CASE LAW UPDATE

1. CASE LAW UPDATE

2. Public Manager’s power and duty to set aside wrongful acts MEC, Dept of Education, KZN v Khumalo & Another • Two employees unlawfully promoted: one by the selection panel; the other via a settlement agreement • MEC brought application ito s 158(1)(h) to review and set aside the “acts” of the officials who had promoted the 2 employees – ie set aside the promotions

3. MEC submitted that the application was the only way of undoing the illegality as the MEC was functus officio • Meaning of funtus officio = once an official decision is made, people are entitled to rely on these decisions and to be protected against injustice flowing from officials changing their minds and revoking or revisiting the decision. Conversely, if allowing the decision to stand results in injustice, it must be revoked or revisited

4. LC held: • LC had jurisdiction to determine matter because the application was brought ito s158(1)(h) which gives the LC the power to review any decision taken or any act performed by the State in its capacity as employer. • However, there was no need for the MEC to bring such an application and her reliance on functus officio for failing to reverse the unlawful promotions was no justification for launching the review application because:

5. The doctrine of functus officio did not bar the MEC, at her own instance, from reversing wrongful and unlawful decisions or decisions based on ignorance; s195 of the Constitution obliged her to eliminate illegalities in public administration • The MEC, as head of the department, ought, at her own instance, to have revoked the unlawful promotions as soon as she became aware of them

6. Uncovering and correcting irregularities is typically a managerial function, performed in the ordinary course of management. Many [government] departments have reversed their irregular decisions without applying to Court for assistance • In this dispute s 33 of the Constitution and PAJA are not engaged because, like dismissal, promotion in the public sector is not an administrative act but an employment related act justiciable through the designated structures and procedures of the LRA

7. Promotions in the public sector are effected ito the PSA. However the PSA relies on the LRA for the machinery to test the fairness and propriety of appointments and promotions • The LC does not interfere in disputes settled by agreement. To do so would undermine the labour dispute resolution system which is premised on conciliation and settlement of disputes. However, if the settlement agreement was concluded in circumstances where the official had no right to conclude such an agreement because the promotion would be unlawful, the agreement is a nullity, irrespective of the mandate of the official

8. Legality of special leave on full pay pending investigation Heyneke v Umhlatuze Municipality (2010) LC • At the request of some council members, H accepted to go on special leave. According to his contract such leave was not for investigation purposes, but for matters like writing exams etc • When the leave continued indefinitely he told the council he wanted to go back to work. Council refused. H approached LC for reinstatement • Issue to be determined: whether the decision to place H on special leave was lawful

9. LC held: • The facts indicated that the purpose of the special leave was to suspend H pending misconduct investigation. Thus the council used a mechanism aimed at benefitting employees as a weapon against H • In terms of H’s contract, special leave granted to him would always have to be at his request or consent. It could not be imposed on him • At best, H had agreed to special leave for a short time. Once he asked to return to work, and was refused, the special leave was not authorised and his employment contract was breached

10. No municipality [or public sector employer], acting reasonably, in the public interest, can put an employee on special leave on full pay for a long time, not even if the employee agrees • Such a practice was a sign of weak, indecisive management and against public interests and public policy, for it can never be public policy to waste public resources and pay for services that are not rendered

11. Putting an employee on special leave for a long time on full pay pending investigation is especially unreasonable when precautionary suspension in terms of the relevant regulations and codes pending misconduct investigations is restricted to a specified period [in casu, to 60 days] • The LC found the decision to place Heyneke on special leave was motivated by ulterior motives, done without his consent and the council had not properly applied its mind to the matter

12. The LC declared the council’s decision to place Heyneke on special leave to be unlawful and directed it to accept his tender of services • For the first time since the enactment of the Municipal Finance Management Act 2003, a court applied the section that says damages suffered because of the deliberate unlawful actions of political officer bearers or officials when performing a function of state may be recovered by a municipality

13. The LC directed the council to investigate recovering the costs of the special leave, some R400 000, from the officials responsible for this debacle • The court warned that if the council was reluctant to recover the costs they were still publicly accountable for their decisions and if they did not act appropriately they could be ruled in contempt of court

