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Article 23/2022

In the scenario where a senior employee enters into an agreement resolving a grievance of employees, on what basis did the labour appeal court recently hold that such employer is estopped from denying the authority of such senior employee to enter into such agreement?  And, what role does the conduct of the agent play, on the one hand (i.e. the senior employee), and, on the other hand, what role does the conduct of the principal play (i.e. the senior employee’s superior)?

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In Western Platinum Ltd v National Union of Mineworkers (2020) 31 SALLR 141 (LAC), the following principles were identified:

  • actual authority may be express or implied. It is express when it is given by express words, such as when a board of directors pass a resolution which authorises two of their number to sign cheques. It is implied when it is inferred from the conduct of the parties and the circumstances of the case, such as when the board of directors appoint one of their number to be managing director. They thereby impliedly authorise him to do all such things as fall within the usual scope of that office. Actual authority, express or implied, is binding as between the company and the agent, and also as between the company and others, whether they are within the company or outside it
  • ostensible or apparent authority is the authority of an agent as it appears to others. It often coincides with actual authority. Thus, when the board appoints one of their members to be managing director, they invest him not only with implied authority, but also with ostensible authority to do all such things as falling within the scope of that office. Other people who see him acting as managing director are entitled to assume that he has the usual authority of a managing director. But sometimes ostensible authority exceeds actual authority. For instance, when the board appoints the managing director, they may expressly limit his authority by saying he is not to order goods worth more than R500 without the sanction of the board. In that case his actual authority is subject to the R500 limitation, but his ostensible authority includes all the usual authority of a managing director. The company is bound by his ostensible authority in his dealings with those who do not know of the limitation. He may himself do the ‘holding-out’. Thus, if he orders goods worth R1 000 and signs himself ‘Managing Director for and on behalf of the company’, the company is bound to the other party who does not know of the R500 limitation…’ (see South African Broadcasting Corporation v Coop and Others [2006] 1 All SA 333 (SCA); Makate v Vodacom (Pty) Ltd 2016 (4) SA 121 (CC); 2016 (6) BCLR 709 (CC))
  • in South African Eagle Insurance Co Ltd v NBS Bank Ltd [2002] 2 All SA 220 (SCA), the court held that, when one of the parties to a contract purports to be acting in a representative capacity but has, in fact, no authority to do so, the person whom he or she purports to represent can obviously not be held bound to the contract. The principal will only be held bound if his or her own conduct justified the other party’s belief that authority existed
  • the conduct of the principal plays a crucial role in determining whether it ratified its agent’s action. This was much the case in NBS Bank Ltd v Cape Produce Co (Pty) Ltd [2002] 2 All SA 262 (SCA), at paragraph [25], where the court held that ostensible authority flows from the appearances of authority created by the principal
  • actual authority may be important in sketching the framework of the image presented, but the overall impression created is crucial. The court further held that our law has borrowed an expression, estoppel, to describe a situation where a principal may be held accountable when he has created an impression in another’s mind, even though he may not have intended to do so and even though the impression that this agent was acting on its behalf was in fact wrong. Where a principal is held liable because of the ostensible authority of an agent, agency by estoppel is said to arise. But the law stresses that the appearance, the representation, must have been created by the principal himself. The fact that another holds himself out as his agent cannot, of itself, impose liability on the principal
July 20, 2026

Precautionary suspensions

In the public sector, the Senior Management Service Handbook (SMS Handbook) directly addresses precautionary suspensions and the 60-day time limit.

Clause 2.7(2)(c) of the SMS Handbook provides that ‘If a member is suspended or transferred as a precautionary measure, the employer must hold a disciplinary hearing within 60 days. The chair of the hearing must then decide on any further postponement.’

Regulation 6 of the Local Government: Disciplinary Regulations Senior Managers, 2010 (Regulations) provides for the precautionary suspension of senior municipal employees and Regulation 6(6)(a) provides: ‘If a senior is suspended, a disciplinary hearing must commence within three months after the date of suspension, failing which the suspension will automatically lapse.’

What are the principles governing a determination of the question as to whether or not a senior municipal employee’s suspension automatically lapses in terms of the aforesaid Regulation 6(6)(a)?

Obviously, the answers to the aforesaid question are very relevant in the private sector where, firstly, a collective agreement regulates a similar process or, alternatively, such contractual rights have been created between the parties, to be enforced in terms of s77(3) of the BCEA.

July 13, 2026

In the previous article, we dealt with the consequences of a plant level collective agreement with a definite beginning and end date. We indicated to you that, in line with s23(2) of the LRA, and an analysis of the relevant case law, that, once such a collective agreement reaches its expiry date, it expires and is no longer of any force or effect. In this article, we deal with the scenario where a plant level collective agreement is concluded for an indefinite period and the employer gave notice to terminate same.

What are the consequences when a party to a plant level collective agreement, concluded for an indefinite time period, gives notice to terminate such collective agreement?

July 6, 2026

In terms of s23(2), a collective agreement binds, for the whole period of the collective agreement, every person so bound in terms of s23(1)(c) (the members of a registered trade union and the employers who are members of a registered employers’ organisation who are a party to the collective agreement, if the collective agreement regulates the terms and conditions of employment, or the conduct of the employers and employees) who was a member at the time it became binding, or who becomes a member after it became binding (irrespective of whether or not that person continues to be a member of such trade union or employers’ organisation for the duration of the collective agreement).

What is the relevant case law development as to a plant level collective agreement that has an expiry date, i e does such collective agreement continue to be of force and effect after such expiry date?