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[2018] ZASCA 65
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Minister of Defence and Another v Xulu (337/2017) [2018] ZASCA 65; 2018 (6) SA 460 (SCA) (24 May 2018)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 337/2017
In the matter between:
MINISTER OF
DEFENCE
FIRST APPELLANT
CHIEF OF THE SOUTH
AFRICAN
NATIONAL DEFENCE
FORCE
SECOND APPELLANT
and
BONGANI POSTOLIE
XULU
RESPONDENT
Neutral citation:
Minister
of Defence v Xulu
(337/2017)
[2018]
ZASCA 65
(24 May 2018)
Coram:
LEWIS, WALLIS, SALDULKER and MOCUMIE
JJA and PILLAY AJA
Heard
:
14 May 2018
Delivered
:
24 May 2018
Summary:
Defence Act 42 of 2002
– soldier
enrolled as member of the South African National Defence Force on
fixed term contract – contract renewed
on three occasions –
renewal considered when due to expire but refused – refusal
constituting administrative action
in terms of
Promotion of
Administrative Justice Act 3 of 2000
– decision reviewed and
set aside – appropriate relief.
ORDER
On appeal from:
Gauteng Division of the High Court,
Pretoria (Tolmay J, Raulinga and Khumalo JJ concurring):
1
Special leave to appeal is granted.
2
Paragraph 1 of the order of the full court
is amended to read:
‘
The appeal is
upheld with costs, and paragraphs 2 and 5 of the high court’s
order are set aside.’
3
The appeal is otherwise dismissed with
costs
.
4
The Respondents are ordered jointly and
severally to compensate the Applicant for such further losses as he
may have incurred as
a result of his fixed term contract not having
been renewed in 2011, the amount of such losses to be agreed between
the parties
within 30 days of the date of this order, failing which
they are to be determined summarily on the written representations of
the
parties by an arbiter chosen by them or, in the absence of
agreement, appointed by the Chair for the time being of the Pretoria
Bar.
JUDGMENT
Wallis JA (Lewis,
Saldulker and Mocumie JJA and Pillay AJA concurring)
[1]
Until the events giving rise to this appeal
the respondent, Mr Xulu, was a soldier. He joined the South African
National Defence
Force (SANDF) on 29 July 1996, initially for a fixed
term of two years. In 1998 his contract was extended until 2000 in
which year
it was further extended until 2005. The final extension
was in 2005 until 31 July 2011. At the end of November 2010 he was
informed
by the SANDF that it did not intend to renew his ‘employment
contract’ when it expired on 30 June 2011. Notwithstanding
his
own representations and detailed representations made on his behalf
by his attorney, he was informed on 29 April 2011 that
his contract
would not be renewed.
[2]
Mr Xulu challenged the decision not to
extend his contract in the Gauteng Division of the High Court,
Pretoria. He was unsuccessful
at first instance before Lephoko AJ,
but succeeded on appeal to the full court (Tolmay J, with Raulinga
and Khumalo JJ concurring).
It set aside the decision and ordered the
SANDF, represented by the first and second appellants, respectively
the Minister of Defence
(the Minister) and the Chief of the SANDF, to
appoint him on a contract for a further six years expiring on 30 June
2017. The application
by the Minister and the Chief of the SANDF for
special leave to appeal was referred for argument to this court in
terms of
s 17(2)
(d)
of the
Superior Courts Act 10 of 2013
.
[3]
The special circumstances advanced in
support of the grant of special leave to appeal were that the SANDF
were not represented before
the full court when the appeal was argued
in the high court and that it needed clarity from this Court on its
legal obligations
when dealing with the non-renewal of fixed term
contracts of members of the Regular Force. As to the first of these,
notwithstanding
the various excuses advanced in the application the
blame for the non-appearance has to be laid at the door of their
attorney.
Notice of set down had been sent to her office by telefax
in November 2015 and one of the judges sitting in the appeal had
caused
his secretary to telephone her offices on several occasions to
enquire why no heads of argument had been filed. Her claim that her
office was unaware of the set down on 1 February 2016 did not hold
water.
[4]
Ordinarily, in the absence of an
explanation for the SANDF not being represented at the appeal
hearing, there would have been no
good cause for the grant of special
leave to appeal to this court. However, it is common cause that there
are a number of cases
pending, in which the failure by the SANDF to
renew fixed term contracts under which various members serve in the
Regular Force
constitutes the
casus
belli
. There is therefore a
considerable need for clarity on the proper basis, if any, for such
cases. Albeit reluctantly, I am therefore
persuaded that the issues
raised are of such a character that they should be addressed by this
court. Special leave to appeal will
therefore be granted.
The facts
[5]
The letter informing Mr Xulu that the SANDF
did not intend to renew his contract was received at the end of
November or early December
2010 and read as follows:
‘
EXPIRY
OF CORE SERVICE SYSTEM CONTRACT: 96678958 MC RFM BP XULU, SAIC
1. The
Department of Defence intends not to renew your employment contract
when it expires on 30 June 2011. The following offences
were taken
into consideration.
a
1XSec 10
b
1XSec 33(b)
2. Department
of Defence intends to terminate your current service contract in
terms of the provisions of the New Service System,
the
Defence Act,
Act
No 42 of 2002 and the General Regulation Chapters III and IV
[when it] expires.’(My insertion.)
Mr Xulu was afforded
an opportunity to make representations and did so on 10 December 2010
by way of his own submissions and, thereafter,
on 18 March 2011,
through his attorney. These representations cast light on the two
offences that had been taken into consideration
when the original and
provisional decision had been taken.
[6]
The first offence is described in the
Military Discipline Code as ‘mutiny’. That was a
pretentious title for a relatively
trivial work stoppage arising from
the failure by the SANDF to pay transport costs to certain members of
the force to their homes
away from base. The SANDF’s own
records describe it as being absent without leave. Mr Xulu’s
role, as a representative
of his colleagues, was to convey their
refusal to accept a proposal by a senior officer to resolve the
dispute. His own participation
was limited and the stoppage was
short-lived. Mr Xulu was dealt with informally and had R75 deducted
from his salary. He was thereafter
permitted to complete his basic
training. This occurred in 1997, a year after he joined the SANDF,
and it did not provide a bar
to the extension of his contract in
1998, 2000 or 2006.
