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[2010] ZALCCT 33
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Moloto v City of Cape Town (C657/2009) [2010] ZALCCT 33 (19 November 2010)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD AT CAPE
TOWN
CASE
NO: C657/2009
In
the matter between:
MAMOTSHABO SARAH
MOLOTO Applicant
and
CITY OF CAPE
TOWN
Respondent
JUDGMENT
FRANCIS
J
Introduction
1.
The applicant brought a claim for damages in terms of section 77(3)
of the Basic Conditions of Employment Act 75 of 1997 (the
BCEA) after
her contract of employment was terminated by the respondent. She is
not seeking specific performance but only damages.
The
respondent’s defence is that the contract of employment was
terminated lawfully in that it had given the applicant a
month’s
notice of termination in terms of the contract of employment.
Background facts
2.
The applicant was initially employed by the respondent in a permanent
capacity as Director: IDP on 1 April 2002. Following
restructuring within the respondent, she was employed as the
respondent’s Director: Citizen Relationship Management on a
five-year fixed-term contract, terminating on 31 March 2010. On
or about 27 June 2007 her fixed term contract was by agreement,
varied to an indefinite period of employment. Her contract of
employment was terminated with effect from 31 March 2010 by
the
respondent who gave her a month’s notice. She then
instituted these proceedings. The matter was initially
enrolled
for a hearing on 5 May 2010. Evidence was heard on the first
day for about an hour when the matter was postponed
to 6 May 2010.
Because more discovery had to take place, the matter was postponed to
20 September 2010.
3.
On 18 August 2010 the applicant was handed a with prejudice letter in
terms of which she was given notice in terms of section
37(1) and
offered notice pay in terms of section 38 of the BCEA. The
respondent also tendered to pay her remuneration for
the period
between 1 April 2010 and 31 August 2010 and accrued leave pay.
The tender was open for acceptance until
close of business on 25
August 2010. The tender was not accepted by the applicant.
The matter did not proceed on 20
September 2010 because the applicant
had secured new attorneys to represent her. The matter was
eventually re-enrolled for
a hearing on 8 November 2010. On
that day, the respondent brought a rule 11 application read with rule
33(4) of the High
Court Rules. The application was opposed by
the applicant. After hearing arguments I refused to grant the
order prayed
for. Because of this, the parties met and
concluded an agreement which resulted in the proceedings being
shortened considerably.
They agreed that no evidence would be led.
It is therefore not necessary to set out the evidence led
previously and
all the issues raised in the pleadings and pre-trial
minute.
Analysis of the
evidence and arguments raised
4.
On 9 November 2008, the parties concluded the following agreement:
“
For
the purposes of the above Labour Court proceedings only, the parties
have agreed on the following:
1.
Respondent accepts that, in or about 27 June 2007, Applicant’s
fixed-term
contract was, by agreement, varied to an indefinite period
contract of employment.
2.
Applicant abandons her claim for specific performance and confines
her claim
to one of damages for breach of contract arising from an
alleged wrongful termination of that contract on 31 March 2010.
3.
Without prejudice to the Applicant’s right to contend that the
Respondent
was not legally entitled to give the Applicant notice
terminating her contract of employment, the standard notice period
applicable
to the Respondent’s employees, including the
Applicant, is four weeks.
4.
The Respondent gave more than one month’s prior notice of its
intention
to terminate the Applicant’s contract of employment
with effect from 31 March 2010.
5.
Annexure 14E to the Respondent’s Response (and the cheque
referred to therein)
was sent to the Applicant and received by her on
or about 18 August 2010.
6.
The sum tendered in the aforementioned cheque constituted one month’s
remuneration.
7.
Neither party shall lead any further evidence”.
27.5
Further and/or alternative relief”.
5.
The issues that arise for determination are as follows:
5.1
Whether the respondent has breached the contract of employment.
The applicant contends
that the respondent has breached the contract
of employment by having given her notice of termination. The
respondent contends
that the contract of employment was terminated
lawfully in that she was given notice.
5.2
Whether the applicant is entitled to any damages.
6.
The applicant’s claim is a contractual one. It is founded
in common law and is brought in terms of section 77 (3)
of the BCEA.
