About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Johannesburg Labour Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: Johannesburg Labour Court, Johannesburg
>>
2008
>>
[2008] ZALCJHB 78
|
|
Harley v Bacarac Trading 39 (Pty) Ltd (J2543/08) [2008] ZALCJHB 78 (9 December 2008)
IN
THE LABOUR COURT OF SOUTH AFRICA
BRAAMFONTEIN
REPORTABLE
CASE
NO: J2543/08
2008-12-09
In
the matter between
GARRY
HARLEY
Applicant
And
BACARAC
TRADING 39 (PTY)
LIMITED
Respondent
J
U D G M E N T
VAN
NIEKERK J
[1].......
This is my judgment in the matter heard by way of an urgent
application on Friday, 5 December 2008. The
applicant
initiated these proceedings on 27 November 2008, on an
urgent basis, seeking an order declaring him to be an
employee of the
respondent, declaring his continued suspension to be unfair, and
reinstating him into the position of the technical
director of the
respondent.
It
is common cause that on the day after this application was filed, on
27 November 2008, the respondent’s attorney wrote
a letter to
the applicant’s attorney notifying the applicant of his
dismissal with immediate effect.
[2]
On 3 December 2008, prior to the hearing of this application, the
applicant filed an application to amend the notice of motion
by the
addition of a paragraph requiring the respondent to make payment to
the applicant of all his remuneration up to and including
the date of
his dismissal.
[3]
Mr Van Der Merwe, who appeared for the respondent, opposed this
application on the basis that it represented a case different
to that
which the respondent was initially required to meet and which it had
addressed in its answering affidavit. There
is no merit in this
submission. The effect of the relief sought in the notice of
motion filed on 27 November 2008
was to confirm the
applicant’s employment status, with the consequent rights to
payment of all remuneration withheld by the
respondent during the
period of his suspension.
[4]
The respondent having now dismissed the applicant, the essence of the
relief sought in these circumstances is different only
in relation to
the applicant’s continued employment. His claim to the
remuneration which he contends is owed to him
in respect of his
period of suspension is unaffected.
[5]
The respondent has dealt fully with these and related issues in its
answering papers and I fail to appreciate any basis upon
which the
respondent is likely to be prejudiced by my granting the application
for amendment of the notice of motion. The
application to amend
the notice of motion is accordingly granted.
[6]
Mr Van Der Merwe submitted that the application was not urgent.
He contended that this court has been disinclined to consider
financial hardship and more particularly loss of income as a good
ground for urgency. If financial hardship were to be allowed
as
a ground for urgency, so the argument went, then virtually every
dismissed employee would have
locus standi
to approach this
court for urgent relief.
[7]
In support of his submission on this point, Mr Van Der Merwe made
reference to a number of cases, including
SACAWU v Shoprite
Checkers (Pty) Limited
,
1997 (10) BLLR 1360
(LC),
Hultzer v
Standard Bank of South Africa
,
1999 (8) BLLR 809
(LC), and
University of the Western Cape, Academic Staff Union & Others
v University of the Western Cape
, 1999 (2) ILJ 1300 (LC).
[8]
The principle established in these cases is one that inclines this
court to avoid granting what amounts to status quo relief
in unfair
dismissal disputes pending a final determination of the dispute by
the appropriate dispute resolution body. None
of these cases,
it seems to me, establishes that financial hardship and loss of
income can never be grounds for urgency.
If an applicant is
able to demonstrate detrimental consequences that may not be capable
of being addressed in due course and if
an applicant is able to
demonstrate that he or she will suffer undue hardship if the court
were to refuse to come to his or her
assistance on an urgent basis, I
fail to appreciate why this court should not be entitled to exercise
a discretion and grant urgent
relief in appropriate circumstances.
Each case must of course be assessed on its own merits.
