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[2012] ZALAC 27
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South African Football Association v Mangope (JA13/11) [2012] ZALAC 27; (2013) 34 ILJ 311 (LAC) (7 September 2012)
REPUBLIC OF SOUTH AFRICA
THE LABOUR APPEAL COURT OF SOUTH
AFRICA
HELD IN JOHANNESBURG
Reportable
Case no: JA13/11
In the matter between:
THE SOUTH AFRICAN FOOTBALL
ASSOCIATION
...........................................................................................
Appellant
and
KWENA DARIUS MANGOPE
................................................................
Respondent
Heard: 16 May 2012
Delivered: 7 September 2012
Corum: Waglay DJP, Tlaletsi JA,
Murphy AJA
______________________________________________________________
JUDGMENT
MURPHY AJA
This is an appeal against an order of
the Labour Court granting the respondent substantial damages for
breach of contract. The
respondent was employed by the appellant,
the South African Football Association (“SAFA”), on a
fixed term contract
as its Head of Security in the run up to the
World Cup of 2010. He sued the appellant in the Labour Court by way
of application
proceedings for damages and an order declaring the
appellant’s decision to terminate his contract of employment
unlawful
and in breach of contract.
[2] The application was made in terms
of section 77(3) of the Basic Conditions of Employment Act
1
(“the BCEA”), which
provides that the Labour Court has concurrent jurisdiction with the
civil courts to hear and determine
any matter concerning a contract
of employment, irrespective of whether any basic condition of
employment constitutes a term of
that contract. Section 77A(e) of the
BCEA empowers the Labour Court to make a determination that it
considers reasonable on any
matter concerning a contract of
employment in terms of section 77(3), which determination may include
an order for specific performance,
an award of damages or an award of
compensation. With the introduction of these provisions the Labour
Court acquired jurisdiction
to determine issues related not only to
the fairness of a dismissal but also whether a dismissal is a
wrongful repudiation in breach
of contract.
2
Where it determines that such a breach
has occurred it may make any determination that it considers
reasonable, and is thus not
restricted to the common law remedies of
specific performance or damages.
[3] The court
a
quo
(Molahlehi J) held that
the appellant’s decision to terminate the respondent’s
contract was unlawful and amounted to
breach of contract. It ordered
the appellant to pay the respondent an amount of R1 777 000 as
damages. The
quantum
of
damages was computed to be the full amount of what the respondent
would have received in salary for the unexpired period of his
3 year
fixed term contract, less any income earned in the interim. Since the
respondent only worked for the respondent for five
months, the judge
a quo
calculated
his damages to be 31 months’ salary, being R1 860 000, less the
amount of R83 000 which the respondent had earned
since his
dismissal.
[4] The court
a quo
refused the
appellant leave to appeal. Leave to appeal against the entire
judgment was granted by this court.
[5] The appellant’s grounds of
appeal are poorly formulated and badly drafted in the notice of
appeal. Thus, while the appellant
clearly challenges the finding that
it acted unlawfully in breach of contract, it is not immediately
obvious whether the appellant
appeals against the award of damages.
The notice of appeal focuses for the most part on the ground that the
respondent’s
application should have been dismissed because
material disputes of fact existed regarding the respondent’s
performance of
his obligations and the claim for unliquidated
damages, which could not be resolved on the papers in application
proceedings. The
ground in relation to damages is stated in the
following terms: ‘in light of the respondent’s inability
to perform
a satisfactory service, it was unlikely that he would have
proved any damages even if the appellant had afforded him an
opportunity
to make representations before his dismissal.’ It
is difficult to make sense of that statement as a ground of appeal.
However,
if one has regard to the notice of application for leave to
appeal and takes a generous approach it is clear that the intention
was to appeal against the award of damages. There it is contended
that the court
a quo
erred in finding that the alleged breach
of contract was of a material nature or that there was a causal link
between the appellant’s
conduct and the amount of damages
claimed. The appellant averred further that the court
a quo
erred
in not considering any contingency factors, and importantly perhaps,
‘omitted to weigh up the interests of both parties’.
[6] In short, therefore, the appeal is
directed not only at the findings of the court
a
quo
in relation to the
repudiation and breach of the contract, but also at those forming the
basis of the damages award.
[7] There is also before us an opposed
application for condonation for the late filing of the record of
appeal (which resulted in
the appeal being deemed to be withdrawn in
terms of Rule 5(17)) and reinstatement of the appeal. In terms of
Rule 12(1) this court
may, for sufficient cause, excuse the parties
from compliance with any of the rules. Despite the reprehensible
manner in which
the appeal was prosecuted, for reasons principally
related to the merits of the appeal which I discuss later in this
judgment,
we were satisfied that it would be in the interests of
justice to condone non-compliance with the rules in this instance,
and hence
that there was sufficient cause to reinstate the appeal.
[8] As mentioned at the outset, the
respondent opted to prosecute his claim by way of application rather
than by action and trial
proceedings. The appellant has contended
that this was inappropriate because of disputes of fact. The
respondent has countered
that the appellant failed to establish any
disputes of fact on the papers so as to justify a referral to oral
evidence or trial.
Hence, it is necessary to reflect on the
principles governing factual disputes in application proceedings
before approaching the
facts and any possible disputes arising in
relation to them.
3
[9] It is trite that an application
encompasses pleadings and evidence, all rolled into one.
4
The affidavits take the place of the
pleadings and the evidence, and formulate the issues of fact between
the parties and contain
the evidence upon which each wishes to rely.
The applicant must set out in the founding affidavit the facts
necessary to establish
a
prima
facie
case in as complete a
way as the circumstances demand. The respondent is required in the
answering affidavit to set out which of
the applicant’s
allegations he admits and which he denies and to set out his version
of the relevant facts. In dealing with
the applicant’s
allegations of fact, the respondent should bear in mind that the
affidavit is not solely a pleading and that
a statement of lack of
knowledge coupled with a challenge to the applicant to prove part of
his case does not amount to a denial
of the averments of the
applicant.
5
Likewise, failure to deal with an
allegation by the applicant amounts to an admission. It is normally
not sufficient to rely on
a bare or unsubstantiated denial.
