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[2012] ZALCJHB 44
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Mohlala v Department of Trade and Industry and Others (J 1148/12) [2012] ZALCJHB 44 (18 May 2012)
REPUBLIC OF SOUTH AFRICA
Reportable
THE LABOUR COURT OF SOUTH AFRICA,
IN JOHANNESBURG
JUDGMENT
Case
no: J 1148/12
In the matter between:
MAMODUPI MOHLALA
Applicant
and
DEPARTMENT OF TRADE AND INDUSTRY
First Respondent
MINISTER OF TRADE AND INDUSTRY
Second Respondent
THE OFFICE OF THE DIRECTOR GENERAL
Third Respondent
Heard
:
17 May 2012
Delivered
:
18 May 2012
Summary:
(Interpretation of contract – obligation to
confer on non –renewal of contract – determination of
term of appointment
of Commissioner under
Consumer Protection Act 88
of 2008
)
JUDGMENT
LAGRANGE, J
Introduction
This is an application that was brought on an urgent basis to obtain
interim relief effectively in the following terms, and pending
the
final determination of the relief:
a declaration that the decision communicated in writing on 3
February 2012 by the second respondent not to automatically renew
the applicant's contract of employment was invalid, unlawful and no
legal force and effect.
A declaration that the applicant was appointed for a period of five
years within the contemplation of the
Consumer Protection Act.
Interdicting
and restraining the minister and office of the
director general from proceeding with the process of appointing
another commissioner
pending the determination of final relief.
In the course of the hearing, it was agreed that the court should
determine the matter on a final basis and the question of urgency
fell away as an issue.
Background
For the sake of contextualising matters, a brief chronology of
events leading to the application without detailing every step
along
the way should suffice.
The applicant Ms M Mohlala, was previously appointed as head of
Department of the Department of Communications under a three-year
fixed term contract commencing on for September 2009 and due to
terminate on 3 September 2012. A dispute arose between the applicant
and her former employer which ended in a settlement agreement in
terms of which she was to be placed in another post outside
her
former department. Eventually she was seconded to occupy the
position of the National Consumer Commissioner, a position created
in terms of the Consumer Protection Act 88 of 2008 (‘the
CPA’).
A letter of appointment dated 16 November 2010 was issued by the
Minister. In terms of that letter, her appointment to the position
would be effective from 1 November 2010 and end on 25 August 2012.
On 29 November 2010, the applicant wrote to the Minister thanking
him for the confidence he showed in her abilities and provisionally
accepted the appointment letter. She stated that her acceptance
of
the appointment was:”.... Subject to the following:
Firstly
I would need to have sight of the proposed contract of employment
and/or terms and conditions of employment which I have
not to date
have sight of or received a copy thereof;
Secondly
in my discussions with Minister Baloyi I had indicated that
a
period of appointment longer than two years
,
would be
preferable
due to the following:
In
terms of my current contract with the Department of communication
and in terms of a Cabinet decision all heads of Department
have the
option of renewal for an additional two years on the expiry of the
fixed term contract;
Further
in terms of section 87 (1) (b) of the consumer protection act there
is reference to the Commissioners period being
up to a maximum
of five years;
I
therefore
request that the Minister must consider increasing the
period of office to either five years as per the statute or at
least
reinstate the option of renewal for a further two years after
expiration of the fixed term period
;
I
will await the Minister's decision with respect to the above
enumerated issue.
Thirdly
I note that my appointment letter makes no reference to the
appointment being in terms of the provisions of the
Consumer
Protection Act.
I
would appreciate it
if the appointment
could be specifically in terms of the relevant section of the
Consumer Protection Act.”
(sic)
(Emphasis added)
After some haggling over provisions of the contract, in particular
those governing renewal of the contract, the applicant finally
stated in an e-mail to the respondent’s representative dated
13 April 2011:
“
I have read through the contract of
employment I think that it is the best I will get. I am ready to
sign. Please forward the final
copy to me for signature."
The final contract was then concluded in July 2011. For the purposes
of this application it should be noted that the clause dealing
with
the duration of the contract states:
"4.1 This agreement shall commence on 1st November 2010 and
terminate on 3rd September 2012."
