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[2007] ZASCA 72
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Amplats Management Services (Pty) Ltd. v van Jaarsveld (269/06) [2007] ZASCA 72; (2007) 28 ILJ 2669 (SCA) (31 May 2007)
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THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Not Reportable
Case No : 269/06
In the
matter between :
AMPLATS
MANAGEMENT SERVICES (PTY) LIMITED
...............................
Appellent
and
AURET PRITCHARD VAN JAARSVELD
...............................
Respondent
Coram:
SCOTT,
NUGENT, JAFTA, MLAMBO, JJA and MUSI AJA
Heard
:
14 May 2007
Delivered : 31 May 2007
Summary: Contract of employment ─
whether established.
Neutral
Citation: This judgment may be referred to as
Amplats
Management Services (Pty) Ltd v Van Jaarsveld
[2007]
SCA 72 (RSA)
J U D G M E N T
SCOTT JA/
SCOTT JA:
[1] The
respondent (the plaintiff in the court below) instituted action in
the Johannesburg High Court against the appellant for the
payment of
damages in the sum of R 7 314 900, together with ancillary relief,
arising out of an alleged breach of a contract of employment
which
the respondent alleged it had entered into with the appellant. At the
commencement of the trial the court a quo (Horn J), as
requested by
the parties, ordered the issue of the appellant’s liability to
be decided first and the issue of the quantum of
the respondent’s
claim to stand over for later determination. The court found for the
respondent and declared him entitled
to recover damages. The appeal
is with the leave of the court a quo.
[2] The
appellant, a wholly owned subsidiary of Anglo Platinum Ltd, has as
its function the provision of what in effect is a head
office for the
Anglo Platinum group of companies. It has a number of divisions or
departments, each of which has at its head a general
manager who
reports to an executive director. The senior members of its staff are
appointed by a sub committee of an executive committee
called the
administrative committee which consists solely of directors. I shall
refer to the latter as ‘the ADCO’. The
appellant has a
grading system in terms of which each employee is allocated a grade
depending on the particular function he performs.
The highest grade
is level one; it is not clear from the evidence how far down the
grading goes. An applicant for appointment to
a post at senior level
would ordinarily be interviewed by the director in charge of the
department concerned and thereafter be graded
by a grading committee
which, similarly, consists entirely of executive directors. The human
resources department would also consider
the application and add its
input regarding such matters as employment equity requirements and
the need to ensure that the size of
the staff at senior level did not
expand unnecessarily. Thereafter, as I have indicated, the
application is considered by the ADCO
which takes the final decision.
The director in charge of the department in which it is proposed the
applicant will be employed would
normally motivate the appointment
before the ADCO.
[3] In May 1995
the respondent joined Rustenburg Platinum Mines (Pty) Ltd (also a
subsidiary of Anglo Platinum Ltd) as a planning
manager at one of its
mines. Mr Ray Menne, who was then the General Manager in the business
development and planning department of
the appellant, was impressed
by his work and, with the authority of the director then responsible
for that department, Mr Dorian
Emmett, arranged to interview the
respondent on 6 June 1997 with a view to the latter being seconded to
the head office for a period
of six months. Menne required the
respondent’s services for an initiative then in progress,
namely, the strategic planning
initiative (referred to in evidence as
the SPI). What was said and agreed at that meeting was the principal
issue at the trial.
[4] According to
the respondent, he was told by Menne that if he, Menne, was satisfied
with his performance during the period of secondment
he, the
respondent, would be appointed as a permanent member of the head
office with effect from 1 January 1998. On this basis he
accepted the
offer of secondment and became involved first in only the SPI and
later in other aspects of the work undertaken by that
department. He
testified further that after he had been at the head office for about
three months Menne told him that he, Menne,
was very happy with his
performance and that ‘he was definitely going to appoint me at
the beginning of the new year’
and that his appointment would
be at level three. The respondent said that at that stage he had
never heard of the ADCO and only
became aware of its existence in
July 2000.
[5] Before
commenting on this evidence and considering the appellant’s
response thereto, it is convenient to sketch briefly
the subsequent
events which culminated in the respondent signing a formal agreement
of employment on 25 August 2000, which he did
without prejudice to
his rights.
[6] In about
December 1997 (before the expiry of the six months period) the
respondent spoke to Menne about his appointment. At the
time the
department was about to be divided in two. Emmett, the director
formerly responsible for the department, was to become the
marketing
director and another director, Mr Dreyer, would take over as the
director responsible for the planning department. According
to the
respondent, Menne told him that he would ‘hold over’ his
appointment until the new director had had a chance ‘to
find
his feet’. He said that shortly after he returned from vacation
which was on 19 January 1998, he again spoke to Menne
about his
appointment. He said that Menne told him that he had spoken to Dreyer
who had explained that he was in the process of restructuring
the
whole division and that the respondent’s appointment was part
of that process. It appears, however, that nothing further
was done
to expedite the respondent’s appointment for the remainder of
1998. Menne left officially at the end of the year,
but had been
absent for some time prior to that on account of poor health. His
position as general manager of the department was
finally taken over
by Dr Baxter in February 1999.
[7] According to
Baxter and Dreyer, the two discussed the matter of the respondent’s
appointment but Baxter was still in the
process of assessing the
overall position of the department, including his own role, and was
unwilling at that stage to make any
recommendations regarding new
appointments. When approached by the respondent, Baxter made it
clear, he said, that he did not regard
himself as bound by any
‘promises’ made by his predecessor. Finally, in about
July 1999, Baxter, as he put it, began
‘feeling comfortable’
about a permanent appointment for the respondent and he approached
the human resources department
which was the first step in the
process of procuring an appointment for the respondent. However, a
number of difficulties presented
themselves. These included the need
for an appropriate grading, the determination of an appropriate
salary having regard to that
grading and more particularly some
resistance from the director responsible for the human resources
department, Mr Ngubane, who was
concerned with the need to comply
with employment equity requirements.
