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[2012] ZALAC 23
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Gardner and Others v Central University of Technology: Free State (JA 65/10) [2012] ZALAC 23 (25 July 2012)
REPUBLIC OF SOUTH AFRICA
THE LABOUR APPEAL COURT OF SOUTH
AFRICA, JOHANNESBURG
Reportable
Case No. JA 65/10
In the matter between:
GARDNER, C I
...................................................................................
First
Appellant
THULARE, S M
….........................................................................
Second
Appellant
MANDEW, M S
…..............................................................................
Third
Appellant
STONE, R F S
….............................................................................
Fourth
Appellant
and
CENTRAL UNIVERSITY OF TECHNOLOGY
FREE STATE
…......................................................................................
Respondent
Heard: 08 November 2011
Delivered: 25 July 2012
Summary
: Appellants formerly
employed by the respondent university (the CUT) in executive
management positions. Upon retrenchment appellants
sought to have
their severance packages calculated on the basis of a controversial
retrenchment policy that was allegedly approved
by the former
vice-chancellor by virtue of the power delegated to him by the
Council. The policy was challenged by the CUT on various
grounds. The
defined issues included:
(1) Whether the retrenchment policy
constituted integral part of CUT’s governance functions,
exclusively assigned to Council
by the Act. (2) Delegation of
(discretionary) power – Concept & Restrictive
Interpretation thereof. (3) Factual disputes
in final relief
applications – Principle restated.
______________________________________________________________
JUDGMENT
NDLOVU JA
Introduction
[1] This appeal is against the
judgment of the Labour Court (Fulton AJ) in which the Court
a quo
dismissed with costs the review application launched by the
appellants seeking an order in the following terms:
‘
1.
That the purported decision by the respondent on 15 June 2007
relating to the retrenchment policy of the respondent be reviewed
and
set aside;
That
the respondent be ordered to effect payment to the individual
applicants, as severance packages, pursuant to their retrenchment
by
the respondent as follows:
2.1
To the first applicant the amount of R1 218 858,00;
2.2
To the second applicant the amount of R2 146 891,00;
2.3
To the third applicant the amount of R2 146 891,00;
2.4
To the fourth applicant the amount of R297 308,59.
Alternatively
that the respondent be ordered to pay compensation to the applicants
in terms of section 8(1)(c)(ii)(bb) of the
Promotion of
Administrative Justice Act, totalling the amounts indicated in
prayer 2 above.’
[2] The Court
a
quo
granted
the appellants leave to appeal to this Court.
[3] During
arguments, it turned out that the appellants no longer sought to
pursue the appeal against prayers 1 and 3. In other
words, the appeal
was to proceed only in respect of the quantum of the severance pay
which the appellants were entitled to on their
retrenchments, plus
mora
interest
thereon and costs.
[4] The respondent,
known as The Central University of Technology Free State (the CUT),
is a higher education institution in terms
of section 1 of the Higher
Education Act
1
(the Act) and is an
organ of State in terms of section 239(b) of the Constitution
2
.
The CUT was formerly known as the Technikon Free State until about
2004 when this name was changed to that of the CUT.
[5] All four appellants were formerly
employed by the CUT in various executive management positions which
are set out hereunder.
On or about 30 November 2007, they were all
dismissed from employment on the ground of the CUT’s
operational requirements
in that their jobs became redundant upon the
restructuring and reorganisation of the CUT’s executive
management personnel.
4.1 The first appellant was appointed
as chief director: human resources (HR) on pheromones post level 4
(P4) with effect from 1
November 2001 and elevated to the post of
executive director: human resources on post level 3 (P3) with effect
from 1 January 2003,
which was the post he occupied at the time of
his dismissal.
4.2 Both the second and third
appellants were appointed on 1 January 1997 and were each elevated to
the post of deputy vice-chancellor:
student services, post level 2
(P2), with effect from 1 December 2001 and these were the positions
they held at the time of their
retrenchment.
4.3 The fourth appellant was appointed
to the position of executive director: finance and operations on post
level 2 (P2), with
effect from 1 October 2003. Although his date of
retrenchment was not specifically disclosed in the papers – an
apparent
inadvertent oversight – it was common cause that he
was served with the notice of his retrenchment on 27 November 2007
and,
on this basis, it followed that he was retrenched on or about
the same date as his co-appellants.
[6] The fact that the appellants were
dismissed for a fair reason based on the CUT’s operational
requirements was not in dispute.
However, they were not satisfied
with the manner their severance packages were determined. They
contended that the procedure followed
by the CUT in this regard was
unfair in that the CUT did not accord them an opportunity to be heard
before it unilaterally decided
on 15 June 2007 to revoke or ignore
its (the CUT’s) existing and valid retrenchment policy (the
impugned policy) in the calculation
of their retrenchment packages.
[7] In terms of the
impugned policy, the appellants would have been entitled to severance
pay equivalent to 3 years remuneration,
far in excess of the
severance pay calculated in terms of the Basic Conditions of
Employment Act
3
(the BCEA) which
the CUT applied. The appellants alleged that the impugned policy
constituted part of the terms and conditions of
their employment with
the CUT and that they were, therefore, contractually entitled to have
their severance pay determined in terms
thereof. The amount of the
severance package, on the basis of the BCEA formula, was equal to one
week’s remuneration for
every completed year of service with
the employer. However, in the present instance the CUT, on its own
volition, multiplied by
two the amount calculated in terms of the
BCEA formula. The appellants were offered and paid the following
severance packages,
which they received, but claimed to have done so
under protest:
First appellant = R17 892,00
Second appellant = R383 687,00
Third appellant = R383 687,00
Fourth appellant = R146 493,41.
[8] The appellants had then referred
their dispute (which was characterised in the referral as “severance
pay – s 41”)
to the Commission for Conciliation,
Mediation and Arbitration (the CCMA) on 13 December 2007 in respect
of the first, second and
fourth appellants and on 29 November 2007 in
respect of the third appellant. The CCMA failed to resolve the
dispute through conciliation
and issued the certificates of outcome
to that effect on 10 January 2008 (in respect of the first, second
and fourth appellants)
and on 29 December 2007 (in respect of the
third appellant).
[9] Although both
certificates of outcome aforesaid reflected that the disputes could
thenceforth be referred to arbitration, the
appellants elected not to
pursue that route. Instead, they
elected
to refer the matter to the Labour Court by way of a review in terms
of section 77 of the BCEA, section 158(1)(h) of the
Labour Relations
Act
4
(the LRA) and
sections 3 and 6 of the Promotion of Administrative Justice Act
5
(PAJA).
The Background Facts
[10] During or about 1996, a
collective agreement was concluded between the Technikon Free State
(as the CUT was then known) and
the registered trade union, the
National Union of Technikon Employees of South Africa (NUTESA),
representing certain categories
of employees of the CUT (the 1996
collective agreement). In terms of the 1996 collective agreement, a
formula was agreed upon on
how severance packages would be paid out
to the employees falling within those categories in the event of
termination of their
employment with the CUT through, amongst others,
retrenchment. These categories involved employees in Groups A, B and
C4 to C8
as contemplated in the institutional rules. The
identification of employees in these categories is an issue not
necessary to elaborate
upon. Suffice it to say that those were
employees who fell below the management level.
[11] On 20 November
1995 the CUT, by virtue of section 19(1) of the Technikons Act,
6
adopted a body of
institutional rules for the CUT (the 1995 rules).
7
On 16 September
1996, the 1995 rules were amended by the addition thereto of rule
64(1) which had the heading ‘Termination
of Service Package’.
Rule 64(1) was a virtual direct English translation of the 1996
collective agreement.
8
[12] Some eight
years after the conclusion of the 1996 collective agreement, the
vice-chancellor’s executive team drafted
a policy document
which was titled ‘Policy B/11.5 Retrenchment of Employees at
the Central University of Technology, Free
State’,
9
purporting to set
out, amongst others, the retrenchment policy of the CUT (the impugned
policy). At the top front page of the document,
it reflected its
“approval date” as 1 November 2004, the “approval
authority” being the “executive
director: human resources
and principal and vice-chancellor; and the “date of next
review” being I November 2005.
