Reinstatement in the Context of ‘Deemed Dismissal’: A Critical Analysis of Recent Case Law

by | Oct 23, 2022 | SAMLJ, SAMLJ V34 I1

Reinstatement in the Context of ‘Deemed Dismissal’: A Critical Analysis of Recent Case Law

Authors: Chuks Okpaluba & Mpfariseni Budeli-Nemakonde

ISSN: 1996-2185
Affiliations: Research Fellow, Centre for Human Rights, University of the Free State, South Africa; Professor of Labour Law, School of Law, College of Law, UNISA
Source: South African Mercantile Law Journal, Volume 34 Issue 1, 2021, p. 1 – 28
https://doi.org/10.47348/SAMLJ/v34/i1a1

Abstract

The ‘deemed dismissal’ or ‘discharge’ clause is not mentioned either in the reinstatement provisions of section 193 of the Labour Relations Act 66 of 1995 (‘LRA’), or indeed, in any other provision of that Act. Such an expression can be traced to several public sector employment statutes such as: section 14(1)(a) of the Employment of Educators Act 76 of 1998; section 59(3) of the Defence Act 42 of 2002; and section 17(3)(a)(i) and (b) of the Public Service Act 103 of 1994 (‘PSA’). Notwithstanding that the substance and process of the ‘deemed dismissal’ disputes are quite different from those encountered in the law of unfair dismissal under the LRA, the determination whether reinstatement would be made in such a circumstance has been guided by the provisions of section 193(2)(a)–(d) of the LRA. After discussing the important South African cases of Phenithi v Minister of Education 2008 (1) SA 420 (SCA); Minister of Defence and Military Veterans v Mamasedi 2018 (2) SA 305 (SCA); and Ramonetha v Department of Roads and Transport, Limpopo [2018] 1 BLLR 16 (LAC), and those from the Botswana and Namibian jurisdictions, it becomes obvious that the Ramonetha case was quite different from the others. The conclusion, therefore, is that the judgment of the Labour Appeal Court sends a clear message to the employer that the statutory discretion invested in it by the PSA requires it to act within a space of time; the PSA does not give the employer the unbridled power to literally approbate and reprobate at the same time.

Good Faith is not Dead: It still Lives after Beadica 231 CC v Trustees, Oregon Trust

by | Oct 23, 2022 | SAMLJ, SAMLJ V34 I1

Good Faith is not Dead: It still Lives after Beadica 231 CC v Trustees, Oregon Trust

Author: Michele van Eck

ISSN: 1996-2185
Affiliations: Senior Lecturer, Department of Private Law, University of Johannesburg
Source: South African Mercantile Law Journal, Volume 34 Issue 1, 2021, p. 29 – 51
https://doi.org/10.47348/SAMLJ/v34/i1a2

Abstract

In Beadica 231 CC v Trustees, Oregon Trust, the Constitutional Court provided much-needed clarity on the role of equity principles (fairness, reasonableness and good faith) in contracts, in that the abstract principles found in equity principles will not apply directly to contractual engagements but will apply indirectly by means of public policy considerations. This article illustrates that this default position, as articulated by the Constitutional Court, does not completely exclude good faith in contractual engagements. In fact, good faith is infused in the entire contract lifecycle, starting from negotiation and presenting itself even in certain remedial action. In addition, there are a number of exceptions to the default position in that equity principles can be established by means of express incidentalia (in the form of good faith clauses), and could even be imported ex lege in consumer contracts by means of the Consumer Protection Act 68 of 2008. It can therefore be said that the operation of equity principles, such as good faith, in South African contractual engagements is neither dead nor obsolete. Rather, good faith has survived the Constitutional Court’s decision and continues to manifest itself in different ways in contracts reaffirming the place of good faith as a cornerstone principle in the operation of the law of contract.

