THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Case no: 442/13
Reportable

In the matter between:

SOLIDARITY
FIRST APPELLANT

JACOBUS ADRIAAN HENDRIK KOTZE
SECOND APPELLANT

and

THE PUBLIC HEALTH & WELFARE SECTORAL
BARGAINING COUNCIL
FIRST RESPONDENT

COMMISSIONER C L DICKENS N.O.
SECOND RESPONDENT

DEPARTMENT OF HEALTH: FREE STATE
THIRD RESPONDENT

Neutral citation:
Solidarity v The Public Health & Welfare Sectoral Bargaining

Council (442/13) [2014] ZASCA 70 (28 May 2014)

Bench:

Ponnan, Bosielo and Theron JJA and Hancke and Swain AJJA

Heard:

6 MAY 2014

Delivered:

28 MAY 2014

Summary:
Employment – deemed discharge from public service by operation of law
– s 17(5)(a) of the Public Service Act 103 of 1994 – whether employee on
suspension absent from duties without permission.

_____________________________________________________________________

ORDER
______________________________________________________________________

On appeal from: Labour Appeal Court, Johannesburg (Tlaletsi JA (Waglay AJP
concurring), Murphy AJA dissenting sitting as court of appeal):

(1)
The appeal is upheld.
(2)
The order of the Labour Appeal Court is set aside and in its stead is substituted
the following order:

‘(a)
The appeal succeeds with costs.

(b)
The order of the Labour Court is set aside and substituted with:
“(i) The arbitration award issued by the second respondent, Commissioner
CL Dickens NO, under case number PSHS453-07/08 on 27 September
2008 is reviewed and set aside;
(ii) The matter is remitted to the first respondent, the Public Health and
Welfare Sectoral Bargaining Council, to arbitrate the dispute referred to it
by the first applicant, Solidarity, on behalf Jacobus Adriaan Hendrik
Kotze.”’
______________________________________________________________________

JUDGMENT
______________________________________________________________________

PONNAN JA (BOSIELO and THERON JJA and HANCKE and SWAIN AJJA
concurring):

[1] On 4 July 2007 the second appellant, Jacobus Adriaan Hendrik Kotze (the
employee), who had been in the employ of the third respondent, the Department of
Health: Free State (the employer), for 17 years was placed on what was described by

the employer as a ‘precautionary suspension’ pending the finalisation of an investigation
into allegations of misconduct levelled against him. With effect from 23 July 2007 and
whilst under suspension, the employee, without having first obtained the permission of
the employer, secured employment in Pretoria with a firm called Compu Africa, which
was owned by one of his relatives.

[2] On 19 October 2007 the employee received a letter from the employer which ran
thus:
‘DISCHARGE FROM SERVICE: YOURSELF: PERSAL NUMBER: 12545015
1.
Kindly take [notice] that you are deemed to be discharged from the Public Service with
effect from 3 July 2007 when you accepted alternative employment whilst you were still in
service of the Department of Health.
2.
Above-mentioned discharge is [imminent] in terms of Section 17(5)(a)(ii) read in
conjunction with Section 30(b) of the Public Service Act, 1994, which stipulates the following: “If
such an officer assumes other employment, he or she shall be deemed to have been
discharged as aforesaid irrespective of whether the said period has expired or not”.
3.
All benefits will be paid to you and all debt you [owe] the Government will be recovered
from your pension.’

[3] When the employee’s attempt to have that decision reviewed internally proved
unsuccessful, he referred a dispute to the third respondent, the Public Health and
Welfare Sectoral Bargaining Council (the council). Conciliation under the auspices of
the council having failed, a certificate of non-resolution issued and the matter proceeded
to arbitration before the second respondent, CL Dickens NO (the commissioner).