6
Unless an admission, including a
failure to deny, is properly withdrawn (usually by way of an
affidavit explaining why the admission
was made and providing
appropriate reasons for seeking to withdraw it) it will be binding on
the party and prohibits any further
dispute of the admitted fact by
the party making it as well as any evidence to disprove or contradict
it.
7
[10] The inherently limited form and
nature of evidence on affidavit means that on occasion an application
will not be able to be
properly decided on affidavit, because there
are factual disputes which cannot or should not be resolved on the
papers in the absence
of oral evidence. The various provisions of
Rule 7 of the Rules of the Labour Court take cognisance of this
reality. Rule 7(3)
requires the applicant to set out the material
facts in the founding affidavit with sufficient particularity to
enable the respondent
to reply to them, while Rule 7(4) expects the
same on the part of the respondent. Rule 7(7) grants the Labour Court
a discretion
to deal with an application “in any manner it
deems fit”, which may include “referring a dispute for
the hearing
of oral evidence”. That discretion, in keeping with
general practice and principles applicable in relation to the
determination
of applications, should be exercised to ensure that
justice is done with a view to resolving a dispute of fact. Whether a
factual
dispute arises from the papers is not a discretionary
decision; it is itself a question of fact and, importantly, a
jurisdictional
pre-requisite for the exercise of the discretion to
refer the dispute for the hearing of oral evidence. While the
equivalent provision
in Rule 6(5) (g) of the High Court Rules is more
explicit in this regard, requiring, as it does, the referral to oral
evidence
to be “with a view to resolving any dispute of fact”,
there can be no doubt that Rule 7(7) of the Labour Court Rules,
being
in pari materia
,
should be construed similarly to that effect.
[11] As pointed out in
Room
Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
,
8
a real dispute of fact will arise in
one of three ways. Firstly, the respondent may deny one or more of
the material allegations
made by the applicant and produce evidence
to the contrary, or may apply for the leading of oral witnesses who
are not presently
available or who though averse to making an
affidavit, would give evidence if subpoenaed. Secondly, the
respondent may admit the
applicant’s affidavit evidence but
allege other facts which the applicant disputes. Thirdly, the
respondent, while conceding
that he has no knowledge of one or more
material facts stated by the applicant, may deny them and put the
applicant to the proof,
and himself give or propose to give evidence
to show that the applicant and his deponents are untruthful or their
evidence unreliable.
[12] A real dispute of fact will not
arise therefore if the respondent relies merely on a bare denial of
the applicant’s allegations
or simply puts the applicant to the
proof of allegations and in effect indicates no intention to lead
evidence disputing the truth
of the applicant’s allegations.
Bare denials will not suffice to give rise to a dispute of fact where
the facts averred fall
within the knowledge of the denying party and
no basis is laid for disputing the veracity or accuracy of the
averment. There is
accordingly a duty upon a legal advisor who
settles an answering affidavit to ascertain and engage with facts
which his or her
client disputes and to reflect such disputes fully
and accurately in the answering affidavit. If that does not happen,
the court
may well take a robust approach and grant the applicant
relief in accordance with the rule enunciated in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
,
9
which provides that notwithstanding
factual disputes on the papers, if the court is satisfied that the
applicant is entitled to
relief in view of the facts stated by the
respondent together with the facts in the applicant’s
affidavits which are admitted
or have not been denied by the
respondent, it will grant the relief sought by the applicant.
[13] It has been necessary to set out
these well known general principles, at the risk of labouring them,
because in dealing with
the respondent’s case, the appellant
and its legal advisors seem to have been unaware of them, or for
reasons unknown opted
to ignore them. For the most part the answering
affidavit fails to respond to the specific allegations in the
founding affidavit.
Additionally, the relevant averments are not
supported by confirmatory affidavits. It is not entirely surprising
therefore that
the Labour Court took a robust approach and granted
the order it did, which has significant adverse financial
consequences. The
primary question on appeal is whether the Labour
Court erred or misdirected itself in the method it employed to
determine the facts
in relation to its finding of unlawful
termination and the award of damages it made.
[14] During September 2009 the parties
entered into a written 3 year fixed term contract of employment
effective from 1 August 2009
with an expiry date of 31 July 2012. In
terms of clause 3 of the contract the respondent was offered
appointment in the position
of the Head of Safety and Security on the
basis “that you have the requisite skills and experience”.
The position was
evidently a senior one in that the respondent would
report directly to the CEO of SAFA (the appellant).
[15] The contract defined the
respondent’s key performance areas to be:
‘•
Accountability
for safety and security at all SAFA sanctioned events.
•
Responsibility
for sourcing, evaluation and accreditation of safety and security
service providers at all events.
•
Responsibility
for vetting event and venues.
•
Accountability
for the safety and security of all stakeholders (local, visiting
spectators, officials and property) at SAFA sanctioned
events.
•
Custodian
of FIFA and SAFA guidelines on Safety and Security at Football
Matches.
•
Maintaining
relations and co-ordinations with security authorities.’
The appointment was made in
anticipation of the World Cup soccer tournament, hosted by South
Africa in 2010.
[16] The respondent was paid
remuneration at a rate of R720 000 per annum (R60 000 per month).
Clause 5 of the contract provided
for probation in the following
terms:
‘
5.
PROBATIONARY
PERIOD
5.1
Prior to the Employee’s employment being confirmed, the
Employee will be required to serve a period of probation of three
(3)
months calculated with effect from the effective date;
5.2
The purpose of the probation is to provide the Association an
opportunity to evaluate the Employee’s performance before
confirming his appointment and although the period of probation is
not used for the purposes of depriving the Employee of the status
of
permanent employment, it is of particular significance that proper
evaluation and consideration be given to the Employee’s
performance, compatibility and overall conduct;
5.3
To the extent that it is necessary, the Employee will be given
reasonable evaluation instruction, training, guidance or counselling
in order to allow the Employee to render satisfactory service during
the course of the probationary period. The extent thereof
will depend
upon the seniority and remuneration of the Employee;
5.4
Should the Association determine that the Employee’s
performance is below standard, the Association will advise the
Employee
of any aspects in respect of which it considers the Employee
to be failing to meet the required performance standards and, at the
conclusion of the probationary period either dismiss the employee or
extend the probationary period, as the case may be;
5.5
The period of probation may only be extended for a reason that
relates to the purpose of probation and the Association will
only
dismiss an Employee or extend the probationary period after the
Employee has made representations, duly assisted by a fellow
Employee;
5.6
Should it be determined, however, prior to the expiry of the
probationary period that the Employee is not rendering the service
satisfactorily as might reasonably be expected by the Association and
that, in the opinion of the Association, the continuing of
the
employment relationship through to the expiry of the period of
probation would be inconsequential, the Association may terminate
the
agreement prior to the expiry of such probationary period.’
