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[2017] ZAGPPHC 344
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Sentletse v Nedbank Limited (13216/16) [2017] ZAGPPHC 344 (15 March 2017)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
DATE:
15/3/2017
CASE
NO: 13216/16
REPOTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
In
the matter between:
SENTLETSE
DIAKANYO
APPLICANT.
and
NEDBANK
LIMITED
RESPONDENT.
JUDGMENT
Coram:
RE Monama, J.
Introduction.
[1]
During 18 December 2001, the parties created an
employment relationship. The applicant was appointed
as an Executive
Head of Risk, Compliance and the South African Reserve Bank Liaison
in the Group Finance Clusters
[2]
The position of the applicant entitled him to receive
certain the incentives. The incentive were
in the form of
the share and options . They were allocated in terms of their
the share schemes.
[3]
During 2008 he was granted Option Shares and Restricted Shares. This
grant was made under the scheme known as the Nedbank Eyethu
Black
Executive Trust ("the Trust Deed".) In or during 2011 and
2012 was granted further incentive shares
under the Nedbank
Group (2005) Share Option Matched Share and Restricted Share
Scheme ("the 2005 Scheme").
[4]
The Eyethu Trust Deed and the 2005 Schemes are governed by their
respective rules. These rules govern various aspects
of
the relationship such as vesting of the allocations and the
consequences of the dismissals prior to
the
vesting. The applicant's
entitlement in
respect
of the Restricted Shares were scheduled to vest during 8 and 9
March 2014 and 8 and 9 March 2015. At
the time of the dismissal the
relevant Restricted Shares had not vested as yet. These are the
shares that form the subject matter
of this application. The
allocation vested in tranches and the applicant claims the 2014 and
2015 tranches.
The
material background
[5]
During 25 February 2014 the applicant was dismissed from his
employment. The dismissal followed a disciplinary hearing
process.
The dismissal dispute was referred to the Commission for
Conciliation Mediation and Arbitration ("the
CCMA")
in terms of the provisions of the
Labour Relation Act. The applicant alleged that
the dismissal
was unfair.
[6]
The Commissioner at the CCMA found in his favour.
It was found that the dismissal was substantially
unfair.
The Commissioner found that in the
circumstances of this case, there was a break-down of
the trust
relationship between the parties. Accordingly, it
was held that it would be
inappropriate
to order the respondent to reinstate
the applicant. The Commissioner
ordered the respondent to
pay a monetary compensation. The applicant
received the compensation
in terms of the ruling.
[7]
On 19 February 2016 the applicant launched these proceedings. He
seeks an order in the following terms:
"that
the respondent is ordered to reinstate the
invested shares
to
the applicant."
There
notice of motion contains an is an ancillary prayer for cost in the
event of non-opposition by respondent.
The
grounds for the reinstatement
[8]
The applicant relies on the outcome of the order of the Commissioner
of at Commission for Conciliation Mediation and Arbitration
that the
dismissal was substantially unfair.
The
issue.
[9]
The issue for the determination as I understand it, is whether the
verdict of the CCMA renders dismissal
of the
applicant or certain consequences a
nullity. In other words whether the dismissal should be
interpreted
to mean that notwithstanding the acceptance of the compensation the
applicant is nonetheless still entitled to certain
incentives which
admittedly had not vested at the time of his termination of
employment. In short the issue is whether the termination
was by non
fault or by fault termination. The Trust Deed Agreement contains a
provision that:
"
- Options may be exercised by the beneficiary at anytime during the
exercise period."
Consequently,
the exercise period can only follow the vesting.
The
provisions in terms of the agreements.
[10]
As
stated above, there are two sets of rules which govern the subject
matter at hand. The 2005 Scheme is governed by the rules attached
as
annexure to the applicaton. The 2008 Eyethu Trust arrangements are
governed by and subjected to the rules attached to the record.
The
dismissal procedure is in annexure CR2 to the application
[1]
.
Paragraph 26 thereof
provides:
"-TERMINATION
OF EMPLYMENT
If
a Participant is granted a Restricted Award, and before the Vesting
Date, the Participant is no longer employed by any member
of the
Group by reason of a:
1
No Fault Termination: Death ...
2
No Fault Termination Other, then the Vesting Date in respect of
his/her
Restricted Award shall be unaffected and remain the first day
following the third anniversary of the Restricted Award Date:
26.3
Fault Termination, then the Participant shall forfeit all rights to
such Restricted Shares to the trust."
