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[2011] ZALCJHB 162
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Minister of Land Affairs v General Public Service Sectoral Bargaining Council and Others (JR699/09) [2011] ZALCJHB 162 (8 December 2011)
Not reportable
REPUBLIC OF SOUTH AFRICA
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
case no: JR699/09
In the matter between:
MINISTER OF LAND AFFAIRS
........................................................................
First
Applicant
and
THE GENERAL PUBLIC SERVICE SECTORAL
BARGAINING COUNCIL
..............................................................................
First
Respondent
COMMISSIONER Z MDLADLA N.O
......................................................
Second
Respondent
PUBLIC SERVANTS ASSOCIATION OF SA
OBO A C MANDOLO
.......................................................................................
Third
Applicant
Heard
:
10 November 2011
Delivered
:
8 December 2011
Summary:
Arbitration award reviewed, set aside and substituted
with an order that the third respondent was not dismissed from the
employment
of the applicant
. No reasonable
expectation to have a fixed term contract renewed on the same or
similar terms.
judgment
SAVAGE AJ
Introduction
This is an application to review and set aside an arbitration award
made by the second respondent (“the commissioner”)
on 12
January 2009 in which the dismissal of the third respondent (“Ms
Mandolo”) was found to be both procedurally
and substantively
unfair following the failure by the applicant to renew her fixed
term contract. The applicant was ordered to
reinstate the applicant
in the position that she held prior to termination.
The facts
Ms Mandolo was employed by the applicant on a fixed term contract in
2003, which contract was renewed first until 2005 and then
until 31
March 2008. The contract of employment provided that it would not be
extended and that it would ‘finally terminate
on 31 March
2008’ without it being necessary to notify the employee of the
termination of the agreement. The agreement
further provided that Ms
Mandolo would have ‘no right to be converted to a permanent
position/status’ and that she
agreed that ‘no legitimate
expectation exists in this regard’. In addition, it was agreed
‘that the Employee
or his/her post shall not be part of any
conversion process’.
An unfair dismissal dispute was referred to the first respondent by
Ms Mandolo after expiry of her fixed term contract on the
basis that
she held a legitimate expectation that her contract would be
converted into a permanent employment contract. In the
alternative,
Ms Mandolo alleged that she had a reasonable expectation that her
contract be extended.
Most of Ms Mandolo’s fellow employees who were appointed on
fixed term contracts were appointed into permanent positions
with
the applicant. Ms Mandolo completed the requisite application for
conversion from contract-based to permanent employment
but was not
appointed permanently in that she was issued with a written warning
by the Regional Land Claims Commissioner on 28
March 208 for the
misuse of government transport during September 2007. Ms Mandolo was
informed that this was the reason that
her fixed term employment was
not converted into permanent employment with the applicant. Having
been advised of this fact, the
applicant was provided with a letter
by Ms Stenie Anderson, of the applicant’s human resources
directorate, confirming
her conversion from fixed term to permanent
employment. The said letter was withdrawn on the instruction of the
Regional Land
Claims Commissioner the same day by Ms Anderson on the
basis that the human resource office had not been authorised to
issue
the letter.
Arbitration award
The commissioner found that the applicant had created a legitimate
expectation that Ms Mandolo’s contract would be extended
or
converted into a permanent position given:
The delay in advising the employee of the outcome of the
disciplinary investigation;
That Ms Mandolo was advised, when her colleagues received letters
confirming the conversion of their positions into permanent
employment, that her letter had been sent back for correction;
That the Regional Land Claims Commissioner advised Ms Mandolo that
her written warning would be valid for six months and that
she was
entitled to appeal within five working days;
That the conversion committee only took the decision on 25 April
2008 when Ms Mandolo’s contract had already expired;
and
The human resources office had issued Ms Mandolo with the letter of
conversion and there was no evidence that Ms Mandolo had
misled Ms
Anderson of the human resources office.
Grounds of review
The applicant seeks that the arbitration award be reviewed and set
aside in that the expectation of permanent employment does
not
constitute a dismissal in terms of section 186(2)(b) of the LRA.
Furthermore, the evidence presented did not warrant an inference
that Ms Mandolo held an expectation of renewal of her fixed term
contract or its conversion into permanent employment.
Legal principles
Section 186 of the LRA provides that:
‘
(1)
Dismissal means that …(b) An employee reasonably expected the
employer to renew a fixed term contract of employment on
the same or
similar terms but the employer offered to renew it on less favourable
terms, or did not renew it.’
Generally, a reasonable expectation may arise as a result of a prior
promise, either express or implied, by the employer to renew
the
fixed term contract or as a result of prior practice, for example,
where the employer has habitually renewed the contract.