[17] Clause 18 provided for
termination of the contract. The relevant provisions of this clause
read:
‘
18.
TERMINATION
OF CONTRACT
18.1
This agreement shall automatically terminate on the termination date.
18.2
Notwithstanding anything to the contrary herein, at any time before
the termination date, the Association shall be entitled
to terminate
the employee’s employment summarily (without notice or payment
in lieu of notice) or on any other basis it considers
appropriate if,
inter alia, the employee:
18.2.1
…
18.2.2
…
18.2.3
performs his duties and functions unsatisfactorily; and/or
18.2.4
…
18.3
…
18.4
In all such events, the employee acknowledges that he shall not be
entitled to payment in respect of the unexpired period of
the fixed
term agreement. Likewise, should it become necessary for the
Association to terminate this agreement prematurely based
on its
operational requirements, the employee will have no entitlement to
payment in respect of the unexpired period thereof save
as may be
required in terms of Section 41 of the Basic Conditions of Employment
Act.’
[18] Clause 18.2.3 thus entitled the
appellant to terminate the employment of the respondent summarily if
the respondent failed
to perform his duties and functions
unsatisfactorily. This general power of dismissal was qualified by
the specific requirements
of clause 5 during the probation period
which provides for the employee to be given reasonable evaluation,
instruction, training,
guidance or counselling “in order to
allow the employee to render satisfactory service during the course
of the probationary
period” to the extent that such was
necessary. Where it is determined during the probationary period that
the employee is
“not rendering the service satisfactorily”
and in the opinion of SAFA the continuation of the employment
relationship
to the expiry date would be “inconsequential”,
SAFA would be entitled to terminate the agreement prior to the expiry
of the probation period. The clause is consonant with the purpose of
item 8 of Schedule 8 of the LRA -
Code of Good Practice Dismissal
,
which allows for probationary periods in employment and for a lower
standard of substantive fairness for dismissals during or
at the end
of probation, provided dismissal has been preceded by a fair process
of evaluation and training, and consideration of
any alternatives to
dismissal. However, it should be kept in mind that the respondent has
not sued for unfair dismissal. Hence,
the provisions of the LRA do
not apply in this instance. The respondent’s claim has to be
determined in accordance with the
common law of the contract of
employment and the provisions of the BCEA.
[19] On 23 November 2009, about four
months after he commenced rendering services, the CEO of the
appellant, Mr Raymond Hack, addressed
a letter to the respondent
which read:
‘
TERMINATION
OF EMPLOYMENT CONTRACT
Dear
Mr. Mangope,
In
terms of your employment contract your probation period ends on the
31 October 2009 and was subsequently extended to 30 November
2009.
The
Association has received a number of complaints in recent weeks. We
have attached copies for your convenience. Given these
considerations, the Association is not in a position to provide you
with permanent employment beyond the date of termination of
the
probationary period being 30 November 2009. You are accordingly
released from your duties with immediate effect.
I
would like to take this opportunity to thank you for the contribution
that you have made to the Association over the past months.
Kindly
confirm your acceptance of this condition by affixing your signature
where indicated below.’
[20] The “attached” copies
of complaints referred to in the letter are not annexed to the letter
filed as Annexure KM17
to the founding affidavit; nor were they filed
as part of the answering affidavit. The respondent in the founding
affidavit nonetheless
fully set out and dealt with the evidence and
issues relating to his performance. In particular, he averred that
the allegation
regarding the number of complaints against him was
exaggerated, and stated that he was only aware of two complaints. As
with most
of the allegations in the founding affidavit, this
allegation was not addressed or denied by the appellant in the
answering affidavit.
The respondent, as will appear more fully
presently, made out a compelling case that his performance was in
fact satisfactory and
that no factual basis existed to conclude
otherwise.
[21] At this point I pause to
elaborate further on the shortcomings of the answering affidavit to
which I alluded earlier. While
the answering affidavit, deposed to by
the appellant’s Human Resources Manager, Ms Nannie Coetzee,
presented a version
a propos
the respondent’s
performance, supporting the assertion that the dismissal was lawful,
it failed entirely to set out which
of the respondent’s
allegations were admitted and which were denied. None of the
respondent’s allegations were dealt
with
ad seriatim
.
Many averments were not even referred to, never mind specifically
denied, admitted or challenged. The answering affidavit in the
main
consists of a general narrative and alternative interpretation of the
events and does not deal with most of the respondent’s
averments in the founding affidavit. To make matters worse, there is
not a single supporting or confirming affidavit from any witness
who
had a complaint about the respondent’s performance or who made
a decision to terminate the contract. The strange reason
advanced for
taking this unorthodox approach to the evidence is found in paragraph
4.5 of the answering affidavit, which reads:
‘
Due
to the considerable disputes of fact which would inevitably arise in
this particular matter, I do not deem it appropriate to
go into a
detailed analysis of the Applicant’s performance during his
period of employment and his probationary period with
the Respondent.
Suffice it, at this junction to record that his performance fell
short of what would be required of an individual
of his particular
experience, ranking and understanding of security and security
related issues.’
[22] The appellant further stated that
it had been advised (wrongly in my view) that any claim for damages
for breach of contract
“should be initiated by way of an action
and it would not be proper or appropriate, let alone justified to
have a dispute
of the nature contemplated adjudicated as and by way
of application”. It accordingly asked for the application to be
dismissed
on that ground alone. The proposition so stated is simply
not correct. It is trite that a litigant may sue for breach of
contract
by application where there are no foreseeable disputes of
fact. Whether any dispute of fact exists or may arise will depend on
the responses to an applicant’s factual averments. The
appellant’s naïve, even foolhardy, decision to approach
the evidence in the fashion it did, has had detrimental consequences
for the appellant which would have been obvious to the least
experienced of legal practitioners. In accordance with the principles
applicable to determining the facts in application proceedings,
the
appellant’s failure to deal with the allegations made by the
respondent in relation to the satisfactory nature of his
performance
means that such allegations for the most part must be taken to have
been admitted, and not being withdrawn, are binding
on the appellant
as admitted facts which cannot be regarded as disputed. Consequently,
as appears from what follows, no dispute
of fact has arisen on the
papers, in the sense contemplated in
Room Hire
, with the
further result that the Labour Court had no jurisdiction to refer the
matter to oral evidence, which it correctly declined
to do.
