THE LABOUR COURT OF SOUTH AFRICA,
HELD AT CAPE TOWN

CASE NO: C454/2016
Not reportable 

In the matter between:

SOUTH AFRICAN NATIONAL DEFENCE FORCE 					 Applicant

and

STEPHEN ANGELO BLAAUW 						     First Respondent
JUSTICE NEDZAMBA N.O. 							Second Respondent
GENERAL PUBLIC SERVICE SECTORAL
BARGAINING COUNCIL 								    Third Respondent 

Heard:	9 July 2021
Handed down:	This judgment was handed down electronically by circulation to the parties' representatives by email and release to SAFLII. The date and time for hand­ down is deemed to be 10h00 on 8 October 2021.
Summary:	Application to review arbitration award – arbitrator's finding that employee was dismissed reviewable on objectively justiciable grounds – fixed-term contract employee – held section 198B applied, alternatively, that the first respondent had a reasonable expectation of permanent employment – review dismissed with costs.  

JUDGMENT

LESLIE AJ

Introduction and background

[1]	The first respondent ("Blaauw") was initially employed by the applicant in 2010 as a casual worker. With effect from January 2012, Blaauw was formally appointed under the Public Service Act as a fixed-term contract worker in the position of groundsman at a Special Forces facility. This fixed-term contract was for a period of one year. It expired on 9 January 2013.

[2]	After 9 January 2013, Blaauw continued to be employed by the applicant, albeit that there was no formal contract in place. The applicant's version is that, from this date onwards, Blaauw's contract of employment was extended "on a month to month basis" – that is, it was renewed at the end of each month for a further one month period. Blaauw, on the other hand, considered that he was permanently employed. 

[3]	On 21 August 2014, the applicant's Major Smit met with Blaauw and certain other employees, in order to discuss the contents of a letter generated by Brigadier General R Maphwanya (dated 14 August 2014). The letter concerned an alleged administrative error concerning the retirement dates of certain employees. It read as follows: 

"EMPLOYEES APPOINTED AS CONTRACT WORKERS (CB SUFFIX)

1.	Letters DHRSS/R/104/1 dated 25 April 2014 and a meeting between Maj G. Smit, Capt W. Mente, Sgt L.M. Gontshi and Ms J. Smith dated 07 August 2014 has reference.
2.	The employees on the attached list [this included Blaaw] are currently appointed on the PERSOL system. These employees are appointed as Contract Workers – CB, but their last day of service is in the month they turn 65 years of age.
3.	DHRSS requests Special Forces to rectify the contract expiry date as the members are not yet appointed with a "CA" suffix.
4.	The contract end date of the members applicable is shorten (sic) to 30 September 2015 (See attached name list).
5.	The submission of Advertisement of posts iro above-mentioned subject must reach this HQ on or before 25 August 2014 to expedite the process of placing members who qualifies (sic).
6.	The reason for the contract end date of 30 September 2015 is for the Special Forces HQ to complete the process of placing the qualifying members permanently as instructed by CHR.
7.	Your cooperation in this regard is appreciated.'' (bold in the original)

[4]	Blaauw's position was subsequently advertised on a permanent basis. Blaauw duly applied but was unsuccessful. His employment therefore terminated with effect from 30 September 2015.  

[5]	Blaauw alleged that the termination of his employment amounted to an unfair dismissal. He referred an unfair dismissal dispute to the third respondent ("the GPSSBC"), where it was arbitrated before the second respondent ("the arbitrator"), culminating in the arbitration award under review. 

[6]	At the arbitration hearing, Blaauw testified in support of his case. The applicant called Sergeant Major Johanna Van Zyl, a Human Resources Development Clerk, to present evidence in defence. 

The award

[7]	The arbitrator held that Blaauw had been dismissed and that his dismissal was procedurally and substantively unfair. Retrospective reinstatement was ordered.

[8]	The crux of the arbitrator's reasoning, in support of his finding that Blaauw had proved that he had been dismissed, is found in paragraphs 34 to 36 of the award. After referring to the applicant's letter dated 14 August 2014 (reproduced above), the arbitrator held as follows:

"[34]	I note that in that same letter, the respondent sought to shorten the length of his employment; evidence shows that the applicant was not consulted, let alone consented to the decision to shorten his employment duration. It is not the respondent's contention that the applicant's last day was a mistake; it unilaterally shortened the contract end date because it needed to complete the process of placing qualifying members permanently. I find that the respondent's unilateral decision to shorten the applicant's decision (sic) to 30 September 2015 constituted dismissal. 

[35]	Mr Mdhuli [the employer's representative] submitted that the fact that the applicant applied for the permanent position shows that he was aware that he was still employed on a fixed-term basis. It is important to note Van Zyl's evidence that the respondent used the interview process to place fixed-term employees into permanent position (sic). It is clear that the advertising of the position was just a transitional measure to place the employees on (sic) permanent positions. This is consistent with the applicant's undisputed evidence that during 2014 he was initially told not to apply for the post because they were just waiting for the signature to formalise their employment status. In my view, the fact that he applied for the position did not undo the fact that he was already translated into permanency. It is therefore not necessary for me to determine whether the applicant had a reasonable expectation that his fixed-term (sic) would be renewed.

