Brief Summary

Labour Law — Suspension — Unlawful suspension of Municipal Manager — Applicant, appointed as Municipal Manager, placed on forced special leave without due process or lawful grounds — Respondent's Council failed to provide notice or opportunity to make representations prior to suspension — Court held that the suspension was unlawful, as it lacked procedural fairness and rational basis, and granted relief to uplift the suspension.

Comprehensive Summary

Summary of Judgment

1. Introduction

This was an urgent application in the Labour Court in which the applicant sought judicial intervention to set aside a municipal council resolution that had the effect of removing him from active duty. The proceedings were framed as a challenge to the lawfulness of the respondent municipal council’s decision, rather than as a dispute about the fairness of conduct in the sense typically associated with statutory unfair labour practice jurisdiction.

The parties were Tebogo Shadrack Chanda, the applicant and incumbent Municipal Manager of the respondent, and the Ratlou Local Municipality, the respondent. The application was heard on 21 December 2018 and judgment was delivered on 28 December 2018.

Procedurally, the applicant approached the Labour Court on an urgent basis shortly after the impugned council decision. The applicant sought condonation for non-compliance with the Rules relating to form and service, and substantive relief setting aside the council decision of 13 December 2018 to “suspend” him or place him on “forced special leave”, together with an order directing the municipality to uplift that status immediately.

The general subject-matter concerned the extent of a municipal council’s power to remove a senior municipal manager from the workplace under the guise of “special leave”, the requirement to comply with the applicable local government regulatory framework for precautionary suspensions of senior managers, and the proper role of a municipal manager as accounting officer when confronted with council instructions alleged to be unlawful.

2. Material Facts

The applicant was appointed as the respondent’s Municipal Manager on 31 August 2018 and assumed duties on 1 October 2018. The impugned “suspension” or “forced special leave” occurred within approximately six weeks of him taking up the post. A factual dispute arose as to whether a written employment contract existed between the parties: the applicant alleged that a contract had been concluded, while the respondent’s deponent denied the existence of such a contract. The court, on a prima facie basis, accepted that a contract of employment had been entered into, noting the signature similarities between the letter of appointment and the purported contract.

During October and November 2018 the municipal council dealt with the employment status of 34 employees whose contracts had previously been converted from fixed-term to permanent employment under a former municipal manager. On 31 October 2018, council resolved to terminate those employees’ employment with effect from 1 November 2018 on one month’s notice. A separate dispute concerning those employees was pending in the North West High Court, in which the municipality sought to review and set aside the contracts of employment of the 34 employees.

On 1 November 2018, after consulting with the municipality’s Manager for Legal Services, the applicant advised council that terminating the 34 employees’ employment as contemplated would not be fair, especially given that the conversions dated back to September 2014 and that the review proceedings (instituted in August 2018) were still pending. The applicant proposed that the municipality’s legal representatives be invited to make representations on how to proceed in light of the pending High Court proceedings. The Speaker responded expressing a contrary view and warned the applicant not to contest the council resolution.

At an Executive Committee meeting held on 6 November 2018, it was resolved that further legal opinion should be obtained. A legal opinion was obtained on 11 November 2018, which warned that if any of the 34 employees approached court urgently to interdict the terminations, a court would likely be unsympathetic to the municipality given the pending High Court review.

Despite that, at a special council meeting on 21 November 2018, council resolved to direct the applicant to terminate the 34 employees’ contracts within 14 days. On 13 December 2018 another special council meeting was convened to receive an update. The applicant reported that he had not implemented the instruction to terminate the 34 employees’ services, and that a legal opinion had advised against effecting dismissals while the High Court application remained pending.

After making submissions, the applicant was asked to leave the meeting, then called back and informed orally that council had resolved to place him on special leave for three months. He was instructed to leave the municipal premises immediately, and another person was appointed as Acting Municipal Manager. The applicant’s evidence was that no explanation was given at the time for the decision and that the matter of his removal had not appeared on the agenda.

The respondent contended that the applicant was not suspended but merely placed on special leave with full pay and benefits. The respondent sought to rely on a letter dated 14 December 2018 as notification of the special leave decision. The court noted the absence of evidence as to how, when, and by whom that letter was served, and further recorded that the letter itself indicated that special leave was granted to allow an investigation by council/EXCO into alleged misconduct by the municipal manager.

3. Legal Issues

The court was required to determine whether the matter should be heard as urgent proceedings under the Labour Court rules and whether the applicant had met the requirements for urgent relief.