[13] The impugned
policy was embodied in clause 11.5.1.2 of the document referred to as
‘Retrenchment Policy’
.
In turn, clause
11.5.1.2 had a sub-heading ‘Benefits of voluntary retrenchment
where a job becomes redundant’. On the
last page thereof, it
reflected that the impugned policy was endorsed by the executive
director: human resources on 1 December
2004 and by the principal and
vice-chancellor on 24 January 2005. Nothing purporting to be
signatures or names of the endorsing
officials appeared anywhere on
the document.
[14] Significantly, the 1996
collective agreement, the 1995 rules and the impugned policy
contained virtually the same information,
save that whilst the 1996
collective agreement and the 1995 rules excluded, by non-reference,
the category of employees in the
executive management (including the
appellants) in their application, the impugned policy was of general
application to all employees
alike, including the appellants.
[15] The three instruments referred to
above are of pivotal importance in this matter and I propose to refer
thereto. However, given
their being virtually identically the same in
content, subject to what I have alluded to in the preceding
paragraph, it would seem
reasonable, for the sake of brevity, to
refer hereunder only to rule 64(1) of the 1995 rules, which will then
serve to mirror the
content of the other two documents.
Section 64(1) of the 1995 Rules:
‘
Termination
of Service Package
(
Added
: September 16, 1996)
64(1)
If a full-time employee of the Technikon Free State falling in
categories A, B and C4 and C8, is discharged on the initiative
of the
employer due to industrial requirements such as affirmative action,
re-organisation or inability of an employee to execute
his/her
duties, as contained in Government Gazette No. 16005 of 7 October
1994, the Technikon Free State will be responsible for
the payment of
additional remuneration to such employees, calculated according to
the following formula:
1.
Employees with less than five years Technikon service
:
Such
employees will receive
one year’s bruto earnings
as
immediate single amount payment. By bruto earnings it is referred to
all earnings and benefits an employee would have received
for one
year, namely:
Basic
salary
Full
contribution to Medical Aid Scheme (if any)
Employee’s
contribution to Retirement Fund
Accumulative
leave for one year
Holiday
leave for one year
Service
bonus
Car
allowance (if any)
Study
advantages of employee and dependants (if they are busy with further
studies)
Housing
allowance for one year (if any)
2.
Employees with five years, but less than eight years Technikon
service:
The
benefits payable to such employees are calculated on the same basis
as category 1, but the bruto payment and other benefits
are based on
two years bruto earnings
, instead of one year. Furthermore, a
pro rata
calculation is done with regard to those persons with
less than (eight) years Technikon service. For example, the earnings
of an
employee with six years’ service, or a part thereof, will
be adjusted by multiplying it with seven and dividing it by eight.
3.
Employees with eight years but less than 10 years’ service at
the Technikon:
The
advantages payable to such employees are calculated on the same basis
as in category 1, but the bruto payment and other benefits
are based
on
two years and six months’ bruto earnings
, instead of
one year. Furthermore, a
pro rata
calculation is done with
regard to those employees having less than ten years’ service
at the Technikon.
For
example, the earnings of an employee with eight years’ service,
or a part thereof, will be adjusted by multiplying it
with nine and
dividing it by ten.
4.
Employees with more than ten years service at Technikon Free State:
Such
employees will receive a payment as in category 1, but the
remuneration will be based on
three years’ bruto earnings
instead of one year’s bruto salary.
5.
This additional remuneration is a termination of service
(“severance”) package that is payable apart from the
payment
of advantages that the employee will receive from the
National Technikon Retirement Fund.’
[16] As stated, the only difference
with the impugned policy was that in terms thereof the benefits
referred to above were not restricted
to those retrenched employees
falling in the specified categories, but to all CUT employees,
including the appellants.
The Reasons why the CUT rejected
the Impugned Retrenchment Policy
[17] The events which led to the
restructuring of the CUT’s executive management and eventual
retrenchment of the appellants
started shortly after the appointment
of Professor Thandwa Mthembu at the beginning of 2007, as the CUT’s
principal and vice-chancellor.
[18] On 16 March 2007 Prof Mthembu
approached the Council and advised that under his delegated authority
he was to follow a restructuring
exercise as far as the internal
workings of the CUT were concerned. The implementation of his
restructuring philosophy would affect
the executive management team
(which at that stage reported to him) commonly known as the
vice-chancellor executive team (the VCET).
The VCET comprised the
appellants plus the registrar of the CUT. These officials were also
members of the CUT’s management
committee (the MANCOM).
[19] Prof Mthembu
submitted his recommendations to the Council in a document titled
‘Framework for Institutional Restructuring
(Rightsizing of the
Staff Establishment)’ dated 8 March 2007 marked annexure “O”
to the founding affidavit (the
restructuring report). The
restructuring report proposed a wide-ranging institutional
restructuring process that would consist
of three stages ‘to be
implemented almost in succession, for which background work should
proceed in parallel’
10
and which included
a proposal to restructure the CUT’s staff at the executive
management level. This particular aspect of
the restructuring process
was described in the document as one of urgency to the extent that
its implementation was to be expedited
before 30 June 2007. The main
objectives of the restructuring exercise were stated as follows:
11
‘
(a)
Overall cost efficiency in the proportion of the salary budget used
at the executive level –
Reduction
of the number of executives and senior managers
Reduction
of the number of people who report to the vice-chancellor
Reduction
of the number of post levels P2 – P4.
Establishing
a lean, cohesive, strong, strategically focussed, goal-and
task-orientated, efficient and productive leadership at
executive
team level.’
[20] In his analysis of the situation,
Prof Mthembu sought to demonstrate, by way of a comparative schedule
with reference to some
other South African universities, that the
executive management staff at the CUT was unduly larger than what it
reasonably ought
to be. He pointed out that there were currently 14
individuals employed by the CUT at management level which cost the
CUT an annual
expenditure of some R10 million. The post levels of the
14 staff members in the management positions were broken down as
follows:
P2 = 5
P3 = 5
P4 = 2
P6 =
2
14
[21] Consequently, Prof Mthembu
submitted his report recommending drastic reduction of executive
management staff. On 16 March 2007,
the Council accepted his
recommendations. On 19 March 2007, he addressed letters to all the
appellants and the copy of one such
letter served on Mr Gardner was
included in the founding papers as annexure “Q”. It read
as follows:
‘
TOP
MANAGEMENT RESTRUCTURING: Notice of an imminent S189 LRA Process
You
are aware of CUT’s attempts at restructuring top management
(and the rest of the University) due to various reasons, amongst
which are: a need to reduce the number of people who report to the
Vice-Chancellor; cost-effectiveness at top management levels;
a
leaner top management structure.
Council,
in its meeting of 16 March 2007, agreed to some broad parameters of
CUT’s restructuring process, including that of
top management.
I am, therefore, giving you notice that in due course – when a
restructuring proposal has been produced,
together with its
implications on your current position – I will engage with you
and others who may be affected by this process.
I envisage that I
will be ready with a proposal by 31 May 2007 or earlier. You will be
informed accordingly.
In
restructuring processes the potential for retrenchments always looms
large; and Council confirmed that retrenchments are an option
in this
and other cases that will follow at CUT. But, as you know, many other
alternatives are pursued before that option is exercised;
and I will
not deviate from this accepted practice.
You
are a very experienced manager and you should be familiar with these
processes. I just want to assure you that at this stage,
there is no
cause to panic about what may happen to you as an individual because
there is no specific proposal at this stage.
I
hope that you will continue to support me and deliver on your tasks
as we move this institution forward to greatness.
