Case Number: PSES 691-13/14FS
Province: Free State
Applicant: EF Naude
Respondent: Department of Education: Free State
Issue: Unfair Dismissal - Non-renewal of fixed term contract
Award Date: 30 August 2014
Arbitrator: Jerome Mthembu
IN THE EDUCATION LABOUR RELATIONS COUNCIL
HELD AT BLOEMFONTEIN
Commissioner: Jerome Mthembu
Case no. PSES 691-13/14
Date: 30 August 2014
In the matter between:
E F NAUDé
DEPARTMENT OF EDUCATION,
FREE STATE PROVINCE
DETAILS OF HEARING AND REPRESENTATION:
1. The hearing was held on 1 August 2014. Adv P M Venter represented the Applicant and Mr Masihleho, the Respondent.
2. The parties agreed that the issue /s to be determined did not require the presentation of viva voce evidence and therefore agreed to file Heads of Argument as follows:
2.1 The Respondent on 8 August 2014;
2.2 The Respondent to answer on 16 August 2014;
2.3 The Applicant to reply on 21 August 2014. However, the Applicant elected not to reply to the Respondent’s Argument.
THE ISSUE TO BE DETERMINED AND JURISDICTION:
3. The Applicant referred the matter in terms of Sections 186(1)(b) and 191 of the Labour Relations Act, 66 of 1995 (“the LRA”).
4. I was therefore requested to determine whether the Applicant was dismissed and, if found in the affirmative, whether the dismissal was procedurally and substantively fair.
5. This type of dispute falls squarely within the ambit of Section 186(1)(b) read with Section 191 of the LRA and jurisdiction of the ELRC.
BACKGROUND TO THE ISSUE:
6. The Applicant was employed on 2nd August 2010 as temporary Geography Educator at Ipetleng Secondary School. His employment contract was renewed initially for three (3) month terms and thereafter for consecutive six (6) month terms without problems until the end of 2013.
7. During November 2013, Mr Khuze the Deputy Principal submitted the school’s recommendation that the Applicant’s contract must be renewed. Mr Lekgari, the SGB Chairperson, confirmed that the school did submit the documentation and said that it was signed by the Deputy Chairperson of the SGB.
8. On 17th December 2013 the Applicant received a letter, signed by the Assistant Director for HR, stating that his contract will be renewed as from 1st January 2014 until 30th June 2014, and every term thereafter.
9. On 31st January 2014 the Applicant did not receive his salary and he was told to contact Mr Mogotso the SMGD. The latter informed him to return home and his salary for January 2014 was later paid.
10. On 7 February 2014 the Applicant received his January salary but no deductions were made for pension or medical aid. The Applicant was instructed to return his classroom key on 10 February 2014.
SURVEY OF THE ARGUMENT:
11. It was stated that the Applicant was initially employed on a fixed term contract with effect from 2nd August 2010. His employment contract was renewed initially for three (3) month terms and thereafter for six (6) month terms without problems until the end of 2013.
12. It is common cause that the Applicant was initially employed for three (3) months and thereafter for periods of six (6) months.
13. It is common cause that the Applicant performed his duties without any interruption in service.
14. The Applicant’s contracts were automatically renewed. (Annexure “A”).
15. On 11 December 2012 the Respondent provided the Applicant with a letter confirming that his employment contract has been extended from 1 January 2013 to 30 June 2013. (Annexure “B”).
16. From 1 July 2013 to 31 December 2013 the Applicant continued his duties without any interruption in service.
17. On 17 December 2013 the Respondent issued another letter to the Applicant indicating that his contract is extended from 1 January 2014 to 30 June 2014 and every term thereafter. (Annexure “C”).
18. Notwithstanding abovementioned letters the Respondent terminated the Applicant’s employment on 7 February 2014.
19. It was argued that Section 186(1)(b) of the LRA makes it clear that a dismissal may occur in instances where an employee had a reasonable expectation of renewal of a fixed term contract and such contract is not renewed. The section was obviously included in the LRA to curb the practice of keeping an employee on a temporary basis without employment security until it suits an employer to dismiss such employee without the unpleasant obligations imposed by the LRA.
