Sithole v Premier of Mpumalanga Province and Others (JA41/09) [2010] ZALAC 42 (7 September 2010)

IN THE LABOUR APPEAL COURT OF SOUTH AFRICA

[HELD AT JOHANNESBURG]

LABOUR APPEAL COURT CASE NO: JA41/09

In the matter between:

MAUREEN SITHOLE ..........................................................APPELLANT

AND

PREMIER OF MPUMALANGA PROVINCE ...................1ST RESPONDENT

MEC: DEPARTMENT OF AGRICULTURE & LAND

ADMINISTRATION: MPUMALANGA PROVINCE ........2ND RESPONDENT

DIRECTOR GENERAL: MPUMALANGA PROVINCEE ...3RD RESPONDENT

GOVERNMENT EMPLOYEES PENSION FUND .............4TH RESPONDENT

DRAFT JUDGMENT

Tlaletsi JA

Introduction

[1] In this appeal, the parties, commendably, reached a settlement agreement on the merits of their dispute. Regrettably, they could not reach any agreement to settle the issue of costs. In a draft agreement that was made an order of court at the request of the parties, they agreed that this Court should determine their dispute as regards costs. They subsequently also agreed that the Court should do this in chambers.

[2] To facilitate the adjudication of costs, the parties filed written submissions and agreed to dispense with oral argument on the issue.

Background

[3] The matter came to the Labour Court by way of an urgent application in terms whereof the appellant sought inter alia, a declaratory order to the effect that she had retired from her employment with the Government of the Republic with effect from 7 November 2007 and consequently that she is entitled to all benefits due to her as a result of such retirement in terms of the Government Employees Pension Law, 1996. Her application in this regard was dismissed by the Labour Court. Having been unsuccessful in obtaining leave to appeal in the Labour Court, she successfully obtained leave from this Court on petition to the Judge President.

[4] The relevant factual background of the dispute is necessary for a better understanding of the issues. The appellant was employed in the public service in the Department of Health since September 1979. On 7 November 2002 she took up employment as Head of the Department of Agriculture in Mpumalanga in terms of a fixed term contract of employment of five years. Her new appointment had the effect that she lost her status as a permanent employee in the public service and became a five (5) year contract employee.

[5] Whilst Head of the Department of Agriculture, the appellant was charged with five (5) alleged acts of misconduct. She was found guilty of four (4) acts of misconduct and was subsequently dismissed. She declared a dispute of unfair dismissal which she referred to the relevant bargaining council for conciliation. After an unsuccessful attempt at conciliation, the matter was arbitrated. The arbitrator confirmed the finding of guilt on three of the allegations of misconduct charges and found her not guilty of one. The arbitrator issued an arbitration award to the effect that the dismissal of the appellant “was substantively unfair to the extent that the sanction of dismissal was not appropriate” and that the “respondent proved a procedurally fair process”. In addition the respondent was directed to pay the appellant compensation equal to three (3) months remuneration less “statutory deductions”. Neither party was awarded costs.

[6] In an attempt of enforce the award the appellant successfully applied for an order making the award an order of the Labour Court. Subsequent thereto, the appellant received pension benefits which were calculated on the basis that she had been dismissed for misconduct by the employer on 6 February 2007. The appellant, however, contended that she had not been dismissed as her dismissal was found to be unfair. She contended that the reason why the arbitrator did not order her reinstatement was because it would not have been competent for him to do so since at the time of the arbitration the term of her contract of employment had already expired on 6 November 2007. The award is dated 7 May 2008. The appellant believed that she was entitled to payment of the retirement benefits to which she would have been entitled if she retired at the expiry of her fixed term contract of employment, whereas her former employer believed that she was only entitled to benefits that were in line with those of someone who had been dismissed for misconduct on the day on which she had been dismissed. Obviously, there was a huge difference in the benefits applicable to the two situations.

[7] Since the parties could not resolve the dispute, the appellant brought the urgent application which is the subject of this appeal to the Labour Court. The orders that she sought were the following:

(a) “A declaration that the applicant had retired from public service on 07 November 2007 when the fixed term written employment contract concluded between applicant and first respondent expired;

(b)A declaration that the applicant is entitled to all benefits due to her as a public servant who has retired in terms of section 19 of Government Employees Pension Law Act 21 of 1996 (“Pension Act”);

(c)A declaration that the applicant is entitled to be paid all benefits including pension benefits which accrued to her up to and including the last day of her fixed term employment contract (06 November 2007);

(d) An order directing the first, second and/or third respondents to pay all benefits which accrued in law to the applicant as a retiree who has retired pursuant to section 19 of the Pension Act and that such benefits be paid in terms of section 26 of the Pension Act;

(e) Directing the first, second and/or third respondents to pay all benefits that accrued to the applicant as a retiree within 7 days of the date of the order;

(f) Directing the fourth respondent to pay pension benefits accrued to applicant in terms of section 36 of Pension Act;

(g) Directing the fourth respondent to amend the date of commencement of contribution to pension fund by applicant from November 1984 to September 1979 as evidenced by the applicant’s date of employment in the public service;

(h) Costs of suit”.