Yours
sincerely
Prof
Thandwa Mthembu
Vice-Chancellor
and Principal’
[22] Mr Gardner testified, on
affidavit, that he felt that as the HR executive director of the CUT
it was his duty to assist Prof
Mthembu in the proposed restructuring
process and the possible retrenchment of the CUT’s employees.
He then held a personal
discussion with Prof Mthembu over the matter
during which he pointed out the existence of the impugned policy. He
said Prof Mthembu
requested to see the document, which reaction
indicated to him that Prof Mthembu had not, up to that stage, even
been aware of
the existence of the impugned policy. A copy of the
document was duly furnished to Prof Mthembu.
[23] Prof Mthembu submitted a further
written proposal, dated 27 April 2007, to the Council headed ‘The
Restructuring of Executive
Management’, which was marked
annexure “S” to the founding affidavit. This document
contained proposals and recommendations
which would obviously have
far-reaching implications to the appellants and which were in line
with the objectives contemplated
in the restructuring report.
[24] On 7 May 2007, Prof Mthembu
issued a communiqué in which he reiterated his view that,
given its size, the CUT could
manage with four executive managers at
a cost of about R3.4m annually, down from R7m. However, he assured
everyone concerned that
he would be engaging in consultations with
all those likely to be affected.
[25] Mr Gardner then did a calculation
on how much, in terms of the impugned policy, each executive manager
(including the appellants)
would be entitled to receive as severance
packages and he furnished Prof Mthembu with this information, which
is contained in annexure
“U” to the founding affidavit,
as shown hereunder. (The amount of the severance package calculated
on the basis of
the impugned policy is reflected within bracket under
the column ‘C
urrent Cost to Company
’).
Name
Job
Title
Date
of appointment in current post
Current
Cost-to-Company Package
Date
of Appointment at CUT
Dr
MJ du Plooy (11689)
Registrar
17
November 1999
R843
624
(R2
530 872)
1
January 1997
Prof
MS Mandew (11672)
DVC:
Student Services
1
December 2001
R843
528
(R2
530 584)
1
January 1997
Prof
SM Thulare (11657)
DVC:
Advancement & Marketing
1
December 2001
R843
5 6
(R2
530 578)
1
January 1997
Mr
RFS Stone (12194)
Executive
Director: Fin Management & Operations
1
October 2003
R697
875
(R1
395 750)
1
October 2003
Mr
CI Gardner (12044)
Executive
Director: Human Resources
1
January 2003
R697
875
(R1
395 750)
1
November 2001
Prof
PG Le Roux
Executive
Dean: Management Sciences
1
January 2004
R709
161
(R2
127 483)
1
January 1988
Prof
BJ Frey
Executive
Dean: Health and Environmental Sciences
1
January 2004
R705
963
(R2
117 889)
1
July 1987
Prof
GD Jordaan
Executive
Dean: Engineering, Information and Communication Sciences
1
January 2004
R704
258
(R2
112 774)
1
January 1983
TOTAL
R16
189 732
[26] On 5 June 2007, Prof Mthembu
issued his final report titled ‘Report to Council on
Consultations and Implications of Executive
Management Restructuring’
which was also included in the appellants’ founding papers as
annexure “V” (the
final report). This was a comprehensive
report in which Prof Mthembu sought to illustrate the extent that he
had covered in terms
of consultations and negotiations with the
relevant stake holders on the restructuring process of the executive
management, in
particular. He severely criticised the impugned
policy. At this stage, he had obtained legal opinion on the question
of the legal
force and effect of both the impugned policy and the
collateral re-deployment policy (the latter not being at issue in
this case)
from a Bloemfontein attorney Mr CM Dell (the Dell
opinion), in terms of which the following was advised:
‘
1.
The then Vice Chancellor had the necessary delegated authority for
the approval of an Institutional HR Management Plans and Strategies.
2.
The 2 policies concerned, however were disguised to form part of a
Management Plan, whilst, in actual fact, specifically relating
to
Service Benefits and Employment Conditions of employees.
3.
In terms of Section 76 of the Institutional Statute Conditions of
Service Benefits and Leave Privileges of employees, as defined
therein, are to be determined by the Council and Council only,
without there being a reference to delegation.
4.
The implementation of the policies concerned herein has an enormous
financial potential burden for the Institution, who is accountable
to
the Minister of Education and which accountability does remain that
of the Council.
5.
Lastly, the policies, then, were never at any stage approved by
Council as for what they are and, thus, as only Council could
approve
them, these policies could never have come into operation and are,
therefore, null and void.’
[27] Prof Mthembu
also set out a comparative outline indicating how much it would
probably cost the CUT to pay out severance packages
in respect of the
eight executive managers, including the four appellants, applying the
relevant labour law provision (being the
BCEA, in particular) on the
one hand, and applying the impugned policy, (which he termed the
‘
unapproved
policy’
),
on the other. In this regard, he concluded that only about R1 million
would cost the CUT when applying the labour legislation
compared to
some R8.3 million it would cost when applying the impugned policy.
[28] The Council had then on 15 June
2007 resolved to approve Prof Mthembu’s recommendations as
contained in the final report,
which included the rejection by the
CUT of the impugned policy.
[29] On 25 July
2007, Mr Gardner addressed an email to Prof Mthembu in which Mr
Gardner referred to the Council’s recent step
of approving the
final report. This time Mr Gardner referred not only to delegation 50
but also to delegations 15 and 36 in respect
of which powers on
matters related to “changes to conditions of employment as
approved by council and the employment rules
of council”, and
powers on matters related to “employment benefits and
privileges” were, respectively, delegated
from Council to the
vice-chancellor. In this email Mr Gardner sought to offer advice to
Prof Mthembu, an initiative which Mr Gardner,
as the CUT’s HR
executive director, had felt he was obliged to do. Significantly,
though, he also stated the following:
12
‘
It
is not clear whether or not council scrapped the mentioned policies
(referring to the retrenchment and redeployment policies)
or whether
the policies are still applicable to the rest (non-executive) of the
staff.
It
seems that these policies must now be reviewed and that the LRA takes
effect in the meantime
.
The mere fact that this institution had signed a collective agreement
with NUTESA is, in my view, a binding arrangement until
there is
agreement on the termination thereof.
Whether
this is applicable to executives is not for me to debate now. My
concern is how it will affect staff at levels lower down.
’
(My underlining for emphasis.)
The significance of this email,
particularly the emphasized portions thereof will be discussed later
in this judgment.
[30] In or about September 2007, Prof
Ralekhetho Mojalefa, the acting executive director in the office of
the vice-chancellor, took
over from Prof Mthembu the task of dealing
with the implementation process of restructuring the CUT’s
executive team. He
engaged in further discussions and consultations
with the affected executive members, including the appellants. As to
how the discussions
progressed was demonstrated in the letters and
emails which were exchanged between Prof Mojalefa (on behalf of the
CUT) and Mr
Gardner (on behalf of the appellants) some of which
correspondence was carried in annexures “AA”, “BB”
and “CC” to the founding papers. However, all attempts to
resolve the impasse proved unsuccessfiul.
Brief outline of the parties’
submissions
[31] The appellants alleged that the
1996 collective agreement, which according to the appellants was
still valid and binding on
the CUT, was incorporated in the
institutional rules of the CUT which formed part of its institutional
statutes. They submitted
that their appointments by the CUT were
subject to the policies and statutes of the CUT. The statutes made
provision for severance
packages to be paid out to employees in terms
of the CUT’s retrenchment policy (meaning the impugned policy)
in the event
of their involuntary retrenchment. On this basis, the
appellants had accrued contractual rights to the severance packages
as contained
in the impugned policy and the statutes of the CUT.
[32] In any event, the appellants also
alleged that the CUT had already in the past paid out retrenchment
packages calculated in
terms of the impugned policy. In other words,
they alleged an act of inconsistency on the part of the CUT. They
furnished examples
of the CUT’s former employees whom they
alleged were paid retrenchment packages calculated on the basis of
the impugned policy.
