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[2018] ZAECMHC 36
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Jezile and Others v Mnquma Local Municipality (167/18) [2018] ZAECMHC 36 (31 July 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
[EASTERN
CAPE LOCAL DIVISION, MTHATHA]
CASE
NO: 167/18
Heard
on: 07/06/18
Delivered
on: 31/07/18
Not
reportable
In
the matter between:
ENOCK
JEZILE 1
st
Applicant
MPHO
STENGILE 2
nd
Applicant
BABALO
NKUTU 3
rd
Applicant
ZANEKHAYA
SIYEPU 4
th
Applicant
PHIWOKUHLE
CIYO 5
th
Applicant
SIPHOKAZI
LEVE
6
th
Applicant
MAWANDE
NCEDE
7
th
Applicant
NOKULINDA
ADONIS 8
th
Applicant
NANGAMSO
LAMANA 9
th
Applicant
NOLUCEBISO
HLUBI 10
th
Applicant
and
MNQUMA
LOCAL
MUNICIPALITY Respondent
JUDGMENT
NHLANGULELA
DJP
[1]
Mr Enock Jezile together with his nine co-applicants seek an order
that termination of employment contract that had been
concluded
between them and Mnquma Local Municipality be declared
unlawful; and that they be re-instated to their employment
on payment
of salaries due to them in terms of the contract. In essence
they seek an order of performance of that on which
the contract
agreed.
[2]
The defence raised by Mnquma Local Municipality, the Municipality, is
that the appointment of the applicants as its employer
was unlawful;
hence the counter application it launched for the setting aside of
the employment contract. The applicants
would have none of that
as they contend that the employment contract is legally binding and
is enforceable against the Municipality.
[3]
On 23 November 2017 Mr Kulile Clock, the duly appointed Municipal
Manager, addresses a letter to the applicants stating that
they were
not the employees of the Municipality by reason that the employment
was irregular and unlawful. The letter was
written against the
following background.
[4]
On 15 February 2017 the Municipality advertised ten vacancies for
Traffic Wardens in the Daily Dispatch inviting suitable candidates
to
apply. The applicants were amongst 18 people who responded to
the advert. On 24 April 2017 thirty candidates were
shortlisted
for interview by a Recruitment Panel of the Municipality, of which
ten candidates were recommended to the sitting Acting
Municipal
Manager for approval. The sitting Acting Municipal Manager at
the time happened to be one Mr Zonwabele Plata.
On 08 May 2017
Mr Plata received the recommendation report, it having been signed by
the Human Resource Practitioner, Human Resource
Manager and the
Director for Corporate Services. It would appear that the Chief
Financial Officer had to sign the recommendation
report as well.
But his signature was not obtained by the Recruitment Panel. On
12 May 2017 Mr Plata signed off the
recommendation report, thus
signifying his approval that the applicants were the successful
candidates for employment as Traffic
Wardens. However, the
appointment letters that were prepared by Mr Plata on 08 May 2017 for
the applicants to counter sign
only reached the applicants on 01
November 2017, the date when they actually signed the letters.
[5]
It is not disputed by the applicants that Mr Plata’s services
as the Acting Municipal Manager were terminated on or before
16 May
2017, just four days after he had approved the recommendation
report. Mr Themba Hani took over as the Acting Municipal
Manager. Upon entering his office Mr Hani found out that the
approval of the recommendation report granted by Mr Plata was
not
supported by a budget for the 2016/2017 financial year as required by
the job selection policy of the Municipality. On
30 May 2017 Mr
Hani instructed one Ms Mrwetyana, the Director for Corporate
Services, to withdraw the approval that had been erroneously
granted. That step terminated the recruitment process. It
is important to note that as at 30 May 2017 the applicants
had not
yet signed the letters of appointment as the Traffic Wardens.
[6]
According to the applicants Ms Zine Ngidi of the Human Resources
Section of the Municipality congratulated them on the approval
granted by Mr Plata as it had paved the way for their ultimate
appointment. They state further that on 17 July 2017
Ms
Mrwetyana called them into the office to sign the letters of
appointment. But that was not to be as they were ushered
into
the office of one Mr Mpithi, the Legal Advisor of the Municipality
where they were told that the appointment letters would
not be signed
“due to internal complications” with regard to the
recruitment process.
