THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 337/2017

In the matter between:
MINISTER OF DEFENCE

FIRST APPELLANT
CHIEF OF THE SOUTH AFRICAN
NATIONAL DEFENCE FORCE

SECOND APPELLANT
and
BONGANI POSTOLIE XULU

RESPONDENT

Neutral citation: Minister of Defence v Xulu (337/2017) [2018] ZASCA
65 (24 May 2018)
Coram: LEWIS, WALLIS, SALDULKER and MOCUMIE JJA and
PILLAY AJA

Heard:
14 May 2018
Delivered: 24 May 2018
Summary: Defence Act 42 of 2002 – soldier enrolled as member of the
South African National Defence Force on fixed term contract – contract
renewed on three occasions – renewal considered when due to expire but
refused – refusal constituting administrative action in terms of Promotion
of Administrative Justice Act 3 of 2000 – decision reviewed and set aside
– appropriate relief.

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Tolmay
J, Raulinga and Khumalo JJ concurring):
Special leave to appeal is granted.
Paragraph 1 of the order of the full court is amended to read:
‘The appeal is upheld with costs, and paragraphs 2 and 5 of the
high court’s order are set aside.’
The appeal is otherwise dismissed with costs.
The Respondents are ordered jointly and severally to compensate
the Applicant for such further losses as he may have incurred as a
result of his fixed term contract not having been renewed in 2011,
the amount of such losses to be agreed between the parties within
30 days of the date of this order, failing which they are to be
determined summarily on the written representations of the parties
by an arbiter chosen by them or, in the absence of agreement,
appointed by the Chair for the time being of the Pretoria Bar.

JUDGMENT

Wallis JA (Lewis, Saldulker and Mocumie JJA and Pillay AJA
concurring)

[1] Until the events giving rise to this appeal the respondent, Mr Xulu,
was a soldier. He joined the South African National Defence Force
(SANDF) on 29 July 1996, initially for a fixed term of two years. In 1998

his contract was extended until 2000 in which year it was further
extended until 2005. The final extension was in 2005 until 31 July 2011.
At the end of November 2010 he was informed by the SANDF that it did
not intend to renew his ‘employment contract’ when it expired on 30 June
2011.
Notwithstanding
his
own
representations
and
detailed
representations made on his behalf by his attorney, he was informed on
29 April 2011 that his contract would not be renewed.

[2] Mr Xulu challenged the decision not to extend his contract in the
Gauteng Division of the High Court, Pretoria. He was unsuccessful at
first instance before Lephoko AJ, but succeeded on appeal to the full
court (Tolmay J, with Raulinga and Khumalo JJ concurring). It set aside
the decision and ordered the SANDF, represented by the first and second
appellants, respectively the Minister of Defence (the Minister) and the
Chief of the SANDF, to appoint him on a contract for a further six years
expiring on 30 June 2017. The application by the Minister and the Chief
of the SANDF for special leave to appeal was referred for argument to
this court in terms of s 17(2)(d) of the Superior Courts Act 10 of 2013.

[3] The special circumstances advanced in support of the grant of
special leave to appeal were that the SANDF were not represented before
the full court when the appeal was argued in the high court and that it
needed clarity from this Court on its legal obligations when dealing with
the non-renewal of fixed term contracts of members of the Regular Force.
As to the first of these, notwithstanding the various excuses advanced in
the application the blame for the non-appearance has to be laid at the door
of their attorney. Notice of set down had been sent to her office by telefax
in November 2015 and one of the judges sitting in the appeal had caused
his secretary to telephone her offices on several occasions to enquire why

no heads of argument had been filed. Her claim that her office was
unaware of the set down on 1 February 2016 did not hold water.

[4] Ordinarily, in the absence of an explanation for the SANDF not
being represented at the appeal hearing, there would have been no good
cause for the grant of special leave to appeal to this court. However, it is
common cause that there are a number of cases pending, in which the
failure by the SANDF to renew fixed term contracts under which various
members serve in the Regular Force constitutes the casus belli. There is
therefore a considerable need for clarity on the proper basis, if any, for
such cases. Albeit reluctantly, I am therefore persuaded that the issues
raised are of such a character that they should be addressed by this court.
Special leave to appeal will therefore be granted.

The facts
[5] The letter informing Mr Xulu that the SANDF did not intend to
renew his contract was received at the end of November or early
December 2010 and read as follows:
‘EXPIRY OF CORE SERVICE SYSTEM CONTRACT: 96678958 MC RFM BP
XULU, SAIC
1. The Department of Defence intends not to renew your employment contract when it
expires on 30 June 2011. The following offences were taken into consideration.
a
1XSec 10
b
1XSec 33(b)
2. Department of Defence intends to terminate your current service contract in terms
of the provisions of the New Service System, the Defence Act, Act No 42 of 2002 and
the General Regulation Chapters III and IV [when it] expires.’(My insertion.)
Mr Xulu was afforded an opportunity to make representations and did so
on 10 December 2010 by way of his own submissions and, thereafter, on
18 March 2011, through his attorney. These representations cast light on

the two offences that had been taken into consideration when the original
and provisional decision had been taken.

[6] The first offence is described in the Military Discipline Code as
‘mutiny’. That was a pretentious title for a relatively trivial work
stoppage arising from the failure by the SANDF to pay transport costs to
certain members of the force to their homes away from base. The
SANDF’s own records describe it as being absent without leave. Mr
Xulu’s role, as a representative of his colleagues, was to convey their
refusal to accept a proposal by a senior officer to resolve the dispute. His
own participation was limited and the stoppage was short-lived. Mr Xulu
was dealt with informally and had R75 deducted from his salary. He was
thereafter permitted to complete his basic training. This occurred in 1997,
a year after he joined the SANDF, and it did not provide a bar to the
extension of his contract in 1998, 2000 or 2006.

