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Maada v Member of the Executive Council of the Northern Province for Finance and Expenditure and Another (JA34/01) [2003] ZALAC 2 (19 March 2003)

.RTF of original document

IN THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD IN JOHANNESBURG
Case no: JA 34/01

In the matter between:

MBEREGENI JOSEPH MAADA                              APPELLANT

and

MEMBER OF THE EXECUTIVE
COUNCIL OF THE NORTHERN
PROVINCE FOR FINANCE
AND EXPENDITURE                                      FIRST RESPONDENT
PROVINCIAL SERVICE COMMISSION    SECOND RESPONDENT
________________________________________________________________
JUDGEMENT
________________________________________________________________

ZONDO JP

Introduction

[1]      This is an appeal from a judgement of the Labour Court in which it dismissed with costs an application that had been brought by the present appellant against the respondents for an order the effect of which would have been to set aside his dismissal by the first respondent. The Court a quo granted leave to appeal.

The facts
[2]      The facts in this matter are largely common cause. In August 1996 the appellant was employed by the Venda Government as a clerk. By 1994, when that Government ceased to exist, he had risen to the position of Deputy Director-General in the Department of Public Works. Upon the re-incorporation of the Venda homeland into South Africa, the appellant became Deputy Director-General in the Department of Finance and Expenditure: Northern Province. He held that position until the end of August 1997 when his services were terminated in the circumstances described below.

[3]      On 22 May 1996 the Department of Public Service and Administration issued a circular known as circular 10/12/26. The subject of the circular was a special initiative by the Government to reduce the number of public servants. The heading of the circular was: “ Application of the special initiative whereby serving officials are afforded the option to request that their services be terminated on a voluntary basis.”

[4]      Clause 2 of the circular was to the effect that, in order to give effect to the Government’s objective of rationalising the public service, an agreement had been reached between the government and employee organisations admitted to the Chamber of the Public Service Bargaining Council at central level which made provision for the “right-sizing” of the public service and the implementation of a voluntary severance package. It was stated that the purpose of the circular was primarily to convey to departments or administrations information pertaining to the implementation of the severance package.

[5]      Clause 4 provided that on the recommendation of the Public Service Commission in terms of sec 3(2)(a)(i) and 42 of the Public Service Act, 1994, it had been decided that with effect from 1 May 1996 “serving officials be afforded the option to request that their services be terminated on a voluntary basis and that a special severance package be paid to those officials whose applications are approved.” Clause 8 of the circular stated that, “(i)n view of the aims of the voluntary severance package, departments / administrations are also requested to put a hold on all employer-initiated retrenchments which would require the application of sec 17(2)(b) or (c) of the Public Service Act, 1994.”

[6]      Sec 17(2)(b) and (c) of the Public Service Act, 1994 read thus:.“Every officer, other than a member of the services or an educator or a member of the Agency or the Service, may be discharged from the public service-
(a)     
------------------------
(b)     
owing to the abolition of his or her post or any reduction in or reorganisation or re-adjustment of departments or offices;
(c)     
if, for reasons other than his or her own unfitness or incapacity, his or her discharge will promote efficiency or economy in the department or office in which he or she is employed, or will otherwise be in the interest of the public service;”
        Clause 8 further stated that the freeze on such employer - initiated retrenchments took effect on the date of the circular and would remain in place until further notice. It stated that these measures had been recommended by the Public Service Commission in terms of sec 3(2)(a)(i) and 42 of the Public Service Act, 1994 and would be incorporated in the Public Service Staff Code. Clause 10(c) of the circular was to the effect that personnel who were interested in applying for the severance package should be assisted by the departments and administrations with the calculation of the benefits and privileges that they would be accorded if their requests were approved. The last sentence of clause 12 was to the effect that the departments/administrations could not be held responsible for any miscalculations which occurred.

[7]      Various annexures were attached to the circular. Annexure “A” contained “measures governing voluntary termination of service”. Clause 2 (8) of annexure “A” required requests to be made in writing on the pro - forma given in annexure A1. Clause 2(9) provided that candidates who identified themselves for the voluntary termination of service under this special initiative should not be re-appointed in the Public Service in terms of the Public Service Act, 1994 and that they “relinquish any claims to benefits payable under any other provision of the Public Service Act, 1994, Public Service Regulations, Service Staff Code, or, any other act, regulations or prescripts.”

