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[2018] ZALAC 17
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Government Employees Pension Fund v Sithole and Others (JA121/2014) [2018] ZALAC 17; [2018] 11 BLLR 1096 (LAC) (10 July 2018)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Not reportable
Case no JA121/2014
In the matter between:
GOVERNMENT EMPLOYEES
PENSION
FUND
Appellant
and
MAUREEN
SITHOLE
First
Respondent
PREMIER OF MPUMALANGA
PROVINCE
Second
Respondent
MEC: DEPARTMENT OF
AGRICULTURE AND
Third
Respondent
LAND ADMINISTRATION:
MPUMALANGA
DIRECTOR GENERAL:
MPUMALANGA
Fourth
Respondent
Heard: 27 March 2018
Delivered: 10 July
2018
Summary: Employee and
an employer embroiled in the computation of employee’s benefits
after the bargaining council found employee’s
dismissal unfair
– prolonged litigation ensued both before this Court and the
court below – parties entering into a
settlement agreement to
solve the dispute – notwithstanding the settlement agreement,
employee contending that not all benefits
were paid – employer
contending otherwise – employee then approaching the Labour
Court to enforce the settlement agreement
– Labour Court
removing the matter from the roll for want of jurisdiction –
Despite the order matter finding its way
back in the Labour Court
before another judge –
Res
judicata
Court held that: When
the Labour Court assumed jurisdiction there was already an order to
the effect that the Labour Court had no
jurisdiction. Consequently,
the proceedings before Haslop AJ are a nullity and can be ignored and
Van Niekerk’s order is
valid until it is set aside by a
competent court. Appeal upheld and Labour Court’s order
substituted with an order that the
application is dismissed.
Coram: Phatshoane
ADJP, Musi JA and Savage AJA
JUDGMENT
MUSI JA
[1] This is an appeal
against the judgment of the Labour Court (Haslop AJ). It is brought
with the leave of the Labour Court. This
matter has a long, chequered
and unfortunate history. Although the appeal can be decided on the
crisp issue of whether Haslop AJ
had the power to adjudicate the
matter, it is best for all parties concerned that the entire history
of the matter be set out and
some of the contentious issues be
addressed.
[2] The first respondent,
Ms Maureen Sithole (employee), was employed in the Public Service
from 1979 to 2002. In 2002, she was
appointed Head of Department
(HOD) of Mpumalanga Department of Agriculture, Rural Development and
Land Administration, on a five-year
fixed term contract which was due
to expire on 6
November 2007. However, before the contract
could expire she was charged, convicted, and dismissed on 6 February
2007 for misconduct.
[3] She referred a
dispute concerning the fairness of the dismissal to the General
Public Service Sector Bargaining Council (GPSSBC).
The employee only
sought compensation and not reinstatement. The reason for this was
because her fixed term contract had already
expired by the time the
matter was arbitrated and she had already reached retirement age.
[4] On 7 May 2008, the
arbitrator issued the following award:
‘
1.
The dismissal of the applicant was substantially unfair to the extent
that the sanction of dismissal was not appropriate. The
respondent
proved a procedurally fair process.
2. The respondent must
pay the applicant compensation equal to three months’
remuneration less statutory deductions…’
The arbitration award was
made an order of court on 29
October 2008.
[5] When her exit
benefits were calculated, they were calculated on the basis that she
was dismissed from the Public Service. She
was aggrieved by this and
approached the Labour Court for the following substantive relief:
‘
1.
A declaration that the applicant had retired from the public service
on 7 November 2007 when the fixed term written employment
contract
between applicant and the first respondent (Premier of Mpumalanga
Province) expired.
2. A declaration that the
applicant is entitled to all benefits due to her as a public servant
who has retired in terms of section
19 of the Government Employees
Pensions Law Act, 1996 (Proclamation No 21 of 1996). Hereafter
referred to as the Pension Act.
