The Prime Minister & 3 Others V Nonkululeko Zaly (C of A (CIV) 78/2024) [2025] LSCA 36 (2 May 2025)

IN THE COURT OF APPEAL OF LESOTHO LESOTHO HELD AT MASERU C OF A (CIV) 78/2024 CIV/APN/0012/23 In the matter between THE PRIME MINISTER 1ST APPELLANT MINISTRY OF TRADE, INDUSTRY, BUSINESS DEVELOPMENT AND TOURISM 2ND APPELLANT PUBLIC SERVICE COMMISION ATTORNEY GENERAL 3RD APPELLANT 4TH APPELLANT AND NONKULULEKO ZALY RESPONDENT CORAM : MOSITO P MUSONDA AJA MATHABA AJA HEARD: 16 APRIL 2025 DELIVERED: 2 MAY 2025 FLYNOTE Constitutional and Administrative Law — Employment Law — Public Service — Termination by Notice — Clause 4 “No Fault” Termination Clause — Whether Audi Alteram Partem Applicable — Whether Termination Implied Misconduct — Jurisdictional Overreach in Granting Relief Not Sought — Freedom of Contract — Sanctity of Contract The respondent was employed on a fixed-term contract as Principal Secretary within the Government of Lesotho. Her contract included Clause 4, a standard termination by notice provision entitling either party to terminate with three months’ notice or pay in lieu, and Clause 7, which provided for termination on grounds of misconduct after due process. The Prime Minister invoked Clause 4, terminating the contract by notice. However, the letter of termination referred to alleged possession of confidential documents and investigations by the anti- corruption authority (DCEO), which the High Court interpreted as implicating misconduct, thereby requiring a hearing. The High Court set aside the termination and ordered payment of all benefits for the remainder of the contract. Held, allowing the appeal: 1. The Prime Minister lawfully invoked the mutual separation clause (Clause 4), which did not require a hearing or reasons. The use of such a clause reflects a valid exercise of executive contractual power, provided it is not exercised in bad faith or for ulterior purposes. 2. The termination letter's reference to contextual facts was unfortunate and created the erroneous impression of dismissal for misconduct, but it did not alter the character of the termination under Clause 4. 3. The learned judge in the court a quo mischaracterised the nature of the termination and erred in treating it as disciplinary dismissal under Clause 7. 4. A court cannot grant relief not competently before it. The High Court erred in granting order (b), which was never validly introduced through proper amendment nor subject to judicial scrutiny. 5. The courts must uphold the principle of pacta sunt servanda and from rewriting or circumventing valid contractual refrain provisions between parties. 6. The respondent is entitled to contractual and statutory benefits accrued up to the date of termination, but not to the full salary for the unexpired term of the contract. Appeal allowed. No order as to costs. JUDGMENT 1. Introduction This appeal is against the High Court judgement (Khabo J) for setting aside the termination of respondent’s employment contract with the Government of Lesotho as the Principal Secretary. 2. The Respondent sought the following reliefs in the court a quo (a) The 1st Respondent’s decision to terminate her employment contract with Government of Lesotho as Principal Secretary of the 2nd Respondent as set out in his letter of the 11th January 2023 shall not be reviewed, corrected and set aside; (b) Upon granting of the above prayer, the respondent be directed to pay her for the remainder of the contract in salaries and all benefits which accrued and or would have accrued had the remained contracted; (c) The Respondents be ordered to pay costs on an attorney and client scale and (d) The Appellant be granted further and/or alternative relief. 3. The substantive prayers, as amended were couched in the following terms: That a rule nisi be issued returnable on the date and time to be determined by the court calling upon the Respondent to show cause (if any) why – (a) the 1st Respondent’s decision to terminate her employment contract with the Government of Lesotho as the Principal Secretary of the 2nd respondent set out in his letter of the 11th January 2003 shall not be reviewed, corrected and set aside; (b) upon the granting of (the above prayer, the Respondents be directed to pay her for the remainder of her contract in salaries and all benefits which accrued and or would have accrued had (she) remained contracted; (c) the Respondents be ordered to pay costs on the Attorney client scale; and (d) the Applicant be granted further and/or alternative relief. 