THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Case no: A2025-172473
In the matter between:
NAIDOO, DR DHANASAGRAM Appellant
and
TSHWANE UNIVERSITY OF TECHNOLOGY First Respondent
BREEDT, A N.O. Second Respondent
COMMISSION FOR CONCILIATION,
MEDIATION AND ARBITRATION Third Respondent
Heard: 25 August 2026
Delivered: 27 August 2026
Coram: Molahlehi JP, Mahalelo ADJP et Van Niekerk JA
JUDGMENT
VAN NIEKERK, JA
(1) Reportable: No
(2) Of interest to other Judges: Yes
(3) Revised
____________ ______________
Signature Date
2
Introduction
[1] On 6 June 2022, the first respondent, the Tshwane University of Technology
(TUT), advised the appellant, Dr. Dhanasagran Naidoo (Naidoo), that his five -
year fixed-term contract, under which he was employed by TUT from 1 July 2017
to 30 June 2022, would not be renewed. Naidoo referred a dispute to the
Commission for Conciliation, Mediation and Arbitration (CCMA), contending that
TUT’s failure to renew his contract constituted a dismissal as defined by section
186(1)(b)(i) of the Labour Relations Act, 66 of 1995 (LRA), and that the dismissal
was unfair. The second respondent (the commissioner) ruled that Naidoo had
been dismissed, that his dismissal was unfair, and that TUT should pay him
compensation of R1 467 657.29. On review, the Labour Court reversed the
commissioner’s award and held that Naidoo had failed to establish the existence
of a dismissal. The Court granted leave to appeal, raising the crisp question of
whether Naidoo had discharged the onus of establishing that he had a
reasonable expectation that his fixed-term contract would be renewed.
Factual background
[2] The material facts are not disputed. Naidoo was employed by TUT as an
executive director: institutional effectiveness and technology, under a five- year
fixed-term contract that ran from 1 July 2017 to 30 June 2022. Clause 4 of the
contract read as follows:
‘4.1 This contract will commence on 1 July 2017 and will, subject to 4.4 below,
terminate automatically through effluxion of time on 30 June 2022.
4.2 As this is a fixed-period contract, there shall be no expectations, rights or
claims by the employee in regard to renewal or extension.
4.3 It is specifically agreed and recorded that as this contract terminates
through effluxion of time, termination will therefore not constitute a
dismissal.’
3
[3] Clause 3.4 of the contract also warrants mention. In that clause, the parties
agreed:
‘3.4 At the end of the five-year term, the employee will be appointed to another
management/academic position in line with his qualifications, skills, and
experience, at a remuneration package commensurate with the post level
of the position and in accordance with all existing and future policies of the
University and any applicable legislation.’
[4] On 30 September 2021, clause 4.1 of the contract was amended to add the
following wording, reflected in the underlined portion below:
‘4.1 This contract will commence on one July 2017 and will, subject to 4.4
below, terminate automatically through effluxion of time on 30 June 2022
renewable for a further term of five years subject to satisfactory
performance.
[5] Clauses 4.2 and 4.3 of the contract remained unamended. The insertion of what
was termed the ‘renewal clause’ into clause 4.1 resulted from a decision by the
executive committee of the TUT council, made in November 2016, to include
such clauses in the fixed- term contracts of its senior management, subject to
satisfactory performance, as a means of retaining senior staff and maintaining
continuity in TUT’s operations.
[6] It is undisputed that, during the term of his fixed- term contract, Naidoo’s
performance was exemplary. The pre- arbitration minute records, as a common
cause fact, that Naidoo ‘excelled in his key performance areas’. It is also not
disputed that, until 2021, the period immediately preceding the contract's
termination date, Naidoo’s performance was evaluated by Prof van Staden (Van
Staden), his immediate supervisor. After 1 January 2022, when Prof Twala
(Twala) succeeded Van Staden following the latter’s reti rement, Naidoo's
performance was not evaluated.
