IN THE LABOUR COURT OF SOUTH AFRICA
HELD AT JOHANNESBURG
Case Nos: JR 1607/2001
JR 1608/2001
JR 1609/2001
In the matters between:
DIHLABENG LOCAL MUNICIPALITY Applicant
and
COMMISSIONER MARTHINUS VAN AARDE First Respondent
THE COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION Second Respondent
T L SCHOLTZ Third Respondent in 1607/01
T W MONTSITSI Third Respondent in 1608/01
T P MOTSIMA Third Respondent in 1609/01
JUDGMENT
Vahed AJ:
[1] Three separate review applications were instituted under the above cited case
numbers. Save for the identity of the third respondent, each involved the same parties. The
question to be determined in each was identical. For convenience they were heard together. In
this judgment I shall refer to the third respondent in each by name or collectively as “the third
respondents”.
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[2] The facts which underpin these reviews may be briefly stated as follows. The third
respondents were each serving councillors of the applicant, having been duly elected as such.
During 1997 they each resigned as councillors and were subsequently employed by the applicant
in divers capacities. In the case of each the date of employment was within a six month period
calculated from when they each last held office as a councillor. During 2000, and after the local
government elections had been completed, the appointment of the third respondents was
challenged on the basis that it was contrary to the provisions of section 67 of the Local
Government Ordinance, 1962. That section provided:
“67. Appointment of employees
(1) A council shall, subject to the provisions of the Remuneration of Town Clerks Act, 1984, and the Profession of
Town Clerks Act, 1988, appoint a town clerk and such other employees as it may consider necessary for the proper
performance of its functions, at such remuneration as it may determine.
(2) ...
(3) No person shall be appointed in terms of subsection (1) if he is or at any time during the six months
immediately preceding the appointment, was a member of council.”
[3] Under case number 2000/1858 one Marais, then a councillor of the applicant,
applied to the Orange Free State Provincial Division of the High Court of South Africa for an order
declaring the appointments of Scholtz and Montsitsi as being void, being in contravention of
section 67 of the Ordinance. In bringing that application Marais purported to act on behalf of the
applicant.
[4] The applicant resolved to oppose Marais’ application and also resolved to challenge
the constitutionality of section 67 of the Ordinance. This they subsequently did in the same court
under case number 2000/2520. In this latter aspect they were supported in their efforts by Scholtz
and Montsitsi.
[5] On 26 January 2001, apparently on the advice of counsel, the applicant resolved to
no longer pursue the constitutional challenge and it, together with Scholtz and Montsitsi, withdrew
the application under case number 2000/2520. On the same day the applicant resolved to
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terminate the services of the third respondents with immediate effect. The applicant also withdrew
its opposition to the relief sought in case number 2000/1858.
[6] During or about February 2001 the third respondents referred disputes to the second
respondent, inter alia , challenging the fairness of their alleged dismissals.
[7] On 14 June 2001 the High Court (per Van Coller J in case number 2000/1858)
declared the appointments of Scholtz and Montsitsi to be void.
[8] The arbitration before the first respondent under the auspices of the second
respondent was held on 25 June 2001 and the award was delivered on 26 June 2001.
[9] The applicant raised a point in limine at the arbitration to the effect that the third
respondents were not employees as defined for the purposed of the Labour Relations Act, 1995,
and that consequently, the first and second respondents had no jurisdiction to entertain the
matter. That point in limine was contended for on the basis that as the appointments of the third
respondents were in contravention of section 67 of the Ordinance they were void ab initio with the
result that the third respondents never became employees of the applicant in the first place.
[10] In his award the first respondent correctly summarised the issues to be determined
by him as follows:
“(a) did the ... Council have the authority to appoint the [third respondents]?;
(b) if not, [were] the appointment[s] void ab initio in terms of section 67(3) of [the Ordinance] and thus without any
legal effect?;
(c) if not, is the Council estopped from denying its authority and, therefore, bound by the appointment made by
them?; and
(d) [are the third respondents] entitled to any relief by the CCMA following [their] dismissal/termination ...?”
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[11] The first respondent ultimately found in the third respondents’ favour and awarded
them relief in the form of compensation limited to the period 26 January 2001 (ie. the date of
termination) to 13 June 2001 (ie. the date of Van Coller J’s declaration that the appointments were
void).
[12] The first question: Did the applicant have authority to appoint?
The first respondent did not expressly answer this question. To be fair to him, however, he did
appear to align himself with a submission made by the applicant’s representative at the arbitration
to the effect:
“...that ... administrative action not authorised by law or in conflict with an Act is invalid and it would not be legally
correct to hold the administration responsible for ultra vires actions performed by it.”
In the context of the appointments I am concerned with here that statement is undoubtably
correct. In my view section 67(3) of the Ordinance contains an absolute prohibition and there
cannot be any doubt that the appointments were void.
