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[2018] ZALCD 22
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Dube and Others v University of Zululand and Others (D956/17) [2018] ZALCD 22; [2019] 3 BLLR 285 (LC) (8 November 2018)
THE
LABOUR COURT OF SOUTH AFRICA, DURBAN
Not
Reportable
Case
no: D956/17
In
the matter between
:
HLENGIWE
DUBE AND 63 OTHERS
Applicant
and
UNIVERSITY
OF ZULULAND
First Respondent
THE
COMMISSION FOR MEDIATION,
CONCILIATION
ARBITRATION
Second Respondent
BERLIN
NAYAGER
Third
Respondent
Heard:
1 November 2018
Delivered:
8 November 2018
Summary:
Review application – section 186(1)(b) dismissal –
parties are bound by their pleaded cause of action.
JUDGMENT
NKUTHA
- NKONTWANA. J
Introduction
[1]
This is an
application for an order reviewing and setting aside the arbitration
award issued by the third respondent (commissioner)
under the
auspices of the second respondent, the Commission for Conciliation,
Mediation and Arbitration (CCMA) dated 22 June 2017
under case number
KNRB1604-16. The commissioner found that the applicants failed to
prove that the third respondent’s failure
to renew their fixed
term contracts of employment constitutes a dismissal in terms of
section 186(1)(b) of the Labour Relations
Act
[1]
(LRA).
[2]
The
applicants’ main ground of review is that the commissioner
committed a reviewable misconduct when he found that they failed
to
prove any reasonable expectation that their fixed term contracts of
employment would be renewed.
Background
[3]
The
applicants were employed by the first respondent, the University of
Zululand (University) and occupied various positions within
the
Catering Department, rendering services at the dining halls. The last
fixed term contracts of employment for the applicants
were for the
period between February 2016 and 30 September 2016. Even though not
all applicants’ contracts of employment
for this period were
part of the bundle of documents before the commissioner, it was not
in dispute that all the applicant’s
employment contacts had
been renewed on the same terms.
[4]
On 21
September 2016, the applicants received notices of expiry of their
fixed term contracts of employment with effect from 30
September
2016. The applicants referred an unfair dismissal dispute to the
CCMA.
[5]
It is
common cause that the applicants’ contracts of employment had
been renewed more than three times, previously. As such,
the crux of
the applicants’ claim is that they had a legitimate expectation
that their contracts would be renewed hence they
sought a relief of
permanent appointments.
[6]
The
University’s defence was that its operations in relation to
provision of dining hall services to students was affected
by the
change in the NASFAS funding model. In the past NASFAS allocated 30%
of the funding toward food purchased from universities’
dining
halls. In terms of the new funding model student are given portion of
the funding that was previously allocated for food
to spend wherever
they choose. As a result, the demand for food provided in dining
halls reduced drastically. The University incurred
a loss of about 11
million rand annually from 2014 to 2016. Hence it decided not to
engage additional staff by not renewing the
applicants’ fixed
terms contracts of employment.
[7]
The figures
that were presented during arbitration clearly demonstrated that,
because of the declining demand for their catering
services, even the
jobs of permanent staff members who work in dining halls were under
the same threat. Mr Ngcobo, the HR executive,
testified that even
though he was not the author of the report on the state of the dining
halls and the extent of losses suffered
by the University, he had
personal knowledge of the facts contained therein. As such, the
applicants’ impugn that the commissioner
used an inadmissible
document to hinge his findings is without merit. Mr Nonyongo, the
applicants’ attorney, prudently conceded
this point.
[8]
The
applicants could not dispute the University’s operational
challenges. In fact, Ms Mgomezulu, one of the two applicants
who
testified during arbitration, conceded in cross examination that she
was aware that the demand for dining hall meals had dropped
and the
University incurred losses between April 2016 and April 2017.
[9]
In all the
instances, the appointment and/or renewal of the applicants’
contracts of employment took place after the promulgation
of the LRA
amendments in January 2015. However, it was never their case that
their contracts of employment were permanent in accordance
with
section 198B(5) of the LRA which states that ‘any fixed term
contract concluded in contravention of subsection (3) is
deemed to be
indefinite’. In fact, in terms of the pre-trial minute the main
issue in dispute was whether a legitimate expectation
to renew the
applicant’s fixed term contracts of employment had been created
by the University.
[10]
The
commissioner dealt with the matter on the basis of the pleaded cause
of action and found that there was no reasonable expectation
created
and that the University was justified in invoking the termination
clause in the applicants’ contracts of employment
which states:
‘
NB:
please note that this contract of appointment for limited period of
time only, and as indicated above and there are no expectations
of
renewal or extension. Your contract will terminate automatically on
30 September 2016. By accepting the offered appointment,
you
acknowledge and agree that no representations or guarantees regarding
your conditions of service have been made by the University
other
than those contained in this letter of appointment.’
Legal
principles and application
[11]
In the
recent decision of the Labour Appeal Court (LAC) in
Enforce
Security Group v Fikile and Others,
[2]
the review test in these instances was reaffirmed as one of
correctness as opposed to reasonableness, In this regard it was
stated:
‘
The question whether there has
been a dismissal goes to the jurisdiction of the CCMA and the Labour
Court to entertain the parties’
dispute. A finding that there
was no dismissal means that the CCMA and subsequently the Labour
Court did not have jurisdiction
to entertain the dispute. Such a
finding, as a matter of fact, has to be a correct finding. It cannot
be a finding that falls within
a band of reasonable findings since
there can only be one correct finding.’
