IN THE LABOUR COURT OF SOUTH AFRICA, DURBAN

Case No: D10/2022
Not Reportable

In the matter between:
MEC FOR HEALTH, KWAZULU -NATAL Applicant
and
HOSPERSA obo ZAKIA HOOSEN First Respondent
PUBLIC HEATH AND SOCIAL DEVELOPMENT
SECTORAL BARGAINING COUNCIL Second Respondent
JAMES NGOAKA MATSHEKA NO Third Respondent
Heard: 2 February 2025
Delivered: This judgment was handed down electronically by circulation to the
parties and / or their legal representatives by email. The date and time for handing-
down is deemed 15h00 on 19 June 2025


JUDGMENT


ALLEN -YAMAN J

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Introduction
[1] The applicant applied to this court for orders in the following terms:
‘1. That the late filing of the applicant’s review application be and is hereby
condoned.
2. Setting aside the settlement agreement entered into purportedly by the
applicant and the first respondent.
3. Reviewing and setting aside or correcting, in terms of the provisions of
section 158 of the Labour Relations Act, 66 of 1995, the arbitration award
handed down by the third respondent under case number PSHS 480-19/20
dated 10 July 2020.
4. Substituting the arbitration award with an order of the above
honourable court dismissing the applicant’s referral of her dispute relating to
the application of Collective Agreement, Resolution 3 of 2009.
5. That the first respondent pays the costs of the application in the event
that the application is opposed by her.’

[2] The applicant was opposed by the first respondent, referred to herein as
‘HOSPERSA’ and ‘Ms Hoosen’ where it is necessary to distinguish them.
Background
[3] Having referred a dispute in terms of s24(2) and (5) of the LRA to the second
respondent on 17 July 2019, it remained unresolved at the stage of conciliation
convened on 12 August 2019. The first respondent duly requested that it be
scheduled for arbitration , in which request the issue in dispute was categorised as
having been, ‘OSD Translation – Interpretation and / or application of a collective
agreement, Resolution 3/2009.’ The outcome required by the first respondent was
stated to have been, ‘Employee be translated to Pharmacy Supervisor with backpay
to 2009.’

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[4] Ms Hoosen’s claim for translation was premised on her belief that the
applicant had erroneously translated her from the position of Principal Pharmacist to
Pharmacist Grade 1 in terms of Resolution 3/2009, rather than to the position of
Principal Supervisor, in circumstances in which she met the requirements for
translation. The requirements were stipulated in such resolution to have been,

‘2.3.4 Translation tables to facilitate the translation to the post of Pharmacy
Supervisor with effect from 1 April 2010 are provided for serving employees –
2.3.4.1 who occupied a post of Pharmacist on salary level 8 or higher
pre-OSD as at 30 June 2009; and
2.3.4.2 where it was required of the incumbent and contained in the
formal job description / performance agreement to directly supervise more
than one post of Pharmacist (including a Pharmacist: Community Service)
that was converted / aligned to Pharmacist Grade 1, 2 or 3 on 1 July 2009 in
accordance with the provisions of PHSDSBC Resolution 3 of 2009
(regardless of whether such posts were filled or vacant).
2.3.4.3 Employees who meet the requirements in paragraphs 2.3.4.1
and 2.3.4.2 shall translate to the post/job level of Pharmacy Supervisor in
accordance with the translation tables contained in Annexure B2 of this
Agreement.
2.3.4.4 Employees who are translated in accordance with the provisions
of paragraph 2.3.4 above shall been 1 July 2009 as their date of entry into the
OSD post/job level of Pharmacy Supervisor.’
[5] On 8 November 2019 the settlement agreement which forms the subject
matter of the present application was concluded. Utilising the second respondent’s
standard pro forma settlement agreement, the first respondent’s dispute was
recorded as having been settled, its terms having reflected that the applicant would
translate Ms Hoosen to the position of Pharmac y Supervisor from 1 April 2010 to
date (presumably intended to mean that the translation was to have been
retrospective and for an indefinite period of time) and would pay her the amount of
R795 392.26. The agreement was signed by Ms Hoosen herself, and one Mr Msane
on behalf of the applicant.

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[6] On its own version, the applicant became aware of the settlement agreement
in November 2019 but did not then implement its terms. Unnecessary for the
purpose of the present application, but nonetheless canvassed in some detail, were
the steps taken by the applicant to interrogate whether Ms Hoosen’s translation to
the post of Pharmac y Supervisor had been justifiable in accordance with the
provisions of collective agreement 3/2009.

[7] In consequence of the applicant’s failure to have acted in accordance with the
terms of the settlement agreement, the first respondent applied to the second
respondent to make the settlement agreement an arbitration award in terms of
s142A of the LRA. Albeit that the applicant referred to the award as having been
certified, nothing before this court suggests that pursuant to the settlement
agreement having been made an arbitration award in terms of s142A on 10 July
2020 the first respondent proceeded to have the award certified in terms of s143. On
its own further version, the applicant became aware of the arbitration award when it
was served on it on 14 September 2020.