[11]
The Trust Deed allocations are governed by the rules contained in the
Deed of Trust attached to the record. It provides for
Options Share
in clause 12.4.1 and states that:
"-If
a beneficiary is granted an Option, and before the Vesting Date the
employment of such Beneficiary terminates:
1
by reason of a No Fault Termination, such
Option shall be deemed to vest in the beneficiary on the Termination
Date and shall be capable of being exercised until the last day of
the 1 (twelve) month period following the Termination Date,
failing
which it shall lapse and shall cease to have any further force or
effect, provided the RemCom may determine in its sole
discretion
(which discretion shall be exercised by not later than the
Termination Date) that the Option shall lapse automatically
on the
termination Date; and
2
by reason for a Fault Termination, shall lapse automatically on the
day which is 30
(thirty) days immediately following the Termination
Date and shall cease to have any further force or effect, provided
that RemCom
may determine in its sole discretion (which discretion
shall be exercised by not later than the Termination Date) that the
Option
shall lapse automatically on the Termination Date."
[12]
The Restricted Shares which are the subject matter of this
application are governed by the provisions of clause 13 which
provides
that:
"-If
a Beneficiary is granted a Restricted Share, and before the Vesting
Date the employment of such Beneficiary terminates:
1
by reason of a Fault Termination, the Beneficiary shall forfeit all
rights to such Restricted
Share(excluding any Vested Portion) and
shall be deemed to have ceded all its rights, title and interest in
and to such Restricted
Shares (excluding any Vested Portion); or
2
by reason of a no Fault Termination, the Beneficiary shall, at the
discretion of RemCom
be regarded as remaining in the employ of the
Group and the Restricted Shares may be released to him in terms of
clause 13.1."
The
rules attached to the record
[2]
.
[13]
As stated above the two schemes are somewhat different from one
another but have certain common features. The prominent same
features
relate the certain critical terms. These phrases are the
non fault
termination of employment , non fault termination of employment
:
others, discretionary non fault
termination of employment, fault
termination of
employment and discretionary fault termination.
The
discretionary fault or non fault termination of
employment occurs when is classified as such by
the
board and / or remuneration committee of the respondent.
[14]
The fault termination is the termination which follows a
disciplinary hearing for the misdemeanour or infraction
of the employment code of the respondent. The two
no fault phrases refer to non fault such as
in
death , no fault others refer to the retrenchments, retirements
and disabilities as defined or
so classified.
The
consequences of the ruling.
[15]
The commissioner ruled that the dismissal of the applicant was
substantively unfair. He order compensation payment to the applicant.
However the Commissioner ruled against reinstatement and held the
trust relationship between the parties has broken down. The applicant
accepted the award. The acceptance of the award has consequences. One
such consequence is to confirm the dismissal. It 1s correct
that the commissioner found the dismissal
to be unfair. The commissioner
has a
discretion to address the situation. The remedies are contained in
Section 193 of the Labour Relations Act. He ordered compensation.
He
advanced cogent reason why he cannot order the reinstatement.
This decision cannot be faltered. Any termination
of employment
contrary to the prov1s10ns of the Labour Relations Act remains
dismissal. The Constitutional Court the majority judgment
held that:
"..
the absence of a provision in the LRA for a right not to be dismissed
unlawfully is an indication that the LRA does not
contemplate an
invalid dismissal as a consequence of a dismissal
effected in a breach of a provision of the LRA."
[3]
[16]
The contention of the applicant is that the ruling of unfair
dismissal amounts to the no fault termination. This contention
is
disputed by the respondent. I find the interpretation of the
applicant to be misplaced.
[17]
The
parties derive their rights and obligations from the documents
constituting the 2005 Scheme and the Eyethu Trust Deed Scheme.
Therefore, the consequence of the termination of the employment
relationship must be determined in terms thereof. This matter
therefore involves the interpretation of the terms or phrases
termination of employment referred to in
paragraph 13 above. The correct approach
is
settled.
[4]
The process is
subjective and not objective. In Natal Joint Municipality
Pension Fund
[5]
it was
held that:
The
primary rule if interpretation is stated in Natal Joint
Municipal Pension Fund v Endumeni Municipal
as follows
"The
present state of the law can be expressed as follows: interpretation
is the process of attributing meaning to the words
used. In a
document, be it legislation,
some other statutory
instrument or contract, having
regard to the context provided by reading the particular provision of
provisions in the light of
the document as a whole and the
circumstances attendant upon its coming into existence. Whatever the
nature of the document, consideration
must be given to the language
used in the light of the ordinary rules of grammar and syntax;
the
context in which the provision appears; the apparent purpose to which
it is directed and the material known to those responsible
for its
production
. Where more than one meaning
is possible each possibility must be
weighed
in the light of all these factors. The process is objective
not subjective. A sensible meaning is to be preferred to one that
leads
to insensible or unbusinesslike results or
undermines the
apparent purpose of the document.
