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[2015] ZALCJHB 178
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Ramabulana v Pilansberg Platinum Mines (J808/13) [2015] ZALCJHB 178; (2015) 36 ILJ 2333 (LC) (12 June 2015)
REPUBLIC
OF SOUTH AFRICA
THE
LABOUR COURT OF SOUTH AFRICA, JOHANESBURG
JUDGMENT
Reportable
Of interest to other
judges
case
no: j808/13
In
the matter between:
LISEBO
LERATO PEARL
RAMABULANA
Applicant
and
PILANSBERG
PLATINUM
MINES
Respondent
Heard
:
29 January 2015
Delivered
:
12 June 2015
Summary:
Contract – termination of employment contract - right to a
pre-dismissal hearing - specific performance
in the form of
reinstatement
JUDGMENT
WHITCHER,
J
Introduction
[1]
The applicant was employed as a SED manager
by the respondent on 5 November 2007, but dismissed on 31 January
2013.
[2]
Clause 6.1 of the applicant’s
contract of employment reads:
‘
Subject
to compliance with the Employer’s Disciplinary Code and
Procedure, any party may terminate this contract by giving
at least
one month’s notice to the other party, provided that the
provisions of schedule 8 to the
Labour Relations Act, 1995
, will
apply to any dismissal of the employee; and the employer shall be
entitled to summarily dismiss the employee for any sufficient
reason
acceptable in law.’
[3]
Clause 11.3 reads:
‘
The
parties agree that the employee shall be subject to the employer’s
Disciplinary Code and Procedure which is contained
in a separate
document, but which shall be deemed to form part of this Agreement.’
[4]
The Disciplinary Code and Procedure in
question provides,
inter alia,
that in all cases of alleged misconduct, the employer undertakes to
abide by the provisions of Schedule 8 to the
Labour Relations Act,
1995
and that in certain cases such as serious misconduct involving
alleged fraud or dishonesty, leading to a breakdown of the trust
between employer and employer, a formal disciplinary enquiry will be
held and conducted by a chairperson who will make a decision
regarding the guilt or innocence of the employee.
[5]
The applicant launched an application in
terms of
section 77(3)
of the
Basic Conditions of Employment Act,
1997
in order to claim specific performance, alternatively damages as
a result of the respondent’s alleged unlawful termination
of
her employment contract.
[6]
In her application, the applicant alleges
that her contract of employment was terminated unlawfully for two
reasons, namely the
respondent did not have a valid and/or acceptable
reason in law to terminate her employment contract, and the
respondent failed
to conduct a disciplinary hearing and/or failed to
give her an opportunity to make representations prior to taking the
decision
to terminate her contract.
[7]
However, before this court, the applicant
restricted the issue to be decided to the alleged procedural
irregularities in her dismissal
and to a claim for specific
performance.
[8]
In her heads of argument, the applicant
described the issue to be decided by the Court as follows:
‘
Whether
the respondent committed a breach of the terms and conditions of the
applicant’s employment by dismissing the applicant
from work
without affording the applicant a pre-dismissal hearing or an
opportunity to be heard?’
[9]
Regarding the relief she seeks, she
submitted that:
‘
Once
a prima facie right to a fair dismissal inquiry has been established
by the applicant then the applicant’s contractual
rights have
been breached. The only proper cause of action is to set aside the
termination and to direct the respondent to continue
with the
contract of employment on the same terms and conditions as existed.’
[10]
The respondent does not dispute that the
applicant’s contract of employment affords her a distinct
contractual right to a
pre-dismissal hearing. The respondent opposes
the application on the basis that the applicant was given a hearing
relevant to the
context in which the need to terminate her services
arose and, even if the Court finds that the respondent is in breach
of the
procedural prescripts of the applicant’s contract prior
to the termination, an order for specific performance is not an
appropriate
remedy in the circumstances of this case.
The
applicant’s version in her founding affidavit
[11]
On 12 May 2012, the respondent instructed
the applicant to leave work and go home. The respondent told her it
was for her own safety
because the local community was not pleased
with the manner in which she was performing her duties.
[12]
On 31 May 2012, she was summoned to a
meeting with the respondent’s Human Resources Manager and
General Manager. In that meeting,
discussions centred on allegations
that she was causing harm to the company and must therefore decide on
the quickest and least
painful way to part ways with the respondent.