This issue will be dealt with in due course.
[33] Furthermore, according to the
appellants, the existence of the impugned policy and the CUT’s
past practices aforesaid,
had given them a legitimate expectation
that they would be afforded proper procedural rights before any
decision on the matter
was taken. However, this did not happen
because the CUT unfairly and unilaterally changed the “existing
retrenchment policy”
and decreed that it was not bound by it.
[34] It was reiterated on behalf of
the CUT that the 1996 collective agreement never applied to any of
the CUT’s employees
in the category of the appellants. In any
event, the institutional rules and statutes which had adopted the
1996 collective agreement
had been repealed prior to the acceptance
by the appellants of their appointments to the executive management
positions.
[35] The Council adopted the
institutional regulatory code in respect of conditions of employment
rules’ for the CUT which
came into operation on 19 September
2001. The institutional regulatory code effectively replaced the
statute and rules of the Technikon
Council of 1996. The CUT further
stressed that the regulatory code aforesaid did not make any
provision for, or mention of, any
retrenchment or severance packages.
That being the case, the severance packages would have to be
calculated in terms of section
41(2) of the BCEA.
[36] It was further submitted, on
behalf of the CUT, that there was an irresolvable dispute of fact on
the question of whether the
impugned policy was validly adopted and
authorised, as a matter of fact.
The proceedings in the Labour Court
[37] The appellants’ case was
pleaded on the averments made by the first appellant (Mr Gardner) who
deposed to both the founding
and replying affidavits on behalf of the
appellants. Mr Gardner sought to demonstrate that, by virtue of his
position as the CUT’s
HR executive director, he had personal
knowledge and insight into the CUT’s internal HR operations and
dynamics, which included
the circumstances that informed the
appellants’ challenge of the CUT’s decision under review
in the Court
a quo
.
[38] Prof Mthembu deposed to the
answering affidavit on behalf of the CUT opposing the review
application on several grounds including
the submission that Prof
Koorts did not have the authority to approve the retrenchment policy
and that such approval fell within
the exclusive competence of the
Council. Therefore, since there was no existing retrenchment policy
at the time, the CUT was left
with no option but to resort to the
provisions of section 41(2) of the BCEA.
[39] After setting out a comprehensive
and useful analysis of the applicable legislation and other
authorities in relation to the
pertinent facts, the Court
a quo
made its findings, including the following:
There was a genuine dispute of fact
on whether Prof Koorts actually endorsed or adopted the retrenchment
policy and that the appellants
failed to show that Prof Koorts did
so.
The CUT’s delegations in terms
of its delegations register were only meant to give effect to the
day-to-day application
of the CUT’s institutional statues and
institutional rules and not to give the principal and
vice-chancellor the power
to determine any new or different
conditions of service or benefits (in respect of any category of
employees) not already determined
by the Council.
The contextual consideration and
restrictive interpretation of the delegations evidently showed that
the principal and vice-chancellor
did not have the power to approve
any CUT’s governance policy, including one under
consideration.
The decision in
Oudekraal
Estates
(Pty)
Ltd v City of Cape Town and Others
,
13
on which the
appellants had sought to rely, was no authority for the proposition
that every unlawful and invalid administrative
act remained binding
until such time that it was set aside in judicial proceedings.
On the facts of the case, the CUT was
entitled to ignore and treat as invalid the purported endorsement or
adoption of the impugned
policy by the then CUT’s principal
and vice-chancellor, Prof Koorts.
Hence, the Court
a quo
dismissed the appellants’ review application with costs,
including the costs of two counsel.
The Appeal
[40] In their grounds of appeal, the
appellants submitted that the Court
a quo
erred in a number of
respects, including the following:
1. In its factual finding that it was
bona fide
disputed that Prof Koorts had in fact adopted the
policy and that the appellants had failed to prove that Prof Koorts
did so.
2. In disregarding that, when it made
the decision to reject the retrenchment policy, the CUT acted
unilaterally without consulting
with the appellants as the affected
employees.
3. In disregarding the fact that,
subsequent to the approval of the policy, the CUT acted upon its
terms in paying out severance
packages to employees retrenched at the
CUT.
4. In holding that the Council’s
power to adopt the impugned policy could not have been delegated to
anyone, including the
then vice-chancellor.
5. In holding that the effect of the
delegation of the Council’s powers to the then vice-chancellor
amounted to no more than
the confirmation of authority on the
vice-chancellor to execute upon a decision of the Council.
6. In holding that the applicable
delegations were meant to give effect to the day-to-day application
of the institutional statues
and institutional rules only. In
particular, in holding that delegation 15 prohibited the adoption of
the policy by Prof Koorts.
The Issues
[41] The issues which arise from the
pleadings and grounds of appeal are discussed in the course of my
analysis and evaluation of
the appeal hereunder.
Analysis and Evaluation
[42] It is common
cause that the CUT is an organ of state
14
and a public higher
education institution.
15
As such, it is an
institution whose establishment was funded by, and whose continued
operational existence ultimately depended on,
public moneys
appropriated by Parliament for such purpose.
16
The Act provides
that the Minister
17
‘
must …
allocate public funds to public higher education (and, therefore, to
public higher education institutions) on a fair
and transparent
basis.’
18
This provision is
in line with the Constitutional imperative that ‘[w]hen an
organ of state in the national, provincial or
local sphere of
government, or any other institution identified in national
legislation, contracts for goods or services, it must
do so in
accordance with a system which is fair, equitable, transparent,
competitive and cost-effective.’
19
Therefore, it seems
to follow, in my view, bearing in mind this imperative, that every
rand and cent acquired from public coffers
for the purpose of
promoting and advancing education at all public institutions,
including public higher education institutions,
must be utilised and
expended in a manner that is responsible, fair, equitable and
cost-effective. I now turn to deal with the
issues and facts in this
case.
Whether a genuine and material
dispute of fact arises from the papers
[43] There is the question whether or
not the impugned policy was, as a matter of fact, adopted or approved
by Prof AS Koorts regardless,
for the moment, whether he had the
requisite authority to do so or not.
[44] The CUT submitted that the
appellants failed to present proof that, as a matter of fact, Prof
Koorts endorsed or approved the
impugned policy. However, Mr Kemp SC,
for the appellants, submitted that when the review application was
launched there was not
even a suggestion made on behalf of the CUT
that there was a real factual denial of this allegation. However, he
conceded that
this issue was indeed raised by the CUT in its
answering affidavit. He sought to explain that what he meant was that
when the appellants
filed their founding papers (in the review
application) such factual dispute was not anticipated.
[45] With respect,
I am unable to agree with counsel’s suggestion that the CUT’s
factual denial of Prof Koorts’
approval should be disregarded
on the ground that the denial was never raised prior to the launch of
the litigation and therefore
not anticipated by the appellants when
they instituted the review application. A party initiating
application proceedings does
not have to be apprised of potential
defences by the opposing party. It is common and elementary knowledge
that in motion proceedings
a defence is normally formally announced
in the answering affidavit, be it a defence
in
limine
or
on the merits of the application. In other words, the CUT was under
no obligation to make known to the appellants every detail
of its
defence strategy beforehand. For the CUT to have raised this defence
for the first time in its answering affidavit was,
in my view,
neither irregular nor unfair to the appellants, nor was it a bare
denial in content.
[46] There was no direct evidence by
Mr Gardner to the effect that he personally saw (or even heard) Prof
Koorts approving the impugned
policy. It was significant that the
impugned policy was embodied in a typed and, more importantly,
unsigned document. It did not
even bear the name of Prof Koorts in
any form. Therefore, apart from the say so of the appellants, there
was nothing else of probative
value that linked Prof Koorts to the
impugned policy document. Most significantly, notwithstanding the
CUT’s persistent factual
denial of the alleged approval, no
evidence was tendered by Prof Koorts, on affidavit or otherwise,
confirming that he indeed endorsed,
adopted or approved the impugned
policy. Nor was there any explanatory evidence adduced by anyone,
including the appellants, as
to why Prof Koorts was not secured to
confirm the appellants’ allegation related to him. I will
return to this aspect shortly.
