Sterklewies (Pty) Ltd t/a Harrismith Feedlot v Msimanga & others

Sterklewies (Pty) Ltd operated a feedlot and employed Msimanga, Mqina and Tsotetsi (the former employees) who resided in hostel rooms on the employer's premises. The former employees were dismissed in 2004 following internal disciplinary proceedings. They challenged their dismissals unsuccessfully through the Labour Relations Act processes, which concluded in November 2007 when the CCMA refused condonation for late filing. Despite dismissal, they continued residing in the hostel rooms. In January 2008, they received notice terminating their right of residence. Between May and December 2008, notices under s 9(2)(d) of the Extension of Security of Tenure Act 62 of 1997 (ESTA) were served requiring them to vacate, but they refused. Sterklewies instituted eviction proceedings in the Magistrates' Court. The magistrate granted an eviction order on 10 February 2010. On automatic review under s 19(3) of ESTA, the Land Claims Court (Mpshe AJ) set aside the magistrate's order on 25 November 2011. Sterklewies appealed with leave.

• Whether the former employees' right of residence arose solely from their employment agreements and terminated with the lawful termination of their employment in terms of s 8(2) of ESTA
• Whether the employment contracts, including company rules and policies, provided that the right of residence was dependent on continued employment
• Whether s 8(2) of ESTA operates independently or must be read subject to the 'just and equitable' requirements of s 8(1)
• Whether the Land Claims Court on review exceeded its jurisdiction by determining issues not raised by the parties

The appeal succeeded. The order of the Land Claims Court was set aside. The magistrate's eviction order was confirmed with amendments: (a) paragraphs (a) and (b) were amended to apply only to the first and second respondents (Msimanga and Mqina); (b) paragraph (c) was deleted; (c) paragraphs were re-lettered; and (d) a declaratory order was made regarding the third respondent (Tsotetsi) declaring that his employment-based right of residence had been lawfully terminated, but any continuing right derived from his wife's employment with the plaintiff. No costs order was made against the former employees.

Where an occupier is a former employee who resided on the employer's property solely by virtue of an employment agreement, and that agreement (including incorporated company rules and policies) provided that the right of residence would terminate upon cessation of employment, the right of residence is lawfully terminated under s 8(2) of ESTA once the employment has been lawfully terminated and all labour law remedies have been exhausted. Company rules and policies that employees are contractually required to observe constitute express terms of the employment contract and can establish that the right of residence arose solely from the employment relationship. A court exercising review jurisdiction under s 19(3) of ESTA may not raise and determine issues that were not raised by the parties in the proceedings, except for pure points of law properly arising on the facts.

The court made several significant obiter observations: (1) The definition of 'consent' in ESTA should not be restrictively interpreted to require a formal agreement - tacit consent arising from an owner's failure to prevent occupation may suffice to create occupier status. (2) The court deliberately left open the important question of whether s 8(2) operates independently or must always be read subject to the 'just and equitable' requirements of s 8(1), noting this involves constitutional ramifications and should only be decided after full argument and proper pleading. The court suggested that if this issue is to be raised, it must be pleaded and supported by evidence showing why eviction would not be just and equitable despite lawful termination of employment. (3) The court noted that such a case would likely require strong evidence of factors such as lengthy residence, old age, ill health, absence of alternative accommodation and no burden to the employer. (4) The court explained the historical purpose of s 8(2) and s 8(3) was to prevent employers from evicting workers during ongoing labour disputes, a practice common before the LRA. (5) On costs, the court declined to establish a general rule but indicated that in ESTA evictions involving impoverished former employees occupying minimal accommodation, costs orders may generally be inappropriate, though each case depends on its facts. (6) The court emphasized the constitutional principle of avoiding constitutional issues where a matter can be disposed of on other grounds.

This case provides important guidance on the interpretation and application of s 8(2) of the Extension of Security of Tenure Act 62 of 1997 (ESTA), particularly regarding eviction of former employees from employer-provided accommodation. It clarifies that: (1) The right of residence can arise from express terms in employment contracts, including through incorporation of company rules and policies by reference. (2) Where accommodation is provided solely by virtue of employment, and the employment is lawfully terminated (including exhaustion of labour law remedies), the right of residence terminates under s 8(2). (3) The court left open the important constitutional question of whether s 8(2) operates as a self-contained provision or must be read subject to the 'just and equitable' requirements of s 8(1). (4) The case emphasizes the limited role of reviewing courts under s 19(3) of ESTA - they must confine themselves to issues raised by the parties and cannot determine cases on a different basis. (5) It demonstrates how the terms of employment contracts may be found in multiple sources including written contracts, collective agreements, company rules and policies. The case is significant for land law, eviction law and labour law intersections.