The onus is
on the employee to prove that a reasonable expectation of renewal
existed.
1
The test for establishing a reasonable expectation is an objective
one. The court will enquire whether a reasonable employee
in the
circumstances prevailing at the time would have expected the
employer to renew his or her fixed term contract on the same
or
similar terms.
2
A number of factors have been considered by the courts in assessing
whether or not a reasonable expectation exists. These include:
‘
...
the evaluation of the surrounding circumstances, the significance or
otherwise of the contractual stipulation, agreements, undertakings
by
the employer, or practice or custom in regard to renewal or
re-employment, the availability of the post, the purpose of or reason
for concluding the fixed term contract, inconsistent conduct, failure
to give reasonable notice, and nature of employer’s
business.’
3
The fact that the contract contains a clause permitting
renegotiation does not in itself create a reasonable expectation.
4
Likewise, a clause stating that the contract will not be subject to
renewal does not preclude a challenge that a reasonable expectation
of renewal was created. However, the Labour Appeal Court has held
that when a contract specifically states that it is for a fixed
period and that there will be no expectation of renewal, a party
claiming a reasonable expectation must advance more than 'flimsy
evidence'.
5
In Cremark
A Division of Triple P-Chemical Ventures (Pty) Ltd v
SA Chemical Workers Union and Others,
6
the surrounding circumstances will determine whether termination of
employment at the end of a contact period is fair. In
Bronn and
Others v University of Cape Town,
7
employees were employed on fixed term contracts that were renewed as
long as funding was available. The CCMA did not take issue
with the
fact that UCT would continue to renew the contracts only for as long
as funding was available.
The circumstances in which repeated renewal of a fixed term contract
will give rise to a reasonable expectation of further renewal
will
depend on the facts of the case. In
King Sabata Dalindyebo
Municipality v CCMA and Others,
8
it was held that as the employer had previously renewed the
employees’ contracts without demur and as the services the
employees had performed were still regularly required, the employees
had had a reasonable expectation of renewal of their contract.
In
SACTWU and
Another v Cadema Industries (Pty) Ltd,
9
repeated renewals over a long period of
relatively short fixed-term contracts gave rise to a reasonable
expectation. This was
reinforced by the fact that the employee had
been permitted to work beyond the termination date of the final
contract.
In the circumstances, in order for a reasonable expectation of
renewal of the contract to arise:
the employee must advance more than ‘flimsy evidence’
that objectively a reasonable expectation of renewal existed;
the surrounding circumstances must support the contention that such
a reasonable expectation existed. This may require a consideration
of the nature of the employer’s business, the purpose for
which the fixed term contract has been concluded, whether the
post
is available or not, the conduct of the employer in the form of
agreements or undertakings, and past practice or custom;
and
where consecutive fixed term contracts have been concluded,
reasonable notice may, according to the circumstances, be required
of the expiry of the contract in order not to give rise to an
expectation of renewal.
Where a reasonable expectation of renewal is found to exist, the
failure to renew the fixed term contract will constitute an
unfair
dismissal in terms of section 186(1)(b) of the LRA. However, where
it can be shown that objectively a reasonable employee
in the
circumstances prevailing at the time could not reasonably have
expected the employer to renew his or her fixed term contract
on the
same or similar terms, no unfair dismissal can result.
10
Evaluation
On the basis of the decision of the Labour Appeal Court in
Rugby
Players Association and Others v SA Rugby (Pty) Ltd and Others,
11
Ms Mandolo was required to advance
more
than ‘flimsy evidence’ to support an argument that a
reasonable expectation of renewal existed given the fixed
term
period recorded in a contract and the existence of the contractual
provision recording that there is to be no expectation
of renewal.
The evidence before the commissioner was that:
Ms Mandolo had applied to have her position converted into
permanent employment;
When other colleagues were sent an email requesting them to collect
letters, Ms Mandolo did not receive such an email;
She queried this with Ms Anderson of human resources and was told
to be patient as there was an error with her new notch and
that the
letter would ‘be ready by the end of the week’;
12
However, on 28 March 2008 Ms Mandolo met the Regional Land Claims
Commissioner and was given a written warning in exceeding
the
period for which a vehicle had been rented. She was told that by
the Commissioner that ‘she did not consider her
for permanent
employment’;
Ms Mandolo’s supervisor informed the Regional Land Claims
Commissioner that Ms Mandolo had a letter of permanent employment.