20. It was further argued that any Court or arbitrator must examine the circumstances around the non-termination in order to establish whether it was only a disguised dismissal and such inquiry goes beyond the normal principles of contract.
21. The first critical issue in determining whether or not a dismissal occurred in terms of Section 186(1)(b) is whether or not the employee’s expectation was reasonable i.e. would any reasonable employee have expected the contract to be renewed. Repeated renewals obviously increases the expectation of an employee.
UNIVERSITY OF CAPE TOWN v AUF DER HEYDE (2001) 12 BLLR 1316 (LAC) and BLACK v JOHN SNOW PUBLIC HEALTH GROUP (2010) 4 BLLR 374 (LC).
22. In SACTWU & ANOTHER v CADEMA INDUSTRIES (PTY) LTD (2008) 8 BLLR 790 (LC), it was also held that repeated renewals might lead to a reasonable expectation of renewal.
23. In S A RUGBY (PTY) LTD v SARPA (2008) 9 BLLR 845 (LAC), it was held that the test is whether a reasonable employee has acquired an expectation that the fixed term contract would be extended.
24. The Applicant’s fixed term contract was repeatedly renewed for a period of almost four (4) years.
25. The Applicant was informed that his contract was renewed until 30 June 2014 and every term thereafter simply meaning until 31 December 2014.
26. The Applicant had a reasonable expectation of renewal of his fixed term contract.
27. It is also worth mentioning that seven new educators were appointed in the meantime at the same school.
28. The Applicant was seriously prejudiced as he bought a house close to the school and was blissfully unaware that his medical aid payments were stopped by the Respondent. He had to incur medical costs due to the fact that the Respondent did not pay his medical contributions and did not have the basic decency in informing him accordingly.
29. The Respondent failed to follow any due process and simply informed the Applicant that he should return his classroom’s keys.
30. Therefore the termination of the Applicant’s services constituted a dismissal and the Applicant had a reasonable expectation of renewal. The dismissal was furthermore both substantively and procedurally unfair.
31. The Respondent took a decision that is arbitrary and clearly frivolous.
32. The normal test to be applied is fairness to parties.
NUM v EAST RAND GOLD AND URANIUM (1997) 2 BLLR 225 (CCMA)
33. On the issue of costs it was argued that in order to consider costs an adjudicator should take cognisance of the following factors:
· Fairness to parties (the Applicant has been forced to appoint a legal representative. The Respondent clearly committed an unfair dismissal).
· Whether the matter is a new type of dispute or test case (this is not a new type of dispute).
· The financial position and hardship of a party (the Applicant’s salary has been stopped whereas the Respondent is a public enterprise).
· Whether a simple procedural error was made (the Respondent took no cognisance of the LRA).
· Whether a party persisted with a wrong viewpoint (despite many attempts to settle the matter the Respondent persisted with their approach).
· Costs should normally follow a successful party.
· Whether a party is frivolous.
CITY OF CAPE TOWN v SAMWU (2008) 7 BLLR 618 (LC)
34. The Applicant sought relief as follows:
34.1 That a dismissal occurred within the ambit of Section 186(1)(b) of the LRA.
34.2 That the dismissal was both substantively and procedurally unfair.
34.3 That the Respondent be ordered to pay the remaining period that the Applicant would have been employed, 1 February 2014 to 31 December 2014 alternatively 1 February 2014 to 30 June 2014 (in line with the letter from the Respondent).
34.4 That the Respondent be ordered to pay the Applicant’s legal fees for 1 August 2014.
THE RESPONDENT’S CASE:
35. The Respondent averred that the Applicant’s dispute is succinctly one relating to termination of a fixed term contract and Applicant contend that he had a reasonable expectation that the contract would be renewed on the same or similar terms as envisaged in Section 186(1)(b) of the LRA.
