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[2014] ZALCJHB 147
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Capricorn District Municipality v Mostuki (J2764/2013) [2014] ZALCJHB 147 (5 May 2014)
REPUBLIC
OF SOUTH AFRICA
THE LABOUR COURT OF
SOUTH AFRICA,
IN JOHANNESBURG
JUDGMENT
OF
INTEREST TO OTHER JUDGES
CASE
NO: J2764/2013
In
the matter between:
CAPRICORN DISTRICT
MUNICIPALITY
Applicant
AND
MOATLHODI
ISAAC MOTSUKI
Respondent
Heard:
24 April 2014
Delivered:
05 May 2014
Summary:
(Application for rectification – fixed term contract –
sufficient that the applicant pleads that the document
to be
rectified is incorrect because of an error.)
JUDGMENT
LAGRANGE,
J
[1]
This is an application to rectify a
contract concluded between the Capricorn District Municipality (the
applicant) and Mr M I Motsuki
(the respondent) employed as an
Executive Manager: Community Services in Polokwane. The essential
dispute between the parties is
whether a document signed in April
2012 annexed as Annexure “NDM1” to the founding affidavit
correctly reflects that
the respondent's fixed term contract is only
due to terminate on 1 May 2015, rather than 15 May 2014, or 15 June
2014. Ancillary
to this dispute is a dispute over the respondent's
current annual performance contract and when it expires. It is common
cause
that the respondent only commenced work in his new post on 15
June 2009.
[2]
It must be said at the outset that the
notice of motion and founding affidavit set out different purported
start and end dates from
each other, which did not make the
application a model of clarity. However, I am satisfied that the
essential dispute between the
parties concerns whether or not they
entered into a five year fixed term contract commencing on 15 June
2009, or a term just short
of six years.
[3]
The respondent insists that there is no
error in the document, which correctly reflects his contract
termination date as 1 May 2015.
Effectively, the applicant is
contending that the contract was for a five year period whereas the
respondent contends for a fixed
term contract of nearly six years. It
is common cause that the contract signed in April 2012 was intended
to replicate the original
contract concluded between the parties in
2009 which the applicant said had been mislaid. The applicant
contends however that the
stipulated end date of 1 May 2015 was
inserted in error.
[4]
The respondent tendered another document
identical in all respects to the document signed in April 2012 which
he claims is the original
contract sent to him by the applicant under
cover of an e-mail in November 2009, which he states he was
instructed to print, sign
and return to the applicant. The signed
copy attached to his answering affidavit only reflects his signature
and is undated.
[5]
Both documents contain two conflicting
clauses. The first clause which is identical in both documents reads:
"2.1
The Employer hereby employs the Employee on a
five year fixed term
contract
and Employee hereby accepts employment as the manager
community services, subject to the terms and conditions contained in
this
contract and subject to the
Local Government: Municipal Systems
Act, 2000
and the Municipal Finance Act, 2003. The main duties that
the Employee will be expected to perform are: ..."
(Emphasis
added)
The second clause which
is also identical in both contracts save for the last portion (which
is underlined in the version stated
below) reads:
"2.2 The employment
of the Employee with the Employer commences on
01 June 2009
regardless of the date of signing this contract and terminates on
01 May 2015
.
It is specifically recorded that this
agreement is the replacement of an earlier agreement that has been
mislaid and could not be
found after a diligent search
."
The underlined portion of
the clause only appeared in the document signed by both parties in
April 2012. The emphasised dates were
highlighted in bold in both
documents.
[6]
The respondent claims that when he signed
the version of the contract that was e-mailed to him in November 2009
he focused on the
dates emphasised in clause 2.2 and did not notice
clause 2.1. He further stated:
"As I was already
working and receiving a salary from the applicant, I quickly glanced
at my remuneration package and the performance
aspects and then
signed the last page thereof in November 2009, the exact date which I
cannot recall." (sic)
[7]
The applicant had also sought declaratory
relief in respect of the annual performance agreement concluded
between the parties for
the financial year 1 July 2013 to 30 June
2014. Originally, it sought to have the termination of that agreement
determined as 15
May 2014, which in itself made little sense.
