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[2015] ZALAC 18
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Mbashe Municipality v Dumezweni and Others (PA 4/14) [2015] ZALAC 18 (19 May 2015)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA,
PORT
ELIZABETH
Case
no: PA 4/14
DATE: 19 MAY 2015
Not reportable
In the matter
between:
MBASHE
MUNICIPALITY
....................................................................................................
Appellant
And
SABELO DUMEZWENI
AND
OTHERS
..........................................................................
Respondents
Heard: 24
February 2015
Delivered: 19
May 2015
Jurisdiction –
Point
in limine
– employee’s appointment as
municipal manager declared null and void by the municipality and
appointment revoked -
employee seeking declarator to enforce his
contract of employment – municipality raising a point
in
limine
that Labour Court lacking jurisdiction to entertain the
legality of the employee’s appointment in terms of the Local
Government
Municipal Systems Act – employee seeking a
declaratory order to be appointed as municipal manager – such
relief falling
outside the prescripts of section 191 but within the
jurisdiction of the Labour Court in terms of sections 158 of the LRA
and 77
of the BCEA - Labour Court having jurisdiction to decide on
the validity of contracts of employment with reference to other
statutes.
Labour Court’s judgment upheld. Appeal dismissed with
costs
Coram: Waglay JP,
Ndlovu
et
Landman JJA
JUDGMENT
LANDMAN JA
Introduction
[1]
This appeal is against the dismissal of a point
in limine
that
the Labour Court (Lallie J) did not have jurisdiction to hear an
application brought by Mr Sabelo Dumezweni against the Mbashe
Local
Municipality (the Municipality) in which he sought an interdict and
various other reliefs. The appeal is brought with leave
of the Labour
Court. I shall refer to the appellant as “the Municipality”
and the first respondent as “Mr Dumezweni”.
The affidavits
[2]
Mr Dumezweni alleged in his founding affidavit that he was the duly
appointed Municipal Manager of the Municipality. The Municipality
concluded a five year contract with him. Shortly after his
appointment, the Municipality stopped paying his remuneration and he
was informed that an inquiry was being held into his appointment. He
was also informed that the Municipality considered that his
appointment was null and void. The Municipality was in the process of
recruiting a Municipal Manager when the Mr Dumezweni sought
interim
and final relief against the Municipality. He cited the acting
Municipal Manager, the Mayor, and the MEC for Local Government
and
Traditional Affairs in his application.
[3]
The Municipality’s case in its answering affidavit is that:
(a) Mr Dumezweni’s
appointment was in contravention of section 54A(3) of the Local
Government Municipal Systems Act 32 of
2000 (the MSA) in that he did
not have the prescribed skills, expertise, competencies or
qualifications, rendering the appointment
null and void;
(b) the
Municipality’s resolution, which appointed Mr Dumezweni as
Municipal Manager, was rescinded on 25 April 2013 by a
further
resolution of the Municipal Council;
(c) the
investigation into the legality of the Municipal Council meetings
that resulted in Mr Dumezweni’s appointment, established
that
the appointment was null and void as it was in contravention of the
law, as evidenced by the Municipal Council resolution
of 25 April
2013.
[4]
In his replying affidavit, Mr Dumezweni averred:
(a) that the
resolution of the Municipal Council of 25 April 2013, which rescinded
the resolution that appointed him, was not taken
properly as there
was no quorum; and
(b) that he meets
the minimum competencies for the position of a Municipal Manager.
Notice of points
of argument
[5]
Before the matter was heard, the Municipality advised Mr Dumezweni
that the following points would be argued at the hearing,
namely:
(a) that because Mr
Dumezweni was challenging the legality of the Municipal Council
resolution of 25 April 2013, it would be argued
that the Labour Court
does not have jurisdiction;
(b) the application
turns almost exclusively on the interpretation and application of the
relevant provisions of the MSA, and in
particular section 54A and as
the Labour Court does not have jurisdiction, the application ought to
have been instituted in the
High Court; and
(c) in any event,
and in the alternative, Mr Dumezweni’s case was either that he
had been unfairly dismissed or unfairly suspended.