The central substantive legal question was whether the municipal council’s decision to place the applicant on “forced special leave” (which the court treated as a suspension in substance) was lawful in light of the statutory and regulatory framework governing senior municipal managers. This required determining whether the municipality had a legal source of power to impose special leave without the employee’s request or consent, and whether it had complied with the applicable procedural requirements for a precautionary suspension based on alleged misconduct.

A further issue concerned jurisdiction and alternative remedies: whether the Labour Court had the competence to set aside a municipal council resolution on the basis of unlawfulness in these circumstances, and whether the applicant was required to exhaust dispute-resolution procedures (including referral to the SALGBC) before approaching the Labour Court.

The dispute therefore concerned primarily law (the existence and scope of lawful authority to impose “special leave” or suspension and the court’s jurisdiction), and the application of law to fact (whether the established facts satisfied the statutory and regulatory prerequisites, including procedural fairness requirements embodied in the regulations). There was also an evaluative component in assessing the rationality and good faith of the council’s decision and the appropriateness of a punitive costs order.

4. Court’s Reasoning

On urgency, the court rejected the respondent’s contention that urgency was self-created. The applicant had been placed on special leave or suspended on 13 December 2018 and approached the court on 18 December 2018, which the court considered sufficiently prompt. The court also considered the nature of the relief sought—challenging a patently unlawful “forced special leave” that effectively removed a senior manager from office—as a factor supporting urgency.

On jurisdiction and alternative remedies, the court distinguished the applicant’s case from a statutory unfairness dispute. The court understood the applicant to be challenging the unlawfulness of the municipality’s decision, not alleging unfairness under labour dispute mechanisms. On that basis, the court held that the SALGBC would not have jurisdiction to determine the unlawfulness of the suspension/special leave decision. Accordingly, the argument that internal remedies had not been exhausted, or that the application was premature because bargaining council processes had not been invoked, was rejected. The court also regarded as misplaced the respondent’s attempt to rely on a clause of a contract while simultaneously denying the contract’s existence.

Regarding the contract dispute, the court treated the existence of a contract as established on a prima facie basis. It emphasised that the letter of appointment was signed on behalf of the municipality, and the contract appeared also to have been signed (though undated). The court accepted that the applicant’s terms and conditions would in any event be determined in conjunction with the applicable statutory prescripts governing municipal managers.

Turning to lawfulness, the court emphasised that the appointment and discipline of a municipal manager are governed by section 54A of the Local Government: Municipal Systems Act 32 of 2000 and by the Local Government: Disciplinary Regulations for Senior Managers. Regulations 5 and 6 in particular regulate disciplinary procedures and precautionary suspension on full pay, including the requirement that the municipal manager be given an opportunity to make written representations within a stipulated period before a suspension is effected.

The court found the factual circumstances “curious” and procedurally defective. The decision to remove the applicant from the workplace was not an item on the meeting agenda. The applicant was informed orally and instructed to leave immediately. Even accepting the subsequent letter as notice, the letter itself linked the “special leave” to the investigation of alleged misconduct. In the court’s view, if misconduct was alleged, the council was required to invoke and comply with the applicable disciplinary and precautionary suspension regulations, rather than impose an alternative mechanism.

The court further dealt with the concept of “special leave” for senior managers. It reasoned that the applicable regulatory framework recognises special leave as a form of leave that can be granted in defined circumstances and, critically, the court understood that such leave is ordinarily granted upon the request of the senior manager. The court found no clear source of authority permitting “forced special leave” in the manner imposed, and held that the respondent had not identified any lawful basis or policy framework justifying that course.

In applying authority, the court relied on the Labour Court’s approach in Heyneke v Umhlatuze Municipality (2010) 31 ILJ 2608 (LC), which treated imposed special leave as effectively a suspension and required the employer to justify its lawfulness by showing, among other things, that special leave was at the employee’s instance and with consent, that exceptional circumstances existed, and that the decision was adopted in good faith and was rational, reasonable, proportionate and in the public interest. The court considered the respondent’s conduct—its haste, lack of compliance with the senior manager disciplinary framework, and the absence of a demonstrated legal source for forced special leave—as inconsistent with those requirements.

The court also evaluated the broader context. It accepted that the applicant’s reluctance to implement council’s instruction to terminate the 34 employees’ contracts was grounded in legal advice and concern about the consequences of acting while High Court review proceedings were pending. The court rejected any suggestion, on the papers before it, that the applicant had simply acted out of open defiance without reason.

