About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Labour Appeal Court
SAFLII
>>
Databases
>>
South Africa: Labour Appeal Court
>>
2016
>>
[2016] ZALAC 4
|
|
Gbenga-Oluwatoye v Reckitt Benckiser South Africa (Pty) Ltd and Another (JA95/2014) [2016] ZALAC 4; (2016) 37 ILJ 902 (LAC); [2016] 5 BLLR 425 (LAC) (3 February 2016)
IN
THE LABOUR APPEAL COURT OF SOUTH AFRICA, JOHANNESBURG
Case no: JA 95/2014
In the matter between:
MUYIWA
GBENGA-OLUWATOYE
Appellant
and
RECKITT BENCKISER SOUTH AFRICA
(PTY)
LIMITED
First Respondent
NADEEM
BAIG N.O.
Second
Respondent
Heard:
12 November 2015
Delivered:
03 February 2016
Summary: Appellant’s urgent
application to have separation agreement declared invalid and to set
aside the termination of
his employment dismissed by the Labour
Court. On appeal held: agreement remains in force and binding upon
parties; duress and undue
influence not proved to exist; and no term
contrary to public policy. Appeal dismissed with costs.
Coram: Waglay JP, Coppin JA
et
Savage AJA
Judgment
SAVAGE AJA
[1]
This
is an appeal, with the leave of this Court, against the judgment of
the Labour Court (Molahlehi J) which dismissed with costs
the urgent
application of the appellant, Mr Muyiwa Gbenga-Oluwatoye, in which an
order was sought that:
1. the first
respondent, Reckitt Benckiser South Africa (Pty) Ltd (the
respondent), had breached clause
10.1 of his employment contract in
dismissing the appellant without a hearing;
2. the mutual
separation agreement concluded between the parties on 3 March 2014
was unlawful, invalid
ab initio
and of no force and effect;
and
3. the
termination of the appellant’s employment be set aside and he
be reinstated into his employment
pending an enquiry into the
allegations of misconduct raised against him.
[2]
The
appellant, a Nigerian citizen, concluded a contract of employment
with the respondent on 16 June 2013. On 22 July 2013, he commenced
employment as the respondent’s regional human resources
director. His employment with the respondent followed an approach
made by a recruitment consultant during January 2013 to the
appellant, who was at the time employed by Unilever in Dubai,
regarding
a work opportunity in South Africa. In February 2013, the
appellant left Unilever to take up employment with Standard Chartered
Bank in Dubai. Shortly thereafter he contacted the recruitment agent
to enquire about the South African work opportunity previously
mentioned. In his
curriculum
vitae
provided to the respondent, the appellant did not record that he was
no longer employed at Unilever, or that he was employed at
Standard
Chartered Bank. In fact, when interviewed by the respondent, he
indicated that he remained employed at Unilever and it
was on this
basis that his remuneration package with the respondent was
negotiated. As a result, the respondent agreed to pay the
appellant
US $40 000 as a sign-on bonus for Unilever shares/share options he
purportedly held and which he represented to the respondent
he would
forego on termination of his employment with Unilever.
[3]
On 21
February 2104, several months after the appellant had commenced
employment with the respondent, the appellant was suspended
from duty
pending the outcome of a disciplinary investigation against him into
alleged misconduct.
[4]
On 3
March 2014, the appellant was called to the offices of the respondent
in Johannesburg where from 14h00 several telephonic conversations
were conducted between the appellant, the respondent’s in-house
regional legal counsel, Mr Francois French, who was also
in
Johannesburg, and Mr Nadeem Baig, the second respondent, who was in
Dubai. The transcript of one of these conversations records
that the
appellant admitted that “…
there
is really nothing that I am going to say to justify …my
actions
…”
which he acknowledged had breached the trust relationship between him
and the respondent.