In passing it should be mentioned that some of the later
correspondence reference was made to the previous termination date
of 25 August 2012, but that appears to have been a common mistake
which is not material to the issues under consideration in this
application.
Another provision clarified a point to query previously by the
applicant letter mentioned above. Clause 3.1 of the contract reads:
"3.1 The Employer hereby appoints the Employee, who agrees to
accept the appointment as National Consumer Commissioner of NCC
in
terms of section 87 (1) (a) of the Act.
3.2 The Employee’s employment and conditions of service
shall be governed by the Act, and any other legislation applicable
to
the Employee.”
Also of particular importance in the context of the present dispute
is the following provision:
“
5. Renewal and extension of terms of
office
5.1 The Employer
shall in writing confer with
the Employee
at least
2 (two) calendar months prior to the expiry of the
term contemplated in clause 1(supra)
whether she proposes to
retain
the Employee in service for an extended period not
exceeding 5 (five) years 60 (sixty) calendar months),
or not
.
If
the Employee
is so informed of such intention to retain
her
in service for an extended term,
she shall in writing
inform
the Employer, within 1 (one) calendar months from the date
of that communication,
of her acceptance
or not such extended
employment.
5.2
In the event that agreement is reached
the Employee
shall enter into a further agreement on termination or completion of
the agreement, the continued service of the Employee
will be
recognised under the new agreement so as to avoid any break in
service and any accrued or pro rata entitlement will be
carried
forward into the new agreement.
5.3
Should the Employer not renew
the agreement period
beyond the initial period stated in clause 4, the Employee shall be
entitled to the pension and other benefits
directly linked to the
specific section of the applicable Legislation."
(
sic
)
(Emphasis added)
Lastly, under the general provisions of the contract in clause 11,
there are provisions governing the issue of changes to the
contract,
and its scope. The following subclauses are of interest in this
regard:
"11.3 This Agreement constitutes the whole Agreement between
the Parties as to the subject matter hereof and no Agreements,
representations or warranties between the Parties regarding the
subject matter hereof other than those set out herein are binding
on
the Parties.
11.4 No addition to or variation, consensual cancellation or
novation of this Agreement and no waiver of any rights arising from
this contract or its ritual termination shall be of any force and
effect and this reduced into writing and signed by both Parties
or
their duty authorised representatives."
On 3 February 2012, the Minister sent the applicant a letter by
e-mail, which stated:
“
Appointment as Commissioner to the
National Consumer Commission (NCC) for the period 1 November 2010 to
25 August 2012
The terms of your settlement agreement and your appointment
letters stipulate that your contract term is from 1 November 2010
until
25 August 2012. Given this context,
your contract will not
be automatically renewed
.
Rather, in the interests of good governance,
the DTI will
embark on an open recruitment process
to appoint next
commissioner.
You are of course welcome to apply for this post
as soon
as the recruitment process has been triggered
."
(Emphasis added)
The applicant's initial response to this letter was circumspect and
sought clarification about the provision in terms of her
letter of
appointment, settlement agreement or contract of employment, which
the Minister relied on when issuing his letter.
On 13 March 2012
through her attorney, the applicant placed on record that in terms
of section 87 (1) (a) and (b) of the CPA,
it was contemplated that
her appointment as a commissioner should be for a period of five
years and the purpose of this section
would be defeated if the
appointment was for a lesser period. She also claimed in the letter
that when she had raised the issue
it was agreed that after 25
August 2012 the agreement “
...will be extended for a period
not exceeding five years, and should there be no extension a
consultation process shall take
place and reasons be given for
non-appointment.
”
The letter further went on to state that the applicant was shocked
by the Minister’s letter because it was clearly a breach
of
the employment agreement and the purpose of section 87. She demanded
immediate withdrawal of the letter. No response from
the Ministry
was forthcoming. The next development was that an advertisement for
the position of Commissioner appeared in a newspaper
on 10 May 2012,
which mentioned 21 May 2012 as a closing date for submitting
applications for the five-year appointment. It was
the advertisement
of the post, which galvanised the applicant to launch these
proceedings. She stated in paragraph 8.2 of her
founding affidavit:
"It is clear to me that after 21 May 2012, respondents will
forge ahead with the filling of the post despite the unlawful action
on the part of the second respondent to not renew and advertise my
position. If another person is appointed whilst my cases pending
before court, a[ny] relief that I may obtain will become academic. As
demonstrated above I have had the least a clear right to
be consulted
upon before the position could be offered to others by way of an
advert. If the court does not intervene, this right
will be negated.”
