Tsekedi v Masilonyana Local Municipality (J 571/2021) [2021] ZALCJHB 96 (4 June 2021)

The Labour Court of South Africa

(Held at Johannesburg)

Not reportable

Case No: J 571/2021

In the matter between:

PULE

SIMON

TSEKEDI

Applicant

and

MASILONYANA

LOCAL MUNICIPALITY

First Respondent

ACTING MAYOR: CLR X NQWILISO N.O Second Respondent

SPEAKER: CLR D E MODISE N.O

Third Respondent

MR N SELLO N.O

Fourth Respondent

MEC

FOR COOPERATIVE GOVERNANACE

AND TRADITIONAL AFFAIRS, FREE

STATE

PROVINCE

Fifth Respondent

MINISTER

OF COOPERATIVE GOVERNANCE

AND

TRADITIONAL AFFAIRS

Sixth Respondent

MR

K S

KOALANE Seventh Respondent

Date of hearing: 2 June 2021 (via Zoom).

Date of judgment: 4 June 2021. Judgment delivered by email.

JUDGMENT

VAN

NIEKERK J

[1] On 14 May 2021, the first respondent’s council adopted a resolution rescinding the applicant’s contract of employment. The applicant contends that in doing so, the first respondent (the municipality) breached a material term of his contract, and thus acted unlawfully. The applicant seeks a declaratory order, on an urgent basis, to the effect that his contract of employment with the first respondent (the municipality) remains extant, and that he be reinstated into the position of municipal manager.

[2] The first to fourth respondents, who oppose the application, primarily on the basis that the application is not urgent, that the applicant’s ‘section 158’ application is not appropriate. The fifth respondent abides by the decision of the court.

[3] The background facts are not in dispute. The applicant commenced employment with the first respondent on 1 January 2018 when he was appointed as the municipal manager and accounting officer. In terms of the agreement between the applicant and the municipality, his employment would commence on 1 January 2018 and terminate on 31 December 2022. Clause 17.3 of the contract entitles the municipality to terminate the applicant’s employment contract on ‘any sufficient reasons recognised by law and for any ‘breach of the code of conduct for municipal staff members.’ Reasons for which the applicant’s employment contract could be terminated or included in clause 17.3 and extend to being guilty of serious misconduct or deliberately collect in the discharge of his duties, being absent from employment without approval, disobeying a lawful instruction, conviction of a criminal offence and failing to place the whole of his time at the disposal of the municipality. Clause 22.1 of the contract is in the nature of a ‘good faith’ clause and requires both parties to observe the utmost good faith in the implementation of the contract and in their dealings with one another.

[4] On 23 July 2018 the Minister addressed a letter to the then MEC of Co-operative Governance and Traditional Affairs raising concerns regarding the applicant’s appointment. The letter concluded with a request that the MEC take appropriate steps contemplated in terms of section 54A (8) of the Municipal Systems Act and submit a report indicating the remedial action taken. The letter raised a concern that the applicant’s academic qualifications do not meet the prescribed qualifications, that there is no evidence to prove that certain reference checks were conducted and verifications done. In the absence of anything to the contrary, the letter suggests that the applicant’s appointment was made in contravention of the systems act and its regulations and is consequently invalid. Specific reference is made to the provision in the systems act that empowers the MEC to take appropriate steps, including any application to court for a declaratory order on the validity of the appointment.

[5] Neither the Minister nor the MEC took any steps to implement the terms of the letter but for a response in August 2018 by the former mayor, the municipality who reported to the Minister regarding the applicant’s required skills, expertise, competencies and qualifications on which the visibility had relied when appointing the applicant. It is not disputed that the applicant was advised by the former mayor to carry on with his duties.

[6] In his founding affidavit, the applicant submits that he possessed all of the required skills, expertise, competencies and qualifications prescribed for a municipal manager at the time of his appointment, both in terms of the systems act and its regulations. In particular, the applicant submits that he’s academic qualifications, which include a bachelor of arts degree and diploma in University education met the threshold requirements, and that he had the required experience, including 10 years’ service at the Ngwathe municipality. Further, the applicant provided proof that all necessary screening be completed prior to his appointment. None of these averments are addressed in the answering affidavit.