[5]
On
the same day, the appellant’s employment with the respondent
was terminated with immediate effect on the basis of the
misrepresentations which he made. In the termination letter provided
to him, it was recorded that:
‘…
1.2
during the interview[s] and/or the recruitment process you advised,
inter alia [that] –
1.2.1
you were employed at Unilever, situated in Dubai, until RB made the
formal offer of employment on/or about
12 June 2013 and until you
accepted employment at RB on/about the same date, i.e. 12 June 2013,
via e-mail;
1.2.2
you negotiated your remuneration package based on your then current
employment at Unilever;
1.2.3
you stated that you would lose shares/share options as a result of –
1.2.3.1
terminating your employment with Unilever; and
1.2.3.2
if you accept the offer of employment at RB;
1.3
RB compensated you for the loss of
shares in the amount of gross USD 40,000.00;
1.4
your Curriculum Vitae (“CV”)
which you forwarded and presented to RB, also stated
that you were at
all times employed at Unilever;
True
State of Affairs
1.5
you were not employed at Unilever
during the interview[s] and/or the recruitment process;
1.6
you were employed at Standard
Chartered Bank (“SCB”), situated in Dubai, as a Senior
Human Resources Relationship Manager, from 11 February 2013 to 30
June 2013;
1.7
your employment with SCB terminated
on/about 30 June 2013;
1.8
you were aware that the
representations you made in relation to your employment with
Unilever,
including the period and currency of your employment, the
loss of shares and remuneration you earned at the time, were false;
1.9
you failed to act in the best interest
of RB in that you were dishonest and/or made representations
to RB
which representations were untrue, which is also a breach of your
Employment Agreement, alternatively failed, neglected or
refused to
disclose pertinent information in relation to your employment with
Unilever and SCB;…
…
1.9.3
In addition, when questioned on 21 February 2014, regarding your
employment at SCB, you advised that you were only employed
for 1
month at SCB whereas you were in fact employed for almost 5 months,
from 11 February 2013 to 30 June 2013.
2.
Had RB known the true
state of events, RB would not have employed you, let alone agreed
to
pay the compensation for the alleged loss of shares in the amount of
gross USD40 000.00…’.
[6]
The
appellant was informed that it had been decided to terminate his
employment immediately on the basis of what was stated to be
his
misconduct which was “…
serious,
has a significant and negative impact on RB as employer and erodes
any confidence or trust RB has in you as an employee
and executive…”.
The
letter recorded that “
all
mitigating and aggravating circumstances
”
had been considered and that the appellant had been invited to make
representations as to why his services should not be
terminated and
that the representations made had been considered prior to his
termination.
[7]
Having
been informed that his employment had been terminated, the appellant
immediately thereafter requested that the respondent
afford him a
“softer exit”. He asked for time to repay the US$40 000
and to allow his work permit and housing allowance
to be extended for
some months. When the second respondent agreed, the appellant
responded: “
Nadeem,
thank you very much for the human touch and the human face and
extending for 3 months my work permit and my – the
housing
.”
Further negotiations took place and the second respondent indicated
that a further letter would be prepared which would
require the
appellant to agree to the repayment of the US$40 000. The appellant
agreed.
[8]
The
first separation agreement prepared by the respondent was not signed.
Further negotiations took place and in a subsequent telephone
conversation between the parties, the second respondent advised the
appellant that management had agreed to a soft exit on the
terms
discussed. The amended separation agreement was then signed. It
recorded that it was entered into “
in
full and final settlement of all claims of whatsoever nature and
however arising between the Parties
”.
The appellant acknowledged in the agreement that he accepted the
termination of his employment “without duress or
undue
influence” and that he “…
was
not in any manner whatsoever forced or coerced to conclude this
[a]greement
”.
He “voluntarily and unconditionally” waived his right to
any notice pay and “
his
right to approach any [r]elevant [a]uthority including the CCMA
and/or the Labour Court or any other [c]ourt for any relief
against
the
[first respondent]
emanating
from his [e]mployment and/or his resignation and/or this
[a]greement
”.
In addition, the appellant signed an acknowledgment of debt in terms
of which he became indebted to the first respondent
in the sum of US$
40 000 with interest, which debt was to be repaid from no later than
31 January 2015.
[9]
On 10
March 2014, a week after the termination of his employment, the
appellant approached the Labour Court on an urgent basis,
contending
that he was coerced into signing the separation agreement against his
will and under duress, after having been threatened
with the
immediate revocation of his work permit and cessation of his salary,
payments towards his housing, medical aid and school
fees and
repatriation costs. The appellant further contended that the terms of
the agreement, particularly those restricting his
right to approach
the courts were contrary to public policy and that the agreement was
invalid
ab
initio
.
The appellant also claimed that the respondent had repudiated the
contract of employment, which, in clause 10.1, created an express,
alternatively an implied entitlement to a pre-dismissal hearing. As a
result, he sought specific performance in the form of an
order of
reinstatement.