[9]
A more recent indication of the approach to be adopted is to be found
in the case of
Hospersa & Another v MEC for Health, Gauteng
Provincial Government
,
2008 (9) BLLR 861
(LC). In that
case, Basson J held that an employee was entitled to urgent relief in
circumstances where her employer had
unilaterally withheld her salary
in breach of the Basic Conditions of Employment Act, and where she
had not been given an opportunity
to make representations before her
remuneration was stopped.
[10]
This case similarly concerns a unilateral termination of the payment
of remuneration. The respondent does not dispute
the
applicant’s claim that the consequences of his suspension was
such that he is in dire financial strains, and in particular
that on
21 November 2008, the bank addressed correspondence to him
threatening
inter alia
to foreclose on his mortgage bond.
[11]
The respondent, on the other hand, contends that the applicant’s
financial circumstances are of his own making.
Given the facts
of this case to which I will refer shortly, that is nothing less than
a fatuous statement. This court has
a wide discretion to
determine the urgency with which applications should or should not be
treated and I am satisfied that this
application is urgent and that
the applicant is not abusing the processes of this court. I
will therefore proceed to deal
with the application on that basis.
[12]
Turning to the merits of the application, the applicant seeks a final
order for payment of his remuneration during the period
of
suspension. That being so, factual disputes must be resolved in the
first instance in favour of the respondent. The applicable
test is
that established by
Plascon Evans Paints Limited v Van Riebeeck
Paints (Pty) Limited
,
[1984] ZASCA 51
;
1984 (3) SA 623
(A), where the court found:
“
It
is correct that wherein proceedings on notice of motion, disputes of
fact had 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
had 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.
Moreover,
there may be exceptions to this general rule, as for example where
the allegation or denials of the respondent are so
far fetched or
clearly untenable, the court is justified in rejecting them merely on
the papers. 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 65G of
the uniform rules of
court, and the court is satisfied as to the inherent credibility of
the applicant’s factual averment,
he may proceed on the basis
of the correctness thereof and include this fact amongst those upon
which he determines whether the
applicant is entitled to the final
relief which he seeks”.
[13]
On this basis and applying this approach, the relevant factual
context to this application is broadly the following.
Here I
draw on the papers filed in this application and those filed under
case number J2116/08 which were incorporated into these
papers. The
applicant was employed by the respondent on 1 July 2007.
On 12 November 2007, he purchased 30 shares
in the respondent company
from the existing shareholders, Herlander and Carla Pinheiro, for a
consideration of R1.8 million.
On signature of the agreement,
the applicant was to pay the Pinheiros R500 000 in part payment
for the shares.
[14]
The agreement contains a clause to the effect that should the
employment of any shareholder be terminated on a count of misconduct,
that party is obliged to dispense of his or her shareholding to the
other shareholders for no purchase consideration and the remaining
shareholders are not obliged in those circumstances to pay anything
to acquire the shareholding. The validity of this clause,
on
the basis that it was
contra bonos mores,
is the subject of a
separate dispute.
[15]
Between July 2007 and December 2007, the applicant received a nett
amount of R40 000 each month. In January 2008
he received
no payment. In April 2008 and May 2008 he received R20 000
for each of those months. In July 2008,
he again received no
payment. On 21 July the applicant addressed a letter to
the Pinheiros regarding what he considered
to be the non payment of
his salary. In the same month, the applicant attended at the
respondent’s auditors to enquire
as to the reasons for his not
being paid and as to the respondent’s financial well being.
[16]
On 24 July the applicant was advised by one Dobson, the auditor, that
Carla Pinheiro had demanded the applicant’s immediate
resignation, that he should make his shares available for sale at a
price of R300 000 (to include the amount of R120 000
being
arrear salary) that the applicant should not return to work and that
he would be paid an initial amount of R80 000 on
receipt of his
letter of resignation.
