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[2015] ZALCJHB 184
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Mthembu v Mpumalanga Economic Growth Agency (J991/15) [2015] ZALCJHB 184 (17 June 2015)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Not Reportable
Case
no: J991/15
MTHEMBU QINISO
CHRISTOCENTRIC
Applicant
and
MPUMALANGA ECONOMIC GROWTH
AGENCY
Respondent
Heard:
11 June 2015
Delivered:
17 June 2015
JUDGMENT
TLHOTLHALEMAJE,
AJ
Introduction:
[1]
The applicant
approached the Court on an urgent basis to seek an order declaring
the agreement of employment concluded between her
and the respondent
on 20 December 2013 to be extant, and further ordering the respondent
to abide by the terms of that agreement.
The application is opposed.
Background
to the dispute:
[2]
The respondent was established
in terms of section 2 of the Mpumalanga Economic Growth Agency Act,
2010, a provincial act assented
to by the Mpumalanga Provincial
Legislature on 29 March 2010. The applicant was appointed as its
Manager: Operations in terms of
a letter of appointment and contract
of employment signed on 20 December 2013. She started her employment
on 6 January 2014. The
appointment was subject to a positive
verification of her qualifications and a six months probationary
period. On 19 August 2014,
Advocate Boyce Mkhize, the then Chief
Executive Officer of the respondent had confirmed her successful
completion of the probation
period and her position with effect from
1 July 2014.
[3]
In or about June or July 2014,
the appointments of senior employees within the respondent, including
that of the applicant received
media attention. Mkhize who had
contacted the applicant and invited her to apply for the position and
confirmed her appointment,
had in the face of these enquiries left
his position by mutual agreement with the respondent. Thulani Nobela
took over from Mkhize
in August 2014.
[4]
On 22 October 2014, Nobela had
sent the applicant a letter informing her that in the light of media
enquiries about her and other
employees’ appointment, the
respondent’s board had commissioned a ‘special audit’
into allegations that
her appointment was irregular. These
irregularities pertained to the fact that the applicant’s
highest qualification was
grade 12 whereas the position she occupied
required a Bachelor’s degree or equivalent; that the
advertisement for the position
closed on 30 July 2013 and there was
no proof that she had submitted her application for the position
prior to the closing date;
and further that although the
advertisement envisaged the position would be for a fixed period of
five years, she was nevertheless
appointed on a permanent basis.
[5]
In his letter, Nobela had
invited the applicant to confirm or object to the allegations, and to
show cause why action should not
be instituted against her. The
applicant had responded on 24 October 2014, informing Nobela that it
was the respondent that had
made a determination that she was fit for
the position following the consideration of her CV and her interview.
[6]
A new Chief Executive Officer,
Sithole, was appointed in January 2015. The applicant met with
Sithole on 14 April 2015. She was
had handed a letter stating
that following an enquiry into the circumstances of her appointment
and further having considered
her response to Nobela’s letter
of October 2014, the respondent had concluded that her appointment
was irregular, flawed
in law, invalid, and stood to be rescinded. The
applicant was invited to provide reasons within five days as to why
the employment
agreement should not be rescinded.
[7]
On 24 April 2015, the
applicant had sent a letter to the respondent and disputed that there
was a legal basis to terminate her contract
of employment. Her
attorneys of record also sent correspondence to the respondent,
reiterating her position and further requested
an undertaking that no
steps would be taken to rescind the contract.
[8]
In the light of a response not
forthcoming, the applicant’s attorneys of record had on 8 May
2015 followed up on the letter
of 24 April 2015. Still no response
was forthcoming, and on 15 May 2015, the applicant was called to
Sithole’s office where
she was handed a letter informing her of
the rescission of her contract of employment. The correspondence of
18 May 2015 by the
applicant’s attorneys of record to the
respondent demanding that the contract not be rescinded received no
response.