[8] The matter
appears to have dragged on for some while until as a result of
pressure from the respondent, the whole process was
expedited with
some haste and following approval by the ADCO the respondent was
appointed at level four with effect from 15 September
2000. Once so
appointed, the respondent became entitled to participate in a share
option scheme. His complaint was that by reason
of his not having
been appointed with effect from 1 January 1998 he suffered damage in
an amount of some R7 m on account of the rise
in the market price of
the shares on the Johannesburg Securities Exchange during the
intervening period. In February the following
year the respondent
lodged a complaint which was ultimately rejected by the ADCO. Of
significance is that, at the request of the
appellant, Menne
submitted a memorandum dated 17 October 2001 to the appellant setting
out his view of the matter. Menne died not
long thereafter. The
memorandum was however admitted at the instance of the respondent
without objection. I shall refer to it later
in this judgment.
[9] The
respondent’s case as pleaded, and as presented to this Court in
argument, was that by reason of his agreement with Menne
and the
subsequent approval by the latter of his performance, the
respondent’s secondment ended on 31 December 1997 and that
as
from 1 January 1998 he became an employee of the appellant; all that
was lacking was a letter of appointment which was a mere
formality.
In other words, Menne, acting on behalf of the appellant in effect
appointed the respondent to a position at the head
office, subject
only to the condition that Menne was satisfied with his performance
during the period of secondment.
[10] Quite apart
from the issue of Menne’s authority to enter into such an
agreement and whether he would have done so, it is
clear that the
respondent did not become an employee of the appellant as from 1
January 1998. His secondment was simply extended.
The evidence shows
that he remained on the pay role of Rustenburg Platinum Mines and was
paid by that company. Furthermore, Menne,
who at all times was in
favour of the respondent being appointed as a permanent member of the
staff, recorded in a written appraisal
of the respondent in October
1998 that the latter had originally been seconded for six months but
‘has continued in this capacity
to date’. Menne’s
advice to the respondent in December 1997 that he would ‘hold
over’ the respondent’s
appointment until Dreyer had found
his feet is similarly inconsistent with the notion that on 1 January
1998 the respondent would
automatically have become an employee of
the appellant.
[11] Counsel
contended, however, that the evidence of the respondent was equally
capable of the construction that Menne, acting as
agent for and on
behalf of the appellant, agreed with respondent that, if the latter’s
performance was satisfactory, the appellant
would be bound to
conclude a contract of employment with the respondent on the terms
and conditions which Menne and the respondent
had agreed upon. Such a
contract, known as a
pactum
de contrahendo
,
is enforceable provided that the terms of the contract to be made in
the future are agreed upon. See
H
Merks & Co (Pty) Ltd v The B-M Group (Pty) Ltd
[1995] ZASCA 45
;
1996 (2) SA 225
(A) at 233G-J;
Hirschowitz
v Moolman
1985
(3) SA 739
(A) at 765I-766E. On this basis the respondent’s
case would be founded on the appellant’s failure to conclude a
contract
of employment with the respondent in breach of the latter’s
agreement with Menne in 1997.
[12] Whichever
construction one seeks to place on the respondent’s evidence,
the cardinal issue is whether Menne, acting for
and on behalf of the
appellant entered into such an agreement and purported to bind the
appellant as alleged. Menne died some while
before the trial. The
only surviving witness available to testity as to what was said at
the meeting between the two was therefore
the respondent who is the
party who bears the onus of proof. It is a well established rule of
practice that in such circumstances,
although the onus is no higher
than in any other case, the evidence of the survivor is to be
scrutinized with caution and weighed
against the probablilities based
on other acceptable evidence. See eg
Low
v Consortium Consolidated Corporation (Pty) Ltd
[1998] ZASCA 92
;
1999 (1) SA 445
(SCA) at 450D-451C and the cases there cited.
[13] Menne
undoubtedly had authority to enter into a contract of secondment with
the respondent (and with Rustenburg Platinum Mines).
This was
confirmed by Emmett. But he clearly had no authority to bind the
appellant to the contract of employment which, it is alleged,
he
entered into with the respondent. Menne was a senior member of staff,
he knew full well the procedures involved for the appointment
of
personnel to head office and the need for such appointments to be
approved by the ADCO. This much is apparent from his subsequent
conduct. In these circumstances, it is most unlikely that he would
ever have purported to bind the appellant in the manner alleged
by
the respondent. The probabilities are overwhelming that he would have
done no more than express a view, however strongly, that
at the end
of the secondment period the respondent was likely to be appointed or
that he, Menne, would use his best endeavours to
procure an
appointment for the respondent. On the respondent’s case Menne
would have had to deliberately exceed his authority
knowing full well
what the appointment procedures were. This is unlikely, to say the
least.
[14] I have
previously referred to Menne’s memorandum dated 17 October
2001. It contains the following passage which was the
subject of much
debate in this Court:
‘
With
the agreement of [Emmett], [the respondent] was offered a secondment
to head office for a six-month probation period. If his
performance
proved to be satisfactory, he would then be offered a permanent
position in the department. The implication was always
that any
administrative procedures required would follow timeously. [The
respondent] accepted the offer on this basis.’
