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[2018] ZALCJHB 198
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Smith v National Lotteries Commission and Another (JR358/18) [2018] ZALCJHB 198 (18 May 2018)
THE
LABOUR COURT OF SOUTH AFRICA,
JOHANNESBURG
Not Reportable
Case no: JR358/18
In the matter between:
IVEDA VALERIE SMITH
Applicant
and
NATIONAL
LOTTERIES COMMISSION
First Respondent
KGOANA MAMOGALE:
CHAIRMAN
OF
THE DISCIPLINARY ENQUIRY
Second
Respondent
Heard:
29 March 2018
Delivered:
18 May 2018
Summary:
Final interdict – declaratory order –
power
to discipline a member of the Distributing Agency in terms of the
Lotteries Act 33 of 1997
– relief not competent due to
non-joinder and alternative recourse.
JUDGMENT
NKUTHA-NKONTWANA. J
Introduction
[1]
In
this application, the applicant (Ms Smith) seeks an order
interdicting the pending disciplinary enquiry, reviewing and setting
aside the ruling by the second respondent (Mr Mamogale) to proceed
with the disciplinary enquiry, declaring that the first respondent,
the National Lotteries Commission (the NLC), has no power to
institute disciplinary proceedings against her as a member of the
Distributing Agency (the DA), and declaring the disciplinary enquiry
against her unlawful.
[2]
On
18 April 2017, the Minister of Trade and Industry (the Minister)
appointed Ms Smith as a full time member of the DA reporting
to the
Board of the NLC, subject to the policies, rules and regulations of
the NLC. On 25 April 2017, Ms Smith signed a contract
of employment
with NLC wherein she accepted the terms and conditions of her
employment which include an undertaking to be bound
by the NLC Human
Capital Management Policies,
inter
alia.
She
affectively commenced her employment with the NLC on 1 May 2017.
[3]
The
NLC has instituted the pending disciplinary proceedings against Ms
Smith on charges of misconduct pertaining to the allegations
of
dishonesty and misrepresentation. Tersely, Ms Smith is accused of
failing to disclose the circumstances relating to her dismissal
by
the South Africa Council of Social Services Professionals (the
SACSSP), her erstwhile employer, including the criminal charge
of
fraud. Also, that Ms Smith had lied to the interviewing panel that
the SACSSP was willing to settle with her all the labour
and criminal
matters.
[4]
The
disciplinary enquiry sat on 18 and 19 January 2018. Ms Smith raised a
point
in
limine
to the effect that the NLC lacked jurisdiction to institute
disciplinary proceedings against her as she was appointed by the
Minister.
On 3 February 2018, during the sitting of the disciplinary
enquiry, Mr Mamogale, handed down his ruling, dismissing the point
in
limine.
It
was in that sitting that the disciplinary proceedings were adjourned
to 8 to 10 March 2018.
[5]
On
3 March 2018, Ms Smith launched this application in the ordinary
course. On 7 March 2018, the NLC’s attorneys of record
reminded
Ms Smith’s attorneys of record that the disciplinary hearing
would proceed as scheduled. The next day, 8 March 2018,
Ms Smith
approached this Court on urgent basis. The urgent application was
struck off the roll for lack of urgency by Prinsloo
J on 9 March
2018.
[6]
The
matter came before me on expedited basis at the instance of Ms Smith
and as directed by the Judge President of this Court.
Section 26A
and
26D
of
the
Lotteries Act
[7
]
Ms
Smith is appointed in terms of
section 26A
of the
Lotteries Act
[1
]
which provides that:
‘
26A. Distributing
agency.
[2]
—
The distributing agency
contemplated in
section 22
(3) shall be —
(a)
appointed by the Minister in
terms of this Act; and
(b)
accountable to the board.’
[8]
The
Lotteries Act gives
the Minister the power to discipline the member
of DA in cases of conflict of interest.
Section 26D
provides as
follows:
‘
26D. Conflict
and declaration of interest.
