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[2011] ZALCJHB 91
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Private Security Industry Regulatory Authority v Commission for Conciliation Mediation and Arbitration and Others (J 2641/09) [2011] ZALCJHB 91; (2012) 33 ILJ 961 (LC) (2 November 2011)
REDDY AJ
IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT BRAAMFONTEIN
Reportable
CASE NO. J 2641/09
In
the matter between:
PRIVATE
SECURITY INDUSTRY
REGULATORY
AUTHORITY
…..............................................................................
Applicant
and
COMMISSION
FOR CONCILATION
MEDIATION
AND ARBITRATION
…...........................................................
First
Respondent
SETH
ABRAHAM MOGAPI
…...............................................................
Second
Respondent
JM
SIAVHE N.O
….....................................................................................
Third
Respondent
Date of Hearing: 11 August 2011
Date of Judgment: 02 November 2011
______________________________________________________________________
JUDGMENT
REDDY
AJ
[1] This is an application in terms of
section 158(1)(g) of the Labour Relations Act (the LRA)
1
to:
1. review and set aside the ruling of
the third respondent dated 16 October 2009 under case number GATW
9452-09 (“the ruling”);
2. substituting the ruling of the
third respondent with a ruling that the first respondent does not
have jurisdiction to conciliate
and arbitrate the dispute referred to
it under case number GATW 9452-09, in respect of the alleged unfair
dismissal of the second
respondent by the applicant;
3. staying the proceedings in the
first respondent in respect of the dispute, pending final
determination of the application to
review and set aside the ruling;
4. costs in the event of opposition.
[2] The application is opposed by the
second respondent (“the employee”).
Background
[3] The employee was employed as a
director of the applicant (“the employer”) with effect
from 1 April 2004.
[4] The employer regulates private
security services within the Republic of South Africa. It is an organ
of state and falls under
the authority of the Minister of Safety and
Security.
[5] In terms section 5 of the Private
Security Industry Regulation Act
2
[“the Act”], the employer
is governed and controlled by the Private Security Industry
Regulatory Authority Council (“the
PSIRA council”).
[6] During the interview of the
employee (and prior to his appointment to the post of director), he
disclosed to the interview panel
that he had a previous criminal
conviction with a suspended sentence. One of the members of the
interviewing panel was the chairperson
of the PSIRA council. The
employee further submitted to the chairperson a letter confirming
same.
[7] The employee was later informed by
the chairperson of the PSIRA council that he was recommended for the
post and he was offered
a letter of appointment which he signed on 8
March 2004. For all intents and purposes, the parties commenced the
employment relationship
on 1 April 2004.
[8] The letter of appointment provides
that the employee must successfully undergo security clearance checks
as determined by the
PSIRA council from time to time. The clause
reads as follows:
“
2.
Security
clearance check
Your
appointment and ongoing employment as Director is subject to you
successfully undergoing such security clearance checks conducted
by
the National Intelligence Agency as may be determined by the Council
from time to time. Your employment may be terminated with
immediate
effect should you not successfully undergo any security clearance
check.”
[9] Section 14 (4)(c) of the Act
provides that employees of the Authority “must successfully
undergo such security clearance
check conducted by the National
Intelligence Agency, as may be determined by the Council if this is
relevant in respect of their
work.”
[10] From 1 April 2004 to May 2008,
the employee performed the duties and functions of a director. On 27
May 2008, he was suspended
pending disciplinary action in respect of
various charges of misconduct. The disciplinary hearing was scheduled
to take place in
September 2008.
[11] In September 2008, the hearing
was postponed and the parties engaged in a retrenchment consultation
process. The reasons for
his selection for retrenchment were that the
employee had a criminal record and had failed to disclose that to the
employer and
that he had not successfully undergone a security
clearance check. In other words, an operational requirement of his
job had not
been fulfilled and he had to be retrenched. During the
course of the retrenchment consultations, the employee informed the
employer
that he had informed the PSIRA Council of his criminal
record during the interview. It seems that this was the first time
the employer
became aware of such disclosure. Nonetheless the
employer still required the employee to undergo a security clearance
check. The
employee agreed to do so and he completed the necessary
forms in September 2008 which were then submitted to the National
Intelligence
Agency (“the NIA”).
[12] A response from the NIA was not
forthcoming for many months and the employee remained on suspension.