[7]
It was only after a period of approximately five months since July
2017 (in November 2017) that the applicants managed to put
their
signatures on the letters of appointment duly assisted by Mr Fihla
and Mr Mntukushe to do so. They state on affidavit
that the
cause for delay in signing the letters was the fact that Mr Plata had
been interdicted by the Municipality by means of
a Court Order to
render services as the Acting Municipal Manager.
[8]
The deponent to the opposing papers / counter application is not Mr
Hani, but Mr Clock doing so in his capacity as the new Acting
Municipal Manager. He is duly authorized to represent the
Municipality in an appropriate manner. He states on affidavit
that Mr Plata could not lawfully simply forge ahead with a
recruitment process that had been terminated during May 2017 as he
had no authority to do so and knowing fully well that the process had
not been supported by a budget. He contends further
that the
recruitment process that had not been approved by the Chief Financial
Officer because the Municipality would not have
had funds to meet the
new posts of Traffic Wardens.
[9]
I have not been able to find proof that, as a fact, the recruitment
process had been funded by the Municipality at the time
when the
newspaper advert went up in February 2017. Counsel for the
applicants urged me to make a finding that the budget
was in place.
I was referred to annexure “CSDHRD” it being contended
that it serves as proof of existence of
a budget for the recruitment
process under question. This document is the recommendation
report in which it is recorded that:
“
The positions
of Traffic Wardens became vacant after the adoption of 2016/2017
Organogram by Council on the 25 May 2016…
The position was
advertised externally in the Daily Dispatch on 15 February 2017 and
the closing date was the 28
th
February 2017.”
That
document cannot be accepted as evidence because the Municipality
contradicts the fact that actual budget had been voted for
the
vacancies. In the absence of better evidence in the nature of a
resolution of the Council for the Municipality the Court
is prepared
to accept the version of the Municipality that at budget never came
into being. There is no evidence put forward
to gainsay these
assertions. Therefore, the case of
Plascon-Evans
Paints (TVL) Ltd. v Van Riebeck Paints (Pty) Ltd
[1984] ZASCA 51
;
[1984] 2 All SA 366
(A) f
inds
application.
[10]
Properly distilled the upshot of the proved facts of the matter is
that there was a contract of employment that came into being,
but on
the face of a non-existent financial budget, the contract of
employment was illegal as the Municipality could not perform
an
obligation to pay salaries and benefits attended thereto. In
circumstances such as these the remedy of specific performance
is
available to the applicant. However, not only is the ordering
of such a remedy often difficult to make, but in this case
the
enforcement of a contract that is tainted by an irregularity /
illegality is the sticky point that cries out for resolution.
[11]
As I understood the submission advanced on behalf of the applicants,
since the issue of the validity of the contract of employment
was not
addressed by a court the counter-application brought by the
Municipality should not be entertained. A similar point
raised
against a Municipality was defeated in the cases of: Municipal
Manager:
Qaukeni Local Municipality And Another v F V General
Trading CC
2010 (1) SA 356
(SCA). There Leach AJA (as he
was then) said the following in para 26:
“
While I
accept that the award of a municipal service amounts to
administrative action that may be reviewed by an interested third
party under PAJA, it may not be necessary to proceed by review when a
municipality seeks to avoid a contract it has concluded in
respect of
which no other party has an interest. But it is unnecessary to reach
any final conclusion in that regard. If the second
respondent’s
procurement of municipal services through its contract with the
respondent was unlawful, it is invalid and this
is a case in which
the appellants were duty bound not to submit to an unlawful contract
but to oppose the respondent’s attempt
to enforce it. This it
did by way of its opposition to the main application and by seeking a
declaration of unlawfulness in the
counter-application. In doing so
it raised the question of the legality of the contract fairly and
squarely, just as it would have
done in a formal review. In these
circumstances, substance must triumph over form. And while my
observations should not be construed
as a finding that a review of
the award of the contract to the respondent could not have been
brought by an interested party, the
appellants’ failure to
bring formal review proceedings under PAJA is no reason to deny them
relief.”