[8] More than a year later, on 11 January 2022, the applicant initiated the present
application.
Analysis
[9] As relief in these proceedings the applicant sought independently both the
reviewing and setting aside of the award as well as the setting aside of the
settlement agreement which underpinned the award.
[10] The applicant’s singular complaint concerning the award itself concerned what
was said to have been the absence of notification of the s142A proceedings having
been given to it by the first respondent,

‘As stated earlier, these proceedings were unopposed, and the applicant has
no record of a notice of set-down. According to the best of my knowledge, the
applicant was not notified of these proceedings.’

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[11] The deponent to the applicant’s founding affidavit, Mr Mnguni, the applicant’s
Director, Human Resource Management Services, conceded at the outset that not
all the facts deposed to therein had been within his own personal knowledge, but
constituted information conveyed to him by those who were familiar with the facts, or
were derived from documents under the applicant’s control. The statement made by
him concerning the absence of any record of notice having been given of the first
respondent’s s142A application did not itself demonstrate that no notice of the
application had been given to the applicant , it merely suggested that no such notice
could be found in the applicant’s own records . The further statement evincing the
deponent’s belief that no notice of the application had been given to the applicant
likewise did not establish the correctness of such a proposition in circumstances in
which no confirmatory affidavits by any functionaries who had personal knowledge of
the facts were delivered. Moreover, notwithstanding such assertions, the applicant
did not rely on this particular issue as a basis upon which it sought to review and set
aside the award itself.

[12] In consideration of that which was stated in the applicant’s founding affidavit,
it is evident that the applicant failed to allege any reviewable irregularity on the part
of the third respondent and, as was conceded by Ms Qono on behalf of the
applicant , the application to review the award was wholly unsubstantiated. As the
applicant’s application for condonation related to the late delivery of its review
application, which application has no possible prospects of success, condonation for
the late delivery of its review application falls to be refused.
[13] The applicant’s application that the settlement agreement fell to be set aside
was premised upon its assertions that (1) its functionary who signed the settlement
agreement on behalf of the applicant failed to exercise an appropriate standard of
care when having done so, and (2) did not have the requisite authority to bind the
applicant.
[14] Insofar as the first of the applicant’s complaints was concerned the alleged
‘lack of care’ exercised by Mr Msane when having concluded the settlement
agreement was premised on its contentions that the Ms Hoosen had not been
entitled to have been translated to the position of Pharmacy Supervisor, and, as
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such, there had been no reason for the applicant to have capitulated to the first
respondent’s claim. It alleged that,

‘The agreement to pay the respondent the amount recorded in the settlement
agreement, and consequently, the award is illegal since there is no justifiable
basis on which the agreement was concluded. The payment to the
respondent in terms of the award and settlement agreement will amount to
fruitless and wasteful expenditure in terms of the PFMA as Msane did not
consider the terms of the agreement with reasonable care. Furthermore,
payment to her would amount to irregular expenditure.’

[15] In circumstances in which disputed or uncertain obligations are novated by
way of compromise, any previous disagreements concerning the parties’ original
obligations are superseded by the obligations created under the settlement
agreement. Accordingly, the validity of a compromise or settlement agreement is
unaffected by any defence which may have been raised to the original claim ,1 and
the applicant’s assertions concerning the merits of the first respondent’s dispute are
accordingly irrelevant to the issue of the legality of the settlement agreement.
[16] The further issue regarding the settlement agreement concerns that of Mr
Msane’s authority. In seeking to establish that Mr Msane had not been authorised to
enter into the settlement agreement Mr Mnguni alleged that:
- In terms of the applicant’s Financial Management Delegations, only
Senior Managers identified by the applicant’s Head Office are authorised to
approve expenditure on sundry payment vouchers of other expenditure (which
includes expenditure in relation to settlement of disputes) .
- Mr Msane, in his capacity as Assistant Director: Labour Relations did
not have such authority, and nor had the relevant Senior Manager delegated
such delegated authority to him.
This being the case, Mr Msane did not have the authority to enter into the
settlement agreement, which was accordingly ultra vires .


1 Christie, The Law of Contract in South Africa, Third Edition, page 505
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[17] In opposition the first respondent asserted that in the event that this court
found that Mr Msane did not have actual authority, the principles of ostensible
authority found application, and further that the applicant was estopped from denying
Mr Msane’s authority. The first respondent accepted that the issue of Mr Msane’s
authority was dispositive of the validity of the settlement agreement,

‘It is conceded that if it is established that Mr Msane did not have ostensible
authority and that the Applicant is not estopped from denying his authority and
that the settlement agreement is for that reason null and void, then the Award
and its certification would also be liable to be set aside. On the merits
therefore the only relevant question is whether the settlement agreement was
void for lack of authority or not.’