3. A declaration that the
applicant is entitled to be paid all benefits including pension
benefits which accrued to her up to and
including the last day of the
fixed term employment contract (6 November 2007).
4. An order directing the
first, second and/or third respondent to pay all benefits which
accrued in law to the applicant as a retiree
or has retired pursuant
to section 19 of the Pension Act and that such benefits be paid in
terms of section 26 of the Pension Act.
5. Directing the first,
second and/or third respondents to pay all benefits that accrued to
the applicant as a retiree within seven
days of the order.
6. Directing the fourth
respondent to pay pension benefits which accrued to the applicant in
terms of section 26 of the Pension
Act.
7 Directing the first
respondent to amend the date of the commencement of contributions to
the pension fund by the applicant from
November 1984 to September
1979 as evidenced by the applicant’s date of employment in the
Public Service.’
[6] On 22 May 2009,
Francis J, granted prayers 6 and 7 only. He dismissed the rest. The
employee unsuccessfully applied for leave
to appeal. She petitioned
the Judge President and the matter was set down, in the Labour Appeal
Court (LAC), to consider the petition
as well as arguments on the
merits.
[7] On the date of the
hearing, the LAC indicated to the parties that the matter seemed
capable of being settled. Thus the parties
requested and were granted
an opportunity to explore settlement options. The matter was
postponed to 22 January 2010 for those
purposes. The parties reached
a settlement on 22 January 2010 and the settlement agreement between
the parties was made an order
of court. The order reads as follows:
‘
1.1
That the applicant be paid all the pension benefits which had accrued
to her up to the time when she lost her permanent status
as a
government employee and when she took up the appointment as HOD on 6
November 2002;
1.2 That the respondents
pay all pension and other benefits payable to the applicant in
accordance with the Public Service Act and
the SMS handbook for the
period when she was employed as HOD until she was dismissed in (sic)
6 February 2007;
1.3 That the payment
referred to in paragraph 1.1 and 1.2 above, should take into account
the payments of over two million rand
that had already been paid to
the applicant;
1.4 That the issue of
costs be postponed
sine die
with either party having a right
to set the matter down on an agreed date before the Labour Appeal
Court, or such court as the
Labour Appeal Court may order for
argument on costs.’
[8] The parties could not
agree on the issue of costs and the matter was duly set down to
determine the issue of costs. On 7 September
2010, the Labour Appeal
Court ordered that each party is to pay its own costs.
[9] The parties remained
at loggerheads. The employee alleged that she did not receive any
money in terms of the settlement agreement
and the respondents, on
the other hand, alleged that she was paid all money due to her. The
employee approached the Labour Court
under case number J 2454/2010
for an order in the following terms:
1.
That the 1
st
to 4
th
respondents be ordered to comply with the provisions of the
settlement agreement subsequently made an order of court by the
Labour
Appeal Court dated February 2010.
2.
That the first respondent (Premier of
Mpumalanga), in compliance with the court order mentioned in
paragraph 1 above, pay the applicant,
within 10 days of the date of
the order, an amount of R 1, 495,727,39 as well as interest at the
rate of 15.5% calculated from
31 August 2010 to date of payment,
which amount is an equivalent of all the other benefits payable by
the first respondent in terms
of the SMS handbook
3.
That the fourth respondent (GEPF) in
compliance with the court order mentioned in the foregoing
paragraphs, pays the applicant,
within 15 days from the date of the
order, an amount of R1,727,565,29 as well as interest at the rate of
15.5% calculated from
31 August 2010 to the date of payment, in
respect of the pension benefits.
4.
The first of the respondents (sic) are to
pay the cost of this application.
5.
Further and/or alternatively relief.’
[10] The application
under case number J 2454/10 was argued before Van Niekerk J and he
issued the following order:
‘
1
The application is removed from the roll due to lack of jurisdiction.
2
There is no order as to costs.’
