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[2018] ZALCJHB 237
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NEHAWU obo Mokhokoana and Others v Pan South African Language Board and Another (J2981/14) [2018] ZALCJHB 237 (13 June 2018)
THE
LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
JUDGMENT
Of
interest to other Judges
CASE
NO: J2981/14
In the matter between:
NEHAWU obo
RICHARD MOKHOKOANA &
OTHERS
Applicant
and
THE PAN SOUTH AFRICAN
LANGUAGE
BOARD
First
respondent
MINISTER OF ARTS AND
CULTURE
Second
respondent
Application heard: 6 June 2018
Judgment delivered: 13 June 2018
JUDGMENT
VAN
NIEKERK J
[1]
This is an application for a declaratory order that the employment
contracts entered into between the applicant’s members
(the
employees) and the respondent remain valid and enforceable. By
agreement, the second respondent was joined to the proceedings
and
abides by the decision of the court.
[2] The factual background is not in
dispute. The first respondent is a statutory body created by the
Pan
South African Language Board Act, 59 of 1995
. In June 2012, the then
Minister of Arts and Culture dissolved the first respondent and
appointed a Mr Mxolisi Zwane as the caretaker
chief executive
officer. The first respondent was reconstituted some two years later,
in June 2014, when Zwane was removed from
office and a new board
appointed. The first respondent’s view, briefly stated, is that
the minister acted ultra vires when
he appointed Zwane, that Zwane
‘entrenched himself’ as the board of the
organisation and acted as if vested with
the roles of accounting
officer and accounting authority, and that in this period, he
appointed some 40 employees without there
being posts established and
without a budget.
[3] In these circumstances, on 28
November 2014, the first respondent resolved that it would not
recognise any employment contracts
entered into during the period
when Zwane was the caretaker CEO. The then acting CEO, Mr Z Feni,
distributed a memorandum on 1
December 2014 recording that the board
had resolved not to recognise all appointments and employment
contracts entered into by
Zwane, since Zwane had no authority to make
the appointments on behalf of the board. Further, the board resolved
that all of the
affected individuals were not entitled to any further
remuneration, with effect from December 2014. However,
employees would
be paid for the month of December as a goodwill
gesture. Letters signed by Feni, with substantially the same content
as the memorandum,
were addressed to each of the affected employees
on the same date.
[4] The basis for the applicant’s
claim is apparent from paragraphs 25 and 26 of the founding
affidavit. Under the heading
‘Applicant’s argument in
support of the order sought’, the applicant avers the
following:
25.
As set out in the Notice of Motion the Applicant seeks an order
declaring that its members’ employment contract with the
Respondent remains valid and enforceable and as such they should
resume their duties with the Respondent from the date of this
order
is granted.
26.
In support of this order the Applicant argues that the Respondent was
wrong in law to take the view that all employment contracts
entered
into and between Zwane, acting on behalf of the Respondent and the
Applicant’s members, are null and void for the
following
reasons:
26.1
the decision by the Minister to dissolve the then PanSALB and appoint
Zwane as the caretaker CEO was an administrative act/decision
26.2
on the assumption the Respondent is correct in arguing the Minister
acted ultra vires when appointing Zwane, which is denied,
the
respondents cannot simply overlook the administrative act of the
Minister and in so doing, the consequential acts of Zwane
(in
particular entering into employment contracts on behalf of the
Respondent), until such time as the administrative act of the
Minister is set aside by a court in proceedings for judicial review.
Therefore
the Minister’s decision to appoint Zwane and the consequential
effects of such a decision remain valid and in effect.
Put
differently even an unlawful administrative act is capable of
producing legally valid consequences until the unlawful act is
set
aside by a court of law.
26.3
It cannot be disputed that the Minister’s decision to appoint
Zwane has not been set aside by a court of law, albeit
this is the
same legal issue pending before this court in another application
referred to elsewhere in this affidavit.
[1]
26.4
On this basis and on the respondent’s very own argument, its
resolution to declare the employment contracts of the Applicant’s
members null and void has no legal effect.
26.5
As a legal consequence to the above, the members’ employment
contracts with the respondent remain valid and enforceable.
[5]
During argument, I raised with the applicant’s counsel the
cause of action on which the applicant relied. I did so because
it
seemed to me that the applicant’s claim was one that conflated
a claim in administrative law with one that concerns an
alleged
unfair dismissal. In the heads of argument, the applicant’s
counsel submitted that there are three legal questions
that arise for
decision – first, whether the applicant’s members were
employees of the respondent; secondly, whether
the letter addressed
to them by the respondent constituted the dismissal and if so,
whether the dismissal was fair; and thirdly,
whether the respondent
was entitled to cancel all of the employment contracts concluded by
Zwane.
[6]
The applicant’s counsel conceded that to the extent that the
applicant in its heads of argument sought a determination
as to
whether any of the employees were unfairly dismissed, that was not a
case that had been made on the papers. In any event,
a claim of
unfair dismissal flies directly in the face of prayers 1.1 to 1.3 of
the notice of motion, i.e. that the employees’
employment
contracts remain in force, that they remain employees of the
respondent and that they be entitled to resume their duties.