Accordingly, the
Labour Court does not have jurisdiction to grant what is, in effect,
final relief in respect of a dispute which
ought to have been
referred to either the CCMA or bargaining council, but had not been
so referred.
Judgment of the
court
a quo
[6] The Labour Court
set out all the relevant facts and then went on to say:
‘
The
question of legality regarding the validity of the applicant’s
contract of employment, whether it ever came into existence
because
it was void ab initio in terms of section 54A of the MSA fall within
the ambit of section 77(3) of the BCEA as they concern
the
applicant’s contract of employment. The question of legality
does not exist in vacuo it refers to the applicant’s
contract
of employment. So do the provisions of section 54A of the MSA. The
respondent’s point in limine that this court
lacks jurisdiction
for the above reason has no legal basis and is dismissed.
The Labour
Court’s jurisdiction to grant a declaratory order is provided
for in section 158(1)(a)(iv). It is common cause
that the applicant
signed a contract appointing him as the applicant’s Municipal
Manager. There is a dispute over the validity
of the contract which
led the first respondent to take a decision that the applicant’s
contract was void ab initio. Some
of the consequences of the decision
are that the applicant is neither performing his duties nor receiving
his remuneration in terms
of the contract. He is for all intents and
purposes not the first respondent’s Municipal Manager. He seeks
an order declaring
him the first respondent’s Municipal
Manager. The Labour Court is the appropriate Court with the necessary
jurisdiction to
determine his dispute and grant the order he is
seeking which falls outside the realm of section 191 of the LRA and
the jurisdiction
of both the CCMA and bargaining councils.’
Grounds of appeal
[7] The Municipality
relies on the following grounds of appeal:
(a) The Court
a
quo
erred in finding that the issue of jurisdiction is determined
on the basis of the pleadings and not on the substantive merits of
the case.
(b)
The Court
a
quo
erred in failing, in accordance with the unanimous judgment of the
Constitutional Court in the matter of
Gcaba
v Minister for Safety and Security and Others
,
[1]
to interpret the supporting affidavit “to establish what the
legal basis of Mr Dumezweni’s claim is”.
(c) The Court
a
quo
erred by failing to properly interpret the issue before it
with reference to the founding affidavit. Had this been done, it
would
have been apparent that the substance of the matter is the
issue of legality, over which the Labour Court has no jurisdiction.
(d)
The Court
a
quo
erred in finding that the issue before it was distinguishable from
the matter of
De
Beer v Minister of Safety and Security/Police
[2]
on the basis that the respondent does not seek re-instatement. The
Court
a
quo
erred in failing to have any proper regard to the fact that it was Mr
Dumezweni’s case that:
(i) he had a valid
and binding employment contract;
(ii) he had been
advised by the Municipality that he was not an employee;
(iii) his
remuneration had ceased; and
(iv) he was seeking
an order to the effect that he be declared the Municipal Manager and
be paid his remuneration.
(e) Had the Court
a
quo
had any or proper regard to the issue referred to in (d)
above, it would have concluded that, in substance, Mr Dumezweni was
seeking
re-instatement – albeit temporary, as was the case in
De Beers
(supra). Accordingly, the Labour Court erred by
failing to find that it was bound to follow the
De Beer’
s
judgment.
(f) The Court
a
quo
erred in concluding that, in truth, the relief sought by Mr
Dumezweni was re-instatement and reference to the order declaring him
Municipal Manager was in truth, part and parcel of him seeking his
order of re-instatement.
(g) Alternatively to
(f) above, and in the event of it being found that Mr Dumezweni was,
in fact and law, seeking a declaratory,
the court
a quo
erred
in finding that “
both the CCMA and the bargaining council
lack jurisdiction to determine a dispute where an applicant seeks a
declaratory order”.
The Court failed to have regard to the
provisions of
section 138(9)
of the
Labour Relations Act 66 of 1995
which expressly gives a bargaining council and/or CCMA arbitrator the
power to make an award which “
includes, or is in the form
of, a declaratory order”
.
(h) The court
a
quo
erred by failing to uphold the
in limine
jurisdictional challenge and by not dismissing the application with
costs (including costs of two counsel).
