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IN THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not reportable

Case No: JR 1811/20

In the matter between:

DEPARTMENT OF PLANNING, MONITORING AND EVALUATION	Applicant
And
GENERAL PUBLIC SERVICE SECTORAL BARGAINING COUNCIL	First Respondent
ISAAC MILANZU N.O.	Second Respondent
KAILASH BHANA	Third Respondent

Heard: 2 February 2023

Delivered: This judgment was handed down electronically by circulation to the parties' legal representatives by email and publication on the Labour Court’s website. The date and time for hand-down is deemed to be on 10 August 2023.

 

JUDGMENT

 

TLHOTLHALEMAJE, J

Introduction:

[1]  The applicant (The Department), seeks an order reviewing and setting aside the arbitration award issued by the second respondent (Arbitrator) acting under the auspices of the first respondent, the General Public Service Sectoral Bargaining Council (GPSSBC). The applicant further seeks an order condoning the late filing of the review application. The third respondent, Ms Kailash Bhana (Bhana), only opposed the review application.

Condonation:

[2]  The period of the delay in filing the review application is two weeks, which is minimal. The applicant has proffered a reasonable and satisfactory explanation in that regard. In the absence of opposition, one cannot speak of any prejudice to Bhana. Furthermore, having had regard to the applicant’s prospects of success, and the importance of this case to both parties, I am satisfied that the applicant has demonstrated good cause, and that the overall interests of justice dictate that condonation be granted.

Background:

[3]  The following are common cause;

3.1 Bhana is an erstwhile employee of the applicant. She initially occupied the position of Chief Director: Distress Mining Communities. She was employed in terms of a fixed term contract from October 2013. That contract was extended on 1 June 2015 for a further period of three years and was to terminate on 30 September 2018.

3.2 On 25 June 2017, and during the currency of the extended fixed term contract, the Acting Director General (DG) of the Department informed Bhana that approval was obtained for her contract to be converted into a permanent contract in the position of Senior Sector Expert in terms of the provisions of section 9 of the Public Service Act[1].

3.3 On 27 November 2017, the Acting Director Human Resources Manager (Mr Victor) made submissions to the Director General (Ms Mpofu) to the effect that the decision to appoint Bhana on permanent basis was irregular and unlawful, as it was not in compliance with recruitment and appointment policies, and accordingly ought to be reversed.

3.4 On 4 December 2017, Bhana was informed of the reversal of her employment status, and further that the position she had occupied was to be translated into that of Senior Sector Expert: Revitalisation of Distress Mining Community. This was for the period until the expiry of her original fixed term contract on 30 September 2018, or until the permanent position was filled, or whichever eventuality occurred first.

3.5 On 23 January 2018, Bhana and the applicant concluded a 10 months’ fixed term contract. She was employed in the translated position as mentioned above, and the contract was due to expire on 30 September 2018. The contract was however extended on 28 September 2018 for a further period of three months ending on 31 December 2018.

3.6 It is common cause that despite the expiry of the fixed term contract on 31 December 2018, Bhana with the blessing of her supervisor, Mr Rudi Dicks, had reported for duty in January 2019. During this period, Bhana was tasked with preparation of the Mining Indaba in Cape Town. Her travel and accommodation costs were paid by the applicant. The applicant’s contention however was that Dicks did not have authority to extend Bhana’s contract or to instruct her to go to Cape Town.

3.7 Bhana was not paid a salary in January 2019 and had made enquiries with Dicks and the HR department. In response, the applicant’s Chief Director: Human Resources and Corporate Services, and deponent to the founding affidavit, Mr Nomlala, informed her on 29 January 2018 that she had been reporting for duty without the delegated authority having approved the extension of her fixed term contract. She was accordingly told to stop reporting for duty until such time that approval was granted for the extension of her fixed term contract.

3.8 Bhana’s contention was that at the time, she had been recommended for permanent appointment to the position of Chief Director: Distressed Mining Communities on no less than two occasions and was merely waiting for permanent appointment. She had further contended it was before the expiry of the contract that she had enquired from Dicks about the recommended positions, and the latter informed her to continue working in January 2019.

3.9 On 15 February 2019, Bhana referred an alleged unfair dismissal dispute to the GPSSBC. Her dispute was in terms of section 186(1)(b) and 188 of the Labour Relations Act[2] (LRA), and she alleged in her referral that she had a reasonable expectation that her fixed term contract would be renewed. The dispute having been declared as unresolved, Bhana then referred it for arbitration.