[4] The commissioner held:
‘The effect of Section 17(5)(a)(i) & (ii) is that provided the requirements are satisfied the
employment contract terminates by operation of law. As this termination is triggered by the
occurrence of an event and is not based on an Employer’s decision, there is no dismissal as
contemplated by Section 186 of the Labour Relations Act.’
She accordingly concluded:

‘The Bargaining Council does not have the jurisdiction to hear this matter as a deemed
dismissal does not constitute a dismissal for purposes of the Labour Relations Act.’
Aggrieved by that conclusion, the employee, as the second applicant, and duly
represented by the first appellant, his trade union (Solidarity), as the first, approached
the Labour Court (LC) for an order in the following terms:
‘a)
Reviewing and setting aside the Arbitration award issued by the Second Respondent
under case number PSHS453-07/08 on the 27th of September 2008, and received by the
Applicants on the 14th of October 2008;
b)
Refer[ing] the matter back for rehearing before a Commissioner other than the Second
Respondent in terms of Section 145 of the Labour Relations Act 66 of 1995.
c)
Alternatively, remitting the matter back to the First Respondent for [the hearing of the]
matter de novo before a different Commissioner.’

[5] The LC (Molahlehi J) dismissed the application. In so doing, the learned Judge
held:
‘[15]
In the present instance the applicant was suspended on the 4th July 2007, he then
assumed employment with another employer on 23 July 2007 without authorisation from the
respondent. Obtaining work with another employer amounted to absenting himself without
authority. Although the applicant was on suspension, he was still accountable to the respondent
even during the period of suspension. He therefore required authorisation to absent himself to
attend employment with the third party. He also required authorisation to undertake employment
with another employer even during his suspension. In [taking] employment with Compu Africa
the applicant absented himself from his work without authorisation of his employer. Objectively
speaking the applicant could not make himself available if the suspension was to be [uplifted]
and was to be immediately instructed to report for work. Unlike in the case of absconding in the
private sector cases the respondent did not dismiss the applicant but the dismissal occurred by
the operation of the law. The requirement of a fair reason before termination does not apply. In
other words the employer does not have to show what steps it took to locate the whereabouts of
applicant before [invoking] the deeming provisions of the PSA.
[16] It needs to be emphasised the applicant took employment with Compu Africa without
authorization by the respondent. In accepting employment with Compu Africa the employee
absented himself from work without the authorization of the respondent and thereby subjected
his contract to termination by the operation of the law.

[17] It is for the above reasons that I am of the view that the commissioner cannot be faulted
for arriving at the conclusion that the first respondent did not have jurisdiction to entertain the
dispute of the applicant as there was no dismissal. It is also for these reasons that I found that
the case of the applicant [stands] to fail. I however do not [believe] that it would be fair to allow
costs to follow the results.’

[6] With the leave of the LC, the employee and Solidarity appealed to the Labour
Appeal Court (the LAC). The LAC (per Tlaletsi JA (Waglay AJP concurring) with Murphy
AJA dissenting) dismissed the appeal with costs. According to Tlaletsi JA:
‘The issue that was raised before the Commissioner as a point in limine was whether the
Bargaining Council had jurisdiction to entertain the matter. The question that had to be asked in
determining whether the Bargaining Council had jurisdiction is whether the employee had been
dismissed. If there was no dismissal, the Bargaining Council would not have jurisdiction. The
issue of jurisdiction does not depend on a finding of the Commissioner but on whether,
objectively speaking, the facts that would in law clothe the Bargaining Council with jurisdiction
indeed existed. If such facts were not present it would then mean that the Bargaining Council
did not have jurisdiction, notwithstanding any finding by the Commissioner to the contrary . . . .’
That issue, Tlaletsi JA approached thus:
‘[13]
For a deemed discharge provided for in s 17(5)(a)(ii) to take effect, no act or decision on
the part of the employer is required. The discharge takes effect by operation of law as soon as
the jurisdictional requirements are met. The jurisdictional requirements for the deemed
discharge to take place is: it must be an employee who is not excluded; who is absent without
permission; assumes other employment without the permission of the employer. All what the
head of the institution then does is to convey to the employee what has taken effect by
operation of law. The head of the institution does not have the power to stop or suspend what
takes effect by operation of law. It is therefore not within the head of the institution to decide or
make an election on what cause to follow and ignore what has taken effect by operation of law
and follow a procedure that he is in his opinion less draconian.
[14] I have already expressed my views on the HOSPERSA decision in a recent judgment of
this Court in [Grootboom v National Prosecution Authority (2013) 34 ILJ 282 (LAC) para 38] . . .
[16] In this case there is no doubt that the employee did not have the permission of the head
of the department when he assumed other employment. The question that must be considered
is whether the fact that he was on precautionary suspension pending an investigation and a
disciplinary enquiry for misconduct could be deemed to have been discharged when he