[11]
Subsequent to Van Niekerk J’s order, the employee launched an
application in the LAC under case number JA41/09
[1]
wherein
she sought an order that the first and fourth respondents be ordered
to comply with the settlement agreement; that the first
and fourth
respondents be directed to pay her all pension benefits which had
accrued to her as referred to in paragraphs 1.1 and
1.2 of the
settlement agreement; that the respondents be directed to pay her
benefits in terms of paragraphs 1.1 and 1.2 of the
settlement
agreement as contained in the actuarial reports annexed to her
founding affidavit and that in the event that the respondents
were to
fail to comply with the court order as aforesaid within 30 days from
the date of the court order, that the applicant be
and is granted
leave to approach the LAC on the same papers duly supplemented for an
order of contempt of court and the committal
to prison of the
respondents. This application is still pending in this Court because
it has never been withdrawn.
[12] One would have
thought that the launching of application JA 41/09 meant that the
employee accepted Van Niekerk J’s order
and that the matter
will then be prosecuted in this Court. Inexplicably, the same
application, that was before Van Niekerk J, under
the same case
number (J2454/10) and between the same parties was again argued
before Haslop AJ, on 20 March 2013. This was done
in total disregard
of Van Niekerk J’s order.
[13] Haslop AJ, seemingly
unaware of Van Niekerk’s order, made the following order:
‘
1.
The 1
st
to 4
th
respondents are ordered to comply with the provisions of the
settlement agreement subsequently made an order of the LAC on 22
January 2010 under case number JA41/09, the effect of that settlement
agreement being that the benefits due to the applicant, both
in
respect of her employment up to and including 6 November 2002 and
thereafter, are those due to an employee in the applicant’s
position who has retired from her employment on 6 February 2007.
2. In compliance with the
provisions of the settlement agreement and court order, the first
respondent is ordered to pay the applicant,
within 21 days of the
date of this order, the amount of R 1 495 727,39 plus
interest calculated at the rate of 15.5%
per annum from 31 August
2010 to date of payment.
3. In further compliance
with the provisions of the settlement agreement and court order, the
fourth respondent is ordered to pay
the applicant, within 21 days of
the date of this order, the amount of R 1 727 565,29 plus
interest calculated at the
rate of 14.5% per annum from 31 August
2010 to date of payment.
4. The first second and
third respondent are ordered to pay the applicants cost of this
application, including the cost associated
with the application to
strike out, jointly and severally the one paying, the others to be
absolved.’
[14] Haslop AJ
interpreted the settlement agreement reached between the parties to
mean that the employee should be paid all pension
benefits as if she
retired and not as if she was dismissed or had resigned.
[15] The fourth
respondent referred to in Haslop AJ’s judgment is the
Government Employee Pension Fund (GEPF). It did not
oppose the
application in the Labour Court. It was also not a party to the
settlement agreement that was made an order of the LAC.
It
successfully applied for leave to appeal against Haslop AJ’s
order. Likewise, the other respondents, except the employee,
also
successfully applied for leave to appeal against Haslop AJ’s
order.
[16] The GEPF pointed out
that Haslop AJ’s order is incompetent and contrary to the laws
governing pension funds. It also
contended that the order is contrary
to the Income Tax Act, 58 of 1962 because a pension benefit is
taxable and the order does
not make provision for the lump sum to be
paid after the employee’s tax liability has been determined.
[17] The Premier and the
GEPF contended that Haslop AJ could not hear the matter subsequent to
it having been decided by Van Niekerk
J. The matter was
res
judicata.
I agree. When Van Niekerk J decided that the Labour
Court does not have jurisdiction to entertain the matter; that was
the end
of the matter in that court. Therefore, the matter could not
be set down to be heard by another Judge of the Labour Court. The
aggrieved party, in this case, the employee, had two options: to take
Van Niekerk J’s decision on appeal or to prosecute the
matter
in the correct forum. The employee decided to prosecute the matter in
this Court.
