Uthukela District Municipality v Khoza and Others (D 735 / 2013) [2015] ZALCD 19 (20 March 2015)

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[2015] ZALCD 19
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Uthukela District Municipality v Khoza and Others (D 735 / 2013) [2015] ZALCD 19 (20 March 2015)

REPUBLIC
OF SOUTH AFRICA
THE LABOUR COURT
OF SOUTH AFRICA, DURBAN
JUDGMENT
Case no: D 735 /
2013
DATE: 20 MARCH
2015
Reportable
In the matter
between:
UTHUKELA DISTRICT
MUNICIPALITY
...........................................................................
Applicant
And
BHEKI HAMILTON
KHOZA
....................................................................................
First
Respondent
SOUTH AFRICAN
LOCAL GOVERNMENT
BARGAINING
COUNCIL
......................................................................................
Second
Respondent
ARBITRATOR
MLUNGISI
SABELA
.....................................................................
Third
Respondent
Heard:
21 October 2014
Delivered:
20 March 2015
Summary:
Bargaining council arbitration proceedings – Review of
proceedings, decisions and awards of arbitrators – Test
for
review – Review concerning issue of jurisdiction – Test
of rationally and reasonableness does not apply –
Issue
considered
de novo
as to whether arbitrator right or wrong
Practice
and procedure – Review grounds based on case never before
arbitrator – Impermissible to raise such review grounds
–
Review grounds rejected
Practice
and procedure – Pr-arbitration agreement as to how case is to
be conducted – Parties bound by such agreement
– Review
grounds contrary to such agreement rejected
Municipal
Systems Act – Sections 56 and 57 – Consideration and
interpretation of such sections – Application to
employment
contract of senior manager considered
Dismissal
– Meaning of dismissal – Employer prematurely bringing
employment contract to an end – Constitutes dismissal
Dismissal
– Allegation of invalid contract – Act of employer
seeking to abolish contract constituting dismissal
Employment
contract – Unilateral termination by employer prior to expiry
of contract term – Such constituting unfair
dismissal –
Arbitration award upheld
Snyman AJ
Introduction
[1]
This matter concerns an application by the applicant to review and
set aside an arbitration award of the third respondent in
his
capacity as an arbitrator of the SALGBC (“the second
respondent”). This application has been brought in terms of

Section 145 of the Labour Relations Act
[1]
(“the LRA”).
[2]
The very issue before the third respondent as arbitrator was whether
the first respondent had been dismissed by the applicant,
or whether
the first respondent’s employment had been terminated by
operation of law. The first respondent however, contended
that he had
been dismissed on 6 June 2012, and he pursued his contended dismissal
an unfair dismissal dispute to the second respondent,
being the
applicable bargaining council. The matter came before the third
respondent for arbitration on 13 April 2013. The third
respondent, in
an award dated 13 July 2013, determined that the first respondent had
indeed been dismissed by the applicant, and
that such dismissal was
unfair. The applicant was directed to reinstate the first respondent
with effect from 11 June 2012, and
pay the first respondent back pay
from 1 January 2013 in an amount of R481051.26. It is this
determination by the third respondent
that forms the subject matter
of the review application brought by the applicant, which application
was timeously filed on 23 July
2013.
Background facts
[3]
Fortunately in this matter, the case was presented by way of what was
in effect tantamount to an agreed statement of facts.
No
viva voce
evidence was led as to the merits of the matter. There was also a
bundle of documents presented as agreed and accepted evidence.
The
parties also made written submissions in support of their respective
cases. The background facts set out hereunder are extracted
from all
this agreed evidence.
[4]
The first respondent was employed by the applicant as the Executive
Director: Health and Environmental Services. The first respondent
was
in fact appointed to head up that department in the applicant. The
first respondent occupied this position as from 1 July 2005.
[5]
On 15 July 2006, the applicant and the first respondent concluded a
written contract of employment, for a fixed period of five
years,
commencing on 1 July 2006. As stated, and in terms of this contract,
the first respondent was appointed as the Executive
Director: Health
and Environmental Services, and reported to the Municipal Manager.
Provision was made for the renewal of the contract
upon expiry upon
mutually agreed terms and conditions.
[6]
Despite the commencement of the five year period in terms of the
aforesaid contract being defined as 1 July 2006, and the contract

thus expiring on 30 June 2011, it appears that the parties commenced
a process of concluding another contract with the first respondent
in
2010. There was never any evidence as to why this was the case. In
this regard, however, a meeting of the Council was held on
31 May
2010 to discuss the renewal of the contract of the first respondent.
The Council then adopted a resolution on 31 May 2010
(resolution
7.3). The resolution records that the issue of the contract period of
the first respondent, going forward, was debated.
The resolution
further reflects a consideration of the issue of an appropriate fixed
term contract period, in the form of a statement
that the Municipal
Manager’s contract cannot exceed five years, but the other
heads of department could have longer contract
based on the
prerogative of the Council. Pursuant to this discussion, it was
resolved as follows:
‘
Mr
B H Khoza’s contract be renewed for seven (7) years as the
Executive Director Health and Environmental Services with effect
from
1 July 2010.
The
Municipal Manager as the administrative head of the municipality
enter into a seven (7) years contract with the Executive Director

Health and Environmental Services in accordance with Section 57 of
the Municipal Systems Act’
[7]
A further fixed term contract was then indeed concluded between the
Municipal Manager and the first respondent, on 1 July 2010,
pursuant
to the above resolution. The first respondent was again appointed as
Executive Director: Health and Environmental Services,
reporting
directly to the Municipal Manager. The contract commenced on 1 July
2010 and would endure for a period of 7(seven) years,
ending 30 June
2017. The applicant, however, had the right to terminate the contract
before the expiry of the fixed term, on three
months’ notice,
but subject to applicable labour laws.
[8]
It was common cause that the first respondent’s appointment was
made in terms of the Municipal Systems Act (‘the
Systems
Act’)
[2]
.
There was however, an issue between the parties as under which
section of the Systems Act the appointment of the first respondent

was made, being in terms of section 56 or 57. I will address this
later in this judgment. However, and having been so appointed
and
having concluded the contract referred to above, the first
respondent, at all relevant times, properly discharged his duties
in
terms of this appointment.
[9]
The Systems Act was amended with effect from 5 July 2011.
[3]
This amendment included amendments to sections 56 and 57.
Considering the case advanced by the applicant (as will be dealt
with
hereunder), it is necessary to refer to the relevant parts of these
two sections, as they existed prior to and after the amendment.
[10]
I will first refer to section 56, which is the section in the Systems
Act that provides for the appointment of managers that
are directly
accountable to the Municipal Manager. Prior to 5 July 2011, section
56 provided that a manager directly accountable
to the Municipal
Manager is appointed by the Council, and the person so appointed must
have the requisite qualifications and skills
for the position, but
also taking into account affirmative action objectives. Then, and
after 5 July 2011, section 56 read thus:
‘
(1)
(a) A municipal council, after consultation with the municipal
manager, must appoint – (i) a manager directly accountable
to
the municipal manager ….
(b)
A person appointed in terms of paragraph (a)(i) must at least have
the skills, expertise, competence and qualifications as prescribed.

….
(5)
If a person is appointed to a post referred to in subsection 1(a) in
contravention of this Act, the MEC for local government
must, within
14 days of becoming aware of such appointment, take appropriate steps
to enforce compliance by the municipality with
this Act, which steps
may include an application to court for a declaratory order on the
validity of the appointment of any other
legal action against the
municipality. ….
(7)
A person appointed in a permanent capacity as a manager directly
accountable to the municipal manager when this section takes
effect
must be regarded as having been appointed in accordance with this
section.’
[11]
Turning then to section 57, this is the section that regulates the
issue of employment contracts, both for the Municipal Manager,
and
the managers directly accountable to the Municipal Manager.
Section 57(1)(a) required that all such managers must have
a written
contract of employment signed by both parties. Prior to 5 July 2011,
the relevant further parts of the section 57 read:
‘
(3)
The employment contract referred to in subsection 1(a) must include,
subject to applicable labour legislation, details of duties,