[47] Mr Kemp referred to certain
passages in the CUT’s answering affidavit which, in his
submission, only amounted to either
an admission on the part of the
CUT or simply a bare denial which did not constitute a genuine
dispute of fact. I do not agree
with this submission for the reasons
that follow.
[48] The appellants
alleged that in the following passage (which is extracted from the
CUT’s answering affidavit) Prof Mthembu
(on behalf of the CUT)
admitted, after all, that Prof Koorts did in fact endorse the
impugned policy:
20
‘
80.
As is clear from the contents of page 7 of the said document, the
policy was also approved by …… Principal and
Vice-Chancellor (Prof AS Koorts) on the 24
th
January 2005.’
[49] To the extent relevant, page 7 of
the document provides for what is termed “Source of Approval”
under which heading
appears three CUT’s official designations
in this form: (1) VCET (2) Executive Director: Human Resources (3)
Principal and
Vice-Chancellor. Significantly, no names of incumbents
are reflected, let alone their signatures. The same is true with the
“Endorsement”
columns which appear on page eight which
also bear neither the names nor signatures of the alleged endorsing
officials.
[50] Therefore,
taken in its proper context it appears to me that Prof Mthembu’s
statement (above) did not amount to an admission.
The opening phrase
‘As is clear from the contents of page 7 of the said document’
could not, in my view, have lent
any other meaning to the sentence
than merely to say “On the face of the said document the policy
was approved by Prof Koorts.”
All that Prof Mthembu was saying
was that the document purported to be endorsed by Prof Koorts.
Indeed, the proper context of what
he actually meant clearly appears
in the next paragraph, where Prof Mthembu states:
21
‘
81.
The erstwhile principal and vice-chancellor
purported
to endorse the
policy
by
virtue of his authority to endorse managerial policy principles and
directives whereas the retrenchment and termination of service
of
employees clearly falls within the exclusive jurisdiction of the
council of the university as a governance policy and procedure.’
(Underlined
for emphasis.)
[51] Mr Kemp further submitted that
the CUT’s response at paragraphs 96 and 97 of its answering
affidavit amounted to a bare
denial in relation to the appellants’
allegation in this regard. The exchange on the record appears as
follows:
(Founding
affidavit)
22
at
paragraph 16.13
‘
16.13
It is necessary to indicate that the Vice-Chancellor at that stage,
Prof AS Koorts, had adopted the policy…’
(Answering
affidavit)
23
Ad
paragraph 16.13 thereof:
‘
96.
There is no proof that the vice-chancellor at that stage, Prof AS
Koorts, had in fact adopted and approved the two policies.
97.
The allegations contained in this paragraph are therefore denied.’
[52] The appellants alleged that Prof
Koorts approved the impugned policy, which is denied by the CUT. On
this basis, the appellants
bore the
onus
to demonstrate to the
Court on a balance of probabilities that indeed, as a matter of fact,
things happened as they alleged. In
the present instance, the CUT did
not have to amplify or elaborate more than it did on its response
that there was ‘no proof
that … Prof AS Koorts had in
fact adopted and approved the two policies’. In this way, the
appellants were put to
the proof of this allegation. Therefore the
appellants were specifically required to furnish proof that Prof
Koorts did, as a matter
of fact, approve the impugned policy and they
had the opportunity to do so in reply, if there was such proof. They
failed to furnish
the required proof.
[53] The appellants replied as follows
to paragraph 96 of the CUT’s answering affidavit, above:
‘
Ad
Paragraph 96
37.1
This averment is not understood. The respondent has not disputed the
authenticity of the documents attached to the founding
affidavit as
annexure “E”. This
on
its face
reflects the
adoption by Prof Koorts pursuant to his delegated authority. It
follows that this paragraph is denied.’ (
Underlined for
emphasis.
)
[54] The averment
referred to is, in my view, quite comprehensible. It is not clear on
what basis the appellants are alleging that
the CUT did not deny the
authenticity of the document concerned. On the appellants’ own
version, what appears in the impugned
policy is only ‘on its
face’ (
prima
facie
)
a reflection of approval by Prof Koorts. Besides anything else, this
was a demonstration that the authenticity of the impugned
policy
document was not conclusively proven. There was simply no admissible
evidence submitted by the appellants in response to
the CUT’s
factual denial of the appellants’ allegation that the impugned
policy was actually endorsed by Prof Koorts.
[55] Significantly,
as pointed out already,
ex
facie
the
impugned policy document no signatures by both the HR executive
director (Mr Gardner) and the then principal and vice-chancellor,
Prof Koorts. Whilst Mr Gardner deposed to an affidavit and positively
verified his endorsement of the document, there was no similar
verification by or on behalf of Prof Koorts. Nor was there any
explanation furnished by the appellants as to why (1) the document
was not signed at all, (2) Prof Koorts was not used as a witness or
(3) no verification or confirmation was presented of Prof Koorts’
endorsement of the policy. On the probabilities, an adverse inference
on the credibility of the appellants’ case was, in
the
circumstances, justified.
24
[56] The impugned policy was drafted
by the members of the VCET who included all the appellants; endorsed
by Mr Gardner, in his
capacity as the HR executive director; and
purportedly approved by the then vice-chancellor Prof Koorts. Despite
their executive
management positions all these officials remained the
employees of the CUT. Ironically and strangely indeed, save for the
then
vice-chancellor, the impugned policy was clearly aimed at
benefiting the very same employees who were responsible for its
existence.
This situation alone tends to lend some degree of doubt
and suspicion on the genuineness of the alleged approval of the
impugned
policy by Prof Koorts, particularly in the absence of his
signature (or some form of his identification) on the document, as
well
as the appellants’ failure to get him to confirm their
allegations in the proper manner.
[57] As pointed out
earlier, on the front page of the impugned policy document is
reflected that the “approval date”
of the policy was 1
November 2004 and that its “date of next review” was 1
November 2005. This implied that the “policy”
would
operate for one year whereafter it would be reviewed. There was no
evidence or suggestion that the impugned policy was indeed
reviewed
on 1 November 2005 or any date thereafter prior to 30 November 2007
when the appellants were retrenched. The conclusion
which readily
comes to mind is that the impugned policy had, on its own terms,
lapsed or expired when the appellants were retrenched.
Indeed, Mr
Gardner appeared to concede this apparent fact in his email dated 25
July 2007 addressed to Prof Mthembu, which I have
referred to earlier
in this judgment.
25
For the sake of
convenience, I refer again to the relevant passage in the email:
‘
It
is not clear whether or not council scrapped the mentioned policies
(referring to the retrenchment and redeployment policies)
or whether
the policies are still applicable to the rest (non-executive) of the
staff. It seems that these policies must now be
reviewed and that the
LRA takes effect in the meantime. The mere fact that this institution
had signed a collective agreement with
NUTESA is, in my view, a
binding arrangement until there is agreement on the termination
thereof. Whether this is applicable to
executives is not for me to
debate now. My concern is how it will affect staff at levels lower
down.’
[58] In the email aforesaid, Mr
Gardner was seemingly of the view that, since the policies were past
their review dates they could
not be applied and that the provisions
of the LRA should then be applicable. It is unclear why Mr Gardner
suddenly had a change
of mind in the matter. In any event, he does
not appear to present valid grounds in support of his changed
attitude. This apparent
contradiction on the part of Mr Gardner was
not explained.
[59] In my view,
this factual challenge of Prof Koorts’ approval of the impugned
policy had all the hallmarks and ingredients
of a real and genuine
dispute of fact. That being the case and given that the appellants
sought an order for final relief, the
Plascon-Evans
Paints (Pty) Ltd v Van Riebeeck
Paints (Pty) Ltd
principle
26
would have to
apply. In that event, the appellants could only succeed if the facts
as stated by the CUT, together with those facts
in the appellants’
affidavit which were admitted by the CUT, justified the order
sought.
