SABC's victory in employment contract appeal: What it means for workers

The South African Broadcasting Corporation (SABC) has successfully overturned a Labour Court ruling that found it had unlawfully dismissed a former deputy company secretary and discriminated against her on the grounds of age.

The Labour Appeal Court set aside the lower court's decision in favour of Famida Valla, who had claimed her fixed-term employment contract was unlawfully terminated when it expired in April 2018.

Valla, who was employed as deputy company secretary from May 2013 on a five-year fixed-term contract, had argued that a November 2015 board resolution converted her employment to permanent status and extended her retirement age from 60 to 63 years.

At the centre of the case was a board resolution adopted on November 26, 2015, which approved converting general managers from fixed-term to permanent employment "where the status of the job is permanent in nature and not project-based."

"The respondent [Valla] testified that after the board meeting, her immediate superior, … called the respondent to her office and advised her that all general managers were now permanent employees of the SABC," the ruling stated.

The judgment further noted that, "despite the fact that the resolution makes no reference to any change in the retirement age as set out in the retirement policy and the rules of the pension fund, the respondent testified that she understood the resolution to mean that the conversion of her employment to permanent status meant that she could 'stay on until age 63.'"

However, the Appeal Court found that the resolution did not automatically convert existing fixed-term contracts without individual negotiation and agreement. "Any variation to the terms of existing contracts would necessarily have to be negotiated and agreed with those SABC employees who qualified for conversion," the judgment stated.

The original Labour Court had found in Valla's favour on multiple grounds, ruling that the SABC had unlawfully terminated her contract, dismissed her for automatically unfair reasons, and discriminated against her on the basis of age. The initial court had also ordered the SABC to pay her legal costs.

The case was further complicated by the SABC's retirement policies and pension fund rules. At the time of Valla's employment, senior managerial employees on fixed-term contracts were required to retire when their contracts expired, while those on permanent contracts retired at 60, and other employees at 63.

Valla became concerned in 2016 when her pension fund statement showed no change in her retirement age, prompting her to lodge a grievance in November 2017.

The grievance was dismissed in December 2017.

The SABC initially considered disciplinary action against Valla for allegedly using confidential board information for personal benefit, but decided not to pursue this given that her contract was set to expire.

Writing for the three-judge Appeal Court panel, Justice Van Niekerk concluded that there was no evidence of any express agreement between the SABC and Valla to vary her contract terms.

"In the absence of any mutually agreed variation to the respondent's fixed-term contract, her employment terminated on 30 April 2018, which also constituted her normal retirement age for the purposes of the pension fund rules," the judgment stated.

The court found that since Valla's contract expired on its agreed date, there was no "dismissal" as defined in labour law, meaning the Labour Court lacked jurisdiction to hear her unfair dismissal claims.

Regarding the discrimination claim, the Appeal Court ruled that the differential retirement ages were based on occupational category, not age, and therefore did not constitute prohibited discrimination.

The Appeal Court set aside all the Labour Court's orders in favour of Valla and substituted them with a dismissal of her claims. Notably, the court ordered that each party bear its own costs, both in the Labour Court and on appeal.

The court noted that Valla was "an individual who, in good faith, challenged a decision by her employer that she perceived to be unjust," justifying the decision not to award costs against her despite her unsuccessful case.

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