[7]
The second offence occurred in 2001 when Mr
Xulu was to be deployed to Durban from his base in Mthatha.
Apparently he was called
upon at short notice and unexpectedly to
draw his unloaded weapon and place it on board a bus being used to
transport members to
Durban. He had been off duty at his
accommodation outside the base when the order came and had been
drinking. A senior officer
noticed this and he was charged with being
unfit to perform his duties. He was sentenced to a reprimand.
Notwithstanding this additional
offence his contract was extended on
6 June 2006.
[8]
From 2006 until November 2010 Mr Xulu’s
military career appears to have blossomed and he may well have
entertained ideas of
promotion. He attended and performed well on
several courses, one of which was described as being for servicemen
seeking promotion
to the rank of a junior non-commissioned officer.
This latter course was undertaken from 31 May to 26 November
2010.
[9]
Mr Xulu’s commanding officer,
Lieutenant Colonel Oss, fully supported the extension of his
contract. He wrote in his report
to the Review Board that ultimately
made the decision that:
‘
-
Member proved himself a future leader and an asset of DOD. There are
projects in the unit which members must complete.
- He just
completed the JIN LP and he [has] done exceptionally well. See the
attached confidential report from Infantry School.
- There was no
incident or offence reported about the member for the past 10 year …
I fully recommend that the member’s
contract to be renewed
since it won’t be a mistake.
- The
member will soon be appointed as Section 2IC
[1]
and bulk store man.’
The unit personnel
officer said that he had no objection to Lieutenant Colonel Oss’s
recommendation.
[10]
Mr Xulu’s attorney’s letter was
sent on 18 March 2011 and received a response on 29 April 2011. The
reply incorrectly
claimed that Mr Xulu had not responded timeously to
the notice letter and went on as follows:
‘
Despite
the fact that the member had previous disciplinary offences as
mentioned in our letter dated 26/11/2009, it remains the
GOC Infantry
Fmn
[2]
prerogative to renew the member’s contract or not. It must
further be noted that there is no clause or agreement that is
entered
into with the member that his contract is renewable after every 5
year term of its expiry.’
[11]
T
he letter correctly stated that the terms
of Mr Xulu’s contract did not provide for an automatic
extension on its expiry.
That emerged from his service agreement
which provided that:
‘
A
member shall be informed at least 18 months prior to the lapsing of
his/her CSS
[3]
contract of the intention of the SANDF to offer a subsequent
employment contract or not. For Enlisted Personnel a three months’
notice period applies.
There is
no obligation on the DOD to offer a subsequent contract when the said
period of employment lapses.’
[12]
While under no obligation to offer an
extension of the contract the quoted provision indicated that the
SANDF would engage in a
process in which it would consider whether to
offer such a contract and would do so at least 18 months before the
existing contract
was due to expire. Lieutenant General Nkabinde, who
deposed to the answering affidavit on behalf of the SANDF, denied
that 18 months’
notice had to be given and claimed that the
required period was eight months. He was relying on a policy document
to which I will
revert in due course, but this was inconsistent with
the service conditions attached to Mr Xulu’s contract letter in
2005,
which said that 18 months’ notice would be given of the
SANDF’s intentions in regard to renewal. This undertaking was
not followed as Mr Xulu was only informed of the fact that the SANDF
did not intend to extend his contract at the end of November
or early
December 2010. Somewhat deceptively, the letter advising him of the
SANDF’s intentions was dated 26 November 2009.
There was no
explanation of how this occurred.
[13]
Apart from the problem with the dates and
the statement that Mr Xulu had not made timeous representations, the
letter of 29 April
2011 again referred to the two disciplinary
offences already described. There was also a suggestion that the GOC
Infantry Fmn had
a ‘prerogative’ whether or not to extend
a contract, but the affidavits on behalf of the SANDF do not suggest
that
Mr Xulu’s contract was not extended in the exercise of the
claimed prerogative and counsel accepted that the reason lay in
the
two disciplinary offences.
[14]
It transpired from the review record
delivered on behalf of the SANDF that the decision not to extend Mr
Xulu’s contract was
taken on 17 January 2011 at a meeting of
the Infantry Formation Review Board for the Non-Renewal of CSS
Contracts. Major General
Nkabinde (as he then was) chaired that
meeting and the other participants were two members of his human
resources support team,
Colonel Fongoqa and Major Joki, and
Lieutenant Colonel Maungwa, who was described as being from legal
services. According to the
minutes, the secretary read the
representations by each of the thirteen members, the non-renewal of
whose contracts were under
consideration at that meeting, and the
Board ‘took note of the generic reasons provided by the members
… as well as
the fact that they have rehabilitated from the
conduct as presented against them’. Presumably in the case of
Mr Xulu the
latter was a reference to the two offences referred to in
the original letter. That is reinforced by the following paragraph of
the minutes:
‘
After
thorough deliberations the board felt that these members did not
advance sufficient arguments instead of their socio-economic
conditions which they failed to consider when committing these
offences.’
The Board concluded
that none of the ten individuals whose cases they were considering
should have their contracts renewed and a
week later, on 26 January
2011, gave authority to terminate Mr Xulu’s services.
[15]
Lieutenant General Nkabinde, was
subsequently promoted and was the head of human resources of the
SANDF when he deposed to the answering
affidavit on behalf of the
SANDF. He said that his two subordinates, Colonel Fongoqa and Major
Joki, had noticed, during their
inspection of various contracts that
had come up for renewal, that Mr Xulu’s had previously been
renewed, despite his convictions.
