Billy Lesedi Masetlha was appointed Director-General and head of the National Intelligence Agency (NIA) on 14 December 2004 for a three-year term ending 31 December 2007. Following the "Macozoma affair" (a surveillance operation conducted without proper authorization), the Minister for Intelligence Services suspended Masetlha on 20 October 2005. The President later purported to record this suspension decision in a Presidential Minute dated 15 November 2005. On 20 March 2006, the President amended Masetlha's term of office to expire on 22 March 2006, effectively terminating his employment 21 months early, citing an irreparable breakdown of trust. The President offered to pay Masetlha his full remuneration and benefits for the unexpired period. Masetlha declined this payment and challenged both the suspension and termination decisions in the Pretoria High Court, which dismissed his applications. Masetlha then sought leave to appeal directly to the Constitutional Court.
The appeal was dismissed. The decision of the High Court was set aside and replaced with an order dismissing the consolidated application with no order as to costs. No order as to costs was made in the Constitutional Court. The President was ordered to pay Masetlha remuneration, allowances, pension and other benefits under section 37(2)(d) of the PSA for the period from 22 March 2006 to 31 December 2007, placing him in the same financial position he would have been in but for the termination. Any dispute regarding the extent of this financial compensation could be referred to a competent court.
This is a landmark case on the scope of presidential power, the doctrine of legality, and the relationship between executive action and administrative law in South Africa. It clarifies that: (1) The President's power to appoint senior intelligence officials under section 209(2) of the Constitution carries an implied power to dismiss; (2) Such dismissals constitute executive action excluded from PAJA review but subject to the constitutional doctrine of legality; (3) Legality requires rationality and lawfulness but does not necessarily impose procedural fairness requirements applicable to administrative action; (4) The special relationship of trust between the President and heads of intelligence services justifies greater executive discretion in dismissal decisions; (5) Courts will not order re-instatement where the relationship of trust has irretrievably broken down, even if the dismissal was procedurally flawed; (6) The case also illustrates important divisions within the Constitutional Court regarding the procedural content of the rule of law and the extent to which fairness requirements constrain executive power. The judgments reveal different approaches to balancing executive effectiveness in sensitive national security matters with constitutional constraints on public power.