[10]
The
respondent opposed the application on the basis that the appellant
had signed the separation agreement voluntarily, in full
and final
settlement, without duress and that he had neither been coerced, nor
forced to sign the agreement. The respondent denied
that the
agreement was invalid
ab
initio
and disputed that the limitation on seeking further redress, on the
basis of the full and final settlement reached, was a term
that was
contrary to public policy. In addition, it was disputed that the
appellant held an express, or implied, contractual right
to a
pre-dismissal hearing. The respondent contended that even if the
appellant held such a right, he was heard prior to termination
and
the terms of the contract of employment had not been breached.
[11]
The
Labour Court approached the matter on the basis that the respondent
was entitled to terminate the contract of employment with
the
appellant on grounds of misconduct. The facts were found not to
support the appellant’s contention that he had been coerced
to
sign the separation agreement, and that he did so under duress, after
he had refused to sign the first draft of the agreement
and had, on
his version, requested that he be “
afforded
a softer exit – having acknowledged that the 40,000 USD had
been paid to him in error
”.
The separation agreement was therefore found to constitute a valid
compromise entered into between the parties and the
application for
urgent relief was dismissed with costs.
Evaluation
[12]
Contractual
principles apply to any agreement entered into between an employer
and employee, including an agreement of compromise
in terms of which
parties agree to settle any dispute, or claims, that may exist
between them.
[1]
[13]
It is
not in issue that the appellant and respondent signed the mutual
separation agreement. Neither is there any dispute that the
agreement
records that it was entered into “
in
full and final settlement of all claims of whatsoever nature and
however arising between the Parties
”;
that the appellant waived his right to notice pay and his right to
approach both the Commission for Conciliation Mediation
and
Arbitration (CCMA) and any court for relief against the respondent
“
emanating
from his Employment, his resignation and/or
[the]
[a]greement.”
[14]
The
appeal against the judgment of the Labour Court turns, in the first
instance, on whether the separation agreement was signed
under duress
by the appellant and is, as a consequence, invalid
ab
initio
and whether the Court
a
quo
erred in finding that it was not.
[15]
A
contract may be vitiated by duress where “
intimidation
or improper pressure renders the consent of the party subjected to
duress no true consent
”.
[2]
Compulsion
may be exercised by way of physical force, or indirectly, by way of a
threat of harm. In order to obtain an order setting
aside a contract
on the grounds of duress, actual violence or reasonable fear must be
shown. The fear must be caused by the threat
of some “considerable
evil” to the person concerned, or to his, or her, family. The
threat or intimidation must be
unlawful, or
contra
bonos mores
and
the moral pressure used must have caused damage
.
[3]
The burden of proving the existence of duress rests on the party
raising it.
[4]
[16]
The
appellant approached the Labour Court by way of urgent application.
The general rule applicable to the resolution of genuine
disputes of
fact in applications in which final relief is sought is stated in
Stellenbosch
Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd,
[5]
namely that -
‘
....
where there is a dispute as to the facts a final interdict should
only be granted in notice of motion proceedings if the facts
as
stated by the respondents together with the admitted facts in the
applicant's affidavits justify such an order.... Where it
is clear
that facts, though not formally admitted, cannot be denied, they must
be regarded as admitted’
[6]
.
[17]
This
rule was qualified in the matter of
Plascon-Evans
Paints v Van Riebeeck Paints
[7]
in
which Corbett JA stated as follows:
‘…
It
is correct that, where in proceedings on notice of motion disputes of
fact have arisen on the affidavits, a final order, whether
it be an
interdict or some other form of relief, may be granted if those facts
averred in the applicant’s affidavits which
have been admitted
by the respondent, together with the facts alleged by the respondent,
justify such an order. The power of the
Court to give such final
relief on the papers before it is, however, not confined to such a
situation. In certain instances the
denial by the respondent of a
fact alleged by the applicant may not be such as to raise a real,
genuine or bona fide dispute of
fact (see in this regard
Room
Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949 (3) SA 1155
(T);
Da
Mata v Otto NO
1972 (3) SA 858
(A) at 882 D-H). If in such a case the respondent has
not availed himself of his right to apply for the deponents concerned
to
be called for cross-examination under Rule 6(5)(g) of the Uniform
Rules of Court (cf
Petersen
v Cuthbert & Co Ltd
1945 AD 420
at 428;
Room
Hire
case supra at 1164) and the Court is satisfied as to the inherent
credibility of the applicant’s factual averment, it may
proceed
on the basis of the correctness thereof and include this fact among
those upon which it determines whether the applicant
is entitled to
the final relief which he seeks (see eg
Rikhoto
v East Rand Administration Board and Another
1983 (4) SA 278
(W) at 283 E-H). Moreover there may be some
exceptions to this general rule, as, for example where the
allegations or denials of
the respondent are so far-fetched or
clearly untenable that the Court is justified in rejecting them
merely on the papers (see
the remarks of Botha AJA in the
Associated
South African Bakeries
case, supra at 924A).’