14. Appointments – s 6(3) of the Employment of Educators Act Kimberley Junior School & Others v Head: Education Dept, NC & Others (2009) LC • In terms of s 6(3) the HoD’s discretion to make an appointment is dependent on the prerequisite of a proper recommendation by the SGB • s 6(3) requires the SGB to recommend at least 3 candidates. For a recommendation of a lesser number the SGB must consult the HoD

15. In casu, there had been no proper recommendation by the SGB because it had put up the names of 3 candidates but had recommended only one • Consequently the HoD had no discretion to make any appointment at all • The appointment by the HoD was set aside by the LC

16. Deemed dismissals Mahlangu v Minister of Sport & Recreation [2010] • Re-affirmed that termination of employment under s 17(5)(a)(i) of the PSA [and s 14 of EEA]: (a) is not a dismissal as defined by, and is not justiciable under, the LRA; (b) does not entail any decision, and is accordingly not reviewable

17. If the factual elements set out in s 17 and s 14 exist, the termination is by operation of the law, ie by the operation of s 17(5)(a)(i) and s 14 • However s 17(5)(b) [the reinstatement issue] entails a decision by the employer and this decision is a reviewable decision • s 17(5)(b) confers a discretion on employers to reinstate the employee.

18. The official making the decision must apply his/her mind to the employee’s representations and must determine whether the absence was wilful and whether the employment relationship has been resuscitated • Failure by the official to perform this function or properly apply his mind to the representations is reviewable by the LC under s 158(1)(h) of the LRA • In casu, the employer refused to reinstate Mahlangu. His case was struck off the roll because he pleaded that he had been unfairly dismissed for misconduct or incapacity, over which the LC lacks jurisdiction

19. Compare: PSA obo Van der Walt v Minister of Public Enterprise & Another • Held: If a department declines to reinstate in terms of s 17(5)(b), the aggrieved ‘employee’ could refer an unfair dismissal dispute to the relevant council/CCMA • One commentator suggested that this obiter statement is debatable. If Van der Walt’s employment had already lapsed “automatically” in terms of s 17(5)(a)(i), how could she be dismissed if the department declined to take her back?

20. Jammin Retail v Mokwane & Others (2010) 4 BLLR 404 (LC) • In the private sector, the LRA requires the employer to grant deserters a hearing before dismissal and does not recognise “automatic termination clause”

21. What can public sector employers do if they are not satisfied with the decisions of disciplinary chairpersons? Ntshangase v MEC, Finance, KZN (2009) 12 BLLR 1170 (SCA) • A decision taken by the chairperson of a disciplinary enquiry involving an employee in the public sector constitutes administrative action, and accordingly must be lawful, reasonable and procedurally fair

22. Where the chairperson’s decision did not pass this test, and thereby prejudiced the employer, the employer had a right and obligation to approach the LC • The LC may review and set aside the decision and, in addition order that the employee must be dismissed or the sanction changed [eg increased]

23. Comment: • Chirwa held that public sector employers do not perform administrative acts when they make employment related decisions, eg dismiss, promote etc. Therefore an employee’s labour disputes are not justiciable under administrative law • This case gives public sector employers a right which private sector employers do not have

24. Appointments and Demographics Solidarity obo Bernard v SAPS (2010) LC • Numerical targets cannot determine everything. Where a post cannot be filled by an applicant from an under-represented group because a suitable candidate from that group cannot be found, promotion of a suitable qualified applicant from another group should not be denied without a satisfactory explanation. • Due regard must be paid to the efficient operation of the public service

25. Transfers • Transfers are not included in the scope of ULPs listed in s 186(2) of the LRA which means the CCMA/BCs do not have jurisdiction to arbitrate transfer disputes under s 186(2) • Nxele v Chief Deputy Commissioner, Corporate Services, Dept of Correctional Services (2006) 10 BLLR (LC) • Transfers regulated by legislation reviewable by the LC because the legislature could not have intended to take away the entitlement of public service employees to challenge their transfers

26. Nxele (2008) 12 BLLR 1179 (LAC) • Transfers regulated by legislation reviewable by LC • Transfers that constitute a demotion – lead to a demotion- justiciable under s 186(2)(b) as ULP • Minister of Safety and Security v SSSBC & Others (2010) (LAC)) • EE applied for a transfer. ER refused application.

27. EE referred a ‘dispute about the interpretation or application of a CA’ to the BC • A CA of the SSSBC, agreement No 5 of 1999, regulates transfers. It provides for procedures to be ff and the factors the ER must take into account.