This caused Lieutenant General
Nkabinde to instruct them to review all similar cases meticulously
and bring them to the attention
of the Review Board. He had not been
a member of the Review Board in 2006 and claimed that had he been he
would not have renewed
Mr Xulu’s contract. He described the
previous decisions to renew Mr Xulu’s contract as ‘flawed’
and incorrect.
It is apparent that his focus throughout was on these
offences.
[16]
While Lieutenant General Nkabinde did not
say that the Board disregarded the views of Lieutenant Colonel Oss,
he said that he had
not worked with Mr Xulu for six months prior to
his submissions and that the report from Mr Xulu’s commanding
officer should
have come from a Colonel Ngcobo. There was no
explanation for the absence of a report from Colonel Ngcobo, although
Lieutenant
General Nkabinde acknowledged that under ordinary
circumstances an application for non-renewal would come from the
member’s
commanding officer.
[17]
Lieutenant General Nkabinde also claimed
that Mr Xulu had been convicted of further offences after 2006, but
the convictions reflected
in the records to which he referred
occurred in March 2011 after the decision not to renew Mr Xulu’s
contract had been taken.
At most the Board could have been aware that
he was facing certain charges as the alleged offences had arisen in
February 2009
and February 2010 respectively. There is, however,
nothing in the Board’s record of proceedings to suggest that it
had any
regard to these offences. The records show that the first one
attracted a reprimand and the second an unspecified period of
detention,
although Mr Xulu said he was fined R1500. His contract
terminated before he could appeal.
The legislative and
regulatory background
[18]
The governing statute is the Defence Act 42
of 2002 (the Act). It provides in s 11
(a)
that the SANDF, constituted in terms of
s 224(1) of the Interim Constitution (now s 200 of the
Constitution), consists of the
Regular Force, the members of which
serve full-time until they reach the age of retirement or their
contracted term of service
expires or until they are discharged, and
the Reserve Force. The members of the Regular Force may serve in a
permanent or a temporary
capacity in accordance with prescribed terms
and conditions of service, as well as prescribed conditions and
procedures regarding
enrolment, contract, promotion and transfer
(s 52(2)).
[19]
Members of the Regular Force are enrolled
as such, ‘enrol’ being defined in s 1 of the Act as
meaning ‘to
accept and record the attestation of any person as
a member of the Regular Force’. This appears to be something
different
from concluding a contract of employment, as the definition
of ‘employee’ in the Act does not encompass members of
the Regular Force or members of the Reserve Force.
[4]
This caused O’Regan J in
SANDU
(1)
[5]
to say that they do not enter into a contract of employment as
ordinarily understood, but nonetheless their enrolment as members
of
the SANDF carries with it legal consequences. Although their
relationship with the SANDF is unusual and not identical to an
ordinary employment relationship they are nonetheless workers and
entitled to the constitutional protection that workers enjoy
under
s 23 of the Constitution.
[6]
[20]
At the expiry of his previous fixed term
period of service in the SANDF in June 2006, Mr Xulu was re-appointed
for the period from
29 July 2006 to 31 July 2011. The contract
was made under s 52(1) of the Act. The letter of appointment
attached a service
contract that Mr Xulu signed and that said it was
in accordance with the prescribed conditions of service of the SANDF.
[21]
Some of the provisions of the contract are
relevant for present purposes. It said that the member’s
service ‘is terminated’
on the lapsing of the contract in
terms of the Act.
[7]
The reference to the Act was a reference to s 59(1)
(b)
,
which provides for a member’s service to be terminated on the
termination of any fixed term contract or the expiry of any
extended
period of such contract. Clause 1 said that the member should be
informed ‘at least 18 months prior to the lapsing
of his/her
CSS contract of the intention of the SANDF to offer a subsequent
employment contract or not.’ It recorded that
there was no
obligation on the Department of Defence to offer such a contract.
Where a service contract expired the member would
be entitled to the
benefit of what were called Mobility Exit Mechanism and Labour Market
Entry Enablement, both being aimed apparently
at facilitating the
member’s transition to civilian life.
[22]
The last relevant document is a publication
by the Human Resources Division of the Department of Defence (‘the
Policy’)
entitled
‘
Process
and Procedures for the Management of the Separation of Officials from
the Department of Defence (DOD).’
The Policy was issued on 27
January 2010 under the joint names of the Acting Secretary of Defence
and General Ngwenya, the Chief
of the SANDF, having been approved by
the Defence Policy Board. The foreword records that it was published
under the authority
of an earlier Department of Defence Instruction
and goes on to say that it:
‘…
must
be implemented in conjunction with instructions prescribed therein,
This
publication describes the process and procedures to be followed when
officials of the Department of Defence (DOD) separate
(terminate
service) from the Department of Defence.
This
publication must be implemented by the Chiefs of the Services and
Divisions down to the applicable levels of command and management.’
The stated aim of the
Policy
[8]
was to prescribe the administrative process and procedures for the
management of separation of officials
[9]
from the DOD within budget provision.
[23]
The Policy dealt comprehensively with the
various circumstances in which a member of the SANDF might cease to
be such. Thus it covered
compulsory and early retirement,
resignations, and various situations in which a member could be
discharged, such as medical reasons,
administrative discharge,
discharge by virtue of being sentenced to imprisonment or the
sentence confirmed by a court of military
appeals, cancellation of
the commission of an officer and absence without permission.
[24]
In the midst of these provisions, clause 17
of the Policy dealt with ‘Expiry or Non-Renewal of Fixed Term
Contracts’
commencing with the following:
‘
Whenever
the need exists for the non-renewal of a fixed term contract of a
member, the following administrative actions must be
effected:
a.
Members must receive letters to remind them of the expiry of their
fixed term
contracts by the last day of the eighth-month prior to the
month in which the contracts expire.
b.
The Officer Commanding of a member must submit an application for the
non-renewal
of the fixed term contract to the respective Career
Manager.
c.
In the application, the Officer Commanding must substantiate the
reason for the
non-renewal of the fixed term contract by completing a
report iro the events which have led him or her to the decision to
apply
for the intended non-renewal of the contract.’