However, the first respondent went on immediately to say:
“I also want to point out that in [ Pottie v Kotze 1954 (3) SA 719 (A)] the court held that such actions would prima facie
(and not per se ) be regarded as void.”
No doubt the first respondent, in making that statement, had the following extract from Pottie’s
case (at 724H 725D) in mind:
“The Ordinance does not expressly say that noncompliance with the requirements of subsecs. (1) and (3) invalidates
the transaction. We are asked to infer invalidity from words which make such compliance imperative and impose a
penalty for entering into the transaction without prior compliance. The inference is said to be called for by the well
known maxim of construction which is formulated as follows in Halsbury’s Laws of England (Hailsham ed.), vol 31,
par. 748, pp. 555, 556:
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‘Every transaction forbidden by a statute and carried out in violation of it is prima facie illegal and therefore void. An act for the doing of which a
penalty is imposed is a thing forbidden.’
In this formulation the words ‘ prima facie ’ qualify the application of the rule, and the very next paragraph in Halsbury
says:
‘The Court has always drawn a distinction between statutes denying a legal effect to instruments by declaring them to be void to all intents and
purposes and statutes which merely require formalities to be observed, and the Court will not readily construe contracts so as to bring them within
the prohibition of a statute’
(para. 749, p. 557).”
In my view Pottie’s case was relied upon incorrectly as support for the contention that such acts
are “prima facie ...void”. Unlike the Ordinance being considered in Pottie’s case, here we have a
prohibition in clear terms, not just something visited with a penalty for a contravention.
In my view there can be no question that appointments made in contravention of section 67(3) of
the Ordinance were void in the sense that they were “ per se void” and to the extent that the first
respondent may have found otherwise, he was incorrect.
[13] The second question: Is the appointment void ab initio ?
The first respondent appears to have construed Van Coller J’s order as being a declaration that
the appointments were void from the date of the order to that effect being made. That, in my view,
was wrong. The act was either void or it was not. Baxter, Administrative Law , 1994, pp. 357 358,
explains the position thus:
“When the courts refer, as they do in the vast majority of cases, to the fact that unlawful administrative acts are ‘void’,
‘nullities’, ‘of no force and effect’, ‘invalid’, and so on, they are referring to the formal status of those acts when
adjudged according to the criterion of legality. This they must do, for otherwise they would have no warrant to
interfere. But when they sometimes refer to unlawful acts as ‘voidable’, this must be viewed within the context of their
own role as the authoritative oracles of validity and legality. They do not thereby imply that the act was valid until set
aside, nor do they mean to suggest that refusal to declare the act in question void thereby validates it, even though
the effect of their refusal is that it continues to be treated as if it were valid.”
I respectfully adopt those views.
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[14] The third question: Can estoppel operate against the applicant?
I must confess that I do not understand the first respondent’s treatment of this question in his
award. To my mind the state of our law is clear. I agree with Mr Gauntlett, who appeared for the
applicant, when he submitted, relying upon the authority of Abrahamse v Connock’s Pension
Fund 1963 (2) SA 76 (W) at 79H, that the applicant:
“...cannot be estopped from denying that it has entered into a contract which it was ultra vires for it to make, and it
cannot be bound by estoppel to do anything beyond its legal capacity...”
Thus, the applicant cannot be clothed with authority it did not have in the first place to make the
appointments concerned.
[15] Having reached those conclusions, there is no need, in my view, to visit the fourth
question.
[16] There are two reviews before me with regard to each of the third respondents. In
each case the applicant contends that the first respondent acted outside his powers in accepting
that he had jurisdiction to accord relief to the third respondents and that the award falls to be
reviewed and set aside. In each also each of the third respondents crossapply for the award to be
reviewed and setaside and replaced with an enhanced award.
[17] As far as the crossapplications are concerned they were brought out of time and
there are also before me applications for this to be condoned. The applications for condonation
were not opposed by the applicant, which abides my decision in this regard. In my view the
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explanation for the delay is an acceptable one and I accordingly grant the condonation sought.
[18] In my view first respondent’s treatment of the matter was not justifiable. The actions
of the applicant in making the appointments were clearly void and no legal consequences
attaches thereto. It therefore must follow that the third respondents were not employees. On the
authorities of both Carephone (Pty) Ltd v Marcus N.O. & Ors (1998) 19 ILJ 1425 (LAC) and
Shoprite Checkers (Pty) Ltd v Ramdaw N.O. & Ors (2001) 22 ILJ 1603 (LAC) the award falls to be
set aside and that the crossreview must be dismissed.
[19] Finally I must acknowledge that there has been a long delay in delivering this
judgment. For that I apologise to the parties.
[20] I therefore make the following order in each of case numbers JR1607/2001,
JR1608/2001 and JR1609/2001:
1. The award of the first respondent under the auspices of the second respondent is reviewed
and set aside in terms of section 145 of the Labour Relations Act, 1995.
2. The crossreview is dismissed.
3. The third respondent is ordered to pay the applicant’s costs.
Date of Judgment:
11 March 2004
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