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[2017] ZALCJHB 281
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Molefe v Eskom Holdings SOC Limited and Others (J1276/17) [2017] ZALCJHB 281 (4 July 2017)
THE LABOUR COURT OF SOUTH AFRICA
JOHANNESBURG
Not
reportable
c
ase
no
: J
1276 /17
In the
matter between:
BRIAN
MOLEFE
Applicant
and
ESKOM
HOLDINGS SOC LIMITED
First
Respondent
MINISTER
OF PUBLIC ENTERPRISES
Second
Respondent
THE
DEMOCRATIC ALLIANCE
Third
Respondent
THE
ECONOMIC FREEDOM FIGHTERS
Fourth
Respondent
Heard
:
27
and 29 June 2017
Delivered
:
4 July 2017
Summary:
Urgent application to declare the Applicant’s dismissal
unlawful and void
ab initio.
Applicant seeks enforcement of
his contract of employment. Disputed whether Applicant resigned in
December 2016 and whether a valid
contract of employment existed in
June 2017 when he was allegedly dismissed. High Court applications to
be decided first. Matter
is postponed
sine
die.
JUDGMENT
PRINSLOO,
J
Introduction
The Applicant
approached this Court on an urgent basis for an order to declare his
dismissal unlawful and void
ab
initio.
The
application is opposed.
Brief history
The
undisputed background facts are as follows: The Applicant (Molefe)
commenced employment with the First Respondent (Eskom)
as acting
chief executive from 17 April 2015 to 30 September 2015. On 7 March
2016 Molefe entered into a five year fixed term
employment contract
with Eskom and in terms of the contract he was appointed as ‘group
chief executive’ (chief executive)
of Eskom with effect from 1
October 2015.
The contract
provided
inter alia
that
Molefe would become a member of Eskom’s Pension and Provident
Fund (EPPF), subject to the rules thereof, and that Eskom
would pay
his monthly contributions to the said fund.
On 2 November
2016 a report titled ‘State of Capture’ prepared by the
former Public Protector, Advocate Madonsela,
was released. In the
report it was observed
inter
alia
that there was a distinct
line of communication between Molefe of Eskom, the Gupta family and
directors of their companies and
that these links could not be
ignored as Molefe did not declare his relationship with the Gupta
family. On his own version Molefe
was concerned about the negative
press that would ensue as a result of the observations made against
him in the ‘State
of Capture’ report.
On 11
November 2016 Molefe issued a statement wherein he made reference to
the release of the ‘State of Capture’ report
and stated
that he would clear his name in future when a commission of inquiry
is appointed to conduct a proper investigation
into the Public
Protector’s observations. Molefe recorded that in the
meanwhile harm is done to Eskom’s reputation
and that he had
decided to leave his employ at Eskom with effect from 1 January 2017
and he did so ‘in the interests of
good corporate governance.’
Molefe reiterated that it was not an admission of wrongdoing, but
was the correct thing to
do in the interests of Eskom and good
corporate governance. The statement concluded by saying ‘I go
now, because it is
in the interests of Eskom and the public it
serves, that I do so.’
On the same
day the Eskom Board issued a statement to the effect that Molefe has
decided to step down in the interest of good
corporate governance.
The Minister also issued a media statement on 11 November 2016
regarding Molefe’s departure and stated
that she was saddened
by Molefe’s resignation but she respected his decision to do
so.
Also on 11
November 2016 Molefe wrote a letter to Dr Ngubane (Ngubane), the
chairman of Eskom’s board, wherein he requested
approval for
early retirement in terms of the rules of the EPPF read with a
resolution of the ‘People and Governance’
subcommittee
of the board dated 9 February 2016. Molefe indicated that his last
day of service would be 31 December 2016.
On 24
November 2016 Ngubane responded to Molefe’s letter of 11
November 2016 and confirmed that Molefe’s last day
of service
would be 31 December 2016. Ngubane further recorded that Molefe’s
early retirement in terms of the EPPF rules
and Board resolution was
approved.
Molefe’s
employment at Eskom ended on 31 December 2016.
Molefe was
sworn in as a Member of Parliament on 23 February 2017.
In April 2017
the Second Respondent (Minister) read in the Sunday newspapers that
Molefe had been paid a R 30 million pension
payout and she convened
an urgent meeting with the Eskom Board on 19 April 2017 to discuss
the pension payout she became aware
of in the Sunday newspapers. The
Minister raised queries about Molefe’s pension benefits and
she issued a statement on
23 April 2017 to the effect that the
pension benefits Molefe thought he was entitled to lacked a legal
rationale and that the
Eskom board had to engage with him regarding
the pension payment. The Minister made it clear that she declined
the proposed R
30 million pension payout.
The rules of
the EPPF clearly do not permit early retirement before the age of 55
and as Molefe has not reached the age of 55,
he could not take early
retirement.
Molefe’s
case is that he and Eskom harboured under the common mistake that he
had reached the age (50) at which he could
take early retirement and
it turned out later that their understanding of the EPPF rules was
incorrect. The EPPF rule 24 clearly
states that the age for early
retirement is 55 and not 50 as Molefe and Eskom understood it to be.
Molefe explained that neither
himself nor Eskom knew this before
they concluded the early retirement agreement in November 2016.
In the same
breath Molefe explained that his understanding of the EPPF rules was
informed by the Board resolution of 9 February
2016 and based on
this understanding he thought he was entitled to early retirement
and the pension benefits arising from such
early retirement. Molefe
also explained that he did not check the EPPF rules and merely
assumed that he would qualify for early
retirement and that all was
in order with his early retirement and attendant pension benefits.
Be that as it
may, by April 2017 it became evident that Molefe could not and did
not qualify for early retirement and that his
purported early
retirement could not be effected. Molefe submitted that as the early
retirement agreement concluded between himself
and Eskom was based
on a common misunderstanding of the EPPF rules, Eskom obtained legal
advice on how to regularise the situation.