[7] The applicant avers that during April 2021, the letter addressed by the Minister to the MEC was leaked to the media. On 28 April 2021, the applicant received a WhatsApp message from a manager in the offices of the current acting municipal manager of the first respondent. In the message, he sent the applicant to the leaked letter which had been circulating on social media. On 12 May 2021 the committee clerk of the municipality forwarded a notice of special council meeting to the applicant. On the agenda, item 2 reflected that a motion to advise council to rescind the applicant’s appointment as municipal manager was to be considered. The applicant states that he could not attend the special council meeting held on 14 May 2021 consequent on the leaked letter from the Minister, the applicant feared for his life and had to stay away from the municipality. On 15 May 2021, the applicant states that he had an informal telephonic discussion with the acting principal manager who informed him that a decision had been taken at the special council meeting the previous day to terminate his (the applicants) employment.

[8] On 18 May 2021 the applicant’s attorney of record addressed a letter to the office of the mayor and the acting municipal manager, copied to the MEC in which it was stated that the municipality’s council did not possess the powers to nullify a valid and binding contract of employment, that if the media was correct and the applicant’s contract of employment had indeed been nullified by the council, the council was in breach of the applicant’s employment contract. The council was called upon to remedy any breach within seven days from the date of the letter. There was no response to this letter.

[9] On 18 May 2021 the applicant received an email from the secretary of the acting manager in which she attached a letter of termination. The letter of termination states that on 14 May 2021, a special council meeting was held at which it was resolved that the applicant’s appointment as municipal manager ‘be rescinded subsequent to the anomalies as determined by the Minister of COGTA in his consideration of your appointment’.

[10] On 20 May 2021, the applicant’s attorney notified the municipality of its unlawful repudiation and advised the municipality that the applicant would be approaching this court on an urgent basis. Again, there was no response to this letter.

[11] The applicant’s case is that at the time he was appointed as the municipality’s municipal manager, he complied with all of the prescribed requirements. Secondly, he contends that the power and authority to terminate his employment contract is granted to the municipality only in terms of clause 17.3 of his contract, on the grounds stipulated, i.e. for any sufficient reason recognised by law, and secondly, in the case of any breach of the code of conduct for municipal staff.

[12] The termination letter explicitly states that the applicant’s termination was effected in terms of section 54A (3) of the Municipal Systems Act, 2000. This is the sole ground on which the municipality purported to terminate the applicant’s employment. The applicant’s records that section 54A (3) has been declared constitutionally invalid and submits that in consequence, the the municipality terminated his employment contract without contractually permitted grounds, thus committing a material breach of the contract entitling him to elect to enforce the terms of the contract.

[13] Section 54A (3) was inserted into the systems act by the local government: Municipal Systems Amendment Act, 7 of 2011. On 23 February 2016, the High Court issued a declaratory order in respect of the constitutional invalidity of the entire amendment act. In South African Municipal Workers Union v Minister of Co-Operative Governance and Traditional Affairs [2017] ZACC 7, the Constitutional Court decided on 9 March 2017 to confirm the declaration of invalidity of the amendment act by the High Court and ordered that the declaration be suspended for a period of 24 months to permit the legislature to cure the procedural defects which resulted in the invalidity of the amendment act. That period expired in March 2019 without any attempt by the legislature to cure the defect identified by the High Court. In the premises, the section of the amended Systems Act on which the first respondent replied on 14 May 2021 for its authority to rescind and terminate the applicant’s employment did not exist.

[14] The respondents’ answering affidavit and heads of argument simply failed to address the status of section 54A (3), and I did not understand the respondent’s counsel at the hearing to dispute the submissions made on the applicant’s behalf in this regard.

[15] The basis of the respondent’s opposition to the application is to deny that the application is urgent, and to submit that the applicant’s reliance on section 158 of the Labour Relations Act was inappropriate and impermissible.

[16] I deal first with the terms in the issue of urgency. The applicant avers that the application is urgent on account of the financial hardship that he is suffering consequent on his dismissal, and that the municipality’s decision has damaged his reputation and standing in the community. The respondents dispute these contentions and submit that in any event, any urgency is self-created.

[17] The principles to be applied are well-established. Whether or not a matter is urgent involves two considerations. The first is whether the applicant has set out cogent reasons in the founding affidavit and secondly, whether the applicant will not obtain substantial relief at some later stage. Where an applicant seeks final relief on an urgent basis, as the applicant does in these proceedings, the court must be particularly circumspect in deciding whether or not urgency has been established. Further, urgency must not be self-created by an applicant as a consequence of the applicant not having brought the application at the first available opportunity.

