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[2020] ZALAC 32
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Smith v National Lotteries Commission and Another (JA87/2018) [2020] ZALAC 32; [2020] 10 BLLR 1036 (LAC); (2020) 41 ILJ 2612 (LAC) (25 June 2020)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case no: JA87/2018
In
the matter between
:
IVEDA
VALERIA SMITH
Appellant
and
NATIONAL
LOTTERIES COMMISSION First
Respondent
KGOANA
MAMOGALE: CHAIRPERSON OF
THE
DISCIPLINARY HEARING
Second Respondent
Heard:
06 June 2020
Delivered:
25 June 2020
Coram:
Davis, Sutherland JJA and Savage AJA
______________________________________________________________________
JUDGMENT
______________________________________________________________________
SUTHERLAND
JA
Introduction
[1]
Who may dismiss Mrs Smith? That question is the origin of the
controversy in this
curious case.
[2]
The options are the National Lotteries Commission (NLC) or the
Minister of Trade and
Industry (MTI). The NLC tried to discipline
Smith for an alleged material non-disclosure upon taking up
“employment”
with it. The sanction upon a finding of
guilt would almost certainly be dismissal as Smith fulfilled a role
requiring the utmost
integrity as a member of the NLC’s
distributing agency. At the disciplinary enquiry, Smith advanced the
contention that the
NLC had no power to discipline her; rather the
MTI had to be privy to such a decision and hence the institution by
the board of
NLC of a disciplinary enquiry into her alleged conduct
was unlawful. The chair dismissed the point and held that she was an
employee
of the NLC ,and therefore, the NLC had the power to
discipline and dismiss.
[3]
Smith then brought an application before the Labour Court in which
the relief sought
was a review of the chair’s decision, a
declarator that the NLC “has no right and/or jurisdiction to
institute disciplinary
proceedings against [her], a member of the
distributing agency” and a declarator that the proceedings
instituted by the NLC
are unlawful.
[4]
It is the order and judgment of the Labour Court that are before this
court. The outcome
of those proceedings brought under section 158 (1)
(
h
) of the Labour Relations Act 66 of 1995 (LRA) was that the
Labour Court dismissed the application. The grounds for dismissal
were
twofold. The primary ground was that there was a material
non-joinder in that the MTI was not a party. The secondary reason was
a decision based on the court’s discretionary power not to
grant an interdict; in this case, premised on the notion that
Smith
should exhaust her remedies available to her to challenge any adverse
outcome of the disciplinary proceedings rather than
litigate
in
media res
. Who has the power to dismiss Smith was not decided.
[5]
The matter has been addressed in this court under the circumstances
that have prevailed
as a result of the Covid 19 pandemic and the
lockdown imposed. By agreement of the parties, this court dealt with
the matter without
the benefit of oral argument and relying entirely
on the heads of argument filed.
The Context of the
controversy
[6]
The NLC is a statutory body and an organ of state. It came into being
pursuant to
the provisions of the
Lotteries Act 57 of 1997
. Its
function is self-evidently to run the lottery. This involves
receiving large sums of money. Also, it must pay prize-winners.
Moreover, the purpose of the statute is to raise huge sums of money
to distribute to worthy causes.
[7]
The distribution of money to charities and other selected
beneficiaries is obviously
sensitive and susceptible to corrupt
practices. As part of a system of checks and balances, the function
of the selection and distribution
is ring-fenced. An entity called
the “distributing agency” in terms of
section 22(3)
, is
responsible for
considering,
evaluating and adjudicating “an application for a grant or
following a recommendation of funding of worthy good
causes from the
Commission after research conducted in terms of this Act.”
Section 26A then provides that:
‘
The
distributing agency contemplated in section 22(3) shall be-
(a)
appointed
by the Minister in terms of this Act; and
(b)
accountable
to the board.’
[8]
Section 26F provides that:
‘
The
distributing agency is accountable to the board and the board may-
(a)
determine
the operational policy for the performance of all financial,
administrative and clerical functions of the distributing
agency;
(b)
determine
or direct or order the performance of any other matter or research
intended to enhance the optimum functioning of the
board and the
distribution of grants;
(c)
ensure
that the distributing agency performs its function independently and
without fear, favour or prejudice; and
(d)
ensure
that the distributing agency adheres to any policy, directive or code
of ethics approved by the board and applicable within
the public
sector.’
