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[2019] ZALCCT 2
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Department of Agriculture Forestry and Fisheries v Teto and Others (C359/17) [2019] ZALCCT 2 (6 February 2019)
IN
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
Not
Reportable
Case no: C359/17
In
the matter between:
DEPARTMENT OF
AGRICULTURE
FORESTRY
AND
FISHERIES
Applicant
And
MISELWA
PRICILLA TETO
First Respondent
CHARLES
RODGERS TITUS
Second Respondent
RANDAL
PETER JOHN KOOPMAN
Third Respondent
GENERAL PUBLIC SERVICE
SECTORAL
BARGAINING
COUNCIL
Fourth Respondent
COMMISSIONER
JUSTICE NEDZAMBA
Fifth Respondent
Date
heard: 1 November 2018
Delivered:
6 February 2019
JUDGMENT
RABKIN-NAICKER,
J
[1]
This is an opposed application to review an award issued by the fifth
respondent (the Arbitrator) under
case number GPBC2071/2016. He found
that the first to third respondents were dismissed and ordered the
applicant to reinstate them
with retrospective effect. The applicant
was in addition ordered to pay back pay to the individual respondents
in an amount equivalent
to 8 months of their salary.
[2]
The background to the dispute is set out in the Award as follows:
“
6.
The applicants were initially employed by the respondent on a one
year fixed-term contract from 15 July 2013 to 14 July 2014.
Teto and
Koopman were employed as Senior Administrators and on their last day
of work they earned a gross salary in the amount
of R18, 947.00.
Titus was employed as Assistant Programme Manager earning a gross
salary in the amount of R31,000 per month.
7.
It is common cause that when the applicants’ fixed term
contract ended on 14 July 2014, they continued to work for the
respondent until the date of their alleged dismissals on 26 August
2016.
8.
The applicants’ case is that they became permanent employees of
the respondent when they were allowed to work beyond their
fixed term
contracts. They claim they were unfairly dismissed when the
respondent’s director telephonically instructed them
to clear
their offices and to hand the respondent’s equipment and to
vacate the respondent’s premises. According to
them there was
no reason for their dismissal and they were not afforded an
opportunity to explain why they should not be dismissed.
9.
The respondent’s case is that the applicants were not employed
by the respondent. According to the respondent, when the
applicants’
fixed term contracts came to an end they ceased to be the
respondent’s employees and instead they became
employees of
Management for Excellence, a temporary employment services (TES).
10.
Initially the respondent submitted that I should join Management for
Excellence, as a second respondent and argued that the
Council has no
jurisdiction to arbitrate the dispute. Such submission was abandoned
and the hearing consequently continued.
11.
The applicants seek reinstatement.”
[3]
There are a number of issues raised by the applicant in this review.
For the purposes of this judgment
I focus on the submission that the
Arbitrator failed to have regard to the fact that the Programme on
which they worked was grant
dependent for three years. His award is
premised on the finding that the individual respondents became
permanent employees.
[4]
The transcript of the arbitration hearing reflects that on the 13
July 2014, one day before the fixed
term contract expired, the
applicant’s Chief Director called them to meet in Denver
Barron’s office. He was the Programme
Manager for the
Applicant’s Working for Fisheries Programme going forward. The
evidence of Ms Teto is recorded as follows:
“…
.
And then it was myself, Charles and Randall Koopman and Denver and Ms
Sue Middleton. And then Ms Sue Middleton asked to work with
Denver
since we were done with prep (?) 2013. And then Denver was busy
setting up the Working for Fisheries Programme. And then
we agreed.
Unfortunately we were not told up until when….”
[5]
Under cross-examination she confirmed her understanding that the
contract had become open ended.
Teto testified that the
individual respondents were on PERSAL for the fixed term contract and
because of that they were getting
37% on top of what they were
getting subsequent to that. She stated :“..and all I can tell
now is that what we used to get,
from 2013 to 2014 as well as from
2014 to 2016, there was a difference on my salary. I got less from
2014 to 2016 because 37% was
not added.”
[6]
The arbitration record reflects that Denver Baron was also employed
on a 12 month fixed term contract.