The allegations were not substantiated by the managers.
[13]
On 27 July 2012, the respondent furnished
her with a document entitled “Severance and Settlement
Agreement” in which
the respondent proposed that she agree to
the termination of her employment “for operational reasons”
and to a severance
package equivalent to three months remuneration,
plus leave pay. She declined to sign the document because she did not
agree with
the terms of the proposed agreement.
[14]
The applicant then received a letter from the respondent on 14
January 2013 wherein the respondent stated that the reason her
services were discontinued was purely on the basis of the local
community’s request for her to discontinue her company work
within the community.
[15]
The applicant did not refer to the full contents of the attached
letter which reads as follows:
‘
I
refer to the consultations held with yourself during the course of
last year to discuss your continued employment in the company
in
light of the Community’s request for you to discontinue your
company work within the community. We last held a meeting
with
yourself and your representative on the 1 October 2012 in an
endeavour to resolve the matter. We stressed that we were unable
to
resolve with the Community their concerns about your presence and we
were not prepared to allow or insist that you continue
such work for
your own safety and the Company’s interests within the
Community. At such a meeting we made a reasonable proposal
to resolve
this matter in terms of a Severance and Settlement Agreement the
terms of which were made known to you. We requested
that you consider
our proposal. Contact was again made with you during November 2012 to
request your attendance at a meeting on
21 November 2012 which you
did not attend. You subsequently phoned my offices on 23 November
2012 to state that you were not prepared
to attend any further
meetings. On 30 November 2012 we received a response through your
representative requiring that we pay you
an amount equivalent to 5
years remuneration. The company is not able or prepared to entertain
such demands. You have remained
on full pay since you were sent home
on 17 May 2012 whilst we have endeavoured to resolve this matter.
Regrettably we cannot allow
the status quo regarding your continued
employment to continue any further and need to resolve the matter
finally by the 31 January
2013.’
[16]
When she received this letter, the applicant consulted an attorney
who wrote to the respondent on 28 January and 1 February
2013.
[17]
In the letter of 28 January 2013, her attorney noted that the tone of
the letter of 14 January 2013 suggested an intention
by the
respondent to terminate the applicant’s employment contract and
contended that the termination would constitute a
breach of the
applicant’s employment contract. The attorney, however, stated
that the applicant “concurs” with
the respondent’s
proposal to have the matter amicably resolved by the 31
January
2013 and suggested the parties meet to do so. The respondent did not
respond to this letter.
[18]
In the letter of 1 February 2013, the applicant’s attorney
noted that the applicant’s salary for January 2013 had
not been
paid and contended that this act was tantamount to unlawful
repudiation of the applicant’s employment contract which
the
applicant does not accept.
[19]
The respondent responded as follows:
‘
Ms
Ramabulana’s service was terminated on 31 January 2013 due to
operational reasons. PPM will pay to Ms Rambulana the prescribed
statutory amounts as defined in the LRA. The fact that she did not
receive her remuneration for the month of January was an
administrative
error which has been rectified.’
The
respondent’s version
[20]
The respondent operates within the Bakgatla Ba Kgafela Region and
community near Rustenburg. The local community are material
shareholders and stakeholders in the respondent. Access to the
region and production activities are subject to the good relationship
between the respondent and the local community.
[21]
During May 2012, the local community “became severely aggrieved
as a result of the fact that it felt that the local youths
were not
given preference when posts became available at the respondent’s
mine. The community leaders accused the applicant
of selling proof of
residence and jobs to individuals that were not members of the local
community. The local community insisted
that the applicant could not
be trusted in the capacity in which she was employed and that as a
result her services must be terminated.”
[22]
On 12 May 2012, it was decided that in order to ensure the
applicant’s safety it would be better for her to stay at home.
In addition, taking into account the effect of the serious nature of
the allegations against her, the respondent deemed it appropriate
to
immediately “relieve her of her duties”.
[23]
The parties met on 31 May, 27 July and 1 October 2012. In these
meetings, the allegations against her and their effect on all
the
parties’ relationships were explained to the applicant. She was
told that her services were discontinued because the
local community
had demanded her dismissal and the respondent was unable to resolve
with the community the concerns raised by the
community. It was
suggested to her that it would be appropriate in these circumstances
to discuss an amicable separation between
the parties. In this regard
the respondent proposed the “Severance and Settlement
Agreement”.
