employee’s own conduct constitutes a material breach or repudiation justifying termination. The court emphasised the requirement of a causal nexus between breach and damages: the claimant must show that the loss claimed was factually caused by the breach by comparing the post-breach position with the position that would have existed absent the breach.

Applying those principles to the applicant’s complaint about denial of an internal appeal, the court highlighted factual features that, in its view, were inconsistent with a live assertion of an enforceable contractual entitlement to an appeal. It relied on the absence of evidence that the applicant, his trade union, or his legal representatives ever disputed the statement that no internal appeal existed. It further relied on the applicant’s election not to seek specific performance under section 77(3) of the BCEA, which the court treated as an available mechanism to compel performance of contractual procedures (including an appeal). Instead, the applicant pursued the CCMA route, represented by counsel, seeking a full rehearing of the dismissal dispute in a forum where arbitration proceeds de novo.

On the applicant’s contention that waiver/abandonment was not pleaded, the court held that this omission was not consequential on the facts of the case. The court’s conclusion was that the combination of the applicant’s knowledge of his procedural rights, his representation, his failure to place the employer on terms to perform, and his election of alternative remedies supported the finding that TUT had not breached the contract in relation to the internal appeal complaint. In addition, the court reasoned that even if a procedural breach had existed (which it did not accept), the breach had to be evaluated in the context of the applicant’s dismissal for serious financial misconduct and the contractual requirement of proof of damages caused by the alleged breach.

The court also referred to the Constitutional Court’s explanation in Steenkamp and Others v Edcon Ltd 2016 (3) SA 251 (CC) of the Labour Relations Act’s design: where the LRA creates rights, it also creates specific processes, fora, and remedies for their enforcement. The court used this to underline the risks inherent in electing to frame an employment dispute as a common-law contractual damages claim rather than using the dispute-resolution architecture of the LRA, particularly where the complaint is procedural in nature.

Finally, turning to the leave to appeal test under section 17(1)(a)(i) of the Superior Courts Act 10 of 2013, the court was not persuaded that an appeal would have reasonable prospects of success, nor that any other compelling reason justified the appeal being heard.

5. Outcome and Relief

The application for leave to appeal was dismissed.

The court ordered the applicant to pay costs, including the costs of two counsel where employed.

Cases Cited

Van Den Berg v Tshwane University of Technology (16704/2012) [2019] ZAGPPHC 60 (14 March 2019).

SA Football Association v Mangope (2013) 34 ILJ 311 (LAC).

Steenkamp and Others v Edcon Ltd 2016 (3) SA 251 (CC).

Zuma and Another v Public Health and Social Development Sectoral Bargaining Council & Others (2016) 37 ILJ 257 (LC).

South African Transport and Allied Workers Union v MSC Depots (Pty) Ltd (2013) 34 ILJ 206 (LC).

Potgietersrus Platinum Ltd v Commission for Conciliation, Mediation and Arbitration and Others (1999) 20 ILJ 2679 (LC).

Legislation Cited

Basic Conditions of Employment Act 75 of 1997, section 77(3).

Labour Relations Act 66 of 1995, sections 185, 186, 187, 188 and 191.

Superior Courts Act 10 of 2013, section 17(1)(a)(i).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that leave to appeal should be refused because the proposed appeal lacked reasonable prospects of success under section 17(1)(a)(i) of the Superior Courts Act 10 of 2013.

On the merits of the limited ground advanced, the court maintained that TUT did not breach the applicant’s employment contract by denying an internal appeal in the circumstances. It relied on the absence of any contemporaneous challenge to the alleged absence of an appeal process, the applicant’s legal representation, his failure to pursue specific performance under section 77(3) of the BCEA, and his choice to proceed through the CCMA.

The court further held that, in any event, procedural non-compliance in a contract of employment does not found contractual damages unless it is shown to be causative of damages, particularly where the employment contract was lawfully terminated due to serious misconduct. The fact that waiver was not specifically pleaded was treated as not affecting the outcome on these facts.

LEGAL PRINCIPLES

A claim for contractual damages based on alleged procedural breaches in an employment context requires proof of a causal nexus between the breach and the damages claimed. The claimant must prove factual causation by comparing the actual position after breach with the position that would have obtained had the breach not occurred.

Procedural non-compliance with an employment contract will not necessarily be treated as material or causative at common law, and will generally be “of no contractual consequence” unless it results in damages, especially where the employee’s conduct amounts to a material breach or repudiation entitling the employer to cancel the contract. This approach was applied with reference to SA Football Association v Mangope (2013) 34 ILJ 311 (LAC).

The Labour Relations Act 66 of 1995 provides a statutory scheme in which labour rights are paired with dedicated enforcement mechanisms, dispute-resolution procedures, designated fora, and remedies. The judgment relied on Steenkamp and Others v Edcon Ltd 2016 (3) SA 251 (CC) to emphasise the risks to employees in electing common-law claims in circumstances where statutory processes may be more directly aligned to the nature of the complaint.

Leave to appeal may be granted only where the court is satisfied that the appeal would have reasonable prospects of success, in accordance with section 17(1)(a)(i) of the Superior Courts Act 10 of 2013.