Tully v MLS Bank Limited (JA94/98) [1999] ZALAC 36 (28 September 1999)

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[1999] ZALAC 36
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Tully v MLS Bank Limited (JA94/98) [1999] ZALAC 36 (28 September 1999)

IN THE LABOUR APPEAL COURT OF
SOUTH AFRICA
HELD IN JOHANNESBURG
CASE NO JA 94 / 98
In the matter between:-
JON B TULLY
Appellant
and
MLS BANK LIMITED
Respondent
___________________________________________________________________________
JUDGMENT
___________________________________________________________________________
MOGOENG AJA
[1] This is an appeal against the determination
made by the Industrial Court, per Bernhardt
(AM),
which is to the effect that the termination of the Appellant’s
employment does not amount to a constructive dismissal.
[2] What follows are
the allegations on which Appellant relies for the contention that the
termination of his employment constitutes
an unfair labour practice
on the basis that he was constructively dismissed.
[3] He was employed as
the financial manager of Akasia Clinic when Mr Gerard Cloete, the
executive director of the Respondent, asked
him in to take up
employment with the Respondent. Cloete told him that he could either
become a director of Adjoes Tyres or carve
out a career with the
Respondent. This culminated in his resignation and his employment by
the Respondent on 1 July 1996. His manager
was Mr Christopher Smith.
[4] One of the
Appellant’s responsibilities was to complete credit applications.
At some stage he drew up a contract of loan which
involved a certain
Dr Labuschagne. On 26 September 1996, Smith told him that Cloete had
refused to sign that credit agreement on
the basis that it was of
substandard quality. Appellant was unhappy about the fact that Smith
and Cloete had not discussed their
dissatisfaction about the
agreement with him. In response, Smith advised him to think about
whether banking was the right career
for him and whether the
Respondent, in particular, was the right employer for him. Appellant
said he was devastated by these utterances.
[5] On the next day,
Smith asked the Appellant if he had thought about what he said the
day before. Appellant replied that if he had
a problem he would
discuss it with Cloete.
[6] On 4 October 1996
the Respondent held a celebratory function to mark the success of
Smith who had clinched an apparently important
deal with a certain
eye clinic. It was at that function that Eugene van den Berg was
introduced to the Appellant by Cloete. Cloete
told Appellant that van
den Berg would soon be employed by the Respondent . He assured the
Appellant that he had no reason to feel
threatened by the arrival of
a newcomer.
[7] Van den Berg did
assume duty thereafter and took over some of the credit applications.
After a few weeks or about month thereafter,
Appellant was told to
split the portfolio of clients with Smith. This did not happened but
what ultimately happened was that van
den Berg took over all the
credit applications and he (Appellant) had to do the administrative
work.
[8] Sometime before the
day of Appellant’s resignation, he drove Cloete to the airport.
Cloete asked whether he was happy with his
job. He told Cloete that
he was unhappy because he was not delegated enough work. He
complained that he sat in the office doing nothing
for the better
part of the day. On another occasion, Cloete called Appellant’s
former boss and enquired whether Appellant would
leave his job if he
was unhappy about it or whether he would resign. On yet another
occasion Cloete invited Appellant to have a beer
with him so that
they could discuss his situation at work. Cloete then proposed that
Appellant should perhaps take over some of his
administrative
responsibilities. Appellant again expressed dissatisfaction about the
fact that he was not delegated enough work and
that he was not given
a chance to do credit applications.
[9] On 17 October 1996,
a Mr van Niekerk informed Appellant that Cloete wanted to see him on
18 October 1996. That meeting did take
place. Cloete told Appellant
that he thought Appellant would readily fit in in the new job and
that he obviously did not fit in.
Cloete also told Appellant that he
could see that he was very unhappy and advised him to go and think
about whether he wanted to
remain in the employ of the Respondent or
not. He then told Appellant that he had a choice either to resign or
to stay on until he
found alternative employment. Cloete also told
the Appellant that he and Mr Croucamp, the chairman of the
Respondent’s board, had
considered the possibility of offering him
another job but none could be found. He then decided to resign.
[10] As a result of
this decision, both Cloete and Appellant negotiated the terms on
which their employment relationship would be
terminated. Appellant
told Cloete that the prospects of finding another job might be
diminished if his work record reflected that
he was unemployed.
Cloete then proposed that if Appellant’s letter of resignation
stated that he was acting as a consultant for
the Respondent, this
would enhance his prospects of securing employment. This was accepted
by the Appellant. The severance package
was also discussed. All these
issues were agreed upon on 18 October 1996.