4
[7] On 9 March 2022, Naidoo addressed a letter to his new immediate supervisor,
Twala, notifying him of the impending termination of his contract, recording that
he had performed well, and requesting renewal of the contract. The
correspondence that followed between Naidoo and Twala reveals a fraught
relationship between the two, and culminated in Twala’s communication to
Naidoo on 6 June 2022 confirming that the TUT would not renew the fixed- term
contract but would extend it by two months (ending on 31 August 2022) to
facilitate a handover of Naidoo’s duties. Twala gave evidence that, upon
assuming his appointment on 1 January 2022, he concluded that he should
restructure the division he headed because of duplication of work or phase out
Naidoo’s position. He opted for the latter when he noted that Naidoo’s fixed-term
contract expired later in the year. His interpretation of clause 4.1 of the contract
was that, provided Naidoo’s performance was satisfactory, TUT could consider
renewal of the contract, but there was no obligation on TUT to renew the
contract. Twala conceded that he had not consulted Naidoo about his intention
not to renew his fixed-term contract.
[8] [8] Naidoo considered that the refusal to renew his contract constituted a
dismissal under section 186(1)(b) of the Labour Relations Act (LRA) and that the
dismissal was unfair. The dispute was referred to arbitration before the
commisssioner.
The arbitration award
[9] In an award extending to some 45 pages, the commissioner summarised the
evidence of Naidoo, Ms. Mokuele, TUT’s executive director: human resources
and transformation, and V an Staden, the former vice -chancellor and principal of
TUT, all of whom testified in support of Naidoo, and Twala, the single witness for
TUT. In particular, the commissioner noted Van Staden’s testimony that Naidoo
was an excellent performer and that the wording of clause 4.1 of the contract was
was an excellent performer and that the wording of clause 4.1 of the contract was
intended to afford a measure of job security for senior staff who performed well ,
and to ensure continuity in TUT’s operations. Mokuele, executive director for
5
human resources and t ransformation, supported Van Staden’s account, stating
that the renewal clause required no interpretation because of its clarity. Renewal
was not automatic, but clearly contingent upon performance. Following the
executive committee’s approval, this clause became standard practice in similar
contracts.
[10] The commissioner found that TUT’s council included a renewal provision in
senior managers’ fixed- term contracts to retain top -level talent and ensure
institutional continuity. This renewal option was intended to be applied once only.
On 21 September 2021, Naidoo received the document entitled “Correction of
Terms of Contract of Employment”, which formally included the renewal clause.
The updated clause stated the contract “... was renewable for a further term of 5
years subject to satisfactory performance”. The clause became an integral term
of Naidoo’s employment and reasonably led him to expect that the contract
would be renewed, particularly given his history of excellent performance
reviews. The renewal clause aligned with what Naidoo was told during his
interview: that the five- year contract would be extended for another five years,
provided his performance met expectations. The commissioner found further that
Naidoo had consistently demonstrated excellent performance, which was never
challenged. According to Van Staden, his performance was exceptional, and had
he (Van Staden) remained in charge, he would have renewed the contract.
[11] The commissioner held further that clause 3.4 of the employment contract (which
provided that upon expiry of the five- year term, Naidoo would be appointed to
another suitable management or academic role) further strengthened the
expectation of continued employment. When he was asked if Dr Naidoo still had
a role at the institution, the vice-chancellor, Professor Maluleke, reportedly said,
“that is a no-brainer”.
[12] The arbitrator held that Naidoo had met all of his responsibilities relating to the
[12] The arbitrator held that Naidoo had met all of his responsibilities relating to the
renewal of his contract , including initiating timely correspondence with Twala
regarding contract renewal. He had arranged a face- to-face meeting, which was
6
neither honoured nor officially cancelled by Twala. When no clarity was
forthcoming, Naidoo took the issue to the vice -chancellor, prof. Maluleke, to
express his concerns about the process. The fact that Twala failed to respond,
effectively leaving Naidoo in a state of uncertainty until 3 June 2022, did not
invalidate the legitimate expectation arising from the renewal clause.
[13] The commissioner concluded that the most plausible explanation was that Twala
acted on his own, without proper authority or full understanding, when he had
informed Naidoo that his contract had ended through effluxion of time, ignoring
the binding implications of the renewal clause. It appear ed that no consideration
was given to the legal protections provided by fair labour practices.