I do not read the passage as supporting the respondent’s
version that a binding agreement was entered into with the respondent
to the effect that at the end of the six-month period, if his
performance was satisfactory, he would become a permanent member of
the head office staff or that at the end of the period the appellant
would enter into a contract of employment with him on terms
previously agreed upon. On the contrary, the passage suggests that
Menne told the respondent no more than what was likely to happen
at
the end of the six-month period. Furthermore, he goes on in the
memorandum to say that although he considered that the respondent
was
a major asset and should be appointed ‘a number of events
conspired against any immediate action’. These, he says,
included an executive decision in December 1997 to split the
department with Dreyer becoming the executive director responsible
for
Menne’s department. He says further that he discussed the
respondent’s appointment with Dreyer who ‘while
appreciating
[the respondent’s] contribution to the department
─ requested patience from all parties while he reviewed his
division’s
function, and how to best arrange and rationalise
his resources’. In these circumstances, he adds, ‘accordingly,
it was
thus hardly appropriate for me to request that the Human
Resources Division proceed with [the respondent’s] appointment
at
that time’. Menne concludes his memorandum by expressing the
belief that the appellant ‘has a moral obligation to redress
its shoddy treatment of a valuable and grossly underestimated
employee’. All of this, in my view, is inconsistent with Menne
having exceeded his authority and entered into a contract on behalf
of the appellant as alleged by the respondent.
[15] Given the
probabilities and the content of Menne’s memorandum, I am
accordingly unpersuaded that the respondent’s
evidence was
enough to discharge the burden of establishing the contract on which
he relied. It follows that in my view the court
a quo erred in
finding in his favour on this ground.
[16] A further ground on which it was alleged that the appellant was
liable was stated in the Particulars of Claim to be that during
about
April or May 1998, the appellant, represented by Menne, orally agreed
with the respondent that the latter ‘would not
suffer any
financial prejudice as a result of the [appellant’s] failure .
. . to formalize the [respondent’s] appointment
with effect
from 1 January 1998’. In support of this allegation the
respondent testified that in about April or May 1998, after
expressing his concern to Menne about the fact that he had not yet
been appointed, Menne came back to him shortly thereafter and
reported that Dreyer had said that he did not understand what the
problem was as he, the respondent, need not worry ‘about
any
financial losses or anything like that’ as the appellant was a
big company and it would look after him. Dreyer, on the
other hand,
vehemently denied that he had ever given such an undertaking and
stressed the improbability of an undertaking of such
‘an
unquantifiable liability’ ever being given on behalf of the
appellant.
[17] Given the far reaching consequences of such an undertaking ─
the respondent’s claim is far more than R7 m ─
it does
strike me as most improbable that, had it been given, it would have
been given in such an informal manner without at least
being
confirmed in writing. Significantly, no mention of it is made in
Menne’s memorandum of 17 October 2001. It is common
cause that
the memorandum was given by Menne to the respondent for the latter’s
approval before being submitted to the appellant.
Having regard to
the overall tenor of memorandum one would have imagined that had the
undertaking been given it would have been dealt
with and indeed given
some prominence. In the circumstances, I am unpersuaded that the
respondent discharged the burden of establishing
this ground of
liability.
[18] It follows that in my view the appeal must succeed. The
following order is made:
The appeal is upheld with costs, including the costs of two counsel.
The order of the court a quo is set aside and the following
substituted in its place
‘
The plaintiff’s claim
is dismissed with costs, including the costs of two counsel.’
___________________
D
G SCOTT
JUDGE OF APPEAL
AGREE:
NUGENT JA
JAFTA JA
MUSI AJA
MLAMBO JA:
[19] I have had the benefit of reading the judgment of my colleague
Scott. In his judgment my colleague Scott makes the finding that
Menne had no authority to bind Amplats by entering into a contract
with the respondent (Van Jaarsveld). I respectfully differ from
my
colleague Scott. I believe that the factual basis laid by my
colleague does not take account of all the evidence and ignores the
context under which the meeting of 6 January 1997 between Menne and
Van Jaarsveld, took place. As I demonstrate herein the evidence
warrants and indeed justifies contrary findings and a conclusion
contrary to that arrived at by him.
[20] It is correct that Van Jaarsveld, a qualified and registered
mining engineer, was employed as a Planning Manager at level E1
by
Rustenburg Platinum Mines Ltd (RPM) at its Union Section Mine just
outside the town of Northam in the Nort West Province. His
focus area
was the technical planning of new shafts, the extension of existing
shafts including surface and underground infrastructure
planning and
culminating in financial models inclusive of capital projects
requiring R10 million and above.
[21] After his employment by RPM Van Jaarsveld was involved for seven
months in an Amplats project known as Project Breakthrough.
In this
project he worked with executives and mining engineers drawn from
throughout the Amplats group of companies where he gained
a
reputation as an astute and competent mining engineer and this is
what drew Menne’s interest to him.
[22] On 3 June 1997 Menne, then general manager employed by Amplats,
in the Business Development and Strategy Planning Department
(the
department) within Amplat’s structure at head office,
telephoned Van Jaarsveld to invite him to an interview regarding
possible employment in the department. Menne was, with the agreement
of his Executive Director Mr Dorian Emmett (Emmett) headhunting
for,
amongst others, an experienced mining engineer who had appropriate
analytical skills. At that time Menne’s department
was
responsible for the so-called Strategic Planning Initiative and it
was for this specific venture that Menne sought, amongst others,
the
services of an experienced mining engineer. The department was at
that time understaffed and Menne’s objective was to recruit
appropriately qualified and experienced staff. The SPI was in actual
fact behind in its work and Menne and Emmett were anxious to
get it
going.
