Khawula v Dannhauser Local Municipality and Another (5248/08) [2009] ZAKZPHC 53 (6 November 2009)

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[2009] ZAKZPHC 53
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Khawula v Dannhauser Local Municipality and Another (5248/08) [2009] ZAKZPHC 53 (6 November 2009)

IN THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL, PIETERMARITZBURG
Case No: 5248/08
In the matter between:
BHEKANI PAULOS KHAWULA
Applicant
and
DANNHAUSER LOCAL MUNICIPALITY
First Respondent
M. V. PHATSOANE
Second Respondent
JUDGMENT
VAN ZÿL, J.
:-
In this matter the applicant seeks to review and set aside a
decision of the first respondent. The order sought is as set out

hereunder, namely:-
“
1. It is declared that when the First Respondent’s Council
resolved on 4 March 2008:
(a) not to accept the recommendation in the ‘Outcome of Appeal
Hearing’, dated 1 February 2008, issued by Second Respondent;
and
(b) to confirm the decision to dismiss Applicant,
First Respondent’s Council acte ultra vires the disciplinary
code and procedure that was meant to apply in respect of the
disciplinary
proceedings conducted by First Respondent against
Appellant.
2. The said resolution of First Respondent’s Council is hereby
set aside.
3. First Respondent is ordered;
(a) to give effect to the rulings and recommendation contained in
the said ‘Outcome of Appeal Hearing’ issued by the Second
Respondent.
(b) to re-instate Applicant pursuant to such recommendation.
4. Alternatively to paragraph 3 above, Second Respondent is
ordered to make a final determination, in terms of clause 14.12 of
the
South African Local Government Bargaining Council Disciplinary
Procedure, in the appeal lodged by the Applicant.
5. First Respondent is ordered to pay to Applicant that
remuneration that he would have earned had First Respondent accepted
Second
Respondent’s said recommendation.
6. First Respondent is ordered to pay the costs of this
application.
”
The first respondent has actively opposed this review application
whilst the second respondent has taken no active part therein
and
abides the decision of the court. Although the papers herein are
voluminous, the background giving rise to the review application
may
conveniently be summarised before the issues in dispute are
considered in greater detail.
Applicant was appointed as the Municipal Manager of the first
respondent, a local municipality in northern KwaZulu-Natal, in
terms
of a written agreement (annexure MBS3) concluded on 20 June 2006.
Notwithstanding the date of conclusion, the period of
employment was
agreed to commence on 5 June 2006 and to extend until expiry through
the effluxion of time with effect from 5
December 2012.
Clause 4.2 of the employment contract is of relevance to subsequent
events. It reads, as follows –
“
4.2 …, this agreement may be terminated immediately by the
Council without compensation or payment in lieu of notice if any
circumstances
arise justifying such termination at common law or in
terms of the applicable labour laws if the Municipal Manager does not
fulfil
his obligations in terms of the performance agreement
referred to hereinafter, provided that the Municipal manager shall be
entitled
to a legal appeals procedure before a final decision is made
regarding non-performance.
”
During May 2007 first respondent instituted disciplinary proceedings
against applicant, who was then formally charged with six
counts of
alleged misconduct at a disciplinary inquiry presided over by a
practicing attorney, one Mr L. Verveen and who was
especially
appointed for this purpose. Each of applicant and first respondent
was duly represented at the inquiry, which commenced
with effect
from 4 July 2007. At the conclusion thereof it held applicant
guilty on counts 1, 2, 3, 4 and 6. He was acquitted
on count 5.
The subsequent appeal was presided over by second respondent, also a
practising attorney, who was likewise especially appointed
for this
purpose. The conclusions of the appeal are contained in a written
document headed “
Outcome of the Appeal Hearing
”. After
analysis of the issues, evidence and argument, the conclusions
reached by second respondent on appeal regarding the
guilt of the
applicant were that the appeal succeeded in part, in that:
a. The findings of the disciplinary inquiry on count 1 were not
sustainable and that applicant should instead have been held to
be
guilty on the alternative to count 1.
b. Equally the findings of the disciplinary inquiry on counts 2 and 3
were not sustainable and applicant should instead have been
held not
to be guilty on both of these counts.
c. The findings of the disciplinary inquiry on counts 4 and 6 were
sustainable and the disciplinary inquiry correctly found applicant