assumed new employment. Furthermore, whether when on suspension he could be said to
have been absent without permission.
[17] A situation anomalous to the one at hand arose in Masina v Minister of Justice, Kwazulu
Government. In that case an employee who was on suspension pending an investigation of
misconduct allegations assumed other employment. He was informed that he was deemed
discharged in terms of the applicable legislation. The then AD held, inter alia, that assuming
other employment must be comparable to resignation or incompatible with continued
employment with the department and:
“There is authority that in a case of wrongful dismissal the onus is on the employee to prove the
agreement and his subsequent dismissal; and that the onus thereafter is on the employer to
justify it . . .”
In my view, the above test is applicable in the facts and circumstances of this case in
determining whether the second appellant absents himself from his official duties without the
permission of his head of the institution and assumed other employment.
[18] In my view, the employee’s conduct fell within the circumstances envisaged in s
17(5)(a)(i) and (ii) of the PSA. He is an officer who assumed other employment without the
permission of the executing authority. The employee even though on suspension, remained an
employee of the department and was subject to its authority in terms of the contract of
employment . . . Accepting or assuming other employment amounts to being absent from duty
because the employee is now rendering his services to another employer which conduct is
irreconcilable with his employment with the department while under suspension. He left the Free
State where he was stationed and moved to Pretoria to put his labour at the disposal of the new
employer. In the circumstances, I am of the view that he was deemed to be discharged and
there was no decision to dismiss him. The Bargaining Council therefore, lacked jurisdiction to
entertain his dispute since he was not dismissed.’

[7] The further appeal by the appellants against the judgment of the LAC is with the
special leave of this court. Of the three respondents, only the employer participated in
the proceedings in the LC and the LAC. In this court the employer filed a notice with the
registrar withdrawing its opposition to the appeal and intimating that it would abide the
decision of the court. At the request of this court, Mr Grobler of the Bloemfontein Bar
appeared as amicus curiae, and the court is indebted to him for his assistance in the
matter.

[8] The Labour Relations Act 66 of 1995 (the LRA) provides: if there is a dispute
about the fairness of a dismissal, the dismissed employee may refer the dispute for
conciliation and arbitration to a bargaining council, if the parties to the dispute fall within
the registered scope of that council (s 191); and, in any proceedings concerning any
dismissal, the employee bears the onus of establishing the existence of the dismissal (s
192). In this case the commissioner’s conclusion flowed from his having found that the
employee had not discharged the onus resting upon him of proving that he had been
dismissed. Instead, so he held, the ‘employment contract terminates by operation of
law’. Both the LC and the majority of the LAC agreed with that finding.

[9] The principal thrust of the employee’s argument is that s 17(5)(a) of the Public
Service Act 103 of 1994 (the PSA) did not find application inasmuch as the employer
had failed to prove that he had absented himself from his official duties as contemplated
by that section. To the extent here relevant, s 17(5) provides:
‘(a)(i) An officer . . . who absents himself or herself from his or her official duties without
permission of his or her head of department, office or institution for a period exceeding one
calendar month, shall be deemed to have been discharged from the public service on account
of misconduct with effect from the date immediately succeeding his or her last day of
attendance at his or her place of duty.
(ii)
If such an officer assumes other employment, he or she shall be deemed to have been
discharged as aforesaid irrespective of whether the said period has expired or not.
(b)
If an officer who is deemed to have been so discharged reports for duty at any time after
the expiry of the period referred to in paragraph (a), the relevant executing authority may, on
good cause shown and notwithstanding anything to the contrary contained in any law, approve
the reinstatement of that officer in the public service in his or her former or any other post or
position, and in such a case the period of his or her absence from official duty shall be deemed
to be absence on vacation leave without pay or leave on such other conditions as the said
authority may determine.’

