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[2020] ZALAC 19
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Department of Agriculture, Forestry and Fisheries v Teto and Others (CA8/2019) [2020] ZALAC 19; (2020) 41 ILJ 2086 (LAC); [2020] 10 BLLR 994 (LAC) (28 May 2020)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, CAPE TOWN
Reportable
Case
no: CA8/2019
In
the matter between:
DEPARTMENT
OF AGRICULTURE, FORESTRY
AND
FISHERIES Appellant
and
MISELWA
PRISCILLA
TETO First
Respondent
CHARLES
RODGER
TITUS Second
Respondent
RANDALL
PETER JOHN KOOPMAN Third
Respondent
GENERAL
PUBLIC SERVICE SECTORAL
BARGAINING
COUNCIL Fourth
Respondent
COMMISSIONER
JUSTICE NEDZAMBA N.O
Fifth Respondent
Heard:
07 May 2020
Delivered:
28 May 2020
Summary:
Dismissal----employees continued working beyond their fixed-term
contract and dismissed thereafter---court finding that
contract
deemed to be tacitly relocated or novated and unless contrary
intention can be inferred from the facts, it will generally
be
assumed that the parties intended the new contract to be of
indefinite duration, terminable by reasonable notice given by either
party.
Dismissal---remedies----in
the absence of exceptional circumstances specified in s 193(2) of the
LRA, primary remedy of reinstatement
the appropriate remedy.
Coram:
Phatshoane ADJP, Davis JA and Murphy AJA
JUDGMENT
MURPHY
AJA
[
1
]
The appellant, the Department of Agriculture, Forestry and Fisheries
(“DAFF”),
appeals against the judgment of the Labour
Court (Rabkin-Naiker J) setting aside the arbitration award of the
fifth respondent,
Mr. Justice Nedzamba, (“the commissioner”)
and substituting it with an order upholding the commissioner’s
finding
that the first to third respondents (“the respondents”)
were unfairly dismissed by DAFF but awarding them a “
solatium
”
for their unfair dismissal instead of reinstatement. DAFF contends
that the Labour Court erred in finding that the respondents
were
employed by it at the date of their dismissal. It maintains that the
respondents were not its employees beyond the expiration
of their
fixed-term contracts and that their continued employment thereafter
was not with DAFF but with one of its implementing
agencies.
[2]
The respondents have filed a cross-appeal raising various grounds.
Most importantly,
they contend that the Labour Court
erred
firstly
in
entertaining a fatally defective review application
in
that
the
original
papers were not filed
with
the court and various affidavits of the appellant did not comply
with the Justices of the Peace and Commissioners of Oaths Act
[1]
and its regulations.
[2]
Secondly,
they allege that the Labour
Court
erred in ordering
the
payment of a
solatium
instead
of granting
the primary remedy
of
reinstatement.
[3]
The respondents were initially employed by DAFF on a one-year
fixed-term contract
from 15 July 2013 to 14 July 2014. The first and
third respondents (Teto and Koopman respectively) were employed as
Senior Administrators
and the second respondent (Titus) as an
Assistant Programme Manager in the Working for Fisheries Programme
(“WFFP”)
of DAFF. It is common cause that when their
fixed-term contracts expired on 14 July 2014, they continued working
in their positions
performing the same tasks until they were
dismissed on 26 August 2016.
[4]
After their dismissal, the respondents referred an unfair dismissal
dispute to the
General Public Service Sectoral Bargaining Council for
conciliation and arbitration.
[5]
At the arbitration, DAFF contended that beyond the expiration of the
fixed-term contracts,
the respondents ceased to be employed by it and
that Management for Excellence (“ME”), a temporary
employment service
and one of its implementing agents, had taken over
as their employer. It, in effect, challenged the jurisdiction of the
commissioner
to determine the dispute.
[6]
The respondents testified that on 13 July 2014 (one day before their
fixed-term contracts
expired) they were called to a meeting with Mr.