–
(1)
A member of the distributing agency must, before appointment, submit
to the
Minister, board and the Commission a written statement in
which he or she declares whether or not he or she has any direct or
indirect
interest, financially or otherwise, whether or not such
interests –
(
a
)
may constitute a conflict of interest in respect of his or her
functions as a member
of the distributing agency; or
(
b
)
could reasonably be expected to compromise the distributing agency in
the performance
of its functions.
(2)
If such a member acquires any interest as contemplated in
subsection
(1)
, he or she must,
within 30 days in writing, declare that fact to the Minister, board
and the Commission.
(3)
A member must not be present at, or take part in, the discussion of
or the taking
of a decision on any matter before the distributing
agency in which that member has an interest contemplated in
subsection
(1)
.
(4)
A member must not use his or her position or privileges, or
confidential information
obtained as a member of the distributing
agency, for personal gain or to improperly benefit another person.
(5)
Should the Minister or the board become aware of any conflict of
interest or perceived
conflict of interest or circumstances that may
compromise the impartiality of a person in executing his or her
duties as a member
of the distributing agency, the Minister may,
after consultation with the board immediately order such person to
stop executing
any duties related to distributing grants pending any
investigation or inquiry.
(6)
Should any member of the distributing agency become aware of any
conflict of interest
or perceived conflict of interest or
circumstances that are likely to compromise his or her impartiality
in executing his or her
duties, such person must immediately stop
executing such duties and must within seven days of becoming aware of
such conflict or
perceived conflict or circumstances inform the
Minister, board and the Commission of any such conflict or
circumstances and the
Minister must, after consultation with the
board consider whether such conflict or circumstances is likely to
compromise the impartiality
of such person in the performance of his
or her duties.
(7)
The Minister may, after consultation with the board, institute
disciplinary proceedings
against any member of the distributing
agency who fails or refuses to comply with or contravenes this
section.
(8)
The Minister, board and the Commission must keep a register of the
interests of members
of the distributing agency disclosed in terms of
this section and must update that register from time to time.
(9)
The Minister may, after considering whether such conflict or
circumstances is likely
to compromise the impartiality of such a
person, inform such a person of his or her decision which may include
–
(
a
)
suspending such a person pending any further investigations;
(
b
)
instituting a disciplinary inquiry to probe such conflict or
circumstances; or
(
c
)
dismissal of such a person from executing his or her duties as a
distributor of grants
on the ground of serious misconduct, where such
person has failed to inform the Minister, board and the Commission of
the existence
of such conflict.’
[9]
The
crux of Ms Smith’s impugn is that it is only the Minster who
can institute disciplinary proceedings against her. Advocate
Pheto,
for Ms Smith, submitted that other than
section 26D
, the
Lotteries
Act is
silent on the powers to discipline a member of the DA.
Therefore,
section 26D(9)
evidently provides that it is only the
Minister who can suspend, investigate, and institute disciplinary
enquiry or dismiss a member
the DA. Ms Smith further argued, in the
alternative, that if it is found that the
Lotteries Act is
silent on
the Minister’s power to discipline a member of the DA, other
than in terms of
section 26D
, the Minister’s power to
discipline a member of the DA must be implied in his power to
appoint. To fortify this argument,
Advocate Pheto referred to the
Constitutional Court judgment in
Masethla
v President of the Republic of South Africa and Another.
[3]
[10]
The
NLC, on the other hand, argued that the
Masethla
decision is distinguishable in the present case as Ms Smith bound by
the employment contract which clearly stipulate the terms
and
conditions of her employment, including being subject to its
disciplinary code. Advocate Kennedy SC, for the NLC, referred
to the
judgment in
Maroga
v Eskom Holdings Ltd and Others,
[4]
where
the High Court, per Masipa J, held that the
Masethla
decision was distinguishable since Mr Maroga had entered into a
contact of employment which explicitly vested the power to dismiss
in
Eskom as his employer and not with the Minister of Public
Enterprises. Similarly, in the present case, Ms Smith is employed
by
the NLC and as such the power to institute disciplinary proceedings
vests with it and not with the Minster, so it was further
argued.