[10] A ‘deemed dismissal’ in terms of s 17(5)(a)(i) of the PSA follows by operation of
law. Accordingly, the notice of 19 October 2007 to the employee purportedly in terms of
that section, was purely a communication of a consequence that, in the employer’s

view, followed by operation of law (Minister van Onderwys en Kultuur v Louw 1995 (4)
SA 383 (A) at 388). Plainly, that section only finds application to an employee who
‘absents himself or herself from his or her official duties without permission’.
Foundational to the judgment of the majority of the LAC was the premise that the
employee was absent from duty without permission when he accepted outside work.
This is obviously incorrect. The employee was indeed absent from duty. But, having
been suspended, he was absent at his employer’s behest. And, not having been
assigned alternative duties, for the duration of his suspension he had no duties.
Logically therefore, he could thus not conceivably ‘absent himself from his official
duties’. In Grootboom v National Prosecuting Authority 2014 (1) BCLR 65 (CC) para 42
the Constitutional Court held:
‘It is so that the applicant was absent from his employment. He was absent because he was
suspended. This means that he was absent with the permission of his employer. Therefore, one
of the essential requirements of s 17(5)(a)(i) has not been met.’
In arriving at that conclusion, the Constitutional Court overruled the LAC, which in its
judgment - the subject of that appeal, namely, Grootboom v National Prosecution
Authority & another (2013) 34 ILJ 282 (LAC) - had held (para 37):
‘The fact that the appellant was on precautionary suspension and was not required to report for
duty is, in my view, not a bar to the application of section 17(5)(a) of the PSA.’

[11] The finding by the majority that the employee had effectively resigned by
assuming alternative employment is equally untenable. There was no evidence that the
employee’s temporary employment with Compu Africa was indeed incompatible with his
obligations to the employer. The employee was under suspension when he commenced
work with Compu Africa. Self-evidently, his suspension relieved him of his obligation to
render his services to the employer. The employee’s only obligation in return for his
salary was to make himself available should his suspension be lifted.  His suspension
had not been lifted when he received the notice in terms of s 17(5) of the PSA. It bears
noting that an employee’s entitlement to payment and an employer’s obligation to pay
arises not from the actual rendering by an employee of his services but from his making
those services available to his employer (Johannesburg Municipality v O’Sullivan 1923

AD 201). That principle was endorsed by the Constitutional Court in Equity Aviation
Services (Pty) Ltd v CCMA 2009 (1) SA 390 (CC) para 54 in these terms:
‘As long as an employee makes himself or herself available to perform his or her contractual
obligation in terms of the contract of employment, he or she is entitled to payment despite the
fact that the employer did not use his or her services.’

[12] Moreover, Masinga v Minister of Justice, Kwazulu Government [1995] 2 All SA
350 (A), which the majority of the LAC called in aid, is not authority for the proposition
that assuming alternative employment equates to a resignation. As Murphy AJA
correctly observed in his dissenting judgment, the deeming provision in that case
differed quite significantly from that here under consideration. The relevant provision (s
19(29) of the KwaZulu Public Service Act 18 of 1985), which occupied the attention of
the court in Masinga read:
‘An officer who has been suspended from duty in terms of sub-section (4) or against whom a
charge has been preferred under this section and who resigns from the Public Service or
assumes other employment before such charge has been dealt with to finality . . . shall be
deemed to have been discharged on account of misconduct . . . .’
Of that provision, Nienaber JA stated (Masinga at 351):
‘Before dealing with the evidence, such as it was, it is helpful to consider the purpose of s
19(29). According to Didcott J:
“It is to prevent someone who is facing charges of misconduct from ducking these charges by
resigning and attracting the advantages of a resignation in good standing. It is to ensure that, if
anybody resigns while he is facing charges, he will be in as bad a position as he would have
been if the charges had been found proved and he had been dismissed on account of them.  So
what is prevented is, as I say, a resignation in an attempt to avoid the charges and to prevent
the misconduct from being investigated and its presence or otherwise determined.”
The court a quo agreed with this analysis and so do I.’
Nienaber JA added:
‘An officer who resigns while under suspension shall be deemed to be discharged on account of
misconduct. In effect it means that his resignation is deemed to be an admission of misconduct
justifying a discharge from a date specified by the minister. So too, if the officer, without formally
resigning, assumes other employment. The phrase “assumes other employment” is thus used
as an elaboration or extension of the concept of “resignation”. “Assuming other employment”