Urgency:
[9]
The main basis of the
respondent’s opposition to this application is that it ought to
be dismissed solely on account of lack
of urgency. The applicant set
out the grounds of urgency in paragraphs 58 to 71 of her founding
affidavit which can be summarised
as follows;
9.1
On 15 May 2015 her attorneys of record requested an undertaking from
the respondent by 18
May 2015 that it would continue to abide by the
terms of the contract of employment;
9.2
Further correspondence was sent by her attorneys on 18 May 2015
reminding the respondent
that it sought an undertaking by 17h00 on
that day;
9.3
The termination of her employment will result in severe irreparable
financial harm in the
context of her living arrangements; her ability
to financially support her extended family; future career
opportunities and future
financial commitments;
9.4
The loss of employment will have extreme adverse effects on her and
her family as she was
the sole breadwinner; she owned property
subject to a loan; had relocated to Nelspruit from Johannesburg after
her appointment
and had bills to pay;
9.5
She did not have suitable job prospects in Nelspruit and would thus
have to urgently sell
her property and relocate to Johannesburg.
Furthermore, the termination of her contract will harm her
reputation.
[10]
In further contending that the application is
urgent, it was submitted on the applicant’s behalf that her
employment was summarily
terminated without notice, that the
termination of her contract in the light of the media interest
suggests misconduct and the
respondent’s unlawful conduct
harmed her reputation. It was further added that the harm she had set
out in her founding affidavit
necessitates urgent intervention by the
court; that she had acted with reasonable expedition when it became
clear that the respondent
was not willing to reconsider the
rescission of her employment, and that the time limits imposed on the
respondent occasioned it
no prejudice.
[11]
Submissions
made on behalf of the respondent were that being placed in an adverse
financial position was not a basis of urgency;
that financial
hardship or loss of income was not regarded as a ground of
urgency
[1]
; that on her own
version, the applicant was aware of the fact that there were
considerations to have the contract rescinded, and
that a notice was
issued to her on 14 April 2015. It was contended that she took no
steps to challenge the decision until on the
eve of her financial
expectations being affected, and that she had simply set out
circumstances that would befall any employee
or person who suffers
the consequences of the termination of a contract or dismissal.
Essentially, the respondent’s contention
is therefore that the
urgency alleged is self-created.
Evaluation:
Urgency:
[12]
Rule
8 of the Rules of this Court
[2]
deals with urgent applications, and requires an applicant to provide
cogent reasons why the matter is urgent and why the rules
of this
Court have not been complied with
[3]
.
Whether a matter is urgent involves two considerations. The first is
whether the reasons that make the matter urgent have been
set out,
and secondly whether the Applicant seeking relief will not obtain
substantial relief at a later stage.
[13]
It
is equally trite that an Applicant is not entitled to rely on urgency
that is self-created when seeking a deviation from the
rules
[4]
.
In
National
Police Service Union and others v National Negotiating Forum and
others
[5]
,
this court held the view that the latitude extended to parties to
dispense with the rules of the court in circumstances of urgency
is
not be available to parties who are dilatory to the point where their
very inactivity is the cause of the harm on which they
rely on to
seek relief.
[14]
From
the above, it follows that an applicant should be struck off the roll
for want of urgency if no convincing material has been
placed before
the court as to why it should intervene. The basis for allowing
parties to dispense with the Rules of Court relating
to time periods
is to prevent the occasioning of an injustice and involves the
balancing of this consideration with that of the
rights of parties to
a considered opportunity to place their cases before the court
[6]
.
[15]
In this case, it was common cause that as at 14
April 2015, the applicant was informed of irregularities surrounding
her appointment.
From that date, there were engagement between the
parties, including from the applicant’s attorneys of record as
to the reason
the respondent should not rescind the employment
contract. The contract was ultimately rescinded with immediate effect
on 15 May
2015, and the applicant had approached this court some ten
days later on 25 May 2015. This was also after the applicant’s
attorneys of record’s correspondence of 18 May 2015 to the
respondent to request certain documentation remained unanswered.
[16]
The
question whether financial hardship and loss of income as a
consequence of a termination of employment contract can constitute
a
ground of urgency was considered and determined in the negative by
this court in a number of decisions
[7]
.
