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[2016] ZAKZPHC 57
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SAMWU National Provident Fund v Umzimkhulu Local Municipality and Another (11458/15) [2016] ZAKZPHC 57; (2018) 39 ILJ 121 (KZP) (24 June 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO:
11458/15
DATE:
24 JUNE 2016
In
the matter between:
SAMWU
NATIONAL PROVIDENT
FUND
....................................................................
APPLICANT
And
UMZIMKHULU
LOCAL
MUNICIPALITY
..................................................
FIRST
RESPONDENT
T
J
NGOEMU
................................................................................................
SECOND
RESPONDENT
JUDGMENT
Delivered
on: 24 June 2016
KRUGER
J:
[1]
The Applicant seeks an order that the Respondents furnish to it the
information prescribed in terms of Section 13 A(2) of the
Pension
Fund’s Act 24 of 1956, read with regulation 33 of the Pension
Fund Regulations. The information sought is in
respect of the
period 31
st
December 2013 to August 2015.
[2]
The Applicant further seeks an order that it be granted leave to
apply on the same papers, duly supplemented as far as is necessary,
for payment of arrear contributions, once the information sought in
paragraph [1]
supra
has been provided.
[3]
The prayers for payment in an amount of R486 040,01 together
with interest thereon, have not been persisted with.
[4]
It is common cause that the First Respondent is “a
participating employer” and an “employer” in terms
of the Rules of the Applicant. The First Respondent is also an
“employer” within the meaning of that phrase in
Section
13A of the Pension Fund Act, read with the definition of “employer”
in Section 1 of the said Act.
[5]
It is also common cause that the information sought by the Applicant,
as outlined in paragraph [1]
supra
has been furnished by the
First and/or Second Respondent to the Applicant. This information was
furnished in respect of all, bar
six, of the First Respondents’
employees. It also became common cause that the said six
employees “transferred”
their membership to the Municipal
Employees Pension Fund with effect from the 1
st
January
2014.
[6]
The Applicant contends that it is entitled to the information sought
in respect of the said six employees as it still regards
the said six
employees as its members. The core of its ascertain being that
the rules prohibit the transfer from one fund
to another while still
employed with a “participating employer”. Once the
information has been furnished, the
Applicants, after having
calculated the amount due, intends proceeding against the First
Respondent for the recovery of the said
amount.
[7]
The First Respondent, on the other hand, contends that as the six
members have transferred to the Municipal Employees Pension
Fund, it
is no longer obliged to furnish the information and contributions as
requested by the Applicant.
[8]
Two issues arise:
(a)
The quintessential issue is whether the six members are permitted to
transfer to the Municipal Employees Pension Fund (or to
any other
Pension Fund) while still in the employ of the First Respondent and
(b)
Whether the six employees ought to have been joined in these
proceedings.
[9]
In respect of (a)
supra
, the Applicant contends that in terms
of Rule 3.2.1 of the pension fund rules, the six employees are
prohibited from transferring
their membership and that the First
Respondent is prohibited from allowing such a transfer. Rule
3.2.1 provides:
“
A
member may not withdraw from the fund while he remains in service”.
[10]
In terms of Section 13 of the Pension Funds Act, a pension fund and
its members are governed by the rules of the pension fund.
Section 13 provides:
“
Subject
to the provisions of this Act, the rules of a registered fund shall
be binding on the fund and the members, shareholders
and officers
thereof, and on any person who claims under the rules or whose claim
is derived from a person so claiming.”
See
also
TEK Corporation Provident Fund and others v Lorentz
1999(4) SA 884 (SCA) at paragraph 15
.
It
is noted that Rule 3.2.1 has not been repealed or set aside.
[11]
Mr van Niekerk SC, on behalf of the Respondents, has submitted that
the provisions of Rule 3.2.1 are “over broad, unduly
onerous
and unconstitutional” by virtue of it being in conflict with
the provisions of Section 18 of the Bill of Rights in
that the
employees’ freedom of association is compromised. Relying
on the decision in
Coetzee v Comitis and others
2001(1)
SA 1254 (C)
he has submitted that Rule 3.2.1 has the effect of a
barrier of entry to other better funds. The facts in the
Coeztee v Comitis and others
differs
materially. In the said case the court held that “the
compensation regime (of the National Soccer League) constitutes
a
restraint of trade which is unreasonable.” The existing
laws prohibited the free movement of a football player once
his
contract had ended. This is clearly distinguishable in that
there is no limitation of freedom of association once an
employee’s
contract of employment ends – either by resignation or
dismissal or retirement.
[12]
I am of the view that the First Respondent lacks the necessary
locus
standi
to raise the issue of a breach of the right of freedom of
association. Mr van Niekerk has submitted that the First
Respondent
has the necessary
locus standi
as it (a) permitted
the transfer of the six employees and (b) it pays the contributions.
As such, it (First Respondent) has
a direct interest in these
proceedings. The factual bases of the submissions (a) and (b)
supra
may be true but they do not, in my view, clothe the
First Respondent with the necessary
locus standi
.
Section 13 of the Pension Fund Act provides that the rules of the
fund binds the employee and the fund and as correctly
pointed out by
Mr van Niekerk, do not bind the employer. It is accordingly the
employees, and in
casu
the six employees, who enjoy the right
of freedom of association and possess the necessary or
locus
standi
.
[13]
I turn now to consider whether the six employees ought to have been
joined in these proceedings. It is clear from what
has been
stated in this judgment thus far that the said six employees have a
direct and substantial interest in these proceedings.
It is
their right of freedom of association – viz - their right to
transfer to another pension fund while still in the employ
of the
First Respondent, that is affected. See
United Watch and
Diamond Co (Pty) Ltd and others v Disa Hotels Ltd and another
1972(4) SA409 (C) at 415 E-H
;
Judicial Services Commission
and another v Cape Bar Council and another
2013(1) SA170
(SCA) at paragraph 12
.
[14]
Any decision, at this stage, regarding the validity of their transfer
to the Municipal Employees Pension Fund, would in my
view, be
premature.
[15]
In the circumstances, the proceedings will have to be adjourned to
afford the Applicants an opportunity of considering whether
to join
the six employees.
[16]
I accordingly make the following order:
1.
The application is adjourned sine die.
2.
The Applicant is to pay the costs
occasioned by the adjournment. Such costs are to include the
costs of and incidental to
the hearing on the 15
th
June 2016.
KRUGER
J
DATE
OF HEARING: 15 June 2016
DATE
OF JUDGMENT: 24 June 2016
COUNSEL
FOR THE APPLICANT: P van der Berg SC
INSTRUCTED
BY: Shepstone & Wylie
COUNSEL
FOR THE RESPONDENT: G O van Niekerk SC
INSTRUCTED
BY: Mathew Francis Inc.