Merits
As agreed between the parties there are essentially two issues to
determine. Firstly, was the appointment of the applicant as
a
Commissioner in terms of section 87 of the CPA necessarily an
appointment for a five-year term, by virtue of the provisions
of
that section. Secondly, did the minister's letter of 3 February 2012
satisfy the requirements of clause 5.1 of the applicant’s
contract of employment?
The effect of section 87 of the CPA
The relevant portions of section 87 of the CPA read:
"87 Appointment of Commissioner
(1) the Minister must appoint a person with suitable
qualifications and experience in economics, law, commerce, industry
or Public
affairs as Commissioner of the commission, who –
(a) is responsible for all matters pertaining to the functions of
the commission under this act; and
(b) holds office
for an agreed term not exceeding
five
years.
(2) before the Minister makes an appointment in terms of
subsection (1), the relevant Parliamentary Committee must be
consulted
with respect to such an appointment.
(3) a person may be reappointed as Commissioner on the expiry
of
an agreed term
of office.”
(Emphasis
added)
A plain reading of s 87(1) and (3), with reference to the emphasised
portions of those provisions demonstrates, in my view, a
clear
intention that the term of office of the National Commissioner was a
matter that had to be agreed upon, but could not exceed
a five-year
period. I see nothing in the provision that requires the minister to
appoint a Commissioner for a five-year term,
whatever the merits of
doing so might be. The applicant's appointment to the position in
terms of s 87(1)(b) for the period stipulated
in the contract is
perfectly compatible with the provision itself.
Even if there had been some other agreement reached about a longer
term of appointment, the applicant still has to overcome the
obstacle presented by clauses 11.3 and 11.4 of the contract. The
effect of those clauses is that unless and until any variation
of
the contract is reduced to writing and signed by both parties, their
rights and obligations on the issues dealt with in the
contract must
be determined with reference to that document alone.
The applicant was fully alive to the importance of the terms of the
contract, as demonstrated by her close scrutiny of it and
of her
letter of appointment. She would have known that, in the absence of
an amendment of the term of her engagement set out
in clause 4.1 of
the contract, there would have been no scope for contending a longer
term was intended.
On the papers before me, there is no basis for concluding that the
parties had agreed on a five-year term of appointment of the
applicant as the National Commissioner, nor do the provisions of the
CPA oblige the Minister to appoint the applicant for that
period in
spite of what is stated in her contract of employment.
The Minister's letter and clause 5.1 of the employment contract
The central issue that remains to be determined is whether the
minister's letter of 3 February 2012 was a clear breach of the
applicant's entitlements in terms of clause 5.1 of the contract and
if so, what remedy, if any, might be appropriate.
The first aspect which can be easily dispensed with is whether the
Minister was entitled to act in terms of clause 5.1 more than
two
months before the agreed termination date of the contract. It is
clear that the wording of the provision simply requires
that he
should act in terms of the provision ‘at least’ two
months before that date. Consequently, if he acted in
terms of the
provision on 3 February 2012 nothing would be untoward about that.
It also follows that, if he elected to act in
terms of clause 5.1 on
a date earlier than 3 July 2012, his action would have to satisfy
the requirements of that provision.
The respondent contended in
argument that the notice from the Minister ‘fell squarely
within the ambit of the clause’
which ‘required him to
confer
in writing
’.
The parties agreed that the interpretation of clause 5 and in
particular clause 5.1 was therefore critical to deciding whether
the
letter of 3 February 2012 complied with its provisions.