[18] By launching the
application in this Court, the issues between the parties had to be
decided by this Court. It is clear from
the pleadings that the issues
before Van Niekerk J and Haslop AJ were the same issues which the
employee wanted this Court to decide
under case number JA41/09. When
Haslop AJ heard and decided the matter, the dispute between the same
parties, concerning the same
subject matter was already pending
before this Court. The fact that the same matter is pending in this
Court was brought to Haslop
AJ’s attention and the employee
undertook to withdraw the matter in this Court but never did so. When
Haslop AJ heard and
decided the matter it was already pending in this
Court.
[19] Haslop AJ did not
deal with these issues in his main judgment but stated the following
in his judgment granting leave to appeal:
‘
In
addition, and aside from the fact that this is a somewhat unusual
case, there is another reason why I am inclined to grant leave
to
appeal to the first second and third respondents. When this matter
came to court on a previous occasion, it was removed from
the roll by
my brother, Van Niekerk J, due to lack of jurisdiction. When the
matter came before me I accepted that this Court did
in fact have
jurisdiction to deal with the matter, even though it effectively
required me to interpret what was ultimately an order
of the Labour
Appeal Court. There was no jurisdictional challenge from the parties
and the court’s lack of jurisdiction is
still not raised as a
ground of appeal. However, it may be necessary for the Labour Appeal
Court to consider whether this Court
did have jurisdiction to deal
with the matter in the first place.’
[20] It is not clear from
the above passage whether the assumption of jurisdiction was made
with the full knowledge of Van Niekerk
J’s order or not. What
is clear is that jurisdiction was assumed without a proper
investigation by the judge as to whether
the court had the necessary
jurisdiction or not. The Labour Court has no power to assume
jurisdiction when it is clear that it
does not have jurisdiction. On
the facts of this case, it is also not necessary for this Court to
decide whether the Labour Court
had or did not have jurisdiction to
interpret the order of the LAC. That is neither here nor there. This
is so because a valid
court order had already been made by Van
Niekerk J that the Labour Court did not have such jurisdiction and
that order still stands.
When Haslop AJ assumed jurisdiction there
was already an order to the effect that the Labour Court had no
jurisdiction. Faced with
such an order, Haslop AJ could not assume
jurisdiction. Consequently, the proceedings before Haslop AJ are a
nullity and can be
ignored and Van Niekerk’s order is valid
until it is set aside by a competent court.
[21]
In
the
Master of The High Court (North Gauteng High Court, Pretoria) v
Motala No and Others,
[2]
the
court stated that:
‘
[12]
As long ago as 1883 Connor CJ stated in
Willis
v Cauvin
4 NLR 97
at 98 –
99:
Ponnan JA (Malan JA and
Wallis JA concurring) 'The general rule seems to be that a
judgment, without jurisdiction in the Judge
pronouncing it, is
ineffectual and null. The maxim
extra territorium jus dicenti
inpune non paretur (Dig
. 2.1.20) is applicable (
Dig
.
50.17.170 & 2.1.20;
Cod.
7.48.1 &
14.4;
Wes
.
ibi Poth. Pand.
42.1.(14,
15);
Voet
42.1.48;
Wes. ad. Dig
.
42.1.(5);
Wes. ad. Dig.
50.17.170 &
2.1.(50);
Groenwn. ad. Cod.
7.64;
Christin.
Decis
. 4.94.2); . . .'
Willis
v Cauvin
was cited with approval
in
Lewis & Marks v Middel
1904
TS 291
; and
Sliom v Wallach's
Printing & Publishing Co, Ltd
1925
TPD 650.
In the former, Mason J (with whom Innes CJ and Bristowe J
concurred) held at 303: 'It was maintained that the only remedy
was to appeal against the decision of the Land Commission; but
we think that the authorities are quite clear that where legal
proceedings are initiated against a party, and he is not cited to
appear, they are null and void; and upon proof of invalidity
the
decision may be disregarded, in the same way as a decision given
without jurisdiction, without the necessity of a formal order
setting it aside (Voet, 2, 4, 14; and 66; 49, 8, 1, and 3;
Groenewegen,
ad Cod
.