The Regional Commissioner instructed Ms Anderson to withdraw this
letter;
In a letter dated 28 March 2008 from Ms Anderson to Ms Mandolo it
was stated:
‘
The
Department informed you in a letter dated 26 March 2008 about your
conversion from contract employment to permanent employment.
You came
to the Directorate: Human Resource Management on 28 March 2008 for
advice. You informed the Human Resources Practitioner
that your
Manager informed you that you will not be converted because you are
dismissed. Your Manager then handed a written warning
letter to you.
You were subsequently informed by the Human Resources Practitioner
that a warning letter cannot be used as a letter
of dismissal and a
copy of the conversion letter was handed to you on 28 March 2008.
It then came to the
Directorate’s notice that you misled the Human Resources
Practitioner by withholding a true reflection
of what had transpired
between you and your Manager. As a result of the fact that you
withheld serious information as indicated
above, it is with regret
that the Department has to inform you that it has decided to withdraw
your letter of permanent appointment
that was given to you by the
Human Resources Practitioner on 28 March 2008 with immediate effect.
The Human Resources does not
have the jurisdiction or authority to
appoint staff in the Commissioner.’
The commissioner concluded that ‘any reasonable person could
have had a legitimate expectation that his/her contract would
be
either renewed or converted’ for reasons including:
The delay in advising the employee of the outcome of the
disciplinary investigation;
That Ms Mandolo was advised, when her colleagues received letters
confirming the conversion of their positions into permanent
employment, that her letter had been sent back for correction;
That the Regional Land Claims Commissioner advised Ms Mandolo that
her written warning would be valid for six months and that
she was
entitled to appeal within five working days;
That the conversion committee only took the decision on 25 April
2008 when Ms Mandolo’s contract had already expired;
The human resources office had issued Ms Mandolo with the letter of
conversion and there was no evidence that Ms Mandolo had
misled Ms
Anderson of the human resources office.
This Court, with reference to the grounds of review, is entitled to
set aside an arbitration award if the commissioner’s
decision
falls outside of a band of decisions to which a reasonable person
could come on the available evidence.
13
It is accordingly not the correctness of the commissioner’s
decision which is relevant but whether the result of the arbitration
proceedings is reasonable.
In
Bestel v Astral Operations Ltd and Others,
14
Davis JA emphasised:
‘…
that
the ultimate principle upon which a review is based is justification
for the decision as opposed to it being considered to
be correct by
the reviewing court; that is whatever this Court might consider to be
a better decision is irrelevant to review proceedings
as opposed to
an appeal. Thus, great care must be taken to ensure that this
distinction, however difficult it is to always maintain,
is
respected.’
The test in
Sidumo
for determining whether a decision or
arbitration award of a CCMA commissioner is reasonable is a
stringent one that will ensure
that awards are not lightly
interfered with.
15
It follows therefore that it is only an award that is unsupported by
any evidence, is based on speculation, is disconnected from
the
evidence or is made without appropriate consideration of evidence
that may be considered unreasonable.
16
It is clear that the commissioner, in concluding that ‘any
reasonable person could have had a legitimate expectation that
his/her contract would be either renewed or converted’, failed
to apply her mind to the provisions of section 186 in two
respects.
In the first instance, the requirement is not one that an employee
held a legitimate expectation but rather a reasonable
expectation.
In the second instance, the employee is required to show that he or
she reasonably expected the employer to renew
a fixed term contract
on the same or similar terms. Not much appears to turn on the
commissioner’s error in considering
a legitimate as opposed to
a reasonable expectation and it is apparent from the arbitration
award that the commissioner’s
reasoning does not consider the
distinction and that in the circumstances, it is not material.
However, what is apparent is that the commissioner did not apply her
mind to the issue of expectation of renewal of the contract
on the
same or similar terms. There was a total absence of any evidence
before the commissioner which indicated that Ms Mandolo
at any time
held any expectation at all that her fixed term contract stood to be
renewed on the same or similar terms for any
further period. Rather,
the evidence before the commissioner clearly indicated that Ms
Mandolo had applied for a conversion into
permanent employment and
expected to obtain such employment. The conclusion of the
commissioner therefore, that ‘any reasonable
person could have
had a legitimate expectation that his/her contract would be either
renewed or converted’ is unsupported
by any evidence and is
disconnected from the evidence that was before the commissioner, is
based on speculation and is made without
appropriate consideration
of evidence before her. There is simply no basis on which to support
a finding, given the evidence
before the commissioner, that Ms
Mandolo held an expectation that her fixed term contract was to be
renewed on the same or similar
terms. Her expectation, on her own
evidence, was directly to the contrary.
It follows therefore that the arbitration award falls outside of a
band of decisions to which a reasonable person could come
on the
available evidence and therefore stands to be reviewed and set
aside.