The respondents objected to the emphasis given by the applicant to
the meaning of the word ‘confer’, and her treatment
of
the word as being synonymous with the word ‘consult’. In
particular, the respondents argued that the particular
interpretation of the word ‘confer’ contended for by the
applicant was only set out in her answering affidavit. As
illustrated by paragraph 8.2 of the applicants founding affidavit
cited above, the applicant did assert a right to be consulted
in
terms of clause 5.1 at the outset, so even though she may have
placed more emphasis on this in her replying affidavit, the
matter
was squarely on the table for the respondents to consider when they
filed an answering affidavit. Moreover, the respondents
directly
address this in the Minister's answering affidavit at paragraph 43,
where he deals with the contention in the applicant's
letter of 13
March 2012 in which she argued that if there was no extension a
consultation process should take place and reasons
should be given
for the non-appointment. Addressing this contention, the Minister
says:
“
In respect of this contention, the
applicant cannot be entitled to an order which she seeks. At best,
she could be entitled to a
relief intending to address the
consultation process and the reasons for non-appointment. This relief
she does not seek. Legal
argument will be addressed in this regard at
the hearing of this matter.”
Further on in the answering affidavit and in direct reply to
paragraph 8 to 12 of the applicants founding affidavit, the
respondents
reiterate that the allegations in those paragraphs
constitute matters for legal argument, which were disputed and would
be addressed
at the hearing. I am satisfied on the face of the
pleadings that the issue of interpretation of the provisions of
clause 5 and
in particular, what it means to ‘confer in
writing’, were pertinently raised as part of the applicant’s
case.
In any event, it is impossible to interpret clause 5.1 without
considering the meaning of the phrase.
Turning to the interpretation of clause 5 itself, the respondents
correctly pointed out that the dictionary definition of a word
is
not the be-all and end-all of legal interpretation principles, and
that the context in which a term is used is also of cardinal
importance.
1
However, that does not avoid the need to attribute meaning to the
actual words used by the parties in interpreting the provisions
of
clause 5. That process is obviously inherent in applying the golden
rule of interpretation, which the respondents cited namely
that, the
language of the document must be given its grammatical and ordinary
meaning unless this would result in some absurdity,
or some
repugnancy or inconsistency with the rest of the document.
2
Looked at as a whole, Clause 5 deals with what might transpire on
the termination of the original term of appointment, which
is set
out in clause 4.1 of the contract. It addresses two scenarios:
firstly it deals with the possibility of an extension of
the
contract for a period not exceeding five years and secondly it
addresses the other alternative that the termination date
in clause
4.1 would indeed be the end of the appointment. The sequence
envisaged in the provisions if the Minister proposed to
retain the
applicant would be that this intention would be conveyed to the
applicant and the applicant would be obliged to inform
the Minister
within a month whether she accepted the proposal. If agreement is
reached by the parties, then a new agreement would
be drawn up in
terms of clause 5.2 and the employee’s service would be deemed
continuous. Clause 5.3 spells out the benefits
accruing to the
employee if the employer does not renew the agreement.
There is no great difficulty in understanding the intentions of
clauses 5.2 and 5.3 which clearly deal with the consequences
of
following the two alternative choices. Clearly an agreement to
extend the contract must be concluded, whereas no agreement
is
necessary if the contract is not extended, since the parties have
already agreed on the termination date in the original contract.
The
respondents’ lead counsel, Mr Motau, contended that the
reference to conferring in writing in clause 5.1 could only
have
been intended to address the situation where a renewal was
contemplated by the Minister. It had no application to the situation
where the Minister had no intention of extending the contract. This
argument is consistent with the statement by the Minister
in the
answering affidavit that clause 5.1 of the contract of employment
"
...is intended to avoid applicant being prejudiced by way
of being given a period of notice, which is less than two (2)
months
”.
In essence, what the respondents are arguing is that if the Minister
does not intend to renew the contract or extend it after
the agreed
termination date, he merely needed to give the applicant notice that
there would be no renewal of the contract. Indeed
this is the
manifest purpose of his letter of 3 February 2012. The Minister
clearly believed this was all he needed to do, and
that he was
giving the applicant more generous notice that the contract would
not be renewed, than she was entitled to in terms
of clause 5.1.