Evaluation
[8] The grounds of
appeal raise three questions:
(a)
Did the court
a
quo
apply the correct test for
determining jurisdiction
in limine
?
(b)
Did the court
a
quo
correctly establish the nature of
Mr Dumezweni’s case?
(c)
Does the Labour Court have jurisdiction to
decide whether a contract of employment or appointment complies with
the MSA?
Did the court
a
quo
apply the correct test to determine jurisdiction
in
limine
?
[9]
The Municipality’s first ground of appeal is that the court
a
quo
“
erred in finding that the issue of jurisdiction is
determined on the basis of the pleadings and not on the substantive
merits of
the case”
. It will be recalled that the court
a
quo
was dealing with a challenge to jurisdiction as a point
in
limine
. The merits of the Mr Dumezweni’s case was not then
in issue.
[10]
Van der Westhuizen J delivering the judgment in
Gcaba
v Minister for Safety and Security
[3]
observed that:
‘
Jurisdiction
is determined on the basis of the pleadings, as Langa CJ held in
Chirwa, and not the substantive merits of the case…
In the
event of the Court’s jurisdiction being challenged at the
outset (in time), the applicant’s pleadings are the
determining
factor. They contain the legal basis of the claim under which the
applicant has chosen to invoke the court’s
competence. While
the pleading – including in motion proceedings, not only the
formal terminology of the notice of motion,
but also the contents of
the supporting affidavits – must be interpreted to establish
what the legal basis of the applicant’s
claim is, it is not for
the court to say that the facts asserted by the applicant would also
sustain another claim, cognisable
only in another court. If however
the proceedings, properly interpreted, establish that the applicant
is asserting a claim under
the LRA, one that is to be determined
exclusively by the Labour Court, the High Court would take
jurisdiction.’
[Footnote omitted]
[11]
The court
a quo
was correct in looking at the pleadings in
order to establish jurisdiction at the outset of the proceedings. It
follows that this
ground of appeal is without merit.
Did the court
a
quo
correctly establish the nature of Mr Dumezweni’s case?
[12]
Mr Dumezweni’s case is to be established by examining the
notice of motion and the affidavits.
[13]
Mr Dumezweni sought a rule
nisi
in the following terms:
‘
2.1
That the Respondents be and are hereby interdicted and/or restrained
from continuing with the recruitment process and any conduct
in
furtherance of the filling of the post of Municipal Manager, Mbashe
Local Municipality as advertised in the issue of Daily
Dispatch
dated 3rd June 2013, pending the finalization of the investigation,
conducted by the Respondents in respect of the appointment
of [Mr
Dumezweni] as Municipal Manager of the First Respondent and any
subsequent process challenging the ultimate decision of
the
Applicant;
2.2
That the decision of the Respondents to terminate [Mr Dumezweni’s]
remuneration as Municipal Manager of the First Respondent
be declared
wrongful, unlawful and unconstitutional, reviewed and set aside
pending the finalization of the processes mentioned
in paragraph 2.1
above;
2.3.
That [Mr Dumezweni] be declared to be the Municipal Manager of the
First Respondent and entitled to receive remuneration and
privileges
attached to such employment, pending the finalization of the
processes mentioned in paragraph 2.1 above;
2.4
That the Respondents be and are hereby ordered to conclude the
investigation in respect of [Mr Dumezweni’s] appointment
as
Municipal Manager of the First Respondent within 60 (sixty) days of
this order.
3.
Prayers in terms of sub-paragraphs 2.1, 2.2 and 2.3 above shall
operate as an interim interdict or mandamus until the finalisation
of
this application.
4.
The Respondents be and are hereby ordered to pay the costs of this
application, jointly and severally, the one paying, others
to be
absolved.’
[14]
Mr Dumezweni’s case as set out in his founding affidavit can be
summarised as follows:
(a) He was employed
as the Municipality’s Manager: Land and Housing Department as
from December 2007.
(b) His contract was
extended and he acted as Municipal Manager as from 9 January 2013.
(c) He applied for
the post of Municipal Manager and was interviewed.
(d) He was appointed
(or his appointment was authorised) as the Municipal Manager by a
resolution of a special council meeting of
the Municipality of 12
March 2013.
