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[2014] ZALCJHB 200
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Mmatli and Others v Department Of Infrastructure Development (Gauteng Province) (J1238/14) [2014] ZALCJHB 200; (2015) 36 ILJ 464 (LC) (6 June 2014)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA,
IN JOHANNESBURG
JUDGMENT
REPORTABLE
CASE
NO: J 1238/14
In
the matter between:
RENEILWE MMATLI
First
Applicant
THULISILE THIPE
Second
Applicant
OTHUSITSE
PHEKONYANE
Third
Applicant
REUBEN RAMPHISHA
Fourth
Applicant
MARLYN MAKAMU
Fifth
Applicant
MNCEDISI JULY
Sixth
Applicant
PRUDENCE MOLELE
Seventh
Applicant
JEAN RONOTI
Eight
Applicant
KENEILWE MOGALE
Ninth
Applicant
TINTSWALO CHAUKE
Tenth
Applicant
MILLICENT CHAUKE
Eleventh
Applicant
LUCAS PHORA
Twelfth
Applicant
SIMON RAMAPEPE
Thirteenth
Applicant
MATLAKALA SEKOTO
Fourteenth
Applicant
MARIA PHASHA
Fifteenth
Applicant
KNOX MOKOTO
Sixteenth
Applicant
GOSIAME MOSIANE
Seventeenth
Applicant
ZODWA MOHLALA
Eighteenth
Applicant
MMATHABO NAKEDI
Nineteenth
Applicant
PATRICK MOTHUPI
Twentieth
Applicant
And
DEPARTMENT
OF INFRASTRUCTURE DEVELOPMENT (GAUTENG PROVINCE)
Respondent
Heard:
29 May 2014
Delivered:
06 June 2014
Summary:
(Urgent – Interim declaratory and interdictory relief to
prevent dismissals for not agreeing to
amend existing monthly
contracts with retrospective effect – prima facie case that
dismissal not for a recognised fair reason
established – given
circumstances of applicants employment status unfair dismissal claim
in due course is a suitable alternative
remedy - no costs awarded to
either party in circumstances).
JUDGMENT
LAGRANGE,
J
Introduction
[1]
This is an application brought on an
urgent basis. The applicants are employees of the respondent who are
currently employed on
month-to-month contracts. Previously they had
been employed by an entity known as Impophoma Infrastructure Support
Entity ('Impophoma')
within the Gauteng Department of Public
Transport, Roads and Works, which was dissolved sometime in October
2009 following which
they were transferred to the respondent. During
their employment by Impophoma they had been engaged on fixed term
contracts which
had been renewed a number of times. This changed when
they were transferred to the respondent.
[2]
In June 2012 the applicant's were
issued with backdated fixed term contracts for the period 1 November
2011 to 30 September 2012,
which they refused to sign.
[3]
The relief sought by the applicants
in this matter was interim relief, pending the determination of a
final order, in the following
terms:
3.1
declaring that their employment with the
respondent was of an indefinite
3.2
preventing the respondent from dismissing
them, and
3.3
compelling the respondent to follow a fair
and lawful procedure in the event it wished to terminate their
employment for a valid
and fair reason.
[4]
At
the hearing of the matter the applicants abandoned their first claim
for declaratory relief. The claim for this relief should
never have
been brought in the first place, as it was the subject matter of a
previous judgement of this court in the case of
Reneilwe
Mmatli & 30 others v Department of infrastructure development,
Gauteng Province
(
case
number J1602/12 dated 28 March 2014
).
In that matter the applicants had also applied for declaratory relief
that their employment relationship with the respondent
was that of
permanent employees. The Honourable Mr Justice Zondo, AJ found that
the real nature of the dispute was that, on the
strength of previous
renewals of the contracts, the applicant's believed they had a
reasonable expectation that their contracts
would assume a permanent
status. Zondo, AJ held that a dispute about the failure to renew or
renew contracts on less favourable
terms thereby constituting the
dismissal was a matter governed by section 186 (b) of the LRA and the
applicants should have referred
a dispute to the CCMA or the relevant
bargaining Council.
[1]
[5]
It is common cause that all the
applicants are currently employed on a contract containing the
following term:
"The employer hereby
undertakes to engage the employee, and the employee hereby undertakes
to serve the employer on a monthly
basis reckoned from
01 May
2010 to month on month basis
at the Department of
Infrastructure Development."
