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[2018] ZACC 1
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Zungu v Premier of the Province of KwaZulu-Natal and Others (CCT136/17) [2018] ZACC 1; (2018) 39 ILJ 523 (CC); [2018] 4 BLLR 323 (CC); 2018 (6) BCLR 686 (CC) (22 January 2018)
Links to summary
Heads of arguments
CONSTITUTIONAL COURT OF
SOUTH AFRICA
Case CCT 136/17
In the matter between:
SIBONGILE
ZUNGU
Applicant
and
PREMIER OF THE PROVINCE OF
KWAZULU-NATAL
First Respondent
MEMBER OF THE EXECUTIVE COUNCIL FOR
THE DEPARTMENT OF HEALTH,
KWAZULU-NATAL
Second Respondent
SIFISO TOKELLO
MTSHALI
Third Respondent
Neutral citation:
Sibongile Zungu v Premier of the Province of KwaZulu-Natal and
Others
[2018] ZACC 1
Coram:
Mogoeng CJ, Zondo
DCJ, Cameron J, Froneman J, Jafta J,
Kathree-Setiloane AJ, Kollapen AJ, Madlanga J, Mhlantla J, Theron J
and Zondi AJ
Judgments:
Mhlantla J
Decided on:
22 January 2018
Summary:
Appeal from the Labour Appeal Court — costs — rule of
practice that costs follow result does not apply in labour matters
—
law and fairness governs the awarding of costs — nothing in the
present case meriting the award of costs —
Labour Appeal Court
and Labour Court did not exercise their discretion judicially —
justice requires that cost
orders be set aside and each party pay its
own costs — appeal on costs upheld and set aside
ORDER
On appeal from the Labour Appeal Court:
1.
Leave to appeal on the merits
is refused.
2.
Leave to appeal against
the costs orders of the Labour Court and
Labour Appeal Court is granted.
3.
The appeal on costs is upheld.
4.
The costs orders granted
by the Labour Court and the
Labour Appeal Court are set aside.
5.
No order as to costs is
made in relation to the proceedings in this
Court.
JUDGMENT
MHLANTLA J (Mogoeng CJ, Zondo DCJ,
Cameron J, Froneman J, Jafta J, Kathree Setiloane AJ, Kollapen
AJ, Madlanga J, Theron J
and Zondi AJ concurring):
[1]
This is an application for leave to appeal against an order of
the Labour Appeal Court in terms of which the applicant’s
appeal was dismissed with costs.
[1]
The applicant is Dr Sibongile Zungu. She was employed by the
first respondent, the Premier of KwaZulu-Natal Province
(Premier) as
the Head of Department: Health in KwaZulu-Natal (Head of Department)
on a five year contract from 1 December 2009
to 31 July 2014.
The second respondent is the Member of the Executive Council for the
Department of Health (MEC), and the
third respondent is Dr Sifiso
Tokello Mtshali, the incumbent Head of Department. The third
respondent did not participate
in the proceedings.
[2]
On 26 June 2014, the Premier gave notice to the applicant that
he had no intention of renewing her contract upon the expiry of her
term but would advertise the post. He indicated to the
applicant that she could apply if she so wished. Thereafter,
the post was advertised and the applicant and other candidates
applied. In the interim, short-term extensions were made to
the
applicant’s contract of employment until December 2014.
The applicant was one of the candidates interviewed for
the
position. The selection committee recommended that the
applicant be appointed as Head of Department for a further period
of
five years.
[3]
In the meantime, certain allegations were levelled against the
applicant by the National Education, Health and Allied Workers’
Union (NEHAWU). The Premier decided to conduct an investigation
before making a final decision on the appointment process.
This
necessitated another extension of the applicant’s contract from
1 December 2014 until 31 March 2015.
[4]
During March 2015, the investigating team submitted a
provisional report to the Premier and the applicant. It sought
more
time to conclude the work. There were findings in the
report that related to the applicant’s managerial shortcomings
as an accounting officer.
[5]
The applicant was concerned that the Premier would rely on the
provisional report and not appoint her. As a result, on 30
March 2015, a day before her contract was due to come to an end, she
launched an urgent application in the Labour Court. She
sought
the issuance of a rule nisi calling upon the respondents to show
cause why an order in the following terms should not be
made:
(a)
an interdict prohibiting the Premier from
replacing her with anyone
else in the position of Head of Department;
(b)
a
mandamus
(a mandatory direction) that she be appointed as
Head of Department in accordance with the recommendation of the
selection committee;
[2]
and
(c)
a declarator that the Premier was not entitled
to take into account
the findings contained in the provisional report.