Non-joinder
[11]
The
NLC raised an issue of non-joinder. It argued that the Minister ought
to have been joined as a party in light of the fact that
Ms Smith
seeks as the declaratory order that the Minister has exclusive powers
to institute disciplinary proceedings against a
member of the DA.
[12]
In
State
Information Technology Agency (Pty) Ltd (SITA) v Swanevelder and
Others
[5]
this Court, per Molahlehi J, pertinently expounded the basic tenets
applicable in instances of non-joinder as follows:
‘
[12]
This Court in
Minister
of Safety v De Vos
(2008) 29 ILJ 688 (LC), held that the commissioner has a duty, to
raise the issue of non-joinder
mero
motu
where none of the parties have done so. This duty arises from the
principle that a third party should be joined in proceedings
if he or
she has a direct and substantial interest in a matter and has not
consented or undertaken to be bound by any judgment
or award that may
be given in the matter. The duty arises from the principle that the
commissioner should not pronounce on matters
that may adversely
affect the rights of a party who is not before him or her (see
Public
Servants Association v Department of Justice & others
(2004) 25 ILJ 692 (LAC) [also reported at
[2004] JOL 12460
(LAC) -
Ed]). Thus failure by the commissioner to raise the issue of
non-joinder renders the arbitration award reviewable and makes
it
irrelevant whether or not it was raised by any of the parties. The
duty also arises in terms of
rule 26
of the Rules of the CCMA.
[13] The
broad principle at common law is that if a third party has or may
have a direct and substantial
interest in any order that a court may
make or if such order cannot be carried into effect without affecting
or prejudicing a third
party, he or she is a necessary party and
should be joined in the proceedings (see
Amalgamated Engineering
Union v Minister of Labour
1949 (3) SA 637
(A)). A "direct
and substantial interest" has been held to be "an interest
in the right which is the subject matter
of the litigation and not
merely a financial interest": it is a "legal interest in
the subject matter of the litigation"
(see
Henry Viljoen
(Pty) Ltd v Awerbuch Brothers
1953
[2009] 7 BLLR 715
(SCA) (2) SA
151 (O) at 169-170) …
[14] The
approach to be adopted when dealing with the issue of non-joinder was
set out in
De Vos
supra as follows:
"In my view a court or an
arbitrator can
mero motu
raise the issue of joinder at any
stage of the proceedings. In other words a court or an arbitrator can
raise the issue of joinder
at the beginning of the case where the
cause of action or the dispute as defined by the applicant is such
that it clearly reveals
that there is a third party that may have a
substantial interest in the matter. Where the pleadings or the
dispute as defined in
the referral form of the applicant does not
reveal that there is a third party that may have an interest in the
matter, a court
or an arbitrator may raise the issue of joinder at
any stage when the evidence presented by any of the parties reveals
that there
is a third party that has an interest in the matter."
[15] The
two principles upon which this approach is based on were found in
Amalgamated Engineering Union v Minister of Labour
1949 (3) SA
637
(A) to be:
"(1)
That a judgment cannot be pleaded as
res judicata
against
someone who was not a party to the suit in which it was given;
and
(2)
That the Court should not make an order that may prejudice a party
not before it."’
[13]
In
view of the above, the NLC correctly argued that the Minister ought
to have been joined as a party. There is no merit in Ms Smith’s
argument that non-joinder ought to have been raised in the pleadings.
It is clear from the authorities quoted in
SITA
that the issues can be raised any time during the hearing of the
matter or, as a matter of fact, by the Court,
mero
motu
[14]
In
my view, t
he
res
judicata
test demonstrates that the affected interest is direct and
substantial. The Minister
may,
for
example,
seek a declaratory order endorsing the NLC’s power to
discipline a member of the DA and the
order
sought in these proceedings, i
f
granted,
cannot
be pleaded as
res
judicata
.
[6]
[15]
Accordingly,
on this point alone, this application stands to be dismissed.
Alternative remedy
[16]
Another
hurdle to the grant of the declaratory order in this instance is the
existence of alternative remedies.