guilty in regard thereto.
In the light of her appeal conclusions regarding the guilt of
applicant on the misconduct charged, second respondent then
proceeded
to consider the appropriateness of the sanction of
dismissal, as recommended by the disciplinary inquiry. Second
respondent concluded
that such sanction was too severe. She
expressed the conclusion to which she came, as follows:-
“
In the premise I recommend that the employee be given final
written warning in respect of each of the three offences committed.
”
Subsequently applicant was advised that the appeal report would be
considered by the full council of the first respondent and
he was
invited to be present and to address the council in regard thereto.
Applicant declined to do so, contending that the first
respondent
was bound by the appeal decision of the second respondent and not at
liberty to reconsider the matter. As a result
first respondent’s
council resolved, in the absence of the applicant, to dismiss him
from the employ of the first respondent.
The attack upon review is not aimed at the second respondent’s
findings on appeal, either in regard to applicant’s misconduct,
or
the sanctions as recommended by her. Whilst applicant contends that
he does not accept that he is guilty of any misconduct
whatsoever,
he seeks to have the decision by the first respondent to dismiss him
set aside on review and at the same time to
implement the appeal
recommendations as made by second respondent, all by way of an order
of this court. That much is clear,
for instance, from the relief
sought in paragraph 3 of the notice of motion, as set out above.
Applicant contends that the first respondent’s decision to
terminate his employment was taken
ultra
vires the powers of
the council of first respondent, in that it lacked the power to
disregard the appeal recommendations made
by the second respondent.
In support of the view that first respondent was bound to put into
effect such recommendations, it is argued that the Local Government:

Municipal Performance Regulations for Municipal Managers and
Managers Directly Accountable to Municipal Managers, 2006, as

contained in Government Notice R805 in Government Gazette 29089 of 1
August 2006 and promulgated in terms of s120 of the Local
Government
: Municipal Systems Act 32 of 2000 (“
the Act
”), are
applicable to the employment relationship between applicant and
first respondent. Reliance is then placed upon Regulation
17(2),
which deals with the termination of a contract of employment and
which provides that –
“
The employer will be entitled to terminate the employee’s
employment contract for any sufficient reason recognized by law,
provided
that the employer must comply with its disciplinary code and
procedures, in the absence of which the disciplinary code and
procedures
of the South African Local Government Bargaining Council
will apply, as well as in accordance with the Labour Relations Act,
1995
(Act No. 66 of 1995). Reasons for terminating the employment
contract may include …
”
Applicant suggests that since the first respondent does not have its
own disciplinary code and procedures, it follows that the

disciplinary code and procedures of the South African Local
Government Bargaining Council must then apply in the circumstances.

In terms of Clause 14 thereof it is submitted that the presiding
officer at an appeal tribunal has the power to confirm or set
aside
any decision, determination or finding of a disciplinary hearing,
including the setting aside or reduction of any penalty
imposed and
that he has the “
sole discretion
” to make an order on
appeal. It follows, so the argument ran, that the second respondent
was bound to make a final determination
upon the issues on appeal
and that first respondent was, as a matter of law, obliged to accept
and implement such determination.
In failing to do so and indeed, in
deciding upon a penalty different from that determined by second
respondent, first respondent
thus acted
ultra vires
its
powers, so that the review must succeed.
Recognising that second respondent had, in fact, not purported to
make any final ruling or determination of the issues on appeal,
but
limited herself to merely making a recommendation, the applicant in
the alternative seeks an order (as per paragraph 4 of
his notice of
motion and as set out above) directing second respondent to make
such a final determination.
Assuming, but without deciding, that the provisions of the
disciplinary code and procedures of the South African Local
Government
Bargaining Council do apply to the circumstances under
consideration, then applicant claims that the code requires the
appeal
tribunal “…
to make a final determination on the
question concerning my guilt and the sanction to be imposed.
”
(see : paragraph 28.1 of his founding affidavit). This approach,
however, loses sight of the fact that the code does not expressly