Based on the legal advice
obtained, four options were presented namely a consensual rescission
of the early retirement agreement
which entailed an agreement to
cancel the early retirement agreement and revert to the
status
quo ante
, or a non-consensual
rescission of the early retirement agreement, or a rescission of the
early retirement agreement with the
option for Molefe to resign and
lastly payment in settlement of the matter.
The Eskom
Board preferred the first option of consensual rescission of the
early retirement agreement and indicated its willingness
to accept
Molefe back as its group chief executive. The Eskom Board presented
the four options to the Minister and indicated
its preference of the
consensual rescission.
Eskom passed
a resolution on 2 May 2017 to rescind its decision to approve
Molefe’s request for early retirement.
Eskom and
Molefe understood that the consequence thereof was that the
status
quo ante
had to be restored and
that he had to resume his duties as group chief executive and the
amounts paid out by Eskom on account
of Molefe’s retirement
would have to be repaid to Eskom.
A letter to
this effect was addressed to Molefe on 3 May 2017 and Ngubane
informed Molefe that the Board had to review its decision
of 21
November 2016 and that the decision to approve Molefe’s early
retirement was rescinded and Molefe had to resume duty
as Eskom’s
group chief executive. Ngubane made specific reference to the
potential impact the decision might have on Molefe’s
‘current
role.’ It is undisputed that Molefe was a Member of Parliament
at the time the letter was addressed to him.
Ngubane concluded by
saying the they were looking forward to a favourable response from
Molefe.
On 11 May
2017 Ngubane addressed a letter to Molefe wherein Eskom tendered the
resumption of Molefe’s duties as chief executive
by 15 May
2017 on the basis as set out in the reinstatement agreement.
Molefe signed
the reinstatement agreement on 11 May 2017.
In terms of
the reinstatement agreement Molefe’s employment agreement
signed on 7 March 2013 (the principal agreement) shall
continue on
its terms, Molefe should resume duties in terms of the principal
agreement on 15 May 2017, Eskom should take all
necessary steps to
give effect to the reinstatement agreement, Molefe should pay all
amounts due to the EPPF which were paid
to him pursuant to the
retirement agreement by no later than 30 November 2017 and the
period between 1 January 2017 and 15 May
2017 would be regarded as
unpaid leave.
On 12 May
2017 the Minister issued a statement indicating that Molefe had
agreed with the Board to serve the remainder of his
original
contract of employment.
Molefe
returned to Eskom as chief executive on 15 May 2017 and resumed his
duties in that capacity.
On 15 May
2017 the Third Respondent (Democratic Alliance referred to as DA)
filed an urgent application in the High Court: Gauteng
Division,
Pretoria under case number 33051/2017 seeking
inter
alia
an order to review and set
aside the decision to reinstate Molefe as Eskom’s chief
executive.
On 19 May
2017 the Fourth Respondent (Economic Freedom Fighters referred to as
EFF) filed an urgent application in the High Court:
Gauteng
Division, Pretoria under case number 34568/2017 seeking
inter
alia
an order to set aside the
decision to re-appoint Molefe as chief executive.
The DA and
EFF applications (the High Court applications) were set down for
hearing in the High Court in Pretoria on 6 and 7 June
2017.
On 31 May
2017 the Minister issued a directive to the Eskom Board to rescind
the decision to reinstate Molefe as chief executive.
The Minister
was of the view that the appropriate process was not followed.
On 2 June
2017 the Eskom Board resolved to rescind the reinstatement agreement
concluded between Molefe and Eskom on 11 May 2017.
On the same date
Molefe was informed that the reinstatement agreement was rescinded
and that he was no longer the chief executive
of Eskom.
Molefe
subsequently filed an urgent application in this Court on 5 June
2017 seeking an order to declare his dismissal unlawful
and void
ab
initio.
Molefe sought his
urgent application to be heard and his employment status to be
restored prior to the High Court applications
that were due to be
heard on 6 June 2017.
Rule 8 of the
Rules of the Labour Court provides that the Registrar of this Court
must fix a date, time and place for the hearing
of an urgent
application and as soon as the Registrar has allocated same, the
application should be served on the respondent
party. Molefe did not
approach the Registrar to allocate and enrol the urgent application
for 5 June 2017 and as there was no
compliance with the Rules,
Molefe’s urgent application was not enrolled for hearing on 5
June 2017.
On 6 June
2017 and at the High Court in Pretoria the DA, EFF, Eskom and Molefe
agreed to an order that Molefe would not attend
at Eskom for the
purpose of performing his employment duties, that Eskom does not
require Molefe to perform any employment duties
and that the Labour
Court application would be postponed to a date to be arranged with
the Registrar of the Labour Court. The
High Court applications were
postponed
sine die.
The DA and
EFF subsequently filed applications in this Court seeking leave to
intervene and be joined as parties in case number
J 1276 /17.
The
intervention application was argued on 27 June 2017 and the DA and
EFF were granted leave to intervene and were joined as
Respondents.
The High Court applications
In the main
application filed in this Court as well as the intervention
applications filed by the DA and EFF reference is made
to the High
Court applications and the parties provided this Court with the
papers in the pending High Court applications.
The High
Court applications are relevant to the extent that they are related
to the relief sought in the intervention applications
and the relief
this Court is inclined to grant, thus it is necessary to provide a
brief summary of the pending High Court applications.
The High
Court applications filed by the DA and EFF seek relief in terms of a
part A and a part B. Part A seeks relief pending
the determination
of the relief sought in part B and the relief so sought is that
Molefe be interdicted from performing any duties
or functions or
from receiving any benefits or entitlement deriving from or
associated with the post of Eskom’s chief executive
and that
the Eskom Board be interdicted from taking any steps to reinstate
Molefe.
In part B of
the relief the DA seeks an order to review and set aside the
Minister’s decision to reinstate Molefe as Eskom’s
chief
executive and that any payment or sum of money received by Molefe
pursuant to the early retirement be declared invalid
and that Molefe
be ordered to repay such amount.
In part B of
its application the EFF seeks an order directing the Minister to
remove the members of the Eskom Board and for the
decision of the
Board to reappoint Molefe as chief executive and the Minister’s
decision to approve such reappointment
to be declared irrational,
unlawful, unconstitutional and invalid and for that to be set aside.