Arbitration award:

[4]  Having heard the evidence of Bhana, and Dicks and Mr Matona on her behalf, and that of Nomlala on behalf of the applicant, the Arbitrator identified the issues for determination as whether Bhana was dismissed and if so, whether the dismissal was fair. The Arbitrator accepted that Bhana was employed in terms of successive fixed term contracts with the last one coming to an end on 31 December 2018, but that she had reported for duty on 2 January 2019 on the instructions of Dicks.

[5]  The Arbitrator further held that issue for consideration was whether the acceptance of Bhana’s services by the applicant constituted a tacit contract of employment for an unlimited duration, and if so, whether she was dismissed. He noted that Dicks had confirmed Bhana’s evidence that he had instructed her to report for duty in January 2019; that she was sent to Cape Town to prepare for the Mining Indaba; and that the costs thereof were paid by the applicant. Dicks and Matona had further testified that Bhana’s services were needed in the light of work still to be done in January 2019. Furthermore, the Arbitrator observed that it was common cause that Dicks was Bhana’s supervisor and thus, competent to issue her with instructions. The Arbitrator noted that Bhana was provided with the necessary tools of trade by the applicant and granted access into its premises.

[6]  Based on these factors, the Arbitrator accepted that the applicant had received and accepted Bhana into its service after the termination of the fixed term contract on 31 December 2018. As such, Bhana had continued to render her services after the date of expiry of the fixed term contract. This was further fortified by the concession on behalf of the applicant that it had acted unfairly in not remunerating her for that period and further that Nomlala had asked Dicks to make submissions to the DG that Bhana’s contract be backdated to January 2019.

[7]  With reliance on Department of Agriculture, Forestry and Fisheries v Teto and others[3] the Arbitrator concluded that where an employer permits an employee to continue to render her services beyond the expiry of a fixed term contract, the contract shall be deemed to have been tacitly extended for an indefinite period and could only be terminated through a dismissal or resignation. The Arbitrator concluded that Bhana’s contract was tacitly renewed on the same terms and conditions for an indefinite period, and that she was dismissed on 29 January 2019 when she was informed not to resume duties.

[8]  The Arbitrator further concluded that since the applicant had not adduced any evidence to demonstrate the procedural and substantive fairness of the dismissal but had merely persisted with its contention that Bhana was not dismissed, it therefore did not discharge its onus of proving the fairness of the dismissal. The Arbitrator ordered the applicant to reinstate Bhana in the position of Chief Sector Expert: Revitalisation of Distressed Mining Communities effective from 29 January 2019, together with back-pay.

Grounds of review:

[9]  The contention on behalf of the applicant was that the Arbitrator had misconceived the inquiry before him by failing to first consider whether Bhana was in fact dismissed and where he found in the affirmative to then consider the fairness of the dismissal. It was submitted that there was no evidence from Bhana that she had rendered services to the Department between the period 2 and 29 January 2019 since her contract had expired by effluxion of time and not renewed after 31 December 2018.

[10] It was further contended that the Arbitrator misinterpreted, misunderstood and/or misapplied the provisions of section 186(1)(b) in concluding that there was a tacit contract between the parties. It was submitted that the Arbitrator had introduced a non-existent requirement under the provisions of section 186(1)(b) of the LRA, since that provision does not contemplate that an employee such as Bhana ought to demonstrate that she was a party to a tacit renewal of a contract. All that was required of her was to demonstrate that she held a reasonable expectation that the contract would be renewed on the same terms or that she would be retained for an indefinite period on the same terms but that the employer had failed to fulfil that expectation. To this end, it was contended that the Arbitrator made no attempt to analyse the evidence of Bhana to establish an expectation of a renewal, and whether if it existed, it was based on reasonable grounds.

[11] Furthermore, it was contended that the Public Finance Management Act[4] and the Public Service Act[5] were incorporated into Bhana’s contract of employment, which implied that only the DG had the authority to enter into contract on behalf of the applicant. In such circumstances, it was contended that the Arbitrator committed an irregularity in failing to appreciate this legal position by inappropriately placing reliance on the conduct of Dicks for the purposes of demonstrating a tacit contract between the parties.

[12] The applicant further took issue with the relief granted by the Arbitrator and contended that he failed to consider that the position of Chief Sector Expert: Revitalisation of Distressed Mining Communities in which Bhana was to be reinstated, did not exist in the departmental organisational structure, was not budgeted for, and that her appointment in that position would have constituted a breach of the PFMA.