She is not seeking specific performance but damages arising from the
breach of contract arising from an alleged
wrongful termination of
contract on 31 March 2010. The issue of unfairness does not
arise in this instance. It will
only arise in a statutory claim
brought in terms of the Labour Relations Act 66 of 1995 (the LRA).
Her union had referred
an unfair dismissal dispute to the relevant
Bargaining Council but withdrew it.
7.
In terms of the agreement referred to in paragraph 4 above, the
respondent has accepted that the applicant’s fixed term
contract was by agreement varied to an indefinite period contract of
employment. The question that arises is whether the
respondent
can terminate an indefinite contract of employment by giving a
month’s written notice. In terms of the common
law, an
indefinite contract of employment will endure indefinitely and is
terminable by either party on the giving of reasonable
notice.
In this regard see
Tiopaizi v Bulawayo
Municipality
1923 AD 317.
Such
contracts are said to run from period to period, either daily,
weekly, monthly or annualy, depending on the period provided
in the
contract for the calculation and payment of remuneration. An
indefinite contract of employment may be terminated by both
parties
if they give reasonable notice of termination. The BCEA
requires that four week’s notice of termination be
given for a
monthly paid employee. The parties agreed that in the present
case the standard notice period applicable to respondent’s
employees including the applicant is four weeks.
8.
The applicant contended that the respondent was not legally entitled
to give her notice of terminating her contract of employment.
It
could not terminate the contract and when it purported to do so,
breached the contract of employment. The notice to terminate
could only be lawful if it was for a probable cause. The
contract of employment could not be terminated without any good
cause. The giving of the notice to terminate may have
consequences. The respondent by having given notice of cancellation,
repudiated the contract and must pay her damages. Notice pay is
not damages. There was an implied term in the contract
of
employment that there would be fair dealing. The relationship
between the parties is one of trust and confidence and at
common law
conduct clearly inconsistent with it may lead to a cancellation of
the contract. Contrary conduct constituted
breach. In
this case, the applicant elected not to cancel the contract and the
first price would have been to hold the respondent
to contract but
this option was not open to her. The applicant relied on
Council
for Scientific & Industrial Research v Fijen
1996 (2) SA (1) (A); (1996) 17 ILJ 18 (A).
9.
The following appears in
Council for Scientific & Industrial
Research vs Fijen
at page 20 paragraphs B - D:
“
It
is well established that the relationship between employer and
employee is in essence one of trust and confidence and that, at
common law, conduct clearly inconsistent therewith entitles the
‘innocent’ party to cancel the agreement. On
this
basis our law is the same as that of English law, namely that in
every contract of employment there is a duty that the employer
will
not, without reasonable and probable cause, conduct itself in a
manner calculated or likely to destroy or seriously damage
the
relationship of confidence and trust between the parties. This
duty may be breached without the intention to repudiate
the
contract. It is sufficient if the effect of the employer’s
conduct as a whole, judged reasonably and sensibly,
is such that the
employee cannot be expected to put up with it. A reciprocal
duty also rests on the employee. However,
in our law, it is not
necessary to work with the concept of an implied term. The
duties referred to simply flow from naturalia
contractus.”
10.
The above decision was followed in a number of cases. However
the issue of implied term in a contract of employment in
common law
was rejected in
S A Maritime Safety Authority v McKenzie
(2010)
31 ILJ 529 (SCA). The following appears in the judgment:
“
58.
I can see no answer to these questions. For the judiciary to
construct a general common law remedy
for unfair circumstances
attending dismissal would be to go contrary to the evident intention
of Parliament that there should be
such a remedy but that it should
be limited in application and extent.
[33]
I find myself in respectful agreement with this reasoning. I
would add to it that there is the
further bar in South Africa that
the legislation in question has been enacted in order to give effect
to a constitutionally protected
right and therefore the court must be
astute not to allow the legislative expression of the constitutional
right tO be circumvented
by way of the side-wind of an implied terms
in contracts Of gmployment. I am also fortified in that
conclusion by the fact
that it reflects an approach adopted in a
number of other jurisdictions. In addition the Constitutional
Courthas already
highlighted the fact that there is no`need to employ
suci provisions into the contracts of emPloym%nt because the LRA
already includeSthe
protection that is nEcessary. The passage I
have in mind is the following:
{42
T`% LRA includes the principles of natural justice. The dual
fairness requirement is one example; a
dismissal needs to be
substantively and procedurally fair. By doing so, the LRA
guarantees that an employee will be protected
by the rules of natural
justice and the procedural fairness requirements will satisfy the
audi alteram partem principle and the
rule against bias. If the
process does not, the employee will be able to challenge her or his
dismissal, and will be able
to do so under the provisions and
structures of the LRA. Similarly, an employee is protected from
arbitrary and irrational
decisions, through substantive fairness
requirements and a right not to be subjected to unfair labour
practices’.