[12]
In terms of
section 186(1)(b) of the LRA, dismissal means that:
‘
(b)
an employee employed in terms of a fixed-term contract of employment
reasonably expected the employer –
(i)
to renew a fixed-term contract
of employment on the same or similar terms but the employer offered
to renew it on less favourable
terms, or did not renew it; or
(ii)
to retain the employee
in employment on an indefinite basis but otherwise on the same or
similar terms as the fixed-term contract,
but the employer offered to
retain the employee on less favourable terms, or did not offer to
retain the employee;’
[13]
The best
construction of section 186(1)(b) is found in
Fedlife
Assurance Ltd v Wolfaardt,
[3]
quoted
with approval in
Enforce
[4]
,
where
the Supreme Court of Appeal (SCA) stated:
‘
[17] The 1995 Act does not
expressly abrogate an employee’s common-law entitlement to
enforce contractual rights and nor do
I think that it does so by
necessary implication. On the contrary there are clear indications in
the 1995 Act that the legislature
had no intention of doing so.
[18]
The clearest indication that it had no such intention is s 186
(b)
which extends the meaning of “dismissal” to include the
following circumstances:
“
[A]n
employee reasonably expected the employer to renew a fixed-term
contract of employment on the same or similar terms but the
employer
offered to renew it on less favourable terms, or did not renew it.”
It is significant that although the
legislature dealt specifically with fixed-term contracts in this
definition it did not include
the premature termination of such a
contract notwithstanding that such a termination would be manifestly
unfair. The reason for
that is plain: The common-law right to enforce
such a term remained intact and it was thus not necessary to declare
a premature
termination to be an unfair dismissal
.
The very reference to fixed-term contracts makes it clear that the
legislature recognized their continued enforceability and any
other
construction would render the definition absurd.
By
enacting s 186
(b)
the legislature intended to bestow upon an employee whose fixed-term
contract has run its course a new remedy designed to provide,
in
addition to the full performance of the employer’s contractual
obligations, compensation (albeit of an arbitrary amount)
if the
employer refuses to agree to renew the contract where there was a
reasonable expectation that such would occu
r.
That being so, it would be strange indeed, and bereft of any
rationality, for the legislature to deny to the employee whose
fixed-term contract of five years has been unlawfully terminated
within days of appointment the benefit of either specific performance
of the contract or damages for its premature termination and to
confine the employee to the limited and entirely arbitrary
compensation
yielded by the application of the formula in s 194 of
the 1995 Act.’ (Emphasis added)
[14]
Clearly,
the burden was on the applicants to show the basis of the expectation
that their contracts of employment would be renewed
on 30 September
2016 and the reasonableness thereof. As set out by the LAC in
SA
Rugby Players’ Association v SA Rugby (Pty) Ltd
:
[5]
‘
[44]
[The employee] had to place facts which, objectively considered,
established a reasonable expectation.
Because
the test is objective, the enquiry is whether a reasonable employee
in the circumstances prevailing at the time would have
expected the
employer to renew his or her fixed term contract on the same or
similar terms
. As soon as
the other requirements of s 186(1)(b) have been satisfied it would
then be found that [the employee] had been dismissed,
and [the
employer] would have to establish that the dismissal was both
procedurally and substantively fair.’ (Emphasis added)
[15]
In this
instance, the commissioner was satisfied that, given the declining
demand for the dining hall catering services, the University’s
decision not to renew the applicants’ contracts of employment
was operationally justifiable. Stated otherwise, the change
in the
University’s operational requirements interrupted the
applicant’s expectation that their contracts of employment
would be renewed. This finding cannot be faulted.
[16]
There is
nothing untoward with University’s decision to invoke the
automatic termination clause in the applicants’ contracts
of
employment as opposed to retrenchment. In
Enforce
[6]
the
LAC, pertinently that ‘[t]he fact that the appellant had an
option to retrench the employees or could have considered
other
options instead of relying on the automatic termination clause cannot
be used to negate the clear terms agreed to by the
parties. Put
differently, one cannot simply use the considerations of the fairness
or otherwise of a dismissal to determine whether
an employee has been
dismissed’.
[17]
Unlike in
Enforce
,
the applicants in the present case are not challenging the validity
of the automatic termination clause. As such, I deem it unnecessary
to deal with this issue.
Conclusion
[18]
In all the
circumstances, I am convinced that the arbitration award is
unassailable and the review application stands to be dismissed.
Costs
[19]
I am
disinclined to award costs against the applicants who are individual
litigants.
[20]
In the
premises, I make the following order:
Order
1.
The review
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:
Mr Nonyongo from MP Nonyongo Attorneys
For
the respondent:
Mr G Cassels from Maserumule Attorneys
[1]
Act 66 of 1995 as amended.
[2]
[2017] 8 BLLR 745
(LAC) at para 16,
see also
SA Rugby (Pty) Ltd
v SARPU and Another
[2008] ZALAC 3
;
[2008]
9 BLLR 845
(LAC) at paras 39 – 40.
[3]
2002 (1) SA 49
(SCA); (2001) 22 ILJ
2407 (SCA) at paras 17-18.
[4]
Supra
n 2 at para 20.
[5]
SA Rugby
above n 2 at para 44.
[6]
Supra
n 2 at para 24.