Further,
none of the jurisdictional prerequisites for a claim of unfair
dismissal (a prior referral to conciliation, the existence
of a
dismissal and the assertion of a reason for dismissal that would
confer jurisdiction on this court) have been established
[7]
To the extent that the applicant’s claim is that the employees’
contracts of employment were validly concluded and
remain in force
because Zwane was validly appointed (at least in administrative law
and until that appointment is set aside), this
is no more than an
application of what is often referred to as the
Oudekraal
principle, following the judgment by the Supreme Court of Appeal in
Oudekraal Estates v City of Cape Town
2004 (6) SA 222
(SCA). The assumption
that underlies the applicant’s case is that a decision by the
minister to appoint Zwane as the caretaker
CEO of the respondent
constitutes administrative action. The definition of administrative
action (assuming that the applicant relies
on the Promotion of
Administrative Justice Act; this much is not apparent), is
notoriously difficult to apply. It is well-established
that it is the
function rather than the functionary that is important when assessing
the nature of the action in question. The
mere fact that a member of
the executive exercises the power concerned is not in itself
determinative; a determination must necessarily
be made on a
case-by-case basis (see
Minister of
Defence and Military Veterans v Motau and others
2014 (5) SA 69
(CC), at paragraph 36 and 37, referring to
President
of the Republic of South Africa v South African Rugby Football Union
and others
2000 (1) SA 1
(CC)). The
source of the power is a relevant but not decisive factor, as is the
nature of the power, its subject matter and whether
it involves the
exercise of a public duty. (See
SARFU
at
para 141.) The applicant has made no averments to support its
contention that the minister’s decision was administrative
in
nature.
[8]
Section 157(1) and (2) of the LRA establish the jurisdiction of this
court. The court is a creature of statute, and has no jurisdiction
beyond that conferred by the LRA or any other law. The court’s
limited jurisdiction to entertain claims that are of an
administrative
law nature is established by s 157 read with s 158
(1)(h), which empowers the court to review any decision taken or act
performed
by the state in its capacity as employer, on such grounds
that are permissible in law. But the jurisdictional footprint that
applies
necessarily limits judicial intervention to
employment-related decisions taken or acts performed by the state.
The minister’s
decision to appoint Zwane as a caretaker CEO
does not fall into this category, certainly not in respect of any
employment relationship
to which the employees were party.
[9]
To the extent that the applicant’s case is that the respondent
was first required to set aside what it contends to be
the unlawful
appointment of Zwane before it was entitled to terminate the
employees’ contracts of employment, this submission
ignores the
fact that in having made the appointments, Zwane did not exercise any
administrative powers since he was not exercising
a public power or
performing a public function in terms of any empowering provision.
The respondent’s decision to terminate
the contracts was rooted
in the application of common law principles in terms of which the
respondent contends that Zwane had no
authority to contract.
[10]
Confronted with these difficulties, counsel then took a different
tack, and submitted that the applicant’s cause of action
was
contractual in nature, and sought a declaratory order that the
employees had concluded valid contracts of employment with the
respondent, and that that the contracts had been terminated by the
respondent. Counsel relied on the notice of motion and paragraphs
6
and 25 of the founding affidavit which respectively read follows:
6.
This is an application for a declaratory order declaring that the
contract entered into between the Applicants and the Respondent
is
enforceable and that the Applicants where (sic) employees of the
Respondent before their unfair dismissal…
25.
As set out in the Notice of Motion the applicant seeks an order
declaring that its members’ employment contract with the
Respondent remains valid and enforceable and that as such they should
resume their duties with the Respondent from the date of
this order
is granted.
[11]
While the stated purpose of the application and the description of
the notice of motion as recorded above might foreshadow
a claim cast
in contractual terms, the case made on the papers is rather
different, especially if regard is said to paragraph 26
of the
founding affidavit and referred to above. It is clear from that
provision that the true nature of the applicant’s
claim is that
until Zwane’s appointment is set aside by court of law, his
appointment remains valid, as do any employment
contracts entered
into by him on behalf of the respondent.
[12]
In any event, nowhere in the founding papers is there any reference
to s 77(3) of the Basic Conditions of Employment Act, the
statutory
provision that confers jurisdiction on this court, concurrently with
the civil courts, to hear and determine any matter
concerning a
contract of employment. There is no reference to any breach of any
employment contract by the respondent, nor is there
any reference to
any election by the employees to accept the respondent’s
repudiation and cancel the contract, or to hold
the respondent to the
contract. There are no averments that deal with the issue of Zwane’s
authority, either actual or ostensible,
to conclude agreements on the
respondent’s behalf. On the contrary, the case put up by the
applicants (made clear by paragraph
26 of the notice of motion), is
limited to the assertion that the contracts were and remain valid on
account of Zwane’s appointment
never having been reviewed and
set aside. In short, the applicant’s contractual claim is
stillborn.
[12]
For all of the above reasons, the application stands to be dismissed.
[13]
Section 162 of the LRA confers a wide discretion on the court to make
orders for costs according to the requirements of the
law and
fairness. In my view, the application is nothing short of misguided,
and the interests of the law and fairness are best
satisfied by costs
following the result.
I
make the following order:
1.
The application is dismissed, with costs.
André van Niekerk
Judge
REPRESENTATION
For
the applicant: Adv. L Maunatala instructed by Majang Inc
For
the respondent: Adv. C Bester instructed by Bowmans Inc.
[1]
This is a
reference to
Lindiwe
Cindi & 27 others v Minister of Arts and Culture & others
(unreported, J157/14, 27 October 2015) in which this court dismissed
an application brought by a number of the respondent’s
employees who contended that Zwane’s appointment was invalid
with the consequence that the contracts of employment of the
4
th
to 48
th
respondents were invalid. (The 4
th
to 48
th
respondent s in that matter are in essence the same group of
employees who are represented by the applicant in the present
matter.) The court held that it had no jurisdiction to review and
set aside Zwane’s appointment on the grounds that the
appointment constituted a breach of s10 of the Pan South African
Language Board Act.