[8]      Clause 2(10)(a) of annexure “A” provided that individual requests in terms of that provision had to be approved by the executing authority or his/her delegate, and, that, for the purpose of the initiative, “the Public Service Commission has delegated its powers to recommend the discharge of officials who have applied for voluntary termination of service up to and including the level of Deputy-Director-General, to heads of department at national level.....” Clause 4(c)(viii) of annexure “A” provided that the notice period to be given in respect of the discharge of employees was to be the period of remuneration (e.g a week’s notice if the employee was paid weekly and a month’s notice if the employee was paid monthly). It was also provided therein that instead of keeping a person in service for the full period of notice, his or her services could be terminated with his or her consent at the beginning of, or, during, the notice period. It provided further that in such an event a further package which covered the unexpired period of notice up to the date of discharge could be calculated additional to the normal package and be paid in the form of a once - off and all-inclusive amount to compensate for various benefits therein set out including pensionable salary and pro-rata service bonus. Annexure C to the circular provided, among other things, that severance pay would be equal to one week’s remuneration for each completed year of continuous service within the Public Service. It also invited anyone interested to know more about the package including the specific amount he would receive to contact his/her personnel office immediately.

[9]      Some time during 1996 the appellant became aware of the circular. In July 1997 he asked for a quotation of the severance package that he would receive if he requested to be discharged on a voluntary basis in terms of the circular and if the request was approved. He was informed that he would receive a severance package totalling R1 353 567,86. On the 20th June 1997 the appellant signed a request addressed to the Director-General that he be discharged from the public service in terms of the provisions of the circular. The body of the request reads thus:

“REQUEST TO BE ALLOWED TO BE DISCHARGED VOLUNTARILY FROM THE PUBLIC SERVICE IN TERMS OF THE PROVISIONS OF ANNEXURE A OF THE DEPARTMENT OF PUBLIC SERVICE AND ADMINISTRATION CIRCULAR 10/12/26 DATED 22 MAY 1996.

I, MAADA MBEREGENI JOSEPH............. Deputy-Director-General Persal No/Pay No 80054480 do hereby request to be allowed to be discharged from the Public Service in terms of the provisions of Annexure A of the Department of Public Service and Administration circular 10/12/26 dated 22 May 1996.

I hereby declare that this request is made voluntarily and that I am familiar with the conditions and severance benefits as set out in the relevant Annexure.”

[10]     On the 19th August 1997 Mr Badenhorst, who was a Deputy Director-General in, and, Head of, the Department of Finance and Expenditure of the Northern Province, wrote a letter to the appellant advising him that the quotation of severance package that he had been provided with was incorrect. He wrote that the quotation was based on the appellant’s full pensionable service since he joined the public service on the 3rd August 1976 whereas it should have been based on the appellant’s pensionable service from 1 March 1992. This related to the fact that, although the appellant had joined the public service in 1976, he had been paid a package in 1992 covering the period 1976 to February 1992 when the Venda Pension Fund was liquidated. The suggestion was that in calculating the severance package that the appellant would be entitled to, the period from 1976 to February 1992 had to be disregarded and only the period from the 1st March 1992 and thereafter had to be taken into account. A quotation dated the 19th August 1997 was attached to the letter and was said to be the correct one. That quotation reflected that the appellant would be entitled to a severance package totalling of R483 223,04.

[11]     The appellant says he was shocked and upset at the second quotation. On 25 August he addressed a letter to Mr Badenhorst in which he purported to withdraw his request to be discharged. The body of the letter read thus:-

“ Voluntary termination of service on the basis of severance package: self your s4/6/2 dated 19th August 1997 refers.

1.      
When I applied for severance package I based my application on the quotation dated 08 July 1997 and not on the quotation of 19th August 1997.

2.      
My quotation was based on the circular minute 1/3/25 dated 2 May 1997 issued by the Department of Public Service and Administration whereby my services on the voluntary package is (sic) supposed to be taken into account from the date of my appointment which is August 1976 and not March 1992.

3.      
On the basis of paragraphs 1 and 2 above I therefore withdraw my application until such time I will benefit and be treated in terms of circular minute 1/3/25 dated 02 May 1997 from the Department of Public Service and Administration”.