[36] In any event, even if I were to make this determination, the respondent's decision to allow the applicant to work for more than 3 years after the expiry of the contract had given the applicant a reasonable expectation that he would be employed permanently. I find that the applicant was dismissed."

The test on review

[9]	Although both parties initially submitted that the applicable test on review was the unreasonableness standard postulated in Sidumo, this was not correct. It is well-established that findings regarding the existence of a dismissal are jurisdictional in nature. As such the applicable test is correctness, not reasonableness. On reflection, the representatives for both parties accepted this as correct. Accordingly, the existence of a dismissal falls to be assessed on objectively justiciable grounds, which is akin to an appeal.

Was Blaauw dismissed?

[10]	The applicant's case is that Blaauw was employed on a fixed-term contract, renewed monthly, that terminated by effluxion of time on 30 September 2015. As such, the applicant argues, there was no dismissal, and the arbitrator erred in finding to the contrary.

[11]	The arbitrator rejected the applicant's version that Blaauw's employment was of fixed duration. He found that Blaauw was already permanently employed in August 2014 when the applicant unilaterally, and impermissibly, sought to alter the termination date of his contract from 28 February 2057 (the date on which Blaauw turned 65) to 30 September 2015, Since Blaauw did not consent to the applicant's attempt to change to a material term of his contract, it had no legal effect.

[12]	The arbitrator held, in any event, that the applicant's conduct in permitting Blaauw to continue working after the expiry of his written fixed-term contract gave rise to an expectation of permanent employment. On this finding, the applicant's failure to offer Blaauw permanent employment at the end of September 2015 constituted a dismissal.

Permanent employment

[13]	One of the most far-reaching changes to the LRA in recent years came about on 1 January 2015, when the legislature introduced important new measures aimed at regulating non-standard employment (Chapter IX). These changes included greater protection for vulnerable employees, earning below the applicable threshold, against the abuse of so-called "rolling" fixed-term contracts.  

[14]	Blaauw earned well below the applicable threshold, his monthly remuneration as at the date of termination of his employment was R4968.75. As such, he prima facie qualified for the protection contained in section 198B. Section 198B(3) provides as follows:  

"(3)	An employer may employ an employee on a fixed-term contract or successive fixed-term contracts for longer than three months of employment only if – 
(a)	the nature of the work for which the employee is employed is of a limited or definite duration; or
(b)	the employer can demonstrate any other justifiable reason for fixing the term of the contract." (my emphasis)

[15]	Section 198B(5) is a deeming provision that stipulates:

"Employment in terms of a fixed-term contract concluded or renewed in contravention of subsection (3) is deemed to be of indefinite duration."

[16]	Section 198B(4) lists a number of circumstances in which the conclusion of a fixed-term contract will be justified (within the meaning of section (3)). These include, for example, where the employee is taken on as a replacement for someone who is temporarily absent, where a student is given an opportunity to acquire work experience, and seasonal work. Suffice to say that none of these examples has any application to the present case. This is borne out by the fact that Blaauw's position was advertised on a permanent basis. It could not have been converted to a permanent position if the nature of the work was of a limited or definite duration, or if there was any other justifiable reason for fixing its term (within the meaning of section 198B(3)).

[17]	In any event, section 198B(7) places the onus on an employer to prove, if it is relevant in any proceedings, "that there was a justifiable reason for fixing the term of the contract as contemplated in subsection (3) and that the term was agreed".

[18]	Neither party referred to section 198B in the arbitration or review proceedings and it forms no part of the arbitrator's reasoning. When the matter was argued I raised the potential application of section 198B to the parties' representatives, who submitted written representations on the point.

[19]	Ms Davis, who appeared for the applicant, submitted firstly that the applicant was not required to defend "a claim" in terms of section 198B and that it therefore did
not present any evidence as to whether either of the exceptions in sub-section (3) applied to Blaauw's employment. These submissions overlook the fact that section 198B(5) is a deeming provision that is triggered by operation of law when certain facts are present. It clearly had application to the present factual matrix (subject to what is set out below regarding the nature of Blaauw's contract), thus placing an onus on the applicant to prove, if applicable, the existence of either of the exceptions in subsection (3)(a) and (b).

[20]	As set out above, the question before me is, objectively, whether Blaauw was dismissed or not. This exercise is closer to an appeal than a review. It is convenient to have regard to the Constitutional Court's summary of the trite legal principles governing appeals in Masstores (Pty) Limited v Pick n Pay Retailers (Pty) Ltd (1) SA 613 (CC): 

"A decision of a court is not overturned merely because wrong reasons were invoked to support it. In our law no appeal lies against reasons in a judgment. Instead, the appeal lies against an order. Hence it often occurs that an appeal is dismissed but for reasons different from those advanced by the lower court whose judgment is the subject of an appeal."