He wished to return to
work (having been suspended for nearly a
year). The employer would not consent to his return to work until the
security clearance
had been issued. The employee referred an unfair
suspension dispute to the CCMA in April 2009.
[13] A series of correspondence was
entered into by the parties’ legal representatives regarding
the employment relationship.
The thrust of it was whether the
employee would remain on suspension pending the outcome of the
clearance check.
[14] In July 2009, the employer
terminated the relationship on the basis that the employee had not
successfully undergone a security
clearance check and that as a
result, the conditions of his appointment were not fulfilled. The
employer further recorded that
the appointment was a nullity and that
the employment relationship had lapsed as a matter of law. The letter
also recorded that
the disciplinary proceedings against the employee
were withdrawn.
[15] The employee referred an unfair
dismissal dispute to the CCMA in August 2009. Pursuant to that
referral the employer lodged
an application in the CCMA seeking a
ruling that the CCMA lacked jurisdiction to hear the dispute as the
contract, according to
the employer, had terminated by operation of
law and there was therefore no dismissal.
[16] On 16 October 2009, the
commissioner handed down a ruling dismissing the
point in limine
and confirming the CCMA’s jurisdiction to hear the unfair
dismissal dispute.
[17] In a letter dated 30 September
2009, the National Intelligence Agency (“the NIA) recorded that
the employee had failed
the security clearance as he had been
convicted of a Schedule 1 offence in 2003. This letter had not come
to the attention of the
parties until after the ruling was handed
down. The commissioner therefore had not had regard to this letter.
[18] The employer then launched these
review proceedings in respect of the ruling. The arbitration hearing
has in the interim been
adjourned
sine die
pending the outcome
of these proceedings.
The review application
[19] The employer submitted that by
ruling as he did, the commissioner failed to apply his mind to the
proceedings, misconceived
the nature of his functions and exceeded
his powers.
[20] The employer’s submissions
in respect of the CCMA’s lack of jurisdiction can be summarised
as follows:
The conditions for the employment
contract were never fulfilled as the employee did not successfully
undergo a security clearance
check;
As a result a valid contract of
employment did not exist and the employee was not an employee for
the purposes of the LRA, alternatively
if such a contract did come
into existence, the employee did not successfully undergo a security
clearance check and as a result
the contract of employment was
destroyed;
The employee was not dismissed rather
his services were terminated by operation of law and contract.
[21] In effect, the employer’s
argument is that for a dismissal to occur, the employer must have
terminated the contract.
This did not occur as the suspensive
condition had not been fulfilled and a valid contract did not result.
Alternatively, if the
condition was resolutive in nature and if a
valid contract was in place, the contract was destroyed when the
employee did not successfully
undergo the security clearance check.
[22] One of the grounds of attack on
the ruling is that the commissioner interpreted the condition as
resolutive in nature. The
commissioner had found that the employer
could not terminate the contract without the results of the security
clearance check being
known to the employer and until such time, the
contract was valid and enforceable.
[23] The employer submits that in so
concluding, the commissioner:
ignored the clear wording of the
employment contract that the employee’s appointment is subject
to his successfully undergoing
a security clearance check;
did not furnish any reasons why he
regarded the condition as resolutive and that there was no rational
connection between the
ruling and the evidence before him;
ignored the provisions of clauses
19.3 and 19.4 of the employee’s contract of employment which
recorded that the employee
was responsible to direct and oversee the
execution of policy, strategic management of the employer and
perform functions of
the director in terms of section 14(2) of the
Act.
[24] The employee submits that a valid
contract is in place as he twice submitted to clearance checks –
in 2005 and 2008.
[25] The security clearance check that
allegedly occurred in 2005 is in dispute. There are no copies of the
relevant forms and the
NIA has denied that it received such forms
from the employee.
[26] The employee further submits that
the employer also had obligations to perform in terms of the
suspensive condition in that
the employer had to subject the employee
to the security clearance check before confirming his appointment. By
failing to do so,
the employer has deliberately prevented the
fulfilment of the condition and is now seeking to avoid the
obligations of the ensuing
contract. The employer, according to the
employee, had fictionally fulfilled the condition and the contract is
validly in place.
[27] A further submission by the
employee was that as result of the parties entering into a
contractual relationship despite the
PSIRA Council’s knowledge
of his previous conviction, the employer had waived the enforcement
of the condition.
[28] The employee also submits that he
was entitled to be heard before the contract was terminated.