[18] The applicant does not dispute that financial hardship and reputational damage is not in themselves grounds for urgency. The applicant submits that the facts need to be considered as a whole and that the court ought further to have reference to the nature of his claim. None of the financial consequences of the applicant’s termination of employment are disputed. While reputational damage to the applicant is not disputed, the respondent submit that the applicant’s reputation had already been tarnished if not damaged by prior events (including service delivery protests) and that the termination of his employment was not the causa causans of his complaint. That may well be so, but it is not a basis to find that the application is not urgent. What weighs particularly heavily with me is the fact that it will not be possible, in present circumstances, for the applicant to obtain relief in the normal course. The applicant’s contract of employment, as I have indicated, expires on 31 December 2022. It is highly unlikely, given the backlog in the opposed motion court, that this matter would be finalised prior to that date. Insofar as the applicant contends that any urgency is self-created, this is simply not the case. Counsel for the respondents submitted that the applicant was aware, at least by the date on which the minister’s letter was leaked, that he’s continued

employment was in jeopardy. On his own version, so the respondent submits, the applicant was aware at least by 12 May 2021 that a special meeting of the council had been convened and that the matter of his continued employment was on the agenda. What these submissions overlook is the nature of the applicant’s claim. His claim, in essence, is that the decision to terminate his employment constituted a breach of contract and that having accepted the municipality’s repudiation of the contract, he seeks specific performance. The termination of the contract occurred only at the meeting of the council on 14 May 2021 and formal notice was given to the applicant only on 19 May 2021 when he was advised by email that his appointment had been rescinded. The present application was filed on 26 May 2021. I fail to appreciate how it can be said that the applicant acted other than with due diligence and the necessary degree of urgency in filing and prosecuting these proceedings.

[19] In short, I am satisfied that the application is urgent.

[20] Insofar as the merits of the applicant’s claim are concerned, as I have indicated, the claim is undisputed but for the contention that the applicant’s reliance on section 158 of the LRA was inappropriate and impermissible. This contention is entirely misguided since the applicant places no reliance on section 158 or any other section of the LRA. His claim is one in contract and specifically, as I have indicated, a claim for specific performance. Insofar as the respondents counsel relied on judgments such as Chirwa v Transnet Ltd and others [2007] ZACC 23; 2008 (4) SA 367 (CC) and Gcaba v Minister of Safety and Security and others (2010) 31 ILJ 296 (CC) to submit that the present claim was either inappropriate or impermissible, those judgments confirmed that a remedy against unfair employer conduct ought to be sought in the LRA and in accordance with its dispute resolution structures, rather than by way of a claim of unlawful or unreasonable administrative action. Neither of those cases concerned a claim in terms of an employment contract where a contractual remedy was sought. The respondents’ appeal to Mohlomi v Ventersdorp/Thlokwe Municipality and Another (2018) 39 ILJ 1096 (LC) is equally misguided. That matter concerned an application brought in terms of section 158 (1) (h) to review and set aside a termination of an employment contract by way of a resolution. One

of the central issues was whether the remedy of a section 158 (1) (h) review was appropriate in the circumstances. The authorities to which the court referred to (which include Chirwa and Gqaba) must be appreciated in that context. The court’s observation that the classification of a dismissal dispute is one that concerns an infringement of the constitutional principle of legality must necessarily be carefully scrutinised so as to ascertain if it is a dispute capable of resolution under Chapter VIII of the LRA is no doubt correct, but again must be appreciated in the context where an applicant seeks to invoke this court’s power of review in terms of section 158 (1) (g) or (h). Indeed, the conclusion of the court as reflected in paragraph 91 of the judgment is to the effect that the applicant had failed to make out a case for review. Nowhere in the judgment is that suggested that an employee whose employment is terminated by way of a resolution adopted by a municipal council is precluded from seeking a common-law contractual remedy. As I have noted, in the present instance, the applicant specifically disavows any reliance on any right or remedy that he may have in terms of the LRA, nor does he seek any review of any act on any ground permitted by law in terms of section 158 (1).

