University of Pretoria v CCMA & Others (2012) 25 ILJ 183 (LAC)

The employee was initially employed on a fixed-term contract as a part-time lecturer in the Mercantile Law Department of the employer on a 6-month contract for the first half of 2004. The fixed-term contract was then renewed for the second half of the year. The contracts were subsequently renewed on the same or similar terms until November of 2007. In 2007 the employee applied for one of three permanent positions but was unsuccessful. The employee was however offered a renewed fixed-term contract for the first half of 2008 on more favourable conditions than she had previously enjoyed. The employee turned down the offer of the renewal of the fixed-term contract and claimed that she had been dismissed in terms of section 186(1)(b) as she had expected to be appointed to the permanent position.153 _{It seems from the record that the reason for the employee turning down the offer} of the 2008 fixed-term contract was that it was made on the understanding that no further employment contracts would be made to her.154

The facts of the matter were not in dispute as they were essentially common cause. The critical question was whether a reasonable expectation of indefinite employment met the requirements of section 186(1)(b) of the LRA, which would in turn mean that the employee had been dismissed.155

The employer argued in favour of the interpretation of section 186(1)(b) being limited to a dismissal being to be found only on the section’s express terms, that stated that a dismissal could only have occurred if the employee had an expectation of a renewed contract on the same or similar terms. In support of this submission the employee made reference to an

152 _{SA Rugby Players’ Association & Others v SA Rugby (Pty) Ltd & Others supra par 53.}

153 _{http://www.hrfuture.net/legal/just-in-case-fixed-term-contracts-non-renewal-and-the-consequences-} thereof.php?Itemid=80 (Accessed on 2 November 2013).

154 _{University of Pretoria v CCMA & Others (2012) 25 ILJ 183 (LAC) par 8.} 155 _{University of Pretoria v CCMA & Others supra par 9.}

article by Marius Olivier “Legal restraints on the termination of fixed-term contracts of employment: An enquiry into recent developments” (1996) 17 ILJ 1001. In this article Professor Olivier writes at 1006:

“The third issue of importance relates to the nature of the expectation, and by implication the nature and extent of the relief to be afforded. What is required in order to activate the provisions of section 186(1)(b) is an expectation that the fixed- term contract in question would be renewed on the same or similar terms. It is evident that the Act does not require that or regulate the position where the expectation implies a permanent or indefinite relationship on an ongoing basis. The reference to renewal on the same or similar terms supports that this is the inference to be drawn from the wording of the subsection. What section 186(b) apparently envisages is that an employer should not be allowed not to continue with fixed-term employment in circumstances where an expectation of renewal is justified. The implication is that the usual remedy to be granted in this case, if the termination is found to be unfair, is that of reinstatement or reemployment on the same or similar terms (see section 193(1) and (2)), but not that the employee has to be (re-) appointed as a permanent employee or on an indefinite basis. This would consequently leave the possibility open that the employer could after the expiry of the period of the subsequent fixed-term contract terminate the services of the employee concerned, as long as the termination is not otherwise prohibited- such as where the employee had once again a reasonable expectation that the contract would be renewed.”156

This approach was followed by Dierks v The University of South Africa (1999) 20 ILJ 1227 (LC) at paragraph 118-149. Penzhorn AJ dissented from this judgment and held in McInnes

v Technikon Natal (2000) 21 ILJ 1138 (LC) that:

“What section 186(b) clearly seeks to address is the situation where an employer fails to renew fixed-term employment when there is a reasonable expectation that it would be renewed. It is the employer who creates this expectation and it is then this expectation, created by the employer, which now gives the employee the protection afforded by this section. If then the expectation which the employer creates is that the renewal is to be indefinite, then the section must be held also to cover that situation.”157

The court found support for Penzhorn’s view in Grogan Workplace Law (2010) at 150, where he states that:

“There seems to be no reason in logic or law, why an expectation of permanent employment should not provide a ground for a claim of dismissal under this provision. It seems excessively technical to presume that the legislature had in mind the duration of the contract when it required that the employee’s expectation should contemplate renewal on the ‘same or similar terms.”158

156 _{University of Pretoria v CCMA & Others supra par 10.} 157 _{University of Pretoria v CCMA & Others supra par 11.} 158 _{University of Pretoria v CCMA & Others supra par 12.}

The employee, in further support of his submission, referred to the approach adopted by the Constitutional Court in NUMSA v Bader Bop (Pty) Ltd and Another (2003) 24 ILJ at 305 (CC) at paragraph 37 which states that: “if (that provision) is capable of a broader interpretation that does not limit fundamental rights, that interpretation should be preferred”.

In his evaluation of the case, Davis JA referred to S v Zuma (1995) 2 SA 642 (CC) at paragraphs 17–18 where the Constitutional Court warned against the interpretation of legislation so that “it means whatever we might wish it to mean”. The inference is that the language chosen by the legislature needs to be respected. Courts are to engage carefully with the words used in the Act so as to develop interpretations which can be plausibly justified on the words chosen by the legislature. See also SA Airways (Pty) Ltd v Aviation

Union of SA and Others (2011) 32 ILJ 87 (SCA) at paragraphs 27–33.159

The court differentiates between a fixed-term contract and an indefinite contract, saying that there is a clear distinction between the two which has clear economic rationale. The example the court uses to demonstrate this is that a employer may have only sufficient funds to employ a person on a temporary contract and should be allowed to contract in accordance with its needs and funds.160

The court then turned its attention to the wording contained in the draft Bill. The court held that despite the draft Bill not having had significant interpretive weight that it was instructive to look at the amendments proposed at section 186(1)(b)(ii) of the Labour Relations Amendment Bill which in addition to the wording already contained in section 186 reads:

“to offer the employee an indefinite contract of employment on the same or similar terms but the employer offered it on less favorable terms, or did not offer it, where there was reasonable expectation.”161

Davis JA ruled that the draft demonstrates the distinction between permanent and fixed-term employment and held that the section 186(1)(b) could not be read to include an expectation of indefinite employment.

159 _{University of Pretoria v CCMA & Others supra par 17.} 160 _{University of Pretoria v CCMA & Others supra par 18.} 161 _{University of Pretoria v CCMA & Others supra par 19.}