remuneration, benefits and other terms and conditions of employment
….
(6)
The employment contract for a municipal manager must – (a) be
for a fixed term of employment up to a maximum of five years,
not
exceeding a period ending one year after the election of the next
council of the municipality ….
(7)
A municipality may extend the application of subsection (6) to any
manager accountable to the municipal manager.’
Then,
and after 5 July 2011, the relevant part of section 57 read:
‘
(3)
The employment contract referred to in subsection 1(a) must –
(a)
include the details of duties, remuneration, benefits and other terms
and conditions as agreed to by the parties, subject to
consistency
with–
(i)
this Act;
(ii)
any regulations as may be prescribed that are applicable to municipal
managers or managers directly accountable to municipal
managers; and
(iii)
any applicable labour legislation ….’
(6)
The employment contract for a municipal manager must – (a) be
for a fixed term of employment up to a maximum of five years,
not
exceeding a period ending one year after the election of the next
council of the municipality ….’
In
addition, subsection (7) allowing for the application of subsection
(6) to managers directly accountable to the Municipal Manager
was
deleted by way of the amendment.
[12]
Following the 2011 amendment of the Systems Act, the Department of
Co-operative Governance and Traditional Affairs for Kwa-Zulu
Natal
(‘Cogta’) issued circular 37 of 2011, on 3 October 2011.
It was recorded in such circular that its purpose was
to emphasize
the provisions of the Systems Act (especially the amendments) and the
legal responsibility on Municipal Councils as
a result. It was
recorded that the MEC was obliged to take appropriate steps to ensure
compliance with,
inter alia
, section 56 of the Systems Act.
Because of the responsibilities that rested on the MEC in terms of
the amended Systems Act, the
circular was intended to impress on the
Municipalities why it was important that all information that had to
be provided to the
MEC in terms of the Systems Act by the
Municipalities, had to be timeously and properly provided. However,
and of importance to
the proceedings
in casu
, the circular
recorded that the recommended procedure when appointing a municipal
manager or a manager directly accountable to
the municipal manager
was that the post had to advertised in a national newspaper as
sanctioned by council resolution, the decision
for the constituting
of the short list panel and details of its members had to be
sanctioned by council resolution, and the decision
for the
constituting of the interview panel and details of its members also
had to be sanctioned by council resolution.
[13]
What followed circular 37 of 2011 was then circular 5 of 2012, issued
by Cogta on 3 May 2012. The purpose of circular 5 of
2012 was to
enlighten the functionaries in the municipalities of the requirements
and the provisions of the Systems Act where it
came to the
recruitment, appointment and employment of municipal managers and
managers directly accountable to municipal managers.
The circular was
critical about the manner in which such managers had been appointed
in the past. It was explained in detail how
such managers had to be
recruited, selected and appointed going forward, and what information
about such appointments then having
to be supplied to the MEC. It was
recommended that the MEC should first endorse the appointments to
prevent possible disputes and
legal problems. Circular 5 of 2012 also
dealt with existing employment contracts of municipal managers and
managers directly accountable
to municipal managers, and recorded
that the following principles must be considered: (1) the Systems Act
provided that an employment
contract must be for a fixed term of
employment up to a maximum of five years, not exceeding a period of
one year after election
of the next council; (2) Mayors are required
to scrutinize the employment contracts of municipal managers and
managers directly
accountable to municipal managers to determine
compliance with these fixed term provisions; (3) Council should
immediately commence
with recruitment processes to expedite the
filling of posts.
[14]
Circular 13 of 2012 from Cogta promptly followed on 15 May 2012, and
was intended to provide a ‘further guide’
with regard to
the principles as set out in circular 5 of 2012 in respect of the
appointment of municipal managers and managers
directly accountable
to municipal managers. In circular 13 of 2012, ‘practical
measures’ were proposed with regard
to instances where there
was a termination of the employment contracts of municipal managers
and managers directly accountable
to municipal managers, which
measures were: (1) municipalities may retain these senior managers on
a month to month basis, in an
acting capacity, up to a maximum of six
months; (2) the municipality, if it does not retain such managers,
may appointed internal
employees in an acting capacity for not more
than six months, provided such employees are suitably qualified; (3)
secondment of
employees from district municipalities could be
considered; and (4) the MEC could be requested to second other
suitably qualified
individuals at the municipality’s cost.
Properly considered, this circular informed municipalities what could
be done in
the interim, where the employment contracts of municipal
managers and managers directly accountable to municipal managers
ended,
but the post still needed to be filled.
[15]
All of these circulars, and the amendments that were effected to the
Systems Act, prompted the applicant to seek its own legal
opinion
from attorneys in Ladysmith, being Ramkhelawan Inc. In a written
opinion dated 23 May 2012, Ramkhelawan stated that the
amendment to
section 57 of the Systems Act does not take away the discretion of
the council to determine the terms of employment
of managers directly
accountable to the municipal manager. Ramkhelawan further said that
the duration of the contract of a manager
directly accountable to the
municipal manager is determined by the actual terms of the contract
itself that was entered into. Ramkhelawan
concluded that the
assertion that the employment contracts of managers directly
accountable to the municipal manager would terminate
on 18 May 2012
was incorrect, and that the employment contract of managers directly
accountable to the municipal manager may only
be terminated of the
expiry of the actual stipulated term in that contract.
Ramkhelawan specifically said that any attempted
reliance on
circulars 5 and 13 of 2012 as substantiation for earlier termination
of such employment contracts would be incorrect.
[16]
Another document in evidence was circular 14 of 2012 issued by the
South African Local Government Association (‘SALGA’),

dated 28 May 2012, of which the applicant is a member. The circular
records that SALGA had been ‘inundated’ by requests
from
municipalities to provide guidance where it came to the issue of the
termination of the employment contracts of municipal
managers and
managers directly accountable to municipal managers, following the
amendments to the Systems Act. SALGA stated that
circulars issued by
provincial departments in this regard were contradictory,
inconsistent with the law, and caused ‘general
confusion in the
sector’. After discussing the relevant Constitutional framework
governing municipalities and referring to
the Systems Act (as
amended), SALGA expressed the view that where it came to a manager
directly accountable to a municipal manager,
the municipality had the
discretion as to the terms of appointment of such managers. According
to SALGA, unless the employment
contract of such managers contained
an express provision as contemplated by the now repealed Section
57(7), the agreements of such
managers must be allowed to run its
course.
[17]
Then, and faced with all of the above, the applicant convened a
special council meeting on 6 June 2012 to
inter alia
discuss
the employment contract of the first respondent. The minutes of such
meeting form part of the documentary evidence. From
these minutes, it
appears that there was some concerns about terminating the employment
contract of the first respondent. A reading
of the minute in my view
reflects all the circulars referred to above, as well as the legal
opinion by Ramkhelawan Inc, was available
for consideration. Finally,
and in this meeting, it was resolved that the employment contract of
the first respondent be ‘abolished’,
the first respondent
be appointed on a month to month basis not exceeding six months, and
the process of advertising for the position
commence immediately.
[18]
On the same day, being 6 June 2012, the first respondent was then
given written notice by the mayor that his employment contract
had
been ‘abolished’ with effect from 6 June 2012 following a
council resolution. The first respondent then approached
his
attorneys, who wrote to the applicant on 11 June 2012, recording that
the ‘abolishment’ of the first respondent’s

contract was not accepted, and was unfounded and arbitrary. The first
respondent’s attorneys attempted to resolve the issue
by
suggesting that the first respondent would accept that the approach
adopted by the applicant could be considered to be issues
of
misunderstanding and misinterpretation, and that the first respondent
was willing to overlook this if the applicant simply restored
the
status quo ante
. The applicant failed to heed this invitation.
[19]
On 20 June 2012, the first respondent then referred an unfair
dismissal dispute to the second respondent, being the bargaining

council with jurisdiction, contending in the referral that the
applicant had terminated his employment before the expiry of its
term
without fair reason on 6 June 2012. The first respondent sought
reinstatement. The dispute was unsuccessfully conciliated
on 18 July
2012, and referred to arbitration on the same date. The first
respondent, at all relevant times, was pursing an unfair
dismissal
dispute and seeking reinstatement.
[20]
In the arbitration before the third respondent on 13 April 2013, the
arbitration was in essence conducted as a stated case,
as I have
referred to above. The only
viva voce
evidence given was by
the first respondent only as to his current employment status.
[21]
By agreement between the parties, the issue the third respondent had
to determine was whether the first respondent had been
dismissed by
the applicant as contemplated by Section 186(1) of the LRA. The crisp
issue relevant to this determination was whether
the applicant was
legally obliged to terminate the employment contract of the first
respondent as a result of the provisions of
sections 56 and 57 of the
Systems Act (as amended), as read with Cogta circulars 5 and 13 of
2012. In short, the case of the applicant
was that the employment
contract of the first respondent expired in terms of the Systems Act,
and even if it had not expired, it
was unlawful and void because it
was at odds with the Systems Act and thus its termination could not
be a dismissal.
[22]
Both parties then indeed submitted written submissions to the third
respondent, as agreed. The third respondent ultimately
made an award
that the first respondent had indeed been dismissed, that such
dismissal was unfair, and the first respondent be
afforded the relief
as set out above. It is this award that then gave rise to this review
application.
The
relevant test for review
[23]
The issue as to whether the first respondent was dismissed by the
applicant is a jurisdictional fact. If there is no dismissal,
then
the bargaining council (second respondent) would have no jurisdiction
to determine the matter in terms of the LRA. This being
the
situation, the review test as enunciated in
Sidumo
and Another v Rustenburg Platinum Mines Ltd and Others
[4]
does
not apply. In specifically considering the judgment in
Sidumo
,
the Labour Appeal Court in
Fidelity
Cash Management Service v Commission for Conciliation, Mediation and
Arbitration and Others
[5]
said:
‘
Nothing
said in
Sidumo
,
supra
, means that the grounds of review
in section 145 of the Act are obliterated. The Constitutional Court
said that they are suffused
by reasonableness. Nothing said in
Sidumo
means that the CCMA’s arbitration award can no longer be
reviewed on the grounds, for example, that the CCMA had no
jurisdiction
in a matter or any of the other grounds specified in
section 145 of the Act.
If the CCMA had no jurisdiction in a
matter, the question of the reasonableness of its decision would not
arise.
Also, if the CCMA made a decision that exceeds its powers
in the sense that it is ultra vires its powers, the reasonableness or