27
However, it seems
to be in the interests of justice that ‘a robust, common-sense
approach’
28
be applied in this
case, which the Court
a
quo
apparently
did. I now proceed to deal with the other issues in the matter.
Whether the then principal and
vice-chancellor, Prof Koorts, possessed the delegated authority
entitling him to approve or adopt
the impugned policy.
[60] Mr Gardner contended that when
Prof Koorts approved the impugned policy he did so by virtue of the
powers delegated to him
by the Council in terms of the CUT’s
delegations register. In this regard, he referred specifically to
delegation numbers
15, 30, 36 and 50 in terms of which certain powers
specified therein were delegated from the Council to the
Vice-Chancellor. These
delegated powers concerned the following
matters:
Delegation15 – “Changes to
conditions of employment as approved by council and the employment
rules of council”
Delegation 30 – “Redundancy
and Retrenchment”
Delegation 36 – “Employment
benefits and privileges”
Delegation 50 –
“
Approval
of institutional HR management plans and strategies
”
29
[61] On the concept of delegation of
power, Baxter
30
points out that the power of an
official to delegate authority does not exist automatically, and must
be provided for either expressly
or impliedly.
31
The learned author further submits:
‘
While
a practical need for delegation must be recognised, there is a danger
that power which the Legislature has chosen to be exercised
by a
specific officer, office holder or body, might in fact be exercised
by someone who is neither as well qualified nor as responsible
(politically or otherwise) as the chosen repository of the power. For
this reason the courts tend to interpret delegatory powers
restrictively and it has been held, rightly, it is submitted, that
such powers may be exercised only once the delegee (is) unable
to
delegate the powers still further. …
When
power is conferred upon an office of statutory body it is intended
that the power should be exercised by that office of body
and not
someone else. The recipient of the power has presumably been chosen
for a purpose – for his accountability, expertise,
seniority or
advantaged position in exercising the power. Should he allow the
power to be exercised by someone who was not chosen
he will
effectively have abdicated his own power and will not have complied
with the legislation.’
32
[62] The approval of employment
benefits and retrenchment packages is clearly a matter which, in a
work environment, involves governance
function and power on the part
of the employer. Therefore, ordinarily any decision-making on matters
pertaining to governance policy
is the sole preserve of the employer.
In the present instance, the employer is the CUT which exercised its
powers and performed
its functions on the governance and control of
the CUT through the Council.
Indeed,
in terms of the Act the Council ‘must govern the public higher
education institutions, subject to this Act, and the
institutional
statute.’
33
[63] By its nature and purpose, an
institutional statute (together with the institutional rules) is both
supplementary and complementary
to the Act in constituting the
foundational pillars on which the governance function of every public
higher education institution,
such as the CUT, is laid. On this
basis, an institutional statute has the status of the Act itself in
terms of its legal consequences.
As indicated, institutional statutes
and institutional rules are made by the Council, which is the highest
decision-making body
of the public higher education institution
concerned.
[64] Besides section 27(1), the
importance and significance of the Council, the institutional
statutes and institutional rules in
the governance of a public higher
education institution is also apparent from sections 32 and 33 of the
Act.
Section 32 (1) provides:
‘
(1)
The council of a public higher education institution may make –
An
institutional statute, subject to section 33, to give effect to any
matter not expressly prescribed by this Act; and
Institutional
rules to give effect to the institutional statute.’
34
Section 33 provides:
‘
(1)
Any institutional statute must be submitted to the Minister for
approval, and if so approved must be published by notice in
the
Gazette
and
comes into operation on the date mentioned in such notice.
(2)
The Minister must table any institutional statute made under section
32 in Parliament as soon as reasonably practicable after
it has been
published as contemplated in sub-section (1).
(3)
The Minister must make a standard institutional statute, which
applies to every public higher education institution that has
not
made an institutional statute until such time as the council of such
public higher education institution makes its own institutional
statute under section 32.
35
[65] Therefore, in the light of its
statutory mandate in terms of the Act, it could never, in my view,
have been the intention of
the Council, as the repository and
delegator of power, that any delegation of power from it to the
vice-chancellor, in terms of
the delegations register, would include
the delegation of its governance powers, including the power to
approve the policies of
the CUT, such as the impugned policy in this
case. Approval of any policy was an integral part of the CUT’s
governance function.
Hence, it seems to me, any deviation from this
position would, from the perspective of the vice-chancellor, amount
to usurping
the Council’s powers whilst, from the perspective
of the Council, constitute an abdication of its statutory duty and
responsibility
under section 27(1) of the Act.
[66] During 1999,
the Council issued an institutional statute (the 1999 statute) which
took effect on 6 June 1999.
36
As the then
principal and Vice-Chancellor, Prof Koorts was, in terms of the Act
and the 1999 statute, the chief executive and accounting
officer of
the CUT,
37
responsible for the
general management, administration and control of the CUT.
38
In terms of the
1999 statute, he was thus –
‘
(3)
(assigned with the duty), in accordance with subparagraph (2)
(to)
execute all actions on behalf of the CUT and ha(d) the power
to –
(a)
… …
(b)
restructure and reorganise the institution for purposes of effective
management and development of the CUT; and
(c)
give instructions to any employee, student or managerial committee of
the council, which instructions must be executed promptly
and fully.
(4)
directly
responsible to council
(5)
by virtue of his office, a member of all committees of the council
and all managerial committees.’
39
(
Underlined
for emphasis)
[67] The underlying
principle in section 6(3) of the 1999 statute, above, was that the
vice-chancellor was vested with the power
to execute all actions on
behalf of the CUT as approved by the Council. His were only executive
powers in relation to implementation
of policies adopted by the
Council. It does not appear to me that any of the delegations relied
upon by the appellants purported
to delegate the approval of the
CUT’s governance policies to the vice-chancellor. In my view,
these delegations were only
enacted to capacitate the
vice-chancellor, as the CUT’s chief executive and accounting
officer, in his day-to-day implementation
and execution of the
governance policies as approved by the Council. In other words, the
delegations were not intended to bestow
upon the vice-chancellor
‘policy legislative powers’, so to speak, but simply to
strengthen the executive powers already
conferred on the office of
the vice-chancellor who, by the way, at all times remained directly
responsible to the Council.
40
Had the Council
intended to do otherwise, it would clearly have done so, given the
critical nature and importance of the issue.
Whether, in any event, the
discretionary power vested in the Council, as the repository of
power, could be delegated
[68] Any decision-making on policy,
which eventuates in the favourable adjustment of employment benefits,
is a matter that almost
invariably involves the exercise of a
discretionary power on the part of the employer. In the present case,
therefore, the appellants’
contention amounts to saying that
the then vice-chancellor was, by virtue of the powers delegated to
him by the Council, bestowed
with the discretionary power to approve
the impugned policy which provided huge retrenchment benefits for its
drafters, the appellants.
The question arises whether, if such be the
case, the Council would not have abdicated its statutory obligation
in terms of the
Act to govern the CUT.
[69] In
Hofmeyr
v Minister of Justice and Another,
41
it was held that when a discretionary
power is vested in an official it generally must be exercised by that
official (or his lawful
delegate) and although it may be appropriate
to consult and take advice from others, the official must exercise
the discretion
and not abdicate this in favour of someone else.
[70] The position was re-iterated in
Minister of Enviromental
Affairs and Tourism and Another v Scenematic Fourteen (Pty) Ltd
:
42
‘
A
functionary in whom a discretionary power is vested must himself
exercise that power in the absence of the right to delegate ...
.
[I]t does not follow that a functionary ... would have to read every
word of every application and may not rely on the assistance
of
others ...What the functionary may not do, of course, is adopt the
role of a rubber stamp and so rely on the advice of others
that it
cannot be said that it was he who exercised the power. If in making a
decision he were simply to rely on the advice of
another without
knowing the grounds on which that advice was given the decision would
clearly not be his.’