2; 41; 7, 54;
Willis v Cauvin
,
4 N.L.R. 98
;
Rex v Stockwell
,
[1903] T.S. 177
; Barnett & Co. v
Burmester & Co.,
[1903] T.H.
30).'
And in the latter
Curlewis JP (Krause J concurring) held at 656: 'The action,
therefore, of the respondent company in applying
for judgment,
apparently by default, against the individual partner Sliom, the
appellant in the present case, was an illegal and
wrongful act. A
judgment was thereby obtained against a person who had not been
legally cited before the Court, and the effect
of that judgment is
that it is a nulllity; it is invalid and of no effect. In the case
of
Lewis & Marks v Middel
, to which
Mr
Murray
has referred us, and also in an earlier
case where the Roman-Dutch authorities were examined, it was laid
down on the authority
of
Voet
that a judgment given
against a person who had not been duly cited before the Court is of
no effect whatsoever. It is a nullity
and can be disregarded. It
seems to me that is the position here. A judgment was obtained
against the individual Sliom personally, whereas
he had never
been cited personally and individually to appear before the Court.
Therefore, that judgment was wrongly obtained against
him, and that
judgment, in my opinion, was a nullity as far as he was concerned.
The only judgment the plaintiff, on that citation,
was entitled to
was against the partnership’”
[22] And further that:
‘
Lewis
& Marks
and
Sliom
were
cited with approval by this court in
S
v Absalom
1989
(3) SA 154
(A)
at 164, which held:
'Dit
volg dus dat die Volle Hof myns insiens geen bevoegdheid gehad het om
die appèl aan te hoor nie. Die gevolg, meen ek,
was, soos
voorspel deur Strydom R, dat die Volle Hof se uitspraak 'n nietigheid
was. Sien, benewens die bronne, aangehaal deur
Strydom R,
Voet
Commentarius
ad Pandectus
49.8.1
en 3; Groenewegen
De
Legibus Abrogatis
,
Ad
Cod
7.64;
Lewis
& Marks v Middel
1904
(TS) 291 op 303;
Sliom
v Wallach's Printing and Publishing Co Ltd
1925
TPD 650
op
656 en
Trade
Fairs and Promotions (Pty) Ltd v Thomson and Another
1984
(4) SA 177
(W)
op 183D-E. Soos blyk uit hierdie bronne, het die uitspraak van 'n hof
wat nie regsbevoegdheid het nie, geen regskrag nie, en
kan dit
eenvoudig geïgnoreer word.
Groenwegen
(
loc
cit
)
sê wel dat, waar dit gaan oor die nietigheid van 'n uitspraak
van die Hooggeregshof, die
Princeps
se
hulp ingeroep moet word, maar hierdie reël geld nie meer by ons
nie
[3]
.'
[23] It is, therefore,
clear that the order of Haslop AJ should be set aside on the basis
that the matter before him was
res judicata. It was also pending
in this Court.
[24]
There are other reasons why Haslop AJ’s order should be set
aside.
In paragraph 1 of the order, Haslop
AJ states:
‘
the
1
st
to
4
th
respondents are ordered to comply with the provisions of the
settlement agreement subsequently made an order of the Labour Appeal
Court on 22 January 2010 under case number JA41/09, the effect of
that settlement agreement being that the benefits due to the
applicant, both in respect of the employment up to and including 6
November 2012 and thereafter, are those due to an employee in
the
applicant’s position who has retired from her employment on 6
February 2007.