(
sic-
original emphasis)
[6]
The respondent states that it
embarked on a project to absorb the contract employees into permanent
jobs by affording them opportunities
for permanent positions as and
when they became available. By May this year, the number of contract
employees had been reduced
to about 87. Some of the applicants who
were party to the previous application have since been absorbed into
permanent posts, but
the applicants in this matter had refused to
apply for permanent positions when they became available.
[7]
On 12 May 2014 the applicants were
given letters asking them to sign contracts agreeing to the
termination of their contracts by
30 June 2014. The respondent
explains that "... the DID has received unfavourable audit
outcomes over the years because of
payments made to these employees
who are not on the establishment and who are refusing to avail
themselves for permanent jobs and
are insisting that their jobs are
permanent. The DID does not have a budget continued to pay for these
employees.” The letter
of 12 May read:
"
RE:
EMPLOYMENT CONTRACT
1.
We are pleased to inform you that your
contract with the department has been renewed effectively from
01
April 2011
until
30
June 2014
.
2.
You are required to sign and submit the
attached contract to the human resources Department ("HR")
by no later than the
15th May 2014
.
3.
Failure to submit a signed contract HR by
15th May 2014
will be construed as a rejection of the renewal of your contract.
Accordingly your services will be terminated in line with such
rejection."
[8]
On 15 May 2014, the applicant's
attorney submitted an urgent letter of demand to the respondent
calling upon it to give an undertaking
it would not dismiss the
applicants if they refused to sign the backdated fixed term
contracts, and threatening to bring an urgent
application if such an
undertaking was not given.
[9]
On 19 May 2014, the respondent’s
attorney of record replied asking the applicant's to keep the matter
in abeyance until the
respondent had given them instructions. The
following day the respondent gave its answer stating, amongst other
things, the following:
"1. On numerous
occasions in the past, our client has been pleading with your clients
to sign employment contracts without
any success;
2. The recent letter that
was sent by a client to your clients is therefore not a "threat"
but a way of ensuring that
it addresses the audit queries that have
been raised by the auditor general on such contracts of employment.
Therefore, there is
no basis in law for labelling our clients letter
as "unlawful, unfair and infringes on our client's right not to
be subjected
to fair labour practices";
3. Our client has
terminated the employment contracts of those employees who have
refused to abide to our clients letter of 8 May
2014. Letters
confirming that the employment contracts had been terminated will be
handed over to clients during the course of
this week;
4. With regard to those
employees who had signed a contract of employment, their employment
with our client will not be renewed
post 30 June 2014;
5.
Your clients have at all times been employed by our client on a
contract basis and not on an "indefinite period";...
[10]
The applicants submit that because
there is no lawful reason for their dismissal, even though they have
the right to refer a dispute
to the CCMA if they are dismissed, they
should not have to incur the costs of consequent litigation in the
Labour Court pursuing
a claim after their dismissal for an
automatically unfair dismissal. They contest their dismissal would be
automatically unfair
based on the fact that they were dismissed for
failing to agree to sign the backdated contract of employment.
In
limine
objections
[11]
The respondent claims firstly that
the matter is
res judicata
in view of the previous judgement of Zondo, AJ. As mentioned, the
applicants withdrew their claim for declaratory relief when the
matter was heard. No doubt this was done because they realised they
could not succeed in obtaining this relief once the applicant
raised
the
res judicata
point.
It should not have been necessary for the respondent to raise this
point, and the applicants ought to have disclosed in their
founding
papers that they had effectively sought the same declaratory relief.
The only reference they made to it in their founding
papers was one
they could not avoid because it appeared in the letter from the
respondent's attorneys dated 15 May 2014. Although
the withdrawal of
the prayer for declaratory relief obviates the need to consider the
res judicata
objection, the conduct of the applicants in this regard is a matter
which will be addressed in dealing with costs.
[12]
The second preliminary objection
raised by the respondent is whether the court has jurisdiction to
entertain the application. The
respondent argues that the applicants’
claims that it has no right to dismiss them and that the fairness of
the procedure
followed by it in doing so is unfair, essentially
amounts to a claim of alleged dismissal under section 186 (1) of the
LRA and
should be dealt with as an unfair dismissal claim. Exactly
what the nature of the applicants claim is debated below.