[23] The respondent sets out the
events leading to his dismissal in the founding affidavit. At the end
of October or the beginning
of November 2009, Ms Coetzee, the Human
Resources Manager, handed the respondent a letter extending the
probation period until
the end of November 2009. Coetzee, in response
to a question from the respondent as to why, explained to him that it
was in accordance
with HR procedures that he should serve a full
three months probation, and since he had been absent on account of
ill health intermittently
for a period of 8-10 working days, it was
necessary to extend the period. Coetzee then asked the respondent to
take the extension
letter to Raymond Hack, the CEO, to obtain his
confirmation of the extension of the period. When the respondent
handed the letter
to Hack and requested confirmation, Hack informed
him that he was happy and satisfied with his work performance and
that the extension
of the probation period was to compensate for the
period of absence caused by ill health.
[24] In paragraph 6 of the answering
affidavit, Coetzee dealt in part with some of these allegations. She
in effect denied that
ill health was the reason for the extension and
claimed that it was explained to the respondent (it is not stated by
whom) that
the extension was to permit a further opportunity for
assessment. It is not denied that the applicant took the letter to
Hack for
his confirmation; nor that Hack confirmed the extension,
stated that he was happy and satisfied with the respondent’s
performance,
and explained to the respondent that the extension was
to compensate for the period of illness. No explanation is offered by
the
appellant for why Hack chose not to depose to an affidavit
supporting the vague and non-specific contentions made by Coetzee or
setting out any shortcomings of the respondent, or most importantly
denying that he had informed the respondent that he was satisfied
with his performance. The respondent reported to Hack, who must have
played a key role in the decision to extend the probation
and
ultimately to dismiss him. Coetzee’s unsupported averment
amounts to a bare denial and a failure to deny without putting
up
Hack’s evidence in support of the denial. Such does not give
rise to a real and genuine dispute of fact. Absent such,
the Labour
Court was obliged to accept the respondent’s version as to both
the reason for the extension of the probation
period and Hack’s
positive assessment of his performance.
[25] The respondent, as I have said,
canvassed and openly discussed in the founding affidavit various
incidents and issues that
were relevant to an assessment of his
performance. The first related to his involvement in the
co-ordination of the security aspects
of a football match between the
South African national football team (“Bafana”) and
Serbia. He was jointly responsible
for the security issues and
preliminary arrangements for the match together with Mr David
Nhlabathi, the previous Acting Head of
Safety and Security and a
former member of the National Executive Committee of SAFA. The
respondent annexed to his founding affidavit
Nhlabathi’s report
regarding the security protocol aspects of the event which took place
at the Super Stadium in Pretoria
- Annexure KM3. The report
corroborates the respondent’s assertion that the game went
ahead without any security hitch. However,
there were one or two
inconsequential issues in relation to transport. The report indicates
that the Serbian team were transported
from the airport without the
benefit of a police escort due to “a breakdown in
communication” within the department
of the Pretoria Metro
Police. There was also a problem with the vehicles supplied to the
Serbian team, but this was sorted out
by Hack on the day of their
arrival. Despite these problems, Nhlabathi at the time conveyed to
the respondent that he was happy
with his management of the security
for the event, and confirmed as much in a confirmatory affidavit
annexed to the founding affidavit.
[26] Once again, the appellant failed
to deal specifically with the respondent’s averments, the
report or Nhlabathi’s
affidavit. Without referring to the
respondent’s averments, indicating which of them it admitted or
denied, the appellant
said the following in relation to the Metro
Police allegedly having failed to honour their commitment to provide
an escort to the
Serbian team:
‘
In
the context of security arrangements and the high risk which these
types of fixtures inevitably attract, this is inexcusable.
The fact
that according to the report the South African Police Services did
not have the necessary internal arrangements in place
begs the issue
and is of absolutely no consequence. The obligation to ensure that
there were proper security and safety measures
for the visiting
Serbian team rested squarely on the shoulders of the Applicant and he
failed, dismally at that, in that regard.’
The respondent pointed out in the
replying affidavit that when the Serbian game took place he had been
in employment for about a
week and arrangements had been made for the
escort by his predecessor, Nhlabathi. The respondent duly took the
matter up with the
Metro Police who acknowledged their error and
apologised for their incompetence. Nhlabathi confirmed the veracity
of this account
in a further confirmatory affidavit annexed to the
replying affidavit.
[27] The appellant failed to produce
any documentary evidence or to indicate that it proposed to produce
oral evidence from anybody
within SAFA or the Metro Police in support
of its contention that the non-arrival of the police escort at the
airport was the result
of any negligence or failure on the part of
the respondent. The statement in Nhlabathi’s report that it was
a failure on
the part of the Metro Police, in the face of the
appellant failing to produce countervailing evidence or laying any
basis for disputing
the accuracy or veracity of the respondent’s
averment, in effect stands un-denied. In view of that, there was no
real dispute
of fact arising on the papers regarding the appellant’s
responsibility for the escort. Additionally, no material evidence
shows any other mal-performance on the part of the respondent in
relation to the match. On the contrary, Nhlabathi’s averment
that the appellant performed satisfactorily is not denied or dealt
with and therefore amounts to an admission. Accordingly, the
allegation of poor performance on the part of respondent in relation
to the game between Bafana and Serbia was not proven and no
dispute
of fact existed which required the Labour Court to refer the issue to
oral evidence.
[28] The respondent also raised and
discussed in some detail various aspects of his performance in
support of his contention that
he properly carried out his
obligations. He held meetings with different stakeholders to discuss
issues pertaining to staff, risk
management, transport and facilities
management. He formed a security committee to deal with all matters
regarding security and
safety. He liaised with the South African
Police Service regarding logistics at the airport and communicated
with Hack about the
upgrading of security systems and technology. He
kept Hack abreast of his activities by sending him memoranda. The
description
the appellant provided of his activities between August
and late October 2009 does not give the impression that he had a
taxing
schedule or that he had many tasks assigned to him.