[23] The discussion, as my
colleague points out, at the interview on 6 June 1997 is pivotal
to the result of this appeal. It
is not in dispute that Menne
informed Van Jaarsveld that he had identified him as one of the
persons he required for the SPI initiative;
that he had the support
of his Executive Director Emmett and that the intention was to second
him to Amplats for a period of six
months to enable Menne to assess
if he performed at the required level, instead of finalising the
employment and discovering afterwards
that he did not meet the grade,
something which had occurred in the past. I accept as my colleague
Scott does, that Menne told Van
Jaarsveld that if he made the grade,
he would be offered a permanent contract of employment by Amplats. It
is not in dispute that
Van Jaarsveld was interested in the job offer
presented by Menne and that the two agreed that Van Jaarsveld would
report for duty
at head office on secondment for a period of six
months starting on 1 July 1997. Van Jaarsveld testified and was not
contradicted
that when he reported for work at head office in
Johannesburg on 1 July 1997 he occupied an office next to
Menne’s and
Emmett’s in the 10
th
floor and that, Emmett took it upon
himself to welcome him to the department. He worked with Mr John
Wood, a level 3 employee within
the SPI.
[24] My colleague finds that Menne only had authority to enter into a
contract of secondment with Van Jaarsveld and that he had no
authority to bind Amplats to the contract of employment alleged by
Van Jaarsveld. Reliance for this finding is based on Menne’s
seniority within Amplats and his knowledge of the procedures involved
in the appointment of personnel at head office as well as the
need
for such appointments to be approved by Amplats’ Administrative
Committee (Adco). My colleague goes on to find that it
is most
unlikely that Menne would ever have purported to bind Amplats in the
manner alleged by Van Jaarsveld. My colleague Scott
then concludes
that the probabilities are overwhelming that Menne did ‘no more
than express a view, however strongly, that
at the end of the
secondment period’ Van Jaarsveld ‘was likely to be
appointed or that, Menne, would use his best endeavours
to procure’
his appointment.
[25] I cannot agree with this analysis. In essence my colleague says
Menne merely predicted that Van Jaarsveld would be offered a
contract
of employment by Amplats at the end of the secondment if he performed
well. I call this the prediction thesis. This thesis
does not take
account of all the evidence and is incompatible with the documentary
trail. The correct factual analysis as I hope
to show is that Menne
with proper authorisation offered Van Jaarsveld a job subject only to
proving himself in the six month secondment.
This Van Jaarsveld did.
When therefore he was not appointed at the end of six months a breach
of contract occurred.
[26] In my view the context within which Menne made the
representation is also relevant and it is that Menne and Emmett were
concerned
that the SPI, a key initiative of that department had
fallen behind due to understaffing. That this is so is demonstrated
by the
approach to Van Jaarsveld and the appointment in
October/November 1997 of Messres Paul Brogan and Pieter Du Preez into
the SPI with
effect from 1 January 1998. These appointments were not
from within the group and were at Menne’s instance. Du Preez
was appointed
to Wood’s position when the latter was
transferred to the Operations Division with effect from 1 January
1998. Even though
Du Preez was appointed into that position Van
Jaarsveld in actual fact took over Wood’s duties.
[27] It is remarkable that these appointments were to take effect
from the date put forward by Van Jaarsveld as being the effective
date of his permanent appointment if he made the grade during the six
month secondment. What is also remarkable about these appointments
is
that their passage through Adco was nothing more than a mere
formality. In my view these appointments coinciding, as they do,
with
the effective date put forward by Van Jaarsveld as the date he agreed
with Menne within the SPI, initiated by Menne and the
ease with which
Adco formalised them, shows that Van Jaarsveld’s appointment
was in the same mould and was meant to be treated
similarly.
[28] On 1 January 1998 the department was divided into two and Emmett
became the marketing director. The other section in which the
SPI was
located was headed from that date by Mr John Dreyer (Dreyer). It is
not in dispute that just before the end of the six month
secondment
period and thereafter when he returned from annual leave, Van
Jaarsveld enquired on several occasions from Menne about
his
permanent employment. He testified that on one of these enquiries
during April/May 1998 Menne reported to him that he had spoken
to
Dreyer about his situation and Dreyer’s response was that he
could not understand why Van Jaarsveld had a problem because
Amplats
was a big company, and that Van Jaarsveld did not have to worry about
financial losses, as he would be looked after and would
not suffer
any prejudice as a result of his delayed appointment.
[29] Van Jaarsveld also testified that during the six month
secondment he and Menne discussed his possible participation in the
Anglo
American Platinum share option scheme. It was during this
discussion that Menne, having been made aware that as a mine employee
Van
Jaarsveld did not participate in the scheme, stated that it was
critical that Van Jaarsveld be put on the books of Amplats as soon
as
possible so that he did not lose out.
[30] My colleague concludes that Van Jaarsveld failed to discharge
the burden of proving that he was told by Menne in April or May
1998
that he should not worry as the delay in his permanent appointment
would not result in any financial loss to him. The basis
for this
conclusion is based partly on the observation that Menne’s memo
of 17 October 2001, (which I deal with later) does
not mention this.
If one accepts, as I do, that Van Jaarsveld continuously pestered
Menne about his permanent appointment from the
beginning of January
1998, then it is significant that these enquiries died down from
April/May 1998 until just before Menne left
Amplats employ in
October/November 1998 on medical grounds. Clearly Van Jaarsveld must
have been given some assurance hence he stopped
his enquiries. He
started his enquiries again when he realized that Menne was about to
leave the employ of Amplats. The probabilities
are in my view
overwhelming that Van Jaarsveld stopped his enquiries in April/May
1998 because he received the necessary assurance
from Menne.
Furthermore Van Jaarsveld had specifically made reference to this
assurance from Dreyer in an e-mail he sent on 2 August
2000 to Baxter
and in a memo he sent to Dreyer on 27 February 2001. Dreyer was
aware of this correspondence at the time and
in actual fact responded
to the memo of 27 February. He did not dispute giving the
assurance alluded therein in his response
to the memo of 27 February.
This shows in no uncertain terms that Dreyer gave the assurance.