otherwise of its decision cannot arise.’ (emphasis added)
The
same reasoning would clearly also apply to the review of bargaining
council arbitration awards.
[24]
When deciding a review on the basis of jurisdiction, the proper
review test where the existence of the requisite jurisdictional
fact
is objectively justiciable in court, would be whether the
determination of the arbitrator was right or wrong. This was so
held
in
SA
Commercial Catering and Allied Workers Union v Speciality Stores
Ltd
[6]
where the court said:
‘…
Where the
precondition is an objective fact or a question of law, its existence
is objectively justiciable in a court of law and
if the public
authority made a wrong decision in this regard the decision may be
set aside on review…’
And
in
Zeuna-Starker
Bop (Pty) Ltd v National Union of Metalworkers of SA,
it
was held
[7]
:
‘…
The
commissioner could not finally decide whether he had jurisdiction
because if he made a wrong decision, his decision could be
reviewed
by the Labour Court on objectively justiciable grounds...’
[25] In
SA
Rugby Players Association and Others v SA Rugby (Pty) Ltd and
Others,
[8]
the Labour Appeal Court specifically articulated the enquiry as
follows:
‘
The
issue that was before the commissioner was whether there had been a
dismissal or not. It is an issue that goes to the jurisdiction
of the
CCMA. The significance of establishing whether there was a dismissal
or not is to determine whether the CCMA had jurisdiction
to entertain
the dispute. It follows that if there was no dismissal, then, the
CCMA had no jurisdiction to entertain the dispute
in terms of s 191
of the Act.
The
CCMA is a creature of statute and is not a court of law. As a general
rule, it cannot decide its own jurisdiction. It can only
make a
ruling for convenience. Whether it has jurisdiction or not in a
particular matter is a matter to be decided by the Labour
Court…’
[26] There are
several recent applications of this ‘jurisdiction’ review
test by the Labour Court, starting with
Asara
Wine Estate and Hotel (Pty) Ltd v Van Rooyen and Others
[9]
where Steenkamp J reasoned:
‘
The test I
have to apply, therefore, is not whether the conclusion reached by
the commissioner was so unreasonable that no commissioner
could have
come to the same conclusion, as set out in
Sidumo
, but whether
the commissioner correctly found that Van Rooyen had been dismissed.’
The same approach
was followed in
Hickman
v Tsatsimpe NO and Others,
[10]
Protect
a Partner (Pty) Ltd v Machaba-Abiodun and Others,
[11]
Gubevu
Security Group (Pty) Ltd v Ruggiero NO and Others,
[12]
Workforce
Group (Pty) Ltd v CCMA and Others
[13]
and
Stars
Away International Airlines (Pty) Ltd t/a Stars Away Aviation v Thee
NO and Others.
[14]
I conclude with the following reference to what I said in
Trio
Glass t/a The Glass Group v Molapo NO and Others
[15]
:
‘
The
Labour Court thus, in what can be labelled a 'jurisdictional' review
of CCMA proceedings, is in fact entitled, if not obliged,
to
determine the issue of jurisdiction of its own accord. In doing so,
the Labour Court is not limited only to the accepted test
of review,
but can in fact determine the issue de novo in order to decide
whether the determination by the commissioner is
right or
wrong.’
[27]
What all of the above means is that, in determining the question
whether the first respondent was dismissed by the applicant,
I will
decide whether the award of the third respondent was right or wrong,
by way of a
de novo
consideration of the justiciable facts on
record.
The applicant’s
review case
[28]
Before I even start deciding the merits of this review application, I
will first address exactly what the applicant’s
review case is,
and then whether such review case is properly before me for
determination. Starting with the founding affidavit,
it is of no
assistance when seeking to determine what exactly the applicant’s
grounds of review are. The founding affidavit
is permeated with what
can simply be described as general and unmotivated statements of
alleged irregularities without any particularity
as to how it is
arrived at. For example, it is said that the second respondent failed
to consider and to properly evaluate relevant
and admissible
evidence, without any indication of why this is so. There is a bald
statement that the arbitration award is not
reasonable in relation to
the reasons given, but nothing is said as to why. There is no summary
of the background facts. The founding
affidavit is hopelessly
inadequate, and bordering on being a material defect susceptible to
being struck out. It is of no assistance
to the Court where review
applicants simply make generic and unmotivated statements raising
review grounds in the widest possible
terms. If this review
application was founded only on what is contained in the founding
affidavit, I may have been inclined to
dismiss the review application
for this reason alone.
[29]
Fortunately for the applicant, the supplementary affidavit does fare
better. But there are still problems. Firstly, I am somewhat
puzzled
by the fact that the applicant’s supplementary affidavit
contains a number of references to events and issues that
are simply
not relevant to the case at hand, and was never in evidence before
the third respondent. There were statements to the
effect that the
first respondent issued false certificates for a number of vehicles
and that the first respondent was one of the
miscreants in the
municipality responsible for wholesale looting in the municipality.
There was also reference to a disciplinary
process being instituted
against the first respondent. As stated above, the evidence in this
matter was in essence in the form
of a stated case and written
submission by the parties. There is nothing in these documents making
reference to these facts now
raised for the first time in the
supplementary affidavit. It is entirely inappropriate and
unacceptable to raise new material in
a review application that was
not before the arbitrator. In
Rambar
Construction (Pty) Ltd t/a Rixi Taxi v Commission for Conciliation,
Mediation and Arbitration and Others
[16]
the Court held:
‘…
Parties
cannot come before court with fresh evidence no matter how good it is
and hope that the court will find in their favour
when that evidence
ought to have been brought and tested at the arbitration level by the
commissioner…’.
I
shall therefore have no regard to any of these contentions, as the
same simply did not form part of the agreed evidence before
the
arbitrator.
[30]
In the supplementary affidavit, it is stated that the applicant’s
case before the third respondent had been that there
was no dismissal
and that the bargaining council did not have jurisdiction to hear the
case. Elaborating on this, the applicant
says, as a first ground of
review, that there was no dismissal of the first respondent in this
instance because the first respondent’s
employment contract
terminated by way of operation of law in terms of section 57 of the
Systems Act.A second ground of review raised
is to the effect that
the first respondent’s employment contract was ‘illegal’
and thus its termination cannot
be a dismissal. If I consider the
agreed statement of facts and the parties’ closing arguments, I
am satisfied that the issues
relating to these two grounds of review
were indeed placed before the third respondent and were part of the
applicant’s case
at the arbitration. I will thus consider and
determine these grounds of review, hereunder.
[31]
But then, in the supplementary affidavit, the applicant raises a
number of other review grounds. The first of these further
grounds of
review are that the issue in dispute before the third respondent was
the termination of a fixed term contract based
on a misinterpretation
of the law, and that such cases should not come before the bargaining
council, but should be referred directly
to the Labour Court. Then
the applicant also refers to the arbitration clause contained in
clause 10.1 of the first respondent’s
employment contract, and
stated that in terms of this clause, the matter should have been
referred to private arbitration. The
next of these further review
grounds is a contention that the first respondent’s erstwhile
employment contract signed on
15 July 2006 would only expire on 31
July 2011, and there was thus a ‘scheme’ between the
first respondent and one
Mr Nkehli to ‘mislead’ the
council and trick it into an undue renewal of the employment contract
already in 2010. Added
to this, the applicant complains that one
cannot renew a fixed term contract one year before it expires. If I
then consider to
the agreed statement of facts, the documents, and
the written submissions by both parties, none of these issues now
raised as grounds
of review were ever raised or placed before the
third respondent in evidence, or as part of the applicant’s
case the third
respondent was called on to determine.
This
is not permissible. The Court in
Albany
Bakeries Ltd v Van Wyk and Others
[17]
made it clear that it was prohibited for a review applicant to raise
on review a
case
never placed before the arbitrator.
[32]
Even considering that this is a jurisdictional review, determined on
the basis of the arbitrator being right or wrong, the
applicant is
still not entitled to raise a case on review that was never before
the arbitrator in the first place. The applicant,
even in this
regard, must remain bound by the case placed before the arbitrator.
The approach adopted by the applicant is
similar to where an
appellant seeks to raise a new case on appeal, never before the Court
a
quo
,
and it has been made clear that this is not permissible.
[18]
As was said in
National
Union of Mineworkers on behalf of Botsane v Anglo Platinum Mine
(Rustenburg Section)
[19]
:
‘…
. An
issue cannot be properly the subject of an appeal against a dismissal
of the review if the issue had not been put to that review
court as a
ground of review. Thus, even if a contention that, on a balance, the
sanction was too harsh, had enjoyed merit,
which, in our view,
it cannot, it is not open to the court of appeal to entertain it.’
I conclude in this
respect by referring to the following
dictum
from the judgment in
Commercial
Workers Union of SA v Tao Ying Metal Industries and Others
[20]
:
‘…
. A
party who seeks to review an arbitral award is bound by the grounds
contained in the review application. A litigant may not
on appeal
raise a new ground of review. To permit a party to do so may very
well undermine the objective of the LRA to have labour
disputes
resolved as speedily as possible.’
[33]
Therefore, I shall not consider the ground of review of the applicant
relating to the arbitration clause in the contract. I
may mention in
this regard that this ground in any event has no merit of any kind in
any event, considering the wording of clause
10.1 which specifically
excludes disputes in terms of the LRA (which is what this matter
actually relates to) from this prescribed
private arbitration. I
shall equally not consider the grounds of review relating to some or
other ‘scheme’ to mislead
the council into concludingthe
contract, nor the issue as to whether it is possible to renew a fixed
term contract one year before
it expires. The simple point is that
none of these issues were before the third respondent as arbitrator
and it was never part
of the applicant’s case. It is simply not
permissible to raise it now, and thus I will not entertain it.
[34]
Finally, the applicant raised several review grounds as to the manner
in which the third respondent conducted the arbitration,
with
reference to the review record. The applicant complains there was
disproportionate representation in the arbitration, as the