4. Background The respondent was engaged as Principal Secretary on a fixed term contract of thirty-six (36) months from 24th August 2020 to 31st August 2023. Attached to the position was a cocktail of benefits including allowances for water and sanitation, telephone bill, electricity bill for which she was paid M800 for each of those benefits. She was entitled to an interest free loan to the tune of M500,000.00, diplomatic travel and 25 percent - gratuity. 5. On around 16th December 2022, six men dressed in civilian clothes, who did not identify themselves stormed her house situated at Ha Lekhobanyane next to Moshoeshoe 1 International Airport and searched it. They seized receipts of payment through Nedbank Lesotho to Rankoloko Investments Sanlam and an agreement for purchase of a field from Mr Mphonyo. This was done despite her contestation. 6. The search was pursuant to a search warrant graced by the Maseru Magistrates Court on 13th December 2022. She obtained an order from the High Court dated 20th February 2023. The core reliefs sought were that: (i) 1st respondent and officers subordinate to him were ordered to permit respondents lawyers to be present during interrogations; (ii) The 1st respondent and officers subordinate to him were interdicted from further executing the search warrant; (iii) The 3rd respondent was ordered to dispatch the record of proceedings which gave birth to the search warrant within seven (7) days; (iv) The search warrant and it’s execution to be declared null and void; and (v) The return of all items and/or properties seized by the officials of the 1st respondent to be returned to the appellant forthwith. Proceedings in the Court a quo Applicant’s case 7. It was the applicant’s averment that she had never been invited by the Directorate of Corruption and Economic Offences (DCEO) regarding the seized properties or on any other matter. She has not been charged with any criminal offence. The first respondent (The Right Honourable Prime Minister) never asked her to respond to the allegations contained in the termination letter dated 11th January 2023. There was no show cause communication why her contract cannot be terminated. The allegations contained in the termination were patently false. 8. On or about 16th December 2022, while she was on leave, some men stormed into her house without identifying themselves, raided, searched and seized some documents. She was being investigated by the Directorate on Corruption and Economic Offences (DCEO). 9. Applicant averred that at the time she instituted this application, no criminal charges had been preferred by the DCEO. She prayed that the decision to terminate her services ought to be reviewed and set aside. She prayed that the court orders that she be paid her benefits up to the end of her contract. 10. The termination was preceded by a criminal investigation and seizure of some items by the DCEO, which culminated in the applicant suing the DCEO for the retrieval of those documents. 11. The 1st appellant (Right Honourable Prime Minister) placed much store on clause 4, which is couched in these terms: Either party may give three (3) calendar month’s notice of termination of appointment or cash in lieu of notice. He averred that this was a ‘no fault’ termination clause1 12. The 1st appellant averred that the respondent was a subject of investigations by the Directorate on Corruption and Economic Offences. This clearly put the esteemed office that the respondent held in disrepute and that was an aggravation that informed his invocation of clause 4. 13. It was the 1st appellant’s averment that his invocation of the notice clause (clause 4) was based on cumulative reasons. The decision served a legitimate governmental purpose. The law does not place an obligation on the prime minister to give a Principal Secretary a hearing when the mutual termination clause is invoked. In any event he duly consulted the Public 1 Para 2.3 of the answering affidavit Service Commission pursuant to section 11(6) of the Public Service Act, 2 Respondent’s case 14. The appellants who were respondents in the court a quo anchored their case on the appellant’s legitimate exercise of executive power to which the courts should defer. The termination was a ‘no fault’ termination. The termination was permissible in terms of section 11 (6) of the Public Services Act, 2005. He had consulted the Public Service Commission. 15. The 1st respondent contended that he exercised contractual right mutually available to either party, not a public or statutory duty and that in the circumstances, review is not a tenable remedy as the matter is not a review of a public administrative action, but is regulated by the law of contract. 