36. Essentially, the arbitrator was requested to determine whether Respondent had terminated the contract unfairly and thereby amounting to dismissal or whether the fixed term contract terminated upon the end of its natural life-term.
37. Hereunder, a brief background of the relationship between the Applicant and the Respondent was outlined in order to put matters into correct perspective.
BACKGROUND TO THE DISPUTE:
38. On 1 April 2010, Respondent had a vacancy after one of the Head of Department vacated the position. The vacancy is graded at level 2, which means it is a promotional supervisory post at school management level.
39. In order to respond to an immediate operational need for effective teaching and learning, Ipetleng Secondary School requested Respondent to provide a replacement on a temporary basis until a suitable replacement was found. (Annexure “DOE1”).
40. It should be noted that the request from the school to the Respondent and a provision for a temporary educator is a practice by the Respondent.
41. Respondent authorised the advertisement of a post for Geography Grades 10 to 12 at Ipetleng Secondary School. (Annexure “DOE2”).
42. The Applicant applied for the post and was recommended by the School Governing Body (SGB) for a temporary appointment. Respondent approved the recommendation of the SGB in terms of Section 3 of the Employment of Educators Act 76 of 1998 as amended to appoint Applicant temporarily against an HOD promotional post graded at salary level 2. (Annexure “DOE3”).
43. During August 2010, Applicant and Respondent entered into a contract regulating their relationship, terms and conditions of employment (Annexure “DOE4”).
44. Initially, Applicant was appointed on a three (3) month basis with effect from 2nd August 2010 until the fixed term contract terminated on 30 September 2010.
45. Applicant was reappointed again on 1 October 2010. The contract was again terminated on 31 March 2011. On 1 April 2011, Applicant was reappointed for another term ending on 30 June 2012.
46. Respondent reappointed Applicant on 1 July 2012. Immediately after Applicant was reappointed, Respondent commenced a recruitment process that led to the appointment of a fully suitably qualified HOD. Once the appointment of the HOD was finalised, Applicant’s temporary post was occupied by the HOD.
47. Respondent had erroneously omitted to inform Applicant of the termination as it was under the false impression that Ipetleng Secondary School had attended to the communication with the Applicant.
48. Respondent and Applicant had contracted that Applicant is appointed on a temporary basis until Respondent finds a suitably qualified HOD.
49. Applicant is not a qualified educator as the Employment of Educators Act 76 of 1998 requires; he is not eligible for conversion in terms of the ELRC Resolution of 2009 because he was not appointed on a vacant and substantive post. As such the operation of the ELRC Resolution above finds no application.
FACTS AS CONTENDED BY THE APPLICANT:
50. Paragraph 8 of Applicant’s Heads is denied by the Respondent, a recommendation referred to by Applicant does not exist. Applicant is put to proof of it.
51. Paragraph 9 of Applicant’s Heads is admitted to the extent that the letter was issued by the Assistant Director for Human Resources. Respondent denies that the letter was for purposes of renewing the contract of the Applicant; and it is further denied that the letter was representing to Applicant that his contract will be renewed.
52. The letter referred to was requested by the Applicant for purposes of accessing medical benefits from the Government Employees Medical Scheme (GEMS) as it is a practice by all other temporary employees.
53. The Assistant Director Human Resources does not have the authority to bind the Respondent on any contractual matters. It was submitted that it would be unlawful for an Assistant Director to extend a Contract of Employment when the contract was entered into and signed on behalf of the Respondent by the District Director. (See Annexure “DOE3” and “DOE4” respectively)
54. It is contended that the Respondent never intended to renew the contract of the Applicant on same or similar terms. The contract ended on a date agreed upon by both parties.
55. Paragraph 10 of Applicant’s Heads is admitted by the Respondent, the fact that Applicant was not paid for January is testimony to the fact that Respondent recognised the contract to have terminated unlawfully on 31 December 2013. The salary claim was honoured by the Respondent on account of Applicant having served for the January month and not because Respondent intended to renew the contract or that the contract had been renewed.