applicant’s representative was facing an experienced labour law
advocate on behalf of the first respondent. The applicant
says
further that the curtailment of cross examination by the third
respondent was prejudicial to the applicant A further issue
raised is
that the third respondent allowed the first respondent’s
representative to ask leading questions. As these are
the kind of
review grounds that can be competently raised following the discovery
of the record of proceedings in the arbitration,
I will equally
consider these review grounds.
The issue of the
conduct of the arbitration
[35]
In a nutshell, the applicant’s case with regard to the issue of
representation, the curtailment of cross examination
and the allowing
of leading questions is a case that the third respondent committed
misconduct in the conducting of the arbitration
as contemplated by
section 145(2)
(a)
(i)
of the LRA.
[21]
[36]
In my view, any case by the applicant of misconduct committed by the
third respondent in the course of the arbitration faces
an
insurmountable obstacle, being the agreed basis on which the
arbitration was in the end conducted. At the outset of the
arbitration,
the applicant’s representative, Mr L Yingwana
(‘Yingwana’) is asked to make an opening statement, and
he says
‘…. In fact we don’t think that there is
any oral evidence that we are going to be leading. On our part, safe

to say that the argument, we’ve got documents, it’s all a
matter of principle. Otherwise I won’t have any opening

address’ (sic). Ms Allen, who also represented the first
respondent in the arbitration, said that she and Yingwana spent
some
time that very morning finalizing pre-arbitration minutes. These
minutes were, as stated above, handed to the third respondent

together with an agreed bundle of documents. Ms Allen said that the
only real issue is the applicability of section 57 of the Systems

Act. Ms Allen further records that it had been agreed that the matter
be dealt with by way of written submissions by both parties.
Ms Allen
finally stated that the crux of what the third respondent had to
determine was whether or not there was a dismissal. Yingwana
never
contradicted anything Ms Allen said, and in fact confirmed that the
documentary evidence handed in has been accepted by both
parties.
Considering all of this, as to the substance of the matter, it was
clearly conducted by way of an agreed process. There
is no dispute
that this agreed process was then applied.
[37] The applicant
is bound by this agreed process. The applicant simply cannot now,
whether directly or indirectly, seek to in
any way contradict or
disavow that process by way raising grounds of review as it did in
the founding affidavit, especially those
complaints relating to the
presentation of evidence.
The
Court i
n
Filta-Matix
(Pty) Ltd v Freudenberg and Others
[22]
dealt with the issue of a party seeking to resile from that which was
recorded in a pre-trial minute and said:
‘…
To
allow a party, without special circumstances, to resile from an
agreement deliberately reached at a pretrial conference would
be to
negate the object of Rule 37 which is to limit issues and to curtail
the scope of the litigation.’
The
exact same sentiment was echoed in
National
Union of Metalworkers of SA and Others v Driveline Technologies (Pty)
Ltd and Another
[23]
where Zondo AJP (as he then was) held:
[24]
‘
I
think it is necessary immediately to accept as a point of departure
that, where a litigant is a party to a pre-trial minute reflecting

agreement on certain issues, our courts will generally hold the
parties to that agreement or to those issues. …’
[38]
Furthermore, and once again by agreement, the only
viva voce
evidence led was by the first respondent, and this only related to
his present employment status. From the record, it is clear
that Ms
Allen only asked him such related questions. Yingwana was given an
opportunity to cross examine the first respondent and
stated off by
saying: ‘Ordinarily, you know, the questions that were asked
were kind of leading with the common causes.’
(sic). Ms Allen
answers: ‘Leading on common cause issues I didn’t think
it would be a problem’. Yingwana replies:
‘Ja, it won’t
be a problem.’ But now, and on review, the applicant complains
about leading questions being asked
and allowed by the third
respondent. I consider this to be entirely disingenuous and in fact
opportunistic and nothing more than
an attempt to try and bolster the
review.
[39]
When Yingwana then starts his cross examination, he proceeds to ask
the first respondent who drafted the contracts that the
first
respondent entered into. As stated above, and by agreement, the only
viva voce
evidence by the first respondent would be as to his
current employment status and nothing else, and Ms Allen did not lead
him on
anything else. The question by Yingwana had nothing to do with
employment status and was actually irrelevant, and needless to say,

Ms Allen properly objected. Ms Allen in fact said that if Yingwana
wanted to delve into the merits in his cross examination of
the first
respondent, then the parties may as well ‘scrap’ the
pre-trial minute, and she would then lead the first
respondent on all
of the merits of the case. After some debate on the issue, Yingwana
concedes, and says ‘I will be able
to address it in my
submissions. Okay fine I will live with that.’ But now, and on
review, the applicant complains about
undue curtailment of cross
examination. I am again compelled to regard the review ground of
undue curtailment of cross examination
raised by the applicant as
entirely disingenuous and in fact opportunistic, and again nothing
more than an attempt to try and bolster
the review.
[40]
This then only leaves the representation point. It has, fortunately,
a simple answer. There was in effect no arbitration conducted
before
the third respondent. There was agreed documentary evidence and an
agreed statement of facts. Both parties could, and did,
go away from
the arbitration and use the ample time afforded to draft proper and
complete written submissions based on what had
been agreed to be the
evidence. In this respect, Yingwana could seek whatever assistance he
wanted. In my view, he prepared proper
and detailed submissions and I
am satisfied that he understood and properly came to grips with what
was the real issue. There was
never any issue of disproportionality
in the conduct of the arbitration.
[41]
In the end, there is simply no substance in any review ground to the
effect that the third respondent misconducted himself.
Any review
ground in this respect falls to be rejected.
The existence of
a dismissal
[42]
As stated above, the existence of a dismissal was the real issue
before the arbitrator. In addition, this was not an issue
of fact,
but principally an issue of law. In his closing submissions, Yingwana
in fact says the following:‘The introduction
portrayed in the
Applicants founding documents depict a fair summation of events and
the contents of the documents as they are.
What needs to be answered
is whether the contract entered into was a legal document or and to
answer if indeed the Respondent erred
in interpreting circulars from
COGTA’ (sic). Yingwana concludes: ‘It is the Respondent’s
case that in any event
the contract of employment would have
terminated on 18 May 2012 as per prescripts of legislation and cannot
in any circumstance
terminate at any other time if the prescripts of
legislation were applied.’ This certainly encompasses the two
review grounds
I have referred to above, and I will now proceed to
determine these issues.
[43]
It is undisputed that the first respondent was appointed as a manager
directly accountable to the municipal manager. For ease
of reference,
I will refer to the concept of the manager that is directly
accountable to the municipal manager as ‘the section
56
manager’. It is also undisputed that the first respondent was
indeed appointed by the council, by way of resolution, on
a fixed
term contract of seven years, and that a written employment contract
to this effect was signed between the first respondent
and the
Municipal Manager on 1 July 2010. Finally, it was also undisputed
that the signature of the first respondent’s employment