must therefore be comparable in effect to a resignation; the “other employment”, in a word, must
be incompatible with continued employment with the department. It would be incompatible, on a
par with resignation, if his new conditions of service should prevent him from resuming
employment with the department at will if his suspension is lifted e.g. if he is obliged to give
notice to his new employer to do so. It would likewise be incompatible with his occupation as a
prosecutor if the nature of his new employment would tend to create a conflict of interests, e.g. if
his new employer had an interest in exploiting confidential information at his disposal or is
engaged in criminal pursuits. These are mere examples. They are not applicable in this case.
Here the only real issue is whether his work in the CLP could prevent him from resuming
employment with the department forthwith if his suspension were lifted.’
After alluding to the evidence adduced in that case, the learned Judge of Appeal
concluded (at 354):
‘The evidence of Chaplin was that the appellant was initially employed on a casual basis for
which he was paid by the hour. There is nothing to suggest that the basis of his employment
changed thereafter. On the face of it Chaplin’s further statement:
“He was not appointed on University conditions of service and there was no contract between
him and the University.”
can only mean, judged on the probabilities, that his employment was an ad hoc one, a loose
arrangement, which the appellant could terminate at will. And if that is so the appellant’s
employment with the university was not incompatible with his employment with the department
while he remained under suspension, no more so than if he hawked fruit or sold insurance on
commission or did casual paint work for a building contractor.’
It must therefore follow that reliance on Masinga was misplaced.

[13] In advising the employee of his discharge from service, the employer asserted
that it was invoking ‘Section 17(5)(a)(ii) read in conjunction with Section 30(b) of the
[PSA].’ Somewhat surprisingly, s 17(5)(a)(i) of the PSA was not alluded to in that notice.
That notwithstanding, the commissioner and both courts below approached the matter
as if the employer had indeed placed reliance on s 17(5)(a)(i).  The finding of Tlaletsi JA
in favour of the employer appears to be predicated on a reading of s 17(5)(a)(ii) to the
effect that the assumption of outside employment by a suspended employee in and of
itself automatically leads to a deemed discharge.  But that is not what that subsection
states. It provides that if ‘such an officer’ assumes other employment, he or she shall be

deemed to have been discharged ‘as aforesaid irrespective of whether the said period
has expired or not’ (my emphasis). Section 17(5)(a)(ii) is not intended to provide for a
deemed discharge by operation of law whenever an employee assumes other
employment. That subsection, which merely provides for the one calendar month
envisaged in subsection (i) to be abridged if certain requirements are met, is not a self-
standing provision. Linguistically, the phrase ‘such an officer’ in subsection (ii) is plainly
a reference to ‘the officer’ contemplated in subsection (i). And, ‘the officer’ contemplated
in subsection (i) is ‘an officer’ ‘who absents himself . . . from his . . . official duties
without permission . . .  for a period exceeding one calendar month’. It thus follows that
unless the requirements of subsection (i) are met, subsection (ii) does not find
application. Here, as the employee was not an employee who had absented himself
without permission as envisaged in subsection (i), s 17(5)(a)(ii) did not find application.

[14] That leaves s 30(b) of the PSA, which provides:
‘[N]o officer or employee shall perform or engage himself or herself to perform remunerative
work outside his or her employment in the public service, without permission. . . .’
The employee may well have breached this provision, but in the light of the conclusion
of the commissioner that the council lacked jurisdiction, it did not occupy the attention of
either of the courts below. Nor could it, for whether he had breached that provision fell
to be decided by a duly convened disciplinary enquiry.  That did not occur.  In any event
had such a tribunal terminated the employee’s employment that would have constituted
a dismissal for misconduct. That is in the nature of a dispute in respect of which the
council would not have suffered a want of jurisdiction. Thus whether s 30(b) does
indeed find application to a suspended employee is a question which neither of the
courts below had to consider. Nor does this court.

