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[2019] ZALCJHB 121
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Tlokwe Local Municipality v Independent Municipal and Allied Trade Union (IMATU) obo Lerefolo and Others (JR536/16) [2019] ZALCJHB 121 (30 May 2019)
IN
THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG
Not
Reportable
Case
No: JR536/16
In
the matter between:
TLOKWE
LOCAL
MUNICIPALITY Applicant
and
INDEPENDEANT
MUNICIPAL AND ALLIED
TRADE
UNION (IMATU) OBO P LEREFOLO
First
Respondent
SOUTH
AFRICAN LOCAL BARGAINING
COUNCIL Second
Respondent
COMMISSIONER
MARLEZE BLIGNAUT
(SWANEPOEL)
N.O. Third
Respondent
Heard:13
July 2018
Delivered:
30 May 2019
JUDGMENT
MOSEBO,
AJ
Introduction
[1]
This is an
application brought in terms of section 145(1)(a) of the Labour
Relations Act
[1]
(the LRA). In this application, the applicant (the municipality)
seeks an order to review and set aside the arbitration award issued
by the third respondent (the arbitrator) on 25 February 2016 under
case number NWD081506. The application is opposed by the third
respondent, IMATU, on behalf of its member, Mr P Lerefolo (the
employee).
Background
[2]
On or about 22 July 2014, the finance department of the applicant
advertised a vacancy for a senior clerk debt collection. The
employee
applied for the position even though he did not have 3 years working
experience that was set out in the advertisement
as one of the
minimum requirements of the post. It appears that at some stage the
municipality placed a moratorium as a result
of which no permanent
appointments could be made in the advertised posts. As a result,
there were no interviews that were conducted
in respect of the
relevant posts including the post of senior clerk debt collection.
[3]
However, the finance department requested the municipal manager's
approval that, in the interim, somebody be appointed in the
post of
senior clerk debt collection on a fixed term contract to assist with
the workload until such time when the moratorium would
have been
uplifted and a suitable candidate would have been appointed. The
municipal manager approved the request and as a result
the employee
was employed by the municipality on a fixed term contract. It was
also not in dispute that when he was employed, the
employee was
informed by the Revenue Manager, Ms Theresa van Wyk (Ms Van Wyk)
that he was being appointed on a temporary
basis until the
municipality could appoint a suitable candidate in that post.
[4]
It is also not in dispute that the employee was handpicked from a
data base of the candidates who had applied for the post of
senior
clerk debt collection. According to the Human Resources Manager, Ms
Nontobeko Klass (Ms Klass), the employee was handpicked
not because
he met all the requirements of the post, but simply because he
happened to be the first candidate on the data base
who appeared on
the face of it that he could perform the required job. It was not
disputed that the municipality normally used
this selection method
when any department had a requirement to temporarily fill a vacancy
on an urgent basis and it was also testified
that this selection
method gave an opportunity to the selected candidates to gain
experience and enhance their possible future
employment
opportunities.
[5]
On or about 17 December 2013, the municipality and the employee
concluded a fixed term contract (the contract) for the period
18
December 2013 to 17 March 2014. Paragraph 1 of the contract provided
that the employee's fixed term contract as a clerk Gr 1
2013-12-18 to
2014-03-17 was confirmed. Paragraph 2 provided that the employee's
appointment was in the Department: Finance Section:
Revenue –
debt collection. Paragraph 4 refers to the attached contract of
employment but only the following documents were
attached 1. A copy
of a code of good conduct for municipal staff employees 2. A copy of
the employee's job description 3. A copy
of the structure of the
revenue management.
[6]
The first addendum extended the fixed term contract to 17 June 2014.
Thereafter, the said contract was extended to 17 September
2014; 17
November 2014; 18 December 2014; 17 January 2015; 17 February 2015;
17 April 2015; 17 May 2015 and finally to 17 June
2015. Despite the
fact that all the addendums refer to clause 2.1, it is apparent that
there is no clause 2.1 in the contract.
However, it was common cause
between the parties that those addendums duly extended the contract
concluded on 17 December 2013.