[12]
The statement of Leach AJA in
F V Trading CC, supra,
received
a stamp of approval in the case of
Department of Transport And
Others v Tasima (Pty) Ltd
2017 (2) SA 622
(CC), resulting in a
finding that appears at 658-9 that:
“
I therefore
agree … that the Supreme Court of Appeal was incorrect to find
that the Department was barred from bringing a
reactive challenge to
the extension of the contract solely because it is a state
functionary.”
[13]
The case of
Tasima
also confirms the legal principle that
Municipality is entitled to challenge exercise of its own public
power. See also:
Pepcor Retirement Fund and Another v
Financial Services Board and Another
2003 (6) SA 38
(SCA) in para
10-15.
[14]
Much that has to do with this case lies in the legal position that
municipalities must account fully for the work that it does
as is
envisaged in s 195 of the Constitution. In this connection the
case of
Fedsure Life Assurance v Greater Johannesburg Transitional
Metropolitan Council And Others
[1998] ZACC 17
;
1999 (1) SA 374
(CC) is
apposite. There the following was said at page 399:
“
[55] There
are a series of provisions in Chap 10 itself which make it plain that
a local government’s powers’ to act
are limited to the
powers conferred by the Constitution or laws of a competent
authority...
[56] These
provisions imply that a local government may only act within the
powers lawfully conferred upon it. There is nothing
startling in this
proposition - it is a fundamental principle of the rule of law,
recognised widely, that the exercise of public
power is only
legitimate where lawful. The rule of law - to the extent at least
that it expresses this principle of legality -
is generally
understood to be a fundamental principle of constitutional law. This
has been recognised in other jurisdictions. In
The Matter of a
Reference by the Government in Council Concerning Certain Questions
Relating to the Secession of Quebec from Canada
53
the Supreme
Court of Canada held that:
“
Simply
put, the constitutionalism principle requires that all government
action comply with the Constitution. The rule of law principle
requires that all government action must comply with the law,
including the Constitution. This Court has noted on several occasions
that with the adoption of the Charter, the Canadian system of
government was transformed to a significant extent from a system
of
Parliamentary supremacy to one of constitutional supremacy. The
Constitution binds all governments, both federal and provincial,
including the executive branch (Operation Dismantle Inc. v. The
Queen,
[1985] 1 S.C.R. 441
, at p.455). They may not transgress
its provisions: indeed, their sole claim to exercise lawful authority
rests in the powers
allocated to them under the Constitution, and can
come from no other source.”
[15]
That said the steps taken by both Mr Hani and Mr Clock to correct the
irregularity with regard to the flawed recruitment process
were
informed by legal obligations, rather than personal choices, that the
Municipality owe to the public and the Constitution.
For this
reason I am of the opinion that even if the
functus
officio
rule
did apply in this case it would not stand on the way of the
Municipality’s efforts to correct its own illegal actions.
The wrong action of Mr Plata in May 2017 when he approved the
recommendation report without authority would not have changed in
November 2017 because the necessary budget was still not available,
even to this day. Therefore, the contract of employment
concluded between the applicants is invalid and unenforceable in
law. On these bases, the applicant’s applications
cannot
be sustained.
[16]
The general rule applicable when considering an award of costs is
that they follow the event. Since the applicants have
not been
successful they are not entitled to the costs. They must pay
the costs. The laudable conduct of the both Mr Hani
and Mr Clock in
protecting the Municipality from committing on illegal administrative
action is yet another reason for the applicants
to pay the costs.
Added to that is the knowledge on the part of the applicants in July
2017 that the contract could not be
implemented; as well as treating
as non-existent a duly appointed Municipal Manager in Mr Clock who
would have told them that the
letters of appointment could not be
signed.
[17]
In the result the following order is made:
1.
The applicants’ main application be and is hereby dismissed
with costs.
2.
The counter application be and is hereby dismissed with costs.
3.
The counter application be and is hereby granted with costs.
_________________
_________________________________
Z.
M. NHLANGULELA
DEPUTY
JUDGE PRESIDENT OF THE HIGH COURT
MTHATHA
Counsel
for the applicants: Adv. N.D. Ngadlela
Instructed
by: Mboto Attorneys
c/o
Macpauzin Attorneys
MTHATHA.
Counsel
the respondent: Adv. J. Hobbs
:
T.L. Luzipho Attorneys
MTHATHA.