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[2007] ZALCD 2
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W v Fidelity (Pty) Ltd (D119/06) [2007] ZALCD 2 (27 September 2007)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
AT DURBAN
REPORTABLE
CASE
NO
: D119/06
In
the matter between
J.
J. W.
Applicant
and
FIDELITY
(PTY)
LTD
Respondent
JUDGMENT
PILLAY D J
[1]
The applicant employee, Mrs W., sought an order declaring that she
was dismissed, that her dismissal was automatically unfair,
alternatively unfair, and that the respondent employer, Fidelity
(Pty) Ltd (“Fidelity”), should compensate her.
She
abandoned her initial claim for reinstatement.
[2]
The circumstances were the following: Mrs W. was a public relations
officer. She had worked for Supercare Cleaning (Pty)
Ltd
(“Supercare”) since 1978. In 2001 Fidelity took
over Supercare. Predictably, the take-over resulted
in some
confusion and adjustments to synchronise the custom, culture,
practices and policies of the constituent entities.
[3]
Not everyone welcomed the changes. Three former Supercare
employees who testified for Mrs W. resigned or retired from
Fidelity
soon after the take-over to join competitors. As Mrs W. enjoyed
her work, she remained with Fidelity.
[4] On 1 May 2000 she had
her letter of appointment with Supercare refreshed. A term of
the contract material to this dispute
is the following:
“
Your
employment shall terminate automatically without notice on you
reaching the company’s compulsory retirement age of 60
years.”
[5]
Mrs W. was approaching 60 years. She did not want to retire.
The retirement age stipulated in the pension fund for
former
Supercare employees was 60 years. Fidelity employees engaged
before and after the take-over retired at age 65.
Mrs W. wanted
to retire at age 65.
[6]
About six months after the take-over she telephoned Ashley Thomas,
the Group Human Resources Director based in Johannesburg,
to enquire
about her retirement. Mr Thomas, she alleged, advised her that
she would have to claim her retirement benefit
at age 60 and reinvest
it while she continued working for Fidelity until age 65.
Mrs W. deduced from this that she would
be allowed to work until
age 65.
[7]
Nevertheless, she remained concerned about her retirement age and
raised it on no less than three occasions with the Managing
Director
himself, Mr Philip Kruger. The first occasion was at a regional
meeting in 2004. Mrs W. alleged that at the
end of the
scheduled business for that meeting she asked Mr Kruger what her
position would be as she would be turning 60 two years
later.
Mr Kruger, she said, reassured her that she had nothing to worry
about and that she was valuable to Fidelity.
He reiterated this
during the luncheon. She inferred from this that she would
remain employed after she turned 60 years.
At both the regional
meeting and the luncheon her witnesses were present.
[8]
The second occasion was when she transported Mr Kruger to or from the
airport. On that occasion she was alone with him.
The
third occasion was at the 2005 July Handicap. Mr Kruger’s
wife was present. Mrs W. alleged that he gave her
similar
assurances on the last two occasions as he did on the first occasion
when she raised her concern about her retirement.
[9] In
April 2005 Graeme Bird, the Regional Manager since 2004, discussed
with Mrs W. the issue of her Avis car lease expiring and
informed her
that she would thereafter receive a car allowance. Mr Bird also
asked her to work a full day at an additional
1% increase in
remuneration. She refused to work longer hours. After
negotiations, Fidelity agreed to give her a car
allowance of R3 500
per month. She informed Fidelity that she would buy the leased
car from Avis, which she would transfer
to her son as he had paid for
it. She also claimed to have informed Mr Bird that she would be
buying another car for herself.
She subsequently bought a car
under a five-year credit agreement, which she intended to pay off
with her car allowance. She
submitted that she would not have
assumed the burden of credit if she had known she was to retire
before the car was paid off.