[7]
On or about 03 March 2015, the municipal manager uplifted the
moratorium and issued an email to Ms Klass instructing her to
proceed
with the recruitment of all the advertised posts which had been
placed on hold. On or about 21 April 2015, a shortlisting
panel made
a recommendation of the shortlisted candidates but the employee was
excluded from the shortlisting. The interviews of
the shortlisted
candidates were scheduled for 12 May 2015 and Ms H M Erasmus was
recommended for appointment. It only came to the
employee's attention
on or about 14 May 2015, that the shortlisting and the interviews had
already been conducted and that he was
excluded from the shortlist on
the basis that he did not have 3 years working experience and that
the shortlisted candidates had
the required 3 years working
experience.
[8]
On or about 14 May 2014, the employee wrote a complaint to the
municipal manager about his exclusion on the basis of lack of
3 year
experience in circumstances where he was the only person working in
that office with his supervisor from 17 December 2013
and he had
performed his duties satisfactorily. There was no response to this
complaint and this was followed up with about three
emails some of
which were also addressed to the Human Resources Department. It is
common cause that the only reason the employee
was excluded from the
shortlist was the fact that he did not have the 3 year working
experience which was set out in the advertisement
as one of the
minimum requirements of the post.
[9]
On 27 July 2015, the employee was issued with a letter terminating
his fixed term contract with effect from 31 July 2015.
On or
about 12 August 2015, the first respondent (the union), referred the
dispute to the second respondent (the bargaining council)
for
conciliation on behalf of the employee. The union identified the
nature of the dispute as interpretation and/application of
section
198B of the LRA in that the municipality had failed and/or neglected
to comply with the section. The bargaining council
was unable to
resolve the dispute and the matter was referred to arbitration.
Arbitration
Award
[10]
In her award, the arbitrator concluded that the employee, was in
accordance with the provisions of section 198B, deemed to
be employed
on an indefinite basis by the municipality at the time of the
termination of his employment contract on 31 July 2015.
The
municipality was ordered to pay the employee compensation in the sum
of R98 104.00 (Ninety eight thousand one hundred and four
rand,
calculated as R12 263 x 8) for having unfairly terminated his
employment contract. The said amount was to be paid on or before
31
March 2016. It is common cause that at the commencement of the
arbitration, the employee abandoned his claim for reinstatement
and
sought compensation only.
[11]
The municipality seeks to review this award on various grounds. In
its first ground of review, the municipality states that
the
arbitrator misconstrued the nature of the dispute that served before
her in that she confused and/or incorrectly took into
account the
provisions of s 186(1)(b)(ii) relating to legitimate expectation
instead of only the provisions of s 198B of the LRA
under which the
dispute was referred. In this regard, the municipality referred to
various paragraphs in the arbitration award
but in particular to
paragraph 30 where the arbitrator has stated that on 01 January 2015,
new legislation was promulgated which
amended both s 186(1)(b) and s
198B of the LRA.
[12]
In my view, the commissioner simply set out the legal position of
both s 186(1) (b) and s 198B. She stated that based on s
186(1) (b)
an employee employed on a fixed term contract can now claim that he
reasonably expected an employer to either (i) renew
the fixed term
contract or to (ii) retain the employee on an indefinite basis. If he
does not renew or retain the employee, then,
an employee can claim
that he was unfairly dismissed. However, an employee's expectation in
that regard would still be subject
to an enquiry to establish what
expectation existed or not. In paragraph 31 of her award, the
arbitrator continued and stated the
following:
"Section 198B
further places a limitation on what would constitute a valid fixed
term contract and under what circumstances
a fixed term contract
would be justified. The legislature also stipulated that if a fixed
term contract was concluded or renewed
in contravention of subsection
(3) (the justification clause) then the contract would be deemed to
be of indefinite duration (sec198B
(5)). It further requires that the
offer to employ or to renew on a fixed term basis must be in writing
and state the reason for
fixing the period (sec 198B (6)). It also
places an onus on the respondent to prove that there is in fact a
justifiable reason
for having fixed the term of the contract and that
the term was agreed (sec 198B(7))."
[2]
[13]
Thereafter, the arbitrator continued and stated that in determining
the dispute referred to the Council she would consider
the employee's
case against the provisions of s 198B of the LRA. In my view, the
commissioner merely set out the background and
the import of both s
186(1)(b) and s 198B and thereafter she made it clear that she would
consider the employee's case against
the provisions of s 198B and not
s 186(1)(b) of the LRA. It is apparent from the aforegoing that the
arbitrator was not confused
about the task she was about to undertake
and, indeed, she did not determine the dispute based on a legitimate
expectation, but
did so based on s 198B of the LRA. This ground of
review has no merit and falls to be dismissed.