[17]
On 29 July 2008, the applicant addressed a letter of demand to the
Pinheiros and to the auditor, claiming payment of R120 000
which
he alleged was arrear salary due to him for the months of January,
April, May and July 2008. On 30 July 2008, the applicant
was
advised by the respondent’s attorney that he had been suspended
pending an investigation and the convening of a disciplinary
enquiry.
[18]
On 1 August 2008, the Pinheiros addressed a letter to the
respondent’s creditors stating
inter alia
that “
we
would like to bring to your attention that Mr Garry Harley (the
applicant) is no longer with our company”
.
[19]
On the same day, 1 August 2008, the respondent’s attorney
addressed a letter to the applicant’s attorney stating
that the
auditors held R120 000 in trust as proof of the respondent’s
ability to meet the applicant’s claim and
further notified the
applicant that an amount of R80 000 would be released to him
that day.
[20]
On 21 August 2008, the respondent’s attorney wrote to the
applicant’s attorney regarding the disciplinary enquiry.
The enquiry was convened on 26 August and postponed to 8 September
2008. The enquiry eventually proceeded on 22 September
2008.
On 29 September the chairperson of the enquiry found the
applicant guilty of three out of 17 charges of misconduct
brought
against him, a finding that the applicant contests.
[21]
On 7 October 2008, the applicant filed an application in this court
under case number J2116/08 for an order declaring the respondent
to
be in breach of its contractual obligations to the applicant by not
making payment to the applicant of his remuneration and
benefits, and
for other alternative relief.
[22]
When the matter came before this court on 14 October 2008,
an interim agreement was reached in terms of which the
respondent
agreed to pay the applicant R40 000 by the next day and that the
matter would be postponed
sine die
and placed on the opposed
motion roll.
[23]
After subsequent agreement on the resumption of the disciplinary
enquiry and in particular a hearing on the disciplinary sanction
to
be imposed on the applicant, the chair of the enquiry recused
himself. After further discussion between the parties’
legal representatives, the applicant’s attorney addressed a
letter to the respondent’s attorney recording that the
applicant remained suspended and that he had not been paid the months
of September and October 2008. No response was received
to that
letter.
[24]
On 24 November 2008, the applicant’s attorney addressed a
further letter to the respondent’s attorney recording
that the
applicant’s continued suspension was unwarranted, unlawful and
unfair. The letter also recorded the respondent’s
failure
to pay the applicant his salary for September and October and to pay
attention to the applicant’s financial circumstances.
[25]
There was further correspondence relating to an application brought
in the High Court that the applicant had initiated and
the wording of
certain affidavits in that matter, none of which are material to the
present dispute. On 26 November 2008,
the applicant’s
attorney again recorded the disciplinary chairperson’s decision
to recuse himself on 22 October
2008, the applicant’s
continued suspension and the fact that he had not been paid his
salary for the months of September
and October 2008.
That
letter or more accurately, the lack of any response to it, led to the
filing of this application.
[26]
There are a number of issues in dispute and which fall to be dealt
with in accordance with the rule established by the
Plascon Evans
case. The most material of them and indeed the only dispute
that is significant for present purposes is the respondent’s
denial that the applicant is owed any remuneration. The
respondent contends that its policy was that the respondent could
make payment of salaries to its management staff in circumstances
where that salary could be deferred or even forfeited in the
interest
of growing the business or maintaining a positive cash flow
position. The existence of this policy, which the respondent
concedes may be applied in a harsh and brutal manner in appropriate
circumstances, was supported by a schedule of payments annexed
to the
papers which reflect that the Pinheiros between August 2007 and
September 2008 had on occasion been paid less than
what appears
to be a norm of R40 000 per month and that on occasion they had
been paid nothing at all. The total amounts
in the schedule for
the period I have referred to, reflect that in that period the
applicant was paid a total of R520 000
and the Pinheiros a total
of R380 000 each.
[27]
I am not persuaded that the denial by the respondent of the
applicant’s entitlement to a monthly nett remuneration of
R40 000 raises a genuine or
bona fide
dispute of fact.