Nevertheless, his assertion that he did what he was required to do
properly
in that period is not challenged meaningfully by Hack or any
SAFA official to whom he reported. The appellant did not deny or
admit
that the respondent properly performed the tasks he mentions,
with the result that these averments too must be deemed to be
admitted.
[29] Bafana was scheduled to play
against Japan on 14 November 2009. The venue for the match was
originally the Orlando Stadium
in Soweto. This venue was changed on
25 October 2009 due to the condition of the pitch and moved to the
Rand Stadium in Rosettenville,
Johannesburg. On 4 November it was
again decided to move the game to the Nelson Mandela Bay Stadium in
Port Elizabeth. From correspondence
annexed to the founding affidavit
it appears that the decisions to make the changes were made by Hack
and were appropriately aimed
at fulfilling a contractual obligation
to the Japan Football Association to provide a world-class venue. The
respondent averred
that due to the frequent changes of venue at short
notice, there were various logistical difficulties that frustrated
the flow
of information and made it difficult to co-ordinate various
security measures. Nevertheless, the required planning meetings were
held and the match against Japan went ahead in Port Elizabeth on 14
November 2009 without any security incident. The respondent
annexed a
newspaper article of 17 November 2009 which includes comments by Mr
Danny Jordaan, the CEO of the FIFA Local Organising
Committee,
regarding the game. The article stated:
‘
Jordaan
has rated Port Elizabeth 8 out of 10 for atmosphere,
security
arrangements
,
accommodation, parking and large crowds following the international
at the Nelson Mandela Bay Stadium on Saturday.’
The article noted that a strong
security presence was visible in the crowd.
[30] The appellant did not admit or
deny the respondent’s averments that the change of venue
impacted on logistics, that nonetheless
planning meetings were held,
that the security arrangements were perceived to be a success by FIFA
and the media, and that there
was no security incident of material
negative consequence. In keeping with its blunderbuss approach, the
appellant ignored the
specific allegations and instead resorted to
vague and unsubstantiated allegations to the effect that the
respondent was not “hands
on”, that on the day of the
match he was not willing to be placed in the venue operational centre
thus was difficult to contact
and “very often the information
which was provided (the exact nature of which the appellant does not
describe) was incorrect
and not an accurate reflection of what was
being undertaken or experienced”. The respondent was also
criticised for not ensuring
that refreshments and catering facilities
were made available, in particular for security personnel. The
respondent dealt with
these vague allegations in reply stating that
he was unaware of any person who had struggled to contact him, that
he thought it
better to move around the venue to keep an eye on the
security arrangements and that the provision of refreshments was
(unsurprisingly)
not part of his job description. Moreover, the
appellant did not deny the respondent’s averment in the
founding affidavit
that he was not unwilling to be based in the
operation centre. He in any event arranged for another employee, Mr.
Moerane, to be
there. The appellant did not indicate who attempted to
contact the respondent, when that happened and what information
provided
by the appellant was incorrect or an inaccurate reflection
of events. Nor was it indicated with any specifics in what respects
the appellant was not “hands on”. Facts so vaguely stated
and unsupported by evidence of persons (other than the HR
Manager who
did not attend the game) who could properly attest to the
respondent’s behaviour are not facts at all, do not
establish
that the respondent performed unsatisfactorily and did not give rise
to any genuine dispute of fact requiring referral
to oral evidence.
[31] Prior to the Japan game, on 10
November 2009, Hack received a letter from the Divisional
Commissioner: Visible Policing of
SAPS, AH Lamoer which read:
‘
Previous
correspondence dated 2007-12-06 refers.
National
instructions to the Provinces to secure the South African and Japan
teams could not be submitted due to insufficient and
late submission
of information received from SAFA. Contingency measures had to be put
in place to secure the Japanese team because
of the delay in
obtaining the itineraries.
The
South African Police Service therefore, cannot take responsibility in
securing the teams or the event.
Your
personal intervention in addressing these issues will be greatly
appreciated.’
The letter dated 6 December 2007 to
which Lamoer refers (Annexure KM13 to the founding affidavit) is
essentially a complaint by
the SAPS that SAFA was failing to provide
“sufficient and early information” requested by SAPS to
ensure the safety
and security of all stakeholders, and stated that
SAPS had experienced “numerous difficulties in obtaining the
necessary
information”. It was accordingly requested that SAFA
provide SAPS “with timeous information” on the programme
of the events and international games that would be held in the
country in the lead up to the World Cup.
[32] On 12 November 2009, Hack
addressed an internal memo to the respondent requesting him to
furnish a report regarding the letter
from the SAPS of 10 November
2009. The respondent replied to Hack by email on the same day. The
email read:
‘
Your
memo dated 12 Nov 2009 has reference
It
would appear there has been a long standing communication problem way
back from 2007 as per a letter from SAPS. There is indeed
a
communication challenge within SAFA and the recent letter from SAPS
is adequate proof thereof. I must however indicate that inadequate
communication with SAPS was exacerbated by the change of venues
specifically for the Japan game. Furthermore all information required
by this SAPS unit resides in the main with SAFA’s Commercial
Dept. The required information was coming in drips and drapes
(sic)
due to the uncertainty of the venue.
I
have however met with Supt. Mokoena and we have agreed on a modus
operandi for communication in the future in our respective areas
of
responsibilities.’
[33] The communication problem that
existed in 2007 was obviously not the responsibility of the
respondent because he was not employed
by the appellant at that time.
His explanation that the problem was an ongoing one caused by a lapse
of communication within the
organisation between Hack and the
commercial department, is not denied. Likewise, it is not denied that
the respondent satisfactorily
resolved the matter, as spelt out in
his email. In fact, the answering affidavit does not refer at all to
this issue (raised by
the respondent in the founding affidavit). Nor
is there an affidavit from Hack denying that the problem rested with
him and the
commercial department, or indicating whether or not he
considered the respondent’s explanations and the steps taken
satisfactory.