The further
provisions of clause 17 provided for the Commanding Officer’s
request to be reviewed by a review board and, once
it had made a
provisional recommendation, for the Commanding Officer to provide the
member with specific reasons for the intended
non-renewal of their
contract as well as the specific measures under which the member’s
contract would be terminated. The
member was then to be allowed ten
days to respond, in accordance with the
audi
alteram partem
rule, before the entire
matter would be referred to higher authority via the Career Manager.
All this was to be done five months
before the existing contract
expired.
[25]
The provisions of the Policy were plainly
intended to satisfy the requirement in clause 3 of Chapter XX of the
General Regulations
to the
Defence Act
[10
]
that members of the SANDF are entitled to fair labour practices, a
conclusion that necessarily followed from
SANDU
(1)
. Whether, like the provisions of
Chapter XX they had statutory force,
[11]
was unclear and counsel were unable to assist us in that regard.
Assuming that they did not have statutory force, they nonetheless
prescribed the procedures that were to be followed before a decision
was taken not to renew a member’s fixed term contract.
These
were described as ‘administrative actions’, which was
consistent with the purpose of the Policy, namely, to prescribe
the
administrative process and procedures to be followed when managing
the separation of officials from the Department of Defence.
Lastly
the Secretary for Defence and the Chief of the SANDF issued it with a
clear instruction that it was to be followed.
The issue
[26]
The provisions of the Policy were not
followed in any material respect in Mr Xulu’s case. I highlight
only the following.
The notice given to Mr Xulu was not given eight
months before the expiry of his contract
[12]
and it went far beyond the permissible provisions of such a notice,
by informing him of the Department of Defence’s intention
not
to renew his contract. No application for non-renewal had been
received from Mr Xulu’s commanding officer. Lieutenant
Colonel
Oss, who clearly understood that he was his commanding officer,
whatever Lieutenant General Nkabinde said in that regard,
and urged
that his contract be renewed. No reason for non-renewal emanating
from Mr Xulu’s commanding officer was presented
and the reasons
given were those of Major General Nkabinde, who had no right to be
involved at that stage under the process prescribed
in clause 17.
[27]
The end result was that someone who had
already determined that his contract should not be renewed considered
Mr Xulu’s representations,
together with his own subordinates.
In substance Major General Nkabinde played the roles of prosecutor,
judge and executioner.
That was flatly contrary to the Policy and an
infringement of Mr Xulu’s right to fair labour practices.
Counsel for the SANDF
did not dispute this. The issue is to determine
its legal consequences.
[28]
In the high court Mr Xulu’s case was
argued on the basis that consideration of the non-renewal of his
contract constituted
administrative action within the meaning of that
expression in s 33 of the Constitution and PAJA.
[13]
Lephoko AJ rejected this contention, holding that the Constitutional
Court had held that employment related decisions do not constitute
administrative action. For this he relied upon the decisions in
Chirwa
[14]
and
Gcaba
.
[15]
[29]
On appeal Mr Xulu relied on both PAJA and
the constitutional principle of legality. The full court held that it
was unnecessary
to decide whether the decision constituted
administrative action as it could, so it held, be resolved by
applying the principle
of legality.
[16]
It held that in disregarding its own policy relating to non-renewal
of fixed term contracts and Mr Xulu’s right to fair labour
practices the SANDF acted contrary to the principle of legality. Its
decision not to renew Mr Xulu’s contract accordingly
fell to be
set aside.
[30]
In this court the SANDF submitted that Mr
Xulu’s application was founded entirely on the refusal to renew
his contract being
administrative action under PAJA. It submitted
that the decision was not taken in the exercise of public power under
a statute,
but was a contractual decision not to renew his contract,
which had the effect under s 59(1)
(b)
of the Act of automatically terminating
his contract. The decision, so the argument proceeded, had no direct,
external legal effect.
Insofar as the principle of legality was
concerned the SANDF submitted that all of the grounds invoked by Mr
Xulu under this head
were grounds of review of administrative action
under PAJA. Therefore the principle of legality was being used to
disguise a PAJA
review of conduct not constituting administrative
action as reviewable on a different basis.
[31]
In their heads of argument counsel for the
SANDF had submitted that departures from the Policy were permissible
provided Mr Xulu’s
situation was fairly considered in the
exercise of the SANDF’s discretion whether to renew it. All
that was required was
substantial compliance with the Policy and any
deviations that had occurred were minor and should be condoned. The
absence of a
recommendation of non-renewal was dismissed on the
grounds that Lieutenant Colonel Oss had not served in that role for
six months
prior to making his recommendation that Mr Xulu’s
should be retained in service. It was submitted that fairness was
ensured
by Lieutenant General Nkabinde sitting on the review board
and applying his mind to the matter.
[32]
This argument was untenable in the light of
the gross departures from the Policy outlined in paragraphs 26 and 27
and was not pursued
in oral argument. Instead counsel submitted that
any claim available to Mr Xulu was a contractual claim, perhaps
sounding in damages
but not one based on the review of the
non-renewal decision.
Administrative action
[33]
PAJA gives effect to the right to just
administrative action in section 33 of the Constitution. It provides
for judicial review
of administrative action. What constitutes
administrative action is the subject of a lengthy and somewhat
convoluted definition,
which was consolidated and abbreviated by
Nugent JA in
Grey’s Marine
,
[17]
in the following terms:
‘
Administrative
action means any decision of an administrative nature made …
under an empowering provision [and] taken …
by an organ of
State, when exercising a power in terms of the Constitution or a
provincial constitution, or exercising a public
power or performing a
public function in terms of any legislation, or [taken by] a natural
or juristic person, other than an organ
of State, when exercising a
public power or performing a public function in terms of an
empowering provision, which adversely affects
the rights of any
person and which has a direct external legal effect …’
[34]
The Constitutional Court,
[18]
citing
Grey’s Marine
with
approval, has broken the definition into seven components, namely
that ‘
there
must be (a) a decision of an administrative nature; (b) by an organ
of State or a natural or juristic person; (c) exercising
a
public power or performing a public function; (d) in terms of any
legislation or an empowering provision; (e) that adversely
affects
rights; (f) that has a direct, external legal effect; and (g) that
does not fall under any of the listed exclusions
.
