Mngomezulu v Swaziland Water and Agricultural Development (3/2016) [2016] SZICA 7 (03 October 2016);

 

IN THE INDUSTRIAL COURT OF APPEAL OF SWAZILAND

 

JUDGMENT

                                                                                                Case No. 3/2016

In the matter between:

 

                                                         

DUMISANI Z. MNGOMEZULU                                         Appellant

 

And

 

SWAZILAND WATER & AGRICULTURAL

DEVELOPMENT ENTERPRISE [SWADE]                       1st      Respondent 

 

THE MINISTER FOR AGRICULTURE N.O.                    2nd     Respondent 

 

THE CHAIRMAN OF THE STANDING COMMITTEE

ON PUBLIC ENTERPRISES                                                         3rd     Respondent 

 

THE ATTORNEY GENERAL                                             4th     Respondent 

 

Neutral citation:  Dumisani Z. Mngomezulu v Swaziland Water & Agricultural Development Enterprise (SWADE) (3/2016) [2016] SZIC 7 (14th October 2016)

 

Coram:                          M. DLAMINI AJA

T.  MLANGENI AJA

M. FAKUDZE  AJA

 

For Appellant:              M. SIBANDZE

For Respondent:           S. V. MDLADLA

 

Heard:                           03 October, 2016

 

Delivered:                      14th October, 2016

Labour law:  Parties providing their own mechanism for dispute resolution in respect of contract of employment. Respondent alleging that appellant cannot contract out of Part VIII of the Industrial Relations Act 2000.

 

Held:                Where the terms of the parties to an employment contract correlate to the spirit of the Industrial Relations Act, freedom of contract is upheld.

__________________________________________________________________

JUDGMENT

__________________________________________________________________

                  

M. DLAMINI AJA

Summary:   The appellant is appealing against the court a quo’s refusal of an order directing that the matter between the parties be referred to arbitration.  According to appellant this is as per clause 13 of the contract of employment.

                  

                   Synopses

 

[1]               The appellant was employed by the Government of Swaziland in the Ministry of Agriculture.  In August 2012, the appellant was seconded to the first respondent as the Acting Chief Executive Officer for an undetermined period albeit “until further notice.”  On the 11th February 2015, the first respondent’s board of directors authored a correspondence advising the appellant that he has been appointed as the substantive Chief Executive Officer of first respondent.  The effective date was, however, 30th October 2012.  Appellant declined the appointment, protesting inter alia the backdated effect of the appointment.  The appellant suggested that the matter be referred to arbitration.  While there were discussions on arbitration, on 14th December 2015 the first respondent’s board of directors wrote another letter advising the appellant that following a correspondence from the Civil Service Commission (a body responsible for employing government employees) advising first respondent of appellant’s de-secondment, the appellant’s acting appointment is terminated with effect from 1st December 2015. 

 

[2]               On receipt of the correspondence of 1st December 2015, appellant declined to accept the termination of his employment and advised that the matter be still referred to arbitration in terms of the written contract of employment.  First respondent refused citing that there was no basis to refer the matter to arbitration as the contract of employment between them terminated upon de-secondment, and by letter of 14th December 2015.  On the 16th December 2015, the appellant, under a certificate of urgency, filed an application.  The court dismissed the application.  On 10th February 2016, appellant filed the application which is the subject matter of this appeal.

 

                   Ground of appeal

 

[3]               In his grounds of appeal, the appellant appealed the decision of the court a quo’s finding that the matter was not urgent.  The appellant had deposed that the matter was urgent because the first respondent was at the time engaged in recruiting a substantive Chief Executive officer to occupy the very post he was contending for.

 

[4]               I must point out that during the hearing of this appeal, appellant’s Counsel did not press for argument on this point.  He was informed by the trite principle of our law that only final orders are appealable in law.  He was correctly advised on this.  However, it would be remiss of me not to point out that in terms of our labour law, the appellant had a right of review on this point provided injustice is established as a result of the interim order.  Expatiating on this position of the law, MCB Maphalala J, as he then was, in Swaziland Water and Agricultural Development Enterprises Ltd v Doctor Lukhele and Others Civil Case No. 1504/11 at paragraph 72 held:

 

“It is apparent from section 19 (5) of the Industrial Relations Act that a decision or order of the Industrial Court or Arbitrator is subject to review by the High Curt on common law grounds at the instance of any interested party.  This section does not distinguish between a final order or an interim order.  What matters is that there has to be an order or decision made by the Industrial Court or arbitrator to which there is an aggrieved party.  It would not be in the interest of justice and fairness to prevent an aggrieved party from seeking redress merely because the order in question is interim in nature.  Grave injustice would result if an aggrieved party were to await the finalisation of the matter on its merits.”