[7] The second offence occurred in 2001 when Mr Xulu was to be
deployed to Durban from his base in Mthatha. Apparently he was called
upon at short notice and unexpectedly to draw his unloaded weapon and
place it on board a bus being used to transport members to Durban. He
had been off duty at his accommodation outside the base when the order
came and had been drinking. A senior officer noticed this and he was
charged with being unfit to perform his duties. He was sentenced to a
reprimand. Notwithstanding this additional offence his contract was
extended on 6 June 2006.

[8] From 2006 until November 2010 Mr Xulu’s military career appears
to have blossomed and he may well have entertained ideas of promotion.
He attended and performed well on several courses, one of which was

described as being for servicemen seeking promotion to the rank of a
junior non-commissioned officer. This latter course was undertaken from
31 May to 26 November 2010.

[9] Mr Xulu’s commanding officer, Lieutenant Colonel Oss, fully
supported the extension of his contract. He wrote in his report to the
Review Board that ultimately made the decision that:
‘- Member proved himself a future leader and an asset of DOD. There are projects in
the unit which members must complete.
- He just completed the JIN LP and he [has] done exceptionally well. See the attached
confidential report from Infantry School.
- There was no incident or offence reported about the member for the past 10 year …
I fully recommend that the member’s contract to be renewed since it won’t be a
mistake.
- The member will soon be appointed as Section 2IC1 and bulk store man.’
The unit personnel officer said that he had no objection to Lieutenant
Colonel Oss’s recommendation.

[10]  Mr Xulu’s attorney’s letter was sent on 18 March 2011 and
received a response on 29 April 2011. The reply incorrectly claimed that
Mr Xulu had not responded timeously to the notice letter and went on as
follows:
‘Despite the fact that the member had previous disciplinary offences as mentioned in
our letter dated 26/11/2009, it remains the GOC Infantry Fmn2 prerogative to renew
the member’s contract or not. It must further be noted that there is no clause or
agreement that is entered into with the member that his contract is renewable after
every 5 year term of its expiry.’

1 An abbreviation for second in command.
2 An abbreviation for General Officer Commanding Infantry Formation.

[11]  The letter correctly stated that the terms of Mr Xulu’s contract did
not provide for an automatic extension on its expiry. That emerged from
his service agreement which provided that:
‘A member shall be informed at least 18 months prior to the lapsing of his/her CSS3
contract of the intention of the SANDF to offer a subsequent employment contract or
not. For Enlisted Personnel a three months’ notice period applies.
There is no obligation on the DOD to offer a subsequent contract when the said period
of employment lapses.’

[12] While under no obligation to offer an extension of the contract the
quoted provision indicated that the SANDF would engage in a process in
which it would consider whether to offer such a contract and would do so
at least 18 months before the existing contract was due to expire.
Lieutenant General Nkabinde, who deposed to the answering affidavit on
behalf of the SANDF, denied that 18 months’ notice had to be given and
claimed that the required period was eight months. He was relying on a
policy document to which I will revert in due course, but this was
inconsistent with the service conditions attached to Mr Xulu’s contract
letter in 2005, which said that 18 months’ notice would be given of the
SANDF’s intentions in regard to renewal. This undertaking was not
followed as Mr Xulu was only informed of the fact that the SANDF did
not intend to extend his contract at the end of November or early
December 2010. Somewhat deceptively, the letter advising him of the
SANDF’s intentions was dated 26 November 2009. There was no
explanation of how this occurred.

[13]  Apart from the problem with the dates and the statement that Mr
Xulu had not made timeous representations, the letter of 29 April 2011

3 An abbreviation for Core Service System.

again referred to the two disciplinary offences already described. There
was also a suggestion that the GOC Infantry Fmn had a ‘prerogative’
whether or not to extend a contract, but the affidavits on behalf of the
SANDF do not suggest that Mr Xulu’s contract was not extended in the
exercise of the claimed prerogative and counsel accepted that the reason
lay in the two disciplinary offences.

[14] It transpired from the review record delivered on behalf of the
SANDF that the decision not to extend Mr Xulu’s contract was taken on
17 January 2011 at a meeting of the Infantry Formation Review Board for
the Non-Renewal of CSS Contracts. Major General Nkabinde (as he then
was) chaired that meeting and the other participants were two members of
his human resources support team, Colonel Fongoqa and Major Joki, and
Lieutenant Colonel Maungwa, who was described as being from legal
services. According to the minutes, the secretary read the representations
by each of the thirteen members, the non-renewal of whose contracts
were under consideration at that meeting, and the Board ‘took note of the
generic reasons provided by the members … as well as the fact that they
have rehabilitated from the conduct as presented against them’.
Presumably in the case of Mr Xulu the latter was a reference to the two
offences referred to in the original letter. That is reinforced by the
following paragraph of the minutes:
‘After thorough deliberations the board felt that these members did not advance
sufficient arguments instead of their socio-economic conditions which they failed to
consider when committing these offences.’
The Board concluded that none of the ten individuals whose cases they
were considering should have their contracts renewed and a week later,
on 26 January 2011, gave authority to terminate Mr Xulu’s services.