Subsequently, in an amended notice of motion, it asked that the
termination date to
be determined as 15 June 2014. The annual
performance agreements are also relevant to the dispute about the
length of the respondent's
contract. Two copies of performance
agreements for the financial year as 1 July 2011 to 30 June 2012 and
1 July 2013 to 30 June
2014 were attached to the applicant's founding
affidavit. The applicant's Municipal Manager who deposed to the
affidavit claimed
he was unable to locate copies of previous
performance agreements. The respondent does not dispute the validity
of these documents
nor does he deny the conclusion of prior
performance agreements. The first provision of both performance
agreements is identical
and reads:
"1.1
The Municipality has, in terms of section 57 (1) (a) of the Local
Government Municipal Systems
act, No. 32 of 2000 (' the Systems Act')
entered into a contract of employment with the Manager
for a
period of five years
,
commencing on 15 June 2009
."
[8]
In the 2011/2012 performance agreement, the
date 15 June 2009 appears in handwritten script. Once again, the
respondent disclaims
any specific knowledge of this provision saying
that he never read the performance agreements properly in spite of
completing certain
sections thereof. In particular he did not note
the date in clause 1.1, as it was clause 2.2 of the contract of
employment which,
in his words, was "stuck in my memory".
[9]
The provisions of the current performance
agreement which are relevant to the duration of the agreement on the
following:
"2.1
The Parties agree that the purposes of this Agreement are to:
2.1.1 comply with
the provisions of section 57(1)(b), (4 A), (4 B) and (5) of the
Systems Act as well as the contract of
employment entered into
between the parties;...
...
3.1
Notwithstanding the date of signature this agreement will commence on
the 1 July 2013 and
will remain in force until a new performance
agreement including a Performance Plan and Personal Development Plan
is concluded
between the parties as contemplated in clause 3.2.
3.2
The Parties will review the provisions of this Agreement during June
each year. The parties
will conclude a new performance agreement
including a Performance Plan and Personal Development Plan that
replaces this agreement
at least once a year by not later than 31st
July each year."
[10]
The provisions of the Systems Act referred
to in clause 2.1.1 of the performance agreement read:
“
57
Employment contracts for municipal managers and managers directly
accountable to municipal managers
(1) A
person to be appointed as the municipal manager of a municipality,
and a person to be appointed as a manager directly accountable
to the
municipal manager, may be appointed to that position only-
(a)
in terms of a written employment contract with the municipality
complying with the provisions
of this section; and
(b)
subject to a separate performance agreement concluded annually as
provided for in subsection
(2).
...
(4A) The provisions of
the Municipal Finance Management Act conferring responsibilities on
the accounting officer of a municipality
must be regarded as forming
part of the performance agreement of a municipal manager.
(4B) Bonuses based on
performance may be awarded to a municipal manager or a manager
directly accountable to the municipal manager
after the end of the
financial year and only after an evaluation of performance and
approval of such evaluation by the municipal
council concerned.
(5)
The performance objectives and targets referred to in subsection (4)
(a) must be practical, measurable and based on the key
performance
indicators set out from time to time in the municipality's integrated
development plan.”
[11]
The applicant claims it became aware of
what it claims was the error in the employment contract when it
concluded the current performance
agreement and realised that its
term extended beyond the five year fixed term of the respondent’s
employment which should
end in mid-June 2014. When it turned to look
at the contract itself it was realised that the employment contract
also reflected
the wrong date. In July 2013 the applicant tried to
obtain the respondent’s agreement to rectify the dates and,
when this
was unsuccessful, it wrote to the respondent giving him an
ultimatum to sign an amending addendum, failing which it would
approach
a court to rectify matters. The rectification sought, rather
ineptly, to have the start and end dates in clause 2.2 of the
employment
contract amended to read 15 June 2009 and 14 May 2014,
respectively. The respondent never replied to the ultimatum
claiming
that the applicant’s confusion about starting and
ending dates coupled with its apparent ignorance of what was intended
in
the original contract justified his lack of response. It ought to
have been patently obvious to the applicant that there was a problem
with the termination date it had identified because it was a month
short of a five year term of employment that would end on 14
June
2014. These calculation errors are replicated in the careless
drafting of the notice of motion. Even the amended version of
the
notice motion still contained errors in that it incorrectly
identified the ‘correct’ termination date as 15 June
instead of 14 June 2014. Nonetheless, as mentioned already, the nub
of the dispute is that the applicant seeks to rectify the contract
to
reflect a five year fixed term of employment whereas the applicant
seeks to rely on the dates in the clause 2.2 of the contract.