contract by the Municipal Manager was also approved by the same
council resolution. Therefore, and in the normal course, the first

respondent’s employment contract appeared to have been validly
and properly concluded, and would come to an end on 30 June
2017.
[44]
It was common cause that the first respondent’s employment
contract was terminated by the applicant on 6 June 2012, more
than
five years prior to the expiry of the agreed fixed term. The
applicant called it an abolishment of the employment contract.
It was
however, clear that this termination came about by way of a
resolution of the council and thus it is clearly this conduct
of the
applicant that caused the employment contract to terminate.
[45]
As stated above, what now must be determined is whether this
termination of the first respondent’s employment contract
on 6
June 2012 was a dismissal as contemplated by Section 186(1)(a) of the
LRA.
[46]
At the core of the applicant’s first point raised in argument
by Mr Jafta, on behalf of the applicant, was that section
57(6) in
fact applies to the employment contract of the first respondent, as
section 57 as a whole was extended to such contract
by way of the
council’s appointment resolution. According to Mr Jafta, all
section 56 managers’ posts are permanent
posts, and thus any
appointment made by the council into such posts must be a permanent
and not fixed term appointment. He submitted
further that only if the
now repealed section 57(7) is actually applied by the council, can a
section 56 manager be appointed on
a fixed term, and then only for
the period as permitted in section 57(6). So therefore, according Mr
Jafta, the Council really
only has two choices where it comes to a
section 56 manager, being either permanent appointment, or a fixed
term appointment only
for the five year period (or one year following
a council election) in terms of section 57(6). Therefore, and as far
as the applicant
was concerned, the fixed term appointment of a
section 56 manager could only be effected by using section 57(7) to
incorporate
section 57(6) into the employment contract, and because
the time period in terms of section 57(6) was limited to five years
or
one year after council election, any fixed term employment
contract concluded for a longer period was invalid, and thus would
terminate
by operation of law when the actual period in section 57(6)
expires. This all meant, according to the applicant, that the first

respondent’s employment contract terminated on 18 May 2012,
which is one year after the new Council was elected.
[47]
Unfortunately for the applicant, there are several fundamental flaws
in this argument all based on an incorrect interpretation
of sections
56 and 57, which I will now discuss hereunder.
[48]
A section 56 manager is not appointed in terms of section 57, but in
terms of section 56.  Section 56 allows for the appointment
of a
Municipal Manager and a section 56 manager by the council, and in
this respect, all that section 56 requires for a valid appointment
is
a properly skilled and qualified person as approved by council
resolution. Section 57 in turn then requires the section 56 manager

(and a municipal manager for that matter) to conclude a written
employment contract with the municipality, once appointed, and

provides that this employment contract has to specify all the
relevant terms and conditions of employment relating to the
appointment.
However, and where it comes to a municipal manager
specifically, section 57(6) prescribes only fixed term employment as
an essential
term of the employment contract, and this section also
determines this fixed term. But where it comes to the section 56
manager,
it is the employment contract itself that regulates and
determines employment terms. The council can, however, resolve to
also
apply section 57(6) to a section 56 manager, and if the council
does this, it has to be unambiguously recorded in the employment

contract itself. Following the 2011 amendment of section 57, this
option is in any event no longer available.
[49]
In effect, the point of departure of interpreting sections 56 and 57,
by the applicant, is wrong. Section 56 does not prescribe
terms of
employment. It prescribes what is needed for a valid appointment.
Section 57 then determines terms of employment, and
in essence
prescribes a written contract of employment that specifies the
employment terms. Section 57 does not dictate what these
employment
terms must be, save for the case of the municipal manager, where it
is actually dictated that only fixed term employment
for the legally
prescribed term is permitted. Thus, in short, neither section 56 nor
57 prescribes only permanent employment of
section 56 managers, as
suggested by the applicant. It prescribes employment in terms of a
written contract of employment on terms
agreed to between the
parties. In fact, and contrary to what the applicant submits, section
57 does not seek to prescribe permanent
employment per se, but
actually seeks to prescribe only fixed term employment per se for
municipal managers. For all else, any
term of employment is
determined by agreement. Following the 2011 amendments, these terms
of employment must just be consistent
also with the Systems Act,
relevant regulations and labour laws.
[50]
The above being the case, what was then the mutually agreed terms of
employment between the first respondent and the applicant?
It starts
with the resolution of 31 May 2010, which was adopted following
discussion whether the five year fixed term contract
period
applicable to municipal managers was equally applicable to the
appointment of the first respondent. It was resolved, pursuant
to
this deliberation, that the first respondent be appointed for seven
years from 1 July 2010, as this five year limitation did
not apply,
and the municipal manager was authorized to conclude a contract with
the first respondent in terms of section 57. Again,
and contrary to
what the applicant suggests, this is simply not a resolution by the
council to apply or adopt section 57(6). Far
from it, it is clear
from the resolution that the council in fact considered section 57(6)
and concluded that it did not apply,
and the council then resolved to
conclude a specific agreement for seven years with the first
respondent. The reference to section
57 in the resolution clearly
contemplates the employment contract in terms of section 57(1)(a) as
read with section 57(3). I agree
with the submission of Ms Allen that
if the council intended section 57(6) to apply, it would have
specifically said so in the
resolution, and this would have found
room in the contract itself.
[51]
I thus conclude sections 56 and 57 do not require, in the case of a
section 56 manager, that section 57(6) must be applied
by a
municipality in order to validly effect a fixed term appointment of
such a manager. Provided the council authorizes the appointment,
the
manager appointed is suitably skilled and qualified, and a written
contract is concluded in the terms of what is required in
section
57(3) for such a manager, there can be nothing unlawful or invalid in
concluding such contract, and in particular, any
agreed fixed term
stipulated therein. In
Dihlabeng
Local Municipality v Nthute and Others
[25]
,
Musi JP, writing for the full Court on appeal, said the
following:
[26]
‘
The
court
a quo
erred when
it said that
section 57 appointees
needed to have
fixed-term contracts and concluded that because the second to the
fifth respondents did not have such fixed-term
contracts, they could
therefore not be managers directly accountable to the municipal
manager. The requirement of a fixed-term
contract is contained in
section 57(6) and applies only to
the appointment of a municipal manager. Of course a municipal council
can act in terms of subsection
(7) of section 57
and
extend the requirement to managers directly accountable to the
municipal manager. There has been no suggestion
in
casu
that
the appellant council had so extended the requirement.
Section 57
stipulates only two basic requirements for the appointment of a
manager directly accountable to the municipal manager.
They are a
written contract of employment and a separate performance contract.
…. In this regard it is noteworthy that whereas
in terms of
section 56(a), the municipal council must make the appointments, the
fulfilment of the provisions of section 57 is
left to the municipal
manager. ….’
[52]
In casu
, there is, as said, a written contract and an
appointment by the council. There was no issue in the arbitration
about the conclusion
or not of a performance contract by the first
respondent and no evidence was presented in this regard. As this was
never placed
in issue
in casu
, and was not a basis upon which
the applicant challenged the employment contract of the first
respondent, the existence of a performance
contract is an irrelevant
consideration in this particular matter. Thus, all the requirements
for a valid employment contract of
the first respondent as section 56
manager exists.
[53] I may point out
that in his heads of argument, Mr Jafta raised the point of the
absence of a performance contract, as a basis
for contending that the
first respondent’s employment contract was invalid. In the
absence of this issue being raised before
the third respondent, and
even more importantly, not even being raised as a ground of review in
the supplementary affidavit, it
simply cannot be competently raised
in heads of argument. In
Brodie
v Commission for Conciliation, Mediation and Arbitration and
Others
[27]
it was held:
‘
The
final issues raised by Ms
Liebenberg
were that proper
performance standards were not set, and if there were standards set,
they were not reasonable, because the third
respondent did not adhere
to the rules of SOMAR. The problem with these issues raised is that
no such case has been made out in
the founding affidavit or in the
rule 7A(8) notice of the applicant. There also does not appear to be
any issue raised in
the record that no standards were set and/or
that standards were unreasonable …. The applicant sought to
raise these additional
issues for the first time in her heads of
argument on review, and that is not permissible.…’
Similarly and in
Northam
Platinum Ltd v Fganyago NO and Others
[28]
it was held that:
‘…
In
my view the law is very clear that a ground for review raised for the
first time in argument cannot be sustained. The basic principle
is
that a litigant is required to set out all the material facts on
which he or she relies in challenging the reasonableness
or otherwise
of the commissioner's award in his or her founding affidavit.'
I
shall thus have no regard to the issue as to whether a performance
contract was concluded, in deciding this matter.
[54]
Therefore, considering the above, and applying the
ratio
in
Dihlabeng
Local Municipality
,
I accept that the employment contract concluded between the applicant
and the first respondent on 1 July 2010 is valid and lawful.
There is
no indication
in
casu
that section 57(6) was extended to the appointment of the first
respondent, and in fact, as I have said, the contrary is true.
The
employment contract in all respects complies with what is stipulated
in sections 57(1) and (3). This all being the case, it
is an
imperative that effect must be given to the employment contract.
Although dealing with a case of legitimate expectation in
the
instance of a senior manager contracted under section 57 of the
Systems Act, the Court in
Tshongweni
v Ekurhuleni Metropolitan Municipality
[29]
said:
‘…
. By
the same token, the employment of senior managers in local
government, governed by s 57, must be done in terms of a written