[35]
I do not think the decisions they refer to go as far as the writers
suggest. While the Constitution
guarantees to everyone ‘the
right to fair labour practices’, and also call upon courts,
when developing the common
law, to ‘promote the spirit, purport
and objects of the Bill of Rights’, it does not follow that
courts are thereby
enjoined to dEvelot the #ommon-law contract of
employment by simply incorporating in it the constitutional
guaRantee. Where
the coMmon law,`as supplemented by
legislation, accords to employees the constitutional righT to fAir
labour practices there is
no`constitutional imperative thdt calls for
tHe common law to be developed. indeed, to Duplicate rights that
exist by statute does
no more than to create the ‘jurisdictional
quagmire’ thatis referred to by Tamara Cohen. As she
rigHtly points
out, the consequence is that the carefully crafted
structure which those rights were legislatively created becomes
superfluous.
[37]
I share the view of Professor Halton Cheadle, whose role in the
drafting of the LRA is well documented,
that where, as here, the
employees are protected by the LRA, s 8(3) of the Constitution does
not warrant or require an importation
from the realm of
constitutionally protected labour rights into individual contracts of
employment by way of an implied term.
The LRA specifically
gives effect to the constitutional right to fair labour practices and
the consequent right not to be unfairly
dismissed. Accordingly
the constitutional basis for developing the common law of employment
and thereby altering the contractual
relationships is absent.
[55]
I do not think that any of the cases I have referred to can be said
to have decided authoritatively
that the common law is to be
developed by importing into contracts of employment generally rights
flowing from the constitutional
right to fair labour practices.
It is uncontroversial that the LRA is intended to give effect to that
constitutional right
and I see no present call, certainly not in this
case, for the common law to be developed so as to duplicate those
rights (at least
so far as it relates to employees who are subject to
that Act). The obiter dictum in Gumbi, which has been
reiterated without
elaboration, and without apparent consideration of
the matters that have been dealt with in this judgment, cannot be
considered
to be authoritative.
[56]
In my view the interpretation given to the cases mentioned goes
further than the judgments warrant
and they provide no obstacle to
the correctness of the analysis set out above. That analysis
concludes that, insofar as employees
who are subject to and protected
by the LRA are concerned, their contracts are not subject to an
implied term that they will not
be unfairly dismissed or subjected to
unfair labour practices. Those are statutory rights for which
statutory remedies have
been provided together with statutory
mechanisms for resolving disputes in regard to those rights.
The present is yet another
case in which there is an attempt to
circumvent those rights and to obtain, by reference to, but not in
reliance upon, the provisions
of the LRA an advantage that it does
not confer. It is precisely similar attempts that in my view
occasioned the recent jurisdictional
debate in cases such as Chirwa,
Makhanya and Gcaba.”
11.
Applicant’s counsel has argued that the present facts were
distinguishable from the
Mackenzie
matter. I do not agree.
There is no substance in the applicant’s submissions.
The facts of this case
are not distinguishable from those in
Mckenzie
.
The position has changed after the
Mackenzie
(supra)
judgment. The position
might have been different if the parties had made provision for
this in the contract of employment.
What the applicant
contended has not been pleaded in the pleadings. What was
pleaded is that the respondent breached the
contract of employment by
having refused to employ her permanently. Contracts of
employment are not subject to an implied
term that an employee will
not be unfairly dismissed unless it is specifically agreed upon in
the contract.
12.
It is common cause that the applicant’s fixed term contract was
varied to an indefinite contract. The parties agreed that
the
standard notice period applicable to the respondent’s
employees, including the applicant is four weeks. Where an
employer gives the requisite notice, the contract is lawfully
terminated. There is no evidence before me that the contract
of
employment contains a clause limiting the right to dismiss. Since it
is common cause that the respondent has given more than
one month’s
prior notice of its intention to terminate the applicant’s
contract of employment with effect from 31 March
2010, the contract
of employment was terminated lawfully. It becomes unnecessary
to deal with the issue of damages.