The Court in
Democratic
Nursing Organisation of South Africa
,
however appreciated that there may be circumstances where financial
hardship may be a consideration and held that:
“
In order to
succeed when reliance is based on financial hardship, exceptional
circumstances must be shown before an urgent interim
relief can be
granted.”
[17]
In
Garry
Harley v Bacarac Trading 39 (Pty) Limited
[8]
,
the Court rejected the approach that financial hardship and loss of
income can never constitute grounds for urgency, and held
that;
“
The principle
established in these cases is one that inclines this court to avoid
granting what amounts to status quo relief in
unfair dismissal
disputes pending a final determination of the dispute by the
appropriate dispute resolution body. None of these
cases, it seems to
me, establishes that financial hardship and loss of income can never
be grounds for urgency. If an applicant
is able to demonstrate
detrimental consequences that may not be capable of being addressed
in due course and if an applicant is
able to demonstrate that he or
she will suffer undue hardship if the court were to refuse to come to
his or her assistance on an
urgent basis, I fail to appreciate why
this court should not be entitled to exercise a discretion and grant
urgent relief in appropriate
circumstances. Each case must of course
be assessed on its own merits”
[9]
[18]
It is accepted that the loss of income and
financial hardship are natural consequences of a termination of any
contract of employment.
After all, an employee enters into an
employment relationship in return for or expectation of remuneration.
It is further accepted
that it would be untenable for this court to
willy-nilly accept a loss of income or financial hardship as a basis
for granting
urgency in every given circumstances, as all employees
dismissed for whatever reason can then jump the proverbial litigation
queue
and run to court on an urgent basis.
[19]
I nevertheless align myself with the view that
the court should not as a rule of thumb, throw out urgent
applications brought mainly
on the grounds of financial hardship or
loss of income, and should rather look at the merits of each case,
ascertain whether compelling
or exceptional circumstances exist for
it to intervene on an urgent basis, and then exercise its discretion
accordingly. In line
with this approach, I further accept that an
employee should be entitled to urgent relief if she can demonstrate
detrimental consequences
that may not be capable of being addressed
in due course and if she is able to show that she will suffer
irreparable hardship if
the Court did not intervene on an urgent
basis.
[20]
The
starting point in my view is section 23 (1) of the Constitution
[10]
,
which affords everyone a right to fair labour practices, and section
33 (1) of the Constitution which affords everyone the right
to
administrative action that is lawful, reasonable and procedurally
fair. These provisions are amplified further by those of section
185
of the LRA in terms of which every employee has a right not to be
unfairly dismissed or subjected to unfair labour practices.
It
therefore follows that if the employer in circumstances that appear
grossly unfair or unlawful infringes these rights, the subsequent
consequences of financial hardship and loss of income are factors
that ordinarily arise from the infringement of these rights,
and
these factors should persuade the court to intervene on an urgent
basis.
[21]
In this case, it may be argued that the
applicant may not have been diligent in her efforts to file the
application as soon as the
decision to rescind her contract was
taken, in the light of the ten days it took her to approach this
court. It is however my view
that
the
applicant’s dilatoriness cannot be said to have been to the
point where it can be said that it was the main cause of the
harm on
which she rely on to seek relief.
The
harm was essentially caused by the rescission of her contract of
employment. The d
etrimental
consequences of that decision are such that the application should be
heard on an urgent basis.
[22]
As already indicated,
it is not always that this court should regard financial hardship and
loss of income as grounds for urgency,
but in this case the applicant
has adduced sufficient evidence to support these grounds, which
invariably extends beyond pure financial
considerations. In
conclusion on this issue,
I am willing to
further accept that the lack of diligence was not unreasonable given
the circumstances of this case, and even if
a contrary view was to be
held, there are other factors in this case that are indeed compelling
and exceptional to call for the
court’s intervention as
illustrated below.