[35]
The SANDF conceded that the decision not to
renew Mr Xulu’s contract satisfied three of these requirements,
namely that the
decision was one by an organ of state; that it
adversely and directly affected Mr Xulu’s rights and that the
decision did
not fall under any of the enumerated exceptions. I turn
to consider each of the remaining requirements.
[36]
What constitutes a decision of an
administrative nature can be a difficult question and depends upon
the nature of the decision
and whether it is of an administrative
character. The function rather than the functionary is important.
[19]
A number of factors suggest that the decision not to renew Mr Xulu’s
contract was administrative. It related to employment
and involved no
issue of policy. The SANDF repeatedly described the Policy as
involving the taking of administrative steps. These
followed a clear
bureaucratic course. The starting point was that unless the member’s
commanding officer made a request that
the contract not be renewed it
would be renewed automatically. That reflected a policy choice, as
s 59(1)
(d)
of the Act provides for the automatic termination of the contract on
expiry of its fixed term. Once such a request was made a number
of
further steps had to be taken. The non-renewal of the contract would
only occur at the end of this process after all the prescribed
steps
had been taken. This exhibits all the characteristics of an
administrative process leading to an organ of state taking a
decision.
[37]
The subject of the decision was the
non-renewal of the fixed term contract of a member of the Regular
Force. The steps had to be
taken in terms of the Department of
Defence’s Policy in dealing with such matters. The
characteristic of administrative action
identified by Nugent JA in
Grey’s Marine
,
[20]
that it is the conduct of the bureaucracy in the application of
policy, applies in this case.
[21]
A similar decision not to reinstate a member of the SANDF, after his
contract had been terminated by operation of law in consequence
of
his being absent without leave, was held by this Court to amount to
administrative action.
[22]
[38]
The cases relied on by the judge at first
instance to hold that this was not administrative action, namely
Chirwa
and
Gcaba
, are
in my view distinguishable. In
Chirwa
the claimant alleged that she had been
unfairly dismissed, a claim falling within the Labour Relations Act
66 of 1995 (the LRA)
and initially pursued under that Act. The
majority in the Constitutional Court rejected her reformulated claim,
based on the right
to just administrative action. They did so firstly
on jurisdictional grounds that are not relevant in this case. Their
second ground
was that although it involved the exercise of public
power it was not in terms of a statute, but the exercise of a
contractual
right, and therefore not administrative action.
[23]
[39]
What distinguishes this case from
Chirwa
is that the actions of the SANDF were
not taken in terms of the contract under which Mr Xulu was appointed.
The contract made no
provision for its renewal and recorded expressly
that it would terminate in terms of s 59(1)
(b)
of the Act on expiry of the fixed term.
The decision not to renew was one in terms of s 52(2) of the
Act, because it involved
the extension of Mr Xulu’s contract
and hence his further enrolment in the SANDF. It concerned the
procedures relevant to
the enrolment of members of the Regular Force,
read in conjunction with the Policy. While Mr Xulu lost his post as a
member of
the SANDF as a result, this was not because he was
dismissed, but as a result of the application of s 59(1)
(b)
of the Act.
[24]
It was the statutory consequence of his contract not being renewed.
The dispute between the parties is not a dismissal dispute,
but a
dispute in relation to the decision of the SANDF not to extend Mr
Xulu’s contract.
[25]
[40]
Gcaba
is
far closer to the type of issue in the present case. It involved a
police officer who applied for a promotion post, but was not
appointed. The Constitutional Court held that the failure to appoint
him was a quintessential labour issue with little or no direct
consequence for any other citizens.
[26]
On that basis it held that the failure to appoint him was not
administrative action. It said that generally employment and labour
relationship issues do not amount to administrative action within the
meaning of PAJA.
[27]
[41]
By contrast the issue in the present case
is of importance to the citizenry at large, namely the manner in
which people are selected
for enrolment in our armed forces and the
circumstances in which their contracts may be terminated. It cannot
be categorised as
the exercise of a contractual power under a
contract of employment, because that is not the nature of the
contract between a soldier
and the SANDF. Irrespective of the precise
nature of the contract, the decision not to renew it did not involve
an exercise of
contractual power, because no such exercise was
required in the situation. If nothing had been done the contract
would have come
to an end by operation of law. If Mr Xulu had found
more lucrative employment elsewhere, perhaps in the security
industry, he was
perfectly entitled to walk away and there was
nothing the SANDF could do to stop him. His obligation to serve until
discharged
in terms of s 52(3)
(d)
of the Act would have terminated on the
termination date of his fixed term contract, entitling him to his
discharge in the absence
of either of the special circumstances
referred to in s 59(5) of the Act. Unlike
Gcaba
,
which was a dispute over promotion in the context of a contract of
employment, falling within the dispute resolution mechanisms
of the
LRA, this is a non-contractual dispute over the exercise of a
statutory power to extend Mr Xulu’s period of enrolment
in the
SANDF falling outside the LRA.
[42]
Referring in
Chirwa
[28]
to the pre-democracy cases of
Zenzile
[29]
and
Sibiya
,
[30]
Skweyiya J pointed out that the rationale for those judgments, in
which it was held that employment disputes in the public sector
involved exercises of public power, could not be faulted at a time
when public sector workers were not accorded rights under labour
legislation. He said:
‘
In
the absence of such rights being afforded to them there was, in my
view, a judicial duty on the judicial officers to extend protection
to State employees.’
