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[2017] ZALCD 14
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Endumeni Municipality v South African Local Government Bargaining Council and Others (D1097/14) [2017] ZALCD 14 (26 May 2017)
IN
THE LABOUR COURT OF SOUTH AFRICA, DURBAN
Not Reportable
Case no: D1097
/
14
In the matter between:
ENDUMENI
MUNICIPALITY
Applicant
and
SOUTH AFRICAN LOCAL
GOVERNMENT
BARGAINING
COUNCIL
First
Respondent
VEESLA SONI
N.O.
Second Respondent
ERIC JABULANI
MBEJE
Third Respondent
Heard:
16 November 2016
Delivered:
26 May 2017
Summary:
Review.
JUDGMENT
GUSH J
[1]
The
applicant in this matter applies to review and set aside the
arbitration award handed down by the second respondent in which
award
the second respondent found that the third respondent had been
unfairly dismissed by the applicant. In the alternative, should
the
court find that the dismissal was unfair; the applicant prays that
the third respondent be awarded compensation.
[2]
To
all intents and purposes, the background to the matter is common
cause.
[3]
The
applicant is a municipality as defined in
section 2
of the
Local
Government: Municipal Systems Act 32 of 2000
and it is required to
conduct its business in accordance with the provisions of that Act.
In particular, the Act specifically governs
the procedures to be
followed when employing staff.
[4]
During
April 2013, the applicant’s municipal Council resolved to
institute disciplinary proceedings against the then municipal
manager
Mr. Biyela. As a consequence, the Council suspended Biyela with
effect from 18 April 2013.
[5]
With
the apparent unlawful connivance of the number of Councillors and the
applicant’s Executive Council, the Council purported
to resolve
to withdraw the charges against Biyela and uplift his suspension.
[6]
This
decision or resolution was subsequently found to be a nullity and of
no force and effect meaning that Biyela having been suspended
was not
entitled to lawfully represent the applicant.
[1]
The applicant had appointed an acting municipal manager in the place
of Biyela.
[7]
Acting
on the authority of the unlawful resolution, Biyela insisted on
resuming his position of municipal manager or as described
by the
second respondent “took siege of the municipality in September
2013, whilst on suspension, and was only legally removed
during April
2014”.
[2]
[8]
During
his “siege”, Biyela made a number of appointments to the
staff of the applicant. The third respondent was one
of these
appointments. Biyela purported to conclude a contract of employment
with the third respondent appointing him as “Senior
Manager
Legal and Estates in the Corporate Services Department” on 17
January 2014 with effect from 1 March 2014. It is common
cause that
Biyela was not entitled to lawfully make the appointment or enter
into any contracts for or on behalf of the municipality
and that the
appointment of the third respondent did not comply with the
provisions of the
Local Government: Municipal Systems Act.
[9
]
As
a result, at a meeting of the applicant’s Council on 16 April
2014, it resolved correctly that the appointments made by
Biyela were
“illegal and invalid
ab
initio
”.
[10]
The
Council further resolved that the persons unlawfully appointed by
Biyela were to be advised of the invalidity of their contracts.
On 17
April 2014, the then acting municipal manager, who had been appointed
effective 13 June 2013, addressed a letter to the third
respondent
advising him of the “nullification of [his] irregular and
un-procedural employment” and setting out in detail
the reasons
behind the Council’s resolution.
[3]
[11]
As
a consequence, the third respondent referred a dispute to the first
respondent who in turn appointed the second respondent to
arbitrate
the dispute.
[12]
At
the arbitration, the applicant submitted that as the third respondent
had been irregularly appointed without the consent of the
applicant’s
Council, the appointment was null and void and that accordingly the
third respondent had not been employed and
accordingly had not been
dismissed.
[13]
Despite
this argument, the second respondent concluded that the applicant was
estopped from raising the invalidity of the contract
and that
termination of the third respondent’s employment was both
substantively and procedurally unfair. The second respondent
concluded:
‘
[24] I also
believe that summary termination the [third respondent’s]
employment on a declaration of illegality and noncompliance
with a
recruitment policy was harsh and unfair, thus entitling him to the
relief sought herein. I accept there will be financial
repercussions
on the [applicant] but the [third respondent’s] situation far
outweighs the [applicant]. The harm to the [third
respondent]
overshadows any harm the [applicant] may or will suffer. The balance
of convenience certainly favours the applicant
herein.
[25] The applicant
challenged the procedural fairness. [the applicant’s witness]
maintained there was no dismissal on the
appointment was withdrawn,
hence there was no need to for the applicant an opportunity to
present his case. I find this stance
illogical and absurd and does
not nullify a person’s right to a fair hearing. He should have
been afforded a formal inquiry
and such failure deprived him of a
right to be heard. [the third respondent] was entitled to an
explanation for his dismissal and
the failure by the municipality to
afford him that opportunity amounted to procedural unfairness
.
[4]
[14]
I
am not persuaded that the doctrine of estoppel in the circumstances
of this matter can be applied in order to establish that a
lawful
contract of employment existed. The facts are:
a.
Biyela
was lawfully suspended;
b.
The
uplifting of his suspension was found to be null and void; and
c.
His
resumption of his duties as municipal manger was accordingly unlawful
as were his actions in entering into contracts of employment
with
inter
alia
the third respondent during the period September 2013 to April 2014.
d.
As
the contracts of employment did not comply with the
Local Government:
Municipal Systems Act 32 of 2000
, the contracts were unlawful and
void
ab
initio
.
[15]
In
a previous judgment, I concluded that in such circumstances as no
contract came into being there could no dismissal.
[5]
In this matter, I am persuaded by Mr Pitman’s that despite the
fact that the purported contract between the applicant and
the third
respondent, concluded by Biyela, was null and void an employment
relationship as contemplated by the Labour Relations
Act did in fact
come into existence.