56. Paragraph 11 of Applicant’s Heads is admitted.
57. The Respondent submitted that it is apposite to establish guidance from case law on what are the relevant factors to be considered in establishing a reasonable expectation.
58. AJ Oosthuizen in ANDREAS DIERKS v UNIVERSITY OF SOUTH AFRICA (1999) 20 ILJ 1227 (LC), at par. : “A number of criteria has been identified as consideration which have influenced the findings of the past judgments of the Industrial and the Labour Appeal Courts. This includes an approach involving the evaluation of all the surrounding circumstances, the significance, or otherwise of the contractual stipulation, agreements, undertakings by the employer, or practice or custom in regard to renewal or reemployment, the availability of the post, the purpose of or reason for concluding the fixed term contract, inconsistent conduct, failure to give reasonable notice, and (sic) nature of employer’s business.”
59. The factors listed above are a pointed guide more emphatically on evaluating surrounding circumstances; contractual terms; practice or custom; reason for concluding fixed term contract and the nature of the employer’s business.
60. It is Respondent’s case that the use of temporary educators on fixed term contracts is to ensure that learning continues while internal processes are invoked to recruit a suitable candidate.
61. It is Respondent’s case that the use of temporary educators on fixed term contracts is to ensure that learning continues while internal processes are invoked to recruit a suitable candidate. This is the nature of Respondents business of teaching and learning, which does not allow for a vacancy to ensue for a period of time as that will destabilise teaching and learning.
62. Critical to the Respondents case is that once a temporary educator is appointed against a promotional post, once a suitably qualified educator is recruited, the temporary educator is immediately displaced and if there is no available vacancy at post level 1, the fixed term contract will be allowed to run its course and naturally terminate at the end of the term as agreed between parties.
63. It was submitted that the above contentions abort any expectation by the Applicant of a renewal; otherwise any resultant expectation would be objectively unreasonable.
64. The Labour Appeal Court per AJA Tlaletsi in SOUTH AFRICAN RUGBY PLAYERS ASSOCIATION v SOUTH AFRICAN RUGBY (PTY) LTD  9 BLLR 845 (LAC), reasoned as follows in paragraph  and : “What Section 186(1)(b) provides for is that there would be a dismissal in circumstances where an employee reasonably expected the employer to renew a fixed term contract of employment on the same or similar terms but the employer only offered to renew it on less favourable terms or did not renew it. The operative terms in Section 186(1)(b) are in my view, that the employee should have a reasonable expectation, and the employer fails to renew a fixed term contract or renew it on less favourable terms. The fixed term contract should also be capable of renewal.
Paragraph  The appellants carried the onus to establish that they had a ‘reasonable expectation’ that their contracts were to be renewed. They had to place facts which, objectively considered established a reasonable expectation. Because the test is objective, the enquiry is whether would a reasonable employee in the circumstances prevailing at the time have expected the employer to renew his or her fixed term contract on the same or similar terms. As soon as the other requirements of Section 186(1)(b) have been satisfied it would then be found that the players had been dismissed, and the respondent (SA Rugby) would have to establish that the dismissal was both procedurally and substantively fair.”
65. By the same parity of reasoning, the relevant question is whether a temporary position occupied by the Applicant was capable of renewal. Objectively it was submitted earlier that the Applicant was temporarily appointed until a suitably qualified HOD was appointed to the post. The Applicant knew from the onset of the contract that there was no expectation for renewal or appointment because his services were that of a post level one educator and not an entry post level one educator. The terms to which, Applicant accepted.
66. The test to be applied is whether a reasonable employee in the circumstances prevailing at the time expected a renewal on same or similar terms. The test is an objective one. It is submitted that facts relied upon by the Applicant, must be objectively considered.