[18] By the time of the initiation of the present application, Mr Msane had passed
away and the applicant’s application was unsupported by an affidavit by him.
[19] Although the applicant asserted that Mr Msane had not been authorised to
enter into the settlement agreement on behalf of the applicant, it nonetheless
accepted that such authority could lawfully have been delegated to him by the
relevant Senior Manager who him or herself had been delegated the authority to do
so. The applicant omitted, however, to mention who such Senior Manager may have
been. No affidavit in which the issue of the extent or limit of Mr Msane’s authority
was elaborated upon, and none confirmed the correctness of Mr Mnguni’s assertions
on the point.
[20] The only particularity provided to this court which directly concerned the issue
of Mr Msane’s authority was its allegation that,

‘In or about December 2019, the Chief Executive Officer, Ms B C Ndlovu
wrote to the Head of Department, Dr Tshabalala informing him that the
settlement agreement entered into on behalf of the applicant was not
authorised by her. She further recorded that she did not receive a written
mandate from “Head Office Labour Relations/Head of Health/ Chief Financial
Officer to settle the matter neither commit to payment.’
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From the copy of the letter annexed to the founding affidavit it was evident that Ms
Ndlovu was the CEO of the Port Shepstone Regional Hospital. She provided no
confirmatory affidavit concerning that which had been attributed to her.
[21] On the applicant’s own version, Mr Msane could have been authorised to
conclude the settlement agreement by a Senior Manager with delegated authority.
Absent from its version was that Ms Ndlovu had been such a manager, or indeed,
the only manager capable of delegating him the requisite authority. This being so,
the applicant’s case is devoid of any evidence substantiating its assertion that Mr
Msane had not been authorised to enter into the settlement agreement.
[22] Moreover, the applicant’s functionaries became aware of the settlement
agreement in the month in which it had been concluded; November 2019, yet failed
then to raise the issue of Mr Msane’s alleged lack of authority with the first
respondent. The certified award was thereafter served on the applicant in September
2020, yet again Mr Msane’s alleged lack of authority was not drawn to the first
respondent’s attention. The circumstances surrounding Ms Msane’s signature to the
settlement agreement, together with the events subsequent thereto, militate against
the conclusion that he did not have actual authority to bind the applicant. For this
court to conclude otherwise would require it to accept Mr Mnguni’s unsubstantiated
hearsay that such authority had never been delegated to Mr Msane in circumstances
in which the latter had conducted himself in a manner consistent with the holder of
authority, and the converse suggestion was raised for the first time only upon the
initiation of the present application in 2022.
[23] However, regardles s whether Mr Msane had actual authority, the
circumstances in which the settlement agreement was entered into nonetheless
established the existence of ostensible authority.
[24] The principles relevant to a claim premised on ostensible or apparent
authority were summarised in Makate v Vodacom (Pty) Ltd 2016 (4) SA 121 (CC),

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‘In summary the position in regard to representations of authority founding a
claim of ostensible authority is the following. The statements or conduct
constituting the representation must be those of persons, individually or
collectively, who have actual authority to bind the principal to the transaction
in dispute. The conduct may include the appointment of an individual to a
position ordinarily carrying with it a particular level of authority. If the
appointment is made, but some of that authority is withheld or subjected to
limitations, it is essential that this is made clear to persons dealing with that
individual. Otherwise they will be entitled to hold the company to the
representation of authority created by the appointment. A representation may
also be made by permitting the putative agent to engage in a course of
dealing on behalf of the principal. Representations by the agent alone without
more are insufficient, whatever form they may take. But the conduct and
statements relied upon may be those of the agent, provide the conduct or
statements are themselves within the actual or ostensible authority of the
agent. The statements and conduct must, when taken as a whole, be such as
reasonably to convey to a person dealing with the agent the impression that
they have authority to conclude the transaction in question, and thereby to
induce the belief in that person that they have that authority.’2

[25] In consideration of these requirements the conclusion drawn by the first
respondent that Mr Msane had been clothed with the necessary authority to
conclude the settlement agreement was entirely reasonable. As the applicant’s
Assistant Director Labour Relations he attended the dispute resolution process at the
PHSDSBC in his capacity as the applicant’s representative. He duly engaged with
the first respondent and, in such capacity, concluded a written settlement agreement
to which his signature was affixed as the applicant’s representative. There is
accordingly no reason to doubt the veracity of the first respondent’s unchallenged
version that the circumstances in which the settlement agreement was entered into
gave rise to the first respondent’s not unreasonable belief that Mr Msane had the
necessary authority to bind the applicant thereto. This being the case, if Mr Msane
did not, in fact, have actual authority to bind the applicant, ostensible authority was
nevertheless established, and the applicant is bound by the consequences thereof .

2 At paragraph 165
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[26] The application to set aside the settlement agreement accordingly falls to be
dismissed.

Costs

[27] The first respondent asked that the application be dismissed with costs. In
circumstances in which the first respondent has been obliged to incur costs opposing
the present application in order to preserve Ms Hoosen’s rights, this court can
conceive of no reason why the applicant ought not to pay its costs.
Order
1. Condonation for the late delivery of the applicant’s review application is
refused.
2. The application to set aside the settlement agreement under case
number PSHS 480-19/20 dated 8 November 2019 is dismissed.
3. The applicant is to pay the first respondent’s costs.

K Allen -Yaman
Judge of the Labour Court of South Africa
Appearances
Applicant:
Ms Z Qono, instructed by the State Attorney, KwaZulu -Natal
First Respondent:
Mr B Purdon, Purdon and Munsamy Attorneys