[11] On 21 October 1996
Cloete spoke to the Appellant by telephone and told him to bring the
resignation letter. They met on 22 October
1996. Appellant told him
that he was not even sure of what he should say in that letter.
Cloete then helped him to phrase the terms
of the resignation
relating to the package and the consultancy. Appellant left, caused
the letter to be typed and delivered it to
the Respondent.
[13] There is a dispute
regarding the circumstances surrounding the employment of van den
Berg and the remarks attributed to Mr Cloete
in this connection.
Another dispute relates to what actually transpired between Appellant
and Mr Cloete before Appellant announced
his decision to resign. Be
that as it may, I will assume in the Appellant’s favour that his
aforestated version is true for the
reasons set out herender.
[14] Mr Cloete said a
few things which lend credence to some of the allegations made by the
Appellant. Firstly, he said that Smith
complained to him about the
length of time the Appellant spent on a task before its completion
and of his poor performance in general.
Secondly, Cloete had the
perception that Appellant did not recognise Smith’s authority over
him, he viewed Smith as being inferior
and did not want to report to
him. This perception finds support in Appellant’s statement to
Smith on 27 September 1996 that if
he were unhappy he would approach
Cloete. Thirdly, Cloete repeatedly told the Appellant that he was
not trying to solicit his resignation
when nothing seemed to warrant
such a comment.
[15] On the
probabilities, all these facts indicate that the Respondent, through
Smith and Cloete, held the opinion that Appellant’s
performance was
unsatisfactory, and that Appellant did not fit in the operations of
the Respondent. As a result, Cloete advised the
Appellant to resign.
Counsel for the Respondent conceded the correctness of the version of
the Appellant that Cloete gave him two
options.
[16] Smith did not
testify and the utterances attributed to him by the Appellant are
uncontroverted. I have no choice but to accept
Appellant’s version
in this regard. Van den Berg is, however, in a different category.
Cloete denied all the allegations relating
to this aspect.
Furthermore, those allegations were intended to support a suspicion
rather than a fact. Clearly, Appellant did not
know what the
Respondent’s staff requirements were at the time. It may well be
that van den Berg would have been employed even
if no need arose for
the termination of Appellant’s employment. He suspected that the
Respondent had already decided to dismiss
him when van den Berg was
employed. No facts were given to support this suspicion.
[17] Mr Wessels, for the Appellant, relied
primarily on the case of
Unilong Freight Distributors (Pty) Ltd v
Muller (1998) 19 ILJ 229 (SCA)
as authority for the contention
that Appellant was constructively dismissed. There are in fact
striking similarities between the
facts relevant to the resignation
of Muller ( the employee in the
Unilong
case) and the
Appellant in the present case. They are that:
Muller had no experience in the transport
field. Similarly Appellant had no experience in the banking
industry.
Muller’s work performance was poor and so
was the Appellant’s performance.
Muller just like the Appellant, was not given
any :
(i) prior warning that failure to improve his
performance could lead to dismissal;
(ii) opportunity to improve his performance;
(iii) reasonable and
explicit ultimatum.
In both cases the employer had explored the
possibility of offering the employee a different position but could
not think of any
vacant position he could be moved to.
[18] These similarities
do not, however, dispose of the enquiry. The following are the
material differences between the two cases:
Muller was not even aware that his performance
was poor. He thought that he was doing a good job. On the contrary,
the Appellant
in this matter knew that his performance was
sub-standard.
Muller was happy with his working environment
and with his job in particular. Appellant was not. He had for some
time been unhappy
about his job-content, the fact that he spent most
of the day doing nothing and the inadequate delegation of authority
to him.
Muller’s resignation was not preceded by any
meaningful negotiations with the employer. On the other hand,
Appellant and Cloete
discussed all the material issues in a very
friendly atmosphere.
Muller was unwilling to resign. In the present
case the parties agreed to an amicable termination of the employment
relationship,
a very generous severance package and an undertaking
by Cloete to secure temporary employment for the Appellant in some
hospitals
in case of desperation.
Muller was told by the employer that it had
been decided that he should be summarily dismissed, the only other
option being to sign
a letter requesting his voluntary retrenchment.
He was virtually forced to sign a letter of resignation which was
already prepared
before he met van Staaden. He was not even given a
chance to reflect on the employer’s decision. In the matter before
me, the
Appellant had at least four days to reflect on the matter
and to even seek advice if he chose to.
Muller was very unhappy and was opposed to the
termination of employment. Appellant was not necessarily thrilled,
but he resigned
on a cordial note and went so far as to express his
gratitude to the Respondent for the time it spent on him.