In this context, the court referred to the municipal manager’s statutory position. While subject to council policy direction as head of administration, the municipal manager is also an accounting officer and has obligations under section 55 of the Municipal Systems Act 32 of 2000 to guide council where decisions may be unlawful, irrational, unconstitutional, or not in the municipality’s best interests. The court was critical of the respondent’s apparent insistence that the applicant should implement council decisions “irrespective of their lawfulness”, and it regarded the respondent’s approach as reflecting disregard for the rule of law.

The court additionally rejected the respondent’s argument that there was no prejudice because the applicant was on special leave with full pay. It expressed concern about the public governance implications of paid removals from duty without a rational basis and without proper legal compliance.

On costs, the court considered the respondent’s conduct in imposing the forced special leave, the unlawfulness of the decision, and the way the matter was opposed. It concluded that the requirements of law and fairness justified a punitive costs order. The court also noted that the applicant had not cited the individual councillors responsible for the impugned decision, and sought to mitigate the effect on the public purse by directing that the judgment be forwarded to the National Treasury for assessment of whether the costs should be treated as wasteful and fruitless expenditure and whether any individuals should bear liability.

5. Outcome and Relief

The Labour Court granted urgent relief. It condoned the applicant’s non-compliance with the rules relating to form and service.

The court set aside the municipal council decision taken on 13 December 2018 to suspend the applicant or place him on forced special leave on the basis that the decision was unlawful. It ordered the respondent to uplift the applicant’s special leave or suspension with immediate effect.

The respondent was ordered to pay the applicant’s costs on the attorney and own client scale, including the costs of counsel. The Registrar was directed to forward a copy of the judgment to the Office of National Treasury for assessment of potential classification of those costs as wasteful and fruitless expenditure and any determination regarding the liability of individual(s) in the council in respect of the costs incurred in opposing the application.

Cases Cited

Heyneke v Umhlatuze Municipality (2010) 31 ILJ 2608 (LC).

Legislation Cited

Local Government: Municipal Systems Act 32 of 2000.

Labour Relations Act 66 of 1995.

Local Government: Disciplinary Regulations for Senior Managers (including regulations 5 and 6, as quoted in the judgment).

Local Government: Regulations: Appointment and Conditions of Employment of Senior Managers promulgated under the Local Government: Municipal Systems Act of 2000 (as referred to in the judgment).

Rules of Court Cited

Rule 8 of the Rules of the Labour Court.

Held

The court held that the applicant had satisfied the requirements for urgent relief under the Labour Court rules. It further held that the respondent’s decision to place the applicant on “forced special leave” was, in substance, an unlawful suspension, imposed without compliance with the applicable regulatory framework governing the suspension of senior municipal managers and without an identified lawful source of authority for “forced special leave”.

The court held that the SALGBC was not an adequate alternative forum for the unlawfulness challenge raised, and that the matter was properly brought to the Labour Court on an urgent basis. It held that the impugned council decision lacked procedural fairness safeguards required by the governing regulations, including the opportunity to make representations, and was not shown to be rationally justified.

LEGAL PRINCIPLES

The judgment applied the principle that where a senior municipal manager is removed from the workplace on the basis of alleged misconduct, the municipality must act within the confines of the prescribed statutory and regulatory scheme governing discipline and precautionary suspension of senior managers, including compliance with mandatory procedural requirements.

It applied the principle that “special leave” imposed by an employer may be treated as a suspension in substance, and that the employer bears the burden of demonstrating the lawfulness of such an arrangement, including showing that it was at the employee’s instance and with consent and that it was adopted in good faith and is rational and proportionate, consistent with the approach articulated in Heyneke v Umhlatuze Municipality (2010) 31 ILJ 2608 (LC).

The judgment further applied the principle that the existence of pay during removal from duty does not, without more, cure unlawfulness or justify public expenditure on paid absence from work, and that the rule of law and good governance require rational, procedurally compliant decision-making by public bodies when exercising power affecting employment and administration.

Finally, the judgment applied the principle that punitive costs may be justified where a public entity acts unlawfully and adopts an unreasonable approach to litigation, and it recognised the public finance dimension of such costs by directing referral to the National Treasury for assessment of possible wasteful and fruitless expenditure consequences.

Chanda v Ratlou Local Municipality (J4584/2018) [2018] ZALCJHB 428 (28 December 2018)