[14]
The municipality's second ground of review is based on the fact that
the arbitrator stated that in considering the version
presented by
the municipality, she had taken notice of the fact that there is
nothing in writing that confirmed the intention of
the municipality
to appoint the employee only until such time when it found a suitable
candidate. The commissioner further stated
that the municipality was
quite opportunistic to raise this as their defence.
[15]
The municipality's case is that the employee conceded under
cross-examination that he was informed by his manager that the
position was on a fixed term contract and that he might be released
from his duties when a permanent employment is made. It was
submitted
that the appointment of a permanent employee in the employee's
position constituted an occurrence of a specific event
contemplated
in s 198B(1)(a) of the LRA and it was further submitted that it was
immaterial that this was not reduced to writing
because the facts are
not disputed but are common cause.
[16]
In Piet
Wes Civilis CC & another v Association of Mineworkers &
Construction Union & others
[3]
the Labour Appeal Court (LAC) considered the application of s 198B in
a case where some of the employees had signed a written contract
of
employment and others had been employed in terms of an oral
agreement. After considering that s 198B came into operation on
01
January 2015, the court stated the following:
"An offer to employ
an employee on a fixed term contract, or to renew or extend that
contract must, in terms of s 198B (6)
be in writing; with a fixed
term contract, in terms of s 198B (1), required to state expressly
that it is to terminate on the occurrence
of a specified event, on
the completion of a specified task or project or a fixed date,
subject to s 198B (3). The requirement
that a written offer of
employment is made to an employee is for the compelling reason in
that it seeks to prevent any later dispute
arising as to terms, scope
or duration of the fixed term or limited duration contract entered
into. On the appellants’ own
version, no written employment
contract was entered into with a number of employees employed by both
Piet Wes and Waterkloof, with
the basis of employment apparently
having been agreed verbally with those employees. No evidence was put
up that employees were
provided with a written offer of employment,
as required by s 198B (6). It follows that the appellants failed to
show, in respect
of those employees with whom no written contract had
been concluded, that the provisions of s 198B had been complied with.
. .
"
[4]
[17]
In respect of the employees with whom the appellant had a written
employment contract and where the duration of contract was
made
subject to the supply of work contracts by the clients, the LAC held
that a contract duration linked to the supply of work
contracts by
clients cannot be construed to equate to the occurrence of a
specified event, the completion of a specified task or
project or a
fixed date, as contemplated by s 198B (1).
[18]
It is apparent from the above authority that the specified event
contemplated by s 198B (1) is in terms of s 198B (6) required
to be
expressly stated in the written fixed term contract or extension,
subject to s 198B (3). The LAC found against the appellants
on the
basis that the contracts offered to the employees were not in writing
and therefore did not comply with the provisions of
s198B (6). This
subsection (6) provides that an offer to employ an employee on a
fixed term contract or to renew or extend a fixed
term contract, must
– (a) be in writing; and (b) state the reasons contemplated in
subsection (3) (a) or (b).
[19]
S 198B (3) provides that an employer may employ an employee on a
fixed term contract or successive fixed term contracts for
longer
than three months of employment only if – (a) the nature of the
work for which the employee is employed is of limited
or definite
duration; or (b) the employer can demonstrate any justifiable reason
for fixing the term of the contract. This means
that the offer of
employment must not only be in writing but it must also expressly
state the reasons contemplated in subsection
(3) (a) or (b).
[20]
It is significant to note that in the instant case, the offer of
employment was made to the employee on 17 December 2013 well
before s
198B was brought into operation. The relevant extensions are those
that were made after 01 January 2015 up to 31 July
2016 when the
employee's contract of employment was terminated. Nonetheless, I
consider it significant in the instant case to note
that neither the
offer of employment dated 17 December 2013 nor several extensions
that followed it, in particular those that were
made after 01 January
2015 expressly state any reason contemplated in subsection (3) (a) or
(b).
[21]
Therefore, it follows that even though the offer of employment made
to the employee including the extensions made to his contract
were in writing, the fixed term contract in this matter was renewed
in contravention of subsection (3) in that the provisions of
s
198B(6)(b) were not complied with. In terms of section 198B (5), a
fixed term contract renewed in contravention of s 198B (3)
is deemed
to be of indefinite duration.