require such “
final determination
” at all. Clause 14.11
of the code empowers the “
Presiding Officer (
of the appeal
tribunal
) in his sole discretion shall be entitled to make
whatever order he deems reasonable in the circumstances.
”
That is a far cry from a final determination of the guilt or penalty
concerned. Notionally the appeal tribunal could decide that
there
are issues which require clarification by the leading of further
evidence and refer the matter back to the disciplinary
hearing or,
as here, content itself with a recommendation to the employer. If a
recommendation to the first respondent (as employer)
is legally
permissible, then that undermines the argument that the first
respondent was duty bound to adopt and was indeed powerless
to
resist the second respondent’s recommendation.
The meanings of “
recommend
” include “
To mention or
introduce (a thing) with approbation or commendation (to a person),
in order to induce acceptance or trial.
” and that of
“
recommendation
” means “
That which procures a
favourable reception or acceptance. Exhortation, advice.
” (see
: The Shorter Oxford English Dictionary on Historical Principles
(1978)). A recommendation thus inevitably implies the
possibility of
rejection of the commendation, so that the person or body to whom
the recommendation is directed may decline to
follow the recommended
course of conduct and adopt a different course of action. It follows
that first respondent was not, based
upon this argument, obliged to
implement second respondent’s recommendations regarding the
sanction to be meted out to applicant
for his misconduct.
But there are more fundamental difficulties which arise from
applicant’s argument that that the Local Government: Municipal

Performance Regulations for Municipal Managers and Managers Directly
Accountable to Municipal Managers, 2006, (“
the regulations
”)
as well as the disciplinary code and procedures of the South African
Local Government Bargaining Council (“
the code
”) apply in
the circumstances of this matter.
The first respondent contended that the regulations do not apply
because the contract of employment was concluded on 20 June
2006 and
the regulations were only promulgated on 1 August 2006. Accordingly,
so it was argued, since the regulations have no
retrospective
application, the disciplinary process contemplated by clause 4.2 of
the employment contract had not been revoked
or substituted thereby.
Alternatively and if the regulations are held to apply, then
regulation 17(2) provides that first respondent
was entitled to
apply its disciplinary code and procedures which, in this instance,
are contained in clause 4.2 of the employment
contract. Further
alternatively and if it were held that clause 4.2 of the contract is
not a disciplinary code and procedure
and that the procedures
prescribed by the code had to be followed, then that second
respondent’s recommendation fell within
the ambit of the powers
conferred upon her by clause 14.11 of the code and that an
employer’s power to reject any recommendation
thus made to it, is
not excluded by the code. The latter submissions have already been
considered above and I indicated that
I am of the view that clause
14.11 is permissive of the recommendations made by second respondent
and that first respondent were
not necessarily obliged to implement
them but could, in suitable circumstances, reject them.
In my view, however, the argument for the application of the
regulations to the employment contract between applicant and first

respondent fails upon a far more fundamental consideration. Section
72 of the Act, which falls within Chapter 7 relevant to local
public
administration and human resources (sections 50 to 72 inclusive),
provides for regulations to be promulgated in terms
of section 120
of the Act. Section 120(7)(b) provides that –
“
120(7) Regulations made in terms of this section-
(a) ….. ; and
(b) take effect on a date determined in the regulations, which
must be the date of publication or a date after such publication.
”
Regulation 39(2) then provides that –
“
Employment contracts entered into before the effective date of
the regulations continue to apply until such employment contracts

have terminated in terms of the provisions of such contracts.
”
In the light of the foregoing it is therefore clear that the
regulations do not apply to the employment of the applicant by the