The EFF also seek an order to
declare that Molefe is unsuitable to
hold the position of chief executive of Eskom.
The
Respondents in the High Court applications are Eskom, the Minister
and Molefe and they all filed opposing papers.
When the
matter was enrolled for hearing on 6 and 7 June 2017 it did not
proceed as an interim settlement was reached between
the parties, as
already alluded to
supra.
The DA’s
case before the High Court is that Molefe resigned and his
employment thus terminated and the decision to reinstate
Molefe
amounted to a fresh appointment which is in breach of the
requirements of the relevant legal framework and is irrational.
The
decision to reinstate is unlawful and falls to be reviewed and set
aside. The reasons why the DA avers that Molefe indeed
resigned are
fully dealt with in the papers before the High Court.
The EFF’s
case before the High Court is that Molefe’s contract of
employment with Eskom came to an end on 1 January
2017 and it could
not be revived without a lawful recruitment process. Subsequent to
Molefe’s departure, Eskom embarked
on a recruitment process
and advertised the position of chief executive with the closing date
for applications on 20 March 2017,
bearing credence to the finality
of Molefe’s departure. The reinstatement of Molefe as chief
executive subverted an ongoing
recruitment process and is unlawful,
procedurally unsound, unconstitutional and irrational and falls to
be reviewed and set aside.
Molefe’s contract of employment
could not be revived by simply reinstating him without following a
lawful process.
The EFF’s
case is further that Molefe could not have retired as he is not of
retirement age, nor could he take early retirement
and he has in
fact resigned from Eskom.
The Minister
filed an explanatory affidavit wherein she explained that she was
under the impression that Molefe resigned on 11
November 2016 as
chief executive and to her mind his resignation was just that. The
Minister further explained that she was unaware
of the fact that
Molefe applied for early retirement and that Eskom had on 11
November 2016 accepted such an application. The
Minister stated that
once these facts were explained to her, she could not hold the
position that Molefe resigned. The Minister
explained the reasons
why the early retirement agreement was rescinded and this was based
on her understanding that such an agreement
was reached with Molefe.
However, the Minister was not a party to the early retirement
agreement and the agreement was invalid
and the
status
quo ante
had to be restored.
Eskom filed
an opposing affidavit explaining that Molefe has not resigned but in
fact requested early retirement and his request
for early retirement
was accepted. The early retirement agreement concluded between Eskom
and Molefe was given effect to and
Eskom made payment of R 30
million to the EPPF. Molefe departed from Eskom on the basis of his
early retirement and became a
Member of Parliament. In April 2017
the Board concluded that the early retirement agreement had legal
impediments to its implementation
and had to be rescinded and the
status quo ante
was
restored and Molefe had to resume his duties as chief executive.
Eskom’s
case is that in consequence of the resolution to rescind the early
retirement agreement, Molefe and Eskom concluded
a reinstatement
agreement which provided for Molefe’s employment contract to
continue on its terms, for Molefe to resume
duty as chief executive
and to repay the amounts he received pursuant to the early
retirement agreement and for the period between
1 January 2017 until
15 May 2017 to be treated as unpaid leave. Eskom’s case is
that Molefe has not resigned and when the
early retirement agreement
was rescinded, the
status quo
as
it existed prior to the conclusion of the retirement agreement had
been restored.
In Molefe’s
opposing affidavit he stated that the High Court applications rest
on the incorrect premise that his original
contract of employment
came to an end when he left on 31 December 2016 and that his return
to Eskom required a decision by the
Eskom Board or the Minister.
Molefe’s case is that his contract did not come to an end
because the early retirement agreement
reached with Eskom was based
on a common mistaken understanding that he was eligible for early
retirement in terms of the EPPF
rules when that was not the case.
His purported retirement was not effective as it was influenced by a
common error.
Molefe’s
case is that his employment never terminated and there was no
decision made or required to reinstate him.
In its
replying affidavit the DA addressed the Respondents’ version
that Molefe did not resign but instead applied for early
retirement,
which agreement could not be enforced. The DA submitted that Molefe
resigned and that his employment with Eskom indeed
terminated and
that a decision was taken to reinstate Molefe, which decision is
unlawful and subject to review.
In the EFF’s
replying affidavit it is disputed in fact and in law that Molefe’s
employment contract did not terminate
at the end of December 2016.
The reasons why the EFF avers that Molefe indeed resigned are fully
dealt with in the papers before
the High Court.
The Labour Court application
Molefe
approached this Court on an urgent basis and explained that it is of
considerable importance for him to have his employment
status
restored, in that absent an order from this Court declaring his
dismissal to have been unlawful and void
ab
initio,
it will render the High
Court applications academic to his ultimate disadvantage.
Molefe
submitted that he needs his employment status to be restored so that
he could effectively participate and oppose the High
Court
applications.
It is evident
from the High Court applications that Molefe was cited as a
Respondent in his personal capacity and that he has
filed
comprehensive opposing papers. I find it difficult to accept that
Molefe needs his employment status to be restored so
that he could
effectively participate and oppose the High Court applications. As
it stands Molefe is participating and opposing
the High Court
applications.
The High
Court applications concern
inter
alia
the lawfulness of the
decision to reinstate Molefe, which is separate from the subsequent
decision to rescind the reinstatement
agreement. Molefe is entitled
to participate and oppose the High Court applications and he can do
so without an order from this
Court restoring his employment status.
The
Respondents before this Court, except Eskom, took issue with the
urgency of this matter. I have considered the submissions
raised in
respect of urgency and although those are not without merit and
although urgency may be questionable in a case where
the effect of
the relief sought is specific performance of a contract, I deem it
in the interest of the parties before this Court
to deal with the
matter and to give direction as to the way forward.
Molefe’s case
In this Court
Molefe’s case is that the agreement concluded between himself
and Eskom relating to his early retirement (the
early retirement
agreement) was concluded in good faith and his request for early
retirement was intricately linked to the pension
benefits flowing
therefrom. The rules of the EPPF however do not permit early
retirement at the age of 50 and the parties’
understanding of
the EPPF rules was incorrect and as the agreement for early
retirement had been entered into on the basis of
a common mistake,
it was rescinded and the
status
quo ante
was restored.