Re-Acquisition by a Company of Own Issued Shares under Sections 48 and 114(1) of the Companies Act 71 of 2008: A Critical Assessment through Capprec

by | Oct 23, 2022 | SAMLJ, SAMLJ V34 I1

Re-Acquisition by a Company of Own Issued Shares under Sections 48 and 114(1) of the Companies Act 71 of 2008: A Critical Assessment through Capprec

Author: Simphiwe S. Bidie

ISSN: 1996-2185
Affiliations: Senior Lecturer, Nelson R. Mandela School of Law, University of Fort Hare
Source: South African Mercantile Law Journal, Volume 34 Issue 1, 2021, p. 52 – 87
https://doi.org/10.47348/SAMLJ/v34/i1a3

Abstract

Since the Companies Act 2008 came into being, there has been no clear direction regarding the interpretation to be given to the provisions regulating buy-back transactions. Recently, the provisions finally received some concrete attention in the judgment of Windell J in First National Nominees (Pty) Limited v Capital Appreciation Limited (Capprec). The judgment is important because it has since provided a measure of clarity on the potent interdependence between sections 48 and 114 of the 2008 Act, and how these must be interpreted. What is of interest is how Windell J set out and interpreted the operation and interdependence between section 48(2)(a), section 48(8)(b) and section 114 of the 2008 Act. Overall, the arguments from both parties in Capprec presented Windell J with a solid foundation that enabled the court to proffer a succinct and illuminating direction on the interpretation and operation of the provisions. This article attempts to extricate whether the course Windell J adopted in her judgment is consistent with what the 2008 Act contemplates, and if not, what would have been the appropriate course to take. The article demonstrates that Windell J did not seize the opportunity to thoroughly engage with section 114(1)(e) regulating buy-back schemes of arrangement and to ascertain what a scheme entails. This is despite the fact that in Capprec both parties’ arguments were underpinned by whether or not the proposed arrangement was a scheme. In this regard, Windell J’s approach is disappointing and is criticised because her interpretation means that the provisions of the 2008 Act have still not been clarified, although we have been waiting for 13 years for clarification. This is an unnecessary oversight by the judge.

South Africa’s Exchange Control Regulations and ‘Loop Structures’: The Income Tax Implications of the Removal of the Restrictions with Effect from 1 January 2021

by | Oct 23, 2022 | SAMLJ, SAMLJ V34 I1

South Africa’s Exchange Control Regulations and ‘Loop Structures’: The Income Tax Implications of the Removal of the Restrictions with Effect from 1 January 2021

Author: Annet Wanyana Oguttu

ISSN: 1996-2185
Affiliations: Professor, Department of Taxation and the African Tax Institute in the Faculty of Economic and Management Sciences, University of Pretoria
Source: South African Mercantile Law Journal, Volume 34 Issue 1, 2021, p. 88 – 117
https://doi.org/10.47348/SAMLJ/v34/i1a4

Abstract

This article analyses the implications of the income tax provisions introduced to address the potential tax avoidance that could arise from the lifting of the exchange control restrictions on ‘loop structures’ which were effected from 1 January 2021. Most South Africans and foreign investors do not quite understand the operation and implications of exchange controls due to the complexity of these regulations, and the perception that it is difficult to move money in and out of South Africa. Since the removal of exchange control restrictions on loop structures does not apply to existing unauthorised loop structures, this paper also provides a broader understanding of the operation of exchange controls regarding loop structures. The article first explains the administration of exchange controls and how the restrictions of exchange controls on loop structures have been relaxed over the years, and then it explains the 2021 removal of the restriction on loop structures as well as the amendments to the Income Tax Act to curtail tax avoidance risks.

Case Notes: An Exploratory Analysis of Central Bank Digital Currencies – Some Considerations

by | Oct 23, 2022 | SAMLJ, SAMLJ V34 I1

Case Notes: An Exploratory Analysis of Central Bank Digital Currencies – Some Considerations

Author: Vivienne Lawack

ISSN: 1996-2185
Affiliations: University of the Western Cape
Source: South African Mercantile Law Journal, Volume 34 Issue 1, 2021, p. 118 – 134
https://doi.org/10.47348/SAMLJ/v34/i1a5