[14] The commissioner concluded that the most probable inference was that Twala
made a unilateral and uninformed decision to notify Naidoo that his contract had
expired by the effluxion of time, without proper consideration of the ‘renewable
clause’. The commissioner acknowledged that the provisions of clauses 4.2 and
4.3 of the contract, recording that there was no right of renewal, did not, in
themselves, preclude the creation of a reasonable expectation of renewal . As to
the credibility of the witnesses, the commissioner found that Van Staden, in
particular, was a frank, eloquent, and honest witness, and that, on a balance of
probabilities, Naidoo had adduced sufficient evidence to establish that he had a
reasonable expectation of renewal of his contract on the same terms. Further,
TUT had failed to establish that Naidoo’s dismissal was fair. If there were
genuine operational requirements that militated against the renewal of Naidoo’s
contract, it remained open to TUT to follow the relevant statutory process.
[15] The commissioner’s award finds that TUT’s failure to renew Naidoo’s fixed-term
contract constituted a dismissal and ordered that he be reinstated by no later
contract constituted a dismissal and ordered that he be reinstated by no later
than 12 March 2023, with payment of back pay in the sum of R1 467 657.29.
The Labour Court
7
[16] TUT sought to review the award on the basis that the arbitrator had committed
gross irregularities in the conduct of the arbitration proceedings and engaged in
misconduct in relation to her duties as an arbitrator.
[17] There was some debate before the Labour Court about the appropriate standard
of review. The Court (correctly) observed that the pleadings should be examined
for their substantive content rather than their form, and that the grounds for
review extended to the correctness of the arbitrator’s decision. After referring to
this Court’s decision in Jonsson Uniform Solutions (Pty) Ltd v Brown and
Others,
1 the Labour Court recorded that the core question on review was
whether, on the evidence, the arbitrator had correctly concluded that Naidoo had
established a dismissal under section 185(1)(b) of the LRA. The Court then
stated:
‘
In the context of this matter, Dr Naidoo relies on the corrected clause 4.1 and the
evidence of Professor van Staden to support his case that he had reasonably
expected his contract to be renewed for another period of 5 years, whilst clause
4.2 of the contract remained unchanged that:
‘4.2 As this is a fixed-period contract, there shall be no expectations, rights or
claims by the employee in regard to renewal or expectation.’
[18] From that premise, while noting that in terms of the applicable authorities a
contractual term to this effect did not preclude a finding of a reasonable
expectation of renewal of the contract, the Labour Court concluded that the
commissioner’s decision was incorrect. The Court’s reasoning is based on the
following:
‘25.1 There is a dispute as to whether the fixed-term contract of Dr Naidoo was
automatic or was going to be renewed based on clause 4.1, the suspension
of the condition of satisfactory performance.
25.2 Dr Naidoo sought to rely on clause 4.1, and the evidence of Professor Van
Staden and their interpretation of clause 4.1 that he had a reasonable
1 [2014] ZALAC 709 (13 February 2014).
8
expectation that his fixed -term contract would be renewed; whilst replying
(sic) on the contract, he states that the position still exists.
25.3 There is a dispute whether the contract provides for further expectation in
that at the end of the five-year term then Dr. Naidoo will be appointed to
another position.
25.4 According to the applicant, clause 4 does not mean that the contract will be
automatically renewed, as it was a fixed-term contract, it came to lapse
through the effluxion of time.
25.5 In my view, even if clause 4.1 that the contract of Dr Naidoo would be
automatically renewed in light of clause 4.2, which clearly states that he
cannot have expectations of his contract to be automatically terminated.
This quagmire can only be resolved through interpretation, which is not the
case herein.
25.6 Furthermore, to the extent that Dr Naidoo sought to rely on the terms of the
contract, that issue raises a different dispute altogether under the
provisions of section 24 of the LRA, as was correctly pointed out on behalf
of TUT. That position will fall short of the jurisdictional fact of section 186
(1)(b) of the LRA.