[10]
On 10 November 2005 Mr Bird met Mrs W. and informed her that she
would be retiring on 13 January 2006. Mrs W. was shocked
and
upset. Mr Bird offered to extend her employment with a
fixed-term contract until the end of February 2006. Despite
several exchanges, Mrs W.’s employment terminated with effect
from 13 January 2006. On 10 January 2006 Mr Bird
instructed her to leave immediately. He allegedly frog-marched
her out of the building.
[11] Against this
background Mrs W., on the representations allegedly made by Messrs
Thomas and Kruger, alternatively on the basis
of Fidelity’s
customs, culture, practices and policies not to enforce the
contractual retirement age of 60, asserted that:
(a)
Fidelity had agreed to extend her retirement date to age 65.
(b)
Alternatively, Fidelity had given her a choice to retire at or after
60 but
not later than 65.
(c)
Further, alternatively, she had a reasonable expectation to renew her
employment until age 65.
[12]
Fidelity disputed many of Mrs W.’s allegations. However, the
Court concerns itself with only those allegations that are
material
to the resolution of the central issues.
[13]
The obvious starting point of the Court’s analysis must be to
determine the basis on which Mrs W.’ services with
Fidelity
terminated. It is common cause that her contract of employment
and pension fund fixed her retirement age at 60 years.
Fidelity
took over Supercare in terms of section 197 of the Labour Relations
Act No 66 of 1995 (“the LRA”). In
so doing,
Fidelity stepped into the shoes of Supercare in respect of all the
latter’s rights and obligations towards its
employees. In
relation to Mrs W., section 197 effectively substituted Fidelity as
her employer in terms of her May 2000 letter
of employment.
[1]
[14]
Fidelity’s personnel policies and procedures manual
[2]
(“the manual”) applied to all staff “except where
the provisions of any policy are inconsistent with any legislation
or
formal agreement covering any employee/employees, e.g. wage
determinations, bargaining council agreements, recognition
agreements”.
Although that page of the manual originated
in 1997 following the merger of the cleaning and security divisions
of Fidelity, it
remained in force when Fidelity took over Supercare.
[15]
The letter of appointment was a formal agreement and fell within the
exception above unless Mrs W. proved that the formal agreement
was
cancelled, varied or superseded by the representations from
Messrs Thomas and Kruger or Fidelity’s customs, practices,
culture or policies.
[16]
Mrs W. conceded that she did not engage anyone from Fidelity about
extending her retirement date to 65 in “a focused
manner”,
nor was there anything in writing concerning the extension of her
retirement date to age 65.
[17]
Messrs Thomas and Kruger deny ever entering into any agreement with
Mrs W. for the extension of her retirement date to age
65. Both
had no recollection of ever having had discussions with her in terms
of which they gave her any undertaking that
her employment would
continue after she turned 60 years, or from which she could
reasonably have inferred such an undertaking.
[18]
Mr Thomas testified that if he had been asked about her retirement he
would have answered that she had to retire at age 60.
If her
services were still required Fidelity would have entered into a
fixed-term contract with her for, at most, a year.
As her
services were not required, Fidelity insisted on enforcing the
contract.
[19]
The only discussion Mr Kruger recalled was that which occurred when
Mrs W. was transporting him. He testified that he
informed her
that she could continue working for Fidelity after resigning at age
60, provided it was operationally convenient and
she had the skills
and ability to perform her function. She was advised that she
would have to renegotiate her fixed-term
contract with the Regional
Manager. Fixed-term contracts usually did not exceed a year.
[20]
The Managing Director and the Group Human Resources Director
therefore denied that they would ever have given an undertaking
to
employ her up to 65 years in the light of Fidelity’s
contractual arrangements and its customs, culture, practices and
policies.
[21]
By no stretch of any construction can the Court elevate Mrs W.’s
representations to Messrs Kruger and Thomas, even
on her version, to
an express agreement to extend her retirement date. Nor can the
Court infer such an agreement from her
representations.
