The Constitutional Court confirmed the declaration of invalidity of the Local Government: Municipal Systems Amendment Act 7 of 2011 in Samwu v Minister of Co-Operative Governance and Traditional Affairs [2016] ZAGPPHC 733 (HC).but suspended it for 24 months to allow the defect to be corrected.

Samwu v Minister of Co-Operative Governance and Traditional Affairs (CCT54/16) [2017] ZACC 7 (9 March 2017) per Khampepe J (Nkabinde ACJ, Cameron J, Froneman J, Madlanga J, Mbha AJ, Mhlantla J and Musi AJ concurring)

Excerpts without footnotes

Introduction

[1]   This matter comes to us as two distinct but related applications brought by the applicant.  The first is a confirmation application, in which the applicant seeks confirmation of a declaration of constitutional invalidity of the Local Government: Municipal Systems Amendment Act (Amendment Act)[1] made by the High Court of South Africa, Gauteng Division, Pretoria (High Court), on 23 February 2016 (Procedural Challenge).[2]

The second is an application for leave to appeal directly to this Court against the same order of the High Court in respect of its failure to find that section 56A of the Amendment Act, read with the definition of “political office” in section 1,[3] is inconsistent with the Constitution (Substantive Challenge) and in respect of its failure to award the applicant costs.[4]

. . . . .

Factual background

[4]   On 5 July 2011, the Amendment Act was promulgated.[1] It amended the Systems Act[2] to, inter alia, address what was perceived to be an alarming increase in the instances of maladministration within municipalities.  The Amendment Act introduced measures to ensure that professional qualifications, experience and competence were the overarching criteria governing the appointment of municipal managers or managers directly accountable to municipal managers in local government, as opposed to political party affiliation.[3]

[5]   The bill preceding the Amendment Act was submitted to Parliament as the Local Government: Municipal Systems Amendment Bill (Bill).[4] Thereafter the Bill was “tagged” by the Joint Tagging Mechanism (JTM), a committee of Parliament consisting of the Speaker and the Deputy Speaker of the National Assembly and the Chairperson and the Deputy Chairperson of the National Council of Provinces.[5]

. . . . .

[8]   Section 56A of the Amendment Act read with the definition of “political office” in section 1 introduced the restriction that municipal managers or managers directly accountable to municipal managers could no longer hold political office in a political party.

[9]   Section 56A of the Amendment Act provides:

“(1)      A municipal manager or manager directly accountable to a municipal manager may not hold political office in a political party, whether in a permanent, temporary or acting capacity.

(2)        This section does not apply to a person appointed as municipal manager or a manager directly accountable to the municipal manager when subsection (1) takes effect.”

[10]   The definition of “political office” in section 1 is as follows:

“‘political office’, in relation to a political party or structure thereof, means—

(a)        the position of chairperson, deputy chairperson, secretary, deputy secretary or treasurer of the party nationally or in any province, region or other area in which the party operates; or

(b)        any position in the party equivalent to a position referred to in paragraph (a), irrespective of the title designated to the position”.

[11]   The above sections of the Amendment Act form the basis of SAMWU’s Substantive Challenge.

. . . . .

Procedural Challenge

[15]   SAMWU contended that the Amendment Act was incorrectly tagged as an ordinary bill not affecting the provinces (section 75 bill).  It argued that the Bill should have been tagged as an ordinary bill affecting the provinces (section 76 bill), and should consequently have been passed in accordance with the provisions of section 76 of the Constitution.[1]  Section 76(3)[2] provides that a bill must be dealt with in terms of either sections 76(1) or 76(2)[3] if it provides for legislation envisaged in, inter alia, sections 195(3) and (4) or section 197 of the Constitution.   SAMWU argued that the Bill fell within these categories.   This was the thrust of SAMWU’s attack.   In addition, SAMWU relied on the powers conferred by sections 154 and 155 of the Constitution on both national and provincial governments to regulate municipalities and municipal executive authority through setting standards and monitoring compliance with those standards.

[16]   In the alternative, SAMWU contended that the Bill constituted legislation envisaged in section 44(3) of the Constitution as it provided for matters reasonably necessary for, or incidental to, the effective exercise of power concerning a matter listed in Schedule 4 of the Constitution (“Functional Areas of Concurrent National and Provincial Legislative Competence”).[4]

. . . . .

[23]   The High Court upheld the Procedural Challenge and declared the Amendment Act unconstitutional and invalid.  The declaration was not suspended, nor was there any limitation placed on the declaration’s retrospective effect.   The High Court referred its order to this Court for confirmation in terms of section 167(5) of the Constitution.[1]

 Substantive Challenge

[24]   SAMWU contended that section 56A of the Amendment Act is invalid because it violates a number of provisions in the Constitution.[1] The most notable is the freedom to make political choices (section 19(1))[2] and the right of employees in the public service not to be prejudiced on the ground that they support a political party or cause (section 197(3)).[3]  SAMWU submitted that section 56A of the Amendment Act limits these rights in a manner that cannot be justified in terms of section 36(l) of the Constitution.   The Minister conceded that this section is a limitation on certain fundamental rights, but contended that the limitation is justifiable.