[15] It must follow that the commissioner’s conclusion and also the conclusions by the
LC and LAC that the council lacked jurisdiction cannot be sustained. Accordingly, the
appeal must succeed. Counsel for the appellant urged upon us that in that event, given
the time that has elapsed, we should order the employee’s re-instatement. I do not
believe that we can accede to counsel’s request. The effect of the council’s order was to

dismiss the employee’s claim (that he had been unfairly dismissed) for want of
jurisdiction. Having taken the view that it lacked jurisdiction – erroneously as it now
turns out – the council did not enter into the merits. Nor could it. (See Makhanya v
University of Zululand 2010 (1) SA 62 (SCA).) That it must now do. The matter must
thus be remitted to it.

[16] As to costs: The LC, in dismissing the employee’s application, made no order as
to costs. Counsel for the appellant intimated from the Bar in this court that he would
abide that order. In dismissing the appeal, the majority of the LAC ordered each party
‘to pay [its] own costs’. Murphy AJA, who would have upheld the appeal, inclined to the
view that the employer should pay the costs of that appeal. There, undoubtedly, is much
to recommend that approach.

[17] In the result:
(1)
The appeal is upheld.
(2)
The order of the Labour Appeal Court is set aside and in its stead is substituted
the following order:

‘(a)
The appeal succeeds with costs.

(b)
The order of the Labour Court is set aside and substituted with:
“(i) The arbitration award issued by the second respondent, Commissioner
CL Dickens NO, under case number PSHS453-07/08 on 27 September
2008 is reviewed and set aside;
(ii) The matter is remitted to the first respondent, the Public Health and
Welfare Sectoral Bargaining Council, to arbitrate the dispute referred to it
by the first applicant, Solidarity, on behalf Jacobus Adriaan Hendrik
Kotze.”’

_________________
V M PONNAN
JUDGE OF APPEAL

APPEARANCES:

For Appellants:

J Grogan

Instructed by:

Serfontein Viljoen & Swart, Pretoria

Vermaak & Dennis Inc, Bloemfontein

Amicus Curiae:

S Grobler

Instructed by:

Claude Reid Attorneys

Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME
COURT OF APPEAL

FROM
The Registrar, Supreme Court of Appeal

DATE
29 May 2014

STATUS
Immediate

Please note that the media summary is for the benefit of the media and
does not form part of the judgment.

HEPPLE v LAW SOCIETY OF THE NORTHERN PROVINCES (507/2013)
[2014] ZASCA 75 (29 May 2014)

The SCA today dismissed an appeal by two attorneys, Thomas Walter
Rothwell Hepple and Christiaan Hendrik Earle, whose names were removed
from the roll by the North Gauteng High Court (Wright AJ and Makhubele AJ)
for various transgressions and contraventions of the rules of the law society
and the Attorneys Act 53 of 1979, respectively. They were directors in an
incorporated practice in Centurion, Pretoria, under the name, Hepple
Attorneys Inc.

One of the main complaints against them was that they had conducted an
investment practise which did not generate the necessary cash flow to pay the
capital. The trust account was then used irregularly to make interest
payments. Interest to investors was paid out of the trust account. Between 24
July 2009 and 3 June 2010 a total of R268 479.64 was paid to investors out of
the trust account. These practices resulted in trust deficits. The attorneys tried

to conceal these trust deficits by manipulating bank reconciliation statements.
These irregularities persisted from 2005 to 2010, when they were uncovered
by a law society investigation conducted by a Chartered Accountant
appointed by the law society, Mr Vincent Faris. At some point there was a
shortfall of over R600 000 in the attorneys’ trust account.

One of the attorneys, Earle, admitted his wrong-doing but claimed that the
other directors, Hepple and two others Mr Gerhard Barnard and Mr Micheal
Johnson were not aware of what was going on. Hepple’s defence was that a
resolution was taken by the directors confining him to commercial litigation
and that he had little to do with the financial management of the firm did not
avail him.

On appeal the SCA held reiterated that the obligation to keep proper books of
account rested on both. Hepple’s claim that when he discovered what Earle
was doing in 2008, he asked him to stop was not enough. The court held that
such discovery should have caused him to be more vigilant and not to simply
to continue with his unquestioning behaviour.

The appeal was accordingly dismissed and the order of the high court
removing the two attorneys from the roll was confirmed. The SCA further
ordered the two attorneys jointly and severally, to pay costs to be taxed on the
scale as between attorney and client.