[23]
Notwithstanding the respondent’s contention
that there are material disputes of facts in this case, I have no
hesitation in
concluding that the applicant is an innocent party in
this case. On her version, she was invited to apply for the position
by Mkhize
who has since jumped ship. This was despite it being
apparent that her qualifications did not clearly meet the
requirements of
the post. She had submitted her CV
albeit
after the closing date, was interviewed and appointed. This was all
done under the watch of Mkhize, whose confirmatory affidavit
was
filed to confirm the applicant’s allegations. The wheels
started coming off the cart when her appointment and that of
other
senior employees came under media spotlight, and her case was not
made less onerous by the departing of Mkhize.
[24]
The
circumstances of this case brings into question whether an employer
such as the respondent (which is a statutory creation),
having found
that certain appointments were invalid or unlawful for whatever
reason, can at a stroke of a pen, set aside those
appointments, in
the absence of legal steps having been taken as contemplated in
section 158 (1) (h) of the LRA
[11]
.
This is said bearing in mind the principles set out in
Edcon
v Steenkamp and Others
[12]
.
[25]
The nature of our polity is such that there is a
constant change in guard in our state institutions and structures. It
would thus
be untenable that each time there is a change in guard,
current employees are removed at a stroke of a pen, without regard to
due
processes and their rights as alluded to above, simply on the
basis that the new guard is of the opinion that those appointments
may be invalid. This is so even if there is a basis on the principles
of illegality to remove those employees. In my view, to simply
rescind such appointments is
prima facie
unfair, especially in circumstances where the appointee is an
innocent party as in this case, and there is no evidence or
suggestion
that she may have prompted or solicited the invalid or
unlawful appointment complained of. We are a constitutional
democracy, and
even if appointments made are invalid or unlawful for
whatever reason, it is expected that due process should be followed
in setting
them aside. In this case therefore, there is nothing to
gainsay the applicant’s contention that she was invited by
Mkhize
to apply for the position, notwithstanding the flaws that the
respondent had subsequently discovered in relation to her and others’
appointments.
[26]
A further consideration in this case is that the
termination of the applicant’s contract was effected
unilaterally and immediately
on 15 May 2015 without notice. The
respondent does not in any manner dispute the financial hardship
visited upon her as a result
of the rescission of the contract other
than to contend that they are not a ground for urgency. As a result
of her appointment
she had relocated to Mpumalanga from Johannesburg,
and other than this consideration, there are other financial
hardships and consequences
that follow from the rescission of her
contract, which it would be remiss of this court to ignore.
[27]
It is accepted that the rescission of the
contract may have been foreseen as far as April 2015. Nevertheless, I
am not convinced
however that this was justification to effect the
rescission with immediate effect on 15 May 2015, and without due
regard to the
applicant’s fundamental rights. In these
circumstances, I am satisfied that in this case, compelling and
exceptional factors
have been placed before the court for its urgent
intervention. That urgency is in my view real and not self-created,
and there
is no reason to believe that by this application, the
applicant is abusing the processes of this court.
The
merits:
[28]
With this application, the applicant seeks
specific performance, i.e. to enforce the terms of the employment
contract concluded
between the parties. In the light of the finding
that the application is urgent, the matter will be dealt with on the
basis of
the pleadings before the Court. In the answering affidavit,
the respondent had indicated that there are material disputes of
fact,
which the applicant ought to have foreseen.
[29]
It however
needs to be stated that having considered the respondent’s
answering affidavit, no material disputes of fact arise
therein as
there is nothing to refute the applicant’s allegations
pertaining to the circumstances of her appointment and
the rescission
of her contract of employment. A confirmatory affidavit from Mkhize
was also attached to the applicant’s replying
affidavit and
there is nothing to gainsay her contentions. There is therefore no
basis upon which the principles set out in
Plascon
Evans Paints Limited v Van Riebeeck Paints (Pty) Limited
[13]
can
find application in this case as any material disputes of fact (if
there are) have not been placed before the Court.