[24]
The underlying reasons for an agreement of mutual separation between
the parties were never contested by the applicant in these
meetings
or in any correspondence prior to her dismissal. The applicant was at
all times amenable to the mutual separation between
the parties. Her
only concern related to the amount that she would be paid as a
severance package. As long as the respondent was
willing to pay the
applicant the amounts she demanded, she was willing to terminate her
services with the respondent.
[25]
The respondent attached email correspondence dated 30 November 2012
from a person purporting to be the applicant’s representative.
In the email, the representative refers to meetings held between the
parties, a wish by the applicant for the matter to be settled
as much
as the respondent and a proposed severance package of five years’
remuneration.
[26]
During November 2012, the applicant was requested to attend a meeting
at the respondent’s premises on 21 November but
she failed to
do so. In the letter of 14 January 2013, she was told the issue
needed to be resolved finally by 31 January 2013
and invited to
attend a meeting on 21 January 2013. She failed to attend. The
respondent then terminated her contract on 31 January
2013 due to
“operational reasons”.
The
applicant’s reply
[27]
The Applicant, of course, denies the allegations proferred against
her by the community, but contends that in any event the
respondent’s
version confirms that her employment contract was terminated based on
allegations of misconduct and that no
disciplinary hearing was
conducted in respect of these allegations.
[28]
Moreover, her relationship with the local community is a factual
question which had to be determined in a properly constituted
disciplinary hearing and by adducing evidence.
[29]
The applicant avers that the respondent cannot formulate an opinion
by itself regarding the allegations and her relationship
with the
community and then terminate her employment contract without
affording her an opportunity to respond to these issues.
[30]
The meetings she attended and the proposals she submitted are of no
legal significance because they were aimed at settlement
of the
matter. They did not constitute a pre-dismissal hearing in any form.
However, to the extent that they are relevant, she
points out that
she offered to meet the respondent before 31 January 2013 but the
respondent did not respond even though they set
the 31st January 2013
as the deadline for the resolution of the matter.
Analysis
[31]
The applicant’s case rests on a breach of contract constituted
by the alleged failure by the respondent to give her an
appropriate
pre-dismissal hearing and her right to enforce that obligation.
[32]
In my view, the reason for the termination of the applicant’s
employment is central to the determination of whether there
was
breach of contract constituted by the alleged failure by the
respondent to give the applicant an appropriate pre-dismissal
hearing.
[33]
In this regard, the respondent hedges. The respondent denies that the
reference to “operational reasons” in their
correspondence equates to operational requirements as envisaged by
section 189
of the LRA. The respondent contends that the operational
reasons referred to at all times related to the fact that the
respondent
terminated her employment to ensure her safety and because
the allegations made against her involve serious acts of dishonesty
with the resulting breakdown of the relationship of trust between the
respondent and the applicant and between the applicant and
the
community.
[34]
The respondent correctly contended that South African Labour law
recognises as a class of acceptable dismissal, a dismissal
as a
result of pressure on an employer from third parties. In this regard,
the respondent referred to the Labour Appeal Court judgments
in
Lebowa
Platinum Mines Ltd v Hill
[1]
and
Mnguni
v Imperial Truck Systems Pty) Ltd t/a Imperial Distribution
[2]
and Grogan who wrote that:
‘
Such
situations are more akin to classic dismissals for operation
requirements than dismissals for incompatibility, because the
tension
arising from the employer’s continued presence cannot alleviate
even if the employees concerned adapt their conduct.’
[3]
[35]
An issue before this court is then whether the cause of the
applicant’s dismissal was unrelated to misconduct,
specifically,
the respondent’s response to operational
pressures created by a third party’s unhappiness with the
applicant and/or
concerns for the applicant’s safety.
[36]
The enquiry into the reason for a dismissal is an objective one and
entails applying the principles of causation.
[4]
There is little doubt that, absent allegations of misconduct against
the applicant being brought to the respondent’s attention,
she
would not have been dismissed. Misconduct allegations are thus,
factually, the cause of her dismissal.