contract, and renewal for a fixed period depends on the prior
satisfactory attainment of identified performance objectives and

targets. The reluctance of the court a quo to create a new contract
for a municipal manager on the basis of legitimate expectation

accordingly reflects
prudent and appropriate deference to the
contractual requirements applicable to senior managers in the local
government sector
.’ (emphasis added)
I
find this same reasoning apposite
in casu
. With a proper
written contract in place in this instance, following a valid
appointment approved by the council, effect must be
given the
employment contract as it stands.
[55]
I therefore conclude that the seven year term as contained in the
employment contract concluded between the applicant and the
first
respondent on 1 July 2010 is binding on both parties. This means that
the employment contract expires on 30 June 2017, and
I thus reject
the applicant’s contention that the employment contract in fact
expired on 18 May 2012 by virtue of the application
of the section
57(6) time period.
[56] The next
question is whether the 5 July 2011 amendments of the Systems Act
change anything, considering the employment contract
was concluded on
1 July 2010, prior to such amendments. This seems to have been the
view of the applicant’s council, based
primarily on its
interpretation of the contents of circulars 5 and 13 of 2012, by
Cogta. In my view however, and based on the reasons
I will now go
into, I do not believe the 5 July 2011 amendments of the Systems Act
changed anything.
[57]
Firstly considering section 56 of the Systems Act, it is in my view
clear that none of the amendments effected, in any way
impact on the
validity of the appointment of the first respondent and the
resolution adopted by the council on 30 May 2010. The
substance of
the section remained the same following the amendment, insofar as it
concerns the basis of appointment of a section
56 manager. What was
added was a provision which allows for the appointment of an acting
section 56 manager and a determination
that if the provisions of the
Systems Act with regard to appointment of such an acting manager was
not complied with, the contract
concluded with the acting manager is
null and void. What was further introduced was a process in terms of
which a new section 56
manager, where such a post had become vacant,
must be recruited, and a duty is imposed on the municipality to
report to the MEC
as to such recruitment process.
[30]
Further, and in the case of an irregular or invalid appointment, the
MEC is given the power to intervene to enforce compliance
with the
Systems Act.
[31]
None of these amendments detract from the validity of the appointment
of the first respondent effected in terms of section 56,
prior to
amendment. The first respondent was still firmly in the position when
the amendments came into effect and thus there simply
was no vacancy
to be filled on the basis as contemplated by the new section 56(3).
Equally, there was no intervention by the MEC
with regard to the
first respondent’s appointment at any time, nor was this sought
by the applicant.
[58]
Where it came to the amendment of section 57, what took place was a
tightening up of the provisions relating to the conclusion
of the
performance agreement
[32]
,
which, as I have said, is not relevant
in
casu
.
Further, there were additions to provisions of section 57(3) relating
to the content of the employment contract to be concluded
with the
manager concerned, including that terms and conditions of employment
must be consistent with the Systems Act, relevant
regulations, and
applicable labour laws.
[33]
It was added that bonuses may be awarded to such managers, subject to
certain conditions. What is significant, however, is the
fact that
section 57(7) has been deleted, which further cements the distinction
between the municipal manager and the section 56
manager, as well as
the fact that any terms and conditions relating to the appointment of
the section 56 manager would have to
be determined by the council in
its discretion, and this would include any fixed term of employment.
[59]
I simply cannot see, based on a simple reading of the sections
concerned, how any of the amendments to sections 56 and 57 can
serve
to undo the employment contract concluded on 1 July 2010. I will now
turn to Cogta circulars 5 and 13 of 2012 to see whether
this might
bring me to other insights. Circular 5, considering the new
provisions relating to the recruitment and appointment of
section 56
managers in the case of filling a vacancy, sought to enlighten
municipalities as to the process to follow in recruiting
and then
appointing such managers, and in particular impressed on
municipalities the obligation to provide information in this
regard
to the MEC. Circular 5 then dealt with existing employment contracts
of managers, and as set out above, simply stated that
certain
principles must be ‘considered’ by councils, which
included the section 57(6) time limits, so as to determine
whether
there was compliance with legally prescribed termination dates. There
is nothing in circular 5 prescribing or even suggesting
the
termination of the contracts of section 56 managers by using the
section 56(7) time limits. How circular 5 can ever be interpreted
to
suggest such a course of action is in my view beyond belief. What is
in effect really said is that Mayors should check contracts
to see of
the section 57(6) time limits actually apply, and if so, whether the
contract terms then correspond with the legally
prescribed
termination dates. This can never be seen to be an instruction to
terminate these contracts, even if it found that section
57(6)
applies.
[60]
Turning then to circular 13, all its seeks to do is to provide
guidance to the municipalities on what to do where the contract
of a
municipal manager or section 56 manager then indeed terminated, and
there is thus a vacancy in a position that certainly requires