[30]
Since the applicant seeks
specific performance, which by its nature is a status quo order if
granted, I am in agreement with the
submissions made on her behalf
that issues surrounding balance of convenience do not play a role in
this case. Furthermore, on
the respondent’s own version, the
rescission of the contract took place on the basis of invalidity or
unlawfulness. The issue
of whether the applicant has an alternative
remedy further in my view becomes moot, in that she was entitled to
approach the court
in the light of her election not to accept the
repudiation of her contract.
[31]
In her replying affidavit, the applicant had
correctly pointed out that a party loses its right to file further
affidavits in the
event that its challenge to urgency fails. Thus if
in an urgent application the only opposition is on the grounds of
urgency, that
is a risk that the respondent party takes. The
respondent had a period of nine days (11 days in the light of the
indulgence granted
by the applicant) within which to file a
comprehensive answering affidavit, and the risks should have been
foreseen. In the answering
affidavit, the basis for rescinding the
agreement was that the respondent had every right to do so as there
was a material error,
and that the applicant was appointed in breach
of specified prescripts. However, these material errors or specified
prescripts
are not addressed with any particularity.
[32]
In contending that the applicant is entitled to
specific performance, it was submitted on her behalf that the
respondent’s
purported rescission of the agreement amounted to
repudiation, and that since she had not accepted the repudiation, she
was entitled
to enforce the terms of that agreement. The respondent
had unilaterally decided to rescind the agreement in circumstances
where
there is no basis to do so other than that the agreement may
have been invalidly or unlawfully entered into. At the same time,
there is nothing to indicate that the applicant did anything wrong,
other than accepting an offer of employment by the then CEO.
No
attempt was made to subject her to any due process to establish
whether she may have been party to any wrong doing, and it is
apparent the rescinding of the agreement was influenced by other
considerations other than the applicant’s conduct.
[33]
In the letter of 15 May 2015, the respondent
provides its reasons as being that the contract was invalid from
inception. Even if
this was the case, more than merely requiring of
the applicant to make written submissions as to the reason the
contract should
not have been rescinded fell short of expected due
processes under the circumstances, and in particular, since it could
not be
pointed out that she was at fault.
[34]
The court finds jurisdiction to consider
the applicant’s claim for specific performance by virtue of the
provisions of section
77 of the Basic Conditions of Employment Act.
In
Edcon
, the Labour
Appeal Court had held that;
“
The
failure by an employer to give proper or valid notice of termination
to an employee can be construed as a breach of contract
and if
material may result in a wrongful or unfair termination of
employment, entitling the employee to invoke the remedies either
of
specific performance or damages for wrongful termination; or
reinstatement, re-employment or compensation (in terms of section
193
of the LRA) for unfair dismissal.”
[14]
I
accept that
courts
in general should be ‘slow and cautious’ in not enforcing
contracts, and that performance should be refused only
where a
recognised hardship to the defaulting party is proved.
[15]
The respondent in this case has not placed anything before the Court
to indicate any hardship that may befall it should specific
performance be ordered. The rescission of the contract having
constituted a repudiation, the applicant elected not to accept it
and
elected to seek specific performance, which is a permissible step in
terms of section 77 of the BCEA and as confirmed in
Edcon
.
It is further accepted that in contract law, an innocent party
complaining of a breach of contract is entitled as of right to
claim
specific performance. If she is not granted the relief she seeks, she
will continue to suffer harm for consequences which
are not of her
own making. To this end, nothing has been placed before the court to
indicate any sustainable reason why it should
not exercise its
discretion in favour of the applicant.
Costs
[35]
The applicant sought a cost order, including the costs of two
counsel. It has already been indicated that the rescission of
the
contract of employment found no basis on the papers before the court.
The applicant was compelled to approach to defend her
rights to fair
labour practices or fair administrative actions. All that the
respondent could muster was an unsustainable approach
that the
application was not urgent, and in the process failed to address the
substantive allegations made by the applicant. It
is trite that
this court has a wide discretion in
terms of the provisions section 162 (1) of the LRA to make orders for
costs according to the
requirements of the law and fairness. Having
regard to all of the relevant facts and circumstances of this case,
it is my view
that the respondent should be burdened with the costs
of this application.