first respondent because their written agreement (annexure MBS3) was
concluded on 20 June 2006 and, notwithstanding the date
of its
conclusion, the period of employment was agreed to commence on 5
June 2006 and to extend until expiry through the effluxion
of time,
with effect from 5 December 2012. Since the regulations were only
promulgated on 1 August 2006, the relevant employment
contract was
entered into before the regulations came into force and in terms of
regulation 39(2) the contract therefore continues
to apply and is
unaffected by the regulations.
Clause 4.2 of the employment contract provides for an appeal
procedure “
… before a final decision is made regarding
non-performance
”. It follows that the appeal procedure was not
intended by the parties to the contract as the final word on the
outcome of
any alleged non-performance. The only decision making
body in such event would be the council of the first respondent, or
its
executive where delegated powers have been conferred upon it by
the full council. In the circumstances the action of the second

respondent in making a recommendation upon appeal is procedurally
sound.
Counsel for the first respondent submitted that the decision by
first respondent not to follow second respondent’s recommendation

and instead to dismiss the applicant, was not
ultra vires
the
powers of the first respondent in the circumstances. In my view that
submission is correct.
On behalf of first respondent it was then submitted that the
decision to dismiss was unassailable and that the application should

be dismissed, with costs. I do not think that the latter submission
necessarily follows, merely because the first respondent
was not
obliged to follow the second respondent’s recommendation and had
the power to dismiss the applicant. It remains to
consider whether
that power was properly exercised in all the circumstances and if
not, whether that decision should be set aside
on review.
Counsel for the applicant also submitted that the parties, by
agreement between them, instructed second respondent to finally

determine the issues in dispute and that, by reason thereof, it was
not competent for the first respondent to depart from the
sanction
recommended by the second respondent. In this regard counsel relied,
inter alia
, upon the unreported judgment of Rampai, AJ in the
Johannesburg Labour Court in the matter of the Greater Letaba Local
Municipality
v L S Mankgabe NO & Ors (JR3108/05) ZALC 74 of 3
October 2007.
However, at paragraph 17 of the judgment the learned Acting Judge
remarked that it was not competent to nullify the recommended

sanction because there had been prior agreement between the employer
and the employees’ union that the determination of the

disciplinary tribunal would be final and binding on the employer,
save that the employee may lodge an appeal thereto. The present

matter is different, in that there is no evidence of such an
agreement between the applicant and the first respondent and as

already indicated, the terms of clause 4.2 of the employment
contract envisage that a further decision would be made, following

upon the appeals procedure.
The question remains whether the applicant has shown grounds upon
which the decision of the first respondent to dismiss him from
its
employment can be set aside upon review. There are no clear grounds
advanced upon which such a review can be based. The arguments

centred mainly upon the hotly disputed jurisdictional issue of the
first respondent’s
locus standi
to have departed from
second respondent’s recommendations. However, implied may be that
the decision to terminate the services
of applicant was grossly
unreasonable in all the circumstances.
After the appeal recommendations of the second respondent became
known the applicant, through his representatives, was invited
to
appear before and address the council of the first respondent before
it deliberated and made any decision upon the recommendations
of the
second respondent. By virtue of the pro forma prosecutor’s letter
(annexure “C”) the applicant was not only invited
to appear, or
to be represented at the intended deliberation of the council of the
first respondent and where second respondent’s
recommendations
would be considered, but he was also invited to actively participate
and make representations in regard thereto.
This invitation was
declined. In my view the rule of
audi alteram partem
was
thereby satisfied and the requirements of procedural fairness
complied with in all the circumstances.
The next issue under consideration is whether the requirements of
substantive fairness have been satisfied. In this regard it
needs to
be remembered that applicant was employed as the municipal manager
and as such was the head of first respondent's administration
and
its chief accounting officer (see: section 55 of Act 32 of 2000).
This involved not only a position of the utmost trust,
but also a
situation where the first respondent needed to rely upon the
applicant as its eyes and ears in relation to the entire
municipal
administration. He was more than an ordinary municipal employee. The
misconduct of which applicant was found guilty
and which, for
purposes of this review, is not in dispute, needs to be evaluated
against that background.
On the first charge the applicant was found to have been negligent
in obtaining payments, for his personal benefit, in respect
of
travelling expenses which he claimed and which amounted to
unauthorised expenditures. Considering that, as municipal manager