Although
not an absolute bar
,
the fact that alternative remedies are available is certainly a
consideration which the Court takes into account in exercising
its
discretion as to whether or not to make a declaration of rights.
[7]
[17]
The
annotations in
Jiba
v Minister of Justice and Constitutional Development & others,
[8]
are
instructive. In that case,
Ms
Jiba had approached this Court on urgent basis seeking a declaratory
order that the decision to commence and proceed with disciplinary
proceedings against her was unlawful, that the decision to suspend
her was unlawful, and an order to be reinstated with immediate
effect.
[18]
Having
affirmed this Court’s jurisdiction to interdict disciplinary
proceedings on exceptional circumstances, the Court declined
to
intervene. The Court was of the view that it is not ideal for this
Court to entertain applications to review and set aside rulings
made
in uncompleted proceedings as such intervention would undermine the
informal nature of the system of dispute resolution established
by
the LRA, frustrate the expeditious resolution of disputes and utterly
emasculate the statutory dispute resolution scheme.
[9]
In essence, as is in the
present case, when the applicant requests this Court to pronounce on
the lawfulness of the disciplinary
proceedings, she is, in reality,
asking the Court to circumvent the relevant dispute resolution
tribunal.
[19]
Similarly,
Ms Smith is not yet dismissed. Her approaching this Court on urgent
or expedited basis to bar her disciplinary enquiry
is clearly
ill-considered. In
Jiba,
the Court, pertinently, stated the following:
‘
[15]
For at least two reasons, the ratio of the
Tshavhunga
decision is distinguishable from the facts of the present case.
In
Tshavhunga
,
the applicant had been dismissed, and challenged the lawfulness of
his dismissal
inter
alia
on the basis that the executive committee that took the decision to
terminate his services was not authorised to do so. In the
present
circumstances, there is no dismissal - the applicant has been called
to account for her conduct in a disciplinary enquiry;
she has not
been dismissed
.
Secondly,
there being no dismissal, the issue of authority to effect a
dismissal is prematurely raised - the applicant has the right
to
raise as a defence at the disciplinary hearing the alleged
unlawfulness of her employer’s actions, or those of any of
the
other respondents, a defence that may be upheld. In the event that
the applicant is found guilty of any of the charges against
her, it
remains open for her to contend that only the Minister has the right
to make any decision to dismiss her. In this event,
the chairperson
(should she be persuaded to uphold the applicant’s contentions
on authority to dismiss) might elect to make
only a recommendation to
the Minister, based on the evidence led at the hearing. It is not for
this court, in motion proceedings
brought on an urgent basis, to
anticipate events that might equally give substance to the
applicant’s contentions or not.
[16]
Further, the
Tshavhunga
judgment is not authority for the
proposition that the dispute resolution structures established by the
LRA can be undermined by
piecemeal attacks brought by way of motion
proceedings in this court on interlocutory rulings and decisions made
by chairpersons
of disciplinary hearings, or by commissioners and
arbitrators. When the court in that matter stated that a contested
termination
of employment should be brought before the appropriate
forum without delay, it meant no doubt that this should be done
subject
to the procedures established by the LRA and the time frames
that it provides. In short: there is no reason why the question of
authority to dismiss should be determined by this court in motion
proceedings, initiated on an urgent basis, in circumstances where
no
dismissal is apprehended, and where the chairperson of a disciplinary
enquiry (and I would add, a commissioner or arbitrator
in unfair
dismissal proceedings) have not been seized with the question of
authority and have made no ruling on it.’
[17]
In
summary: although the court has jurisdiction to entertain an
application to intervene in uncompleted disciplinary proceedings,
it
ought not to do so unless the circumstances are truly exceptional
.
Urgent
applications to review and set aside preliminary rulings made during
the course of a disciplinary enquiry or to challenge
the validity of
the institution of the proceedings ought to be discouraged. These are
matters generally best dealt with in arbitration
proceedings
consequent on any allegation if unfair dismissal, and if necessary,
by this court in review proceedings under
s 145
.