[15] Lieutenant General Nkabinde, was subsequently promoted and was
the head of human resources of the SANDF when he deposed to the
answering affidavit on behalf of the SANDF. He said that his two
subordinates, Colonel Fongoqa and Major Joki, had noticed, during their
inspection of various contracts that had come up for renewal, that Mr
Xulu’s had previously been renewed, despite his convictions. This caused
Lieutenant General Nkabinde to instruct them to review all similar cases
meticulously and bring them to the attention of the Review Board. He had
not been a member of the Review Board in 2006 and claimed that had he
been he would not have renewed Mr Xulu’s contract. He described the
previous decisions to renew Mr Xulu’s contract as ‘flawed’ and incorrect.
It is apparent that his focus throughout was on these offences.

[16]  While Lieutenant General Nkabinde did not say that the Board
disregarded the views of Lieutenant Colonel Oss, he said that he had not
worked with Mr Xulu for six months prior to his submissions and that the
report from Mr Xulu’s commanding officer should have come from a
Colonel Ngcobo. There was no explanation for the absence of a report
from
Colonel
Ngcobo,
although
Lieutenant
General
Nkabinde
acknowledged that under ordinary circumstances an application for non-
renewal would come from the member’s commanding officer.

[17] Lieutenant General Nkabinde also claimed that Mr Xulu had been
convicted of further offences after 2006, but the convictions reflected in
the records to which he referred occurred in March 2011 after the
decision not to renew Mr Xulu’s contract had been taken. At most the
Board could have been aware that he was facing certain charges as the
alleged offences had arisen in February 2009 and February 2010
respectively. There is, however, nothing in the Board’s record of

proceedings to suggest that it had any regard to these offences. The
records show that the first one attracted a reprimand and the second an
unspecified period of detention, although Mr Xulu said he was fined
R1500. His contract terminated before he could appeal.

The legislative and regulatory background
[18]  The governing statute is the Defence Act 42 of 2002 (the Act). It
provides in s 11(a) that the SANDF, constituted in terms of s 224(1) of
the Interim Constitution (now s 200 of the Constitution), consists of the
Regular Force, the members of which serve full-time until they reach the
age of retirement or their contracted term of service expires or until they
are discharged, and the Reserve Force. The members of the Regular
Force may serve in a permanent or a temporary capacity in accordance
with prescribed terms and conditions of service, as well as prescribed
conditions and procedures regarding enrolment, contract, promotion and
transfer (s 52(2)).

[19] Members of the Regular Force are enrolled as such, ‘enrol’ being
defined in s 1 of the Act as meaning ‘to accept and record the attestation
of any person as a member of the Regular Force’. This appears to be
something different from concluding a contract of employment, as the
definition of ‘employee’ in the Act does not encompass members of the
Regular Force or members of the Reserve Force.4 This caused O’Regan J
in SANDU (1)5 to say that they do not enter into a contract of employment
as ordinarily understood, but nonetheless their enrolment as members of

4 It reads: ‘”employee” means a person appointed to the Department in terms of the Public Service Act,
1994 … or any person regarded as having been appointed to the Defence Secretariat in terms of section
6(4).’
5 South African National Defence Union v Minister of Defence and Another (SANDU 1) [1999] ZACC 7;
1999 (4) SA 469 (CC) para 22. That statement was made in respect of the position under the Defence
Act 44 of 1957 but the position under the present Act does not appear to be any different.

the SANDF carries with it legal consequences. Although their
relationship with the SANDF is unusual and not identical to an ordinary
employment relationship they are nonetheless workers and entitled to the
constitutional protection that workers enjoy under s 23 of the
Constitution.6

[20] At the expiry of his previous fixed term period of service in the
SANDF in June 2006, Mr Xulu was re-appointed for the period from
29 July 2006 to 31 July 2011. The contract was made under s 52(1) of the
Act. The letter of appointment attached a service contract that Mr Xulu
signed and that said it was in accordance with the prescribed conditions
of service of the SANDF.

[21] Some of the provisions of the contract are relevant for present
purposes. It said that the member’s service ‘is terminated’ on the lapsing
of the contract in terms of the Act.7 The reference to the Act was a
reference to s 59(1)(b), which provides for a member’s service to be
terminated on the termination of any fixed term contract or the expiry of
any extended period of such contract. Clause 1 said that the member
should be informed ‘at least 18 months prior to the lapsing of his/her CSS
contract of the intention of the SANDF to offer a subsequent employment
contract or not.’ It recorded that there was no obligation on the
Department of Defence to offer such a contract. Where a service contract
expired the member would be entitled to the benefit of what were called
Mobility Exit Mechanism and Labour Market Entry Enablement, both

6 SANDU (1) para 27.
7 There is also a reference in the letter to General Regulations Chapters III and IV, but it is unclear
whether these are still in force and no-one suggested that they had any bearing on the case.

being aimed apparently at facilitating the member’s transition to civilian
life.

[22] The last relevant document is a publication by the Human
Resources Division of the Department of Defence (‘the Policy’) entitled
‘Process and Procedures for the Management of the Separation of Officials from the
Department of Defence (DOD).’
The Policy was issued on 27 January 2010 under the joint names of the
Acting Secretary of Defence and General Ngwenya, the Chief of the
SANDF, having been approved by the Defence Policy Board. The
foreword records that it was published under the authority of an earlier
Department of Defence Instruction and goes on to say that it:
‘… must be implemented in conjunction with instructions prescribed therein,
This publication describes the process and procedures to be followed when officials of
the Department of Defence (DOD) separate (terminate service) from the Department
of Defence.
This publication must be implemented by the Chiefs of the Services and Divisions
down to the applicable levels of command and management.’
The stated aim of the Policy8 was to prescribe the administrative process
and procedures for the management of separation of officials9 from the
DOD within budget provision.