Analysis of the arguments
The employee’s appointment
was subject to his successfully undergoing a security clearance
check:
[29] Given the clear wording of clause
2 of the letter of appointment and section 14(4)(c) of the Act, it is
plain that the employee’s
appointment and continued employment
were subject to the fulfilment of a contractual condition that
emanated from statute. The
condition was therefore both contractual
and statutory.
[30] The security checks are relevant
to the employee’s work and it is imperative that as a very
senior employee, he is ethically
able to enforce policy, strategy and
decisions of the private security industry.
[31] If he does not successfully
undergo the clearance check, his employment
may
be terminated
by operation of law with immediate effect. The fact that the word
“may” is used in the contract makes
it plain that any
termination was not automatic but was an election at the instance of
the employer - which is what occurred.
[32] The terms of the security
clearance checks in line with the statutory and contractual
obligations are that:
they are at the instance of the PSIRA
Council;
they are to be performed by the NIA;
the NIA has to notify the employer of
the outcome of the check;
[33] The effect of the checks being at
the instance of the PSIRA Council is that the checks could not be
initiated at the instance
of the employer or the employee. This
applies whether the checks were to occur prior to the commencement of
the contract or during
the course of the contract. When the council
directs the employee to subject himself to a check he must do so –
it is not
an option available to the employee to refuse to subject
himself to the checks. For this reason, the employee’s
submission
that the employer (as opposed to the council) had an
obligation to subject the employee to the security clearance check
before
confirming his appointment is rejected. I therefore do not
find that the employer had fictionally fulfilled the condition and
that
as a result the contract was validly in place.
[34] There was no evidence before the
commissioner that the council required the employee prior to 2008 to
submit to a clearance
check.
[35] A major portion of the dispute
between the parties is whether the employee had successfully
undergone the check at the time
that the employment relationship was
terminated. What does the term “successfully undergo clearance
checks” entail?
[36] The employee submitted that the
fact that he submitted to a test when asked to do so in 2008 was
sufficient to satisfy the
condition. The employer submitted that the
discharge of the condition required more than submitting to the test,
he had to successfully
undergo it by achieving the necessary
clearance from the NIA to be employed.
[37] I agree with the employer’s
submission in this regard. The wording is clear: the employee had to
successfully undergo
the clearance test. It is not sufficient that he
merely submitted himself to the test. There must be a positive
finding by the
NIA that he has achieved the necessary security
clearance. This means that an outcome from the NIA is required. If
the outcome
is in favour of the employee then he has satisfied the
condition on him. If the outcome is against the employee then he has
not
successfully undergone the clearance test and the condition
remains unfulfilled. This means that the process for undergoing the
security clearance check commences with the employee being directed
by the Council to undergo the clearance check, the employee
actually
submitting himself to the test and the NIA providing an outcome of
the clearance check.
[38] It is only on being informed that
the employee had not been given the necessary clearance that the
employer could correctly
assert that the contract fell to be
terminated by operation of law. Prior to this outcome being known by
the employer, there was
no factual basis upon which the contract
could be terminated by operation of law.
[39] A further reason for this
conclusion is that the employer is bound to its argument that the
result of the clearance check is
required and not merely the
employee’s subjection to the check before the employee can say
that he has satisfied the condition.
Taken to its logical conclusion,
that argument similarly requires the employer to await the outcome of
the clearance check before
it could terminate the contract of
employment. It flies in the face of the employer to assert that the
contract falls to be terminated
by operation of law when the outcome
of the security clearance check that may have enabled a termination
by operation of law did
not exist.
[40] I therefore find that given that
the employee could not initiate any security clearance checks himself
that there was no factual
basis for the employer to assert in the
letter of termination that the employee had been “unwilling”
or “unable”
to obtain the security clearance since the
commencement of his employment in 2004. Further, that until the
employer had received
the outcome from the NIA the process of
undergoing the security clearance had not been completed and the
employer could not terminate
the employment relationship when it did.
[41] In this regard, I therefore find
that the commissioner arrived at a decision that a reasonable
commissioner would have arrived
at when he found that the employer
ought to have waited for the outcome of the clearance check from the
NIA before terminating
the contract with the employee.
