Walker v Rainbow Farms (Pty) Limited and Others (DA31/2001) [2002] ZALAC 26 (6 December 2002)

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[2002] ZALAC 26
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Walker v Rainbow Farms (Pty) Limited and Others (DA31/2001) [2002] ZALAC 26 (6 December 2002)

IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA
HELD
AT DURBAN.
Case
No. DA31/2001
In the matter between:
PETER
WILLIAM WALKER
Appellant
And
RAINBOW
FARMS (PTY) LIMITED
First Respondent
THE COMMISSION FOR
CONCILIATION
MEDIATION AND
ARBITRATION Second
Respondent
COMMISSIONER L
MAHLANGU Third
Respondent
COMMISSIONER B
PURDON Fourth
Respondent
JUDGMENT
DAVIS
AJA
INTRODUCTION:
[1] In November 1991 appellant was employed by
first respondent. In terms of his contract of employment his
retirement age was stipulated
as being 62 in November 1999.
Accordingly his last day of service was 30 November 1999 Appellant
then remained on in the service
of first respondent until 29 February
2000 performing similar work earning the same salary as he had
previously earned.
[2] On 18 February 2000
first respondent wrote to the appellant rejecting a request to remain
on employment and alleging that a fixed
term contract had been
concluded which would come to an end on 29 February 2000. Appellant
did not accept this interpretation of
their relationship. He
contended that he had been unfairly dismissed and he referred the
matter to the second respondent.
[3] Second respondent
said that first respondent had not concluded a fixed term contract
and and thus could not have relied on such
a contract to terminate
the employment relationship with appellant. For these reasons second
respondent found that the dismissal
of the appellant was unfair and
hence he awarded reinstatement.
[4] On review, the Labour Court, per
Pillemer
AJ
found that appellant could have
been under no illusion that there was no offer of employment beyond
29 February 2000. On the contrary,
he had been informed by
representatives of first respondent that he would not get an
extension of employment beyond the end of February
2000. For this
reason
Pillemer AJ
found
that, ‘while there was no agreement on the duration of the
employment contract everything else had been agreed upon albeit
tacity and with regard to duration, Fourth Respondent knew that the
most then on offer was an extension to the end of February.
When he
decided to stay on he knew that come end of February, if there was
no extension, Applicant considered the contract to be
at an end. In
my view there was a tacit contract embodying the resolutive condition
contended for…..’ Against this judgment
appellant has appealed
to this court.
SUMMARY
OF THE FACTS
.
[5] It was common cause that, in August 1999,
appellant was advised that his employment would not be extended past
November 1999 and
that he would be retired on 30 November 1999. In
September 1999 he was approached to stay for a few months to complete
the implementation
of the “autonet refrigerated transport
contract”. Discussions took place between September 1999 and
November 1999 concerning
the terms on which appellant was to be
employed after his retirement. Appellant had a discussion with Mr
Meade, his immediate superior,
about the possibility of further
employment. As he testified ‘There was still going to be some work
– there still going to be
work similar to that I had done, that
would continue to happen but not to the same extent. So again, I
said to him: “Look, until
you make some provision for permanent
employment with these people….” and he also hadn’t found a
replacement for me, although
they had advertised, they hadn’t had a
reasonable response. I said: “until you can find people, I am
willing to take that, I
am now willing to still do those three jobs
that I talked about in March”.
[6] On1 December 1999
appellant returned to work and continued to perform similar tasks
until the 8 December 1999. On that date he
met with Meade who
offered him a fixed term contract for a period of two months
terminating at the end of January 2000. The appellant
refused to
sign the fixed term contract and asked for time to consider the terms
thereof. Two days later he informed Meade that
he would not sign it.
Appellant told Meade on 8 December that he was determined to persuade
Mr McNolty, the Chief Executive Officer
of first respondent(“the
CEO”) to extend his contract, at least until he had attained the
age of 65.