continuity. Municipalities are simply informed that there is the
option to still keep these managers on, despite the termination
of
their contract, but then on a month to month basis up to a maximum of
six months. And if this is not a viable option, municipalities
are
informed where they can obtain alternative resources on an interim
basis until the vacancy is filled. This would all of course
be an
interim solution until the vacancy had then been properly filled
using the process in the Systems Act referred to above.
Again, I am
completely bemused by the suggestion that circular 13, provides a
basis for the termination of the first respondent’s
contract.
In fact, any interpretation of circular 13 to that effect is simply
nonsensical, as the circular is, in simple terms,
a directive as to
what to do only once the contract of the section 56 manager has ended
and the position has become vacant. The
circular cannot serve as a
means or basis to actually end the contract.
[61]
But, and worse still, before the applicant even went down the path of
terminating the employment contract of the first respondent,
it had
available to it alternative, and in my view entirely authoritative,
proper and correct, advice. SALGA made it clear in its
circular 14 of
2012 that where it came to a section 56 manager, the municipality had
the discretion to decide on the terms of appointment
of such manager,
and unless the contract contained an express provision as
contemplated by the now repealed section 57(7), the
agreement of such
a manager must be allowed to run its course. The applicant also had
the written opinion by Ramkhelawan Inc, which
stipulated that the
section 57 amendments did not take away the discretion of the council
to determine the terms of employment
of the section 56 manager, and
that the duration of the contract of a section 56 manager would be
determined by the actual terms
of the contract itself. But more
importantly, Ramkhelawan Inc made it clear that any attempted
reliance on circulars 5 and 13 of
2012 as substantiation for earlier
termination of such contracts would be incorrect.
[62]
I find it astonishing that the applicant would then convene a special
council meeting, as it did on 6 June 2012, and resolve
that the first
respondent’s employment contract be abolished. If one reads the
extract from the minutes of this council meeting,
it appears that the
council was well aware of the difficulties surrounding this issue. As
I said above, what the council then did,
by way of its resolution on
6 June 2012, is to prematurely terminate the first respondent’s
valid and binding employment
contract, which would only finally run
its course on 30 June 2017. But the basis on which the applicant
sought to ‘abolish’
the first respondent’s contract
has no foundation in law, and was not provided for or sanctioned by
the Systems Act, whether
before or after the 2011 amendment.
[63]
It does not matter that the council sought to label the premature
termination as ‘abolishing’ the contract. The
Oxford
Dictionary
[34]
defines abolish as ‘formally put to an end’, and ‘to
do away with’. This clearly constitutes a termination
of the
contract by ending it. The resolution of the council abolishing the
contract was perfected by written notice to the first
respondent on
the same day, informing him that his contract was abolished, and this
clearly constitutes written notice that the
contract had been
terminated by the council. No matter how one looks at it, it was the
conduct of the council that brought the
employment contract of the
first respondent to an end.
[64] Section
186(1)(a) of the LRA inter alia defines dismissal as ’
Dismissal
means
that …. an employer has terminated employment with or without
notice’.
In
National
Union of Leather Workers v Barnard NO and Anothe
r
[35]
the Court held as follows as to this definition:
‘
The
key issue in the interpretation of the phrase 'an employer has
terminated the contract of employment with or without notice'
is
whether the employer has engaged in an act which brings the contract
of employment to an end in a manner recognized as
valid by the
law.’
Further,
and hot off the press, so to speak, the Labour Appeal Court in
Edcon
v Karin Steenkamp and Others
[36]
said:
‘
The
definition of dismissal is thus wide enough to include a wrongful or
“invalid” termination in violation of contractual
of
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 coloured
by the lawfulness, fairness or otherwise
of the action ….’
The
Court in
Edcon
concluded:
[37]
‘…
.
A termination by an employer without giving proper or valid notice is
still a dismissal. It may prove to be a wrongful or unfair
dismissal,
but it is a dismissal nonetheless. As explained earlier, wrongful or
unfair dismissal will have the consequences of
bringing a contract of
employment to an end unless and until a court orders specific
performance or retrospective reinstatement.
The LRA thus clearly
recognises what has been termed a “premature termination”
to constitute a dismissal. The ideas
of nullity, voidness and
invalidity are inconsistent with that scheme.’
[65] There can be no
doubt that it was the applicant that brought the employment contract
of the first respondent to an end. If
it was not for the council
meeting, the resolution adopted and the written notice to the first
respondent, all on 6 June 2012,
the employment contract would have
endured. It simply does not matter whether the council viewed the
termination as properly motivated
by invalidity or voidness in terms
of the Systems Act, as it still remained a dismissal. In any event,
the unilateral conduct of
the applicant in bringing about the end of
the first respondent’s contract of employment must be
considered in the proper
legal context, as enunciated in
SA
Post Office Ltd v Mampeule
[38]
,
where the Court said:
‘…
it
is accepted in labour law jurisprudence that lawfulness cannot be
equated with fairness. Accordingly it is not a defence to an
unfair
dismissal claim that the employee's dismissal was lawful ….
.Thus Mampeule, like any other employee, enjoyed the
right not to be
unfairly dismissed or more appropriately unfairly removed. This is
more so since the Act was enacted to give effect
to the right to fair
labour practices guaranteed in s 23(1) of the Constitution of the
Republic of SA (
Act
108 of 1996
).
The right not to be unfairly dismissed is not only essential to the
enjoyment of this constitutional imperative but is one of
the most
important manifestations thereof and further forms the foundation
upon which the relevant sections of the Act are erected
and is
consonant with the spirit and the letter of the Act …’
In short, where the
conduct of an employer brings about the termination of the contract
of employment, whatever the motivation for
this conduct may be, it
has to be considered to be a dismissal of the employee as
contemplated by the LRA.
[39]
The simple question that must be asked is whether, was it not for the
conduct of the employer, the employment contract would have
endured.
If the answer is yes, then there has to be a dismissal. It is
important to cast the dismissal net as wide as possible,
because it
is an imperative in terms of the LRA and Constitution that
terminations of employment, as far as possible, be tested
against the
fundamental principle of fairness.
[66]
I thus have no doubt that the conduct of the applicant, by way of the
resolution of the council on 6 June 2012 and the notice
issued to the
first respondent on the same day, constitutes a dismissal of the
first respondent. It is clearly the conduct of the
applicant that
brought about the end of the employment contract, and was it not for
this conduct, it would have endured (in the
normal course) until the
end of its term on 30 June 2017. In the end, the third respondent, as
arbitrator, was thus correct in
concluding that there was a dismissal
in this instance.
[67] For the sake of
completeness, and even if it was true that the fixed term in the
employment contract concluded between the
applicant and the first
respondent was in contravention of the Systems Act, it was simply not
up to the applicant to by way of
what is nothing more than self-help,
seek to ‘abolish’ it. The fact is that the applicant
should have sought to challenge
the agreement by way of available
legal avenues, such as, for example, applying to court to declare it
invalid
[40]
.
With the agreement having been concluded, and then applied for almost
two years, it simply not up to the applicant to adopt another

resolution to abolish it. In
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
[41]
the Court said:
‘…
.
But the question that arises is what consequences
follow from the conclusion that the Administrator acted unlawfully.
Is the permission
that was granted by the Administrator simply to be
disregarded as if it had never existed? In other words, was the Cape
Metropolitan
Council entitled to disregard the Administrator's
approval and all its consequences merely because it believed that
they were invalid
provided that its belief was correct? In our view,
it was not. Until the Administrator's approval (and thus also the
consequences
of the approval) is set aside by a court in proceedings
for judicial review it exists in fact and it has legal consequences
that
cannot simply be overlooked. The proper functioning of a modern
State would be considerably compromised if all administrative acts

could be given effect to or ignored depending upon the view the
subject takes of the validity of the act in question. No doubt
it is
for this reason that our law has always recognised that even an
unlawful administrative act is capable of producing legally
valid
consequences for so long as the unlawful act is not set aside.’
This
ratio
in
Oudekraal
Estates
has been consistently applied over the last decade,
[42]
and was equally applied by Molahlehi J in the Labour Court in
Taung
Local Municipality v Mofokeng.
[43]
Most recently, however, the Constitutional Court was specifically
asked to reconsider the
Oudekraal
Estates
principle in
MEC
for Health, Eastern Cape and Another v Kirland Investments (Pty) Ltd
t/a Eye and Lazer Institute.
[44]
The majority of the Court, by way of Cameron J, held as follows:
[45]
‘
The
argument mistakes the nature of the mandate the Constitution entrusts
to public officials. This does not require them to act
without
erring. On the contrary, the Constitution anticipates imperfection,
but makes it subject to the corrections and constraints
of the law.
The task of public officials is thus to act in accordance with the
law and the Constitution, which includes being subject
to correction
when they err.
By
corollary, the department's argument entails that administrators can,
without recourse to legal proceedings, disregard administrative

actions by their peers, subordinates or superiors if they consider
them mistaken. This is a licence to self-help. It invites officials

to take the law into their own hands by ignoring administrative
conduct they consider incorrect. That would spawn confusion and