Denver Barron, the WFFP Project Manager, and Ms Sue Middleton, the
Chief Director
of DAFF. During the meeting, it was agreed that,
although their contracts had come to an end, they would continue
working on the
WFFP on an indefinite basis. They were told that their
salaries would no longer be paid through the Persal system (the
government
payment system) but that an arrangement would be made with
one of the service providers or implementing agencies to pay their
salaries.
Over the next two years, they were paid by Jaymat Environ
Solutions CC, Cederberg Municipality and ME. The arrangement involved
DAFF paying the respondents’ salaries to one of these agencies
which in turn paid the respondents. The reason for this arrangement
was that the respondents’ posts were not on the establishment
organogram and therefore could not be paid directly by DAFF.
Middleton initiated a process to get approval for the WFFP
organogram, which was accepted in late 2014 and the vacant new
establishment
positions were then advertised.
[7]
Titus testified that in 2015 he was interviewed for the Deputy
Programme Manager position
on the new organogram. He was informed by
Barron that he “was the number one candidate” for the
position. While waiting
for the finalisation of the appointment, he
was told that the Deputy Director General of DAFF (“the DDG”)
had decided
not to make any of the new appointments. No reasons were
provided for the decision. Middleton, however, asked Titus to
continue
working. He had the expectation that he would continue
working permanently on the WFFP, which he saw as part of DAFF and in
time
would be incorporated on the DAFF organogram. In July 2015,
Barron was dismissed, Titus took over as the Project Manager of WFFP
and reported directly to Middleton and the DDG. In June 2016, his
request for physical accommodation for the WFFP project team
at DAFF
was granted. On 25 August 2016, while on assignment in Durban, he was
contacted by Middleton who informed him that he and
the other
respondents had been dismissed on the instructions of the DDG, for
reasons that were not clearly explained.
[8]
Teto confirmed the evidence of Titus regarding the continuation of
work after the
expiry of the fixed-term contracts. She testified that
she was phoned by Koopman on 25 August 2016 who told her that she was
no
longer needed and in effect was being dismissed with immediate
effect. No explanation was given to her or Koopman as to why this
was
done. Koopman testified that he was informed by Titus that he too had
been dismissed without explanation.
[9]
None of the relevant evidence of the respondents regarding the events
of 25 August
2016 was contested meaningfully during
cross-examination.
[10]
Mr. Denver Barron, who was the Programme Manager of the WFFP,
testified on behalf of the respondents.
He was employed by DAFF to
establish the WFFP as part of the government’s Expanded Public
Works Project. He described the
process whereby he began employing
employees for the WFFP and how the respondents had first been
employed on fixed-term contracts
and were accountable to him. Once
the fixed-term contracts expired, DAFF needed to find a mechanism “to
keep everyone on
board” and to have the respondent’s
salaries paid until appointments were made to DAFF in accordance with
an approved
WFFP organogram. It was decided to approach one of the
service providers to pay the salaries and DAFF would add the
additional
payments to the service provider’s budget. However,
it was understood that the respondents worked for DAFF and that the
arrangement
with the service providers was simply “a payment
arrangement”. The DDG approved the arrangement and the payments
would
be signed off by the Chief Director on a monthly basis. The
respondents worked at the premises of DAFF, they reported to Barron
and there was no employment contract between any of the service
providers and any of the respondents. Moreover, when the respondents
travelled for work, DAFF would make the arrangements and would pay
their daily subsistence allowances.
[11]
When asked in cross-examination whether the respondents were on an
“open-ended” contract
after the expiry of their
fixed-term contracts, Barron explained that once appointments were
made to an approved WFFP organogram,
the intention was for the newly
appointed employees to be appointed on three-year fixed-term
contracts, as funding was initially
guaranteed for that period. This
intention was never realised and none of the respondents was
appointed on this basis. They were
employed by DAFF in terms of a
verbal contract on a monthly basis.