Objectively viewed the giving of this
assurance goes to the heart of
the agreement concluded by Menne and Van Jaarsveld in that it
preserves 1 January 1998 as the effective
date of his permanent
appointment.
[31] It is not Amplat’s case that Van Jaarsveld did not make
the grade during the six month secondment. In this regard Van
Jaarsveld testified, and was not challenged, that Menne informed him
sometime in October 1997 that he and Emmett were very happy
with his
performance and that he would be appointed permanently on 1 January
1998. That Van Jaarsveld was a star performer is borne
out by his
appraisal by Menne around July 1998. By all accounts Van Jaarsveld
scored very high in this appraisal, scoring a final
performance
rating of +4 translated to mean ‘very good’. Menne
commented on the form that: ‘APVJ (Van Jaarsveld)
has performed
admirably. He has aptly demonstrated his expertise with respect to
all aspects of mining engineering, business and
strategic planning’.
[32] Another comment in the appraisal reads: ‘APVJ is currently
on secondment from U/S since July 1998. RM has on various occasions
tried to get APVJ transferred to HO (correspondence to JAD dated
April 1998 and August 1998 refers)’. I pause to point out
that
at the pre-trial stage Van Jaarsveld’s legal representatives
requested the discovery of this correspondence but were informed
that
Amplats did not have the documents in question. Emmett signed this
appraisal signifying his agreement with it.
[33] After Menne left the employ of Amplats his position was filled
by Dr Rodney Baxter (Baxter) during February 1999. Van Jaarsveld
informed Baxter of his employment situation and requested the latter
to take up the matter with Dreyer. It is not in dispute that
Van
Jaarsveld directed further enquiries to Baxter in this regard, just
like he did with Menne.
[34] It is common cause that Van Jaarsveld continued to perform
exceptionally. In this regard during 1999 when he was appraised by
Baxter, Baxter commented:
‘
Auret
continues to be a major and valued contributor to the Department. The
Department relies heavily on his technical mining experience
in
evaluating the integrity and business cases of many capital
investment proposals. The Department will continue to look to Auret
to fulfil the role of assessing projects from a technical as well as
a business perspective, and to question and input into the technical
development teams and assist in their decision-making on the back of
sound business assessments.’
Baxter and Dreyer signed this appraisal on 23 December 1999. In my
view, the comments on the 1998 appraisal that Menne had tried
on
several occasions to get Van Jaarsveld permanently appointed as well
as Van Jaarsveld’s own ‘pestering’ of Menne
and
Baxter is in line with him having concluded the agreement he alleges
on 6 June 1997 to the effect that he would be permanently
appointed
on 1 January 1998. Baxter’s comments further demonstrate
that Van Jaarsveld was indispensable to the department
and was not
viewed as a temporary sojourner, so to speak, but was a permanent and
reliable member of the department.
[35] My colleague makes the point that all appointments of head
office personnel could be authorised only by Adco. This is based
on
the evidence by Amplats to this effect and that it being so Menne had
no such authority to bind it in his discussions with Van
Jaarsveld.
This view, in my opinion, is not determinative of the matter and as
stated not supported by the evidence. Menne had a
mandate from
Emmett, his Executive Director, to recruit personnel to the SPI. The
appointment of Brogan and Du Preez and the ease
with which these
appointments went through Adco bears this out. Menne’s mandate
as far as Van Jaarsveld is concerned did not
only encompass a six
month secondment. The evidence shows that his mandate encompassed a
six month secondment as a trial period and
an offer of permanent
employment just like Brogan and Du Preez. No evidence was given by
the Amplats’s witnesses why Van Jaarsveld
was to be treated
differently.
[36] It is inconceivable that Emmett would have given Menne only a
mandate to offer Van Jaarsveld a six month secondment without
stating
the purpose thereof. The absence of any evidence by Amplats that Van
Jaarsveld was to be offered an open ended secondment
or why he was
treated differently to Brogan and Du Preez shows that Menne’s
mandate extended beyond the limits fixed by my
colleague Scott. In
fact Emmett and Dreyer did not give evidence that having become aware
of the agreement concluded by Menne with
Van Jaarsveld, that they
told him that he was not authorised to do so. This demonstrates, in
my view that they acquiesced in what
Menne had done. Their
acquiescence shows in my view that Menne never acted out of line.
[37] As far as Adco’s authority is concerned the evidence
suggests that this could only mean that an executive director placed
any matter before Adco to be formalised. Indeed Menne did not qualify
to place any matters before Adco but Emmett and Dreyer did.
It was
therefore their responsibility to place Van Jaarsveld’s matter
before Adco for his appointment to be formalised. They
did not do so
and failed dismally to provide an acceptable reason why they omitted
to do this on the expiry of the six month secondment.
[38] My colleague seems to attach a lot of significance to Dreyer’s
assertions that before considering Van Jaarsveld’s
permanent
appointment he had to finalise the department’s restructuring
process which included Van Jaarsveld’s position
in the
department. Significance seems to be also given to Baxter’s
assertion that he was also unwilling to recommend Van Jaarsveld’s
permanent appointment as he was in the process of assessing the
overall position of the department. In my view no significance should
be accorded to these assertions for the simple reason that they are
not borne out by the evidence. Baxter gave no evidence of exactly
what he was assessing and what the end result was. He simply says it
was only around July 1999 that he felt comfortable to appoint
Van
Jaarsveld permanently but does not say what influenced this, other
than of course that Van Jaarsveld was a competent and reliable
employee.
[39] Dreyer for his part gave no evidence of the restructing he was
allegedly engaged in. In fact the record shows that no restructuring
of any sort was undertaken by him. The only restructuring was the
splitting of the department into two, which occurred before Dreyer’s
arrival and this had absolutely no effect on the position occupied by
Van Jaarsveld and the work he did on the SPI.
