Calibre Clinical Consultants (Pty) Ltd and The Right to Care Consortium v National Bargaining Council for the Road Freight Industry and HIV Managed Care Solutions (Pty) Ltd

The National Bargaining Council for the Road Freight Industry, a bargaining council established under s 27 of the Labour Relations Act 66 of 1995, established a wellness fund to provide HIV/AIDS treatment and support to employees in the road freight industry. The fund was financed through compulsory levies on employers and employees pursuant to a collective agreement extended by ministerial declaration. The council invited proposals for appointing a service provider to manage the wellness programme. Two appellants submitted proposals: a partnership comprising Thebe Ya Bophela Healthcare Administrators and Calibre Clinical Consultants, and a consortium comprising Right to Care Limited and others. After due diligence reviews by SizweNtsaluba VSP raised concerns (including Thebe's insolvency and the consortium's reliance on a single individual subject to a restraint of trade), the council decided not to appoint either bidder. Instead, it engaged KPMG to identify alternative providers, ultimately appointing HIV Managed Care Solutions (Careworks). The appellants sought judicial review of the council's decisions under the Promotion of Administrative Justice Act 3 of 2000 (PAJA).

• Whether decisions by a bargaining council relating to procurement of services for a wellness fund constitute 'administrative action' subject to judicial review under PAJA
• Whether a bargaining council exercises 'public powers' or performs 'public functions' when procuring services for member-funded projects
• Whether the council acted procedurally unfairly by not affording appellants a further hearing before rejecting their proposals
• Whether the council's decisions were irrational or unreasonable within the meaning of PAJA

The appeal was dismissed. The appellants were ordered to pay the costs of the appeal jointly and severally, as well as the reserved costs of the application for interim relief. Costs in each case were to include the costs of two counsel where two counsel were employed.

A bargaining council established under the Labour Relations Act does not exercise 'public powers' or perform 'public functions' when procuring services for projects funded by its members, even where the underlying collective agreement has been extended by ministerial declaration. Such procurement decisions constitute domestic functions for which the council is accountable to its members, not to the public, and therefore do not constitute 'administrative action' subject to review under PAJA. The test for whether conduct is subject to public law review requires examining whether the function has features that are 'governmental' in nature, considering factors such as: integration into governmental regulatory systems, governmental supervision and regulation, public funding, substitution for governmental functions, and public accountability. Procurement by bodies using member contributions (as opposed to public funds) does not attract the public accountability required by s 217 of the Constitution or PAJA. A legitimate expectation of procedural fairness does not arise merely from responding to an invitation to tender; it requires an express promise or regular practice that objectively gives rise to a reasonable expectation of a hearing. Where concerns are raised and parties given opportunities to address them, no further hearing is required before rejecting proposals.

Nugent JA made several important observations: (1) While there is no single universal test for determining whether a function is 'public' in nature, the extent to which it might be described as 'governmental' is a useful enquiry that directs attention to public accountability - the essence of judicial review. (2) Public accountability relates to those with whom the functionary has no special relationship other than being adversely affected by its conduct. (3) The court expressed doubt about decisions suggesting bodies exercise public functions merely because the public has an interest in their activities, finding no support for that approach. (4) Even if a body ultimately owes its existence to statute, this is not determinative of public accountability (just as companies owe existence to company legislation but are not thereby publicly accountable). (5) The court noted it would be hesitant to establish a general rule that persons responding to invitations from public bodies are entitled to be heard before their responses are rejected, though this may be required in specific cases. (6) The court queried whether the 'irrationality' and 'unreasonableness' grounds of review in PAJA might collapse into a single enquiry. (7) Decisions to avoid risk in long-term contractual relationships have a rational objective basis, and courts should not direct contracting parties to be more 'robust' in risk-taking.

This case is significant in South African administrative law for its comprehensive analysis of when conduct constitutes 'administrative action' subject to PAJA review. The judgment clarified that not all decisions by statutory bodies are subject to public law review - the key question is whether the function is 'governmental' in nature. The case established that bargaining councils, when procuring services for member-funded projects, perform domestic functions accountable to their members rather than public functions accountable to the broader public. The decision provides important guidance on the boundaries of administrative law, particularly distinguishing between public accountability (subject to PAJA) and private accountability (subject to private law remedies). The judgment also reinforced that s 217 of the Constitution (fair public procurement) does not extend to all statutory bodies. The case is frequently cited for its analysis of 'legitimate expectation' in procedural fairness contexts and for the principle that courts should exercise deference to commercial decision-makers evaluating risk in contractual relationships.