South African Post Office Ltd v Mampeule (JS349/07) [2008] ZALC 163; (2009) 30 ILJ 664 (LC) ; [2009] 8 BLLR 792 (LC) (12 December 2008)

IN

THE LABOUR COURT OF SOUTH AFRICA

HELD

AT BRAAMFONTEIN

REPORTABLE

CASE NUMBER: JS349/07

In the matter between:

SOUTH

AFRICAN POST OFFICE LTD Applicant

and

MAMPEULE,

KHUTSO Respondent

_______________

JUDGEMENT

NGALWANA AJ

Introduction

[1] In this application the applicant seeks a declaratory order that the termination of the respondent’s employment, as a direct result of his removal on 21 May 2007 from the applicant’s board of directors, does not constitute dismissal for purposes of section 186(1)(a) of the Labour Relations Act, 66 of 1995 (“the LRA”).

[2] This proposition is founded on a term of the respondent’s contract of employment with the applicant, read together with the applicant’s Articles of Association, to the effect that his removal from the applicant’s board gives rise unavoidably to the automatic and simultaneous termination of his employment contract with the applicant.

[3] It is in my view an extraordinary proposition but one which requires careful consideration because it has implications far wider than executives employed in state-owned enterprises and organs of state.

[4] The respondent, unsurprisingly, opposes the application.

The Factual Background

[5] The facts giving rise to this application are largely common cause.

[6] The respondent was appointed as the applicant’s Chief Executive Officer on a five-year fixed-term contract commencing on 20 June 2005. In terms of the contract of employment concluded between the parties on 30 October 2005, the employment relationship could be terminated on any one of four grounds, namely,

automatically upon expiry of the five-year period reckoned from 20 June 2005;

incapacity resulting from poor work performance or ill-health;

misconduct; or

the applicant’s operational requirements.

[7] Upon his appointment as the applicant’s Chief Executive Officer the respondent was also consequentially appointed as executive director on the applicant’s board of directors, thus giving effect to article 8.3 of the applicant’s Articles of Association which makes it “an inherent requirement” of an executive’s employment by the applicant that he also holds the office of executive director.

[8] On 17 November 2006 the Minister of Communications suspended the respondent as Chief Executive Officer of the applicant and

commissioned a forensic audit into his conduct. The trigger for this ministerially induced audit is the subject of dispute in a multi-million Rand claim for alleged breach of contract and unfair dismissal. That dispute is still pending before this Court. The applicant’s version is that the Minister of Communications has “lost confidence” in the respondent and believes that

“his failure to provide the Post Office Board of Directors with relevant, appropriate and accurate information regarding the work at the Post Office, resulted in a breakdown in trust between him and the Board”.

[9] The respondent’s version points to an entirely different trigger. He says the trigger was certain protected disclosures, within the meaning of the Protected Disclosures Act, 26 of 2000, made by him in good faith to the Minister of Communications (in January and March 2006), the South African Police Service (in February 2006) and the Communications department’s Director-General (in October 2006) about procurement irregularities by the applicant involving former employees of the applicant as well as a disinformation campaign and threats against him. The applicant denies knowledge of any such disclosures and disputes that, if made, they were made in good faith and constituted protected disclosures under the Protected Disclosures Act.