’
[25] This part of the
order was made contrary to the employee’s case. When the
employee launched her application in this Court
after Van Niekerk J’s
order, she stated the following:
‘
Basically,
the first and third respondents’ contention is that I have been
dismissed and therefore not entitled to benefits
of a retiree. With
due respect to the respondents, they are completely missing the point
or deliberately seek to conflate the issues
because at no stage was
there any contention that the settlement is on the basis that I am a
retiree. The settlement acknowledges
that I have been dismissed, but
despite the dismissal, I am entitled to all the pension benefits and
other benefits which accrue
to a HoD.’
[26] It is abundantly
clear that the employee’s case was not based on the fact that
the settlement agreement was entered into
on the basis that she
should be paid as a retired employee. Her argument was more about the
computation of the benefits and not
about whether she was a retiree.
She was obviously aware that as a retiree she would be entitled to
annuities which would be paid
to her on a monthly basis. This
proposition is fortified by the fact that in the notice of motion she
did not claim that she should
be paid a lump sum and thereafter
annuities in terms of the rules of the pension fund. What she wanted
was a particular amount
from her erstwhile employer and an amount
from the GEPF.
[27] Haslop AJ ordered
the GEPF to pay the employee R1 727 565,29 plus 15,5%pa
interest. This sum was based on the calculations
of an actuary. The
actuarial report was disputed. The Premier and the MEC pointed out
that the actuary assumed that she retired,
which was an incorrect
assumption. They contended that she was not entitled to a leave
gratuity, calculated at R603 703.30
because she was a HoD. The
Labour Court did not attempt to resolve these disputes. It probably
accepted the actuarial report because
it comported with its view that
the employee was to be treated as a retiree.
[28] Haslop AJ could not
order the GEPF to pay a gratuity to the employee unless such payment
was sanctioned by an Act of Parliament.
Section 20 of the Government
Employee Pensions Act states as follows:
‘
(1)
Save as is otherwise provided in this law, no award of a benefit or
any increase thereof and no alteration of any condition
or
condonation of a breach of any condition upon which such benefit is
by law earned or to be earned in respect of a pensioner
of the Fund,
the Temporary Employees Pension Fund or a previous fund, shall be
lawful unless the award, increase, alteration or
condonation is
authorised by an Act of Parliament…’
[4]
[29] It is not clear from
Haslop AJ’s judgment in terms of which Act of Parliament this
award was made.
[30] I need to say a few
words about a very disconcerting aspect. After the parties argued the
matter, they were given an opportunity
to explore, having heard their
respective stances the possibility of a settlement. The parties
request time and they were given
until 9 April 2018. We were all
under the impression that the parties found each other when we heard
nothing from them. I enquired
from the Acting Deputy Judge President
what the status of the matter was. After an investigation, I was
informed late on 5 July
2018 that the parties could not settle and
that they communicated that to the Registrar’s office during
April 2018. This
was not brought to our attention. We apologise to
all the parties for the delay and the unfortunate situation.
[31] The following order
is made.
[31.1] The appeal is
upheld with no order as to costs.
[31.2] The order of the
Labour Court is set and replaced with following:
‘
The
application is dismissed.’
_______________
CJ Musi JA
Phatshoane
ADJP and Savage AJA concur with CJ Musi
APPEARANCES:
FOR
THE APPELLANT: Adv S Khumalo assisted by Adv K Magan
Instructed
by Bowman Gilfillan
Sandton
FOR
THE FIRST RESPONDENT: Mr Kolisi
BM
Kolisi Inc Benoni
[1]
It
should have been launched with a different case number because case
number JA 41/09 was finally disposed of when the costs issue
was
decided. Van Niekerk J’s order was made on 9 February 2012.
[2]
The
Master of The High Court (North Gauteng High Court, Pretoria) v
Motala No and Others
2012 (3) SA 325
(SCA) at para 12.
[3]
The
court also made reference to the following cases:
State
v Mkize
1962
(2) SA 457
(N) at 460
and also
Government
of the Republic of South Africa v Von Abo
2011
(5) SA 262
(SCA)
at paras 18 and 19.
[4]
Proclamation
21 of 1996.