There is furthermore no confirmatory affidavit from
Lamoer attributing any responsibility to or expressing concern about
the performance
of the respondent. In the circumstances, there is no
dispute of fact arising in respect of this issue either, and the
averment
of the respondent that he bore no responsibility for this
matter and that he in any event satisfactorily resolved the problem
once
it was brought to his attention, must be deemed to have been
admitted by the appellant.
[34] On 19 November 2009, Hack
received a memorandum from Mr. Jan Koopman, a member of the National
Executive Committee of SAFA,
complaining about the respondent’s
performance as regards the match with Japan and a match between
Bafana and Jamaica which
took place on 17 November 2009. As these
complaints appear to have led to the respondent’s dismissal a
few days later, it
is necessary to cite the memorandum in full. It
read:
‘
1.
During
the first week of November 2009 the Security Head of SAFA, General
Mangope was phoned by myself regarding the issue of the
security
meetings for the two matches of Bafana Bafana and Japan and Jamaica
respectively. Mr Mangope informed me that a meeting
was already held
in Bloemfontein and that he was currently in Port Elizabeth where a
security meeting was taking place. He also
informed me that another
security meeting will be held in Bloemfontein prior to the match
between Bafana Bafana and Jamaica.
2.
On the 11
th
November 2009 the meeting was
held in Bloemfontein with the different stakeholders and it was
attended by me and General Mangope,
(Security Head of SAFA).
3.
During the meeting the following questions were raised by the
Operational Commander, Sr. Supt. PG Solo.
Practice
venues and dates of the two teams
The
Security Head of SAFA could not give information when Bafana Bafana
will arrive in Bloemfontein and where their practice venue
will be.
He was also not sure of the practice venue of Jamaican team.
Current
status of ticket sales
The
Security Head of SAFA was also unable to give any information on the
status of the sale of tickets and whether it will be available
at the
match venue of stadium.
Deployment
of Private Security Company (how many and if local people will be
used).
The
Security Head of SAFA was not in a position to clarify how many
Security Guards will be deployed during the match and how many
of
them will be local security guards, although the Head of the Private
Security Company informed him that they will use local
security
guards.
Bafana
Bafana vs Japan
During
the match on 14
th
November 2009 in Port Elizabeth,
Bafana Bafana vs Japan, the Security head of SAFA was not willing to
be placed in the Venue Operational
Centre (VOC). I was not impressed
with the duties of the Security Head because every time I had to
phone him for information.
At
the debriefing session after the match questions were also raised
with regards to the promise that General Mangope made to the
VOC that
they will be provided with food but in the end no one received any
food.
Bafana
Bafana vs Jamaica
During
the match on 17
th
November 2009 in Bloemfontein,
General Mangope was requested to give feedback to me on security
issues but he only said that everything
is in order. I also ask him
if there was any security meetings held but according to him
everything is in order.
At
the debriefing session after the match questions were also raised
with regard to the promise that General Mangope made to the
VOC they
will be provided with food but he didn’t give feedback to the
VOC, then the VOC thanked me and Roxanne Bartlet who
intervened and
provided them with food and drinks. No water was also available for
the VOC personnel.
Questions
were also raised regarding the availability of General Mangope to
answer security related questions from SAFA.
CONCLUSION
General
Mangope was not up to standard regarding the security issues during
both matches. He only provided me with little information
on security
meetings. It was an embarrassment for SAFA during
both
matches because promises were made but it was not delivered.’
[35] When the respondent was dismissed
he was simply called into Hack’s office and given the letter of
termination dated 23
November 2009. He was not asked at any time
prior to his dismissal to comment on the allegations in Koopman’s
memorandum.
The dismissal was presented to him as a
fait accompli
.
These allegations were not denied by the appellant. The respondent in
the founding affidavit however addressed the complaints
made in
Koopman’s memorandum. Some have already been discussed. With
regard to the practice venues, he averred that it was
the duty of the
commercial department to inform him of the venues, and only then
would he arrange for security. The venues are
arranged in conjunction
with SAFA local structures. At the time of the meeting he was
awaiting instructions. Likewise, ticket sales
and distribution are
the exclusive responsibility of the commercial department and he
awaited that information too. By reason of
the constant and ongoing
venue changes, as the respondent understood it, the commercial
department was not in a position to furnish
him with the information
before the meeting of 11 November 2009. As for the private security
company and the deployment of security
guards, the respondent denied
the allegations made by Koopman in the memorandum. He maintained that
he told Koopman that local
security guards would be used. He was
unable to tell him the exact number due to the fact that the final
coordination meeting for
setting in motion a final security plan
would only be held on 16 November 2009 and that this would be
conveyed to the SAPS at that
meeting.
[36] At first sight there might have
been some merit in the appellant’s general concern that the
respondent did not act proactively.
However, that has to be assessed
against the common cause fact that no security incidents occurred at
any of the matches for which
the respondent bore responsibility,
namely those against Serbia, Japan, Jamaica and Madagascar. Moreover,
the respondent’s
averments that the issues raised by Koopman
fell outside of his KPA’s and that given a proper opportunity
he would have demonstrated
that the allegations made in the complaint
were largely baseless and without substance were not denied by the
appellant. The respondent
reiterated that the established procedures
for security planning had been complied with.
[37] The answering affidavit deals
with some of the issues raised in the Koopman complaint in a vague
and unsatisfactory manner,
without addressing the exculpatory
explanations tendered by the respondent. There is no affidavit from
Koopman confirming his complaints
under oath or seeking to refute the
respondent’s allegations that the complaints were baseless. The
deponent to the answering
affidavit, Ms Coetzee, who had no personal
knowledge of what transpired at the relevant meetings because she did
not attend them,
stated baldly that “the applicant did not have
the necessary information and statistics and data at his disposal to
provide
critical and important advice” and referred to the
various issues raised by Koopman. Coetzee merely repeated the
allegation
that the respondent was requested to provide proper and
adequate feedback on all security issues and that his only response
was
that everything was in order; and also that he did not make
himself available to answer queries. It was not stated in either the
memorandum or the affidavit who requested feedback and in what
respects it was inadequate, or why an assessment that all was in
order (which proved to be the case) was deficient or incomplete. Yet
again, therefore, the appellant failed to make out a proper
case that
the respondent performed unsatisfactorily or presented evidence in a
manner giving rise to a real dispute of fact obliging
a referral to
oral evidence.