[40] It is inconceivable that Menne
would have expressed a view merely that Van Jaarsveld would be
employed at the end of the secondment.
This finding is equally not
borne out by the evidence. The memo written by Menne on 17 October
2001 clearly states that ‘
with
the agreement of Emmett
’
,
Van Jaarsveld ‘
was
offered a secondment to head office for a six month period if his
performance proved satisfactory, he would then be offered a
permanent
position in the department
’
(my
emphasis). There is nothing predictive in this statement. It is a
statement of fact. Clearly within the context of a department
that
was behind in its work, and which was desperately looking for an
experienced and reliable mining engineer, amongst others, it
is
highly improbable that having found such a person and being satisfied
with his performance his permanent employment would become
dependant
on requirements other than those discussed on 6 June 1997.
[41] Clearly at the end of the six month secondment Amplats was
obliged to inform Van Jaarsveld either that he had not made the grade
and to return him to his mine if this was so. No one told him this.
The agreement reached between Menne and Van Jaarsveld was a
probationary
agreement for a period of six months. Because Van
Jaarsveld was employed within the group it became necessary to agree
that another
agreement would be concluded if he made the grade during
the secondment period. Had Van Jaarsveld been an outside employee
only one
agreement would have been concluded, as was the case with
Brogan and Du Preez, followed by a mere formalisation of the
employment
by Adco if he made the grade. Because Van Jaarsveld was
within the group the only way in which he would be employed at head
office
was through a permanent transfer from his mine to head office.
That is what was agreed should have happened if he make the grade.
That this is so is borne out by the fact that the secondment of Van
Jaarsveld was known by his immediate boss Knock and his superior
Beamish. Furthermore Van Jaarsveld’s position in the mine was
filled in 1998 (after the secondment) and he remained on the
mine’s
books in name only, a source of irritation to the mine managers at
Union Section. In my view his position would not
have been filled
after the six month secondment if he was coming back. If anything
this is a powerful indication that his passage
through the secondment
period with flying colours was to result in his permanent transfer to
head office.
[42] Van Jaarsveld realized for the first time that his appointment
required Adco approval in July 2000 when his appointment was
processed. No one had told him this before and no case is made out by
Amplats that this was done. Emmett and Dreyer never placed
Van
Jaarsveld’s matter for consideration by Adco until Dreyer did
so in August 2000 under pressure from Van Jaarsveld. Adco
approved
Van Jaarsveld’s appointment at its meeting on 14 August 2000.
The minute of the meeting reflects:
‘
Auret van
Jaarsveld
JAD reported that the formal appointment of Auret van Jaarsveld at
C&OO (Business Planning) had been delayed depending on the
evaluation of his job and the overall structure of Business Planning.
The initial evaluation of the position did not make a transfer
to
C&OO attractive. The job grading was subsequently reviewed and
evaluated at Level 4. As a result of the delay in the appointment
process, AvJ had not received a salary increase for the past two
years. He had taken legal advice on this situation.
The position had been advertised and AvJ was the only applicant.
JAD recommended, and it was agreed (subject to BEN’s
confirmation that the prescribed recruitment process had been duly
followed)
that a job offer be made to Auret van Jaarsveld on the
terms and conditions of a Level 4 appointment with back-pay for his
loss of
annual increases. AvJ’s performance was satisfactory.’
It is instructive that this minute does not mention that the
appointment was delayed because Dreyer was busy with a restructuring
or that Baxter was still assessing the department’s needs.
These are the reasons advanced by Amplats for the delay in appointing
Van Jaarsveld permanently. If anything this minute goes to show that
Amplats’ failure to appoint Van Jaarsveld permanently
on 1
January 1998 was not because Menne was not authorised to conclude the
agreement of employment with Van Jaarsveld, but that the
appointment
was not put before Adco timeously due to administrative bungling.
[43] Having dealt with the aforegoing factual analysis it remains for
me to cite two pieces of correspondence which in my view sketch
the
true background of the matter. One is from Van Jaarsveld to Dreyer
dated 27 February 2001. This memo sketches the bureaucratic
bungling
that accompanied his situation from the moment he started work at
head office on 1 July 1997. I find it necessary to cite
the memo in
full:
‘
1. In
August 2000, during the time of crisis concerning my situation at
Anglo Platinum, you invited me to come to you directly in
future
should there be any further problems. A matter of great concern to me
has arisen in relation to my share options, and I am
appealing to you
to assist in resolving it.
2. The problem is briefly this. Whereas I have in substance been a
permanent employee of H/O since January 1998, purely as a result
of
bureaucratic delays, that situation was only formalised with effect
from 1 September 2000.
3. However, as a direct result of these delays, my participation in
the share option scheme was delayed by 33 months, during which
period
the share price rose dramatically. If matters are allowed to stand, I
will lose an amount in excess of R2 million. As I am
approaching
possible early retirement due to my health, this is a matter of the
utmost importance to me and my and my family and
one which I trust
the company will rectify for the reasons which I will set out below.
4. In order to assist in understanding the situation, I will briefly
list the sequence of events from June 1997 to September 2000.
5. RL Menne (RLM) offered me a position in his department (Business
Development and Planning ie BD&P) in June 1997. Our agreement
was
that I would be on secondment from the mine for a trial period of six
months and if RLM was satisfied with my performance, my
position
would become permanent. I accepted the offer.
6. Before the six month period had expired and in about October 1997,
RLM told me that he was highly satisfied with my performance
and that
I would be permanently appointed to H/O in January 1998.
7. Late in 1997, RLM told the department that we were getting a new
director, namely, yourself, and that Paul Brogan and Pieter du
Preez
would be joining the department. He said that our new director would
probably restructure the department and formalise my permanent
appointment.