[42] The employer further submits that
the commissioner in finding that the employer ought to have waited
for the outcome of the
security clearance, had found that a
reasonable period of time had not passed. The commissioner, the
employer submitted, had committed
reviewable errors by :
not giving any reasons for the
finding that a reasonable period of time had not passed;
ignoring the employee’s demand
of an unconditional reinstatement following his continued
suspension. The Minister could
not have allowed for further time to
pass as the employee would have recommenced his duties;
ignoring the passage of time since
the conclusion of the contract in April 2004.
[43] Points 1 and 3 above are without
merit for the following reasons: the employee was under no obligation
to initiate the security
clearance as this could only be done at the
instance of the PSIRA Council. The employer could only rely on the
reasonable passage
of time if there had been directives in the past
from the PSIRA Council that the employee submitted to clearance
checks and he
had not availed himself to the clearance checks. .
There was no evidence before the commissioner that the PSIRA Council
had requested
the employee to submit to a test before 2008. When
asked to do so in 2008 the employee complied.
[44] Point 2 is without merit for the
following reason: The employee had been suspended since May 2008 on
the basis that he was
to face disciplinary action in September 2008.
The employer postponed the disciplinary hearing and commenced a
retrenchment process
in September 2008. One of the reasons for his
being selected for retrenchment was that he had not undergone a
security clearance
check. He was asked to do so and he acquiesced.
The forms for the check were submitted in September 2008 to the NIA.
A considerable
period of time had lapsed since the forms were lodged
in September 2008 and the employee remained on suspension without the
NIA
issuing an outcome. The employee requested to return to his work
and the employer declined this request. The employee referred an
unfair suspension dispute to the CCMA in April 2009.
[45] The employee was not acting
unlawfully in wanting to resume his duties. An employment
relationship existed and he was entitled
to resume his duties until
the relationship was terminated. There was nothing that he could do
to fast track the process with the
NIA (having been previously
advised that requesting an outcome from the NIA was the PSIRA
Council’s function and not his)
and the retrenchment process
seeming to have stalled until such time as the NIA had made its
decision. He requested the outcome
of the security clearance check in
November 2008. The employer responded that same month that the
outcome was not available. On
5 June 2009, the employee wrote to the
employer’s attorneys informing them that he was aware that the
NIA had corresponded
with the employer and informed it that the NIA
would not proceed with the security clearance until the impasse with
the employee
had been resolved. The employee enquired from the
employer about this communication from the NIA. The employer replied
in a letter
dated 10 June 2009 that the outcome from the NIA was not
ready as yet and denied that the NIA was reluctant to continue with
the
investigation. The next letter from the employer was in July 2009
terminating the contract for the employee’s failure to satisfy
the security clearance condition.
[46] It is plain from the above
summary that the employer knew that the NIA had not decided the
clearance issue as at June 2009
and that there was no conceivable
reason for the employee to have remained on indefinite suspension
since May 2008. Rather than
conceding that the employee resumes his
duties pending the outcome of the clearance check, the employer
elected to terminate the
contract of employment so as not to allow
further time to pass.
[47] The position that would have
supported a termination by operation of law (that is the employee had
not been given a security
clearance by the NIA) was not present when
the termination occurred. The reason for the termination (as
submitted by the employer
in point 2 above) was to disallow the
employee from resuming his duties. This is distinct from a
termination for failing to obtain
a security clearance.
[48] The employer ought to have
enquired from the NIA prior to terminating the employee’s
services whether the clearance had
been approved or not. A letter
from the employer to the NIA was only sent on 18 September 2009, two
months after the termination
had occurred. This can be elicited from
the NIA’s letter in reply dated 18 September 2009.
[49] I find that the employment
relationship was not terminated by operation of law but was motivated
by the employer’s will
to prevent the employee from resuming
his duties
[50] These grounds of review as listed
in paragraph 42 above are also dismissed.
Suspensive or resolutive condition:
[51] The employer submitted that the
commissioner could not, on the evidence before him, determine the
condition to be resolutive
in nature.
[52] Simply put, the non-fulfilment of
conditions in a contract has the effect of either enabling or
destroying a contract. The
fulfilment of a suspensive condition
results in the contract becoming enforceable retrospectively as if
the contract was unconditional
from the outset. The fulfilment of a
resolutive condition means that the contract is destroyed and the
destruction of the contract
operates retrospectively as if the
contract never came into effect. (See Christie
The law of Contract
in South Africa
4ed (LexisNexis, Durban 2001 pages 159 to 169).
