In Munthali v Passenger Rail Agency of South Africa [2022] 8 BLLR 769 (GP), the applicant was employed by the Passenger Rail Agency of South Africa Development Foundation (PRASA) as Chief Executive Officer. The applicant was suspended with immediate effect and PRASA announced her suspension by publishing an internal statement to approximately 15 000 employees. The internal statement stated, among other things, that the suspension was ‘in line with the commitment to good corporate governance and the eradication of irregularities with[in] the organisation’ but added that PRASA presumes innocence until due process has been completed (the Internal Statement).

A year later, and without any disciplinary proceedings having been instituted against the applicant, the applicant was notified that her suspension had been lifted and that she was to remain on paid leave pending a resolution between the parties. PRASA did not inform employees of the withdrawal of the applicant’s suspension, nor was a resolution between the parties forthcoming. Instead, approximately six months later, the applicant was notified that her employment contract was terminated with immediate effect.

PRASA then published a media statement announcing, among other things, that on an analysis by PRASA of the employment contracts of executives, it became apparent that some of them ought to have left PRASA years ago. With reference to the applicant, the statement recorded that she had been on suspension for alleged misconduct and that her contract ought to have been terminated on the expiry of a five-year term (the Media Statement).

The applicant challenged the fairness of her dismissal and, as a result, the Labour Court ordered PRASA to reinstate the applicant retrospectively. Thereafter, the applicant instituted a claim against PRASA for damages, alternatively loss of earnings, arising from the publication of the Internal Statement and Media Statement. According to the applicant, the statements were wrongful and defamatory.

PRASA raised an exception to the claim on the basis that the applicant’s particulars of claim did not disclose a cause of action against PRASA. In this regard, PRASA alleged that readers could not have understood the Internal Statement nor the Media Statement to suggest that the applicant was guilty of misconduct or that she had done anything wrong, and that her reputation and good name could not have been tarnished.

The court noted that to determine whether a statement is defamatory and, therefore, prima facie wrongful entails a two-stage inquiry. The first inquiry is to determine the ordinary meaning of the statement. The second inquiry is to determine whether the meaning is defamatory. The test is objective. In determining the meaning of a statement, the court must take account not only what the statement expressly conveys, but also what a reasonable person may infer from it.

The applicant contended that the meaning assigned to the Internal Statement was that she was suspended in line with ‘the eradication of irregularities’, the inference being that the applicant’s suspension was because of something improper. Further, because the Internal Statement was provided to approximately 15 000 employees, it was the intention of PRASA to defame the applicant by diminishing the applicant’s standing with her subordinates.

PRASA, on the other hand, contended that the purpose of the Internal Statement was to notify employees that the applicant had been put on ‘precautionary’ suspension. In these circumstances, employees could not have understood that the applicant was guilty of misconduct. Further, that because it acted on the presumption of the applicant’s innocence until due process had been completed, it could not have been understood to defame the applicant.

The court found that PRASA had attempted to import the word ‘precautionary’ before the word ‘suspension’, thereby creating its own narrative. However, the word ‘precautionary’ did not appear in the Internal Statement and PRASA had relied on its intention when publishing the Internal Statement to dictate the meaning thereof. This was, however, misplaced. Further, the court found that the announcement of the suspension of a high-ranking executive with immediate effect, objectively viewed, may not leave the esteem, which the applicant once enjoyed in place. Consequently, the Internal Statement could undermine the applicant’s status, good name, and reputation within PRASA.

Turning to the Media Statement, PRASA contended that it was published in good faith as the PRASA board was under the impression that the applicant’s contract had lapsed and that the reference to the applicant’s suspension was factually accurate. The court, however, found that the ordinary meaning of the words and the structure of the Media Statement provided that the applicant was one of the executives who knowingly and unlawfully overstayed her welcome. In addition, the Media Statement had been widely published without any attempt to verify the allegations and suggested that the applicant’s conduct was so serious that she had to be suspended. This would impact the esteem the applicant had enjoyed as a high-ranking executive in the eyes of her colleagues.