[23] The Policy dealt comprehensively with the various circumstances
in which a member of the SANDF might cease to be such. Thus it
covered compulsory and early retirement, resignations, and various
situations in which a member could be discharged, such as medical
reasons, administrative discharge, discharge by virtue of being sentenced

8 Clause 3, vol 2, p 277.
9 The definitions made it clear that ‘officials’ included members employed in terms of the Defence Act
and the word ‘member’ in relation to the Defence Force meant any officer and any other rank. (Clauses
4 d and e.)

to imprisonment or the sentence confirmed by a court of military appeals,
cancellation of the commission of an officer and absence without
permission.

[24] In the midst of these provisions, clause 17 of the Policy dealt with
‘Expiry or Non-Renewal of Fixed Term Contracts’ commencing with the
following:
‘Whenever the need exists for the non-renewal of a fixed term contract of a member,
the following administrative actions must be effected:
a.
Members must receive letters to remind them of the expiry of their fixed term
contracts by the last day of the eighth-month prior to the month in which the contracts
expire.
b.
The Officer Commanding of a member must submit an application for the
non-renewal of the fixed term contract to the respective Career Manager.
c.
In the application, the Officer Commanding must substantiate the reason for
the non-renewal of the fixed term contract by completing a report iro the events which
have led him or her to the decision to apply for the intended non-renewal of the
contract.’
The further provisions of clause 17 provided for the Commanding
Officer’s request to be reviewed by a review board and, once it had made
a provisional recommendation, for the Commanding Officer to provide
the member with specific reasons for the intended non-renewal of their
contract as well as the specific measures under which the member’s
contract would be terminated. The member was then to be allowed ten
days to respond, in accordance with the audi alteram partem rule, before
the entire matter would be referred to higher authority via the Career
Manager. All this was to be done five months before the existing contract
expired.

[25] The provisions of the Policy were plainly intended to satisfy the
requirement in clause 3 of Chapter XX of the General Regulations to the
Defence Act10 that members of the SANDF are entitled to fair labour
practices, a conclusion that necessarily followed from SANDU (1).
Whether, like the provisions of Chapter XX they had statutory force,11
was unclear and counsel were unable to assist us in that regard. Assuming
that they did not have statutory force, they nonetheless prescribed the
procedures that were to be followed before a decision was taken not to
renew a member’s fixed term contract. These were described as
‘administrative actions’, which was consistent with the purpose of the
Policy, namely, to prescribe the administrative process and procedures to
be followed when managing the separation of officials from the
Department of Defence. Lastly the Secretary for Defence and the Chief of
the SANDF issued it with a clear instruction that it was to be followed.

The issue
[26] The provisions of the Policy were not followed in any material
respect in Mr Xulu’s case. I highlight only the following. The notice
given to Mr Xulu was not given eight months before the expiry of his
contract12 and it went far beyond the permissible provisions of such a
notice, by informing him of the Department of Defence’s intention not to
renew his contract. No application for non-renewal had been received
from Mr Xulu’s commanding officer. Lieutenant Colonel Oss, who
clearly understood that he was his commanding officer, whatever
Lieutenant General Nkabinde said in that regard, and urged that his

10 Chapter XX was originally introduced by GNR 998 of 20 August 1999 (Government Gazette
201376), but rapidly replaced by GNR 1043 of 1 September 1999 (Government Gazette 20425).
11 South African National Defence Union v Minister of Defence and others [2007] ZACC 10; 2007 (5)
SA 400 (CC) para 51.
12 I leave aside for the present that the conditions attached to his letter of contract provided for 18
months’ notice of an intention to renew or not to renew.

contract be renewed. No reason for non-renewal emanating from Mr
Xulu’s commanding officer was presented and the reasons given were
those of Major General Nkabinde, who had no right to be involved at that
stage under the process prescribed in clause 17.

[27] The end result was that someone who had already determined that
his contract should not be renewed considered Mr Xulu’s representations,
together with his own subordinates. In substance Major General
Nkabinde played the roles of prosecutor, judge and executioner. That was
flatly contrary to the Policy and an infringement of Mr Xulu’s right to fair
labour practices. Counsel for the SANDF did not dispute this. The issue is
to determine its legal consequences.

[28] In the high court Mr Xulu’s case was argued on the basis that
consideration
of
the
non-renewal
of
his
contract
constituted
administrative action within the meaning of that expression in s 33 of the
Constitution and PAJA.13 Lephoko AJ rejected this contention, holding
that the Constitutional Court had held that employment related decisions
do not constitute administrative action. For this he relied upon the
decisions in Chirwa14 and Gcaba.15

[29] On appeal Mr Xulu relied on both PAJA and the constitutional
principle of legality. The full court held that it was unnecessary to decide
whether the decision constituted administrative action as it could, so it
held, be resolved by applying the principle of legality.16 It held that in

13 The Promotion of Administrative Justice Act 3 of 2000.
14 Chirwa v Transnet Ltd and others [2007] ZACC 23; 2008 (4) SA 367 (CC) para 139.
15 Gcaba v Minister of Safety and Security [2009] ZACC 66; 2010 (1) SA 238 (CC) para 64.
16 President of the Republic of South Africa and Others v South African Rugby Football Union and
Others [1999] ZACC 11; 2000 (1) SA 1 (CC) (SARFU) paras 147 and 148; Pharmaceutical

disregarding its own policy relating to non-renewal of fixed term
contracts and Mr Xulu’s right to fair labour practices the SANDF acted
contrary to the principle of legality. Its decision not to renew Mr Xulu’s
contract accordingly fell to be set aside.