[26] It follows from the above observations that the only conclusion to be reached
is that it cannot be said in the light of the prevailing facts and circumstances
that Dr Naidoo had placed facts before the commissioner, which when
objectively assessed, could have led to a conclusion that he had a legitimate
expectation that his fixed term contract would be renewed on the same or
similar terms.’
[19] On this basis, t he arbitrator’s award was reviewed and set aside and substituted
with an order dismissing Naidoo’s referral for lack of jurisdiction.
Grounds for appeal
[20] The appellant submits that, among other things, the Labour Court erred by
finding that Naidoo failed to adduce sufficient evidence to establish a reasonable
9
expectation of renewal of his contract, that the renewal clause was not the sole
objective indicator that the employee’s contract would be renewed, and that the
Court failed to consider the totality of the evidence.
Applicable legal principles
[21] The legal principles that apply to the application of section 186(1)(b) of the LRA
are well established. Section 187(1)(b) defines a ‘dismissal’ to include a failure to
renew a fixed- term contract on the same or similar terms when the employee
reasonably expected the employer to renew it. The purpose of including s
186(1)(b) in the LRA was explained by the Labour Court in Biggs v Rand Water
(2003) 24 ILJ 1957 (LC) as follows:
‘
Section 186(b) was included in the LRA to prevent the unfair practice of keeping
an employee in a position on a temporary basis without employment security until
it suits the employer to dismiss such an employee without the unpleasant
obligations imposed on employers by the LRA in respect of permanent
employees.’
[22] Put another way, section 187(1)(b) is intended to prevent the abuse of fixed- term
contracts by repeatedly renewing them in circumstances where the work that is
the subject of the contract is ongoing. While employees such as Naidoo,
engaged under long- term contracts, do not fall into the category of vulnerable,
lower-paid employees whose short-term contracts are continuously rolled over to
deny them protection against unfair dismissal, the courts have repeatedly held
that the constitutional right to work extends equally to all employees.
[23] The test to be applied to determine the existence of a dismissal in these
circumstances is equally well established. The expectation of renewal must be
both subjectively held by the employee and objectively likely, in the light of all the
facts, that the expectation was reasonable. In Joseph v University of Limpopo &
others
2 this Court held:
2 (2011) 32 ILJ 2085 (LAC).
10
‘[35] The onus is on an employee to prove the existence of a reasonable or
legitimate expectation. He or she does so by placing evidence before an
arbitrator that there are circumstances which justify such an expectation.
Such circumstances could be, for instance, the previous regular renewals of
his or her contract of employment, provisions of the contract, the nature of
the business, and so forth. The aforesaid is not a closed list. It all depends
on the given circumstances and is a question of fact.’
[24] When a commissioner's ruling on the existence of a dismissal is sought to be
reviewed, this Court has made clear that the test for reviewing a jurisdictional
issue requires an objective inquiry and that reasonableness is not the standard of
review.
[25] There was some debate when the appeal was heard about the pleadings filed by
TUT in the review proceedings, particularly whether they properly disclosed a
basis for review under the applicable standard of correctness, rather than the
award's reasonableness. It is clear that, although some reference was made to
the reasonableness standard articulated in Sidumo v Rustenburg Platinum
Mines,
3 the founding affidavit adequately addressed the correctness of the
commissioner’s award.4 Any uncertainty was dispelled in the replying affidavit, in
which the correctness standard was clearly articulated.
[26] Regrettably, the Labour Court’s reasons for disagreeing with the commissioner’s
award are far from clear. Having eschewed the terms of the contract as the sole
basis for assessing any subjective expectation of renewal that is objectively
reasonable, the Court appears to have fallen into the trap of treating those terms,
especially clause 4.2, as an overriding consideration, and the dispute as one that
concerned the interpretation of clause 4 of Naidoo’s contract.
[27] While it is correct that clause 4.2 was no doubt intended to disabuse Naidoo of
any automatic expectation of renewal, the courts have consistently held that
any automatic expectation of renewal, the courts have consistently held that
3 (2007) 28 ILJ 2405 (CC).