Abstract

The history of central banking began with payment services. Ever since then, payment-related innovation has always been an integral part of central banking (BIS Committee on Payments and Market Infrastructures and Markets Committee Report, ‘Central Bank Digital Currencies’ (2018) iii). Payments have evolved extensively over the years with the emergence of various technologies, from the development of real-time gross settlement (‘RTGS’) systems, to electronic money and mobile money, to name a few. The arrival of financial technologies or ‘fintech’ has led to cryptocurrencies and now central bank digital currency (‘CBDC’) (on cryptocurrencies, see Reddy & Lawack, ‘An overview of the regulatory developments in South Africa regarding the use of cryptocurrencies’ (2019) 31 SA Merc LJ 1–28; see also Deloitte, ‘Are Central Bank Digital Currencies (CBDCs) the money of tomorrow?’, available at https://www2.deloitte.com/ie/en/pages/financial-services/ articles/central-bank-digital-currencies-money-tomorrow.html, accessed on 3 May 2021). A CBDC represents another potential innovation in the area of an evolving branch of the law called ‘fintech law’. This exploratory analysis provides an overview of the meaning of CBDC and the legal nature of money and CBDC. In addition, it provides a broad overview of some legal implications, policy considerations and regulatory issues. Challenges and risks are also highlighted.

Case Notes: Jurisdictional Quandaries Triggered by a New Variant for Dismissal

by | Oct 23, 2022 | SAMLJ, SAMLJ V34 I1

Case Notes: Jurisdictional Quandaries Triggered by a New Variant for Dismissal

Author: Tumo Charles Maloka

ISSN: 1996-2185
Affiliations: University of Limpopo
Source: South African Mercantile Law Journal, Volume 34 Issue 1, 2021, p. 135 – 151
https://doi.org/10.47348/SAMLJ/v34/i1a6

Abstract

While the imperative tone of the Constitutional Court (CC) in Steenkamp v Edcon Ltd (2016) 37 ILJ 564 (CC) (Steenkamp I) leaves no doubt that the Labour Relations Act 66 of 1995 (LRA) does not contemplate invalid dismissals or an order declaring a dismissal invalid, or of no force or effect, the extent of the Labour Court’s (LC) jurisdiction to grant appropriate relief declaring dismissals unlawful and invalid because they constitute encroachment of the applicants’ fundamental rights is a vexed question. In Steenkamp I it was decided that when an applicant alleges that a dismissal is unlawful (as opposed to unfair), there is no remedy under the LRA. What this means is that the LC lacks jurisdiction to make any determination of unlawfulness. A multi-layered and complex jurisdictional problem arose in Chubisi v SABC (SOC) Ltd (2021) 42 ILJ 395 (LC) (Chubisi) where the question was whether Ms Chubisi could obtain a declaratory order that the termination of her contract of employment was unconstitutional, unlawful, invalid and of no force and effect. At issue was the termination of employment pursuant to non-recognition of the employee’s contract by the public broadcaster ostensibly to give effect to the Public Protector’s remedial actions. There is no doubt that the remedial actions of the Public Protector have a binding effect, unless, of course, they are reviewed and set aside (EFF v Speaker of the National Assembly 2016 (3) SA 580 (CC); see also Mhango & Dyani-Mhango, ‘The powers of the South African Public Protector: A note on Economic Freedom Fighters v Speaker of the National Assembly’ 2020 African Journal of Legal Studies 1). The court held in Chubisi that the termination of the applicant’s contract of employment by the South African Broadcasting Corporation (SABC) was unlawful, invalid and of no force and effect. The question that arises, therefore, is whether the LC in granting a declaratory order to the effect that the termination of employment was unlawful and invalid misinterpreted and misconstrued the ratio of Steenkamp I. To answer this question, the reasoning of Tlhotlhalemaje J in addressing jurisdictional difficulties requires close scrutiny and analysis. In effect, the resolution of the issues emerging from Chubisi allows for a detailed examination of the import of Steenkamp I. This also provides a platform for examining the fundamental but somewhat tenuous distinction between the jurisdiction and the powers of the LC. In legal parlance, the critical task for the court in any given case is to decide whether the statutory provision on which an applicant relies to found jurisdiction is indeed one that confers jurisdiction. At a more general level, Chubisi implicates corporate governance malaise at the SABC with the unfortunate reality of retrenchments. Therefore, a concise discussion of the corporate governance challenges is merited.