8. RLM indicated to me that my situation would be resolved in a few
weeks and indeed that he was continuously discussing the matter
with
you. He gave me an assurance, on behalf of the company that I would
not be financially compromised by any delays in formalising
my
appointment to H/O.
9. In the meanwhile my position on
the mine was filled. It follows that my transfer to H/O was a
fait
accompli
, even if the
paperwork was not yet in place.
10. Late in 1998, RLM retired and Larry Cramer acted as departmental
head for a short period. Rod Baxter (RCB) was appointed as
departmental
head and I immediately informed him of my unresolved
situation and my unhappiness with it. He undertook urgently to
address it.
11. On 3 February 1999, RCB told me that he had discussed my
situation with you and that he was instructed immediately to proceed
with the administrative process of my transfer to H/O.
12. Since that time I was told on numerous occasions that the
formalisation of my transfer was delayed by administrative and
workload
problems in the HR Department. At the time I accepted this
in good faith. I believed that the company was committed to a policy
of
fair dealing and integrity and that I would not be compromised by
these bureaucratic delays. In addition, I had a very heavy workload
(Maandagshoek, SPI and ad hoc projects) and believing, as I did, that
I would not be prejudiced, I could not spend too much time
dealing
with what was after all, a purely bureaucratic matter, or so I
believed.
13. In August 1999, I was informed that the Business Manager of Union
Section refused to authorise my annual salary increment because
I was
an H/O employee. I reported this to RCB and he suggested that we
ignore it and handle it as part of the process of my formal
transfer
to H/O. I was told that my transfer was imminent and again I accepted
this in good faith.
14. Late in 1999 / early 2000, I was told that due to the
introduction of the Employment Equity Bill, all new appointments
(including
mine) would be made according to new procedures adopted by
the HR Department. The process of my transfer was administratively
delayed
yet again although, I was assured on numerous occasions that
there had been progress.
15. In May 2000, Paul Grogan acted in RCB’s position. He was
asked by RCB to handle aspects of my transfer, which I believe
he
discussed with you. When he discussed it with me it became apparent
that the process was far from complete.
16. In July 2000 I was told that my transfer would definitely be
finalised at a meeting to be held on 26 July 2000. However, the
meeting never took place and at that point I sought legal advice and
put the company on notice on 31 July 2000, to resolve the matter.
With your help and involvement my transfer to H/O was concluded
within a mere three weeks, for which I sincerely thank you.
17. My appointment was formalised on the 1 September 2000 and I
received a shares option offer on 22 December 2000 which was
back-dated
to 1 September 2000.
18. As I understand the position, the share option scheme is intended
to incentivise and reward H/O executives for their efforts.
I have
given nothing less than my best. I contributed to projects of more
than R4 billion, I developed the SPI model and I introduced
the Alcar
software to the department / company. I have had three performance
assessments (1998, 1999 and 2000), all of them excellent.
I received
H/O bonuses in 1998, 1999 and 2000.
19. I have no doubt that had my transfer been formalised, as it ought
to have been, in January 1998, I would immediately have been
invited
to participate in the share option scheme, in accordance with the
normal practice in the company.
20. To summarise:
Since July 1997 I have fulfilled my role as a member of the BD&P
Department at H/O.
On the basis on which I was initially seconded and the subsequent
assurances given to me by RLM, I would, but for purely arbitrary
and
bureaucratic delays, have been permanently appointed with effect from
January 1998.
I was expressly assured that I would not be financially compromised
as a result of the delays in formalising my appointment.
21. In the circumstances I cannot accept that I am not entitled to
the same incentives as my colleagues, some of whom joined the
department after I did.
22. The basis for Anglo Platinum’s
code of ethics is “
.
. . a fundamental belief that business should be conducted honestly,
fairly and legally. The Group expects all employees to share
its
commitment to high moral, ethical and legal standards.
”
I humbly appeal to you for
assistance to ensure that these values are also applied to me in my
current situation.’ (p 903-908)
[44] The other memo is the one by Menne to Geldenhuys dated 17
October 2001 to which reference was made earlier. This memo is also
a
critical piece of evidence and I also find it necessary to cite it in
full:
‘
1. I
refer to your telephone call in late June, 2001 regarding APvJ’s
inexplicably delayed appointment to Anglo Platinum head
office –
and the impact this has had on his associated share option
entitlement(s). The purpose of this memorandum is to add
further
perspective to this unfortunate event and my involvement in same. It
is believed that APvJ has indeed been severely compromised
by events
beyond his control and the Corporation should redress the issue as
soon as possible.
2. By mid 1997 it had become apparent that the planning department of
the Commercial Division was severely under-resourced. As head
of
department, and with the agreement of the Commercial Director, Mr
Emmett (“DTGE”), I canvassed both “in house”
and externally for an experienced mining engineer with the
appropriate analytical skills to assist with the extra workload of
the
department. The opportunity presented itself in the form of APvJ
– then planning manager at Union Section – and who
indicated
his interest at moving to head office. Furthermore, it was
established that he could be released from his current position by
the
Mine Manager (with the concurrence of the Operations Director).
With the agreement of DTGE, APvJ was offered a secondment to head
office for a six-month probation period. If his performance proved to
be satisfactory, he would then be offered a permanent position
in the
department. The implication was always that any administrative
procedures required would follow timeously. APvJ accepted the
offer
on this basis.
3. It should be stressed that APvJ was initially known to me only by
reputation, which included a published article on the inefficiencies
of the gold mining industry which struck my colleagues and myself as
particularly insightful (if unpopular within the mining fraternity).
Subsequent meetings with APvJ also reinforced my opinion of his
suitability to contribute to the department’s ongoing
development
of long term mining options (the so-called strategic
planning initiative).