conflict, to the detriment of the administration and the public. And
it would undermine the courts' supervision of the administration.’
The
Court in
Kirland
Investments
concluded as follows:
[46]
‘
The
fundamental notion — that official conduct that is vulnerable
to challenge may have legal consequences and may not be
ignored until
properly set aside — springs deeply from the rule of law.
The courts alone, and not public officials,
are the arbiters of
legality…
For a public official to ignore
irregular administrative action on the basis that it is a nullity
amounts to self-help. And it invites
a vortex of uncertainty,
unpredictability and irrationality. The clarity and certainty of
governmental conduct, on which we all
rely in organising our lives,
would be imperilled if irregular or invalid administrative acts could
be ignored because officials
consider them invalid.’
[68]
The conduct of the applicant,
in casu
, propagates the very
approach the Court in
Kirland Investments
is critical of. The
applicant simply cannot, just because the applicant’s council
considers the first respondent’s contract
of employment to be
invalid, resolve to undo it. The facts of the current matter actually
serve as an excellent illustration why
this kind of conduct should be
discouraged in the strongest possible terms. What has happened
in
casu
is that a long serving and senior employee in the applicant
occupying a senior and responsible position, in a department
supplying
an important public service, is simply bounced out of his
position, leaving it
de facto
vacant, just because councilors,
in the face of clear opinion to the contrary, consider the employment
contract to be invalid.
It is for this kind of reason why these kind
of decisions relating to legality of contracts, especially contracts
of employment,
must be left up to the Courts to decide. As a result,
whether or not the first respondent’s contract of employment
was invalid,
simply matters not. It was just not up the council to in
effect declare it invalid and abolish it by way of resolution. In
doing
this, the applicant thus still effected a dismissal of the
first respondent.
[69]
The applicant was always entitled to terminate the employment
contract of the first respondent before the expiry of the fixed
term,
as this was provided for in the employment contract itself. But it
was specifically agreed in the contract that in order
to do this, the
municipality had to give three months’ written notice subject
to applicable labour laws.
[47]
This clearly means that such notice of termination of employment had
to be fair as contemplated by Section 188 of the LRA, and
thus must
be effected for a fair reason and pursuant to a fair procedure. It is
undisputed evidence that there was never a fair
procedure followed,
and certainly the first respondent was never heard when the decision
to abolish his contract was made. Further,
and considering what I
have said above, there equally existed no substantive fair reason for
the termination of the contract. It
follows that the first respondent
was unfairly dismissed on 6 June 2012. Again, the conclusion of the
third respondent as arbitrator
in this regard is correct.
[70]
I thus conclude that the award of the third respondent to the effect
that the first respondent was indeed dismissed by the
applicant, and
that such dismissal was unfair, is correct, and must thus be upheld.
This means that the applicant’s review
application must fail.
Concluding
remarks
[71]
I also have before me the first respondent’s application in
terms of section 158(1)(c) to make the arbitration award
of the third
respondent an order of court., brought under case number D 1011 / 13.
This application was opposed only on the basis
of the pending review.
As the applicant’s review is unsuccessful, it follows that
there is no basis not to grant the first
respondent’s
application to make the arbitration award an order of court.
[72]
In closing, I must say that I share the third respondent’s
sentiments expressed in his award that the conduct of the
applicant
in casu
is difficult to comprehend. How it could have
interpreted the Cogta circulars as a license to abolish the contract
of employment
of the first respondent is beyond belief, especially
considering the clear and unambiguous opinions, to the contrary,
available
to it. At the very least, the applicant should have
referred the matter to the MEC. I am actually comfortable in saying
that what
the applicant did in this instance smacks of
mala fides
.
[73]
I also have a difficulty with the regard to the manner in which the
applicant sought to bolster its review case by raising
issues that
were never in dispute between the parties or before the third
respondent to decide. This kind of litigation practice
should be
discouraged, and compels a judge to deal with issues that are just
not necessary to be dealt with.
[74]
I make all these comments in the context of the issue of costs. Both
the applicant and the first respondent asked for costs
in the event
of either one of them being successful, in other words that costs
should follow the result. Ms Allen has actually
asked for a punitive
costs order against the applicant. In terms of the provisions of
Section 162(1) and (2) of the LRA, I have
a wide discretion where it
comes to the issue of costs. I believe the applicant should have
known better than to still pursue this
matter, which always had
little merit. This was the kind of case that should not have
proceeded beyond arbitration. I was momentarily
tempted by Ms Allen’s
invitation to award punitive costs, but I do not think the conduct of
the applicant in this instance
goes far enough to justify such kind
of punishment. But there is no reason why a costs award should not be
made against the applicant,
both in respect of the review and the
section 158(1)(c) applications.
Order
[75]
In the premises, I make the following order:
75.1
The applicant’s review application is dismissed.
75.2
The arbitration award under case number KPD061211 dated 13 July 2012
is made an order of court.
75.3
The applicant is ordered to pay the costs of the review application
and the section 158(1)(c) application under case number
D 1011 / 13.
Snyman
AJ
Acting Judge of
the Labour Court of South Africa
APPEARANCES:
For the
Applicant: Mr P O Jafta of Jafta Inc Attorneys
For the First
Respondent: Advocate K Allen
Instructed
by: Vishnu Moodley & Company Attorneys
[1]
No 66 of 1995.
[2]
Act
32 of 2000.
[3]
This
was done by way of the Municipal Systems Amendment Act 7 of 2011.
[4]
(2007) 28
ILJ
2405 (CC).
[5]
(2008) 29
ILJ
964
(LAC) at para 101.
[6]
(1998)
19
ILJ
557 (LAC) at para 24.
[7]
(1999)
20
ILJ
108 (LAC) at para 6:
[8]
(2008)
29
ILJ
2218
(LAC) at paras 39 – 40.
[9]
(2012) 33
ILJ
363 (LC) at para 23.
[10]
(2012) 33
ILJ
1179 (LC) at para 10.
[11]
(2013) 34
ILJ
392 (LC) at paras 5–6.
[12]
(2012)
33
ILJ
1171 (LC) at para 14.
[13]
(2012)
33
ILJ
738
(LC)
at para 2.
[14]
(2013) 34
ILJ
1272
(LC) at para 21.
[15]
(2013) 34
ILJ
2662 (LC) at para 22.
[16]
(2012) 33
ILJ
1911 (LC) at para 42. See also
ZA
One (Pty) Ltd t/a Naartjie Clothing v Goldman NO and Others
(2013) 34
ILJ
2347 (LC) at para 32;
Stars
Away International Airlines (Pty) Ltd t/a Stars Away Aviation v Thee
NO and Others
(2013) 34
ILJ
1272 (LC) at para 24.
[17]
(2005) 26
ILJ
2142 (LAC) at paras 39 and 40.
[18]
See
SA
Police Service v Solidarity on behalf of Barnard (Police and Prisons
Civil Rights Union as Amicus Curiae)
(2014) 35 ILJ 2981 (CC) at para 59;
Motor
Industry Staff Association and Another v Silverton Spraypainters and
Panelbeaters (Pty) Ltd and Others
(2013) 34
ILJ
1440
(LAC) at para 41.
[19]
(2014) 35
ILJ
2406
(LAC) at para 46.
[20]
(2008) 29
ILJ
2461
(CC) at para 67.
[21]
Section 145(2)(a)(i) reads: ‘a defect referred to in
subsection (1), means —
(a)
that the commissioner — (i) committed misconduct in relation
to the duties of the commissioner as an arbitrator'. See
Chabalala
v Metal and Engineering Industries Bargaining Council and Others
(2014) 35
ILJ
1546 (LC) at para 13.
[22]
[1997] ZASCA 110
;
1998 (1) SA 606
(SCA) at 614B-C.
[23]
(2000)
21
ILJ
142 (LAC). See also
GE
Security (Africa) v Airey and Others
(2011)
32 ILJ 2078 (LAC) at paras 20 – 21
[24]
Id at para 83.
[25]
[2009] JOL 23108
(O).
[26]
Id
at paras 21 – 22.
[27]
(2013) 34
ILJ
608 (LC) at para 33.
[28]
(2010)
31
ILJ
713 (LC)
at para 27.
[29]
(2012) 33
ILJ
2847
(LAC) at para 33.
[30]
Section
56(3), (4) and (4A).
[31]
Section
56(5).
[32]
Section
57(2).
[33]
See
Sections 57(3)(a) and 57(3A).
[34]
Oxford
2014 Edition.
[35]
(2001) 22
ILJ
2290
(LAC) at para 23.
[36]
Unreported
case numbers JS 648 / 13, JS 51/14 and JS350/14 dated 3 March 2015
per Tlaletsi DJP, Murphy AJA and Musi JA, at para
41.
[37]
Id
at para 49.
[38]
(2010) 31
ILJ
2051 (LAC) at para 21(b).
[39]
See
also
Trio
Glass
(
supra
)
at paras 35 – 36.
[40]
Khumalo
and Another v MEC for Education, KwaZulu-Natal
(2013) 34
ILJ
296 (LAC) at para 43. For examples of such very challenges see
Motitswe
v City of Tshwane
(2014) 35
ILJ
3458
(LC);
Sondlo
v Chris Hani District Municipality
(2008) 29
ILJ
2010
(LC);
SA
Municipal Workers Union on behalf of Monyama and Others v Greater
Tzaneen Municipality and Others
(2013) 34
ILJ
1781
(LC);
Retlaobaka
v Lekwa Local Municipality and Another
(2013) 34 ILJ 2320 (LC).
[41]
2004 (6) SA 222
(SCA) at para 26.
[42]
See
Manok
Family Trust v Blue Horison Investments 10 (Pty) Ltd and Others
2014 (5) SA 503
(SCA) at para 17;
Kouga
Municipality v Bellingan and Others
2012 (2) SA 95
(SCA)
;
Camps Bay Ratepayers' and Residents' Association and Another v
Harrison and Another
2011 (4) SA 42
(CC) at para
62;
Seale v Van Rooyen NO and Others; Provincial Government, North West
Province v Van Rooyen NO and Others
2008
(4) SA 43 (SCA)
at para 14.
[43]
(2011) 32
ILJ
2259 (LC) at paras 27 – 30.
[44]
2014 (3) SA 481 (CC).
[45]
Id
at paras 88 – 89.
[46]
Id
at para 103.
[47]
See
clause 4.1 of the contract.