[12]
The only witness to testify on behalf of DAFF was Mr. Desmond
Marinus, its Technical Manager for Fishing
Harbours in the
Directorate of Agriculture, Socioeconomic Development. He was
appointed by the DDG to act as the Programme Manager
for the WFFP
after Barron was dismissed in 2017. Thus he did not work in the WFFP
at the time of the respondents’ dismissal,
but had worked with
them on “the harbour related projects”. He understood the
respondents to be employees of DAFF because
the WFFP fell under DAFF.
He testified that the WFFP had 11 posts but that only four were
currently filled because there was some
reluctance on the part of
DAFF to fill them.
[13]
The commissioner held that the respondents were employees of DAFF and
had been unfairly dismissed.
He reasoned lucidly and concisely as
follows:
‘
Since
the respondent’s defence is that it was not the applicants’
employer, it is important to determine whether or
not they were
re-appointed by the respondent when their fixed term contracts
terminated. The respondent’s argument is based
on the fact that
the applicants were not paid directly by the respondent and that they
were not on respondent’s persal system.
To my mind, that cannot
be the only determining factor; the evidence suggests that the
applicants continuously performed their
work under the sole control
of the respondent. Their workplan and performance agreements were
signed for by the respondent. They
were responsible to the respondent
in their daily duties. The role of implementing agents like Managing
for Excellence insofar
as it relates to their employment relationship
with the respondent was simply intended to administer their
salaries….Evidence
shows that Managing for Excellence or any
implementing agent neither procured nor provided applicants to the
respondent….The
applicants had no employment contract with
Managing for Excellence…I accordingly find that the respondent
remained the applicants’
sole employer..(sic)’
[14]
The commissioner then referred to the established principle that if
an employee is allowed to work
beyond the end of a fixed-term
contract, the contract is tacitly converted into a permanent one of
indefinite duration, terminable
on reasonable notice.
[3]
On that basis, he concluded that the respondents had remained
employed with DAFF until their dismissal. In effect, he held that
he
had jurisdiction in relation to the dispute because there was a
“dismissal” as contemplated in section 186 of the
Labour
Relations Act
[4]
(“the
LRA”). The employer, DAFF, terminated the employment of the
respondents.
[15]
With regard to the fairness of the dismissals the commissioner held:
‘
Since
the respondent relied only on its contention that it was not the
applicants’ employer and that it could not have dismissed
them,
it failed to lead evidence to prove that the applicants’
dismissals were procedurally and substantively fair. Under
the
circumstances and having considered the evidence in totality, I find
that the respondent has failed to discharge the onus to
show me that
the applicants’ dismissals were fair. I accordingly find that
their dismissals were both procedurally and substantively
fair.’
[16]
The commissioner, after considering the provisions of section 193(2)
of the LRA, and concluding that
reinstatement was reasonably
practicable and a continued employment relationship was not
intolerable, ordered the retrospective
reinstatement of the
respondents.
[17]
In its review application before the Labour Court, DAFF contended
that the commissioner had erred in
finding that the respondents were
employed by DAFF and in awarding reinstatement.
[18]
The Labour Court held that the terms and conditions of the
respondents did not remain the same after
the expiry of their
fixed-term contracts as they were not on the Persal system and
received less remuneration. However, it accepted
that an employment
relationship existed between the respondents and DAFF but not one
that was permanent. This and “the sudden
manner” of the
dismissals justified some form of
solatium
. The Labour Court
then set aside the award of the commissioner, declared the dismissals
substantively and procedurally unfair and
awarded payment of
compensation in an amount equal to 12 months’ remuneration.