[25]   SAMWU also submitted that the definition of “political office” in the Amendment Act is “so broad and vague” that it is not possible for municipal managers or managers directly accountable to municipal managers, appointed after the Amendment Act came into effect, to know how to regulate their conduct and activities to comply with its provisions.

. . . . .

Procedural Challenge

[30]   SAMWU advances the same arguments it made before the High Court in support of the confirmation of the declaration of invalidity.  It submits that the declaration of invalidity should be confirmed because the High Court correctly held that Parliament erred in tagging the Bill as a section 75 bill rather than a section 76 bill.

. . . . .

Substantive Challenge

[37]   SAMWU submits that the High Court’s failure to decide the Substantive Challenge was based on an incorrect reading of Tongoane.  It argues that Tongoane is distinguishable on the facts as that decision concerned legislation that was due to be repealed.   SAMWU also argues that, as the High Court is not a court of final appeal, it would have been desirable for the High Court to have expressed its views on the Substantive Challenge.[1]

[38]   SAMWU argues that it is in the interests of justice for this Court to determine the Substantive Challenge.  SAMWU submits that if the declaration of invalidity is not confirmed, section 56A of the Amendment Act will remain in force and will continue to violate constitutional rights.   If the declaration of invalidity is confirmed, SAMWU expresses concern over a possible re-enactment of section 56A without any changes.   In this respect, SAMWU points out that the Minister’s position continues to be that the provision is of great importance and is sufficient to justify the limitation of political rights.   In SAMWU’s view, this means that the constitutional rights of municipal managers or managers directly accountable to municipal managers remain under threat.

. . . . .

Issues

[41]   The preliminary issues to be determined are:

(a)   Whether this Court has jurisdiction to determine the applications before it.

(b)   Whether leave to appeal should be granted.

(c)   Whether SAMWU’s late filing of its written submissions should be condoned.

(d)   Whether the submissions of the Premier should be considered in this Court.

[42]   In respect of the Procedural Challenge, the issues to be determined are:

(a)   Whether the order of constitutional invalidity should be confirmed.

(b)   If the order of constitutional invalidity is confirmed—

  • whether the declaration of invalidity should be suspended to allow the Legislature an opportunity to cure the procedural defect; and

  • whether there should be a limitation on the retrospective effect of the declaration.

[43]   In respect of the Substantive Challenge, the issues to be determined are:

(a)   Whether this Court should decide if section 56A of the Amendment Act violates the Constitution.

(b)   Whether this Court should interfere with the costs order of the High Court.

. . . . .

[57]   The applicable rule in this instance is rule 31 of the Rules of this Court.  Rule 31 pellucidly states that any party to the proceedings “shall be entitled .  .  .  to canvass factual material that is relevant to the determination of the issues before the Court and that does not specifically appear on the record”, provided the facts in that material are “common cause or otherwise incontrovertible” or “are of an official, scientific, technical or statistical nature capable of easy verification”.[1]  It is common cause that the Premier is a party to these proceedings.   It is also common cause that the issues of suspension and retrospectivity were never canvassed in the High Court.

[58]   Consequently, the information that the Premier wishes to place before this Court meets the requirements set out in rule 31 of the Rules of this Court.  The submissions of the Premier are accordingly admitted.

Procedural Challenge

[59]   The Procedural Challenge is a confirmation application in terms of section 172(2)(a) of the Constitution.  This Court has stated that “section 172(2) confirmation proceedings are not routine, for it does not follow that High Court findings of constitutional invalidity will be confirmed as a matter of course”.[2]  Accordingly, I must first consider whether the Amendment Act is indeed unconstitutional for want of compliance with section 76 of the Constitution.

. . . . .

[60]   Section 195(3) of the Constitution directs that legislation must ensure the promotion of the values and principles listed in section 195(1).[1] The Amendment Act aims to promote the values listed in section 195(1).  This is because, if one has regard to—

(a)   the preamble of the Amendment Act;

(b)   section 54A (Appointment of municipal managers and acting municipal managers);

(c)   section 56A (Limitation of political rights of municipal managers and managers directly accountable to municipal managers);

(d)   section 57A (Employment of dismissed staff and record of disciplinary hearings);

(e)   the amendment of other provisions by the Amendment Act (notably the amendments to section 106, which deals with non-performance and maladministration and gives the MEC various responsibilities regarding non-performance and maladministration); and

(f)   the purposes of the Amendment Act as succinctly summarised and enumerated in the High Court judgment,[2]

the Amendment Act clearly seeks to promote a number of the values listed in section 195(1) of the Constitution, for example:

(a)   the promotion and maintenance of a high standard of professional ethics;[3]

(b)   the promotion of efficient, economic and effective use of resources;[4] and

(c)   the cultivation of good human resource management and career development practices, to maximise human potential.[5]

[67]   This, in terms of section 76(3)(d) of the Constitution, is enough to trigger the requirement that the Bill should have been dealt with in accordance with the procedure set out in section 76.