When the
early retirement agreement was rescinded and the
status
quo ante
prevailed Molefe had
to resume his duties as chief executive as a continuation of his
contract of employment. Molefe’s case
is that he did not
resign from Eskom and that his departure at the end of December 2016
was on account of early retirement. The
terms of the early
retirement agreement could however not be placed into effect as a
matter of law and the early retirement agreement
is void.
Molefe
submitted that his contract of employment entered into in March 2016
did not come to an end and he remained employed as
Eskom’s
chief executive in terms of the said contract. The restoration of
the
status quo ante
means
that his employment never terminated but continues. Molefe’s
purported retirement from Eskom’s employ was not
effective and
was void
ab initio
on
the basis of a common mistake.
In respect of
the reinstatement agreement Molefe’s case is that the
agreement did no more than to regulate the unwinding
of the
financial consequences arising out of the implementation of his
early retirement agreement and the parties’ performance
in
terms of the void early retirement agreement. Molefe submitted that
the reinstatement agreement had no legal consequence beyond
this.
The early retirement agreement was a nullity from inception and it
was not necessary for Eskom to rescind the early retirement
agreement wherefore the reinstatement agreement was not required to
declare the early retirement agreement a nullity.
In summary
Molefe’s case is that his early retirement agreement was a
nullity, his contract of employment dated 7 March
2016 did not come
to an end on 31 December 2016 or on any other date and his return to
Eskom on 15 May 2017 was pursuant to a
valid and operative
employment contract concluded on 7 March 2016 and was not the result
of an appointment by Eskom or the Minister
in May 2017.
The decision
the Eskom Board took on 2 June 2017 constituted a summary dismissal
and the decision was unlawful for a number of
reasons. Firstly, the
Board has no power to remove Molefe as chief executive as that power
is exclusively entrusted in the Minister
and the Board purported to
dismiss Molefe in circumstances where it did not have the power to
do so.
Secondly,
Eskom’s memorandum of incorporation (MOI) requires Molefe’s
dismissal to be effected in terms of section
186(1)(a) of the Labour
Relations Act
1
(the Act) and neither Molefe’s contract of employment nor the
MOI permit Eskom or the Minister to impose a summary dismissal
and
such dismissal is in breach of his contract of employment read with
clause 14.3.6 of the MOI.
If it is
accepted that Molefe’s summary dismissal was effected at the
instance of the Minister, the Minister had no authority
to do so
because her conduct amounted to an unlawful repudiation of his
contract as the Minister had no legal grounds premised
on either
capacity, operational needs or conduct to effect his dismissal.
Molefe’s case is that his dismissal was motivated
by political
considerations which are not lawful grounds for dismissal. His case
is further that the Minister failed to follow
the mandatory
requirement that the Act applies to the removal of the chief
executive and he should have been given a hearing
in compliance with
the requirements of procedural fairness.
Thirdly,
Eskom was not entitled to rescind the reinstatement agreement as it
elected to honour Molefe’s contract of employment
and in
exercising such election, it divested itself of any right it may
have to dismiss him. The election was exhaustive and
irrevocable.
Finally, the
retirement agreement was a nullity
ab
initio
and the reinstatement
agreement had no legal consequences beyond formalising the
recognition of the legal position that Molefe’s
contract of
employment had not been terminated. The rescission of the
reinstatement agreement cannot bring about Molefe’s
dismissal
and he is entitled to insist on the enforcement of his contract of
employment.
Molefe seeks
an order declaring his dismissal unlawful and void
ab
initio.
Eskom’s case
Eskom filed
an affidavit stating that it abides by the decision of this Court in
respect of the merits of the application and
only opposed a cost
order sought against it.
Eskom made it
clear that it did not want to be embroiled in a dispute as to
whether the resumption of Molefe as Eskom’s
chief executive
was legally valid and it decided to give effect to the Minister’s
directive to rescind the decision to
reinstate Molefe. It is for the
Minister to defend the matter.
The Minister’s case
In her
opposing affidavit the Minister made it clear that the question
whether Molefe has resigned or not formed the basis of
a dispute in
this application.
The Minister
explains that her understanding is that Molefe resigned as chief
executive of Eskom on 11 November 2016 and such
understanding is
based on a meeting she had with Molefe at her home a few days before
Molefe publicly announced his decision
to step down. The Minister
referred to Molefe’s departure as a resignation and he did not
correct her or suggested to her
that he intended to take early
retirement. The Minister met and interacted with Molefe and the
Eskom Board after her media statement
of 11 November 2016 and
neither Molefe nor any member of the Board corrected her description
of his departure as one of resignation.
The Minister
submitted that her view that Molefe resigned persisted for five
months until 16 April 2017 when she read in the Sunday
newspapers
about the R 30 million pension payout for Molefe. She was surprised
to discover that the Board had concluded an early
retirement
agreement with Molefe and she convened an urgent meeting with
representatives of the Board to discuss the newspaper
revelations.
The Minister expressed her disagreement with the early retirement
agreement and the pension payment and she instructed
the Board to
get back to her with an appropriate pension proposal.
On 9 May 2017
the Minster met with the Board to discuss the proposals to address
her concerns and she was informed that Eskom
obtained an opinion
from senior counsel to the effect that Molefe did not qualify for
early retirement in terms of the EPPF rules
and as the early
retirement agreement was concluded on a mutual misunderstanding of
the EPPF rules it was invalid. The Board
presented the Minister with
four proposals and indicated that it preferred the proposal of a
consensual rescission of the early
retirement agreement and
reinstatement of Molefe as chief executive. At the time the Minister
accepted the advice the Board had
obtained from senior counsel and
on 12 May 2017 she issued a statement confirming Molefe’s
reinstatement as chief executive
on the proviso of its legality.