[6]
The matter was set down for 31 March 2015. On that day,
the hearing was postponed by agreement between the parties to 17
April
2015. The Premier undertook not to appoint anyone to the
position of Head of Department. After the postponement, the
applicant became aware that the Premier had appointed Dr Simelane as
acting Head of Department with effect from 1 April 2015 until
the
appointment of a new Head of Department.
[7]
On 2 April 2015, the applicant received a letter from the
Premier advising her that her contract had expired and that he had no
intention of renewing it. The applicant formed the view that
the Premier had reneged on the agreement between the parties
when he
appointed an acting Head of Department. As a result, she
launched another urgent application and sought an order
declaring
that the Premier had breached the undertaking not to appoint a Head
of Department. In addition, she sought a personal
costs order
against the Premier on an attorney and client scale (
de bonis
propriis
).
[8]
The Premier submitted that, had the position of Head of
Department been left vacant, he would have been in breach of the
provisions
of the Public Finance Management Act
[3]
(PFMA) which preclude him from leaving the position of an accounting
officer vacant.
[4]
[9]
The Labour Court, per Lallie J, held that the agreement
by the parties related to the subject matter of the original
application.
This was the appointment in the Head of Department
position for a period of five years. In terms of the agreement,
the Premier
had undertaken not to make that appointment pending the
finalisation of the dispute between the parties. That
appointment
had not been made. The Labour Court held that the
Premier had not undermined the agreement because he had placed
someone
only as an acting Head of Department, not as permanent Head
of Department. The Labour Court further stated that the defence
by the Premier that he was bound by the PFMA was not challenged by
the applicant. It therefore dismissed the urgent application
and postponed the remainder of the application to 17 April 2015 in
terms of the agreement between the parties. The Labour
Court
declined to make a costs order against the applicant.
[5]
[10]
On 21 April 2015, the main application was eventually heard by
the Labour Court before Whitcher J.
[6]
The Labour Court dismissed the main application on the grounds that
it had no jurisdiction and that, in any event, no case
had been made
for urgency or for final interdictory relief. With regard to
jurisdiction, it held that the nature of the dispute
between the
applicant and the Premier was connected to a dismissal issue, that
is, whether there was a legitimate expectation of
the contract to be
renewed. Therefore, the dispute fell within the exclusive
jurisdiction of the Commission for Conciliation,
Mediation and
Arbitration (CCMA) or the relevant bargaining council. The
Labour Court thus dismissed the application
for an interdict
with costs.
Labour Appeal Court
[11]
Aggrieved by the decision, the applicant appealed to the
Labour Appeal Court. Whilst the appeal was pending, the Premier
advertised
the post and appointed the third respondent as the Head of
Department.
[12]
In the Labour Appeal Court, the applicant challenged the
conclusion of the Labour Court that it had no jurisdiction because
the
issue related to a dispute that had to be referred to the CCMA.
She contended that her cause of action was that the Premier’s
decision not to adopt the recommendations of the selection committee
was irrational and susceptible to review under the Promotion
of
Administrative Justice Act
[7]
(PAJA).
[13]
The Labour Appeal Court pointed out that the applicant, whose
fixed term contract of employment was about to expire, sought to
compel
a renewal thereof. The alleged right of renewal was
premised on a legitimate expectation, founded on a recommendation by
the selection committee, that the applicant’s contract of
employment be renewed. The Labour Appeal Court held that the
dispute was within the realm of section 186(1)(b) of the Labour
Relations Act
[8]
(LRA). This section defines a dismissal as including a failure
or refusal by the employer to renew a fixed term contract
of
employment on the same or similar terms. The Labour Appeal
Court held that a claim that a fixed term contract be renewed
on the
grounds of a legitimate expectation is a species of dismissal as
defined in section 186 and regulated by section 191, which
requires
such a dismissal to be arbitrated and not adjudicated.
[9]
The Labour Appeal Court also held that there was no basis to rely on
PAJA as the dispute was a pure labour relations dispute.
[14]
The Labour Appeal Court also considered the provisions of the
Public Service Regulations.
[10]
Section D.7 makes provision for when an executive authority does not
approve a recommendation of a selection committee and
states that the
authority must record the reasons for his or her decision in
writing. In terms of section D.8, the executive
authority
shall, before making a decision on an appointment, satisfy himself or
herself about the suitability of the candidate.
[11]
[15]
Lastly, the Labour Appeal Court upheld the decision of the
Labour Court that it did not have jurisdiction and that the proof of
a clear right necessary for a final interdict was absent. The
Court therefore dismissed the appeal with costs.