[18]
It is
apparent from the founding and answering affidavits that factual
disputes arose between the parties on the papers. The appellant
in
his founding affidavit stated that he had been compelled to sign the
separation agreement and had done so under duress, given
the impact
the immediate termination of his employment had on his financial
position, his housing and benefits, his child’s
schooling and
his status in South Africa. The respondent in its answering affidavit
stated that the separation agreement had been
signed freely and
voluntarily in the absence of duress, or coercion, and at the
instance of the appellant, who had sought to soften
the personal
impact of the termination of his employment and its consequences for
his work permit.
[19]
In
Buffalo
Freight Systems (Pty) Ltd v Castleigh Trading (Pty) Ltd and
Another,
[8]
the Court cautioned against deciding probabilities in the face of a
conflict of facts apparent from the affidavits. The respondent’s
denial that duress existed raised a real, genuine and
bona
fide
dispute of fact, which from the papers is apparent to be neither
far-fetched, nor untenable. A substantiated and a weighty defence
to
the relief sought by the appellant was put up by the respondent.
[20]
The
appellant elected to proceed by way of notice of motion in the matter
and did not seek a referral to oral evidence or trial.
Having made
such election, he could only have been successful if the facts as
stated by the respondents, together with the admitted
facts in his
affidavit, justified the grant of the relief he sought. In the face
of a real, genuine and
bona
fide
dispute of facts put up by the respondent, which amounted to a
substantiated and clear defence, the Labour Court, on an application
of the relevant principles, could not properly have granted the
relief sought by the appellant. It follows that the Labour Court
correctly refused to declare the separation agreement invalid
ab
initio
and
of no force and effect on the grounds of duress. The result is that,
under the terms of the separation agreement, all claims
had been
settled between the parties and the appellant had waived his right to
approach the CCMA, or any court to seek relief against
the respondent
“
emanating
from his [e]mployment, his resignation and/or
[the]
[a]Agreement.”
[21]
In
this appeal, the appellant takes further issue with the failure of
the Labour Court to find that the separation agreement was
contrary
to public policy insofar as it restricted the appellant from
approaching the CCMA, or the courts, for relief emanating
from his
employment with the respondent. In this respect, the appellant
contends that the agreement is contrary to public policy
in that it
violates his constitutional right to seek judicial redress under s 34
of the Constitution. Section 34 provides that:
‘
Everyone
has the right to have any dispute that can be resolved by the
application of law decided in a fair public hearing, before
a court,
or where appropriate, another independent and impartial tribunal or
forum.
’
[22]
In
Barkhuizen
v Napier,
[9]
the Constitutional Court emphasised that all law, including the
common law of contract, is subject to constitutional control. While
public policy, as informed by the Constitution, in general, requires
that parties comply with contractual obligations that have
been
freely and voluntarily undertaken, a term in a contract that is
inimical to the values enshrined in the Constitution is contrary
to
public policy and unenforceable.
[10]
[23]
The
Court found that a contractual limitation on seeking judicial redress
is permissible when it is reasonable to limit such right.
As much was
found to reflect public policy with the constitutional values of
freedom and dignity permitting self-autonomy and the
ability to
regulate one’s own affairs.
[11]
Nevertheless, the Court stated that relevant to a determination as to
whether the objective terms of the contract are contrary
to public
policy is a consideration of the relative position of the parties,
including their bargaining power and understanding
of the
contract.
[12]
[24]
The
appellant was employed in a senior management position by the
respondent and had a history of prior work experience at a senior
level. From a consideration of the relative position of parties,
nothing indicates that their bargaining power was such that the
appellant did not understand the contractual limitation on seeking
judicial redress to which he had agreed. The limitation on redress
was agreed to within the context of the terms of the compromise. Such
a term is not only commonplace, but permits for disputed
obligations
to be settled in this manner in order to bring finality to disputes.