[38] The respondent’s case is
that the termination of his employment was unlawful and in breach of
contract. In essence, his
main contention is that he performed
satisfactorily and there was accordingly no justification for
termination in terms of either
clause 5.6 or clause 18.2.3 of the
contract. At common law an employer may summarily terminate a
contract of employment without
notice provided there is a justifiable
reason. It is an implied term of every contract of employment that
employees must exercise
due diligence and skill and will perform
their duties competently.
10
By applying for employment an employee
is deemed to warrant impliedly that he or she is suited for that
position. Such warranty
was expressly given by the respondent in this
case in clause 3 of the contract. If the employee is later found to
be incompetent,
“then in the eye of the law he stands in the
same position as if he had been negligent in the discharge of his
duties”.
11
Whether particular conduct justifies
summary dismissal or termination of the contract will always be a
question of fact. What must
be determined is whether the employee’s
conduct or negligence is serious enough to constitute a repudiation
of the contract,
or a serious breach of a material express or implied
term of the contract. The lawfulness of the termination of the
contract therefore
depends on the justifiability of the reason for
it. Where the employer terminates the contract without lawful reason,
the employer
will have repudiated the contract permitting the
employee to sue for specific performance or damages.
[39] The respondent and the court
a
quo
placed much in store on the appellant’s failure to
follow the evaluation procedure in clause 5 of the contract prior to
terminating
the contract. The reliance is to a certain extent
misplaced in a suit for breach of contract as opposed to one for
unfair dismissal.
Accepting that the appellant did not properly
evaluate the respondent’s work performance or provide
reasonable instruction
or opportunity to improve, such breaches of
contract by the employer would not necessarily be construed as
material or causative
at common law. Non-compliance with procedural
provisions in a contract of employment ordinarily will ground a claim
for unfair
dismissal in terms of the LRA, even where there is a
justifiable substantive reason for dismissal; but at common law a
procedural
breach will be of no contractual consequence unless it
results in damages, particularly where there has been a material
breach
or repudiation by the employee entitling the employer to
cancel. In the law of contract there must be a causal nexus between
the
breach (procedural or otherwise) and the actual damages suffered.
A contractant must prove that the damage for which he is claiming
compensation has been factually caused by the breach. This involves a
comparison between the position prevailing after the breach
and the
position that would have obtained if the breach had not occurred.
Accordingly, if the respondent’s contract is found
to have been
lawfully terminated on account of his repudiation of the warranty of
competence, he would have suffered no contractual
damages arising
from the procedural breaches. As I have just explained, he may have
been entitled to compensation (not damages)
in terms of the LRA for a
procedurally unfair dismissal, but then he needed to refer an unfair
dismissal dispute to the CCMA in
terms of section 191 of the LRA.
[40] It follows that the principal
enquiry before the Labour Court ought to have been whether the
respondent had repudiated or breached
the contract by reason of his
alleged incompetence. The learned judge
a
quo
correctly refused to
refer the matter to oral evidence on the grounds that no real dispute
of fact had arisen on the papers. However,
he held that the appellant
had repudiated the contract by failing to follow the evaluation
procedure in clause 5 and that such
entitled the respondent to
damages in the amount of R1,777 000. His reasoning, with respect, is
unsustainable for the reasons just
discussed. The procedural flaws
alone may not directly have resulted in damages and would have been
immaterial from a contractual
perspective if it was established on
the evidence before court that the respondent had not performed
satisfactorily in terms of
the contract. The court thus erred by not
determining on the papers whether the respondent had breached or
repudiated the warranty
of competence in a manner justifying lawful
termination by the appellant.
[41] Be that as it may, as it turned
out the respondent was entitled to relief because, as already
discussed, the appellant did
not prove that he had breached or
repudiated the contract. The allegations of unsatisfactory
performance or incompetence were not
established. In those instances
where the respondent may have fallen short, it cannot be said that
his conduct attained a level
of habitual negligence or persistent
incompetence as to constitute a breach of the warranty of competence
or a repudiation of the
contract.
12
All the more the case when the
appellant neglected to follow the procedure in clause 5 to put the
respondent on terms
a propos
his performance. The inescapable
conclusion is that the appellant repudiated the contract, permitting
the respondent to accept the
repudiation and to claim damages.
[42] The respondent filed a
supplementary affidavit
inter
alia
quantifying his
damages, and in which he claimed the balance of his fixed term
contract; which he determined to be 31 months at
R60 000 per month =
R1,86 million, less certain interim earnings of R83 000, giving a
total of R1, 777 000, the amount which the
Labour Court awarded.
[43] The
quantum
of damages awarded seems to rest upon
an uncritical application of the standard enunciated 60 years ago by
the Cape Provincial Division
in
Myers
v Abramson
13
which in relation to damages for
breach of a fixed term contract of employment (as opposed to an
indefinite term contract terminable
on notice) stated the following:
‘
The
measure of damages accorded such employee is, both in our law and in
the English law, the
actual
loss
suffered by him represented by the sum due to him for the unexpired
period of the contract less any sum he earned or could
reasonably
have earned during such latter period in similar employment.’
14
There is a tendency among lawyers
practising in the field of labour law to rely on these
dicta
to contend that the unlawful premature
termination of a fixed term contract of employment entitles the
wrongfully dismissed employee
to be paid the balance of the unexpired
portion of his or her contract. That view has been reinforced by the
order made more recently
by the Constitutional Court in
Masetlha
v President of the RSA and Another
.
15
In that case the court held that the
dismissal of the applicant from his post of Director-General of the
National Intelligence Agency
was in violation of his constitutional
rights. In exercising its discretion in terms of section 172(1)(b) of
the Constitution to
grant a remedy which is just and equitable, the
Constitutional Court ordered the appellant to be paid the
remuneration payable
for the balance of his fixed term contract. It
is not clear from the judgment whether the court gave any
consideration to either
a contractant’s duty to mitigate
damages or the collateral benefit rule as envisioned in the
dicta
pronounced in
Myers
v Abramson
. The order in
Masetlha
,
being one in terms of the Constitution, was not intended, in my
opinion, to re-define the contractual measure of damages in respect
of a material breach of a fixed term contract of employment.
