Directors’ battle not over

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TWO of Lukhanji Municipality’s long- serving directors, whose contracts were not renewed in 2014, continue to battle it out with the local authority at the Local Government Bargaining Council.

The Rep reported (“Directors shock,” September 9 2011) that a legal battle was looming for Lukhanji, following a decision not to renew contracts of community services director Gideon Judeel, human settlements director Lungile Nomeva, the late technical services director, Piet Bezuidenhout – and late municipal manager (MM) Professor Bacela.

At the time, a letter from an East London legal firm, Russell Inc Attorneys, acting on behalf of the directors and leaked to The Rep, indicated the decision to terminate the contracts had apparently been taken by council on June 17 2011 with the decision conveyed to the four on June 20.

The legal firm’s director, Bridgette Magnus, stated the purported terminations were considered to be irregular and contra to the directors’ employment contracts.

The move was also believed to be in contravention of the provisions of the Municipal Systems Act 32 of 2000 and various South African Local Government Bargaining Council determinations and agreements.

The letter stated that the terminations would not stand up to the scrutiny of the courts and would, if necessary, be set aside by the courts with an appropriate cost order.

IN CONFLICT: Gideon Judeel Picture: FACEBOOK
IN CONFLICT: Gideon Judeel Picture: FACEBOOK

“The Municipal Systems Act at Section 55, 56 and 57 as well as our clients’ contracts of employment paragraph 2.5 govern the terms of employment, more particularly the duration and renewals. The municipality may not unilaterally adjust the terms or give legal effect to any purported extensions which were not negotiated or reduced to writing and signed by both parties.”

According to the stated paragraph, the initial contracts of the directors were for a fixed period. Bacela’s was until June 31 2006 and the other three to December 31 2007.

Negotiations to renew contracts should have been finalised by no later than six months prior to expiry.

“If no notice is given of an intention not to renew by the employer prior to six months of expected expiry, the contracts would automatically be renewed for a further two years.”

As no notification was received and no negotiations took place, the contracts were automatically renewed with Bacela then set to serve until June 30 2008 and Bezuidenhout, Judeel and Nomeva to December 31 2009.

The contracts also apparently stated that during the two-year period, negotiations should have taken place or termination notice been given prior to the new expiry dates. If notice was not given, the contracts would automatically renew for a further five years.

This would mean Bacela’s contract would expire on June 30 2013 and those of the other three on December 31 2014.

In a follow-up report (“Legal twist in contract drama,” December 9 2011) The Rep revealed that Lukhanji had asked lawyers for legal opinion regarding the termination of the contracts.

Salga advocate, Mzwanele Yawa, said the Municipal Systems Act 32 of 2000 stipulated the terms of renewal of the contracts were by agreement between parties and not automatically. He said Bacela was, in terms of Section 55 (1) (i) of the Act and his contract, duty bound to advise the municipality about the expiry.

In terms of schedule 2 (2) (e) of the Act and contracts of Section 57 managers, it could not be said Bacela acted impartially and treated the municipality and council without favour and prejudice.

“Even before all else is attended to, the foundation of the claim to expire in 2013 is founded on a potentially (to put it mildly) unlawful clause.”

The municipality now faced having to continue an employment relationship with him and the other section 57 managers “beyond the time it would have loved, at cost to its strategic future focus etc,” Yawa indicated.

He advised Lukhanji, either to keep to its communication to terminate the contracts and deal with legal challenges, or write to Bacela and require him to submit the dispute to arbitration.

Another opinion prepared by TJM Paterson SC for Bobotyana and Company concluded that the period of the contract could endure a year into the life of the new council.

“As to the municipal manger, if the employment contract is regarded as operative at the commencement of the new council in July 2011, it can only endure until 30 June 2012.”

M J Lowes SC, in a legal opinion also prepared for Bobotyana, said the matter should be subjected to arbitration. “Either way, it seems the employees are bound to clause 14 of their contracts, providing for compulsory arbitration. Perhaps the most sensible way forward would thus be to give effect to that clause and to urgently convene arbitration proceedings with a view to obtaining clarity on the parties’ respective rights and obligations.”

Bacela and the directors ended up staying with Lukhanji (“Bacela, three directors stay,” December 16 2011). A source within the council, who wanted to remain anonymous, confirmed at the time that the decision not to terminate the contracts had been made in the last council meeting of 2011.

Former executive mayor Mncedisi Nontsele said the contracts had been due to expire at the end of December 2011. He said sufficient notice had been given to the affected managers “but they instead opted to challenge council’s interpretation of their respective contract periods”.

After considering independent legal opinion and the claims made by the managers, council regarded the notices of termination served on them to be legally binding.

“When the contracts were initially extended in 2008, the negotiators from both council and the officials’ side failed to reduce the agreement to writing. This created a predicament as council resolved as far back as 2006 that any new contracts of senior managers be in line with the Municipal Performance Regulations for Municipal Managers and Managers directly accountable to Municipal Managers, 2006,” he said.

In order to avoid further uncertainty the council had resolved to enter into new contracts with them in line with the performance regulations. Nontsele confirmed that the new contract of the municipal manager would expire in 2013 and that of the other managers in 2014.

In a subsequent report (“In crisis,” December 19 2014) Samwu demanded the withdrawal of the adverts of Nomeva and Judeel’s posts and reinstatement of their employment contracts. The union voiced unhappiness at being left out of council decisions including the one not to renew the contracts of the two directors.

Executive mayor Nozi Makanda said at the time council had decided not to renew the directors’ contracts but that Nomeva and Judeel could apply for the advertised posts.

Responding this week, MM Nolwandle Gqiba said Judeel and Nomeva’s attorneys and those of the municipality, would be presenting closing arguments at the bargaining council in Port Elizabeth on July 29.

“Within 14 days after the 29 July as per the bargaining council rules, we are expecting to receive the outcome. Their matter is on arbitration,” Gqiba said. It could not be independently verified if Lukhanji was still paying the salaries of the two directors or if they would be eligible for back-pay should they win the case against the municipality.

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