 

[5]               The essence of the appeal is that the court a quo erred in law in that having dismissed the matter on the basis of lack of urgency, the court a quo as per appellant,went on to decide the matter on its merits and found that the appellant was not entitled to have his dispute referred to arbitration, as of right in terms of the contract of employment between the appellant and the first respondent.”[1]

 

[6]               The appellant also appealed against the order of costs including certified costs of Counsel meted against him by the court a quo.

 

 

                   First respondent’s heads

 

[7]               In the heads of argument, the first respondent raised a number of points in limine.  He pointed out that the record was incomplete. There was no application for extension of time to file a proper record.  The first respondent cited extensive authorities on such points in limine.  However, there is no need to adjudicate on the points in limine by reason that Counsel for both parties then agreed that the record be amended and an application to reschedule the hearing of the appeal within the sitting session was granted by consent of both parties.  The first respondent also raised two other points in limine viz., that the matter was res judicata and academic.

                  

Res judicata

 

[8]               In the case of Turk v Turk 1954 (3) SA 271 at 272 the court propounded on res judicata:

 

“If the earlier case necessarily involved a judicial determination of same question of law or issue of fact, in the sense that the decision could not have been legitimately irrationally pronounced without at same time determining that question or issue, then such determination though not declared on the face of the recorded decision, is deemed to constitute an integral part of it, and will be res judicata in any subsequent action between the same parties in respect of the same subject matter.”

 

[9]               Voet commenting on the rationale behind this rule stated:

 

“[T]he rule is to prevent inexplicable difficulties from arising out of discordant and may be mutually contradictory judgments, on account of one and the same matter in dispute being again and again brought forward in different actions”.[2]

 

[10]             The appellant had prayed before Nkonyane J by its urgent application of 16th December 2015:

 

“3.1     That the dispute between Applicant and the first respondent relating to first respondent’s employment status be referred to arbitration as agreed between Applicant and first respondent.”

 

“3.3     That pending the completion of these proceedings and of the arbitration referred to in Prayer 3.1, the Applicant’s continued employment is maintained and the termination of Applicant’s purported lapse of Applicant’s employment by first respondent and desecondment by the 4th Respondent are hereby stayed.”

 

[11]             Before Dlamini J on the 10th February 2016 and again by certificate of urgency, the appellant prayed:

 

“3.1     That the dispute between Applicant and 1st Respondent relating to 1st Respondent’s termination of Applicant’s services be referred to arbitration in terms of Clause 13.2 of Applicant’s Contract of Employment.

 

3.2       That pending the outcome of these proceedings and of the arbitration referred to under Prayer 3.1, the 2nd Respondent be and is hereby interdicted from appointing a substantive Chief Executive Officer for the 1st Respondent.”

 

[12]             Appellant’s Counsel submitted that when the appellant sought for an order for referring the matter to arbitration before Nkonyane J in December 2015, it was intending that the arbitration would decide on the question of whether by the contract reading that the appellant was acting “until further notice” meant that he was employed on permanent basis.  This is different from the prayer that was serving before Dlamini J on February 2016 where the appellant wished the arbitrator to pronounce on the termination of the contract of employment.

 

[13]             I must point out that on a cursory reading of the prayers serving before their Lordships below, suggests that there is no material difference.  However, firstly, there is no reason for the court to reject the explanation advanced on behalf of Counsel that a close reading of the prayers do show that they are different in terms of the reason for the referral.

 

[14]             Secondly, section 11 (1) of the Act points out as follows:

 

“The Court shall not be strictly bound by the rules of evidence or procedure which apply in civil proceedings and may disregard any technical irregularity which does not or is not likely to result in a miscarriage of justice.”