For most employees in
the public service this imperative fell away when the LRA was enacted
bringing them under the umbrella of
the same legislation as employees
in the private sector. But the SANDF is excluded from the operation
of the LRA and the remedies
under the LRA are not available to its
members. In the result, the reasons given in
Gcaba
and
Chirwa
for holding that
Zenzile
and
Sibiya
were
no longer applicable in a dispensation where public and private
sector employees enjoy the same labour rights, are inapplicable
here
and the judicial duty referred to by Skweyiya J remains clamant.
[31]
[43]
I therefore hold that the Policy was
correct to describe as administrative the steps it prescribed to be
taken when considering
the non-renewal of the fixed term contract of
a member of the SANDF. The decision not to renew was a decision of an
administrative
nature. The court of first instance was wrong in
holding that it was not.
[44]
Turning to the remaining requirements for
the decision not to renew Mr Xulu’s contract to constitute
administrative action,
the analysis already undertaken of the source
of the power to renew, or decide not to renew, fixed term contracts,
demonstrates
that it is a public power sourced in the Act. That
conclusion is reinforced by the SANDF’s obligation to give
effect to the
soldier’s constitutional and statutory right to
fair labour practices. The Policy was designed to give effect to
these rights
and to set out the manner in which the public power was
to be exercised.
[45]
The final question is whether the exercise
of the power in this case, by way of the decision not to renew Mr
Xulu’s contract,
had direct, external legal effect. Here there
is a large measure of overlap with the admitted impact on his rights.
The decision
meant that he became unemployed and lost the benefits to
which he was entitled to as a member of the SANDF, including
membership
of the group life insurance scheme and pension fund.
Whatever the precise scope of this requirement may be, it is in my
view satisfied
for reasons similar to those advanced by the
Constitutional Court in
Joseph
.
[32]
[46]
I accordingly conclude that the decision
not to renew Mr Xulu’s fixed term contract as a member of the
SANDF constituted administrative
action. It was therefore subject to
review in terms of s 6 of PAJA.
The principle of
legality
[47]
Before dealing with the relevant grounds of
review it must be said that the approach of the full court, in
avoiding the question
whether this was a case of administrative
action and disposing of it on the basis of the principle of legality,
was in principle
incorrect and one to be discouraged. The right to
just administrative action is the primary source of the power of
courts to review
the actions of the executive and the administration.
The Constitution required legislation to be enacted to provide for
this and
PAJA is the result. It is specific, although not necessarily
simple, in its provisions and prescribes procedures that must be
followed
in pursuing judicial review, while vesting rights in people
dealing with the administration, such as the right to reasons. It
imposes
significant limitations in regard to the requirement to
exhaust internal remedies and in regard to the time within which
review
proceedings must be brought. Litigants and courts should not
circumvent these by proceeding directly to questions of legality. If
action by the executive and administration is administrative action,
then the jurisprudence of the Constitutional Court is clear
in saying
that this is the path that the litigation must follow.
[33]
[48]
The role of the principle of legality as
developed and explained by the Constitutional Court in
Pharmaceutical
Manufacturers
[34]
is
to provide a control over exercises of public power that do not
constitute administrative action. In that case the court was
concerned with the issue of a proclamation by the President bringing
certain legislation into force without the promulgation of
the
schedules necessary to render it operative, thereby removing any
regulation from the distribution of pharmaceutical and other
drugs in
South Africa. The Court held that the President’s decision was
executive rather than administrative action. It applied
the principle
of legality and its requirement of rationality as a threshold
requirement for action falling outside the ambit of
administrative
action.
[35]
As had been the case in
Fedsure
,
[36]
it first dealt with whether the case involved administrative action
and only once it had concluded that it did not proceeded to
rationality review under the principle of legality. The scope of
rationality review has broadened somewhat to include rationality
in
both the decision itself and in the process whereby the decision is
taken,
[37]
but this does not justify ignoring PAJA and proceeding directly to a
rationality review under the principle of legality.
[38]
[49]
In
Albutt
[39]
the Constitutional Court held that it was not necessary to consider
whether the action of the President in not giving victims a
hearing
before exercising the power of pardon under s 84(2)
(j)
of the Constitution constituted
administrative action under PAJA. However, that was a very special
case and Ngcobo CJ said that
there was a substantial measure of doubt
as to whether the exercise of the power of pardon constituted
administrative action. I
share that doubt and point out that the
‘context-specific features of the special dispensation’
apparently dictated
the Court’s approach.
[40]
It provides no warrant for avoiding the question whether a review is
one under PAJA and dealing with it as a legality review.
[41]
[50]
Apparently there may be a species of
judicial review that falls under neither PAJA nor the principle of
legality, but concerns cases
brought on the basis of unconscionable
state conduct that is in breach of constitutional principles of
reliance, accountability
and rationality.
[42]
The scope of these principles is unclear, but they appear to apply
only in certain exceptional cases. In my view they do not justify
a
departure from the general principle that when dealing with the
conduct of the executive and administrative arms of government
the
starting point is whether the conduct in question constitutes
administrative action. If it is, the principle of subsidiarity
demands that it be dealt with under PAJA. If it falls outside PAJA,
then the principle of legality may come into play, bearing
in mind
that this is a threshold requirement and that the concept of
rationality that it invokes is a narrow one, not necessarily
the same
as that applied in a review under s 6(2)(
f)
(ii)
of PAJA. The development of a coherent administrative law demands
that litigants and courts start with PAJA and only when PAJA
does not
apply should they look to the principle of legality and any other
permissible grounds of review lying outside PAJA.
Review of the decision
[51]
Counsel did not seriously contend that the
decision not to renew Mr Xulu’s contract was not vulnerable to
attack under PAJA.
That was a wise approach. From a procedural
perspective the decision-making process in defiance of the SANDF’s
own policy
was unfair. From a substantive perspective it was not a
reasonable decision in the sense of one that a reasonable
decision-maker
could make in the circumstances. It was based solely
on the two old convictions without any investigation of the
circumstances
in which they had occurred, their relative
inconsequentiality and the fact that equally senior officers to Major
General Nkabinde
had not in the past thought them an obstacle to the
extension of Mr Xulu’s contract. In the decision-making process
the strong
recommendation by Lieutenant Colonel Oss was disregarded.