28. Issue before LAC: • Whether the dispute was (1) a dispute about the interpretation or application of a CA or (2) a transfer dispute. • If (1) BC had jurisdiction to arbitrate dispute. If (2) BC did not have jurisdiction because transfer disputes do not fall under definition of ulp and thus not arbitrable under LRA

29. LAC held: • Distinction between a dispute [main/real disputes sought to be resolved] and an issue or issues in a dispute[issue/s that needs to be looked at or answered in order to resolve the main dispute] • In casu, the dispute[ie real dispute] was a dispute concerning the fairness or otherwise of the department’s refusal to approve the employee’s application for a transfer [ie a transfer dispute] • The application of the provisions of the CA was an issue in a dispute. It had to be examined/dealt with in order to resolve the real dispute

30. Breach of contract / Damage claims in the High Court SAMSA v McKenzi (2010) SCA • Employee instituted contractual damages claim in the HC, alleging that his dismissal was also a breach of his contract of employment on the basis that the effect of the prohibition on unfair dismissals in the LRA is to incorporate into all contracts of employment a term that the employee may not be unfairly dismissed

31. SCA held: • The LRA prohibits unfair dismissals and prescribes remedies and dispute procedures for same • As the matter of dismissals is comprehensively dealt with in the LRA it is unnecessary to imply a term into the contracts of employment. • Nor is it desirable, as it leads to attempts to circumvent the LRA remedies and dispute forums and obtain remedies for which it does not provide

32. Administrative Action – promotions Gcaba v Minister for Safety and Security (2009) (CC) • A police officer pursued a dispute relating to promotion in the High Court relying on a right to fair administrative action ito PAJA CC held: • A promotion decision in the public sector does not constitute an administrative act for the purposes of PAJA • The promotion dispute should have been processed under the LRA

33. Resignations ANC v Municipal Manager, George Local Municipality and Others (2010) 3 BLLR 221 (SCA) • The issue was whether Jones, a councillor, had resigned. He delivered a notice of resignation to the municipal manager, but before the manager had become aware of it and read it, Jones sent a letter withdrawing his resignation

34. The SCA held that: • Section 27 of the Local Government: Municipal Structures Act 1998 provides that a notice of resignation must be communicated in writing • Being a unilateral act, a resignation does not need to be accepted by the intended recipient, but in order to be effective, it must be ‘unequivocally communicated to the intended recipient. This meant that the mere delivery of a resignation letter was not sufficient • Jones’s decision to resign should have been conveyed to the mind of the municipal manager in order to become effective

35. The manager must have read the letter before the withdrawal of resignation letter for the resignation to have constituted an effective resignation • Accordingly, there had been no resignation • Comment: if the requirement had simply been that an employee must ‘resign in writing’ and not that the notice of resignation ‘must be communicated to the employer in writing’, there may have been a different outcome

36. Certificates, Rulings by Conciliators, Staying of Arbitration Proceedings to review certificates EOH Abuntu v CCMA & Another (2010) 2 BLLR 172 (LC); Strautmann v Silver Meadows (2009) 10 BLLR 1007 (LC) • Conciliator ruled that the referring party was not ‘an employee’ and the CCMA therefore did not have jurisdiction to entertain the dispute • Conciliator ticked boxes in certificate that said the dispute concerned an ‘automatically unfair dismissal’ and that the dispute must be referred to the LC. EE maintained he was dismissed for no reason and referred dispute for arbitration. At the arbitration the commissioner ruled the CCMA did not have jurisdiction to arbitrate the dispute on the basis of the certificate

37. LC held: • A ‘ruling’ on jurisdiction by a conciliator is nothing more than an advisory award and has no binding legal effect • Accordingly, a referring party retains the right to refer the matter to arbitration • It is the arbitrating commissioner, assisted by all the evidence, who is best suited to make a binding jurisdictional ruling

38. A certificate of outcome has no legal significance other than to confirm that a dispute remained unresolved • The classification of the dispute on the certificate and the forum it must be referred to is nothing more than gratuitous advice. A referring party was not bound by these classifications

39. In light of all the above, a certificate is not capable of being reviewed and set aside • Accordingly, applications to stay arbitration proceeding pending review of certificate should not be permitted