[71] Whether or not there has been an
abdication of a discretionary power vested in a functionary is, of
course, a question that
must be decided on the facts of each case.
43
On the facts of this case, it is clear
to me that the Council never intended to delegate its discretionary
power which it exercised
on matters of governance policy, such as
approval of policies of the nature of the impugned policy.
The appellants’ terms and
conditions of employment in the executive management positions
[72] The letters of
the appellants’ appointments to the executive management
positions clearly and comprehensively set out
the terms and
conditions of their employment in those positions
44
and, in my view, no
support to the appellants’ claim can be gleaned therefrom
either. In particular, clause 1 of the appointment
letters reads as
follows:
‘
1.
This agreement will be subject to the following, as amended from time
to time:
The
Labour relations Act, 66 of 1995;
The
Occupational health and Safety Act;
1.3
The
Higher Education Act, 1997
;
1.4
Any applicable legislation regulating the minimum conditions of
employment;
1.5
The Rules of the Technikon Free State, as well as the statute, as
approved by the Minister and published in the government gazette,
as
well as the terms and conditions as set out in this agreement;
1.6
The Conditions of Employment Rules, attached as Appendix A, and the
disciplinary rules and Procedures, attached as Appendix
B; and
1.7
The Code of Ethics for employees of the Technikon Free State,
attached as Appendix C.’
[73] The CUT
alleged that the rules referred to in Appendix A and which were
attached to the letters of appointment were not the
1995 rules but
the new institutional
“
conditions
of employment rules
”
which
were issued by the Council and became effective on 19 September 2001
(the 2001 rules).
45
This allegation was
not disputed by the appellants.
46
As stated already,
the appellants were appointed to their respective executive
management positions after 19 September 2001, and
when the 2001 rules
were already in place and operative.
47
It follows,
therefore, that the appellants’ appointments were subject not
to the 1995 rules, but the 2001 rules, copies of
which, as stated
above, were attached to each one of the appellants’ letters of
appointment as Appendix A.
[74] The
explanatory note on the front page of the 2001 rules reflected that
these rules replaced, amongst other things, the
‘
rules
of CUT Council as resoluted (sic) by the CUT Council on 16 September
1996 …
’
48
.
It
is clear that this was reference to rule 64(1) which was ‘added’
to the 1995 rules on 16 September 1996
49
and whereby a
retrenchment policy, very similar to the policy under debate, was
introduced. Therefore, the 2001 rules did not just
effectively
replace the 1995 rules, as the CUT suggested,
50
but they actually
and expressly did so. It is noted that the 2001 rules made no
provision for a retrenchment policy of the CUT providing
a formula
for the calculation of severance packages. Hence this would have to
be calculated in terms of the relevant provisions
of the BCEA,
51
which prescribed
that an employee dismissed for operational requirements must be paid
severance pay equal to at least one week’s
remuneration for
each completed year of continuous service with that employer.
Whether the retrenchment benefits
envisaged in the 1995 rules and the 1996 collective agreement applied
to the appellants
[75] The appellants
conceded that the 1996 collective agreement did not apply to them
since, given the executive management positions
they held, they did
not fall in the categories of employees referred to in the said
agreement. Further, they were not part of the
bargaining unit
represented by NUTESA during the conclusion of the 1996 collective
agreement. However, they contended that the
institutional rules had
the status of the CUT’s institutional statute and that for this
reason rule 64(1), in particular,
was applicable to them as well. I
am unable to comprehend this contention since rule 64(1) – in
the same way as the 1996
collective agreement – expressly
stipulated the categories of employees who qualified for the
entitlement under this rule;
and the appellants were excluded.
Therefore, it is inconceivable to fathom on what basis the appellants
relied on the provisions
of rule 64 (1) of the 1995 rules
52
in seeking to prove
their case.
[76] Significantly,
whilst in terms of rule 64(1) of the 1995 rules provision was made
for a retrenchment policy (which incorporated
the payment formula of
severance packages in the event of involuntary retrenchment) no such
provision was made in the 2001 rules
to which the appellants’
appointments were subject. It cannot be said that this omission was
accidental but, in my view,
it was clearly intended. Nor was there
any provision made, in relation to retrenchment policy, in the
institutional statute issued
by the Council on 4 June 1999 (the 1999
statute).
53
The rules of
statutory interpretation generally do not allow the insertion or
addition into any legislative instrument what has
been omitted
therein, a
casus
omissus
,
for it is the function and mandate of the responsible legislative
authority concerned to do so, unless without such insertion
or
addition the legislative instrument becomes meaningless or results in
absurdity.
54
In this regard,
Kellaway
55
makes the following
submission, with which I respectfully agree:
‘
Although
the omission of certain words in a provision in an amending statute,
which were there before, may well appear to be an
oversight, a court
should
not
,
it is submitted, construe the provision as if the words were still
there, particularly if the inclusion would clearly conflict
with the
intention or purpose of the amending Act.’
[77] The only provision in the 1999
statute that is somewhat relevant for the present purpose is section
76 thereof, with the heading
‘Conditions of service, service
benefits, and leave privileges of employees’ which reads as
follows:
‘
The
conditions of service of terms or employment (sic) of CUT employees
relating to hours of work, leave privilege, holidays, benefits,
allowances, grievances, achievement,, performance appraisal,
termination of service, promotion, working conditions and others
are
as determined by the council, subject to the applicable labour law
.’
56
(Underlined
for emphasis)
[78] In my view, section 76 of the
1999 statute, above, simply lends emphasis to the overriding role of
the Council as the structure
with the sole power to determine and
approve any policy relating to governance matters of the CUT.
Notably, nothing in section
76 purports to deal with the issue of
delegation of any power to the vice-chancellor. Therefore this
section does not, in any way,
assist the appellants in their claim.
Whether there was inconsistency in
the CUT’s conduct to the extent that previously certain
retrenched employees were preferentially
treated
[79] It was submitted that the CUT had
previously applied the impugned policy when it paid out severance
packages to some of its
employees and examples, which were relied
upon in this regard are briefly discussed hereunder. I am satisfied
that reasonable explanations
were furnished by the CUT in respect of
those instances. I now refer to these cases hereunder.
[80] Prof Gerhard Hechter, the CUT’s
former vice rector, was retrenched on 31 December 2003 which was
prior to the alleged
approval of the impugned policy on 1 November
2004. He had 10 years of service with the CUT. According to the CUT
(through the
affidavit of Prof Mthembu), whilst the CUT acknowledged
that Prof Hechter was paid severance package on the equivalent basis
as
formulated in the 1996 collective agreement, his case was
different because it was considered on its merits by the Council
which
then gave its approval for the payment to be made accordingly.
The appellants might have to prove that Prof Hechter’s
severance
package was determined and paid out without the Council’s
express approval but only with the delegated approval of the
Vice-Chancellor,
which is essentially what they claim should happen
to their cases. They have not done so.
[81] It is common
cause that Messrs MS Thateng and D Martin were formerly employed by
the CUT as general assistant and senior committee
officer,
respectively. They were both retrenched during or about 2006. Whilst
the CUT admitted that their severance packages were
calculated in
terms of the impugned policy, it is to be borne in mind that these
were, after all, employees falling within the
categories of employees
referred to in the 1996 collective agreement, the terms of which were
essentially the same as the impugned
policy. Clearly, therefore, it
would make no difference in their cases whether the calculation of
their severance packages was
labelled as done in terms of the 1996
collective agreement or the impugned policy, as the outcome, in
either way, would have been
precisely the same. The appellants
confirmed that the 1996 collective agreement “was still valid
and binding”.
57
Therefore, on the
appellants’ own version, these employees would, in any event,
have qualified for calculation and payment
of their severance
packages in terms of the 1996 collective agreement.