[30] In this court the SANDF submitted that Mr Xulu’s application was
founded entirely on the refusal to renew his contract being administrative
action under PAJA. It submitted that the decision was not taken in the
exercise of public power under a statute, but was a contractual decision
not to renew his contract, which had the effect under s 59(1)(b) of the Act
of automatically terminating his contract. The decision, so the argument
proceeded, had no direct, external legal effect. Insofar as the principle of
legality was concerned the SANDF submitted that all of the grounds
invoked by Mr Xulu under this head were grounds of review of
administrative action under PAJA. Therefore the principle of legality was
being used to disguise a PAJA review of conduct not constituting
administrative action as reviewable on a different basis.

[31] In their heads of argument counsel for the SANDF had submitted
that departures from the Policy were permissible provided Mr Xulu’s
situation was fairly considered in the exercise of the SANDF’s discretion
whether to renew it. All that was required was substantial compliance
with the Policy and any deviations that had occurred were minor and
should be condoned. The absence of a recommendation of non-renewal
was dismissed on the grounds that Lieutenant Colonel Oss had not served
in that role for six months prior to making his recommendation that Mr

Manufacturers Association of South Africa and Another: In re Ex Parte President of the Republic of
South Africa and Others (Pharmaceutical Manufacturers) [2000] ZACC 1; 2000 (2) SA 674 (CC)
paras 85-86.

Xulu’s should be retained in service. It was submitted that fairness was
ensured by Lieutenant General Nkabinde sitting on the review board and
applying his mind to the matter.

[32] This argument was untenable in the light of the gross departures
from the Policy outlined in paragraphs 26 and 27 and was not pursued in
oral argument. Instead counsel submitted that any claim available to Mr
Xulu was a contractual claim, perhaps sounding in damages but not one
based on the review of the non-renewal decision.

Administrative action
[33]  PAJA gives effect to the right to just administrative action in
section 33 of the Constitution. It provides for judicial review of
administrative action. What constitutes administrative action is the
subject of a lengthy and somewhat convoluted definition, which was
consolidated and abbreviated by Nugent JA in Grey’s Marine,17 in the
following terms:
‘Administrative action means any decision of an administrative nature made … under
an empowering provision [and] taken … by an organ of State, when exercising a
power in terms of the Constitution or a provincial constitution, or exercising a public
power or performing a public function in terms of any legislation, or [taken by] a
natural or juristic person, other than an organ of State, when exercising a public power
or performing a public function in terms of an empowering provision, which
adversely affects the rights of any person and which has a direct external legal effect
…’

17 Grey’s Marine Hout Bay (Pty) Ltd & others v Minister of Public Works & others (Grey’s Marine)
[2005] ZASCA 43; 2005 (6) SA 313 (SCA) para 21.

[34] The Constitutional Court,18 citing Grey’s Marine with approval,
has broken the definition into seven components, namely that ‘there must
be (a) a decision of an administrative nature; (b) by an organ of State or a
natural or juristic person; (c) exercising a public power or performing a
public function; (d) in terms of any legislation or an empowering
provision; (e) that adversely affects rights; (f) that has a direct, external
legal effect; and (g) that does not fall under any of the listed exclusions.

[35] The SANDF conceded that the decision not to renew Mr Xulu’s
contract satisfied three of these requirements, namely that the decision
was one by an organ of state; that it adversely and directly affected Mr
Xulu’s rights and that the decision did not fall under any of the
enumerated exceptions. I turn to consider each of the remaining
requirements.

[36] What constitutes a decision of an administrative nature can be a
difficult question and depends upon the nature of the decision and
whether it is of an administrative character. The function rather than the
functionary is important.19 A number of factors suggest that the decision
not to renew Mr Xulu’s contract was administrative. It related to
employment and involved no issue of policy. The SANDF repeatedly
described the Policy as involving the taking of administrative steps.
These followed a clear bureaucratic course. The starting point was that
unless the member’s commanding officer made a request that the contract
not be renewed it would be renewed automatically. That reflected a
policy choice, as s 59(1)(d) of the Act provides for the automatic

18 Minister of Defence and Military Veterans v Motau & others [2014] ZACC 18; 2014 (5) SA 69 (CC)
(Motau) para 33.
19 SARFU para 141.

termination of the contract on expiry of its fixed term. Once such a
request was made a number of further steps had to be taken. The non-
renewal of the contract would only occur at the end of this process after
all the prescribed steps had been taken. This exhibits all the
characteristics of an administrative process leading to an organ of state
taking a decision.

[37] The subject of the decision was the non-renewal of the fixed term
contract of a member of the Regular Force. The steps had to be taken in
terms of the Department of Defence’s Policy in dealing with such
matters. The characteristic of administrative action identified by Nugent
JA in Grey’s Marine,20 that it is the conduct of the bureaucracy in the
application of policy, applies in this case.21 A similar decision not to
reinstate a member of the SANDF, after his contract had been terminated
by operation of law in consequence of his being absent without leave,
was held by this Court to amount to administrative action.22

[38] The cases relied on by the judge at first instance to hold that this
was not administrative action, namely Chirwa and Gcaba, are in my view
distinguishable. In Chirwa the claimant alleged that she had been unfairly
dismissed, a claim falling within the Labour Relations Act 66 of 1995
(the LRA) and initially pursued under that Act. The majority in the
Constitutional Court rejected her reformulated claim, based on the right
to just administrative action. They did so firstly on jurisdictional grounds
that are not relevant in this case. Their second ground was that although it

20 Grey’s Marine para 24.
21 See also Permanent Secretary, Department of Education and Welfare, Eastern Cape and Another v
Ed-U-College (Section 21) (PE) Inc [2000] ZACC 23; 2001 (2) SA 1 (CC) paras 18 to 21.
22 Minister of Defence and Military Veterans and Another v Mamasedi [2017] ZASCA 157; 2018 (2)
SA 305 (SCA) para 15.