Judges must be alert to and
guard against, the temptation to substitute what they regards as
reasonable sensible or businesslike
for the words actually used. To
do so in regard to a statute or statutory instrument is to cross the
divide between interpretation
and legislation; in a contractual
context it is to make a contract for the parties other than the one
they in fact
made.
The
'inevitable'
point of departure
is the
language of the provision itself, read in context and having
regard to
the
purpose of
the
provision and
the
background to
the
preparation and
production of
the document."
(emphasis added)
Accordingly,
the court when seized with such an assignment must look at
all the facts and determine what the document
means.
[18]
The parties created these documents to govern their affairs. The
contract documents have clearly itemed and categorised what
constitute a no fault termination. In the context of the 2005 scheme
the no fault termination means termination of employment by
death, by
reason of retrenchment, permanent disability or a fault termination
and in respect the Eyethu Trust Deed the no fault
termination means
termination of the employment by reason of retrenchment, permanent
disability, permanent incapacity or retirement.
On the facts
the only interpretation to be given to the nature of of
the termination is
the fault
termination. The fault is the
insubordination.
[19]
The applicant's dismissal falls outside the agreed
circumstances of no fault termination. Accordingly,
the dismissal of the applicant terminated the relationship. The
termination occurred before the vesting of the last
two
tranches of the Restricted Shares. Therefore the
were no shares that vested and as a result there
are no
shares to be reinstated.
[17]
During the oral submissions the applicant primarily
argued that the decision not reinstate the shares
was
taken by wrong person.
[6]
This
submission is misplaced because such case was no pleaded. It is
always helpful to note the primary functions of the affidavits.
The
general rule is that a party must or
fall by the founding affidavit.
The
applicant was
expected
to make his case in the founding affidavit. In the application
proceedings these affidavits constitute the evidence
and
the pleading.
[7]
The
point was not made out in the
pleadings.
[20]
As stated above the affidavits constitute an
important piece of evidence.
There
should be drafted with care in order to include all information
necessary to sustain the claim. The founding affidavit is
lacking in
information. Be that as it may, the essence of the claim is
based on finding of the commissioner
that the dismissal
was unfair because the respondent follow a fair procedure.
[21]
The applicant did not sufficiently articulate the kind of shares that
he was entitled to have reinstated. In fact
the applicant's case is
made out by the respondent in the answering affidavit
wherein the respondent
meticulously give the
background, the details of the incentive scheme in which the
applicant participated. It also deals with the
issues of the
disciplinary hearing and the award.
[22]
Notwithstanding the meticulous exposition referred to above the
respondent persisted that the unfair dismissal cannot amount
to no
fault employment termination. This aspect has already been dealt with
above. The submissions is well made and
has merit
and I agree.
Conclusion
[23]
In the circumstance the applicant stand to be dismissed. Counsel for
the respondent requested the costs of two counsel. He
submitted that
the respondent regarded this matter to have some importance. I
cannot dispute the view of the
respondents. As far
as the costs are concerned this matter is not
complex and certainly does
not justify, the participation
of two counsel junior. I am satisfied that the service of
senior counsel
alone was sufficient.
Order.
In
the circumstances the following order is made: namely
a.
The application for the reinstatement of shares is dismissed.
b.
The applicant is ordered to pay the costs of senior counsel
only.
REMONAMA
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION
Appearances:
For
the Applicant:
Adv E Masumbuka .
Instructed
by:
AK Nkome Attorneys, Pretoria.
For
the Respondent:
Adv. A Cockrell SC ,
Adv Z Ngwenya.
Instructed
by:
Cliff Dekker Hofmeyer Inc, Johannesburg,
Friedman Hart Solomon and
Nicholson Pretoria.
Date
of judgment:
15 March 2017.
[1]
See page 96 of the record.
[2]
See pages 103-140 of the record.
[3]
See Steenkamp v Edcon Limited
2016 (3) SA 251
CC at page
286 G-H.
[4]
See Natal Joint Municipality Pension Fund
v
Endumeni
Municipality
2012 (4) SA 593
SCA and Bothma Batho Transport(Edm) Bpk
v
S
Botha en Seun Transport
2014 (3) SA 494
SCA and Novartis
v
Maphil
Trading 2016 (1) SA 518 at 506 B-H
and the authorities referred to
therein.
[5]
Page 603F-G to 604 A-D.
[6]
This is reference to annexure CRS on page 141 of the
record.
[7]
Swissborough Diamond Mines (Pty) Ltd v Government of
the Republic of South Africa 1999(2) SA 279
(T)