[16]
The
chronology of events leading up to the so-called “nullification”
(sic) of the contract further reinforce the conclusion
that despite
the invalid unlawful contract, an employment relationship was
established.
[17]
In
the award, the second respondent records that the chairperson of the
applicant’s Council had formally objected to the appointment
of
the third respondent on 28 February 2014. The applicant only
commenced his employment in march 2014 The objection was
addressed to the applicant’s acting municipal manager. It is
also apparent that the speaker of the applicant’s Council
also
reported the matter to the Member of the Executive Council (MEC),
prior to the “nullification” and indicated that
the
Council was not prepared to condone the appointment.
[18]
What
is clear from trhis is that the applicant became aware that the
employment contract entered into with the third respondent
by Biyela
was invalid before Biyela commenced his employment. Despite this it
took the applicant a further two months before the
contract was
cancelled.
[19]
As
a result, when the third respondent commenced work with the applicant
despite the invalid contract of employment, an employment
relationship was created between the applicant and the third
respondent. When the applicant resolved to cancel and nullify the
Biyela’s contract, it was necessary for the applicant to
terminate the employment relationship.
[20]
That
being so, the applicant in terminating that employment relationship
was required to act fairly.
[21]
The
Biyela’s contract was null and void and the terms and
conditions of the employment relationship did not comply with the
Local Government: Municipal Systems Act 32 of 2000
.
[22]
In
the award, the second respondent having concluded that the
termination of the third respondent’s employment was “harsh
and unfair” found the dismissal to be substantively unfair and
ordered retrospective reinstatement. What the second respondent
ignored were the requirements of the
Local Government: Municipal
Systems Act 32 of 2000
.
[23]
It
is not disputed that the applicant, in employing personnel, in order
for the employment to be lawful must comply with the
Local
Government: Municipal Systems Act 32 of 2000
: The employment
relationship with the third respondent that came into existence
alongside the unlawful contract did not comply
with that Act. I am
satisfied that in the circumstances, the applicant had a fair reason
for terminating the employment relationship
and that accordingly the
termination was substantively fair.
[24]
The
question that remains is whether the applicant followed a fair
procedure in terminating the applicant’s employment.
[25]
The
termination of the third respondents employment is clearly a no-fault
termination. Using as an analogy the procedure required
in a
dismissal for operational reasons, also a no-fault termination, the
Labour Relations Act 66 of 1995
specifies a detailed and
comprehensive consultation process. There is no reason why an
employee in the position of the third respondent
should not be
entitled to be engaged by the municipality in a similar process.
[26]
In
this matter, all the applicant did was to address a letter to the
third respondent advising him of the “nullification of
[his]
irregular and un-procedural employment”. I am not persuaded
that this constituted procedural fairness.
[27]
As
for the appropriate relief for the procedural unfairness, it is so
that the third respondent sought an order of reinstatement.
It is
therefore necessary to consider whether in the circumstances it would
be “reasonably practical for the applicant to
reinstate the
third respondent”.
[6]
[28]
As
the effect of an order reinstating the third respondent would be to
oblige the applicant to restore an unlawful contract that
did not
satisfy the statutory requirements of the Municipal Systems Act, that
is not reasonably practical.
[29]
I
am satisfied though that the third respondent is entitled to
compensation.
[30]
I
am for the reasons above persuaded that it is necessary to review and
set aside only that portion of the second respondent’s
award
that declares the dismissal unfair and the order reinstatement.
[31]
The
third respondent is however entitled to compensation for the unfair
procedure adopted by the applicant.
[32]
In
its Notice of Motion, in the alternative, the application prayed for
an order that the third respondent be awarded “compensation
of
an amount which is deemed fitting by the Court.”
[7]
I understood the third respondent’s Counsel’s argument
also to be that in the alternative should reinstatement not
be
appropriate that compensation should be awarded but in an amount
equivalent to 12 months’ salary.
[33]
In
order to determine what compensation would be “fitting”,
I have taken into account that the third respondent was
not the
author of his misfortune; that the contract had just commenced; that
the applicant did not acted timeously and that the
arbitration was
concluded six months after his employment was terminated.
[34]
Having
regard to all these factors, I find that the appropriate compensation
to which the third respondent is entitled is an amount
equal to 12
months’ salary.
[35]
As
far as costs are concerned I have taken into account that the
applicant has been partially successful in its application. I am
however satisfied that in the interests of law and fairness that the
applicant should pay the third respondent’s costs.
[36]
In
the circumstances, I make the following order:
a.
The
second respondent’s award is reviewed and set aside and
substituted with the following:
i.
The
dismissal of the third respondent was procedurally unfair;
ii.
The
applicant is to pay the third respondent an amount equivalent to 12
months’ salary
b.
The
applicant is ordered to pay the third respondent’s costs.
____________________
D H
Gush
Judge
Labour Court of South Africa
APPEARANCES:
FOR THE
APPLICANT:
Adv P Blomkamp
Instructed by Acutt and
Worthington
FOR THE THIRD
RESPONDENT:
Adv M Pitman
Instructed
by Shepstone and Wylie
[1]
T B Biyela v
Endumeni Municipality and another Kwazulu-Natal
High Court Case Number 7494/14.
[2]
Arbitration award
paragraph 20 page 30 of the pleadings.
[3]
Page 44-55 of the
pleadings.
[4]
Award paragraphs
24 and 25 pleadings page 32.
[5]
Endumeni
Municipality and SALGBC and Others
Case
Number D758/14 (unreported).
[6]
Labour Relations
Act 66 of 1995
s 193(2)(c).
[7]
Notice of Motion
Pleadings page 2.