67. Accordingly, does a letter requested by the Applicant from the Assistant Director Human Resources for purposes of accessing Medical Benefits from GEMS; and such letter subsequently addressed and received by GEMS constitute an objective fact to raise an expectation of renewal of the fixed term contract to the Applicant. Respondent disavow authority of the Assistant Director Human Resources to bind Respondent contractually; disavow the purpose for which such letter was issued and therefore submit that the status of the letter cannot be considered to be an objective fact as it has been invalidated by opposite positive facts highlighted herein.
THE ISSUE OF REPEATED RENEWALS:
68. This aspect must be assessed in line with other facts as argued above and not as a separate aspect of the case.
69. In MALANDOH v SABC  5 BLLR 555 (LC), the Labour Court held, despite the fact that the fixed term contract had been renewed eight times, that the employee had no reasonable expectations for renewal for the following reasons: contract stated that the employee was temporary; contract was renewable at employer’s sole discretion; there was a clear agreed procedure for recruitment and selection of permanent employees, which had not been followed and the person allegedly promising permanent employment had no such authority.
70. It is submitted that repeated renewals are not a reason to raise expectation of renewal if the contract of the Applicant stated that he was appointed temporarily; contract of the Applicant was at the sole discretion of the Respondent and that the letter from the Assistant Director Human Resources was issued by her without authority either to appoint or renew contracts.
71. The law relied upon by the Applicant in SACTWU AND ANOTHER v CADEMA INDUSTRIES (PTY) LTD (2008) 8 BLLR 790 (LC), is very clear that it is not expressing an exact principle of law. This is seen in the language used by the Judge in concluding that repeated renewals might (our emphasis) lead to a reasonable expectation of renewal. Therefore, it is not good law to rely on in making up a case for renewal, unless supported by objective facts and evaluated in totality.
72. The renewal of the contract over the last three years is not a conclusive factor to raise an expectation for renewal of the fixed term contract. This aspect must be assessed in line with other facts as argued above and not a separate aspect of the case.
73. In the decision in CHWEIZER v WACO DISTRIBUTORS (1998) 19 ILJ 1573 (LC), the Labour Court confirmed that a contract that comes to an end by the efflux of time cannot be regarded as constituting a dismissal in terms of the Labour Relations Act, 66 of 1995, as amended.
74. The termination of the contract of the Applicant was by effluxion of time and the Applicant did not have a reasonable expectation for renewal on same or similar terms. It is submitted on the authority of CHWEIZER v WACO DISTRIBUTORS above that the termination of the contract does not constitute dismissal.
75. It is denied that Respondent ever demonstrated any frivolity or arbitrariness in the matter of the Applicant.
76. It was argued that if Applicant has failed to make a good case on the merits and should therefore fail on costs as well.
77. Should Applicant succeed on the merits, it is submitted that Respondent has a bona fide defence that the non-renewal of the Applicant’s fixed term contract ended by effluxion of time as per the contract (See Annexure “DOE5”).
78. The Applicant failed to discharge the onus to prove that he had a reasonable expectation of renewal of the fixed term contract on same or similar terms, thereby constituting dismissal.
79. The Applicant failed to make a good case for unfair dismissal.
80. That the order of compensation to the Applicant would not be fair and equitable under the circumstances.
81. That Applicant’s application for costs should fail as no case had been made to warrant the award of costs and that Applicant bear his own costs.
82. That the arbitrator orders that the ELRC does not have jurisdiction to determine validity of termination of fixed term contracts by effluxion of time.
ANALYSIS OF THE ARGUMENT:
83. The Respondent put the Applicant to the proof of his averment that the Deputy Principal of the school submitted a recommendation that the Applicant’s contract be renewed and that same was signed by the chairperson of the SGB. The Applicant failed to present such proof.