[9]
The institutional relationship between the Board of the NLC and the
distributing agency
is thus clear from these provisions of the
Lotteries Act
>
[10]
Who are the persons who serve in the distributing agency?
Section 26
B (2) – (4) provides for the power to appoint members and the
methodology thereof:
‘
(1)
….
(2)
The number of the distributing agency members in each category shall
be determined by the Minister after consultation with the
board in
line with the size of the funds in such category: Provided that such
number shall not exceed nine in each category.
(3)
Members of the distributing agency shall be appointed for a period of
five years, which may be renewed only once, to serve on a
full-time
basis as members of the distributing agency and staff members of the
Commission responsible for adjudication of applications
for grants or
recommendations of funding of worthy good causes received from the
Commission
.
(4)
The Minister may, after consultation with the board-
(a)
appoint
persons with suitable combination [sic] of qualifications, skills and
expertise to consider, evaluate and adjudicate applications
for
grants or recommendations of funding of worthy good causes received
from the Commission on such terms and conditions determined
by the
Minister in consultation with the Minister of Finance;
and
(b)
designate
one person from amongst the members of the distributing agency as a
full-time chairperson, for a non-renewable period
of five years on
such terms and conditions determined by the Minister in consultation
with the Minister of Finance.
(5)
….’
[11]
Smith was a person who the MTI appointed pursuant to the power
conferred in
section 26B
(4). This is the font of her case: the
MTI appointed her, and
ergo
, no-one else can dismiss her. The
argument she advances elaborates on this theme and despite several
allusions to members of the
distributing agency being accountable to
the Board, being staff members of the NLC, parties to employment
contracts with the NLC,
the thesis is advanced that these
circumstances are trumped by the power vested in the MTI which,
properly interpreted, includes
a critical involvement in any
discipline to be instituted, absent which, such proceedings are null
and void.
The non-joinder issue
[12]
This point, as already stated, was the issue on which the case was
decided
a quo
.
[13]
The appellant has quibbled about the point being taken
mero motu
by the court
a quo
and the absence of an opportunity to
postpone the matter to join the MTI. These grumbles fail on the
facts. The NLC raised the
issue. The court offered an opportunity to
apply for a postponement which was not taken up.
[14]
To decide this point, it was unnecessary to decide whether the
contention advanced by Smith is correct.
Rather, the true enquiry
into the joinder question is simply whether the MTI was a necessary
party if the argument was to be advanced
that no discipline could
take place without the MTI’s involvement because this was a
competence reserved for the MTI.
[1]
[15]
In my view, it is not enough to say that no relief is sought against
the MTI, as is contended on behalf
of Smith, to substantiate the
absence of the MTI as a party to the proceedings. In the context of
the controversy, were a court
to hold that the NLC had no power to
discipline a member of the distributing agency, it could only reach
that conclusion by determining
that the power to do so is vested in
the MTI. It would never be palatable that, having succeeded in
obtaining a declarator excluding
the authority of the NLC to
discipline, that in subsequent proceedings, the MTI adopted a stance
which denied that the authority
to discipline vested in that office.
[16]
Accordingly, the decision of the Labour court is correct. The MTI
must be joined in proceedings to
decide whether that office or the
NLC has the power to discipline members of the distributing agency.
Axiomatically, it is inappropriate
to decide the question of who may
discipline the members of the distributing agency.
[17]
On this ground, the appeal must fail.
[18]
Both parties seek a costs order. In accordance with those wishes,
costs shall follow the result.
The
order
The
appeal is dismissed with costs.
___________________
Sutherland JA
Davis
JA and Savage AJA concur.
APPEARANCES:
FOR
THE APPELLANT:
Adv NH Maenetje SC
and Adv AM Pheto,
Instructed
by Kalamore Chipu Attorneys.
FOR
THE RESPONDENT:
Adv PM Kennedy SC,
Instructed
by Hogan Lovells SA Inc.
[1]
The
necessity test for non-joinder: see, eg:
Judicial
Service Commission and Another v Cape Bar Council
2013 (1) SA 170
(SCA) at esp para 12.