(e) The Mayor
appointed him as the Municipal Manager on 15 March 2013. A contract
of employment for a period of five years was concluded
and Mr
Dumezweni assumed his duties.
(f) On 26 March
2013, he met Mr Oxley Sibongile Ngqele who gave him a copy of a
letter indicating that Mr Ngqele had been seconded
to act as
Municipal Manager for three months.
(g) On 11 April
2013, he established that the Municipality had stopped payment of his
remuneration.
(h) On 15 April
2013, he was informed by Mr Ngqele that his contract of employment
was null and void as it was in contravention
of the law and that an
investigation was pending into his appointment.
(i) On 4 June 2013,
he came to learn that the post of Municipal Manager of the
Municipality had been advertised in “The Daily
Dispatch”
of 3 June 2013.
(j) It may be
inferred that Mr Ngqele acted on behalf of the Municipality.
[15]
The Municipality submits that the substance of Mr Dumezweni’s
case and therefore the true basis of his claim is his alleged
unfair
dismissal or alleged unfair suspension which falls within the
province of the CCMA or a bargaining council and, as this
is the
case, the Labour Court does not have jurisdiction in this matter.
[16]
The Municipality relies on
De
Beer v The Minister of Safety & Security Services/Police and
Another
[4]
that
is to the effect that the Labour Court does not have jurisdiction to
adjudicate a dispute about an unfair dismissal or unfair
labour
practice, unless the dispute has been referred to conciliation and
the reason for the dismissal is one of those listed in
s 191(5)(b)
of
the LRA. See para 29.
[17]
In the
De Beer’s
case, it was found that the crucial and
central issue concerned the termination of the appellant’s
employment and the fairness
thereof, despite his averments to the
contrary. See para 38. The ratio in the
De Beer
’s
judgment will be applicable only if the Labour Court erred in finding
that Mr Dumezweni did not complain of unfair dismissal
or unfair
suspension.
[18]
Mr Dumezweni alleges that the Municipality has breached his contract.
He alleges in addition that the Municipality intends
recruiting
another person to occupy his post. He seeks a declaratory order, an
interdict, a mandamus and specific performance of
his contract. Mr
Dumezweni does not complain of an unfair dismissal or unfair
suspension. He bases his case squarely on a contract
of employment.
[19]
As the court
a
quo
was at pains to point out Mr Dumezweni does not make any allegation
of unfairness. He could perhaps have done so. But it is his
prerogative to formulate his case and he has opted to rely on his
contractual remedies. He does not seek equity based relief. He
complains of the wrongfulness or unlawfulness of the Municipality’s
actions. Nugent JA in
Manama
v King Sabata Dalindyebo Municipality,
[5]
emphasised that the existence of other remedies does not have any
bearing on a case based on one remedy upon which an applicant
relies.
Nugent JA said:
‘
The
evidence in this case establishes the existence of a contract of
employment between the municipality and [the applicant]. And
he
wishes to enforce the contract…. That he might have been
entitled to other relief under the remedies provided for under
the
Labour Relations Act does
not somehow extinguish his contractual
rights.’
[6]
[20]
The jurisdiction of the Labour Court includes, in terms of section
77(3) of the Basic Conditions of Employment Act 75 of 1997
(the BCEA)
“…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.” The Labour
Court has the power and
jurisdiction to grant the relief claimed by Mr Dumezweni.
Does the Labour
Court have jurisdiction to decide whether a contract of employment or
appointment complies with the MSA?
[21]
The Municipality submitted in its heads of argument that Mr Dumezweni
is challenging the validity or the legality of the municipal
resolution taken on 25 April 2013 which apparently revokes the March
resolution that authorised his appointment as Municipal Manager.
This
is regulated by the MSA and the Labour Court does not have
jurisdiction as regards this Act.
[21]
Mr Buchanan SC, with him Mr Grobler, who appeared for the
Municipality, contended during oral argument that Mr Dumezweni relied
on the MSA because he was obliged to show that his contract of
employment was a valid one in terms of this Act. This is undoubtedly
correct.