In this Court
[16]
The applicant lodged an application in this Court for leave to
appeal against the order of the Labour Appeal Court. She also
seeks leave to appeal directly to this Court against the judgment of
the Labour Court. On 20 September 2017, the Chief Justice
issued directions,
[12]
calling on the parties to file written submissions on costs.
[17]
The parties filed written submissions and the matter was
determined without oral argument.
[18]
This Court cannot entertain an application for direct access
to appeal the decision of the Labour Court in the applicant’s
urgent application because this was an interlocutory order, which is
ordinarily not appealable, except to the extent that the interests
of
justice dictate otherwise. The applicant has not provided any
basis for so concluding.
[19]
With regard to the merits, we are satisfied that leave to
appeal must be refused as the application has no prospects of
success.
The applicant seeks to challenge the adverse decision
of not being appointed on the basis that the Premier did not have the
discretion to ignore the selection committee’s recommendation.
The applicant’s complaint in effect relates to
a dismissal as
defined in section 186(1)(b) of the LRA, which defines a dismissal as
follows:
“
[A]n
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.”
[20]
The Labour Appeal Court was correct in upholding the Labour
Court’s decision that it did not have jurisdiction in the
matter.
This is because the claim by the applicant relating to
the Premier’s decision not to appoint her, and the contention
that
this was unlawful, falls squarely within the definition of
dismissal in section 186(1)(b) of the LRA. The dispute should
have been referred to conciliation and ultimately to arbitration
under section 191 of the LRA. Therefore, the applicant cannot
bypass the dispute resolution process envisioned in the LRA.
The applicant was obliged to follow the dispute resolution process
in
Chapter VIII of the LRA but did not do so.
[21]
In any event, the applicant’s argument that the Premier
had no discretion to ignore the recommendation of the selection
committee
has no merit when regard is had to sections D.7 and D.8 of
the Public Service Regulations.
[13]
The regulations expressly contemplate instances where the Premier may
not accept the recommendation of the selection committee.
They
do not fetter the Premier’s discretion to make the
appointment. Section D.7 in fact makes provision for when an
executive authority does not approve a recommendation of a selection
committee. It states that the authority must record
the reasons
for his or her decision in writing. In terms of section D.8 the
executive authority shall, before making a decision
on an
appointment, satisfy himself or herself about the suitability of the
candidate. That shows that the Premier has a discretion
and may
reject the recommendation of the selection committee. On 8
April 2015, the Premier gave written reasons to the applicant
for not
accepting the recommendation of the selection committee.
Therefore, the applicant’s appeal on the merits must
fail.
[22]
What remains is the question of costs. The applicant
submits that the costs orders against her constituted a misdirection
by the Labour Court and Labour Appeal Court. She
contends that the Premier should have been ordered to pay her costs.
On the other hand, the Premier submits the courts sufficiently and
judicially considered the issue of costs and that the costs
orders
should not be set aside.
[23]
I disagree with the Premier’s submissions. The
correct approach in labour matters in terms of the LRA is that the
losing
party is not as a norm ordered to pay the successful party’s
costs. Section 162 of the LRA governs the manner in which
costs
may be awarded in the Labour Court. Section 162 provides:
“
(1)
The Labour Court may make an order for the payment of costs,
according to the requirements of
the law and fairness.
(2) When deciding
whether or not to order the payment of costs, the Labour Court may
take into account—
(a) whether the matter
referred to the Court ought to have been referred to arbitration
in
terms of this Act and, if so, the extra costs incurred in referring
the matter to the Court; and
(b) the conduct of the
parties—
(i) in proceeding
with or defending the matter before the Court; and
(ii)
during the proceedings before the Court.”
[24]
The rule of practice that costs follow the result does not
apply in Labour Court matters. In
Dorkin
, Zondo JP
explained the reason for the departure as follows:
“The rule of
practice that costs follow the result does not govern the making of
orders of costs in this Court. The
relevant statutory provision
is to the effect that orders of costs in this Court are to be made in
accordance with the requirements
of the law and fairness. And
the norm ought to be that costs orders are not made unless the
requirements are met. In
making decisions on costs orders this
Court should seek to strike a fair balance between on the one hand,
not unduly discouraging
workers, employers, unions and employers’
organisations from approaching the Labour Court and this Court to
have their disputes
dealt with, and, on the other, allowing those
parties to bring to the Labour Court and this Court frivolous cases
that should not
be brought to Court.”
[14]
[25]
In this matter, there is nothing on the record indicating why
the Labour Court and Labour Appeal Court awarded costs against the
applicant. Neither court gave reasons for doing so. It
seems that both courts simply followed the rule that costs follow
the
result. This is not correct.