involved the exercise of public power it was not in terms of a statute, but
the exercise of a contractual right, and therefore not administrative
action.23

[39] What distinguishes this case from Chirwa is that the actions of the
SANDF were not taken in terms of the contract under which Mr Xulu
was appointed. The contract made no provision for its renewal and
recorded expressly that it would terminate in terms of s 59(1)(b) of the
Act on expiry of the fixed term. The decision not to renew was one in
terms of s 52(2) of the Act, because it involved the extension of Mr
Xulu’s contract and hence his further enrolment in the SANDF. It
concerned the procedures relevant to the enrolment of members of the
Regular Force, read in conjunction with the Policy. While Mr Xulu lost
his post as a member of the SANDF as a result, this was not because he
was dismissed, but as a result of the application of s 59(1)(b) of the Act.24
It was the statutory consequence of his contract not being renewed. The
dispute between the parties is not a dismissal dispute, but a dispute in
relation to the decision of the SANDF not to extend Mr Xulu’s contract.25

[40] Gcaba is far closer to the type of issue in the present case. It
involved a police officer who applied for a promotion post, but was not
appointed. The Constitutional Court held that the failure to appoint him

23 See the judgment of Ngcobo J in Chirwa para 142 and the majority judgment of Skweyiya J at para
73. The minority judgment of Langa CJ held that her dismissal was the exercise of a contractual right
not involving the exercise of a public power and therefore not administrative action.
24 A dismissal occurring by operation of law does not involve a decision and is not administrative
action: Phenithi v Minister of Education and Others [2005] ZASCA 130; 2008 (1) SA 420 (SCA). That
judgment is unaffected by the decision in Grootboom v National Prosecuting Authority and Another
[2013] ZACC 37; 2014 (2) SA 68 (CC) where the court held that the appellant had not in fact absented
himself and hence did not come within the provision that such absence could by operation of law
terminate his employment.
25 The distinction between the termination of the contract by operation of law and the decision not to
extend the contract is similar to the distinction drawn in Mamsedi fn 42 supra between a termination by
operation of law and a decision not to reinstate the member.

was a quintessential labour issue with little or no direct consequence for
any other citizens.26 On that basis it held that the failure to appoint him
was not administrative action. It said that generally employment and
labour relationship issues do not amount to administrative action within
the meaning of PAJA.27

[41] By contrast the issue in the present case is of importance to the
citizenry at large, namely the manner in which people are selected for
enrolment in our armed forces and the circumstances in which their
contracts may be terminated. It cannot be categorised as the exercise of a
contractual power under a contract of employment, because that is not the
nature of the contract between a soldier and the SANDF. Irrespective of
the precise nature of the contract, the decision not to renew it did not
involve an exercise of contractual power, because no such exercise was
required in the situation. If nothing had been done the contract would
have come to an end by operation of law. If Mr Xulu had found more
lucrative employment elsewhere, perhaps in the security industry, he was
perfectly entitled to walk away and there was nothing the SANDF could
do to stop him. His obligation to serve until discharged in terms of
s 52(3)(d) of the Act would have terminated on the termination date of his
fixed term contract, entitling him to his discharge in the absence of either
of the special circumstances referred to in s 59(5) of the Act. Unlike
Gcaba, which was a dispute over promotion in the context of a contract
of employment, falling within the dispute resolution mechanisms of the

26 Gcaba  para 66. For a criticism of the grounds of the decision see Cora Hoexter Administrative Law
in South Africa (2ed, 2011) pp 214 to 218.
27 Gcaba para 64. This was taken one step further in National Director of Public Prosecutions and
Another v Tshavhungwa and Another; Tshavhungwa v National Director of Public Prosecutions and
Others [2009] ZASCA 136; 2011 (1) SA 141 (SCA) para 22, where it was said:
‘Gcaba makes it clear that the dismissal of an employee in the public sphere does not constitute
“administrative action” ….’

LRA, this is a non-contractual dispute over the exercise of a statutory
power to extend Mr Xulu’s period of enrolment in the SANDF falling
outside the LRA.

[42]  Referring in Chirwa28 to the pre-democracy cases of Zenzile29 and
Sibiya,30 Skweyiya J pointed out that the rationale for those judgments, in
which it was held that employment disputes in the public sector involved
exercises of public power, could not be faulted at a time when public
sector workers were not accorded rights under labour legislation. He said:
‘In the absence of such rights being afforded to them there was, in my view, a judicial
duty on the judicial officers to extend protection to State employees.’
For most employees in the public service this imperative fell away when
the LRA was enacted bringing them under the umbrella of the same
legislation as employees in the private sector. But the SANDF is excluded
from the operation of the LRA and the remedies under the LRA are not
available to its members. In the result, the reasons given in Gcaba and
Chirwa for holding that Zenzile and Sibiya were no longer applicable in a
dispensation where public and private sector employees enjoy the same
labour rights, are inapplicable here and the judicial duty referred to by
Skweyiya J remains clamant.31

[43]  I therefore hold that the Policy was correct to describe as
administrative the steps it prescribed to be taken when considering the
non-renewal of the fixed term contract of a member of the SANDF. The

28 Chirwa  para 39.
29 Administrator, Transvaal and Others v Zenzile and Others 1991 (1) SA 21 (A).
30 Administrator, Natal and Another v Sibiya and Another 1992 (4) SA 532 (A).
31 Cora Hoexter op cit 211 says that these decisions have lost their force. That may not be correct, at
least not entirely.

decision not to renew was a decision of an administrative nature. The
court of first instance was wrong in holding that it was not.

