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[2007] ZALCCT 4
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McCaffery v Ascot Venture Capital (C619/05) [2007] ZALCCT 4 (18 May 2007)
IN THE LABOUR COURT OF
SOUTH AFRICA
(HELD AT CAPE TOWN)
OF
INTEREST
C
ASE
NO
: C619/05
DATE
:18
MAY 2007
In the matter between:
WENDY
McCAFFERY
Applicant
and
ASCOT
VENTURE CAPITAL
Respondent
J U
D G M E N T
PILLAY
D, J:
[1]The
applicant was employed on 1 April 1998. On 1 September 2001 she was
transferred to the respondent. From about 2003 she worked
as the
personal assistant to Mr Mark Paulsmeir, the managing director of the
respondent. Other than her, the respondent employed
only a
char.
[2]
On 8 March 2005, the applicant was informed that there would be a
meeting the following day. On 9 March 2005 she was called
to
the boardroom. Mr Jacobs, who was then a director of the
respondent, was present to witness the discussion. Mr Paulsmeir
informed the applicant of the poor state of the business and the
possibility of it being closed. He proposed to the applicant that
she
be employed until 24 June 2005 and if by that stage the business was
not turned around by a new strategy, or she did not find
alternative
employment, her services would be terminated. She was also free
to take time off to look for alternative employment.
The
applicant acquiesced in this arrangement. At the end of that
discussion, Mr Paulsmeir gave the applicant a pre-typed letter
recording the proposal.
[3]
The respondent’s case is that the applicant agreed on these
terms to the termination of her services on 24 June 2005.
As
the termination was by agreement it did not amount to dismissal.
The applicant persisted that she did not agree
to the termination of
her services, that she was dismissed and that her dismissal was
procedurally and substantively unlawful and
unfair.
[4]
The Court finds
for the following reasons
that the applicant was dismissed unlawfully and unfairly:
1.
The letter given to the applicant on 9 March 2005 records: “You
are hereby officially notified
that your services are terminated with
effect from 24 June 2005”. The plain meaning of that
sentence is that the termination
of the applicant’s services
was effected not by the applicant. The use of the passive voice
makes this clear.
The only other party who could have
terminated her services was the respondent.
2.
The letter was pre-typed. As such it evidences an absence of good
faith engagement about the applicant’s
future with the
respondent. It was also contrived and an exercise in commencing
the evidential paper trail that must precede
a retrenchment. For
instance, the letter refers to an “information session”.
When cross-examined about that,
Mr Paulsmeir testified that it
referred to informing the applicant of the meeting the next day.
That hardly qualifies as
an “information session”, which
is a term used during consultations that precede negotiations between
employer and
employee.
3.
The applicant’s acquiescence in the terms of the letter and the
discussion cannot by any construction
amount to a waiver of her
rights to be engaged timeously about suitable alternative employment
and about severance pay.
(a)
Working for Mr Paulsmeir through some other
entity for half her salary was always an option. However, it
was only presented
to her on 21 June 2005 when she was paid her final
cheque. She did not meet Mr Paulsmeir after that because he
went on leave
and Mr Jacobs told her that her services were
terminated with effect from 24 June 2005. Whether this would
have been a suitable
alternative was not properly canvassed prior to
her dismissal. The respondent made a vague offer of relocating
to Johannesburg.
She refused it outright as that was not an
option for her.
(b)
Severance pay did not ever enter the discussion. That is one of
the items about which the respondent
had to consult in order to
render the dismissal fair. As it was common cause that the
respondent did not discuss severance
pay, it follows that the
dismissal is unfair on that ground alone. Severance pay is a
right accorded by the law to employees
who are retrenched. A waiver
of a right is effected if the employee was aware of it and chose to
waive it. It is common cause that
neither party was aware of this
right during the discussions on 9 March 2005. Consequently the
applicant could not have waived
it. On the probabilities, the
applicant was hardly likely to forego seven weeks of severance pay
when she faced the prospect
of unemployment and raising a teenage
daughter.
4.
The 9
th
March proposal kept the door open to the
possibility of her employment continuing with the respondent after 24
June 2005.
On 21 June 2005 it became explicit that her services
would be terminated. The respondent should have notified the
applicant
before 21 June 2005 that its new strategy was
unsuccessful. It was submitted for the respondent that the
applicant was fully
aware of the status of the respondent’s
business. As Mr Paulsmeir’s professional assistant she was his
typist and his
telephonist. In the opinion of the Court,
having information about the status of the respondent did not mean
that the
applicant would interpret that information in the same way
that the respondent did. In any case, it is hard to fathom precisely
what the status of the respondent is, despite the disclosure of its
financial statements and the evidence of Mr Paulsmeir.
For
2003, 2004 and 2005, the respondent’s financial statements
reveal that it generated more revenue than previously.
On
paper, it appears that the respondent had an asset of R40 million,
which was the intellectual capital it owned. This asset
has
since been sold for US $500 million. But the purchase price has yet
to be paid according to Mr Paulsmeir. As recently
as 16 August
2006 when the respondent held its annual general meeting, its
shareholders approved the payment of US $125 million
for its
philanthropic program.
[5]
The respondent has an issued share capital of one million rand. As Mr
Paulsmeir would have the Court believe that the respondent
is a
valuable asset to its shareholders, the Court has no hesitation in
awarding compensation. If the respondent has a cashflow
problem, that will evaporate as soon as the respondent is paid the
purchase price for the intellectual property that Mr Paulsmeir
alleges has been sold. Alternatively, the balance of its capital,
after paying dividends which it resolved at its August 2006 annual
general meeting to use for philanthropic purposes, can be used
towards the compensation awarded. After all, charity begins at home.
[6]
The applicant seeks the maximum
compensation R120 000. She found employment in October 2006 at R3 000
which was less than the salary
paid by the respondent. She was paid
provisional leave pay and bonus. She was also forewarned three months
ahead of the probabilities
of her retrenchment and allowed to find
alternative employment. By these means the respondent mitigated the
hardship of the dismissal.
The appropriate compensation is R60 000.
[7] In the circumstances,
the order that I grant is in the following terms:
1.
The applicant was dismissed.
2.
The dismissal was unfair.
3.
The respondent is ordered to pay the applicant R60 000 as
compensation.
4.
The respondent is to pay the applicant’s costs.
_________________________
PILLAY
D, J
Edited : 13 June 2007