13.
This brings me to the rule 11 application. I had refused to
grant the application and indicated that I would provide reasons
for
the order that I made. The respondent had sought an order
directing that the following questions be determined separately
and
before hearing further evidence on the following on the other issues
in dispute between the parties:
“
On
the assumption (in favour of the applicant) that the contract between
the parties was amended from being a fixed-term contract
to a
permanent contract (it being noted that this remains disputed by the
Respondent); whether the notices of termination referred
to in
paragraphs 12A.2 and 12.A.3 of the amended Response (i.e. annexure
‘R14.A.’, ‘R14B’ read with R14C;
and/or R14D
lawfully terminated the contract; and/or whether the sending of
Annexure R14E (referred to in paragraph 12.A.4
of the amended
Response), together with the cheque which accompanied it, lawfully
terminated the contract. In view of the
answers above, whether
reinstatement or specific performance is a legally competent
contractual remedy which could be awarded to
the applicant”.
14.
The respondent also indicated that it would if the application for
the above relief was granted, thereafter apply on the same
papers,
duly amplified if need be, for orders declaring that the employment
contract between the parties was lawfully terminated;
directing the
respondent to comply with its offer in terms of Rule 22A;
dismissing the applicant’s claim in the main
proceedings and
directing the applicant to pay the respondent’s costs of the
main proceedings incurred after 15 October 2010.
15.
The rule 11 application was opposed by the applicant on two grounds.
The first is that attorney MacRobert who deposed
to the founding
affidavit did not have
locus standi
in
those proceedings. He is a legal representative of the
respondent and not a party to the proceedings. He could
therefore
not depose to an affidavit on behalf of the respondent.
He is not a councillor or an employee of the respondent and as a
result could not act as if he is a party to this process. The
second ground was that the application should fail since the
application was made on an assumption.
16.
The rule 11 application was dismissed primarily because it was based
on an assumption. Decisions are taken by courts not
on
assumptions but on facts. Those facts are sometimes common
cause or in dispute. It is then for the court to decide
what
the facts are. This Court may have granted the
application if the parties had agreed that the applicant’s
placement was duly made in terms of the realignment process and that
her fixed-term contract was varied to an indefinite contract
of
employment. Whilst it is trite that an application for an order
under High Court rule 33(4) can be made any time up to
the judgment,
the court must be satisfied that it would be convenient to do so.
I was not satisfied that it would have been
convenient to do so.
Even if I had granted the application, it would not have disposed of
the matter since evidence still
had to be led. It is also clear
from the notice of the rule 11 application that the respondent would
still have approached
this court for the relief referred to in
paragraph 14 above. Some issues that arose in the rule 11
application could have
been dealt with at a pre-trial meeting.
17.
It was for these reasons that I refused the rule 11 application.
18.
The respondent has made a formal payment into Court. It sought
an order that in the event the applicant refusing to accept
the
tender that she should not be entitled to the costs paid after it.
19.
I do not believe that this is a matter where a cost order should be
made in favour of any of the parties. Both parties
sought costs
against the other. The parties were at some stage miles apart
as far as the issues are concerned. Real
progress was made
after this Court had dismissed the rule 11 application. Common
sense prevailed and both parties were able
to crystallise the real
issues. Part of the issue in dispute was whether the
applicant’s fixed term contract was converted
into an
indefinite contract of employment. The respondent was not
prepared to admit this. It will be fair and just
not to award
any costs.
20.
In the circumstances I make the following order:
20.1
The application is dismissed.
20.2
There is no order as to costs.
____________________
FRANCIS
J
JUDGE
OF THE LABOUR COURT OF SOUTH AFRICA
FOR
THE APPLICANT
: A P
LAKA INSTRUCTED BY RAMUTLA AT LAW INC
FOR
RESPONDENT
: A
FREUND SC INSTRUCTED BY HEROLD GIE ATTORNEYS
DATE
OF HEARING
:
5 & 6 MAY 2020 AND 8 & 9 NOVEMBER 2010
DATE OF
JUDGMENT
: 19
NOVEMBER 2010