[68]   As regards the other claims, I am unconvinced that they specifically trigger the application of section 76.  Section 195(4) of the Constitution deals with appointments in “public administration” and section 197 deals with the “public service”.   The assessment of the High Court that “the ‘public service’ is not considered to include municipal employees”[6] cannot be faulted.   This because “public service” and “public administration” refer only to national and provincial spheres of government.[7]

. . . . .

[70]   For the reasons stated above, the declaration of invalidity made by the High Court must be confirmed.  The next matter to consider is the appropriate remedy in the circumstances.   Before that, however, I will deal with the Substantive Challenge.

Substantive Challenge

[71]   The High Court declined to decide the Substantive Challenge on the basis of this Court’s statement in Tongoane that—

“[o]nce it is concluded that [the relevant Act] is unconstitutional in its entirety because it was not enacted in accordance with the provisions of section 76, it seems to me that that is the end of the matter.   Although the anxiety of the applicants to finalise the matter in the light of the energy and time they invested in it is understandable, there is nothing left for this Court, as a court of final appeal, to consider.”[1]

[72]   Although the statement applied from Tongoane does apply to the Substantive Challenge before this Court, it was imprudent for the High Court to have placed reliance on that statement to decide not to consider the Substantive Challenge before it.  This is because, although the High Court declared the Amendment Act unconstitutional and thus invalid in its entirety on procedural grounds, its declaration was not final, nor was it binding or of any force and effect at the time of its finding.

. . . . .

[77]   Plainly put, the failure of the High Court to express its opinion on the Substantive Challenge carried with it the potential to frustrate the proper assessment of the appeal, should this Court have found it necessary to consider this issue.  For these reasons, it would have been desirable for the High Court to express itself on the Substantive Challenge.

. . . . .

[81]   Although the Substantive Challenge raises issues that directly implicate rights in the Bill of Rights, there is nothing to be gained from considering the challenge at this point.  There is no guarantee that the section will not change once it has been passed in accordance with the correct procedures.[1]  In my view, providing a post-obit assessment of section 56A of the Amendment Act circumvents the course and intrudes upon the correct legislative process.[2]

. . . . .

Remedy

[82]   Section 172(1)(a) of the Constitution explicates that a finding of unconstitutionality must be followed by a declaration of invalidity.[1] Section 172(1)(b) empowers this Court to make any order that is just and equitable when deciding a constitutional matter within its power, including an order suspending a declaration of invalidity or limiting the retrospective effect of that declaration.[2]

[83]   The wording of section 172(1)(b) makes plain two pertinent points.  The first is that, in the context of an order of constitutional invalidity, suspension of the order is not applied automatically.   A declaration of invalidity renders the impugned legislation invalid immediately with retrospective effect.[3]  This is because it is undesirable for a constitutionally invalid provision to remain effective once a court of law has found it to be inconsistent with the Constitution.

[84]   The second is that, once an Act has been found to be constitutionally invalid, its invalidity operates retrospectively unless a court finds that it would be just and equitable to limit its retrospective effect.  This Court’s jurisprudence is quite clear about the possible factors to be taken into account when deciding whether it would be just and equitable to grant a party the exceptional remedy of suspension or limited retrospectivity.[1]

Limiting the retrospective effect of the declaration of invalidity

[85]   This Court has held that limiting retrospectivity can be used “to avoid the dislocation and inconvenience of undoing transactions, decisions or actions taken under [the invalidated] statute”.[2] The submissions of the Premier succinctly set out the dislocating consequences that will ensue should the retrospective effect of the declaration of invalidity not be limited.

. . . . .

[91]   Having had regard to the Premier’s submissions, I am of the view that the declaration of invalidity should be suspended for a period of 24 months to allow the Legislature to cure the procedural defect.[1] The Amendment Act brought about reforms that inform the proper functioning of the municipalities.   I am of the view that the reforms provided for in the Amendment Act are not provided for in any other legislation.   Accordingly, suspension is justified to minimise disturbance in the running of the municipal administration.[2]

. . . . .

Section 56A Amendment Act

[96]   The evidence that SAMWU has put before this court is not conclusive.  During the hearing, counsel for the applicant acknowledged that there may very well be legitimate reasons that it would be undesirable for municipal managers or managers directly accountable to municipal managers to hold certain positions of political office.   Furthermore, the reason for SAMWU’s “remedial attack” on the suspension of section 56A is deeply rooted in their Substantive Challenge.   Put differently, their remedial arguments against the suspension of section 56A emanate from the premise that the section is substantively unconstitutional.   However, the Substantive Challenge is not being decided here.   In these circumstances, singling out section 56A in respect of remedy would come unduly close to deciding the Substantive Challenge, and would likewise be a moot exercise.

[97]   For these reasons, I see no legal basis to make an exception for section 56A in relation to remedy.