[12]     Circular 1/3/25 of 2 May 1997 was attached as annexure “D” to the answering affidavit. It was from the Director-General of the Department of Public Service and Administration. It read thus:-

“TO HEADS OF ALL DEPARTMENTS/PROVINCIAL ADMINISTRATION/OFFICES OF PROVINCIAL SERVICE COMMISSIONS

APPLICATION OF THE SPECIAL INITIATIVE WHEREBY SERVING OFFICIALS ARE AFFORDED THE OPTION TO REQUEST THAT THEIR SERVICES BE TERMINATED ON A VOLUNTARY BASIS

1.      
During a recent meeting of the Central Chamber of the Public Service Bargaining Council it was brought to the attention of the representatives of the State as employer that certain departments do not recognise years of service in the former TBVC states when granting personnel the voluntary severance package. Consequently, the representatives of the employer undertook to issue a circular on the matter to clear up any possible incorrect application of the relevant measures.

2.      
Section 2(5)(b) of the Public Service Act, 1994, stipulates that all persons who immediately before the commencement of this Act were, by virtue of a law repealed by this Act, officers or employees in an institution referred to in section 236(1) of the Constitution, 1993,shall remain in employment and shall from that commencement be deemed, without break in service, to be officers or employees, as the case may be, and the provisions of this Act shall apply to or in respect of those officers or employees.

3.      
Continuous service in the Public Service of the former TBVC states before 10 June 1994 thus must be recognised for purposes of the voluntary severance package in respect of those personnel who remained in the service of the new Public Service after the said date.

DIRECTOR-GENERAL”

[13]     It will be noted that the last paragraph of circular 1/3/25 was to the effect that continuous service rendered in the public service of the former TBVC states (which included Venda where the appellant had served) before 10 June 1994 had to be recognised for purposes of the voluntary severance package in respect of those personnel who remained in the service of the new Public Service after that date. On the 28th August 1997 Mr Badenhorst responded to the appellant’s letter in the following terms:

“APPLICATION FOR VOLUNTARY SEVERANCE PACKAGE

Your letter dated 25 August 1997 refers.

You indicate, as [the] main reason for your request to withdraw the application, that you are not treated equitably in terms of [the] contents of DPSA Circular 1/3/25 dated 2 May 1997 which instructs Departments to take all service in previous administrations into considerations when calculating severance packages.

You, furthermore, indicate that you withdraw your application ‘until such time as I will benefit and be treated in terms of circular minute 1/3/25 dated 2 May 1997......’

I wish to point out to you that you are, in fact being treated very equitably in terms of the contents of the above circular. All your benefits, with the exception of pension lump sum have been calculated based on a service period of 21 years.

As far as pension benefits are concerned, you are well aware of the fact that the ex Venda pension fund was liquidated in 1992 and benefits paid to members, which you also were at that point in time. Thereafter, a new fund was established which was eventually taken over by the National Government and incorporated into the GEPF.

The second calculation thus, quite correctly, reflects your membership to the pension fund as having commenced in 1992 and not 1976 as previously stated. The reason for this is that you have already received your pension benefits for the period 1976 to 1992 and that you only qualify for pension benefits from the date you joined the ‘new Venda’ pension fund.

You are, thus, informed that your statement of withdrawal is not accepted and that your services will officially be terminated, in terms of the voluntary severance scheme, on 31 August 1997.

Allow me to thank you for your contribution to the Department of Finance and Expenditure”.

[14]     It will be seen from the penultimate paragraph of Mr Badenhorst’s letter that he informed the appellant that his “statement of withdrawal” of the request to be discharged was not accepted and that his services would officially be terminated in terms of the voluntary severance scheme on 31 August 1997. Prior to this letter the appellant had not as yet been told the outcome of his request to be discharged. On the 1st September 1997 the appellant left the public service in the light of Mr Badenhorst’s letter dated 28 August. He subsequently instructed attorneys to take his matter up with the Department because he was unhappy that he had been dismissed despite his letter of the withdrawal of his request.

Proceedings in the Labour Court

[15]     In due course the appellant launched an application in the Labour Court for an order inter alia reviewing and setting aside the first respondent’s decision not to accept the appellant’s withdrawal of his application for a voluntary severance package, declaring the appellant’s services to have been terminated unlawfully on 31 August 1997 and ordering the appellant’s reinstatement and the payment of his costs.         