4. Once at head office, APvJ soon demonstrated his value to the
department. Such sentiments were conveyed to him by myself who, in
addition, advised DTGE that APvJ was indeed a major asset to the
division and his appointment to head office should be formalised
forthwith. Unfortunately, a number of events conspired against any
immediate action, including
(i) the intense workload of the Planning Department (manifested by
two additional appointments made within APvJ’s probation
period
(PLB) and PEdP) to further strengthen the department’s resource
base,
(ii) my deteriorating health condition, and
(iii) an executive decision in December 1997 to split the division as
it then existed with Mr Dreyer (“JAD”) accepting
the
position of executive director of the Business Development and
Strategic Planning Division (in which the planning department
resided), while DTGE retained and further developed the Marketing
Division.
5. In discussions with JAD (DTGE no longer having executive control
of planning), APvJ’s delayed appointment was highlighted
and
recommendations were made that such be formalised. JAD – while
appreciating APvJ’s contribution to the department
–
requested patience from all parties while he reviewed his division’s
function, and how to best arrange and rationalise
his resources. In
any event, such was my interpretation of JAD’s position.
Accordingly, it was thus hardly appropriate for
met to request that
the Human Resources Division proceed with APvJ’s appointment at
that time.
6. Unfortunately, by mid 1998 my health had deteriorated to the
extent that I applied for – and was granted – disability
status in October of that year. The intervening few months were
extremely busy in finalising my involvement with the current affairs
of the department. To my discredit, I failed to secure APvJ’s
appointment. Be that as it may, I took no further part in the
affairs
of the Division/department from October 1998 onwards. I recall,
however, urging the new head of department, Dr Baxter, to
accelerate
the unsatisfactory state of affairs regarding APvJ, both with respect
to a permanent appointment and indeed, a merit promotion.
7. There was, in my opinion, never any intention to get APvJ “on
the cheap” and the fact that he has now been prejudiced
financially by only being officially appointed – let alone
promoted – in September 2000 (ie some 40 months after being
seconded to head office) seems grossly unfair. Anglo Platinum should
not only redress this situation as soon as possible, but also
earnestly encourage the corporation to strive to retain his services
in whatever capacity is mutually agreeable. He is far too valuable
a
resource to lose, especially over a period of major industry changes
and corporate expansions.’
[45] In my view the agreement between Menne and Van Jaarsveld on 6
June 1997 crystallized into a legally enforceable contract on
fulfilment of the condition agreed therein. The omission and/or
failure by Amplats to offer Van Jaarsveld a permanent employment
contract was a clear breach. It does not assist Amplats to contend
that Menne and Emmett for that matter did not have authority to
bind
Amplats in those terms. As I have shown in the aforegoing paragraphs
the Adco step was a mere formality. The process through
which Van
Jaarsveld was subjected to before his eventual permanent appointment
in September 2000 was a farce, a fact acknowledged
by Emmett and
Baxter. This process, accepted by my colleague Scott and relied on in
these proceedings by Amplats to lend credence
to the contention that
it was an Adco requirement that all appointments go through it, was
no more than a pretext engineered to justify
the delay in appointing
Van Jaarsveld permanently. No evidence was given about such a process
regarding Brogan, Du Preez, Baxter
and Dreyer himself. The Ngubane
angle on employment equity is clearly a red herring. It did not
feature when Menne spoke to Van Jaarsveld
in June 1997. Nor did it
feature in the appointment of Brogan, Du Preez, Baxter and Dreyer who
are all white for that matter.
[46] Anyway Amplats cannot rely on
Menne’s (and Emmett’s for that matter) lack of authority.
A representation was made
to Van Jaarsveld which he believed as he
was entitled to and Emmett, Baxter and Dreyer who were aware that
such a representation
was made did nothing to contradict it or even
correct it. This court stated in
NBS
Bank Ltd v Cape Produce Co (Pty) Ltd
2002
(1) SA 396
(SCA) at 411 para 25:
‘
As
Denning MR points out, ostensible authority flows from the
appearances of authority created by the principal. Actual authority
may be important, as it is in this case, in sketching the framework
of the image presented, but the overall impression received by
the
viewer from the principal may be much more detailed. Our law has
borrowed an expression, estoppel, to describe a situation where
a
representor may be held accountable when he has created an impression
in another’s mind, even though he may not have intended
to do
so and even though the impression is in fact wrong. Where a principal
is held liable because of the ostensible authority of
an agent,
agency by estoppel is said to arise. But the law stresses that the
appearance, the representation, must have been created
by the
principal himself. The fact that another holds himself out as his
agent cannot, of itself, impose liability on him.’
See also
SABC
v Coop
2006 (2) SA 217
(SCA) at 234 para 66.
[47] It is correct that Van
Jaarsveld did not become a permanent employee on 1 January 1998
as found by my colleague Scott because
of the absence of the Adco
formality. However the evidence justifies a conclusion that Menne
concluded a binding contract to employ
Van Jaarsveld if he made the
grade on 1 January 1998. This was an agreement to conclude
another agreement in future, the so-called
pactum
de contrahendo
discussed
by my colleague Scott.
[48] The terms of the future agreement were also established being
the employment of Van Jaarsveld on a level 3 or 4 and subject
to the
conditions applicable to those levels. It is probable that Van
Jaarsveld would have been employed as a level 3 employee for
the
reason that his E1 grading was lower than that level but he worked in
a level 3 capacity and his appointment at head office was
in fact a
promotion. There is also no suggestion that had he been appointed, as
he should have, on 1 January 1998, he would not have
been accorded
all the benefits in accordance with his appointment such as
participation in the Anglo American Platinum share option
scheme.
[49] Van Jaarsveld has in my view demonstrated that a breach
occurred. I would therefore dismiss the appeal with costs.
______________
D MLAMBO
JUDGE OF APPEAL