So was Mr Xulu’s record of advancement during the previous five
years and the successful completion of a course that could lead to
his promotion to non-commissioned officer. This was a classic
case of
irrelevant, or only marginally relevant, considerations being taken
into account and all the relevant considerations being
discounted or
ignored completely.
[52]
It is unnecessary to go further and
consider any other possible grounds of review in terms of s 6(2)
of PAJA. Those set out
above suffice for the decision not to renew Mr
Xulu’s contract to be set aside. The order of the full court
was therefore
correct although for different reasons. Some
consideration must, however, be given to the relief that it granted.
Relief
[53]
The order granted by the full court reads:
‘
1
The appeal is upheld.
2
The respondents’ decision not to renew the appellant’s
fixed
term contract is declared unlawful and is set aside and is
replaced by the following:
“
The
appellant’s fixed terms contract is extended from 2011 until 30
July 2017 under the same conditions applying to other
members of the
SANDF employed on fixed terms contracts.”
3
The respondents are ordered to pay the costs of the appeal jointly
and severally,
the one paying the other to be absolved, including the
costs for the leave to appeal.’
[54]
Counsel for the SANDF accepted that it
would be desirable to vary this order in certain respects with a view
to finalising the dispute
as soon as possible. Although there was no
cross appeal, he accepted that para 1 of the order needed to be
amended to deal with
the costs in the high court, while preserving
two costs orders already made in favour of Mr Xulu relating to
certain reserved costs.
The easiest way in which to do this is to add
words to para 1 of the full court’s order so that it reads:
‘
The
appeal is upheld with costs and paragraphs 2 and 5 of the high
court’s order are set aside.’
[55]
30 July 2017 has come and gone thereby
rendering para 2 of the full court’s order one with purely
financial consequences.
In those circumstances it was accepted that
it should rest undisturbed, whatever criticisms might otherwise have
been addressed
to it. We were asked to make an order further
extending it but that is inappropriate in view of the absence of a
cross appeal and
the absence of any information concerning Mr Xulu’s
fitness to return to duty as a soldier and the SANDF’s need for
his services. Instead this court should exercise its powers, in terms
of
s 19
(d)
of
the
Superior Courts Act 10 of 2013
, to render ‘any decision
that the circumstances require’, and make an order that
addresses any further claims Mr Xulu
may have as a result of the
elapse of the period provided by the full court and the fact that he
will not be returning to the SANDF.
In my view the need for this is
met by our granting the following order:
‘
The
Respondents are ordered jointly and severally to compensate the
Applicant for such further losses as he may have incurred as
a result
of his fixed term contract not having been renewed in 2011, the
amount of such losses to be agreed between the parties
within 30 days
of the date of this order, failing which they are to be determined
summarily on the written representations of the
parties by an arbiter
chosen by them or, in the absence of agreement, appointed by the
Chair for the time being of the Pretoria
Bar.’
[56]
There is no need to alter para 3 of the
full court’s order dealing with the costs of the appeal in that
court.
[57]
I grant the following order:
1
Special leave to appeal is granted.
2
Paragraph 1 of the order of the full court
is amended to read:
‘
The appeal is
upheld with costs and paragraphs 2 and 5 of the high court’s
order are set aside’.
3
The appeal is otherwise dismissed with
costs.
4
Respondents are ordered jointly and
severally to compensate the Applicant for such further losses as he
may have incurred as a result
of his fixed term contract not having
been renewed in 2011, the amount of such losses to be agreed between
the parties within 30
days of the date of this order, failing which
they are to be determined summarily on the written representations of
the parties
by an arbiter chosen by them or, in the absence of
agreement, appointed by the Chair for the time being of the Pretoria
Bar.
_____________________________
M J D WALLIS
JUDGE OF APPEAL
Appearances
For appellant:
G T Avvakoumides (with him L Harilal)
Instructed by:
Mokuena Attorneys, Midrand
McIntyre Van der Post, Bloemfontein
For respondent:
G L van der Westhuizen
Instructed by:
Viren Singh & Co, Durban
Mthembu, Van Niekerk Inc, Bloemfontein.
[1]
An abbreviation for second in command.
[2]
An abbreviation for General Officer Commanding
Infantry Formation.
[3]
An abbreviation for Core Service System.
[4]
It reads: ‘”
employee”
means a person appointed to the
Department in terms of the Public Service Act, 1994 … or any
person regarded as having
been appointed to the Defence Secretariat
in terms of section 6(4).’
[5]
South African National Defence Union v
Minister of Defence and Another (SANDU 1)
[1999]
ZACC 7
;
1999 (4) SA 469
(CC) para
22. That statement was made in respect of the position u
nder
the Defence Act 44 of 1957 but the position under the present Act
does not appear to be any different.
[6]
SANDU (1)
para
27.
[7]
There is also a reference in the letter to
General Regulations Chapters III and IV, but it
is unclear whether these are still in force and no-one suggested
that they had
any bearing on the case.
[8]
Clause 3, vol 2, p 277.
[9]
The definitions made it clear that ‘officials’
included members employed in terms of the Defence Act and the word
‘member’ in relation to the Defence Force meant any
officer and any other rank. (Clauses 4 d and e.)
[10]
Chapter XX was originally introduced by GNR 998
of 20 August 1999 (Government Gazette 201376), but rapidly replaced
by GNR 1043
of 1 September 1999 (Government Gazette 20425).
[11]
South African National Defence Union v Minister of Defence and
others
[2007] ZACC 10
;
2007 (5) SA 400
(CC) para 51.
[12]
I leave aside for the present that the conditions
attached to his letter of contract provided for 18 months’
notice of an
intention to renew or not to renew.
[13]
The
Promotion of Administrative Justice Act 3 of
2000
.
[14]
Chirwa v Transnet Ltd and others
[2007]
ZACC 23
;
2008 (4) SA 367
(CC) para 139.