He testified that the applicant
decided that one of the service providers implementing a project of
the applicant should be approached
to pay “our staff” and
that additional funds would be added to their budget. At the time of
the expiry of the fixed
term contract it was Jaymat Enviro
Consultants one of the applicant’s implementers. Two other
implementers were used later
on. The arrangement is explained as
follows:
“
We
would add the funds to the implementer’s contract in order pay
the staff for the work that they were performing at DAFF.
But why the
arrangement was agreed to in-house was that whilst that was happening
we would then go through the process of establishing
this unit, the
approval process within DAFF, then the advertisements, and of course
then the appointment, and until such time,
because the function was
required, until such time we would then – everyone would be
employed and paid through a –
whichever service provider we
could utilize at the time.”
[7]
Baron insisted that there was never an employment arrangement between
the individual respondents and
the implementers. It was a payment
arrangement:
“
I
mean, everyone was working at DAFF. They came to work at DAFF. They
reported to, when I was here, to me. When I was not here they
reported to whoever the supervisor superior was. And all the
functions that we – the unit did, the individuals, was for
DAFF. …..There was never a contract with any of the
implementers between these employees…..When the individual
employees
would go out to go monitor projects that were implemented
by the various implementers and the service providers they would be
representing
DAFF when they do that.”
[8]
Under cross-examination by the applicant’s representative at
the arbitration, he testified that
the arrangement was sanctioned at
the highest level of the Department:
“…
there’d
be a business plan that was attached to the implementer’s
contract, and in this business plan the provision
would be made for
the funding – or the payment of the salaries for the
individuals and the DDG would sign those business
plans. That was the
process. So that was your contractual arrangement in place.
Thereafter on a monthly basis, the times –
the payments to be
made to the individuals would be signed off by the Chief Director, Ms
Middleton, and that timesheets –
or the payment instruction
would then be given to the – or submitted to the implementer
for payment…”
[9]
It is of note that Baron did not agree that the arrangement was
open-ended and explained that the Programme’s
funding Cycles
were for a period of three years:
“
Every
year by November National Treasury would inform the Department what
the funding cycle is for the next three years. So at any
given stage
there would be a three-year period whereby which the Department would
be informed whether funding would be available
from Treasury for the
programme or not. So hence that is why the DG at the time approved
the contracts for a three year period,
because the funding was always
guaranteed for a three year period from treasury.”
[10]
The applicant’s witness at the arbitration Mr Marinus’
evidence was also to the effect that the applicant
was the employer
of the individual respondents. The arbitrator summarises his evidence
as follows:
“
Mr
Desmond Marinus (Marinus) is employed by the respondent as Techical
Manager for fishing harbours. During October 2016 until 31
March 2017
he acted as programme manager. He worked with the applicants in some
of the harbours. According to him, applicants were
employed and
worked for the respondent. During 2014 there was a submission for the
structure and 11 positions were approved but
only four of the
positions were filled. He tried to fill the remaining seven but that
was not approved. He is currently using data
capturers to perform the
fisheries duties.”
[11]
As referred to above, the applicant challenges the Award on various
basis and contends that the result of the award
is unreasonable. The
challenge at its core relates to the following reasoning in the
Award:
“
Applicants’
employment status
40.
It is common cause that the applicants were all employed on a one
year fixed term contract. Their fixed term contracts ended
on 14 July
2014 and they were not renewed or extended. Evidence shows that the
applicant (sic) continued to work beyond the expiry
of their fixed
term contract until 30 August 2016. For the period between 14 July
2014 and 30 August 2016 the applicants worked
without a contract.
According to the applicants they became permanent employees of the
respondent.
41.
There is an established principle that if an employee is allowed to
work beyond the end of a fixed term contract the relationship
is
tacitly converted into a permanent contract. In this regard, see the
Labour Court case in Owen & Others v Department of
Health,
KwaZulu-Natal (2009) 30 ILJ 2461 (LC). In that case the employer
allowed employees (Medical Doctors) to continue to work
on the same
terms and conditions of employment after their fixed term contract
had expired. The Court accepted and commended the
approach suggested
by a labour law author, John Grogan, that a tacit renewal of the
contract on the same terms but for an employment
relationship of
indefinite duration.”
42.