[21]	Conversely, judgments and arbitration awards are routinely upheld or confirmed for reasons other than those alighted upon by the decision-maker. The present enquiry, involving as it does the review of a jurisdictional finding, postulates a test that is broader than Sidimo-unreasonableness. However, even the Sidumo test is result-based. The enquiry is whether the conclusion reached by the arbitrator is reasonable in relation to all the material that served before him. The reviewing court is not constrained by the reasons relied upon by the arbitrator for his conclusions.

[22]	In short, the fact that the legal consequences of section 198B did not form part of the arbitrator's award is no impediment to considering these consequences on review.

[23]	Ms Davis submitted that, in any event, the 2015 amendments to the LRA (including the introduction of section 198B) found no application to the present matter. In this regard, reliance was placed on the Labour Appeal Court's decision in CCMA v Commission Staff Association [2020] 1 BLLR 9 (LAC), which held that section 198B did not apply retrospectively to fixed-term contracts concluded before its promulgation (1 January 2015).

[24]	A novel argument was raised in support of this submission. Ms Davis submitted that when Blaauw was informed by Major Smit, on 21 August 2014, that his contract end-date was being adjusted from 28 February 2057 to 30 September 2015, this constituted the conclusion of a new fixed-term contract. Since this "new" contract was concluded prior to the 2015 amendments to the LRA, it was not hit by section 198B.

[25]	These submissions do not withstand scrutiny. Firstly, there is no evidence that Blaauw at any stage agreed that his employment would terminate on 30 September 2015. On the contrary, it is clear that the applicant made no attempt to reach any agreement with Blaauw. He was simply informed by Major Smit that his contract had a new end-date. This was nothing more than a unilateral attempt to impose a new termination date on Blaauw, which fell well short of the legal requirements for concluding a new fixed-term contract. (Major Smit, in any event, did not testify at the arbitration). 

[26]	What is more, the submission that a new fixed-term contract was concluded in August 2014 is irreconcilable with the applicant’s own pleaded version. As set out above, the applicant’s case was that following the expiry of Blaauw’s fixed-term contract in January 2013 he was “employed on a month to month basis, pending his successful application for a permanent position”. On the applicant’s version, this meant that Blaauw’s contract was renewed every month, including during the period of January to September 2015.  

[27]	Accordingly, insofar as Blaauw remained employed on a fixed-term basis in 2015, the application of section 198B(5) meant that his employment was deemed to be of indefinite duration with effect from 1 April 2015. As such, when the applicant purported to terminate Blaauw’s employment on 30 September 2015, this constituted a dismissal within the meaning of section 186(1)(a) of the LRA.

[28]	If I am wrong, however, it is in any event clear from the evidence that Blaauw at least had a reasonable expectation of permanent employment. This expectation was created, firstly, by the applicant’s conduct in continuing to employ him following the expiry of his original fixed-term contract in January 2013.  

[29]	Secondly, the events of 21 August 2014 are revealing. On that date, Major Smit met with Blaauw and other affected employees in order to discuss the contents of the letter referred to in paragraph 3 above. According to this document, the stated reason for shortening the end-date of the employees’ contracts was for the applicant “to complete the process of placing the qualifying members permanently as instructed by CHR”. This created the impression that the September 2015 date was presented as a stop-gap, within which time the administrative process of converting the employees to permanent employment. This impression is borne out by Ms Van Zyl’s evidence, who clarified that “qualifying members” referred to all the affected employees, including Blaauw: 

“MR NDULI: Do you know who the qualifying members that they referring to? 
MS VAN ZYL: All these contract workers whose contract is shortened.”

[30]	I accordingly find that, even if Blaauw was not permanently employed by August 2014, the applicant’s conduct in retaining his services well after the expiry of his initial fixed-term contract, coupled with its assurance that he would be made permanent before 30 September 2015, created a reasonable expectation of indefinite employment within the meaning of section 186(1)(b). On this approach, too, Blaauw was dismissed with effect from 30 September 2015.

[31]	On either of the above grounds, the arbitrator’s finding that Blaauw was dismissed was correct and does not warrant interference on review. There was no challenge to the arbitrator’s finding that the dismissal was procedurally and substantively unfair, nor to the award of retrospective reinstatement.

[32]	For the sake of completeness, the applicant sought condonation for its failure to comply with the time period in section 145(5) of the LRA, which was not opposed by the first respondent. Condonation was granted. 

[33]	As regards costs, I see no reason why the requirements of law and fairness in this matter would warrant depriving Mr Blaauw of his costs.  

[34]	In the premises, the following order is hereby made: 

Order

1.	The application is dismissed with costs.

G A LESLIE
Acting Judge of the Labour Court of South Africa

Appearances: 
For the applicants:  		M L Davis, instructed by the State Attorney, Cape Town.
For the first respondent: 	F H Cronje, of Cronjes Incorporated Attorneys.