[37]
In determining the subsequent issue of the legal cause of dismissal,
the LAC suggested that:
‘…
the most
practical way of approaching the issue would be to determine what the
most probable inference is that may be drawn from
the established
facts as a cause of the dismissal, in much the same way as the most
probable or plausible inference is drawn from
circumstantial evidence
in civil cases.’
[38]
In my view, the most probable cause, indeed the dominant and
principle cause of the applicant’s dismissal, were the
allegations of misconduct made against her. This is apparent even on
the respondent’s version. As early as 12 May 2012, the
respondent considered these allegations to be of such a serious
nature that it
deemed it appropriate to
immediately “relieve her of her duties”. The respondent
also references the breakdown in the
trust relationship with the
applicant as having been caused by the serious allegations of
dishonesty made against her. This is
classically the conceptual
landscape of misconduct.
[39]
The issue of the applicant’s safety is logically a secondary
issue. There is nothing on the respondent’s version
to indicate
that ‘the local community’ were so irrationally and
implacably opposed to the applicant’s employment
that it did
not matter to them whether she was truly guilty of the misconduct
they alleged and that they would likely harm her
whatever a formal
disciplinary hearing found. The respondent’s papers are
particularly light on the nature and scope
of any threats made
against the applicant by this third party.
[40]
For policy reasons too, any wrong-doing on the part of an employee
should be assessed before recourse is had to dismissal for
incapacity
or operational reasons at the instance of a third party. This is
because providing an employee an opportunity to answer
allegations of
misconduct might, in properly ventilating the facts, reverse the
insistence of a third party that the employee’s
contract be
terminated. If the respondent had dismissed the employee principally
to ensure her own safety, and not because it gave
credence to the
allegations of misconduct, one would have expected much more detail
about the precise nature of the threats against
her, the names of the
community leaders who made them, and what specific steps the
respondent took to dissuade ‘the community’
from adopting
a threatening attitude towards their employee. Similarly, if the
principal reason for the dismissal was to preserve
the local
community’s goodwill for operational reasons, one would expect
far greater detail about how exactly the applicant’s
continued
employment was realistically expected to impact on the respondent’s
business. The respondent provided only rather
bald allegations,
verging on caricature that the applicant’s safety and the
respondent’s financial interests were at
risk from an irate
‘local community’.
[41]
In my view, the dominant and most plausible reasoning behind the
applicant’s dismissal is that it was for alleged misconduct.
This situates the case squarely within the parameters of the
Disciplinary Code and Procedure which is incorporated into the
applicant’s
contract as a term and condition of employment.
This contract provides that in
all
cases of
alleged
misconduct, the employer undertakes to abide by the provisions of
Schedule 8 to the
Labour Relations Act, 1995
and that in certain
cases such as serious misconduct involving
alleged
fraud or
dishonesty,
leading to a breakdown of the trust between employer
and employer
, a formal disciplinary enquiry will be held and
conducted by a chairperson who will make a decision regarding the
guilt or innocence
of the employee.
[42]
It is common cause that the respondent did not hold a formal
disciplinary hearing.
[43]
The applicant had a contractual right to such a hearing and I am not
persuaded that her conduct in pursuing a financial settlement
as an
alternative to going through a formal hearing constituted either a
waiver of her right to that hearing or that the content
of such
discussions constituted the formal disciplinary hearing contemplated
in her contract.
[44]
I do not fault the respondent for pursuing a mutually agreed
separation from the employee. In circumstances, where it gave
some
credence to the serious allegations against the applicant and where
the local community demanded the employee’s dismissal,
this was
a legitimate option, if only to minimise the complexity of running a
formal hearing.
[45]
The fact that the applicant was amenable to and engaged in this
process until the respondent rejected her high demands of R5
million
as a separation package is not legally significant. She was in a
relatively strong bargaining position because, in the
absence of a
negotiated agreement, the applicant could still insist on and pursue
the disciplinary hearing route. The respondent
found itself in this
position not because of the applicant’s intractability but
because it had bound itself, in its contract
with her, to provide the
applicant with a contractual right to a disciplinary hearing where
misconduct was alleged.
[46]
The only ‘agreement’ the applicant reached during the
settlement discussions was when her attorney stated that
the
applicant “concurs” with the respondent’s proposal
to have the matter amicably resolved by 31 January. When
no agreement
was reached on this date, her right to a formal disciplinary hearing
remained intact.