 

[15]             This section viewed together with the principle of our law that justice is best served by disposing off matters on the basis of their merits must hold in the case in casu.  This is fortified by the reason that appellant has in the present appeal prospects of success and that there is no miscarriage of justice envisaged.  It appears that the court a quo also held the same view as per Dlamini J as he did not dwell in the question whether the matter was res judicata or not.

 

                   Moot

 

[16]             The first respondent submitted that following that the vacancy of the Chief Executive Officer has been closed, it would serve no purpose for the matter to be referred to arbitration and therefore the matter was academic.

 

[17]             On the question on when a matter is moot, the court in National Coalition for Gay and Lesbian Equality and Others v Minister for Home Affairs and Others 2000 (L) SA 1 (CC) (2000 (1) BCLR at 18 the court held:

 

“A case is moot and therefore not justiciable if it no longer presents an existing or live controversy which should exist if the court is to avoid giving advisory opinion on abstract proposition of the law.”

 

[18]             In the case at hand the appellant is contesting his position as the Acting Chief Executive Officer of the first respondent.  The relationship is based on a contract of employment.  The position of the law is clear on the number of remedies available to a party who alleges that the other party has repudiated the contract.  In other words, reinstatement is not the only remedy available to the appellant in the event the appellant’s matter eventually succeeds before the arbitrator.  Section 16 (1) of the Act refers not only to reinstatement but also re-engagement to other reasonably suitable work or compensation as remedies where breach of an employment term is in issue for instance.  For this reason therefore, the controversy between the parties is “existing or live” as per the National Coalition case supra.

 

                   Issue

 

[19]             The question for determination is whether the written contract of employment provides for resolution of dispute by arbitration.  If yes, whether the appellant may refer the matter to arbitration following that the contract of employment was terminated by the first respondent.

 

[20]             In determining the above issue, the court a quo concluded at paragraph 10 of the judgment: 

 

“It would seem that the Appellant still regards himself as an employee of the Respondent whereas that it is not the case.  His services have been terminated and he no longer has any relationship with SWADE.  The agreement of the parties had provided as follows at clause 13.1;

 

“Should any disagreement, dispute or difference arise between the parties to this agreement” (court’s underlining)

 

The words above are self-explanatory.  They connote that if a disagreement, dispute or difference arises as between the contracting parties, then it has to be dealt with in a particular manner.  But this is as long as they are still parties to the agreement.  In this case though, the reality is that they are no longer parties to the agreement because the 1st Respondent decided that it would no longer be part of the agreement when it terminated the services of the Applicant.  Neither of the parties is contractually bound by this contract that has been terminated.”

 

[21]             First respondent argued further that where there is a breach of the contract of employment, the matter should be dealt with in accordance with Part VIII of the Act, that is, referral to Conciliation, Mediation and Arbitration Commission (CMAC).  First respondent pointed out that by correspondence dated 1st February 2016 it duly advised the appellant of this position.  However, appellant declined and opted to file an urgent application.  First respondent’s Counsel fortifying first respondent’s submission pointed out that appellant ought to have complied with the judgment of Nkonyane J who ruled that appellant’s remedy lies first with CMAC. 

 

[22]             It was further contended on behalf of first respondent that whatever the terms of the contract of employment, they could not override the provision of the Act which succinctly lays out the procedure to be followed by an aggrieved party such as appellant.  In this way, appellant was bound to report a dispute with CMAC.  The matter was according to first respondent brought before the court a quo prematurely.

 

                   Adjudication

 

[23]             Was the matter before the court a quo brought prematurely?  Was appellant bound by the dictates of Part VIII of the Act?  Can parties contract out of the provisions of the Act?

 

                   Freedom of Contract vis-à-vis Part VIII of the Act.

 

[24]             Freedom to contract (pacta sunt servanda) is a principle of our law based on public policy.  Van Heerden JA 1993 (1) SA 179 at 187 articulated as follows on this established principle of our law:

 

“[I]f there is one thing which more than another public policy requires is that men of the full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice.

 

[25]             From the above quotation, it is clear that our law recognizes that parties have the right to dictate on the terms and conditions of their agreements.  The question therefore is not whether the parties can contract out of the provisions of Part VIII of the Act but whether in so doing, their terms violate Part VIII of the Act.  This calls for the court to consider the relevant terms of the parties.