Furthermore, all the circumstances discussed above and below militate
against such an inference. Most
pertinently, the express terms
of the letter of appointment bar the Court from inferring any implied
terms. Mrs W. had to
prove a clear cancellation or variation of
the letter of appointment in order to succeed in proving that the new
term of her employment
was that she could retire at age 65.
[22]
As regards Fidelity’s customs, culture, practices and policies,
Fidelity demonstrated that every former Supercare employee
was
contractually bound to retire at age 60. Except for Mr Bird,
all the witnesses for the parties were former Supercare
employees.
All of them confirmed that their retirement age was 60 years.
Fidelity also showed that retired employees,
for example Mr Vawda and
Ms Groenewald, who returned to work, did so on fixed-term
contracts. Mrs W. could not point
to a single instance in which
the employment of a former Supercare employee was extended to
65 years. Marcia Nel remained
employed with Fidelity after
her retirement date at age 60 only because Mr Walter Burger, who was
Ms Nel’s supervisor and
Mrs W.’s first witness, omitted
to process her retirement. Another former employee, namely Mrs
Weir, continued her
relationship with Fidelity, but not as an
employee.
[23]
Fidelity’s customs, culture, practices and policies therefore
were not to extend the contracts of Supercare employees
beyond 60
years, but to terminate them automatically when employees reached
60 years. Exceptionally, some employees
were retained on
fixed-term contracts of not more than a year.
[24]
Several witnesses for both parties acknowledged the corporate culture
of Fidelity. Every change in Fidelity’s employment
policies was documented, hence the manual was described as a “living
document”. Specifically in relation to Mrs
W. an addendum
was agreed and signed to reaffirm her working hours as they differed
from other employees. The change from
having the use of a
leased car to receiving a car allowance was agreed and recorded in
writing. Her leave was amended unilaterally,
but to her
advantage. Fidelity issued documentation to the staff notifying
them of the changes.
[25]
Fidelity’s customs, culture, practices and policy was to record
important changes in writing. If Fidelity had agreed
to change
Mrs W.’s retirement date to age 65, it would have recorded
such a material term of employment in writing.
The
probabilities are, therefore, that it did not agree to extend the
retirement date, nor could she reasonably infer such an agreement
from either the representations made to her or from Fidelity’s
customs, culture practices and policy.
[26]
In these circumstances, Mrs W. could also not have had any reasonable
expectation of her employment continuing after age 60.
There
was no precedent to support it. In the opinion of the Court she
did not in fact have such an expectation because, if
she did, she
would not have asked Mr Kruger repeatedly about her position.
She was insecure because she knew she had no clear
right to
employment with Fidelity after age 60. She bought a car on
credit despite her insecurity about her job because she
needed a car
to do her job.
[27]
Turning to the discrimination claim, the Court questioned
Mr M
Stewart
,
counsel for Mrs W., about the basis of this claim as it appeared from
the way the pleadings were drafted that the cause of action
was a
breach of an express, alternatively implied, agreement or policy to
extend her retirement date. At the end of the trial
the Court
was still in the dark about whether Mrs W. was discriminated
against. If she was discriminated against then she
did not
prove who was differentiated from whom and whether and how the
differentiation amounted to discrimination. As a discrimination
claim, these issues had to be specifically pleaded, but Mrs W.’s
representatives failed to do so.
[28]
In these circumstances the Court was inclined to dismiss the
discrimination claim without further consideration. However,
it
elected to respond to Mr
Stewart’s
submissions made during the closing argument in reply. Mr
Stewart
submitted that the ground of discrimination was age. Mrs W. was
differentiated from other Fidelity employees on that ground
and that
the differentiation amounted to discrimination because it was
irrational. The Courts have repeatedly pointed out
that simply
articulating a listed or unlisted ground of discrimination is not
enough to found an action for discrimination.
Harksen
v Lane N.O. and Others
[1997] ZACC 12
;
1998 (1) SA 300
(CC) and the litany of cases in the Constitutional Court, the Supreme
Court of Appeal and the Labour Court prescribe the format
for
pleading and proving a discrimination claim. The Court does not
intend to repeat the requirements here.