[47]
Even on the respondent’s own version, the interactions between
the respondent and applicant between May 2012 and 31 January
2013 did
not, in my view, constitute a formal hearing nor a waiver of her
right to a hearing.
[48]
It is true that labour law has introduced a certain flexibility in
the enforcement of employment contracts. This is done to
advance
fairness, a concept which often comes down to balancing the interests
of parties. With the preamble to the LRA in mind,
one appreciates how
a certain flexibility in the strict enforcement of employment
contracts can, in particular circumstances, advance
labour peace,
social justice and economic development. However, if an employer, to
the benefit of an employee, literally contracts
out of the fairness
jurisdiction, it has presumably accepted the risks that this entails.
One of these risks is that the employer’s
acts or omissions
which in labour law would merely constitute procedural unfairness
could now constitute breach of contract depending
on how the matter
is pleaded. One effect of this is that the more circumscribed and
balanced statutory remedies prescribed by the
LRA, for example, for
failing to provide an employee with a disciplinary hearing are
foregone for stricter and more far-reaching
contract law remedies.
[49]
A well-developed set of legal principles underpin contract law,
specifically the conditions under which a contract may be terminated,
and these are not lightly to be tampered with.
[50]
When parties contract on specific contractual terms, they bind
themselves to honour and perform their respective obligations
in
terms of that contract. Each party is entitled to expect that the
other party has carefully looked into the future and has satisfied
itself that it can meet its obligations for the entire term of the
agreement. Accordingly, no party is entitled to later seek to
escape
its obligations in terms of the contract on the basis that its
assessment of the future had been erroneous or had overlooked
certain
things. This is simply because the employer is free not to enter into
an agreement. He takes the risk that he might have
a need to dismiss
the employee in circumstances or in a manner not catered for in the
agreement.
[5]
[51]
Not to hold the respondent to the contract law obligations it
voluntarily and lawfully imported into an employment relationship
would introduce a grave level of uncertainty into a range of similar
commercial arrangements.
The
right to specific performance
[52]
Specific performance is performance of that which the parties agreed
to in the contract.
Section 77A
(e) of the BCEA specifically empowers
this Court to grant specific performance.
[53]
A conspectus of case law shows that where an employee has been
dismissed the employee, in a contractual dispute, is not obliged
to
cancel the agreement and claim damages but is entitled to claim
specific performance subject to the court’s discretion
to
refuse to grant such an order. Specific performance is a primary and
not a supplementary remedy. Courts in general should be
slow and
cautious in not enforcing contracts. Specific performance should be
refused only where it would be inequitable in all
the circumstances
or where, from a change of circumstances or otherwise, it would be
“unconscientious” to enforce a
contract specifically.
Each case must be judged in light of its own circumstances. The
right of an applicant to specific
performance of a contract, where
the respondent is in a position to do so, is thus beyond doubt. The
court’s discretion not
to provide this relief is exercised with
reference to the facts as they exist when performance is claimed and
not as they were
when the contract was concluded.
[6]
[55]
Wallis wrote that in considering this question the issue of whether
the employer had cause good to dismiss (or the fairness
of the
dismissal) does not play a part. He further opined that the view of
some early cases that, even where there was a contractual
right to a
hearing a breach of this right did not invalidate the dismissal and
there can be no order for specific performance was
incorrect.
[7]
[56]
The respondent contended that specific performance is not appropriate
in the circumstance of this case because, in its view,
the facts
establish the existence of a breakdown of trust. The respondent
referred to case of
Abdullah
v Kouga Municipality
[8]
in
which Lagrange J held that the decision in the Constitutional Court
judgment of
Masetlha
v President of the Republic of South Africa and another
[9]
highlights
that where a breakdown of trust exists, the discretionary remedy of
specific performance in the form of reinstatement
is unlikely to be
granted.
[57]
The present matter is distinguishable from
Masetlha
in that
the breakdown of trust between the President of South Africa and his
head of intelligence was common cause. The applicant
has made no such
admission. In addition, the Constitutional Court took cognisance of
the very “the special relationship of
trust” that must
exist between a principal and his agent in the relationship at stake
in
Masetlha
. While even a hint of doubt can bedevil a
relationship of that sensitivity, the same intensities of trust are
not plausibly at
stake in this case, nor did the respondent claim
that they were.