The undisputed facts in this case establish a pattern, according to
which the applicant was paid monthly
on a regular basis from the date
that he commenced employment in July 2007 until December 2007.
The month after he signed
the shareholder’s agreement and paid
the Pinheiros R500 000, short payments or no-payments were made
to the applicant
in January, April, May and July 2008.
These outstanding amounts were paid to the applicant only after he
had met with
the respondent’s auditor and applied pressure on
the Pinheiros. After the applicant’s suspension, no
further
payments were made to him, except the amount of R40 000,
paid after the proceedings initiated in this court under case number
J2116/08.
[28]
This pattern and the obviously close correlation between non payment
of salary to the applicant which he alleges, and the activities
by
him to question and ultimately seek enforcement of payment, are in my
view indicative of a right to the receipt of remuneration
at regular
monthly intervals.
[29]
In these circumstances, the respondent’s allegations regarding
its remuneration policy and the application of that policy
(given
that it is common cause that the applicant was never provided with
any justification or explanation by the Pinheiros in
relation to each
instance of non payment or part payment and that the version of an
agreement to receive irregular payments of
an unspecified amount, or
even no payment at all, was raised only in these proceedings), are
clearly untenable and should be rejected.
[30]
There is a further submission by the respondent that needs to be
considered. In the answering papers, Carla Pinheiro
deposes to
the following:
“
I
fail to understand the applicant’s contention that his
suspension is unfair because he has not received payment of an amount
he claims to be entitled to. Rationally, the two concepts have
nothing to do with each other, the applicant has in any event
received what he is entitled to”.
[31]
Suspension without pay and the fairness thereof, is self evidently
linked to the payment of remuneration, especially where,
as is the
case here, an employee is suspended without pay. Where
suspension is effected as a measure pending a disciplinary
hearing,
as is the case here, suspension without pay is a material breach of
contract. In the absence of any apparent apprehension
that the
applicant’s continued presence in the workplace prejudiced a
legitimate business interest and in view of the demonstrated
psychological and financial prejudice to the applicant, the
applicant’s suspension was also unfair.
[32]
Insofar as it might be suggested that the applicant has an
alternative remedy and is therefore not entitled to final relief
in
these proceedings, it is true, as Mr Van Der Merwe submitted, that
the applicant is entitled to sue the respondent for unpaid
remuneration on a contractual basis, either in this court or in a
civil court with jurisdiction. However, in my view, that
submission ignores the context in which this application is brought.
The relief claimed by the applicant is premised on an
unlawful
suspension, breach of contract in the form of a failure to pay the
applicant his remuneration, and also a breach of the
Basic Conditions
of Employment Act. These are all matters in respect of which
this court clearly has the powers to entertain
applications for final
relief and in appropriate circumstances, to grant the relief.
[33]
Finally, there is the argument that, given the applicant’s
dismissal, the relief he seeks in this application has become
academic and that the application should be refused for that reason.
There is no merit in this submission. The applicant’s
dismissal was clearly a direct response to the filing of this
application and effected in circumstances where formal notice of
termination of employment was given by the respondent’s
attorneys to the applicant’s attorneys. Far from being
academic in the present circumstances, this smacks of an act of
victimisation.
I
am satisfied that the applicant has made out a case for the relief he
seeks and I accordingly make the following order:
1.
The applicant’s suspension was
unlawful;
2.
The respondent is ordered to pay the
applicant his remuneration for the months of September, October and
November 2008, a nett
amount of R120 000;
3.
The respondent is to pay the costs of this
application.
_____________________________
ANDRE VAN NIEKERK
JUDGE OF THE LABOUR
COURT
Date of Hearing 05
December 2008
Date of Judgment 09
December 2008
Appearances:
For the applicant Mr B
Bleazard from Brian Bleazard Attorneys
For the Respondent Adv
H A Van Der Merwe
Instructed by Senekal
Simmonds Inc