[44] The standard in
Myers
v Abramson
intimates that
an employee will be entitled to his proven
actual
damages reduced by collateral benefits
and other justifiable deductions. In an action for damages the onus
of proving damages rests
on the plaintiff. The mitigation rule
requires the defendant to prove that the amount claimed by the
plaintiff does not represent
the true amount because of a failure to
take reasonable steps to mitigate; the evidentiary burden shifts to
that extent. There
remains nonetheless a duty on a plaintiff to prove
the value of the prospective loss of the expectancy of income.
[45] In accordance with general
principle, a plaintiff claiming damages for a prospective loss of
future salary must adduce evidence
enabling a fair approximation of
the loss even though it is of uncertain predictability and
exactitude. It is not competent for
a court to embark upon conjecture
or guesswork in assessing damages when there is inadequate factual
basis in evidence.
16
Moreover, allowance has to be made for
the contingency or probability that the anticipated future loss may
not in fact eventuate,
at least not in its entirety, because the
dismissed employee may obtain another job or source of income. There
should be evidence
as to the reasonable period it would take a person
in the position of the respondent to obtain analogous employment. By
similar
token, any amount awarded as damages for future loss has to
be discounted to current value. In other words, the value of the
expectancy
of future salary before and after the breach has to be
determined in order to quantify damages. Where it is highly probable
that
the expectancy would have been realised but for the breach, the
value of the expectancy will usually be the value of the expected
income (the salary for the unexpired period) less amounts which
reasonably might be earned (potential collateral and mitigated
amounts), adjusted firstly by a contingency for the possibility of
the entire loss not being realised, and discounted in addition
for
the advantage of the expectancy being accelerated or received earlier
than it would have been.
[46] In the present case, the
appellant did not allege or prove any failure by the respondent to
mitigate his accrued damages. In
its answer to the supplementary
affidavit it however submitted:
‘
As
to the
quantum
of damages claimed, the Applicant has not alluded to what the
future
prospects
are of him mitigating his damages. I am advised that a discounted
factor must be taken into account to reflect the prospects of
the
Applicant mitigating his damages during the balance of the fixed-term
contract.’
The respondent proved his actual, past
damages, but did not adduce any evidence to support his claim for the
non-realisation of
his future income beyond the date of the Labour
Court judgment. No evidence was before the Labour Court with regard
to the future
value of the respondent’s package, an appropriate
rate at which to discount it or a proper basis for adjusting for
contingencies.
The appellant merely proved his accrued mitigated
damages, his
damnum emergens.
[47] It was therefore, in my opinion,
wrong for the Labour Court to equate, without further ado, the
respondent’s damages
with the salary owing for the balance of
the unexpired period of his fixed term contract. Such an amount, in
the nature of things,
will in all cases be the maximum payable as
damages. But the maximum does not axiomatically follow upon breach.
As a result, the
award of damages was not reasonable, as required by
section 77(A) of the BCEA. A reasonable award in the circumstances
would be
the amount of the actual damages proved. The dismissal was
at the end of November 2009 and the judgment of the Labour Court was
handed down on 17 December 2010; meaning that the damages proved
amounted to 12 months’ salary at R60 000 per month and R60
000
at a ratio of 17:31 in respect of December 2010, less the amount of
R83 000 in collateral earnings. Thus R720000 + R32 903
- R83 000 =
R669903. The appeal should therefore succeed to that extent and the
order be varied accordingly.
[48] Given that the appellant had good
prospects of succeeding significantly on the question of damages, the
reinstatement of the
appeal was in the interests of justice and
sufficient cause was shown to condone non-compliance. However, the
manner in which the
appeal was prosecuted was unsatisfactory and the
reasons advanced for the delay in filing the record were
unconvincing. For those
reasons the appellant should not be awarded
its costs in the application. As both parties enjoyed some success in
the appeal, it
is just that there be no costs order in respect of the
appeal either.
[49] In the result the following
orders are issued:
(a) The appeal succeeds to the limited
extent as provided in this order.
(b) The order of the Labour Court is
set aside and substituted as follows:
‘
1
.
The
decision of the respondent to terminate the applicant’s
contract on 23 November 2009 is declared to be in breach of contract
and unlawful.
2.
The respondent is ordered to pay the applicant damages in the amount
of R669 903.
3.
The respondent is ordered to pay the costs of the application.’
c) There is no order as to costs in
respect of both the appeal and the application for condonation.
_______________
MURPHY AJA
I agree
_______________
Waglay DJP
I agree
________________
Tlaletsi JA
APPEARENCES
FOR THE APPELLANT: W Hutchinson
INSTRUCTED BY: Fluxmans Incorporated
FOR THE RESPONDENT: F Boda
INSTRUCTED BY: Eversheds
1
Act
75 of 1997.
2
Langeveldt
v Vryburg Transitional Local Council
[2001]
5 BLLR 501
(LAC).
3
See
generally Harms et al
Civil Procedure in the Superior Courts
(Service Issue 44, 2011
Lexis Nexis) B6 from
which I have borrowed liberally to summarise the principles in the
text which follows.
4
Rosenberg
v South African Pharmacy Board
1981 (1) SA 22
(A) 30H-31C.
5
Gemeenskapontwikkelingsraad
v Williams(2)
1977 (3) SA 955(W).
6
Room
Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949
(3) SA 1155 (T) 1163-1165.
7
Water
Renovation (Pty) Ltd v Gold Fields of SA Ltd
[1993] ZASCA 169
;
1994
(2) SA 588
(A) 605H.
8
1949
(3) SA 1155 (T) 1163.
9
1984
(3) SA 623 (A) 634.
10
Wallace
v Rand Daily Mails Ltd
1917
AD 479, 482.
11
Ndamase
v Fyfe-King NO
1939 EDL
259, 262.
12
Hankey
Municipality v Pretorius
1922
EDL 306.
13
1952
(3) SA 121
(C).
14
At
127 D-E.
15
[2007] ZACC 20
;
2008
(1) SA 566
(CC).
16
Hersman
v Shapiro and Co
1926 TPD
367
, 379;
Esso
Standard SA (Pty) Ltd v Katz
1981 (1) SA 964
(A) 970E; and
Aaron’s
Whale Rock Trust v Murray and Roberts Ltd and Another
1992 (1) SA 652
(C) 655F-656E.