[82] Indeed, it is also common cause
that Messrs SM van Wyk, HSM Jacobs and MH Benson were employed in the
food services division
of the CUT and were retrenched on 31 December
2002, which was also prior to the alleged coming into effect of the
impugned policy.
They were paid severance packages in terms of the
collective agreement as they belonged to the category of employees
referred to
therein.
[83] It is also to be recalled that
the CUT did not shy away from the fact that prior to the detection of
its impropriety and invalidity,
the impugned policy was applied in
certain instances. However, save for Prof Hechter, those were
instances which would, in any
event, have qualified under the 1996
collective agreement, as illustrated above.
[84] Hence, I find no substance in the
appellants’ claim that past practices demonstrated that the CUT
treated certain retrenched
employees preferentially.
[85] I agree with the Court
a quo
that the decision in
Oudekraal Estates,
above, was no
authority for the proposition that every unlawful and invalid
administrative act remained binding until such time
that it was set
aside in judicial proceedings. However, given the reasons that I have
furnished already justifying the dismissal
of this appeal, it seems
to me unnecessary to elaborate further on this point.
Findings
[86] I am satisfied, on the facts of
this case, that the following findings are justified:
The approval of the impugned policy
was an integral part of the CUT’s governance function which,
in terms of section 27(1)
of the Act, was exclusively assigned to
the Council.
The impugned policy was never
authorised or approved by the Council.
The then principal and
vice-chancellor, Prof Koorts, did not have the authority and the
power to adopt or approve the impugned
policy.
In any event, there was no evidence
that Prof Koorts did, as a matter of fact, purport to adopt or
approve the impugned policy.
In terms of section 27(1) of the Act
the Council had the duty to govern the CUT and, in terms of section
217(1) of the Constitution,
the Council was to do so in a manner
which was fair, equitable, transparent and cost-effective. In the
present context, this
obligation also meant ensuring that public
funds appropriated by Parliament for the purpose of promoting and
advancing public
higher education, was expended responsibly and
cost-effectively.
The CUT was justified in its decision
to reject the impugned policy as being null and void
ab initio
.
In the circumstances, there was no
need for the CUT to have consulted with the appellants before
formally taking its decision
to reject the impugned policy.
[87] In the circumstances the appeal
must fail. There is no reason, in my view, why the costs should not
follow the result, including
the costs of the employment of two
counsel. I also see no reason to grant costs jointly and severally.
Order
[88] In the result I make the
following order:
The appeal is dismissed with costs
including the costs of the employment of two counsel
.
________________________
NDLOVU, JA
Judge of the Labour Appeal Court
I agree
_____________________
WAGLAY, DJP
Deputy Judge President of the Labour
Appeal Court
I agree
____________________
MOLEMELA, AJA
Acting Judge of the Labour Appeal
Court
Appearances:
For the Appellants : Adv KJ Kemp SC,
with him Adv S Grobler
Instructed by : Horn & Van
Rensburg Attorneys, Bloemfontein
For the Respondent : Adv L Halgryn SC,
with him Adv L Malan
Instructed by : Lovius Block
Attorneys, Bloemfontein
1
Act
101 of 1997.
2
The
Constitution of the Republic of South Africa, Act 108 of 1996 (the
Constitution).
3
Section
41 of Act 75 of
1997.
4
Act
66
of
1995.
5
Act
3
of 2000.
6
Act
125 of 1993.
7
See
annexure D, at 38 of the indexed papers.
8
The
original version of the 1995 rules was issued in Afrikaans.
9
See
annexure E, at 67 of the indexed papers.
10
Clause
2 of the restructuring report, at 105 of the indexed papers.
11
Clause
3 of the restructuring report, at 106 of the indexed papers.
12
See
Annexure X, at 149 of the indexed papers.
13
2004
(6) SA 222
(SCA).
14
S
ection
239(b) of the Constitution (See footnote 2, above).
15
Section
21 of the Act (See footnote 1, above)
.
16
S
ection
20 read with section 40(1)(a) of the Act.
17
The
Minister of Education (presumably now the Minister of Higher
Education), in terms of section 1 of the Act.
18
Section
39(2) of the Act.
19
Section
217(1) of the Constitution.
20
See
Answering affidavit, at para 80, at 346 of the
indexed papers.
21
See
Answering affidavit, at para 81, at 34 of the
indexed papers.
22
See:
Founding affidavit, at para 16.13, at p.13 of the indexed papers.
23
See
Answering affidavit, at paras 96 and 97, at 349
of the indexed papers.
24
Compare:
Lombaard v Droprop CC and Others
2010 (5) SA 1
(SCA) at para 24
25
See
para 29 above.
26
[1984] ZASCA 51
;
1984
(3) SA 623
(A).
27
Id
at 634H-I.
28
Soffiantini
v Mould
1956 (4) SA 150
(E) at 154G-H;
See also
Reed v Wittrup
1962
(4) SA 437
(D) at 443G;
Jonker v
Ackerman and Others
1979 (3) SA 575
(O) at 599D-E;
Wiese v Joubert
and Others
1983 (4) SA 182
(O) at 202G;
Minister
of Health v Drums and Pails Reconditioning CC
t/a
Village Drums and Pails
1997
(3) SA 867
(N) at 872C-J;
Truth
Verification Testing Centre v PSE Truth Detection CC
and
Others
1998 (2) SA 689
(W) at 698H-I.
29
See
A
nnexure G (Record of Proceedings) at 241-243 of
the indexed papers.
30
Baxter,
Administrative Law,
Juta,
2
nd
Ed
(1994).
31
Id
at 432.
32
Id
at 433-434.
33
Section
27(1) of the Act.
34
Section
32(1) of the Act.
35
Section
33 of the Act.
36
Published
in Government Notice No. 715 dated 6 June 1999.
37
Section
1 of the Act. See also section 6(2) of the 1999 statute.
38
Section
30 of the Act and section 6(2) of the 1999 statute.
39
Section
6 (3), (4) and (5) of the 1999 statute.
40
Section
6(4) of the 1999 statute
.
41
1992
(3) SA 108
(C) at 117F-G.
42
[2005] ZASCA 11
;
2005
(6) SA 182
(SCA) at para 20
.
43
Id
at para 21.
44
See
Annexures G, H, and I, at 82-98 of the indexed papers.
45
See
A
nnexure J (Record of Proceedings) at p. 276-299
and
A
nswering affidavit at paras 126-128
at 355 of the indexed papers.
46
See
Replying affidavit, at para 51 at 393 of the
indexed papers.
47
1
st
appellant appointed on 1/11/01; 2
nd
and 3
rd
appellants (1/12/01) and 4
th
appellant (1/10/03).
48
Indexed
papers at 276.
49
Indexed
papers at 65.
50
See
Answering affidavit, para 126 at 355 of the
indexed papers.
51
Section
41(2)
of the
Basic Conditions of Employment Act 75 of 1997
.
52
See
Founding affidavit,
para 16.9 at 13 of the
indexed papers.
53
See
A
nnexure E, at pages 189-227 of the indexed
papers.
54
See
Union Government (Minister of Mines) v
Thompson
1919 AD 404
at 425;
Osaka
Mercantile Steamship Co Ltd v South African Railways and Harbours
1938 AD 146
at 180;
Walker
v Carlton Hotels (SA) Ltd
1946 AD 321
at 330;
Minister van Waterwese v Von
During
1971 (1) SA 858
(A) at 876E-F
;
Joint Liquidators of Glen Anil Development Corporation Ltd (in
Liquidation) v Hill Samuel (SA) Ltd
1982
(1) SA 103
(A) at 112F-G;
Stafford v
Special Investigating Unit
1999 (2) SA
130
(E) at 140F-I.
55
Kellaway,
Principles of Legal Interpretation:
Statutes, Contracts and Wills,
at 144.
56
Section
76
of the 1999 statute, at 224 of the indexed papers.
57
See
F
ounding affidavit, at para 16.10, at 13 of the
indexed papers.