Impact of the declaration of invalidity of the Municipal Systems Amendment Act of 2011

Background: On 9 March 2017, the Constitutional Court (the Court) confirmed a decision of the High Court, which had declared the Local Government: Municipal Systems Amendment Act, 2011 (Amendment Act) unconstitutional and entirely invalid. The Amendment Act had mainly sought to make changes to the Local Government: Municipal Systems Act of 2000 (Principal Act) while making a minor related amendment to the Local Government: Municipal Structures Act of 1998. . The process of its enactment had wrongly followed the procedure laid out under section 76 of the Constitution instead of the appropriate procedure under section 75. The Court confirmed this invalidity in the case of South African Municipal Workers’ Union v Minister of Co-Operative Governance & Traditional Affairs and Others [2017] ZACC 7.

Since the declaration of invalidity affected an Act that had been in operation for over six years, the Court held that the declaration would apply going forward from the date of the judgment in order to avoid disruption. The Court also proceeded to suspend the coming into effect of the declaration of invalidity for a period of 24 months from the date of the Court’s decision so as to give Parliament an opportunity to remedy the procedural defect identified.

The 24 months suspension period lapsed on 9 March 2019. At that time, the new amendment Bill had only been reintroduced into Parliament but was far from being enacted into law. An attempt by the Minister of Cooperative Governance and Traditional Affairs (the Minister) to obtain an additional 12 months extension of the suspension period was dismissed by the Constitutional Court. This therefore meant that the declaration of invalidity of the Amendment Act came into effect on 9 March 2019 (the effective date).  What does this mean and what precise matters are affected by this declaration of invalidity?

The significance of the declaration of invalidity

The coming into effect of the declaration of invalidity of the entire Amendment Act means that all matters that sought to be regulated through the Amendment Act, as well as any regulations or policies that had been made pursuant to the Amendment Act, prima facie became inoperative and unenforceable. Formally, therefore, nothing may be done or enforced on the basis of a direct reference to the provisions of the Amendment Act (formal invalidity).

Substantively and in practice, however, the impact of the declaration of invalidity may be understood based on a two-fold classification of the contents of the Amendment Act: those provisions whose existence can only be traced to the Amendment Act (original provisions) and those which although contained in the Amendment Act were merely an extension or elaboration of provisions that were already existing in the Principal Act prior to the amendment (elaborative provisions). Accordingly, any original provisions as well as any specific regulations or guidelines that arose out of these original provisions were automatically rendered invalid and unenforceable on the effective date. The elaborative provisions, however, as well as any specific regulations or guidelines that emanate from them remain valid and enforceable to the extent that they may still be justifiable based on the provisions of the Principal Act. Therefore, although local government matters may not be directly guided based on a formal reference to the Amendment Act, they may still be substantively regulated by reference to other existing legislation that have the same effect as the elaborative provisions of the Amendment Act (substantive invalidity).

It is important to note that all other provisions of the Principal Act, including any amendments and regulations or policies made or issued prior to the 2011 amendment, remain operative and are still enforceable.

The precise matters affected by the declaration of invalidity

The Amendment Act largely sought to regulate public administration at the local government level on two levels namely, on the level of municipal managers and managers directly accountable to municipal managers (senior managers) and on municipal staff generally. In so far as original provisions are concerned, the Amendment Act: prohibited senior managers from holding any position in political parties; allowed for the secondment of a suitable person for the position of a senior manager; imposed a duty on municipalities to report on the outcome of processes of appointment of senior managers; required that senior managers conclude performance agreements within 60 days of appointment; required municipal employees dismissed due to misconduct be re-employed only after the expiry of a prescribed period; required municipal councils to approve staff establishments; and imposed an obligation on organised local government to first consult, among others, the Financial and Fiscal Commission and the Minister before embarking on any negotiations with parties in the bargaining council. All the provisions regulating these issues, therefore, became invalid and unenforceable. Also, parts of regulations, such as regulations 4 (6-8), 17, 18 and 20 of the Regulations on the Appointment and Conditions of Employment of Senior Managers, 2014 (Appointment Regulations), that are traceable to these provisions also became inoperative and unenforceable as from the effective date.

With respect to elaborative provisions, the Amendment Act made provision for the procedures and competences for the appointment of senior managers as well as the evaluation of their performance. It also gave powers to the Minister to make regulations relating to their duties, remuneration, benefits and other terms and conditions of their employment. In doing so, the Act was merely elaborating what was already provided for under section 82 of the Structures Act on the appointment of municipal managers as well as under the Principal Act. The latter allowed the Minister to make sweeping regulations setting uniform standards for any matter concerning municipal personnel administration, including, standards on municipal staff systems and procedures (section 72 (1) (c) & (h)). The Minister is also allowed to make regulations on the remuneration and other conditions of service of municipal staff members (section 72 (1) (g) & (i)) (note that municipal “staff” under the Principal Act includes municipal managers).

With respect to these elaborative provisions, therefore, municipalities are still required to comply with their substance as long as their legal force is attributable to the Principal Act as well as the Structures Act rather than the Amendment Act. However, guidelines such as the notice on the Upper Limits of Packages of Municipal Managers and Managers directly accountable to Municipal Managers issued by the Minister on 8 November 2018 (under section 72(2A) of the Amendment Act) become invalid and unenforceable in so far as they are issued based on the Amendment Act rather than on the authority of the provisions of the Principal Act (section 72 (1) (g) & (i)).

The interpretation of the implications of the declaration of invalidity in this article is applicable until a new Amendment Act that complies with the Constitution is enacted.

Unfortunately, however, the last Parliament that had considered the new Amendment Bill was dissolved ahead of the general elections held on 8 May 2019, while the Bill was still undergoing stakeholder engagement. Under Rule 333(2) of Parliamentary Rules, all Bills that are before the National Assembly or any of its committees when the Assembly is dissolved lapse at the end of the day the Assembly is dissolved. However, while adopting the dissolution motion, the National Assembly voted to suspend the application of this Rule with respect to the Bills that were before it. This, therefore, meant that upon the start of the term of the new Parliament, the Bill could be revived by motion in the National Assembly and the legislative process continued from where it was before the dissolution. However, currently the Bill is indicated on both Parliament’s and the Parliamentary Monitoring Group’s websites as having lapsed. Moreover, nothing in the record of Parliament points to the Bill having been revived or re-introduced since the new Parliament resumed business.

The declaration of invalidity affected the clarity and accountability afforded by the Amendment Act on matters touching on senior municipal managers. The fact that the new Amendment Bill was only approved by Cabinet on 5 December 2018 and introduced in Parliament on 6 February 2019, barely a month before the expiry of the suspension period reflects a failure by the government to appreciate and take seriously the potential consequences of the declaration of invalidity. The government, therefore, needs to move with speed to ensure that the new Amendment Bill is either revived or reintroduced in the National Assembly. In the meantime, COGTA may still proceed to issue new regulations based on powers conferred by the Principal Act in order to avoid further disruptions in municipalities as a result of the gaps created by the declaration of invalidity of the Amendment Act.

 

By Henry Gichana