[12]
In relation to the approximate six year
term he seeks to rely on, the respondent does not advance any reason
why it should have
been six years, rather than five as the applicant
alleges. All he says is that he noticed the period in the contract
which was
sent to him and that it accorded with his retirement
planning. It is common cause that the advertisement of the post and
limited
discussions which took place as well as the correspondence
exchanged prior to the confirmation of the applicant’s
appointment
did not deal with the period of the fixed term contract.
[13]
The main material facts which emerge from
the affidavits and attachments are that:
13.1
The applicant commenced work in his post on
15 June 2009.
13.2
The existing replacement contract signed by
both parties in April 2012, which supposedly reproduced the original
contract concluded
in 2009, contains irreconcilable provisions about
the intended duration of the contract: clause 2.2 containing specific
dates indicating
a contract commencing on 1 June 2009 and ending five
years and eleven months later, and clause 2.1 confirming the
employment of
the respondent for a fixed term contract of five years.
13.3
The 2011/12 and 2013/14 annual performance
agreements concluded by the parties in the latter half of 2001 and in
July 2013 respectively,
both confirm the existence of a five year
fixed term contract of employment commencing on 15 June 2009
consistent with clause 2.1
of the employment contract but
inconsistent with clause 2.2.
13.4
No reason is advanced why the applicant
would have entered into a contract just short of six years duration.
13.5
The respondent himself simply says he
agreed because it suited his retirement planning without elaborating
thereon. He does not
contend there was a specific reason why the
parties agreed on this period.
13.6
The applicant contends the dates in clause
2.2 of the replacement contract were an error and do not conform with
the intention to
conclude a fixed term contract of only five years,
which is expressed in clause 2.1 and in the performance agreements.
The respondent
denies this was an error, and claims simply not to
have noticed these conflicting provisions in the agreements he
signed, fixated
as he was on the dates in bold typeface in clause
2.2.
Evaluation of the merits
[14]
The respondent initially raised a challenge
to the Municipal Manager’s authority to initiate the
application, but withdrew
this after receiving the replying
affidavit. He further attacked the Municipal Manager’s
authority to bring the application
as it amounted to an attempt to
determine or alter the applicant’s conditions of employment,
and that power could only be
delegated to an executive committee or
executive mayor in terms of s 60(1)(b) of the Systems Act, but
Mr
Van Graan SC
, appearing for the
respondent conceded, rightly, that an application for rectification
of the existing terms of an employment contract
was not the same as
the determination of conditions of employment which is envisaged in
that provision.
[15]
The respondent also claimed that the
application was fatally defective, because the nature of the error on
which the applicant sought
rectification was not clearly pleaded.In
the case of
Offit Enterprises &
others v Knysna Development Company and others
1987(4) SA (CPD)
cited by
Mr
Manchu
, for the applicant, the court
had to consider an application by the defendant for further
particulars relating
inter alia
to the manner in which the applicants had come to hold a mistaken
belief about the correctness of an agreement they sought to rectify
and how the defendant arrived at that mistaken belief as well. The
court held:
“
When
the plaintiff seeks
rectification
of the agreement, one can hardly expect him to prove how the
defendant came to make the mistake. In fact the mechanics
of the
mistake are irrelevant, so also whether it is a reasonable error or
not. Whatever happened, once the Court is satisfied
that the
agreement recorded is not the same as the actual agreement arrived at
the Court will grant the
rectification.”