[19]
The contention by DAFF on appeal that the respondents were not its
employees is not sustainable for
the reasons accepted by the
commissioner. DAFF’s own witness confirmed that the respondents
were employees of DAFF and their
payment by the implementing agents
was intended to be a temporary expedient. The respondents were
subject to the control and direction
of DAFF in all their work
activities and received remuneration from DAFF although their payment
was channelled through the implementing
agent. There is no evidence
of any kind supporting the contention that the employees concluded
contracts of employment with the
implementing agent. After the expiry
of their fixed-term contracts with DAFF, the respondents continued to
work at the same workplace
performing the same functions under the
direction of the Programme Manager.
[20]
The fact that some of the terms and conditions of the respondents’
employment may have altered
is not decisive. They remained employed
by the same employer, albeit on different terms. If after the expiry
of a fixed-term contract,
an employee continues to render services to
an employer and receives remuneration for the rendering of those
services, the contract
is deemed to be tacitly relocated or novated.
The new contract may be on varied terms and its duration period must
be determined
in the light of the circumstances of each case. Unless
a contrary intention can be inferred from the facts, it will
generally be
assumed that the parties intended the new contract to be
of indefinite duration, terminable by reasonable notice given by
either
party.
[5]
The
commissioner correctly held that this is what happened in this case.
His reference to the new contract as a “permanent”
contract was perhaps a mischaracterisation, but he clearly meant that
the new contract was one of an indefinite nature terminable
by
reasonable notice. His finding that the respondents were employees of
DAFF, and thus that he had jurisdiction to determine the
unfair
dismissal dispute, was unassailably correct; as was his finding that
since DAFF failed to lead any evidence justifying the
dismissals it
did not discharge its onus to prove their fairness.
[21]
In the premises, there is no merit in the appeal and it must be
dismissed.
[22]
The cross-appeal is on firmer ground.
Section 193(2) of the LRA provides that
unless the employee does not seek to be reinstated
,
or the circumstances surrounding the
dismissal are such that a continued employment relationship would be
intolerable
,
or it is not practicable for the
employer to reinstate the employee
,
or the dismissal is only found to
be
procedurally unfair, the
commissioner
must reinstate the employee.
Thus, the
employer bears the
onus
to
prove that there are exceptional reasons not to afford the primary
remedy of reinstatement
.
The
Labour Court made no reference to section 193(2) of the LRA in
deciding to set aside the award of reinstatement.
DAFF
presented no evidence that reinstatement was not practicable or that
the continuation of an employment relationship was intolerable.
Indeed, DAFF’s
own witness, Mr Marinus,
stated
during his testimony
that
the
respondents’
skills were still needed an
d
their posts had not been filled. Accordingly, there was no
evidentiary basis for the Labour Court to interfere with the
commissioner’s
decision to award reinstatement.
[23]
Given our view of the merits, there is no need to pronounce on the
preliminary point that the application
for review was technically
defective and should have been dismissed on that ground alone.
[24]
Equity demands that costs should follow the result in this case.
[25]
In the result, the following orders are made:
25.1.
The appeal is dismissed with costs.
25.2
The cross-appeal is upheld with costs and the order of the Labour
Court is substituted with an order dismissing
the application for
review with costs.
__________________
JR
Murphy
Acting
Judge of Appeal
I
agree
_______________________
M
Phatshoane
Acting
Deputy Judge President
I
agree
_______________________
DM
Davis
Judge
of Appeal
APPEARANCES:
FOR
THE APPELLANT:
Adv T Masuku SC
Instructed
by The state attorney
FOR
THE RESPONDENTS: Adv
V Barthus
Instructed
by Webber Wentzel
[1]
Act
16 of 1963.
[2]
The
Labour
Court
did not make a ruling on this point
in
limine
and
accepted a fresh review application weeks after the
application
was heard
in
court
.
[3]
Owen
& others v Department of Health, KwaZulu-Natal
(2009) 30 ILJ 2461 (LC).
[4]
Act
66 of 1995.
[5]
J
Grogan
Workplace
Law
(10
th
Edition) 41-42;
Redman
v Colbeck
1917
EDL 35
at 38; and
Braund
v Baker, Baker & Co.
(1905) 19 EDC 54.