[29]
In so far as the differentiation was between Mrs W. and other
Fidelity employees, there was a rational basis for differentiation
between former Supercare and Fidelity employees. Each group
came with different conditions of employment. In some respects
Supercare employees were employed on better terms. Some
employees like Messrs Vawda and Davis, who was another witness for
the employee, preferred to retire at age 60 in accordance with the
Supercare conditions of service. Section 197 of the LRA
required Fidelity to abide by the Supercare contracts of employment.
Likewise, section 64(4) of the LRA prohibited Fidelity
from
unilaterally changing terms and conditions of service of Supercare
employees.
[30]
The suggestion of Mrs W. and her witnesses that Fidelity’s
practices applied to Supercare unilaterally and without deference
to
the individual contracts of employment is factually unfounded and
improbable. If it did happen, it would be unlawful or
unfair.
Fidelity also established that all former Supercare employees
subsequently employed as Fidelity employees were treated
similarly,
i.e. all Supercare employees retired at age 60.
[31]
The basis for differentiating Mrs W. from other Fidelity employees is
therefore ill-conceived. The proper comparison
should have been
between Mrs W. and former Supercare employees. Having failed to
prove the differentiation, the Court’s
inquiry about the
alleged discrimination ends. Mrs W.’s representatives did
not plead or submit that as Fidelity terminated
her services on the
grounds of age which is listed as a prohibited ground of
discrimination in the Constitution and the
Employment Equity Act No
55 of 1998
, the termination was automatically discriminatory and no
comparator was required. The Court has found a comparator,
namely,
former Supercare employees. Consequently, Fidelity’s
treatment of Mrs W. is not unique that no comparator is available,
as
in the case of women refugees in South Africa. (
Union
of Refugee Women and Others v Director: Private Security
Industry Regulatory Authority and Others
2007 (4) SA 395
(CC).)
[32]
The Court accordingly finds that Mrs W. was not dismissed.
Her services terminated in accordance with her
contract
of employment when she reached the retirement age of age 60.
Section 187(2)(b)
of the LRA stipulates that dismissal based on age
is fair if the employee has reached the normal or agreed retirement
age.
Therefore, in so far as Mrs W. suggested that her
services were not terminated by the effluxion of time but at
Fidelity’s
will,
section 187(2)
makes it clear that such a
dismissal would be fair.
[33]
The Courts are usually slow to impose cost orders on litigants in
discrimination cases. In this case the Court is mindful
that a
person who is retiring after 27 years service is emotional and
vulnerable. The reality of a future without work, without
an
income and the mere thought of getting old can be overwhelming.
In the quest to avoid retirement, the Court finds that
Mrs W. could
only have misread Fidelity’s responses to her and slanted them
to best suit her ends to avoid retirement.
[34]
However, the Court must discourage ill-conceived discrimination
litigation. In this case Mrs W. failed to establish even
a
factual basis for discrimination. Furthermore, if those
advising her stopped to study
Harksen
they would have realised at the outset that the facts of this case
did not satisfy the requirements for discrimination. In
those
circumstances the Court cannot but impose the usual costs order.
[35] The order that the
Court grants therefore is the following:
The
claim is dismissed with costs.
-
- - - - - - - - - - - - - - - - - - - - - - - -
_______________________
PILLAY D, J
Judge
of the Labour Court
Date
of Judgment
: 27
September 2007
Appearances
:
ON
BEHALF OF THE APPLICANT:
MR A J PRIOR
ON
BEHALF OF THE RESPONDENT: MR R A K
VAHED
SC
CONTRACTOR
Sneller Recordings (Pty)
Ltd, Durban, 103 Jan Hofmeyr Road, Westville 3630
Tel 031 2665452 : Fax 031
2665459
[1]
A 178
[2]
A 107(a)