The applicant does not seek this Court to refer the matter back to
the first respondent for a hearing de novo nor does he seek
to
substitute the award. The Court is in terms of the further relief
sought by the applicant entitled to consider whether or
not to
substitute the award or refer the matter back to the CCMA for a
hearing
de novo.
In doing so, considerations of fairness are
paramount bearing in mind the record of evidence available and
whether there would
be a purpose in remitting the matter back to the
CCMA for re-hearing.
17
The LAC and this Court have held that a
decision should be substituted or corrected rather than be referred
back to the CCMA for
a hearing de novo where:
the result is a foregone conclusion and it would merely be a waste
of time to order the CCMA to reconsider the matter;
where a further delay would cause unjustified prejudice to the
parties;
where the CCMA has exhibited such bias or incompetence that it
would be unfair to require the applicant to submit to the same
jurisdiction again; or
where the court is in as good a position as the CCMA to make the
decision itself.
18
In this matter, I am satisfied that the factors referred to above
under subparagraphs 25.1, 25.2 and 25.4 are present
.
It is therefore not appropriate that the matter be remitted back to
the first respondent for re-hearing.
Costs
With regard to the issue of costs, in terms of section 162 of the
LRA, this Court holds a discretion as to whether or not to
award
costs taking into account considerations of law and fairness. In
exercising this discretion,
ordinarily, it is
the party that is wholly successful in an action or application that
is awarded costs.
‘…
In other
words, the judicial officer may not, as he or she pleases, deprive a
successful party of its costs. He or she must
do so for reasons which
he or she must set out or state. It similarly follows that, although
ordinarily a successful party will
be awarded its costs, it does not
follow that that will always be the case.’
19
I can find there to exist no reason as to why costs, given
considerations of law and fairness, should not follow the result.
Order
The arbitration award made by the second respondent under the
auspices of the first respondent under case number PSGA 87-08/09
dated 12 January 2009 is reviewed and set aside.
The third respondent, Ms A C Mandolo, was not dismissed from her
employment with the applicant.
The third respondent is to pay the applicant’s costs.
_______________________
K M Savage
ACTING JUDGE OF THE LABOUR COURT
APPEARANCES
APPLICANT: Mr P Pio
Instructed by State Attorney, Pretoria
THIRD RESPONDENT: Mr F van der Merwe
PSA
1
Ferrant
v Key Delta
(1993) 14
ILJ
464 (IC); and
SA
Rugby Players’ Association and Others v SA Rugby (Pty) Ltd and
Others
[2008] ZALAC 3
;
[2008] 9 BLLR 845
(LAC) at para
44.
2
SA
Rugby Players’ Association and Others v SA Rugby (Pty) Ltd and
Others
[2008] ZALAC 3
;
[2008] 9 BLLR 845
(LAC).
3
Dierks
v University of South Africa
(
1999) 20
ILJ
1227 at 1246.
4
SA
Bank of Athens Ltd v Cellier NO and Others
(2009)
30
ILJ
197
(LC).
5
Rugby
Players’ Association and Others v SA Rugby (Pty) Ltd and
Others
above n2 at para 46.
6
(1994)
15 ILJ 289 (LAC).
7
(1999)
20 ILJ 951 (CCMA).
8
[2005]
7 BLLR 696
(LC) at 702A-C.
9
[2008] ZALC 5
;
[2008]
8 BLLR 790
(LC) at para 23.
10
Zamisa
and Another v Sans Fibres (Pty) Ltd
(1999)
20 ILJ 726 (CCMA).
11
Above
n 2 especially para 46.
12
Arbitration
award para 4.1
13
See
Sidumo and Another v Rustenburg Platinum Mines Ltd and Others)
[2007] 12
BLLR
1097 (CC)
14
[2011]
2 BLLR 129
(LAC) at para 18.
15
Above
n13 at para 100.
16
See
A Myburgh ‘Sidumo v Rusplats: How the Courts deal with it’
(2009) 30 ILJ 1
17
See
Gauteng Gambling Board v Silverstar
Development Ltd and Others
2005 (4) SA 67
(SCA) at para
40.
18
Southern
Sun Hotel Interests (Pty) Ltd v CCMA and Others
[2009]
11
BLLR
1128
(LC) at para 33
19
The
Trustees of the Time Being of the Biowatch Trust v Registrar
Genetic Resources and Others
(Open Democracy Advice
Centre as Amicus Curiae) (A831/2005)
[2008] ZAGPHC 135
(13 May 2008)
2008 JDR 0442 (T)
at para 31