[15]
Gcaba v Minister of Safety and Security
[2009]
ZACC 66
;
2010 (1) SA 238
(CC) para 64.
[16]
President of the Republic of South Africa and
Others v South African Rugby Football Union and Others
[1999]
ZACC 11
;
2000 (1) SA 1
(CC)
(SARFU)
paras 147 and 148;
Pharmaceutical
Manufacturers Association of South Africa and Another: In re Ex
Parte President of the Republic of South Africa
and Others
(Pharmaceutical Manufacturers)
[2000]
ZACC 1
;
2000 (2) SA 674
(CC) paras 85-86.
[17]
Grey’s Marine Hout Bay (Pty) Ltd &
others v Minister of Public Works & others (Grey’s Marine)
[2005] ZASCA 43
;
2005 (6) SA 313
(SCA)
para 21.
[18]
Minister of Defence and Military Veterans v
Motau & others
[2014] ZACC 18
;
2014 (5) SA 69
(CC) (
Motau
)
para 33.
[19]
SARFU
para 141.
[20]
Grey’s Marine
para
24.
[21]
See also
Permanent
Secretary, Department of Education and Welfare, Eastern Cape and
Another v Ed-U-College
(Section 21)
(PE) Inc
[2000]
ZACC 23
;
2001 (2) SA 1
(CC) paras 18 to 21.
[22]
Minister of Defence and Military Veterans and
Another v Mamasedi
[2017] ZASCA 157
;
2018 (2) SA 305
(SCA) para 15.
[23]
See the judgment of Ngcobo J in
Chirwa
para 142 and the majority judgment of
Skweyiya J at para 73. The minority judgment of Langa CJ held that
her dismissal was the
exercise of a contractual right not involving
the exercise of a public power and therefore not administrative
action.
[24]
A dismissal occurring by operation of law does
not involve a decision and is not administrative action:
Phenithi
v Minister of Education and Others
[2005]
ZASCA 130
;
2008 (1) SA 420
(SCA). That judgment is unaffected by the
decision in
Grootboom v National
Prosecuting Authority and Another
[2013]
ZACC 37
;
2014 (2) SA 68
(CC) where the court held that the appellant
had not in fact absented himself and hence did not come within the
provision that
such absence could by operation of law terminate his
employment.
[25]
The distinction between the termination of the
contract by operation of law and the decision not to extend the
contract is similar
to the distinction drawn in
Mamsedi
fn 42
supra
between a termination by operation of
law and a decision not to reinstate the member.
[26]
Gcaba
para
66. For a criticism of the grounds of the decision see Cora Hoexter
Administrative Law in South Africa
(2ed, 2011) pp 214 to 218.
[27]
Gcaba
para 64.
This was taken one step further in
National
Director of Public Prosecutions and Another v Tshavhungwa and
Another; Tshavhungwa v National Director of Public Prosecutions
and
Others
[2009] ZASCA 136
;
2011 (1) SA
141
(SCA) para 22, where it was said:
‘
Gcaba
makes
it clear that the dismissal of an employee in the public sphere does
not constitute “administrative action”
….’
[28]
Chirwa
para
39.
[29]
Administrator, Transvaal and Others v Zenzile
and Others
1991 (1) SA 21 (A).
[30]
Administrator, Natal and Another v Sibiya and
Another
1992 (4) SA 532 (A).
[31]
Cora Hoexter
op cit
211 says that these decisions have
lost their force. That may not be correct, at least not entirely.
[32]
Joseph and Others v City of Johannesburg and
Others
[2009] ZACC 30
;
2010 (4) SA 55
(CC) para 27.
[33]
Bato Star Fishing (Pty) Ltd v Minister of
Environmental Affairs and Tourism and Others
[2004]
ZACC 11
;
2004 (4) SA 490
(CC) para 25;
Minister
of Health and Another v New Clicks South Africa (Pty) Ltd
[2005]
ZACC14;
2006 (2) SA 311
(CC) para 95 (per Chaskalson CJ) and paras
436 and 437 (per Ngcobo J).
[34]
Pharamceutical Manufacturers
fn
34
supra
.
[35]
Cora Hoexter
op cit
p124 describes it as a safety
net.
[36]
Fedsure Life Assurance Ltd and Others v
Greater Johannesburg Transitional Metropolitan Council and Others
[1998] ZACC 17; 1999 (1) SA 374 (CC).
[37]
Democratic Alliance v President of South
Africa and Others
[2012] ZACC 24
;
2013
(1) SA 248
(CC) paras 33 to 37.
[38]
For a forceful criticism see Cora Hoexter
op
cit
pp131-137 and her article ‘The
enforcement of an official promise: Form, substance and the
Constitutional Court’
(2015) 132
SALJ
207
at 218-221. The criticisms are
referred to by the Constitutional Court in
Pretorius
and Another v Transnet Pension Fund and Another (Pretorius)
[2018]
ZACC 10
para 37.
[39]
Albutt v Centre for the Study of Violence and
Reconciliation and Others
[2010] ZACC
4
;
2010 (3) SA 293
(CC) paras 80-82.
[40]
Ibid
para
81.
[41]
The jurisprudence of this Court likewise does not
support that approach. Both
Minister of
Home Affairs and others v Scalabrini Centre, Cape Town and Others
[2013] ZASCA 134
;
2013 (6) SA 421
(SCA) and
Judicial Service Commission
and Another v Cape Bar Council and Another
[2012]
ZASCA 115
;
2013 (1) SA 170
(SCA) were decided on the footing that
the action under review was not administrative action and not
reviewable under PAJA. In
those circumstances this Court dealt with
both of them under the principle of legality.
[42]
Pretorius ibid
paras
33 to 36. The foundation for such a ground of review is the judgment
in
KwaZulu-Natal Joint Liaison
Committee v MEC for Education, KwaZulu-Natal
[2013]
ZACC 10
;
2013 (4) SA 262
(CC) where a claim pleaded and argued on
contractual grounds was upheld on public law and regulatory grounds.