16. In the 1st Respondent’s submission a quo counsel relied on this Court’s decision in Supreme Furnishers (Pty) Ltd and Another v Molapo,3 Naran v Head of the Department of Local Government, Housing and Agriculture House of Delegates and Another4 , where it was held that: 2 Act No1 of 2005 3 LAC (1995-1999) 134 at 141 4 1993 1 SA 405 “The audi alteram partem principle is only applicable in cases where a public body exercises a statutory right. The audi alteram partem principle is not applicable in the exercise of purely contractual rights” (P407 B-C) The Court 17. It was the learned Judge’s opinion that “The exercise of executive power may be constrained by the principles of legality, procedural fairness and rationality”. The decision of the President of the Court of Appeal (Justice Michael Mathealira Ramodibeli) v Prime Minister (Dr Motsoahae Thomas Thabane and 4 Others was cited in support of that proposition. 18. The breach of trust being a form of misconduct, the 1st Respondent ought to have afforded the Applicant a hearing to answer to the adverse allegations levelled against her. These were allegations that affected her prejudicially, and as such she had to be afforded an opportunity to give her side of the story before the 1st Respondent could take the decision to terminate her contract, so reasoned the judge. He set aside the 1st Respondent’s termination of the applicant’s employment and ordered that she be paid benefits as if she had served the full term of the contract. 19. In this appeal, the appellants, being dissatisfied with the decision of the High Court, advance three grounds of appeal, viz: First, it is contended that the learned judge erred in law and misdirected herself in granting order (b) of the judgment as,that particular relief was not sought in the original notice of motion, nor did it form part of the relief properly before the Court. Further, although the respondent had filed a notice of amendment in an attempt to introduce that prayer, the proposed amendment was met with a formal objection duly filed per the Rules of the High Court. Importantly, no further steps were taken to pursue the amendment, and no leave to amend the originating process was ever sought or granted. In the absence of such leave, the learned judge lacked the jurisdictional basis to grant order (b). Secondly, it is submitted that the learned judge misdirected herself both factually and legally in granting order (a), which purported to review and set aside the termination of the respondent’s employment. It was contended that, the court’s finding that the termination was premised on misconduct allegations was plainly erroneous. The termination letter makes no such suggestion; rather, it expressly invokes the mutual termination clause, citing a breakdown of trust following the discovery that the respondent was in possession of confidential government documents and files at her private residence—materials which had become the subject of an investigation by the Anti-Corruption Authorities. The letter does not allege misconduct requiring a disciplinary hearing, and the learned judge’s contrary conclusion lacks a foundation in fact or law. Thirdly, the learned judge further erred in granting, simultaneously with the review order, an order compelling the appellants to pay the respondent the full salary and benefits for the unexpired term of her contract. The complaint proceeds that it is well-settled that procedural irregularity in the termination of a contract of employment does not, without more, entitle an employee to automatic reinstatement or to an award of contractual remuneration for the remainder of the term. They complained that the learned judge, in ordering such relief, failed to apply this settled principle and thereby misdirected herself in law. The appeal 20. The appellants argue that the amendment was not compliant with Rule 33, of the High Court Rules 1980. No notice was given to the appellant. The appellant having not amended the pleadings, it was a misdirection by the court a quo to have granted a prayer anchored on the amended pleading. 