Order:
i.
The agreement of
employment entered into between the applicant and the respondent on
20 December 2013 is declared to be extant.
ii.
The respondent is
ordered to abide by the terms of that agreement.
iii.
The respondent is
ordered to pay the costs of this application.
__________________
Tlhotlhalemaje, AJ
Acting
Judge of the Labour Court of South Africa
APPEARANCES:
On
behalf of the Applicant:
Adv HM Viljoen with Adv J MacDonald
Instructed
by:
Cowan –Harper Attorneys
On
behalf of the respondent:
Adv. B Ford
Instructed
by:
MV Gwala & Associates INC
[1]
Hultzer v
Standard Bank of South Africa
[1999] 8 BLLR 809
(LC) at para [13;
Malatji v University of the North [2003] ZALC 32 (LC)
[2]
Which
provide that;
“
(2)
The affidavit in support of the application must also contain-
(a) the reasons for urgency and why
urgent relief is necessary;
(b) the reasons why the requirements
of the rules were not complied with, if that is the case ...”
[3]
Clause 12.5
of the Practice manual of the Labour Court equally obliges an
Applicant to set out explicitly the circumstances which
render the
matter urgent
[4]
Jiba v
Minister: Department of Justice and Constitutional Development and
Others (2010) 31 ILJ 112
(LC)
at para 18.
[5]
(1999) 20
ILJ 1081 (LC) para [39]
[6]
National
Police Services Union and Others v National Negotiating Forum and
Others (1999) 20 ILJ
1081
(LC)
[7]
Democratic Nursing Organisation of South Africa and Others v The MEC
for Health: North Cape (case number: J2386/08; Hultzer v
Standard
Bank of South Africa (Pty) Ltd [1999] 8 BLLR 809 (LC), at para [13];
Malatji v University of the North
[2003] ZALC 32
(LC); and National
Sorghjum Bierbrouery (Edms ) Bpk (Rantoria Divisie) v John NO &
Ander (1990) 11 ILJ 971 (T); Jonker v
Wireless Payments Systems CC
(2010) 31 ILJ 381 (LC)
[8]
(2009) 30
ILJ 2085 (LC)
[9]
At para [8]
See also UTATU SARWHU v Autopax Passenger Services (SOC) LTD (Case
no: J 1931 / 2013
[10]
The
Constitution of the Republic of South Africa, 1996
[11]
Which
provides that the Labour Court may
“
review
any decision taken or any act performed by the State in its capacity
as employer, on such grounds as are permissible in
law”.
[12]
(JS648/13,
JS51/14, JS350/14)
[2015] ZALAC 2
(3 March 2015) at para [41]
where the LAC held that;
“
The
definition of dismissal is thus wide enough to include a wrongful or
“invalid” termination in violation of contractual
or
statutory notice periods within its ambit. The word “terminated”
in section 186(1)(a) of the LRA should be given
its ordinary meaning
of “bringing to an end”. The ordinary meaning is not
coloured by the lawfulness, fairness or
otherwise of the action. The
fact that a remedy may exist to redress any wrongfulness or
unfairness does not per se alter the
consequence of an ending
brought about by the employer’s action. As a rule, a wrongful
or unfair termination will only
be reversed (and the contractual
rights and obligations restored) by the grant of the remedy of
specific performance or an award
of retrospective reinstatement at
the discretion of the court. The resultant legal position is not
unlike that prevailing in
administrative law where a declaration of
illegality will not have the inevitable consequence that wrongful
action will be declared
invalid and set aside.”
[13]
1984 (3) SA
623(A)
[14]
At para [37]
[15]
Santos
Professional Football Club (Pty) Ltd v Igesund & another
2003
(5) SA 73
(C), as referred to with approval in Ngubeni v The
National Youth Development Agency and Another (J 2322/13) [2013]
ZALCJHB
269 (21 October 2013) at para [19].