[16]     One of the matters that the appellant dealt with in his founding affidavit was the allegation made by the Director of Legal Services on behalf of the appellant’s erstwile employer in a letter dated 13 January 1998 addressed to his attorney. In that letter it was alleged that the appellant had “voluntarily accepted a severance package offered to him” which was then approved and he was accordingly paid the benefits due to him. The appellant dealt with the contents of that letter in par 3.9.4 of the founding affidavit. There he said that the allegations in the letter were “clearly wrong”, that the second quotation was submitted to him after Mr Badenhorst, the Director-General and the Provincial Service Commission had recommended the approval of his request but before it had been finally approved by the first respondent, and that no benefits it had been paid to him but, on the contrary, that he had ensured the return by his attorneys to the Department of a cheque that the Department had sent to him.

[17]     In the answering affidavit filed on behalf of the first respondent, the first respondent associated himself with the contents of the letter of the 13th January from the Director of Legal Services of the Northern Province. In par 23.3 of the answering affidavit it was said in part:.
“As far as the allegation of a voluntary acceptance of the severance package is concerned, the whole measure was structured upon a first step by the employee to identify himself as a possible candidate for a discharge from service by the employer. The act of self- identification was the sole voluntary step that the employee had to take to be taken into consideration for this measure. The [appellant’s] belated refusal to accept the severance package after the second quotation submitted to him, is therefore of no relevance. The fact is that after his self-identification for the application of this measure, he qualified for that severance package and did not need to formally ‘accept’ it thereafter. His entitlement thereto flowed from his own voluntary act of stepping forward and indication that he wished to be discharge[sic] from the Public Service.”
The first respondent admitted that the second quotation was brought to the appellant’s attention after Mr Badenhorst and the Director-General had made their recommendations but before he (the first respondent) could approve the request.

[18]     The appellant makes the following submissions as to his case in paragraph 4.1 of the founding affidavit:
(a)     
in applying to be discharged, he had acted upon an erroneous representation negligently or otherwise made to him in the first quotation,
(b)     
had he been aware of the true facts, he would not have requested to be discharged,
(c)     
he never accepted the second quotation which was submitted to him before the executing authority had approved his request,
(d)     
the decision not to accept the withdrawal of his request for a severance package and to terminate his services was taken unlawfully in circumstances where the Deputy Director-General was in any event not authorised to take such a decision, and
(e)     
his services were terminated in circumstances where no legitimate reason existed for such termination and that his services were accordingly unlawfully terminated.

[19]     In response to the submissions made by the appellant in paragraph 4.1 the first respondent took the attitude that the contents thereof were legal submissions and argument to which he did not need to respond. However, he proceeded to say the following in par 25.2 of the answering affidavit:.
“For the convenience of the Honourable Court, however, I wish to point out that the [appellant] is apparently trying to bring in some principles of the law of contract and misrepresentations so as to purportedly set aside an agreement in terms whereof his services were terminated. This line of thought is with respect misconceived, because the [appellant] was at all relevant times dealt with within the parameters of section 17(2)(c) of Act 103 of 1994. This is not a case where the parties have reached a bilateral agreement that the services of the [appellant] be terminated; this was an exercise in terms whereof the employer after consultation with the employees’ organisation and with the co-operation of the employee exercised a power of dismissal entrusted to it by the relevant provision.”

[20]     In par 25.3 the first respondent submitted that the procedure that was followed was fair and objectively above board. He submitted further that the appellant was not prejudiced because he ultimately received what he was entitled to. He went on to say that “(w)hat [the appellant] is trying to do now, is to benefit from a bona fide error on the PERSAL - system which was fortunately detected by Badenhorst in time. If Badenhorst did not so detect this error, the [appellant] would in any event have remained liable to re-pay any such unlawful remuneration in terms of section 31 of the Public Service Act 103 of 1994.”

[21]     The basis for the decision of the Court a quo was that the appellant was not entitled to withdraw his request or application once he had made it. In this regard the Court a quo upheld the contention which Counsel for the first respondent pursued before us, namely, that the special initiative contained in the circular was only voluntary at the initial stage when an employee made the request to be discharged but that, once the employee had made that request, he could not withdraw it.

The appeal

[22]     In a nutshell the appellant’s case was ultimately the following:-

1.      
the government announced a special initiative in terms of which officers and employees in the public service could request to be discharged from the public service on a voluntary basis in return for the payment of a special severance package;

2.      
he asked his employer what his severance package would be if he request