21. In case of Lesotho National Olympic and Others v Morolong5, this court said; “This court has stressed more than once that it is wrong to direct the attention of the other party to one issue and then attempt to canvass another……. The Court is confined to resolving the 5 LAC 2000 – 2004 p449 dispute on the issues raised in the founding affidavit and must not have regard to extraneous issues and unproved facts…” 22. It was the appellant’s case, that the decision to terminate the Respondent’s employment was fairly and honestly arrived at. There was no mala fide and was not therefore judicially reviewable. This Court’s decision in Raphuthing v Chairman Disciplinary Hearing and Others6 was relied on. 23. The court was dealing with contractual rights. The audi partem principle is only applicable in cases where a public body exercises a statutory right. The termination was a “No fault” termination and the respondent was not entitled to a hearing. The South African decision of Navan v Head of Department of Local Government Housing and Agriculture (House of Delegates) and Another7 and this courts decision in Ramone v Teaching Service Commission8, were cited for that proposition. In a nutshell that was the appellant’s case. The Respondents case 24. The upshot of the Respondent’s case is that the respondent was entitled to a hearing as the termination of the employment contract was based on broken confidence and trust. Furthermore, the Directorate on Corruption and Economic Offences (DCEO) 6 C of A (CIV) 45 of 2014 [2015] LSCA 2 (7th August 2015) 7 (1993) 1 SA 405 8 LAC 2000-2004 p998 reported to the Prime Minister that they had seized documents from the respondent evidencing the Commission of crime. The Respondent did not give a satisfactory explanation for the possession of the documents. 25. The termination of the contract ought to be rendered null and void, as the decision was arbitrary. According to the Respondents, the issues on which her termination were anchored were devoid of merit and factually false. 26. The respondent’s position as Principal Secretary was and is a public service position in accordance of Section 96 of the Constitution. The Prime Minister appoints and disappoints in terms of section 139 of the Constitution, as read with section 11(6) of the Public Service Act. Under clause 4 of the agreement each party can give three (3) months to terminate the appointment or cash in lieu of notice. 27. Respondent valiantly argue that the power of the Prime Minister is subject to review in cases of illegality and irrationality: The contract is not beyond judicial scrutiny. The High Court decision of Maope v Principal Secretary of Foreign Affairs and International Relations9, was cited in support of alternative relief, to pay respondent all her benefits, rights, increment and entitlement for the remainder of respondent’s contract. In Maope, 9 C of A (CIV) 52 of 2018 the applicants were ambassadors whose contracts were terminated without a hearing. The court ordered that they be paid the benefits of the remaining period. Masetlha v President of the Republic of South Africa and Another10, is another case where applicant was paid benefits until effluxion of contract. This is the condescend version of the Respondent’s case. 28. The issues (i) Can termination by notice (no fault) pursuant to a clause in the employment contract (clause 4), be preceded by a hearing, is the only issue in this appeal? 29. The law The employment contract between the Appellant and the Respondent contain two termination provisions relevant to this appeal, clause 4 and clause 7. Clause 4 provides that: Each party may give three (3) calendar months’ notice of termination of appointment or cash in lieu of notice. Clause 7(1) provides that: If a person engaged shall at any time after the signing hereof neglect or refuse or from any cause (other than ill health not 10 (CCT 01/07) 2007) ZACC 20:2008 caused by his/her misconduct or negligence, as provided for in clause 6 become unable to perform any of his/her duties or to comply with any order, or shall disclose any information of the affairs of the Government to the unauthorized person, or shall in any manner misconduct himself/herself, the Government may terminate his/her engagement or dismiss him/her from the service after due process of the law and thereupon all rights and advantages reserved to him/her by this contract shall cease. 7(2) The person engaged may at any time after the expiration of three months from the commencement of any service, terminate his/her engagement on giving the Government three months notice in writing or paying to the Government three months salary in lieu of such notice. 30. The tenor of clause 7 is in accord with a plethora of authorities as the provision provides for procedural justice if the termination is by misconduct. In the decision of this Court in Tsotetsi v Lesotho Highlands Development Authority11, where it was held that: Even when an employer terminates employment by giving notice, if the termination is linked to allegations of misconduct or other adverse reasons, the employee is entitled to a fair hearing before such action is taken. The court emphasized that procedural fairness is a fundamental right in employment relationships and failure to observe renders the dismissal unfair. 