The Labour Court granted her relief on the prayers relating to the obligations of the fourth respondent, namely, to amend the date of her contribution to the Government Employees Pension Fund to the year 1979 and not 1984 as erroneously recorded, and that she be paid her pension benefits which accrued to her in terms of section 26 of the Government Employees Pension Act. The prayers seeking a declarator that she is entitled to be paid all benefits that accrue to retirees as if she was a retired employee were dismissed. She was further ordered to pay seventy percent (70%) of the respondent’s costs of the application.

[8] On the day that the appeal was to be heard by the Court the parties sought and were granted a postponement of the hearing of the appeal to enable them to attempt to settle the matter amicably. On the day on which the matter had been postponed the Court was informed that the parties had settled the merits of the dispute and, as already stated earlier, that only the issue of costs remained. At the request of the parties the settlement agreement was made an order of court.

[9] It has been contended on behalf of the appellant that she is entitled to her costs because she is the successful party in that the draft order that was made an order of court, constitute, in substance, the relief that she had sought in the Labour Court and in this Court. The order, it is contended, is in direct contrast or in contradiction to the position that was maintained by the respondents (1st, 2nd and 3rd respondents) at all relevant times that the appellant is not entitled to payment of all her pension benefits. It was further submitted that the fact that the appellant has now been paid all her pension benefits in terms of the order, is a concession made by the respondents that they have been at fault.

[10] The respondents on the other had contended that the appellant is not entitled to costs as she has not been successful in the relief which she sought in the Labour Court or in this Court and that the order does not constitute the substantial success on her part. They submitted that the order only reflects what the appellant is entitled to in terms of the law and not in terms of what she sought in the Labour Court. It was further contended that there has not been a concession that the appellant is entitled to retirement benefits as Head of the Department up to 6 February 2007. It was submitted that in her capacity as Head of the Department the appellant was only entitled to benefits payable to a dismissed employee. Furthermore, it was contended, there is no order by this Court setting aside the decision of the Labour Court, consequently that court’s order still stands and the parties merely decided to settle the matter to avoid further litigation. It was submitted that though the appellant should pay the costs, the respondents do not persist that the appellant be ordered to pay the costs of the appeal and submit that an appropriate order to be made at this stage is that each party should pay its own costs on appeal.

[11] Sections 162 and 179 of the Labour Relations Act 66 of 1995 (“the Act”) provide that the Labour Court and this Court may make an order for the payment of costs according to the requirements of the law and fairness. The sections provide further that when deciding whether or not to order the payment of costs, these Courts may take into account:

(a) Whether the matter should have been referred to arbitration in terms of the Act, and if so, the extra costs incurred in referring the matter to the Court, and;

The conduct of the parties in proceeding with or defending the matter before the Court and during the proceedings before the Court.

[12] As I have already said above, in terms of the Act the question of whether or not this Court should or should not make an order of costs depends upon whether or not the Court thinks that it would or would not accord with the requirements of the law and fairness to make a costs order. Where a party has been successful, this does not necessarily mean that it is entitled to a costs order in its favour because it might not be fair to make a costs order in favour of such party despite the fact that it has been successful.

[13] In this case the order that was made by this Court is not necessarily an order that reflects the view that this Court took of the merits of the appeal. It is an order that was based upon a settlement agreement that the parties reached for their own reasons and in their own wisdom. The fact that the respondents reached the settlement agreement that they reached with the appellant does not necessarily mean that, if they had not done so, the appellant’s appeal in this Court would necessarily have been successful. Since the parties reached a settlement agreement on the main dispute, it is undesirable that this Court should now proceed to make any definitive findings on the merits and demerits of the appellant’s appeal and the respondents’ opposition of that appeal. In my view it should suffice to say that neither party had a clear-cut case. Indeed, if the appeal had been proceeded with, we would have put certain difficulties to Counsel for both sides and, whether or not those difficulties would have been overcome in the end is something we do not know.

[14] The appellant’s contention that she has been substantially successful and that, therefore, she should be awarded costs when that “substantial success”, if it be substantial success at all, is not substantial success in Court but in the settlement negotiations is misplaced. In my view the respondents’ contention that each party should pay its own costs is the contention that accords with the requirements of the law and fairness. Accordingly, we propose to make an order to that effect. After all the order of the Labour Court dismissing the appellant’s application, as the appellant has submitted, still stands. Furthermore, the settlement agreement concluded between the parties did not include a clause that the order of the Labour Court be set aside. I say this even though I do not necessarily mean that, if the parties had so agreed, that would necessarily have meant the setting aside of that order by this Court without a consideration of the merits of the appeal.

Order:

[15] In the result it is ordered as follows:

1. Each party is to pay its own costs.

____________________

TLALETSI JA

I agree.

_____________________

ZONDO JP

I agree

______________________

SANGWENI AJA

APPEARENCES:

For the Appellant: Adv W.R Mokhare

Instructed by: MESSRS MOGASWA ATTORNEYS

For the Respondents: Adv B.R Tokota SC and Adv D.T Skosana

Instructed by: THE STATE ATTORNEYS

DATE OF JUDGMENT: 07 September 2010