According to Meade,
appellant had previously been informed that Meade had ‘gone to Rod
Saadie and to the CEO to fight on Peter’s
behalf and in fact that a
continuation and was told quite categorically in terms of the company
position, that Peter was going to
retire. I fed that back to Peter.
I gave him that. That all took place in November’.
[7] Notwithstanding his
intention to persuade CEO to extend his contract of employment to 65,
appellant continued to work in the employ
of first respondent and,
despite the terms of the contract which had been presented to him on
8 December 1999 he performed similar
tasks which he had undertaken
prior to 30 November 1999.
[8] On 28 January 2000
the appellant acceded to a request by Meade to continue working for
February as some work was still outstanding
and a new cost saving
idea had surfaced which required appellant to prepare a feasibility
study. According to a memorandum prepared
by appellant the following
then occurred: ‘On 31 January my superior advised me that since the
CEO was away, Mr Parsons had agreed
I should stay on for Feb. but
that this ‘was definitely the last month’. I told my superior I
would pursue try to negotiate
the continued employment issue directly
with the CEO. On 2 February my superior handed me Feb’s offer (an
extension of the offer
made 8 Dec) to sign but I again declined to
sign. When he protested that my refusal to sign ‘left him as piggy
in the middle’
I offered to stop work immediately to save him from
further embarrassment. What was becoming an impasse required
resolution so we
later met with H R Director Mr P September….’
[9] On 15 February 2000
appellant wrote to Meade stating that the offer which had been made
regarding the extension of his service
represented inferior terms
when compared to those contained in his letter of appointment dated
28 November 1991. He then went on
to say: This letter is my service
contract with Rainbow and is believed by third party and myself to
remain valid in all respects
until such time as service termination
is invoke by either party. No good reason exists for me to
favourably consider Rainbow’s
latest offer/s while a service
contract already accepted to me remains in place’.
[10] On 18 February 2000 Mr Parsons, the
general manager’ sales and marketing, wrote to appellant,
inter
alia,
‘in order to complete
certain tasks the company entered into a fixed term contract with you
until the end of January 2000 on the
understanding that your
permanent employment with the company was terminated. Your contract
of temporary employment has been extended
to end on 29 February 2000.
On that day you will be paid all your due benefits’.
[11] On 29 February
2000 appellant was handed a letter written by Meade and Rajoo
informing him that that was his last day of employment.
He then
replied by way of e-mail reserving his rights and requesting finality
on the grievance procedure.
APPELLANT’S CASE.
[12] Mr Schuman, who appeared on behalf of
appellant, submitted that, in circumstances where appellant remained
in the employ of first
respondent after his official retirement date
of 30 November 1999 and without any express agreement on the terms of
such employment
having been concluded, a new contract of employment
had arisen on the same terms and conditions as had previously existed
and for
an indefinite period. Mr Schumann justified this submission
by way of the application of doctrine of “tacit relocation”.
[13] In this connection Mr Schuman relied on
the decision in
Tiopaizi v Bulawayo
Municipality
1923 AD 317
at 325
where
De Villiers JA
said
‘Parties to a contract of letting and hiring may either agree that
the contract should run for a definite fixed term or they
may leave
its duration undefined…..Now if the parties agree upon a definite
time for the expiration of the contract, it follows
that no notice of
termination is required. The contract expires by effluxion of time,
and with it the relationship of lessor and
lessee ceases. But in the
same passage Voet (19.2.9) proceeds to point out that by our law what
is called a tacit relocation may
take place, e.g. by allowing the
tenant to retain possession of the premises after the contract has
expired…..Now… tacit relocation
is one of the consensual
contracts for which a
nudus consensus
sufficed even in the Roman law, such
consent being inferred from the fact that the relationship is allowed
by both parties to continue
after the contract had come to an end. It
was to guard against this danger, therefore, and not to terminate the
contract, that notice
became essential….Unless notice is given
before the date of expiry of the lease, it will be too late to resist
the presumption
that there has been a tacit relocation of the
premises. And from this it follows that no definite power was
required for such notice.