[19] I am therefore of the view that the effect
of the striking similarities between the two matters is watered down
by the fact that
in the instant case, there was a consensual
termination of employment. The material dissimilarities also
distinguish the
Unilong
case from the present one.
[20] Mr Wessels also submitted that the
Appellant was driven to resign by some kind of duress which resulted
from the cumulative effect
of the abovementioned incident with Smith,
the employment of van den Berg and what Cloete said about it as well
as the two options
presented to him by Cloete on 18 October 1996 as
well as the generous package the Appellant was given. Duress was
relied on for two
reasons. The one was to add substance to the
allegation that the Appellant was constructively dismissed and the
other was to vitiate
his consent to the termination of his
employment. Ramsbottom J set out the requirements of duress as
follows in
Broodryk v Smuts NO
1942 TPD 47
at 51-52
:
“
1. Actual violence or
reasonable fear.
2. The fear must be caused by the
threat of some considerable evil to the party or his family.
3. It must be the threat of an
imminent or inevitable evil.
4. The threat or intimidation must be
contra
bonos mores.
5
.
The
moral pressure used must have caused damage
.”
( See also
Machanick Steel & Fencing v
Transvaal Cold Rolling
1979 (1) SA 265
(T) at 271; Poragon Business
Forms (Pty) Ltd v Du Preez
1994 (1) SA 434
(SOK) at 439F; Van den
Berg & Kie Rekenkundige Beamptes v Boomprops 102 BK
1999 (1) SA
780
(T) at 784.
)
Clearly the facts relied on by the Appellant do
not satisfy any of these requirements.
[21] There are two other defences of duress
left to be considered. They are ‘duress of goods’ and ‘economic
duress’, both
of which entitle a party to avoid an agreement
provided that the pressure amounts to a coercion of the will which
vitiates consent.
It had been accepted that the English law concept
of ‘duress of goods’ was in harmony with South African law,
whereas the principle
of ‘economic duress’ in English law was not
part of South African law. (
Van der Berg supra at 792 F-G and 792
I-J
) In any event the facts of this case do not support the
notion that these principles are applicable.
[22] It follows
therefore that no form of duress, in respect of which the onus of
proof was on the Appellant, has been proved to have
had anything to
do with the Appellant’s resignation.
[23] The fact of the
matter is that the Appellant had been unhappy for quite some time as
at 18 October 1996. He was unhappy as a
result of the negative
remarks made by Smith about his performance, about the inadequate
delegation of duties and his undisputed
poor work performance. On the
probabilities, he must have been just as unhappy when he saw the
realisation of his ambition or dream,
to become a director of Adjoes
Tyres or to have a meaningful carrier in the bank, fading away.
Nothing had happened prior to 18 October
to alleviate his
unhappiness.
[24] It is noteworthy
that the discussions which resulted in his resignation were not held
with the somewhat unfriendly Smith but
with Cloete. It was the same
Cloete who had recruited him, promised him a bright future during the
interview and whom he considered
to be more approachable if regard is
had to Appellant’s response to Smith was on 27 September 1996.
Having discussed Appellant’s
unhappiness on at least three
occasions, Cloete again engaged him on the subject. It was in this
context that and in view of Appellant’s
persistent unhappiness that
Cloete advised him to either resign or stay on until he found
alternative employment. A very friendly
atmosphere pervaded the
ensuing discussions which culminated in an agreement, in a loose
sense, to terminate the employment relationship.
The terms on which
Appellant resigned were not disclosed for the first time on 22
October 1996. They had been discussed on 18 October
1996. Therefore
Mr Wessels’ contention that Cloete dictated the contents of the
resignation letter therefore loses whatever substance
it might
otherwise have had. Appellant had sufficient time to reflect on those
terms, he could have refused to resign but he did
not. He wanted to
leave and found the severance package and Cloete’s undertaking to
find him temporary employment in case of need,
far too generous to
resist. The consensual nature of the resignation is fortified by
Appellant’s unsolicited expression of gratitude
to the Respondent.
[26] I am satisfied,
therefore, that the Respondent did nothing to render Appellant’s
continued employment unbearable or intolerable.
In the result, the
appeal is dismissed with costs and the order made by the Industrial
Court is confirmed.
________________
MOGOENG AJA
I agree
______________
CONRADIE JA
I agree
_______________
NICHOLSON JA
Appearances:
Appearing for the
Appellant: Adv E Wessels instructed by Mendelow- Jacobs Attorneys.
Appearing for the
Respondent: Adv E S J Van Graan instructed by Tim Du Toit &
Company inc.
Date of hearing: 12
August 1999
Date of judgment: 28
September 1999