Having applied the principles to the facts before me, I find that the
applicants’ fixed term contracts transformed into
a permanent
employment on 14 July 2014 when they verbally accepted to continue
working for the respondent.”
[12]
A reading of
Owen
& others v Department of Health, KwaZulu-Natal
[1]
however does not accord with
the Arbitrator’s understanding recorded above. In that case the
Court per Van Niekerk J stated
the following:
“…
..The
issue is whether, after 1 August 2005, the applicants were
party to an implied contract that limited their continued
employment
to 31 January 2006 and whether it can be said in those circumstances,
that they were dismissed for the purposes of the
Act when that
contract terminated by the effluxion of time on that date.
The
approach suggested by Grogan, ie that a tacit renewal of the contract
on the same terms but for an employment relationship of
indefinite
duration, is commendable at the level of principle, but each case is
fact and context specific and the application of
the principle must
account for this.”
[13]
The fact specific context of this case was not taken into account by
the Arbitrator. On the evidence
before him, the terms and conditions
of the individual respondents did not remain the same after the
expiry of their fixed term
contracts, in that they were no longer on
Persal and received less remuneration as a result. In addition, the
evidence from Baron
(who was a witness for the individual
respondents) was that the Programme was funded in three year cycles
on the say so of National
Treasury.
[14]
On the evidence before the Commissioner an employment relationship
existed between the parties
after the expiration of the one year
fixed term contract, from the 14 July 2014 until the 26 August 2016,
a period of some two
years. The submissions made in this Court (but
abandoned in the Bargaining Council) that the service providers were
of the nature
of a TES were without merit. In the Court’s
view, the Arbitrator dealt succinctly and, with respect, correctly
with
this issue in his Award:
“
Evidence
shows that Managing for Excellence or any implementing agent neither
procured nor provided applicants to the respondent.
The evidence
suggests that the applicants were in fact procured and offered
employment by the respondent. It is clear that Managing
for
Excellence Company was not a TES and therefore not the applicants’
employer for the purposes of the LRA….I agree
with the
applicants that the Managing for Excellence’s involvement in
their employment relationship was to act as a conduit
through which
their salaries were paid…”
[15]
In the Court’s view, the Arbitrator’s finding that an
employment relationship
existed between the parties and that
the individual respondents were dismissed is well within the bounds
of reasonableness. However,
given the evidence of the three year
cycles for the funding of the Programme, the employment of the
individual respondents after
the expiry of the one year fixed term
contract, could not be considered as permanent.
[16]
The sudden manner of the individual respondents’ dismissal,
without explanation or a hearing,
deserves some form of solatium.
Whatever the nature of the Programme, a state employer cannot ignore
and indeed attempt to avoid
the employment laws established under our
Constitution in the manner it tried to do in this case. In all the
circumstances, the
Award should be set aside. This is a matter in
which no purpose would be served in remitting the Award. It is also a
case in which,
on grounds of equity, I am of the view that applicant
should pay the costs, even though partially successful.
[17]
It is not necessary for me to deal with the point in limine raised by
the respondents in the
proceedings as the original papers of the
applicant were filed subsequent to that hearing.
[18]
I make the following order:
Order
1.
The award under case numberCPBC2071/16 is
reviewed and set aside and substituted as follows:
2.
The dismissal of the First, Second and
Third Respondents was substantively and procedurally unfair;
3.
The applicant is to pay the First, Second
and Third Respondents compensation in an amount equivalent to 12
months salary less deductions
as follows:
3.1
An amount of R18,940 X 12 =R 227 280
(Two hundred and twenty seven thousand and two hundred and
eighty Rand) each
to the First and Third Respondent;
3.2
An amount of R31,000 X12 = R372,000 (Three
hundred and seventy-two thousand Rand) to the Second Respondent.
4.
The amounts in 3.1 and 3.2 above are to be
paid within 20 court days of this order.
5.
The applicant is to pay the costs of this
application.
_________________
H.
Rabkin-Naicker
Judge
of the Labour Court
Appearances:
Applicant:
Thabani Masuku S.C. instructed by the State Attorney
First
to Third Respondents: Veronique Barthus instructed by Weber Wentzel
[1]
(2009)
30 ILJ 2461 (LC)