Billy Lesedi Masetlha v The President of the Republic of South Africa and Manala Elias Manzini

Billy Masetlha was appointed as Director-General and head of the National Intelligence Agency (NIA) for a fixed three-year term from 1 January 2005 to 31 December 2007 by the President under section 3(3)(a) of the Intelligence Services Act (ISA) and section 3B(1)(a) of the Public Service Act (PSA). On 20 October 2005, following the "Macozoma affair" (an unauthorised surveillance operation), the Minister for Intelligence Services suspended Masetlha. The President subsequently executed a Presidential Minute on 15 November 2005 purporting to record the suspension decision with retrospective effect. On 20 March 2006, the President purported to amend Masetlha's term of office to expire on 22 March 2006, effectively dismissing him 21 months early, citing an irreparable breakdown in the relationship of trust. The President offered to pay Masetlha full remuneration and benefits for the unexpired term, which Masetlha declined, seeking instead reinstatement. The Pretoria High Court dismissed Masetlha's applications challenging both the suspension and dismissal. Masetlha applied for direct leave to appeal to the Constitutional Court.

• Does the President have the power to suspend and/or dismiss the head of the NIA?
• Is the power to dismiss implied in section 209(2) of the Constitution read with section 3(3)(a) of ISA?
• What is the source and scope of the power to alter or terminate the term of office of the head of the NIA?
• Does the exercise of such power constitute executive action or administrative action?
• What constitutional constraints apply to the exercise of such power - is procedural fairness required?
• Was the decision to alter the term of office lawful and constitutional?
• What is the appropriate remedy given the breakdown of trust between the President and the head of the NIA?

Leave to appeal granted. Appeal dismissed. The decision of the High Court dismissing the consolidated applications was upheld, with the costs order set aside. No costs order made in the Constitutional Court. The President was ordered to pay Masetlha remuneration, allowances, pension and other benefits in terms of 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. Provision was made for resolution of disputes regarding the extent of financial benefits.

The power to appoint the head of an intelligence service under section 209(2) of the Constitution read with section 3(3)(a) of the Intelligence Services Act implies the power to dismiss, as this is necessary for the effective performance of the President's executive functions. The exercise of this power constitutes executive action under section 85(2)(e) of the Constitution, not administrative action subject to PAJA. While not subject to procedural fairness requirements as such, the exercise of the power to dismiss is constrained by the doctrine of legality, which requires that the decision be lawful, rational and not arbitrary. The irretrievable breakdown of the relationship of trust between the President and the head of the NIA, which is fundamental to the effective pursuit of national security, constitutes a lawful and rational basis for dismissing the head of the NIA. Where such dismissal occurs without fault on the part of the dismissed official, fairness requires that the official be placed in the same financial position they would have been in had the term run its course.

Moseneke DCJ observed that institutions of public power must act in accordance with values of accountability, responsiveness and openness, and that the rule of law and legality are foundational to the constitutional order. He noted that the President has significant constraints on the exercise of executive authority even where procedural fairness does not apply. Ngcobo J's dissenting observations emphasize that the rule of law has both substantive and procedural components under the Constitution, and that the duty to act fairly is implied by the principle that public power must not be exercised arbitrarily. He argued that this duty applies even to executive decisions that do not constitute administrative action. Sachs J made important observations about the sui generis nature of constitutional appointments, noting that they exist in a special category between political appointments and ordinary public service positions. He emphasized the importance of civility and ubuntu in the exercise of public power, stating that "civility in a constitutional sense involves more than just courtesy or good manners" and is "one of the binding elements of a constitutional democracy." He noted that fairness requires appropriate concern for reputational consequences when terminating high-profile public appointments.

This landmark case establishes crucial principles regarding the appointment and dismissal of heads of intelligence services in South Africa. It clarifies that: (1) The power to appoint implies the power to dismiss when derived from constitutional provisions. (2) The dismissal of the head of the NIA constitutes executive action, not administrative action, and is thus excluded from PAJA but subject to the doctrine of legality. (3) The doctrine of legality requires that executive decisions be lawful, rational and not arbitrary. (4) The special relationship between the President and the head of the NIA is founded on trust, and the irretrievable breakdown of that trust provides a lawful basis for termination. (5) Procedural fairness requirements do not apply to all executive decisions, particularly those involving national security functions requiring presidential confidence. The case demonstrates the Court's approach to balancing executive power with constitutional constraints, and the limits of judicial review of high-level security appointments. It also illustrates different judicial approaches to the rule of law and procedural fairness in the exercise of executive power.