[22]
It is
understandable that the offer of employment would not state the
reasons contemplated in subsection (3)(a) or (b) because it
predated
the said subsection. The same applies to the extensions that were
made before 01 January 2015. The extensions made after
01 January
2015 should have been made with the provisions of s 198B in mind.
However, the wording of the said extensions is exactly
the same as
the wording of the extensions made prior to 01 January 2015. This is
an indication that the possible consequences of
the introduction of s
198B in the LRA, with effect from on 01 January 2015, was not taken
into consideration by the municipality
concerning this contract. This
much was confirmed by Ms Van Wyk at the arbitration when she
testified that the panel did not take
any consideration to the
amendments in terms of the labour law.
[5]
[23]
Therefore, the arbitrator's conclusions that in considering the
version presented by the municipality, she had taken notice
of the
fact that there was nothing in writing that confirmed the intention
of the municipality was to appoint the employee until
such a time
when it found a suitable candidate, cannot be faulted. So too, the
arbitrator's conclusion that the municipality was
quite opportunistic
to raise that as their defence. In my view, the arbitrator's finding
in this regard is correct in that the
extensions to the fixed term
contract, in particular, those that were made after the introduction
of s 198B do not expressly state
that the fixed term contract will
terminate once a suitable candidate has been appointed. Therefore,
this ground of review falls
to be dismissed as well.
[24]
The municipality's third ground of review is that the employee
conceded in cross-examination that he agreed with his manager
that
one day the position would be filled and when it is filled the fixed
term contract would come to an end even though the manager
did not
specify as to when. The municipality's case is that the arbitrator
ignored this evidence when she stated in her award that
the
municipality had to prove that there was a justifiable reason for
fixing the term of the contract as contemplated in subsection
(3) and
that the term was agreed to.
[25]
In her award, the arbitrator, indicated that s 198B (3) allows
appointment on a fixed term period only if the work is of limited
or
defined duration or if the employer can demonstrate any other
justifiable reason. The arbitrator concluded that the municipality
was not able to prove on a balance of probabilities that it had a
justifiable reason for fixing the term of the applicant's employment
contract, in that on the municipality's own version the work was not
of a limited nature, but, in essence, the municipality wanted
to
appoint somebody who met the minimum requirements of 3 years working
experience. The commissioner found this justification illogical
in
that the employee had occupied that position for 19 months without
meeting the minimum requirements of 3 years working experience
and
during that period, it made no difference to the municipality and to
the service delivery. I find this reasoning unassailable
and
therefore correct.
[26]
The municipality's further submission that there was an agreement
made with the employee in terms of s 198B (3) that the employee's
contract would terminate once the municipality had found a suitable
candidate does not take this matter further in that the said
agreement did not comply with the provisions of s 198B(6)(b) and in
any event, the arbitrator correctly found that there was no
justifiable reason for fixing the employee's employment contract.
This ground of review falls to be dismissed as well.
[27]
The municipality's fifth ground of review should also suffer the same
fate simply on the basis that the municipality's alleged
justification for fixing the employee's employment contract was not
expressly stated in the contract or in the extensions to the
contract
in accordance with the provisions of s 198B(6)(b) of the LRA.
Therefore, this ground falls to be dismissed as well.
[28]
The municipality's sixth ground of review has no merit in that the
factors that the arbitrator took into account are clearly
set out in
the award. There is no indication in the arbitration award that in
determining the appropriate amount of compensation,
the arbitrator
took into account any of the factors relied upon by the municipality
in this ground of review. Therefore, this ground
of review also falls
to be dismissed.
[29]
In my view, considerations of law and fairness dictate that no order
should be made as to costs.
[30]
In the premises, I make the following order:
Order
1. The application for
review is dismissed.
2. There is no order as
to costs.
__________________
Mosebo
AJ
Acting
Judge of the Labour Court of South Africa
Appearances:
For
the applicant: Mr H Wissing of Henk Wissing Attorneys
For
the first respondent: Mr/Ms _________ Union Official
[1]
66
of 1995, as amended.
[2]
Record
of the hearing p27
[3]
(2019)
40 ILJ 130 (LAC).
[4]
Para
23
[5]
Record
of the proceedings p194 ll 1-10