[26]
In the result, the Labour Court and the Labour Appeal Court
erred in not following and applying the principle in labour matters
as set out in
Dorkin
. The courts did not exercise their
discretion judicially when mulcting the applicant with costs. This
Court is therefore
entitled to interfere with the costs award.
Taking into account the considerations of the law and fairness, it
will be in
accordance with justice if the orders of costs by the
Labour Court and Labour Appeal Court are set aside and each party
pays his
or her own costs. With regard to costs in this Court,
there will be no order as to costs.
[27]
In the result the following order is made:
1.
Leave to appeal on the merits
is refused.
2.
Leave to appeal against
the costs orders of the Labour Court and
Labour Appeal Court is granted.
3.
The appeal on costs is upheld.
4.
The costs orders granted
by the Labour Court and the
Labour Appeal Court are set aside.
5.
No order as to costs is
made in relation to the proceedings in this
Court.
For the
Applicant:
T G Madonsela SC instructed by Strauss Daly Inc
For the First and Second
Respondents:
A A Gabriel SC and I J Patel instructed
by the State Attorney
[1]
Zungu v Premier, Province of KwaZulu-Natal and Another
[2017]
ZALAC 26.
[2]
For ease of reference, the term “selection committee”
will be used throughout this judgment. In their submissions,
the
parties use “selection committee” and “selection
panel” interchangeably, however the term “selection
committee” is the term adopted in section D.7 of the Public
Service Regulations, 2001. GN No. R. 1, 5 January 2001 (Public
Service Regulations).
[3]
1 of 1999.
[4]
Section 36(1) of the PFMA states that “[e]very department and
every constitutional institution must have an accounting
officer”.
Section 37 provides that—
“[w]hen an
accounting officer is absent or otherwise unable to perform the
functions of accounting officer, or during a
vacancy, the functions
of the accounting officer must be performed by the official acting
in the place of that accounting officer”.
[5]
Zungu v Premier of the Province of KwaZulu-Natal and Another
[2015] ZALCJHB 122.
[6]
Zungu v Premier of the Province of KwaZulu-Natal and Another,
unreported judgment of the Labour Court, KwaZulu-Natal, Case No.
D244/15 (21 April 2015).
[7]
3 of 2000.
[8]
66 of 1995. The definition of “dismissal” provided in
section 186(1)(b) is as follows:
“[A]n
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.”
[9]
Section 191(1) provides:
“(a)
If there is a dispute about the fairness of a dismissal, or a
dispute
about an unfair labour practice, the dismissed employee or
the employee alleging the unfair labour practice may refer the
dispute
in writing to—
(i)
a council, if the parties to the dispute fall within the registered
scope of that council; or
(ii)
the Commission, if no council has jurisdiction.
(b)
A referral in terms of paragraph (a) must be made within—
(i)
30 days of the date of a dismissal or, if it is a later date,
within
30 days of the employer making a final decision to dismiss or uphold
the dismissal;
(ii)
90 days of the date of the act or omission which allegedly
constitutes
the unfair labour practice or, if it is a later date,
within 90 days of the date on which the employee became aware of the
act
or occurrence.”
Section 191(5) of the LRA lists the
circumstances under which an employee may refer a dispute to the
Labour Court for adjudication:
“
. . .
(b)
[T]he employee may refer the dispute to the Labour Court for
adjudication
if the employee has alleged that the reason for
dismissal is—
(i)
automatically unfair;
(ii)
based on the employer’s operational requirements;
(iii)
the employees participation in a strike that does not comply with
the provisions
of Chapter IV or
(iv)
because the employee refused to join, was refused membership of or
was expelled from a trade union party to a closed shop agreement.”
[10]
Public Service Regulations above n 2.
[11]
Sections D.7 and D.8 of the Public Service Regulations read as
follows:
“D.7
When an executing authority does not approve a recommendation of a
selection committee,
she or he shall record the reasons for her or
his decision in writing.
D.8
Before making a decision on an appointment or the filling of a post,
an executive
authority shall—
(a)
satisfy herself or himself that the candidate qualifies in all
respects for the post and that her or his claims or his application
for the post have been verified; and
(b)
record in writing that verification.”
[12]
The Chief Justice issued the following directions:
“The Court
is minded to intervene on the costs orders and invites the applicant
and respondents, if so minded, to make submissions
by 6 October
2017.”
[13]
Public Service Regulations above n 2.
[14]
Member of the Executive Council for Finance, KwaZulu-Natal v
Wentworth Dorkin N.O.
[2007] ZALAC 41
(
Dorkin
) at para
19. See also
Martin Vermaak v MEC for Local Government &
Traditional Affairs, North West Province
[2017] ZALAC 2.