[44] Turning to the remaining requirements for the decision not to
renew Mr Xulu’s contract to constitute administrative action, the analysis
already undertaken of the source of the power to renew, or decide not to
renew, fixed term contracts, demonstrates that it is a public power
sourced in the Act. That conclusion is reinforced by the SANDF’s
obligation to give effect to the soldier’s constitutional and statutory right
to fair labour practices. The Policy was designed to give effect to these
rights and to set out the manner in which the public power was to be
exercised.

[45] The final question is whether the exercise of the power in this case,
by way of the decision not to renew Mr Xulu’s contract, had direct,
external legal effect. Here there is a large measure of overlap with the
admitted impact on his rights. The decision meant that he became
unemployed and lost the benefits to which he was entitled to as a member
of the SANDF, including membership of the group life insurance scheme
and pension fund. Whatever the precise scope of this requirement may be,
it is in my view satisfied for reasons similar to those advanced by the
Constitutional Court in Joseph.32

[46] I accordingly conclude that the decision not to renew Mr Xulu’s
fixed term contract as a member of the SANDF constituted administrative
action. It was therefore subject to review in terms of s 6 of PAJA.

32 Joseph and Others v City of Johannesburg and Others [2009] ZACC 30; 2010 (4) SA 55 (CC) para
27.

The principle of legality
[47] Before dealing with the relevant grounds of review it must be said
that the approach of the full court, in avoiding the question whether this
was a case of administrative action and disposing of it on the basis of the
principle of legality, was in principle incorrect and one to be discouraged.
The right to just administrative action is the primary source of the power
of courts to review the actions of the executive and the administration.
The Constitution required legislation to be enacted to provide for this and
PAJA is the result. It is specific, although not necessarily simple, in its
provisions and prescribes procedures that must be followed in pursuing
judicial review, while vesting rights in people dealing with the
administration, such as the right to reasons. It imposes significant
limitations in regard to the requirement to exhaust internal remedies and
in regard to the time within which review proceedings must be brought.
Litigants and courts should not circumvent these by proceeding directly
to questions of legality. If action by the executive and administration is
administrative action, then the jurisprudence of the Constitutional Court
is clear in saying that this is the path that the litigation must follow.33

[48] The role of the principle of legality as developed and explained by
the Constitutional Court in Pharmaceutical Manufacturers34is to provide
a control over exercises of public power that do not constitute
administrative action. In that case the court was concerned with the issue
of a proclamation by the President bringing certain legislation into force
without the promulgation of the schedules necessary to render it

33 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism and Others [2004]
ZACC 11; 2004 (4) SA 490 (CC) para 25; Minister of Health and Another v New Clicks South Africa
(Pty) Ltd [2005] ZACC14; 2006 (2) SA 311 (CC) para 95 (per Chaskalson CJ) and paras 436 and 437
(per Ngcobo J).
34 Pharamceutical Manufacturers fn 34 supra.

operative, thereby removing any regulation from the distribution of
pharmaceutical and other drugs in South Africa. The Court held that the
President’s decision was executive rather than administrative action. It
applied the principle of legality and its requirement of rationality as a
threshold requirement for action falling outside the ambit of
administrative action.35 As had been the case in Fedsure,36 it first dealt
with whether the case involved administrative action and only once it had
concluded that it did not proceeded to rationality review under the
principle of legality. The scope of rationality review has broadened
somewhat to include rationality in both the decision itself and in the
process whereby the decision is taken,37 but this does not justify ignoring
PAJA and proceeding directly to a rationality review under the principle
of legality.38

[49]  In Albutt39 the Constitutional Court held that it was not necessary
to consider whether the action of the President in not giving victims a
hearing before exercising the power of pardon under s 84(2)(j) of the
Constitution constituted administrative action under PAJA. However, that
was a very special case and Ngcobo CJ said that there was a substantial
measure of doubt as to whether the exercise of the power of pardon
constituted administrative action. I share that doubt and point out that the
‘context-specific features of the special dispensation’ apparently dictated

35 Cora Hoexter op cit  p124 describes it as a safety net.
36 Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council
and Others [1998] ZACC 17; 1999 (1) SA 374 (CC).
37 Democratic Alliance v President of South Africa and Others [2012] ZACC 24; 2013 (1) SA 248
(CC) paras 33 to 37.
38 For a forceful criticism see Cora Hoexter op cit pp131-137 and her article ‘The enforcement of an
official promise: Form, substance and the Constitutional Court’ (2015) 132 SALJ 207 at 218-221. The
criticisms are referred to by the Constitutional Court in Pretorius and Another v Transnet Pension
Fund and Another (Pretorius) [2018] ZACC 10 para 37.
39 Albutt v Centre for the Study of Violence and Reconciliation and Others [2010] ZACC 4; 2010 (3)
SA 293 (CC) paras 80-82.

the Court’s approach.40 It provides no warrant for avoiding the question
whether a review is one under PAJA and dealing with it as a legality
review.41

[50] Apparently there may be a species of judicial review that falls
under neither PAJA nor the principle of legality, but concerns cases
brought on the basis of unconscionable state conduct that is in breach of
constitutional principles of reliance, accountability and rationality.42 The
scope of these principles is unclear, but they appear to apply only in
certain exceptional cases. In my view they do not justify a departure from
the general principle that when dealing with the conduct of the executive
and administrative arms of government the starting point is whether the
conduct in question constitutes administrative action. If it is, the principle
of subsidiarity demands that it be dealt with under PAJA. If it falls
outside PAJA, then the principle of legality may come into play, bearing
in mind that this is a threshold requirement and that the concept of
rationality that it invokes is a narrow one, not necessarily the same as that
applied in a review under s 6(2)(f)(ii) of PAJA. The development of a
coherent administrative law demands that litigants and courts start with
PAJA and only when PAJA does not apply should they look to the
principle of legality and any other permissible grounds of review lying
outside PAJA.