On 24 May
2017 President Jacob Zuma appointed an inter-ministerial committee
(IMC) comprising the Minister and the Ministers of
Justice, Finance
and Energy to consider the implications of Eskom’s decision to
reinstate Molefe. A meeting between the
IMC and the Eskom Board took
place on 31 May 2017 and it subsequently concluded that it would be
in the best interest of Government,
Eskom and the country as a whole
for the Board to rescind the decision to reinstate Molefe. On the
same day the Minister issued
a directive to that effect to the Board
and on 2 June 2017 the Board complied with the Minister’s
directive.
The
Minister’s case is that the early retirement agreement could
not be set aside as void
ab
initio
with consequent
reinstatement of the
status quo
ante
for a number of reasons.
Firstly, Molefe has resigned and expressed an unequivocal intention
to depart on 31 December 2016 before
the early retirement agreement
was considered by the Board or concluded. Any common mistake had no
impact on Molefe’s decision
to step down. The early retirement
agreement was merely a mechanism to achieve a better outcome and
there was no scenario under
which Molefe would remain an employee.
Secondly, before Molefe could have been reinstated he had to undergo
the procedure contemplated
in the MOI and there was no compliance
with any of the procedures set out in clause 14.3 of the MOI. The
Minister’s approval
of the reinstatement agreement was
accordingly not effective.
The Minister
rejected the notion that Molefe was unaware of the rules of the EPPF
and that he did not check the rules and make
sure he was entitled to
early retirement as inherently improbable.
The Minister
further submitted that the reinstatement agreement was invalid and
Molefe’s reinstatement was premised on an
invalid agreement.
There was no dismissal as there had not been a valid appointment
after Molefe’s resignation on 11 November
2016.
The DA’s case
The DA’s
case is that Molefe could only be dismissed if he was validly and
lawfully employed to begin with. The DA submitted
that on a proper
understanding of all the facts, in truth and in law Molefe resigned.
His purported early retirement agreement
with Eskom was unlawful.
The DA
submitted that the evidence demonstrated a clear intention that
Molefe’s employment with Eskom was terminated on
31 December
2016. His request for early retirement and Eskom’s acceptance
thereof was not conditional in any way and the
parties clearly
contemplated an end to his employment with effect from 31 December
2016. This intention is also evident from
the statements made by
Molefe, Eskom and the Minister on 11 November 2016 and the
appointment of an acting chief executive. Molefe
left Eskom’s
employ on 31 December 2016 and was sworn in as a Member of
Parliament on 23 February 2017. Section 47(1)(a)
of the Constitution
does not permit Molefe to be a member of the National Assembly and
the chief executive of Eskom and Molefe’s
contention that
during the period when he left Eskom and went to Parliament as a
Member of Parliament, he was still employed
and was placed on unpaid
leave, is contrived as an afterthought and is manifestly false.
Eskom duly advertised the vacant position
of chief executive.
The DA
disputed that the decision to reinstate Molefe is merely a
continuation of his employment contract as it was a deliberate
decision and Molefe’s employment did not continue by operation
of law when the early retirement agreement was rescinded,
nor can it
be deemed to never have terminated. The DA’s case is that the
reinstatement agreement is unlawful and irrational.
The EFF’s case
The EFF
submitted that the Minister exercises control and supervision over
Eskom and she issued a directive to the Eskom Board
to rescind the
reinstatement of Molefe as chief executive and demanded that an open
and competitive recruitment process be followed
in the election of
the most suitable candidate. The EFF stated that Molefe has not
challenged the directive issued by the Minister
which is the
underlying
causa
for
his dismissal.
The EFF
further submitted that Molefe’s employment came to an end in
December 2016 and he was reinstated after a pension
payout could not
lawfully be disbursed to Molefe and after the Minister rejected such
payment. The reinstatement agreement violated
the process prescribed
for the appointment of a chief executive in Eskom’s MOI, the
ongoing recruitment process that followed
Molefe’s departure
in December 2016 and section 195 of the Constitution
2
.
The EFF took
issue with Molefe’s averment that he has not resigned and his
contract did not terminate and submitted that
such contention is
unsustainable on the facts as Molefe could not have been a Member of
Parliament and the chief executive of
Eskom simultaneously.
The pertinent events
In my view
there are three pertinent events namely Molefe’s departure
from Eskom in December 2016 (December departure),
Molefe’s
return to Eskom in May 2017 (May return) and Molefe’s
departure from Eskom in June 2017 (June departure).
In respect of
the December departure Molefe’s case is that he had not
resigned, but that he left in terms of an early retirement
agreement
reached with Eskom which agreement was void as it was influenced by
a common error. Molefe’s version is that
his employment never
terminated.
The version
of the Minister, DA and EFF is that Molefe indeed resigned and that
his contract terminated on 31 December 2016.
In respect of
his May 2017 return Molefe’s version is that as there was no
resignation or valid early retirement agreement,
the reinstatement
agreement was nothing more than a mere continuation of his existing
employment agreement that was signed on
7 March 2016 and his return
was nothing but a restoration of the
status
quo ante.
The DA and
EFF’s version is that Molefe’s May 2017 return
constituted a new agreement as Molefe’s employment
terminated
on 31 December 2016. Their case is that Molefe was not lawfully
employed as he had resigned and was reinstated to
the position of
chief executive in terms of a reinstatement agreement which they
submit was an unlawful and invalid agreement.
The Minister’s
version is that Molefe has resigned and the reinstatement agreement
was invalid and Molefe’s reinstatement
was premised on an
invalid agreement.
In respect of
his June 2017 departure Molefe’s case is that the decision to
rescind the reinstatement agreement constituted
a dismissal and the
opposing Respondents’ case is that as Molefe resigned, there
existed no valid employment relationship
hence there was no
dismissal.
In summary
the three pertinent questions to be considered are firstly whether
the December 2016 departure was premised on an invalid
early
retirement agreement or whether it was a resignation, secondly
whether the reinstatement agreement entered into between
Molefe and
Eskom in May 2017 was valid or not and thirdly whether Molefe was
dismissed on 2 June 2017 or not.