11 CIV/APN/445 of 99, (2000) LSCA 91 31. In Don Nyamande & Another v Zuva Petroleum (Pty) Ltd12, the Zimbabwean Supreme Court held that employers could terminate contracts by giving notice or payment in lieu, even without misconduct. 32. In Botswana, in the case of Sebako and Another v Shona Gas13, the Court held that while employers can terminate contracts by notice or payment in lieu, if the termination is due to misconduct, a fair hearing is essential to uphold procedural fairness. 33. The South Africa Labour Appeal Court in Lebowa Platinum Miner Ltd v Hill14, emphasized that even when terminating employment by notice, if the reason is related to misconduct or performance a fair hearing is required to ensure procedural fairness. In Serame Khampepe v Muela Hydropower Project Contractors and Others15, the Labour Court of Lesotho held that a hearing is not a pre-dismissal requirement, when termination is due to operational requirements. However, dismissal for misconduct or performance issues necessitate a fair hearing. Consideration of the appeal The view I take is that the outcome need not consider ground one and grounds 2 and 3 will be considered together. 12 SC 43/15 13 2006 (1) BLR 86 1C 14 (1998) 1 BLR 1 (LAC) 15 LC 29/97 34. There is “jurisdictional consensus’’ that, if the termination is due to misconduct the termination or dismissal must be preceded by a hearing if it is based on misconduct, which in my view is in accord with clause 7 of the appellant and respondents’ employment contract. However, the termination was in substantial conformity with clause 4. The DCEO investigations are severable, just as the action the respondent has taken against the DCEO in the High Court is severable from the termination. In my judgment, the first appellant cannot assume the mantle or functions properly vested in the Directorate on Corruption and Economic Offences (DCEO). In any event, the DCEO is statutorily mandated to address matters of criminal conduct, and it would be wholly inappropriate—indeed impermissible—to invoke Clause 4 as a shield or justification in circumstances where a criminal investigation is underway. 35. The distinction between termination and dismissal is razor thin. However, in termination by notice, the employee is typically entitled to receive all earned contractual and statutory benefits up to the last day of employment. In Buthelezi v Municipal Demarcation Board16, the Labour Appeal Court emphasized that an employer terminating a contract must fulfil all contractual obligations. Where notice is given, employee retain full right to benefits earned during the contract (my emphasis). 16 JA37 / 2002, [2004] ZALAC 15 (22 July 2004) 36. This Court said in Tsotetsi (supra) if dismissal is fair and lawful, only earned benefits are payable. The respondent was not facing disciplinary proceedings for her to be entitled to the right to a hearing. Her entitlement re those that are provided in the contract in the event of termination. The intention of the 1st Appellant was a “no fault termination”, within the context of clause 4. 37. However, those drafting the letter for the 1st Respondent went too far by attacking her integrity portraying mutual separation, as if it was dismissal for misconduct, which may have the potentiality of dooming what could be an illustrious career. Further it could dim the employment prospects of the respondent. It is only fair that that is erased. The termination letter should comply with the spirit of clause 4 (No fault termination). The courts cannot contract out the respondent from the employment contract. That could be assault on freedom of contract. 38. Disposition (i) The appeal is allowed. (ii) The letter of termination should strictly terminate within the context of clause 4 and no further. (iii) I will make no order regarding costs, as we were told she has not been paid all her terminal benefits because we do not know if she is still out of employment. A costs’ order against her is like getting blood out of the stone. _________________________ P MUSONDA ACTING JUSTICE OF APPEAL MOSITO P: 39. I have read in draft the judgment of my Brother Musonda AJA, and I respectfully agree that the appeal should succeed with no order as to costs. However, given the constitutional significance of the issues traversed, particularly the proper characterisation of termination by notice under a contract of employment within the public service, I consider it appropriate to express my own reasons for concurring in the result. 