and chief accounting officer of the first respondent, the applicant
was tasked with enforcing financial discipline on behalf
of first
respondent over the entire staff compliment of the latter, applicant
may well be said to have abused his position of
trust by benefitting
himself at his employer’s expense, even by being negligent.
However, the sixth charge also involved personal
benefit to the
applicant at the expense of the first respondent, but here
negligence was not involved. The applicant, in this
instance,
dishonestly abused municipal services at his residence when he was
not entitled thereto. The motive was self enrichment
at the expense
of his employer, the first respondent.
On the fourth charge the applicant failed to report, or cause to be
reported, the criminal conduct of the offender to the South
African
Police Services, as he was required by law to do. That failure was
likewise of a serious nature in circumstances where
the first
respondent was entitled to be able to rely upon the trustworthiness,
diligence and effectiveness of the applicant,
as head of its
administration.
There is nothing to suggest on what basis the council of the first
respondent was required to exercise its discretion in arriving
at a
decision upon the recommendations of the second respondent.
Prima
facie
it was entitled to act as it did and it would follow that
the only challenge to the decision would have to be by way of
review.
In
11
Johannesburg Stock Exchange and
Another v Witwatersrand Nigel Ltd and Another
1988 (3) SA 132
(A),
Corbett JA (as he then was) at page 152 A-E stated the approach to
an administrative review in the following terms -
"
1
Broadly, in order to
establish review grounds it must be shown that the president
(being
the decision maker in that instance)
failed to apply his mind to
the relevant issues in accordance with the 'behests of the statute
and the tenets of natural justice'
(see National Transport Commission
and Another v Chetty's Motor Transport (Pty) Ltd
1972 (3) SA 726
(A)
at 735F - G; Johannesburg Local Road Transportation Board and Others
v David Morton Transport (Pty) Ltd
1976 (1) SA 887
(A) at 895B - C;
Theron en Andere v Ring van Wellington van die NG Sendingkerk in
Suid- Afrika en Andere
1976 (2) SA 1
(A) at 14F - G). Such failure
may be shown by proof, inter alia, that the decision was arrived at
arbitrarily or capriciously or
mala fide or as a result of
unwarranted adherence to a fixed principle or in order to further an
ulterior or improper purpose;
or that the president misconceived the
nature of the discretion conferred upon him and took into account
irrelevant considerations
or ignored relevant ones; or that the
decision of the president was so grossly unreasonable as to warrant
the inference that he
had failed to apply his mind to the matter in
the manner aforestated. (See cases cited above; and Northwest
Townships (Pty) Ltd
v Administrator, Transvaal, and Another
1975 (4)
SA 1
(T) at 8D - G; Goldberg and Others v Minister of Prisons and
Others (supra at 48D - H); Suliman and Others v Minister of
Community
Development
1981 (1) SA 1108
(A) at 1123A.) Some of these
grounds tend to overlap.
"
Applicant did not advance any of the recognised grounds for review,
save possibly that the decision by the council of the first

respondent was so unreasonable as to warrant the inference that it
had failed to apply its (collective) mind properly to the
matter
before it. However, when the decision to dismiss is viewed against
the nature of the misconduct committed by the applicant
and the
responsible position of trust which he occupied at the time in the
administrative and financial spheres of the first
respondent
municipality, then it cannot be said that the decision was
unreasonable to the extent where it becomes susceptible
to being set
aside on review.
In my view the attack upon the decision by the first respondent to
terminate the employment of the applicant, in terms of the

provisions of clause 4.2 of the employment contract, must fail. So
also must the alternative claim requiring second respondent
to
convert her recommendations into a "
final determination
".
I see no reason why costs should not follow the result, nor have any
been advanced during the course of argument. In the result
the
review application is dismissed, with costs.
______________________
Date argued: 12 September 2008
Date delivered: 06 November 2009
Appearances:
For Applicant: Adv D. P. Crampton instructed by
TomlinsonMnguni James Inc of Pietermaritzburg.
For First Respondent: Adv E. S. J. van Graan SC instructed by De
Swart Vogel Mahlafonya c/o Tatham Wilkes Inc of
Pietermaritzburg.
For Second Respondent: No appearance.