These
questions are interrelated for obvious reasons. A finding that
Molefe indeed resigned would mean that the employment relationship
terminated in December 2016 and such finding will impact on the
question whether the subsequent reinstatement agreement was valid
and will ultimately impact on the question whether there was a
dismissal or not. Equally so will a finding that Molefe has not
resigned impact on the questions relating to the validity of his
reinstatement agreement and existence of dismissal.
Forum shopping
In her
opposing affidavit the Minister admitted that this Court has
jurisdiction to hear this matter, but noted that the High
Court also
has jurisdiction to determine a dispute that is rooted in contract.
The Minister submitted that the institution of
the present
proceedings in this Court is forum shopping of the most flagrant
kind.
The DA
submitted that the pending High Court applications deal with
overlapping subject matter concerning to a large extent the
same set
of facts, parties, legal principles and issues and there is a real
potential for conflicting judgments from the High
Court and the
Labour Court in this matter.
The DA argued
that in bringing this matter before the Labour Court, the same
parties must again traverse the same factual background
and issues
in further affidavits in this Court and it is an unnecessary and
costly exercise in that there is an unnecessary duplication
of
proceedings with the associated escalating costs. This is more
concerning in view of the fact that the Minister and Eskom
are
litigating this matter using public funds.
This was
raised with Molefe’s attorneys as far back as 4 June 2017 when
the DA’s attorneys stated in a letter to Molefe’s
attorneys that: “
We see no
reason why Mr Molefe should not have raised any challenge to the
decision of 2 June 2017 in the currently pending High
Court
proceedings. To challenge that in separate proceedings in the Labour
Court is, we believe, an attempt at forum shopping
and a process
which is unnecessary, time consuming and wasteful of costs as well
as the resources of the courts. It will lead
to the highly
undesirable situation where two different courts are asked to
consider the issue of the validity of the 11 May
2017 decision. It
has the potential for conflicting judgments on that issue.”
The DA’s
concern is that should this Court find in favour of Molefe, it would
by implication have found that Molefe’s
reinstatement was
lawful and such finding would result in a situation where the High
Court is faced with a judgment from this
Court on the same facts
concluding that the reinstatement agreement is lawful.
The DA
submitted that the correct forum to ventilate the issues is the High
Court and that Molefe is forum shopping. The High
Court has
concurrent jurisdiction in respect of any matter concerning a
contract of employment. The High Court is already seized
with the
matter and it is not open to Molefe to approach both Courts on the
same issues in respect of the same facts to obtain
relief which
mirrors his opposition to the DA’s High Court application.
The EFF
raised the issue of forum shopping and submitted that Molefe is
forum shopping, a practice that should not be countenanced
as it
presents the potential of contradicting judgments and an
embarrassment to the judiciary, which should be avoided.
The factual
and legal issues raised in this application are the same or similar
to the issues raised in the High Court applications
and the High
Court is the correct forum to ventilate the issues.
Molefe
disputed that he was forum shopping and Mr Graves on his behalf
submitted that this Court has jurisdiction to adjudicate
the matter
and that Molefe has the right to institute legal proceedings in the
Court of his choice.
This Court’s
jurisdiction to hear this matter is not disputed and I am alive to
Molefe’s right to institute legal
proceedings in this Court
and I do not suggest for one second that Molefe has no right to
approach this Court. On the contrary,
he has every right to do so
and he has done so. My concern however, as I canvassed with Mr
Graves during argument, remains whether
this Court is in a position
to declare a dismissal unlawful and void when there is an undecided
dispute about the very existence
of a valid employment relationship.
Issues to be decided
In the papers
filed in this Court Molefe made it clear that this Court is only
called upon to pronounce on the lawfulness of his
dismissal on 2
June 2017. The issue regarding his reinstatement is an issue
currently before the High Court and does not require
this Court’s
consideration.
There are two
questions that come to mind. The first is whether this Court can, in
view of the dispute pending before the High
Court, accept that
Molefe was lawfully employed as at 2 June 2017. Whether Molefe was
lawfully employed as at 2 June 2017 is
an issue that is hotly
disputed and properly ventilated in the High Court applications. The
second is whether this Court can,
in the absence of a finding that
Molefe was indeed lawfully employed as at 2 June 2017, decide on the
lawfulness of his alleged
dismissal.
Molefe’s
case is that his early retirement agreement was a nullity, his
contract of employment dated 7 March 2016 did not
come to an end on
31 December 2016 or on any other date and his return to Eskom on 15
May 2017 was pursuant to a valid and operative
employment contract
concluded on 7 March 2016, which contract was unlawfully terminated
on 2 June 2017.
Molefe’s
case rests on two pillars namely that he was validly and lawfully
employed at Eskom and that he was unlawfully
dismissed due to a
breach of his contract of employment.
Logic
dictates that before there could be a breach of a contract, a
contract should exist and the first issue to be considered
and
decided is whether Molefe was lawfully employed as at 2 June 2017
before there can be a consideration of whether such contract
was
breached and whether he was unlawfully dismissed.
The first
question whether Molefe resigned or not and the validity of the
reinstatement agreement and whether he was validly and
lawfully
employed are raised and fully ventilated in the High Court. There is
a pending dispute concerning whether Molefe’s
employment with
Eskom terminated in December 2016 and whether the subsequent
reinstatement agreement signed on 11 May 2017 is
lawful.
The relief
sought by Molefe in this Court necessitates a finding by this Court
on the existence and lawfulness of his employment.
In my view this
Court could only decide the merits of this application after the
High Court has decided the part B of the pending
applications. To do
otherwise
would
amount to dealing with the matter on a piecemeal basis and would
pose the real risk of conflicting judgments.
The
approach Molefe wants this Court to take by dealing with the
lawfulness of his dismissal before it is decided whether he was
lawfully employed, will amount to stepping into a minefield of
undecided but relevant and related issues pending before the High
Court.
The question
which this Court is called upon to decide namely whether Molefe was
unlawfully dismissed, cannot be decided before
a determination is
made on whether Molefe was lawfully employed.