40 Ibid  para 81.
41 The jurisprudence of this Court likewise does not support that approach. Both Minister of Home
Affairs and others v Scalabrini Centre, Cape Town and Others [2013] ZASCA 134; 2013 (6) SA 421
(SCA) and Judicial Service Commission and Another v Cape Bar Council and Another [2012] ZASCA
115; 2013 (1) SA 170 (SCA) were decided on the footing that the action under review was not
administrative action and not reviewable under PAJA. In those circumstances this Court dealt with both
of them under the principle of legality.
42 Pretorius ibid paras 33 to 36. The foundation for such a ground of review is the judgment in
KwaZulu-Natal Joint Liaison Committee v MEC for Education, KwaZulu-Natal [2013] ZACC 10; 2013
(4) SA 262 (CC) where a claim pleaded and argued on contractual grounds was upheld on public law
and regulatory grounds.

Review of the decision
[51] Counsel did not seriously contend that the decision not to renew
Mr Xulu’s contract was not vulnerable to attack under PAJA. That was a
wise approach. From a procedural perspective the decision-making
process in defiance of the SANDF’s own policy was unfair. From a
substantive perspective it was not a reasonable decision in the sense of
one that a reasonable decision-maker could make in the circumstances. It
was based solely on the two old convictions without any investigation of
the circumstances in which they had occurred, their relative
inconsequentiality and the fact that equally senior officers to Major
General Nkabinde had not in the past thought them an obstacle to the
extension of Mr Xulu’s contract. In the decision-making process the
strong recommendation by Lieutenant Colonel Oss was disregarded. So
was Mr Xulu’s record of advancement during the previous five years and
the successful completion of a course that could lead to his promotion to
non-commissioned officer. This was a classic case of irrelevant, or only
marginally relevant, considerations being taken into account and all the
relevant considerations being discounted or ignored completely.

[52] It is unnecessary to go further and consider any other possible
grounds of review in terms of s 6(2) of PAJA. Those set out above suffice
for the decision not to renew Mr Xulu’s contract to be set aside. The
order of the full court was therefore correct although for different reasons.
Some consideration must, however, be given to the relief that it granted.

Relief
[53]  The order granted by the full court reads:
‘1
The appeal is upheld.

The respondents’ decision not to renew the appellant’s fixed term contract is
declared unlawful and is set aside and is replaced by the following:
“The appellant’s fixed terms contract is extended from 2011 until 30 July 2017 under
the same conditions applying to other members of the SANDF employed on fixed
terms contracts.”
The respondents are ordered to pay the costs of the appeal jointly and
severally, the one paying the other to be absolved, including the costs for the leave to
appeal.’

[54] Counsel for the SANDF accepted that it would be desirable to vary
this order in certain respects with a view to finalising the dispute as soon
as possible. Although there was no cross appeal, he accepted that para 1
of the order needed to be amended to deal with the costs in the high court,
while preserving two costs orders already made in favour of Mr Xulu
relating to certain reserved costs. The easiest way in which to do this is to
add words to para 1 of the full court’s order so that it reads:
‘The appeal is upheld with costs and paragraphs 2 and 5 of the high court’s order are
set aside.’

[55] 30 July 2017 has come and gone thereby rendering para 2 of the
full court’s order one with purely financial consequences. In those
circumstances it was accepted that it should rest undisturbed, whatever
criticisms might otherwise have been addressed to it. We were asked to
make an order further extending it but that is inappropriate in view of the
absence of a cross appeal and the absence of any information concerning
Mr Xulu’s fitness to return to duty as a soldier and the SANDF’s need for
his services. Instead this court should exercise its powers, in terms of
s 19(d) of the Superior Courts Act 10 of 2013, to render ‘any decision
that the circumstances require’, and make an order that addresses any
further claims Mr Xulu may have as a result of the elapse of the period

provided by the full court and the fact that he will not be returning to the
SANDF. In my view the need for this is met by our granting the
following order:
‘The Respondents are ordered jointly and severally to compensate the Applicant for
such further losses as he may have incurred as a result of his fixed term contract not
having been renewed in 2011, the amount of such losses to be agreed between the
parties within 30 days of the date of this order, failing which they are to be
determined summarily on the written representations of the parties by an arbiter
chosen by them or, in the absence of agreement, appointed by the Chair for the time
being of the Pretoria Bar.’

[56] There is no need to alter para 3 of the full court’s order dealing
with the costs of the appeal in that court.

[57] I grant the following order:
Special leave to appeal is granted.
Paragraph 1 of the order of the full court is amended to read:
‘The appeal is upheld with costs and paragraphs 2 and 5 of the high
court’s order are set aside’.
The appeal is otherwise dismissed with costs.
Respondents are ordered jointly and severally to compensate the
Applicant for such further losses as he may have incurred as a
result of his fixed term contract not having been renewed in 2011,
the amount of such losses to be agreed between the parties within
30 days of the date of this order, failing which they are to be
determined summarily on the written representations of the parties
by an arbiter chosen by them or, in the absence of agreement,
appointed by the Chair for the time being of the Pretoria Bar.

_____________________________

M J D WALLIS
JUDGE OF APPEAL

Appearances

For appellant:
G T Avvakoumides (with him L Harilal)
Instructed by:
Mokuena Attorneys, Midrand
McIntyre Van der Post, Bloemfontein
For respondent:
G L van der Westhuizen
Instructed by:
Viren Singh & Co, Durban
Mthembu, Van Niekerk Inc, Bloemfontein.