[53] The employer itself relied on the
condition either being suspensive or resolutive (see point 2 under
paragraph 20 above). The
submissions before the commissioner were
that either:
a valid contract did not exist
because the suspensive condition was not fulfilled by the employee
or
that if a valid contract did exist
then the resolutive condition was not fulfilled by the employee and
the contract was therefore
destroyed.
[54] This submission is also contained
in the Minister’s July 2009 letter to the employee terminating
the contract. The Minister
records in that letter:
“
Since
the date of your purported engagement, a reasonable period has
elapsed for the obtaining of the requisite clearance. In consequence
of the aforegoing, it must be concluded that the conditions of your
appointment, whether precedent or subsequent … have
not been
fulfilled, and as a result you must be treated as occupying no
position within PSIRA…”
[55] Suspensive and resolutive
conditions are also known as precedent and subsequent conditions
respectively.
[56] In relying on these facts and
submissions, the employer placed evidence before the commissioner
which allowed him to conclude
that the condition was resolutive.
There is therefore no merit in the grounds of review submitted by the
employer and recorded
under paragraphs 22 and 23 above.
[57] To my mind, whether the condition
was suspensive or resolutive did not have a bearing on the actual
termination of the contract.
Although there is a public interest in
the employee fulfilling the condition, as stated above the reason for
the termination was
not because the condition was not satisfied but
to avoid the employee being reinstated after the indefinite
suspension.
[58] I find that a condition existed
and that the non-fufilment of that condition could have resulted in a
termination by operation
of law – although that did not happen
in this matter. Whether the condition was resolutive or suspensive
has a bearing on
the parties’ rights subsequent to the
termination of the contract. In other words, one of the questions
that must be answered,
should a party seek redress as a result of a
termination by operation of law, is whether the contract was in
existence and whether
a claim for damages arises. Having found in
this matter that the termination did not occur for the failure to
satisfy the condition,
it is not necessary for me to decide whether
the condition was suspensive or resolutive.
[59] A consequence of this finding is
that the employee’s submission in respect of waiver is not
relevant.
[60] Also of no relevance is the
employer’s submission whether a party can enforce a contract
which is in contravention of
statutory requirements. The employer
relied on the cases of
City of Tshwane Metropolitan Municipality v
RPM Bricks (Pty) Ltd
2008 (3) SA 1
SCA and
Eastern Cape
Provincial Government and Others v Contractprops 25 (Pty) Ltd
2001
(4) SA 142
(SCA) in support of this submission. Those cases refer to
the illegality of contracts that fall foul of statutory obligations.
Having found that the employer terminated the contract to prevent the
employee from resuming his duties, as opposed to his falling
foul of
the statutory obligations on him, it is not necessary for me to
determine whether the contract was valid.
[61] The commissioner’s ruling
confirming the jurisdiction of the CCMA to hear unfair dismissal
dispute in the above circumstances
does not warrant interference by
this Court. For the sake of clarity, I find that the contract was not
terminated by operation
of law in terms of section 14 (4) (c) of the
Act. The employee was dismissed. The CCMA has jurisdiction to hear
the unfair dismissal
dispute.
[62] I am also mindful of the fact
that the arbitration proceedings in this matter have been adjourned
sine die
pending the outcome of this review application. This
Court has not lightly intervened in proceedings to dispose of issues
on a
piecemeal basis. To do so is to undermine the effective and
speedy resolution of disputes intended by the LRA. [See
Trustees
for the Time Being of the National Bioinformatics Network Trust v
Jacobson and Others
(2009) 30 ILJ 2513 (LC) and the cases cited
therein. See also Mol
efe v Dihlabeng Local Municipality
and
Others (2004) 25 ILJ 680 (O)].
[63] The employer would have been
entitled to review the entire award and included the grounds it
relies on in this application
at the end of the arbitration
proceedings.
[64] I accordingly find that the
commissioner did not commit any reviewable irregularity in arriving
at the conclusions that he
did. I also find that the commissioner’s
ruling is a ruling that a reasonable commissioner would have arrived
at.
[65] In the circumstances, I make the
following Order:
The review application is dismissed
with costs;
The arbitration hearing in respect of
the unfair dismissal dispute must be set down for hearing.
________________________
Reddy AJ
Appearances:
For the applicant: Mr Van Staden
instructed by Savage, Jooste and Adams Inc
For the second respondent: Mr
Nthambeleni instructed by Makhuparetsa Ramarumo Inc.
1
66
of 1995.
2
56
of 2001.
19