Molefe
disputed these concerns and submitted that a successful outcome for
him in this application will have no adverse consequence
for the
pending High Court applications as it remains open to the DA and EFF
to pursue the relief claimed in their High Court
applications. This
may be so, but this Court is not in a position to declare a
dismissal unlawful and void when there is a dispute
about the very
existence of a valid employment relationship pending in the High
Court.
Referral to trial
The merits of
the main application were to be argued on 29 June 2017. At the
commencement of the proceedings Mr Graves handed
up another bundle
containing correspondence between the legal representatives of the
parties before Court, a document setting
out the chronology of
events, supplementary heads of argument and a bundle of authorities
referred to in the supplementary heads
of argument.
It appears
from the correspondence placed before this Court that Molefe’s
attorneys approached the Respondents’ attorneys
on 28 June
2017 and indicated that there is a potential that this Court may
experience difficulty in resolving certain factual
matters which
have been raised in the papers, which disputes did not exist at the
time of launching the urgent application. In
view of the affidavit
the Minister filed in the Labour Court, in contrast to her affidavit
in the High Court, there is a dispute
between the Minister and
Molefe relating to the status of his employment on 2 June 2017.
Molefe’s attorneys proposed that
the most practical and
suitable method to have the dispute determined, is to have the
matter referred to arbitration in terms
of the arbitration clause in
Molefe’s contract of employment.
Molefe
indicated no objection to have his dispute with Eskom and the
Minister be determined in accordance with the arbitration
provisions. The DA and EFF were invited to participate as parties in
the arbitration proceedings. The Respondents were requested
to
confirm their acceptance of the referral to arbitration and a draft
order to that effect was sent to the Respondents.
The DA and
the EFF rejected the proposal and recorded that the arbitration
clause has from the outset provided a mechanism to
Molefe and it is
a mechanism that he could have invoked at any time. There is no need
for Molefe to apply to the Court or to
ask for an order from this
Court to refer the dispute to arbitration, as he could have done so
himself under clause 26 of his
contract of employment.
The Minister
also rejected the proposal to refer the matter to arbitration.
Mr Graves
indicated that he wanted to argue the referral to arbitration,
alternatively referral to trial before the merits of
the main
application are argued, as an application to refer a matter for the
hearing of oral evidence or trial must be made
in
limine
and not only after it
becomes clear during argument that the applicant is failing to
convince the Court on the papers
3
.
Mr Graves did
not persist with the relief sought that this Court should refer the
matter to arbitration and only persisted with
his argument that the
matter should be referred to trial in this Court.
Although the
counsel for the Minister, DA and EFF submitted arguments on why this
Court should not issue an order to refer the
matter to arbitration,
it is not necessary to deal with those arguments in view of the fact
that the relief so sought is not
persisted with.
In respect of
the application to refer the matter for trial, Mr Hulley for the
Minister submitted that Molefe’s case is
that the dispute of
fact arose because of the about turn made by the Minister. Mr Hulley
referred to the specific paragraphs
in the Minister’s
answering affidavit where a dispute of fact may arise and those
issues are defined and limited and relate
in main to the issue
whether Molefe resigned.
Mr Hulley
submitted that there has to be a material dispute of fact to be
referred for evidence or trial and the matter before
this Court is a
contractual one and the issues in dispute do not relate to the
contractual issues before this Court. Mr Hulley
argued that the
matter should not be referred for trial.
Mr Kennedy
for the DA argued that there are three issues to be decided namely
whether Molefe’s departure in December 2016
was a resignation
or not, whether Molefe’s reinstatement in May 2017 was valid
or not and whether Molefe’s June 2017
departure is a dismissal
or not.
Molefe wants
this Court to decide whether his dismissal was lawful or not, but
before Molefe could be found to be dismissed, he
must have been an
employee and before that issue could be decided, there are two
antecedent questions to be considered and decided
namely whether
Molefe resigned or not and whether he was validly reinstated or not.
The High Court is seized with the two antecedent
issues and those
must be decided first. The matters should be dealt with in sequence
and the High Court applications are preceding.
Mr Kennedy
submitted that Molefe has the freedom to choose the forum where he
wants to challenge his dismissal, but Molefe has
to accept that
there are antecedent issues pending before the High Court and his
refusal to proceed with his dispute in the High
Court, has
consequences. This Court should not refer the matter to trial as the
trial Court cannot deal with the issues before
the antecedent issues
had not been decided by the High Court and it would be premature to
deal with the lawfulness of the dismissal
in view of the pending
High Court applications.
Mr
Ngcukaitobi for
the EFF submitted that the basis for the relief sought by Molefe in
the main application is set out in paragraphs
65 – 71 of
Molefe’s founding affidavit and those are that
the
Board has no power to remove Molefe as chief executive, Eskom’s
MOI requires Molefe’s dismissal to be effected
in terms of
section 186(1)(a) of the Act and neither Molefe’s contract of
employment nor the MOI permit Eskom or the Minister
to impose a
summary dismissal and such dismissal is in breach of his contract of
employment read with clause 14.3.6 of the MOI.
Furthermore, Eskom
was not entitled to rescind the reinstatement agreement as it
elected to honour Molefe’s contract of
employment and such
election was exhaustive and irrevocable. The rescission of the
reinstatement agreement cannot bring about
Molefe’s dismissal
and he is entitled to insist on the enforcement of his contract of
employment.
Mr
Ngcukaitobi
argued
that in paragraph 11 of Molefe’s supplementary heads of
argument the issues in dispute which according to Molefe
justify a
referral for trail are set out and none of those issues relate to
the basis for the relief Molefe seeks in this Court.
In
this Court Molefe’s claim is a contractual one and there is no
material dispute that calls for referral to trial.
Mr
Ngcukaitobi
submitted that the request to refer the matter for trial is nothing
but a postponement in disguise and an abuse of
process.
In
my view no case has been made out for this application to be
referred to trial. Firstly, it would be premature to do so as
the
trial Court would not be able to decide the lawfulness of Molefe’s
dismissal in isolation and without a finding that
he was lawfully
employed, which is an issue for the High Court to decide. This again
highlights the difficulties and challenges
created by litigation in
separate Courts. Secondly the issues in dispute, as identified by
Molefe, which calls for the hearing
of oral evidence, are not
relevant to the contractual issue this Court has to decide
ultimately and there is no material dispute
to be referred to trial.