[13]
In
exceptional circumstances the labour court may intervene on an urgent
basis to interdict an unfair dismissal.
[2]
Thus, there is no inherent jurisdictional obstacle to obtaining such
relief. As the Labour Appeal Court observed in the
Booysen
decision there is no closed list of factors to consider, but in my
view employees should not even consider seeking this extraordinary
relief if the unfairness is not glaringly obvious and of a very
fundamental nature which can be easily redressed.
The right the
applicants seek to enforce
[14]
The applicants seek to assert a
right not to be dismissed on account of their failure to agree to
sign the backdated fixed term
contract. They claim that such a
dismissal would not be for a lawful reason and would be automatically
unfair. In their founding
affidavit the applicants’ did not
state specifically which one of the illegitimate reasons for
dismissal set out in section
187 they rely on. It was only in oral
argument (there were no written heads filed by the applicants) that
the applicants’
counsel,
Mr Van
Graan
, identified section 187 (1) (d)
as the ground on which the dismissal would necessarily be
automatically unfair. That section provides
that a dismissal will be
automatically unfair if the reason for the dismissal is:
"(d) that the
employee took action, or indicated an intention to take action,
against the employer by-
(i)
exercising any right
conferred
by this Act
; or
(ii)
participating
in
any proceedings in terms of this Act
..."
(emphasis added)
[15]
On the basis of the founding papers,
I have difficulty understanding what rights the applicants had
exercised or intended to exercise,
for which the respondent decided,
or threatened, to dismiss them. Thus, even if I assume that the court
might intervene where it
is manifestly clear that an automatically
unfair dismissal is about to occur, the factual basis for a claim
under section 187(1)(d)
is simply not set out in the founding
affidavit.
[16]
As
an alternative, the applicants suggested, again only in oral
argument, that there was a basis for the court to intervene given
that it would seem the respondent is relying on financial
considerations arising from the auditor general's report. The lines
of this argument are that if that is the reason for the intended
dismissals, then the respondent ought to have acted in accordance
with the provisions of section 189 of the LRA since the ostensible
reason for the intended termination is an operational one. Where
an
employer is intending to terminate an employee’s services for
operational reasons and has made absolutely no attempt to
comply with
section 189, the court might be prepared to order the employer to
consult in terms of the provision before retrenching
the employee.
[3]
Such relief is aimed at trying to ensure that consultation as
prescribed by the section at least does take place before a final
decision is made. But a claim of this nature is not set out in the
founding affidavit, and cannot simply be entertained on submissions
from the bar.
[17]
It
was submitted in the founding affidavit, without express reference to
s187(1)(c) of the LRA, that the imminent dismissals would
be plainly
invalid because the reason for the dismissal was the applicants’
failure to sign the fixed term contracts ending
on 30 June 2014. Even
if the applicants’ had argued that s 187(1)(c) which prohibits
a dismissal if the reason for the dismissal
is to compel an employee
to accept a demand on a matter of mutual interest, in this case the
employer announced its intention to
dismiss them, and indeed
purported to be taking steps to give effect to the dismissal once the
applicants’ did not comply
with its request. On the
interpretation of this section in the judgment in
National
Union of Metalworkers of SA & others v Fry's Metals (Pty) Ltd
2005
(5) SA 433
(SCA);(2005) 26
ILJ
689 (SCA)
such
dismissal would not be construed as a threat to compel compliance
with the employer’s demand and would not be in breach
of the
section.
[4]
[18]
The only explanation given by the
employer for terminating the contracts is that the employees are on a
month to month contract
and cannot insist on being indefinitely
employed. But this is not the reason it gave in its letter of 12 May
2014 for wanting to
terminate their contracts. The reason advanced
there is that they have not agreed to the contrived long term fixed
term contract.
It might be true that this cannot constitute a fair
reason for dismissal because it does not fall within the classes of
recognised
reasons for a fair dismissal set out in s 188 of the LRA.
In so far as the Auditor General’s observations may have
motivated
the respondent to take steps to bring the applicants’
employment to an end, that does not explain why the employer simply
did not rely on that and proceed on the basis that it did not intend
to renew the applicant’s contracts for operational reasons.
The roundabout approach of trying to impose a retrospective fixed
term contract on the applicants is not explained by the employer.