As such, a term limiting redress, in the manner
recorded in the
separation agreement, is a practical approach to dispute resolution
and by its nature is neither unlawful, nor
contrary to public policy.
Such a term caused the disputed obligations between the parties to be
settled in a manner which brought
finality to the dispute and had
immediate practical effect. Given that courts do not possess a
“…
general
jurisdiction to invalidate contracts on the basis of judicially
perceived notions of unjustness or to determine their enforceability
on the basis of imprecise notions of good faith
”,
[13]
it follows that the Labour Court correctly refused to set the
separation agreement aside on the basis that the limitation to obtain
further redress from the CCMA and the courts, was neither unlawful,
nor contrary to public policy.
[25]
The
onus
is on the party alleging that a compromise has been reached to prove
that this is so. The reason that such an agreement must be
clearly
and unambiguously proved is that compromise, as a form of novation,
involves the waiver of existing rights, or claimed
rights.
[14]
Whether it has been entered into is therefore to be established in
the same way as for any other contract, with regard being had
to the
intention of the parties, which is to be determined from the language
of agreement in its context and in light of admissible
evidence.
[15]
[26]
With
the signature of the agreement not being in dispute, the respondent
raised as a preliminary issue in its answering affidavit,
that the
separation agreement had been entered into in full and final
settlement of all claims, with an express limitation having
been
agreed to regarding redress being obtained from either the CCMA, or
the courts regarding the matter. The intention of the
parties is
apparent from the language of the agreement in its context and the
principle of
caveat
subscriptor,
expressed as far back as in the matter of
Burger
v Central South African Railways
[16]
and thereafter
reaffirmed by our courts, applies. It follows that the respondent
clearly and unambiguously proved in the manner
required of it that
the separation agreement had been entered into between the parties.
[27]
Having
found this to be the case, it is unnecessary to determine whether the
appellant held a contractual right to a hearing prior
to the
termination of his employment, given that the terms of the separation
agreement overtook any such contractual entitlement.
[28]
For
these reasons, it follows that the appeal falls to be dismissed and
there is no basis in law and fairness why the costs should
not follow
the result.
Order
[29]
In
the result, the following is ordered:
1. The appeal is
dismissed with costs.
______________
Savage
AJA
Waglay JP and Coppin JA concur in the
judgment of Savage AJA.
APPEARANCES:
FOR THE APPELLANT:
Mr Kelly
Instructed by Ndumiso Voyi Inc.
FOR THE RESPONDENT:
Mr W G la Grange
Instructed by DLA
Cliffe Dekker Hofmeyr Inc.
[1]
Gollach &
Gomperts (1967) (Pty) Ltd v Universal Mills & Produce Co (Pty)
Ltd
1978
(1) SA 914
(A); Hamilton v Van Zyl
1983 (4) SA 379
(E);
Blou
Bul Boorkontrakteurs v McLachlan
1991 (4) SA 283 (T).
[2]
Arend
and Another v Astra Furnishers (Pty) Ltd
1974
(1) SA 298
(C).
[3]
Broodryk
v Smuts NO
1942
TPD 47
at
51-52;
Machanick
Steel & Fencing v Transvaal Cold Rolling
1979
(1) SA 265
(T)
at 271;
Paragon
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.
[4]
Ball
v Bambalela Bolts (Pty) Ltd and Another
[2013] 9 BLLR 843
(LAC); (2013) 34 ILJ 2821 (LAC) at para 19;
Tully v MLS Bank
Limited
[1999]
ZALAC 36
(28 September 1999) at para 29.
[5]
1957
(4) SA 234 (C).
[6]
At
235 E-G.
[7]
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634E-635D.
[8]
2011
(1) SA 8
(SCA) at para 14.
[9]
[2007] ZACC 5
;
2007
(5) SA 323
(CC);
2007 (7) BCLR 691
(CC) at para 15.
[10]
Barkhuizen
v Napier
at para 29.
[11]
Barkhuizen
v Napier
at
para 48.
[12]
Barkhuizen
v Napier
at
para 59.
[13]
Brisley
v Drosky
2002 (4) SA 1
(SCA) at para 93.
[14]
The Torch Moderne
Binnehuis Vervaardiging Venn (Edms) Bpk v Husserl
1946
CPD 548
;
Hubbard
v Mostert
2010
(2) SA 391
(WCC) at para 11.
[15]
Engelbrecht v Senwes
Ltd
2007 3 SA 29
(SCA) at para 6.
[16]
1903TS
571 at 578-579.