[58]
In
Abdullah
,
Lagrange J found that w
here a breakdown in trust exists such
as in
Masetlha
, “the discretionary remedy of specific
performance in the form of reinstatement is unlikely to be granted,
and the employee’s
remedy will be confined to payment of the
balance of his contractual remuneration”.
[59]
Abdullah
too is distinguishable from the facts
in casu
in
that in
Abdullah
the employer’s averred loss of
confidence in the employee, although detached from any claim of
misconduct or poor performance,
still had an objective and reasonable
foundation. The employee, a Chief Financial Officer, while not
assigned the blame for the
breakdown of trust, was nevertheless part
of a top management team that had steered the municipality to near
insolvency. This was
the reason the court did not order the remedy,
effectively, of reinstatement.
[60]
In contrast to
Abdullah
, the respondent has not claimed that
any objective facts exist that would reasonably justify its loss of
trust in the applicant.
If these facts existed, they would not be
difficult to find in the circumstances of this case. For example,
were any persons not
residing in the area from which labour was
supposed to be drawn hired during the applicant’s tenure?
[61]
As I understand the respondent’s arguments, the seriousness of
the allegations made by the community constitute the primary
basis
for the alleged breakdown of trust. If so, this implicitly
contradicts the respondent’s claim that the dismissal was
not
for misconduct. Be that as it may, the mere existence of completely
untested allegations conveyed to the employer by a third
party,
cannot be a legally acceptable basis for claiming that an employment
relationship has broken down. To hold otherwise, would
allow the
primary relief of specific performance to be dodged with entirely
subjective, second-hand, perhaps even contrived claims
of distrust.
[62]
I thus see no reason why the applicant should not be granted the
order. The respondent essentially formed an opinion that there
is a
breakdown of trust on the mere untested allegations of the ‘local
community’. The respondent has not established
that the
applicant’s reinstatement should pose any particular hardship
to the respondent. The respondent has the remedy of
a disciplinary
hearing open to it to establish dismissable conduct.
[63]
In the meantime, the applicant has been branded as corrupt and
dishonest in the absence of a formal hearing to determine the
accuracy of these allegations. This is precisely the situation that
the inclusion of a contractual right to a hearing was meant
to
prevent.
Order
[64] In light of the
findings above, the following order is made:
(a)
It is declared that the decision by the respondent to terminate the
applicant’s employment
from 31 January 2013 is a breach of
clauses 6.1 and 11.3 of the applicant’s contract of employment.
(b)
The termination of employment is set aside, and the applicant is
reinstated in the respondent’s
employ.
(c)
The respondent is ordered to pay the applicant’s salary and
benefits from 31
January 2013 to the date on which her employment,
salary and benefits are restored.
(d)
The respondent is ordered to pay the costs of this application.
_______________________
Whitcher, J
Judge
of the Labour Court of South Africa
APPEARANCES
For the Applicant:
M S Mphahlele
Instructed
by:
Chosane Attorneys
For the
Respondent:
C Goosen
Instructed
by:
MacIntosh Cross & Farquharson
[1]
(1998)
19
ILJ
1112 (LAC).
[2]
(2002)
23
ILJ
492 (LAC).
[3]
Dismissal,
2010 Edition 454.
[4]
See:
Kroukam
v SA Airlink (Pty) Limited
(2005)
266
ILJ
2153
(LAC).
[5]
See:
Buthelezi
v Municipal Demarcation Board
(2004)
25
ILJ
2317
(LAC).
[6]
See:
Thompson
v Pullinger
(1894)
1 OR 298
;
National
Union of Textile Workers and Others v Stag Packing (Pty) Ltd and
Another
1982 (4) SA 151
(T);
Benson
v SA Mutual Life Assurance Society
1986
(1) SA 776
(A);
Santos
Professional Football Club (Pty) Ltd v Igesund and Another
2003 (5) SA 73
(C);
Ngubeni
v The National Youth Development Agency
J2322/13
dated 21 October 2013.
[7]
Labour
and Employment Law
38.
[8]
(2012)
5 BLLR 425
(LC).
[9]
[2007] ZACC 20
;
2008
(1) SA 566
(CC).