In
consequence I am satisfied that there is no basis for concluding that
the applicants’ dismissal for the reasons stated
in the
employer’s letter of 12 May 2014 is one falling within the
class of valid reasons in s 188 of the LRA
[19]
Accordingly, I am satisfied that the
applicants have established a
prima
facie
reason, even if open to doubt,
why the termination would be unlawful. However, when it comes to the
question of alternative remedies
I am not persuaded that the
applicant’s remedies under the LRA for an unfair dismissal
would not provide adequate recompense,
particularly in a situation
where the employees are not in permanent employment and where
granting of this relief would not alter
their precarious employment
status.
[20]
It must be mentioned that the
ultimate fairness of the terminations in terms of s 188 of the LRA is
not at issue here.
Costs
[21]
As mentioned the applicants should
never have sought the declarator which is a repeat of the declaration
previously sought and dismissed,
even if the applicants were
attempting to stop the present attempt of the employer to dismiss
them for not agreeing to amend their
contracts. I have reason to
doubt the applicants were aware of the principle of
res
judicata
in circumstances where they
were defending themselves against a new threat of imminent dismissal,
but their attorney of record,
who was also on record in the first
application, should have known better. Had the respondent sought a
punitive cost award against
him, it might have obtained one.
[22]
As the declaratory relief was only
abandoned at the hearing, I would be inclined to order the applicants
to pay at least half the
respondents costs. On the other hand, the
way the employer has conducted itself leaves much to be desired.
Dismissing the applicants
for not entering into a contract which
plainly distorts the actual history of their past employment
relationship with it for reasons
the respondent does not disclose
either to them or to the court demonstrates a lack of candour which
must be deprecated. The allusion
to the Auditor-General’s
concerns in no way explains the distinctly odd way the respondent is
going about dealing with the
problem and the dismissals would seem to
be prima facie unfair for the reasons stated above
[23]
Accordingly, it is just and
equitable in my view that all parties should bear their own costs.
Order
[24]
The application is dismissed.
[25]
The parties must pay their own
costs.
_______________________
R LAGRANGE, J
Judge
of the Labour Court of South Africa
APPEARANCES
APPLICANTS:
S E Van Graan SC instructed by Rudolf Kuhn Attorney
RESPONDENT:
M K Mathipa instructed by Mncedisi Ndlovu & Sedumedi Attorneys
Inc.
[1]
At
paras [7] – [8] of the judgment.
[2]
See
Booysen
v
The Minister of Safety and Security & others
[2011]
1 BLLR 83
(LAC)
at
99
, para [5]: “
....[T]he
Labour
Court has jurisdiction to interdict any unfair conduct including
disciplinary action. However, such an intervention should
be
exercised in exceptional cases. It is not appropriate to set out the
test. It should be left to the discretion of the Labour
Court to
exercise such powers having regard to the facts of each case. Among
the factors to be considered would in my view be
whether failure to
intervene would lead to grave injustice or whether justice might be
attained by other means. The list
is not exhaustive.”
[3]
See,
for example
National
Union of Metalworkers of SA & others v Comark Holdings (Pty) Ltd
(1997)
18
ILJ
516
(LC);
Vela
& others v Savo & others
(1998) 19
ILJ
916 (LC)
\
National
Union of Metalworkers of SA v Nissan SA Manufacturing (Pty) Ltd
(1999) 20
ILJ
1097 (LC)
and
National
Union Of Metalworkers Of Sa & Others v Dzima Manufacturing
(PTY)
Ltd
(1999)
20
ILJ
2904 (LC)
,
but none of these concerned retrenchments of employees on short term
contracts.
[4]
At
708, viz:
“
[56] The
LAC's solution to the conundrum of the statutory concepts was thus
to assign a distinctive meaning to
'dismissal' in s 187(1)(c), and
then to restrict this category of automatically unfair dismissals to
those effected for the purpose
of inducing employees to change their
minds regarding the employer's demand. On this approach, only
conditional dismissals can
fall under s 187(1)(c), and it is this
that distinguishes them from the broader category of dismissals
where the employer - irreversibly
- 'has terminated' the employment
contract. Dismissals intended to be and operating as final - not, in
other words, reversible
on
acceptance
of the demand - can thus never have as their reason 'to compel the
employee to accept' that demand. They will therefore
not be
automatically unfair.”