 

The legal framework and evaluation:

[13] The inquiry before the Arbitrator as he had stated in the award was whether  Bhana was unfairly dismissed within the meaning of section 186(1)(b) of the LRA. Of course, the Arbitrator had to first determine whether a dismissal took place for the purposes of determining whether he had jurisdiction to arbitrate the dispute. This is based on the trite principle that where a dismissal did not in fact occur, in the sense that the preconditions which afforded him the competency to arbitrate the dispute were absent, the Arbitrator would have lacked the necessary jurisdiction[6].

[14] Thus, in these proceedings, the inquiry is not whether the Arbitrator’s conclusions were rational or reasonable but whether from the objective facts, there existed jurisdictional facts which demonstrated that a dismissal took place within the meaning of section 186(1)(b) of the LRA.[7] This means that the Arbitrator’s conclusions are reviewable on objective grounds, and the review court is simply required to enquire whether from the objective facts, the Arbitrator was correct in determining that Bhana had been dismissed within the meaning of section 186(1)(b) of the LRA, when her contract was not renewed[8].

[15] The onus in disputes under section 186(1)(b) of the LRA rests on the employee to show that she had a reasonable expectation that her contract would be renewed. Whether this onus has been discharged is an objective test and involves a determination whether a reasonable employee [would], in the circumstances prevailing at the time, have expected the employer to renew her fixed-term contract on the same or similar conditions[9] .

[16] In interpreting the provisions of section 186(1)(b) of the LRA, the Labour Appeal Court (LAC) in University of Pretoria v Commission for Conciliation Mediation and Arbitration and Others[10] held that the words employed therein did not carry the meaning that by being employed based on a series of fixed terms contracts, an employee has without more a reasonable expectation of a permanent appointment. It was held that the words in section 186(1)(b) of the LRA covers a restrictive set of circumstances, being a reasonable expectation of a renewal of that which had previously governed the employment relationship (i.e., a fixed term contract) and which had now expired, but which flowing from the factual matrix, created at best, a reasonable expectation of a renewal[11].

[17] What then were the facts that were placed before the Commissioner, which when objectively considered, would lead to a conclusion that indeed Bhana had a reasonable expectation that her fixed-term contract of employment would be renewed on the same or similar terms?

[18] It was common cause that Bhana’s fixed term contract expired by effluxion of time on 31 December 2018 after numerous extensions, and that she had nonetheless reported for duty in January 2019 until she was told not to do so. The Arbitrator however found that the applicant’s acceptance of Bhana’s services in January 2019 constituted a tacit contract of employment for an unlimited duration, and that being informed not to resume duty on 29 January 2019 therefore constituted a dismissal.

[19] Since it is apparent from the award that the Arbitrator simply made a finding that Bhana was dismissed based on what he concluded was a tacit agreement between the parties, this Court should then determine the reasonableness of that conclusion and equally assess whether in the end, the Arbitrator was correct when concluding that Bhana had discharged the onus that she was dismissed for the purposes of jurisdiction.

[20] As a starting point, I agree with the applicant’s contentions that the Arbitrator’s conclusions that Bhana had resumed her duties in January 2019 are not sustainable on the objective facts. This is so in that officially, Bhana’s services were terminated on 31 December 2018, and the fact that she had resumed her duties thereafter with the blessing of Dicks or that she had kept possession of the tools of trade is not a basis for a conclusion to be reached that she had officially resumed her duties in January 2019.

[21] It was however submitted on behalf of Bhana that Dicks was authorised to allow her to continue her employment. Reliance was placed on an exchange between the applicant’s representative (Mr Motlhabane) and Bhana’s representative (Ms Govender) at the arbitration proceedings. Flowing from this exchange[12], it is alleged that Motlhabane had conceded that indeed Dicks had the necessary authority. That concession however ought to be read into context, in that Motlhabane had accepted that Dicks had ‘certain authority’ to negotiate contracts with employees as a supervisor, and to engage HR on the matter. Further under cross-examination, Bhana had conceded that the head of the HR and the delegated authority were the custodian of the recruitment process[13]. It follows from this engagement that it cannot be understood that Dicks had the delegated authority to employ Bhana. His authority was limited to negotiating a contract with her, and there was no evidence that such negotiations took place, which ended with the HR and the DG having authorised any contract of employment with Bhana.

[22] Bhana having concluded fixed term contracts on numerous occasions and their extensions, was aware of the recruitment processes to be followed. It is therefore not correct that Dicks had delegated authority for all intents and purposes, including instructing Bhana to continue with her employment despite the expiry of her fixed term contract. Thus, in the absence of that authority, or even a contract having been concluded, one cannot speak of a formal employment relationship between the parties after 31 December 2018.