4 See Cape Peninsula University of Technology v Kabengele & others (2024) 45 ILJ 1973 (LAC) where
this Court held that despite the express pleading of the unreasonableness of an arbitration award, it was
sufficient that the applicant had in a number of respects taken issue with its correctness.
11
clauses to this effect are not determinative of any subjective expectation of
renewal, nor the objective reasonableness of such an expectation. If that were
not so, the purpose of the protection established by section 186(1)(b) could be
easily undermined by unscrupulous employers using contractual terms such as
clause 4.2. But that is not to say that such terms are always disregarded - the
employer’s refusal to renew must be considered in light of all prevailing facts and
circumstances, including any relevant contractual terms.
[28] The commissioner’s award identifies several factors supporting the conclusion
that Naidoo’s subjective expectation of renewal was objectively reasonable. The
Labour Court addressed none of them. These factors included the terms of the
contract, particularly the history of negotiating the ‘renewal clause’, its purpose,
and its incorporation into the contract; the nature of Naidoo’s work; and Van
Staden's intimation to Naidoo that his contract would be renewed.
[29] The undisputed evidence showed that in 2016, Van Staden submitted to the
executive committee of council a recommendation to approve a ‘renewable
clause’ in future fixed-term contracts with executive managers. On 2 December
2016, the executive committee approved the recommendation. After his 2017
appointment, Naidoo requested a revision of his contract terms to include a
renewable clause. This was done on 29 September 2021.
[30] Naidoo’s evidence was that four senior executives were affected by the
implementation of the renewable clause in 2016. Two of them had their contracts
renewed based on their satisfactory performance. This evidence was
corroborated by Van Staden. Naidoo further testified that the continuous nature
of his work created an expectation of renewal. He also testified about a
discussion with the vice-chancellor in February 2022, when he inquired about his
continued role at TUT. The response was that it was a ‘no-brainer’.
continued role at TUT. The response was that it was a ‘no-brainer’.
[31] To the extent that counsel for TUT sought to persuade us that Naidoo’s
increasing concern about the renewal of his contract , expressed during the
months shortly before the expiry of his contract, was inconsistent with any
12
subjective expectation of renewal of the contract, the correspondence between
Naidoo and Twala exhibits no more than anxiety on Naidoo’s part to obtain
certainty about his immediate future, in light of assurances that had been given
that his contract would be renewed. This is hardly surprising given that Naidoo
had anticipated that the renewal of his contract would be a formality and planned
his affairs accordingly.
[32] The Labour Court failed to assess the evidence adduced before the
commissioner in its totality. Had it done so, it would have concluded that the
primary issue was not the interpretation of clause 4 of Naidoo’s contract, and that
the contract’s terms were no more than a convenient starting point. In particular,
the retention of clauses 4.2 and 4.3 when the renewal clause was agreed did not,
in itself, defeat any reasonable expectation of renewal that may have arisen
under the renewal clause. Further, although Naidoo’s evidence that the renewal
clause created a right to automatic renewal subject to acceptable performance
reflected a mistaken belief on his part, it was not fatal to the existence of either a
subjective expectation of renewal of the contract for a further five- year period or
the reasonableness of that belief.
[33] In summary: the terms of the contract (and, in particular, the renewal clause and
the circumstances in which it was inserted into the contract), considered together
with other surrounding facts and circumstances, including the ongoing nature of
the work performed by Naidoo, his conversations with senior members of TUT’s
management regarding his further engagement, TUT’s treatment of other senior
employees engaged on the same terms, all serve to establish a subjective
intention of renewal that is objectively reasonable. The appeal thus stands to be
upheld. Neither party seriously pursued the issue of costs, and for the purposes
of section 179 of the LRA, each party is to bear its own costs.
Order
[34] I make the following order:
13
1. The appeal is upheld.
2. The order granted by the Labour Court is set aside and substituted by the
following:
‘The application is dismissed.’
______________________
André van Niekerk
Judge of the Labour Appeal Court of South Africa
Molahlehi JP and Mahalelo ADJP concur.
APPEARANCES:
For the Appellant : Adv F Venter
Instructed by: Beech Veltman Inc.
For the Respondent : Adv R Itzkin
Instructed by: ENS Africa Inc.