[1]
The court further stated
by way of an example reminiscent of features of this case:
“
The
conclusion that the plaintiff need allege no more than that the
document to be rectified is incorrect because of an error,
is also
arrived at along a different route. Take for example the case where a
defendant, when signing the agreement that is sought
to be rectified,
is not interested in the part to be rectified and in fact does not
even read that part. Or on reading it prior
to signing he may have a
doubt whether this reflects the actual agreement between the parties,
yet he signs because his attitude
is that if plaintiff is
satisfied why should he concern himself-?”
[16]
To
the extent that it does matter, I think it is readily apparent that,
of the two classes of error relied on in rectification cases
namely
mutual error or intentional error of the other party
[2]
,
the only type of error that could have been contemplated on the basis
of the allegations made by the applicant was a mutual one,
because
the applicant does not attribute the error to the intentional action
of the respondent. It is also clear from the respondent’s
answering affidavit, that he understood it to be such and denied the
dates in clause 2.2 were an error.
[17]
Has the applicant established that the
dates appearing in clause 2.2 of the employment contract were an
error not reflecting the
common intention of the parties? When
considering the absence of any evidence of prior discussions about
the term of the contract,
but the clear intention in clause 2.1 of
the contract that it should be for five years, and the performance
agreements signed before
and after the replacement contract, it seems
most likely the parties intended the applicant would work on a fixed
term contract
of five years from the date he commenced working. The
alternative version is that notwithstanding a five year term being
expressly
stated at the introduction of the contract and ancillary
agreements referring to a five year term with a starting date
conforming
with the date the parties agree he started working in his
new post, the parties nonetheless concluded a contract of an odd
duration,
namely five years eleven months for no reason seems far
less likely. The fact that it suited the respondent from ‘a
retirement
planning’ perspective, even if I accept that as
true, does not provide a plausible explanation why the parties would
have
agreed on such period and he himself does not contend that is
why such an unusual period was agreed on.
[18]
The periods of the performance contracts do
not in themselves assist as they clearly are intended to fit in with
the financial years
of the applicant. It was contended by the
respondent that the current performance contract clearly envisaged it
would be renewed,
which in turn lent support to its argument that the
employment contract would endure until next year. However, the
performance
contract was clearly a standard one designed both for
years in which it would be renegotiated, but also containing other
specific
provisions dealing with the final year of the respondent’s
employment.
[19]
I am satisfied, on the probabilities that
the applicant has established a case for rectification of the
employment contract to reflect
a five year fixed term of employment
commencing on 15 June 2009 and ending on 14 June 2014, despite the
manifest errors in identifying
the termination and commencement
dates, which were not material in the light of the substance of the
dispute between the parties.
[20]
It follows too that the current performance
agreement will not extend beyond the applicant’s contract of
employment and he
will be entitled to the payment of the bonus in
terms of the provisions of clause 3.4 of the said agreement.
Order
[21]
Accordingly,
21.1
Clause 2.2 of the contract of employment
recorded in Annexure “NDM1” of the applicant’s
founding affidavit is
rectified by the substitution of the dates “01
June 2009” and “01 May 2015” by the dates “15
June
2009” and “14 June 2014” respectively;
21.2
The current performance agreement concluded
between the applicant and the respondent for the financial year 01
July 2013 to 30 June
2014 will terminate on 14 June 2014.
21.3
The respondent must pay the applicant’s
costs.
_______________________
R LAGRANGE, J
JUDGE OF THE LABOUR
COURT OF SOUTH AFRICA
APPEARANCES
APPLICANT:
T Manchu instructed by SC Mdhluli Attorneys
FIRST
RESPONDENT:
E S J van Graan SC, instructed by Jan Stemmet
Attorneys
[1]
At
27D-E, cited with approval in
Tesven
CC and another v South African Bank Of Athens
2000 (1) SA 268
(SCA)
at
274, [15].
[2]
See
Harms TC ,
Amler’s
Precedents of Pleadings
,
(7ed), 2009 at 337