84. The Respondent averred that the Assistant Director HR, signed the renewal for purposes of the Applicant accessing medical benefits from the medical scheme and that anyway the Assistant Director HR did not have the authority to renew the contract. The Applicant has not rebutted this submission, further hereto Assistant Directors HR, do not in my view have authority to enter into employment contracts on behalf of State Departments. Therefore in line with the MALANDON-case above, even if (hypothetically) the Assistant Director HR, had done so, he had no such authority and therefore that could not have given the Applicant a reasonable expectation for the renewal of the contract.
85. It stands to reason that the Applicant’s January 2014 salary was paid for services rendered and not on the basis of the letter by the Assistant Director (the purpose of which as averred by Respondent has not been traversed by the Applicant) which without authority renewed the contract.
86. It is common cause that the HOD post in which the Applicant was appointed is a HOD post graded at salary level 2 which is a promotional supervisory post at school management level, however, the Applicant was appointed as a level 1 educator, which he accepted. If the intention was indeed not to appoint him to advance the culture of learning, with no intention to renew the contract, then I submit that would not have been done on a lower level.
87. The Applicant has not rebutted the fact that he is not a qualified educator as envisaged by the Employment of Educators Act 76 of 1998. This would then support the Respondent’s contention that his appointment was just but a stop gap until a suitably qualified HOD was appointed in the post.
88. The Applicant has not traversed the fact that he was appointed temporarily in an HOD promotion which fact then gives credence to the Respondent’s submission that it was common. parlance that once a suitably qualified HOD was appointed, the Applicant’s appointment would end.
89. The decision in the MALANDO-case above held inter alia, that notwithstanding that a fixed term contract has been renewed (as in casu), the employee had no reasonable expectation for renewal for the following reasons: The contract stated that the employee was temporarily (same as in casu, the person allegedly promising permanent employment had no such authority in casu the Assistant Director HR); contract was renewable at employer’s sole discretion (in casu until the appointment of a suitably qualified HOD).
90. Tlaletsi AJA (as he then was) succinctly stated the issues in the S A RUGBY (PTY) LTD-case, that Section 186(1)(b) provides for is that “there would be a dismissal in circumstances where an employee reasonably expected the employer to renew a fixed term contract of employment on the same or similar terms but the employer only offered to renew it on less favourable terms or did not renew it … because the test is objective, the enquiry is whether would a reasonable employee in the circumstances prevailing at the time have expelled the employer to renew his or her fixed term contract on the same or similar terms…”
91. I submit that based on the reasons that I have enunciated in paragraph (89) above, the prevailing circumstances at the time did not reasonably allow the Applicant to expect that his fixed term contract would be renewed.
92. In the ANDREAS DIERKS-case, Oosthuizen AJ stated that a number of criteria has been identified as consideration which have influenced the findings of our Courts these inter alia includes an approach involving the availability of the post, the purpose of or reason for concluding the fixed term contract, nature of the employer’s business.
93. In casu, the post is no longer available, the purpose of or reason for concluding the fixed term contract, has come to an end by the effluxion of time (the post has been filled), the nature of the employer’s business is such that one cannot have two concurrent HOD’s in one post,and to have the one(Applicant) on a lower grade .
94. The Applicant carried the onus to establish that he had a reasonable expectation that his contract will be renewed. He had to place facts which objectively considered established a reasonable expectation because the test is objective the enquiry is whether would a reasonable employee in the circumstances prevailing at the time have expected the employer to renew his fixed term contract on the same or similar terms. I submit that the Applicant has failed to do all of this and the SACTWU-case above that he sought to rely on does not support his course.
95. The Applicant’s case therefore stands to fail and must fail and he is not entitled to any relief.
96. On the issue of costs it is trite law that costs generally follow the course and in casu same the Applicant has failed in his quest to establish that he had a reasonable expectation that his fixed term contract would be renewed; costs cannot therefore be awarded in his favour.
I make the following award:
97. The Respondent’s failure to renew the fixed term contract of the Applicant does not constitute a dismissal within the meaning of Section 186(1)(b) of the LRA.
98. The Applicant’s application is accordingly dismissed.
99. There is no order for costs.