[23] It was further submitted on behalf of the applicant that the Arbitrator introduced a foreign concept in the definition of section 186(1)(b) by inferring a tacit agreement of continued employment. In addressing the issue, it was held in Gauteng Provincial Legislature v Commission for Conciliation, Mediation and Arbitration and Others[14] that the mere fact that an employee continues to work in the same position for the same employer after her fixed-term contract had come to an end does not mean that her fixed-term contract had now “morphed” into permanent employment, or into employment of indefinite duration. The LAC held that the employment may still be on a fixed-term basis, albeit tacitly, and that ultimately, it depends on the facts, or the inferences that may be drawn from the facts. The LAC further set out the test applied for inferring a tacit contract as follows;

“The synthesis, essentially, requires the court to embark on a three-stage, as opposed to a two-stage, process. The first stage would be to decide on a balance of probabilities what facts have been established. The second stage would be to decide, also on a balance of probabilities, what conclusion, consistent with those established facts, is correct, and a third stage would be interposed between those two, in terms of which the court has to decide how the proved facts, that is including the conduct of each party and the relevant circumstances, was probably interpreted by each of the parties. It is said that at the third stage the court is essentially looking at the matter “through the eyes of the parties – at their conduct and the circumstances” and “unless the conduct in those circumstances was so clear, so unequivocal, so unambiguous that the parties must have regarded themselves in agreement, there is no contract.”[15]

[24] I have already dealt with the fact that the fixed term contract came to an end on 31 December 2018, and that there was no basis for a conclusion that Bhana officially continued her employment in January 2019. Her continued services were not officially sanctioned for a conclusion to be reached that she was engaged on a permanent basis. Other than Bhana’s arrangements with Dicks, one cannot speak of an intention by the applicant that her fixed term contract would be renewed, or that she would be permanently employed.

[25] Even if the Arbitrator had accepted that there was a tacit agreement between the parties, that conclusion is however unsustainable based on the principles set out above. This is so in that the probabilities from the facts of this case as already pointed out, clearly do not favour a finding or inferences to be drawn that a tacit agreement was concluded between Bhana and the applicant. It follows that the conclusions reached by the Arbitrator could not have been consistent with the established facts. On the opposite scale, based on those facts, there was nothing from the conduct of the applicant in particular and the relevant circumstances, that could probably have been interpreted unequivocally and unambiguously, that an agreement was reached that there was a contract of employment between Bhana and the applicant.

[26] To the extent that the Arbitrator merely disposed of the matter in finding jurisdiction based on a tacit agreement which could not have been established from the facts, I agree with the applicant’s contentions that the Arbitrator misconceived the nature of the enquiry before him in the light of the dispute having been referred in terms of section 186(1)(b) of the LRA. It is understandable that the Arbitrator may have been persuaded by Bhana’s evidence and submissions that she had continued her services after 31 December 2018, hence a finding that there was a tacit agreement, which conclusion was in any event incorrect on the facts as already concluded.

[27] The issue however in the light of the dispute referred was whether Bhana had discharged her onus to demonstrate that she had a reasonable expectation that her contract would be renewed on the same or similar conditions under the prevailing circumstances. This onus was clearly not discharged as her case appeared to be that she was recommended for a post, had continued her services after 31 December 2018, and was subsequently dismissed on 29 January 2019. These contentions on their own cannot give rise to a conclusion that a reasonable expectation of a renewal of a contract was established from the objective facts. It therefore follows that the Arbitrator’s findings that Bhana was dismissed are not correct, and this therefore implies that he lacked the requisite jurisdiction over the dispute. Based on these factors and other conclusions reached in this judgment, it follows that the review application ought to succeed.

[28] In the light of the conclusions made above and the full record, I am satisfied that the Court is in a position to substitute the Arbitrator’s award rather than remitting it back to the GPSSBC. I have also had regard to the requirements of law and fairness regarding an award of costs. Clearly there is no basis for such an order to be made since Bhana was entitled to defend an arbitration award issued in her favour and had done so bona fide. Consequently, no order as to costs should be made.

[29] In the premises, the following order is made:

Order:

1. The applicant’s late filing of the review application is condoned.

2. The arbitration award issued by the second respondent under case number GPBC 432/2019 is reviewed, set aside and substituted with an order that the GPSSBC lacked jurisdiction.

3. There is no order as to costs.

Edwin Tlhotlhalemaje

Judge of the Labour Court of South Africa

APPEARANCE:

For the Applicant:

Z.Z. Matebese SC

Instructed by

State Attorney: Tshwane.

For the Third Respondent:

Y. Dockrat, of Dockrat Incorporated attorneys

(heads of argument prepared by T. Govender).

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