[21] Whether a common law remedy in relation to a termination of employment coexists with a statutory right against unfair dismissal was a matter considered and disposed of some 20 years ago. In Fedlife Assurance Ltd v Wolfaardt (2001) 22 ILJ 2407 (SCA), the Supreme Court of Appeal held that the clear purpose of the introduction of a remedy against unfair dismissal was to supplement common law rights of an employee whose employment might be lawfully terminated and that there could be no suggestion that either the new constitutional dispensation or the LRA deprived employees of the common law rights to enforce the terms of a fixed term contract of employment. At paragraph 17 of the judgment, the court concluded as follows:

The 1995 Act does not expressly abrogate employees common law entitlement to enforce contractual rights and nor do I think that it does so by necessary implication. On the contrary there are clear indications in the 1995 Act that the legislature had no intention of doing so.

And further, at paragraph 22:

In my view chapter VIII of the 1995 Act is not exhaustive of the rights and remedies that accrue to an employee upon the termination of a contract of employment. Whether approached from the perspective of the constitutional dispensation and the common law or merely from a construction of the 1995 Act itself I do not think the respondent has been deprived of the common law rights that he now seeks to enforce. A contract of employment for a fixed term is enforceable in accordance with its terms and an employer is liable for damages if it is breached on ordinary principles of common law.

[22] Fedlife concerned a claim for contractual damages but the above claim is no less valid in respect of an election to enforce the terms of an employment contract. This court has made clear on many occasions that subject to its discretion, the remedy of specific performance is available to an aggrieved party in the event of a material breach of an employment contract. (See also Makhanya v University of Zululand 2010 (1) SA 62 (SCA) and more recently, Archer v Public School-Pinelands High School & others (2020) 41 ILJ 610 (LAC) where the court affirmed, at paragraph 22 of the judgment, that the impact of section 77 (3) of the BCEA is that employees are free, in addition to pursuing the rights in terms of the LRA, to pursue claims in the High Court on this court arising from their contracts of employment.)

[23] In summary, the applicants contract of employment may be terminated only on the grounds stipulated in clause 7 of the contract, including a reason or ground recognised as sufficient in law. Section 54A (3) of the Systems Act, identified in the termination letter as the sole ground or reason for the rescission or termination of the applicant’s contract of employment, was not in force at the time the contract was terminated, and the reason or ground for termination of the applicant’s employment contract on which the municipality relied is thus not a reason or ground recognised by law. The termination of the applicant’s employment in these circumstances constituted a material breach of his contract. While the remedy of specific performance may constitute a primary remedy at the election of an aggrieved employee, it is not there for the taking (Mpane v Passenger Rail Agency of SA & others (2021) 42 ILJ 546 (LC)). In the present instance, in the absence of any evidence proffered by the respondents as to why specific performance ought not to be granted, the applicant is entitled to the order that he seeks.

[24] Insofar as costs are concerned, the Labour Appeal Court has made clear that where an applicant invokes this court’s jurisdiction in terms of section 77 (3) of the BCEA, costs ought to be determined in terms of the approach adopted by the civil courts and not in terms of section 162 of the LRA. The ordinary rule that supplies, i.e. that save in exceptional circumstances, costs follow the result. In the present instance, there are no exceptional circumstances and the applicant is thus entitled to his costs. Insofar as the applicant sought an order for costs on a punitive scale, I am not satisfied that it has been established that the opposing respondents acted frivolously or in bad faith in their opposition to these proceedings. That opposition was misguided, to say the least, but this in itself is not a basis on which to order costs on a punitive scale.

I make the following order:

1. It is declared that the employment contract between the applicant and first respondent dated 26 January 2018 (and attached to the founding affidavit marked Annexure PT 7.2) remains extent.

2. The first respondent is ordered to comply with the terms of the employment contract forthwith, and is specifically ordered:

2.1 to reinstate the applicant to his employment and the capacity of municipal manager with retrospective effect to the date of the purported termination, namely 14 of May 2021;

2.2 to allow the applicant to resume his normal duties.

3. The first to third respondents are ordered to pay the costs of these proceedings, such costs to include the costs of senior counsel.

André van Niekerk

Judge of the Labour Court of South Africa

APPEARANCES

For the applicant Adv E van Graan SC, instructed by J Mare

For the first to fourth respondents: Adv Luthuli, instructed by