Accordingly, the court held that both the Internal Statement and Media Statement were defamatory and dismissed PRASA’s exception with costs.

Does a reinstatement order only apply once an employer has agreed to take the employee back into service?

In Fidelity Fund Security Services v Ngqola [2022] 8 BLLR 705 (LAC), the employee was employed as a security officer by Fidelity Fund Security Services (the Employer). Pursuant to her appointment, the employee was reprimanded for poor work performance and transferred to another site and post at a lower salary. She was advised that should she not accept the transfer; her employment would be terminated. The employee failed to report for duty at the new site and was consequently dismissed by the Employer.

The employee referred an unfair dismissal dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). The CCMA arbitrator found that the dismissal was both procedurally and substantively unfair and ordered the Employer to reinstate the employee and to pay the employee her arrear salary from date of dismissal.

The employee thereafter reported for duty at the Employer’s workplace. When she did so, she was told that she could not resume work because the Employer was taking the CCMA award on review but offered her a settlement of R 20 000, which she rejected. The CCMA award was then made an order of court. Approximately a year later, and just before the Sheriff served a writ of execution for the employee’s arrear salary, the Employer filed its review application. After a further three years, the Employer filed an application for rescission of the court order. Both the review and rescission applications were dismissed during the following year.

As a result, the Employer addressed a letter to the employee requesting her to report for duty. When she did so, the employee was required to sign a new contract in a lower position and with a reduced salary. The employee’s attorneys contended that this amounted to re-employment rather than reinstatement and the employee declined to sign the new contract. Shortly thereafter, the employee tendered her resignation.

The employee then approached the Labour Court (LC) seeking an order directing the Employer to pay her arrear salary from the date of her dismissal. The LC gave effect to the arbitration award but found that the employee was not entitled to payment during the short period in which she did not tender her services. Disgruntled with the outcome, the Employer took the judgment on appeal to the Labour Appeal Court (LAC).

Before the LAC, the Employer argued that the employee was never reinstated. It contended that the contract of employment, which gave rise to payment of the employee’s salary, only came about once the employee tendered her services and the Employer accepted the tender allowing her to resume duties. As the Employer had not accepted the tender of the employee’s services, the employee was never reinstated and, therefore, was not entitled to any arrear payments.

The LAC noted that more than 11 years had passed since the Employer was ordered to reinstate and compensate the employee. For over 14 months, the Employer did nothing except to deny the employee the right to resume her duties. The Employer delayed the filing of both its review and recission applications. Further, it never appealed against the dismissal of its applications, yet still did not comply with the court order.

The LAC found that the argument advanced by the Employer overlooked the following facts –

• the employee had reported for duty and tendered her services shortly after the award was made. The Employer did not, however, allow her to resume her duties;
• as the Employer had not furnished security, its review application did not suspend the operation of the court order to reinstate the employee. Until the order was set aside or suspended, it remained binding on the Employer; and
• the Employer’s attorneys had assured those of the employee that she would be placed at head office until a suitable position could be found for her. This clearly amounted to reinstatement.

Considering the above, the LAC held that the Employer could not deny that the employee was reinstated. Her employment contract had ensued until her date of resignation. Consequently, the LC’s judgment could not be faulted.

Turning to costs, the LAC held that the exception in labour proceedings to the general rule that costs follow the result is essentially to keep the relationship between the parties intact. This was not applicable in the present matter as the employee had resigned. It was clear to the LAC that the Employer’s wilful refusal to comply with the court order and its deliberate delaying tactics merited sanction. The Employer had been ‘hell-bent’ on exhausting and draining the employee emotionally and financially, resulting in her resignation. It would be unequitable and unfair to burden the employee with any costs incurred by defending the appeal.

The LAC dismissed the appeal with costs.

Nadine Mather BA LLB (cum laude) (Rhodes) is a legal practitioner at Bowmans in Johannesburg.

This article was first published in De Rebus in 2022 (Oct) DR 35.