[10]
(Emphasis added)
[20]
I
fully concur with the sentiments expressed by the Court in
Jiba
.
Apparent also in the present case is the fact that Ms Smith has not
been dismissed. She is only presented with an opportunity
to respond
to the allegations of misconduct levelled against her. In fact, she
has already expressed her
prima
facie
defence to these allegations in the founding affidavit. It is not for
this Court to speculate on the outcome of the disciplinary
proceedings; save to state that Ms Smith would have a recourse in the
comprehensive LRA machinery in the event she is unlawfully
or
unfairly dismissed.
[11]
[21]
Clearly,
there are no exceptional circumstances to justify interference with
the uncompleted disciplinary proceedings. Put otherwise,
no grave
injustice or a miscarriage of justice may perhaps transpire due to
this Court’s refusal to intervene.
[12]
Urgency
[22]
The
NLC raised a concern about the manner in which the matter was
allocated given the fact that, hardly a month after it had been
dismissed for lack of urgency, it was again allocated on expedited
basis despite Ms Smith’s dismal failure to make a case
for
urgency.
[23]
Mr
Kennedy submitted that the Judge President’s permission to have
the matter allocated on expedited basis should not be interpreted
to
mean that the Court hearing the matter is stripped of its power to
decide on urgency or the circumstances surrounding the expedited
allocation.
[24]
In
view of the fact that the NLC raised this issue solely as a concern
but was amenable to the hearing of the matter on merits,
I do not
deem it necessary to be arrested by this issue.
In
passing, I, nonetheless, agree with the NLC that a concerning
trend
is developing in this Court where matters struck off the roll for
lack of urgency are re-enrolled on expedited basis, as typified
in
the present case.
Conclusion
[25]
In
all the circumstances, I am not inclined to grant a declaratory
order, firstly, on the basis of non-joinder; and, secondly, on
the
basis that the Applicant has alternative remedies in terms of LRA. It
is, therefore,
not
necessary to deal with the remainder of the issues that arose in the
application.
Costs
[26]
Ms
Smith is an individual litigant who is funding this litigation from
her own pocket and, in any event, the parties have a persisting
relationship. I, therefore,
make
no order as to costs
.
[27]
In
all the circumstances, I make the following order:
Order
1.
The
application is dismissed.
2.
There is no
order as to costs.
__________________
P. Nkutha-Nkontwana
Judge
of the Labour Court of South Africa
Appearances:
For the applicant:
Advocate Phetho
Instructed
by
Kalamore Chipu Incorporated
For the
respondents:
Advocate P Kennedy SC
Instructed
by
Hogan Lovells South Africa Incorporated
[1]
Act 57 OF 1997 as
amended.
[2]
The
Lotteries Act defines
‘distributing agency’ as an agency appointed by the
Minister in terms of
section 26A
read together with
section 26B
(3)
of this Act, but not any department in the national or a provincial
sphere of government.
[3]
[2007] ZACC 20
;
2008 (1) SA 566
(CC) at para
s
67 to 68.
[4]
[2010] ZAGPJHC 133 (10 December
2010).
[5]
[2009] 7 BLLR 715
(LC)
[6]
City of Johannesburg and Others v
South African Local Authorities Pension Fund and Others
(20045/2014)
[2015] ZASCA 4
(9 March 2015) at para 10.
[7]
Trinity Asset Management (Pty)
Limited and Others v Investec Bank Limited and Others
;
2009 (4) SA 89
(SCA) at para 40;
National
Employers’ Association of South Africa and others v Minister
of Labour and Others
[2012]
2 BLLR 198
(LC) at paras 17 and 18.
[8]
[2009] 10 BLLR 989 (LC).
[9]
Supra
at paras 11 and 12.
[10]
Supra
at paras 15 to 17.
[11]
Member of the Executive Council
for Education, North West Provincial Government v Gradwell
[2012]
8 BLLR 747
(LAC) at para 46.
[12]
Booysen v The Minister of Safety
and Security and Others
[2011]
1 BLLR 83
(LAC) at para 54.