40. The law has long recognised the foundational principle that parties to a contract, including employment contracts, are bound by the terms they have freely and voluntarily undertaken. This principle, often referred to as the sanctity of contract, finds particular resonance in public law where the executive chooses to regulate employment relationships by way of contractual provisions, as opposed to purely statutory instruments. The courts should not lightly interfere with the lawful exercise of rights conferred by such a contract, save where those rights are exercised unlawfully, irrationally, or in breach of fundamental procedural fairness. 41. The present dispute arises from the Prime Minister’s decision to invoke clause 4 of the respondent’s contract of employment, a standard “no fault” termination clause entitling either party to terminate the contract upon giving three calendar months’ notice or payment in lieu. The clause is unambiguous in its terms. It requires no finding of fault, engages no disciplinary process, and contemplates no obligation to furnish reasons. It is, in short, an express contractual mechanism for lawful separation. 42. The difficulty arose, however, not from the invocation of the clause per se, but from how the termination letter was framed. Rather than adhering to the spirit and purpose of clause 4, the letter went further, drawing attention to the respondent’s alleged possession of confidential government documents and linking this to ongoing investigations by the DCEO. This, in my view, was unfortunate. While it may have been intended merely as context, its effect was to introduce an insinuation of wrongdoing contrary to the notion of a no-fault separation. This was not only gratuitous; it risked undermining the respondent’s professional standing and was inconsistent with the mutuality inherent in clause 4. 43. The learned judge in the court a quo interpreted the letter as evidencing a termination for misconduct, thereby triggering an obligation to afford the respondent a hearing. With respect, that analysis rests on an incorrect premise. The true character of a termination must be gathered not merely from form, but from substance. The Prime Minister, having lawfully elected to rely on clause 4, was not required—indeed, was not entitled—to impugn the respondent’s conduct unless he was prepared to pursue the route contemplated by clause 7, namely, termination for misconduct following due process. He did not do so. 44. Where termination is effected under a “no fault” provision, and where that characterisation is not displaced by evidence of ulterior motive or procedural abuse, there is no entitlement to a hearing. That position reflects both the private law nature of contractual autonomy and the need for executive flexibility in appointments to high office. It does not preclude judicial scrutiny where there is evidence of illegality, bad faith, or irrationality, but none were established in this case. 45. Moreover, the learned judge erred in granting relief that had not been sought in the originating process and which, in any event, would have required an amendment that was neither properly pursued nor judicially sanctioned. It is a basic tenet of procedural fairness that a party must know the case it is required to meet, and a court exceeds its remit when it grants relief that goes beyond what is competently before it. The grant of order (b), which directed payment for the unexpired term of the contract, was one such instance and amounted to a material misdirection. 46. Regarding the payment of terminal benefits, I respectfully agree with my learned brother that the respondent remains entitled to those contractual and statutory entitlements accrued up to the termination date. However, she cannot claim damages for breach where the termination itself was in accordance with the contract. Nor is reinstatement available in circumstances where the relationship has been lawfully ended through mutual notice. 47. In sum, the appeal must succeed because the termination was effected in accordance with a valid contractual mechanism, and the respondent’s rights have not been infringed in a manner cognisable in law. I would, however, underscore the need for future communications of this kind—particularly from the highest office in the land—to reflect the decorum, restraint and fidelity to legal form that such high office demands. 48. It follows that the appeal is allowed, the High Court order is set aside, and the termination stands in terms of clause 4. I would also concur that there should be no order as to costs in the particular circumstances of this case. I agree I agree _________________________ K E MOSITO PRESIDENT OF THE COURT OF APPEAL _______________________ AR MATHABA ACTING JUSTICE OF APPEAL ADV RD SETLOJOANE FOR THE APPELLANTS: FOR THE RESPONDENTS: ADV PM MOKOBOCHO 22