As long as the notice was given before the
contract actually came to an end it sufficed. There was no hardship
on the tenant in
getting such notice even at the last moment, for
having agreed upon a definite time, he must be taken to know when the
lease expires
and that the notice was merely for the purpose of
preventing him, by remaining on, from setting up the tacit renewable
contract’.
[14] According to Mr
Schuman, an indefinite contract of employment had come into existence
after 1 December 1999. Such contract could
be terminated in a number
of ways, including impossibility of performance, the death of the
employee, insolvency of the employer,
material breach of the contract
and resignation. None of these alternatives had been contended for
by first respondent and, in the
absence of any agreement by the
appellant that his services were terminated on 29 February 2000, his
contract of employment would
continue past that date.
EVALUATION
.
[15] Had appellant come to work on 1 December
1999 without there having been any previous discussions and debate on
negotiations about
his future and first respondent had accepted his
services on that basis, it may well have been that, by 8 December
1999, it would
have been too late for first respondent to assert a
tacit relocation of the kind contended for by Mr Schuman had not
taken place.
But these were not the facts of the present case. The
appellant returned on 1 December 1999 because first respondent had
need of
his services, at the very least, until the conclusion of “the
autonet refrigerated transport contract”. During this period he
hoped to persuade the CEO of the need to retain his services until he
attained the age of 65. First respondent accepted the return
of
appellant because of its short term employment needs. That the two
parties may not have achieved a consensus on the exact terms
of the
new contract is a justifiable conclusion to be drawn from the facts.
The evidence indicates that appellant was under no illusions
on 1
December 1999 that first respondent had accepted his for an
indefinite period. His own description of events on 2 February 2000
makes this clear, particularly when he comments on his refusal to
accept a written contract on 8 December 1999: ‘I commented that
it
didn’t matter whether I signed letters or not, I prefer not to sign
since it proved to be a problem for me if this matter ever
got into
lawyers hands. P.M. asked what I meant by ‘lawyers’ and I said I
wasn’t a lawyer and at this stage hadn’t seriously
considered
that course of action but knew enough not to agree to anything that
might later turn out to be unfavourable to my cause.
I prefer to
think positively and I was still confident I could convince that YL
(CEO) that my continued employment at Rainbow would
yield mutual
benefits. Dependant on YL’s response I would then have to decide
what to do next but there was no point now, in pursuing
the subject
and I didn’t know enough about it. I repeated my offer to stop
work today if formalising the extension contract remained
an
embarrassment but said I wanted to continue to serve Rainbow as well
and as long as I could. Although it had been at Rainbow’s
request I
stayed on after 1 December, I was also pleased to be kept active and
earn income until YL found time to deal with my request
to meet. PM
said it had been agreed I could stay for February so that wasn’t an
issue. PS decided this matter had to be throughout
and ‘during the
window of February provided and undertook to discuss YL’.
[16] This memorandum
prepared by appellant confirms the evidence of Meade, namely that it
had been made clear to appellant that he
had to retire on 29 November
1999. He knew well that any further employment would be on a fixed
term basis unless they decided otherwise.
[17] At best for
appellant there was a contract of employment, which, due to an
extension, terminated on 29 February 2000. Appellant’s
evidence
makes it abundantly clear that even he considered that an indefinite
contract of employment had not came into existence
when he returned
to work on 1 December 1999.
[18] For these reasons
the appeal is dismissed with costs, including the costs of two
counsel.
__________________
DAVIS AJA
I agree.
__________________
ZONDO JP
I agree.
__________________
DU PLESSIS AJA
Appearance:
For the
Appellant: Adv P Schumann
Instructed
by: Millar & Reardon Attorneys
For Respondent: Adv
KG Kemp SC and Adv CA Nel
Instructed
by: Knight Turner Inc
Date of Hearing: 3
September 2002
Date of Judgement: 6
December 2002