[22]
Section 54A(1) of the MSA requires a Municipal Council to appoint a
Municipal Manager as head of the administration of the
Municipal
Council (or an Acting Municipal Manager). The qualifications of a
Municipal Manager are provided for in subsection (2)
that reads:
‘
A
person appointed as municipal manager in terms of subsection (1) must
at least have the skills, expertise, competencies and qualifications
as prescribed.’
And subsection (3)
provides that:
‘
A
decision to appoint a person as municipal manager, and any contract
concluded between the municipal council and that person in
consequence of the decision, is null and void if-
(a) the person
appointed does not have the prescribed skills, expertise,
competencies or qualifications; or
(b) the
appointment was otherwise made in contravention of this Act.’
[23]
I do not understand subsection (3) to mean that the appointment of a
Municipal Manager may be treated conclusively by a municipality,
or
anybody else, as null and void without the intervention of a court.
The principle of legality does not permit this. Contracts
are binding
but may be void or voidable.
[24]
Mr Buchanan SC submitted that as Mr Dumezweni relied on the MSA to
show the validity of his contract, and as the Labour Court
did not
have jurisdiction in respect of this Act, therefore, it could not
consider the validity of the contract with reference
to the MSA.
[25]
The Labour Court may indeed need to consider the validity of a
Municipal Council resolution or section 54A(2) of the MSA. This
raises the issue whether the Labour Court has incidental jurisdiction
to consider the validity of a contract of employment, in
this case,
with reference to the MSA. When the legislature conferred
jurisdiction on the Labour Court to enforce a contract of
employment
it can only have meant a valid contract of employment and that the
Labour Court would decide whether the contract of
employment in issue
was a valid contract according to whatever law was applicable. The
Labour Court has consistently, and correctly,
decided on the validity
of contracts of employment with reference to other statutes such as
the
Companies Act 71 of 2008
,
Immigration Act 13 of 2002
and as
regards enforceability the Prescription Act 68 of 1969 (to name a
few) over which it does not have direct jurisdiction.
There is no
reason why the same rule should not apply in the case of the MSA.
Concession
[26]
Before concluding, I must mention a concession made by Mr Simoyi, who
appeared on behalf of Mr Dumezweni, that the municipality
had not
complied with section 54A(7)(a) of the MSA which requires a Municipal
Council, within 14 days, to inform the MEC for Local
Government of
the appointment process and outcome, as may be prescribed. The MEC
for Local Government, in turn, must, within 14
days of receipt of the
information referred to in paragraph (a), submit a copy thereof to
the Minister. See section 54A(7)(b) of
the MSA.
[27]
At first blush, Mr Simoyi seemed to concede that Mr Dumezweni’s
appointment was not in accordance with the MSA. However,
the
obligation to inform the MEC is an obligation that arises after the
appointment of a Municipal Manager. It is not part and
parcel of an
appointment. Its purpose is to enable the MEC to monitor appointments
and take appropriate steps to enforce compliance
by the Municipal
Council with section 54A of the MSA. Appropriate action may include
an application to a court for a declaratory
order on the validity of
the appointment, or any other legal action against the Municipal
Council. See section 54A(8) of the MSA.
Where the MEC for Local
Government fails to take appropriate steps, the Minister may take the
necessary steps. See section 54A(9)
of the MSA.
[28]
Therefore the concession does not detract from Mr Dumezweni’s
averments that his contract as Municipal Manager meets
the
requirements of the MSA.
[29]
In the result, I am of the view that the appeal should be dismissed.
Costs should follow the result.
Order
[30] I make the
following order:
The
appeal is dismissed with costs.
Landman
JA
I agree
Waglay
JP
I agree
Ndlovu JA
APPEARANCES
FOR THE
APPELLANT: Mr Buchanan SC, with Mr Grobler,
Instructed by
Kirchmanns Inc.
FOR
THE RESPONDENT: Mr Simoyi
Instructed
by Mlonzi and Co Inc.
[1]
[2009] 12 BLLR 1145 (CC).
[2]
[2013] 10 BLLR 953 (LAC).
[3]
2010 (1) SA 238
(CC) at para 75.
[4]
(2013) 34 ILJ 3083 (LAC).
[5]
[2011]
3 BLLR 215 (SCA).
1
[6]
At para 23.