Was this sufficient? The letter was not cast in the form of a
proposal but was a notification of a decision, albeit with some
reasoning for the decision being provided. It was not cast in the
form of advising the applicant of the Minister’s proposed
non-renewal of the contract. I do not think that the language of
clause 5.1 is commensurate with an interpretation that the
communication from the Minister was intended to describe
communication of a decision. The use of words like ‘intention’
and ‘proposal’ in the clause are more compatible with a
communication about what the Minister was minded to do, not
what he
had already decided to do. That is the context in which the
obligation to confer in writing should be understood. Whatever
else
the word ‘confer’ might mean it does not refer to a
unilateral act but some form of communication and engagement
between
two or more parties. The Minister’s notice did not invite
engagement or a two way communication.
In the light of the above, I am of the view that the Minister
correctly conceded in the answering affidavit that the applicant
might be entitled to the relief to address the consultation process
and the reasons for non-appointment. The respondents contended
however that this was not part of the relief sought. I agree it was
not expressly pleaded, but I think it is reasonably incidental
to
the prayer that the Minister's decision not to renew the contract,
as communicated in his letter should be deemed invalid,
because that
prayer is intrinsically linked with the applicant’s complaint
that the letter was in breach of clause 5.1
of her contract. In any
event, I believe such relief is well within the ambit of alternative
appropriate relief the court might
order in such a case.
Having said this, a word of caution is necessary. It is clear in
terms of the existing contract that the Minister is not bound
to
renew or extend the applicant’s contract. What he must do
however, by 3 July 2012, is to convey a proposal to the applicant
in
writing, indicating his reasons for the proposal. The applicant
should have a reasonable opportunity to digest and consider
the
Minister’s communication and to respond to his proposal and
reasons. The obligation to confer does not imply any obligation
to
reach an agreement, nor does it appear to impose any requirement
that the parties should try and reach agreement. In this
regard it
should be mentioned that, for example, the legislature felt it
necessary to spell out expressly in section 189(2) of
the LRA that
consultation in the context of contemplated retrenchments entailed
an obligation to do so in a consensus seeking
process with a view to
reaching agreement. Even an obligation to consult was felt to be
insufficient to bear the meaning that
it entailed a consensus
seeking process, on the strength of the word ‘consult’
alone.
Conclusion
in the circumstances, I am satisfied that the applicant has failed
to demonstrate that her appointment as National Commissioner
was a
five-year appointment, but that before the Minister decided that she
was not going to extend her contract beyond 3 September
2012, he
should have notified her of his intentions and reasons, and given
her an opportunity to respond thereto. Consequently
he ought not to
have embarked on the further step of advertising her position until
this process had taken place.
On the question of costs, since both parties have been partially
successful, it would seem fair in the circumstances that they
should
each bear their own costs.
Order
Accordingly, I find that:
The second respondent’s decision communicated to the
applicant on 3 February 2012 that he was not going to renew or
extend her contract was in breach of his obligation to confer with
her in writing in terms of clause 5.1 of her contract.
The applicant's appointment as a commissioner in terms of the
Consumer Protection Act 88 of 2008
is for a term which ends on 3
September 2012 and does not extend beyond that.
Consequently it is ordered that:
the second respondent must comply with the provisions of clause 5.1
of the applicants contract of employment by notifying her
of his
proposed intentions regarding the renewal, extension or nonrenewal
of her contract and giving his reasons for his proposal
and
permitting the applicant to respond thereto in writing within 10
days of receipt of his communication, after which he may
make his
decision on the renewal or nonrenewal of her appointment.
Pending the decision of the second respondent at the conclusion of
the process described above, the respondents must suspend
the
recruitment process currently under way.
each party must pay its own costs
_______________________
R LAGRANGE, J
Judge of the Labour Court of South Africa
REPRESENTATION:
For the Applicant: G Moshoana of Mohlaba & Moshoana Attorneys
For the Respondents: T Motau, SC assisted by Ms K. Pillay and Mr M.
Manala and instructed by the State Attorney
1
See
Lombaard v Dropprop CC and Others
2009 (6) SA (N)
at [24] The Shorter Oxford English Dictionary describes ‘confer’
as an intransitive verb meaning: “converse, hold
conference,
take counsel”.
2
Coopers
& Lybrand and others v Bryant
[1995] ZASCA 64
;
1995 (3) SA 761
(A)
at 767