 

[26]             Clause 13 of the contract of employment signed by both parties on the 12th September 2013 describes in detail the procedure to be adopted by the parties in the event of a dispute between them.  Clause 13.1 directs that the first port of call in the event of a dispute is a referral to conciliation.  Should the parties not agree on referring the matter to conciliation or on the name of the person to be conciliator, the matter is to be referred to arbitration in terms of clause 13.1.

 

[27]             Clause 13.1.2 directs that should the parties agree to conciliate then the dispute is to be presented to the conciliator within fourteen  days after date of agreement to conciliate.  The clause further points out that the parties before conciliation shall not have legal representation.

 

[28]             Clause 13.1.3 directs that the fourteen days mentioned in clause 13.1.2 is not pre-emptory as the conciliator may determine a reasonable period upon which written representation to him may be submitted.  This clause further highlights how the conciliator is to carry out his duties of conciliating.

 

[29]             Clause 13.2 prescribes that should any party be aggrieved by the decision of the conciliator, he shall, in writing within fourteen days after receiving the conciliator’s opinion, submit the dispute to an arbitrator.  Clause 13.2 also outlines how the arbitrator is to conduct the arbitration.  Clause 13.3 clarifies how an arbitrator is to be nominated by the parties.  Should the parties fail to agree within ten days on the name of the arbitrator, any party may within seven days of such notice, refer the matter for the nomination of an arbitrator to the Chair of CMAC.  Clause 13.5 details how the arbitrator is to carry out his duties.

 

[30]             Having pointed out the terms of the agreement by the parties, the question is whether such terms are contrary to Part VIII of the Act.  The Legislature described the purpose of the Act as follows at section 4 (1) (d) of the Act:

 

                             “The purpose and objective of this Act is to:-

                                               

(d)        provide mechanism and procedures for speedy resolution of conflicts in labour relations;”

 

[31]             From the terms of the agreement of the parties cited above, it is clear that they correlate to the spirit and purpose of the Act.  They do not in any way violate the objective and purpose of the Act.  The parties set out to design their own mechanism and procedures for the speedy resolution of their dispute should it arise.  For this reason alone, it would be erroneous to interfere with their right to freedom of contract.

 

[32]             Did the right to conciliation and arbitration fall away upon first respondent terminating the contract?  It is common cause that the first respondent by correspondence dated 14th December 2015 advised appellant that his acting appointment has been terminated.  It is on this basis that the learned Judge a quo ruled that the appellant could not claim to enforce a contract before the arbitrator as the right to approach the arbitrator was intertwined with the contract which was no longer subsisting following termination of his services.  The learned Judge a quo’s analysis was influenced by Clause 13.1 which reads:

 

“should any agreement, dispute or difference arise between the parties to this agreement” (my emphasis)

 

[33]             However, with due respect, the court a quo ought to have read the entire agreement.  It would have appreciated Clause 13.8 of the agreement which reads:

 

“The validity of clause 13 shall not be affected by the cancellation of or the validity of this agreement as a whole.”

 

[34]             The above clause points out that in applying the terms of the contract, its validity or otherwise is inconsequential.  In the result, following that there is a dispute between appellant and first respondent on the employment contract, the dispute ought to be resolved in terms of Clause 13.  Appellant’s appeal ought to succeed in this regard.

 

                   Costs

[35]             The learned Judge a quo mulcted the appellant with costs.  It is clear from the above that the appellant was justified in filing the urgent application.  It follows that the order of costs must fall. 

 

 

[36]             In the final analysis, the following orders are entered:

 

  1. The appellant’s appeal is upheld;
  2. The orders of the court a quo are set aside;
  3. The dispute between the parties is to be dealt with in accordance with clause 13 of their agreement signed on 12th September 2013.
  4. No order as to costs

 

 

____________________

M. DLAMINI

ACTING JUDGE OF APPEAL

 

 

                                                                                                                                                                                                                                                                                       ___________________

I agree                                                         T. MLANGENI

                                                                   ACTING JUDGE OF APPEAL

 

 

 

                                                                                                                                                                            __________________

I agree                                                         M. FAKUDZE

                                                                   ACTING JUDGE OF APPEAL

 

[1] see page 123 of the record of appeal

[2] See Boshoef V Union Government 1932 TPD at 345