The intervention applications
DA and EFF
filed applications in this Court in terms of the provisions of Rule
22 of the Rules of the Labour Court, seeking leave
to intervene and
be joined as parties. On 27 June 2017 they were granted leave to
intervene and were joined as Respondents.
On 27 June
2017 I indicated that I would provide reasons for the order in the
judgment in the main application. Herewith the reasons
for joining
the DA and EFF as parties in this application.
Rule
22 of the Rules of this Court provides for joinder as follows:
“(1)
The court may join
any number of persons, whether jointly, jointly and severally,
separately, or in the alternative, as parties
in proceedings, if the
right to relief depends on the determination of substantially the
same question of law or facts.
(2)
(a)
The
court may, of its own motion or on application and on notice to every
other party, make an order joining any person as a party
in the
proceedings if the party to be joined has a substantial interest in
the subject matter of the proceedings.
(b)
When making an order in terms of paragraph
(a)
,
the court may give such directions as to the further procedure in the
proceedings as it deems fit, and may make an order as to
costs”.
Rule
22 provides that in order for a party to be joined there must
firstly be proceedings before Court to which parties could
be
joined, the parties must have a direct and substantial legal
interest in the matter such as to make them necessary parties
to the
proceedings. Only parties that would be directly affected by the
court’s order or where the order cannot be sustained
or
carried into effect without prejudicing such a party are necessary
parties to the proceedings.
The
Court may join parties where the right to relief depends on the
determination of substantially the same question of law or
facts.
These
are the principles this Court applied in deciding the application
for joinder.
The
application for joinder is premised on the submission that the DA
and EFF have standing and a substantial legal interest in
this
matter. They submitted that the matter brought before this Court is
intricately linked to the factual and legal issues in
the High Court
application, where issues similar to the issues before this Court
are pending.
It was
submitted that the underlying premise of Molefe’s application
in this Court is that the decision to reinstate him
on 11 May 2017
was valid but the validity of that decision is challenged in the
High Court and the issues pending before the
High Court and the
issues raised in this Court are inextricably linked. The two
applications deal with overlapping subject matter
concerning to a
large extent the same set of facts, parties, legal principles and
issues. Any finding by this Court in respect
of the merits of
Molefe’s application would include a pre-determination of the
lawfulness of the reinstatement agreement
and would accordingly
impact directly on the relief sought by the DA and the EFF in part B
of the relief sought in the High Court.
I was
satisfied that a case was made out and that the DA and EFF have a
substantial interest in the subject matter of Molefe’s
application and that they may be directly affected by this Court’s
order as it may impact on the pending High Court applications.
I have fully
dealt with the issues pending before the High Court and the issues
to be decided by this Court and those issues further
informed my
view that there is indeed more than just a remote link between this
application and the pending High Court applications.
Mr Graves
submitted that the principles applicable to intervention and joinder
applications are not in dispute, but emphasized
that although
political parties have a role to play, there is no automatic right
to intervene.
In casu
the
primary issue is whether there was a dismissal from Molefe’s
existing employment relationship and that is a private
matter and
the DA and EFF have no interest in private employment relationships.
Mr Graves
conceded that the application for intervention was not frivolous,
but submitted that it was tactical and brought with
the aim to
secure a bloodless victory. Mr Graves argued that the application
for intervention should be dismissed with costs,
including the costs
of three counsel.
Mr Kennedy in
reply submitted that the antecedent question whether Molefe was
employed must be decided before the issue of his
dismissal could be
decided and notwithstanding the fact that the employment of Molefe
is a private matter, the DA and the EFF
are challenging that in the
High Court and they have the right to be heard in these proceedings.
Mr Kennedy
and Mr
Ngcukaitobi
argued
that Molefe should be ordered to pay the costs for opposing the
intervention and joinder application as his opposition
was frivolous
and ill-advised and the application should not have been opposed, in
which event no cost order would have been
sought against Molefe.
Costs should
be considered against the requirements of the law and fairness. The
requirement of law has been interpreted to mean
that the costs would
follow the result. In considering fairness, the Court has held that
the conduct of the parties should be
taken into account and that
mala fide
,
unreasonableness and frivolousness are factors justifying the
imposition of a costs order.
I could see
no reason to deviate from the general rule that the costs should
follow the result, more so where Mr Graves also argued
for a cost
order to be granted in favour of Molefe.
In the
premises I make the following order:
Order
1. The
application to refer the matter to trial is dismissed with costs;
2. The main
application is postponed
sine
die;
3. The
Applicant may approach the Registrar of this Court to enrol the main
application under case number J 1276 / 2017 for hearing
after the
High Court: Gauteng Division, Pretoria, has given judgment in case
numbers 33051/17 and 34568/17.
_______________________
Connie
Prinsloo
Judge of
the Labour Court
Appearances:
For
the Applicant: Advocate N Graves SC with Advocate C Bester and
Advocate I Phalane
Instructed
by: Edelstein Farber Grobler Attorneys
For
the First Respondent
:
Advocate A Bam SC with Advocate M Sikhakhane SC and Advocate Z
Ngwenya (watching brief only)
Instructed
by: Cliffe Dekker Hofmeyer Inc Attorneys
For
the Second Respondent: Advocate G Hulley SC with Advocate U
Dayanand-Jugroop and Advocate M Sibanda
Instructed
by: State Attorney
For
the Third Respondent: Advocate P Kennedy SC with Advocate K
Harding and Advocate L Zikalala
Instructed
by: Minde Schapiro & Smith Inc Attorneys
For
the Fourth Respondent: Advocate T Ngcukaitobi with Advocate R
Tshetlo
Instructed
by: Kwinana and Partners Attorneys
1
Act 66 of 1995.
2
The
Constitution of the Republic of South Africa,
1996
3
Law Society Northern Provinces v Mogami
(2010)
(1) SA 186
(SCA) at para 23,
De Reszke
v Maras and others
2006 (1) SA 401
at
para 33.